Shark Tank star Kevin O’Leary acknowledged that U.S. President Donald Trump’s tariffs are a headache and increase input costs, but said entrepreneurs have not only survived in similar environments but also thrived.
In a wide-ranging interview with Politico on Monday, he said entrepreneurs have endured trade wars, periods of sky-high interest rates and a housing collapse.
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“In fact, the best time to start a business, as evidenced by statistics, is in chaos,” O’Leary added. “Any time the American economy goes through some kind of correction is a fantastic time to be an entrepreneur and start something. And then you have to figure out how to adapt to that.”
According to the Census Bureau, business formation soared during the pandemic after falling shortly after the lockdown and has been volatile since then, with several large spikes and sharp declines.
In August, the number of business opening applications rose 0.5% from the previous month, continuing an upward trend that began earlier this year, despite a brief pullback that coincided with the launch of Trump’s tariffs, which triggered chaos in financial markets, with tax rates heading towards their highest levels in nearly a century.
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However, most of the recent gains have been concentrated in retail trade, while construction, administrative support, professional services, as well as transportation and warehousing have remained stable.
O’Leary added that the advent of AI has increased productivity and contributed to the stock market reaching record levels.
“Each of my companies uses it today, and it is very productive. It helps increase margins. It reduces costs in all sectors of the economy”, he explained.
For example, construction companies are using AI to help allocate capital and labor expenses. And while big companies like carmakers are being hit with higher costs, O’Leary said trade deals are being ironed out.
Agreements with the European Union, Japan and South Korea, for example, reduced car tariffs from 25% to 15%, at the same time that it was agreed with the countries to allocate hundreds of billions of dollars in investments in the USA.
In this environment, the key is to look beyond politics and focus on practices “so you can make radical investment decisions with minimal risk,” O’Leary argued.
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“If you look for the path of least resistance, you want to find great opportunities because of disruption,” he explained. “You’re going to want to find something that has been completely displaced and invest in it because of policy changes.”
Meanwhile, O’Leary also warned the Trump administration against its deal with Intel, against interfering with the Federal Reserve’s independence, and against the side effects of its H-1B visa policy on startups, which will have a harder time paying the proposed $100,000 fee than large companies.
O’Leary highlighted that there is a highly specialized talent pool that cannot be fully filled with domestic workers. And startups that hire AI engineers from abroad, for example, gain a competitive advantage amid the global race for talent.
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“I don’t think we want to take that away from American companies,” he said. “So I would adjust this H-1B requirement only for large corporations of some size that can afford it.”
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