Berkshire Hathaway issues stern warning over Trump's tariffs as profits impacted — here's what investors need to know

“It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses,” Berkshire wrote in its Q2 earnings report.

Buffet put it more bluntly and called tariffs “an act of war, to some degree,” in a recent interview with CBS's Norah O'Donnell.

“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em! And then what? You always have to ask that question in economics. You always say, ‘And then what?’”

Tariffs may feel invisible — but they hit you

While tariffs are framed as penalties on foreign countries, they often raise prices for American businesses and consumers. If it costs more to import steel, electronics, or groceries, someone pays — and usually, it's you.

Buffett has long warned about how trade restrictions can:

• Raise the cost of everyday goods
• Disrupt supply chains
• Trigger retaliatory tariffs that hurt American farmers and exporters

The latest moves by the Trump administration — including a proposed $250 visa fee for some international travelers and limitations on tax deductions for gambling losses — are already affecting tourism, manufacturing, and agriculture. Buffett’s companies touch all those sectors, so his concern isn’t theoretical.

Still sitting on a mountain of cash

Despite the cautionary tone, Berkshire is still immensely profitable and liquid. The firm ended the quarter with $344 billion in cash, slightly down from its record $347 billion earlier this year. But instead of spending, Buffett is holding back:

• No share buybacks in Q2
• 11 straight quarters of net stock selling
• $4.5 billion in equities dumped in the first half of 2025

Buffett seems to be waiting for better deals, or maybe bracing for a correction.

A few red flags in the portfolio

Berkshire also recorded a $3.8 billion loss on its long-troubled Kraft Heinz investment, which is reportedly weighing a grocery spinoff to revive growth. Two Berkshire directors resigned from the Kraft Heinz board earlier this year, suggesting waning confidence.

And despite shares falling more than 10% from a record high, Berkshire didn’t repurchase any of its own stock — a sign the firm may be anticipating more room to fall.

What it means for you

You don’t need to own Berkshire stock to pay attention to this report. Berkshire's cautious tone, especially around tariffs, should resonate with everyday Americans. Tariffs will lead to higher prices — whether it’s appliances, electronics, or groceries, expect price hikes if trade tensions escalate.