Billionaire and veteran investor Warren Buffett made a rare jab at US President Donald Trump’s threats of tariffs, cautioning that the threatened retaliatory tariffs could result in inflation and harm American consumers. In an interview with CBS News, Buffett jokingly said that ‘no tooth fairy’ would pay for these taxes.
“Tariffs are really, we’ve had a lot of experience with ’em. They’re an act of war, to a certain extent,” Buffett said, whose conglomerate, Berkshire Hathaway, has major stakes in insurance, railroad, manufacturing, energy, and retail industries. “In the long run, they’re a tax on goods. I mean, the Tooth Fairy don’t pay ’em!” Buffett chuckled. “And then what? You always have to ask that question in economics. You always say, ‘And then what?'”
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This is the first time the 94-year-old billionaire has spoken about Trump’s economic and trade policies. Trump last week imposed 25 percent tariffs on Mexican and Canadian imports, which will be implemented on March 4. China will also have an extra 10 percent tariff.
Buffett had previously raised alarms over trade wars in Trump’s first term, warning in 2018 and 2019 that the aggressive trade actions would have international consequences. But when asked if he would say anything about the economy’s current state, he refused, saying, “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.”
Buffett, who has been more on the defensive lately, has been quickly selling off stocks and accumulating cash holdings. This is as volatility in the market heightens amid fears of an economic slowdown, Trump’s unorthodox policies, and stock valuations. Consequently, the S&P 500 has increased by only roughly 1 percent this year.