Investor Steve Eisman says we are headed for a global recession if Trump's tariffs spark a trade war

Steve Eisman, the investor who called and profited from the subprime mortgage crisis, said Tuesday President Donald Trump's tariffs against various countries could result in a global trade war and economic downturn, it's just impossible to handicap. "If there's a trade war, chances are we go into a global recession," Eisman said on CNBC's " Squawk Box ." "It reminds me a little bit about all the books I've read in life about World War I. Nobody wanted World War I, and yet, because of all the reciprocal treaties that existed between countries, they somehow ended up there. I don't think anybody wants a trade war, but it's certainly possible." Trump upended the global trading system and launched the U.S. toward greater protectionism during the early days of his second term. His 90-day pause on "reciprocal" tariffs is still in effect, with Japan and the EU looking to strike a deal before the July 9 deadline, when higher trade duties — currently lowered to 10% by Trump in the interim to allow deals to be negotiated — could return with a vengeance. Canada was hit with a 25% tariff on autos and 50% duty on steel and aluminum imports . For China, Trump said a deal between the world's two largest economies is "done" with China supplying rare earths up front to the U.S. as part of a trade agreement. 'The Real Eisman Playbook' podcast host and former Neuberger Berman senior portfolio manager said it's extremely hard to predict how these high-stakes negotiations would unfold. "The negotiations of trade are incredibly complicated, with incredible special interests involved. It's complex. It takes time. Anything could happen. I just don't know how to handicap it all," Eisman said. The widely followed investor said he would be bullish on the U.S. markets and economy if a trade war is avoided. "If there's no trade war, I'm very positive in the US economy long term, and I'm would be very positive on the markets," he said.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Yahoo

27 minutes ago

• Yahoo

Europe Frets About US Retreating From Region Ahead of NATO

(Bloomberg) -- NATO's European allies are focused on getting through this week's summit unscathed. But even if President Donald Trump is satisfied with fresh pledges to ramp up spending, anxiety is growing about the US military presence in the region. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Only after the June 24-25 summit meeting in The Hague – where North Atlantic Treaty Organization members will pledge to spend 5% of GDP on defense – will the US present its military review, which will spell out the scope of what are likely significant reductions in Europe. With some 80,000 US troops in Europe, governments in the region have factored in at least a reversal of the military surge under former President Joe Biden of about 20,000 troops. The stakes got significantly higher overnight after US struck nuclear sites in Iran with the risk that Trump will get sucked into a spiraling conflict in the Middle East after being a vocal critic of US military involvement overseas. His foreign policy U-turn will be a topic that will be hard to avoid at the gathering, especially with NATO ally Turkey present and a key stakeholder in the region. Europeans have been kept in the dark on the Trump administration's plans. But officials in the region are bracing potentially for a far bigger withdrawal that could present a dangerous security risk, according to officials familiar with the discussions who declined to be identified as closed-door talks take place before the review. Up until early June, no official from the US had come to NATO to talk about the US force posture review, spurring concern among allies that this could be done at very short notice, according to a person familiar with the matter. It's unclear whether European nations have started planning to fill any potential gaps left by US forces. Withdrawing the aforementioned 20,000 troops could also have an even greater impact if other NATO allies follow the US lead and remove their troops from the east. The worry with even deeper cuts impacting US bases in Germany and Italy is they could encourage Russia to test NATO's Article 5 of collective defense with hybrid attacks across the alliance, the person familiar also said. Since returning to the White House, Trump and his allies have warned European capitals that – despite the mounting threat from Russia – they need to take charge of their security as the US turns its military and diplomatic focus to the Indo-Pacific region. Contacted by Bloomberg, NATO declined to respond to questions but referred to a statement by NATO Secretary General Mark Rutte in early June. When asked about a US drawdown from Europe, he said it was normal they would pivot to Asia. 'I'm not worried about that, but I'm absolutely convinced we will do that in a step-by-step approach,' Rutte said then. 'There will be no capability gaps in Europe because of this.' The White House referred questions to the Pentagon. 'The U.S. constantly evaluates force posture to ensure it aligns with America's strategic interests,' a defense official responded. The geopolitical shift is likely to have enormous consequences for the 32-member alliance, which is weathering its greatest challenge since it became the bulwark against Soviet power in the decades after World War II. European militaries long reliant on American hard power will have to fill the gap as Washington scales back. If a troop reduction focuses on efficiency, it would be far less problematic for Europeans than one that hits critical assets and personnel that Europe couldn't replace immediately, according to one European diplomat. The nature of a withdrawal would be more important than the troop numbers, the person said. A dramatic pullout announcement is likely to trigger an instant reaction from eastern member states, with those closer to Russia immediately requesting deployments from Western European allies. The holistic review of the US military, which Defense Secretary Pete Hegseth says should focus on threats facing the US, is meant to reflect the tilt in the global power dynamic, bringing potentially large-scale redeployment of weapons and troops. But European diplomats have bristled at the timing of the review, taking place only after NATO signs off on its most ambitious new weapons targets since the Cold War — with member states agreeing to foot the bill. A withdrawal that is more dramatic than anticipated will mean that, after acceding to Trump's ramp-up in defense spending, they still may be left with a heavy burden to respond to a rapidly growing Russian military. 'We would be remiss in not reviewing force posture everywhere, but it would be the wrong planning assumption to say, 'America is abandoning'' or leaving Europe, Hegseth said in Stuttgart in February. 'No, America is smart to observe, plan, prioritize and project power to deter conflict.' After the Trump administration balked at providing a backstop to European security guarantees to Ukraine, a pullout of more US troops could embolden Russia's Vladimir Putin, according to people familiar with the matter. 'The question is when pressure is on for a greater focus on the Indo-Pacific, what capabilities do they need to think about moving,' said Matthew Savill, director of military sciences at RUSI, a defense think tank. 'I don't get an impression that they have yet decided what that means for force levels in specific terms.' Germany, Europe's richest and most populous nation, is positioning itself to take on the largest share of the redistribution. Defense Minister Boris Pistorius is taking the lead in building out the military after the country scrapped constitutional debt restrictions when it comes to security. Berlin will do the 'heavy lifting,' he's said. Pistorius recently unveiled a new battle tank brigade in Lithuania and has said the country is committed to boosting its armed forces by as many as 60,000 soldiers. The military currently has about 182,000 active-duty troops. European governments are pushing Washington to communicate its plans clearly and space out any troop draw-downs to give them time to step up with their own forces. 'There are some capabilities, like deep precision strikes, where we Europeans need some time to catch up,' said Stefan Schulz, a senior official in the German Defense Ministry. He called for any US reduction to be done in an orderly fashion, 'so that this process of US reduction is matched with the uplift of European capabilities.' The ideal scenario would be an orderly shift within NATO toward a stronger Europe that would take about a decade, said Camille Grand, distinguished policy fellow at the European Council on Foreign Relations and a former NATO assistant secretary general. A more dire scenario would involve a US administration acting out of frustration with European progress and drastically reducing troop presence. Grand said a 'plausible' scenario would be a cut to about 65,000 US troops, matching a low-point figure before Russia's annexation of Crimea in 2014 — a level that NATO could manage. 'But if we go below that, we are entering uncharted waters, a different world,' Grand said. --With assistance from Courtney McBride and Milda Seputyte. (Adds a graph of context referencing developments in the Middle East in fourth paragraph.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos

Washington Post

28 minutes ago

• Washington Post

Hundreds protest in The Hague against NATO, days before the Dutch city hosts alliance summit

THE HAGUE, Netherlands — Hundreds of people protested Sunday against NATO and military spending and against a possible conflict with Iran, two days before a summit of the alliance in The Hague that is seeking to increase allies' defense budgets. 'Let's invest in peace and sustainable energy,' Belgian politician Jos d'Haese told the crowd at a park not far from the summit venue. Although billed as a demonstration against NATO and the war in Gaza, protesters were joined by Iranians who held up banners saying 'No Iran War,' the day after the United States launched attacks against three of Iran's nuclear sites. 'We are opposed to war. People want to live a peaceful life,' said 74-year-old Hossein Hamadani, an Iranian who lives in the Netherlands. Look at the environment. 'Things are not good. So why do we spend money on war?' he added. The Netherlands is hosting the annual meeting of the 32-nation alliance starting Tuesday, with leaders scheduled to meet Wednesday. The heads of government want to hammer out an agreement on a hike in defense spending demanded by U.S. President Donald Trump. The deal appeared largely done last week, until Spain's Prime Minister Pedro Sánchez wrote to NATO Secretary General Mark Rutte that committing Madrid to spending 5% of its gross domestic product on defense 'would not only be unreasonable, but also counterproductive .' U.S. allies have ramped up defense spending since Russian President Vladimir Putin ordered a full-scale invasion of Ukraine more than three years ago, but almost a third of them still don't meet NATO's current target of at least 2% of their gross domestic product. The summit is being protected by the biggest ever Dutch security operation, code named 'Orange Shield,' involving thousands of police and military personnel, drones, no-fly zones and cybersecurity experts. ___ Associated Press writer Molly Quell in The Hague contributed.

Newsweek

29 minutes ago

• Newsweek

Before and After Images Show Impact of US Strikes on Iran Nuclear Site

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. New satellite imagery shows large craters and ash at Iran's Fordow nuclear facility following U.S. airstrikes that President Donald Trump said had "totally obliterated" Tehran's major nuclear sites. The Context Trump confirmed late on Saturday that the U.S. had carried out "massive precision strikes" to take out Tehran's nuclear enrichment facilities and damage its ability to make a nuclear weapon. Fordow nuclear site in central Iran on Friday, prior to U.S. strikes on the complex on Saturday afternoon U.S. time. Fordow nuclear site in central Iran on Friday, prior to U.S. strikes on the complex on Saturday afternoon U.S. time. Satellite image ©2025 Maxar Technologies A view of the exterior of Fordow, a major nuclear site in central Iran on Sunday, after U.S. strikes on the facility on Saturday evening U.S. time. A view of the exterior of Fordow, a major nuclear site in central Iran on Sunday, after U.S. strikes on the facility on Saturday evening U.S. time. Satellite image ©2025 Maxar Technologies What To Know The U.S. struck Fordow, roughly 60 miles south of Tehran, as well as the Natanz complex to the southeast and Isfahan, southwest of Natanz, Trump said. The president hailed the attacks as a "spectacular military success," adding: "Iran's key nuclear enrichment facilities have been completely and totally obliterated." Experts said it was too early to tell exactly how much damage has been done to Iran's network of nuclear sites. General Dan Caine, the chairman of the U.S. joint chiefs of staff, said on Sunday morning that initial assessments of the operation dubbed Midnight Hammer indicated "all three sites sustained extremely severe damage and destruction," but analysis was ongoing. Israel continued attacking Iran into Sunday, and Tehran launched fresh strikes on several Israeli cities. Satellite imagery published by space imagery firm Maxar on Sunday showed a number of large craters or holes at the top of the ridge, under which is the underground complex at Fordow. Ash from airstrikes covers much of the area, and several of the entrances to Fordow's tunnel network appear to be blocked with dirt, Maxar said. Images separately published by Planet Labs on Sunday also showed ash covering the area around Fordow. Fordow is built under a mountain, a facility that was secret until 2009 and Israel has been unable to destroy with its weapons. While Israel has carried out strikes on Iran's nuclear sites—including Natanz and Isfahan—since it started its campaign over a week ago, the U.S. is considered the only country able to reach the deeply buried sites like Fordow using B-2 bombers and "bunker buster" bombs. These huge bombs had never been used before in combat. A view of Fordow prior to U.S. airstrikes on the underground complex, taken on Thursday, June 19, 2025. A view of Fordow prior to U.S. airstrikes on the underground complex, taken on Thursday, June 19, 2025. Satellite image ©2025 Maxar Technologies Craters are visible and ash can be seen on the ridge at Fordow on Sunday, after U.S. strikes on the underground facility. Craters are visible and ash can be seen on the ridge at Fordow on Sunday, after U.S. strikes on the underground facility. Satellite image ©2025 Maxar Technologies Caine told the media on Sunday morning that the U.S. had used a total of 14 30,000-pound GBU-57/B bombs against two nuclear target areas in Iran. Reports had suggested at least one GBU-57/B was fired on Natanz. A U.S. submarine launched more than 2 dozen Tomahawk cruise missiles against the aboveground facilities at Isfahan around 5 p.m. ET on Saturday, just before U.S. aircraft entered Iranian airspace. Washington used deception tactics and a host of fourth- and fifth-generation aircraft traveling ahead of B-2 bombers to sweep for Iranian fighter jets and air defenses, Caine said. At 6:40 p.m. ET, the first B-2 dropped two "bunker buster" bombs at Fordow, the chairman said. The rest of the munitions were dropped in the following 25 minutes, and Iran did not fire any shots at U.S. aircraft traveling in or out of Iran, Caine added. Caine said full damage assessments were still pending, but that "all three sites sustained extremely severe damage and destruction." The U.S. "achieved destruction of capabilities" at Fordow, U.S. Defense Secretary Pete Hegseth said. What People Are Saying U.S. Defense Secretary Pete Hegseth, speaking alongside General Dan Caine on Sunday, said, "Iran's nuclear ambitions have been obliterated." What Happens Next Trump has threatened further strikes on Iran if Tehran does not negotiate a deal, while the country's foreign minister, Abbas Araghchi called the American attacks "outrageous," promising "everlasting consequences."