Billionaire Warren Buffett, chairman of Berkshire Hathaway, speaking before Trump’s tariffs on Canada and Mexico went live on Tuesday, called the tariffs “an act of war.”
“Actually, we’ve had a lot of experience with them [tariffs],” Buffett said during an interview with CBS News for a documentary on Katherine Graham, the late Washington Post publisher, reports the New York Post (NYP).
“They’re an act of war, to some degree,” he said.
The new duties, which went into effect Tuesday, impose a 25% levy on Canadian and Mexican goods exported to the US and an additional 20% on China. The three countries accounted for 40% of the US’s imported products last year.
Responding to warnings the tariffs would reheat inflation, impacting the automotive industry in particular and sending up prices for new cars as much as US$12,000 in the US, Buffet said, with a laugh, “Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” reports NYP.
“And then what? You always have to ask that question in economics. You always say, ‘And then what?’”
New cars aren’t the only products Americans will be paying more for because of the tariffs, including a range of goods, from food and electronics to home appliances and cars, reports the NYP.
The NYP compiled a list of products from Canada and Mexico that will cost Americans more:
From Canada (all in US dollars from the NYP):
Agricultural products from Canada include grains such as wheat, barley, and oats, along with meat products like beef, pork, and poultry.
Dairy products, including cheese, milk, and butter, are also significant imports. The US also imports fruits and vegetables, particularly out-of-season produce.
For grocery retailers the higher import costs leave little room to absorb the additional expenses, making it likely that price hikes will be passed directly to consumers.
The US also imports a significant number of vehicles and auto parts from Canada, including cars, trucks, engines, transmissions, tires, and other components. Many automakers have integrated supply chains that cross the border multiple times.
Vehicles sold in the US are rarely built entirely on American soil. Many automobile components cross the Mexican and Canadian borders multiple times before final assembly, whether in the US or one of its neighbouring trade partners.
“There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion by tariffs,” Peter Nagle, an automotive economist for S&P Global Mobility told CNN.
“I would think prices (will) start to change in one-to-two weeks (now that the tariffs are in effect).”
An analysis by the Anderson Economic Group (AEG), a Michigan-based think tank, estimates that production costs for vehicles manufactured in North America will rise between $3,500 and $12,000, reports NYP, adding, “These higher costs could make it unfeasible to continue producing certain models, especially those with lower-cost option packages.”
It could lead to industry-wide job cuts and production reductions, said Patrick Anderson, CEO of the AEG.
“Producers will stop making some of the models,” he said.
Machinery and equipment are also major imports, covering industrial machinery, construction and mining equipment, as well as computers and electrical machinery.
From Mexico (all in US dollars) from the NYP:
The US maintains a robust trade relationship with Mexico, importing a variety of goods that bolster various sectors of the US economy. In 2024, US goods imports from Mexico totaled $505.9 billion, marking a 6.4% increase from the previous year, reports NYP.
In 2024, the US imported $46 billion worth of agricultural products from Mexico, including $8.3 billion in fresh vegetables, $5.9 billion in beer and $5 billion in distilled spirits.
The largest single category was fresh fruit, totaling $9 billion, with avocados alone accounting for $3.1 billion.
“Another significant portion of the imports comprises vehicles and automotive parts, underscoring Mexico’s pivotal role in the North American automotive industry,” reports NYP. “In 2023, the US imported vehicles valued at $130.03 billion from Mexico, including cars at $44.96 billion, parts and accessories for motor vehicles at $35.11 billion and vehicles for transporting goods at $32.88 billion."
Electrical machinery and equipment also represent a substantial segment of US imports from Mexico.
In 2023, these imports were valued at $85.55 billion, encompassing products such as insulated wires and cables at $15.62 billion, telephones and smartphones at $10.36 billion, and monitors and projectors at $10.16 billion.
Additionally, the US imports significant amounts of mineral fuels, oils, and agricultural products from Mexico.
Americans will pay more for all of the above as long as the tariffs are in place
