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SpaceX Looks to Wall Street to Validate Extreme Market Valuation · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: We mentioned IPOs, We mentioned SpaceX. George Ferguson is one
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  Speaker 2: of many of our bi analysts tests with trying to
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  Speaker 2: get some fundamentals around this company, because it's kind of
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  Speaker 2: a company that covers all these different industries. George's, of course,
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  Speaker 2: our senior industry analysts covering aerospace and defense. George, you
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  Speaker 2: have this tad task of putting fundamentals to SpaceX when
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  Speaker 2: all anyone can remember is the total addressable market being
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  Speaker 2: was at number twenty nine trillion.
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  Speaker 3: Twenty eight trillion.
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  Speaker 2: North of twenty eight trillion doesn't matter at this point, George,
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  Speaker 2: can you give us some sense of what profits will
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  Speaker 2: look like for SpaceX once it is sustainably profitable?
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  Speaker 4: Yeah?
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  Speaker 5: So, so look, I mean I should say start by
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  Speaker 5: saying SpaceX is a company that's in a lot of flux, right,
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  Speaker 5: it's essentially building out. I think the bigger portion of
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  Speaker 5: stories it's building out an AI business. I'm not sure
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  Speaker 5: we totally understand what the AI business looks like for anybody.
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  Speaker 5: And when they're done, they're going to i think, put
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  Speaker 5: these data centers in space.
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  Speaker 6: That's where they're trying to go.
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  Speaker 5: So you know, we're not only a business that's I
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  Speaker 5: think nobody fully understands what it's going to look like.
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  Speaker 5: When it's done, they're going to go one step further
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  Speaker 5: and try to make it extraterrestrial.
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  Speaker 6: So we've put together a model though in the Bloomberg.
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  Speaker 5: Service you can find it under BI space ae rog
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  Speaker 5: an interactive model, or you can load the SpaceX ticker
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  Speaker 5: and type in MODL MODL for your model. We essentially
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  Speaker 5: see a business business that we think could go from
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  Speaker 5: nineteen billion dollars in revenue in twenty twenty five to
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  Speaker 5: one hundred and sixty ish billion revenue in twenty thirty,
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  Speaker 5: so a big step. A lot of that is all
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  Speaker 5: about AI, and then we're you know, we kind of
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  Speaker 5: see an operating income. Now twenty twenty five they reported
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  Speaker 5: negative two and a half billion. We think that could
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  Speaker 5: swing to a positive almost twenty one billion by twenty thirty.
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  Speaker 5: The majority of that continues to be connectivity. That's their
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  Speaker 5: satellite business. You know, it's going to be broadband from satellite,
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  Speaker 5: some direct to sell. That could be like a fourteen
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  Speaker 5: to fifteen billion dollar operating income business by twenty thirty.
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  Speaker 5: But AI is at that point sort of in full swing,
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  Speaker 5: you know, building profitability, and we could see maybe six
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  Speaker 5: and a half billion dollar contribution from AI in twenty
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  Speaker 5: thirty to that operating profit number.
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  Speaker 6: So those are the big moving parts.
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  Speaker 5: That space launch business is kind of a barely profitable, barelyon.
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  Speaker 6: Negative kind of business. It's not a not a big business.
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  Speaker 5: But it also doesn't reflect all of its revenues and
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  Speaker 5: profits because any work done for internal SpaceX companies doesn't
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  Speaker 5: flow through the revenue statement in the space business and
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  Speaker 5: doesn't have a recorded expense because of the way they're
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  Speaker 5: going to do the accounting on that.
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  Speaker 7: So, all right, how are they going to how are
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  Speaker 7: they going to finance all this stuff?
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  Speaker 5: George, Yeah, yeah, So I mean that's of course the
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  Speaker 5: million dollar or maybe it's the billion dollar question. So
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  Speaker 5: we've wired in about one hundred billion dollars of debt
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  Speaker 5: out to twenty thirty that in a brazing their initial
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  Speaker 5: offering here. They refinanced a bridge loan and it was
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  Speaker 5: twenty billion dollar bridge loan.
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  Speaker 6: They just did it in the market last weeks or two.
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  Speaker 5: And they came in. They got twenty five billions. That
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  Speaker 5: uped a bit, and they had a rate that was
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  Speaker 5: close to six. So we've kind of wired in a
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  Speaker 5: six percent rate for another one hundred billion dollars worth
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  Speaker 5: of debt. But I mean that's one of the bigger
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  Speaker 5: challenges here right If the company isn't producing a lot
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  Speaker 5: of EBITDA to support that debt and keep investment grade ratings,
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  Speaker 5: you could have a bit of a breakdown in your
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  Speaker 5: ability to finance through debt into twenty thirty. I would
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  Speaker 5: also note that in the S one the authorization for
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  Speaker 5: shares were quite large compared to the shares that were
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  Speaker 5: actually issued, and so you know, there's room to issue
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  Speaker 5: more A shares which only have one voting stake. Elon
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  Speaker 5: Musk's B shares, he has a lot of those those
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  Speaker 5: have ten votes, so does a room to.
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  Speaker 6: Do a lot more A shares.
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  Speaker 5: And they had C shares in that mix as well,
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  Speaker 5: So I think you could see some additional equity issuance
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  Speaker 5: to continue to fund build out a data centers, you know,
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  Speaker 5: designing starship and you know other interplanetary.
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  Speaker 6: You know, transportation devices things like that, and.
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  Speaker 2: Tesla eventually becomes part of SpaceX as well.
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  Speaker 5: You know, that's the rumor we can keep hearing. You know,
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  Speaker 5: I don't know why they wouldn't have rolled it in initially.
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  Speaker 5: To be honest with you, it feels to me like
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  Speaker 5: these three companies do mesh to a degree right.
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  Speaker 6: Space really gets.
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  Speaker 5: You your lift you need for that connectivity business. And
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  Speaker 5: if you're really moving data centers of space, which I
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  Speaker 5: mean everybody complains about putting them in their neighborhood nowadays
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  Speaker 5: because of you know, energy draws and such, I could
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  Speaker 5: see that being maybe a natural fit if you can
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  Speaker 5: find a way for that tech to work.
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  Speaker 6: I don't know how Tesla fits in there.
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  Speaker 5: I mean when we you know, when we saw the
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  Speaker 5: the s one for SpaceX, they had you know, they
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  Speaker 5: had the Tesla trucks ort to dragging or driving around spaceports.
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  Speaker 5: I don't know, maybe they're going to drag rockets out
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  Speaker 5: to the launch with it or something, but I feel
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  Speaker 5: like it doesn't quite fit.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up.
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  Speaker 2: Let's turn now to Washington and check in with our
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  Speaker 2: senior news editor, tech editor, I should say, Michael Shepherd.
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  Speaker 2: He does cover tech and the intersection of policy as well,
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  Speaker 2: which is where I want to start, Michael, because we
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  Speaker 2: now have open Ai beginning discussions about giving the US
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  Speaker 2: government a stake in the company. The proposal, at least
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  Speaker 2: initially here from Sam Altman, the CEO, is a five
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  Speaker 2: percent stake. This is this got my attention. Where did
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  Speaker 2: this come from? How did this begin?
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  Speaker 8: Well, this got a lot of people's attention, Scarlett. And
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  Speaker 8: this idea is not necessarily a new one. The real
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  Speaker 8: headline in the report from the Financial Times from overnight
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  Speaker 8: was the size of the steak, the five percent. We've
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  Speaker 8: previously reported and other outlets have too that you know,
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  Speaker 8: the AI companies, especially open Ai, have floated this idea
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  Speaker 8: of giving the government a piece of their business, giving
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  Speaker 8: them shares. To see what would be a public benefit
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  Speaker 8: fund to redistribute some of the gains from the AI
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  Speaker 8: boom and maybe address some of the concerns that all
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  Speaker 8: of this newfound wealth and economic dislocation brought by the
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  Speaker 8: technology that that could somehow be softened they'll blow from
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  Speaker 8: the AI roller could be minimized by sharing the gains
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  Speaker 8: a little bit through this vehicle, and the administration has
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  Speaker 8: talked about this a little bit. President Donald Trump embraced
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  Speaker 8: the idea when asked by our own Amory hor Dern
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  Speaker 8: last month on Air Force One, but the President offered
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  Speaker 8: no specifics beyond just saying that he had been in
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  Speaker 8: talks with some industry officials, and it's unclear whether negotiations
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  Speaker 8: really active or advancing between the government and the company.
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  Speaker 8: It seems more right now that this is something the
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  Speaker 8: company is really trying to work out ahead of its
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  Speaker 8: IBO to come up with what the size of a
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  Speaker 8: steak could look like. What they're also envisioning is having
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  Speaker 8: other AI labs, such as Anthropic or Google's Deep Mind
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  Speaker 8: also offer stakes to the government. Now, whether those companies
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  Speaker 8: would share the same enthusiasm that Sam Altman has for
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  Speaker 8: it is unclear.
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  Speaker 7: Giving away a five percent steak or selling a five
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  Speaker 7: percent stake.
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  Speaker 4: Well, Paul, that is.
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  Speaker 8: A great question because we can think back to almost
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  Speaker 8: a year ago when the US used the Chips Act
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  Speaker 8: money that it had for set aside for Intel to
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  Speaker 8: actually purchase a stake in the chip maker. This would
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  Speaker 8: be different. The companies would actually give the steak as
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  Speaker 8: seed money for this public benefit fund. Bernie Sanders, the
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  Speaker 8: Vermont Independent, has proposed a similar idea. He has called
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  Speaker 8: for actually creating this kind of a public benefit fund
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  Speaker 8: to be seeded with a fifty percent tax on the
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  Speaker 8: stock of these companies one time of these companies a
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  Speaker 8: one time tax. All those proceeds would go into this
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  Speaker 8: fund to then be redistributed with the American public. Republicans
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  Speaker 8: have rejected the idea, and even President Donald Trump, when
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  Speaker 8: asked specifically about the Sanders proposal, simply said I had
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  Speaker 8: the idea first. And the size of what Bernie Sanders
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  Speaker 8: is asking for is far different from what we're seeing,
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  Speaker 8: at least through the Financial Times report of a five
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  Speaker 8: percent stake.
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  Speaker 2: All right, So we'll continue to watch that space to
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  Speaker 2: see how things develop there. The other story we wanted
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  Speaker 2: to touch on with you, Michael, has to do with
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  Speaker 2: Apple looking to buy memory chips from China, which is
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  Speaker 2: interesting given that the companies being proposed here are on
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  Speaker 2: a blacklist, a Pentagon blacklist of Chinese entities that are
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  Speaker 2: believed to have ties to China's military. But Apple kind
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  Speaker 2: of always feels like it's in its own category.
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  Speaker 8: Well it does, and again this is something else that's
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  Speaker 8: another bit of fallout from the AI boom. There is
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  Speaker 8: this unprecedented demand for memory to meet the needs of
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  Speaker 8: artificial intelligence, and that is putting the squeeze on makers
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  Speaker 8: of consumer electronics devices. Apple of course most prominently, but
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  Speaker 8: also Microsoft and those companies have had to raise prices
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  Speaker 8: across their product lines because of the increased expense for
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  Speaker 8: the memory components that they put into the products that
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  Speaker 8: they make. Now, what Apple is hoping to do is
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  Speaker 8: add to its supply lines when it comes to memory.
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  Speaker 8: And right now they turn to Samsung Electronics and Sknix
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  Speaker 8: and Micron Technology for their memory needs. But their memory
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  Speaker 8: needs right now are insatiable, and those memory providers have
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  Speaker 8: been really trying to reorient some of their production lines
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  Speaker 8: to meet the AI demand. So what Apple is proposing
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  Speaker 8: to do is turn to CXMT and YMTC, two Chinese
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  Speaker 8: chip makers that specialize in memory, but that are also
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  Speaker 8: on a Pentagon blacklist because the US believes they support
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  Speaker 8: China's military, and that really creates a political problem here
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  Speaker 8: for Apple. The company doesn't need permission from the government
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  Speaker 8: per se, say an export license or import license to
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  Speaker 8: use this technology. Our reporting shows that Apple plans to
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  Speaker 8: use the memory will buy from these two Chinese makers
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  Speaker 8: to go into products to be sold into China. So
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  Speaker 8: you would think, well, maybe that's not such a big deal,
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  Speaker 8: But the question really is how to go down here
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  Speaker 8: in Washington, and many of the national security hawks, including
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  Speaker 8: the head of the House Foreign Relations Committee yesterday, responded
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  Speaker 8: to our reports saying that this, from his view, would
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  Speaker 8: be a no go.
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  Speaker 7: Well, that's why Tim Cook has remained at the company
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  Speaker 7: in large part to deal with some.
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  Speaker 4: Of these issues with governments.
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  Speaker 7: And where's President Trump on this, because presumably if Tim
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  Speaker 7: Cook can get President Trump to sign off, then all
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  Speaker 7: is good.
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  Speaker 8: Well, Tim Cook has had that longstanding relationship with the President,
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  Speaker 8: who refers to him jokingly and even lovingly as Tim Apple.
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  Speaker 8: And this relationship dates all the way back to the
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  Speaker 8: president's first term in office. And the question is, though,
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  Speaker 8: will there be a counter lobbying campaign by Micron, which
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  Speaker 8: really would not want to see Chinese chip makers perhaps
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  Speaker 8: taking some of their potential business away, and earlier this
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  Speaker 8: week it did not go on notice that Micron made
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  Speaker 8: a two hundred and fifty million dollars pledge to the
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  Speaker 8: Trump Accounts initiative, the one that also is backed by
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  Speaker 8: Dell Computers founder Michael Dell. So we're seeing a lot
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  Speaker 8: of lobbying cross currents on this, Paul. It'll be interesting
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  Speaker 8: to see who gets to Trump and what ultimately he
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  Speaker 8: will have to say when it comes to giving some
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  Speaker 8: political cover to Apple and other device makers that might
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  Speaker 8: want this Chinese memory.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
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  Speaker 2: And the big jobs report that we got this morning,
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  Speaker 2: by and large, it was weaker than expected. There's still
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  Speaker 2: job growth, but definitely a slowdown after the blistering pace
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  Speaker 2: for the previous three reports. Perhaps the job market is
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  Speaker 2: no longer overheating that might be one interpretation. Let's go
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  Speaker 2: down to Ira, Jersey for the bond market's interpretation. He
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  Speaker 2: is our chief US interest rate strategist and joins us
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  Speaker 2: right now from Princeton, Ira. In the rates market, we
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  Speaker 2: see the two year yield coming in down four bit
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  Speaker 2: basis y four point one three percent, definitely on the
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  Speaker 2: short end of the curve, whereas at the long end
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  Speaker 2: it's pretty much unchanged. What is being priced out following
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  Speaker 2: this June jobs print.
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  Speaker 9: Yeah, so basically a very early rate hike, so interest
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  Speaker 9: rate increases being priced out here at least a little bit.
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  Speaker 4: It was more this morning.
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  Speaker 9: I think that you know, now that you know, traders
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  Speaker 9: are getting ready to go away for the long weekend.
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  Speaker 4: They're trying to square positions.
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  Speaker 9: So people who got pretty long or were long, you know,
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  Speaker 9: taking some profits here and you know, kind of squaring
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  Speaker 9: things up as we get into the to the close.
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  Speaker 9: You know, I think that the jobs report was a
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  Speaker 9: little bit weaker, maybe than some people are even suggesting.
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  Speaker 9: If you look at the revisions to the prior months,
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  Speaker 9: this would actually be a negative number. So yeah, you
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  Speaker 9: know where it's not particularly good. And importantly, you know,
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  Speaker 9: some people I know said Oh, look, the unemployment rate
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  Speaker 9: actually fell a tenth, but it fell for the wrong reasons, right.
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  Speaker 9: It fell because more people left the market, left the
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  Speaker 9: job market.
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  Speaker 4: And stopped looking for jobs.
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  Speaker 9: So you wind up in a situation where the participation
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  Speaker 9: rate fell, which means that you have less people participating
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  Speaker 9: in the economy. And I think that that's being a
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  Speaker 9: little bit overlooked some by some folks.
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  Speaker 7: Iron what do we learn from Fitchairman Warsh yesterday from
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  Speaker 7: his comments in Portugal at that conference.
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  Speaker 9: So first and foremost, Paul, he really does not want
• 15:27
  Speaker 9: to give any forward guidance, right. He mentioned that a
• 15:29
  Speaker 9: whole bunch of times to our former colleague Sarah Ezon.
• 15:33
  Speaker 9: And you know the I think, I think Kevin Moorsh
• 15:37
  Speaker 9: is trying to go back to the pre Ben Bernanky
• 15:40
  Speaker 9: days where you know, Alan Greenspan spoke for the entire committee.
• 15:44
  Speaker 9: He was usually noncommittal, and the few times that he
• 15:48
  Speaker 9: was he was very deliberate. So like when he said
• 15:50
  Speaker 9: we're going to raise rates at a measured pace, for example,
• 15:53
  Speaker 9: back in the early two thousands, that was a very
• 15:55
  Speaker 9: greenspan ism and about as forward guidancey as he ever got.
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  Speaker 4: And I think Kevin Worrish would like to do that.
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  Speaker 9: The thing, Paul that I have a problem with Kevin
• 16:05
  Speaker 9: Worsh's line of thinking is what he had said during
• 16:07
  Speaker 9: the press conference a few weeks ago that he wants
• 16:10
  Speaker 9: the market to lead the Fed. That's not how it works, right.
• 16:15
  Speaker 9: The market tries to anticipate what the Fed is going
• 16:17
  Speaker 9: to do. So we might wind up in a situation
• 16:20
  Speaker 9: where maybe maybe the Fed surprises the market more frequently
• 16:24
  Speaker 9: than they have in the recent past, since communication policy
• 16:27
  Speaker 9: always you know, adjusted rate expectations in real time.
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  Speaker 2: Okay, So clearly the job report today is moving the
• 16:36
  Speaker 2: rates market. Not so long ago, oil was kind of
• 16:39
  Speaker 2: the thing that moved the rates market. We see oil
• 16:42
  Speaker 2: down for a third straight day. Is crude at all
• 16:45
  Speaker 2: dictating the rates market? Or has that now faded as
• 16:47
  Speaker 2: the Iran war turns into you know, just never ending talks.
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  Speaker 9: So there's there's actually a point where the where when
• 16:56
  Speaker 9: you look at inflation expectations, and that's the transmission mechanism
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  Speaker 9: oil into the rates market, and you look at inflation
• 17:03
  Speaker 9: break evens, So how how the market is anticipating future
• 17:07
  Speaker 9: headline inflation to be that Basically when you get under
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  Speaker 9: seventy five dollars, a barrel kind of goes away and becomes.
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  Speaker 4: Much more exogenous on a forward basis.
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  Speaker 9: So I think it had really done a lot of
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  Speaker 9: the work back in the last couple of weeks. But certainly,
• 17:22
  Speaker 9: certainly since since the twentieth or so of June, you know,
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  Speaker 9: inflation break evens basically have been range bound since then,
• 17:30
  Speaker 9: after having come down quite substantially following the following the
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  Speaker 9: you know, if you want to call it the ceasefire
• 17:37
  Speaker 9: that you know, who knows if it's really holding or not.
• 17:39
  Speaker 9: But certainly oil coming down and being in this seventy
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  Speaker 9: five dollars range or so is not going to be
• 17:46
  Speaker 9: anything that the rates market's going to care about. So
• 17:49
  Speaker 9: then we turn a little bit more to fundamentals and
• 17:51
  Speaker 9: we look at things like core inflation, which you know,
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  Speaker 9: when we get that report later this month, will be
• 17:55
  Speaker 9: the next real volatility driver for the rates market.
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  Speaker 6: I think.
• 18:00
  Speaker 3: Us more from Bloomberg Intelligence coming up after this.
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• 18:21
  Speaker 7: News is developing the world of global trade, and that
• 18:23
  Speaker 7: is the US announced that it will not renew its
• 18:26
  Speaker 7: trade deal with Canada in Mexico, instead conducting annual reviews
• 18:30
  Speaker 7: of the pact, which risk adding uncertainty for companies producing
• 18:34
  Speaker 7: goods across North America.
• 18:35
  Speaker 4: Get the latest reporting on this.
• 18:37
  Speaker 7: Returned to Brendan Murray, global Trade editor for Bloomberg News. Brendan,
• 18:41
  Speaker 7: your world, the world of global trade has had, you know,
• 18:43
  Speaker 7: twenty four hours that kind of digest this news here.
• 18:47
  Speaker 7: What's some of the fallout we're seeing from maybe some
• 18:49
  Speaker 7: of our trading partners, like Canada, like Mexico. How are
• 18:54
  Speaker 7: things going to change?
• 18:56
  Speaker 10: Yeah, I think the main response, if we could sum
• 18:59
  Speaker 10: it up, was that they just that they're just resigned
• 19:02
  Speaker 10: to the fact that this is how they're gonna deal
• 19:04
  Speaker 10: with the with the Trump administration as long as he
• 19:06
  Speaker 10: is in office. And so, uh, we didn't see a
• 19:09
  Speaker 10: huge reaction in in either currency. Uh. It's and companies
• 19:14
  Speaker 10: that you know that that do business across the three countries,
• 19:17
  Speaker 10: particularly automakers, you know, their shares didn't really move all
• 19:21
  Speaker 10: that much. I think this is this is really the
• 19:24
  Speaker 10: beginning of of the story rather than the than the
• 19:27
  Speaker 10: than the end of it. And and the Trump administration
• 19:30
  Speaker 10: wants to have trade negotiations with Mexico because there are
• 19:35
  Speaker 10: specific issues to to the to that relationship that Washington
• 19:40
  Speaker 10: wants to address. And then they and then they have
• 19:42
  Speaker 10: to they have to sort out there. There's some of
• 19:45
  Speaker 10: the disagreements with Canada as well, and and and there's
• 19:47
  Speaker 10: not a whole lot of love loss between Ottawa and
• 19:50
  Speaker 10: Washington these days. The uh, the sides aren't really talking
• 19:53
  Speaker 10: about trade at the moment, and so it's, uh, those
• 19:56
  Speaker 10: are those are going to be sort of tougher to
• 19:58
  Speaker 10: get going. And we'll see how We'll see how it
• 20:01
  Speaker 10: shakes out. But ultimately, you know, the USMCA, it was
• 20:05
  Speaker 10: going to expire in twenty thirty six, and that's the
• 20:09
  Speaker 10: that's the course it's on unless they can get it
• 20:13
  Speaker 10: into into a shape where everybody thinks it's worth renewing
• 20:16
  Speaker 10: for another sixteen years.
• 20:18
  Speaker 2: Okay, So this creates uncertainty for automakers, I heard you
• 20:21
  Speaker 2: mentioned them, certainly farmers as well as energy companies. What
• 20:25
  Speaker 2: are the specific sticking points? What is something that the US,
• 20:29
  Speaker 2: the Trump administration wants that Canada and Mexico are not
• 20:31
  Speaker 2: willing to give.
• 20:32
  Speaker 10: For instance, well, one of the issues with Mexico is
• 20:37
  Speaker 10: the are what they call rules of origin. This is
• 20:40
  Speaker 10: basically sort of the nationality of a product. Is it
• 20:43
  Speaker 10: made in Mexico, is it made in the US and
• 20:47
  Speaker 10: the U and the Trump administration wants to sort of
• 20:50
  Speaker 10: tighten up these rules of origin so that so that
• 20:53
  Speaker 10: products are you know, have more American content in them
• 20:57
  Speaker 10: than they would you know, their country like Mexico, and
• 21:01
  Speaker 10: so uh, there are already these rules that exist, but
• 21:04
  Speaker 10: the but the Trump administration wants to wants to to
• 21:08
  Speaker 10: tighten those up to have more things made in the
• 21:11
  Speaker 10: United States.
• 21:12
  Speaker 6: UH.
• 21:13
  Speaker 10: This long running issue that the US has with with
• 21:16
  Speaker 10: the Canadian dairy industry and then the protections that the
• 21:19
  Speaker 10: Canadian government has for its dairy UH producers. That's a
• 21:24
  Speaker 10: that's a that's been a long running sticking point, and
• 21:27
  Speaker 10: the US UH trade officials that we've spoken to have said,
• 21:31
  Speaker 10: that's that's you know, an another another issue they want
• 21:35
  Speaker 10: to deal with it. And also with Canada. You know,
• 21:37
  Speaker 10: Canada produces UH produces vehicles. American automakers have plants in Canada,
• 21:42
  Speaker 10: and the President Trump wants those UH cars and trucks
• 21:46
  Speaker 10: to be made in the US.
• 21:48
  Speaker 7: Brendan is the expectation that if Trump, if President Trump
• 21:52
  Speaker 7: doesn't like a particular economic action from either Canada or Mexico,
• 21:57
  Speaker 7: that the response would simply be tariffs.
• 22:00
  Speaker 6: Yeah.
• 22:02
  Speaker 10: So that's the other unknown that we're going to get
• 22:05
  Speaker 10: here in the in the short term, in the next
• 22:07
  Speaker 10: few weeks, is the the ten percent tariff that the
• 22:10
  Speaker 10: President put on most major US trading partners after he
• 22:15
  Speaker 10: lost the Supreme Court case. That ten percent tariff expires
• 22:18
  Speaker 10: on July twenty fourth, and so we're going to see
• 22:21
  Speaker 10: the administration come out with a sort of a rolling
• 22:26
  Speaker 10: group of different kinds of tariffs, using different authorities to
• 22:30
  Speaker 10: put to put on instead of those the ten percent
• 22:33
  Speaker 10: tariffs that are that are you know, applying now USMCA
• 22:39
  Speaker 10: goods that move across the US Canadian Mexican borders. USMCA
• 22:43
  Speaker 10: compliant goods are not going to be subject to that.
• 22:45
  Speaker 10: But these other tariffs that are going to replace it.
• 22:48
  Speaker 10: There are concerns these sort of sectoral tariffs are going
• 22:53
  Speaker 10: to that there are concerns that if USMC a kind
• 22:57
  Speaker 10: of fades away or starts to be eroded, in the
• 22:59
  Speaker 10: in and the rules that are currently in place that
• 23:02
  Speaker 10: some some some more UH merchandise that moves across UH
• 23:07
  Speaker 10: in North America will face some of those tariffs. That's
• 23:10
  Speaker 10: the fear from Mexico and Canada.
• 23:12
  Speaker 2: Anyway, very quickly, Brendon, I know you mentioned the automaker's
• 23:15
  Speaker 2: stocks for instance, didn't move a whole lot on this announcement.
• 23:18
  Speaker 2: But I wonder what the industry is saying right now
• 23:21
  Speaker 2: in terms of urging governments to to move forward or
• 23:25
  Speaker 2: how they move forward.
• 23:27
  Speaker 10: Yeah, I think generally, you know, the automakers don't really
• 23:30
  Speaker 10: want to you know, stick their necks UH out and
• 23:34
  Speaker 10: and say much and and complain about things. You know,
• 23:37
  Speaker 10: there are there are tariffs on on imports of steel
• 23:43
  Speaker 10: and aluminum that are hitting the auto US automakers UH
• 23:46
  Speaker 10: and making US cars more expensive. But for the generally
• 23:50
  Speaker 10: businesses say, look, we need clarity, we need some stability.
• 23:54
  Speaker 10: We need to know what our costs are going to
• 23:56
  Speaker 10: be over the next you know, a couple of decades,
• 23:58
  Speaker 10: if we're gonna if we're gonna have supply chain that
• 24:00
  Speaker 10: benefit from what Canada, Mexico in the US has to offer.
• 24:05
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