Following the comments from United States President Donald Trump regarding the trade talks between the United States and China, the whole thing could spiral out of control at any moment. The President threatened to raise the tariffs on Chinese goods and services worth $200 billion and assured more tariffs if Beijing did not complete the deal. Following the threats, the trade talks could be suspended by China, and it has also emerged that the Chinese delegation that is scheduled to visit Washington DC for the last round of talks could now cancel the visit altogether. A trade war of that nature is going to be damaging for both countries, and billionaire American investor Warren Buffett said on Monday that such a trade war is going to be a bad thing for the entire world.
Buffett’s comments might sound dramatic, but his whole premise is correct since, at the end of the day, a damaging retaliatory tariff war between the world’s two largest economies is certainly going to have a rippling effect on the global economy as a whole. Most countries do business with both China and the United States, and if the two countries are embroiled in a trade war, then it is almost certain that the overall trade environment is going to be in chaos. While speaking to a television network, Buffett said,
“If we actually have a trade war it will be bad for the whole world. With some people in negotiations, the best technique is to act half-crazy.”
In this regard, it is also necessary to point out that Warren Buffett’s investment company Berkshire Hathaway has considerable interests in companies that depend on China and if such a damaging trade war continues, then it would hurt him as well. One of his biggest stakes is in Apple Inc, which is well known for not only assembling devices in the country but also generating a large chunk of its sales from China. Needless to say, Apple products are going to be slapped with huge tariffs by the Chinese if Trump makes good on his promise to impose heavy tariffs. Trump stated that in addition to imposing a tariff of as much as 25% on $200 billion worth of Chinese goods on Friday, he is going to raise the stakes soon after. The US President stated that the US would next raise tariffs on $325 billion worth of Chinese goods soon after.