Legendary investor Warren Buffett has made a rare public comment about President Donald Trump’s latest round of tariffs, warning that the move could drive inflation and hurt consumers.
In an interview with CBS News’ Norah O’Donnell, Buffett called tariffs “an act of war, to some degree.” The interview was conducted for a documentary about Katharine Graham, the late publisher of The Washington Post.
Buffett’s conglomerate, Berkshire Hathaway, owns businesses across several key sectors, including:
- Insurance
- Railroads
- Manufacturing
- Energy
- Retail
His comments mark the first time the 94-year-old “Oracle of Omaha” has spoken publicly about Trump’s trade policies since Trump left office.
Trump’s New Tariffs Take Effect Soon
Last week, Trump announced new tariffs that will take effect on March 4:
- 25% tariffs on imports from Mexico and Canada
- 10% tariffs on imports from China
China has already promised to retaliate, raising concerns of another trade war.
During Trump’s first term, Buffett regularly spoke about the dangers of escalating trade disputes.
In 2018 and 2019, he warned that Trump’s aggressive trade policies could hurt both the U.S. and global economies.
Buffett on Tariffs: “The Tooth Fairy Doesn’t Pay ’Em!”
Buffett explained why tariffs matter to everyday Americans.
He said:
“Over time, they are a tax on goods.
“I mean, the Tooth Fairy doesn’t pay ’em!”
“And then what? You always have to ask that question in economics. You always say, ‘And then what?’”
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Buffett Avoids Direct Comment on Economy
While Buffett openly discussed tariffs, he avoided giving a direct opinion on the overall 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.”
Berkshire’s Recent Moves Signal Defensive Stance
Over the past year, Berkshire Hathaway has been selling stocks at a rapid pace and building up record levels of cash.
Key facts about Berkshire’s recent strategy:
- Buffett sold billions of dollars in stocks in 2024
- Berkshire’s cash reserves hit an all-time high
- Many see this as a sign Buffett is preparing for his successor
Some experts believe Buffett’s conservative strategy reflects bearish views on the market.
Others think he is simply positioning Berkshire for long-term stability, regardless of short-term political or economic changes.
Market Volatility and Investor Uncertainty
Buffett’s cautious moves come during a time of increased market volatility.
Several factors are worrying investors, including:
- Concerns about a slowing economy
- Unpredictable policy shifts under Trump
- Uncertainty over how tariffs will impact global trade
The S&P 500 is up only about 1% so far this year, showing how fragile investor confidence has become.
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What Buffett’s Warning Means for the Future
Buffett’s comments highlight a key question for businesses and consumers alike: How much will tariffs drive up prices?
As March 4 approaches, companies importing from Mexico, Canada, and China will need to decide whether to absorb the extra costs or pass them on to consumers. Either option could ripple through the economy.
Buffett’s track record of cautious but insightful economic predictions makes his warning worth noting. For now, his message is clear — tariffs may seem like a tool against other countries, but ultimately, American consumers could pay the price.
