Shark Tank's Kevin O'Leary admits 400% tariffs on China would change the country's behavior even before implementation

During an October 17, 2024, CNN segment discussing former President Donald Trump's proposal for increased tariffs, Shark Tank investor and entrepreneur Kevin O'Leary responded by stating that a 400% tariff on Chinese goods would prompt immediate behavioral changes from China, even before enforcement.

Noting his business experience, O'Leary explained that Chinese manufacturers would react by shifting operations to other countries.

"A 400% tariff on the yoga mat will make it Vietnam or make it India or make it America," he said.

The Shark Tank investor maintained that an aggressive tariff policy could force China to adjust its trade practices without waiting for legal implementation.

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Shark Tank investor Kevin O'Leary says 400 percent tariffs on China would shift behavior before enforcement

O’Leary emphasizes tariffs as a method to shift supply chains

Kevin O'Leary underscored his direct experience dealing with Chinese manufacturers to support his position. He explained that tariffs are a tool that prompts companies to relocate manufacturing outside China. He said this would benefit American production and reduce reliance on Chinese goods.

The Shark Tank investor described this approach as a means to force diversification in sourcing, emphasizing that the U.S. would "not buy anything from China." He further illustrated the issue by referencing his experience with intellectual property:

"The Chinese deal monarchy. They make the same product with the molds and I pay for their shipment into this country under a different brand."

O'Leary claimed this was part of a broader pattern that affected his business operations and that the current system allowed Chinese companies to exploit American markets.

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Tariffs frrespond with 25%… 400% tariffs… AND shut down the markets, you’llamed as a response to a lack of reciprocity in trade

O'Leary highlighted the asymmetrical nature of U.S.-China trade policies. He described Chinese legal and market practices as restrictive compared to those in the U.S., pointing out his inability to pursue similar litigation in China. He said:

"The Supreme Leader of China said, no, we're going to use your court systems to litigate the American people. So that doesn't happen. I can't do that in China."

He also addressed the historical context, blaming prior U.S. administrations for leniency. His stance was that a 400% tariff would correct what he perceived as a long-standing imbalance in trade engagement. In defense of his position against criticism, O'Leary responded to economic studies on tariffs impacting American consumers:

"You know I love academic study. I'm doing real business in China. I'm actually doing business."

The Shark Tank investor framed the issue as a matter of practical competition and manufacturing sustainability.

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Consumer cost debate and disagreement with analysts

The discussion with Catherine Rampell, an economics analyst, focused on the economic consequences of such tariffs. Rampell countered that past tariffs had raised prices for U.S. consumers and companies.

"There have been many studies showing that US companies and consumers are the ones who bore the cost," she said.

In response, O'Leary emphasized that the main goal was to "restructure sourcing practices" rather than simply accept increased prices. He explained "the Chinese deal monarchy" and said he no longer wanted to continue relying on those systems. He viewed tariffs as a tool to "change behavior" within the supply chain.

When Rampell pointed out that the outcome would "still be more expensive," O'Leary disagreed, repeatedly saying "no" and rejecting the assumption that price hikes were unavoidable. He stated that "market adjustment" would naturally shift production to other regions outside China.

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