Warren Buffett's Letter to Shareholders Brags About Paying Tons of Taxes — Barrons.com

By Robert Teitelman

Markets: Vice President Vance attacked Europe for "the threat from within," and U.S. officials met with Russian counterparts in Saudi Arabia over the Ukraine war. Gold and Europe's military stocks rose. In the U.S. the S&P 500 set two highs after the Presidents Day holiday, but wavered after President Trump floated 25% tariffs on cars, drugs, and chips, and Walmart warned on 2025. January Federal Reserve minutes were cautious on rate cuts. Friday saw losses. On the week, the Dow industrials fell 2.5%; the S&P, 1.7%; and the Nasdaq Composite, 2.5%.

Companies: Staff cuts hit Medicare, the Food and Drug Administration, and the Centers for Disease Control and Prevention, while DOGE sought access to IRS and Social Security data. Xi Jinping met with China tech leaders. Apple released a low-price iPhone. Microsoft announced its first quantum-computing chip. Meta Platforms shares finally fell after 20 straight winning sessions.

Deals: KKR won Japan's Fuji Soft over Bain Capital...OpenAI weighed giving special voting rights to its directors as defense against Elon Musk... Bloomberg and The Wall Street Journal said Broadcom and Taiwan Semiconductor are mulling deals to split up Intel. Other reports said Silver Lake was in talks to buy a majority stake in Intel's programmable chip unit...Pershing's Bill Ackman offered a new plan to win control of Howard Hughes Holdings...The Financial Times said a Japanese group may seek investment from Tesla and others in Nissan Motor.

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By Gavin Bade

President Trump on Friday signed a presidential memo directing his administration to evaluate placing tariffs on trading partners that levy taxes and regulations against American tech companies, taking aim at a major trade irritant for companies like Meta and Google.

"What they're doing to us in other countries is terrible with digital," Trump said in the Oval Office on Friday.

The memo directs the U.S. Trade Representative's office to renew tariff investigations started during Trump's first term on countries that impose digital services taxes, according to a fact sheet provided by the administration. Those countries include certain European Union member nations, as well as Canada, India and others.

Trump has long argued that such taxes unfairly target American firms. His nominee to serve as U.S. Trade Representative, Jamieson Greer, spoke out against the digital service taxes during this confirmation hearing on Capitol Hill this month.

The memo also directs agencies to look beyond taxes and devise ways to respond to foreign tech regulations, as well as "unfair fines, practices, and penalties that undermine the ability of American companies to operate as intended," the fact sheet said.

The time frame for the investigations wasn't immediately laid out by the White House. Trump has separately ordered a number of trade policy reviews to be completed by April 1.

Penalizing countries that tax U.S. tech firms would address a longstanding irritant for Silicon Valley, which has been targeted by a number of nations levy digital services taxes and antitrust investigations in recent years.

In 2019, Trump's USTR initiated tariff probes into digital taxes in France, Italy, Spain, India and other nations, finding them to be discriminatory toward U.S. firms. But the Biden administration didn't act on the matter, sparking broad outcry from the tech industry and Republicans on Capitol Hill.

With Trump back in office, the prospect of action has grown more likely. Trump has used hardball tactics to counter digital services taxes before, like when he threatened to impose tariffs on French wines and champagnes if Paris didn't pull back on its tax. President Emmanuel Macron relented at the time, but France has since instated a digital services tax that could be targeted by Trump once again.

Greer, the Trump trade nominee, told senators early this month that the U.S. "should not be outsourcing our regulation to the European Union or Brazil or anyone else. They can't discriminate against us, and it won't be tolerated."

Trump's actions on digital trade issues come as Silicon Valley mounts a concerted campaign to cozy up to the new administration. Earlier on Friday, Trump told reporters he had met with Apple CEO Tim Cook the day before, and that the company is planning to "invest hundreds of billions of dollars" in the U.S. — a claim the company hasn't yet confirmed.

Separately, USTR also announced it would open a comment period on potential tariffs or other trade remedies on the Chinese shipbuilding industry, which the U.S. and other governments say is unfairly subsidized by Beijing. The Biden administration, on its last day in office, recommended action against the Chinese sector. The announcement from USTR indicates the Trump administration will seek to build its own record on the issue before acting.

Write to Gavin Bade at gavin.bade@wsj.com

The Standard & Poor's 500 fell 1.7% this week as consumer discretionary and communication services stocks weighed.

The index ended Friday's session at 6,013.13, moving it into the red for the month. The S&P 500 is now down 0.5% in February, but up 2.2% this year.

Data released this week by the National Association of Realtors showed January existing home sales in the US dropped more than projected amid elevated mortgage rates and higher prices. US housing starts fell more than expected last month amid declines in single- and multi-family projects, government data showed

Walmart (WMT) issued a full-year earnings outlook below market estimates amid uncertain consumer behavior and geopolitical conditions. The disappointing guidance came despite better-than-expected fiscal fourth-quarter results from the retailer.

The consumer discretionary sector had the largest percentage drop this week, down 4.3%, followed by a 3.7% decline in communication services. Industrials, materials, financials and technology also fell.

Cruise operators' stocks were among those hit hardest in the consumer discretionary sector as newly confirmed US Commerce Secretary Howard Lutnick suggested the Trump administration would force cruise operators to pay US taxes. Shares of Royal Caribbean Cruises and Carnival fell 11% each on the week while Norwegian Cruise Line Holdings lost 8.6%.

In communication services, shares of Facebook parent Meta Platforms fell 7.2%. The company said in a regulatory filing late Thursday that it has increased the target bonus for each of the company's executive officers, other than its chief executive, to 200% of base salary from 75%, effective beginning with the 2025 annual performance period.

However, the utilities sector rose 1.4%, followed by gains of 1.1% each in energy and health care. Consumer staples and real estate also edged higher.

American Electric Power was among the gainers in utilities, up 3.4%. Morgan Stanley raised its price target on the stock to $108 from $105 while keeping its investment rating at overweight.

Devon Energy was among the energy sector's gainers, climbing 8.2% as the company reported Q4 core earnings per share above estimates while revenue also surpassed the Street view.

Next week's earnings calendar features Home Depot (HD), Intuit (INTU), NVIDIA (NVDA), Salesforce (CRM), Lowe's (LOW), TJX (TJX) and Berkshire Hathaway .

Economic data will include February consumer confidence, revised Q4 gross domestic product and January personal consumption expenditures, a closely watched inflation report.

Tech stocks were in the red late Friday afternoon, with the Technology Select Sector SPDR Fund (XLK) falling 2.7% and the SPDR S&P Semiconductor ETF (XSD) dropping 3.2%.

The Philadelphia Semiconductor index retreated 3.2%.

In corporate news, Advanced Micro Devices is in talks to sell some data center manufacturing plants, Bloomberg reported. Its shares were falling 2.8%.

Pony AI P shares jumped past 30% after it said Friday that it introduced paid robotaxi services from multiple locations in Guangzhou's city center to Guangzhou Baiyun International Airport and Guangzhou South Railway Station in China.

Akamai Technologies has "limited" short-term growth opportunities, BofA Securities said in a note Friday, following the company's Q4 results overnight. BofA downgraded Akamai to neutral from buy and cut its price target to $100 from $125. Akamai shares dropped past 21%.

Apple Chief Executive Tim Cook promised President Donald Trump to move the company's manufacturing to the US from Mexico, Trump told a gathering of governors Friday, according to a Bloomberg report. Apple shares were fractionally higher.

Apple said Friday it will bring Apple Intelligence to Vision Pro in April, offering text-based features such as proofreading, rewriting, summarizing, and ChatGPT-powered composition.

Additionally, Image Playground and Genmoji will also be added to visionOS, along with features like Smart Reply and Create a Memory Movie, the company said.

Apple will utilize on-device processing for most tasks and Private Cloud Compute for larger requests without storing or sharing user data.

Spatial Gallery for photos and videos, along with a new iPhone app for Vision Pro will also be made available, according to the company.

Tech stocks were in the red Friday afternoon, with the Technology Select Sector SPDR Fund (XLK) falling 1.8% and the SPDR S&P Semiconductor ETF (XSD) dropping 2.8%.

The Philadelphia Semiconductor index retreated 2.8%.

In corporate news, Apple Chief Executive Tim Cook promised President Donald Trump to move the company's manufacturing to the US from Mexico, Trump told a gathering of governors Friday, according to a Bloomberg report. Apple shares were rising 0.7%.

Akamai Technologies has "limited" short-term growth opportunities, BofA Securities said in a note Friday, following the company's Q4 results overnight. BofA downgraded Akamai to neutral from buy and cut its price target to $100 from $125. Akamai shares dropped 20%.

The Department of Justice and the Securities and Exchange Commission are investigating a $32 million deal between CrowdStrike and Carahsoft to provide cybersecurity tools to the Internal Revenue Service, Bloomberg reported. CrowdStrike shares fell 4.9%.