Trump’s Upcoming Inauguration: Billionaires and Tariff Talk
The swearing-in of Donald Trump as president on Monday will bring several billionaires to the Oval Office, including Amazon founder Jeff Bezos, Tesla CEO Elon Musk, and Meta Platforms founder Mark Zuckerberg.
Notably absent will be Warren Buffett. Although many large companies, including Amazon, Tesla, and Meta, contributed to the inauguration funding, Buffett’s Berkshire Hathaway has not been reported among them.
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Despite his absence, Buffett could provide valuable insights to the new administration. He has already expressed views on one of Trump’s key policies.
Image source: The Motley Fool.
Trump’s Tariff Plans
In his previous term, Trump imposed tariffs on specific goods such as aluminum, steel, and washing machines, with a strong focus on China. His stance on tariffs seems to have intensified, as he now identifies with the label “Tariff Man.” In a statement, he described tariffs as “the most beautiful word in the dictionary.”
On November 25, 2024, Trump outlined plans for his first day back in office, proposing a 10% tariff on imports from China and a 25% tariff on goods from Canada and Mexico—America’s largest trading partners.
Trump’s plans may not end there. During his campaign, he spoke of imposing up to 20% tariffs on all imports to the United States, singling out China for a staggering 60% tariff. He even suggested high tariffs on Denmark in a peculiar reference to Greenland.
Buffett’s Concerns About Tariffs
While Buffett has not publicly commented on Trump’s latest proposed tariffs, he has previously warned about their potential negative impact on trade and the economy. In a 2016 interview, he cautioned that high tariffs could significantly reduce trade between countries and hurt the economy.
Buffett expressed his views in 2019, noting that while tough talk can be a negotiation strategy, actual tariffs could trigger a trade war, which he deemed harmful on a global scale.
This sentiment is echoed by many economists. The Tax Foundation analyzed studies from 12 different organizations, including Fitch, Moody’s, and the Peterson Institute for International Economics, all projecting negative impacts on U.S. GDP due to Trump’s proposed tariffs.
Will Trump Listen to Buffett?
Some analysts on Wall Street believe Trump may consider Buffett’s warnings about tariffs. UBS, one of the firms in the Tax Foundation’s analysis, forecasts that Trump’s tariffs could harm the U.S. economy. Nonetheless, UBS maintains an optimistic outlook for 2025 based on deregulation and tax cuts, which they believe could lead to a resurgence similar to the “roaring 20s.”
However, there remains uncertainty. UBS’s chief investment officer, Mark Haefele, recognized the risks associated with Trump’s tariff plans, suggesting they might drive inflation, weaken growth, and result in market volatility.
The coming weeks will reveal how serious Trump is about implementing these tariffs, and whether Buffett’s warnings regarding the economic fallout from trade wars will prove accurate.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is also a board member. Keith Speights has investments in Amazon, Berkshire Hathaway, and Meta Platforms. The Motley Fool holds positions in and recommends Amazon, Berkshire Hathaway, Meta Platforms, Moody’s, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
