1 00:00:00,520 --> 00:00:02,759 Speaker 1: And the more than a year long trade war between 2 00:00:02,800 --> 00:00:05,600 Speaker 1: the U S and China. Last Thursday was one of 3 00:00:05,640 --> 00:00:08,639 Speaker 1: the few good days. Story of the morning, US security 4 00:00:08,640 --> 00:00:11,760 Speaker 1: futures jumping after China's commerce industry saying the U. S 5 00:00:11,800 --> 00:00:14,400 Speaker 1: and China have agreed to phase out the tariffs that 6 00:00:14,440 --> 00:00:17,720 Speaker 1: were imposed during the trade war. Stocks rallied on the breakthrough, 7 00:00:18,160 --> 00:00:24,360 Speaker 1: but the euphoria didn't last for long. Just the day after, 8 00:00:24,440 --> 00:00:27,000 Speaker 1: China said the two countries agreed to roll back tariffs 9 00:00:27,040 --> 00:00:30,440 Speaker 1: on each other's goods, which, by the way, US officials 10 00:00:30,440 --> 00:00:34,440 Speaker 1: echoed to President Trump himself came out and denied he's 11 00:00:34,440 --> 00:00:38,760 Speaker 1: agreed to anything. This left down that they couldn't even 12 00:00:38,840 --> 00:00:41,960 Speaker 1: agree on whether there was an agreement. It was just 13 00:00:42,080 --> 00:00:45,760 Speaker 1: one more reminder that this trade war is far from over. 14 00:00:49,120 --> 00:00:51,080 Speaker 1: What hangs in the balance is, of course, the health 15 00:00:51,080 --> 00:00:54,880 Speaker 1: of the entire global economy. It was about seven hundred 16 00:00:54,920 --> 00:00:58,000 Speaker 1: billion dollars in trade between the US and China last year, 17 00:00:58,640 --> 00:01:01,720 Speaker 1: but with numbers that big, it's easier to forget that 18 00:01:01,800 --> 00:01:05,120 Speaker 1: this is about more than just geopolitics or foreign exchange 19 00:01:05,200 --> 00:01:08,520 Speaker 1: rates or corporate earnings. It's also about the lives of 20 00:01:08,560 --> 00:01:11,520 Speaker 1: a lot of people around the world. Whose jobs and 21 00:01:11,560 --> 00:01:16,399 Speaker 1: businesses depends on the two countries getting along. For them, 22 00:01:16,440 --> 00:01:20,360 Speaker 1: this last year has been their own personal nightmare, a 23 00:01:20,400 --> 00:01:24,200 Speaker 1: lot of sleepless nights considering an uncertain future, caught in 24 00:01:24,240 --> 00:01:30,680 Speaker 1: the middle of two quarreling superpowers breaking tonight, serious punching 25 00:01:30,800 --> 00:01:34,640 Speaker 1: and counterpunching taking place right now in what has become 26 00:01:35,040 --> 00:01:38,880 Speaker 1: a full fledged trade war between the US. Today, in 27 00:01:38,920 --> 00:01:41,960 Speaker 1: the show, reporter Shelley Banjo brings us the story of 28 00:01:42,040 --> 00:01:46,319 Speaker 1: one such person, an American named Michael mcgliny, who sells 29 00:01:46,440 --> 00:01:50,440 Speaker 1: espresso makers manufactured in China to American customers on Amazon. 30 00:01:51,400 --> 00:01:54,480 Speaker 1: Michael bet his entire career on the idea of global 31 00:01:54,520 --> 00:01:57,600 Speaker 1: trade and the hope that technology was making the world 32 00:01:57,640 --> 00:02:01,080 Speaker 1: an open and interconnected place, only to watch all that 33 00:02:01,160 --> 00:02:07,400 Speaker 1: unravel in recent months. Amako, you're listening to Decrypted Stay 34 00:02:07,440 --> 00:02:23,800 Speaker 1: with us, Hey, Shelly, welcome back to the show. Thanks 35 00:02:23,840 --> 00:02:27,480 Speaker 1: for having me. You know, you found a really interesting 36 00:02:27,520 --> 00:02:31,720 Speaker 1: guy for today's episode. How did you get to know him? Well, 37 00:02:31,760 --> 00:02:34,400 Speaker 1: the trade war was in full swing and we started 38 00:02:34,440 --> 00:02:37,760 Speaker 1: to wonder what was happening to e commerce sellers who 39 00:02:37,880 --> 00:02:41,400 Speaker 1: had kind of built these big businesses on Amazon making 40 00:02:41,440 --> 00:02:44,360 Speaker 1: stuff in China. And selling them in the US, and 41 00:02:44,400 --> 00:02:47,839 Speaker 1: so I wanted to find someone who could really tell 42 00:02:47,919 --> 00:02:53,160 Speaker 1: us about what that was like. So tell me about him. 43 00:02:53,200 --> 00:02:56,280 Speaker 1: Michael grew up in Hartford, Connecticut, to a blue collar, 44 00:02:56,360 --> 00:02:59,280 Speaker 1: working class family. Michael had to work his way through 45 00:02:59,360 --> 00:03:02,600 Speaker 1: high school working at grocery stores. Then he worked in 46 00:03:02,600 --> 00:03:05,840 Speaker 1: a machine shop with his uncle. I was interning in 47 00:03:05,880 --> 00:03:08,520 Speaker 1: a machine shop in Connecticut where I grew up at Hartford, 48 00:03:08,800 --> 00:03:11,680 Speaker 1: and I was getting shut down. I mean I was there. 49 00:03:11,760 --> 00:03:14,200 Speaker 1: Was like a smart guy, Alex, and he says, you know, 50 00:03:14,320 --> 00:03:17,080 Speaker 1: everything is going overseas. I don't know what we're gonna 51 00:03:17,120 --> 00:03:20,400 Speaker 1: do here. And uh. He went to New Jersey for 52 00:03:20,560 --> 00:03:23,640 Speaker 1: college and ended up getting a job on Wall Street 53 00:03:23,680 --> 00:03:27,160 Speaker 1: in New York working for Deutsche Bank. But you know, 54 00:03:27,280 --> 00:03:29,400 Speaker 1: the one in the Wall Street wasn't necessarily for him, 55 00:03:29,480 --> 00:03:33,240 Speaker 1: and he kind of for fun starts this bartending supplies 56 00:03:33,320 --> 00:03:36,720 Speaker 1: store called New York bar store dot com, where he 57 00:03:36,760 --> 00:03:40,440 Speaker 1: would sell things like um cocktail shakers and beer pong 58 00:03:40,760 --> 00:03:44,680 Speaker 1: accessories on eBay. I was really having a lot of 59 00:03:44,680 --> 00:03:47,880 Speaker 1: trouble trying to buy from China walls on Wall Street, 60 00:03:48,400 --> 00:03:51,320 Speaker 1: and I remember being on Skype at like ten eleven 61 00:03:51,360 --> 00:03:54,120 Speaker 1: pm on my fifth floor walk up. But you know, 62 00:03:54,200 --> 00:03:56,120 Speaker 1: we were just felt a huge disadvantage. I'd wait like 63 00:03:56,320 --> 00:03:58,800 Speaker 1: a week or two weeks for a sample to come, 64 00:03:59,280 --> 00:04:01,600 Speaker 1: you know, and they spoke English, but he didn't understand. 65 00:04:01,960 --> 00:04:05,400 Speaker 1: So in March two thousand and seven, right before the 66 00:04:05,480 --> 00:04:09,480 Speaker 1: financial crisis, he decided to quit his job. Then he decides, 67 00:04:09,600 --> 00:04:11,040 Speaker 1: you know what, I'm going to go to China and 68 00:04:11,120 --> 00:04:13,760 Speaker 1: kind of find those factories that are making these beer 69 00:04:13,800 --> 00:04:17,360 Speaker 1: punks accessories and bar supplies and kind of figure out 70 00:04:17,360 --> 00:04:20,119 Speaker 1: how to turbo charge that business. So I just felt 71 00:04:20,120 --> 00:04:22,839 Speaker 1: like I needed to go there because I felt like 72 00:04:22,880 --> 00:04:26,000 Speaker 1: all of the knowledge and information is getting sent there. 73 00:04:26,360 --> 00:04:27,880 Speaker 1: And I was like, yeah, I just let all of 74 00:04:27,880 --> 00:04:30,400 Speaker 1: our technology, let all of our money, just send it 75 00:04:30,440 --> 00:04:36,240 Speaker 1: all to China. What does outsource everything? So this is 76 00:04:36,560 --> 00:04:40,360 Speaker 1: right before the financial crisis. I remember it was a 77 00:04:40,440 --> 00:04:43,440 Speaker 1: really different time back then. You know, the consensus in 78 00:04:43,520 --> 00:04:48,920 Speaker 1: Washington was very pro free trade, generally receptive towards China, 79 00:04:49,120 --> 00:04:52,800 Speaker 1: and it was just a different mood. That's right. China 80 00:04:52,960 --> 00:04:56,080 Speaker 1: was opening up to Western businesses. There was this general 81 00:04:56,120 --> 00:04:59,719 Speaker 1: feeling that China was the future. But Michael felt a 82 00:04:59,720 --> 00:05:02,720 Speaker 1: lot of resistance when he justified this move to his family. 83 00:05:03,240 --> 00:05:07,000 Speaker 1: I spoke to Michael's uncle, Gary Garno. Michael had worked 84 00:05:07,000 --> 00:05:09,760 Speaker 1: with Gary in a machine shop in Hartford. Gary now 85 00:05:09,800 --> 00:05:13,279 Speaker 1: lives in Florida and he's unemployed. I knew America was dying, 86 00:05:13,320 --> 00:05:16,239 Speaker 1: you know, we were losing all our industry. China was 87 00:05:16,240 --> 00:05:18,880 Speaker 1: was was was heading up. You know, there aren't learning 88 00:05:19,000 --> 00:05:21,520 Speaker 1: up swing, you know, And here's what was happening. And 89 00:05:21,640 --> 00:05:24,920 Speaker 1: during that time, in my opinion, we were shutting out 90 00:05:24,960 --> 00:05:27,960 Speaker 1: factories all over the place, and we were sinking hundreds 91 00:05:27,960 --> 00:05:30,760 Speaker 1: of billions of dollars into China. What was your first 92 00:05:30,760 --> 00:05:33,920 Speaker 1: thought when when Michael told you that he was going 93 00:05:33,960 --> 00:05:37,200 Speaker 1: to move to China. I was kind of hate losing him, really. 94 00:05:37,200 --> 00:05:39,520 Speaker 1: I didn't want to see him leave, but I figured 95 00:05:39,560 --> 00:05:41,480 Speaker 1: he knew what he was doing. He's pretty smart guy 96 00:05:41,600 --> 00:05:44,880 Speaker 1: and he likes to sell stuff, and I guess China 97 00:05:44,960 --> 00:05:46,320 Speaker 1: is the place to go. He told me to get 98 00:05:46,360 --> 00:05:51,520 Speaker 1: a factory in China. I don't fit in with the 99 00:05:51,520 --> 00:05:56,960 Speaker 1: rest of the family. They're not so supportive, honestly. I 100 00:05:57,320 --> 00:06:01,200 Speaker 1: uh my mom cried about it, but they just feel 101 00:06:01,240 --> 00:06:05,880 Speaker 1: like they're much more patriotic than I am. I'm not 102 00:06:05,960 --> 00:06:10,800 Speaker 1: like anti American I'm just more people are humans. I mean, 103 00:06:10,880 --> 00:06:19,320 Speaker 1: all these borders just don't make sense to me. Okay, 104 00:06:19,320 --> 00:06:21,840 Speaker 1: So Michael gets to China. What does he do there? 105 00:06:22,520 --> 00:06:26,400 Speaker 1: So Michael immediately starts to hustle. He's dabbling in and 106 00:06:26,520 --> 00:06:29,440 Speaker 1: out of e commerce. He meets his wife who's Chinese. 107 00:06:29,760 --> 00:06:32,440 Speaker 1: He sets up a consulting company that focuses on cross 108 00:06:32,480 --> 00:06:35,760 Speaker 1: border trade, and then he starts a business manufacturing old 109 00:06:35,800 --> 00:06:38,760 Speaker 1: school Italian espresso coffee pots. These are made in a 110 00:06:38,800 --> 00:06:41,520 Speaker 1: factory in China, and then he sells them on Amazon 111 00:06:41,560 --> 00:06:45,279 Speaker 1: to US customers. And when is this So this is 112 00:06:45,360 --> 00:06:48,560 Speaker 1: right around the time that Donald Trump gets elected. We 113 00:06:48,640 --> 00:06:53,279 Speaker 1: can't continue to allow China to rape our country. And 114 00:06:53,320 --> 00:06:56,240 Speaker 1: that's what they're doing. It's the greatest And of course 115 00:06:56,279 --> 00:07:03,039 Speaker 1: Trump campaigned on very anti China, anti trade rhetoric, right 116 00:07:03,320 --> 00:07:08,400 Speaker 1: And among the voters who voted for Trump was Michael's 117 00:07:08,440 --> 00:07:14,520 Speaker 1: own uncle Gary, who you know, saw jobs moving from 118 00:07:14,560 --> 00:07:18,800 Speaker 1: his hometown of Hartford to China, and he agreed with Trump, 119 00:07:19,320 --> 00:07:21,880 Speaker 1: we gotta start protecting America. Don is right, we gotta 120 00:07:21,880 --> 00:07:24,200 Speaker 1: bring back that industry's gonna keep you gonna bite us. 121 00:07:24,440 --> 00:07:29,000 Speaker 1: But you know, the Trumps presidency starts in that's right. 122 00:07:29,320 --> 00:07:32,440 Speaker 1: And at first Trump and President Chi Jimping of China 123 00:07:32,520 --> 00:07:35,760 Speaker 1: are really getting along. They share chocolate cake, they visit 124 00:07:35,840 --> 00:07:38,920 Speaker 1: each other's countries, and they make this plan that they're 125 00:07:38,920 --> 00:07:42,280 Speaker 1: going to resolve the whole trade difference in one days. 126 00:07:43,000 --> 00:07:46,400 Speaker 1: But near the end of the U s starts implementing 127 00:07:46,480 --> 00:07:52,000 Speaker 1: tariffs on steel and solar panels. These are two major 128 00:07:52,080 --> 00:07:55,400 Speaker 1: industries that China is really proud of, and so China 129 00:07:55,480 --> 00:07:58,840 Speaker 1: hits back and puts tariffs on cars and agricultural goods 130 00:07:58,840 --> 00:08:01,960 Speaker 1: from the US. What does this do? We're now seeing 131 00:08:02,040 --> 00:08:05,080 Speaker 1: the United States made a move and now overnight China 132 00:08:05,160 --> 00:08:08,080 Speaker 1: has made a move, and the trade war keeps escalating. 133 00:08:08,240 --> 00:08:10,600 Speaker 1: Businesses are scrambling to try to figure out what to 134 00:08:10,640 --> 00:08:12,720 Speaker 1: do next. I don't want to use the word because 135 00:08:12,760 --> 00:08:16,320 Speaker 1: it's a highly respected show, but they are taking advantage 136 00:08:16,320 --> 00:08:19,000 Speaker 1: of us. Okay, I'll use a different set of words. 137 00:08:19,040 --> 00:08:24,400 Speaker 1: They are taking And what's Michael up to during this time? 138 00:08:24,880 --> 00:08:27,960 Speaker 1: About a year and a half into Trump's presidency, Michael, 139 00:08:28,120 --> 00:08:30,559 Speaker 1: his wife, and his two kids decided to leave China. 140 00:08:30,800 --> 00:08:33,640 Speaker 1: They end up settling down in Thailand. I mean, I 141 00:08:33,640 --> 00:08:37,080 Speaker 1: could feel that China wasn't welcoming foreigners anymore. Honestly, I 142 00:08:37,080 --> 00:08:39,520 Speaker 1: could feel it even then. I'll say, you know, from 143 00:08:39,520 --> 00:08:42,040 Speaker 1: the US, and I'll say, do you like do you 144 00:08:42,080 --> 00:08:46,400 Speaker 1: still like Americans? You know, I'm just afraid to refresh 145 00:08:46,440 --> 00:08:49,559 Speaker 1: to news sometimes, especially when I'm inside of mainland China, 146 00:08:49,720 --> 00:08:53,199 Speaker 1: because you never know, they decided that they no longer 147 00:08:53,280 --> 00:08:56,240 Speaker 1: actually had to be in China to run the coffee 148 00:08:56,240 --> 00:09:00,240 Speaker 1: pot business, and things just weren't as comfortable any more 149 00:09:00,360 --> 00:09:04,719 Speaker 1: for Michael to be an American in China. And he 150 00:09:05,000 --> 00:09:08,480 Speaker 1: decides that this would kind of hedge his bets against China, 151 00:09:08,679 --> 00:09:19,920 Speaker 1: kind of create another life in a different country. We'll 152 00:09:19,960 --> 00:09:28,240 Speaker 1: be right back, okay. So before the break, Shelley, you 153 00:09:28,280 --> 00:09:31,719 Speaker 1: walked us through the worsening relationship between the US and 154 00:09:31,840 --> 00:09:37,720 Speaker 1: China and the toll that takes on Michael. That gets 155 00:09:37,800 --> 00:09:41,920 Speaker 1: us to the beginning of Well, earlier this year, it 156 00:09:42,000 --> 00:09:45,280 Speaker 1: seemed like again we were getting close to another deal. 157 00:09:45,880 --> 00:09:48,719 Speaker 1: But then March came, and then April came and there 158 00:09:48,800 --> 00:09:52,800 Speaker 1: was still no deal. And then in May Trump rips 159 00:09:52,800 --> 00:09:56,160 Speaker 1: off a tweet, of course, saying that progress is going 160 00:09:56,200 --> 00:10:00,679 Speaker 1: slowly and China is renegging on earlier promises. So Drump's 161 00:10:00,679 --> 00:10:03,360 Speaker 1: had it at this point, and he threatens to increase 162 00:10:03,440 --> 00:10:08,400 Speaker 1: tariffs up to the US decides to ban American companies 163 00:10:08,440 --> 00:10:12,200 Speaker 1: from doing business with Huawei, China's biggest tech company, and 164 00:10:12,240 --> 00:10:15,199 Speaker 1: the trade war kind of explodes. Quick check in the market. 165 00:10:15,240 --> 00:10:17,680 Speaker 1: You'll see the Tao is plunging. It's a response to 166 00:10:17,720 --> 00:10:21,320 Speaker 1: the escalating stakes in this US trade war with China. Yeah, 167 00:10:21,360 --> 00:10:24,440 Speaker 1: this is when things are looking really bad. I think 168 00:10:24,440 --> 00:10:27,240 Speaker 1: a lot of the sellers are like, like me, we're 169 00:10:27,320 --> 00:10:30,040 Speaker 1: just still waiting. We're still kind of in shock, or 170 00:10:30,040 --> 00:10:33,040 Speaker 1: we're still thinking. Maybe there seems like there's still this negotiation, 171 00:10:33,120 --> 00:10:37,120 Speaker 1: always this and that thing, and um, I feel like 172 00:10:37,160 --> 00:10:39,319 Speaker 1: we're all still kind of waiting. So this is when 173 00:10:39,320 --> 00:10:41,560 Speaker 1: I met Michael. It was a right around the time 174 00:10:41,600 --> 00:10:44,520 Speaker 1: of the G twenty summit in Japan last summer, when 175 00:10:44,600 --> 00:10:47,560 Speaker 1: Trump and She were about to meet in person, and 176 00:10:47,640 --> 00:10:50,320 Speaker 1: Michael and probably everyone else around the world was on 177 00:10:50,400 --> 00:10:53,120 Speaker 1: pins and needles to see what would happen. And the 178 00:10:53,280 --> 00:10:56,960 Speaker 1: much anticipated meeting the twain the Chinese and US presidents 179 00:10:57,120 --> 00:10:59,400 Speaker 1: is just a few hours away at the j twenty 180 00:10:59,640 --> 00:11:02,360 Speaker 1: of And I never even really pay attention to T twenty. 181 00:11:02,520 --> 00:11:05,760 Speaker 1: I've heard of it and obviously this year was more important. 182 00:11:05,840 --> 00:11:08,920 Speaker 1: So yeah, I was definitely like, Saturday morning they will 183 00:11:08,920 --> 00:11:12,280 Speaker 1: be meeting, and it was Japanese time. I'm rose Osaka, 184 00:11:12,360 --> 00:11:15,520 Speaker 1: so I'm like, it's a little bit ahead of you know, 185 00:11:15,720 --> 00:11:18,640 Speaker 1: where I was in Thailand, So you know, of course, 186 00:11:18,679 --> 00:11:20,720 Speaker 1: I'm like kind of refreshing the news waiting for the 187 00:11:20,760 --> 00:11:23,679 Speaker 1: update of his meeting. The US and China agreed to 188 00:11:23,800 --> 00:11:27,160 Speaker 1: restart trade talks, but it's certainly not a done deal, 189 00:11:27,640 --> 00:11:29,920 Speaker 1: and at this point, Michael needs to make a decision 190 00:11:29,920 --> 00:11:33,240 Speaker 1: about Christmas. Christmas is super important because it's when he 191 00:11:33,280 --> 00:11:37,040 Speaker 1: brings in of his sales, and he's ordering goods from 192 00:11:37,040 --> 00:11:39,840 Speaker 1: a factory in China. It takes a few months to 193 00:11:39,880 --> 00:11:41,800 Speaker 1: make the coffee pots and then ship them all the 194 00:11:41,800 --> 00:11:46,400 Speaker 1: way to the US. Other Amazon sellers are ordering less stuff, 195 00:11:46,480 --> 00:11:49,720 Speaker 1: but Michael holds off. He ends up taking a big gamble. 196 00:11:50,040 --> 00:11:52,760 Speaker 1: He decides not to change his coffee pot order, and 197 00:11:52,840 --> 00:11:55,720 Speaker 1: he figures he'll just eat the cost of whatever tariffs 198 00:11:55,800 --> 00:11:59,040 Speaker 1: might hit him. What is the other option, like, kind 199 00:11:59,040 --> 00:12:03,600 Speaker 1: of make it in America. Um, from what I saw 200 00:12:03,720 --> 00:12:06,600 Speaker 1: involved in making these products, I don't think I could 201 00:12:06,600 --> 00:12:08,720 Speaker 1: make it in America. At least I guess I could 202 00:12:08,760 --> 00:12:11,360 Speaker 1: fly there to try to teach somebody how to do 203 00:12:11,880 --> 00:12:14,960 Speaker 1: like all of this again, but basically there's no I 204 00:12:15,000 --> 00:12:16,800 Speaker 1: feel like there's no other options. So what that means 205 00:12:16,880 --> 00:12:19,840 Speaker 1: is everybody in my market is buying this from China. 206 00:12:22,040 --> 00:12:24,880 Speaker 1: Maybe in the long term, somebody will win that could 207 00:12:24,920 --> 00:12:28,240 Speaker 1: beat me by being making it somewhere else, but nobody's 208 00:12:28,280 --> 00:12:30,280 Speaker 1: gonna be able to make it somewhere else and before 209 00:12:30,320 --> 00:12:34,680 Speaker 1: at least for Christmas maybe, So I think you got 210 00:12:34,679 --> 00:12:36,120 Speaker 1: to say in the game, if you run a stock, 211 00:12:36,160 --> 00:12:41,160 Speaker 1: you're basically giving up. So, um, what do you think 212 00:12:41,559 --> 00:12:45,079 Speaker 1: it's going to happen in six months? I think Donald 213 00:12:45,080 --> 00:12:48,280 Speaker 1: Trump is probably also realizing he's going to shoot himself 214 00:12:48,280 --> 00:12:52,360 Speaker 1: in the foot. I do feel like American economy is 215 00:12:52,440 --> 00:12:56,800 Speaker 1: based on the important cheap Chinese goods. I feel safe 216 00:12:56,800 --> 00:12:58,760 Speaker 1: for Christmas. I don't think he's gonna screw it. I 217 00:12:58,760 --> 00:13:00,800 Speaker 1: don't think he's a mess with chrisma us. I think 218 00:13:00,840 --> 00:13:04,600 Speaker 1: he's going to just keep extending this and and uh, 219 00:13:04,960 --> 00:13:06,960 Speaker 1: I hope he doesn't because he wants to get reelected. 220 00:13:11,320 --> 00:13:14,440 Speaker 1: So what happens next? And then all of a sudden 221 00:13:14,480 --> 00:13:18,280 Speaker 1: on August first, welcome back to some dramatic breaking news 222 00:13:18,280 --> 00:13:23,080 Speaker 1: on tariffs. Trump starts tweeting again about more tariffs. And 223 00:13:23,200 --> 00:13:27,480 Speaker 1: these are the tariffs that really worry people because they're 224 00:13:27,600 --> 00:13:31,480 Speaker 1: on consumer goods like electronics and clothes and things that 225 00:13:31,520 --> 00:13:35,360 Speaker 1: are really going to hit retailers and consumers where they hurt. 226 00:13:35,559 --> 00:13:39,720 Speaker 1: Right before Christmas, right, people start talking about Trump destroying 227 00:13:39,800 --> 00:13:44,920 Speaker 1: Christmas exactly. So this is when things are starting to 228 00:13:45,040 --> 00:13:48,320 Speaker 1: look really bad. Yeah, and it gets even worse when 229 00:13:48,360 --> 00:13:52,600 Speaker 1: the US declares China currency manipulator, which is kind of 230 00:13:52,600 --> 00:13:56,840 Speaker 1: an official way to accuse a country of cheating on trade. 231 00:13:57,400 --> 00:14:00,559 Speaker 1: So I started thinking about Michael, and I give him 232 00:14:00,559 --> 00:14:03,559 Speaker 1: a call because I'm wondering what Michael's thinking at this time. 233 00:14:04,520 --> 00:14:08,080 Speaker 1: So turns up, Michael has big news. He decides, you 234 00:14:08,080 --> 00:14:12,120 Speaker 1: know this, these tensions and this back and forth is 235 00:14:12,200 --> 00:14:16,400 Speaker 1: just really getting too much for him, and he decides 236 00:14:16,520 --> 00:14:20,600 Speaker 1: to actually sell the coffee pot business, uh to a 237 00:14:20,600 --> 00:14:25,240 Speaker 1: company that kind of rolls up other Amazon businesses, and 238 00:14:25,600 --> 00:14:28,680 Speaker 1: UH join that company, so it kind of spreads out 239 00:14:28,720 --> 00:14:32,400 Speaker 1: his risk. Wow, I can't believe he sold his business 240 00:14:32,440 --> 00:14:34,920 Speaker 1: because of the trade war. You know, I don't think 241 00:14:35,000 --> 00:14:37,680 Speaker 1: it was just the trade war, but I think he 242 00:14:37,800 --> 00:14:42,720 Speaker 1: can kind of feel these growing tensions between the US 243 00:14:42,760 --> 00:14:45,480 Speaker 1: and China that you know, he doesn't want to build 244 00:14:45,760 --> 00:14:50,560 Speaker 1: and keep his whole life tied to China. The bad 245 00:14:50,680 --> 00:14:53,120 Speaker 1: thing about America is you can't play long term. We 246 00:14:53,160 --> 00:14:56,120 Speaker 1: don't know how long Donald Trump will stay. You know, Um, 247 00:14:56,360 --> 00:14:59,000 Speaker 1: the policy just changed, Like Trump comes in and reverses 248 00:14:59,040 --> 00:15:01,440 Speaker 1: what a whilement something Obama did, and then maybe the 249 00:15:01,480 --> 00:15:03,840 Speaker 1: next person comes in and changes what Trump did. You know, 250 00:15:04,480 --> 00:15:06,280 Speaker 1: I think even China's waiting it out, you know, I 251 00:15:06,280 --> 00:15:09,480 Speaker 1: think China can wait until the next president. So in September, 252 00:15:09,560 --> 00:15:12,840 Speaker 1: the tariffs that Trump threatened over the summer come into effect. 253 00:15:13,000 --> 00:15:16,680 Speaker 1: These are tariffs on consumer goods like footwear, TVs and 254 00:15:16,840 --> 00:15:20,240 Speaker 1: of course home goods. And does this include coffee pots? 255 00:15:20,240 --> 00:15:23,200 Speaker 1: It does. So even though Michael sold the business to 256 00:15:23,280 --> 00:15:25,800 Speaker 1: a fund, now that he works for the fund, he's 257 00:15:25,800 --> 00:15:29,280 Speaker 1: still keeping tabs on the business. How much does that 258 00:15:29,360 --> 00:15:34,320 Speaker 1: hurt Michael? The coffee pots go for about on Amazon 259 00:15:34,720 --> 00:15:37,720 Speaker 1: and Michael makes seven dollars on each pot. So this 260 00:15:37,760 --> 00:15:40,440 Speaker 1: new tariff eats into the business, but it doesn't wipe 261 00:15:40,480 --> 00:15:44,120 Speaker 1: out the margin altogether. So, um, did you raise your 262 00:15:44,160 --> 00:15:47,200 Speaker 1: prices on the coffee pots? We haven't raised yet, but 263 00:15:47,760 --> 00:15:50,640 Speaker 1: we it's the scary thing. Well, we've we've taken a 264 00:15:50,720 --> 00:15:56,640 Speaker 1: hit so far and have other have competitors raised their prices, 265 00:15:57,040 --> 00:16:02,200 Speaker 1: It seems just stated about stable honestly. Wow, So everybody's 266 00:16:02,280 --> 00:16:11,600 Speaker 1: kind of just absorbing, holding their breath. So, Shelley, there's 267 00:16:11,600 --> 00:16:14,600 Speaker 1: been so many developments to keep track of with this 268 00:16:14,680 --> 00:16:19,760 Speaker 1: trade war. I'm sure you've been very busy. What's the latest? Who? 269 00:16:19,760 --> 00:16:23,000 Speaker 1: It changes day by day to make it more manageable. 270 00:16:23,120 --> 00:16:25,440 Speaker 1: The US and China have agreed to break up the 271 00:16:25,440 --> 00:16:28,920 Speaker 1: trade deal into phases. Phase one actually looks to be 272 00:16:28,960 --> 00:16:33,280 Speaker 1: gaining some traction. And what's Michael up to? Michael's done 273 00:16:33,320 --> 00:16:36,960 Speaker 1: watching the news. He's really struggling with this roller coaster 274 00:16:37,160 --> 00:16:41,760 Speaker 1: of tariffs, and frankly, he just seems really down. I'd 275 00:16:41,880 --> 00:16:45,120 Speaker 1: rather know I'm gonna have to pay more or more 276 00:16:45,160 --> 00:16:46,920 Speaker 1: and then just be done with it. It's like it's 277 00:16:47,000 --> 00:16:48,880 Speaker 1: kind of like the boyfriend girlfriend thing where you break 278 00:16:48,960 --> 00:16:51,040 Speaker 1: up and you get back together like multiple times. Like 279 00:16:51,080 --> 00:16:52,680 Speaker 1: for me, I just yeah, I want closure. I just 280 00:16:52,680 --> 00:16:53,760 Speaker 1: want to know, am I gonna have to pay a 281 00:16:53,800 --> 00:16:57,080 Speaker 1: lot more? You know? How do you manage the anxiety 282 00:16:57,120 --> 00:17:06,720 Speaker 1: while you're searching for these opportunities meditation, Um, remembering this 283 00:17:06,920 --> 00:17:09,480 Speaker 1: not just me, that everybody's facing this, whether you're a 284 00:17:09,520 --> 00:17:15,199 Speaker 1: small individual seller or a multi million dollars seller. I 285 00:17:15,240 --> 00:17:20,720 Speaker 1: mean realizing I'm I'm flexible. Um, I adapted, I adapt 286 00:17:20,800 --> 00:17:23,960 Speaker 1: so I and I believe I'm more willing to take risks. 287 00:17:23,960 --> 00:17:27,240 Speaker 1: I'm more willing to do what it takes to stay 288 00:17:27,280 --> 00:17:31,200 Speaker 1: in the game. But he doesn't want to move all 289 00:17:31,280 --> 00:17:35,640 Speaker 1: is manufacturing away from China altogether. For the coffee pot business, 290 00:17:35,720 --> 00:17:38,920 Speaker 1: it's just impossible. The only place in the world at 291 00:17:38,960 --> 00:17:42,240 Speaker 1: the moment that makes those coffee pots are in China. 292 00:17:42,560 --> 00:17:45,440 Speaker 1: So he did look into the US. You know, Uncle 293 00:17:45,480 --> 00:17:48,520 Speaker 1: Gary has said to Michael, why can't you make your 294 00:17:48,520 --> 00:17:51,399 Speaker 1: products in the US, And Michael's tried to explain to 295 00:17:51,480 --> 00:17:55,000 Speaker 1: him that that, um, you know, factories don't make those 296 00:17:55,040 --> 00:17:58,800 Speaker 1: coffee pots in the US, or in Southeast Asia or 297 00:17:59,040 --> 00:18:02,160 Speaker 1: really anywhere else. And the trade deal do you think 298 00:18:02,160 --> 00:18:04,399 Speaker 1: that will help that that will help bring more jobs 299 00:18:04,440 --> 00:18:06,760 Speaker 1: back to the US. We have to do something, man, 300 00:18:06,840 --> 00:18:08,800 Speaker 1: because all the products are made over there, and it's 301 00:18:08,840 --> 00:18:12,160 Speaker 1: not the American people's fault, it's it's these cooperation. Michael said, 302 00:18:12,200 --> 00:18:15,760 Speaker 1: for example, that he can't make his coffee pots in America. 303 00:18:15,920 --> 00:18:19,160 Speaker 1: But nowhere in America he couldn't even find a factory 304 00:18:19,200 --> 00:18:22,240 Speaker 1: to make them because they're all going to got moved out. 305 00:18:23,200 --> 00:18:25,920 Speaker 1: It's it's we've lost a lot of our capacity. It's 306 00:18:26,040 --> 00:18:30,639 Speaker 1: very disheartening, you know. So what do you do? Like, 307 00:18:30,800 --> 00:18:33,320 Speaker 1: let's say you're Michael and you want to keep your 308 00:18:33,320 --> 00:18:36,000 Speaker 1: business growing, and you you know, he said to me, 309 00:18:36,040 --> 00:18:38,439 Speaker 1: I would love to make these coffee pots in the 310 00:18:38,560 --> 00:18:42,560 Speaker 1: United States. Like, what do you do if you're him? 311 00:18:42,680 --> 00:18:45,439 Speaker 1: The word a precarious situation? Man, we really are. I 312 00:18:45,520 --> 00:18:47,480 Speaker 1: agree with you, and I agree with Mike. It's sad, 313 00:18:48,720 --> 00:18:54,840 Speaker 1: you know, there's no simple solutions. There isn't. I think 314 00:18:56,040 --> 00:18:59,760 Speaker 1: the politicians in Washington, these ridiculous people, puppets that they 315 00:18:59,760 --> 00:19:03,560 Speaker 1: haven't Washington. Uh, they don't understand the value of jobs. 316 00:19:03,640 --> 00:19:07,280 Speaker 1: They let all these jobs leave the country. People have 317 00:19:07,359 --> 00:19:09,320 Speaker 1: to have jobs. What would you do with our job? Man? 318 00:19:09,359 --> 00:19:10,879 Speaker 1: What would I do? What our job? We have to 319 00:19:10,880 --> 00:19:21,960 Speaker 1: have jobs. So, Shelley, what did Michael end up doing 320 00:19:21,960 --> 00:19:25,400 Speaker 1: about the coffee pots? It took a lot of agonizing 321 00:19:25,400 --> 00:19:27,960 Speaker 1: on Michael's apart, but in the end, he decided to 322 00:19:28,040 --> 00:19:31,040 Speaker 1: raise prices to recoup some of the costs of the tariffs, 323 00:19:31,520 --> 00:19:34,800 Speaker 1: and so did a lot of his competitors. You know, 324 00:19:34,880 --> 00:19:38,080 Speaker 1: I'm sure this whole ordeal over the last year so 325 00:19:38,240 --> 00:19:41,840 Speaker 1: has been so stressful for him. What does he make 326 00:19:41,880 --> 00:19:45,760 Speaker 1: of all of this now, Well, Michael seems a bit lost. 327 00:19:46,080 --> 00:19:48,480 Speaker 1: You know. He moved to China for the promise of 328 00:19:48,560 --> 00:19:52,879 Speaker 1: this globalized world, and that world started to deliver at first. 329 00:19:53,040 --> 00:19:55,840 Speaker 1: It brought him a lot of good things, his business, 330 00:19:56,000 --> 00:20:00,560 Speaker 1: his wife, his family, and now it's threatened. What do 331 00:20:00,600 --> 00:20:03,920 Speaker 1: you think is the general sense that you have now 332 00:20:04,160 --> 00:20:06,920 Speaker 1: compared to like five years ago when you were living 333 00:20:06,960 --> 00:20:10,320 Speaker 1: in China and really believing in this more of a 334 00:20:10,440 --> 00:20:16,119 Speaker 1: globalized world. Yeah, it's really I guess I'm it's sad 335 00:20:16,160 --> 00:20:19,760 Speaker 1: to me. I mean, I think with internet and technology, 336 00:20:20,000 --> 00:20:23,440 Speaker 1: there's a huge opportunity for people from all different parts 337 00:20:23,480 --> 00:20:25,200 Speaker 1: of the world to be able to communicate with each 338 00:20:25,200 --> 00:20:28,080 Speaker 1: other and work with each other. But it just seems 339 00:20:28,080 --> 00:20:30,119 Speaker 1: like it's going backwards as far as that. And I 340 00:20:30,160 --> 00:20:32,920 Speaker 1: thought five ten years ago it wasn't be more and 341 00:20:32,960 --> 00:20:35,400 Speaker 1: more open, but the governments are just trying to put 342 00:20:35,440 --> 00:20:38,880 Speaker 1: walls up, barriers up. I mean, the reason I came 343 00:20:38,920 --> 00:20:45,320 Speaker 1: here was to try to learn and understand rather than 344 00:20:45,400 --> 00:20:47,800 Speaker 1: just put the wall up and not know anything that's 345 00:20:47,840 --> 00:20:51,320 Speaker 1: happening here, Like I wanted to come here to understand it. 346 00:20:51,520 --> 00:20:53,480 Speaker 1: And I have an amazing Chinese wife, and I have 347 00:20:53,520 --> 00:20:56,800 Speaker 1: two children that speak English and Chinese and are going 348 00:20:56,840 --> 00:21:00,800 Speaker 1: to be educated to learn the bull side, and they're 349 00:21:00,800 --> 00:21:10,960 Speaker 1: going to be better people than me. Shelley Banjo, thanks 350 00:21:10,960 --> 00:21:21,520 Speaker 1: for coming on the show today. Thanks Akio. Decrypted is 351 00:21:21,600 --> 00:21:25,120 Speaker 1: hosted by me Ako. Sean Wyn is our executive producer. 352 00:21:25,560 --> 00:21:28,479 Speaker 1: Ethan Brooks mixes Show Today, and Alistair Barrow was our 353 00:21:28,480 --> 00:21:32,400 Speaker 1: story editor. Joe Leonardtine, Matt Burley, and Dex Bruce assisted 354 00:21:32,400 --> 00:21:36,639 Speaker 1: with recordings. Francesco Levy is the head of Bloomberg Podcasts. 355 00:21:36,920 --> 00:21:48,399 Speaker 1: We'll see you next week.