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Larry Fink: The new trade deals will be good, but potentially at great cost

Ethan Wolff-Mann
Senior Writer

The trade spats between the U.S., Mexico, Canada, and China may be riling businesses and consumers, who ultimately pay the prices of tariffs.

However, the new trade deals the U.S. will be getting are probably better, according to Blackrock (BLK) CEO Larry Fink, who spoke at Yahoo Finance’s All Market Summit event in New York on Thursday.

“In the short run, the United States is a big winner,” said Fink. “If you look at what is being proposed in Nafta in the short run, it looks like it’s beneficial for the United States. What is being negotiated with Canada, in the short run it looks good. All the actions with China in the short run, it’s good.”

“What I’m worried about is the long term,” he continued. “In the long run, does the U.S. behaviors impair the world vitality?”

Fink said that he’s been meeting with business and political leaders in Europe and Asia, who are concerned by the U.S.’s unilateralism.

“What I heard consistently: some of the behaviors of the United States are leading more non-U.S. companies to pivot more towards China,” Fink said. The biggest fear across the board, he found, was a worry that the U.S.’s behavior could eventually lead to another major currency replacing the dollar as the currency of choice.

In this June 8, 2018, file photo, President Donald Trump talks with Canadian Prime Minister Justin Trudeau during a G-7 Summit welcome ceremony in Charlevoix, Canada. (AP Photo/Evan Vucci)

The CEO of the world’s largest money manager explained that the foundations of finance of globalism have been multilateralism, and the long-term question is what happens if that goes away.

“Does it change relationships, does it change allies, does it change the course of how we resolve problems?” he mused.

Fink’s greatest fear in the long term, he said, is that “we don’t have the connections” that we have up until recently enjoyed in a multilateral, globalized world.

“The world is less economically safe,” he added. “We all felt secure that this multilateralism would stabilize the world and now that multilateralism is breaking down. Populism is rising, focusing on individual needs of a country. And those issues, could — not saying will — create more volatility and greater problems.”

Ethan Wolff-Mann is a senior writer at Yahoo Finance.

More from Yahoo Finance’s All Markets Summit:

White House economist: Tariffs are hurting China much more than the U.S.

Larry Fink: The market will be higher in 10 years