Warren Buffett calls tariffs an 'act of war' amid Donald Trump’s trade move: ‘And then what?’

Billionaire investor Warren Buffett has warned that tariffs function as an “act of war, to some degree,” as the United States moves forward with steep import levies on Canada and Mexico, escalating trade tensions.

Buffett, chairman and CEO of Berkshire Hathaway, made the remark during an interview with CBS News’ Norah O’Donnell that aired Sunday. He cautioned that tariffs ultimately serve as a tax on consumers, raising prices without a clear economic upside.

“The Tooth Fairy doesn’t pay ‘em!” Buffett quipped, pointing out that the cost of tariffs is ultimately borne by businesses and consumers alike.

“You always have to ask that question in economics: Always say, ‘And then what?’” he said.

His comments come as the Trump administration announced Monday a 25% tariff on all goods imported from Mexico and Canada, a move that sent financial markets into turmoil. The new levies affect more than $900 billion in annual US imports from its two largest trading partners, prompting a sharp selloff in global equities and a drop in bond yields.

“They’re going to have to have a tariff,” President Donald Trump said at the White House, arguing that the measure is necessary to encourage companies to build manufacturing plants in the US. “So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”

Trump dismissed calls to delay the tariffs, saying there was “no room left” for negotiations.

The tariffs, which took effect at 12:01 am EST on Tuesday, include a 10% levy on Canadian energy imports.

Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on C$155 billion ($107 billion) worth of American goods.

“Our tariffs will remain in place until the US trade action is withdrawn,” Trudeau said Monday evening.

Mexican President Claudia Sheinbaum also vowed retaliation, saying, “We have a plan B, C, D.”

Meanwhile, China retaliated against fresh US tariffs by imposing additional levies ranging from 10% to 15% on American agricultural and food products, including chicken, wheat, soybeans, and pork. The tariffs will take effect on March 10, Beijing’s commerce ministry announced.

Buffett has been a longtime critic of protectionist trade policies. In 2016, he called Donald Trump’s tariff proposals “a very bad idea.”

Asked about the overall state of the economy, Buffett described it as the “most interesting subject in the world” but declined to elaborate.

His silence has fueled speculation, especially as Berkshire Hathaway continues to amass record amounts of cash. The conglomerate’s cash holdings reached a historic $334.2 billion in the fourth quarter, up from $167.6 billion a year earlier, as Buffett reduced investments in blue-chip stocks like Apple and Bank of America.