Key Takeaways:
- Warren Buffett warned that tariffs are an “act of war” and could trigger inflation.
- He made these remarks in a rare TV interview with CBS News for a documentary about Katherine Graham, former Washington Post publisher.
- Former President Donald Trump announced plans to impose a 25% tariff on goods from Mexico and Canada and to double tariffs on Chinese imports to 20%.
Buffett’s Strong Statement on Tariffs
In a rare interview with CBS News, Warren Buffett, CEO of Berkshire Hathaway (BRK.A, BRK.B), described tariffs as an “act of war” and cautioned against their inflationary effects.
When asked by Norah O’Donnell about the economic impact of tariffs, the 94-year-old investing legend responded:
“We have seen the effects of tariffs before. To some extent, they are an act of war.”
On the potential inflationary consequences, Buffett humorously added:
“Tariffs are essentially taxes on goods. And the Tooth Fairy isn’t the one paying them! In economics, you always have to ask: What happens next?”
The “Oracle of Omaha” also noted a long-term trend:
“Prices will be higher in 10 years, in 20 years, and in 30 years.”
Trump’s New Trade War Strategy
Last week, former President Donald Trump announced plans to impose a 25% tariff on goods imported from Mexico and Canada starting Tuesday. Additionally, tariffs on Chinese products will double to 20%.
These protectionist measures could escalate trade tensions and drive inflation higher, reinforcing Buffett’s concerns.
