Buffett warned of the trade deficit in a 2003 Fortune magazine column and proposed an "import certificate", but said trade should not be a weapon
Berkshire Hathaway CEO Warren Buffett was asked about a 2003 column in Fortune magazine in which he called for the establishment of "import certificates" to control the trade deficit.
He admitted that the idea was "a bit of a trick" but better than the current trade situation, and he alluded to President Donald Trump's radical tariffs.
Berkshire Hathaway CEO Warren Buffett was asked about his 2003 warning column about the trade deficit published in Fortune, but told shareholders Saturday that trade should not be used as a weapon.
Buffett proposed in his column that the use of "import certificates" (ICs) are used to balance trade, rather than the use of tariffs. At Berkshire Hathaway's annual shareholder meeting, Buffett was asked whether he believed that import certificates were different from tariffs.
Buffett replied: "Although this is a gimmick, I think it is definitely much better than anything we are talking about now. There is no doubt that trade can become an act of war, and I think it causes bad things, it is just the attitude it triggers."
Buffett wrote in his column that the import certificate is essentially a kind of credit that will be issued to exporters, "the amount is equivalent to the dollar value of their exports."
These exporters can then sell their import certificates to international or domestic importers.
Buffett wrote: "For example, to import $1 million of goods, importers need $1 million of by-product integrated circuits for exported goods." "The inevitable result is: a balance of trade."
He warned that "trade should not be a weapon," and Buffett said: "The more prosperous the rest of the world, it will not come at the expense of us."
He also mentioned the beginning of the United States' reliance on trade 250 years ago and said that this is still the cornerstone of the success of the U.S. economy and that the U.S. should continue to trade.
Buffett said: "I mean, in the United States, we should seek to trade with the rest of the world, and we should do what we do best."
