Warren Buffett frequently speaks his mind on a variety of subjects. He talks about stocks, people he admires, mistakes he’s made, and more.

Two subjects you won’t hear Buffett discuss often are politics and Social Security. However, in a recent interview, the 94-year-old investor warned about the potential impact of President Trump’s tariffs. And the ramifications of his warning could spill over to Social Security.

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Buffett’s stark warning

CBS News senior correspondent Nora O’Donnell interviewed Buffett several weeks ago. The main focus of this interview was on the late Washington Post publisher Katherine Graham, a longtime friend of Buffett’s. But O’Donnell eventually shifted the conversation to other topics.

She attempted to get Buffett’s view on the state of the U.S. economy. He was reluctant to engage, though, replying: “Well, I think that’s the most interesting subject in the world, but I won’t talk, I can’t talk about it, though. I really can’t.”

O’Donnell then tried another tack. With significant stock market turmoil stemming from concerns about President Trump’s proposed tariffs, she asked Buffett how tariffs might affect the economy. This time, he didn’t balk at responding. Buffett said: “Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree.”

The veteran CBS News reporter followed up with a question about how tariffs could affect inflation. Buffett answered:

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?”

How Social Security could be affected by tariffs

Neither O’Donnell nor Buffett mentioned Social Security during this interview. However, Buffett’s warning about tariffs could directly affect the popular federal program.

The clearest connection between tariffs and Social Security is related to O’Donnell’s question about how tariffs affect inflation. Buffett was correct that tariffs are taxes on goods imported to a country. While he joked about the Tooth Fairy not paying those taxes, the legendary investor didn’t say what most economists would: Consumers typically pay higher prices as a result of tariffs, which leads to higher inflation.

It isn’t only economists who tie tariffs to inflation. Federal Reserve Chairman Jerome Powell, who was an investment banker and attorney earlier in his career, unequivocally stated in a recent press conference that the Fed’s increased inflation estimate for 2025 is largely due to the anticipated impact of tariffs.

How does higher inflation from tariffs affect Social Security? Higher cost-of-living adjustments (COLAs). The annual Social Security COLA is based on inflation.

However, there’s also another way that tariffs might affect Social Security. Steep tariffs, especially if they spark a full-blown trade war with other countries, could slow economic growth. Some Wall Street analysts have raised their estimated probabilities of a U.S. recession mainly because of concerns about tariffs.

A significant economic downturn would probably lead to lower employment, which would translate to lower FICA payroll taxes that help fund Social Security. Lower-than-expected revenue flowing into the program could accelerate the timeline for when the Social Security trust funds are depleted.

Tariffs promised don’t always mean tariffs kept

Should Social Security beneficiaries bank on higher COLAs? Will the Social Security trust funds run out of money sooner than projected as a result of tariffs? Not necessarily.

President Trump has backed down from some of his threats about imposing especially onerous tariffs on specific countries. The president retreated from his idea of a 200% tariff on European alcohol. In an interview last week with NewsMax, Trump said that across-the-board reciprocal tariffs scheduled to be implemented on April 2 would probably be more “lenient than reciprocal.”

Even if most of the tariffs the president has proposed are implemented, inflation perhaps won’t spike and economic growth might not slow sharply. Trump could quickly reverse course if the economic impact of his tariffs begins to be too painful.

Buffett called tariffs “an act of war.” In wars, too many casualties can lead to a rapid ceasefire.

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