Investor and podcast host Steve Eisman said that while the tariffs imposed by President Donald Trump could weigh on the economy in the near term, they could set the stage for a U.S. industrial resurgence.

‘A Big Positive’ In The Long Run

Speaking on the tariffs and their impact on the U.S. economy during an interview on the New Money podcast early this week, Eisman acknowledged that Trump’s trade policy is “a slight negative because of the tariffs,” but only in the short-term.

However, the investor sees a compelling upside if tariffs are paired with the right incentives. “I think potentially it’s a big positive because I think a lot of factories will come home,” he said, pointing to recently enacted tax provisions that allow companies to fully write off the cost of building U.S.-based manufacturing facilities.

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“If you build a factory in the United States, you get to write 100% off,” he said, noting that it’s “a lot of money,” and something that could spur industrial reshoring in the country.

Still, he warned that the success of these policies hinges on avoiding further escalation with China. “At the end of the day, there can’t be a trade war with China. If there’s a trade war with China, all bets are off.”

Trump’s Trade Push ‘Very Honorable’

The investor made famous by the 2015 movie, ‘The Big Short,’ had praised Trump a few months ago, calling his trade and tariff regime as being both justified and long overdue.

“I think what President Trump is trying to do, just as a general rule, is very honorable,” he said, while acknowledging that the whole process was “messy.”

He did, however, warn that the trade war was the one thing that could “derail” the strong economic momentum the U.S. was experiencing. “The underlying fundamentals of the United States economy are quite strong,” he said, referring to the 3% growth in GDP during the second quarter, while warning against further escalations in the trade war.

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