Howard Marks, Co-Founder and Co-Chairman of distressed debt investment firm Oaktree Capital Management, has likened US President Donald Trump’s aggressive tariff policies to Brexit, calling them an “own goal”, according to a report by Bloomberg.
In his latest investor memo, titled Nobody Knows (Yet Again), Marks warned that the introduction and potential escalation of sweeping trade duties — including a proposed 125% tariff on Chinese goods — could be the most consequential economic shift of our generation, especially if tensions remain elevated or become permanent fixtures in global policy.
“I consider the tariff developments thus far to be what soccer fans call an own goal,” wrote Marks. “They’re highly analogous to Brexit, and we know how that turned out. Brexit cost the British mightily in terms of GDP, morale, and alliances, and it harmed their reputation for governance and stability. All of this damage was self-inflicted.
While President Trump has paused most of the tariffs for 90 days, following turmoil in global financial markets, while raising duties on China to 125%, Marks believes there will still be a price to pay. And if the wider policies are enacted, the US economy is likely to experience a recession faster than would have been the case otherwise as well as higher inflation and “extensive dislocation,” he said, pointing out that negative implications come almost immediately while any gains only come in the long run.
“Even if the tariffs are reversed entirely, it’s unlikely the other nations will dismiss this incident and conclude that they have nothing to worry about in terms of relations with the US” the 78-year-old wrote in the memo. The introduction of the tariffs programme will have “entirely unpredictable” impacts on economies.
“Last week’s events remind us of the events of 2008 and the Global Financial Crisis they produced. All norms have been overthrown,” he said. “The way world trade has operated for the last 80 years may be of little relevance to the future.”
