Warren Buffett has weighed in on the free trade debate.
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BUFFETT: Free trade is 'wonderful' ... but not for everyone
Warren Buffett on the positives and negatives of free trade.
US Mexico border trade tomato produce vegetables jobs workers
"Free trade is wonderful for the world and the United States. But its benefits are diffused among 320 million people," he said in an interview with CNBC's Becky Quick on Monday. "You buy your bananas cheaper because we don't try and produce them in the United States. But the penalties from free trade are terrible to specific industries."
"And as an investor, I can own — make a dumb decision on owning a shoe company, but if I own a good insurance company, I can diversify away the problems. If you are a 55 year old steel worker, you can't diversify away your talents," he added.
US President Donald Trump, in particular, made the debate over free trade one of the central topics of his campaign. He argued in favor of ripping up trade deals, said NAFTA was "the worst trade deal in the history of the country," and called the Trans-Pacific Partnership, or TPP, "a rape of our country."
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And during his first week in office, Trump signed an executive regarding his intent to pull the US out of the TTP. Additionally, he has on multiple occasions stated his intent to "renegotiate" NAFTA.
Trade between countries can theoretically improve economic efficiency and make everyone wealthier by allowing countries to specialize in what they're good at. Despite that, and as Buffett pointed out, the costs and benefits of trade aren't always evenly distributed.
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