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Trump Demands More Defense Spending But Threatens Biggest Firms · Bloomberg Intelligence

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  Speaker 2: I'm not sure if the last twenty four to forty
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  Speaker 2: eight hours has been a good.
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  Speaker 3: Time for the defense contractors or bad time.
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  Speaker 2: On one hand, he got President Trump saying he wants
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  Speaker 2: to ramp up defense spending big time. On the other hand,
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  Speaker 2: he says, we want you to do better, do faster,
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  Speaker 2: stop paying out dividends and buybacks. I don't know what's
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  Speaker 2: going on there. So George Ferguson, it's his job to
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  Speaker 2: know what's going on. He's a senior aerospace, defense and
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  Speaker 2: airlines analysts for Bloomberg Intelligence. George, what it twenty four
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  Speaker 2: to forty eight hours has been for the defense contractors?
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  Speaker 2: My head is spinning.
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  Speaker 3: What's your take?
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  Speaker 4: So my take is that one and a half trillion
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  Speaker 4: sounds like a great defense budget. It sounds like, you know,
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  Speaker 4: if you're a defense contractor, it'll be hard to execute
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  Speaker 4: on that, right. It's that's basically increasing the budget by
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  Speaker 4: fifty percent, So I'm not sure how much they'll really
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  Speaker 4: be able to benefit from that big increase. We still
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  Speaker 4: got to see Congress also approve something like that too,
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  Speaker 4: so I don't get too excited yet about that one
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  Speaker 4: and a half tillion dollar number. Like a lot of
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  Speaker 4: things in Washington, the barrel being the details and see
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  Speaker 4: what they bring forward. I'm a little more concerned about
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  Speaker 4: the you know, the buyback divid end limit on compensation
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  Speaker 4: restrictions or at least uh push to push to limit, right,
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  Speaker 4: because you know, we're kind of looking at this, you know,
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  Speaker 4: overnight thinking about this a bit, right. So you know,
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  Speaker 4: these are defense stocks, right. Defense stacks are not you
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  Speaker 4: don't wake up in the morning and find out some
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  Speaker 4: defense company has the killer I don't know, you know,
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  Speaker 4: killer app, killer device, and all of a sudden, everybody's
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  Speaker 4: got to own it. Venues are rising by seventy percent,
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  Speaker 4: you know, it's it's a huge profit maker. Profits are
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  Speaker 4: just ballooning out and the stocks are rising. These are
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  Speaker 4: you know, these are sort of slow, methodical growing companies.
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  Speaker 4: They help the country build somebody the equipment we need
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  Speaker 4: to defend ourselves. They get margins. You know, ten eleven, twelve,
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  Speaker 4: that's a good margin. It's not you know, for the
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  Speaker 4: rest of the industry, the rest of industrials, that's not
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  Speaker 4: super great. And so you support your stock through dividends
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  Speaker 4: and share buybacks as you need them, right, and so
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  Speaker 4: there's a class of investor in here looking for that dividend.
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  Speaker 4: I think I think it's a it's it's a fair
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  Speaker 4: return for them, meaning it's fair for them to look
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  Speaker 4: for that as a shareholder. So I think that if
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  Speaker 4: they can't have a dividend, they're gonna have to go
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  Speaker 4: find some other shareholders. You know, I'm a little concerned
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  Speaker 4: about how they how they do that, honestly, how they
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  Speaker 4: manage that change how much.
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  Speaker 2: I mean, we know the President Trump signed an executive
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  Speaker 2: order regarding this buybacks and dividends and capping executive pay,
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  Speaker 2: but in reality, I don't know what kind of I
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  Speaker 2: guess authority he really has. Now, I guess there's a
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  Speaker 2: tremendous amount of leverage the federal government has because they're
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  Speaker 2: obviously the biggest customer of these defense contractors. Have you
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  Speaker 2: heard anything from the companies about how they might deal
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  Speaker 2: with you know, a tougher stance with the government.
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  Speaker 4: Not here from the companies yet, right, it's been about
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  Speaker 4: twelve hours. I'm sure they're busy huddling and trying to
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  Speaker 4: figure out what to do next. Yeah, but I agree
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  Speaker 4: with you. So look at feels like the President and
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  Speaker 4: obviously the Defense Department could hold back contracts as a
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  Speaker 4: way to try to influence the defense companies. But I
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  Speaker 4: don't think it's quite as easy as that, right, Like
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  Speaker 4: you're going to You're not going to pull the Joint
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  Speaker 4: Strike Fighter out of Lockheed and put it somewhere else, right,
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  Speaker 4: you can't. It takes you a decade to do that.
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  Speaker 4: I think at least half a decade, and Trump will
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  Speaker 4: be out of office by then. You know, Raytheon makes
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  Speaker 4: really great radars air defense systems. You know, that's one
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  Speaker 4: of their core competencies. You're not going to pull it
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  Speaker 4: out of there, you know, right away? And so to me,
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  Speaker 4: I think, you know, that sort of the contract leverage
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  Speaker 4: is challenging for sure. I think they can make it
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  Speaker 4: a bit more painful than the executive teams would like.
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  Speaker 4: And one of the other things we keep thinking about too,
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  Speaker 4: is so you know, Raytheon is part of a bigger
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  Speaker 4: company called RTX. Two thirds of that company is commercial, right,
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  Speaker 4: So if you're RTX management, maybe you'd want to separate,
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  Speaker 4: right because you all of a sudden you can't feed
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  Speaker 4: your shareholders on the commercial side the way you could
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  Speaker 4: be the same as you could feed them on the
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  Speaker 4: defense side. Maybe you'd say, Okay, why don't we pull
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  Speaker 4: raytheon out of here. I don't think the federal government
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  Speaker 4: wants that either, right, because they're synergies inside and RTX.
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  Speaker 4: Where they make jet engines for the Joint Strike Fighter,
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  Speaker 4: they make jet engines for the commercial aircraft fleet, the
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  Speaker 4: global commercial aircraft fleet. You want those synergies inside the company.
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  Speaker 4: So I'm not I'm not sure how this fully plays.
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  Speaker 4: My guess is that right now you don't need a
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  Speaker 4: lot of support from a buybacked perspective because defense stocks
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  Speaker 4: are generally hot, right, so a lot of them I've
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  Speaker 4: seen sort of wind down some of those buybacks. The
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  Speaker 4: dividends a different story. Maybe they go in and try
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  Speaker 4: to discuss with the administration a bit about how they
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  Speaker 4: keep the dividend, and the CEOs have to worry about
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  Speaker 4: how to fix the five million dollar cap on their
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  Speaker 4: on their pay.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 5: Let's take a look at one of the stocks that
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  Speaker 5: was hard hit last year. Constellation Brands fell thirty six
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  Speaker 5: percent in twenty twenty five, and heading into this earnings report,
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  Speaker 5: I think it's safe to say that expectations were not
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  Speaker 5: necessarily high because, you know, a whole generation of kids
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  Speaker 5: seem to have turned away from alcohol and turned to scandule. Yeah,
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  Speaker 5: alternative sources of you know, aneviation. In any case, Kenneth's
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  Speaker 5: Jay is Bloomberg Intelligence is senior consumer products analysts joining
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  Speaker 5: us now to talk about Constellation Brands and Kenneth Constellation Brands.
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  Speaker 5: The stock at least is up four percent today. Was
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  Speaker 5: it a case of expectations were really low and it
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  Speaker 5: be a lowered bar?
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  Speaker 6: H Scarlett, Yeah, that's the way I'm looking at it. Clearly,
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  Speaker 6: when a company lowered guidance last quarter, it was really
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  Speaker 6: set the bar low, and they exceeded that bar last
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  Speaker 6: night you know. Having said that, though they remained cautious,
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  Speaker 6: and I think it's for good reason. And that's because
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  Speaker 6: the fundamental drivers that are pressuring the company's you know, outlook,
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  Speaker 6: remain in place, and the companies spelled them out predominantly.
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  Speaker 6: It's the impact of the cumultive raises of prices over
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  Speaker 6: the last few years on beer's some degree consumers have
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  Speaker 6: sticker shock they go buy beer. Also, half the company's
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  Speaker 6: customer base, according to the company, or from the Hispanic community,
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  Speaker 6: which understandably is under pressure with the US immigration policy.
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  Speaker 6: Those two factors are unlikely to change in the near term,
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  Speaker 6: and hence the company remains cautious going forward.
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  Speaker 2: So if the Hispanic population is important for them, how
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  Speaker 2: are they dealing with this? Is or any marketing they
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  Speaker 2: can do? Is it just that seems like almost out
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  Speaker 2: of their control to something.
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  Speaker 6: Agree it is? Paul having said that, I mean, the
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  Speaker 6: company has you know, to deserve deserves credit for doing
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  Speaker 6: all it can do. It's coming out with a no
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  Speaker 6: alcoholic version of Corona for those seeking that well a
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  Speaker 6: lot of consumers. And another pressure John is that there's
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  Speaker 6: an alcohol moderation going on. Scarlett alluded that a minute
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  Speaker 6: ago that hasn't changed. Alcohol moderation is not only you know,
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  Speaker 6: the young demographic out there chooses other forms of nebriation
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  Speaker 6: like cannabis, but also they're more conscientious I believe of
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  Speaker 6: health risk associated with alcohol as maybe their parents and
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  Speaker 6: grandparents you know did. Yeah, and then you have GLP
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  Speaker 6: one drugs. You know, our own survey at Bloomberg Intelligence
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  Speaker 6: showed that thirty percent of GLP one users significantly reduce
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  Speaker 6: alcohol in their diets. So all these factors combined suggest
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  Speaker 6: you know, you know, increased caution is needed.
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  Speaker 5: Here, increased caution and of course that's something This is
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  Speaker 5: a structural headwind for a company like Constellation Brands. It's
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  Speaker 5: not just beer either. I know, beer is like the
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  Speaker 5: dominant part of their business. But spirits and wines. How
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  Speaker 5: does that look for Constellation Brands.
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  Speaker 6: Well, they've done a good job pruning some of the
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  Speaker 6: underachieving brands over the last few years. It's predominantly a
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  Speaker 6: wine portfolio, and consumers tend to be pretty loyal to
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  Speaker 6: brands and don't really evate much towards beer and spirits
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  Speaker 6: say thing like wine and they you know, a pretty
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  Speaker 6: stable category. Having said that, there's been a lot of
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  Speaker 6: low priced competition in recent years and that's really hurt
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  Speaker 6: the margin structure of that business. So it's likely to
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  Speaker 6: remain somewhat under pressure by many of the same factors
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  Speaker 6: that I mentioned before. But it is a higher margin
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  Speaker 6: you know, portfolio than it was a year or two ago,
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  Speaker 6: and the company has some pretty good brands in that category.
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  Speaker 2: I'm not sure I want to know the answer to this, Ken,
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  Speaker 2: but can you tell me what the US ready to
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  Speaker 2: drink protein market is?
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  Speaker 6: Sure, Paul, Well, you know it's it's to only eight
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  Speaker 6: billion dollar market as a seguey to beer, which is
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  Speaker 6: one hundred and ten billion. It's a small market, but
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  Speaker 6: it's growing fast. Again. It's been around a while. But
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  Speaker 6: unlike those days where the consumers you know, drank it
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  Speaker 6: as a supplemental to their diet overall diet, now they're
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  Speaker 6: responding to again GLP one. The it's one of the
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  Speaker 6: beneficiaries of the GILB one trend. And also the Dietary
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  Speaker 6: Guidelines came out today and said where protein is needed,
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  Speaker 6: this is a real easy way for consumer to get
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  Speaker 6: the protein. It's inexpensive in lots of different slavers. It's
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  Speaker 6: convenient to you know, it's portable and so basically it's
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  Speaker 6: a high protein. High protein drink can give you as
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  Speaker 6: much as half of your daily intake of protein according
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  Speaker 6: to the FDA, So it's an easy way to you know,
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  Speaker 6: meet or exceed your you know, requirements are protein.
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  Speaker 5: Is this the kind of narrative that consolation brands wants
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  Speaker 5: to be pushing to investors to get them excited or
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  Speaker 5: to kind of signal that this is where they see
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  Speaker 5: opportunities constellation.
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  Speaker 6: Well, you know, I think the communication they're giving investors
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  Speaker 6: is we're doing all we can do, you know, to
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  Speaker 6: ride out this turbulence in alcoholic beverages. And obviously be
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  Speaker 6: or beers ninety percent of their portfolio. At the end
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  Speaker 6: of the day, though the company gets really high margins.
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  Speaker 6: Is the best margine structure of all the beverage companies
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  Speaker 6: I cover. You know, they have an operating margin in
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  Speaker 6: the high thirties. That's that's really high. It's almost twice
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  Speaker 6: out of of the average beer US beverage company, and
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  Speaker 6: as such, it generates a lot of free cash flow.
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  Speaker 6: And I think that explains why Berkshire Hathaway has been
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  Speaker 6: nibbling away and increasing its stake in this company, it's
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  Speaker 6: all about free cash flow. With one of its big
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  Speaker 6: brewers down in Mexico, in Veracruz, almost completed. We would
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  Speaker 6: expect free cash flow to grow at a strong double
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  Speaker 6: digit rate over the next couple of years, even amid
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  Speaker 6: all these pressures on alcohol and ken.
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  Speaker 2: Whenever we talk to you about your companies, we need
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  Speaker 2: to talk about a dividend and dividend policy. I see
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  Speaker 2: they have a dividend yield here about two point eight percent. A.
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  Speaker 2: Is that a competitive dividend yield? And B maybe is
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  Speaker 2: you expected to go higher?
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  Speaker 6: In terms of competitive it's about the same as its
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  Speaker 6: closest US beverage piers around, you know, two and a
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  Speaker 6: half to three and a half percent or so. So
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  Speaker 6: that's on are it's even at pay a ratio at
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  Speaker 6: about thirty percent is comfortable enough that future increase, as
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  Speaker 6: we think, are very achievable. And I think the company
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  Speaker 6: has committed to rewarding shareholders through you know, a regular
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  Speaker 6: dividend increase and also periodic share buybacks, which we would
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  Speaker 6: expect to pick up, you know, as I mentioned, as
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  Speaker 6: a free cashlow picks up over the next couple of years.
• 12:23
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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• 12:44
  Speaker 2: Let's switch gears to the real estate business, because that's
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  Speaker 2: also in the crosshairs of President Trump calling out some
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  Speaker 2: issues more, you know, basically saying Trump target's institutional purchases
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  Speaker 2: of single family homes.
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  Speaker 3: We want to bring in.
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  Speaker 2: Jeff lane Bound covers all the roots for us at
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  Speaker 2: Bloomberg Intelligence. Jeff, what's the president targeting here? And is
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  Speaker 2: it really an issue in the residential real estate market.
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  Speaker 7: It really isn't. It's it's one of those things that's
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  Speaker 7: been a target for politicians for some time because it's
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  Speaker 7: a very easy political message to sell. You're going after
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  Speaker 7: the big institutions that are crowding out the individual home
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  Speaker 7: buyers making prices too expensive. But at the end of
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  Speaker 7: the day, you know, these are these are well run
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  Speaker 7: institutional landlords of rental homes, not unlike you know, apartment homes.
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  Speaker 7: And you know, I think that at the end of
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  Speaker 7: the day of what he is suggesting he wants to
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  Speaker 7: do gets done in some capacity. You know, the net
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  Speaker 7: result probably winds up being less home inventory, which probably
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  Speaker 7: ends up making offsetting any positive impact on pricing that
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  Speaker 7: he would be looking to accomplish.
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  Speaker 2: Well, the only I don't know much about this business,
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  Speaker 2: but are they How big is institutional ownership of residential
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  Speaker 2: real estate.
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  Speaker 3: In the US these days?
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  Speaker 7: It's it's tiny, you know, it's it's I've seen numbers.
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  Speaker 7: It's it's only a couple percent of the overall housing stock,
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  Speaker 7: maybe a little bit more of the overall rental housing stock,
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  Speaker 7: but at the end of the day, it's you know,
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  Speaker 7: a majority of what is owned single family homes that
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  Speaker 7: are are rented are owned by mom and pop small
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  Speaker 7: investors rather than the large institutions. But clearly the large
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  Speaker 7: institutions have the buying power, and that's what's being targeted here.
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  Speaker 2: What I mean, I guess in some fashion the President
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  Speaker 2: and his administration going after the high cost of housing,
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  Speaker 2: the affordable or the lack of affordability of housing in
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  Speaker 2: this country. From your reak perspective, what's going on there?
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  Speaker 2: How do we get ourselves here? And maybe how do
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  Speaker 2: we fix the situation.
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  Speaker 7: Well, I mean the reason that there's a housing affordability
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  Speaker 7: issue is because there hasn't been enough built for an
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  Speaker 7: extended period of time and we were under supplied.
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  Speaker 3: And the way to get out of that.
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  Speaker 7: Is to increase supply. And anything that you do from
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  Speaker 7: an administrative or regulatory perspective that you know, caps incentive
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  Speaker 7: to build new supply is the real problem here. For pricing.
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  Speaker 7: Right now, rentals are more affordable than buying a home.
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  Speaker 7: I think that's pretty well understood across the board. And
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  Speaker 7: there's just there's not enough incentive for builders of either
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  Speaker 7: single family or multifamily right now to increase the housing supply,
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  Speaker 7: which really is needed to increase affordable to improve affordability.
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  Speaker 2: So what do the developers, what are they arguing for,
• 15:40
  Speaker 2: like other specific remedies are looking for in terms of
• 15:43
  Speaker 2: permitting just regulatory hurdles to build.
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  Speaker 7: Yeah, I mean basically that's that's the key is improved
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  Speaker 7: ease of permitting.
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  Speaker 3: You know, maybe some.
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  Speaker 7: Private public private partnerships where there's some government input in
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  Speaker 7: in you know, tax incentives or things of that nature.
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  Speaker 7: Obviously in markets like New York here, you know, the
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  Speaker 7: ability to more easily convert old office buildings into rental housing.
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  Speaker 7: But you know, on the single family side, which is
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  Speaker 7: what this is really targeting. You know, one of the
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  Speaker 7: things that the builders are doing right now is selling
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  Speaker 7: their inventory to institutions who will own it and rent it,
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  Speaker 7: and that's being targeted. And if you take away that buyer,
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  Speaker 7: then you know, it makes it harder for them to
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  Speaker 7: build if they don't necessarily feel confident that they're going
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  Speaker 7: to be able to sell their inventory.
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  Speaker 2: At the end of the day, is are building restrictions?
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  Speaker 2: They're local, right, They're not federal? Are they correct?
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  Speaker 3: That?
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  Speaker 6: You know, the.
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  Speaker 7: Permitting process and the regulations on housing are at the
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  Speaker 7: local level.
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  Speaker 2: So I mean is this something I mean, are certain states,
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  Speaker 2: certain areas, is it easier to build harder to build out?
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  Speaker 3: I think in New York City be terribly hard to
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  Speaker 3: build something.
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  Speaker 7: Yeah, I mean, you know, you can look you can
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  Speaker 7: look broad all geographic strokes. I mean, areas in the
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  Speaker 7: Sun Belt are you know, historically much easier to build.
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  Speaker 7: Obviously there's a much more land, but also the regulatory
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  Speaker 7: environment is easier, and so that's you know, where there's
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  Speaker 7: historically been significant more construction and the demand has followed
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  Speaker 7: and so it you know, typically supply and demand work
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  Speaker 7: on their own, and you know, the government stays out
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  Speaker 7: of it, The federal government stays out of it, and
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  Speaker 7: so you know, at the end of the day, I'm
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  Speaker 7: not really sure exactly what's going to be able to
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  Speaker 7: be done here. It feels like banning specific owners of
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  Speaker 7: properties from playing in a in a private market transaction
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  Speaker 7: is interesting and we'll see what we'll you know, but
• 17:41
  Speaker 7: clearly he's making life difficult for these companies.
• 17:44
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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• 18:01
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 18:05
  Speaker 2: Well, hundreds of companies are lined up to recoup their
• 18:09
  Speaker 2: share of the billions of dollars in duties paid so far.
• 18:11
  Speaker 2: As US Supreme Court is poised to decide the fate
• 18:15
  Speaker 2: of most of President Donald Trump's tariffs, that ruling could
• 18:18
  Speaker 2: come as soon as tomorrow, and that is the subject
• 18:21
  Speaker 2: of the Big Take story on the Bloomberg Terminal in
• 18:23
  Speaker 2: Bloomberg dot Com. Slash, big take. More than one thousand
• 18:26
  Speaker 2: companies are suing Trump over terriffs, is the title of
• 18:29
  Speaker 2: that article. One of the reporters, Zoey Tilman, joins us here.
• 18:32
  Speaker 3: Zoey Tilman.
• 18:33
  Speaker 2: She is Bloomberg News senior reporter covering law and politics. Zoe,
• 18:36
  Speaker 2: what can you tell us about these suits here by
• 18:39
  Speaker 2: these companies?
• 18:41
  Speaker 6: Right?
• 18:41
  Speaker 8: So, back in April, when the President announced his reciprocal tariffs,
• 18:47
  Speaker 8: the so called Liberation Day tariffs, a handful of small
• 18:50
  Speaker 8: businesses and a coalition of states filed suit, and for
• 18:54
  Speaker 8: the most part, that was it. For most of the year,
• 18:56
  Speaker 8: much of the business world did not get involved. Date
• 19:00
  Speaker 8: on the sidelines, you know, talking with trade lawyers, what
• 19:03
  Speaker 8: they told us was there was a fear of blowback
• 19:05
  Speaker 8: for stepping out against the administration. A number of companies
• 19:09
  Speaker 8: wanted to wait and see what happened, you know, before
• 19:11
  Speaker 8: sticking their necks out. But as the year drew to
• 19:14
  Speaker 8: a close the Supreme Court heard arguments, you know, there
• 19:18
  Speaker 8: was some sense that perhaps key members of the conservative
• 19:20
  Speaker 8: wing were skeptical and the tariffs might fall. We are
• 19:24
  Speaker 8: suddenly seeing a flood of businesses going into court wanting
• 19:28
  Speaker 8: to make sure that they've done everything they can to
• 19:31
  Speaker 8: try to get refunds if the court rules against the
• 19:34
  Speaker 8: tariffs in the coming days or weeks. These cases are
• 19:38
  Speaker 8: building off of those original lawsuits. They're not raising new claims.
• 19:42
  Speaker 8: What they're saying is, we agree that the tariffs are unlawful,
• 19:46
  Speaker 8: and if they fall, we think we should get our
• 19:48
  Speaker 8: money back. So it's really a preemptive approach that these
• 19:52
  Speaker 8: companies are taking at this point.
• 19:54
  Speaker 2: So more than one hundred corporate entities are now involved
• 19:57
  Speaker 2: in the legal fight, including some big household company many
• 20:00
  Speaker 2: names like Costco, Goodyear, Tire, and Rubbert Company. What's the
• 20:04
  Speaker 2: feeling in legal circles here about how this Supreme Court
• 20:07
  Speaker 2: case might go and what it might mean.
• 20:10
  Speaker 3: For some of these people that would like to get
• 20:11
  Speaker 3: some of their money back.
• 20:13
  Speaker 8: Right, And I should say the vast majority of companies
• 20:16
  Speaker 8: that have sued so far are small businesses that perhaps
• 20:19
  Speaker 8: most conservatives consumers have never heard of. But we talked
• 20:22
  Speaker 8: with owners who told us that, you know, the amounts
• 20:24
  Speaker 8: that they're paying several thousand dollars, tens of thousands of
• 20:28
  Speaker 8: dollars have been a huge hit to their bottom line
• 20:31
  Speaker 8: and their ability to staff, stock goods and so on
• 20:35
  Speaker 8: that said, you know, the arguments on November fifth, we
• 20:39
  Speaker 8: saw key members of the court asking very skeptical questions
• 20:43
  Speaker 8: about the lawfulness of the president's use of this nineteen
• 20:46
  Speaker 8: seventy seven economic emergency powers law to impose the tariffs.
• 20:51
  Speaker 8: And once that happened, there were at least some companies
• 20:55
  Speaker 8: that said, you know, the odds seem.
• 20:57
  Speaker 3: At least good enough.
• 21:00
  Speaker 8: We're willing to now take steps to publicly come out
• 21:03
  Speaker 8: against this policy. It's certainly not.
• 21:05
  Speaker 3: The case for all.
• 21:06
  Speaker 4: We talked to lawyers who.
• 21:07
  Speaker 8: Said, you know, some didn't fear the blowback. They just
• 21:10
  Speaker 8: didn't see a need to do this until recently some.
• 21:15
  Speaker 2: Red headlines crossing the Bloomberg terminal here. Venezuela Assembly President
• 21:20
  Speaker 2: Rodriguez on state television says that Venezuela to release important
• 21:24
  Speaker 2: number of prisoners. That's according to Venezuela Assembly President Rodriguez.
• 21:29
  Speaker 3: So a'll lot more recording on that going forward.
• 21:31
  Speaker 2: Zoe, is there a mechanism for I don't know, the government,
• 21:36
  Speaker 2: I guess to return some of these tariff back to
• 21:41
  Speaker 2: companies that paid them.
• 21:43
  Speaker 8: So there is precedent for this, just not on the
• 21:46
  Speaker 8: scale that we would expect to see if the Supreme
• 21:48
  Speaker 8: Court strikes down these tariffs. Number of years ago, there
• 21:52
  Speaker 8: was a harbor maintenance tax that the Supreme Court struck down,
• 21:56
  Speaker 8: and that resulted in roughly four thousand companies going to
• 22:01
  Speaker 8: a US Trade court to get refunds for the money
• 22:04
  Speaker 8: that they had paid to the government, according to a
• 22:07
  Speaker 8: court filing in December, looking at roughly three hundred thousand
• 22:12
  Speaker 8: importers so far that have paid these contested tariffs on
• 22:16
  Speaker 8: something like thirty plus million entries of goods into the
• 22:20
  Speaker 8: United States. So there is a process that the Trade
• 22:23
  Speaker 8: Court has used before to handle sort of a mass
• 22:27
  Speaker 8: refund process, and there's been some expectation in some of
• 22:30
  Speaker 8: the filings that we've seen that everyone expects that to
• 22:33
  Speaker 8: be the way this unfolds if the tariffs are struck down.
• 22:37
  Speaker 8: That said, you know, the administration could certainly say, you know,
• 22:42
  Speaker 8: maybe there's an administrative process that we want to use
• 22:44
  Speaker 8: that doesn't go through the courts. They haven't proposed anything
• 22:47
  Speaker 8: like that and have mostly discussed this as if they
• 22:51
  Speaker 8: too anticipate needing to go through courts. But the scale
• 22:54
  Speaker 8: and scope of this is unlike what the Trade Court
• 22:58
  Speaker 8: has had to handle in the past. So it would
• 23:00
  Speaker 8: be you know, the thousand companies that we've seen so
• 23:02
  Speaker 8: far is really a tiny fraction of the importers who
• 23:06
  Speaker 8: might be eligible to at least pursue acclaim with the government.
• 23:11
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