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Retail Stocks Jump After Supreme Court Strikes Down US Tariffs · Bloomberg Intelligence

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  Speaker 2: One of the areas that was certainly impacted by teriffs
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  Speaker 2: had been retail, and they import a lot of the
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  Speaker 2: stuff we all wear from Asia, from China, from areas
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  Speaker 2: of the world that are subject to teriffs. So we
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  Speaker 2: can get a sense of how this might change the game.
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  Speaker 2: Here this Supreme Court decision today, we welcome put them Goyle,
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  Speaker 2: she covers all the retail companies for Bloomberg Intelligence, put
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  Speaker 2: on what's your I guess your initial thought here from
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  Speaker 2: the retailer's perspective to the extent that these a lot
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  Speaker 2: of these terrifts are going to be rolled back.
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  Speaker 3: Yeah, I think. Look, it's good news for retail because
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  Speaker 3: at the end of their costs will go down. These
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  Speaker 3: tariffs caused unnecessary stress in the supply chains, caused retailers
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  Speaker 3: to raise prices. It lowered their margins. So all that
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  Speaker 3: is now set to reverse. We still don't know what
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  Speaker 3: the magnitude of this will eventually shape out to be.
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  Speaker 3: You know, there's our analysts here on the government side
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  Speaker 3: think that while these have been overturned, you don't know
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  Speaker 3: what else could be added. So I wouldn't say we
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  Speaker 3: go to zero. That's probably not happening. But I do
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  Speaker 3: think that as these tariffs get overturned and as cost
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  Speaker 3: drop for these retailers, we should see a pickup in
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  Speaker 3: margins in twenty twenty six, and also a pickup in
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  Speaker 3: demand because you know, the consumers for a long time,
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  Speaker 3: or at least over the last year, have been very
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  Speaker 3: concerned with inflationary pressures and just prices going up, so
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  Speaker 3: all that will help hopefully ease demand too.
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  Speaker 4: You've mentioned prices going up. Do we know of any companies,
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  Speaker 4: any brands that raised prices because of tariffs where they
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  Speaker 4: made that linked very explicit.
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  Speaker 3: Yes, Snike was one of the retailer that had explicitly
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  Speaker 3: said that it's raising prices not on everything, but on
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  Speaker 3: goods that were over one hundred dollars, notably over one fifty.
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  Speaker 3: They had taken a mid single digit price increase. So
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  Speaker 3: prices did go up across retail from tariffs. They didn't
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  Speaker 3: go up twenty thirty percent, but they did go up
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  Speaker 3: in the single digits, mid to high single digits.
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  Speaker 2: You know, the New York Fed is out with the
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  Speaker 2: report recently saying that about ninety percent of the tariff
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  Speaker 2: costs were born somewhere in the US chain, whether it
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  Speaker 2: was the importers, the companies themselves, consumers, maybe only ten
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  Speaker 2: percent by exporters.
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  Speaker 5: Yeah.
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  Speaker 6: Kevin Hasset disputes that, of course.
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  Speaker 2: Yeah, of course that he does. But I'll go with
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  Speaker 2: the New York Fed. They're pretty solid in their numbers.
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  Speaker 2: So from your perspective and the perspective of the retailers, Punum,
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  Speaker 2: how much did do you think, like the Nikes of
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  Speaker 2: the world kind of took in their margin versus passing
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  Speaker 2: along to consumers.
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  Speaker 3: Yeah, I would say that. I think there was a
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  Speaker 3: shared cost across the tariffs between the suppliers and the
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  Speaker 3: manufact So it wasn't ninety ten. I don't. I find
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  Speaker 3: that hard to believe because if that was the case,
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  Speaker 3: a mid single digit price increase wouldn't be enough to
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  Speaker 3: offset the cost pressures. It'd have to be higher. But
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  Speaker 3: that said, I do think that, you know, they did
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  Speaker 3: see their costs rise and they did try to offset it,
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  Speaker 3: not just through price increases, but also through efficiencies within
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  Speaker 3: their organization, whether it was a cross payroll, whether it's
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  Speaker 3: through technology. You know, we've heard a lot about these
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  Speaker 3: AI investments, and they've really helped improve efficiency across the organization,
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  Speaker 3: but we haven't seen that in the numbers. And my
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  Speaker 3: answer to that is it's not in the numbers because
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  Speaker 3: it's really just been helping offset these incremental pressures from tariffs.
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  Speaker 4: We've seen companies like PepsiCo moved to cut prices on
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  Speaker 4: some of their products, their snack products. And I'm not
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  Speaker 4: comparing snacks with clothing or sneakers, but if a company
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  Speaker 4: like Nike raised prices because of the tariffs, is there
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  Speaker 4: any world in which it might reduce prices or lower
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  Speaker 4: prices because tariffs were removed.
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  Speaker 3: So I think the consumer is expecting prices to go
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  Speaker 3: down when the tariffs are removed. The big question is
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  Speaker 3: if prices went up, let's say ten percent, are they
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  Speaker 3: going to come down ten percent? That typically doesn't happen.
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  Speaker 3: They don't necessarily drop to the same extent they went up.
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  Speaker 3: But yes, would you have some relief from the cost increases? Sure?
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  Speaker 3: I think retailers like Walmart that really push the pedal
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  Speaker 3: on price much harder in care about offering that incremental
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  Speaker 3: value to their customers. That's what they stand for. Those
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  Speaker 3: are the retailers that are probably going to push the
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  Speaker 3: pedal much harder on price when they get the relief
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  Speaker 3: from tariffs.
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  Speaker 2: So what's just broadly defined right now, step back a
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  Speaker 2: little bit, put them what's your view of the consumer
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  Speaker 2: here based upon kind of the results you've seen from
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  Speaker 2: some of the retail companies you follow.
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  Speaker 3: I think the consumer is stretched. I think they're under pressure,
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  Speaker 3: but they're making choices. They're being selective. They're shopping at
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  Speaker 3: retailers that offer them convenience, set off for them, speed,
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  Speaker 3: and that offer them something differentiated. And I think that's
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  Speaker 3: been the story for a little while now. I think
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  Speaker 3: that continues. So retailers like Amazon have been doing well
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  Speaker 3: because they offer both value, convenience, free shipping, and they've
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  Speaker 3: done well Walmart, you know, we heard from they also
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  Speaker 3: did well on their value proposition. So I think it's
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  Speaker 3: those retailers that really stand out in the crowd, or
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  Speaker 3: those that have a fashion element, whether it's urban outfitters,
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  Speaker 3: you know, with just the right assortments that's attracting these
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  Speaker 3: younger shoppers. They're the ones who are doing well.
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  Speaker 4: What does this mean for furniture companies like Wayfair? And
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  Speaker 4: I recognize that Wayfair doesn't make a lot of its
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  Speaker 4: own furniture necessarily, it's outsourced a lot of that.
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  Speaker 6: But have they been explicit in how.
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  Speaker 4: Much turffs have hurt them because most of their manufacturing
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  Speaker 4: is not done in the United States. I'm guessing it's
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  Speaker 4: done overseas.
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  Speaker 3: It is done overseas, But I think with Wayfair it's
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  Speaker 3: a little tricky because, as you said, they are a marketplace, right,
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  Speaker 3: So when you think about Wayfair, they have thousands of
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  Speaker 3: suppliers to choose from our manufacturers or sellers, and if
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  Speaker 3: the seller wants to make a sale, you know, they
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  Speaker 3: can go from one seller who may say the sofa
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  Speaker 3: is one thousand dollars and I have a fifty percent
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  Speaker 3: margin on it. But then there's seller number two who says, well,
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  Speaker 3: you know, I'll take a fifteen percent margin on it
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  Speaker 3: because I want to get the sale. So the diversity
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  Speaker 3: and just the choice that they have on who they
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  Speaker 3: bring on board to offer the compelling prices has helped
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  Speaker 3: them offset a lot of these terraf folds that others
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  Speaker 3: that are vertically integrated have to deal with directly.
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  Speaker 2: Put, we heard a lot of companies in re retailers,
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  Speaker 2: but just across the economy talk about shifting their supply
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  Speaker 2: chains to maybe parts of the world that are less
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  Speaker 2: encumbered by tariffs. Have you seen that in the retail space,
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  Speaker 2: like as Nike making shoes in Vietnam and not China
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  Speaker 2: or anything like that.
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  Speaker 3: Absolutely, the supply chain shift has been going on since
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  Speaker 3: the first round of tariffs actually, and it's only been
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  Speaker 3: pronounced since last year. Staff supply chains to continue to
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  Speaker 3: be diversified. The only difference with this ruling being overturned
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  Speaker 3: is the urgency has somewhat been moderated, so you don't
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  Speaker 3: have to be as reactive as you would have been
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  Speaker 3: last year. You can take your time and be more
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  Speaker 3: strategic about where you want to be diversified. But I
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  Speaker 3: don't think that just because the tariffs are overturned now
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  Speaker 3: everything will go back to China. I think the diversification
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  Speaker 3: step up is here to stay.
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  Speaker 7: Stay with us more from Bloomberg Intelligence coming up after this.
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  Speaker 4: As we look through the different sectors that are impacted
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  Speaker 4: by this Supreme Court ruling basically determining that President Trump's
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  Speaker 4: tariffs under the AIPA provision are legal, Let's take a
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  Speaker 4: look at what this means for the auto industry. Steve
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  Speaker 4: Man is our global Autos and Industrials research analysts, and
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  Speaker 4: Steve I'm looking at the top live block that Bloomberg
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  Speaker 4: makes available to our clients. And one thing that many
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  Speaker 4: people may not realize is that the ruling does not
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  Speaker 4: pertain to the main US tarffs affecting the auto industry.
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  Speaker 4: Walk us through what is affected when it comes to
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  Speaker 4: auto tarifs by this ruling.
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  Speaker 5: Yes, Karl it. The bottom line is there's no impact
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  Speaker 5: on the auto industry, you know, the auto industry. The
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  Speaker 5: terraces on the auto industry is under the Section two
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  Speaker 5: thirty two of the Trade Expansion Act of nineteen sixty two,
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  Speaker 5: so it's not put on in place by the emergency powers.
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  Speaker 5: So the baseline of the twenty five percent tarraf on
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  Speaker 5: auto imports is still there now. Trump did renegotiate with
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  Speaker 5: countries like South Korea and Japan to bring it down
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  Speaker 5: at fifteen, but for the most part, you know, consumer
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  Speaker 5: will still feel the impact of these tariffs of you know,
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  Speaker 5: close to one thousand to three thousand dollars per vehicle
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  Speaker 5: on average. The other thing that I want to highlight
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  Speaker 5: is it's the steal and alutlum import terraff with fifty
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  Speaker 5: that's also not impacted by the Supreme Court ruling today,
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  Speaker 5: and that also has a huge impact on, you know,
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  Speaker 5: the cost for the automakers.
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  Speaker 2: So, Steve, what have you seen so far for the
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  Speaker 2: automakers and how they're dealing with these higher tearf levels.
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  Speaker 2: Are they moving production, are they changing maybe some parts
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  Speaker 2: of the supply chain. What have they been trying to
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  Speaker 2: do to mitigate the terriff costs.
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  Speaker 5: That's a that's a good question, Paul. I think, you know,
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  Speaker 5: I think the reason why Trump went with two thirty
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  Speaker 5: two Section two thirty two approaches is that the auto industry,
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  Speaker 5: given its hue manufacturing base, is critical to the economy,
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  Speaker 5: it's critical to national security. He does want to bring
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  Speaker 5: a lot of that manufacturing back into the US. And
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  Speaker 5: that's what we've seen with the US automaker For example,
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  Speaker 5: GM actually have shifted some of the Silverado production from Oshawa,
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  Speaker 5: Ontario back to the US. And you've seen Honda jun
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  Speaker 5: Day from South Korea making huge investments in the US
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  Speaker 5: to set up manufacturing base. So I think I think
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  Speaker 5: that's still a course for the administration, and I think
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  Speaker 5: we'll still continue to hear more probably in the you know,
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  Speaker 5: in the next few years, more of that restoring auto
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  Speaker 5: manufacturing back into the US.
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  Speaker 6: So how do you see this moving forward?
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  Speaker 4: How does a Ford, how does a GM plan for
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  Speaker 4: the next year, for the next four years, the next
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  Speaker 4: ten years.
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  Speaker 5: Yeah, I think they're going to have to revisit and
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  Speaker 5: they're still doing that, and they have done that already.
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  Speaker 5: Revisit the supply chain, right, I think the low hanging
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  Speaker 5: fruit was moving some of the auto assembly back to
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  Speaker 5: the US. But that's that's that's not enough. You know,
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  Speaker 5: if you're if you're if the supply chain is not
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  Speaker 5: close to where the cars are made, break costs will
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  Speaker 5: go up.
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  Speaker 2: Uh.
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  Speaker 5: There will continue to be potential terrorists, uh in some
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  Speaker 5: of the components. So you're starting to see you know, companies,
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  Speaker 5: especially from South Korea, automakers from South Korea and Japan
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  Speaker 5: actually asking the supplier to shift some of that production
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  Speaker 5: uh into the US, just to cut you know, some
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  Speaker 5: of the freight and potential tear across on the auto
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  Speaker 5: auto parts. So we're going to see a whole lot
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  Speaker 5: of changes in the supply chain, uh and UH. You know,
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  Speaker 5: I think one of the things that we also are
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  Speaker 5: keeping an eye on, uh, it's the U S m
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  Speaker 5: c A, the unit US Mexico kind of free trader
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  Speaker 5: there that's up for review this year. That's going to
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  Speaker 5: have a huge, a much bigger impact on the auto industry.
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  Speaker 5: So we'll see how that plays out.
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  Speaker 7: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 6: Do you want to bring in Dan Ives?
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  Speaker 4: Dan, of course, is the noted analyst, the global head
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  Speaker 4: of Technology research at web Bush Securities.
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  Speaker 6: To get his.
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  Speaker 4: Take on what we're seeing in tech and whether Dan
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  Speaker 4: this SCOTUS ruling is kind of just risk on for
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  Speaker 4: the market overall, and that means a big lift for
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  Speaker 4: the biggest part of the stock market, tech or whether
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  Speaker 4: this is specifically good news for tech companies.
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  Speaker 8: Yeah, this specific good news for tech companies because of
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  Speaker 8: the supply chain is the biggest worries at times what
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  Speaker 8: that could do in terms of the data center build out,
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  Speaker 8: AI build out ships, everything that we're seeing with China. Look,
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  Speaker 8: there's gonna be other ways that they're going to try
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  Speaker 8: to go around this two thirty two, Section three oh one.
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  Speaker 8: The reality is a huge good the tariff policy, and
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  Speaker 8: it's very bullish or tech coming out of the gates.
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  Speaker 8: That's going to be an official teach.
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  Speaker 2: So Dan, it's been you know a little more than
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  Speaker 2: a roughly a year that all companies have been dealing
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  Speaker 2: with this terror fund journey. How have the technology companies
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  Speaker 2: who do have a global supply chain rely a lot
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  Speaker 2: on parts of Asia.
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  Speaker 7: How have they kind of adjusted here?
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  Speaker 8: Look at Minnapolis, removed a latta India, others have you know,
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  Speaker 8: had to make significant investments in the US and all
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  Speaker 8: who look at different spy their supply chain. But you know,
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  Speaker 8: as we talked about a lot of the showing the
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  Speaker 8: vast majority of the supply chain and will continue to
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  Speaker 8: be samodnesia and where you had companies starting to look
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  Speaker 8: at diversification. Increased cost was just going to potentially, you know,
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  Speaker 8: impact the supply chain. That's off the table now and
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  Speaker 8: that's something Look, big tech companies, they'll say publicly behind
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  Speaker 8: closed doors, there are huge sense of relief right now into.
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  Speaker 4: This interesting you know, given that so many of the
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  Speaker 4: big tech CEOs have really aligned themselves with the president,
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  Speaker 4: what does this mean for the big chip makers that
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  Speaker 4: are outside the United States, the tsmcs, the Samsung Electronics
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  Speaker 4: of the world.
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  Speaker 9: I mean, it's extreme positive for them because when you
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  Speaker 9: think about each of them, the question there was how
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  Speaker 9: is that going to impact there from a policy perspective,
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  Speaker 9: from a tower in terms of coming into the US,
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  Speaker 9: And then you start to think about manufacturing.
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  Speaker 8: You'll continue to have some manufacturer moved to the US.
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  Speaker 8: But this is actually going to put the brakes on
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  Speaker 8: some of the policies that some of these tech players had. Look,
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  Speaker 8: there's going to be section two thirty two, Section three
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  Speaker 8: or one, there would be other errors go about it.
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  Speaker 8: But for big tech supply chain, ship players, memory players.
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  Speaker 8: It's a clear positive. There's no way to really go
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  Speaker 8: against that thesis.
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  Speaker 2: Dan, your world has been ropped over the last several
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  Speaker 2: weeks by AI and the impact some people are speculating
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  Speaker 2: and may have on certain parts of the marketplace, including
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  Speaker 2: software companies, particularly software as as service companies. Here, what's
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  Speaker 2: the current thinking as you talk to investors these days?
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  Speaker 8: Yeah, I mean, Paul, I'm kanna is the AI goost
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  Speaker 8: trade because you're trying to fight a goose, because the
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  Speaker 8: view that this is going to massively disrupt software, it's
• 15:41
  Speaker 8: going to massively disrupt cybersecurity, and I've talked about it's
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  Speaker 8: the opposite. I think it's the most disconnected trade that
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  Speaker 8: I've seen in my career on Wall Street in terms
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  Speaker 8: of what's happened to software stocks now. But again, like
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  Speaker 8: we talked about fighting a goost, there's going to be
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  Speaker 8: like boxes that are checked. Whether it's open AI and
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  Speaker 8: one hundred billion, there's zaven Air earning next week, where
• 16:04
  Speaker 8: there's app on AI, where there's circuit financing software companies
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  Speaker 8: showing monetization. This is going to happen, But right now
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  Speaker 8: you're fighting a ghost and the bears are loving it,
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  Speaker 8: but again that will be short lived in my opinion.
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  Speaker 4: That might be the case in the equity market, but
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  Speaker 4: we're seeing private credit leverage loans really come under pressure
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  Speaker 4: because of all those loans to a lot of software companies,
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  Speaker 4: many of which don't have investment grade ratings. Is credit
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  Speaker 4: driving the concerns in the equity market?
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  Speaker 6: What's leading?
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  Speaker 3: What? Dan?
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  Speaker 5: Yeah?
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  Speaker 8: I mean, look, if you get blue out right, I
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  Speaker 8: mean obviously be like some concerns there. But then on
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  Speaker 8: the other hand, look at A Powell and others. So
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  Speaker 8: I think if you look relative to some of the
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  Speaker 8: exposure and what the credit market's telling you, it's still
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  Speaker 8: very healthy from a credit perspective, but no different than
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  Speaker 8: we saw the banks a few years ago, a Silver
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  Speaker 8: Valley Bank and others. There's going to be hyper sensitivity
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  Speaker 8: to anything that happens here. But the reality is is
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  Speaker 8: that these companies have more cash and a lot of countries.
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  Speaker 8: When you actually go through it, the point is like
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  Speaker 8: they're going to continue to do it. But look, it's
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  Speaker 8: like you if there's five people trading CDs instrumental oracle
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  Speaker 8: in their basement, that's going to be extrapoid, right, And
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  Speaker 8: we saw that like a few weeks ago. It's just
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  Speaker 8: a reality like we're going through a ghost trade. It's
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  Speaker 8: an AI ghost trade and you got to navigate through it.
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  Speaker 8: But net net today it's positive for tech and that's
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  Speaker 8: one step forward.
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  Speaker 2: Hey, Dan, you spend a lot of time in Silicon
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  Speaker 2: Valley and it's just a great place to get a
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  Speaker 2: sense of kind of where the you know, the tech
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  Speaker 2: investment mindset is here. Has tariffs dialed back kind of
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  Speaker 2: the risk profile of some of the good folks on
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  Speaker 2: sand Hill Roads as they think about what technology is
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  Speaker 2: the fund is it tempered a little bit? And could
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  Speaker 2: today's rule and be a major change?
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  Speaker 8: Yeah, I think temp and maybe have put like a
• 18:01
  Speaker 8: little question mark in the back of the mind in
• 18:04
  Speaker 8: terms of what was going to be the next policy,
• 18:07
  Speaker 8: what was gonna be in next threat, specifically when it
• 18:09
  Speaker 8: came to supply chain, how companies are positioned. You can't
• 18:13
  Speaker 8: just snab the fingers and change your supply chain. Were
• 18:16
  Speaker 8: some about things that could take twenty four thirty six months.
• 18:20
  Speaker 7: This ruin it does clear.
• 18:23
  Speaker 8: The path a little more, and I think that's something
• 18:26
  Speaker 8: that's a positive as you're in a unprecedented build out
• 18:30
  Speaker 8: A fourth industrial revenuetion and AI and for the first
• 18:33
  Speaker 8: time in thirty years, the US is a headed China
• 18:36
  Speaker 8: when it comes attack.
• 18:39
  Speaker 7: Stay with us. More from Bloomberg Intelligence coming up.
• 18:41
  Speaker 1: F you're listening to the Bloomberg Intelligence podcast. Catch us
• 18:48
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• 18:51
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• 18:55
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• 18:59
  Speaker 10: Well.
• 18:59
  Speaker 2: In the summer twenty twenty five, Barry Ridholts spoke with
• 19:02
  Speaker 2: Neil Katie, the lawyer who argued the case against Trump's
• 19:06
  Speaker 2: tariffs in front of the US Supreme Court. Here's what
• 19:09
  Speaker 2: he had to say about their legality.
• 19:12
  Speaker 10: The President has an easy effects if he wants to.
• 19:14
  Speaker 10: He could go to Congress and seek approval for the
• 19:17
  Speaker 10: tariffs that he wants. That's what he did the first
• 19:19
  Speaker 10: time around. And as we talked about last week, you know,
• 19:22
  Speaker 10: that's something that failed in Congress, and so maybe that's
• 19:26
  Speaker 10: why he doesn't want to do it. Obviously, these tariffs
• 19:28
  Speaker 10: are highly unpopular, but nonetheless, you know, the Congress is
• 19:31
  Speaker 10: controlled by his party, and you know that's the place
• 19:35
  Speaker 10: to start. Don't run to the federal courts to do
• 19:37
  Speaker 10: what you can't do in Congress.
• 19:39
  Speaker 2: That was Neil Katiell, the lawyer who argued the case
• 19:41
  Speaker 2: against Trump's terroriffs in front of the US Supreme Court.
• 19:44
  Speaker 2: You're speaking with Barry Ridtholts.
• 19:46
  Speaker 7: Barry Rudults joins us here.
• 19:47
  Speaker 2: He is the founder of Erdheltz Wealth Management and host
• 19:49
  Speaker 2: of Masters in Business. Here Barry, what do you take
• 19:52
  Speaker 2: away from the Supreme Court's decision here today?
• 19:56
  Speaker 11: Yeah, long overdue, long waited. I think the market always
• 20:01
  Speaker 11: has a hard time digesting data inputs that are kind
• 20:06
  Speaker 11: of outside of their sweet spot. So when we get
• 20:09
  Speaker 11: an FDA approval or the announcement of a merger, or
• 20:13
  Speaker 11: corporate earnings or non finn payroll, hey, the markets are
• 20:17
  Speaker 11: really good at integrating that into prices. I suspect it's
• 20:21
  Speaker 11: going to take a little while for this to get digested.
• 20:25
  Speaker 11: My personal expectation is there are a lot of winners
• 20:29
  Speaker 11: and losers from this. I think that the winners are
• 20:33
  Speaker 11: going to be obviously the retailers, because prices have gone up.
• 20:38
  Speaker 11: We've seen a ton of different research that says somewhere
• 20:41
  Speaker 11: between ninety and ninety five percent of the cost of
• 20:43
  Speaker 11: tariffs falls on consumers, essentially making them a that tax.
• 20:48
  Speaker 11: So not only retailers, but manufacturers like Caterpillar and Deer
• 20:54
  Speaker 11: what aren't affected by the Supreme Court ruling. And we
• 20:58
  Speaker 11: heard one of the prior guests this is all of
• 21:02
  Speaker 11: the tariffs on US auto manufacturers on steel on aluminum.
• 21:07
  Speaker 11: That's a whole separate law. That's not the IEPA law.
• 21:11
  Speaker 11: That's the two point thirty two law, and that's still
• 21:16
  Speaker 11: up in the air. There's no resolution from this case
• 21:19
  Speaker 11: for GM Ford, US Steel, et cetera. But when we
• 21:24
  Speaker 11: look at companies like Toyota or Costco or Walmart that
• 21:28
  Speaker 11: Toyota filed a refund because all of the parts that
• 21:32
  Speaker 11: either Toyota proper ships to their US manufacturers that have
• 21:38
  Speaker 11: a big price increase, this is going to work to
• 21:40
  Speaker 11: those companies benefits.
• 21:44
  Speaker 2: So I guess the question is for the markets barrier,
• 21:47
  Speaker 2: is you know, how much of a profit impact could
• 21:52
  Speaker 2: the relaxation of some tariffs have on Corporate America? Because
• 21:56
  Speaker 2: I'm not sure we've got a great handle on how
• 21:58
  Speaker 2: much it impacted them on the downside in the last
• 22:00
  Speaker 2: several quarters.
• 22:02
  Speaker 11: Well, it just goes to show you the you know,
• 22:05
  Speaker 11: the counterfactual is always what would have been otherwise. And look,
• 22:10
  Speaker 11: the president inherited a strong economy, a robust economy with
• 22:15
  Speaker 11: markets at or near all time highs, and profits that
• 22:19
  Speaker 11: are near all time highs. And so even the pick
• 22:23
  Speaker 11: a number one seventy five, two hundred billion in tariffs
• 22:26
  Speaker 11: that have been collected already over the past ten months,
• 22:31
  Speaker 11: you know, arguably a lot of that comes right out
• 22:33
  Speaker 11: of the bottom line for Corporate America. So when we
• 22:37
  Speaker 11: see these tariffs get refunded, and I'm fighting my way
• 22:41
  Speaker 11: through the decision, reading the decision to figure out, all right,
• 22:46
  Speaker 11: if you're a big company, you certainly have corporate counsel
• 22:50
  Speaker 11: and resources to go through the process to apply for refunds.
• 22:55
  Speaker 11: If you're a smaller company, I'm trying to figure out
• 22:58
  Speaker 11: if how you go about this?
• 23:00
  Speaker 5: Do you have to.
• 23:01
  Speaker 11: Join some sort of consortium or maybe even a class
• 23:04
  Speaker 11: action suit, because it's not you know, it's not just
• 23:07
  Speaker 11: like doing an online tax form and getting refunds.
• 23:11
  Speaker 7: It takes a whole process.
• 23:13
  Speaker 4: It's definitely heavy lift for companies that you barely have
• 23:15
  Speaker 4: an HR department, barely have an in house lawyer.
• 23:18
  Speaker 2: Well, I'm coming up with an app that anybody could
• 23:20
  Speaker 2: use wouldn't that be good some person.
• 23:23
  Speaker 6: Solve this, So let's wait for AI to solve just that.
• 23:28
  Speaker 4: Barrett, you are fantastic at kind of thinking ahead, thinking
• 23:31
  Speaker 4: around corners, looking around corners.
• 23:33
  Speaker 6: What do you want to know?
• 23:34
  Speaker 4: What are the questions you're asking right now to kind
• 23:37
  Speaker 4: of help us get through this period of uncertainty, a
• 23:40
  Speaker 4: new period of uncertainty once we kind of get through
• 23:45
  Speaker 4: and start to understand how things move forward, whether the
• 23:48
  Speaker 4: president can move right away on the tariffs under the
• 23:51
  Speaker 4: different sections, or whether he's going to backpedal and kind
• 23:56
  Speaker 4: of rethink everything.
• 23:58
  Speaker 11: So yeah, I've been trying to think about second and
• 24:00
  Speaker 11: third order magnitude results from this. It's not just the
• 24:05
  Speaker 11: pebble you toss in the pond, it's the waves that
• 24:08
  Speaker 11: bounce off of the other waves and how this works.
• 24:11
  Speaker 11: You know, I'm not a political expert, so I'm always
• 24:15
  Speaker 11: reluctant to venture into that space. But staying with market
• 24:20
  Speaker 11: and economic factors. So a couple of things are very positive.
• 24:24
  Speaker 11: The dollar in twenty twenty five had its worst year
• 24:28
  Speaker 11: since twenty seventeen, not coincidentally, two years that were both
• 24:34
  Speaker 11: first year of President Trump's tariffs, first year of a
• 24:38
  Speaker 11: new tariff program first year of a Trump presidency in
• 24:41
  Speaker 11: each of these cases, and the dollar fell nine point
• 24:45
  Speaker 11: nine percent in twenty seventeen nine point three percent last year.
• 24:49
  Speaker 11: This arguably could be very strong for the dollar, which
• 24:53
  Speaker 11: would begin to co into question the rally and precious
• 24:57
  Speaker 11: metals gold especially is kind of been trading crazy. You
• 25:02
  Speaker 11: almost have to look at it as a smaller, wackier
• 25:06
  Speaker 11: little brother of gold. But I wonder if this caps
• 25:10
  Speaker 11: the rally and goal. That's number one. Number two. I
• 25:15
  Speaker 11: have to think that everybody that's engaged in any sort
• 25:19
  Speaker 11: of tariff negotiation is gonna rethink it and decide, hey,
• 25:25
  Speaker 11: do we want to stick with these tariffs? Do we
• 25:27
  Speaker 11: want to see if we can press our hands. That's
• 25:30
  Speaker 11: gonna be kind of interesting it also, and perhaps most enthusiastically, look,
• 25:37
  Speaker 11: depending on which study you consider, tariffs have cost the
• 25:41
  Speaker 11: average American household anywhere between you know, nine hundred dollars
• 25:45
  Speaker 11: and three thousand dollars, and I suspect as you go
• 25:48
  Speaker 11: up the the economic strata, it's probably a whole lot
• 25:52
  Speaker 11: more than that that's gonna essentially get cut in half
• 25:56
  Speaker 11: or more, depending on you know what you're buying. If
• 25:59
  Speaker 11: you're eying burken bags and ferraris you're gonna see and rolexes.
• 26:04
  Speaker 11: You're gonna see your taft drop pretty pretty dramatically. And
• 26:09
  Speaker 11: so this is positive for inflation. This is positive for
• 26:14
  Speaker 11: you know, the Fed has been warning that, hey, rate
• 26:18
  Speaker 11: cuts are not a sure thing in the first half
• 26:20
  Speaker 11: of the year. This is this is very positive for
• 26:24
  Speaker 11: lowering CPI and lowering the possibility of rate hikes. All
• 26:30
  Speaker 11: of this could lead to a reacceleration of the economy,
• 26:36
  Speaker 11: and certainly in specific sectors. And I'm thinking in particular
• 26:40
  Speaker 11: manufacturing and retailing and consumer discretionary. Those sectors can all
• 26:46
  Speaker 11: do really well. We may you know, a lot of
• 26:49
  Speaker 11: people have been talking about the possibility of a recession
• 26:53
  Speaker 11: in the second half of the year. I think the
• 26:56
  Speaker 11: Supreme Court just lowered the possibility of a recession by
• 27:01
  Speaker 11: a not insubstantial percentage. And again these are all second, third,
• 27:05
  Speaker 11: fourth order effects.
• 27:09
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