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The New York Times (https://www.nytimes.com/2025/04/13/business/china-...) reports China Halts Critical Exports as Trade War Intensifies. That is a free link for those who wish to read the full article.
China has suspended exports of a wide range of critical minerals and magnets, threatening to choke off supplies of components central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while the Chinese government drafts a new regulatory system. Once in place, the new system could permanently prevent supplies from reaching certain companies, including American military contractors.
The official crackdown is part of China’s retaliation for President Trump’s sharp increase in tariffs that started on April 2.

Jeff

FAFO

Why are we intentionally shooting ourselves in the foot, almost daily?

Oh wait, I forgot…

Everyone wants there to be a grand scheme behind all of this but the terrible truth is that extremely stupid people are in charge in the US and they have a fanatical devotion to wrong, childlike concepts of society and economics cooked up by right wing radio hosts in order to sell tainted dietary supplements

Just noticed this tidbit in the article:

China’s most famous factory for these magnets is operated by the JL Mag Rare-Earth Company, whose headquarters are in Ganzhou.

The factory supplies the world’s top two electric car producers, Tesla and China’s BYD, with the magnets that power their cars, rare earth industry executives said.

I'm guessing that will annoy at least one person.

Jeff

<
"Dalio said the fallout from turmoil in bonds could be a more severe shock to the monetary system than the 2008 financial crisis."

“We are going from multilateralism, which is largely an American world order type of thing, to a unilateral world order in which there’s great conflict,”
>

https://www.cnbc.com/2025/04/13/billionaire-ray-da...

If the chance of worst case he described has 10% probability, it makes sense to be prepared.

China has suspended exports of a wide range of critical minerals and magnets, threatening to choke off supplies of components central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while the Chinese government drafts a new regulatory system. Once in place, the new system could permanently prevent supplies from reaching certain companies,


But America is the bully. LOL

Anyway, so now the world gets its nose rubbed into the fact that dependence on a somewhat hostile country is an unstable and parlous state of affairs.
Brilliant.
What a maroon.




I heard a rumor that some no-nothing idiot wants to bring production back to America.

Could the ones who diss Trump´s actions and describe how catastropic China´s retaliation is for the US (Please note: I am in no way say this is justified or not justified, not taking sides) please tell me why then the US markets are again strongly up now, after the opening?

......and why Berkshire is up even much more (S&P 1.2% / Brk-B: 2%)?

Could the ones who diss Trump´s actions and describe how catastropic China´s retaliation is for the US (Please note: I am in no way say this is justified or not justified, not taking sides) please tell me why then the US markets are again strongly up now, after the opening?

Sure thing.
Let me introduce you to Mr. Market...
Mr. Market is often identified as having human behavioral manic-depressive characteristics, he:
Is emotional, euphoric, moody.
Is often irrational.
Is there to serve you, not to guide you.
Is in the short run a voting machine, in the long run a weighing machine.
Is frequently efficient...but not always.
Therefore, patience is an important virtue when dealing with Mr. Market.

https://en.wikipedia.org/wiki/Mr._Market

Thank you for the explanation. For a moment I was misguided, thinking maybe others do not share the opinions here, forgetting that that of course must be irrational.

sure

-opens up all sorts of Pandora's boxes... who knows. the evry widgets we need to run our electric and water infrastructure is from china or elsewhere we piss off.

-traders looking to benefit from market chaos, its mainly algorithms , based on old verities.so cannot be trusted

-opens up crony capitalism for trump/family/entourage/loyalists (eg SS must now use X to communicate, starshield and PLTR embedded in military capability

-destruction of post ww2 alliances and trade systems.. who knows whats next ?

-brain and capital drain from USA is well underway, may not come back- loss of assets that underpin "american exceptionalism" a long time already

......and why Berkshire is up even much more (S&P 1.2% / Brk-B: 2%)?

In the context of Mr. Market, Buffet's pile of money shows (presumably) that he recognized the market's over-valued condition and buying shares in his company is an effort to take advantage of his deploying that money when things go to hell in a handbasket. The challenge with this thinking is that, if the market REALLY tanks - enough for that deployment to move BRK's needle a lot, BRK's stock price would first likely drop significantly.

Frankly, I am waffleing between selling my BRK positions or holding for the next cycle. The long-term capital gains tax on the positions would be about 35% (federal + state + city), which means that to break-even after buying it back may be more tramatic than simply biting the bullet. With all due respect to Jim, when it comes to taxes, size does matter :-)

Jeff

In the context of Mr. Market, Buffet's pile of money shows (presumably) that he recognized the market's over-valued condition and buying shares in his company is an effort to take advantage of his deploying that money when things go to hell

That is a good point, much better than this board´s mantra "Mr.Market is irrational". I once believed that too, but it's too simplifying. Mr.Market consists of both actors, by far not only of irrational ones, e.g. the over the last decades higher multiples have reasons other than irrationality (efficiency, net margins, low interest rates).

Regarding your personal one, I for one just (again) sold a chunk of my Berkshire (but very hope to some day (This year? Next year?) buy them back).

Let me introduce you to Mr. Market...
Mr. Market is often identified as having human behavioral manic-depressive characteristics, he:


Another take is
"A chaotic, erratic decline signals panic setting in among the algorithms. It means their code cannot interpret the conditions they are programmed to use for trading."

Ever since computers were invented the trading houses wrote trading algorithms. Now that AI is coming onstream, they surely are heavily using algorithms with AI.

Computer algorithms have difficulty with situations that the developers didn't account for.

While I appreciate the majority of the comments here are very much anti- our current regime, I would like to acknowledge there are some of us that don't share these views. Further, I would like to acknowledge that even the strongest believers that "he is an idiot" or "he is a genius" should recognize that they might be wrong.

OK back to the OT political bashing.

Could the ones who diss Trump´s actions and describe how catastropic China´s retaliation is for the US (Please note: I am in no way say this is justified or not justified, not taking sides) please tell me why then the US markets are again strongly up now, after the opening?

The country came very close to ending democracy forever. Harris/Walz are two of the dumbest silly people on the planet. They were also extreme far left/woke/dei cheerleaders. 4 more years of wide open borders and populating our swing states with illegal aliens would have made impossible a free and fair election ever again. The lying bums lost. Why wouldn’t the market love that!

Frankly, I am waffleing between selling my BRK positions or holding for the next cycle. The long-term capital gains tax on the positions would be about 35%...

True that.

I resolved this by selling the BRK in IRAs and Roths and the recent holdings in taxable accounts that have little or no gain, while keeping the in the taxable accounts long-held BRK which have large gains.

We know (think & hope) that even if BRK drops that it will eventually come back.

Whatever happens, if we continue to hold long enough our kids will get the BRK tax-free when we die.

"if we continue to hold long enough our kids will get the BRK tax-free when we die."

I would venture to guess that the step up basis upon death may go away

With all due respect to Jim, when it comes to taxes, size does matter

Absolutely.

I would only caution against forgetting the distinction between the penalty of switching horses being (a) the tax, versus (b) the time value of the tax. Presumably if you sell in future, you'll eventually pay it.

The US loophole for step up value at death is, one hopes, a loophole that will be closed one day, so a reasonable person might want to plan on it.

Jim

If the chance of worst case he described has 10% probability, it makes sense to be prepared.

then again - you have this:
https://www.cnbc.com/2025/04/14/trump-tariffs-rece...

Hassett also said in a Fox Business interview that there is no chance at all — “100% not” — that the U.S. will experience a recession in 2025.

look here: 100% not going to have a recession in 2025. So Dalio and Fink are crazy?
I guess we can just dive into the market now :^)

The US loophole for step up value at death is, one hopes, a loophole that will be closed one day, so a reasonable person might want to plan on it.

Why would you hope that the government takes away a benefit? SMH
Do you also think that the tax rates of 0% or 12% is a loophole because they don't pay 22% or 24%?

Anyway, just how would you plan for it?
a) As it is now, if you sell then you pay capgain tax, and if you pass it on to your kids, they don't pay that tax.
b) Or you sell now, pay the tax, and pass the remaining money to the kids.

c) If they remove the step-up basis, if you sell then you pay capgain tax, and if you pass it on to your kids, they will pay that tax. SOMEBODY will pay the tax.

How is (c) any different than (b)?

Right now the only alternatives are (a) and (b), so what planning could you do for (c)?

--------------------
::sigh:: I remember this same debate going on in Usenet, long before the internet and WWW was a thing. So that debate has been alive for 40+ years and NOTHING has been settled.

Much like the never-ending debate about taking Social Security at 70 vs. 62. ;-(

These will still be being debated online long after our grandchildren's grandchildren's grandchildren shuffle off this mortal coil.

The US loophole for step up value at death is, one hopes, a loophole that will be closed one day, so a reasonable person might want to plan on it.

In the current political environment, what the billionaire class wants is what happens. So I'm betting that the estate tax will be eliminated AND the step up will remain.

Elan

<<Hassett also said in a Fox Business interview that there is no chance at all — “100% not” — that the U.S. will experience a recession in 2025.>>

"100% not" is typical of a politician or a fool.

Under Trump with all his policies and unpredictable sometimes crazy behaviors so far, and possible war with Iran, a chance of 30-50% of recession, including 10% chance of 2008 type recession, are all reasonable.

"The US loophole for step up value at death is, one hopes, a loophole that will be closed one day, so a reasonable person might want to plan on it." - Mungofitch

"Why would you hope that the government takes away a benefit? SMH" - rayvt

Because he is looking at through the lens of what makes logical sense for a rational tax system and you are looking at it through the lens of what makes sense for you (or an individual who is just looking to minimize taxes).

Because he is looking at through the lens of what makes logical sense for a rational tax system and you are looking at it through the lens of what makes sense for you (or an individual who is just looking to minimize taxes).

Because we have created a system of landed aristocracy, where the merits of one’s work matter less than the merits of the sperm and ovum that produced you. As we have seen in every other culture where the aristocracy rules, that leads to decay, stagnation, and cultural decline.

There is likely a place for some reasonable amount of pass-through, but the endless dodges, pass thrus, and tax avoidances to bequeath vast fortunes is unproductive to all except to the recipient, who has done nothing to deserve it.

It, and it’s many variants and shenanigans, should end, perhaps not abruptly but certainly with finality.

The US loophole for step up value at death is, one hopes, a loophole that will be closed one day, so a reasonable person might want to plan on it

I'll support stepped up basis when cap gains are computed on real value increases and are not computed on nominal gains which are often purely due to inflation.

Until then, I am literally dying to avoid being taxed on an asset which is actually not worth much more than it was bought for.

I would venture to guess that the step up basis upon death may go away

While that may be "easy" to do for financial assets, it is EXTREMELY difficult to do for almost all other assets. It might cause all sorts of unexpected issues if implemented. And in some cases, it would cause issues even with financial assets.

I would venture to guess that the step up basis upon death may go away
...
While that may be "easy" to do for financial assets, it is EXTREMELY difficult to do for almost all other assets. It might cause all sorts of unexpected issues if implemented. And in some cases, it would cause issues even with financial assets.

I'm not sure I follow. Pretty much every other jurisdiction with inheritance tax has no step-up basis rule, and things tick along. I presume an estate files a final-year tax return for the year of death anyway, and the valuation of every asset has to be done either way. No matter, it's not my worry.

Side note on the whole general subject:

Nobody likes estate taxes, as a rule. There is an atavistic desire to pass one's assets to one's children. On the other side, most people are sensibly a little uncomfortable with the idea of dynastic wealth: if one great-great-grandparent made a killing, every descendent is set for life for generations to come, so society has a permanent over-class plutocracy.

If appointed emperor of the planet, I would propose a compromise: no inheritance tax passing things to your spouse or kids. But it ends there: gifts and bequests fully taxable (probably at a high rate) arriving in the hands of anyone else, and if you pass along wealth to your kids, whatever amount that YOU received during your life as tax-free inheritances from your folks, adjusted upwards for inflation, is (heavily) taxable arriving in your kids' hands. So the tax loophole is once-and-done on any given block of money. A family can remain wealthy generation after generation, but only if each generation adds meaningfully to the pile through their own endeavours, not just collecting economic rents. A generation or two of coasters puts the family back into the herd to fend for themselves.

Jim

" There is an atavistic desire to pass one's assets to one's children."

The term "atavistic" refers to characteristics or behaviors that are reminiscent of very old habits from a long time ago in human history. It can also describe the reappearance of traits typical of an ancestral form, often due to genetic factors. In a broader context, it relates to atavism, which is the recurrence of ancestral traits in an organism after several generations of absence.


U Daman bro!

the recurrence of ancestral traits in an organism after several generations of absence.

Hmm, I didn't know that additional meaning.
My great-great-great-great-grandfather was pretty well-to-do. You've probably heard his name. Maybe that ancestral trait will recur in me at some point!?

Jim

" Hmm, I didn't know that additional meaning.
My great-great-great-great-grandfather was pretty well-to-do. You've probably heard his name.'

I read a lot but you often use words I never heard before. Of course, I've heard of the Rockafella's, do you have any lonely single granddaughters?

If there is a tax on farmland at death and the land has significantly appreciated, then a portion of the farm, equipment and buildings may have to be sold to pay the tax. I think this would have a tendency to ruin the business.

Aussi

If there is a tax on farmland at death and the land has significantly appreciated, then a portion of the farm, equipment and buildings may have to be sold to pay the tax. I think this would have a tendency to ruin the business.


I'm not sure why you singled out farmland, as this is true about any illiquid asset. Kid inherits a $100 million Picasso or a $50 million mansion or the family's ownership of 5 local pizza shops and is forced to sell to pay the tax? I don't know, I'm not feeling particularly sympathetic.

But what's especially curious about singling out farmers is (a) how infrequently they face the estate tax (0.3% of farm estates is the most recent data I can find), and (b) the special benefits afforded to farms in terms of the estate tax. In particular:

"In the interests of avoiding that situation [i.e., inheritors being forced to liquidate their farms] and promoting the continuation of family farm operations from one generation to another, Internal Revenue Code (IRC) Section 2032(a) offers estates an alternative special land use valuation for farmland which may result in either a lower tax liability or no liability at all. Under the alternative valuation of Section 2032(a), the value of qualifying farmland is determined based on the net five-year average annual cash rental value of comparable farmland in the same vicinity, after reduction for state and local real estate taxes, capitalized by the average annual effective interest rate applicable to new Federal Land Bank loans. While the application of the formula can be complicated, the net result is that the decedent’s farmland is valued as farmland, and not necessarily at its fair market value. Since farmland values tend to be lower than fair market values, application of the Section 2032(a) alternative valuation may result in lower estate values, and in turn, result in a lower tax liability." (from https://www.girvinlaw.com/how-farm-land-is-affecte...)

I'm not sure why you singled out farmland, as this is true about any illiquid asset.

No particular reason than it is an example of what would happen if at time of death, an asset is taxed at its appreciated value rather than having a step up basis. I am not discussing current tax policy, just what to consider if the tax policy changes to an estate tax based on appreciated value of asset. The painting you mentioned is another good example. Sell a quarter of the painting to pay the tax??

Aussi

"Sell a quarter of the painting to pay the tax??"

I know it was meant tongue in cheek, but yes: https://www.addleshawgoddard.com/en/insights/insig...

I knew of a software product aimed at improving the alternative investment tracking. Yachts, too (https://www.superyachtnews.com/business/securitise...). Can't tie up all those 100s of millions in a boat when mega mansions need building, too.

“I would propose a compromise: no inheritance tax passing things to your spouse or kids.”

Death & taxes are for sure & for certain. I estimate we’ve paid nearly 50% in taxes over a lifetime (Fed, State, sales, ad valorem…)-not insignificant. Honestly, being a millionaire just Ain’t what it used to be, esp. with the melting ice cube of inflation & weaker dollar.

Mr. B’s worth is $165B- does not compute! $5.5M estate exemption is on the Low side imo and $14M (sch. to expire 12/31/25) does not seem insane to me. It was nice to be debt-free upon graduation from grad school and not to have to come out of pocket to pay estate taxes upon the passing of one’s parents. Plenty was also left for charitable causes

Even Charlie himself said his inheritance will be recirculated back to society soon enough, even with his gifted gene pool. We’d like to give our kids a head start and not insignificant cushion from our own sweat equity, discipline & compounding, just like we were fortunate to receive a cushion. However, 80% of our assets are independent of inheritance assets, including appreciation.

Just my two pence.

If there is a tax on farmland at death and the land has significantly appreciated, then a portion of the farm, equipment and buildings may have to be sold to pay the tax. I think this would have a tendency to ruin the business.


I'm not sure why you singled out farmland, as this is true about any illiquid asset. Kid inherits a $100 million Picasso or a $50 million mansion or the family's ownership of 5 local pizza shops and is forced to sell to pay the tax? I don't know, I'm not feeling particularly sympathetic.

Consider that the estate tax exemption is $14M, and $28M for a couple that does some rudimentary estate planning. The value of Iowa farmland is ballpark $10K per acre. So roughly speaking, any family farm of less than roughly 2000 acres would be exempt from estate tax, and a larger farm would pay tax only on the excess acreage. I join you in not feeling particularly sympathetic.

Elan

Consider that the estate tax exemption is $14M, and $28M for a couple that does some rudimentary estate planning. The value of Iowa farmland is ballpark $10K per acre. So roughly speaking, any family farm of less than roughly 2000 acres would be exempt from estate tax, and a larger farm would pay tax only on the excess acreage. I join you in not feeling particularly sympathetic.

But there are ways. I remember watching some estate attorneys happy that they had reduced a 30 million estate to below 3 million by the use of restrictive clauses. (Yes, many moons ago.) And it seemed that most of the restrictive clauses would be negated or have no effect over time. so the idea was to adopt the restrictive clauses to lower the value of the business to get it past the estate tax. I'm still mystified how after some time the clauses would lose effect, so I think that a sunset of sorts must have been built in. This disturbed my notion of fair play. But it was good employment for estate tax attorneys.

These recent taxation posts on this board invariably have the respective individual observers point of view of where the tax monies should be gathered. Senator Russell Long’s famous quote perhaps captures it best.

Senator Russell B. Long quoted in Money in July 1973, “Don't tax you, don't tax me, tax the fellow behind the tree,” appearing in many versions; the idea is to tax somebody else to raise the revenue the government seeks, not me.Aug 23, 2024
https://www.forbes.com
Tax The Fellow Behind The Tree - Forbes

Uwharrie

This disturbed my notion of fair play. But it was good employment for estate tax attorneys.

All the tax attorneys have to do is stay one step ahead of the IRS attorneys. Now with the IRS being decimated, everybody will be ten steps ahead and anyone with enough at stake to hire an attorney won't pay taxes any more.

Elan

Regarding the subject of this thread this is a very interesting article, saying that nowadays for far more countries China is the more important trading partner than the US (It´s about the number of countries, not about volumes, so that number naturally includes many small countries; still interesting):

https://www.aljazeera.com/news/2025/4/22/why-china...

In other words: More countries have economic reasons not to bow to Trump than countries that do have.

In other words: More countries have economic reasons not to bow to Trump than countries that do have.

What does that mean? "bow to Trump"? What does that mean? What will they do or not do, and why?
Just what economic reason do they have to refrain from trading with the US just because a Republican is President? Why do they even care who the US President is?

They won't buy LNG from the US because Orange Man Bad?

They would happily buy stuff from the US and sell stuff to the US if Kamala was President but they won't because Trump is?

What does that mean? "bow to Trump"? What does that mean? What will they do or not do, and why?
Just what economic reason do they have to refrain from trading with the US

You didn't read the article? Otherwise you'd knew a good reason: Because of pressure from the other mighty force, China. They are between two stones, both applying pressure to them, being forced by both to choose which whom to take sides.

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