Trump’s tariffs could fuel US factory growth, says ‘The Big Short’ investor Steve Eisman: ‘It’s a big positive’ in the long term

Investor and podcast host Steve Eisman said while the tariffs imposed by the president Donald Trump could weigh on the economy in the short term, they could pave the way for an industrial revival in the US.

‘A big positive’ in the long term

Speaking about the tariffs and their impact on the US economy during an interview on the New Money podcast early this week, Eisman acknowledged that Trump’s trade policy is “a slight negative because of the tariffs,” but only in the short term.

However, the investor sees a compelling benefit if tariffs are paired with the right incentives. “I think this is potentially a big positive because I think a lot of factories are going to come home,” he said, pointing to recently introduced tax provisions that allow companies to fully write off the costs of building U.S.-based manufacturing facilities.

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“If you build a factory in the United States, you can depreciate it 100%,” he said, noting that it is “a lot of money” and something that could spur industrial reshoring in the country.

Still, he warned that the success of this policy depends on preventing further escalation with China. “Ultimately, there can’t be a trade war with China. If there is a trade war with China, all bets are off.”

Trump’s trade push ‘very honorable’

The investor made famous by the 2015 film “The Big Short” had praised Trump a few months ago, calling his trade and tariff regime both justified and long overdue.

“I think what President Trump is trying to do, as a general rule, is very honorable,” he said, while acknowledging that the entire process was “messy.”

However, he did warn that the trade war was the only thing that could “derail” the strong economic momentum the US was experiencing. “The underlying fundamentals of the US economy are quite strong,” he said, pointing to 3% GDP growth in the second quarter as he warned of further escalations in the trade war.

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