Warren Buffett: America is on the Verge of ‘Economic War’ (RARE New Interview)

 

 

 The US stock market has fallen into correction territory and Warren Buffett is warning that this could just be the beginning. Buffett broke his silence and had harsh words for what lies ahead for the economy and stock market. For the first time in years, Buffett gave a publicly available interview. He used this interview to give a warning about the potentially devastating impacts of tariffs and how this could lead to full out economic war. Take a listen to what Buffett had to say.

 

 For a word that has gotten thrown around so much, very few people actually really know what tariffs are and how they function.So just how exactly do tariffs work? Well, a tariff is simply a tax applied to a country’s imports. Imports being things brought into a country that were manufactured elsewhere. To demonstrate how this works in action, let’s use the United States and Mexico as the trading partners and the example of a car.

 

 The US auto industry is an extremely competitive industry. Auto manufacturers have average profit margins of just 3-5% over the long term. Put another way, for every 100 dollars in sales an auto company has, only 3 to 5 dollars of that turns into profit. A big driver of this is that the industry is notoriously price competitive. Understandably, consumers want the best possible vehicle at the lowest possible price. As a result, a significant part of the auto supply chain is outside the United States. This dynamic has led the auto industry to be front and center in the tariff discussion

 

 

Source:   Investor Center