Berkshire Hathaway Drops 3.14% on White House Tariff Announcement

On April 4, 2025, Berkshire Hathaway's stock price dropped by 3.14% in pre-market trading.

The recent announcement by the White House regarding the implementation of "reciprocal tariffs" on trading partners has sparked significant concerns. Analysts warn that these tariffs could have a profound impact on American households, industries, and the broader economy. The move is seen as a major escalation in trade protectionism, which could disrupt global supply chains and exacerbate economic uncertainty.

The potential impact on consumer spending is particularly alarming. With consumer confidence already on the decline, the additional burden of higher costs for household goods could further strain family budgets. This could lead to a decrease in consumer spending, which is a critical driver of the U.S. economy.

Economic forecasts suggest that if other countries do not retaliate, the U.S. personal consumption expenditures (PCE) could rise by 1.7% in the short term, while the real GDP growth rate for 2025 could drop by 0.6 percentage points. If retaliatory measures are taken, the PCE increase could be as high as 2.1%, and the GDP growth rate could fall by 1 percentage point. The probability of a U.S. economic recession within the next 12 months has also risen to 35%, up from the previous estimate of 20%.

Criticism of the tariff policy has come from various international leaders. German Chancellor Olaf Scholz has publicly criticized the U.S. for disrupting global free trade, while European Central Bank President Christine Lagarde has expressed concerns about the lack of predictability in U.S. policies. The tariffs are seen as a threat to global economic stability and could have far-reaching consequences for businesses and consumers alike.