Billionaire investor Warren Buffett has sharply criticized the Trump administration’s escalating use of tariffs, calling them “an act of war, to some degree.” The chairman and CEO of Berkshire Hathaway expressed his concerns during an interview with “CBS News Sunday Morning,” highlighting the economic burden tariffs impose on American consumers.
“Over time, they are a tax on goods. I mean, the Tooth Fairy doesn’t pay ’em!” Buffett remarked when asked about the potential impact of tariffs on inflation. “And then what? You always have to ask that question in economics. You always say, ‘And then what?’”
His comments underscored the cascading economic effects of tariffs, which are ultimately borne by American consumers through higher prices of goods.
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Buffett, often referred to as the “Oracle of Omaha,” offered only guarded insights into his views on the current economic climate. When asked about the state of the economy, he said: “Well, I think that’s the most interesting subject in the world, but I won’t talk, I can’t talk about it, though. I really can’t.”
He also refrained from discussing politics, maintaining his recent stance of avoiding endorsements or political commentary. Despite his reluctance to delve into economic specifics, Buffett reiterated his confidence in the U.S. economy, stating that “a majority of any money I manage will always be in the United States because it’s the best place.” His enduring faith in the U.S. market aligns with his investment philosophy, which has consistently favored American businesses.
Since taking office, President Donald Trump has aggressively used tariffs as a cornerstone of his trade policy, targeting countries like China, Mexico, Canada, and the European Union. Economists have repeatedly warned that these tariffs could hurt the domestic economy, with additional costs likely to be passed on to American consumers rather than foreign exporters.
Trump’s approach has included placing a 10% tariff on goods from China last month, which he followed with another 10% tariff last Thursday, accusing Beijing of not doing enough to prevent fentanyl from entering the U.S. The Trump administration has also announced a 25% tariff on all steel and aluminum imports to the U.S., set to take effect on March 12.
Moreover, Trump proposed a 25% tariff on Mexico and Canada, which was initially supposed to take effect in February but was postponed, now started on Tuesday. However, Commerce Secretary Howard Lutnick hinted that the tariffs might not be as high as 25%. Trump’s tariff threats also extended to European Union countries, and he warned of a potential 100% tariff on BRICS nations if they attempted to replace the U.S. dollar as their reserve currency.
The tariffs have sparked significant backlash from affected countries, many of which have retaliated with their own tariffs on U.S. goods. China has responded to the U.S. tariffs by imposing duties on American agricultural products, hitting U.S. farmers hard and contributing to a sharp decline in exports of soybeans, pork, and other produce. Beijing also targeted the U.S. automobile industry, adding to the strain on American manufacturers.
In response to the steel and aluminum tariffs, the European Union is gearing up to impose retaliatory tariffs on iconic American products such as bourbon, motorcycles, and jeans. Canada, one of the closest U.S. allies, slapped tariffs on steel, aluminum, and a variety of consumer goods from the U.S., including ketchup and lawnmowers. Mexico, too, joined the fray by getting ready to enact tariffs on U.S. pork, apples, and cheese, aiming to protect its local industries from the impact of American trade policies.
These tit-for-tat measures have raised concerns among economists and trade experts, who warn that escalating tariffs could trigger a global trade war, disrupt supply chains, and stifle economic growth. The additional costs of tariffs are often passed down to consumers, leading to higher prices for everyday goods.
Analysts also worry that prolonged trade disputes could undermine investor confidence and create volatility in financial markets. The business community in the U.S. has been vocal in its opposition to the tariffs, with trade groups representing industries from manufacturing to retail warning of potential job losses and declining sales.
Buffett, who has previously supported Democratic candidates including Barack Obama and Hillary Clinton, has chosen not to endorse a candidate in the 2024 presidential election. His decision aligns with his recent caution against being impersonated or misrepresented, as he noted in a CNBC interview last year: “Nobody should believe anybody saying I’m telling them how to invest or how to vote.”
The billionaire’s reluctance to enter the political fray this election cycle contrasts with his active involvement in past elections.
As the Trump administration continues to wield tariffs as a policy tool, many are asking the same question Buffett posed—”And then what?”—as they contemplate the long-term effects on inflation, consumer spending, and the overall stability of the global economy.
