Market Timing

[gfp927z]

The tariff effects are just beginning. Higher prices (inflation) combined with a slowing economy --> the dreaded Stagflation. Corporate profits squeezed, lower stock prices, and a likely global recession. As in the 1970's, Fed policy is boxed into a deadly quandary where lower rates to help the flagging economy will worsen inflation, and vice versa.

And the tariff 'upside' per Trump's team?

1) It brings in revenue to the US Govt. Yes, but this is dwarfed by the effects of the higher inflation and slowing economy. And the interest rates stay high, accelerating the national debt bomb. And as happened after Trump's 2016 tariff binge, the US has to give huge rebates to affected US industries to offset their tariff related losses.

2) It forces countries to build plants in the US to avoid the tariff. Yes, maybe. But the ongoing political instability in the US is a big red flag for companies wanting to build here, since US policies can change drastically every 4 years. And Trump's 'rule by decree' (whim) increasingly replaces the former rule of law.

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>>> Trump tariffs live updates: Buffett's Berkshire portfolio takes tariffs hit; Trump outlines sweeping new tariffs for dozens of trade partners


Yahoo Finance

August 2, 2025


https://finance.yahoo.com/news/live/trump-tariffs-live-updates-buffetts-berkshire-portfolio-takes-tariffs-hit-trump-outlines-sweeping-new-tariffs-for-dozens-of-trade-partners-200619859.html


It seems even the Oracle of Omaha isn't immune to the impact of President Trump's trade war.

Warren Buffett's Berkshire Hathaway said on Saturday that its consumer goods businesses took a hit from US tariffs, Reuters reported. Its consumer products group, which includes Fruit of the Loom and Brooks Sports, saw a 5.1% year-over-year revenue decline in the second quarter.

Berkshire blamed the tariffs for delays in orders and shipments.

In May, during Berkshire's annual meeting, Buffett strongly defended free trade. He said tarffs should not be used as a "weapon" adding "balanced trade is good for the world."

Meanwhile, President Trump outlined tariff rates on dozens of trade partners, taking a step toward further reshaping the US trade landscape.

Trump signed an order to hike tariffs on Canada to 35%, while he kept a baseline minimum rate of 10% across all partners. The tariffs on Canada went into effect Friday, while many of the other "reciprocal" rates take effect Aug. 7.

Global stocks fell Friday as Trump's imposed tariffs on dozens of countries, advancing his effort to reshape global trade.

Yahoo Finance's Ben Werschkul has more details on the latest orders here. You can see the new rates Trump is set to levy in the graphic below:

In the past several days, Trump has unleashed a flurry of deals and trade moves leading up to his self-imposed deadline:

Trump granted Mexico, the US's largest trading partner, a 90-day reprieve on higher tariffs, saying he would extend the country's current tariff rates to allow for more time for negotiations.

The US agreed to a trade deal South Korea. The agreement includes a 15% tariff rate on imports from the country, while the US will not be charged a tariff on its exports, Trump said.

Trump imposed 50% tariffs on semi-finished copper products starting Aug. 1, but he stopped short of applying the duties to copper scrap and input materials, sending copper (HG=F) futures plunging throughout the week.

The president signed an order to end the de minimis exemption on low-value imports under $800, thereby applying tariffs from Aug. 29.

Trump signed another order to impose a total of 50% tariffs on many goods from Brazil. However, it exempts key US imports like orange juice and aircraft parts that benefit Embraer (ERJ).

The US and EU agreed to a trade deal that imposes 15% tariffs on EU goods. The two sides still need to iron out several key issues.

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