Warren Buffett, the legendary investor, delivered a pointed critique of protectionist trade policies during Berkshire Hathaway’s annual shareholder meeting this past Saturday. Without explicitly mentioning President Trump, Buffett declared that using trade as a weapon is a significant error. He emphasized the importance of global prosperity, arguing that a more prosperous world benefits the United States, rather than harming it. His statement comes on the heels of the White House’s controversial implementation of steep import tariffs, causing significant market volatility.
Buffett highlighted the folly of alienating the vast majority of the global population (7.5 billion people) while celebrating the success of a relatively small portion (300 million Americans). He stressed the need for a more collaborative and less confrontational approach to international trade, suggesting that such a strategy would ultimately lead to greater safety and prosperity for future generations. This marks Buffett’s most direct public commentary on the issue of tariffs to date.
The timing of Buffett’s remarks is particularly relevant, given the recent first-quarter GDP contraction – the first since 2022. Berkshire Hathaway’s first-quarter earnings report itself acknowledged the considerable uncertainty created by tariffs and other geopolitical events, highlighting the impact of these policies on even the most successful and diversified businesses. The report also noted that Berkshire is unable to accurately predict the future impact of these tariffs.
Further underscoring the economic climate, Buffett’s investment strategy has been notably defensive for the past ten quarters. Berkshire Hathaway significantly reduced its holdings in major companies like Apple and Bank of America, resulting in a record-breaking cash pile of $347 billion by the end of March. This massive cash reserve reflects a cautious approach to investment in the current uncertain economic landscape.
Buffett’s message is clear: global cooperation and free trade are vital for long-term economic health and security. His concerns, backed by his decades of experience and Berkshire Hathaway’s extensive holdings, serve as a powerful reminder of the potential negative consequences of protectionist policies.
