May 5, 2025 • 16 mins
Pershing Square Capital Founder & CEO Bill Ackman was named executive chair of the Howard Hughes board. He speaks with Bloomberg's Sonali Basak at the Milken Conference.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. I am sending by
now with Bill Ackman. Of course he's the CEO of
Pershing Square, but also the new executive chair of Howard
Hughes came in this morning with a nine hundred million
dollar deal. Of course, that brings your stake to more
than a billion dollars when you include all of your
(00:24):
affiliates as well. Why you've said you're going to turn
this into a diversified holding company. You said, this is
the intent to create a modern day Berkshire Hathaway.
Speaker 2 (00:34):
How do you plan to make that happen?
Speaker 3 (00:35):
Sure, Actually, our steak in the company is much larger.
We talk about a billion two. That's a nine hundred
million dollar investment that's being made by Ryan israel I CIO,
myself and other Persian Square team members. And on top
of that, our funds own a substantial stake in the company.
So we're on a look through basis well on a
billion two. And our plan is to take this great company,
(00:57):
which has been a real estate development company over its
fourteen year history, and transform it into a diverse fight
holding company.
Speaker 2 (01:05):
That's the business plan.
Speaker 3 (01:05):
We're going to do that by buying great, really high quality,
durable growth companies.
Speaker 1 (01:10):
Now it's interesting to the extent that you want this
to be kind of the next Berkshire Hathaway. You know,
we had some amazing news over the weekend here, historic
really for Berkshire. Buffet's stepping down as the CEO. Have
you any had any plans to reach out to Buffett
himself to figure out how to do this?
Speaker 3 (01:26):
So, first of all, I don't want to say we
want to be the next Berkshire Hathway. Warren Buffet's been
an incredible sort of hero for me. I've learned an
enormous amount watching the creation of Berkshire Hathway over my career,
and he's an aspiration. But you know, how are used
will be something different. We're starting out differently. You know,
(01:47):
Buffett started out with a business with not particularly attractive
long term prospects that he acknowledged. In our case, we're
starting out with a business that has very attractive long
term prospects. It's a wonderful business, but it's not a
business that I would say Wall Street is assigned to
real value to. But it's a very valuable platform. It's
a business is going to generate an enormous amount of
cash over many decades. And what we're going to do
(02:09):
is we're going to take the nine hundred million and
then over time, when and.
Speaker 2 (02:13):
If excess cash it gets.
Speaker 3 (02:17):
Is created at the real estate subsidiary, then we'll have
even more flexibility to use that cash over time. And
we've got a good track record investing in the highest
quality growth companies in the world. We're going to do
that on a much smaller scale as a controlling shareholder
at Howard Hughes.
Speaker 1 (02:31):
Now you've mentioned also that insurance might be part of
the future in a bigger way for this company. How
do you plan to expand on that insurance arm and
to the extent that you would be willing to do
M and A what would that entail?
Speaker 2 (02:42):
Sure?
Speaker 3 (02:43):
So, obviously a Berkshire has had the benefitbuff it's an
amazing investor. But the enhancement to his selection of great
companies and securities is that he's financed that not just
with equity, but very low cost leverage in the form
of insurance flow. That's something obviously that you learn when
you follow Berkshire Hathaway, and interestingly, you know most other
(03:06):
insurance companies are standalone public companies. Here, you have an
insurance company that's a major part of a diverse right
holding company, and that's given Buffet and Berkshire significant advantages
in terms of increasing the flexibility of how that float
can be invested. So that's a model that we're going
to pursue. We're going to likely pursue it by recruiting
a great CEO and a team and building a company
(03:30):
maybe from scratch, maybe from a very small scale.
Speaker 2 (03:34):
You know, that's you know, sort of part of the
you know, the business plan.
Speaker 1 (03:37):
Now, one big question I'm sure a lot of investors
have for you is how are you going to ensure
that the Howard Hughes business doesn't compete with Pershing Square,
both in terms of investments as well as your time.
Speaker 3 (03:47):
Sure, So, Pershing Square strategy, the strategy of the Pershing
Square funds is to buy minority stakes in large cap
and megacap companies, in great businesses in some cases that
have lost their way, and we can be helpful in
making them more successful, or in great businesses that for
whatever reason the market is not assigning a proper value
or people responding to news unrelated to the business, and those.
Speaker 2 (04:11):
Stocks get cheap.
Speaker 3 (04:12):
But it's a minority investment strategy in very large companies.
Speaker 2 (04:16):
Howard Hughes.
Speaker 3 (04:17):
We're going to use Howard Hughes to acquire controlling interests
one hundred percent interests in private companies, maybe some small
cap public companies much smaller scale and controlling interest Now,
what about.
Speaker 1 (04:31):
The rest of Pershing Square as well? A lot of
people still have a lot of questions. Do you plan
to still raise money for a closed end fund?
Speaker 3 (04:38):
Sure SEC doesn't like to tell us to talk about
potential future offerings, so I have to defer on that one.
Speaker 1 (04:43):
So what about for Pershing Square overall? What's the long
term plan? There has been an IPO floated around, but
do you still see yourself getting there? And over what
kind of timeline?
Speaker 3 (04:54):
So the long term plan for Persing Square is to
build is one to deliver great returns for our investors
and our shareholders and the shareholder of Howard Hughes, and
of course that benefits Pershing Square, the person Square funds
because we have a major investment already in Howard Hughes
that we look forward to making more valuable. So that's
kind of our laser focus. I do want to make
(05:15):
Pershing Square an entity that survives. We manage permanent capital,
so it's important that the manager that oversees that permanent
capital becomes a perpetuity. And while Buffett is ninety four
and still incredibly active, you know, if I want to
compete with that track record over time, it's important that
we set up an entity that can survive of the
(05:37):
very long term. So I don't know exactly what form
that will take. We did sell them minority interest in
Pershing Square to a group of investors last year, and
we set up an i boartive directors and we really
run Persian Square the management company today almost as if
it's a public company from a governance and other perspective.
Speaker 1 (05:57):
Now, I want to talk about your portfolio as well
here because with this new company you had mentioned small
and medium sized businesses. Of course, you're exposed to a
large swath of the American economy through Perching Square.
Speaker 2 (06:09):
Already.
Speaker 1 (06:10):
How are the tariffs impacting you today and how do
you think that impact will last six months, twelve months
from now?
Speaker 3 (06:17):
Sure, So, first we own We try to own businesses
where no matter what's going on in the world, what
we call extrinsic factors, we can't control whether those some
commodity prices are tariffs excuse me, or a pandemic interest
rate volatility, don't have a material effect on the business.
So we look for what we call durable growth companies.
And these are the kind of businesses we're going to
try to find. For Howard Hughes, they're very much insulated
(06:41):
from things macro. Obviously they do better. Every business does
better in a positive growth environment, does worse in a
weakening growth environment. But our companies today, other than Nike,
I would say, have really not been directly affected by tariffs.
Although market prices move up and down based on uncertainty.
Speaker 2 (07:00):
Does that not bother you?
Speaker 3 (07:01):
Though? No, it doesn't bother me. Look, the President has
an objective here, right. It's critically important for the United
States strategically and defensively for us to know source certain
key products in the United States, have them be manufactured here,
whether those of pharmaceutical ingredients or stuff we need to
defend the country, to build weapons, AI anything AI related semiconductors,
(07:25):
and so creating the incentive for those important high value
manufacturing and other activities happening here.
Speaker 2 (07:31):
I think it's critically important.
Speaker 3 (07:33):
You know, for eighty years you know, beginning after World
War Two, the United States, you know, helped save the
world and then help save the world economically and allowed
for trade barriers.
Speaker 2 (07:43):
To be built up over time.
Speaker 3 (07:45):
That's allowed Asia, excuse me, countries in Asia Europe to
marshall plant etcetera, to recover, and then over time those
tariff barriers have remained even as those countries have become
very aggressive competitors the United States. Think the Japanese auto
industry and how it is really dominated US auto industry
(08:07):
over time, and it's time for those trade barriers to
come down. And the President is using tariffs in a
tactical way to address those trade barriers, which are not
just tariffs, but there are other things that make it
difficult for US goods. The other issue is trying to
address is balance of trade. Right, we still have balance
of trade issue. Buffett actually talks about this long term
as a problem and he wants to incentivize companies to
(08:30):
do business in the United States.
Speaker 2 (08:33):
Now.
Speaker 3 (08:33):
The way he goes about things, as we've seen from
the President, is a bit of a I would call
it shock and awe, which tends to scare people, but
ultimately he's.
Speaker 2 (08:41):
A deal maker.
Speaker 3 (08:41):
He likes to make deals, and I expect, you know,
he did the right thing in pausing tariffs reciprocal tariffs
for ninety days, and I think that gives time to
negotiate with our eighteen largest countries. And I think the
next step probably should be, I call it one hundred
and eighty day pause, take down the China tariffs. That
will give US businesses that are actually under pressure. There
(09:03):
are a lot of businesses unlike the ones we own,
that are tariff of one hundred and forty five percent
on goods they sourced from China. Can decimate the businesses,
particularly small businesses that don't have the wherewithal to manage
through this period of time. So I think we want
to be economically our strongest when we're negotiating, and the president,
you know, pausing tariffs f one hundred and eighty days
(09:24):
on China sets up a very interesting dynamic where, you know,
puts US really in driver's e Give me one second,
I want to it's an important point. So right now,
because of the announcement, every business that sources in China's,
every US company, et cetera, is relocating their supply chains
out of China. That's not going to change even if
(09:44):
the tariffs go from one hundred and forty five percent
down to ten or down to twenty percent. So once
we pause, China is under enormous pressure to make China
a good place to do business, to eliminate these kind
of trade barriers, and I think at enabling a very
successful negotiation.
Speaker 1 (10:01):
So you were among the first to advocate for that
ninety day pause. Did you talk to anybody in the
Trump administration or the President himself?
Speaker 2 (10:09):
And are you in talks with him about.
Speaker 1 (10:11):
This one hundred and eighty day pause? So you post
about that online as well, so you are getting more
vocal about this idea kind of happened.
Speaker 3 (10:18):
I think it can certainly happened. And you know, I
heard Scott Bessett was here yesterday. He seemed very constructive
on where negotiations are headed.
Speaker 2 (10:28):
So we shall see.
Speaker 1 (10:30):
But more specifically, is he receptive to your idea?
Speaker 3 (10:33):
You know, I don't think it's a good idea for
me to discuss relationships or conversations I have with people
on the administration.
Speaker 1 (10:39):
Well, fair enough, do you think that there could be
exemptions made? You mentioned small businesses. This is a part
of the economy that is getting hard hit. You've said
it yourself. How is this a main street strategy If
small businesses are getting hit harder than the larger one.
Speaker 3 (10:54):
Sometimes you have to have some short term pain to
get a much better long term outlook. But I think
the President has made his points clear, and I do
think it's important to kind of, you know, pause the
China terriffs. That will take the pressure immediately off of
kind of the smaller businesses. And you know it's not
just affecting small but no, by the way, there are
(11:14):
some positive effects from the China terriffs, which you know
a number of US manufacturers, many are doing very well
because of course people are looking to source product in
this country. To the extent something's made in China before
and there's someone you can source from in America, you're
banging down the door to do.
Speaker 2 (11:32):
Business with them here.
Speaker 3 (11:33):
So there is a big boost to a meaningful number
of small, medium size, and large businesses that manufacture in
the US. But there is a negative effect on companies
that don't have that flexibility or the nimbleness to move
their supply chains quickly.
Speaker 2 (11:48):
That's what I'd like to see avoided.
Speaker 1 (11:50):
Do you think that this can be done while avoiding
a recession. Do you think that a recession is a
foregone conclusion.
Speaker 2 (11:56):
At this point, I don't.
Speaker 3 (11:57):
I think I don't think of recessions foregone conclusion, and
I think there are real reasons for optimism. I just
don't want this turbulent period to carry on too long.
I'd like to see deals get announced and progress made,
and then I think people can start looking beyond the
immediate sixty or ninety days.
Speaker 1 (12:16):
You mentioned that even after that sixty ninety, one hundred
and eighty days that tariffs will.
Speaker 2 (12:21):
Still be higher.
Speaker 3 (12:22):
I don't know what the ultimate outcome is, and it's
not just tariffs. You got to look at the overall
effect of the various trade barriers coming down right there.
There are countries with low terroiffs but still have enormous
barriers to US goods in their markets, and so it
could absolutely be a lot of reasons for optimism about
the economy. So one, you know the tax bill yesterday,
(12:46):
the treasure Secretary said it could be signed in July fourth.
That's a very pro growth initiative. Really, the deregulation process
could be very pro growth for the country. Inflation has
really come down meaningfully energy prices, gas prices, egg prices. Right,
that's a very positive thing, uh, you know, for you know,
(13:08):
for our economy.
Speaker 2 (13:10):
And for the consumer.
Speaker 3 (13:11):
I think the only thing that we suffer from right
now of substance economically is the inherent uncertainty about the
terriff situation. I think the sooner that's resolved, the more
that the economy can can move forward it. And there's
also reasons for optimism kind of geopolitically, you know. I
think it's likely will uh you know, we'll have I
think the Ukraine Russia war can get resolved this calendar year,
(13:33):
and hopefully sooner rattan later. I think the Middle East
can be the temperature can come way down once we
resolve by negotiation or otherwise, the Iranian situation. So I'm
an optimist, and I've always been an optimist about our country.
Speaker 1 (13:47):
So before I let you go, also, I want to
have you weigh in on what's happening between Harvard and
the Trump administration as well, because this morning you would
call it for the resignation of Penny Pritzker from Harvard's board.
Now have you talked to her, her or any of
the other board members, So.
Speaker 3 (14:02):
I spoke to her, you know, very early on, in
the midst of the events after on campus, after October seventh.
They've only spoken to her once. And by the way,
I don't know. Well, I'm sure she's a lovely person,
but at some point you have to accountability for what's
gone on at Harvard, and I've not seen any accountability
at the governance level.
Speaker 2 (14:21):
You know.
Speaker 3 (14:21):
The notion that she's still sharing the Harvard board and
leading the charge here, I think is a big negative.
And I think they've mismanaged the relationship with the administration
in a way that's enormously economically costly to Harvard and
funding at Harvard. And you need a new face at
the top of the just even to make a deal right.
(14:41):
And again, I go to the corporate Harvard's the oldest
corporation in America.
Speaker 2 (14:46):
Go to any other corporation.
Speaker 3 (14:47):
If they managed the last you know, eighteen months the
way that they managed, there would be a new there
would be a new chair, and there would be a
new CEO in place. The new CEO is there, but
he's more interim. But they've done nothing in terms of
accountability at the board level.
Speaker 1 (15:02):
Has the ship sailed for Harvard in terms of a
potential negotiation with the administration.
Speaker 3 (15:07):
No, and I would love to be helpful there. You know,
I care enormously about the institution. I want Harvard to succeed.
I think the president has a number of very key
issues that are critical. It's not just the issue of
antisemitism and Prohomas issues on campus. He makes some very
good points about bureaucratic waste at the institution.
Speaker 2 (15:26):
You know, I.
Speaker 3 (15:26):
Believe that if taxpayers are funding a private institution like Harvard,
and particularly one that has a massive endowment, the university
is a fiduciary for those funds. And if they're wasting
money on overhead and bureaucracy that really is interfering or
certainly not enhancing education, they should do something about it.
Speaker 2 (15:46):
Harvard should. Education is about being.
Speaker 3 (15:47):
Exposed to diverse views, and if you know, university, as
I've said, becomes a political advocacy organization, you know, query
whether it should be getting taxpayer support.
Speaker 1 (15:57):
Well, we thank you so much for joining us here,
and said that has been Ackman, who of course is
the CEO of Persian Square as well as the new
executive chair of Howard Hugh's fresh off of a deal
just this morning,
Bloomberg Audio Studios, podcasts, radio news. I am sending by
now with Bill Ackman. Of course he's the CEO of
Pershing Square, but also the new executive chair of Howard
Hughes came in this morning with a nine hundred million
dollar deal. Of course, that brings your stake to more
than a billion dollars when you include all of your
(00:24):
affiliates as well. Why you've said you're going to turn
this into a diversified holding company. You said, this is
the intent to create a modern day Berkshire Hathaway.
Speaker 2 (00:34):
How do you plan to make that happen?
Speaker 3 (00:35):
Sure, Actually, our steak in the company is much larger.
We talk about a billion two. That's a nine hundred
million dollar investment that's being made by Ryan israel I CIO,
myself and other Persian Square team members. And on top
of that, our funds own a substantial stake in the company.
So we're on a look through basis well on a
billion two. And our plan is to take this great company,
(00:57):
which has been a real estate development company over its
fourteen year history, and transform it into a diverse fight
holding company.
Speaker 2 (01:05):
That's the business plan.
Speaker 3 (01:05):
We're going to do that by buying great, really high quality,
durable growth companies.
Speaker 1 (01:10):
Now it's interesting to the extent that you want this
to be kind of the next Berkshire Hathaway. You know,
we had some amazing news over the weekend here, historic
really for Berkshire. Buffet's stepping down as the CEO. Have
you any had any plans to reach out to Buffett
himself to figure out how to do this?
Speaker 3 (01:26):
So, first of all, I don't want to say we
want to be the next Berkshire Hathway. Warren Buffet's been
an incredible sort of hero for me. I've learned an
enormous amount watching the creation of Berkshire Hathway over my career,
and he's an aspiration. But you know, how are used
will be something different. We're starting out differently. You know,
(01:47):
Buffett started out with a business with not particularly attractive
long term prospects that he acknowledged. In our case, we're
starting out with a business that has very attractive long
term prospects. It's a wonderful business, but it's not a
business that I would say Wall Street is assigned to
real value to. But it's a very valuable platform. It's
a business is going to generate an enormous amount of
cash over many decades. And what we're going to do
(02:09):
is we're going to take the nine hundred million and
then over time, when and.
Speaker 2 (02:13):
If excess cash it gets.
Speaker 3 (02:17):
Is created at the real estate subsidiary, then we'll have
even more flexibility to use that cash over time. And
we've got a good track record investing in the highest
quality growth companies in the world. We're going to do
that on a much smaller scale as a controlling shareholder
at Howard Hughes.
Speaker 1 (02:31):
Now you've mentioned also that insurance might be part of
the future in a bigger way for this company. How
do you plan to expand on that insurance arm and
to the extent that you would be willing to do
M and A what would that entail?
Speaker 2 (02:42):
Sure?
Speaker 3 (02:43):
So, obviously a Berkshire has had the benefitbuff it's an
amazing investor. But the enhancement to his selection of great
companies and securities is that he's financed that not just
with equity, but very low cost leverage in the form
of insurance flow. That's something obviously that you learn when
you follow Berkshire Hathaway, and interestingly, you know most other
(03:06):
insurance companies are standalone public companies. Here, you have an
insurance company that's a major part of a diverse right
holding company, and that's given Buffet and Berkshire significant advantages
in terms of increasing the flexibility of how that float
can be invested. So that's a model that we're going
to pursue. We're going to likely pursue it by recruiting
a great CEO and a team and building a company
(03:30):
maybe from scratch, maybe from a very small scale.
Speaker 2 (03:34):
You know, that's you know, sort of part of the
you know, the business plan.
Speaker 1 (03:37):
Now, one big question I'm sure a lot of investors
have for you is how are you going to ensure
that the Howard Hughes business doesn't compete with Pershing Square,
both in terms of investments as well as your time.
Speaker 3 (03:47):
Sure, So, Pershing Square strategy, the strategy of the Pershing
Square funds is to buy minority stakes in large cap
and megacap companies, in great businesses in some cases that
have lost their way, and we can be helpful in
making them more successful, or in great businesses that for
whatever reason the market is not assigning a proper value
or people responding to news unrelated to the business, and those.
Speaker 2 (04:11):
Stocks get cheap.
Speaker 3 (04:12):
But it's a minority investment strategy in very large companies.
Speaker 2 (04:16):
Howard Hughes.
Speaker 3 (04:17):
We're going to use Howard Hughes to acquire controlling interests
one hundred percent interests in private companies, maybe some small
cap public companies much smaller scale and controlling interest Now,
what about.
Speaker 1 (04:31):
The rest of Pershing Square as well? A lot of
people still have a lot of questions. Do you plan
to still raise money for a closed end fund?
Speaker 3 (04:38):
Sure SEC doesn't like to tell us to talk about
potential future offerings, so I have to defer on that one.
Speaker 1 (04:43):
So what about for Pershing Square overall? What's the long
term plan? There has been an IPO floated around, but
do you still see yourself getting there? And over what
kind of timeline?
Speaker 3 (04:54):
So the long term plan for Persing Square is to
build is one to deliver great returns for our investors
and our shareholders and the shareholder of Howard Hughes, and
of course that benefits Pershing Square, the person Square funds
because we have a major investment already in Howard Hughes
that we look forward to making more valuable. So that's
kind of our laser focus. I do want to make
(05:15):
Pershing Square an entity that survives. We manage permanent capital,
so it's important that the manager that oversees that permanent
capital becomes a perpetuity. And while Buffett is ninety four
and still incredibly active, you know, if I want to
compete with that track record over time, it's important that
we set up an entity that can survive of the
(05:37):
very long term. So I don't know exactly what form
that will take. We did sell them minority interest in
Pershing Square to a group of investors last year, and
we set up an i boartive directors and we really
run Persian Square the management company today almost as if
it's a public company from a governance and other perspective.
Speaker 1 (05:57):
Now, I want to talk about your portfolio as well
here because with this new company you had mentioned small
and medium sized businesses. Of course, you're exposed to a
large swath of the American economy through Perching Square.
Speaker 2 (06:09):
Already.
Speaker 1 (06:10):
How are the tariffs impacting you today and how do
you think that impact will last six months, twelve months
from now?
Speaker 3 (06:17):
Sure, So, first we own We try to own businesses
where no matter what's going on in the world, what
we call extrinsic factors, we can't control whether those some
commodity prices are tariffs excuse me, or a pandemic interest
rate volatility, don't have a material effect on the business.
So we look for what we call durable growth companies.
And these are the kind of businesses we're going to
try to find. For Howard Hughes, they're very much insulated
(06:41):
from things macro. Obviously they do better. Every business does
better in a positive growth environment, does worse in a
weakening growth environment. But our companies today, other than Nike,
I would say, have really not been directly affected by tariffs.
Although market prices move up and down based on uncertainty.
Speaker 2 (07:00):
Does that not bother you?
Speaker 3 (07:01):
Though? No, it doesn't bother me. Look, the President has
an objective here, right. It's critically important for the United
States strategically and defensively for us to know source certain
key products in the United States, have them be manufactured here,
whether those of pharmaceutical ingredients or stuff we need to
defend the country, to build weapons, AI anything AI related semiconductors,
(07:25):
and so creating the incentive for those important high value
manufacturing and other activities happening here.
Speaker 2 (07:31):
I think it's critically important.
Speaker 3 (07:33):
You know, for eighty years you know, beginning after World
War Two, the United States, you know, helped save the
world and then help save the world economically and allowed
for trade barriers.
Speaker 2 (07:43):
To be built up over time.
Speaker 3 (07:45):
That's allowed Asia, excuse me, countries in Asia Europe to
marshall plant etcetera, to recover, and then over time those
tariff barriers have remained even as those countries have become
very aggressive competitors the United States. Think the Japanese auto
industry and how it is really dominated US auto industry
(08:07):
over time, and it's time for those trade barriers to
come down. And the President is using tariffs in a
tactical way to address those trade barriers, which are not
just tariffs, but there are other things that make it
difficult for US goods. The other issue is trying to
address is balance of trade. Right, we still have balance
of trade issue. Buffett actually talks about this long term
as a problem and he wants to incentivize companies to
(08:30):
do business in the United States.
Speaker 2 (08:33):
Now.
Speaker 3 (08:33):
The way he goes about things, as we've seen from
the President, is a bit of a I would call
it shock and awe, which tends to scare people, but
ultimately he's.
Speaker 2 (08:41):
A deal maker.
Speaker 3 (08:41):
He likes to make deals, and I expect, you know,
he did the right thing in pausing tariffs reciprocal tariffs
for ninety days, and I think that gives time to
negotiate with our eighteen largest countries. And I think the
next step probably should be, I call it one hundred
and eighty day pause, take down the China tariffs. That
will give US businesses that are actually under pressure. There
(09:03):
are a lot of businesses unlike the ones we own,
that are tariff of one hundred and forty five percent
on goods they sourced from China. Can decimate the businesses,
particularly small businesses that don't have the wherewithal to manage
through this period of time. So I think we want
to be economically our strongest when we're negotiating, and the president,
you know, pausing tariffs f one hundred and eighty days
(09:24):
on China sets up a very interesting dynamic where, you know,
puts US really in driver's e Give me one second,
I want to it's an important point. So right now,
because of the announcement, every business that sources in China's,
every US company, et cetera, is relocating their supply chains
out of China. That's not going to change even if
(09:44):
the tariffs go from one hundred and forty five percent
down to ten or down to twenty percent. So once
we pause, China is under enormous pressure to make China
a good place to do business, to eliminate these kind
of trade barriers, and I think at enabling a very
successful negotiation.
Speaker 1 (10:01):
So you were among the first to advocate for that
ninety day pause. Did you talk to anybody in the
Trump administration or the President himself?
Speaker 2 (10:09):
And are you in talks with him about.
Speaker 1 (10:11):
This one hundred and eighty day pause? So you post
about that online as well, so you are getting more
vocal about this idea kind of happened.
Speaker 3 (10:18):
I think it can certainly happened. And you know, I
heard Scott Bessett was here yesterday. He seemed very constructive
on where negotiations are headed.
Speaker 2 (10:28):
So we shall see.
Speaker 1 (10:30):
But more specifically, is he receptive to your idea?
Speaker 3 (10:33):
You know, I don't think it's a good idea for
me to discuss relationships or conversations I have with people
on the administration.
Speaker 1 (10:39):
Well, fair enough, do you think that there could be
exemptions made? You mentioned small businesses. This is a part
of the economy that is getting hard hit. You've said
it yourself. How is this a main street strategy If
small businesses are getting hit harder than the larger one.
Speaker 3 (10:54):
Sometimes you have to have some short term pain to
get a much better long term outlook. But I think
the President has made his points clear, and I do
think it's important to kind of, you know, pause the
China terriffs. That will take the pressure immediately off of
kind of the smaller businesses. And you know it's not
just affecting small but no, by the way, there are
(11:14):
some positive effects from the China terriffs, which you know
a number of US manufacturers, many are doing very well
because of course people are looking to source product in
this country. To the extent something's made in China before
and there's someone you can source from in America, you're
banging down the door to do.
Speaker 2 (11:32):
Business with them here.
Speaker 3 (11:33):
So there is a big boost to a meaningful number
of small, medium size, and large businesses that manufacture in
the US. But there is a negative effect on companies
that don't have that flexibility or the nimbleness to move
their supply chains quickly.
Speaker 2 (11:48):
That's what I'd like to see avoided.
Speaker 1 (11:50):
Do you think that this can be done while avoiding
a recession. Do you think that a recession is a
foregone conclusion.
Speaker 2 (11:56):
At this point, I don't.
Speaker 3 (11:57):
I think I don't think of recessions foregone conclusion, and
I think there are real reasons for optimism. I just
don't want this turbulent period to carry on too long.
I'd like to see deals get announced and progress made,
and then I think people can start looking beyond the
immediate sixty or ninety days.
Speaker 1 (12:16):
You mentioned that even after that sixty ninety, one hundred
and eighty days that tariffs will.
Speaker 2 (12:21):
Still be higher.
Speaker 3 (12:22):
I don't know what the ultimate outcome is, and it's
not just tariffs. You got to look at the overall
effect of the various trade barriers coming down right there.
There are countries with low terroiffs but still have enormous
barriers to US goods in their markets, and so it
could absolutely be a lot of reasons for optimism about
the economy. So one, you know the tax bill yesterday,
(12:46):
the treasure Secretary said it could be signed in July fourth.
That's a very pro growth initiative. Really, the deregulation process
could be very pro growth for the country. Inflation has
really come down meaningfully energy prices, gas prices, egg prices. Right,
that's a very positive thing, uh, you know, for you know,
(13:08):
for our economy.
Speaker 2 (13:10):
And for the consumer.
Speaker 3 (13:11):
I think the only thing that we suffer from right
now of substance economically is the inherent uncertainty about the
terriff situation. I think the sooner that's resolved, the more
that the economy can can move forward it. And there's
also reasons for optimism kind of geopolitically, you know. I
think it's likely will uh you know, we'll have I
think the Ukraine Russia war can get resolved this calendar year,
(13:33):
and hopefully sooner rattan later. I think the Middle East
can be the temperature can come way down once we
resolve by negotiation or otherwise, the Iranian situation. So I'm
an optimist, and I've always been an optimist about our country.
Speaker 1 (13:47):
So before I let you go, also, I want to
have you weigh in on what's happening between Harvard and
the Trump administration as well, because this morning you would
call it for the resignation of Penny Pritzker from Harvard's board.
Now have you talked to her, her or any of
the other board members, So.
Speaker 3 (14:02):
I spoke to her, you know, very early on, in
the midst of the events after on campus, after October seventh.
They've only spoken to her once. And by the way,
I don't know. Well, I'm sure she's a lovely person,
but at some point you have to accountability for what's
gone on at Harvard, and I've not seen any accountability
at the governance level.
Speaker 2 (14:21):
You know.
Speaker 3 (14:21):
The notion that she's still sharing the Harvard board and
leading the charge here, I think is a big negative.
And I think they've mismanaged the relationship with the administration
in a way that's enormously economically costly to Harvard and
funding at Harvard. And you need a new face at
the top of the just even to make a deal right.
(14:41):
And again, I go to the corporate Harvard's the oldest
corporation in America.
Speaker 2 (14:46):
Go to any other corporation.
Speaker 3 (14:47):
If they managed the last you know, eighteen months the
way that they managed, there would be a new there
would be a new chair, and there would be a
new CEO in place. The new CEO is there, but
he's more interim. But they've done nothing in terms of
accountability at the board level.
Speaker 1 (15:02):
Has the ship sailed for Harvard in terms of a
potential negotiation with the administration.
Speaker 3 (15:07):
No, and I would love to be helpful there. You know,
I care enormously about the institution. I want Harvard to succeed.
I think the president has a number of very key
issues that are critical. It's not just the issue of
antisemitism and Prohomas issues on campus. He makes some very
good points about bureaucratic waste at the institution.
Speaker 2 (15:26):
You know, I.
Speaker 3 (15:26):
Believe that if taxpayers are funding a private institution like Harvard,
and particularly one that has a massive endowment, the university
is a fiduciary for those funds. And if they're wasting
money on overhead and bureaucracy that really is interfering or
certainly not enhancing education, they should do something about it.
Speaker 2 (15:46):
Harvard should. Education is about being.
Speaker 3 (15:47):
Exposed to diverse views, and if you know, university, as
I've said, becomes a political advocacy organization, you know, query
whether it should be getting taxpayer support.
Speaker 1 (15:57):
Well, we thank you so much for joining us here,
and said that has been Ackman, who of course is
the CEO of Persian Square as well as the new
executive chair of Howard Hugh's fresh off of a deal
just this morning,
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