Speaker 1: This is what the flux.
Speaker 2: I'm Brett and I'm Justin and it's Monday the seventh.
Speaker 1: Today, Pril Juzzy boy, it is tariff, central, left, right
Speaker 1: and the center. Now companies and investors are cleaning up
Speaker 1: the mess from Liberation Day. In fact, last week, nearly
Speaker 1: four trillion dollars was wiped from the NASDAQ one hundreds
Speaker 1: and that's the biggest drop since twenty twenty.
Speaker 2: We know what happened then, b Man Fox am March
Speaker 2: on the ASEX was not a pretty month. It dropped
Speaker 2: more than four percent, but there were still four companies
Speaker 2: that saw their share price jump more than ten percent.
Speaker 2: And interestingly, there is one particular industry that dominated. We've
Speaker 2: got it all covered in the Flux at this month,
Speaker 2: So if you want to learn which industry outperform the rest,
Speaker 2: make sure to check out and the Fox out.
Speaker 1: Three spectacular stories today, Juzzy boy, let's do it for
Speaker 1: our first. The owner of KFC stores in Australia, Collins Foods,
Speaker 1: has seen it shares drop nearly three percent, as Trump's
Speaker 1: tariffs might result in more beef eaters in Australia.
Speaker 2: US politics actually changing how we pick up fast food
Speaker 2: meals now b man anymore?
Speaker 1: Well, Colin's Foods is the ASX listed restaurant operator that
Speaker 1: runs KFC and Taco Bell restaurants.
Speaker 2: We'd be talking more than two hundred and seventy five
Speaker 2: kfsa's in Australia, sixteen in Germany, fifty six in the Netherlands.
Speaker 1: Don't you dare forget those twenty seven Taco bells. Juzzy
Speaker 1: Boy irrelevant?
Speaker 2: Now me man. We know that Donald J. Trump whacked
Speaker 2: a ten percent tariff on Australian goods, including beef exports,
Speaker 2: and now the share price of Colin's Foods has dropped
Speaker 2: nearly three percent. Interesting. Colin's Foods does chickens? How does
Speaker 2: that wear well?
Speaker 1: With Australian beef looking likely to become more expensive in
Speaker 1: the US, Australian beef producers are looking likely to sell
Speaker 1: beef domestically instead, and at more competitive prices.
Speaker 2: Think two for one whoppers two dollars quarter pounders. It
Speaker 2: is a burger bonanza.
Speaker 1: And Juzzy Boy this aimed fingerlicking good use for Colin's
Speaker 1: Foods investors.
Speaker 2: No, they're more than a little worried about a price
Speaker 2: war between fried chicken and burger.
Speaker 1: Chains, and this could hurt the profit margins of fried
Speaker 1: chicken big time.
Speaker 2: Yep, So what is the key leading here?
Speaker 1: When a major export destination becomes less attractive, supply often
Speaker 1: shifts back to a domestic market.
Speaker 2: Get this, bee Man. In twenty twenty four alone, nearly
Speaker 2: thirty percent of Australian beef exports were headed to the US.
Speaker 1: And with a ten percent tariff on these exports, it
Speaker 1: could lead to a sharp reduction in demand from the
Speaker 1: US and.
Speaker 2: A sharp reduction in the profit margin for Australian beef producers. Ultimately,
Speaker 2: leading beef produces selling it cheaper locally.
Speaker 1: Now, that's a win for burger chains like McDonald's and
Speaker 1: Hungry Jacks, which may benefit from lower beef costs.
Speaker 2: But for chicken centric businesses like Collins Foods, it's a
Speaker 2: different story.
Speaker 1: You see, approximately ninety five percent of Australia's chicken is
Speaker 1: consumed domestically.
Speaker 2: So the poultry industry's cost structures are already set up
Speaker 2: for the Australian market.
Speaker 1: And they aren't set up for a trade war against
Speaker 1: the big producers of beef.
Speaker 2: So be Man. That means a switch from a Zingerberger
Speaker 2: to a quarter pounder burger might become even more appealing.
Speaker 1: For our second story, Nike has seen at share price
Speaker 1: plummet after Donald Trump's new tariff on Vietnamese imports.
Speaker 2: Jeez, just as Nike was limping already, be Man not
Speaker 2: what they need right now, So tell me more.
Speaker 1: Well, Josey boy, we know that DJT whacked tariffs on
Speaker 1: more than ninety countries around the world on Thursday.
Speaker 2: Kind of felt like he was picking names out of
Speaker 2: a hat with his eyes closed.
Speaker 1: Some countries, like Australia in the UK were hit with
Speaker 1: ten percent standard tariffs.
Speaker 2: While other countries were hit with much bigger tariffs, including Vietnam,
Speaker 2: which was whacked with a forty six percent of tariff.
Speaker 1: But now, Josey boy, Nike has seen its share price
Speaker 1: tumble six percent after this big news.
Speaker 2: That's because Nike produces fifty percent of a choose and
Speaker 2: twenty eight percent of its apparel in you guessed, Vietnam.
Speaker 1: And given this monstrous tariff, Nike needs to find a
Speaker 1: way to bring its goods into the US at a
Speaker 1: reasonable price and be man.
Speaker 2: This continues from Nike's rocky March as well, where they
Speaker 2: saw a twenty percent dip in their share price.
Speaker 1: Guess it goes to show you you just got to
Speaker 1: spread the love when it comes to manufacturing.
Speaker 2: So what is the key learning here?
Speaker 1: When companies rely heavily on one country for production, any
Speaker 1: disruption can trigger big financial consequences.
Speaker 2: It might be tariffs, it might be political tension. It
Speaker 2: might even be the risk of an actual disaster in
Speaker 2: that country.
Speaker 1: And the irony is that Nike moved a lot of
Speaker 1: its production to Vietnam during Trump's first presidency.
Speaker 2: That was when trade tensions with China were heating up.
Speaker 1: At the time, it was seen as a smart hedge
Speaker 1: against relying too much on China.
Speaker 2: But Beman, sometimes even friendly trading partners like Vietnam can
Speaker 2: find themselves on the receiving end of economic pressure.
Speaker 1: Ultimately, companies can diversify their supply chain to reduce their risk.
Speaker 2: That means spreading production across multiple countries and even more regions.
Speaker 1: And Jugie Boy Nike ain't the only clothing company that
Speaker 1: invested big time in Vietnam.
Speaker 2: Now Addedas also produces nearly forty percent of its footwear
Speaker 2: in Vietnam. But the man Nike's breathing a small sigh
Speaker 2: of relief after Trump claimed he had a constructive call
Speaker 2: with Vietnam, so maybe it won't hit them as hard
Speaker 2: as they thought. Neil for our third and final story,
Speaker 2: Apple has become one of the biggest losers of the
Speaker 2: global tariffs, with its largest one day valuation wipeout on record.
Speaker 1: Apple shehare Price just experienced the same sinking feeling that
Speaker 1: I feel when I dropped my iPhone face down on
Speaker 1: the floor, A very scary moment, Juzzi Boy, So tell
Speaker 1: me more.
Speaker 2: Okay, So we know Apple as the world's most valuable company.
Speaker 1: We're talking hardware like iPhone and iPad, wearables like the
Speaker 1: Apple Watch.
Speaker 2: And software like Yicloud and even Apple TV Plus.
Speaker 1: In fact, Jazzy Boy, Apple's iPhone division alone is big
Speaker 1: enough to rank in the Fortune five hundred's top thirty companies.
Speaker 2: Wow, but now, b Man, Apple's lost over three hundred
Speaker 2: billion US dollars in market value, and.
Speaker 1: That's the biggest one day drop in history.
Speaker 2: I'm assuming you're going to drop the big T word
Speaker 2: for the reason, b Man, correct.
Speaker 1: A mundo, Juzzy Boy. Trump has announced a thirty four
Speaker 1: percent tariff on Chinese imports as part of Liberation Day
Speaker 1: and while.
Speaker 2: Apple loves to say it's products are designed in California,
Speaker 2: the assembly actually happens in China.
Speaker 1: As a result, Apple was hit hard by this tariff.
Speaker 2: In fact, did share price drop more than nine percent.
Speaker 1: And while Apple's currently in the pain cave right now,
Speaker 1: the ripple effect might hit consumers and competitors next.
Speaker 2: Yep. So what is the key learning here?
Speaker 1: Tariffs might start as a tax on imports, but they
Speaker 1: end up as a tax on consumers.
Speaker 2: You see, b man, When tariffs is slapt on imported goods,
Speaker 2: businesses face high costs.
Speaker 1: And let me tell you one thing, juzyboy, businesses don't
Speaker 1: just happily absorb.
Speaker 2: The hitt No, no, no, they raised their prices.
Speaker 1: We'd be talking everything from phones and electronics to food
Speaker 1: and household items.
Speaker 2: And they man at tariffs tend to make everything more expensive.
Speaker 1: In fact, take the twenty eighteen US China trade war.
Speaker 2: During this period, the US impoves tariffs on a broad
Speaker 2: range of Chinese imports.
Speaker 1: And studies by the Fed Reserve Bank of New York
Speaker 1: they actually showed that these tariffs were largely passed on
Speaker 1: to consumers.
Speaker 2: They estimated that by May twenty nineteen, these tariffs were
Speaker 2: costing the average American household more than four hundred US
Speaker 2: dollars per year.
Speaker 1: And jugeboy, those tariffs were nothing compared to the Liberation
Speaker 1: Day tariffs.
Speaker 2: Fox Am, there was one big industry that absolutely smashed
Speaker 2: the markets in March on the ASX and got many others.
Speaker 2: If you want to learn what that industry was and
Speaker 2: why and forth so well, make sure to check out
Speaker 2: our article in the Flux out.
Speaker 1: Thanks for listening, and we'll see you on Wednesday