Trump ally Kevin O’Leary calls for 400% tariffs to “drag Xi to Washington”

Canadian businessman and television personality Kevin O’Leary made headlines this week after advocating for the United States to impose a sweeping 400% tariff on Chinese imports. During a CNN panel discussion, O’Leary argued that the recently introduced 104% tariffs announced by US President Donald Trump were not strong enough to force meaningful negotiation from Beijing. The outspoken investor, known for his role on “Shark Tank,” made an aggressive pitch for Washington to escalate its economic pressure, saying that only drastic action could level the global playing field.

O’Leary’s comments came amid escalating economic tensions between the US and China. Trump’s move to impose 104% tariffs followed China’s announcement of 84% retaliatory duties on all US imports, set to take effect from April 10. As tit-for-tat tariffs intensify, the business community and policymakers are once again confronting questions about the long-term impact of aggressive trade barriers and the tools available to address persistent issues in the US-China relationship.

Why does Kevin O’Leary believe the US needs 400% tariffs on China?

Kevin O’Leary’s rationale centers on the belief that moderate tariffs have failed to shift China’s behavior over decades of trade engagement. Citing allegations of intellectual property theft and the Chinese government’s track record of flouting international trade agreements, he described the current 104% tariffs as “not enough.” He argued that only extreme economic measures—such as a 400% tariff on imports from China—would compel Chinese President Xi Jinping to come to Washington for direct talks.

O’Leary claimed the United States has tolerated economic abuse for too long and insisted that prior administrations, along with European governments, lacked the resolve to challenge China’s unfair practices. The US, he added, is still the world’s largest economy and accounts for roughly a quarter of global GDP, but that dominance cannot be taken for granted. According to O’Leary, this window of leverage must be used decisively to correct systemic imbalances before the opportunity vanishes.

Framing his remarks as a voice for “millions of Americans,” O’Leary argued that domestic companies have seen their intellectual property siphoned off, with Chinese firms replicating US technologies, manufacturing products cheaply, and exporting them back into the American market undercutting original creators. He called out China’s alleged failure to adhere to World Trade Organization rules despite being a member and declared that more forceful US trade policy was long overdue.

What’s the history behind US-China trade disputes and tariffs?

US-China trade tensions have been a feature of the global economic landscape for decades, but they escalated sharply during Donald Trump‘s first presidential term. In 2018, the Trump administration initiated a series of tariffs targeting $250 billion in Chinese goods, prompting immediate retaliatory tariffs from Beijing. This trade war highlighted structural problems in the bilateral relationship—chief among them being accusations of state-sponsored technology theft, forced intellectual property transfer, industrial subsidies, and closed markets.

Trump’s tariff strategy, while controversial, was praised in some quarters for confronting issues that had long frustrated American businesses. The subsequent “Phase One” trade deal in January 2020 committed China to increased US agricultural purchases and reforms on IP protection, but enforcement mechanisms remained ambiguous. Since then, the Biden administration retained many Trump-era tariffs but shifted toward multilateral cooperation and strategic decoupling in key sectors like semiconductors and green tech.

Now, with Trump signaling a return to aggressive trade tactics in his second term, and Beijing responding with sweeping new duties and blacklist designations for US firms, the specter of renewed trade warfare has returned. O’Leary’s remarks reflect a broader view among protectionist voices that only unprecedented tariff hikes will compel compliance from a state-backed Chinese economic model that, in their view, thrives on asymmetric openness.

How would 400% tariffs affect the US economy and global trade?

A 400% tariff on Chinese goods would represent one of the most dramatic trade actions in modern US history. The immediate impact would likely be a surge in import prices, passing significant cost increases on to American consumers and businesses. Industries with complex supply chains, such as electronics, automotive components, medical equipment, and textiles, rely heavily on Chinese imports and could see their margins squeezed, or be forced to pivot to costlier suppliers in other countries.

While O’Leary argues that this pain is a necessary short-term cost to restore balance and domestic manufacturing, economists warn of potential inflationary effects and retaliatory risks. China remains a top export destination for US goods such as agricultural products, aircraft, and industrial machinery. Beijing’s own tariffs and non-tariff barriers—like blacklisting firms or restricting rare earth exports—could undermine American industries dependent on global markets.

Furthermore, escalating tariffs risk further fragmentation of the global trading system. Since 2018, global supply chains have already started to diversify, with manufacturers exploring Vietnam, Mexico, and India as alternative bases. A 400% US tariff could accelerate this trend but also destabilize trade flows in the short term, prompting global uncertainty, market volatility, and potentially triggering a worldwide slowdown if the US and China disengage too rapidly.

Is there any precedent for such high tariffs, and would they be legal?

Historically, tariffs at the level O’Leary proposed are extremely rare and would likely face immediate legal challenges under World Trade Organization rules and domestic trade law. The Smoot-Hawley Tariff Act of 1930 remains the most infamous example of high protectionist duties, widely blamed for exacerbating the Great Depression by sparking retaliatory tariffs from major trading partners. In recent history, the Trump administration invoked Section 301 of the Trade Act of 1974 to justify tariffs of up to 25%, arguing that China’s conduct warranted unilateral action in the absence of WTO enforcement.

To impose 400% tariffs, a US president would likely need to invoke emergency economic powers under the International Emergency Economic Powers Act (IEEPA) or pursue new congressional authorization. Even then, such duties would face pushback from trading partners and businesses. The WTO could rule such actions as non-compliant, leading to further challenges on the international stage, although recent US administrations have increasingly sidelined the WTO’s dispute settlement process.

What’s next for US-China trade policy amid this renewed tariff rhetoric?

As both Washington and Beijing escalate their trade defenses, the possibility of a full-fledged tariff war looms once again. China’s finance ministry has already signaled a hardening stance by announcing 84% tariffs on all American goods, effective April 10, and adding several US entities to its unreliable entity list, a step that could restrict their operations in China. These developments suggest a diminished appetite for compromise in the near term.

In this context, O’Leary’s call for a 400% tariff acts as a signal flare—both a warning and a test balloon. His framing resonates with voters and business owners who feel shortchanged by globalization, and aligns with the increasingly hawkish tone on trade from both Republican and Democratic leadership. While the feasibility of such an aggressive tariff policy remains questionable, the sentiment behind it reflects growing bipartisan impatience with China’s trade conduct and a willingness to pursue disruptive strategies to achieve leverage.

Ultimately, the idea of quadrupling tariffs underlines how deeply trade policy has become entangled with geopolitical rivalry. As the US seeks to safeguard its technological edge and economic influence, and China pushes forward with self-reliance strategies, the path to negotiation may become narrower. But absent meaningful engagement, the economic consequences of a hard decoupling could prove severe—not only for the two superpowers, but for the global economy at large.