President-elect Donald Trump’s fresh tariff threats ignited fears of another high-stakes trade war. Berkshire Hathaway Chair and CEO Warren Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted during Trump’s first term. Then, the “Oracle of Omaha” said the Republican’s aggressive moves could cause negative consequences globally, including triggering inflation that could hurt consumers. “If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.” Before Trump is inaugurated as the next U.S. president on Jan. 20, he already laid out a new wave of tariffs he intends to impose on his first day in office. In a series of social media posts, Trump threatened tariffs of 25% on Mexico and Canada and an extra 10% levy on China, citing illegal immigration and illicit drug trade as reasons for his policy. ‘A tax on consumers’ The legendary investor said the benefits of free trade are practically invisible as consumers are used to how things are priced. However, a reversal of that could cause a spike in prices, which would be felt instantly. Tariffs are “a tax on consumers,” Buffett said. “It changes what people buy. It changes where things are produced. … You don’t know what you would be paying for the clothes you’re wearing today if we had a rule they all had to be manufactured in the United States.” He believes the leader of a country should do a good job of explaining the rationale behind the changes in trade policy. Some hold the view that the president-elect was dropping free-wheeling threats as a negotiating tactic to achieve other political outcomes such as curbing illegal drugs. Others believe the U.S. could see a replay of punitive, retaliatory levies in a full-blown trade war from Trump’s first term. “I’ve always said that the president, any president needs to be an educator-in-chief, which [Franklin] Roosevelt was in the Depression,” Buffett said during Berkshire’s annual meeting in 2018. “You have to be very good at explaining how it does really hurt, in a real way.”