Ken Griffin, CEO and founder of Citadel Advisors LLC, speaks during an Economic Club of New York event in New York, USA, on Thursday, November 21, 2024.
Yuki Iwamura | Bloomberg | Getty Images
Citadel CEO Ken Griffin warned against the high tariffs that newly elected President Donald Trump promised to implement, saying crony capitalism could be a consequence.
“I am deeply concerned that the increase in rates puts us on a slippery slope toward crony capitalism,” the billionaire investor said Thursday at the Economic Club of New York.
The Citadel founder said domestic companies could benefit in the short term from their competitors being taken away. In the longer term, however, it does more harm to American business and the economy as companies lose competitiveness and productivity, he said.
Crony capitalism is an economic system characterized by close, mutually beneficial relationships between business leaders and government officials.
“Those same companies that enjoy that temporary sugar rush of removing their competitors from the battlefield quickly become complacent, quickly take their newfound economic superiority for granted, and, frankly, become less competitive on the global stage as well as less competitive in meeting to the needs. of the American consumer,” Griffin said at the event.
Trump made universal tariffs a core tenet of his economic campaign pitch, imposing a 20% tariff on all imports from all countries, with a specifically harsh 60% tariff on Chinese goods.
Protectionist trade policies could make goods more expensive to produce and raise consumer prices just as the world recovers from pandemic-era inflation spikes.
“Now you’ll find the halls of Washington truly filled with special interest groups and lobbyists as people look for ever higher tariffs to keep foreign competition away and to protect inefficient American companies that have failed to meet needs to comply. of the American consumer,” said Griffin.
At the same event, Griffin also said he is not looking at taking Citadel Securities public in the near future. Citadel is a market maker founded by Griffin in 2002.
“We’re focused on building the company, on investing in our future. And we believe there are benefits to being private during this period of very, very rapid growth,” he said.