By Trevor Hunnicutt and Jonathan Stempel
OMAHA, Neb. (Reuters) - Billionaire Warren Buffett on Saturday said it is not likely that the United States and China will come to loggerheads on trade, saying the two countries would avoid doing "something extremely foolish."
"The United States and China are going to be the two super-powers of the world, economically and in other ways, for a long, long, long time," Buffett said at Berkshire Hathaway Inc's annual shareholders' meeting in Omaha, Nebraska.
"We have a lot of common interests and like any two big economic entities, there are times when they'll be tensions, but it is a win-win situation when the world trades," Buffett said.
"We will have disagreements with each other (both Democrats and Republicans) and we'll have disagreements with other countries on trade," Buffett said about a trade war.
"It is just too big and too obvious for that the benefits are huge and the world is dependent on it in a major way for its progress that two intelligent countries will do something extremely foolish," he said. "We both (U.S. and China) may do things that are mildly foolish from time to time. There is some give and take."
The Trump administration has drawn a hard line in trade talks with China, demanding a $200-billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said on Friday.
Buffett, 87, and his longtime partner and fellow billionaire Charlie Munger, 94, are leading Berkshire's annual meeting in Omaha, Nebraska, where they are fielding five hours of questions from shareholders, journalists and analysts.
Buffett defended Wells Fargo & Co and its chief executive, Tim Sloan, in response to a question asking when Berkshire would ditch the bank, one of its largest common stock holdings. Many shareholders in the audience applauded the question.
"Wells Fargo is a company that proved the efficacy of incentives, and it's just that they just had the wrong incentives," said Buffett.
He said that, going forward, the company is not "inferior" as investment or from a moral standpoint "to the other big banks with which it competes."
Berkshire owns $25.2 billion of Wells Fargo stock as of March 31, down from $29.3 billion three months earlier.
Wells Fargo investors last week gave strong backing to the bank's directors and executives on Tuesday, indicating they are ready to give its revamped leadership time to rebuild from scandals that included its employees opening potentially millions of sham accounts.
Shortly before the meeting, Berkshire ended its more than year-long stretch of falling operating profit, while a new accounting rule caused the conglomerate chaired by Warren Buffett to suffer an overall net loss. Buffett said the results are not representative of the business.
Operating profit, which excludes investment and derivative gains and losses, rose 49 percent to $5.29 billion, or about $3,215 per Class A share, higher than the $3,116 per Class A share analysts had expected, according to Thomson Reuters I/B/E/S.
The accounting change required Berkshire to report unrealized losses in its equity portfolio, which totaled $170.5 billion at year end, regardless of whether it planned to sell those stocks. That helped the company to a net loss of $1.14 billion, or $692 per share, compared with net income of $4.06 billion, or $2,469 per share, a year earlier.
The results showed little sign of dimming the enthusiasm of the shareholders who gathered in Omaha.
Berkshire sent out slightly more tickets to this year's extravaganza than in 2015, when an estimated 42,000 celebrated Buffett's 50th year at the helm. A couple of million may watch Buffett and Munger online this year via Yahoo Finance.
Outside the convention center, Berkshire shareholders lined up for prime seats in the middle of the night.
William Robertson, a Scottish native who now fights fires and does forestry work in Switzerland, said he got on line at 11:30 p.m. Friday, 7-1/2 hours before doors opened. This year's meeting is his third.
"It gets me first place in the queue, I think when people go to so much effort it shows Warren how important he is for us," Robertson said.
Inside the hall, shareholders snapped selfies with Buffett caricatures, ate ice cream and crawled through an aircraft on exhibit.
When Buffett showed up to look at a BNSF model railroad, a wall of media and shareholders, some holding Buffett figurines, crowded around him as he inched along. "This is me moving at top speed," he said, to laughter. "Thank you for everything, Warren," yelled one well-wisher.
(Reporting by Trevor Hunnicutt and Jonathan Stempel in Omaha; Editing by Jennifer Ablan and Nick Zieminski)
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