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Speaker 3: Los Angeles entered its fourth day of unrest sparked by
Speaker 3: immigration raids, with President Trump suggesting that Gavin Newsom should
Speaker 3: be arrested for his response, and the governor suing the
Speaker 3: administration for deploying National Guard troops to the city. Separately,
Speaker 3: the Pentagon is mobilizing five hundred active duty Marines to
Speaker 3: help reinforce the National Guard in response to protests in
Speaker 3: Los Angeles. Just according to a person familiar with the matter.
Speaker 4: All right, so let's get to it with Sarah McGregor.
Speaker 4: She is with USh. She's Bloomberg News National Team Managing
Speaker 4: editor based in Los Angeles, and she joins us from
Speaker 4: the LA Bureau. Sarah, you know we've talked with you
Speaker 4: before different moments of crisis in and around the LA area.
Speaker 5: Just talked to us.
Speaker 4: First of all, a little perspective from you and this
Speaker 4: city and what you.
Speaker 6: Have seen over the last few days.
Speaker 7: Absolutely. I think the last time we spoke it was
Speaker 7: during the LA wildfires, when the California National Guard we're
Speaker 7: here to protect people, and of course now we're seeing
Speaker 7: them in the city at the order of Trump, against
Speaker 7: the wishes of Newsome, trying to quell demonstrations that are
Speaker 7: across the city. And just to put into context today,
Speaker 7: over the weekend, you know, we did see some violence,
Speaker 7: some clashes with the police, more than thirty people arrested
Speaker 7: at those but you know, it's quite isolated pockets downtown LA,
Speaker 7: just areas south of the city. This is in response
Speaker 7: to immigration rates. Today. What we're seeing are largely peaceful protests.
Speaker 7: So far, there's a lot of large gathering in downtown
Speaker 7: LA but so far we aren't seeing that sort of
Speaker 7: violence that picked up later in the day yesterday. So,
Speaker 7: you know, just to put that into perspective. As the
Speaker 7: Marines are now being sent actually we are reporting it's
Speaker 7: seven hundred now we've gotten more information that it's now
Speaker 7: seven hundred and so apparently they're on their way to
Speaker 7: LA and that definitely sets the stage for tensions to rise.
Speaker 3: You know, I think people outside of the Los Angeles area,
Speaker 3: and perhaps in Los Angeles, they see images of unrest
Speaker 3: in LA and if they're of a certain age, maybe
Speaker 3: they think of nineteen ninety two and what we saw
Speaker 3: in the wake of the video of Rodney King being
Speaker 3: beaten and the riots that happened in April and May
Speaker 3: of that year. Can you contextualize that and just put
Speaker 3: this into historical context of what the city has seen.
Speaker 7: I don't want to downplay anything, because I do know,
Speaker 7: you know, police officers have been hurt, and they're you know,
Speaker 7: the security forces have definitely had to respond, and they've
Speaker 7: thrown bricks. You know, different charges have been laid, including
Speaker 7: attempt at murder for throwing them alto So there's definitely
Speaker 7: some serious, serious counts here. But ultimately, you know, the
Speaker 7: city is widely calm, and I think it's just sort
Speaker 7: of the comparable now of sending in the National Guard,
Speaker 7: now sending in Marines that really it doesn't seem to
Speaker 7: be a match in terms of and that's what the
Speaker 7: Trump the News administration would say. It doesn't really seem
Speaker 7: to be a match in terms of what the needs
Speaker 7: are for the security forces. So that's not to say
Speaker 7: that things could escalate, But I think the worry from Newsom,
Speaker 7: from Marbez is that it's actually by sending in the
Speaker 7: big guns that things will actually attentions will arise and
Speaker 7: people will lose their cool, and so I think they're
Speaker 7: more worried that the show of force will actually make
Speaker 7: the situation even worse.
Speaker 4: You mentioned today, Sarah that we're seeing some peaceful protests.
Speaker 4: I'm just curious, though, have the protests grown in numbers.
Speaker 7: It is really hard to tell because they are spread out.
Speaker 7: It does seem in sort of similar numbers from day
Speaker 7: to day in terms of protesters. Today, we're actually seeing
Speaker 7: a large number of people in downtown LA protesting a
Speaker 7: labor leader, a major labor leader, who has been detained.
Speaker 7: He's been charged actually now with obstructing the pathway of
Speaker 7: a federal vehicle and so he's going to face charges
Speaker 7: on that, and some local leaders like Maxine Waters, some
Speaker 7: Democratic leaders Adam Schiff, have called for his release, have
Speaker 7: asked to enter the detention center where he's being held,
Speaker 7: and they were denied. So I think that's raising some
Speaker 7: tensions on a whole other level of just a bit
Speaker 7: of an outcry about this labor leader being detained, Sir.
Speaker 3: When we last checked in with you regularly, it was
Speaker 3: during the devastating wildfires in and around the Los Angeles area.
Speaker 3: At that time, Mayor Karen Bass was getting a lot
Speaker 3: of criticism from folks about the city's response to the fires.
Speaker 3: How would you characterize the role that she's taken during
Speaker 3: these during this latest episode that we're speaking to you about,
Speaker 3: what has she been doing?
Speaker 7: I think because you know, the exchange, especially today and
Speaker 7: social media, has largely been between Newsom and Trump. Newsom's
Speaker 7: you know, just sent a tweet out, for instance, with
Speaker 7: a picture of some of the National Guards sleeping on
Speaker 7: the floor, saying Trump sent these people here and now
Speaker 7: they have no place to rest, they have no food.
Speaker 7: You know, it's sort of back and forth between Trump
Speaker 7: and Newsome. I think that's sort of overshadowed. I think
Speaker 7: the efforts locally on the ground of what folks are doing,
Speaker 7: at least from a national perspective. So you know, Karen
Speaker 7: Bess has been up front, she's been holding press conferences.
Speaker 7: You know, there hasn't been a criticism I think about
Speaker 7: the LAPG, the LA Police Force and how they've been
Speaker 7: handling the situation at large outside of Trump and his administration.
Speaker 7: So I think here at home, there isn't a lot
Speaker 7: of analysis yet, I suppose of how it's being handled
Speaker 7: at a local level, but it does seem like it's
Speaker 7: you know, calm heads, Sarah.
Speaker 4: I am also curious about kind of the mood and
Speaker 4: the view point of most Los Angelinos, if you will.
Speaker 4: It's a diverse city, Folks from many walks of life
Speaker 4: in Los Angeles, So I'm just curious what is the
Speaker 4: public's view, if there's a general view when it comes
Speaker 4: to immigration right now.
Speaker 7: Well, you know, all of these these protested stem from
Speaker 7: some raids on Friday and the public seeing you know,
Speaker 7: seeing the ICE folks mobilizing around home depots or the
Speaker 7: fashion district in LA to capture folks, and so that
Speaker 7: anger is palpable. That's where this all stemmed from. You know,
Speaker 7: we have been receiving la USD. The school district has
Speaker 7: had a press conference today, you know, telling people they're
Speaker 7: not going to cooperate with ICE in terms of you know,
Speaker 7: handing over anyone or giving names and numbers of you know,
Speaker 7: parents in the school district. They're going to protect the kids.
Speaker 7: So I do think it sort of raises that awareness
Speaker 7: in a way. I think there have been isolated raids
Speaker 7: in LA, but we haven't really felt the brunt of
Speaker 7: this deportation campaigned by Trump, and I think as they've
Speaker 7: scaled things up to try and reach numbers, to try
Speaker 7: and reach their three thousand and day minimum of arrests,
Speaker 7: we started to see LA be ground zero for that.
Speaker 3: Yeah, it's been remarkable to see play out over the
Speaker 3: last four days. Governor Cuomo, who's running for mayor of
Speaker 3: New York City, was on Bloomberg Surveyllance a little earlier, Sarah,
Speaker 3: and he made the point that you might actually see
Speaker 3: He made the point that what you see in Los
Speaker 3: Angeles you could see in New York City next. And
Speaker 3: I'm just wondering how you view a comment such as
Speaker 3: that with regard to what you've seen the federal government
Speaker 3: and what we've reported the federal government do in Los Angeles.
Speaker 7: Absolutely, I mean we are watching, out of course, to
Speaker 7: see if sort of protests breakout in other cities and
Speaker 7: solidarity of what's happening in LA. We saw some protests
Speaker 7: in San Francisco, for example, yesterday where sixty people were arrested.
Speaker 7: So it is possible, especially in some of these blue
Speaker 7: states where they have sanctuary city policies that the Trump
Speaker 7: administration has been very critical of.
Speaker 2: There.
Speaker 7: You know, it is something to watch out for whether
Speaker 7: similar things will will unfold in these cities.
Speaker 4: All right, we're going to leave it on that note. Listen, Sarah,
Speaker 4: thanks so much for always keeping us up to date.
Speaker 4: Sarah McGregor. She is our Bloomberg News National Team managing editor.
Speaker 4: She's based in Los Angeles and she's been joining us
Speaker 4: from our LA bureau.
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Speaker 3: Well, trade talk between the US and China stretched on
Speaker 3: in London. The US signaled a willingness to remove restrictions
Speaker 3: on some tech ex sports in exchange for assurances that
Speaker 3: China is easing limits on rare earth shipments. The meeting
Speaker 3: began just after one pm local time. It's expected to
Speaker 3: extend into the UK evening. It may restart on Tuesday,
Speaker 3: Caro if necessary. We got a great voice on this.
Speaker 4: We do indeed back with us, Dexter Tiff Roberts. He's
Speaker 4: non resident Senior Fellow at the Atlanta Council's Global China Hub.
Speaker 4: He's also author of Trade War, a weekly newsletter on
Speaker 4: China's economy. He's also professor of Chinese politics at the
Speaker 4: University of Montana. He's former Bloomberg BusinessWeek China bureau chief.
Speaker 4: He lived in Beijing for two decades covering it all
Speaker 4: for Business Week, and he's author of the twenty twenty book.
Speaker 4: We've talked to him about this the myth of Chinese capitalism,
Speaker 4: the worker, the fact, and the future of the world. Sorry,
Speaker 4: we're out of time interview, but this is why you
Speaker 4: want to talk to him about China.
Speaker 3: He joins us from Mizzola, Montana.
Speaker 5: Tip. Good to have you back with us.
Speaker 4: Yeah, these negotiations between the US and China, what for
Speaker 4: you is what you think we should all have on
Speaker 4: our radar here?
Speaker 8: Well, it's all from the US perspective. As we know,
Speaker 8: it's all about rare earth exports. We we've got ourselves
Speaker 8: in a situation over a number of years where China
Speaker 8: absolutely dominates the production and the processing of these crucial,
Speaker 8: crucial rare earths that you know, we need for every
Speaker 8: almost everything you can, you know, you name it, we
Speaker 8: need it for. We need rare earth smartphones, uh, you know,
Speaker 8: electric vehicles, robot x miss missile systems. You know, defense
Speaker 8: need to as well.
Speaker 3: Tiff if that's the case, and we spoke to Graceland
Speaker 3: Baskren at csis a little earlier in our program. She
Speaker 3: joined us from South Africa and we talked specifically about rareers,
Speaker 3: but in the context of trade negotiations and who actually
Speaker 3: has the leverage since for the US this is all
Speaker 3: about rare earths, does that mean that China has the
Speaker 3: upper hand in your view?
Speaker 8: Well, I actually do think China has a little bit
Speaker 8: more leverage than the US, but it's close. We had
Speaker 8: the numbers earlier this week. Chinese exports disappointed. You know,
Speaker 8: we saw this dramatic I think it was thirty four
Speaker 8: and a half percent drop in exports to the US.
Speaker 8: You know, they've been doing a little bit better because
Speaker 8: they've been selling a lot to Southeast Asia, the EU,
Speaker 8: and Africa, but not well enough.
Speaker 5: So China. It's not like China's not hurting.
Speaker 8: But I do think on the US side, there's these
Speaker 8: real fears about inflation if the trade war goes on.
Speaker 8: We saw the relatively weak job report, and we got
Speaker 8: something called the midterm elections coming up, and China, as
Speaker 8: we know, doesn't have any mid term elections ahead.
Speaker 4: Well, I love that you went there, and I was
Speaker 4: going to ask you, you know, TIV, what about you know,
Speaker 4: what is it about the grand kind of Chinese experiment
Speaker 4: and mission that has happened under President Xi? As you said,
Speaker 4: there's no midterms. He's pretty well entrenched and ensconced in
Speaker 4: his position. But what is it about his mission, his
Speaker 4: great experiment and you know kind of goal in creating
Speaker 4: the Chinese economy that we look at today?
Speaker 5: What about it works?
Speaker 3: What doesn't?
Speaker 8: Well, first of all, I would just say that grand
Speaker 8: goal it's clear She jene Ping has and has been
Speaker 8: you know, vocalized and publicized, often more often in Chinese
Speaker 8: than English. But they're very clear that they want China
Speaker 8: to play a dominant role in global supply chains, as
Speaker 8: they already do, but they want to they want to
Speaker 8: strengthen that at the high end, and they want to
Speaker 8: dominate advanced technology. So, first of all, that grand goal
Speaker 8: that we see out of Beijing, unfortunately, is in direct
Speaker 8: conflict with what we would like to see in the US.
Speaker 8: So I guess I just say at the outset, you know,
Speaker 8: we may get some agreements. I think we will out
Speaker 8: of London, but I'm really skeptical, skeptical that they're going to.
Speaker 5: Last long term. For that reason, there's a real there's a.
Speaker 8: Real difference of opinions, if you will, about who's going
Speaker 8: to going to lead in advance deck and supply chains globally.
Speaker 3: Tiff, this is almost an impossible question for any single
Speaker 3: person to answer, but I think you can probably give
Speaker 3: as good of a view into this as anybody else.
Speaker 3: For the last few months, Carol and I've been trying
Speaker 3: to figure out what exactly is happening on the ground
Speaker 3: when it comes to the Chinese economy, to what extent
Speaker 3: is the Chinese economy ahead of the US when it
Speaker 3: comes to electric vehicles, when it comes to robotics, when
Speaker 3: it comes to AI. Because of a past few years,
Speaker 3: what we've learned is that there's yes been a property crisis,
Speaker 3: the consumer is under pressure, there's a debt crisis certainly
Speaker 3: as well. We've reported on extensively. So how would you
Speaker 3: characterize the Chinese consumer, the Chinese economy and where the
Speaker 3: strengths and weaknesses are right now.
Speaker 8: Well, there's a real you've just hit hit upon it, Tim,
Speaker 8: there's this real dichotomy. We have seen tremendous success in
Speaker 8: areas like electric vehicles. There's no question now that they
Speaker 8: are doing far better than we are and leading the
Speaker 8: world in terms of affordable and very good electric vehicles.
Speaker 5: And I saw that last.
Speaker 8: Year when I wrote it in some as well when
Speaker 8: I was in China, we saw, you know, obviously areas
Speaker 8: like smartphones. Apple fell out of the top five brands
Speaker 8: in the China market, so there's huge success there. Robotics again,
Speaker 8: very very impressive obviously with AI we saw with the
Speaker 8: spot Nick moment as people referred to it with deep
Speaker 8: sea and absolutely impressive large language LLM. So that's the
Speaker 8: one side. On the other side, you mentioned you have
Speaker 8: a very weak consumer market, you have an overhang from
Speaker 8: continuing from the real estate market which has been so
Speaker 8: important to the economy, and then also the pandemic they've
Speaker 8: really never recovered from it. So we saw both those
Speaker 8: cited by the OECD earlier this week when they downgraded
Speaker 8: their forecast for Chinese growth I think to four point
Speaker 8: six percent for next year. It's not clear what china
Speaker 8: strategy is at this point to actually reverse that and
Speaker 8: bring confidence back not just the household but also to
Speaker 8: the private sector as well.
Speaker 4: You know, Tip, what I find really interesting is basically
Speaker 4: you've got the two largest economies in the world wanting
Speaker 4: to stay or be number one, right And what's interesting
Speaker 4: is I feel like the US is kind of trying
Speaker 4: to put limitations on the China or telling European allies
Speaker 4: which you can or can't sell to China, And you know,
Speaker 4: it's like and yet we don't want China to put
Speaker 4: any restrictions on us. So I'm curious to see how
Speaker 4: this plays out. And I think a big part of
Speaker 4: it will be where allies fall. And so what kind
Speaker 4: of carving up of the world will we see And
Speaker 4: who do you expect will lie themselves with China? Who
Speaker 4: with the United States? And does Donald Trump make it.
Speaker 3: Better or worse for.
Speaker 4: The US developing the alliances that it really needs.
Speaker 5: Well, wonderful and very important question, Carol.
Speaker 8: If you'd asked me six months ago, before January twentieth,
Speaker 8: I think we could see some real We could see
Speaker 8: some pretty solid allies in Europe, among some of our
Speaker 8: real close partners in Asia, Japan, South Korea, Australia.
Speaker 5: Since January twentieth, since the big view the tariffs, the.
Speaker 8: Beautiful tariffs that have been you know, imposed and threatened
Speaker 8: over fifty times, by the way, over fifty different tariffs
Speaker 8: and adjustments to tariff policy coming out of Washington, there's
Speaker 8: I think I think our alliances are feeling I'm afraid
Speaker 8: a little bit. Our allies and our alliances are a
Speaker 8: bit fraid. So, you know, the other thing I just
Speaker 8: want to mention, China hasn't been sitting still at all.
Speaker 5: They are very aware. The US has been aware as.
Speaker 8: Well about this almost existential tech and supply chain rivalry
Speaker 8: between the two countries. They've spent the recent years really
Speaker 8: sort of redirecting the countries their investment focus. So we see,
Speaker 8: for example, you know, just take you know, a basic
Speaker 8: agricultural product. We've seen how they made tremendous strides in
Speaker 8: lessening their reliance on American soybeans and instead by the
Speaker 8: majority now from Brazil.
Speaker 5: We've seen that across the board.
Speaker 8: So there's been a real growth, there's been a real
Speaker 8: growth in in exports, Chinese exports and investment into what
Speaker 8: we call the Global South, and and a lessening of
Speaker 8: the reduction of the relationship between the US and to
Speaker 8: a lesser degree with the EU, although the EU is
Speaker 8: very much in play now. I think China sees that
Speaker 8: as a real potential ally so that they can scoop up.
Speaker 4: All right, So if I can can just follow just
Speaker 4: real quickly, tips, so then do you see China lying
Speaker 4: with a bunch of European nations and.
Speaker 5: Who ultimately is the US allies at Russia? Like, just
Speaker 5: carve it up for me if you would.
Speaker 8: Well, I certainly hope that's not what happens. I don't
Speaker 8: think we should be with Russia. And Russia, of course,
Speaker 8: is a pretty insignificant I mean it's it's not insignificant,
Speaker 8: but economically and in terms of trades trade, it's a
Speaker 8: relatively small player, unlike the EU obviously. So you know,
Speaker 8: I'm hopeful that we've seen some new pragmaticism, if you will.
Speaker 8: I hope coming out of Washington there's been a willingness
Speaker 8: to try to uh renegotiate some of these initial cair
Speaker 8: of threats that were imposed by Washington.
Speaker 5: So I would hope we'll see, you know, come first
Speaker 5: of all out.
Speaker 8: Of London again, although I'm not sure how long that
Speaker 8: can stick. But some progress in uh In, uh In
Speaker 8: in in cooling tensions and then and then moving on
Speaker 8: to some of our other partners. Obviously there's been the
Speaker 8: talks with India as well. So I guess I'm not
Speaker 8: giving you a great straight answer, Carol, but so much,
Speaker 8: so much is changing so fast.
Speaker 5: Yeah, I do think just finished with one thought on that.
Speaker 8: I do think that Trump has made it clear when
Speaker 8: we know this, of course, that he wants he wants.
Speaker 8: He's perceives himself as a deal maker. He wants to
Speaker 8: cut deals and he, if necessary, will reduce those tariffs
Speaker 8: and try to create a better relationship with countries, starting
Speaker 8: out right now in London with.
Speaker 3: China, tiff uh We've talked a lot about this with
Speaker 3: with other people. We haven't heard your take on it,
Speaker 3: but we know the president and he's been public about this.
Speaker 3: He said he doesn't care if iPhones are made in India.
Speaker 3: He wants them to be made here in the US.
Speaker 3: He doesn't want them in China. He doesn't want them
Speaker 3: to be made in India, as Apple has diversified its
Speaker 3: supply chain. Given what you know about iPhone production, do
Speaker 3: you believe it's realistic for us to think that Apple
Speaker 3: could actually build iPhones in the US, you.
Speaker 8: Know, if we want to spend you know, five thousand
Speaker 8: dollars per iPhone.
Speaker 5: No, No, I don't think so.
Speaker 8: I think that's I mean, if he were able to
Speaker 8: convince iPhone to do that, it's going to hurt all
Speaker 8: of us. It's certainly going to hurt us the consumers
Speaker 8: in much higher prices. There's no reason for Apple to
Speaker 8: do that. And even as Apple is falling out of
Speaker 8: the top five places in the China market, China is
Speaker 8: an important market for Apple. India is an important market
Speaker 8: going forward, So there's no reason for Apple to do that.
Speaker 8: Electric vehicles, That's an interesting.
Speaker 5: Tidbit that Trump threw up on the election trail.
Speaker 8: I think in Iowa where he talked about welcoming Chinese
Speaker 8: electric vehicle makers into the US.
Speaker 5: That makes sense. It would be a big I think
Speaker 5: that's what you think that could happen like that?
Speaker 3: You think we could see that, You think we could
Speaker 3: see that in the next couple of years.
Speaker 8: I definitely a possibility. Trump is indicated he would I
Speaker 8: mean that.
Speaker 3: That would destroy US automakers.
Speaker 8: No, if maybe maybe maybe take a leaf from the
Speaker 8: old China model and say we get fifty percent or
Speaker 8: fifty one percent of a joint venture and you have
Speaker 8: to work with our companies.
Speaker 7: Uh.
Speaker 8: This is you know, sounds a little crazy, but that's
Speaker 8: what China did and it worked very well for them.
Speaker 8: Maybe the US could try something like that, and Trump again,
Speaker 8: he is indicated that.
Speaker 5: He might be open to that.
Speaker 8: The idea that you would have, you know, big Chinese
Speaker 8: factories in the US and creating American jobs.
Speaker 5: Certainly that's what Europe is doing right now.
Speaker 4: All right, we got to leave it there.
Speaker 5: Hey, Tiff, thank you so much.
Speaker 4: Good to get some thoughts from you on this situation.
Speaker 4: Of course, we're going to continue to monitor those talks
Speaker 4: over in London between US and Chinese officials, which, as
Speaker 4: we've been talking, could go into the evening as well
Speaker 4: as into tomorrow, of course. Tiff Roberts Professor of Chinese
Speaker 4: politics at the University of Montana, former Bloomberg BusinessWeek China
Speaker 4: Buera chief and also the author of the myth of
Speaker 4: Chinese Capitalism.
Speaker 2: This is the Bloomberg Business Week Daily Podcast listen live
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Speaker 3: Watching shares Apple today following by one point two percent.
Speaker 3: The company's annual Worldwide Developer Conference kicking off in Cooper
Speaker 3: Tino at Ludlow was there earlier. He brought you some updates.
Speaker 3: You could kind of wait around all year for the
Speaker 3: WWDC to get some news, or you could just read
Speaker 3: what Mark German has been writing in his newsletter and
Speaker 3: what he's been reporting for Bloomberg subscribers and terminal clients,
Speaker 3: because he pretty much called everything. Mark German is joining
Speaker 3: us now. He's Managing editor for Global Consumer Technology. He
Speaker 3: joins us from our Bloomberg Los Angeles bureau. Mark. I'm
Speaker 3: kind of joking, but I'm also kind of not joking.
Speaker 3: We knew a lot of this was coming thanks to
Speaker 3: your reporting. Did you learn anything new at WWDC today?
Speaker 9: I think we got everything. Big Appell told a good story.
Speaker 9: I think they showed a cohesive message of unification across
Speaker 9: its platforms. They definitely didn't pre announce things. Everything you
Speaker 9: saw today is going to come out before the end
Speaker 9: of the year. That's why you didn't see much forward
Speaker 9: looking stuff like you've seen in the past two years.
Speaker 9: They got a lot of flack for that. The other
Speaker 9: thing to understand or the new iPad changes, the iPad
Speaker 9: multitasking changes are significant, all encompassing and has long been requested.
Speaker 9: They make the iPad function more like a Mac and
Speaker 9: it certainly is going to be a big improvement for
Speaker 9: people who are relying more and more on devices like
Speaker 9: the iPad as their main computing platform.
Speaker 4: Hey, one of the things that we've been talking about,
Speaker 4: we also caught up with that Ludlow earlier who was
Speaker 4: also there about AI models and opening that up to developers.
Speaker 4: Big deal, because we've talked with you several times about
Speaker 4: Apple really lagging behind when it comes to artificial intelligence.
Speaker 4: How do you see this move?
Speaker 9: This was a necessary move. They need to open those
Speaker 9: underlying models in order to get developers to use Apple
Speaker 9: intelligence and to make it a bigger competitor to the
Speaker 9: lms from other companies. So certainly this was a necessary move.
Speaker 9: This is another move that we had anticipated for days now.
Speaker 9: Certainly it's going to be seen which developers are going
Speaker 9: to want to do this. How good are these lms
Speaker 9: developers really want to, you know, hitch their wagon. Two
Speaker 9: Apple lms versus third party lms that can also run
Speaker 9: on the company's devices, certainly to be seen.
Speaker 3: Hey, Mark, I want to make sure we have a
Speaker 3: little bit of a delay, so I'm going to give
Speaker 3: our team a little bit of time to work on
Speaker 3: resetting this connection. Once again, we're speaking with Mark German.
Speaker 3: He's head of Global Consumer Technology, Managing editor for Global
Speaker 3: Consumer Technology. He's joining us from our Los Angeles bureau.
Speaker 3: Liquid Glass is the overhauled visual design for Apple's new
Speaker 3: software platform. That's how the experience is being described by Apple. Mark,
Speaker 3: what does that unveiling tell you or tell us about
Speaker 3: the way Apple's thinking about hardware moving forward?
Speaker 9: In terms of Apple hardward moving forward, I think this
Speaker 9: new glass interfaces a peak of what's to come. iOS
Speaker 9: twenty six obviously has the liquid Glass UI, and certainly
Speaker 9: there's going to be a lot of changes to the
Speaker 9: iPhone for the twentieth anniversary in twenty twenty seven, and
Speaker 9: an all glass design is going to be part of that.
Speaker 9: And so now you'll have software and hardware that are
Speaker 9: both glass heavy and all integrated. So I think this
Speaker 9: is a driving force behind that change.
Speaker 4: Anything you heard from the developers that were there, Mark
Speaker 4: that kind of were they more hopeful, were they more excited?
Speaker 4: Were they more are like, hmm, we wanted more. I'm
Speaker 4: just curious any kind of feedback that you've been hearing.
Speaker 9: I think developers like the story Apple told. I think
Speaker 9: developers like the integration of large language models into Excode
Speaker 9: for programming. I think developers are excited about the iPad
Speaker 9: multitasking changes as I am. I think developers are excited
Speaker 9: about the new three D web browser review and the
Speaker 9: Vision pro and the widgets and the like. So I
Speaker 9: think there's a lot to like if you are a
Speaker 9: deep user of the Apple platforms. But remember we're talking
Speaker 9: about legacy platforms here. We're talking about operating system franchises
Speaker 9: that have existed for decades. But we're not talking about
Speaker 9: are new interface paradigms, new operating systems, artificial intelligence because
Speaker 9: quite frankly, Apple didn't have any of that to show today.
Speaker 3: Yes, Okay, that's what I wanted to hit on, Mark,
Speaker 3: is what we still haven't seen from Apple when it
Speaker 3: comes to AI. You've long documented the struggles that the
Speaker 3: company has had. Everybody should go read your reporting on this.
Speaker 3: Did we get anything from Apple on AI today?
Speaker 9: Apple is perfecting its past. It's not perfecting or setting
Speaker 9: the ground work for its future. And that is a
Speaker 9: scary thing.
Speaker 3: Maybe that's why we saw shares do what they did today, Carol,
Speaker 3: I don't know.
Speaker 5: I mean, folksres but.
Speaker 9: Well, they didn't send anything to lower They didn't say
Speaker 9: anything to drive shares down or up. They just didn't
Speaker 9: show anything remarkably innovative and exciting. You know, investors are
Speaker 9: looking for all the AI buzzwords. They're looking for AI innovation.
Speaker 9: You've seen it from Google, Open Ai, anthropic, Microsoft Meta,
Speaker 9: You've not seen it from Apple.
Speaker 4: Yeah, it was about a three percent swinging today up
Speaker 4: as much as a one percent, down almost two percent,
Speaker 4: and finishing the day down about one point two percent.
Speaker 4: Here all right, Mark, glad we could check in with you. Yeah,
Speaker 4: Mark laid it out for us really ahead of the event,
Speaker 4: but just go to get him to weigh in kind
Speaker 4: of afterwards. Mark Germitt, he's Bloomberg News Managing editor for
Speaker 4: Global Consumer Tech. Out there in our la era.
Speaker 3: Just reading the highlights from our live blog, the iPhone
Speaker 3: getting revamped, iPhone and camera apps that focus on simplicity,
Speaker 3: The II futures, Oh Carol underwhelming.
Speaker 1: You're listening to the Bloomberg Business Week Daily podcast. Catch
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Speaker 4: We also continue to monitor different things that come out
Speaker 4: of the White House, and they certainly have made some
Speaker 4: comments when it comes to healthcare pharmaceuticals in the United States,
Speaker 4: which is one of the reasons we want to really
Speaker 4: get to our next guest, good X good RX. I
Speaker 4: should say they recently reported earnings. Just a little bit
Speaker 4: of background. Shares did jump after the price the drug
Speaker 4: pricing comparison software company.
Speaker 5: They did boost their.
Speaker 4: Guidance for just a Ibada for the full year, falling
Speaker 4: better than expected results for the first quarter. We did
Speaker 4: see analysts saying, some of them that the EBITDA beat
Speaker 4: and raised as a good start to twenty twenty five
Speaker 4: for the company. Let's get into the business and how
Speaker 4: White House policies are impacting good OURX Wendy Barnes is
Speaker 4: president CEO of the company. She joins us from Charlotte,
Speaker 4: North Carolina company. By the way, Markey kappav at at
Speaker 4: one point four billion shares two a year to date,
Speaker 4: or down about twelve percent. They're down more than fifty
Speaker 4: percent though in the past year. Wendy, good to have
Speaker 4: you here with us. There's a lot going on in
Speaker 4: your space, but I want to talk first and start
Speaker 4: with a new initiative that you guys have actually introduced today.
Speaker 4: It's called the Community Links program.
Speaker 6: Why did you do this?
Speaker 4: What was the impetus for creating it?
Speaker 10: Hi, Carol, thanks for having me appreciate the question. So
Speaker 10: you know, I would say the company's been on a
Speaker 10: multi year journey to best partner with retail pharmacies, with
Speaker 10: community pharmacies really being at the top of that list,
Speaker 10: and this is really the culmination of that work. And
Speaker 10: so what you referenced, the good RX Community Link is
Speaker 10: a portal by which community pharmacies, sometimes referred to as
Speaker 10: independent pharmacies. So think of those as really your non
Speaker 10: chain pharmacies. They can be as small as a single
Speaker 10: pharmacy or some community independent pharmacy owners have fifty seventy
Speaker 10: five or one hundred locations, but largely their run independent
Speaker 10: of a broader management philosophy, and this is our effort
Speaker 10: to contract directly with these pharmacies in a cost plus
Speaker 10: reimbursement mechanism manner. Look, it's not any new news to
Speaker 10: you or probably to your listeners that pharmacies continue to
Speaker 10: be under reimbursement pressure.
Speaker 6: And we believe that they are key partners in our broader.
Speaker 10: Mission to make medications more affordable and accessible for every American.
Speaker 10: And so this effort is really one in which we're
Speaker 10: trying to bolster reimbursement for those independent pharmacies such that
Speaker 10: they can work with us directly. And in addition to that,
Speaker 10: we're giving them access to ninety plus brand deals that
Speaker 10: we have secured with pharmaceutical manufacturers over the last twelve
Speaker 10: to twenty four months, and those continue to grow. The
Speaker 10: reimbursement on those same drugs is favorable to those pharmacies.
Speaker 10: It's really no secret that pharmacies have long struggled to
Speaker 10: have a favorable margin profile on many brands that they fill,
Speaker 10: and this two gives access to those programs for those
Speaker 10: independent pharmacies.
Speaker 3: Well when they anecdotally speaking, as the large pharmacies and
Speaker 3: the chains have come under pressure, whether it's over store
Speaker 3: closures or different things happening just in the space we've
Speaker 3: all reported on what's happened in cities and the way
Speaker 3: that some of these pharmacies have closed down in certain cities.
Speaker 3: Are you seeing more people go to these independent pharmacies?
Speaker 3: I mean, anecdotally speaking, I can say that certainly the
Speaker 3: way my family has changed its behavior just thanks to
Speaker 3: availability and what pharmacies tend to actually have what we're
Speaker 3: looking for. But how have you seen that affect the
Speaker 3: overall landscape.
Speaker 10: I don't know that we've seen a meaningful shift to
Speaker 10: independent from chain. I think there's still a pretty good
Speaker 10: of grosser versus independent versus chain, and candidly, you know,
Speaker 10: mail order slash digital pharmacy. I think at the end
Speaker 10: of the day, what we see is in the seventy
Speaker 10: plus odd thousand pharmacy options that we have as consumers
Speaker 10: in the US that as a consumer, you just really
Speaker 10: want to get your drugs on your own terms, whether
Speaker 10: it's mail to your home with your preferred community pharmacist,
Speaker 10: or at a chain or grosser. And we pride ourselves
Speaker 10: on working really with all pharmacy such that you can
Speaker 10: get your drugs when and where you know you desire
Speaker 10: to do so.
Speaker 4: Do you see it all that the independent channel is shrinking.
Speaker 4: We've certainly seen it with some of the big pharmacy chains, right,
Speaker 4: We've talked about it, You've seen the headlines. But I'm
Speaker 4: just curious when it comes to independence, Wendy, do you
Speaker 4: see any shrinkage in terms of the number of outlets
Speaker 4: that are out There are no, you.
Speaker 10: Know, I will say in the numbers that we've looked
Speaker 10: at over the last couple of years, there are still
Speaker 10: a good number opening in any given month. I will
Speaker 10: say in our book, with the pharmacies that we work with,
Speaker 10: I haven't seen significant trinkage. But I think there are
Speaker 10: certainly other data sources that would suggest that there are
Speaker 10: a number of independent and or community pharmacies that are
Speaker 10: closing in or selling their business to other owners.
Speaker 6: But in our particular book, it's held pretty study.
Speaker 3: How have independence traditionally reacted to the program at GoodRx,
Speaker 3: because it's our understand they've been a little skeptical about it.
Speaker 3: How do you make sure that they're embracing it rather
Speaker 3: than treating it with skepticism.
Speaker 10: Sure, well, I think you know, look, it's early days
Speaker 10: to be clear, and we're going to be on a
Speaker 10: journey here. Communication is going to be the biggest part
Speaker 10: of this program, in addition to delivering what we said
Speaker 10: we intend to deliver, which is fair economics over the
Speaker 10: course of these contractual agreements as pharmacies agree to contract
Speaker 10: with this directly, and that again can all be conveyed
Speaker 10: through that portal that we stood up this morning. So
Speaker 10: for me, it's really going to be about how we
Speaker 10: deliver on the reimbursement mechanism through this partnership, and I think,
Speaker 10: you know, the ongoing communication will support how the pharmacy
Speaker 10: community embraces this over time. You know, we've certainly been
Speaker 10: setting out communications early on. We've been in dialogue with
Speaker 10: many independent pharmacy owners to speak through the program. But
Speaker 10: I think at the end of the day, it's really
Speaker 10: going to be the outcome of the program and the
Speaker 10: economics that we deliver that we'll prove it out over time.
Speaker 4: Well, that's where I want to kind of just dig
Speaker 4: a little bit deeper, Wendy. You know, for this to
Speaker 4: work for you guys, this new role out this community
Speaker 4: links program. The economics have to work right for the
Speaker 4: independent pharmacy. So I'm just curious what you can tell
Speaker 4: us how the economics are different for the pharmacy that
Speaker 4: directly contacts with GoodRx versus using maybe one of the
Speaker 4: pharmacy benefit managers the PBMs and their networks to dispense
Speaker 4: a prescription. What can you tell us more specifically about
Speaker 4: the economic advantage for independent pharmacies to use your route
Speaker 4: versus going to the PBMs.
Speaker 6: Sure happy to do so. So it's really the agreement
Speaker 6: directly with us is.
Speaker 10: Rooted on a NADAK plus reimbursement. So NADAK is one
Speaker 10: of multiple benchmarks that is effectively a cost mechanism. It
Speaker 10: stands for National average drug acquisition cost, and we are
Speaker 10: negotiating with independent pharmacies to do this with that predicated
Speaker 10: as the baseline, plus an amount that keeps them profitable
Speaker 10: on filling these claims.
Speaker 6: So that's really the precursor, if.
Speaker 10: You will, and or the meat of how this agreement
Speaker 10: will work, which again provides favorable economics to these pharmacies.
Speaker 10: The distinction, Carol, as you called out to perhaps doing
Speaker 10: it through a larger payer when you think about how
Speaker 10: it works through let's just say a larger PDM. There
Speaker 10: are multiple patient pay slash cash networks through which an
Speaker 10: independent pharmacy can participate. And when they're in that type
Speaker 10: of an algorithm, for lack of better description, typically.
Speaker 6: Going to search for.
Speaker 10: Not necessarily favorable margin for the pharmacy, and so there
Speaker 10: would be times in their previous arrangement whereby they may
Speaker 10: not always have favorable economics to fill those prescriptions. And
Speaker 10: by contracting directly, we are putting terms and conditions in
Speaker 10: the agreement that allow them to have certainty around not
Speaker 10: only the reimbursement, but also access to drugs that they're
Speaker 10: not fulfilling today in patient pay programs. Again, that would
Speaker 10: be the list of brands that I mentioned that I
Speaker 10: believe are ninety plus at this point. But they're going
Speaker 10: to have certainty around how they're reimbursed in this direct
Speaker 10: engagement through us that they're not getting through their arrangements today.
Speaker 3: Hey, Wendy, we're watching everything happening outside of Washington and
Speaker 3: coming out of Washington really closely. We're expected to hear
Speaker 3: from the President in just a few minutes. There's an
Speaker 3: event happening in the Oval Office that's about a kid
Speaker 3: account event scheduled. It was scheduled for two pm. We
Speaker 3: understand the presspool has gathered. If the President starts to
Speaker 3: take questions, we will certainly go there. In the meantime,
Speaker 3: thinking about healthcare in the United States, it is inextricably
Speaker 3: bound to politics, and no question, if what the President
Speaker 3: calls the Big Beautiful Bill were to pass, we could see,
Speaker 3: at least according to the CBO estimates of a dramatic
Speaker 3: increase in the number of uninsured almost eight million. What
Speaker 3: does that mean for your business and how much of
Speaker 3: your business comes from medicaid and uninsured people today?
Speaker 10: So interestingly, of the users who access our pricing on
Speaker 10: any given day, roughly ninety percent actually have insurance today.
Speaker 10: So I think there's a bit of a misperception that
Speaker 10: the overwhelming number of consumers who use us in fact
Speaker 10: don't have insurance, which is not the case. Having said that,
Speaker 10: who does come and look for pricing through our different
Speaker 10: platforms is your consumer who's motivated to check for.
Speaker 6: Competitive pricing, whether they have insurance or not.
Speaker 10: And we continue to be the number one platform to
Speaker 10: look for the best price deal that you can find
Speaker 10: on any particular medication. So as it pertains to what
Speaker 10: may or may not pass in the bill, whether it's
Speaker 10: inclusive of Medicaid cuts which continue to be advanced, and
Speaker 10: or other cuts that would put pressure on your typical
Speaker 10: household income. What we do know is that those should
Speaker 10: produce tailwinds for us as a business, for consumers, whether
Speaker 10: they're insured or not, but specifically as it relates to
Speaker 10: Medicaid cuts and the number of individuals that may fall
Speaker 10: out of coverage, we do believe that that presents an
Speaker 10: opportunity for us to continue to support any American that
Speaker 10: really is struggling to purchase their medications.
Speaker 4: Wendy, just got thirty seconds. You know, the word that
Speaker 4: we all use to describe the environment right now is uncertain.
Speaker 4: There's a lot coming out, certainly leaders and CEOs. Just
Speaker 4: in your industry too. You've got write aid, do a bankruptcy,
Speaker 4: you know, I think about the macro within your business
Speaker 4: and just macro overall. Just got about twenty five seconds.
Speaker 4: How do you look at the outlook?
Speaker 5: Just quickly?
Speaker 6: You know the outlook? You're right, turbulent is a fair description.
Speaker 10: Having said that, businesses that stay the course and have
Speaker 10: a mission that makes sense for the consumers in which
Speaker 10: we serve will continue to thrive. And our goal, of course,
Speaker 10: is getting medication affordably and effectively into the hands of
Speaker 10: every American.
Speaker 6: You need it, and we believe will be in a
Speaker 6: position to take advantage.
Speaker 4: Wendy Barnes, President CEO of GoodRx.
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