Billionaire investor Warren Buffett has strongly criticized US President Donald Trump's latest tariffs, calling them “an act of war” and warning about their economic impact. In an interview with CBS on Sunday, Buffett argued that tariffs function as a tax on consumers and ultimately drive up prices.“Tariffs are actually—we've had a lot of experience with them—they're an act of war, to some degree,” Buffett said. He added that consumers, not foreign governments or corporations, end up paying for these tariffs. "The Tooth Fairy doesn’t pay ‘em!" he joked, emphasizing that tariffs lead to higher costs for everyday goods.
 

Trump's Tariff Hikes and Global Trade Tensions

Trump's administration has moved forward with a series of tariff increases, starting Tuesday, which include a 25% tariff on goods imported from Canada and Mexico. Additionally, tariffs on Chinese imports are set to rise from 10% to 20%, further escalating trade tensions.Economists warn that these new tariffs will increase costs on a range of goods, including automobiles, electronics, and household items, ultimately placing a financial burden on American consumers. The trade standoff has also triggered retaliation from China, with the European Union preparing to introduce its own set of countermeasures.Buffett’s comments align with concerns expressed by many economists who fear that escalating trade wars could lead to economic slowdowns, disrupted supply chains, and job losses. This isn’t the first time Buffett has voiced concerns over Trump’s trade policies—he had previously criticized the president’s 2016 tariff plans, calling them a “very bad idea.”
 

White House Dismisses Buffett’s Criticism

Despite the backlash from Buffett and economic experts, the White House remains firm on its stance. US Commerce Secretary Howard Lutnick dismissed Buffett’s criticism, calling it “silly” in an interview with CNN. Lutnick went as far as to suggest that tariffs could potentially replace the IRS, though he inaccurately claimed that the IRS was created during World War I. In reality, the agency dates back to the Civil War, with federal income tax becoming permanent in 1913.While Trump’s administration argues that the tariffs will help American manufacturers and reduce reliance on foreign goods, critics point out that similar trade wars in the past have led to economic downturns rather than prosperity.
 

Buffett Stays Bullish on US Investments Despite Concerns

Despite his criticism of Trump's trade policies, Buffett remains optimistic about the US economy, stating that America is still “the best place” for investments. His company, Berkshire Hathaway, is currently holding a record $334.2 billion in cash after selling off major stock holdings, including Apple and Bank of America.While Buffett refrained from making broad economic predictions, his comments suggest caution in navigating current market uncertainties. With the US economy at a crossroads due to rising trade tensions, investors and businesses alike are closely monitoring how these tariffs will impact growth and inflation in the months ahead.The global trade landscape continues to shift, and whether Trump's tariff strategy leads to economic benefits or unintended consequences remains to be seen. Meanwhile, Buffett’s remarks serve as a stark reminder of the risks associated with aggressive protectionist policies.