1 00:00:02,520 --> 00:00:10,120 Speaker 1: Also media coming up, Will Steve Burke of gamers Nexus 2 00:00:10,160 --> 00:00:14,240 Speaker 1: be able to help d zitron understand tariffs? Should we 3 00:00:14,280 --> 00:00:17,520 Speaker 1: treat Sam Altman's new startup like a venereal disease? 4 00:00:17,920 --> 00:00:20,080 Speaker 2: And who is the mysterious. 5 00:00:19,480 --> 00:00:23,279 Speaker 1: Identical man living in Kevin Russ's mirror? All this and 6 00:00:23,360 --> 00:00:28,880 Speaker 1: more on this week's Better Offline. 7 00:00:32,440 --> 00:00:43,080 Speaker 3: Good grief. 8 00:00:45,520 --> 00:00:47,720 Speaker 4: That's right, you're listening to Better Offline. I'm your host 9 00:00:47,880 --> 00:00:50,000 Speaker 4: ed Zititron. As a reminder, you're now able to buy 10 00:00:50,040 --> 00:00:52,480 Speaker 4: Better Offline merch. Check the episode notes for a link. 11 00:00:52,520 --> 00:00:55,560 Speaker 4: Of course, More importantly, today, I'm joined by Steve Burke, 12 00:00:55,600 --> 00:00:57,560 Speaker 4: the host of the incredible Game is Next as someone 13 00:00:57,560 --> 00:00:59,960 Speaker 4: I wanted them the shows since I started at Steve 14 00:01:00,080 --> 00:01:02,600 Speaker 4: recently put a three hour long video called the Death 15 00:01:02,600 --> 00:01:04,960 Speaker 4: of Affordable Computing, and it's the single best way of 16 00:01:04,959 --> 00:01:08,480 Speaker 4: seeing anybody explain the current tariff situation. Steve, thank you 17 00:01:08,520 --> 00:01:09,040 Speaker 4: for joining me. 18 00:01:09,280 --> 00:01:10,280 Speaker 2: Oh thanks for having me. 19 00:01:10,360 --> 00:01:12,800 Speaker 5: Yeah, I'm excited to talk more about it. 20 00:01:12,920 --> 00:01:14,840 Speaker 4: So, is there any way you can break down in 21 00:01:14,920 --> 00:01:17,640 Speaker 4: simple language how these tariffs actually work? 22 00:01:20,240 --> 00:01:25,800 Speaker 5: I mean, effectively the tariffs are they're effectively attacks. Right, 23 00:01:25,880 --> 00:01:27,800 Speaker 5: let's pay it on imports? So the goods come in 24 00:01:27,840 --> 00:01:31,679 Speaker 5: from any other country that's potentially tariff and the company 25 00:01:31,720 --> 00:01:36,320 Speaker 5: bringing those goods in has to pay some amount in 26 00:01:36,440 --> 00:01:39,440 Speaker 5: order to complete bringing them in, and so that then 27 00:01:39,520 --> 00:01:42,039 Speaker 5: gets passed on to somebody. Maybe they absorb some of 28 00:01:42,040 --> 00:01:44,319 Speaker 5: the costs, maybe they increase the price of the product. 29 00:01:44,360 --> 00:01:47,480 Speaker 5: But tariffs in general, of course not a new concept, 30 00:01:47,520 --> 00:01:52,320 Speaker 5: and it's just this particular round of them has effected 31 00:01:52,320 --> 00:01:54,559 Speaker 5: the computer hardware industry in a larger way. 32 00:01:55,040 --> 00:01:57,680 Speaker 4: So they're paid by the people receiving the goods. So 33 00:01:57,760 --> 00:02:02,600 Speaker 4: the computer so like height or CyberPower, whomever receiving a case, 34 00:02:02,680 --> 00:02:05,639 Speaker 4: for example, would pay the tariff before they even shifted 35 00:02:05,680 --> 00:02:06,120 Speaker 4: to someone. 36 00:02:06,680 --> 00:02:07,080 Speaker 2: Correct. 37 00:02:07,120 --> 00:02:09,639 Speaker 5: Yeah, I mean it's the same all the way down 38 00:02:09,720 --> 00:02:12,520 Speaker 5: to the smallest companies. We spoke to Lewis Rossman as 39 00:02:12,560 --> 00:02:15,560 Speaker 5: part of that piece. He's known best for probably right 40 00:02:15,600 --> 00:02:20,000 Speaker 5: to Repair, and he's a good example where as a 41 00:02:20,040 --> 00:02:23,000 Speaker 5: small repair shop in Austin, Texas. He's got maybe six 42 00:02:23,120 --> 00:02:26,400 Speaker 5: or so employees. He personally doesn't, as he said in 43 00:02:26,440 --> 00:02:28,640 Speaker 5: the video, bring them the goods, but he buys them 44 00:02:28,639 --> 00:02:32,280 Speaker 5: from someone who does. So you know, then that person 45 00:02:32,320 --> 00:02:34,280 Speaker 5: would be the one importing them in paying the tariff. 46 00:02:34,720 --> 00:02:36,600 Speaker 4: So what made you want to make this video because 47 00:02:36,600 --> 00:02:38,679 Speaker 4: you've done a good amount of PC industry stuff, but 48 00:02:38,760 --> 00:02:41,920 Speaker 4: tarift feels like a jump from you. Not an allogical 49 00:02:41,960 --> 00:02:42,400 Speaker 4: one though. 50 00:02:43,040 --> 00:02:43,800 Speaker 2: Yeah, tariffs. 51 00:02:44,080 --> 00:02:49,360 Speaker 5: It's a big topic and it was very challenging to 52 00:02:49,440 --> 00:02:54,240 Speaker 5: try and approach because for us, the number one reason 53 00:02:54,320 --> 00:02:56,320 Speaker 5: to get into it was just we're starting to see 54 00:02:56,320 --> 00:02:58,480 Speaker 5: the impact on computer hardware and a lot of companies 55 00:02:58,480 --> 00:03:00,280 Speaker 5: had things to say about it, so that was the 56 00:03:00,320 --> 00:03:05,239 Speaker 5: obvious reason to maybe look into it. The hesitations from 57 00:03:05,280 --> 00:03:10,320 Speaker 5: us initially were this is a topic that it's very 58 00:03:10,360 --> 00:03:13,560 Speaker 5: difficult to completely isolate from politics, which we try to 59 00:03:13,600 --> 00:03:17,399 Speaker 5: stay away from. But it's also important and it does 60 00:03:17,440 --> 00:03:20,440 Speaker 5: affect what we talk about every day, which is value 61 00:03:20,480 --> 00:03:24,960 Speaker 5: and pricing. But the other challenge is that this is 62 00:03:25,000 --> 00:03:28,200 Speaker 5: not something where I can claim to be an expert, 63 00:03:28,240 --> 00:03:33,840 Speaker 5: like global trade. You might imagine, Yeah. 64 00:03:32,520 --> 00:03:34,160 Speaker 2: Yeah, it's a very large topic. 65 00:03:34,960 --> 00:03:38,560 Speaker 5: But that made it interesting to us because it was 66 00:03:38,600 --> 00:03:42,760 Speaker 5: one of those like, okay, so we're closer to where 67 00:03:42,840 --> 00:03:46,760 Speaker 5: you might expect most viewers to be in terms of knowledge, 68 00:03:46,760 --> 00:03:49,760 Speaker 5: where you're just getting the information daily, with the one 69 00:03:49,800 --> 00:03:52,440 Speaker 5: exception that we might have better access to companies that 70 00:03:52,840 --> 00:03:55,120 Speaker 5: do have a lot of experience with this stuff, and 71 00:03:55,200 --> 00:03:58,080 Speaker 5: maybe no one person can break down global trade for us, 72 00:03:59,800 --> 00:04:03,400 Speaker 5: and we've all seen economists on TV and whatever. But 73 00:04:03,520 --> 00:04:07,240 Speaker 5: what we could get is people talking about just how 74 00:04:07,280 --> 00:04:09,960 Speaker 5: does it affect them and their company and then hopefully 75 00:04:10,000 --> 00:04:13,520 Speaker 5: with that put together a fuller picture that's a little 76 00:04:13,520 --> 00:04:16,080 Speaker 5: more maybe like a pragmatic approach to it. So that 77 00:04:16,560 --> 00:04:18,000 Speaker 5: was a yeah, that was the way to break it 78 00:04:18,040 --> 00:04:18,560 Speaker 5: down for us. 79 00:04:18,640 --> 00:04:20,960 Speaker 4: So for the listeners who haven't watched the video, and 80 00:04:21,000 --> 00:04:23,039 Speaker 4: I say, this is someone who can barely make it 81 00:04:23,040 --> 00:04:24,920 Speaker 4: through a half an hour video, watch the whole bloody thing. 82 00:04:26,040 --> 00:04:28,920 Speaker 4: How what are the current effects? What are the things 83 00:04:29,000 --> 00:04:32,800 Speaker 4: happening today? To say, PC manufacturers that people might not 84 00:04:32,920 --> 00:04:33,640 Speaker 4: know about. 85 00:04:34,040 --> 00:04:37,400 Speaker 5: It's interesting, so might not know about makes that interesting. 86 00:04:38,600 --> 00:04:41,200 Speaker 5: The ones that people do know about. I'll keep brief here, 87 00:04:41,240 --> 00:04:46,080 Speaker 5: but just days ago Microsoft moved to increase pricing of 88 00:04:46,120 --> 00:04:51,799 Speaker 5: its xboxes. Logitech has increased prices of its peripheral components 89 00:04:51,880 --> 00:04:54,680 Speaker 5: keyboards and mice and so forth. And this is something 90 00:04:54,720 --> 00:04:55,960 Speaker 5: we're going to see a course here. 91 00:04:56,000 --> 00:04:56,960 Speaker 2: I was just speaking to them. 92 00:04:57,000 --> 00:04:58,640 Speaker 5: They're about to increase the price of some of their 93 00:04:58,640 --> 00:05:02,159 Speaker 5: computer cases that we're in the process of reviewing, and 94 00:05:03,000 --> 00:05:04,880 Speaker 5: that's kind of the obvious one of that's the one 95 00:05:04,920 --> 00:05:10,360 Speaker 5: people expect. There's also and having listened to some of 96 00:05:10,400 --> 00:05:14,040 Speaker 5: your previous episodes, I think this might be a topic 97 00:05:14,080 --> 00:05:17,520 Speaker 5: you'd want to get into. But there's also some room 98 00:05:17,640 --> 00:05:21,039 Speaker 5: for greed, corporate greed where this is a great cover 99 00:05:21,120 --> 00:05:25,200 Speaker 5: story for them to change some prices. But then as 100 00:05:25,240 --> 00:05:27,799 Speaker 5: far as answer the question like what effects might people 101 00:05:27,920 --> 00:05:31,440 Speaker 5: not know about, I think there's there's some really interesting 102 00:05:31,520 --> 00:05:36,800 Speaker 5: ones sort of downchain in the in the supply chain, 103 00:05:36,839 --> 00:05:45,239 Speaker 5: where things like logistics and freight and shipping companies are 104 00:05:45,880 --> 00:05:49,520 Speaker 5: starting to have to deal with potentially reduced hours. And 105 00:05:49,600 --> 00:05:51,640 Speaker 5: so you think about the supply chain, like to get 106 00:05:51,760 --> 00:05:54,560 Speaker 5: a product from a country to another country, you know, 107 00:05:54,680 --> 00:05:58,120 Speaker 5: just to make it in say China, a motherboard might 108 00:05:58,120 --> 00:06:01,080 Speaker 5: require something like one hundred factories futality, all of them 109 00:06:01,160 --> 00:06:06,080 Speaker 5: meaning including yeah, including the metals factories. And so you've 110 00:06:06,120 --> 00:06:10,880 Speaker 5: got all those impacts, and then you have the freight 111 00:06:10,920 --> 00:06:14,560 Speaker 5: and the couriers, the port, the dock workers, the couriers 112 00:06:14,640 --> 00:06:17,400 Speaker 5: on the other side, the warehouse workers. Right, it's just 113 00:06:17,400 --> 00:06:20,680 Speaker 5: a huge chain, and it's really it can't be elastic. 114 00:06:20,720 --> 00:06:21,839 Speaker 2: It's got to be pretty rigid. 115 00:06:22,960 --> 00:06:25,400 Speaker 5: One of the interesting ones we're seeing though, is some 116 00:06:25,480 --> 00:06:28,839 Speaker 5: of the factories from some of the companies I was 117 00:06:28,839 --> 00:06:32,360 Speaker 5: just speaking with, are beginning to adjust their terms. So 118 00:06:32,520 --> 00:06:37,000 Speaker 5: factories will allow terms of payment to be potentially partially 119 00:06:37,080 --> 00:06:40,080 Speaker 5: upfront and partially on completion of order. Some of them 120 00:06:40,080 --> 00:06:42,799 Speaker 5: are starting to adjust to frontload more of the upfront 121 00:06:42,839 --> 00:06:46,640 Speaker 5: cost or all of it. And that's because they have 122 00:06:47,440 --> 00:06:51,560 Speaker 5: kind of gotten scared of potential order abandonment. When companies 123 00:06:52,000 --> 00:06:55,159 Speaker 5: can't afford the tariff, they abandon the container and stiff 124 00:06:55,200 --> 00:06:59,520 Speaker 5: the factory. Yeah, and so that'll have this unseen impact later. 125 00:07:00,120 --> 00:07:02,240 Speaker 5: It's going to affect the cost of money. Companies have 126 00:07:02,279 --> 00:07:03,719 Speaker 5: to borrow money a lot of times to bring this 127 00:07:03,720 --> 00:07:05,600 Speaker 5: stuff in. They have to pay more upfront. 128 00:07:05,720 --> 00:07:09,080 Speaker 4: Oh, so I hope be borrowing more money upfront because otherwise, 129 00:07:10,480 --> 00:07:12,600 Speaker 4: exactly the way, they won't be able to afford the 130 00:07:12,680 --> 00:07:14,720 Speaker 4: orders that are now more expensive on the front end. 131 00:07:15,280 --> 00:07:18,119 Speaker 5: Yeah, and then they pay interest for a longer period 132 00:07:18,160 --> 00:07:20,840 Speaker 5: of time that gets factored in. So it's just really 133 00:07:20,880 --> 00:07:24,080 Speaker 5: like the more you talk to people, the more there's 134 00:07:24,120 --> 00:07:26,800 Speaker 5: all these hidden consequences that pop up. And the one 135 00:07:26,840 --> 00:07:30,400 Speaker 5: thing everyone kind of drove home was. It's not to 136 00:07:30,520 --> 00:07:33,640 Speaker 5: them the tariffs themselves that are necessarily the problem. It's 137 00:07:33,640 --> 00:07:36,360 Speaker 5: sort of the way they were being rolled out where 138 00:07:36,360 --> 00:07:39,720 Speaker 5: it was at least for a couple of weeks. They're 139 00:07:39,800 --> 00:07:41,920 Speaker 5: nearly daily changes and unpredictable. 140 00:07:42,240 --> 00:07:45,280 Speaker 4: I did like during the video watching as you went 141 00:07:45,400 --> 00:07:49,080 Speaker 4: from from person to person saying, Okay, right now, this 142 00:07:49,200 --> 00:07:52,800 Speaker 4: tariff is this By the end of this conversation, it 143 00:07:52,880 --> 00:07:56,920 Speaker 4: may not be. Yeah, insane way to run global trade. 144 00:07:57,240 --> 00:07:59,480 Speaker 4: You had a few examples as well where it kind 145 00:07:59,520 --> 00:08:01,880 Speaker 4: of looked like certain things would just doubling cost for 146 00:08:01,920 --> 00:08:05,520 Speaker 4: the company, that they would just be paying effectively nearly double, 147 00:08:05,600 --> 00:08:07,400 Speaker 4: or like if it's one hundred and twenty bucks to 148 00:08:08,320 --> 00:08:10,840 Speaker 4: buy something, they're paying one hundred bucks on top. How 149 00:08:10,920 --> 00:08:12,200 Speaker 4: is any of this sustainable? 150 00:08:13,520 --> 00:08:21,160 Speaker 5: I think, I mean, yeah, for the computer industry, I'm 151 00:08:21,200 --> 00:08:24,720 Speaker 5: not sure that it is sustainable. There's already there's already 152 00:08:24,720 --> 00:08:29,440 Speaker 5: been price creep that is not anything to do with tariffs. 153 00:08:29,720 --> 00:08:31,360 Speaker 2: It's just over the last several years. 154 00:08:31,400 --> 00:08:35,040 Speaker 5: The companies, Yeah, I mean, they've they have big markets 155 00:08:35,080 --> 00:08:38,040 Speaker 5: to sell into, and so if you're a small time 156 00:08:38,080 --> 00:08:41,280 Speaker 5: consumer or gammer, you use Adobe Premiere with the Kuduk 157 00:08:41,400 --> 00:08:44,200 Speaker 5: GPU you're just not at the top of the priorities, 158 00:08:44,960 --> 00:08:47,360 Speaker 5: and the only way to get closer to the top 159 00:08:47,440 --> 00:08:49,040 Speaker 5: is to pay a whole hell of a lot more 160 00:08:49,280 --> 00:08:51,959 Speaker 5: for the components. So like there's already been price creep. 161 00:08:52,360 --> 00:08:54,240 Speaker 4: Well, when you say pay a lot more for the components, 162 00:08:54,240 --> 00:08:55,240 Speaker 4: who's paying more there? 163 00:08:56,040 --> 00:08:57,280 Speaker 2: It's it's the consumer. 164 00:08:57,400 --> 00:09:00,920 Speaker 4: I mean, yeah, so it's really the high end stuff 165 00:09:01,000 --> 00:09:03,480 Speaker 4: is the best you have. Why do you have to 166 00:09:03,520 --> 00:09:05,840 Speaker 4: buy the more expensive stuff? Is it just that it 167 00:09:05,840 --> 00:09:07,960 Speaker 4: will be the cheap ones are having to use lower 168 00:09:08,040 --> 00:09:10,720 Speaker 4: quality components or is it something else? 169 00:09:10,960 --> 00:09:16,080 Speaker 5: Well, it's it's interesting because it's almost like this question, 170 00:09:16,120 --> 00:09:21,720 Speaker 5: I think, is it the real answer is that cheap 171 00:09:21,760 --> 00:09:26,640 Speaker 5: stuff doesn't exist anymore? Huh, Like the cheap products are gone, 172 00:09:26,920 --> 00:09:29,760 Speaker 5: and this is pre tariffs. This is like it's only 173 00:09:29,800 --> 00:09:35,800 Speaker 5: getting worse. But you look at GPUs, Nvidia, with its dominance, 174 00:09:35,880 --> 00:09:41,640 Speaker 5: has has managed to slowly shift the low end into 175 00:09:41,720 --> 00:09:44,120 Speaker 5: the mid range in terms of pricing, and the mid 176 00:09:44,200 --> 00:09:46,719 Speaker 5: range into the high end in terms of pricing, but 177 00:09:46,760 --> 00:09:50,560 Speaker 5: not in terms of necessarily performance scaling. And so you're 178 00:09:50,600 --> 00:09:54,560 Speaker 5: already paying disproportionately more for what you're getting versus several 179 00:09:54,600 --> 00:09:58,800 Speaker 5: years ago. And this is beyond inflation. This is beyond tariffs. 180 00:09:59,160 --> 00:10:02,520 Speaker 5: You stack something massive tariffs on top of it, and 181 00:10:04,040 --> 00:10:08,240 Speaker 5: people who are already kind of struggling to justify a 182 00:10:08,280 --> 00:10:12,040 Speaker 5: purchase of an expensive GPU. I was looking at RTX 183 00:10:12,080 --> 00:10:13,800 Speaker 5: fifty nineties, which are supposed to be about a two 184 00:10:13,800 --> 00:10:16,800 Speaker 5: thousand dollars video card, about a week or two ago. 185 00:10:16,920 --> 00:10:20,800 Speaker 5: I haven't checked today, but and the cards were typically 186 00:10:20,840 --> 00:10:23,199 Speaker 5: in the twenty nine hundred to three hundred three thousand dollars. 187 00:10:23,040 --> 00:10:23,840 Speaker 6: Rane of Jesus. 188 00:10:24,280 --> 00:10:29,560 Speaker 5: Yeah, that includes on shelves at microcenters, and and some 189 00:10:29,640 --> 00:10:31,600 Speaker 5: of that's going to be a tariff impact, and some 190 00:10:31,679 --> 00:10:34,120 Speaker 5: of it is just kind of price creep. 191 00:10:45,880 --> 00:10:49,240 Speaker 4: It does kind of feel like, well, to the title 192 00:10:49,280 --> 00:10:51,520 Speaker 4: of the to the title of the video, it's like 193 00:10:51,880 --> 00:10:54,720 Speaker 4: the end of affordable computing has already kind of happened, 194 00:10:54,720 --> 00:10:58,200 Speaker 4: because it doesn't seem and for our less technical listeners, 195 00:10:58,240 --> 00:11:00,360 Speaker 4: when we say fifty seventy fifty eight fifty night, you're 196 00:11:00,360 --> 00:11:03,880 Speaker 4: referring to in videographics cards on the consumer side, so 197 00:11:03,920 --> 00:11:05,600 Speaker 4: the things you put a computer so you can see 198 00:11:05,600 --> 00:11:08,200 Speaker 4: what's on your monotone also play games. Stephen, sure you 199 00:11:08,200 --> 00:11:09,400 Speaker 4: love that technical explanation. 200 00:11:09,760 --> 00:11:10,959 Speaker 2: Yeah, it's great, but. 201 00:11:11,080 --> 00:11:14,760 Speaker 4: It's I nearly said three DFX there for a second, 202 00:11:14,960 --> 00:11:19,480 Speaker 4: aging myself, but it feels like those lower end ones 203 00:11:19,559 --> 00:11:21,560 Speaker 4: aren't even anywhere near as good as you did a 204 00:11:21,600 --> 00:11:24,160 Speaker 4: video on this as well, that the fifty seventy, fifty eighty, 205 00:11:24,679 --> 00:11:27,080 Speaker 4: the lower end or mid range ones just on nowhere 206 00:11:27,080 --> 00:11:29,040 Speaker 4: near as good as mid range and lower end used 207 00:11:29,040 --> 00:11:29,240 Speaker 4: to be. 208 00:11:30,120 --> 00:11:37,720 Speaker 5: Yeah, it's the I think the most understandable version of 209 00:11:37,720 --> 00:11:39,480 Speaker 5: this in terms of when we were trying to figure 210 00:11:39,480 --> 00:11:42,640 Speaker 5: out how do we communicate what's happening to people was 211 00:11:42,679 --> 00:11:45,400 Speaker 5: we came to the word shrinkflation, which people are familiar with, 212 00:11:46,000 --> 00:11:48,360 Speaker 5: except instead of a bag of chips, where you get. 213 00:11:48,240 --> 00:11:50,200 Speaker 4: Well, maybe you should explain what it means? 214 00:11:50,679 --> 00:11:54,320 Speaker 5: Just sure, yeah, yeah, So the concept being that, and 215 00:11:54,360 --> 00:11:57,480 Speaker 5: again to breakface this, you know we're experts on hardware, 216 00:11:57,600 --> 00:12:00,520 Speaker 5: not economy, but like this, this is that it all 217 00:12:00,559 --> 00:12:02,360 Speaker 5: kind of bleeds together in a way we get familiar 218 00:12:02,400 --> 00:12:06,000 Speaker 5: with it. But trinkflation being the concept of you go 219 00:12:06,080 --> 00:12:10,160 Speaker 5: to a store to buy your bag of chips or 220 00:12:10,200 --> 00:12:14,160 Speaker 5: your bundle of toilet paper or whatever, and you get 221 00:12:14,520 --> 00:12:18,120 Speaker 5: fewer items for minimally the same cost as it used 222 00:12:18,160 --> 00:12:21,960 Speaker 5: to be, right, So it sort of disguises the change 223 00:12:21,960 --> 00:12:24,720 Speaker 5: in value, the cost per unit or whatever that you're getting. 224 00:12:25,360 --> 00:12:29,120 Speaker 5: Then you apply this to electronics, and the version of 225 00:12:29,160 --> 00:12:34,439 Speaker 5: it is you buy the video card or the CPU, 226 00:12:34,520 --> 00:12:38,679 Speaker 5: and maybe you have fewer lower performance relatively speaking, than 227 00:12:38,720 --> 00:12:41,959 Speaker 5: you would have had in previous generations, while still spending 228 00:12:42,280 --> 00:12:45,720 Speaker 5: at least the same but likely more. And one of 229 00:12:45,720 --> 00:12:48,920 Speaker 5: the things that you know, this kind of deviates from 230 00:12:48,920 --> 00:12:52,160 Speaker 5: the tariff's discussion. But one of the things I'm concerned 231 00:12:52,160 --> 00:12:57,960 Speaker 5: about is as cost for consumer electronics goes up, especially 232 00:12:58,400 --> 00:13:03,240 Speaker 5: things like computers, and especially as caused by things like 233 00:13:03,240 --> 00:13:07,319 Speaker 5: the current tariffs, there's an opening for companies like on 234 00:13:07,480 --> 00:13:12,960 Speaker 5: Video to push for more of a lack of ownership model. 235 00:13:13,080 --> 00:13:16,640 Speaker 5: So like they have services where you can play games 236 00:13:16,960 --> 00:13:21,920 Speaker 5: over the internet streaming kind of like Netflix, that's right, Yeah, 237 00:13:22,120 --> 00:13:25,079 Speaker 5: And this creates a great opening for these companies to 238 00:13:25,120 --> 00:13:28,160 Speaker 5: step in and say, we're so sorry, you can't afford 239 00:13:28,200 --> 00:13:32,280 Speaker 5: our cheapest model five hundred and fifty dollars video card 240 00:13:32,280 --> 00:13:35,960 Speaker 5: to play games or to render videos, you know, or 241 00:13:36,000 --> 00:13:39,720 Speaker 5: do three D modeling. But good news, we have something 242 00:13:39,760 --> 00:13:42,679 Speaker 5: for you, and it's fifty dollars a month and you 243 00:13:42,720 --> 00:13:45,240 Speaker 5: can use it for you know, this many hours and 244 00:13:45,280 --> 00:13:48,080 Speaker 5: in between, maybe we'll do ads, or maybe we turn 245 00:13:48,160 --> 00:13:50,160 Speaker 5: on and off the different services you have access to. 246 00:13:50,400 --> 00:13:52,440 Speaker 5: And so that's one of my concerns is it's it's 247 00:13:52,480 --> 00:13:59,400 Speaker 5: another step in furthering that you own nothingness of the 248 00:13:59,440 --> 00:14:00,920 Speaker 5: current consumer economy. 249 00:14:01,320 --> 00:14:03,000 Speaker 4: Yeah, it kind of feels as well. And you hint 250 00:14:03,120 --> 00:14:06,160 Speaker 4: it hinted at it earlier as well, where it's like 251 00:14:07,280 --> 00:14:10,560 Speaker 4: these companies are Microsoft's raising the price of the Xbox, 252 00:14:10,920 --> 00:14:13,960 Speaker 4: I don't imagine that's coming down. I don't get this. 253 00:14:14,280 --> 00:14:16,560 Speaker 4: I don't get the sense that Microsoft is going to say, 254 00:14:16,600 --> 00:14:20,200 Speaker 4: don't worry everyone that everyone on Wall Street, by the way, 255 00:14:20,240 --> 00:14:23,880 Speaker 4: they the markets love it when we charge less, so 256 00:14:23,920 --> 00:14:26,000 Speaker 4: we're going to bring this down as an ethical company. 257 00:14:26,520 --> 00:14:29,440 Speaker 4: It just feels like a that there are the immediate 258 00:14:29,800 --> 00:14:32,520 Speaker 4: near term effects where its prices are going to increase, 259 00:14:32,560 --> 00:14:36,640 Speaker 4: but just no one is going to like, no one's 260 00:14:36,640 --> 00:14:38,240 Speaker 4: going to bring these prices back down at the end 261 00:14:38,280 --> 00:14:41,240 Speaker 4: of the tariffs. No one really understands what's going on, 262 00:14:41,360 --> 00:14:43,400 Speaker 4: so they it almost feels like they'll be able to 263 00:14:44,680 --> 00:14:47,040 Speaker 4: kind of push it under the rug and obfuscate what 264 00:14:47,080 --> 00:14:48,400 Speaker 4: they've actually done as well. 265 00:14:48,920 --> 00:14:53,040 Speaker 5: Yeah, I think there's there's a couple of things going 266 00:14:53,040 --> 00:14:54,040 Speaker 5: on where there's. 267 00:14:55,480 --> 00:14:56,160 Speaker 2: It's interesting. 268 00:14:56,240 --> 00:15:01,080 Speaker 5: Normally we as in GN we're in a very cynical 269 00:15:02,520 --> 00:15:04,720 Speaker 5: mindset for a lot of our coverage, and that's just 270 00:15:05,000 --> 00:15:10,120 Speaker 5: the nature of it. It's not necessarily adversarial, but it's untrusting, 271 00:15:10,160 --> 00:15:14,200 Speaker 5: i would say, of what companies are saying. And so 272 00:15:14,360 --> 00:15:17,560 Speaker 5: part of that in this situation is Okay, there are 273 00:15:18,160 --> 00:15:23,040 Speaker 5: avenues here for companies to get the price increases they've wanted, 274 00:15:23,080 --> 00:15:26,320 Speaker 5: but they've needed an opportunity to do it. But at 275 00:15:26,320 --> 00:15:29,360 Speaker 5: the same time, unlike most the other stories we cover, 276 00:15:29,960 --> 00:15:33,840 Speaker 5: this one is so wide reaching an industry impacting with 277 00:15:33,920 --> 00:15:39,160 Speaker 5: the sort of sporadic nature of the tariff's application and 278 00:15:39,200 --> 00:15:42,720 Speaker 5: also the high percentage of them that there are real 279 00:15:42,760 --> 00:15:46,560 Speaker 5: consequences and it is hurting companies. So you've got this 280 00:15:47,480 --> 00:15:50,120 Speaker 5: mix right where it's like, we can't be too cynical 281 00:15:50,200 --> 00:15:53,480 Speaker 5: this time because there are real world impacts, like with height, 282 00:15:53,520 --> 00:15:56,720 Speaker 5: where they were just going to lose money for computer 283 00:15:56,800 --> 00:15:59,000 Speaker 5: cases that they sell if they continued to sell them 284 00:15:59,040 --> 00:16:00,000 Speaker 5: into the US market. 285 00:16:00,160 --> 00:16:01,200 Speaker 2: So they've abandoned it. 286 00:16:01,240 --> 00:16:03,960 Speaker 5: They decided we don't need to sell the US, We'll 287 00:16:04,000 --> 00:16:05,480 Speaker 5: send them somewhere else, which. 288 00:16:05,280 --> 00:16:08,720 Speaker 4: Is crazy that's a large part of their business. 289 00:16:09,520 --> 00:16:10,280 Speaker 2: Yeah, it was. 290 00:16:10,560 --> 00:16:14,320 Speaker 5: I want to say the number the product director Rob 291 00:16:14,360 --> 00:16:17,160 Speaker 5: Tyler shared during the interview, I think he said sixty 292 00:16:17,160 --> 00:16:19,200 Speaker 5: five percent revenue was from the US. 293 00:16:19,920 --> 00:16:20,440 Speaker 2: Yeah. 294 00:16:21,760 --> 00:16:23,440 Speaker 5: But at the same time, you know, so that's a 295 00:16:23,520 --> 00:16:28,680 Speaker 5: real That's where it's it's not helpful to be cynical 296 00:16:28,680 --> 00:16:31,200 Speaker 5: because this is a real impact to this company. We've 297 00:16:31,240 --> 00:16:34,920 Speaker 5: seen their numbers. But then on the flip side of that, 298 00:16:35,000 --> 00:16:36,760 Speaker 5: back to the cynesism, you look at a company like 299 00:16:36,800 --> 00:16:39,720 Speaker 5: Microsoft where they've increased not only the cost of their 300 00:16:39,760 --> 00:16:42,360 Speaker 5: physical hardware, which is impacted by tariffs because it's a 301 00:16:42,400 --> 00:16:45,240 Speaker 5: lot of it does come from China, but also they've 302 00:16:45,280 --> 00:16:48,160 Speaker 5: increased the price of their digital downloads like video games, 303 00:16:48,520 --> 00:16:50,920 Speaker 5: where they're saying they're going to start moving towards an 304 00:16:50,960 --> 00:16:56,480 Speaker 5: eighty dollars per game model from typically sixty and digital 305 00:16:57,040 --> 00:16:59,440 Speaker 5: video game downloads are not currently as far as I 306 00:16:59,480 --> 00:17:01,760 Speaker 5: understand it, are not tariffed. 307 00:17:02,080 --> 00:17:05,840 Speaker 4: No, in fact, but that's the whole point of digital downloads. 308 00:17:05,880 --> 00:17:10,160 Speaker 4: That why they hate dollars. You're saving money selling this, right. 309 00:17:11,119 --> 00:17:15,000 Speaker 5: And I think what's happening here is they have one 310 00:17:15,119 --> 00:17:17,800 Speaker 5: real reason to increase the price, which is their cost 311 00:17:17,880 --> 00:17:24,399 Speaker 5: has gone up on the hardware, and that is giving 312 00:17:24,440 --> 00:17:28,040 Speaker 5: them sort of cover fire to also increase the price 313 00:17:28,080 --> 00:17:31,719 Speaker 5: of things that haven't gone up. Maybe you could make 314 00:17:31,720 --> 00:17:35,159 Speaker 5: an argument for inflation affecting development costs or something like this, 315 00:17:35,320 --> 00:17:38,199 Speaker 5: but packaging it all together and doing it at the 316 00:17:38,200 --> 00:17:38,720 Speaker 5: same time. 317 00:17:39,760 --> 00:17:45,000 Speaker 2: I think it's also it sort of exhausts the. 318 00:17:44,960 --> 00:17:51,560 Speaker 5: Consumer's attention where it eases the acceptance of this higher price, 319 00:17:51,600 --> 00:17:53,240 Speaker 5: because at some point you get hit with this news 320 00:17:53,240 --> 00:17:55,359 Speaker 5: so frequently, like I just I don't care anymore. 321 00:17:55,359 --> 00:17:55,720 Speaker 2: I get it. 322 00:17:55,720 --> 00:17:58,080 Speaker 5: It's all expensive, and you lose the capacity to be 323 00:17:58,080 --> 00:17:59,360 Speaker 5: mad at a specific company. 324 00:18:00,200 --> 00:18:04,120 Speaker 4: It's just I truly, I'm learning about this in real time. 325 00:18:04,200 --> 00:18:07,080 Speaker 4: So Microsoft is raising the price of first party games 326 00:18:07,080 --> 00:18:10,639 Speaker 4: to seventy nine to ninety nine. That's completely insane. And 327 00:18:11,200 --> 00:18:15,040 Speaker 4: I think that there is a delineation of cynicism here 328 00:18:15,160 --> 00:18:18,120 Speaker 4: where you can be cynical about a company. But all 329 00:18:18,160 --> 00:18:20,080 Speaker 4: of the companies you talked to in this video were 330 00:18:20,160 --> 00:18:22,439 Speaker 4: very much I mean, you had competitors hanging out with 331 00:18:22,480 --> 00:18:25,280 Speaker 4: each other to tell you stuff. It feels like there 332 00:18:25,440 --> 00:18:29,400 Speaker 4: is a marked difference between a company saying yeah, we 333 00:18:29,440 --> 00:18:32,200 Speaker 4: are Every two minutes a wheel spins and we pay 334 00:18:32,240 --> 00:18:35,600 Speaker 4: more on staff and having a real reason to do that, 335 00:18:35,600 --> 00:18:38,360 Speaker 4: and a company just saying, yeah, games are eighty bucks. Now, 336 00:18:38,359 --> 00:18:40,679 Speaker 4: I don't know what to tell your mate. 337 00:18:41,480 --> 00:18:41,680 Speaker 2: Yeah. 338 00:18:42,000 --> 00:18:46,480 Speaker 5: I think the companies we spoke to and they range, 339 00:18:46,520 --> 00:18:49,119 Speaker 5: like I said, from someone with six employees who's a 340 00:18:49,280 --> 00:18:52,080 Speaker 5: sort of true small business owner like that you think 341 00:18:52,119 --> 00:18:55,560 Speaker 5: of an American small business owner, and that's exactly the 342 00:18:55,600 --> 00:18:59,760 Speaker 5: representation you think of all the way up to multi 343 00:18:59,760 --> 00:19:05,520 Speaker 5: billion dollar publicly traded course hair Components, which makes memory, keyboards, computers. 344 00:19:06,359 --> 00:19:10,600 Speaker 5: They even have some assembly in the US, and all 345 00:19:10,640 --> 00:19:16,160 Speaker 5: of them feel the impact in comparable ways, but where 346 00:19:16,160 --> 00:19:19,719 Speaker 5: they differ is their ability to cope with it. And 347 00:19:19,760 --> 00:19:22,000 Speaker 5: so I think it's these smaller companies that are going 348 00:19:22,080 --> 00:19:25,000 Speaker 5: to get hit particularly hard. And as actually came up 349 00:19:25,040 --> 00:19:27,600 Speaker 5: a couple times in the interviews as well. One of 350 00:19:27,640 --> 00:19:31,280 Speaker 5: them that we didn't we didn't include was a comment 351 00:19:31,359 --> 00:19:35,920 Speaker 5: that someone from Coursair made. I think we weren't filming yet, 352 00:19:35,920 --> 00:19:39,639 Speaker 5: but we were talking about gn and my goal with 353 00:19:39,720 --> 00:19:44,560 Speaker 5: this wasn't to insert ourselves into this story, so we 354 00:19:44,680 --> 00:19:47,080 Speaker 5: kind of kept anything about gamers Nexus out of it. 355 00:19:47,119 --> 00:19:50,639 Speaker 5: But the tariffs impact us too, and one of the 356 00:19:50,720 --> 00:19:53,400 Speaker 5: comments he made. I asked him who do you think 357 00:19:53,960 --> 00:19:57,399 Speaker 5: this affects the most? And he said, well, it's guys 358 00:19:57,440 --> 00:20:00,000 Speaker 5: like you, right, Like, it's small businesses and medium size 359 00:20:00,160 --> 00:20:03,840 Speaker 5: businesses because the big ones are large enough to have 360 00:20:03,960 --> 00:20:04,560 Speaker 5: levers to. 361 00:20:04,520 --> 00:20:09,040 Speaker 4: Pull, right. And I guess I'm going to ask you 362 00:20:09,080 --> 00:20:12,040 Speaker 4: one of the most annoying questions that I possibly could, 363 00:20:12,080 --> 00:20:14,560 Speaker 4: which is, and you do cover this in the video, 364 00:20:15,040 --> 00:20:17,520 Speaker 4: why can't they just make in America? And I know 365 00:20:17,560 --> 00:20:20,240 Speaker 4: that the answer is it's going to be very obvious, 366 00:20:20,280 --> 00:20:21,840 Speaker 4: but still people are gonna want to hear it. 367 00:20:21,960 --> 00:20:25,760 Speaker 5: Sure, Yeah, it's really It is actually a great question. 368 00:20:25,920 --> 00:20:34,679 Speaker 5: It's obviously very common. It's complicated. So the easiest answer 369 00:20:34,680 --> 00:20:37,760 Speaker 5: to that, I think if you try to boil it 370 00:20:37,800 --> 00:20:41,760 Speaker 5: down into kind of like two components. There's cost, which 371 00:20:41,760 --> 00:20:43,600 Speaker 5: are one's familiar with, and we can kind of get 372 00:20:43,600 --> 00:20:47,960 Speaker 5: into that. So there's things like labor costs, real estate costs, 373 00:20:47,960 --> 00:20:51,919 Speaker 5: all this, and there's maybe some greater social discussions to 374 00:20:51,960 --> 00:20:55,600 Speaker 5: have there with regard to labor cost. But then there's 375 00:20:55,640 --> 00:21:00,000 Speaker 5: also supply chain and so if we ignore the cost 376 00:21:00,119 --> 00:21:03,320 Speaker 5: component for a moment and just assume it costs exactly 377 00:21:03,400 --> 00:21:05,560 Speaker 5: the same amount of money to make it in China 378 00:21:05,680 --> 00:21:07,960 Speaker 5: or Vietnam or Thailand as it does in the US, 379 00:21:08,280 --> 00:21:12,400 Speaker 5: which will cost which it doesn't. It's the global manufacturing 380 00:21:13,240 --> 00:21:17,640 Speaker 5: average cost in terms of wage per hour is, according 381 00:21:17,680 --> 00:21:20,360 Speaker 5: to Courser's CEO and our interview, is two to four 382 00:21:20,400 --> 00:21:24,119 Speaker 5: dollars per hour. Because it's obviously not even close. Yeah, 383 00:21:24,880 --> 00:21:28,080 Speaker 5: and so if we just assume it's equal though for 384 00:21:28,240 --> 00:21:35,040 Speaker 5: take conversation, the new challenge is in China in particular, 385 00:21:35,080 --> 00:21:38,720 Speaker 5: but just that part of Asia in general, there's already 386 00:21:38,840 --> 00:21:41,800 Speaker 5: a huge factory presence. They have the tooling, they have 387 00:21:41,920 --> 00:21:43,879 Speaker 5: the people, they have supply chain, and so what that 388 00:21:43,920 --> 00:21:48,960 Speaker 5: really means is you can go to Wachambai and Shenzhen 389 00:21:49,080 --> 00:21:53,000 Speaker 5: right now and you can go talk to someone to 390 00:21:53,000 --> 00:21:55,720 Speaker 5: get tell them you have this brilliant idea for a 391 00:21:55,720 --> 00:21:58,680 Speaker 5: new electronic device. You can have someone designed the PCB, 392 00:21:59,400 --> 00:22:02,160 Speaker 5: you can have someone print the PCB. The printing can 393 00:22:02,240 --> 00:22:06,240 Speaker 5: be delivered same day for a prototype. And you can 394 00:22:06,280 --> 00:22:14,000 Speaker 5: also start sourcing factories for the capacitors, the inductors, the semiconductors, 395 00:22:14,080 --> 00:22:17,359 Speaker 5: the mos vats, the shell or case if there's going 396 00:22:17,440 --> 00:22:18,920 Speaker 5: to be one. All of that can happen in the 397 00:22:18,960 --> 00:22:21,960 Speaker 5: same spot and it can all be sourced from sort 398 00:22:21,960 --> 00:22:25,119 Speaker 5: of the same, say fifty mile radius for the most part, 399 00:22:25,680 --> 00:22:29,119 Speaker 5: and that doesn't exist in the US. And if you 400 00:22:29,160 --> 00:22:31,680 Speaker 5: want to make a motherboard, as an example, that count 401 00:22:31,720 --> 00:22:33,880 Speaker 5: in the video in the US. We didn't get too 402 00:22:33,880 --> 00:22:37,480 Speaker 5: deep into it in the video, but there's probably ten 403 00:22:37,520 --> 00:22:41,280 Speaker 5: to thirty major component complete component suppliers for that board. 404 00:22:41,880 --> 00:22:44,400 Speaker 5: So if you want to make that motherboard in the US, 405 00:22:44,400 --> 00:22:46,960 Speaker 5: which your CPU and your GPU go into, it's sort 406 00:22:47,000 --> 00:22:49,760 Speaker 5: of the brain stem of the computer. You bring that 407 00:22:49,880 --> 00:22:53,080 Speaker 5: over here. And what you might have first is the 408 00:22:53,119 --> 00:22:56,760 Speaker 5: assembly line. It's an automated line. It's primarily done by 409 00:22:56,840 --> 00:22:59,160 Speaker 5: machine these days. So you bring over the SMT line, 410 00:22:59,160 --> 00:23:02,879 Speaker 5: the Service Amount Technolology line. That line has machines that, 411 00:23:02,960 --> 00:23:05,920 Speaker 5: first of all, are made all over the world. Yeah, 412 00:23:05,960 --> 00:23:09,200 Speaker 5: so that's already a different thing. And then those machines 413 00:23:09,240 --> 00:23:12,720 Speaker 5: have reels of components like capacitors. The capacitors come from 414 00:23:12,720 --> 00:23:14,959 Speaker 5: a factory in China, so you'd have to bring that 415 00:23:15,000 --> 00:23:19,679 Speaker 5: factory over. That factory to make the capacitors has factories, 416 00:23:19,680 --> 00:23:23,720 Speaker 5: so it uses factories for maybe ceramics or for aluminum 417 00:23:23,800 --> 00:23:25,119 Speaker 5: or steel or copper whatever. 418 00:23:25,119 --> 00:23:25,640 Speaker 2: They may use. 419 00:23:25,760 --> 00:23:28,000 Speaker 5: Copper coil for inductors, you have someone doing the winding 420 00:23:28,080 --> 00:23:32,400 Speaker 5: for the coil. For things like going power supplies and 421 00:23:32,840 --> 00:23:37,440 Speaker 5: all of that is downchain factories. So this one motherboard 422 00:23:37,520 --> 00:23:40,480 Speaker 5: quote unquote factory, what they're doing is effectively equivalent to 423 00:23:41,520 --> 00:23:44,440 Speaker 5: someone assemblying a pre built computer and a pre built 424 00:23:44,520 --> 00:23:48,200 Speaker 5: computer assembly plant in the US like Lenovo, they're doing 425 00:23:48,200 --> 00:23:50,040 Speaker 5: the same thing. They're putting all the parts together, but 426 00:23:50,040 --> 00:23:51,919 Speaker 5: they're buying them from elsewhere, and that's fine, that's how 427 00:23:51,960 --> 00:23:55,520 Speaker 5: it works. But to just bring that over, it's not 428 00:23:55,560 --> 00:23:56,720 Speaker 5: something you can flip a switch on. 429 00:24:11,119 --> 00:24:13,120 Speaker 4: And it seems like a big part of it as 430 00:24:13,119 --> 00:24:16,159 Speaker 4: well is that China already has this infrastructure to manufacture 431 00:24:16,160 --> 00:24:18,280 Speaker 4: these things. To your point that they have someone who 432 00:24:18,280 --> 00:24:21,760 Speaker 4: can do the prototype that they have someone I don't know, 433 00:24:21,800 --> 00:24:24,679 Speaker 4: like I assume they were like screw factories and things 434 00:24:24,680 --> 00:24:26,840 Speaker 4: that don't exist in America, or if they do, they 435 00:24:26,880 --> 00:24:29,200 Speaker 4: are geographically inefficient in comparison. 436 00:24:29,960 --> 00:24:31,720 Speaker 5: Yeah, I think that's a big part of it is 437 00:24:32,560 --> 00:24:35,200 Speaker 5: there are factories in the US that can do various things. 438 00:24:35,240 --> 00:24:38,399 Speaker 5: I mean, certainly you get down to physical hardware like screws. 439 00:24:38,760 --> 00:24:41,240 Speaker 5: I'm absolutely certain there's factories that make screws in the US. 440 00:24:41,280 --> 00:24:43,840 Speaker 5: There's factories that make cardboard boxes in the US, but 441 00:24:44,000 --> 00:24:47,000 Speaker 5: like you said, these things are not on the same block. 442 00:24:47,280 --> 00:24:55,360 Speaker 5: And while that can be reconciled, making a company eat 443 00:24:55,359 --> 00:25:00,320 Speaker 5: an extra cost is basically impossible. And so if the 444 00:25:00,359 --> 00:25:04,640 Speaker 5: approach is to do some form of taxes, it would 445 00:25:04,640 --> 00:25:07,879 Speaker 5: have to be so extreme that there really has no 446 00:25:07,920 --> 00:25:10,560 Speaker 5: other choice but to start building factories in the US. 447 00:25:10,680 --> 00:25:14,280 Speaker 5: But the problem then is that this takes years. So 448 00:25:15,119 --> 00:25:18,199 Speaker 5: some of them hey, M right, yeah, it just it 449 00:25:18,320 --> 00:25:19,919 Speaker 5: just takes forever to start building. 450 00:25:20,119 --> 00:25:20,919 Speaker 2: I mean, then if. 451 00:25:22,359 --> 00:25:24,520 Speaker 5: It's also just it's an enormous amount of money, you 452 00:25:24,520 --> 00:25:26,680 Speaker 5: can't just have it, you know, you need to plan 453 00:25:26,760 --> 00:25:29,560 Speaker 5: for it. So so that's a big challenge. 454 00:25:29,640 --> 00:25:32,560 Speaker 4: It kind of feels like that on the cynical side, 455 00:25:33,240 --> 00:25:34,879 Speaker 4: I mean, it kind of feels like it is the 456 00:25:34,920 --> 00:25:37,919 Speaker 4: case where it's so much of our economy is based 457 00:25:37,960 --> 00:25:43,159 Speaker 4: on just cheap labor that we've outsourced, are entire manufacturing 458 00:25:43,200 --> 00:25:46,639 Speaker 4: to other countries that and it all relies upon a 459 00:25:46,680 --> 00:25:50,840 Speaker 4: certain kind of discount labor that just doesn't exist and 460 00:25:50,960 --> 00:25:52,440 Speaker 4: probably can't exist in America. 461 00:25:53,720 --> 00:25:56,919 Speaker 5: I think it not only can't exist in America, but 462 00:25:58,400 --> 00:26:03,760 Speaker 5: the amount of available people is probably not high enough 463 00:26:03,880 --> 00:26:10,359 Speaker 5: to create that many manufacturing jobs, especially instantaneously. One thing 464 00:26:10,400 --> 00:26:14,399 Speaker 5: that's interesting, though, I don't think I've really spoken in 465 00:26:16,160 --> 00:26:21,680 Speaker 5: anywhere about this side, but something that's interesting with contract manufacturing, 466 00:26:21,760 --> 00:26:24,560 Speaker 5: especially in China is, at least for the factories we've 467 00:26:24,560 --> 00:26:27,000 Speaker 5: toured and visited over the years, a lot of the 468 00:26:27,040 --> 00:26:30,720 Speaker 5: contract factories they shut down for Chinese New Year for 469 00:26:30,760 --> 00:26:34,680 Speaker 5: a while. It's it's their biggest holiday, so similar to 470 00:26:34,840 --> 00:26:37,320 Speaker 5: Christmas in the US, you have several weeks off for 471 00:26:37,359 --> 00:26:39,640 Speaker 5: a lot of people, and there it lasts pretty long. 472 00:26:39,760 --> 00:26:43,560 Speaker 5: The one factory work with and we've toured, they shut 473 00:26:43,600 --> 00:26:46,199 Speaker 5: down for nearly a month for Chinese New Year. And 474 00:26:46,280 --> 00:26:49,159 Speaker 5: when I want to ask them, when it was my 475 00:26:49,200 --> 00:26:51,960 Speaker 5: first time over there, you know, I asked the factory owner. 476 00:26:52,000 --> 00:26:54,800 Speaker 5: It was basically, hey, no, absolutely, no disrespect, don't take 477 00:26:54,800 --> 00:26:58,560 Speaker 5: this throng way. I'm just curious why such a long time, 478 00:26:58,640 --> 00:27:00,760 Speaker 5: Like as an American, right, you come from work culture 479 00:27:00,880 --> 00:27:04,560 Speaker 5: in terms of just you're always at work for four 480 00:27:04,600 --> 00:27:07,919 Speaker 5: weeks is a big stretch of time. Doesn't that effect 481 00:27:07,920 --> 00:27:10,560 Speaker 5: to your production? And he said something really interesting to 482 00:27:10,600 --> 00:27:14,160 Speaker 5: me where that factor in particular, a lot of their 483 00:27:14,240 --> 00:27:18,800 Speaker 5: laborers come from all over in China. China is very large, 484 00:27:19,200 --> 00:27:21,120 Speaker 5: and they come from all these different provinces, and so 485 00:27:21,160 --> 00:27:24,480 Speaker 5: they sort of migrate out to do the work locally 486 00:27:24,520 --> 00:27:26,520 Speaker 5: at the factory, and then they might go back and 487 00:27:26,600 --> 00:27:29,959 Speaker 5: maybe they're going back to work at home, or they 488 00:27:30,000 --> 00:27:32,479 Speaker 5: just bring the money home and spend time with the family. 489 00:27:33,160 --> 00:27:37,320 Speaker 5: And the interesting thing there is that kind of opened 490 00:27:37,400 --> 00:27:40,080 Speaker 5: my eyes to how can a place like sheen Gen 491 00:27:40,200 --> 00:27:44,479 Speaker 5: exist where almost everything you need to make a product 492 00:27:44,520 --> 00:27:46,879 Speaker 5: is in like one city. That seems insane, right, Like 493 00:27:46,920 --> 00:27:48,480 Speaker 5: the amount of people that you would need for that 494 00:27:48,600 --> 00:27:51,520 Speaker 5: is crazy. And I guess that's part of it. And 495 00:27:51,520 --> 00:27:53,639 Speaker 5: I don't you know, obviously don't claim to be an 496 00:27:53,640 --> 00:27:56,840 Speaker 5: expert in it, but just from personal experiences talking to 497 00:27:56,840 --> 00:27:58,600 Speaker 5: people and visiting these places, these are kind of the 498 00:27:58,640 --> 00:28:00,879 Speaker 5: pieces that have really clicked for me to help me 499 00:28:00,920 --> 00:28:04,159 Speaker 5: better understand how manufacturing works. 500 00:28:05,560 --> 00:28:09,400 Speaker 4: Yeah, it's just every time I think about what these 501 00:28:09,440 --> 00:28:13,359 Speaker 4: tariffs are meant to do, I feel insane because it's like, Okay, 502 00:28:13,480 --> 00:28:16,479 Speaker 4: we're going to charge more for things to the people 503 00:28:16,520 --> 00:28:19,240 Speaker 4: shipping them in, which will cause them to build things 504 00:28:19,240 --> 00:28:24,399 Speaker 4: in America which they can't do but they should. Like 505 00:28:24,480 --> 00:28:28,320 Speaker 4: that feels like most of the logic here, but we'll 506 00:28:28,400 --> 00:28:31,439 Speaker 4: just factories will spread out to the ground like weeds. 507 00:28:31,480 --> 00:28:33,560 Speaker 4: Like it's just bizarre. 508 00:28:34,480 --> 00:28:37,639 Speaker 5: Yeah, and even the companies that do make stuff here. 509 00:28:37,680 --> 00:28:39,040 Speaker 5: This is what's interesting too, is that. 510 00:28:40,360 --> 00:28:43,360 Speaker 4: Yeah, because you spoke to one an actual manufacturing company 511 00:28:43,440 --> 00:28:44,640 Speaker 4: in America. 512 00:28:44,680 --> 00:28:45,120 Speaker 2: That's right. 513 00:28:45,840 --> 00:28:50,200 Speaker 5: Yeah, So we spoke to three companies that we spoke 514 00:28:50,240 --> 00:28:53,560 Speaker 5: to have sort of different levels of manufacturing here. So 515 00:28:54,480 --> 00:28:56,640 Speaker 5: there's one of them. The one you're probably referring to 516 00:28:56,760 --> 00:29:02,600 Speaker 5: is called Proto Case and they stamp cases, so they 517 00:29:02,680 --> 00:29:08,880 Speaker 5: assemble servers and network attached storage devices and then they 518 00:29:08,880 --> 00:29:11,560 Speaker 5: can stamp their own cases for those they take the medals, 519 00:29:11,840 --> 00:29:13,520 Speaker 5: they put them in a big press with their own 520 00:29:13,560 --> 00:29:16,400 Speaker 5: tooling and they press it and then they can kind 521 00:29:16,440 --> 00:29:20,760 Speaker 5: of bend the metal into a server case. So they 522 00:29:20,800 --> 00:29:23,040 Speaker 5: do some manufacturing here and they do a lot of 523 00:29:23,040 --> 00:29:26,680 Speaker 5: it in Canada. The other two companies we spoke to 524 00:29:26,840 --> 00:29:28,920 Speaker 5: are a different type of manufacturing where it's assembly, and 525 00:29:28,920 --> 00:29:31,239 Speaker 5: actually course here to their credit has assembly as well, 526 00:29:31,280 --> 00:29:35,400 Speaker 5: so I guess three and the assembly groups they so 527 00:29:35,520 --> 00:29:39,760 Speaker 5: CyberPower PC makes pre built computers mostly for gaming, and 528 00:29:40,400 --> 00:29:43,840 Speaker 5: they employ hundreds of people in the city of Industry 529 00:29:43,880 --> 00:29:48,960 Speaker 5: California area to assemble computers. And so those people take 530 00:29:49,600 --> 00:29:52,680 Speaker 5: about eight to ten components that CyberPower does not make. 531 00:29:52,760 --> 00:29:56,480 Speaker 5: They buy them from other companies and they assemble them 532 00:29:56,560 --> 00:30:00,560 Speaker 5: right into a computer. And it's really that straightforward. But 533 00:30:00,640 --> 00:30:03,520 Speaker 5: this is effectively a factory job. It's an assembly job, 534 00:30:04,320 --> 00:30:11,520 Speaker 5: and the PC that's made ultimately it's branded a CyberPower PC. 535 00:30:11,600 --> 00:30:13,720 Speaker 5: But just like any PC on the market Dell HP 536 00:30:14,320 --> 00:30:17,160 Speaker 5: as US, it doesn't matter. They don't make the CPU, 537 00:30:17,240 --> 00:30:19,600 Speaker 5: they don't make the GPU that's probably Intel and Video AMD. 538 00:30:21,080 --> 00:30:25,640 Speaker 5: They often don't make the cooler, the storage device, the memory. 539 00:30:25,960 --> 00:30:27,680 Speaker 5: So all this stuff, yeah, it's got to come from 540 00:30:27,720 --> 00:30:30,480 Speaker 5: other people. And for the most part, the places it 541 00:30:30,560 --> 00:30:35,840 Speaker 5: ends up coming from are going to be China, Vietnam, Thailand, Singapore, Malaysia, 542 00:30:37,720 --> 00:30:41,160 Speaker 5: Taiwan I don't think I named yet, and some stuff 543 00:30:41,200 --> 00:30:45,560 Speaker 5: from Japan, but that's kind of the that's where the 544 00:30:45,560 --> 00:30:47,760 Speaker 5: stuff comes from, and then they assemble it in the US. 545 00:30:47,840 --> 00:30:50,160 Speaker 5: But those companies that assemble the computers in the US, 546 00:30:50,920 --> 00:30:54,880 Speaker 5: they still get hit by tariffs because they're bringing stuff 547 00:30:54,880 --> 00:30:59,320 Speaker 5: in to complete the products. But what's interesting is it's 548 00:30:59,400 --> 00:31:01,719 Speaker 5: almost like the components like cps and GPS. You can 549 00:31:01,760 --> 00:31:04,920 Speaker 5: think of them as raw materials where the products the 550 00:31:04,920 --> 00:31:08,640 Speaker 5: computer can't exist without those raw materials, but they're not 551 00:31:10,160 --> 00:31:13,160 Speaker 5: blanket exempted as raw materials. 552 00:31:13,360 --> 00:31:16,000 Speaker 4: Yeah, and it feels like you can't actually exempt any 553 00:31:16,040 --> 00:31:19,600 Speaker 4: particular industry because of the amountifold different parts. I think 554 00:31:20,000 --> 00:31:22,840 Speaker 4: Lewis Russman made the point as well, where it's customers 555 00:31:22,840 --> 00:31:24,959 Speaker 4: are going to get pissed off about the price increases, 556 00:31:25,360 --> 00:31:28,200 Speaker 4: and it's kind of like, well, you're the one buying 557 00:31:28,240 --> 00:31:30,920 Speaker 4: these things that will make with Chinese pots. It's not 558 00:31:31,000 --> 00:31:33,680 Speaker 4: like you can avoid that, right. 559 00:31:34,160 --> 00:31:34,400 Speaker 6: Yeah. 560 00:31:34,480 --> 00:31:37,360 Speaker 5: No, I mean that that was an excellent point by him, 561 00:31:37,360 --> 00:31:40,960 Speaker 5: where he's he's a repair shop, and as he was saying, 562 00:31:41,600 --> 00:31:44,600 Speaker 5: for the device to even get to him, someone else 563 00:31:44,640 --> 00:31:47,080 Speaker 5: has to exist before him, and that's going to be 564 00:31:47,120 --> 00:31:51,400 Speaker 5: the customer buying from the original manufacturer. If the original 565 00:31:51,440 --> 00:31:58,200 Speaker 5: manufacturer chooses to make their products let's say entirely in Detroit, 566 00:31:58,840 --> 00:32:02,320 Speaker 5: and they use parts and time from Detroit, than Lewis 567 00:32:02,360 --> 00:32:06,520 Speaker 5: the repair shop will probably buy replacement parts from Detroit, right, 568 00:32:06,520 --> 00:32:10,080 Speaker 5: because that's that's where they come from. And so it's yeah, 569 00:32:10,120 --> 00:32:14,000 Speaker 5: I think like him just as much as the assembly 570 00:32:14,600 --> 00:32:17,520 Speaker 5: plants that put a product together the consumer's familiar with. 571 00:32:18,040 --> 00:32:20,720 Speaker 5: They're affected by the same thing, which is there's force 572 00:32:20,760 --> 00:32:24,120 Speaker 5: is so much larger than you. You can't you don't 573 00:32:24,240 --> 00:32:26,880 Speaker 5: have the option to move it because it's not yours, 574 00:32:27,680 --> 00:32:29,240 Speaker 5: and so what do you do? 575 00:32:29,520 --> 00:32:29,760 Speaker 3: Right? 576 00:32:30,280 --> 00:32:34,040 Speaker 4: Yeah, one thing as we come to the end here, 577 00:32:34,200 --> 00:32:35,880 Speaker 4: one thing that did strike me is how did you 578 00:32:35,920 --> 00:32:39,200 Speaker 4: get all of these competing companies to actually hang out 579 00:32:39,280 --> 00:32:42,480 Speaker 4: and talk to you quite candidly at the same time. 580 00:32:43,640 --> 00:32:47,200 Speaker 5: Yeah, it's I've known a lot of the people in 581 00:32:47,240 --> 00:32:47,600 Speaker 5: that video. 582 00:32:47,640 --> 00:32:48,280 Speaker 2: I've known for. 583 00:32:49,760 --> 00:32:53,640 Speaker 5: Pretty close to some of them, like twelve to fourteen years. Fortunately, 584 00:32:53,720 --> 00:32:55,800 Speaker 5: like we've run across each other at conventions a lot, 585 00:32:55,840 --> 00:32:58,200 Speaker 5: and so for like the backstory, I guess Sorry Power 586 00:32:58,240 --> 00:33:03,360 Speaker 5: and Irapower two competing pre built companies, and I pained 587 00:33:03,360 --> 00:33:04,440 Speaker 5: to them both and I was like. 588 00:33:04,360 --> 00:33:06,480 Speaker 2: Hey, it would. 589 00:33:06,400 --> 00:33:09,400 Speaker 5: It would be it would really send a message if 590 00:33:09,480 --> 00:33:13,880 Speaker 5: you guys agree with each other on this particular issue. 591 00:33:14,680 --> 00:33:18,320 Speaker 5: I think it would help people understand that it is 592 00:33:18,720 --> 00:33:23,000 Speaker 5: impacting both of you in similar ways, because these are 593 00:33:23,000 --> 00:33:25,840 Speaker 5: companies that they're fighting for the same market share for 594 00:33:25,880 --> 00:33:30,480 Speaker 5: the same customers, and you know, if you can get 595 00:33:30,480 --> 00:33:32,720 Speaker 5: them together in a room and they were even sharing 596 00:33:32,760 --> 00:33:34,760 Speaker 5: numbers with each other, how many employees they have, how 597 00:33:34,800 --> 00:33:37,040 Speaker 5: many units per year they make, Like this is crazy 598 00:33:37,080 --> 00:33:40,680 Speaker 5: information to share, but I think it was. It was 599 00:33:40,720 --> 00:33:43,240 Speaker 5: sort of a solidarity moment where the read on the 600 00:33:43,240 --> 00:33:46,160 Speaker 5: situation I had was the companies were all looking at 601 00:33:46,160 --> 00:33:49,840 Speaker 5: this as this is our opportunity to try and explain 602 00:33:50,920 --> 00:33:53,920 Speaker 5: why the prices are going to go up, and whether 603 00:33:54,000 --> 00:33:57,520 Speaker 5: or not it's for legitimate reasons or for the more 604 00:33:57,560 --> 00:34:00,640 Speaker 5: cynical reasons we've discussed to them. It was an opportunity 605 00:34:00,680 --> 00:34:05,080 Speaker 5: to talk about that, and I think our timing was 606 00:34:05,080 --> 00:34:08,120 Speaker 5: a big part of that, where we booked our tickets 607 00:34:09,600 --> 00:34:13,239 Speaker 5: as soon as the pause went into effect on some 608 00:34:13,280 --> 00:34:16,440 Speaker 5: of the international tariffs, or actually. 609 00:34:18,280 --> 00:34:19,239 Speaker 2: It was just before that. 610 00:34:19,280 --> 00:34:21,360 Speaker 5: It was like a day before that, so we booked 611 00:34:21,360 --> 00:34:24,040 Speaker 5: the tickets a day before the pause, right around when 612 00:34:24,040 --> 00:34:26,840 Speaker 5: they went into effect. We landed, and then some of 613 00:34:26,880 --> 00:34:30,319 Speaker 5: these changes like pauses and exemptions and non exemptions were 614 00:34:30,320 --> 00:34:32,920 Speaker 5: happening already, but because of the chaos and that four 615 00:34:33,000 --> 00:34:36,160 Speaker 5: day window, I think everyone was willing to talk to 616 00:34:36,239 --> 00:34:39,440 Speaker 5: us on record because nobody knew what was going on. 617 00:34:40,680 --> 00:34:44,920 Speaker 4: And just to close us off, you mentioned it clost 618 00:34:44,960 --> 00:34:46,560 Speaker 4: a ton of money and a ton of time, how 619 00:34:46,600 --> 00:34:47,720 Speaker 4: long and how much money? 620 00:34:47,760 --> 00:34:48,120 Speaker 3: Roughly? 621 00:34:48,280 --> 00:34:51,480 Speaker 4: Because this was I do not watch videos at these 622 00:34:51,560 --> 00:34:55,680 Speaker 4: Lanth Casey Casey friend of the show case Kagawa knows 623 00:34:55,719 --> 00:34:57,920 Speaker 4: this well. But I watched the whole thing like how 624 00:34:58,000 --> 00:35:00,440 Speaker 4: much like roughly, I want to make the video? 625 00:35:00,560 --> 00:35:02,880 Speaker 5: You wook to make the video. 626 00:35:03,000 --> 00:35:05,160 Speaker 2: So it was probably. 627 00:35:06,880 --> 00:35:11,080 Speaker 5: If you count my time at zero dollars, then we 628 00:35:11,800 --> 00:35:16,520 Speaker 5: should have been over ten grand in total costs. So 629 00:35:16,560 --> 00:35:20,760 Speaker 5: that's travel plus editing time. There's a lot of editing 630 00:35:20,760 --> 00:35:25,200 Speaker 5: time because we had over eight hours of footage and 631 00:35:25,239 --> 00:35:26,680 Speaker 5: the way it kind of came together and it was 632 00:35:26,719 --> 00:35:30,279 Speaker 5: interesting where you know, we got the news down the 633 00:35:30,280 --> 00:35:37,000 Speaker 5: wire about the new The word the government has officially 634 00:35:37,080 --> 00:35:39,879 Speaker 5: named them is reciprocal tariffs. So when those came out, 635 00:35:40,920 --> 00:35:42,960 Speaker 5: that was when we started booking the flights. And like 636 00:35:42,960 --> 00:35:44,440 Speaker 5: I said, it was right before the pause on some 637 00:35:44,520 --> 00:35:46,840 Speaker 5: of them, and so we booked the flights with no 638 00:35:46,920 --> 00:35:51,960 Speaker 5: return flight. It's a twelve hour twelve hours away till 639 00:35:51,960 --> 00:35:54,560 Speaker 5: we got on that first plane. We had the first 640 00:35:54,560 --> 00:35:59,040 Speaker 5: hotel booked and then vitally and I'm a camera operator, 641 00:35:59,080 --> 00:36:01,080 Speaker 5: we flew out there and we played it day by 642 00:36:01,160 --> 00:36:03,480 Speaker 5: day and for you know, I used the hotel I knew, 643 00:36:03,600 --> 00:36:06,239 Speaker 5: so it was basically like, hey, yeah, we need to 644 00:36:06,280 --> 00:36:10,160 Speaker 5: extend one more day, you know. And and then we 645 00:36:10,239 --> 00:36:12,000 Speaker 5: just kept booking them based on who I could get 646 00:36:12,040 --> 00:36:14,280 Speaker 5: in touch with. And I was just on the phone 647 00:36:14,320 --> 00:36:16,799 Speaker 5: constantly calling every company I knew, and they're they're kind 648 00:36:16,800 --> 00:36:19,400 Speaker 5: of on the you know, they're either in San Francisco 649 00:36:19,520 --> 00:36:22,920 Speaker 5: or they're in LA for most of them. 650 00:36:22,960 --> 00:36:25,200 Speaker 4: Steven, it's been such a pleasure having you on the show. 651 00:36:25,239 --> 00:36:26,239 Speaker 4: Where can people find you? 652 00:36:27,280 --> 00:36:29,920 Speaker 5: They can check out gamersaxis dot net if they want 653 00:36:29,920 --> 00:36:32,840 Speaker 5: the written adaptation of videos, or the YouTube channel. Gamers 654 00:36:32,840 --> 00:36:35,439 Speaker 5: and Axus is where everything goes, and. 655 00:36:35,400 --> 00:36:37,359 Speaker 4: You can find me on the internet. You were listening 656 00:36:37,400 --> 00:36:39,440 Speaker 4: to Better Offline. Of course, following this will be an 657 00:36:39,480 --> 00:36:42,560 Speaker 4: extremely old line of the I swear all update one day. 658 00:36:42,840 --> 00:36:45,239 Speaker 4: Thank you for listening, and Steven, thank you for joining us. 659 00:36:45,480 --> 00:36:56,400 Speaker 6: Thank you, thank you for listening to Better Offline. 660 00:36:56,520 --> 00:36:59,920 Speaker 4: The editor and composer of the Better Offline theme songs, Metosowski. 661 00:37:00,239 --> 00:37:02,080 Speaker 4: You can check out more of his music and audio 662 00:37:02,120 --> 00:37:05,920 Speaker 4: projects at Mattasowski dot com, M A T T O. 663 00:37:06,160 --> 00:37:10,280 Speaker 4: S O W s ki dot com. You can email 664 00:37:10,320 --> 00:37:12,759 Speaker 4: me at easy at better Offline dot com or visit 665 00:37:12,800 --> 00:37:15,160 Speaker 4: better Offline dot com to find more podcast links and 666 00:37:15,200 --> 00:37:18,319 Speaker 4: of course my newsletter. I also really recommend you go 667 00:37:18,360 --> 00:37:20,960 Speaker 4: to chat dot where's youreaed dot at to visit the discord, 668 00:37:21,200 --> 00:37:22,520 Speaker 4: and go to our slash. 669 00:37:22,239 --> 00:37:25,359 Speaker 6: Better Offline to check out our reddit. Thank you so 670 00:37:25,480 --> 00:37:28,879 Speaker 6: much for listening. Better Offline is a production of cool 671 00:37:28,960 --> 00:37:29,479 Speaker 6: Zone Media. 672 00:37:29,680 --> 00:37:32,520 Speaker 4: For more from cool Zone Media, visit our website cool 673 00:37:32,560 --> 00:37:34,480 Speaker 4: Zonemedia dot com, or check us 674 00:37:34,480 --> 00:37:37,480 Speaker 5: Out on the iHeartRadio app, Apple Podcasts, or wherever you 675 00:37:37,560 --> 00:37:38,680 Speaker 5: get your podcasts.