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In recent days, Donald Trump escalated the trade war with China, then reversed himself, then reversed himself again — all as he heightened a spat with Fed Chair Jerome Powell. In a newly released interview, one tech venture capitalist said Trump’s leadership has begun to hurt American companies.
“Trump’s unpredictability and his way of negotiating is not good for business,” says John Borthwick, whose firm Betaworks has backed hundreds of companies including Twitter (TWTR) and Gimlet Media, since acquired by Spotify (SPOT).
Borthwick acknowledged that Trump has overseen strong economic performance, which has included record low unemployment and high corporate profits. But he questioned Trump’s role in producing the boom.
“I think the economic prosperity and the run, which we're on now, started way before him. And it will end at some point because cycles do,” Borthwick said.
Borthwick, who in the 1990s and 2000s worked on technology development at AOL and Time Warner, joins members of the business community who in recent months have criticized Trump for his negotiating tactics. On Wednesday, 200 footwear companies, including Adidas (ADDYY) and Foot Locker (FL), called on Trump to abandon a proposed tariff increase on Chinese goods.
The American Chamber of Commerce in China conducted a survey in May of almost 250 member companies that found about 75% of its members reported that the increase of U.S. and China tariffs have negatively affected their business.
Last week, Powell said it is difficult to assess the effect of trade headlines because there “are not recent precedents,” as Yahoo Finance reporter Brian Cheung reported.
Trump tweeted last Friday plans to slap an additional 5% tariff on $250 billion in goods already being taxed as well as on $300 billion worth of Chinese goods set to be taxed beginning in September. Two days after the tweet, he said he was having “second thoughts” about the escalation of trade tensions.
Borthwick made the remarks in June, before Trump’s most recent escalation of the trade dispute. But a similar pattern had unfolded a month before Borthwick spoke to Yahoo Finance, when Trump tweeted his intention to raise tariffs on $200 billion worth of Chinese goods, two days before a formal announcement.
The U.S. Trade Representative’s office on Wednesday confirmed that the Trump administration would move forward with the tariff increase on $300 billion worth of goods set to be taxed in September, but did not mention the proposed tariff increase on $250 billion in goods already being taxed.
‘He’s a product of the financial crash’
Borthwick made the comments to Yahoo Finance Editor-in-Chief Andy Serwer in a conversation that airs on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Though the economy has grown throughout the Trump presidency, Borthwick credited the Great Recession and its aftereffects for Trump’s rise.
“He's a product of the financial crash all the way through to the economic dislocation,” Borthwick says. “He's a product of that.”
Media coverage of Trump, along with his ability to capitalize on it, have elevated him, Borthwick said.
“He's also a product of the media system that we've created and that he's helped create,” Borthwick says.
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.