OMAHA, Neb. -- Investor Warren Buffett says if the U.S. has a full-blown trade war with China, it will be bad for the entire world.
Buffett appeared on CNBC Monday with Berkshire Hathaway Vice Chairman Charlie Munger and Microsoft co-founder Bill Gates, who serves on Berkshire's board. Over the weekend, roughly 40,000 people attended Berkshire's shareholder meeting in Omaha, Nebraska.
Trump said over the weekend that he may impose 25 percent tariffs on more Chinese imports, and financial markets initially plunged. The Dow fell 500 points before recovering somewhat to a decline of about 200 points by midday Monday.
Buffett said Trump is making a "nuclear threat" that may bring the Chinese to the table. But it's impossible to predict the outcome because both countries' leaders are used to getting their way.
"It's a dangerous game," Buffett said.
Munger said a trade agreement that includes some tariffs and both sides feeling somewhat disappointed would be a good thing.
"A good settlement is better than a lovely world war," Munger said.
Gates said the rational thing would be for both sides to agree to a trade deal.
Buffett discussed a variety of other topics during the interview including his dislike of initial stock offerings. Buffett said he hasn't ever bought shares in an IPO for Berkshire Hathaway over the past 54 years.
Buffett says that in an IPO, like Uber's expected offering this week, everyone involved has an incentive to sell the stock. Buffett said he prefers to buy when no one is getting a special commission.
Munger said he isn't sure all the disclosures are believable in an IPO
"There's a lot of lying in modern finance," Munger said. "I don't like lying."
Buffett and Munger also offered support for Wells Fargo, in which Berkshire owns a stake of about 10 percent.
"It's a fine company," Munger said. "They made one mistake on an incentive plan."
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