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Warren Buffett Calls Tariffs 'An Act of War'—What It Means for the Economy

3/3/2025
Warren Buffett warns that tariffs imposed by Trump are 'an act of war,' suggesting they act as a tax on goods that could hurt the American economy. As tensions rise, what does this mean for consumers and investors?
Warren Buffett Calls Tariffs 'An Act of War'—What It Means for the Economy
Buffett critiques Trump's tariffs as dangerous for the economy, calling them a tax on goods. Discover his insights on the impact of these policies!

Warren Buffett on Tariffs: An Act of War

In a recent interview with CBS News Sunday Morning, Warren Buffett, the esteemed chairman and CEO of Berkshire Hathaway, made a significant statement regarding tariffs, describing them as "an act of war, to some degree." Buffett emphasized that, over time, tariffs function as a tax on goods, which ultimately impacts consumers. He cleverly remarked, "The Tooth Fairy doesn't pay 'em!" when discussing how tariffs contribute to inflation, urging viewers to consider the broader economic implications by asking, "And then what?"

The Impact of Tariffs on the U.S. Economy

Buffett's insights come at a crucial time as former President Donald Trump has threatened to impose tariffs on multiple countries. Economists have raised alarms that such actions could adversely affect the U.S. economy. They warn that the added costs from tariffs are likely to be passed on to American consumers rather than absorbed by foreign exporters. This situation raises questions about the long-term effects of tariffs on domestic markets.

During the interview, Buffett expressed his reluctance to discuss the current economy in depth, stating, "I think that's the most interesting subject in the world, but I won't talk, I can't talk about it, though." This statement reflects his cautious approach to economic predictions and political commentary.

Trump's Tariff Proposals

Since taking office, Trump has proposed various tariffs, including a 25% tariff on goods from Mexico and Canada, initially slated for February but now expected to take effect soon. Commerce Secretary Howard Lutnick indicated that these tariffs might not reach the proposed 25% rate. Additionally, Trump recently announced a 10% tariff on Chinese goods, citing the country's insufficient efforts to curb fentanyl trafficking into the U.S.

Furthermore, Trump has implemented a 25% tariff on all steel and aluminum imports, with this measure set to take effect on March 12. He has also threatened reciprocal tariffs on nations that impose similar taxes on American products, including a 25% tariff on countries within the European Union and a staggering 100% tariff on BRICS nations should they replace the U.S. dollar as their reserve currency.

Buffett's Political Neutrality

Despite his history of supporting candidates like Barack Obama and Hillary Clinton, Buffett has chosen to remain neutral in the upcoming 2024 election. He expressed concern about potential impersonation, stating, "I'm worried about people impersonating me and that's why we put that on the Berkshire website." This caution underscores the importance of authenticity in both investment and political discourse.

In summary, Warren Buffett's perspective on tariffs highlights their potential role as a detrimental force in the economy. As the political landscape continues to evolve, his insights serve as a reminder to consider the long-term implications of such economic policies.

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