Warren Buffett’s annual shareholders letters are always a must-read. The honesty, clarity, and striking humility of his prose stands out in a world where corporate communications — from companies of any size — tend to be bland and obfuscating. This year’s letter, published back in February, is no exception. Two sections stood out to me. First, in a section titled “Mistakes — Yes, We Make Them at Berkshire”:

Sometimes I’ve made mistakes in assessing the future economics of a business I’ve purchased for Berkshire — each a case of capital allocation gone wrong. That happens with both judgments about marketable equities — we view these as partial ownership of businesses — and the 100% acquisitions of companies.

At other times, I’ve made mistakes when assessing the abilities or fidelity of the managers Berkshire is hiring. The fidelity disappointments can hurt beyond their financial impact, a pain that can approach that of a failed marriage.

A decent batting average in personnel decisions is all that can be hoped for. The cardinal sin is delaying the correction of mistakes or what Charlie Munger called “thumb-sucking.” Problems, he would tell me, cannot be wished away. They require action, however uncomfortable that may be.

During the 2019-23 period, I have used the words “mistake” or “error” 16 times in my letters to you. Many other huge companies have never used either word over that span. Amazon, I should acknowledge, made some brutally candid observations in its 2021 letter. Elsewhere, it has generally been happy talk and pictures.

I have also been a director of large public companies at which “mistake” or “wrong” were forbidden words at board meetings or analyst calls. That taboo, implying managerial perfection, always made me nervous (though, at times, there could be legal issues that make limited discussion advisable. We live in a very litigious society.)

At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters. Greg shares the Berkshire creed that a “report” is what a Berkshire CEO annually owes to owners. And he also understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well.

As the great physicist Richard Feynman said, “The first principle is that you must not fool yourself and you are the easiest person to fool.”

Second is an entire section, not complaining, but instead proudly declaring, that last year Berkshire set the record for the highest single-year corporate income tax payment in United States history:

Huge numbers can be hard to visualize. Let me recast the $26.8 billion that we paid last year.

If Berkshire had sent the Treasury a $1 million check every 20 minutes throughout all of 2024 — visualize 366 days and nights because 2024 was a leap year — we still would have owed the federal government a significant sum at yearend. Indeed, it would be well into January before the Treasury would tell us that we could take a short breather, get some sleep, and prepare for our 2025 tax payments. [...]

Berkshire’s activities now impact all corners of our country. And we are not finished. Companies die for many reasons but, unlike the fate of humans, old age itself is not lethal. Berkshire today is far more youthful than it was in 1965.

However, as Charlie and I have always acknowledged, Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed.

So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.

Again, that was written back in February. Prescient as always.

Auzinea Bacon, CNN:

Electronics imported to the United States will be exempt from President Donald Trump’s reciprocal tariffs, according to a US Customs and Border Protection notice posted late Friday. Smartphones, computer monitors and various electronic parts are among the exempted products. The exemption applies to products entering the United States or removed from warehouses as early as April 5, according to the notice.

The move comes after the Trump administration imposed a minimum tariff rate of 145% on Chinese goods imported to the United States. The tariffs would have a major impact on tech giants like Apple, which make iPhones and other products in China.

Roughly 90% of Apple’s iPhone production and assembly is based in China, according to Wedbush Securities’ estimates. Analysts at Wedbush on Saturday called the tariff exclusion, “the best news possible for tech investors.”

Here’s Commerce Secretary Emily Litella making the announcement on Weekend Update.

Reuters:

China’s Anker, one of Amazon’s largest sellers offering products from power banks to phone cases, has raised prices on a fifth of its products on the U.S. platform since Thursday, in a sign that tariffs on Chinese goods are being passed on to U.S. shoppers.

Some 127 Anker products have seen an average increase of 18% since Thursday last week, with the majority of those occurring after Monday, April 7, when U.S. President Donald Trump added an extra 50% import duty on Chinese goods, according to data from e-commerce services provider SmartScout.

Tariffs driving up consumer prices is as sure a thing as rain making you wet. But it’s worth pointing to the evidence as it comes in, because unlike rain’s wetness, the “emperor sure does have clothes” MAGA contingent is trying to argue that tariffs don’t have this obvious effect.

Financial Times reporter John Burn-Murdoch has a summary on Bluesky of his co-bylined report for the Financial Times:

Visitors from western Europe who stayed at least one night in the US fell by 17 per cent in March from a year ago, according to the International Trade Administration. Travel from some countries — including Ireland, Norway and Germany — fell by more than 20 per cent, an FT analysis of ITA data showed.

The trend poses a threat to the US tourism industry, which accounts for 2.5 per cent of the country’s GDP. Some airlines and hotel groups have warned of waning demand for transatlantic travel and a “bad buzz” about visiting the US. The total number of overseas visitors travelling to the US dropped by 12 per cent year-on-year in March, the steepest decline since March 2021 when the travel sector was reeling from pandemic restrictions, according to the ITA data.

Well, I’m sure it will turn around when the April figures come out, after Trump’s tariff madness and the news that Secretary of State Marco Rubio — supposedly one of the few sane voices in the 2.0 Trump kakistocracy — has signed a two-page argument that noncitizens can be deported for their beliefs, a.k.a. thought crimes.

“In just two months [Trump] has destroyed the reputation of the US, shown one way by diminished travel from the EU to the US,” said Paul English, co-founder of travel website Kayak. “This is not only one more terrible blow to the US economy, it also represents reputation damage that could take generations to repair.”

We need more clearheaded statements like this from business leaders. Just state the truth plainly. The only side English took with this statement is the side of the truth.

Reuters:

“The U.S. side’s imposition of excessively high tariffs on China seriously violates international economic and trade rules, runs counter to basic economic principles and common sense, and is simply an act of unilateral bullying and coercion,” China’s Finance Ministry said in a statement. [...]

“Even if the U.S. continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics,” the Finance Ministry’s statement added.

“If the U.S. continues to play a numbers game with tariffs, China will not respond,” it added. However it left the door open for Beijing to turn to other types of retaliation, reiterating that China would fight the U.S. to the end.

None of this is funny at the moment, but Trump has beclowned himself with these impulsive nonsensical tariffs. No matter how this ends up, he will go down in history looking like a fool for this. In terms of history, what will be remembered in decades to come, he’d have far less embarrassed himself by shitting his pants in public. He came into office less than three months ago with the US economy being the strongest in the world, by far. Everything that’s happened since has been the direct result of his mad-king magical-thinking nonsense and the Republican party’s refusal to stand up to him.

If Joe Biden had imposed these exact same tariff policies a year ago, for the exact same stated reasons, Republicans would have impeached him and called for his immediate ouster through Section 4 of the 25th Amendment — and their actions, for once, would have been justified. These tariff policies are nuts and are endangering the United States’s economic supremacy while simultaneously hurting the entire world economy. No one in their right mind would do this, and the President of the United States needs to be a person in their right mind.

Democrats and all other Trump opponents should immediately begin calling into question Trump’s mental fitness for office. This whole tariff saga is proof that he’s nuts. Just keep repeating that. He’s always been a little nutty but now he’s gone off the deep end. Don’t forget to reiterate that Trump’s father was suffering from severe dementia when he was Trump’s age. Throw Biden under the bus: remind people that we just saw what happens when a mentally enfeebled 80-year-old^* serves as President, and that under Trump it’s far worse. Biden was sleepy but steady; Trump is agitated and erratic. That’s far worse.

Hammer the points — all true, all obvious — endlessly: Trump is too old; these tariffs are proof that he’s lost his mind; he’s hurting America badly; dementia runs in his family. Hammer it.

* Keep calling him “80”; make his sycophants correct you that he’s “only” turning 79 in June.