Donald Trump's 25% Tariff Plan: 'Only Tough Measures Will Level the Playing Field' – Kevin O'Leary Explains the Strategy

President Donald Trump has never been shy about his love for tariffs – he once called them "the most beautiful word in the dictionary." While experts debate their effectiveness, "Shark Tank" star Kevin O'Leary sees them as necessary tools for resetting trade relations, particularly with China.

"China’s a completely different issue compared to Canada or any other country. Since they joined the World Trade Organization, they've broken the rules with every country, including the U.S.," O'Leary said in a recent interview with Fox Business.

He didn't hold back on his frustrations, especially regarding his own business experiences. "I do business there, and my companies have been absolutely screwed. I’ve said it countless times. They don’t play fair, and there's no reciprocity in our trade relationship."

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Because of this, O'Leary believes in taking a hard line. He argued that the only way to pressure Chinese President Xi Jinping is to hit China's economy where it hurts – by targeting industries that employ large numbers of people.

"The only way to put [Xi] at risk is to say, ‘Look, if you want to mess with the biggest economy you trade with, we're going to force a lot of people in your cities – who make things like yoga mats or electronics – out of jobs.

They'll be rioting in the streets, they won't have food, and you'll be out of power.' That's the only way it's going to work – so you need very selective, high-impact tariffs, and you have to be hard core," he explained.

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Trump has already proposed hitting Mexico and Canada with 25% tariffs on his first day in office and a 10% tariff on Chinese goods.

O'Leary believes this approach is necessary to level the playing field, saying, "[Xi] only understands the stick. That's it. Any sign of weakness, and he exploits it – he's been doing it for years. I'm hoping this administration finally fixes the problem. I've been hurt by China, and so have millions of other American businesses."

But tariffs aren't a simple fix. While they can protect U.S. industries by making imports more expensive, they also raise consumer prices. 

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A 2019 study from economists at the Federal Reserve Bank of New York, Princeton University and Columbia University found that "the tariff revenue the U.S. is now collecting is insufficient to compensate for the losses borne by the consumers of imports." 

Tariffs can also trigger retaliation, leading to trade wars that disrupt supply chains. In an interview with Business Insider, Ian Sheldon, a professor at Ohio State University, pointed out that "we're already in a trade dispute with Mexico over genetically modified corn. 

It seems counterproductive to potentially exacerbate trade relations with one of our largest trading partners."

Despite the uncertainty, many business leaders remain optimistic. During The New York Times DealBook Summit, Amazon founder Jeff Bezos said, “We are the luckiest country in the world. We have all these natural resources, including energy independence. We have the best risk capital system in the world, by far.”

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