“We have to be Mexican”: BlackRock CEO Presses Trade Case, Warns on Stock Prices

CEOs concerned that the U.S. has turned its back on free trade have a friend in Larry Fink, who’s continuing to push the case for globalization in Washington, while warning of the potentially grave consequences of protectionism.

The BlackRock CEO sits on Donald Trump’s 18-member economic advisory council, which had an opportunity to air any grievances last Friday. And he doesn’t appear to be pulling any punches.

Speaking at a conference yesterday, the head of the world’s biggest fund manager criticized Trump’s approach to Mexico, while noting that BlackRock has offices there and in dozens of other foreign countries.

“For our business to succeeded in Mexico, we have to be Mexican,” Fink told the conference, organized by Yahoo Finance.

U.S. relations with Mexico City hit an all-time low last month when President Enrique Peña cancelled a meeting with Trump over his border wall plan. Trump also has threatened to slap large tariffs on Mexican imports and blunt the North American Free Trade Agreement with Mexico and Canada.

Fink said he was convinced that Trump isn’t categorically opposed to globalization, though he’d still like to see the policy pendulum swing back from protectionism.

“I think the president does want to have a strong relationship with our neighbors,” he said. “But it’s hard to have great relationships when you take things away.”

Broader CEO enthusiasm for Trump’s plans on taxes and regulation have helped drive stock markets to record highs, though Fink said any reduction in U.S. taxes might not happen until at least 2018. Trade disruptions could bite in the meantime.

“I see a lot of dark shadows. The markets are probably ahead of themselves,” Fink said. “We’re living in a bipolar world right now. In my conversations with CEOs in Europe and the United States they may be very bullish about what may come, but most business people are not investing today.”

As recently reported by Chief Executive, a growing number of large investors are warning of stock market over-exuberance amid uncertainty over when and how Trump’s policies will take shape.