The multinational conglomerate Berkshire Hathaway Inc. (NYSE: BRK.B), owned by legendary investor Warren Buffett, may suffer a blow when Donald Trump takes over the White House in January th.
This is because Berkshire’s home furnishings division, including Nebraska Furniture Mart and Jordan’s Furniture as well as RC Willey, generates a large portion of the company’s revenue.
These businesses may be at risk if the president-elect follows through on his promise to increase tariffs not only on Chinese goods, but on all products after today’s inauguration.
Furniture imports are a major source of revenue for the US
US imports at least 50% of raw materials used to make furniture, making this an industry that is vulnerable to significant damage under Trump 2.0.
China is the largest exporter of furniture in the world. Beijing accounted for close to 30% of all furniture imported by the United States in 2023.
Even if Berkshire furniture companies divert their supply chains away from China to other countries, such as Vietnam or Mexico in 2025, they will still be faced with tariffs of up to 20%.
Furniture Mart, Jordan’s Furniture and RC Willey may see their sales drop as they pass the cost increases on to the consumer.
What is the size of Berkshire Furniture’s business?
Berkshire Hathaway, a business that is fairly diverse, could suffer from higher tariffs on its furniture businesses. These companies generated more than $75 billion in revenue for the conglomerate by 2023.
Berkshire Hathaway’s manufacturing division, which includes its home furnishings business, is one of the company’s most profitable segments.
Berkshire Hathaway’s performance and investments this year could also be affected by Trump’s policies.
Berkshire Hathaway Class B Shares do not pay dividends at this time to make them appear more appealing for investors seeking income.
Berkshire ended the year 2024 with a positive note
Brian Meredith, UBS’s analyst for Berkshire Hathaway shares in 2025 remains optimistic despite potential challenges.
The “buy” ratings on the Class B shares of the Conglomerate that is owned by “Oracle of Omaha”, are accompanied with a price target of $531, which indicates a potential 14% increase from this point.
Berkshire has already had a gain of close to 30 percent in the last 12 months.
UBS analysts are confident that management can deliver a solid financial performance by 2025.
He added that a diversified portfolio could help Berkshire Hathaway to navigate potential headwinds in this year.
Earlier in the month, Consumer Financial Protection Bureau sued Vanderbilt Mortgage & Finance of Berkshire Hathaway for ignoring warning signs related to manufactured homes loans.
As new information becomes available, this post Berkshire Hathaway may take a blow following Trump’s Inauguration: Here’s Why could be updated.
This site is for entertainment only. Click here to read more
