Latest / Beyond Fulfillment Podcast / The Truth Behind Tariffs: Myths, Realities, and Opportunities with Jim Tompkins

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The Truth Behind Tariffs: Myths, Realities, and Opportunities with Jim Tompkins · Beyond Fulfillment Podcast

• 0:00
  Foreign.
• 0:06
  Hello, everyone.
• 0:06
  Dave Gulas, Beyond Fulfillment podcast back with another special edition about supply chain with my good friend Jim Tompkins.
• 0:14
  Welcome, Jim.
• 0:15
  Hi, Dave.
• 0:16
  Good to see you again.
• 0:17
  Good to see you.
• 0:18
  How's everything?
• 0:19
  Awesome.
• 0:20
  Just crazy, crazy awesome.
• 0:23
  Yes, yes.
• 0:24
  Very busy for all of us in supply chain these days, so let's get right into it.
• 0:30
  So, Jim, I know we want to focus our attention on the impacts of the trade war on the supply chain specifically, but I know also you are a student of the Trump presidency.
• 0:42
  So I think our listeners would really be interested, and not from a political point of view, but from a point of view from a supply chain expert like yourself and a businessman.
• 0:52
  Now that Trump has completed his first 100 days, how are things going?
• 0:58
  Well, it's a great question, Dave.
• 1:00
  And you know, there's like you say there's the businessman of me and then the supply chain of me, and sometimes those two guys get in a fight with each other.
• 1:09
  And so it's kind of, kind of interesting.
• 1:12
  But what Trump has done is he came out of the gate.
• 1:19
  I mean, like, you know, if you're watching the Kentucky Derby, you'd say, oh, that horse came out too fast.
• 1:26
  He's not going to be able to keep the pace.
• 1:28
  But he just came out of the gate roaring.
• 1:31
  And he, he, I believe, set very clear first hundred days, second hundred days, third hundred days, and 400 days before the fourth 100 days and the first hundred days.
• 1:44
  I think his objective was to kind of set the tone for 47 for his 47th presidency of the United States.
• 1:55
  And he demonstrated his pace in the month.
• 2:02
  He did 143 executive orders.
• 2:06
  I mean, that's unbelievable.
• 2:07
  That's 1.4 executive orders per day.
• 2:11
  No one has done anything close to that.
• 2:14
  And the subjects he picked out for, for the first hundred days is, number one, immigration.
• 2:20
  This was a major campaign promise and he focused on it like a laser.
• 2:26
  He had some difficulties with the judicial branch, but removing illegals and securing the borders.
• 2:35
  And after 100 days, our borders are secure.
• 2:38
  And that's something that people said could not be done.
• 2:41
  So first hundred days, securing the borders, big deal.
• 2:45
  Second thing, a big deal.
• 2:46
  He wanted to make his point about reducing federal government employees.
• 2:52
  And so the Dodge thing with Elon Musk was a interesting way to do that.
• 2:58
  Some could say it's bad, some can say it's good.
• 3:00
  I'm not going to take an opinion on that.
• 3:02
  But it set the pace for making that happen.
• 3:05
  And then the third thing he did is corporate investments.
• 3:08
  I mean, I Think he got, you know, it was 500 million one day and 600 million the next day and a billion the next day of corporate investments.
• 3:18
  So those three things really kind of set the tone for what he's going to accomplish.
• 3:24
  And what it is, is it's breakneck speed, it's impossible speed of what he's trying to accomplish.
• 3:30
  And he really, with immigration, reducing the workforce and corporate investments, I think had a great 100 days for him, against them.
• 3:40
  Like him, dislike him, it doesn't matter.
• 3:42
  A great 100 days as far as setting the tone for what his presidency and the 47th president is going to be.
• 3:49
  So great job.
• 3:50
  47.
• 3:51
  Yeah, absolutely.
• 3:52
  I mean no matter what your opinion, you cannot deny results.
• 3:57
  Being productive is certainly a man of action and lots and lots of results throughout the first hundred days.
• 4:04
  Okay.
• 4:04
  And you know, as a follow up.
• 4:06
  So what do you see going forward?
• 4:09
  Well, yeah, so he had this plan, I mean he, he has, he's worked full time for the last four years in getting this plan together.
• 4:22
  So he had a plan for the second 100 days which in my view it's, it's the first movement towards the balance, a balance of trade surplus and he really wants to have a balance of trade surplus.
• 4:39
  And so we saw three big efforts, all of them focused in on this trade surplus.
• 4:47
  The first, of course, and the big one is the tariff deals.
• 4:50
  And the tariff deals, they claim there's 200 countries what they're working on.
• 4:59
  I think probably there's 50 or so that are really important and those 50 are really being worked on.
• 5:08
  Well the, the most important of course is China and that one we got news late last night that there will be meetings in Switzerland on Saturday and Sunday with the top people in the US Government and not the
• 5:22
  presidents, but we'll have the Secretary of Treasury and they'll have the equivalent from China there.
• 5:29
  And they're going to meet all day Saturday and all day Sunday.
• 5:32
  So it's not a trivial meeting.
• 5:34
  They're going to get down to what's going on and I think that's exciting.
• 5:38
  We're going to find some peace deals.
• 5:39
  Finally we got some Houters, a peace deal yesterday.
• 5:45
  Certainly Gaza and Ukraine are still hot spots.
• 5:50
  We added to that the issue of the India and Pakistan.
• 5:54
  We got the Iran problem.
• 5:55
  So there's some real interesting peace deals that he's working on.
• 6:00
  And then he began to take a bite out of inflation and we do, you know, eggs and gasoline are both down and that's something he promised on the trail.
• 6:11
  So I think he made a significant impact in the second hundred days.
• 6:17
  His third hundred days is to begin to get the economy into what he calls the golden age and to get it moved there.
• 6:26
  Certainly we're not in the golden age today, a stock market.
• 6:30
  Although we did have nine good days in a row, we've now had two bad days in a row, and it's certainly a lot of volatility.
• 6:38
  But by the third 100 days, I think he's going to get greater control over certainty.
• 6:45
  There's going to be less uncertainty out there, and the market is going to look much more stable, much more normal.
• 6:51
  He's going to have the tax cuts in place by then, and I think he's going to have some really interesting foreign policy deals that wrap together some of his views on the world order as well as trade.
• 7:06
  So that's the third hundred, and then the fourth hundred days is where he's going to really start working on, although he has already started, but it's going to really start focusing on how do we balance the budget.
• 7:19
  And he's going to start making some major steps to getting that done.
• 7:23
  The federal spending cuts are going to be in place.
• 7:27
  I believe you'll have something like 150 trade deals, which will result in revenue and fair trade.
• 7:35
  And then I think what we're going to have is a clear definition of, of three branches of government.
• 7:41
  I believe our Constitution is clear.
• 7:44
  Judicial is separate from legislature, legislature is separate from executive, and those three branches need to be separate.
• 7:52
  And by golly, the guys that wrote the Constitution, I don't know how they had the vision to see where they are, but our Constitution is still the best Constitution in the world.
• 8:02
  So I think he's going to really highlight us doing what the Constitution says and not all this other stuff that starts, you know, legislators taking over executive and judicials trying to take over executive and executive trying to take
• 8:15
  over legislation, and it's all messed up now.
• 8:17
  It's not following the rule.
• 8:18
  You and I took a civics or a history course once upon a time, and we learned how that stuff worked.
• 8:24
  Well, that's not how it works now.
• 8:25
  Trump's going to get his back there.
• 8:27
  So I believe the first 400 days are going to be unbelievable.
• 8:32
  We, we know he's not going to serve a third term, although people talk about it's not going to happen.
• 8:36
  And so he's really going to make these first 400 days work.
• 8:40
  That's going to get us into the midterms elections, which is then going to give him A road to travel on for the second half of his term.
• 8:47
  So I think it's extremely well thought out plan.
• 8:52
  No president has ever had a plan like this before because they didn't have the understanding the Runway and win an election, lose one, and then win one.
• 9:01
  And so it really positioned them in a really very cool way.
• 9:04
  So I, I'm excited about, from a business point of view, from a supply chain point of view, where we're heading.
• 9:11
  Okay.
• 9:12
  All right.
• 9:12
  And I know from our previous discussions that, you know, ever since these tariffs really came out and started being levied, there's been all sorts of so called experts could coming out, you know, with opinions on the whole thing.
• 9:28
  And, and your opinion is many of these people are not experts at all.
• 9:33
  Can you give us some examples of that?
• 9:35
  Oh, yeah.
• 9:37
  You know, the, just the way the press and this is, you know, I'm not talking conservative versus liberal or whatever, but the, the press in general, the way they just use the terminology about Trump's redirecting the tariff negotiations.
• 10:01
  And some quotes I have, haphazard rollout, Trump reversals, Trump about faces, totally inconsistent deployment.
• 10:17
  The people that said those things, they don't really understand how to negotiate.
• 10:21
  I don't think.
• 10:22
  I mean, you take a position and you give and you take and you give and you take and that's how you reach results.
• 10:29
  But I think the one that illustrates what you asked the best is about tariffs specifically.
• 10:37
  So one claim that executives that quote, experts make is that tariffs always hurt consumers.
• 10:46
  And I would suggest you that while tariffs can result in raising prices, they may also protect domestic industries.
• 10:55
  And when you protect domestic industries, it leads to job creation and that leads to wage growth, which results in the ability to offset the higher costs.
• 11:07
  And so I believe the expert that says tariffs always harm consumers, I don't think they're thinking about it in a holistic way.
• 11:15
  Yes, that bottle of wine you just bought might cost more than it did before, but there's other offsets that's going to help you pay for that bottle of wine that are much more significant than the extra cost for
• 11:28
  the wine.
• 11:30
  Another expert, and this is one quote said that tariffs destroy trade relationships.
• 11:39
  And my view on that is, yes, tariffs constrain trade relationships, but tariffs are also used as leverage and negotiations that lead to improving trade agreements.
• 11:54
  If you look at those trade agreements going on all over the world, yesterday the UK and India signed a trade deal.
• 11:59
  There's all sorts of trade agreements going on in Southeast Asia because of people saying, gee, China's not going to Be what it used to be.
• 12:07
  We need other agreements.
• 12:08
  And so I think tariffs can result in improved trade relations.
• 12:15
  I think another example, and I had several, and I just boiled it down to five, but number three said tariffs always cause retaliation.
• 12:27
  That's what the experts said.
• 12:29
  And I think my view on that is, while trade are creating a risk that might result in retaliation, there's a lot of other countries now accepting them.
• 12:42
  And they're saying, yes, we do think we have a problem with this and this and we're going to open our borders and we do see that we've had a major surplus over you for many years, and that's not
• 12:52
  the right way to run this.
• 12:54
  So we will accept the 10% tariff and then the, you know, the Department of the External Revenue Service, not the Internal Revenue Service, but the External Revenue Service is going to be collecting those money.
• 13:05
  So tariffs might, in fact, result in a stronger relationship between countries, not a weaker one.
• 13:13
  If you look at it, Trump is having about one president or, you know, the leader of state, about one a day he has coming through the White House now.
• 13:24
  And so that's a pretty rapid pace.
• 13:26
  Five a week.
• 13:28
  Another expert said tariffs kill economic growth.
• 13:34
  And I say, well, in some cases it might, but in other cases, tariffs will actually encourage domestic production, using innovation and job creation to drive economic growth.
• 13:48
  And so it might be the opposite of killing economic growth.
• 13:53
  It might be driving economic growth.
• 13:56
  And then the last one, the one that gives me the most concern, is that tariffs are always inflationary.
• 14:04
  That's actually been said by many people that tariffs are an inflationary thing.
• 14:10
  Well, if you look at the specific tariff, yes.
• 14:14
  If you have a tariff that's going to increase cost to the consumer, okay, so that's inflationary.
• 14:18
  However, what if at the same time you reduce taxes, at the same time you reduce regulations?
• 14:26
  And what you'll find is that the tariffs will have a capability of reducing inflation.
• 14:34
  And so it's the opposite of what was said.
• 14:37
  And so these things bothers me.
• 14:38
  Now, there's another level of expert that just drives me crazy.
• 14:43
  Here's an article from the Wall Street Journal.
• 14:46
  I know a lot of you don't believe that newspapers still exist, but some people still read newspapers.
• 14:52
  Here's a guy, he kind of looks like a wild scientist to me, and he's got the blackboard behind him with all sorts of writing on it, but the article is entire.
• 15:00
  A dire alert on tariffs from a CEO who knows.
• 15:07
  A dire alert on tariffs from a CEO who knows.
• 15:13
  And the CEO who knows.
• 15:15
  The gentleman in the picture is a gentleman named Ryan Peterson.
• 15:18
  He's the founder and CEO of a company called Flexport, which is the 3PL.
• 15:23
  I know the company.
• 15:25
  And here's a quote from the article.
• 15:29
  Mr.
• 15:30
  Peterson will explain to anyone who will listen.
• 15:34
  While hefty US Tariffs on China imports could be catastrophic for the American small business.
• 15:45
  Well, number one, he's saying tariffs are harder on small businesses, on big business.
• 15:50
  And the expert that comes to that thinking is saying that because big business can absorb cost better than big business.
• 15:56
  I mean, big business can absorb cost better than small business.
• 16:00
  That's not true.
• 16:01
  It depends where they are and what their profits are.
• 16:04
  And so it's not about big versus small.
• 16:07
  But secondly, will be, could be catastrophic for American small business.
• 16:15
  And then he goes on, and this was about five minutes later in the interview, he said, if they do not change the tariffs, it's going to be an extension, extension extinction.
• 16:28
  Like going out of, like dying extinction, you'll be extinct level of asteroid wiping out the dinosaurs kind of event.
• 16:40
  Come on.
• 16:41
  I mean, it's, we're not going to be, you know, blowing up the, the world.
• 16:46
  It's not a nuclear war.
• 16:47
  That's not what tariffs are about.
• 16:49
  But if we do not change the tariff, it's going to be an extinction level asteroid wiping out the dinosaur kind of event that, that you should be put in jail for making statements like that.
• 17:02
  That that's not someone with a knowledge base of what's happening.
• 17:05
  But here it says a dire alert on tariffs from a CEO who knows.
• 17:11
  And I think, oh, come on, Wall Street Journal, you got to do better than publishing those type of people because that's simply not true.
• 17:17
  Simply not true.
• 17:19
  Okay.
• 17:20
  And kind of related to that topic is the information and the statistics that are coming out of China.
• 17:27
  I mean, talk to us about that.
• 17:30
  Yeah, you told me you were going to ask that.
• 17:35
  So I went back and pulled an article.
• 17:39
  Because the way you asked the question, it's interesting.
• 17:41
  The statistics that are coming out of China, the title, this article, I don't know if we could see it online, but the title, the articles is China's Official Statistics are Disappearing.
• 17:56
  Okay?
• 17:57
  And this article ran on Tuesday.
• 18:00
  And what they're saying is that the data is no longer available.
• 18:07
  The statistics, the things that we're used to seeing, the statistics we're used to seeing aren't there.
• 18:17
  We don't see unemployment numbers.
• 18:22
  We don't see foreign investment.
• 18:26
  We don't see the business confidence, the equivalent of University of Michigan data.
• 18:32
  We don't see soy sauce Production, I mean, they don't exist.
• 18:38
  And there's no explanation from the government why we're not seeing these or why they're not being published.
• 18:44
  They disappear.
• 18:46
  And so we're lacking information.
• 18:49
  How bad is the real estate issue?
• 18:52
  How bad is the debt issue?
• 18:54
  There's no statistics on that.
• 18:56
  And then when they do publish numbers, for example, they say last year their GDP grew by 5%.
• 19:04
  There's been four different panels that have looked at what their GDP growth was last year.
• 19:09
  If looking at it from all sorts of different scientific angles and the actual number is someplace between 2 and 3%, well, the difference between 2 and 3 and 5 is huge for an economy the size of China.
• 19:22
  That's not a rounding there.
• 19:24
  That's not a mistake.
• 19:25
  They're cooking the books.
• 19:27
  There's no question they're cooking the books.
• 19:29
  And so if they do publish the numbers, you can't trust them.
• 19:34
  But most of the time these days, they're not publishing them.
• 19:37
  So there's a real issue with data transparency.
• 19:41
  There's simply not giving us the economic data that they have for years and years and years.
• 19:47
  Their economic indicators are not consistent.
• 19:52
  There's experts on China that show that if this number goes up, this number goes up, it always has.
• 19:59
  But now they're showing this number goes up and this number goes down.
• 20:01
  And they're saying that's not what's happened for the last 20 years.
• 20:05
  What is the drop in the change of logic of the numbers?
• 20:13
  External observations are giving us great concerns.
• 20:17
  There's all sorts of independent organizations that are suggesting that there's a huge slowdown in investment, there's a huge slowdown in manufacturing.
• 20:28
  There's this real major issue with respect to debt.
• 20:33
  There's all these brand new buildings that have never been lived in that are crumbling and that what we're seeing is a decline in foreign business expansion within China.
• 20:44
  And so what we're hearing from the Chinese as well, we're not going to meet with the Americans until they meet our conditions.
• 20:52
  You know, we're going to be tough about it.
• 20:54
  Well, guess what?
• 20:55
  They're coming to the table.
• 20:56
  None of the absolutes that they want have been met.
• 20:59
  And the reason is, although, yes, there is, the Chinese, they have a thing they talk about that's called sour wine.
• 21:08
  Chinese people can drink sour wine longer than we can.
• 21:11
  In other words, Americans don't have the fortitude to drink the sour wine.
• 21:16
  We just will go without the wine.
• 21:18
  The Chinese will drink the sour wine.
• 21:20
  So the Chinese government says, the Communist Party says that they can endure more pain in China than we can in America.
• 21:29
  Guess what?
• 21:29
  I agree with them.
• 21:30
  I think they can because they're used to poverty.
• 21:32
  They're used to that type environment.
• 21:33
  They're used to living in cold houses.
• 21:35
  They're used to using charcoal for grilling inside the house.
• 21:38
  And so, so they can endure.
• 21:40
  We're kind of spoiled, we're kind of soft.
• 21:42
  And guess what?
• 21:44
  They're closer to collapse than we are.
• 21:46
  And as in they, they export more to us than we do to them and therefore they need us.
• 21:53
  And so I'm glad they got over their eagle thing and have decided to get to the table because them hiding the statistics.
• 22:00
  I mean there's some statistics that show 73% of the boys under 23 are unemployed from, from 16 to 23.
• 22:10
  16 to 23.
• 22:11
  That work group, there's 73% unemployed.
• 22:15
  Holy cow.
• 22:16
  That's going to cause all sorts of problems.
• 22:18
  And so it's, it's really a shame that they have decided to just hide their problems and not share them openly and let us all work together and establish a much more fairer trade system and get on with it.
• 22:35
  But you know, the, the negotiation starts Saturday, so thank goodness for that.
• 22:41
  Okay.
• 22:42
  And present day companies are dealing with all sorts of uncertainty related to this trade war.
• 22:50
  So how would you recommend companies deal with the uncertainty that's out there right now?
• 22:56
  Well, the first, I mean I'm in.
• 23:00
  The only thing is certain is uncertainty.
• 23:03
  And anybody who's not confused by uncertainty must have been in a Cave for 40 years taking a long nap because I mean we, we don't know what's going on.
• 23:14
  I mean, we have no idea what the next catastrophe is going to be.
• 23:19
  What, what's going to occur next.
• 23:21
  So there is a huge amount of uncertainty sitting there.
• 23:27
  Worrying about uncertainty isn't going to help anything.
• 23:29
  What we, we need to do things.
• 23:31
  And I think there's two things we need to do.
• 23:33
  The first thing we should do is we should cut cost.
• 23:39
  Well, I mean if, you know, we don't know what's going to happen, batten down the hatches.
• 23:46
  Okay.
• 23:47
  And so, you know, in someone's home, if they're saying, gee whiz, you know, the economy is such that maybe mom and dad will lose their jobs.
• 23:55
  Well, guess what?
• 23:56
  Don't go out and buy that thousand dollar television.
• 23:59
  Don't go out and buy the new sofa.
• 24:01
  Delay the expenditures.
• 24:03
  I mean, cut cost.
• 24:05
  And I think we can do that.
• 24:08
  There's what I call supply chain at, and I talk about supply chain At a lot at says supply chain after tariff.
• 24:18
  And so where are we going to source from?
• 24:21
  Where is.
• 24:21
  Are we going to near source?
• 24:23
  Are we going to friendly source?
• 24:24
  Are we going to reshore?
• 24:25
  We're going to bring it back.
• 24:28
  All those are interesting probabilities.
• 24:30
  And what we need to do is look at the total cost of getting the product delivered to the customer.
• 24:36
  And so a portion of that cost is tariffs.
• 24:40
  Now the thing that these one guy is talking about with it's going to be a dinosaur extinction event, be like an asteroid type of thing.
• 24:51
  The tariffs that are being pushed around it, those are negotiation.
• 24:55
  No one's going to pay 145% tariff.
• 24:57
  You're going to move to a different place where you can make the product cheaper.
• 25:01
  I mean, goodness sakes, if there's a company out there that has enough margin, they can charge 145% tariff and still make it.
• 25:10
  Dave, you and I are going to go start a new job, a new company.
• 25:13
  We're going to buy a factory and go build that stuff.
• 25:17
  Because you and I might not be really good manufacturing people, but come within 145% of the other guy.
• 25:23
  We can do that.
• 25:24
  We can make that happen.
• 25:25
  So we need to look at the supply chain after tariff and we don't have certainty there.
• 25:32
  So let's look at it.
• 25:33
  Okay, if this happens, we do this.
• 25:34
  If this happens, then we do this.
• 25:35
  If this happens, we do this.
• 25:37
  We need to look at our logistics costs, huge costs.
• 25:40
  We got transportation costs.
• 25:42
  We've negotiated contracts on transportation that is totally different now.
• 25:47
  You know, the number of cancellations of ships coming out of China is huge.
• 25:51
  They're going from a large vessel to a small vessel.
• 25:53
  But we got this contract price.
• 25:55
  Well, guess what, the spot price now is lower than the contract price.
• 25:59
  So we want to throw our contract away and buy it on spot because it's oftentimes cheaper.
• 26:05
  We also want to look at consolidating shipments.
• 26:07
  We want to negotiate with the freight rates because, boy, they want the freight.
• 26:11
  People want the freight.
• 26:13
  They don't like going from a 18,000 container ship to a 14,000 container ship.
• 26:21
  That's 4,000 containers.
• 26:23
  That's where the profit is.
• 26:24
  And so we want to go with the bigger ships.
• 26:27
  And so they want our look.
• 26:31
  We want to look at different modes of transportation, other ways where we can do it, where we maybe travel different paths or we go different directions.
• 26:39
  We want to cut costs of labor by automating.
• 26:43
  We want to use our innovation, we want to use our ingenuity.
• 26:47
  And so we want to bring the cost of production down, want to do good job on inventory management.
• 26:54
  We want to look at renegotiating our vendor contracts.
• 26:57
  In fact, sometimes we don't necessarily go to a new supplier, but we go to a new location for that same supplier.
• 27:05
  Maybe that, that supplier of ours that we've been working with in China, maybe they do a good job also out of Indonesia, or maybe they have a factory in Vietnam.
• 27:12
  Let's switch from one location to another location to get around those tariffs.
• 27:17
  Let's not pay those tariffs.
• 27:18
  Let's figure out a way to make it happen.
• 27:20
  And then the last way, or not the last way, but the last way I listed here that we can cut cost is by enhancing productivity, by looking at how we can use our labor better.
• 27:33
  Think about how we can take labor and take it from a fixed cost and make it a variable cost.
• 27:39
  And so there's a company we work with called Tasks for Pros.
• 27:43
  And what they're doing is labor on demand.
• 27:46
  And so if you need 50 workers on Monday and 60 on Tuesday and 70 on Wednesday, Wednesday and 70 on Thursday and 100 on Friday, how many people are going to hire?
• 27:58
  Well, you say, I can't hire 100, but maybe I.
• 28:03
  I gotta have 70.
• 28:04
  So I'm gonna hire 70 and work overtime on Friday.
• 28:07
  Why don't you just hire 50, hire 50, and then call this company Task for Pro?
• 28:12
  And they will send you the extra 10 people you need on Wednesday and they'll send you another 10 people on, on Thursday and, and on Friday they'll send you another 40 people.
• 28:22
  And these people are trained and able to do your job, but you're only paying them as a variable cost as opposed to a fixed cost.
• 28:30
  And so on Monday and Tuesday, your costs are going to be the same as they are now.
• 28:34
  Wednesday they're going to be less than they are now because you not have to hire that 80 people.
• 28:39
  And Thursday and Friday going to come out better as well.
• 28:42
  So there's those ways of looking at your productivity and your labor and to make that really good.
• 28:49
  So that's, you know, a tool of reducing cost that is really critical in these difficult times.
• 28:59
  And I think if we're doing that aggressively, with some innovation and some ingenuity, we can actually improve the productivity.
• 29:06
  If the uncertainty goes away, we're going to even be more profitable, but why not get profitable at the level we're at?
• 29:13
  And then the second topic I would mention is optionality.
• 29:19
  And optionality is being able to deal with uncertainty in a planned methodical.
• 29:25
  Way.
• 29:26
  So if this happens, I want to do this.
• 29:28
  If this happens, I'm going to do this.
• 29:29
  And so I have options to pursue which allow me to be successful independent of which one of those options actually takes place.
• 29:39
  Knew you'd mention your favorite word.
• 29:40
  Optionality.
• 29:42
  Yeah, yeah, yeah.
• 29:43
  Okay.
• 29:44
  And are companies getting this?
• 29:47
  Well, you know, yes, yes.
• 29:50
  There's a lot of companies that are not trying to tell the public what we're doing.
• 30:00
  So there's a lot of companies that are saying we're going to hold back our guidance.
• 30:04
  Okay.
• 30:05
  And so they've always given, you know, end of year guidance and the quarter guidance.
• 30:08
  They're holding back the guidance because they don't want to be wrong.
• 30:12
  But internally they are looking at cost reduction, they're looking at delaying investments, they're looking at delaying hiring people and looking at using variable people as opposed to fixed cost people.
• 30:27
  And so that's very smart.
• 30:30
  We do see people rigorously.
• 30:34
  Now it's starting because it's clear US and India is coming along.
• 30:40
  It's clear the UK and India came along.
• 30:43
  We're starting the China negotiation.
• 30:45
  We've got another 50 deals that we have going.
• 30:49
  We've developed the trade profile, what a trade deal is going to look like.
• 30:54
  And now everyone sees that and they know what they need to do to fall in line.
• 30:58
  So these trade deals are going to get started making on a very regular basis.
• 31:03
  And as those trade deals are made, people need to be able to say, okay, so this has taken place and this has taken place and this turn the page and say, okay, so this is what I want to
• 31:15
  do now.
• 31:15
  And I'm going to use this shipping line and I'm going to ship it.
• 31:19
  It's not going to go through the Suez Canal.
• 31:22
  It's going to go, it's to going, going to go from China, it's going to go east and it's going to show up in la or this is not going to be produced in Asia.
• 31:30
  This is going to get produced from Brazil.
• 31:32
  And we bring it up, I'm going to store it in Dominican Republic and ship it in on demand in the United States, et cetera, et cetera.
• 31:39
  So we're going to have the options defined and people are starting to get it.
• 31:44
  I wish they would be a little more aggressive because they're starting to get it, but they aren't doing as robust a plan as I think they should.
• 31:55
  So they're starting to get it is the right phraseology.
• 31:58
  They don't totally get it yet, but this uncertainty thing at this level is unheard of.
• 32:04
  And so it's kind of new ground that we're treading on.
• 32:07
  And so people are kind of treading methodically and not rushing in, which is probably a good thing.
• 32:14
  But I think specifically on cost cutting and specifically on developing optionality, it's the right time to do it because we're going to have this thing straightened out in the next hundred days and the competition is going to be
• 32:27
  ready.
• 32:28
  We need to be ready too.
• 32:29
  Okay.
• 32:30
  And if companies are hearing this and they don't have a solid optionality plan in place or they're looking for guidance or strategies or the tools to really help them navigate these uncertain times, let them know about Tompkins Ventures
• 32:47
  and how they can reach out.
• 32:48
  Well, Tompkins Ventures, we, we invented the word re globalization and we invented the word optionality.
• 32:57
  We really believe that the world is re globalizing.
• 33:03
  And that's not re as in re return.
• 33:08
  It is in reinvention and we're creating new supply chains.
• 33:12
  And so that's what we have built our foundation on at Tompkins Ventures.
• 33:17
  We love working with procurement, with transportation, with third party logistics, with manufacturing, with outsourced manufacturing, looking at different countries to do sourcing.
• 33:29
  And we've got a team of experts literally around the world.
• 33:33
  We're in 59 countries and we're ready to help with experts to get your re globalization work to be successful.
• 33:44
  So the the website is tompkinsventures.
• 33:47
  T o M P K I N S Ventures.
• 33:51
  V E N T u r e s.com and I'm Jim Tompkins.
• 33:57
  J Tompkins.
• 33:58
  T o M P K I n s@tompkinsventures.com.
• 34:02
  write me a note and be happy to work with you and see how we can make some really difference in this opportune time.
• 34:11
  This is not a bad time.
• 34:12
  This is an opportunity time and time to make something happen.
• 34:16
  Amen.
• 34:16
  Okay, well Jim, thanks so much as always.
• 34:19
  We'll link all that in the show.
• 34:20
  Notes for everyone.
• 34:21
  Till next time.
• 34:22
  Have a fantastic day.
• 34:24
  Thanks, Dave.