Investor Kevin O’Leary said markets have adjusted to President Donald Trump’s tariff strategy but warned that elevated energy prices and the Middle East crisis continue to weigh on inflation and the global economy.
O’Leary Warns High Energy Prices
On Sunday, O’Leary said markets want stable policy and have learned the pattern of Trump’s tariff negotiations.
"When it comes to tariffs, we now know the cadence of how Trump negotiates," he said.
He described the process as "punitive tariffs until the other side comes to the table," followed by a "reciprocal tariff baseline" as negotiations progress.
O’Leary said the approach is also playing out in U.S.-China trade negotiations.
However, he said tariffs have not resolved the pressure from elevated energy prices.
"What it didn’t resolve which is causing some angst and inflation numbers to stay higher in the domestic market, is we need gas prices down," O’Leary said.
He argued that the Middle East situation is affecting countries beyond the U.S.
"These energy prices are killing Japan, China, India, and dozens of other countries," he said.
O’Leary added that countries benefiting from secure energy routes should share the cost of maintaining them.
"I would argue that at the end of the day, they should bear some of the burden of whatever it’s gonna take to police this strait in the long run," he said.
Gas Prices Rise
On Sunday, AAA’s latest data showed the national average for regular gasoline at about $4.4768 per gallon.
The national average for regular gasoline rose nearly 5 cents from the previous week to $4.48 per gallon, the highest level ever recorded for this time of year.
Volatility in the Strait of Hormuz and elevated crude oil prices continued to push pump prices higher. September’s average was $4.30 per gallon, putting the month on track to surpass the previous September record of $3.83 set in 2023.
The iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO) closed at $133.70 on Friday, down 0.96%, according to Yahoo Finance.
US-China Agree On Tariff Cut
On Friday, Trump and Chinese President Xi Jinping agreed to more favorable tariff treatment for $30 billion of non-sensitive goods in each direction and established a bilateral dialogue on advanced AI.
Xi said the countries shared responsibility for keeping AI "under human control," while Trump favored DOJ oversight and said the U.S. would refer to emerging technologies as "Super Intelligence."
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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