Summary
⚈ Economists warn the tariffs could trigger a recession and mirror 1930s policies
⚈ Buffett remains cautious, holding $325B in cash while promoting open trade
Berkshire Hathaway (NYSE: BRK.A) founder Warren Buffett has slammed the trade tariffs instituted by the United States under President Donald Trump, terming them a ‘mistake’.
According to the Oracle of Omaha, the tariffs, which have triggered massive volatility in the stock market, are a misstep for the U.S. economy, he said during the 2025 Berkshire Hathaway annual shareholder meeting on May 3.
He emphasized the importance of global trade and cooperation and warned that protectionist policies could harm America’s economic standing and international relationships.
Buffett argued that isolating the U.S. through tariffs risks alienating the global community while ignoring the mutual benefits of international trade.
“It’s a big mistake in my view when you have 7.5 billion people who don’t like you very well, and you have 300 million who are crowing about how they have done. <…> We should be looking to trade with the rest of the world. We should do what we do best and they should do what they do best,” Buffett said.
He stressed that countries should focus on their strengths and trade goods and services to maximize efficiency and prosperity.
Tariffs’ impact on economic harmony
The billionaire investor suggested that tariffs disrupt economic harmony and foster divisive attitudes, potentially escalating tensions in an already polarized world.
“There’s no question that trade, trade can be an act of war. I think it’s led to bad things. The attitudes it’s brought out in the United States, I mean we should be looking to trade with the rest of the world, and we should do what we do best and they should do what they do best,” Buffett asserted.
Buffett’s critique aligns with economists’ warnings that tariffs could slow global growth and disrupt supply chains. For instance, as reported by Finbold, economics scholar Steve Hanke believes that the U.S. economy has a 90% chance of going into a recession, partly due to the Trump tariffs.
He noted that the current trade policies resemble the scenario that led to the 1930s market crash, which was partly triggered by the Smoot-Hawley Tariff Act, which raised taxes on imported goods to the U.S.
Rallying stock market
Amid these concerns, the stock market continues to rally, with the benchmark S&P 500 ending the last trading session in the green for nine consecutive days, the longest streak since 2004. However, economists such as David Rosenberg believe this momentum might be masking underlying bearish sentiments.
Despite the economic headwinds, Buffett remains a staunch advocate for long-term optimism about America’s economic potential, provided it embraces open trade.
His take comes as Berkshire Hathaway sits on a record-breaking cash pile of over $325 billion. This massive reserve points to Buffett’s cautious approach amid economic uncertainties.
Featured image via Shutterstock
