synopsis

He said that businesses would no longer feel comfortable relying on China for a large portion of their supply chain.

Hedge fund manager Bill Ackman has suggested China might not have the upper hand in the trade war with the U.S. even in the long term.

The billionaire ally of President Donald Trump said in a post on X that China can't emerge victorious from the ongoing tariff dispute, as businesses operating in China will likely look to relocate to other countries, including India, Vietnam, and the U.S.

"Some have suggested that because China takes a very long-term view, China can 'win' a trade war with the U.S., which, according to the conventional view, is a much shorter-term player than China," he wrote.

"Time is the friend of the U.S. and the enemy of China in this negotiation."

While most other countries have been negotiating with the U.S. to lower the tariff rates imposed on their goods, China has responded with its own tariffs on American goods.

Some analysts have said that China may be banking on its economy and other markets to negate the impacts of the trade war.

Last week, Trump said the two countries are discussing a trade deal, but China has denied it.

"The only thing stopping the reduction in tariffs to a more sensible level is the fear on the part of both countries' leadership of looking weak," Ackman said.

He added that it was "common sense" to mutually lower tariffs to more reasonable levels as soon as possible.

Ackman, the founder of Pershing Square Capital Management, said businesses would no longer feel comfortable relying on China for a large portion of their supply chain.

The billionaire also suggested that China's best hope is to sign a deal that provides permanent commitments addressing intellectual property theft, forced technology transfer, market access restrictions, tariffs, and other barriers to doing business in China.

Ackman said he expects to see a pause in tariffs and the beginning of trade negotiations soon.

Potential trade deals with other countries and Trump's softer tone on Federal Reserve Chair Jerome Powell helped the U.S. markets gain last week. 

The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, and the SPDR S&P 500 ETF Trust (SPY) were up marginally in extended trading on Friday. At the same time, iShares MSCI China ETF (MCHI) was up 0.2%.

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