May 4, 2025 | Omaha, Nebraska
Warren Buffett, the 94-year-old billionaire investor and outgoing CEO of Berkshire Hathaway, delivered a scathing critique of President Donald Trump’s aggressive tariff policies during his final Berkshire annual shareholders meeting, framing tariffs as a “dangerous weapon” and “act of war” that jeopardizes global economic stability. His remarks come as Trump, now in his second term, prepares to implement sweeping tariffs targeting imports from China, Canada, Mexico, and other nations, reigniting fears of inflation, trade wars, and geopolitical.
Key Points of Buffett’s Critique
1. Tariffs as Economic Warfare
Buffett likened tariffs to a hidden tax on American consumers and warned that weaponizing trade risks destabilizing global relations. Trade should not be a weapon. It can be an act of war, and it’s led to bad things, he stated, referencing retaliatory measures from trading partners like China and the EU . He emphasized that tariffs often backfire, raising prices for goods such as automobiles (projected to spike by up to $12,000 per vehicle) and straining supply chains.
2. Global Prosperity vs. Nationalism
Buffett stressed that U.S. prosperity is intertwined with global economic health: The more prosperous the rest of the world becomes, the better and safer it gets for us. He cautioned against alienating 7.5 billion people through protectionist policies, warning that crowing about U.S. success while isolating allies fosters long-term risks .
3. Historical Precedents and Economic Fallout
Drawing parallels to the Smoot-Hawley Tariff Act of 1930, which deepened the Great Depression, Buffett noted that tariffs historically trigger deadweight losses and market volatility. Recent analyses, including from the Federal Reserve, estimate Trump’s first-term tariffs added 0.3% to inflation, a figure likely to rise under expanded levies.
4. Berkshire’s Strategic Response
Amid uncertainty, Berkshire Hathaway has stockpiled a record $347.7 billion in cash, reflecting Buffett’s cautious outlook. While he praised Apple CEO Tim Cook for boosting Berkshire’s portfolio, he admitted few investments today meet his value criteria.
5. Political Pushback
The Trump administration dismissed Buffett’s warnings. Commerce Secretary Howard Lutnick called the concerns “silly,” claiming tariffs could replace income taxes—a notion economists widely debunk given modern fiscal demands .
Broader Implications
– Market Volatility: Trump’s April 2025 Liberation Day tariffs caused the S&P 500 to plummet 10%, though markets later rebounded .
– Global Retaliation: China has already imposed retaliatory tariffs of up to 125% on U.S. goods, while Canada and Mexico threaten similar measures .
– Investor Sentiment: Analysts like CFRA’s Cathy Seifert note that Buffett’s warnings resonate with business leaders fearing “demand destruction” in key sectors .
A Legacy of Pragmatism
Buffett’s critique aligns with his longstanding advocacy for free trade, including his 2003 “import certificates” proposal to balance trade deficits without punitive measures. His retirement announcement, marking the end of a 60-year tenure, drew a standing ovation from shareholders, though questions linger about successor Greg Abel’s ability to navigate Trump’s turbulent trade landscape.
Final Word
As Trump doubles down on tariffs, Buffett’s parting message underscores a stark divide: economic nationalism versus global interdependence. With inflation fears mounting and alliances fraying, the Oracle of Omaha leaves Wall Street with a sobering reminder: You always have to ask, ‘And then what?.
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