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The use of tariffs by President Donald Trump as part of a political agenda is a potential drag on the markets, according to David Solomon, CEO of Goldman Sachs.
"The problem is that the president is using tariffs as a broader program," Solomon said in an interview with CNBC at the Recode Code Conference in Scottsdale, Arizona. "may have an impact on the market activity".
The Wall Street CEO agreed with the president that there were "very important" fundamental disagreements between the United States and China. But Solomon said he would prefer a "more focused approach" to solving big business problems.
"I agree with the president that we need to rebalance," Solomon said. "The question is how will this happen and over what period of time, I think we can make progress on narrow trade issues."
Nevertheless, the managing director of Goldman said that "the uncertainty" and the "dislocation" that come with tariffs and that a trade war is "harmful to risky badets". But he also said that it weighed on the economy.
"I am not a big supporter of the economic cost of tariffs and I think there is a real economic cost to the US economy and to consumers," said Solomon.
On May 30, the president warned Mexico that it would apply a 5% tariff on all Mexican goods if they took no action to prevent undocumented immigrants from crossing the border. On Friday, the president canceled tariffs in Mexico and said that the United States and Mexico had agreed on some concessions relating to immigration.
The tariffs on China are still in force. In May, the president raised duties on Chinese goods worth $ 200 billion and threatened to levy taxes on an additional $ 300 billion, which effectively includes the rest of Chinese imports to the United States . Trump told CNBC on Monday that he would be placing additional tariffs on Chinese products if Xi did not attend the G-20 meeting later this month.
WATCH: CNBC full interview with David Solomon, CEO of Goldman Sachs
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