Latest / Beyond Fulfillment Podcast / Tariff Mitigation, Global Expansion, and the Trump Trade Effect with Jim Tompkins

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Tariff Mitigation, Global Expansion, and the Trump Trade Effect with Jim Tompkins · Beyond Fulfillment Podcast

• 0:00
  Foreign.
• 0:06
  Dave Gulas back with my good friend Jim Tompkins from Tompkins Ventures.
• 0:11
  Welcome, Jim.
• 0:12
  Thank you, Dave.
• 0:13
  Good to be here.
• 0:14
  Likewise.
• 0:15
  Great to be with you.
• 0:16
  Today we're talking tariffs like normal.
• 0:19
  And of course, we're recording this right now on August 5th.
• 0:23
  And we just had the biggest August 1st tariff day deadline.
• 0:28
  So there's a lot to talk about with what's going on there.
• 0:31
  But before we get into that, I just want to go back to the the the last episode.
• 0:35
  Jim.
• 0:36
  So we're talking about economists and how they are always predicting tariffs lead to inflation and higher prices.
• 0:45
  And you stated that the economists have about as much ability to predict inflation and growth as the weathermen do to predict the weather.
• 0:56
  But forget about all that for a second.
• 0:58
  Forget about the economists.
• 0:59
  Aren't US Companies that are paying these tariffs going to pass those costs on to US Consumers?
• 1:06
  Well, great question, Dave.
• 1:10
  It's interesting because I got quite a few complaints on that analogy between economist and weathermen.
• 1:18
  But the comments about 50, 50 split, half of the weathermen said, come on, we're much better than the economists and the other half were the economists.
• 1:27
  No, no, we're better than the weatherman.
• 1:28
  So I'm not going to take a position on that one.
• 1:31
  Sometimes my analogies get me in trouble.
• 1:34
  But overall, the answer to the question is no, we're not going to see let's say the tariffs are 15% by the time that gets looked at and evaluated and put in the process, is that going to result in
• 1:54
  in price increases and inflation?
• 1:58
  The answer in general, no.
• 2:00
  And so let's look at that.
• 2:02
  There's three big buckets that we can kind of highlight as why what seems like a logical answer if the cost of procurement goes up, doesn't the cost of selling go up?
• 2:16
  And I think we need to look at that carefully.
• 2:20
  The three buckets that it goes into are a bucket of tariff mitigation and a bucket of tax relief and regulatory rollbacks and then a third bucket about entering new markets and expanding your sales.
• 2:40
  And so the first bucket of tariff mitigation where you can use tariff mitigation so that the increases you're taking in price and cost is not going to need to be passed along is what we've been talking a lot
• 2:56
  about.
• 2:56
  In general, we could use the word re globalization there.
• 3:00
  It's when we're diversifying our sourcing.
• 3:04
  It's when we're taking the products to countries that maybe don't have tariffs.
• 3:11
  And that's the difference between the country we were buying from and the country we are buying from, it has to do with reducing transportation cost.
• 3:20
  It has to do with reducing lead times so we have less inventory.
• 3:26
  It has to do with using low labor.
• 3:32
  It has to do with when we have low labor content, reshoring the product and bringing it home and automating it.
• 3:40
  And so the answer from a tariff mitigation point of view is no, it doesn't increase cost.
• 3:48
  Because what we're going to do is we're going to make our supply chain work better and therefore it's going to mitigate that cost.
• 3:55
  And that's going to happen in a lot of situations.
• 3:58
  And it's already happening.
• 4:00
  The second bucket is in tax relief and regulatory rollbacks.
• 4:05
  Now, I'm careful of not wanting to be political here.
• 4:08
  So I'm not going to talk about one big beautiful bill.
• 4:11
  I just talk about obb, one big bill.
• 4:15
  And so I'm not going to put the beautiful in there.
• 4:17
  So people don't want to get after me for calling the Trump OBB one big bill beautiful.
• 4:25
  But what we see here is, first of all, the federal tax cuts that were put in place in 2017 have been extended in OBB and they've been expanded due to some changes in the JOBS Act.
• 4:40
  And so it's going to cost us less taxes.
• 4:44
  Secondly, the bonus depreciation that was put in in 2017 was restored and was enhanced and was expanded to include R and D.
• 4:55
  So when the companies now have the choice of how do they want to write off depreciation, and that's particularly focused on manufacturing and technology, as well as writing off R and D when they want, they can do it
• 5:11
  all in the first year, they can split it the first two years, they can do it how they want.
• 5:15
  And so that's going to reduce cost.
• 5:17
  And then thirdly, the OBB included some substantial rollbacks that were not in there previously with respect to scaling back environmental and consumer protection regulations, and that's going to reduce the cost of compliance.
• 5:32
  So there's going to be, as a result of obb, big corporations are going to save substantial money, small corporations are going to save substantial money.
• 5:41
  And so there'll be a reduction in costs there.
• 5:44
  The third bucket is entering new markets.
• 5:49
  And in particular, Southeast Asia and Africa are available now.
• 5:53
  Those markets were closed.
• 5:55
  We could not sell there.
• 5:57
  And so what that allows us now is to help US Companies reduce the reliance on the US Market and have new growth opportunities.
• 6:06
  And we're seeing a lot of this happening already.
• 6:09
  And when people think about going to a new market they're looking at what do we need to do different for this new market that we weren't doing for the US and that results in innovations.
• 6:20
  And some of those innovations are boomeranging.
• 6:23
  We say, well, if we can help in Southeast Asia by doing this, why don't we also use those innovations back at home?
• 6:30
  And so it's helping us meet our local needs.
• 6:33
  So although tariffs are a headwind, no question they are a headwind.
• 6:38
  There's also the tailwind from tariff mitigation, from tax relief and regulatory rollbacks and from global expansion.
• 6:48
  And so net net.
• 6:50
  No, forget about the economists.
• 6:52
  That's a good question on your part.
• 6:55
  We're not going to see inflation as a result of tariff.
• 6:58
  It's not going to happen.
• 7:00
  And so what we're going to find is companies are going to find a way around those price increases and it's going to result in either a small or no increase.
• 7:10
  And therefore inflation is not going to be a problem going forward.
• 7:15
  Okay.
• 7:16
  All right.
• 7:16
  And Jim, since our last broadcast, every day on the news there's all types of stories about the negotiations, the deals that have happened, what it means, the back and forth.
• 7:27
  And I'm sure everybody, right, that's been watching this closely is really looking for clarity, certainty and an end to all of this political back and forth and uncertainty.
• 7:38
  But I mean, based on your knowledge of the situation, where do you think we're going to end up by the end of the year?
• 7:45
  Well, you're absolutely right, Dave.
• 7:47
  There's all sorts of changes literally happening overnight every night, sometimes not so much on weekends, but every Monday, Tuesday, Wednesday, Thursday, Friday, there are substantial changes that are taking place.
• 8:05
  And as you said at the top, this is August 5th, we're talking.
• 8:10
  And so let's put that in context.
• 8:12
  This is the 198th day of President Trump's 47th term.
• 8:18
  And so it kind of seems like he's been in office for the last eight years or something because the amount of press we've read, but it's only 198 days.
• 8:29
  And also interesting, today is the 125th day since Trump's major first tariff announcement, the Liberation Day.
• 8:39
  So we have been through a lot of twists and turns, but it's only been 125 days.
• 8:46
  And a portion, a significant portion of the 125 days was the 90 day kind of cooling period.
• 8:53
  And so this has only been going , really for 35 days over the last 125 days because it was 90 days was relatively quiet.
• 9:05
  So where we are going to be at the end of the year is in a way already kind of broadcast, except for China and Mexico, which are now on another postponement, and China's 12 days and 10 days and
• 9:23
  Mexico's 90 days.
• 9:25
  So those are being delayed.
• 9:28
  And then three where we have a substantial problem, India, Canada and Brazil.
• 9:35
  The Indian problem, we actually had India.
• 9:37
  We had a good agreement in place and was all it needed to do was get President Trump's blessing.
• 9:44
  But then President Trump got very unhappy with how India was not only buying a lot of Russian oil for India, but also buying and reselling that Russian oil for a profit, which was helping the Russian economy, which of
• 9:59
  course is not something President Trump supports.
• 10:02
  And so that deal has blown up.
• 10:05
  The second was the blow up with Canada, and that is really in trouble at this point.
• 10:13
  And the third one, for political reasons, has got a major problem in Brazil.
• 10:20
  So except for China, Mexico, India, Canada and Brazil, we're actually doing fairly well.
• 10:27
  And if we look at where we are today, between 50 and 60, depends 50 and 60%, depending on how you want to look at it.
• 10:37
  We have 50 and 60% of the global GDP is now covered.
• 10:44
  And I believe by the end of the year, when we get China, Mexico, India, Canada and Brazil included, that's going to be 90 to 95% of the global GDP will be covered by tariffs.
• 10:57
  That's phenomenal.
• 10:59
  That's really unbelievable that that could have occurred.
• 11:02
  And if we were to look back on in April and said, was that going to happen?
• 11:06
  We would probably say no.
• 11:08
  So really a good job taking place there, instead of looking at it as a percent of GDP, probably a more important indicator is the percent of the US trade deficit.
• 11:20
  And where we are today is about 65 to 75% of the trade deficit.
• 11:26
  And by the end of the year, I think that's going to be between 85 and 90% of the trade deficit.
• 11:33
  So we're going to have 85 to 95% of the trade deficit and 90 to 95% of the global GDP covered by the end of the year.
• 11:44
  Now that's open to continue refinement.
• 11:47
  Last night when I read this morning's Wall Street Journal, India, President Trump increased tariffs on India because of their resistance to stop with the Russian oil.
• 11:59
  They went up in Mexico because of a cartel problem occurring in Mexico with respect to the drugs.
• 12:07
  And then also something that was closed but kind of got open last night.
• 12:12
  Japan is sending a delegation to Washington, D.C.
• 12:16
  to try to revisit automotive.
• 12:18
  And I think there will be probably some movement there, but we're really doing well and we have this thing well in hand to be over.
• 12:30
  And although there's going to be continued small deviations, I think by the end of the year we're going to be in good shape.
• 12:37
  Now, if we look at the size of the tariff today, the average effective tariff tariff rate is someplace between 18 and 20%.
• 12:51
  I do believe that'll go up slightly, but I don't think it'll be higher than 22% by the end of the year.
• 12:57
  So we're going to stay in the 18, 20, 22% range of effective tariff rates.
• 13:06
  If we put that in the context of where we been between 1934 and 2017, the tariff was 5%.
• 13:16
  So we are 15% plus above that.
• 13:20
  If we look at where we were between 2018 and 2024, the effective rate was between 2 and 5%.
• 13:28
  And so we've made substantial progress.
• 13:31
  If we think about 2024, we see we collected in the United States about $77 billion on tariffs.
• 13:40
  And what's going to happen is that's approximately going to be multiplied by a factor of four.
• 13:46
  I was predicting that we would see a revenue for next year of around 300 billion.
• 13:57
  I'm now reducing that to a number closer to 250 to 275 billion.
• 14:04
  And the reason I'm doing that reduction is because I had not anticipated the fork in the road that took place first in Japan and then in Europe and now seems to be the new standard where there is substantial
• 14:20
  investments being made and substantial new equipment purchase being made by by countries and buying down their tariff rate.
• 14:32
  The amount of money that the United States has collected since January is $6.8 trillion.
• 14:43
  6.8 trillion.
• 14:45
  That's with the T.
• 14:46
  I have a hard time saying the B word, but now I'm talking about the T word, the trillion, that $6.8 trillion.
• 14:55
  Looking at various experts on that, experts are saying someplace between 4.5 and 5 trillion of that came as a result of tariff negotiation.
• 15:08
  The remaining came from his trip to the Middle east when he was in Qatar and UAE and Dubai.
• 15:18
  So what we see is a 6.8 trillion, 75% of which was a result of the tariffs has become a transformational moment for the US Economy.
• 15:32
  It's reshaping our entire industrial base.
• 15:36
  It's giving us the funds to maintain our technology leadership, which is really being called in question because of the Chinese adventures in AI.
• 15:48
  And it's affecting our global trade position in a major way.
• 15:53
  And so if we think about what we talked about on the first question.
• 16:01
  We were Talking about maybe 200 billion coming in from tariffs, but what we're talking about here is 6.8 trillion coming in to not have those tariffs.
• 16:16
  So if you take money, if we put money in the tariff pool, which increases cost, there is some argument for inflation there.
• 16:28
  But then if you overcome that with 6.8 trillion that's being invested in the United States, holy cow.
• 16:35
  The argument now, if we're looking at this impact, the potential for inflation is nil.
• 16:45
  There is no inflation, and there will not be any inflation, because out of the 7 trillion we're getting, 6.8 of it doesn't come as an increase in cost.
• 16:58
  It comes in as an investment or is in a purchase.
• 17:02
  So President Trump tariff policy is exceeding all expectations.
• 17:09
  I am in favor of his tariff policies, and I underestimated the impact of them.
• 17:17
  And so Trump's trade policies, something that I fully agree with, it's time we rebalance.
• 17:24
  It's time we make it fair again.
• 17:28
  And that's what he's doing.
• 17:30
  But what's happening is it's not just his trade policies that is resulting in this tremendous success.
• 17:38
  It's his negotiating capabilities.
• 17:41
  And so his negotiating capabilities are not necessarily how politicians work.
• 17:47
  They're more like business people work.
• 17:49
  But those negotiating capabilities.
• 17:53
  In fact, even last week, he was joking.
• 17:56
  He said, instead of commander in Chief, they should call me dealmaker in chief.
• 18:01
  And he said that, kind of smiling, kind of joking.
• 18:04
  But I really do think President Trump is the goat of dealmakers.
• 18:09
  And that's really, really, really going to have an impact beyond the end of the year and going into the future.
• 18:16
  And the future of the United States is really strong as a result of what we've seen in the last 198 days since President Trump has taken office.
• 18:27
  Really, really good stuff.
• 18:29
  All right, we'll just clarify for the audience if they don't know what goat is, that still stands for greatest of all time.
• 18:35
  Oh, yeah.
• 18:36
  Amen.
• 18:36
  Yes.
• 18:38
  Thank you for that.
• 18:38
  Yeah, yeah.
• 18:40
  Okay.
• 18:40
  And taking it further than the end of the year, I mean, what do you see as the, the longer term impact of these tariff policies on global trade and global supply chains?
• 18:53
  Yeah, and, and this is one that the writing is almost on the wall in many regards.
• 19:02
  Number one.
• 19:03
  And there's four topics here.
• 19:05
  Number one is supply chain excellence.
• 19:09
  The US Is becoming the goat.
• 19:13
  And thanks for clarifying.
• 19:15
  Greatest of all time is becoming the goat of supply chain.
• 19:20
  What represents being the greatest of all times for supply chain?
• 19:24
  It's when you have a minimum of cost, a maximum of customer satisfaction.
• 19:30
  You're using regionalization and automating what you can bring home.
• 19:36
  You are reliable, you're adaptable, you're sustainable and you have high optionalities.
• 19:44
  Your supply chains are digitally enabled and they are fully enabled with artificial intelligence.
• 19:51
  And that's where we are in the United States.
• 19:54
  We are absolutely head and shoulders above the rest of the world in supply chain.
• 20:00
  And that's a result of the what's been taking place over the last 200 days.
• 20:07
  Secondly, an impact that's going to go way beyond the end of the year is the domestic industry revitalization.
• 20:18
  Manufacturing in certain regards are going to become quite cool again.
• 20:24
  Now, my state of North Carolina, we're not going to be textiles and we're not going to be furniture.
• 20:28
  That's not what, that's what we did in the past.
• 20:31
  That's not what's going to do in the future.
• 20:33
  What we're going to find is the revival of the domestic manufacturing industry is going to be to protect national security.
• 20:43
  Things like pharmaceuticals, things like semiconductors, things like rare earth minerals, we're going to have automation for products that have low labor content.
• 20:55
  And so what we're going to find is that using our innovation and our technology skills in automation and using them in areas like pharmaceutical and semiconductors and mining for rare earths, we're going to find our domestic industrial industry
• 21:14
  is going to really, really, really come back.
• 21:16
  And, and that's going to be huge.
• 21:18
  Those two things, superiority in supply chain and superiority in having a domestic manufacturing sector is going to result in economic viability.
• 21:30
  We're going to have low inflation, we're going to have low uncertainty.
• 21:33
  We don't have that quite yet, but it's going to be here as a result of what we're doing now.
• 21:38
  We said from the beginning this is going to be painful.
• 21:42
  There's going to be some bumps, there's going to be some back steps, but it's going to result in.
• 21:47
  Well, and that's what's happening.
• 21:49
  We're going to have high growth, we're going to have high profitability, we're going to have agility, we're going to have resilience and we're going to have not only the tariff revenue but the growth of all industries because of
• 22:03
  the open markets beyond the US that's going to result in a substantial upgrade in the standard of living.
• 22:11
  And so it's really, really going to be strong from a national wealth point of view.
• 22:17
  We're going to have more goods that we're going to be buying, we're going to have more firms that are profitable.
• 22:23
  The valuation of the US Firms are going to be going up and foreign investment in the United States is going to continue.
• 22:30
  The tariffs of President Trump is going to have a major impact on global trade and supply chain and beyond.
• 22:39
  And, and so we're really positioning ourselves for the golden age that's been talked about.
• 22:46
  These impacts are not only significant, they are the result of a deliberate strategy to reorient our global trade flows, to boost our domestic production and to leverage US market power.
• 23:04
  2025 has been a tough year, and it's going to continue to be tough for the next four months.
• 23:11
  But as we get into 2026 and 2027, it's going to be happy days.
• 23:18
  And so I guess my view is it's a go, go, go, time to make good things happen.
• 23:24
  And, and they're really, really, really going our way.
• 23:26
  I'm really excited.
• 23:28
  Yeah, yeah, that.
• 23:29
  And that's one of your staple statements is go, go, go.
• 23:31
  And I'm sure a lot of people.
• 23:32
  Can resonate with that.
• 23:35
  So, Jim, and I just heard you say something a minute ago where that the tariffs of President Trump will have a major impact on global trade and supply chains and beyond.
• 23:44
  So that's something I hadn't heard from you before.
• 23:46
  The.
• 23:46
  And beyond.
• 23:47
  What do you mean by that?
• 23:51
  Well, now I gotta keep, I gotta be careful here, Dave, because I don't want to get myself in trouble because as we've said multiple times, I'm a supply chain guy and I understand the impacts of tariffs and trade
• 24:10
  policies on supply chain and that's my area of expertise.
• 24:19
  And so if we're talking about re, globalization, near shoring, friendly shoring, reshoring, near shoring, all those shorings.
• 24:29
  If we're talking about resilience and reliability and optionality and what we're doing in planning and procurement and manufacturing and transportation and distribution and fulfillment, we're talking about digital enable, all that stuff.
• 24:43
  That's, that's what I really have the grounds to talk about.
• 24:48
  And so, yeah, I guess I said supply chain and world trade and beyond.
• 24:55
  So it's the.
• 24:56
  And beyond that I need to be careful of.
• 25:02
  The reason that comes in here is because of something President Trump is doing.
• 25:08
  President Trump.
• 25:11
  Now, if you say to him, the lemonade's a little bit too sweet, he's going to say tariffs.
• 25:19
  If you say to him, oh, the weather's not pretty today, so we're going to cancel the picnic, he would say tariffs.
• 25:25
  President Trump, he thinks the solution to all problems is tariffs.
• 25:32
  And the world trade and supply chain tariff solution is one.
• 25:37
  I understand, I get, I support, I agree with, because we must balance trade.
• 25:44
  However, he's also using tariffs to do a lot of other things.
• 25:51
  And when Trump uses tariffs to do other things, we're outside of my area of expertise.
• 25:59
  For example, war and peace.
• 26:02
  Trump is using tariffs to impact the Ukrainian war, to affect Gaza Strip, to affect what took place in Cambodia.
• 26:15
  So he sees tariffs as a tool to affect war and peace.
• 26:20
  Not my thing, not what I do.
• 26:23
  He's affecting using tariffs to handle the drug traffic in Canada and Mexico.
• 26:30
  That's not trade policy, that's political policy.
• 26:34
  He's doing it to address national security, which I support in pharma and semiconductors and rare earth minerals.
• 26:41
  But that's not my area.
• 26:43
  He's using it for political retaliation.
• 26:46
  With president, and I have a hard time with the past Brazilian presidents.
• 26:51
  I say Bolsonaro, but I'm not sure I'm saying that right.
• 26:56
  But.
• 26:57
  And he, you know, yesterday, now he has to wear an ankle bracelet and he's confined to his home in Brazil.
• 27:03
  The past president of Brazil, President Trump, doesn't like that.
• 27:08
  He's using tariffs to address intellectual property.
• 27:11
  And that particularly is pointed at China.
• 27:15
  But as I try to get my arms around this topic and look at what President Trump is doing using tariffs as a tool to replace diplomacy and sanctions, I find myself outside of my element.
• 27:37
  But that is what he is doing.
• 27:41
  And he's not only replacing tariffs to take care of what we used to handle with diplomacy and sanctions, but he's using tariffs with a very business like, aggressive style.
• 27:57
  And so he is not approaching diplomacy is where you and I have a disagreement.
• 28:03
  And so what we decide to put together a task force and we're going to have a six month study and we're going to have a big report and that's diplomacy.
• 28:10
  When diplomacy fails, what you say is, I'm going to place some sanctions on you.
• 28:14
  And those sanctions are quicker, but they're very focused.
• 28:19
  So I'm going to put a tariff as a sanction.
• 28:24
  I'm going to put a tariff on your aluminum.
• 28:26
  Okay, well, that's more of a sanction than it is a tariff play.
• 28:31
  But now when he starts using tariffs in an aggressive way to replace diplomacy and sanctions, and I'm not surprised he's doing that because he finds it works, he does have the cards, as he says, the Canadians do not
• 28:48
  have the cards.
• 28:49
  The Brazilians do not have the cards.
• 28:51
  The Indians do not have the cards.
• 28:54
  The Brazilians do not have the cards.
• 28:56
  So he has the cards and so he is playing those cards.
• 29:01
  Now that's the and beyond because that is not the reciprocal tariff policy.
• 29:09
  This is his approach at sanctions through tariffs.
• 29:15
  And I really don't have the expertise to respond to that.
• 29:20
  So I will continue to help people who want to grasp the impacts on supply chain and trade of tariffs.
• 29:30
  But I got to stay out of these other optics.
• 29:34
  I mean, I got to stay in my lane and not try to become a sanction and a diplomacy guy because that's not what I do.
• 29:43
  My job is to help companies upgrade their supply chains and not to offer people political advice.
• 29:51
  But anybody who listens to me for political advice is not, well, that's the wrong place to go.
• 29:57
  And so I did say and beyond.
• 30:00
  So it's a very fair question on your part.
• 30:03
  But at the same time, business leaders like me have to stay out of the political stuff.
• 30:11
  We have our jobs to do as boards, as C level executives, as vice presidents of company to figure out how am I going to make my company better.
• 30:24
  I mean, here's an interesting fact.
• 30:27
  President Trump will be president until January 20, 2029.
• 30:35
  My goodness sakes.
• 30:36
  I don't know about you, Dave, but my brain doesn't go to 2029.
• 30:40
  That sounds like sometime way out in the future.
• 30:45
  And so what we have to do as supply chain leaders is we need to say how can I make my supply chain better?
• 30:53
  How can I make my company better given the conditions I have?
• 30:58
  And stay the heck out of the political stuff because that's and beyond, that's something else that's happening.
• 31:05
  I am neither favor or against what President Trump is doing there.
• 31:09
  I wish he wasn't quite such a bully on some of these issues.
• 31:14
  But that's, you know, if it works, you know, he should go for it.
• 31:18
  I don't have an opinion on that.
• 31:20
  So the reality is.
• 31:23
  Great question.
• 31:24
  There is a lot and beyond but it's not necessarily something that I should be offering opinions on or anybody should listen to me about because I'm a supply chain guy.
• 31:35
  Okay, very understood.
• 31:38
  And speaking of that too, where your main job is to help companies understand the supply chain changes and navigate the situation as it's still so fluid and it will continue to be.
• 31:48
  Just talk about what Tompkins Ventures does and if companies need help reshoring near shoring, developing optionality and just reacting to these, these changes as they happen.
• 32:00
  How can Tompkins of Ventures Help them.
• 32:03
  Yeah.
• 32:03
  Well, what seems to be working really well, companies say to us and said, oh, my goodness, what do we do?
• 32:09
  All this stuff is happening and what we need to do is we need to do an assessment what areas of business are changing?
• 32:19
  Where are the tariffs having an impact?
• 32:24
  So we do a tariff assessment, relatively straightforward, although you have to use quite a bit of sensitivity analysis because this stuff is changing at this pace quite a bit.
• 32:35
  I think we need to be careful of going out and making major changes in our supply chain before the end of the year, because this still is somewhat volatile.
• 32:44
  But we need to put in place the plans.
• 32:46
  And so we need to assess where tariffs are going to substantially change things.
• 32:51
  We got to use our intelligence on these tariffs.
• 32:54
  Brazil is not going to have a 50% tariff.
• 32:57
  In fact, the reporting today, it's a 50% tariff.
• 33:01
  But why don't they report?
• 33:04
  When that original 50% was put in place, it excluded 12% of the products from Brazil.
• 33:10
  And then last weekend there were 700 additional items placed on the list, which is another 50%.
• 33:18
  So we have 50 plus 12.
• 33:20
  We have 62% of the Brazilian products are not affected by the 50% tariff.
• 33:27
  Well, you don't read that any place, but you really need to understand that.
• 33:32
  And so what I would do if I had a Brazilian client call me, which I do, and they want to talk about it, the first thing I want to know is, are your products in the 62% which are
• 33:45
  not affected, or are you in the 38% that's going to get whack with what today we think is 50%?
• 33:52
  And so that's the first question.
• 33:53
  Once we figure out which pile you're in, then the next thing we know, 50% is not going to hold.
• 33:59
  That won't work.
• 34:00
  It's going to be someplace between 15 and 25%.
• 34:03
  And so what we got to look and say, okay, let's take worst case, you have a 25% increase on these products, these 62%, no problem.
• 34:11
  But on these, we're going to have this part of them.
• 34:13
  And where can we now get that product?
• 34:16
  Other places which will be less than the tariff that we might incur from Brazil.
• 34:20
  And guess what?
• 34:21
  Oftentimes there's other places.
• 34:24
  If you're in coffee, you got a problem because you can't beat Brazilian coffee.
• 34:28
  But guess what?
• 34:29
  Coffee is on the list that's within the 62, not the 38.
• 34:32
  So if someone said, oh, 50% on coffee, it's going to kill us.
• 34:36
  Well, no, it's not, because it's on the list.
• 34:39
  It's not included in that.
• 34:41
  And so that's going to be probably a 10% tariff on coffee.
• 34:44
  And so what we need to do is we really need to analyze what is the impact specifically.
• 34:49
  And then given that impact, what do we do with respect to sourcing that from someplace else, maybe reshowing it, maybe near showing it and trying to understand how to address that?
• 34:59
  And then what are the impacts on transportation and inventory?
• 35:02
  How can we mitigate that?
• 35:03
  And what else can we do now that we have these other locations that we can sell to?
• 35:08
  What can we do to increase our revenue?
• 35:11
  And how do we negotiate with our present suppliers and do the things I talked about in the show?
• 35:16
  So, yeah, it's very methodical and logical.
• 35:21
  What needs to be done.
• 35:23
  The last thing we need is for boards of directors of major companies to start arguing politics, because that's not relevant.
• 35:31
  What we got to argue is how do we make our company more profitable, how do we allow our employees to become more successful, and how can we take care of the stockholders?
• 35:40
  That that's what we need to think about and work on.
• 35:43
  Okay, appreciate that.
• 35:45
  And we'll link all the info for Tompkins Ventures in the show.
• 35:47
  Notes for everyone.
• 35:48
  I love it.
• 35:49
  All right, well, Jim, thank you so much for being here on this live and sharing all your valuable wisdom with the audience once again.
• 35:56
  We greatly appreciate it.
• 35:57
  Thank you, Dave.
• 35:58
  Appreciate the questions.