Warren Buffett addresses free trade concerns

The United States and China are not likely to clash in any major way over trade, despite tensions created by US President Donald Trump's hard economic line toward Beijing, US billionaire investor Warren Buffett said on Saturday.

Buffett's remarks come as the Trump administration called for a  $200-billion (€167-billion) cut in China's trade surplus with the US, drastically reduced tariffs and a stop to subsidies for advanced technology, at trade talks in Beijing, according to people familiar with the negotiations.

Read more:US-China trade talks end without agreement 

What did Buffett say?

Buffet told shareholders, journalists and analysts at the annual meeting of his company Berkshire Hathaway Inc. in the US city of Omaha:

• "The United States and China are going to be the two superpowers of the world, economically and in other ways, for a long, long, long time."
• "It is just too big and too obvious ... that the benefits are huge and [that] the world is dependent on it in a major way for its progress [for] two intelligent countries [to] do something extremely foolish."
• "We both may do things that are mildly foolish from time to time. There is some give and take." 
• "It is a win-win situation when the world trades."
• The benefits of trade are basically not visible. ... The negatives, and there are negatives, are very apparent and very painful."

Read more: EU: 'Protectionism the biggest threat to growth' 

Fears of trade war: Buffett, a highly respected US investor, made his comments amid fears that Trump's hardline trade stance toward China could cause the world's two biggest economies to go head to head in a damaging trade war. Two days of US-China trade talks, which ended on Friday failed to resolve key differences.

Read more: Opinion: EU should not play Trump's customs games

Who is Warren Buffett?  Buffett, 87, is considered one of the most successful investors globally and is the third wealthiest person both in the US and the world. He is often called the "Oracle of Omaha" by media outlets. Buffett is also known as a public critic of Trump.

What is the Berkshire Hathaway annual meeting?  The annual meeting of Buffett's company, a conglomerate with a wide range of business interests, is often called the "Woodstock for Capitalists" after the famous music festival of 1969. The gathering allows Buffett, an influential voice in the US and world economies, to air his views on a wide range of topics.

Why is the US concerned about China, economically speaking? The Trump administration is concerned not only at the current trade gap of $375 billion in China's favor, but also policies that force foreign companies to share technology with Chinese partners.Trump has threatened to impose tariffs worth $150 billion on Chinese goods as a penalty for what he sees as economic malpractices by Beijing, prompting China to react in kind.

tj/aw (Reuters, AP)