Warren Buffett Calls Tariffs an Economic ‘Act of War’

OMAHA, Neb. — Warren Buffett, the renowned CEO of Berkshire Hathaway, expressed serious concerns about President Donald Trump‘s forthcoming tariffs during a CBS interview on Sunday.

Buffett described tariffs as “an act of war, to some degree,” emphasizing their long-term implications for consumers and the economy. “Over time, they are a tax on goods. I mean, the Tooth Fairy doesn’t pay ’em!” he said during a discussion centered around the late Katharine Graham, former publisher of the Washington Post.

Focusing on the economics of tariffs, Buffett urged viewers to consider the question, “And then what?” He highlighted the necessity of examining who will ultimately bear the cost of such policies, as higher taxes on imports typically lead to increased prices for consumers.

The impending tariffs set to take effect on March 4 include a 25% levy on goods imported from Canada and Mexico, alongside an increase of tariffs on Chinese goods from 10% to 20%. These measures have raised eyebrows among economists who predict significant impacts on U.S. consumer prices.

Buffett’s remarks come in the wake of heated discussions surrounding Trump’s tariff proposals, which have been characterized by the president as a strategy to combat illegal drug trafficking and to protect American jobs. In a post on his social media platform, Trump stated, “The proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled.”

In a contrasting opinion, Commerce Secretary Howard Lutnick dismissed Buffett’s critiques, labeling them as “silly.” Lutnick suggested that tariffs could potentially replace the current U.S. tax structure, inaccurately stating that the Internal Revenue Service was created in response to World War I.

In reality, the IRS originated during the Civil War, and the federal income tax was established in 1913, long before the U.S. became involved in World War I. As the global economy has evolved, tariffs have gradually become less effective in generating government revenue, raising questions about the practicality of relying on tariffs alone.

Buffett has a long history of cautioning against tariffs, recalling their detrimental effects during periods like the Great Depression when the Smoot-Hawley Tariff Act ramped up trade barriers, sparking economic turmoil both domestically and internationally. This historical insight underscores the philosopher’s perspective that tariffs often trigger protective policies damaging to the broader economy.

When asked about the current state of the economy, Buffett characterized it as the “most interesting subject in the world,” albeit opting not to provide specifics. However, he affirmed a solid commitment to investing in the U.S., stating that a majority of his managed funds will always remain within the country.

Buffett’s remarks resonate with concerns from various industries affected by the new tariffs. The National Restaurant Association recently warned that the tariffs could lead to losses exceeding $12 billion in the sector, precipitating higher menu prices.

Moreover, a recent survey revealed that 57% of consumers knowledgeable about tariffs hold negative views, primarily due to fears of inflation and product shortages, paralleling anxieties experienced during the COVID-19 pandemic.