Good morning. After taking a short recess, tariffs once again made their way into the headlines as the president not only threatened additional costs be placed on goods coming from countries in the European Union but targeted one specific U.S. company as well. Stocks (futures) immediately headed down after the announcement(s) and investors who thought we would have little economic news today … leading into the holiday weekend … were sorely mistaken. It seems the administration is upset with the speed (and result) tariff talks are going with the EU, so this weapon of choice was once again brought out in the hope of getting a quick resolution (favorable to the U.S., of course). And our friends (or maybe ex-friends) in Europe weren’t the only ones targeted as the president also informed Apple of the intent to charge them an addition fee for phones sold in the U.S. that are not manufactured here. This move, of course, has other tech heavyweights (among others) concerned as they question to what extent individual companies can be hit with extra fees to try to change behavior. Why is this a concern? There is no reason to think this will not expand to other areas. For example … depending too much on DEI in setting up your board? Tariff. Too high of a percentage of foreign aluminum or steel? Tariff. Not using enough fossil-fuel-powered cars to transport goods? Tariff. Tariffs have become an easy weapon as it only takes a statement from the White House to get things riled up. But it is a mistake to think these are only words … and therefore have no cost … as each tariff comment seems to have great power in moving markets … to the benefit of some and to the detriment of others. My note is short as I am sure many will take advantage of the long weekend and have probably already unplugged for today. I also wrote some paragraphs on the situation at Harvard (where not being able to have foreign students … 25% of the population … would be crippling) … but realized some of my comments might not sit well with some … so I deleted them. I also am heading out this weekend toward Lancaster (Amish country) … but careful of what I eat when I stop by their famous Shady Maple Buffet. Last time there … always trying to get my money’s worth … I ate one food I was not accustomed to and ended up with a terrible case of heartburn. It was the wurst. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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