Warren Buffett has admitted a trade war between the US and China would be "bad for the whole world."
Buffett spoke after President Donald Trump tweeted on that he will raise tariffs on $200 billion of Chinese imports to 25% from 10% beginning on Friday, and "shortly" slap a 25% tariff on $325 billion of Chinese goods that have not been taxed.
Major stock markets fell worldwide on Monday in response to the president's tweet, which came ahead of scheduled trade talks this week, and was a "rational" response, Buffett said on CNBC.
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Buffett's conglomerate Berkshire Hathaway Inc owns or invests in many companies that do business in China, including Apple Inc, in which it has a more than $50-billion stake.
"If we actually have a trade war it will be bad for the whole world," Buffett said. A full-scale trade war is unlikely but "would be bad for everything Berkshire owns," he added.
He nonetheless said it would be "nonsense" for investors to sell stocks based on headlines, and that the U.S.-China would not affect how Omaha, Nebraska-based Berkshire operates.
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Trump on Monday tweeted that the US has for many years lost $600 billion to $800 billion annually on trade, and "with China we lose $500 billion. Sorry, we're not going to be doing that anymore!"
Buffett said that for some people in negotiations "the best technique is to act half-crazy," but it would be ineffective to "shake your fist first and then shake your finger later on."
