(2003)
Discussion a few days ago: https://news.ycombinator.com/item?id=43579908
In a more recent interview in March 2025:
> Asked about how tariffs will affect the economy, Buffett stated, "Tariffs are actually, we've had a lot of experience with them. They're an act of war, to some degree."
> I asked, "How do you think tariffs will impact inflation?"
> "Over time, they are a tax on goods. I mean, the Tooth Fairy doesn't pay 'em!" he laughed. "And then what? You always have to ask that question in economics. You always say, 'And then what?'"
* https://www.cbsnews.com/news/warren-buffett-on-legendary-was...
Would you argue that the period between 2003 and 2025 have strengthened or weakened the case for free trade?
In the US this has happened:
https://fred.stlouisfed.org/series/MEPAINUSA646N
https://fred.stlouisfed.org/series/DSPIC96
Meanwhile across the entire world this has happened:
https://ourworldindata.org/history-of-poverty-data-appendix
You can argue the growth of globalization & lowering of trade barriers were unrelated to this up-and-to-the-right, but it’s hard to argue they’re making things worse unless you really scope down to particular losers in a world of mostly winners.
https://www.macrotrends.net/global-metrics/countries/USA/uni...
So something reversed the trend Buffett was seeing in 2003.
For the US specifically, various considerations:
* https://twitter.com/ArmandDoma/status/1908189982789095677#m
* https://www.csis.org/analysis/do-not-blame-trade-decline-man...
* https://archive.is/https://www.wsj.com/opinion/free-trade-di...
But in 2025, tariffs are closing the barn door after the horse ran out, went to horse college, settled down, had some foals, and saw them grow up and move into their own doorless barns. But that's populism for you, always responding to the previous crisis with an approach that will enrich its sponsors and then cause the next crisis.
[0] The Republican party's fake "fiscal responsibility" where most of that money was just handed to banks instead, driving up the asset bubbles. I'm saying this as a general libertarian from a conservative Austrian economics view, not as a Democratic partisan booster. But blame where blame is due.
For the vast majority of people, I’d pick the 70 year-old version even if they did live to 90. With Buffet, I’m not so sure.
How expensive does a tariff have to be before it is a de facto blockade?
I think that comparison is much more apt than it first appears.
(Having said that, it's not such a ridiculous concept as it seemed.)
blockade, embargo, sanction, tariff. Each are different and have different meaning.
To pile on this point, tariffs are a tax and a subsidy:
> Executives from U.S. steel companies were enthusiastic backers of the 2018 tariffs and have urged Trump to deploy them again in his second term. They have called for the elimination of tariff exemptions and duty-free import quotas, saying those carve-outs allow unfairly low-price steel to enter the U.S. and undermine the steel market.
[…]
> Higher prices for imported steel are often followed by domestic suppliers raising their own prices, which then get passed through supply chains, manufacturing executives said. For consumers already reeling from rising retail prices and inflation, pricier steel and aluminum could further lift costs for durable goods like appliances and automobiles, as well as consumer products with aluminum packaging, such as canned beverages.
> “The issue with tariffs is everybody raises their prices, even the domestics,” said Ralph Hardt, owner of Belleville International, a Pennsylvania-based manufacturer of valves and components used in the energy and defense industries. Steel and aluminum are Belleville’s largest expenses.
* https://archive.is/https://www.wsj.com/economy/trade/trump-t...
So tariffs are (regressive) taxes in the sense that consumers are paying higher prices (with the money going to the government). But they are subsidies in that domestic companies don't have as much pressure on prices and can get more money.
So if you want to help a particular industry might as well just go with subsidies directly instead of the taxation add-on as well.
> The time to halt this trading of assets for consumables is now, and I have a plan to suggest for getting it done. My remedy may sound gimmicky, and in truth it is a tariff called by another name. But this is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars. This plan would increase our exports and might well lead to increased overall world trade. And it would balance our books without there being a significant decline in the value of the dollar, which I believe is otherwise almost certain to occur.
> We would achieve this balance by issuing what I will call Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would, in turn, sell the ICs to parties—either exporters abroad or importers here—wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need ICs that were the byproduct of $1 million of exports. The inevitable result: trade balance.
I think that there could be some downsides to this because the US exports a lot of agricultural goods which are already subsidized as it is.
Also due to the reserve nature of the USD the dollar and international trade mostly done in USD there is a huge demand for dollars keeping it strong compared to other currencies. This fundamentally is at odd with an export driven economy.
What if the Dollar weren't the world's reserve currency, either due to deliberate policy by the U.S., or the inevitable fact that the U.S. economy will shrink as a share of the world's economy as India and China develop?
Having different currencies for internal vs external trade isn’t usually something I associate with prosperous countries.
The issue may be that sovereignty is hard to measure, but I think we have been complaining about the long-tail effects for a while:
- wealth inequality (as businesses become optimized on foreign labor, execs are paid more and workers less)
- job security (volatility for investor class means sudden job cuts or offshoring)
- asset inflation in real estate (no one can afford a freakin house)
- WAR (we have an obligation to defend our debt owners in the Middle East)
Every time the public trust gets violated, we lose a small piece of our future.
An intelligent or competent leader who had the power currently enjoyed by the President would be able to implement the system suggested by Buffet, and it would likely see less opposition than the current tariffs have.
The filibuster rule requires bipartisan agreement to implement any proposed policy, and neither party wants to give an administration from the other party any kind of win.
Perversely, the better the idea, the less likely it is to pass Congress.
Better idea -> it will be successful -> it will be popular -> the administration will benefit politically -> the other party will oppose it -> it won't get 60 votes in the Senate -> it won't become law
"Be fearful when others are greedy and greedy when others are fearful".
I don't know if he's specifically said this but I think a more accurate picture of his view is "unless you're an idiot savant like me whose skill for this would be useless at any other point in history, don't try to time the markets".
See the Superinvestors of Graham Doddville: https://en.m.wikipedia.org/wiki/The_Superinvestors_of_Graham...
His principal is simple: Buy priced fairly or underpriced businesses. Sell overpriced businesses.
The not simple part: Using 80 years of business experience to assess strengths and risks to an enterprise, and not FOMOing into something. He would say, he doesn't buy stocks, he buys businesses. How many people buying stocks have even opened a 10K?
One of the few shining examples of investor vs trader mindset.
that is almost Buffets "USA net ownership balance in 1980" - 360 billion. from that 2003 document... ;)
Can someone explain how this translates for average American citizens? What have been the effects, if any, of consistently trading at a deficit since the 80s?
I've been trying to wrap my head around it, but it seems like there are so many factors at play that the effects aren't obvious.
My intuition is that maintaining trade deficits could cause inflation since US often needs to print money to service its debts. But, that only depends on consistent budget deficits. Inflation also depends on Fed rate somehow...Do consistent deficits increase housing prices? I'm lost..
I hardly know anything about econ. But, my gut feeling is that the effects of 40 years of trade deficits should be clearer than they are. It feels like maybe the status quo has been artificially propped up.
One issue with the story is he suggests the people selling America stuff, say China end up accumulating American land and owning the country but it's not what generally happens in practice. In practice foreigners tend to end up either with US dollar debt, which tends to inflate away, or equity in US companies, of which YCombinator and similar churn out hundreds of new ones each year.
Another thing is foreigners may end up buying some US real estate but the likes of Amazon ends up taking over much of the worlds retail industry as local shops close around the globe.
For reasons like this it's probably not worth worrying too much about the deficit and leaving it to market forces to figure out.
In much of the western US, especially Arizona, there are enormous farms growing water-intensive crops, in particular alfalfa. These farms are owned by assorted entities in the Middle East, and the crops are shipped overseas.
This is an enormous problem. The Colorado River basin is already over-allocated and there is not enough water to go around. But due to how water rights work, any entity can purchase an open-ended amount of our already endangered water supply and do as they please with it.
At this moment it isn't a critical problem, because we do have enough other agriculture and water to support ourselves. But with the direction the climate is heading, eventually we will have a drought of such severity that the water used by those farms makes or breaks us.
During the Great Famine in Ireland, the island consistently produced more than enough food to feed its citizens; it was all simply sent overseas.
It's a self-correcting problem - if the dollar starts losing value, that strengthens or our ability to export. And if countries want to manipulate their currency to maintain their ability to export, then they are helping pay to maintain the balance.
> But imagine that the Japanese both want to get out of their U.S. real estate and entirely away from dollar assets. They can’t accomplish that by selling their real estate to Americans, because they will get paid in dollars. And if they sell their real estate to non-Americans—say, the French, for euros—the property will remain in the hands of foreigners. With either kind of sale, the dollar assets held by the rest of the world will not (except for any concurrent shift in the price of the dollar) have changed.
> The bottom line is that other nations simply can’t disinvest in the U.S. unless they, as a universe, buy more goods and services from us than we buy from them. That state of affairs would be called an American trade surplus, and we don’t have one.
> But under any realistic view of things, our huge trade deficit guarantees that the rest of the world must not only hold the American assets it owns but consistently add to them. And that’s why, of course, our national net worth is gradually shifting away from our shores.
Which companies "enabled it". Which companies got fined for brexit? Facebook AND Cambridge Analytica did and did.
Look what for example Cargill UK "assets" were before brexit and what they are now.
Yes sounds like conspiracy theory, but point is most other comments here do not seem to understand that economic war is constant, permanent, global. and wars do need more then one party to be war. in economic war all participants are either attacking or they stop to exist. And USA IS attacker, because it still exists.
globalism means you plunder from longitude 0-10 then you plunder from longitude 10-20... until you are biting your own ass. or russia will stop you at longitude 28, because russia enslaved / robbed their own people so much that there is nothing to extract.
so do you want for USA to rob its own citizens or do you want USA to rob other parts of the world.
or we can globally change economic model and start being sustainable?
I will just give a small example using black leather jackets.
Black leather jackets are indestructible, you can spill any sort of fluid on them, try to light them on fire (they won't catch fire) throw them in the dirt etc.
They never go out of style either, there is basically no reason why an adult should own more than one black leather jacket.
Now think of how many black leather jackets do you own.
See? People have to find within themselves the will to stop their consumerism , not with this sort of central planning idiocy. And it's not granted that doing away with consumerism is desirable either.
Like for example Trump's impact on American society was much better when he was buying planes, yachts, supercars and foreign models than what it has become of him now that he has stopped pursuing those things.
None. I don't really understand this analogy.
I mean... if we are going to have the EPA and environmental standards, then it stands to reason that we must tax imports from countries that do not. Otherwise we are just moving the pollution elsewhere while burning even more fuel to ship products here. Right? It kind of shows that a lot of environmentalism is just NIMBY-motivated. It's fine if we trash other peoples' back yards. But a lot of our big environmental problems are global, so not only is this hypocrisy but it doesn't work.
It's good that we have workers' rights and OSHA, but the same logic applies. Otherwise we are just exploiting workers elsewhere.
On a somewhat tangent... I find it kind of disturbing that the one area where I have some agreement with MAGA is the least popular and most roundly criticized MAGA policy, and the one most likely to result in an electoral defeat.
Most of the other stuff in MAGA -- isolationism, a love for strongman rule (at home and elsewhere), authoritarianism, cults of personality, misogyny, racism, etc. -- is stuff that I find horrific, but the only thing people really care about is short term economic outcomes.
Being “in favor of some trade restrictions and reindustrialization” does not mean you’re taking a MAGA position. It means you just haven’t been paying much attention to policy, and so you’re basing your ideas of the political options on superficial crap. The result of uninformed citizenry is stuff like what’s happening right now, with the markets going into free fall.
Objectively I don't think Biden was a bad president, and no I didn't vote for Trump.
They also never took a principled stand on it. Biden and Harris never said "the trade policy of Reagan and Clinton was a mistake and we are reversing it." If Harris had said that, she would have flipped Michigan and Wisconsin and maybe Ohio. With one sentence. Throw in "the Iraq war was a mistake, and while I support Ukraine we need to make sure we don't repeat the mistakes of the past" and she might have flipped a few more.
If that's at all what Harris thinks, then the Democratic Party has an enormous communication problem. They don't know how to connect and they don't claim their wins. They sound like their whole communication agenda is set by consultants and PR people, because it is, and when people hear that they dismiss it as bullshit because everything consultants and PR people say is bullshit. That communication style is a huge contrarian indicator. When people hear a press release they tune out.
The right has learned how to talk to people. Or rather, they've un-learned the communication playbook of the latter half of the 20th century. That's why they're winning.
I knew Harris was going to lose when she skipped Rogan for SNL. I'm not a big Rogan fan (he's gone way downhill since his early years) but he's how you reach people today. Nobody cares about SNL.
I think a good first step would be to start listening to people like AOC -- not necessarily about all her policy views but about how she communicates. She communicates like a 21st century politician, not like someone from 1980.
