Steve Eisman, the investor who called and profited from the subprime mortgage crisis, said Tuesday President Donald Trump’s tariffs against various countries could result in a global trade war and economic downturn, it’s just impossible to handicap. “If there’s a trade war, chances are we go into a global recession,” Eisman said on CNBC’s ” Squawk Box .” “It reminds me a little bit about all the books I’ve read in life about World War I. Nobody wanted World War I, and yet, because of all the reciprocal treaties that existed between countries, they somehow ended up there. I don’t think anybody wants a trade war, but it’s certainly possible.” Trump upended the global trading system and launched the U.S. toward greater protectionism during the early days of his second term. His 90-day pause on “reciprocal” tariffs is still in effect, with Japan and the EU looking to strike a deal before the July 9 deadline, when higher trade duties — currently lowered to 10% by Trump in the interim to allow deals to be negotiated — could return with a vengeance. Canada was hit with a 25% tariff on autos and 50% duty on steel and aluminum imports . For China, Trump said a deal between the world’s two largest economies is “done” with China supplying rare earths up front to the U.S. as part of a trade agreement. ‘The Real Eisman Playbook’ podcast host and former Neuberger Berman senior portfolio manager said it’s extremely hard to predict how these high-stakes negotiations would unfold. “The negotiations of trade are incredibly complicated, with incredible special interests involved. It’s complex. It takes time. Anything could happen. I just don’t know how to handicap it all,” Eisman said. The widely followed investor said he would be bullish on the U.S. markets and economy if a trade war is avoided. “If there’s no trade war, I’m very positive in the US economy long term, and I’m would be very positive on the markets,” he said.
