Warren Buffett calls U.S. tariff policy 'a big mistake' as Berkshire Hathaway reports steep drop in earnings

Berkshire Hathaway CEO Warren Buffett on Saturday U.S. time harshly criticized the use of tariffs as a policy tool, calling the U.S. administration’s tariff policy “a big mistake,” and saying that trade and tariffs “can be an act of war,” according to U.S. media reports. 

Buffett’s criticism of the U.S.’ tariffs came as Berkshire Hathaway reported a worse-than-expected drop in operating earnings in the first quarter and as the U.S. famed investor announced that he is stepping down as the CEO of the firm.

“Trade should not be a weapon,” Buffett said during Berkshire Hathaway's annual shareholder meeting in Omaha, the U.S. state of Nebraska, on Saturday, according to CNBC. “I do think that the more prosperous the rest of the world becomes, it won’t be at our expense, the more prosperous we’ll become, and the safer we’ll feel, and your children will feel someday.”

Trade and tariffs “can be an act of war,” Buffett added. “And I think it’s led to bad things. Just 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,” according to CNBC. 

Notably, the remarks drew a round of applause from the audience.

Buffett explained that protectionist policies could have negative consequences over the long term for the U.S., CNBC reported. “It’s a big mistake, in my view, when you have seven and a half billion people that don’t like you very well, and you got 300 million that are crowing in some way about how well they’ve done – I don’t think it’s right, and I don’t think it’s wise,” Buffett said.

At the shareholder meeting, Berkshire Hathaway reported that its operating earnings, which include the conglomerate’s fully owned insurance and railroad businesses, dropped by 14 percent to $9.64 billion during the first three months of the year, CNBC reported.

The company further noted that the U.S. tariff policy and other geopolitical risks created an uncertain environment, warning that “our periodic operating results may be affected in future periods by impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events.” 

Buffett also announced at the shareholder meeting that he would step down as CEO at the end of the year. Greg Abel is expected to take over as CEO, pending board approval.