WEBVTT - KFC faces a beefy war | Nike stumbles over tariffs | Apple's largest wipeout on record

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<v Speaker 1>This is what the flux.

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<v Speaker 2>I'm Brett and I'm Justin and it's Monday the seventh.

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<v Speaker 1>Today, Pril Juzzy boy, it is tariff, central, left, right

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<v Speaker 1>and the center. Now companies and investors are cleaning up

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<v Speaker 1>the mess from Liberation Day. In fact, last week, nearly

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<v Speaker 1>four trillion dollars was wiped from the NASDAQ one hundreds

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<v Speaker 1>and that's the biggest drop since twenty twenty.

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<v Speaker 2>We know what happened then, b Man Fox am March

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<v Speaker 2>on the ASEX was not a pretty month. It dropped

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<v Speaker 2>more than four percent, but there were still four companies

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<v Speaker 2>that saw their share price jump more than ten percent.

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<v Speaker 2>And interestingly, there is one particular industry that dominated. We've

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<v Speaker 2>got it all covered in the Flux at this month,

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<v Speaker 2>So if you want to learn which industry outperform the rest,

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<v Speaker 2>make sure to check out and the Fox out.

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<v Speaker 1>Three spectacular stories today, Juzzy boy, let's do it for

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<v Speaker 1>our first. The owner of KFC stores in Australia, Collins Foods,

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<v Speaker 1>has seen it shares drop nearly three percent, as Trump's

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<v Speaker 1>tariffs might result in more beef eaters in Australia.

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<v Speaker 2>US politics actually changing how we pick up fast food

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<v Speaker 2>meals now b man anymore?

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<v Speaker 1>Well, Colin's Foods is the ASX listed restaurant operator that

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<v Speaker 1>runs KFC and Taco Bell restaurants.

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<v Speaker 2>We'd be talking more than two hundred and seventy five

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<v Speaker 2>kfsa's in Australia, sixteen in Germany, fifty six in the Netherlands.

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<v Speaker 1>Don't you dare forget those twenty seven Taco bells. Juzzy

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<v Speaker 1>Boy irrelevant?

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<v Speaker 2>Now me man. We know that Donald J. Trump whacked

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<v Speaker 2>a ten percent tariff on Australian goods, including beef exports,

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<v Speaker 2>and now the share price of Colin's Foods has dropped

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<v Speaker 2>nearly three percent. Interesting. Colin's Foods does chickens? How does

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<v Speaker 2>that wear well?

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<v Speaker 1>With Australian beef looking likely to become more expensive in

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<v Speaker 1>the US, Australian beef producers are looking likely to sell

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<v Speaker 1>beef domestically instead, and at more competitive prices.

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<v Speaker 2>Think two for one whoppers two dollars quarter pounders. It

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<v Speaker 2>is a burger bonanza.

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<v Speaker 1>And Juzzy Boy this aimed fingerlicking good use for Colin's

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<v Speaker 1>Foods investors.

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<v Speaker 2>No, they're more than a little worried about a price

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<v Speaker 2>war between fried chicken and burger.

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<v Speaker 1>Chains, and this could hurt the profit margins of fried

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<v Speaker 1>chicken big time.

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<v Speaker 2>Yep, So what is the key leading here?

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<v Speaker 1>When a major export destination becomes less attractive, supply often

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<v Speaker 1>shifts back to a domestic market.

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<v Speaker 2>Get this, bee Man. In twenty twenty four alone, nearly

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<v Speaker 2>thirty percent of Australian beef exports were headed to the US.

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<v Speaker 1>And with a ten percent tariff on these exports, it

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<v Speaker 1>could lead to a sharp reduction in demand from the

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<v Speaker 1>US and.

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<v Speaker 2>A sharp reduction in the profit margin for Australian beef producers. Ultimately,

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<v Speaker 2>leading beef produces selling it cheaper locally.

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<v Speaker 1>Now, that's a win for burger chains like McDonald's and

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<v Speaker 1>Hungry Jacks, which may benefit from lower beef costs.

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<v Speaker 2>But for chicken centric businesses like Collins Foods, it's a

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<v Speaker 2>different story.

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<v Speaker 1>You see, approximately ninety five percent of Australia's chicken is

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<v Speaker 1>consumed domestically.

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<v Speaker 2>So the poultry industry's cost structures are already set up

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<v Speaker 2>for the Australian market.

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<v Speaker 1>And they aren't set up for a trade war against

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<v Speaker 1>the big producers of beef.

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<v Speaker 2>So be Man. That means a switch from a Zingerberger

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<v Speaker 2>to a quarter pounder burger might become even more appealing.

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<v Speaker 1>For our second story, Nike has seen at share price

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<v Speaker 1>plummet after Donald Trump's new tariff on Vietnamese imports.

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<v Speaker 2>Jeez, just as Nike was limping already, be Man not

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<v Speaker 2>what they need right now, So tell me more.

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<v Speaker 1>Well, Josey boy, we know that DJT whacked tariffs on

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<v Speaker 1>more than ninety countries around the world on Thursday.

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<v Speaker 2>Kind of felt like he was picking names out of

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<v Speaker 2>a hat with his eyes closed.

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<v Speaker 1>Some countries, like Australia in the UK were hit with

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<v Speaker 1>ten percent standard tariffs.

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<v Speaker 2>While other countries were hit with much bigger tariffs, including Vietnam,

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<v Speaker 2>which was whacked with a forty six percent of tariff.

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<v Speaker 1>But now, Josey boy, Nike has seen its share price

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<v Speaker 1>tumble six percent after this big news.

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<v Speaker 2>That's because Nike produces fifty percent of a choose and

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<v Speaker 2>twenty eight percent of its apparel in you guessed, Vietnam.

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<v Speaker 1>And given this monstrous tariff, Nike needs to find a

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<v Speaker 1>way to bring its goods into the US at a

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<v Speaker 1>reasonable price and be man.

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<v Speaker 2>This continues from Nike's rocky March as well, where they

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<v Speaker 2>saw a twenty percent dip in their share price.

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<v Speaker 1>Guess it goes to show you you just got to

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<v Speaker 1>spread the love when it comes to manufacturing.

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<v Speaker 2>So what is the key learning here?

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<v Speaker 1>When companies rely heavily on one country for production, any

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<v Speaker 1>disruption can trigger big financial consequences.

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<v Speaker 2>It might be tariffs, it might be political tension. It

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<v Speaker 2>might even be the risk of an actual disaster in

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<v Speaker 2>that country.

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<v Speaker 1>And the irony is that Nike moved a lot of

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<v Speaker 1>its production to Vietnam during Trump's first presidency.

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<v Speaker 2>That was when trade tensions with China were heating up.

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<v Speaker 1>At the time, it was seen as a smart hedge

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<v Speaker 1>against relying too much on China.

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<v Speaker 2>But Beman, sometimes even friendly trading partners like Vietnam can

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<v Speaker 2>find themselves on the receiving end of economic pressure.

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<v Speaker 1>Ultimately, companies can diversify their supply chain to reduce their risk.

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<v Speaker 2>That means spreading production across multiple countries and even more regions.

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<v Speaker 1>And Jugie Boy Nike ain't the only clothing company that

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<v Speaker 1>invested big time in Vietnam.

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<v Speaker 2>Now Addedas also produces nearly forty percent of its footwear

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<v Speaker 2>in Vietnam. But the man Nike's breathing a small sigh

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<v Speaker 2>of relief after Trump claimed he had a constructive call

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<v Speaker 2>with Vietnam, so maybe it won't hit them as hard

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<v Speaker 2>as they thought. Neil for our third and final story,

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<v Speaker 2>Apple has become one of the biggest losers of the

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<v Speaker 2>global tariffs, with its largest one day valuation wipeout on record.

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<v Speaker 1>Apple shehare Price just experienced the same sinking feeling that

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<v Speaker 1>I feel when I dropped my iPhone face down on

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<v Speaker 1>the floor, A very scary moment, Juzzi Boy, So tell

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<v Speaker 1>me more.

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<v Speaker 2>Okay, So we know Apple as the world's most valuable company.

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<v Speaker 1>We're talking hardware like iPhone and iPad, wearables like the

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<v Speaker 1>Apple Watch.

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<v Speaker 2>And software like Yicloud and even Apple TV Plus.

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<v Speaker 1>In fact, Jazzy Boy, Apple's iPhone division alone is big

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<v Speaker 1>enough to rank in the Fortune five hundred's top thirty companies.

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<v Speaker 2>Wow, but now, b Man, Apple's lost over three hundred

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<v Speaker 2>billion US dollars in market value, and.

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<v Speaker 1>That's the biggest one day drop in history.

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<v Speaker 2>I'm assuming you're going to drop the big T word

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<v Speaker 2>for the reason, b Man, correct.

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<v Speaker 1>A mundo, Juzzy Boy. Trump has announced a thirty four

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<v Speaker 1>percent tariff on Chinese imports as part of Liberation Day

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<v Speaker 1>and while.

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<v Speaker 2>Apple loves to say it's products are designed in California,

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<v Speaker 2>the assembly actually happens in China.

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<v Speaker 1>As a result, Apple was hit hard by this tariff.

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<v Speaker 2>In fact, did share price drop more than nine percent.

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<v Speaker 1>And while Apple's currently in the pain cave right now,

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<v Speaker 1>the ripple effect might hit consumers and competitors next.

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<v Speaker 2>Yep. So what is the key learning here?

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<v Speaker 1>Tariffs might start as a tax on imports, but they

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<v Speaker 1>end up as a tax on consumers.

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<v Speaker 2>You see, b man, When tariffs is slapt on imported goods,

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<v Speaker 2>businesses face high costs.

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<v Speaker 1>And let me tell you one thing, juzyboy, businesses don't

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<v Speaker 1>just happily absorb.

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<v Speaker 2>The hitt No, no, no, they raised their prices.

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<v Speaker 1>We'd be talking everything from phones and electronics to food

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<v Speaker 1>and household items.

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<v Speaker 2>And they man at tariffs tend to make everything more expensive.

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<v Speaker 1>In fact, take the twenty eighteen US China trade war.

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<v Speaker 2>During this period, the US impoves tariffs on a broad

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<v Speaker 2>range of Chinese imports.

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<v Speaker 1>And studies by the Fed Reserve Bank of New York

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<v Speaker 1>they actually showed that these tariffs were largely passed on

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<v Speaker 1>to consumers.

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<v Speaker 2>They estimated that by May twenty nineteen, these tariffs were

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<v Speaker 2>costing the average American household more than four hundred US

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<v Speaker 2>dollars per year.

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<v Speaker 1>And jugeboy, those tariffs were nothing compared to the Liberation

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<v Speaker 1>Day tariffs.

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<v Speaker 2>Fox Am, there was one big industry that absolutely smashed

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<v Speaker 2>the markets in March on the ASX and got many others.

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<v Speaker 2>If you want to learn what that industry was and

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<v Speaker 2>why and forth so well, make sure to check out

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<v Speaker 2>our article in the Flux out.

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<v Speaker 1>Thanks for listening, and we'll see you on Wednesday