Crony capitalism could result from Trump's tariffs, according to Ken Griffin of Citadel.

• The billionaire investor expressed concern that the increase in tariffs could lead to a dangerous path towards crony capitalism, stating this on Thursday at the Economic Club of New York.
• The founder of The Citadel believes that domestic businesses may experience a temporary advantage if their rivals are eliminated.
• In the long run, it can harm both corporate America and the economy as companies lose competitiveness and productivity.

Ken Griffin, CEO of Citadel, cautioned against the steep tariffs promised by President-elect Trump, warning that crony capitalism could result.

The billionaire investor expressed concern that the increase in tariffs could lead to a dangerous path towards crony capitalism, stating this on Thursday at the Economic Club of New York.

The Citadel founder believes that while domestic companies may experience a temporary advantage from their competitors being eliminated, in the long run, this harms corporate America and the economy as companies lose competitiveness and productivity.

Government officials and business leaders have reciprocal, beneficial relationships in the economic system known as crony capitalism.

Griffin stated at the event that the companies that experience a brief surge of success after eliminating their competitors often become complacent, overlook their newfound economic advantage, and ultimately become less competitive globally and in meeting the needs of American consumers.

Trump's economic campaign pitch included universal tariffs, with a proposed 20% levy on all imports from all countries, and a particularly harsh 60% rate for Chinese goods.

The trade policy could increase production costs and lead to higher consumer prices, as the world recovers from inflation caused by the pandemic.

Griffin stated that the halls of Washington are brimming with special interest groups and lobbyists, as individuals search for increased tariffs to safeguard American businesses and keep out foreign competition, despite the inefficiencies of these businesses failing to meet the demands of American consumers.

Griffin stated at the same event that he does not plan to take Citadel Securities public in the near future. Citadel Securities was founded by Griffin in 2002.

"Our focus is on developing the business and investing in our growth future. We believe that being private during this period of rapid expansion has its advantages," he stated.