Billionaire hedge fund manager Bill Ackman issued a sharp warning over President Donald Trump's escalating tariff strategy, calling the economic risk “severe.” In a series of posts on X, Ackman said Trump's latest tariff move could severely damage global investor confidence and push the U.S. economy toward a downturn.

The new tariff policy, signed last week, imposes a baseline 10% levy on all U.S. imports, targeting goods from more than 180 countries. China, in particular, is facing a cumulative 54% tariff on its exports to the U.S., while Beijing has responded with 34% duties on American goods.

Ackman emphasized that while there's broad support for reforming global tariffs, the administration's broad-based approach is undermining business trust. “Business is a confidence game,” he wrote, warning that simultaneous trade offensives could alienate both allies and rivals.

He called on the administration to pause for 90 days to negotiate fairer trade terms and rebuild economic confidence. Ackman cautioned that failure to do so could chill corporate investment and lead to widespread layoffs, especially among small- and mid-sized businesses. In a separate statement, Ackman criticized U.S. Commerce Secretary Howard Lutnick, alleging a conflict of interest tied to his firm's exposure to fixed income assets.

Markets reacted sharply last week. The S&P 500 (SP500) dropped more than 9%, marking its steepest weekly fall since early 2020. Index futures also slid further in early Monday trade, with declines of more than 4% across the S&P 500, Nasdaq 100 (IND), and Dow Jones Industrial Average (INDU).

It's important to note that the SPDR S&P 500 ETF (SPY, Financial), which tracks the performance of the S&P 500 Index, has underperformed its peers across key timeframes. Over the past month, the ETF has fallen more than 12%, outpacing broader ETF losses. Its six-month and one-year returns were also negative, reflecting continued pressure on large-cap U.S. equities.