BlackRock’s CEO, Larry Fink, recently expressed concern over the growing trend of protectionism worldwide, noting that it poses threats to global trade and economic stability. In his annual letter to investors, he pointed out how many nations currently experience a split economic scenario: one part where wealth continues to accumulate and another where hardships compound. This divide, according to Fink, has begun to influence political landscapes, policy-making, and even people’s perceptions of what is achievable. He emphasized that protectionist measures have made a strong comeback.
Fink released his insights just before then-President Donald Trump announced reciprocal tariffs targeting imports from various countries. The U.S. had already implemented punitive tariffs on aluminum, steel, and automobiles, alongside increasing all tariffs on Chinese goods. While Trump argued that these tariffs were essential to protect the U.S. against unfair competition, the move stirred concerns in financial markets about a potential trade war and the looming threat of an economic slowdown or recession.
“I hear from almost every client and leader I meet — nearly everyone expresses increased anxiety about the economy, more than I’ve sensed in recent times. I understand why,” Fink remarked. “But remember, we’ve encountered similar moments of uncertainty before. Over time, we manage to navigate through them.”
Fink believes that the current economic climate is fueling rapid growth in private markets, particularly in infrastructure and private credit sectors. As the world’s largest asset manager, BlackRock, which manages over $11 trillion, took significant steps last year to enhance its presence in private credit and alternative investments. In December, the company acquired HPS Investment Partners for $12 billion in stock, marking a strategic move into private credit. Additionally, they purchased Global Infrastructure Partners, a major infrastructure investment firm, for $12.5 billion.
“Governments are reaching a point where funding infrastructure through deficits isn’t feasible. Deficits can’t keep rising indefinitely. Thus, they’ll increasingly rely on private investors,” Fink explained. “Similarly, companies will begin to look beyond banks for credit, due to tightening bank lending. Instead, they’ll turn to the markets.”
