‘The Mooch’ says Trump will have to cut China tariffs below 10pc

The Australian Financial Review
James Thomson
May 19, 2025

Anthony Scaramucci, the Wall Street investor who famously served for 11 days as White House press secretary in Donald Trump’s first administration, says the US has no choice but to reduce tariffs on China to below 10 per cent, and is likely to face further credit ratings downgrades as its budget crisis rolls on.

Scaramucci, who is best known as The Mooch, is the first big-name global investor to be confirmed for the Sohn Hearts & Minds conference in Sydney in November. He also says Trump appears to be getting bored with the trade war he started just six weeks ago, and will start to focus on how much money he can personally extract from his presidency.

Anthony Scaramucci says America has no choice but to lower tariffs on China further.  Jaclyn Licht

“The guy’s f---ed up. His worst instincts are to take the money,” Scaramucci told The Australian Financial Review from his New York office.

Scaramucci, who runs alternative asset manager SkyBridge Capital and manages a New York Stock Exchange-listed cryptocurrency ETF, has become a strident critic of Trump since his infamous stint as White House communications director back in 2017.

But he maintains close ties with many of Trump’s closest confidantes, including his sons Eric Trump and Donald Trump jnr; in August, Scaramucci will appear at a crypto conference with Trump’s sons.

“They like me. I like them. The fact that I think their father is nuts is no big deal. There’s an expression in New York that there’s a red party and there’s a blue party in America, but there’s also a green party,” he said, brandishing a bunch of $US100 bills at his web camera with a grin.

Scaramucci said that while China ultimately needed an end to the trade embargo with the US, it was Trump who backed down last week when the US announced it would reduce tariffs on Chinese imports from 145 per cent to 30 per cent. He predicted the Trump administration would end up settling for much lower tariffs.

People in Los Angeles shop at a party supply store, where the majority of items are imported from China. Tariffs of 30 per cent “are a recession here”, says Scaramucci.  AP

“He’s now down to 30 per cent, and you know that’s going below 10 per cent. It has to, because 30 per cent is a recession here,” Scaramucci said. “There’ll be a massive capitulation over the next 60 to 90 days. They call it TACO over here – Trump Always Chickens Out.”

Scaramucci said Trump was happy to hand control of the trade negotiations to Treasury Secretary Scott Bessent because the former hedge fund manager had the trust of Wall Street.

But he pointed to arguments that Bessent has previously made against tariffs as proof the treasury secretary and other senior officials are in thrall to Trump and the power they have as part of the administration.

“These guys have Potomac fever. So what is Potomac fever? I want to be on Air Force One. I want to walk into the White House. I want to feel the connection to power and also think I’m smarter than everybody else. I’m going to go to Washington, and I’m going to change Washington. But very few people, including Donald Trump, change Washington.

“One of the big symptoms of Potomac fever is that you don’t know you have Potomac fever. I didn’t know I had it. But I had it, you know?”

Scaramucci said Trump and Bessent’s famous three-legged policy stool – use a combination of tariffs, tax cuts and deregulation to reduce the US budget deficit and get the US economy booming – was more “like one of those auto trolleys that you use to go underneath the car. You know, it’s got wheels on it, and it spins around directionlessly”.

The removal of America’s last AAA credit rating by Moody’s on Friday night was more evidence of how little the market believes in the plan, he said.

“I’m surprised [the downgrade] didn’t happen five years ago and in the next five years there will be further downgrades.”

Scaramucci will be a star attraction at the 10th edition of the Sohn Hearts & Minds conference, which will be held at the Sydney Opera House on November 14. The event, which was founded by Matthew Grounds, Gary Weiss and Guy Fowler, has raised $78 million for medical research over the past decade, which is about a third of the $US150 million ($233 million) that the broader Sohn network of conferences has raised over its 30-year history.

Weiss attended the Sohn New York conference last week to accept an award recognising the Australian event’s contribution.

Hearts and Minds Investments Limited, the listed investment company established to allow Australian investors to trade the stock picks presented at the Australian Sohn conference each year, has also announced a leadership change, with former Challenger boss Richard Howes to replace Brett Jollie as chief executive.

Howes said he was excited to keep growing the annual conference, but will also be focused on closing the discount between the value of the net tangible assets in the Hearts & Minds LIC and its share price.

“I think people think of Hearts & Minds largely in terms of its philanthropic success, but as an investment vehicle, which is very much connected to the conference, it is very innovative and very unique.”

This article was originally posted by The Australian Financial Review here.

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