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Tag: tarrifs

  • Warren Buffett Warns Against Tariffs, Calls Trump’s Trade Strategy a Risk to U.S. Interests

    Warren Buffett did not pull punches when dealing with the subject that took center stage at his company’s annual shareholder meeting: the U.S. trade policy under President Donald Trump. Speaking to a full house in Omaha, the 94-year-old investor expressed disapproval so strong it could be described as nearly the opposite of buffett-ing. He is no fan of using tariffs as a device of political persuasion. Our trade policies, he said, in effect using taxes and costs to try to force other nations to change their behavior, are a big mistake.

    He cautioned that agitating international friends and partners through combative trade actions is a grave blunder. In his view, the U.S. shouldn’t take a combative position with the world market, particularly when so many countries are peering closely at American behavior. Buffett worries that weaponizing economic nationalism does more to estrange than it does to bind.

    Global Trade: A Path to Shared Prosperity

    Buffett reiterated his dedication to economic teamwork. He expressed this in the context of the global trading system: the U.S. and world economy would be better off if the U.S. were to participate fully in international trade and commerce rather than attempt to wall itself off from would-be trading partners. His basic point: let the U.S. do what it does best, let others do what they do best, and then allow all of us, citizens of the globe, to participate in a peaceful prosperity.

    Contrasting with the recent trend of populist economic policy that advocates for less global economic engagement, Warren Buffett has called for more openness, as he believes that this contributes to global prosperity. He thinks that global prosperity makes for a far more secure world and that this has ample, well-understood economic rationale.

    Cash Reserves and Caution in the Market

    Even while critiquing policy, Buffett painted an optimistic picture of America’s future. He said he would choose to be born in the U.S. again, underlining a long-held faith in the country’s resilience. However, he acknowledged a lack of compelling investment opportunities present, that’s why Berkshire Hathaway is holding a record 29 lakh crore rupees (USD 347.7 billion) in cash.

    Even with the stockpile, Buffett expressed confidence that better investment opportunities will someday appear. He characterized the cash reserve not as sign of hesitation, but as a preparation for future prospects that better match Berkshire’s disciplined investment approach. Strategic patience, it seems, remains at the heart of Buffett’s investment philosophy.

    The annual meetings of Buffett have long been known for their insights and for their wit, and this year was no exception. Speculation, some of it quite fanciful, has developed lately about what might happen after he is no longer here. Buffett’s presence was a comfort to the tens of thousands who came to hear him, some from halfway across the world.

  • Trump Freezes Most Tariffs for 90 Days, Escalates Trade War with China

    U.S. President Donald Trump declared a 90-day halt on his sweeping tariff hike aimed at most nations, an apparent softening of a trade policy that had upset otherwise calm global markets. But it still continues to hit China hard: the announcement disclosed that its planned steep tariff of 104 percent on Chinese imports would be raised instead to a whopping 125 percent.

    China Faces the Heat

    Trump has raised the tariff on Chinese imports, first to 104%, and then, somewhat absurdly, to 125%. He claimed these tariffs were long overdue and justified by what he called a long history of Chinese trade exploitation and a lack of respect for global trade rules.

    China lost no time to reply. Within hours, it slapped an 84 percent tariff on U.S. goods, escalating tensions in a situation that looks ever more like a trade war. This latest confrontation follows earlier rounds of tariff retaliation and adds additional strain to a relationship that was already defined by suspicion and economic rivalry.

    Global Fallout and Market Whiplash

    The very first imposition of Trump’s all-encompassing tariffs had prompted big sell-offs in all the main stock exchanges around the world. Yet, after the 90-day delay was announced on these tariffs, at least for now, the price for several shares shot back up.

    The Dow Jones gained nearly 3,000 points. That’s close to an 8 percent increase. The S&P 500 was up by over 9 percent. And would you believe it, the tech-heavy Nasdaq was up more than 12 percent in just one day?

    Even with this rally, analysts are still uncertain. Trump’s tariffs on steel, aluminum, and certain drugs are still making the rounds. And there are more and more questions being raised about the potential fallout for the Indian pharmaceutical industry, which supplies almost 40% of the generics U.S. consumes. This could be Trump’s next target.

    Harsh Rhetoric, Unpredictable Strategy

    Trump’s language has garnered even his supporters’ criticism. He asserted that global power brokers are pleading to negotiate, and he used the most basic expressions imaginable to convey their enthusiasm. This, of course, is just how the guy talks, but it led some voices on Trump’s right flank to question whether his papal visit part two is really what America needs right now.

    Although his tone is confrontational, Trump insists that his approach serves American workers and not the interests of multinationals. Even allies, though, are starting to wonder whether his aggressive trade agenda is worth the long-term cost.

  • Indian Pharma Stocks Slide as Trump Hints at Tariffs on Drug Imports

    Indian pharmaceutical stocks saw a sharp drop on Wednesday after US President Donald Trump signaled that a new wave of tariffs on drug imports might be coming. The Trump thumbs-up for tariffs rattled investor confidence and sent the Nifty Pharma index down 1.7 percent in early trade. This also had the effect of dragging the broader Nifty 50 down with it, as that index slipped 0.52 percent.

    Each stock in the 20-member pharma index was down, painting the sector with a broad brush of negativity following the announcement. Gland Pharma, Lupin, and Zydus Lifesciences saw the sharpest descent, with their stocks dropping between 3% and 5%. Sun Pharma and Cipla, leading names in the market, weren’t spared either, with their stock prices falling 1.69% and 1.87%.

    India’s Generics Exports at Risk

    One of the world’s biggest suppliers of off-patent pharmaceuticals, India, sends a considerable chunk of its pharmaceutical exports to the United States. Nearly a third of the drugs that India sells abroad go to the U.S., whose longstanding low- or no-tariff regime has made it a welcoming market.

    At present, Indian pharmaceutical firms have mostly unfettered access to selling their drugs in the American market, while the United States exports to India a vast array of goods, including around a billion dollars’ worth of drugs, on which India imposes tariffs of about 10%. Any US tariffs imposed on Indian drug companies in retaliation for not allowing US firms into the Indian drug market would likely be offset by reduced Indian tariffs on American drugs. The net effect would be a lowering of the prices of medicines for Americans.

    Trump Pushes for Domestic Production

    At the National Building Museum in Washington, Trump gave a speech urging change to the pharmaceutical supply chain. He wants the drugmakers to manufacture in the U.S., instead of shipping stuff in from overseas. “Tariffs on pharma will be there because we don’t make our own pharma drugs; they are made in another country. The same packet in the US is priced at USD 10 or more. We are going to tariff pharma in such a way that companies will come rushing to us very soon. The advantage we have is, we are very big market. Very shortly, will announce a major tariff on pharma, and when these companies hear that, they will leave China and other countries because most of their products are sold here. And they will be opening their plants here,” he said.

    Trump proposed that new import tariffs would be so hefty that they would push companies out of places like China and India and back into US manufacturing centers. He did not provide a specific timeframe, but he hinted that a big pharma tariff announcement was coming soon, and that ratcheted up worry on Wall Street.

    What This Means for Investors

    The immediate selloff across pharma counters highlights the fragility of Indian drugmakers in relation to changes in US trade policy. The share prices of pharma companies fell in reaction to Trump’s remarks, and his potential influence on US government policy is now most acutely being felt in that sector. The vulnerability of drugmakers to a Trump-led sea change in US trade relations was made clear in the immediate post-election period, highlighted by today’s sharp reaction to comments by the president-elect.

    In the coming weeks, analysts anticipate sustained upheaval in pharmaceutical equities, especially those with significant stake in the US generics space. For the moment, risk-off sentiment has taken root, with many portfolio managers seeking to recalibrate away from export-dependent names and to hunker down in more domestically oriented, policy-resilient holdings.