Warren Buffett Names Greg Abel as Successor; Trump Considers Tariff Reductions Amid Fed Inflation Concerns

Warren Buffett announced his retirement as CEO of Berkshire Hathaway, naming Greg Abel as his successor, surprising even the board. Former President Donald Trump suggested reducing tariffs on Chinese goods, prompting renewed U.S.-China trade talks. Federal Reserve officials, including Michael Barr and John Williams, warned that Trump's tariffs could increase inflation and slow growth. U.S. manufacturers, like Evolutions Brands, report that tariffs hinder domestic factory plans due to high import costs. The National Bureau of Economic Research found tariffs did not significantly affect employment in protected sectors.

Buffett’s Succession Plan: Carefully Crafted, Dramatically Delivered

Warren Buffett, 94, stunned a stadium of Berkshire Hathaway shareholders when he announced he would step down as CEO at the end of 2025, naming Greg Abel as his successor. The announcement, made during the company’s annual meeting, was kept secret from most of the board and even Abel himself until the moment it was revealed.

Buffett’s approach to succession planning has been unconventional. While Abel had long been considered the heir apparent, Buffett had not formally communicated the decision to him or to most board members. Only Buffett’s two children, who sit on the board, were informed in advance. This secrecy ensured the announcement had maximum impact and avoided leaks.

Buffett emphasized that he would remain as chairman and continue to guide Abel, and he pledged not to sell any of his nearly 14% stake in the company, valued at over $160 billion. He described the transition as an “economic decision,” expressing confidence that Berkshire would perform well under Abel’s leadership.

Observers noted that Buffett’s decision to personally select his successor, rather than rely on a search firm or board-led process, deviated from standard corporate governance practices. However, given Buffett’s unique role in shaping Berkshire’s identity, many viewed the move as fitting.

“He has always created great, positive Berkshire theatre, and this deserved another Oscar,” said Macrae Sykes, a portfolio manager at Gabelli Funds.

Trump Floats Tariff Reduction Ahead of U.S.-China Talks

Former President Donald Trump suggested on his social media platform Truth Social that an 80% tariff on Chinese goods “seems right,” signaling a potential softening of his trade stance. This comes ahead of high-level trade talks in Switzerland between U.S. officials, including Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, and Chinese negotiators.

The Chinese Ministry of Commerce confirmed that the talks were initiated at the request of the U.S. side. Trump’s post was interpreted by some analysts as part of a broader negotiation strategy, with reports suggesting that tariffs could be reduced to between 50% and 60% depending on the outcome of the Geneva discussions.

Trump also called on China to open its markets to U.S. goods, writing, “CLOSED MARKETS DON’T WORK ANYMORE!!!” The talks mark the first publicly announced meeting between the two nations since the latest escalation in the trade war, which saw the U.S. impose tariffs of up to 145% and China retaliate with 125% levies.

Fed Officials Warn of Inflation and Economic Risks

Federal Reserve officials are increasingly vocal about the potential economic fallout from Trump’s tariff policies. On Friday, Fed Governor Michael Barr and New York Fed President John Williams warned that the tariffs could lead to higher inflation, increased unemployment, and slower growth.

Their concerns echo those of Fed Chair Jerome Powell, who has stated that the central bank will wait for more clarity on the economic impact of the tariffs before adjusting monetary policy. The Fed recently voted unanimously to keep interest rates steady at 4.25% to 4.5%, citing rising risks to both inflation and employment.

Barr, speaking in Iceland, noted that the tariffs could disrupt global supply chains and lead to long-lasting inflation. He emphasized that businesses may need to overhaul their sourcing strategies, which would take time and investment.

“The Fed could be in a difficult position if inflation rises while unemployment worsens,” Barr said.

Manufacturers Say Tariffs Undermine U.S. Factory Plans

U.S. manufacturers are expressing growing frustration with Trump’s tariff policies, which they say are making it nearly impossible to open or expand factories domestically. According to a Bloomberg report, companies that had planned to reshore production are now reconsidering due to the high cost of importing raw materials and equipment, which are subject to tariffs.

Nora Orozco, owner of footwear company Evolutions Brands, had planned to open a factory in Texas that would create 200 jobs. She told Bloomberg that the tariffs have made the project financially unfeasible.

“I like the idea of onshoring, but this makes it impossible for us,” Orozco said.

The National Bureau of Economic Research found that previous rounds of Trump’s tariffs did not significantly affect employment in protected sectors. Meanwhile, the unpredictability of tariff announcements and reversals has added volatility to the market, discouraging long-term investment.

Executives surveyed by the Federal Reserve Bank of Dallas described the tariff environment as “chaos” and “absolutely terrible,” with many businesses scrapping profit forecasts due to uncertainty.

References

• Warren Buffett delivered a masterclass in succession planning — and a lesson in high drama
• Buffett's Farewell: Reflecting on His Simple Words and Succession Surprise at Berkshire
• Warren Buffett Steps Down: What’s Next for Berkshire Hathaway and Greg Abel?
• Trump says 80% tariff on China "seems right" ahead of trade talks
• More Fed officials warn Trump tariffs could produce higher inflation and slower growth
• Manufacturers Say Trump Has Made Opening U.S. Factories Impossible
• Americans still dream about factory jobs. Can they be brought back?
• Quorum Report: News Clips