During an event at the Economic Club of New York, Citadel CEO Ken Griffin expressed his concerns about the potential consequences of steep tariffs proposed by President-elect Donald Trump, warning against the rise of crony capitalism.

Griffin emphasized the short-term benefits domestic companies may experience from tariffs, such as eliminating competitors. However, he cautioned that in the long run, tariffs could harm corporate America and the economy by reducing competitiveness and productivity.

He defined crony capitalism as an economic system characterized by close relationships between business leaders and government officials for mutual advantage.

Griffin stated, “Those companies that initially benefit from the removal of competitors may become complacent, less competitive on a global scale, and ultimately fail to meet the needs of American consumers.”

Trump’s proposed universal tariffs, including a 20% levy on all imports and a 60% rate on Chinese goods, could increase production costs and consumer prices, particularly as the world emerges from pandemic-induced inflation.

Griffin predicted that higher tariffs would lead to increased lobbying in Washington to protect inefficient American businesses, further distancing them from consumer needs.

Addressing speculation about taking Citadel Securities public, Griffin stated that the company’s focus is on growth and investment, with the benefits of remaining private during a period of rapid expansion.

“We believe there are advantages to maintaining our private status as we continue to build and invest in our future,” Griffin explained.