Warren Buffett Criticizes Trump’s Tariffs as an 'Act of War'

Renowned investor Warren Buffett has voiced his concerns over President Donald Trump’s stringent tariffs, warning that they could lead to inflation and higher costs for consumers. "Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree," Buffett stated during an interview with CBS News.

Buffett, who is the CEO of Berkshire Hathaway, made these remarks while watching a documentary about Katharine Graham, the late publisher of The Washington Post. His comments came just a day before Trump’s tariffs on China, Canada, and Mexico were set to take effect, escalating the trade war that has caused concern among international investors.

Buffett, whose business empire spans insurance, railroads, and retail, emphasized that tariffs are essentially a tax on goods. “Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay 'em!” he added with a laugh.

He also remarked that after a certain age, children stop believing in the tooth fairy, implying that economic policies should similarly be scrutinized and questioned. “And then what?” he added, suggesting a need for deeper analysis when considering the impact of such policies.

These are Buffett’s most recent comments on trade, marking his first public critique of Trump’s tariff policies. The Trump administration announced that the tariffs would go into effect on March 4, including a 25% tariff on goods imported from Canada and Mexico, along with a 10% increase on Chinese imports. Trump claimed these tariffs would boost U.S. job growth and invigorate the economy.

The U.S. retaliatory tariffs against Canada and China have not gone unnoticed, and officials from both countries have signaled that the U.S. will not go unchallenged. Buffett has consistently warned that such trade tensions are self-inflicted wounds that could harm the global economy. In 2018 and 2019, he publicly cautioned against the aggressive tariffs imposed by the Trump administration.

When asked about the U.S. economy, Buffett declined to delve deeper into the subject. However, he did reveal that he is stockpiling cash due to his positive outlook on the United States economy. In the final quarter of the last fiscal year, Berkshire Hathaway’s cash reserves soared to an extraordinary $334.2 billion, compared to $167.6 billion the previous year. Speculation about the company's future grew when Berkshire sold off shares of Apple and Bank of America, leading to renewed interest in Buffett's market predictions.

Despite his concerns over tariffs, Buffett remains bullish on the broader prospects of the U.S. economy, even as the trade war intensifies.