"Hell to pay": Milken crowd hopes threat of GOP midterm wipeout will stop tariffs
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Illustration: Shoshana Gordon/Axios
The big buzzword on stage during this week's Milken Global Conference was "tariffs."
- In the private hotel suites and at $25,000 restaurant tables, it was "midterms."
The big picture: Some of the world's most influential economic leaders hoped President Trump might soften his aggressive tariffs if Republicans get a sense they could lose control in Washington over them.
- Their impression since Trump took office: the economic potholes tore open quickly.
- "Politicians can handle bad headlines and even bad markets, for a while, but there will be hell to pay if photos of empty Walmart shelves go viral," one investor said. "The only thing more powerful than loyalty to Trump is wanting to get reelected."
Behind the scenes: Almost every dealmaker and executive Axios spoke with bemoaned White House trade policy, at least in execution, arguing that it threatens the very golden age that Trump has promised.
- But they also believe that the midterm elections in 2026 will act as a bulwark.
- It wasn't about future policy changes were Democrats to regain control of Congress. But rather: the threat of Democrats regaining control, and the impact that will have on both the White House and GOP lawmakers.
State of play: Trump may back off his tariffs before pre-stocked inventories run out, particularly as talks with China now appear to be on the horizon. For the Milken crowd, that would be viewed as a win — no midterms needed.
- If Trump persists, the thinking is that heads will be forced to cool by Labor Day of 2025, not of 2026.
- "You can break the economy very quickly but everyone in D.C. knows that it takes a lot longer to turn things back around," another investor noted.
- Supply chains, cap-ex plans, dealmaking, and other parts of the economy would need time to ramp back up. Particularly given that many have stopped looking too closely at recent performance data, believing it to be anomalous.
The bottom line: America's business elites are banking, in some cases quite literally, on political fears. Or, to be more exact, on politicians' fears.
Editor's note: This story has been updated with additional context.
