Billionaire entrepreneur Mark Cuban has expressed apprehension over the economic implications of President-elect Donald Trump‘s proposed tariffs.

What Happened: Cuban, a vocal supporter of Vice President Kamala Harris during the recent campaign, has been openly critical of Trump’s tariff strategy. He argues that the mere anticipation of these tariffs is already causing economic strain for American businesses and consumers.

In a discussion on Threads, Cuban pointed out that companies importing from China are currently stockpiling cash and goods in anticipation of increased demand due to the looming tariffs.

He contends that these resources could have been better utilized for business expansion, salary increases, bonuses, and other operational expenses.

"Right now every company that imports from China is taking all the cash they can muster, and buying up as much as they can and stuffing it in a warehouse, in anticipation of the tariffs creating accelerated demand for imports," he said in the post.

Also Read: Mark Cuban Denounces Trump’s ‘Garbage Can’ Comments: ‘Insulting To Every Single American’

Cuban also warned that these companies might hike their prices, as if the higher tariffs were already in place, due to the cost of storing inventory and the relative expense of cash.

Conversely, export companies are preparing for retaliatory tariffs and are encouraging their Chinese buyers to stock up. Although this may result in increased sales at present, it also compels these companies to rapidly purchase components, potentially inflating prices.

Cuban wrapped up his argument by expressing worry about the potential repercussions of retaliatory tariffs, including the possibility of Chinese companies being directed to stop purchasing from the U.S.

Why It Matters: While the impact of the proposed tariffs is yet to be fully realized, Cuban’s concerns highlight the potential economic fallout.

The anticipation of these tariffs is already causing shifts in business strategies, with companies hoarding cash and goods, and potentially increasing prices.

This could have a ripple effect on the economy, affecting everything from business expansion to consumer prices. Furthermore, the potential for retaliatory tariffs from China adds another layer of uncertainty for American businesses.

Read Next

Mark Cuban Drunkenly Bought A $125,000 Lifetime Flight Pass And Turned It Into A Profitable Investment

This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Image: Shutterstock