Amidst the “Liberation Day” tariff storm, several billionaires faced a huge blow to their fortunes and net worth. All except for one.
US President Donald Trump claimed that the tariffs waves would put tax-payers in a better position after being “ripped off for more than 50 years,” and that they would also help the country regain its “economic independence.”
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But what is a tariff?
A tariff is a form of tax that importers pay on goods brought in from countries abroad. In other words, if you wanted something from Europe, you’d have to pay extra money to the government, a certain percentage of the full price of the thing you bought.
Why are people not satisfied with the move?
This move led to the birth of a trade war with some countries, and a few of them have been contemplating imposing retaliatory tariffs on the US.
Additionally, this will increase the price of products coming from abroad, which may not be convenient for many, and billionaires who thought that they were safe are now suffering losses, even penguins haven’t been spared.
The aim behind this move
Trump wanted to ensure that “jobs and factories will come roaring back into our country” because making imported goods less attainable would encourage domestic production and goods, in addition to opening job opportunities to the unemployed.
Global stock markets are suffering
The ongoing global trade war is causing economic damage to the US, as the S&P 500 index on Wall Street drastically dropped by 4.1 percent when markets opened on April 7, according to The Guardian.
Furthermore, 499 out of the 500 world’s richest billionaires have had losses that reflected on their net worth, all except for one.
It was the 94-year-old billionaire
Warren Buffett was the only one of the famous billionaires to come out of the consecutive tariff waves with a winning hand, and that’s due to him selling off shares of his US companies when Trump took over.
As a matter of fact, he sold $134 billion in equities and now has about $334 billion in cash.
He saw it coming and was one step ahead
According to Fortune, Buffett saw the economic blows coming and he isn’t looking to make any big changes for the time being.
Armando Gonzalez, founder of Bigdata.com, explained to the outlet: “Buffett’s actions over the past year have been a textbook example of positioning for turbulence.”
The expert explained his strategic move
“History shows when Buffett turns net seller, he often anticipates a period of subpar market performance, and once again, the Oracle of Omaha seems to have been ahead of the curve,” Gonzalez elaborated.
“He has no interest in timing the market’s bottom, nor does he chase short-term rebounds. Instead, he waits for moments when fear drives prices to levels where the risk-reward equation tilts decisively in his favor,” he highlighted.
