MW Here's what Warren Buffett thinks of Trump's tariffs: 'Over time, they are a tax on goods.'

By William Watts

Tariffs are an 'act of war, to some degree,' Berkshire Hathaway chair says

'Over time, they are a tax on goods. I mean, the Tooth Fairy doesn't pay 'em.'Berkshire Hathaway Chair Warren Buffett

That's billionaire investor Warren Buffett replying to a question from CBS News about what impact he thought tariffs would have on inflation. The chair of Berkshire Hathaway Inc. $(BRK.A)$ $(BRK.B)$ had for the most part deflected questions about policy moves out of Washington, D.C., and the state of the U.S. economy as he sat for an interview with journalist Norah O'Donnell for a documentary on the life of Katharine Graham, the late publisher of the Washington Post.

But Buffett did weigh in on tariffs. "Tariffs are, actually, we've had a lot of experience with them. They're an act of war to some degree," he said in the interview, which aired Sunday.

Tariffs - and their impact on inflation and economic growth - have been a top concern for investors. Stocks fell sharply Monday afternoon, extending earlier losses, after President Donald Trump said Canada and Mexico had run out of time to avoid 25% levies, which will take effect on Tuesday.

The Dow Jones Industrial Average DJIA dropped over 700 points, or 1.6%, while the S&P 500 SPX slumped 1.9% and the Nasdaq Composite COMP dropped 2.6%.

Tariff jitters were also evident in economic data. The Institute for Supply Management's February manufacturing index came in unexpectedly weak at 50.3 in February, down from 50.9 a month earlier, indicating a slowdown in growth. Any number above 50 signals expansion.

More telling, an index that measures the cost of supplies rose to a 33-month high of 62.4% in February, up from 54.9% in the first month of the year. The last time businesses faced such a big inflation threat was in the middle of 2022. Meanwhile, an index that measures new orders, a sign of future demand, sank back into contractionary territory.

"These surveys are telling you that businesses are preparing for price increases ahead, and the only valid reason why is because of the tariffs," economist David Rosenberg, founder of Rosenberg Research, said in a note.

-William Watts

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March 03, 2025 15:38 ET (20:38 GMT)

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