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Speaker 1: From the heart of where innovation, money and power collide

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Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with

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Speaker 1: Caroline Hyde and Ed Ludlow.

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Speaker 2: Live from New York. I'm Caroline Hayden. This is Bloomberg Technology.

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Speaker 3: Tariffs.

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Speaker 2: They have come for Big Tech, the sector among the

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Speaker 2: worst hit as higher duties target their Asian supply chain

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Speaker 2: and investors brace for retaliation. Bloomberg spoke with Treasury Secretary

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Speaker 2: Scott Lesson yesterday, who says the tech sell off is

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Speaker 2: actually not a MAGA problem.

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Speaker 4: In my old business, I was very concerned about market movements,

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Speaker 4: and I'm trying to be a Secretary of Treasury, not

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Speaker 4: a market commentator. What I would point out is that

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Speaker 4: especially the nasdeck peaked on deep set day. That so

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Speaker 4: that's a mag seven problem, not a MAGA problem.

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Speaker 2: But today investors do think the tariffs a mag seven's problem.

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Speaker 3: Let's check in on those markets.

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Speaker 2: We fall hard on the NAZAT one hundred Tech underperformance.

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Speaker 2: The other benchmarks, We're off by almost five percent. This

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Speaker 2: is the worst day for the benchmark since twenty twenty two.

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Speaker 2: We move on to those Magnificent seven players, which we're

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Speaker 2: all in the red even the software services sector being

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Speaker 2: hit by anticipation of what the EU levies back in

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Speaker 2: terms of digital services taxes. Alphabet lower, Meta off by

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Speaker 2: eight percent, Amazon off by eight point eight percent.

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Speaker 3: We move on and have a look at what the

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Speaker 3: hardware impact is in Vidia.

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Speaker 2: Even though semiconductors are exempt from current tariffs, we anticipate

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Speaker 2: further to come and retaliation.

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Speaker 3: We're off by almost seven percent.

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Speaker 2: Tesla wipes out seven percent, and Apple falls the hardest.

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Speaker 2: We're off by almost nine percent. We are having the

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Speaker 2: biggest erasion.

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Speaker 3: Of mark kick cap for Apple.

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Speaker 2: Ever, it's on pace for the biggest single day wipeout

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Speaker 2: in the company's history, more than three hundred billion dollars

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Speaker 2: in one go. Apple supply chain w was we dig

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Speaker 2: into them. Blomberg's Dana Woolman is with us, Dana, why

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Speaker 2: is Apple in the eye of the storm here? We

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Speaker 2: thought they were diversifying out of China, but that has

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Speaker 2: backfired at this moment.

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Speaker 5: Yes, diversity, diversifying out of China does not mean so

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Speaker 5: much in this moment, especially given that the Trump administration

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Speaker 5: has just taken aim at, if not every country in

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Speaker 5: the world, seemingly every country in the world, and certainly

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Speaker 5: levying very high tariffs on some of the very countries

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Speaker 5: where Apple thought it was making progress by diverting some

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Speaker 5: of its manufacturing countries like Vietnam, Thailand, others, even Ireland,

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Speaker 5: not a company necessarily think of as core to Apple

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Speaker 5: supply chain. So Apple did spend years trying to reduce

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Speaker 5: its dependence on China, only to have bits as the outcome.

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Speaker 2: I mean a certain analyst reaction Rosenblat Securities, for example,

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Speaker 2: saying this just blows up Apple's business model that you

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Speaker 2: question how Trump could be targeting such an iconic company.

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Speaker 2: They say, it's hard for us to imagine Trump blowing

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Speaker 2: up an American icon. But at this moment it looks

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Speaker 2: pretty tough. Many out there think eventually they'll get some

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Speaker 2: sort of exemption. But for the here and now, it

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Speaker 2: seems as though Tim Cook tried to be at the inauguration.

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Speaker 2: He's promised investment in the United States, but it's not enough.

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Speaker 5: Absolutely, and I would not go so far as to

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Speaker 5: say this these measures were targeted at Apple, but certainly,

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Speaker 5: as we can see Apple as one of the hardest hits,

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Speaker 5: and as you said, Tim Cook's personal efforts to curry

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Speaker 5: favor the Trump administration clearly did not yield the outcomes

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Speaker 5: that her investors would have wanted or expected.

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Speaker 2: Dane Woman, we thank you for the update on all

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Speaker 2: things Apple, and then we turn our attentions to the

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Speaker 2: services side, the software side too. France, Germany, they are

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Speaker 2: pushing for a stronger response as President Trump's taris pushing

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Speaker 2: for the EU to target US tech companies in particular,

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Speaker 2: and Alan Katz can tell us exactly how this seems

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Speaker 2: to be coming down to the digital services tax in particular.

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Speaker 2: They really want to target big tech as the way

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Speaker 2: forward here.

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Speaker 6: Well, they do really want to target a big tech

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Speaker 6: but it's actually broader than that. So Emanuel maccin is

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Speaker 6: actually meeting with a whole variety of industries that are

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Speaker 6: going to be affected by the tariffside meeting is happening

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Speaker 6: right now, and speaking just before the meeting, he actually

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Speaker 6: asked EU companies to pause all investment in the United

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Speaker 6: States for the moment. So this is not just this

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Speaker 6: is not tech specific, this is all companies in all

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Speaker 6: sectors saying, you know, if the US is hitting us

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Speaker 6: right now, how can you be investing in the United States?

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Speaker 6: And you need cohesion among these sectors that are being

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Speaker 6: affected by the United States. But to come back to

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Speaker 6: your point about tech, the EU and more specifically France

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Speaker 6: and Germany, and France, I suppose more than anyone else,

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Speaker 6: really thinks that going after digital services is the way

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Speaker 6: to hit the United States. Now this has come up before,

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Speaker 6: It's been a fight before between Francs the United States.

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Speaker 6: France does have a digital services tax on companies like

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Speaker 6: Google and Amazon, which levies which makes about seven hundred

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Speaker 6: million dollars a year for France's coffers, and it wants

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Speaker 6: to use that or it thinks that is the way

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Speaker 6: to respond the best way to respond to the US

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Speaker 6: decision to Donald President Donald Trump's decision that said, it's

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Speaker 6: going to be difficult to get everyone to agree. Those

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Speaker 6: digital taxes that exist in Europe are pretty different country

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Speaker 6: by countries, say France versus Polands, for example, are quite different,

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Speaker 6: and some countries have really been very, very reluctant within

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Speaker 6: Europe to impose that kind of tax. So if France

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Speaker 6: getting sort of everybody on board, all twenty seven members

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Speaker 6: of the EU really is a tall task.

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Speaker 2: And I suppose what's interesting is Germany seems to be

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Speaker 2: aligned on wanting to go hard in response. In Germany

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Speaker 2: was one of the company's countries that hadn't want to

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Speaker 2: align itself on this sort of a tax. Will we

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Speaker 2: see big tech pull and retrench from Europe? Even willing

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Speaker 2: to mentally get round that, are we going to start

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Speaker 2: to see bifurcation here?

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Speaker 6: That's that's not a million dollar question, that's a multi

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Speaker 6: trillion dollar question. It would be impossible to say at

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Speaker 6: the moment. I mean, your point is a good one, right.

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Speaker 6: Germany really was pretty opposed to the idea of digital

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Speaker 6: taxation before now it seems to have come around to it.

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Speaker 6: Habek was quite strong, the Economy Minister was quite strong

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Speaker 6: in his comments earlier today. So it does seem that

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Speaker 6: Germany at least is on board with the idea. That

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Speaker 6: doesn't mean again, that all other European countries will be

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Speaker 6: on board. And Europe is trying to do this with

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Speaker 6: more or less one voice, if not exactly one voice,

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Speaker 6: because the things it will be much stronger if it

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Speaker 6: responds that way. So even if France and Germany, which

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Speaker 6: traditionally are the motor for the European Union, even if

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Speaker 6: they agree on something, it doesn't it doesn't necessarily mean

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Speaker 6: that's going to happen on the question of bifurcation. That's

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Speaker 6: of course the question immediately came to me too. France

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Speaker 6: has four years tried to create alternatives to you know,

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Speaker 6: search engines and AI companies, and it's generally hasn't worked

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Speaker 6: out because France is too small a market, and it

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Speaker 6: hasn't There hasn't really been one single European market functionally

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Speaker 6: for these digital services. Will that come as a result

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Speaker 6: of these tariffs? That's that's It's a good question and

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Speaker 6: one that many people are asking themselves. Will We really

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Speaker 6: don't have an answer to that yet.

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Speaker 2: And Kat's great to catch up with you. Thank you

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Speaker 2: for giving us the tech nuance. I mean, while joining

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Speaker 2: us now for more on the global tariff impact, Mark

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Speaker 2: Mahaney ever core is I seenior managing director joining us now,

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Speaker 2: and I start with retaliation. Many of the Internet names

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Speaker 2: that you cover could well be in the eye of

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Speaker 2: the storm if Europe does increase those digital services at

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Speaker 2: taxes that they already hate.

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Speaker 7: I think that's right, Caroline. I don't have any particular

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Speaker 7: insight into that, but that makes logical sense to me.

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Speaker 7: What I senses the way these stocks are trading today.

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Speaker 7: The degree of sell off is kind of determined by

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Speaker 7: retaliatory risk and recession risk. So there are companies that

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Speaker 7: I look at that are just off modestly because they're

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Speaker 7: perceived to have relative they're received to be relatively recessionary resilient.

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Speaker 7: That's names like a Netflix or Spotify, which are inexpensive

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Speaker 7: consumer subscription businesses. But at the other end are the

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Speaker 7: three megacap names that I look at, Amazon, Google, and Meta,

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Speaker 7: which are trading off ford to nine percent. Amazon at

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Speaker 7: the top of that list because of pure terrif exposure.

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Speaker 7: There's most of those products that they sell are produced, manufactured,

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Speaker 7: and then exported from Asia, so there's going to be

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Speaker 7: costs that Amazon's going to have to decide whether to

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Speaker 7: eat or pass al on to consumers and therefore depressed demand.

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Speaker 7: Meta also has this exposure to she and Timu, some

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Speaker 7: of those kind of exporters retailers that got hit by

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Speaker 7: the removal of the Deminimus exemption. So there's a lot

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Speaker 7: of different issues in here, but retaliation and recessionary risks

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Speaker 7: are sort of bifurcating some of the stock movements today.

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Speaker 3: How do you foreseen this mark?

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Speaker 2: Many have been surprised by the aggression shown in the

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Speaker 2: reciprocal tariffs. But do we think this is knee jerk?

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Speaker 2: Is this in any way a buying opportunity?

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Speaker 7: Okay, then yes, I think it's a buying opportunity if

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Speaker 7: you can, if you tell me that I can buy

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Speaker 7: Meta at less than twenty times earnings and Google at

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Speaker 7: fifteen times earnings and Amazon at twenty three times earnings.

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Speaker 7: Even I know, I understand that there's going to be

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Speaker 7: earnings risk from the imposition of tariffs, from a slow

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Speaker 7: down economy, from a recession. You know, you're talking about

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Speaker 7: mid single digit percent earnings growth you step in and

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Speaker 7: take on a full position today? Absolutely not, But like

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Speaker 7: at these levels, yeah, this is you know, I hunt

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Speaker 7: for what I call d HQ's, dislocated high quality companies. Look,

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Speaker 7: we had a two and a half year bullmarket, uper

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Speaker 7: bowl market and tech stocks, particularly in some of these

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Speaker 7: internet stocks that went through the end of last year.

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Speaker 7: Here's your negative catalyst, and you know, you now got it.

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Speaker 7: You didn't have any real dhq's at the beginning of

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Speaker 7: the year, but now you do, And so you want

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Speaker 7: to step in on the highest quality names when they're

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Speaker 7: trading at trough multiples. So yeah, I think you want

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Speaker 7: to be picking away at these. I think what you

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Speaker 7: have to also be very cognizant of is there's going

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Speaker 7: to this terrify is she is going to play out

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Speaker 7: for a while with retaliations, so you can get all

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Speaker 7: that volatility. Then you've got increasing risk of recession. So

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Speaker 7: you're going to have to be careful about those estimates

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Speaker 7: and they're going to come down you know, probably mid

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Speaker 7: singles dit you percent again in a modest recessionary environment.

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Speaker 7: But with these kinds of multiples, Yeah, you want to

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Speaker 7: start picking away at them.

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Speaker 3: Could you in the next earning season.

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Speaker 2: As soon as that see a retrenchment in purchasing of

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Speaker 2: it right now?

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Speaker 7: See we see that in the earning season. I think

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Speaker 7: most of these companies are going to be we're just

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Speaker 7: finishing up our previews now, or most of these companies

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Speaker 7: are going to be reporting reasonably solid March quarter results.

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Speaker 7: My guess is that what's going to be consistent across

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Speaker 7: almost all these tech earnings is cautious commentary about end

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Speaker 7: market demand for the June quarter, and therefore you're going

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Speaker 7: to see cautious guidance that's in life with her below

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Speaker 7: the street for most of these estimates. The only silver

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Speaker 7: lining here is currency, which was a massive which looked

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Speaker 7: to be a massive headwind for the year, doesn't look

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Speaker 7: like it's going to be as much of a headwind

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Speaker 7: as thoughts, So there's a little bit of help there.

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Speaker 7: But at the whole, I think the March quarter results,

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Speaker 7: I think we're going to be fine. I think there's

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Speaker 7: just the guidance is just going to be cautious about

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Speaker 7: the June quarter. So I don't think there's any particular

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Speaker 7: reason for the stocks to trade up on the upcoming prints.

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Speaker 2: You can totally understand why enterprises would just slow down

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Speaker 2: their commitment to spend on some of your names and

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Speaker 2: some of the technology that they sell.

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Speaker 3: What about the AI trade, though.

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Speaker 2: Mark it does affect some of your names like Meta,

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Speaker 2: like Amazon.

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Speaker 3: Does the wind come out of the sales there too?

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Speaker 7: I think it has been coming out. I saw that

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Speaker 7: Treasury Secondary's comments about deep seek being one of the

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Speaker 7: key factors behind the mag seven trade on wine. I

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Speaker 7: think there's some truth to that now. I think there's

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Speaker 7: also policy that's just been just as much, probably more

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Speaker 7: of a factor in the in the in the in

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Speaker 7: the market sell off and then the mag seven unwind

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Speaker 7: the AI trade. I don't think these companies are going

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Speaker 7: to be slowing down their AI capex anytime soon, and

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Speaker 7: I think we're going to see more and more evidence

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Speaker 7: that they're getting a return on that. On that, you know,

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Speaker 7: we're going to get a lot of these good productivity

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Speaker 7: data points. Google is telling you twenty five percent of

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Speaker 7: their code now is being generated by AI, which means

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Speaker 7: that their programmer headcount is probably going to be flat

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Speaker 7: for a couple of years. Amazon telling you that they

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Speaker 7: have twenty five percent lower cost to serve in their

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Speaker 7: most advanced automated distribution centers. That's a massive efficiency gain

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Speaker 7: for a name like Amazon. So I think that's going

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Speaker 7: to come through in terms of margins. The question is

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Speaker 7: what's happening to demand and is that going to depress

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Speaker 7: the margin expansion we would normally expect from the AI trade.

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Speaker 7: That's the big unknown to me. But I don't think

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Speaker 7: these companies are going to slow down their AI expenses.

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Speaker 2: Mark as someone who is every day having to respond

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Speaker 2: to the headlines that we're.

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Speaker 3: Going to get, many feel that you will come there'll

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Speaker 3: be carve outs.

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Speaker 2: Potentially Nearly every analyst anticipating that for Apple, for example,

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Speaker 2: with your names, how are you going to keep abreast

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Speaker 2: of how this changes, how we see other countries respond

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Speaker 2: and try and carve out certain names, or at least

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Speaker 2: will try and curry favor with the administration.

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Speaker 7: Well, I think I'm going to focus. I mean the

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Speaker 7: sector I look at Internet sector has very little direct

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Speaker 7: terrific exposure except for you know, the retailers like particularly Amazon.

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Speaker 7: It's really kind of the indirect exposure. What impact the

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Speaker 7: terriffs have on consumer confidence and on consumer spend and

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Speaker 7: so then what you really want to do is look

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Speaker 7: at the stocks that I look at, and I kind

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Speaker 7: of put it together a recessionary spectrum, like who's the

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Speaker 7: most recessionary resistant, who's the most recessionary exposed? And you know,

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Speaker 7: I think names like Netflix and Spotify are the least

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Speaker 7: recession they are the most recessionary resistant. That's why they're

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Speaker 7: trading off better today. They'll hold up better. The stocks

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Speaker 7: have here todayta actually outperform the market materially. You're to

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Speaker 7: date because of this, PODi.

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Speaker 2: Spify for example, Mark just to jump in a Shopif

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Speaker 2: I would be on the other end of that, yes.

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Speaker 7: It would be and so with the travel names too,

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Speaker 7: your Bookings, your expedias, your Airbnb, the kind of discrete

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Speaker 7: consumer discretionary spends also advertising names with a lot of

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Speaker 7: exposure to brand advertising. Brand advertising always gets cut before

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Speaker 7: performance marketing. So that's why I particularly find Meta very

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Speaker 7: intriguing here. You brought it down to a very attractive

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Speaker 7: price point. It's the largest performance marketing platform out there

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Speaker 7: that isn't called Google, and I think it actually will

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Speaker 7: hold up fundamentally better than most assets. So that's why

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Speaker 7: I'd be chipping away at the stock here.

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Speaker 3: Mart mahoney with news you can use. We thank you

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Speaker 3: so much.

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Speaker 2: Ever caught ISI coming up, will take a look at

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Speaker 2: how the twenty five percent auto tariff is going to

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Speaker 2: be impacting the electric vehicle market.

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Speaker 3: This is blue meg technology.

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Speaker 2: Now let's take a look at how tariffs from the

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Speaker 2: auto industry. That's Trump's twenty five percent tariff on the

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Speaker 2: US imports is already taking effect, expected to increase costs

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Speaker 2: and disrupt industry supply chains from most Credudell joins US.

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Speaker 2: Now these aren't promises, these are delivered. And how much

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Speaker 2: we already seeing auto sector and EV's respond to it.

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Speaker 8: Yeah, I think we will see significant disruptions to supply chains.

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Speaker 8: I think that is part of why you're seeing some

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Speaker 8: of these stocks trade down. I think you're also likely

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Speaker 8: going to see some of these companies caught up in retaliation,

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Speaker 8: you know, potentially in the in the days and weeks

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Speaker 8: to come. We haven't necessarily seen that, you know, from

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Speaker 8: countries that are newly you know, newly facing higher tariffs

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Speaker 8: from the Trump administration. But we did get at least

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Speaker 8: a whiff of that already with you know, Canada, for instance,

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Speaker 8: kind of taking aim at Elon Musk's companies as a

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Speaker 8: result of the tariffs that do you is put on

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Speaker 8: Canada and Mexico in the last few weeks.

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Speaker 2: So yeah, go there for us because Tesla is down hard,

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Speaker 2: even though many would anticipate, look, it makes more of

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Speaker 2: its cars here in the United States should be less exposed.

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Speaker 2: But you think it's a retaliation trade here, I.

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Speaker 8: Think retaliation is likely something that the market would be,

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Speaker 8: you know, concerned about. I do wonder too looking at

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Speaker 8: Tesla's shares. You know, they really were down quite a

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Speaker 8: bit yesterday. They had this you know, really furious rally

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Speaker 8: and response to this report by Politico that maybe Musk

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Speaker 8: would be looking to exit his roles in you know,

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Speaker 8: advising the Trump administration. And I think you know, not

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Speaker 8: only did the White House Press Secretary and Musk himself,

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Speaker 8: you know, sort of knock that down, but you heard

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Speaker 8: jd Vance today, you know, come out and say that,

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Speaker 8: you know, he will continue to kind of have our

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Speaker 8: ear even after he you know, officially leaves. And so

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Speaker 8: this notion that that that TESLA is you know, going

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Speaker 8: to make a clean break from this situation where it's

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Speaker 8: CEO so closely tied to the Trump administration just seems

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Speaker 8: pretty misguided.

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Speaker 7: I think the one other thing I would.

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Speaker 8: Point out is, you know, Tesla likes to and you

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Speaker 8: know rightfully so likes to to tout you know how

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Speaker 8: you know US you know, made in America, it's its

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Speaker 8: cars are. But in order to rely on this parts

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Speaker 8: content to you know, share that data with folks, it

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Speaker 8: relies on US government data that loops in US and

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Speaker 8: Canadian parts content. So you know, that just speaks to

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Speaker 8: this notion that I think, you know, for decades we've

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Speaker 8: sort of thought of, you know, what happens in Canada

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Speaker 8: and what happens in the US. It's sort of one

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Speaker 8: and the same in this you know automotive supply chain,

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Speaker 8: and you know for us to move to this you

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Speaker 8: know new paradigm where that's no longer the case is

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Speaker 8: really disruptive to everybody, even companies that make all their

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Speaker 8: vehicles in the US.

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Speaker 2: Really thoughtfully put crejd ow thank you. Let's get more

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Speaker 2: for you on auto tariffs how they could impact electric

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Speaker 2: vehicles in particular.

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Speaker 3: John Desusar is.

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Speaker 2: With US co founder and president of Ample, which is

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Speaker 2: working to accelerate the transition to electric mobility. And what's

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Speaker 2: so interesting about you is you basically offer to swap

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Speaker 2: out the actual batteries to make charging that much swifter

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Speaker 2: and cleaner. But John, you've made real inroads into building

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Speaker 2: in America. How is this going to back far for

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Speaker 2: you with tariffs?

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Speaker 9: So as you look at the tariffs, there are actually

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Speaker 9: three things that you need to look at. One is

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Speaker 9: where do you go through and produce it whereo factories.

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Speaker 9: The second thing is where you get your materials from,

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Speaker 9: and the third is what you do to finnshurds.

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Speaker 7: So I think we were ahead of the curve. We

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Speaker 7: do all of our production in the US in California.

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Speaker 7: We have our factories there.

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Speaker 9: The two other parts though, one is where do you

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Speaker 9: get the goods When you don't have the capacity or

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Speaker 9: you don't have the necessary skill set domestically to go

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Speaker 9: through and form itt you buy those things from abroad.

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Speaker 9: So the tariff for us, that means everything we bring

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Speaker 9: into this country, we need to go pray tariffs on

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Speaker 9: it because we're doing all our production in the US.

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Speaker 9: The last part of it is once you produce it,

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Speaker 9: we export, and export helps our trade surplus. But I

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Speaker 9: think part of the tariffs has this new provision and

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Speaker 9: where it takes back duty drawbacks. Duty drawbacks says you

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Speaker 9: get your tariffs back, so you paid the trattfs when

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Speaker 9: you bring it in, but when you explot.

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Speaker 7: It you get it back. If you take that back

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Speaker 7: or if.

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Speaker 9: You take it away, it makes you goods exceedingly expensive

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Speaker 9: and uncompetitive. So I think as we think about the

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Speaker 9: full cycle, it's important to look at all three components.

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Speaker 9: We are doing all the production in the US, but

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Speaker 9: the tariff sitters on two paths. The stuff that we

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Speaker 9: buy in and then when we send stuff off you

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Speaker 9: don't get any full stars back.

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Speaker 3: How hard does this make your decision making is uncertainty.

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Speaker 9: I think there are three things, and I think what

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Speaker 9: COVID shows is that the full supply chain is very complicated.

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Speaker 9: So the three things that I think make it difficult

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Speaker 9: is one is the number the number of different tariffs

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Speaker 9: that are coming out there. They're also complicated. Second is

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Speaker 9: the speed at which they come out and change, and

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Speaker 9: I think the third is the speed at which they

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Speaker 9: are implemented. So supply chains have a very long life cycle,

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Speaker 9: so it's hard to go through and change it quickly.

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Speaker 9: So think where the difficulty comes when you put those together.

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Speaker 9: We try to make long term decisions on our supply chain,

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Speaker 9: but with the speed at which come out change and

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Speaker 9: then you don't have the time to react, it puts

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Speaker 9: a lot of stress, especially on smaller companies, and I

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Speaker 9: feel it what we should do is is help the

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Speaker 9: smaller companies through this because it's for the US is

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Speaker 9: known for the innovation, the stuff we create, and I

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Speaker 9: think it's exceedingly burdensome for small companies like ours.

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Speaker 2: John briefly, will the longer term impact be for you

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Speaker 2: to make even more in the US. You have optimism

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Speaker 2: that you'll be able to get the skilled labor, you'll

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Speaker 2: be able to get well, some of the rare earth

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Speaker 2: minerals you need right here in the US, or you're

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Speaker 2: always going to be exposed three three thirty seconds.

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Speaker 9: So I believe that we can produce in the US,

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Speaker 9: but we need the time to be able to do it.

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Speaker 9: So given enough time, I think we can keep on

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Speaker 9: bringing it here.

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Speaker 3: But if you do it.

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Speaker 9: Very quickly, many companies will not survive that time.

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Speaker 7: To be able to do it.

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Speaker 9: So I think we just need to have a partnership

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Speaker 9: with the government to make sure that we're working in

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Speaker 9: concert to make sure we can get your goals, which

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Speaker 9: I think the goals are really important to produce in

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Speaker 9: the US and the increase our exports.

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Speaker 2: John Deer susan really great to speak with your co

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Speaker 2: founder and president of AMPLE.

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Speaker 3: We thank you.

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Speaker 2: Microsoft has pulled back on data center projects around the

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Speaker 2: world's sources say, suggesting that the company is taking a

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Speaker 2: harder look at its plans to build the server farms

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Speaker 2: powering AI and the cloud. Microsoft shares now they're down,

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Speaker 2: as you can see, eleven percent this year. Those concerns

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Speaker 2: of an AI infrastructure bubble. They've been weighing on global

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Speaker 2: tech stocks in recent weeks, especially in video, which sucks

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Speaker 2: up a significant share of data center budgets, of course,

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Speaker 2: but as we had to break, let's just take a

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Speaker 2: look at in Video and all the other big tech

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Speaker 2: names which are under significant duress today. We think about

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Speaker 2: the knock on effects of tariffs, about the exposure of

440
00:21:41,359 --> 00:21:43,360
Speaker 2: countries that many of them have donevers fight away from

441
00:21:43,440 --> 00:21:47,320
Speaker 2: China into and that is why even with an carve

442
00:21:47,400 --> 00:21:50,800
Speaker 2: out for semiconductors, the semiconductor indexes off by eight percent,

443
00:21:50,840 --> 00:21:53,080
Speaker 2: we worry about retaliation coming from these countries.

444
00:21:53,240 --> 00:21:54,480
Speaker 3: In Video off by six percent.

445
00:21:54,520 --> 00:21:56,440
Speaker 2: Move on and have a look at what's happening more broadly,

446
00:21:56,520 --> 00:21:58,040
Speaker 2: is then, as that one hundred has its worst day

447
00:21:58,080 --> 00:22:01,600
Speaker 2: since twenty twenty two, Apple or having its single biggest

448
00:22:01,680 --> 00:22:06,040
Speaker 2: market cap sell off, will almost three hundred billion dollars

449
00:22:06,119 --> 00:22:08,880
Speaker 2: wiped off of Apple in one single training day, as

450
00:22:08,880 --> 00:22:11,560
Speaker 2: we worry about the exposure to Asia, to Vietnam, not

451
00:22:11,640 --> 00:22:15,679
Speaker 2: just China, and what reciprocal nature from other companies and

452
00:22:15,720 --> 00:22:29,720
Speaker 2: countries will mean. From New York, this is Bloomberg Technology,

453
00:22:31,359 --> 00:22:34,040
Speaker 2: Welcome back to Bluemberg Technology and Caroline hired in New York.

454
00:22:34,320 --> 00:22:36,560
Speaker 2: A quick check on these markets which are well and

455
00:22:36,600 --> 00:22:39,080
Speaker 2: truly in the red We're off five five percent, almost

456
00:22:39,080 --> 00:22:40,840
Speaker 2: on the nast that one hundred worst days.

457
00:22:40,800 --> 00:22:43,200
Speaker 3: Since twenty twenty two be drill.

458
00:22:43,040 --> 00:22:46,280
Speaker 2: Into individual moves of certain players within Magnificent seven, in

459
00:22:46,320 --> 00:22:49,680
Speaker 2: particular because the big tech tariffs have come for mag seven,

460
00:22:49,760 --> 00:22:52,120
Speaker 2: Meta having its worst day in a year since April

461
00:22:52,400 --> 00:22:55,640
Speaker 2: twenty twenty four. We're down by seven percent. This iss

462
00:22:55,720 --> 00:22:58,119
Speaker 2: Wei what the EU response might be. Could it be

463
00:22:58,160 --> 00:23:00,880
Speaker 2: a higher digital services taxes is going to effect Meta?

464
00:23:00,920 --> 00:23:03,600
Speaker 2: Amazon off by eight percent as it's in the eye

465
00:23:03,640 --> 00:23:05,840
Speaker 2: of the storm when it comes to commerce, even though

466
00:23:06,080 --> 00:23:09,680
Speaker 2: the Dominimus ruling being removed from Chinese competitors not enough

467
00:23:09,680 --> 00:23:11,360
Speaker 2: to help the stock. We're off by eight percent again,

468
00:23:11,400 --> 00:23:14,800
Speaker 2: the worse since twenty twenty four August of that year. Meanwhile,

469
00:23:14,800 --> 00:23:18,439
Speaker 2: President Trump's tariffs entirely have the markets on edge global

470
00:23:18,480 --> 00:23:21,480
Speaker 2: stocks selling off as well. But US Treasury Sectory Scott

471
00:23:21,520 --> 00:23:25,320
Speaker 2: Bessence says the equity plument in the Magnificent seven is

472
00:23:25,359 --> 00:23:28,520
Speaker 2: a Magnificent seven problem, It's not a MAGA problem. Let's

473
00:23:28,520 --> 00:23:31,800
Speaker 2: get into that with Bloomberg's round Vlastelica. Really interesting from

474
00:23:31,800 --> 00:23:34,560
Speaker 2: Scott Besson that he's saying, look, we peaked in tech

475
00:23:34,960 --> 00:23:37,120
Speaker 2: back when deep Sea happened, it's been a sell off

476
00:23:37,119 --> 00:23:39,760
Speaker 2: since then. It is not because of our tariff policy,

477
00:23:40,080 --> 00:23:42,800
Speaker 2: but today it feels like it is Magnificent Seven's problem.

478
00:23:42,880 --> 00:23:43,480
Speaker 3: These tariffs.

479
00:23:44,800 --> 00:23:47,120
Speaker 10: Absolutely, I would say that tarifs are one hundred percent

480
00:23:47,240 --> 00:23:50,400
Speaker 10: driving to move lower today. A lot of the Magnificent

481
00:23:50,440 --> 00:23:54,320
Speaker 10: seven companies, notably Apple, notably Nvidia, a lot of chip makers,

482
00:23:54,560 --> 00:23:57,480
Speaker 10: they have a ton of manufacturing out of China, out

483
00:23:57,480 --> 00:24:00,560
Speaker 10: of Vietnam, out of Taiwan, countries that were really hit

484
00:24:00,600 --> 00:24:02,520
Speaker 10: with some a lot with tarifs that were a lot

485
00:24:02,600 --> 00:24:05,240
Speaker 10: higher than some people were expecting. So they are now

486
00:24:05,240 --> 00:24:08,280
Speaker 10: facing a really rough decision, assuming they don't get any

487
00:24:08,359 --> 00:24:10,880
Speaker 10: kind of exemption or there's no change in policy. Either

488
00:24:10,880 --> 00:24:13,920
Speaker 10: they're going to have to raise prices, which would hurt demand,

489
00:24:14,359 --> 00:24:16,720
Speaker 10: or they're going to have to absorb higher costs, which

490
00:24:16,800 --> 00:24:19,560
Speaker 10: is going to hurt profitability. It's obviously a not a

491
00:24:19,600 --> 00:24:20,920
Speaker 10: great position for them to be in.

492
00:24:22,000 --> 00:24:24,959
Speaker 2: Not a great position, such a bad position. Ryan, that

493
00:24:25,040 --> 00:24:27,840
Speaker 2: you brought a quote to your story You've assessed to

494
00:24:27,880 --> 00:24:30,119
Speaker 2: some of the analyst reactions. Rosenblat is the one that

495
00:24:30,200 --> 00:24:32,800
Speaker 2: took my attention, and I'll repeat it that they're saying

496
00:24:32,800 --> 00:24:36,479
Speaker 2: that this basically is blows up Apple in many ways,

497
00:24:36,560 --> 00:24:38,919
Speaker 2: and it's hard for us to imagine Trump blowing up

498
00:24:38,960 --> 00:24:41,600
Speaker 2: an American icon. It does feel like a lot of

499
00:24:41,640 --> 00:24:44,399
Speaker 2: analysts out there think there might be exemptions going forward.

500
00:24:45,640 --> 00:24:48,159
Speaker 10: We did see that during the first Trump administration. I

501
00:24:48,160 --> 00:24:50,720
Speaker 10: wouldn't say that the terror policy there were anything nearly

502
00:24:50,760 --> 00:24:53,240
Speaker 10: as aggressive as we're seeing today. So far, we haven't

503
00:24:53,280 --> 00:24:55,960
Speaker 10: seen any real indication that there will be an exemption.

504
00:24:56,119 --> 00:24:58,639
Speaker 10: But a lot of these companies have been working, you know,

505
00:24:58,680 --> 00:25:01,240
Speaker 10: probably behind the scenes first and foremost, trying to get

506
00:25:01,240 --> 00:25:03,760
Speaker 10: some kind of exemption. We saw, you know, Zuckerberg was

507
00:25:03,800 --> 00:25:05,720
Speaker 10: at the White House, I believe it was yesterday looking

508
00:25:05,760 --> 00:25:07,840
Speaker 10: for you know, help with the anti trust stuff.

509
00:25:07,880 --> 00:25:08,280
Speaker 7: So I it.

510
00:25:08,600 --> 00:25:10,720
Speaker 10: You know, obviously they're hoping for something, but so far

511
00:25:10,760 --> 00:25:13,560
Speaker 10: we haven't seen anything yet, and I think the longer

512
00:25:13,760 --> 00:25:16,159
Speaker 10: we have to wait, or until there's clarity one way

513
00:25:16,240 --> 00:25:17,560
Speaker 10: or the other, I think we're going to continue to

514
00:25:17,560 --> 00:25:19,280
Speaker 10: see a lot of uncertainty in markets.

515
00:25:19,640 --> 00:25:23,000
Speaker 2: There's an inauguration, seats not paying off stuffs. Far run Vastelica.

516
00:25:23,440 --> 00:25:25,840
Speaker 2: We thank you very much. Now let's get more on

517
00:25:25,880 --> 00:25:28,119
Speaker 2: the markets. Janet mue is with US obviously ruined Dolphin

518
00:25:28,240 --> 00:25:31,400
Speaker 2: head of market analysis, risk Off just everywhere you turn,

519
00:25:31,520 --> 00:25:32,280
Speaker 2: is that the right move?

520
00:25:34,359 --> 00:25:35,840
Speaker 11: I have Carolin, thanks for having me.

521
00:25:36,280 --> 00:25:36,520
Speaker 7: Yeah.

522
00:25:36,600 --> 00:25:41,320
Speaker 11: Unfortunately, we're in the eye of the storm and we're

523
00:25:41,440 --> 00:25:45,240
Speaker 11: entering a period of significant uncertainty and risk of periods.

524
00:25:45,640 --> 00:25:48,240
Speaker 11: I think the thing is there's still likely to be

525
00:25:48,320 --> 00:25:52,360
Speaker 11: a retaliation going forward, and I think Marqus actually am

526
00:25:52,480 --> 00:25:57,879
Speaker 11: enterprising in more severe economic slow down and more you know,

527
00:25:58,280 --> 00:26:02,280
Speaker 11: behavioral response from companies, which is likely to be a

528
00:26:02,400 --> 00:26:06,000
Speaker 11: freeze in investment and lower hiring, etc. So I would

529
00:26:06,040 --> 00:26:10,000
Speaker 11: say the path down here is likely to be volatile

530
00:26:10,240 --> 00:26:14,160
Speaker 11: and also very bumpy and more likely tutor to the downside.

531
00:26:14,480 --> 00:26:17,560
Speaker 2: Janet, just focusing in on what you just said. You

532
00:26:17,600 --> 00:26:20,119
Speaker 2: think there's more downside to come. You think that we

533
00:26:20,200 --> 00:26:23,639
Speaker 2: haven't priced in enough the retaliation already. We get France

534
00:26:23,720 --> 00:26:27,159
Speaker 2: Germany looking at saying they're not going to invest as

535
00:26:27,240 --> 00:26:30,120
Speaker 2: much in the US, in particular Macron asking French companies

536
00:26:30,200 --> 00:26:31,719
Speaker 2: not to invest in the United States.

537
00:26:33,720 --> 00:26:33,960
Speaker 7: Yeah.

538
00:26:34,000 --> 00:26:35,520
Speaker 3: I think the problem is that.

539
00:26:37,160 --> 00:26:39,600
Speaker 11: I think there's still so much uncertainty. We never really

540
00:26:39,600 --> 00:26:43,960
Speaker 11: had this sort of high tariffs going on that is

541
00:26:44,040 --> 00:26:47,400
Speaker 11: blanket across the globe. In the modern ages. So this

542
00:26:47,440 --> 00:26:51,159
Speaker 11: is like uncharted territory we're talking about here. And I

543
00:26:51,160 --> 00:26:53,439
Speaker 11: think the most significant area that is affectedly is the

544
00:26:53,480 --> 00:26:56,800
Speaker 11: Asian nations that have deeply and better supply chains, and

545
00:26:56,880 --> 00:27:00,760
Speaker 11: you know, multinationals over the past decades have been investing

546
00:27:00,840 --> 00:27:04,439
Speaker 11: heavily in the China and the China plus one branch

547
00:27:04,480 --> 00:27:08,119
Speaker 11: sharing strategy, and that is being appenticed at the moment.

548
00:27:08,200 --> 00:27:11,560
Speaker 11: So huge uncertainty, huge changes to the trade flow and

549
00:27:11,600 --> 00:27:16,080
Speaker 11: cost structures, and huge compression to margins potentially if this

550
00:27:16,359 --> 00:27:18,560
Speaker 11: go on for a longer time. I think what I

551
00:27:18,640 --> 00:27:21,720
Speaker 11: worry about is really the portfolio flows going forward, which

552
00:27:21,760 --> 00:27:25,880
Speaker 11: you know and overseas investors contemplate whether they should continue

553
00:27:25,880 --> 00:27:29,040
Speaker 11: to reduce that US exposure, and you know, it could

554
00:27:29,080 --> 00:27:31,920
Speaker 11: be going on for more sustained period of time.

555
00:27:32,520 --> 00:27:34,399
Speaker 2: What still needs to go on for a sustained period

556
00:27:34,359 --> 00:27:37,600
Speaker 2: of time is clarity with semiconductors. There's a carve out

557
00:27:38,119 --> 00:27:41,440
Speaker 2: for semis from this particular round of tariffs, but there's

558
00:27:41,520 --> 00:27:45,919
Speaker 2: ongoing discussion around support for building here in the United States.

559
00:27:46,000 --> 00:27:49,159
Speaker 2: As the chip SAT gets reworked. How many more shoes

560
00:27:49,160 --> 00:27:51,119
Speaker 2: to drop O are there in the semi space?

561
00:27:53,440 --> 00:27:53,640
Speaker 7: Yeah?

562
00:27:53,640 --> 00:27:56,280
Speaker 11: Again, I think it's the really complex supply chain we're

563
00:27:56,280 --> 00:28:01,960
Speaker 11: talking about here. There's just so much uncertainty and I think,

564
00:28:02,080 --> 00:28:05,320
Speaker 11: you know, TSMC has already pledged over one hundred billion

565
00:28:05,640 --> 00:28:09,119
Speaker 11: dollars of investment. But again Taiwan is being hit with

566
00:28:09,440 --> 00:28:12,840
Speaker 11: thirty four percent of TARRAF. But it seems it's just

567
00:28:13,760 --> 00:28:18,480
Speaker 11: you know, not not much as certainty and potential room

568
00:28:18,520 --> 00:28:21,640
Speaker 11: for negotiation. So I think it is just very bad

569
00:28:21,640 --> 00:28:24,959
Speaker 11: for the center, which is a highly complex of supply

570
00:28:25,080 --> 00:28:27,919
Speaker 11: chain related. I mean, what we'll have to see. But

571
00:28:28,359 --> 00:28:31,800
Speaker 11: ultimately this is going to increase costs for a lot

572
00:28:31,800 --> 00:28:36,679
Speaker 11: of the foundaries semiconductor companies in the States, right, So

573
00:28:36,840 --> 00:28:38,360
Speaker 11: I think this is not a great outcome.

574
00:28:38,440 --> 00:28:39,600
Speaker 4: It's all the situation.

575
00:28:40,080 --> 00:28:41,720
Speaker 2: Janet, mean, we have to leave it there, thank you

576
00:28:41,760 --> 00:28:44,720
Speaker 2: so much. Obviously bruin Dolphin header market analysis. We now

577
00:28:44,800 --> 00:28:48,840
Speaker 2: have to move over to Ottawa where the leader Karne

578
00:28:48,840 --> 00:28:52,480
Speaker 2: is speaking. Take a listeners, we articulate its potentially his retaliation.

579
00:28:53,920 --> 00:28:57,680
Speaker 12: At the same time, President Trump confirmed that the terroriffts

580
00:28:57,680 --> 00:29:02,440
Speaker 12: announced last week against our auto industry will come in

581
00:29:02,480 --> 00:29:06,720
Speaker 12: and indeed have come into effect today. So while it's

582
00:29:06,800 --> 00:29:10,960
Speaker 12: progress that further tariffs were not imposed on Canada yesterday.

583
00:29:11,720 --> 00:29:16,320
Speaker 12: The President's actions will reverberate here in Canada and across

584
00:29:16,360 --> 00:29:22,120
Speaker 12: the world. Three sets, three different sets of US tariffs

585
00:29:22,200 --> 00:29:26,000
Speaker 12: remain in place and will continue to pose significant threats

586
00:29:26,400 --> 00:29:31,520
Speaker 12: to Canadian workers and Canadian businesses. And while they have

587
00:29:31,680 --> 00:29:39,680
Speaker 12: been imposed under different premises, some things are consistent. They

588
00:29:39,680 --> 00:29:47,080
Speaker 12: are all unjustified, unwarranted, and in our judgment, misguided, and

589
00:29:47,120 --> 00:29:52,360
Speaker 12: we are already seeing the consequences. Just last evening, workers

590
00:29:52,400 --> 00:29:56,440
Speaker 12: from unifour Local four four four, with whom I met

591
00:29:56,520 --> 00:30:00,000
Speaker 12: last week, learned that their auto assembly plant in wis

592
00:30:00,000 --> 00:30:03,560
Speaker 12: Win will be shutting down for at least the next

593
00:30:03,560 --> 00:30:04,080
Speaker 12: two weeks.

594
00:30:05,680 --> 00:30:07,480
Speaker 7: That's three thy six hundred.

595
00:30:07,200 --> 00:30:11,800
Speaker 12: Workers who are now out of work by their choice,

596
00:30:12,440 --> 00:30:15,520
Speaker 12: workers who now worry how they're going to put food

597
00:30:15,560 --> 00:30:18,000
Speaker 12: on the table and pay their bills.

598
00:30:19,160 --> 00:30:22,040
Speaker 7: I and my government stand in solidarity.

599
00:30:21,400 --> 00:30:25,640
Speaker 12: With those workers in Windsor and all those workers hurt

600
00:30:25,800 --> 00:30:29,920
Speaker 12: by President Trump's tariffs. And that's why we committed from

601
00:30:29,960 --> 00:30:33,680
Speaker 12: the very start that all and I repeat all of

602
00:30:33,680 --> 00:30:37,880
Speaker 12: our terror proceeds will go to protect workers affected by

603
00:30:37,920 --> 00:30:38,520
Speaker 12: the tariffs.

604
00:30:41,240 --> 00:30:42,720
Speaker 7: They plum me serhif.

605
00:30:51,400 --> 00:30:55,200
Speaker 2: Canadian Prime Minister Mark Connie there speaking regarding the US

606
00:30:55,320 --> 00:30:58,960
Speaker 2: tariffs the impact being had on his country. You can

607
00:30:59,000 --> 00:31:01,120
Speaker 2: watch much more on Live Go if you have a

608
00:31:01,200 --> 00:31:12,160
Speaker 2: terminal President Trump's new tariff where they are sending shockwaves

609
00:31:12,160 --> 00:31:14,840
Speaker 2: across global markets, sparking a trade What is both China

610
00:31:14,840 --> 00:31:18,000
Speaker 2: and the eu' out to retaliate. Canada just now saying

611
00:31:18,040 --> 00:31:21,040
Speaker 2: they will match US taris on passenger vehicles. Most end

612
00:31:21,040 --> 00:31:24,320
Speaker 2: the current joins US. Now, your economic expertise is so valuable,

613
00:31:24,400 --> 00:31:27,160
Speaker 2: so too is your experience in Asia. This has come

614
00:31:27,200 --> 00:31:29,840
Speaker 2: as a surprise, particularly for the countries other than China.

615
00:31:31,080 --> 00:31:33,120
Speaker 13: Yeah, I think it's certainly up at the worst case

616
00:31:33,160 --> 00:31:36,240
Speaker 13: if I'm beyond the worst case Scenaric Harlan. There's been

617
00:31:36,400 --> 00:31:39,680
Speaker 13: a hammer blow to China to begin with. You know,

618
00:31:39,680 --> 00:31:42,320
Speaker 13: you're talking about tarifrd's there of around sixty seven percent

619
00:31:42,360 --> 00:31:46,600
Speaker 13: according to Bloomberg Economics as of next week, across all goods.

620
00:31:46,880 --> 00:31:50,400
Speaker 13: That's going to both hurt Chinese economic growth maybe take

621
00:31:50,440 --> 00:31:54,720
Speaker 13: one to two percentage points of growth there, and really

622
00:31:54,840 --> 00:31:57,840
Speaker 13: hammered the volume of exports out of China to the

623
00:31:57,960 --> 00:32:00,479
Speaker 13: US maybe by as much as eighty percent. That then,

624
00:32:00,520 --> 00:32:03,360
Speaker 13: by extension, if that's happening in China, that's also going

625
00:32:03,400 --> 00:32:07,440
Speaker 13: to spill over to the rest of the region. In particular,

626
00:32:07,600 --> 00:32:12,160
Speaker 13: you have Southeast Age looking very exposed, Vietnam, Cambodia, also

627
00:32:12,200 --> 00:32:17,239
Speaker 13: Bangladesh among those now facing very high tower freights on

628
00:32:17,280 --> 00:32:19,840
Speaker 13: the goods that they do ship to the US. Remember,

629
00:32:19,840 --> 00:32:21,800
Speaker 13: some of these economies had become very important in recent

630
00:32:21,880 --> 00:32:25,240
Speaker 13: years as kind of connector economies between the US and Asia.

631
00:32:25,280 --> 00:32:27,680
Speaker 13: So certainly a hammer blow coming from both exports and

632
00:32:27,760 --> 00:32:29,440
Speaker 13: growth in that part of the world.

633
00:32:29,240 --> 00:32:32,280
Speaker 2: And a hammer blow for US giants that have relocated

634
00:32:32,280 --> 00:32:36,920
Speaker 2: a lot of their production from China into Thailand, into Vietnam,

635
00:32:37,160 --> 00:32:37,960
Speaker 2: into Malaysia.

636
00:32:38,200 --> 00:32:40,040
Speaker 3: Top of mind for US is of course apple.

637
00:32:40,440 --> 00:32:42,440
Speaker 2: But how much are these countries now going to have

638
00:32:42,480 --> 00:32:45,520
Speaker 2: to worry that that foreign direct investment pulls away?

639
00:32:46,240 --> 00:32:46,760
Speaker 7: Well, that's right.

640
00:32:46,840 --> 00:32:49,440
Speaker 13: These economies had emerge as something of connector economies we

641
00:32:49,560 --> 00:32:51,240
Speaker 13: like to call them here, as you mentioned call in

642
00:32:51,280 --> 00:32:54,600
Speaker 13: your Vietnams in Southeast Asia, a lot of companies moved

643
00:32:54,600 --> 00:32:56,920
Speaker 13: there to get out of the tariff drag net in

644
00:32:57,040 --> 00:32:59,360
Speaker 13: hope they could still produce cheaply in Asian sell into

645
00:32:59,360 --> 00:33:02,640
Speaker 13: the US. Will see that model is now under severe scrutiny.

646
00:33:02,880 --> 00:33:05,880
Speaker 13: The question, of course becomes two things. A. Do these

647
00:33:05,880 --> 00:33:09,680
Speaker 13: governments retaliate and the trade war worsens, or do they

648
00:33:09,800 --> 00:33:12,800
Speaker 13: negotiate and those president Trump comes to the table and

649
00:33:12,920 --> 00:33:16,440
Speaker 13: reach some kind of agreement whereby the tariffs are reduced. Now,

650
00:33:16,480 --> 00:33:18,160
Speaker 13: a lot of observers are saying in all framp on,

651
00:33:18,240 --> 00:33:20,720
Speaker 13: this won't be so simple. It's unlikely the tariffs will

652
00:33:20,720 --> 00:33:23,600
Speaker 13: go back to zero, given the kind of ideological outlook

653
00:33:23,600 --> 00:33:25,840
Speaker 13: that President Trump has bringing to this. But nonetheless, the

654
00:33:25,880 --> 00:33:29,240
Speaker 13: benign take is these could be negotiated away. If not,

655
00:33:29,400 --> 00:33:31,240
Speaker 13: then to your point, companies are going to have to

656
00:33:31,280 --> 00:33:35,360
Speaker 13: pace face again very expensive decisions on their supply chains.

657
00:33:35,240 --> 00:33:37,600
Speaker 2: Even those areas that you think might be a little

658
00:33:37,640 --> 00:33:41,200
Speaker 2: bit more protected. For example, Chinese internet giants, which are

659
00:33:41,280 --> 00:33:44,280
Speaker 2: very focused on their home domestic consumer, well, if their

660
00:33:44,440 --> 00:33:47,400
Speaker 2: consumer is hurt, they from knock on will be hurt

661
00:33:47,440 --> 00:33:50,600
Speaker 2: a little bit. But talk us through the deminimus impact

662
00:33:50,720 --> 00:33:53,760
Speaker 2: as well, because that too is another announcement from President Trump.

663
00:33:53,760 --> 00:33:54,480
Speaker 3: He's ending the.

664
00:33:54,400 --> 00:33:56,760
Speaker 2: Ability for Chinese chants to ship cheaply.

665
00:33:56,480 --> 00:33:57,400
Speaker 3: To the US.

666
00:33:57,720 --> 00:33:59,960
Speaker 13: Yes, this is an important announcement in a self law

667
00:34:00,120 --> 00:34:02,440
Speaker 13: by the significance of all the other news. But like

668
00:34:02,480 --> 00:34:05,240
Speaker 13: the likes of Shine and Temu Caroline. The bottom line is,

669
00:34:05,640 --> 00:34:08,280
Speaker 13: currently you can buy in goods on these e commerce

670
00:34:08,280 --> 00:34:11,560
Speaker 13: platforms from China without paying a tariff on it up

671
00:34:11,640 --> 00:34:14,279
Speaker 13: until a threshold of eight hundred dollars, and that's been

672
00:34:14,400 --> 00:34:17,720
Speaker 13: very popular with households. There's literature that says, especially popular

673
00:34:17,760 --> 00:34:21,799
Speaker 13: with lower income households buying goods from China at a

674
00:34:21,840 --> 00:34:24,120
Speaker 13: cheaper costs than they would get here. Now the new

675
00:34:24,200 --> 00:34:27,279
Speaker 13: rule will take away that threshold, will bring it down

676
00:34:27,320 --> 00:34:29,400
Speaker 13: to zero, so you'll have to put pay the tariff

677
00:34:29,400 --> 00:34:31,680
Speaker 13: on all the goods coming in from China. And that

678
00:34:31,760 --> 00:34:34,480
Speaker 13: will both have obviously a specific company impact in terms

679
00:34:34,520 --> 00:34:37,160
Speaker 13: of those e commerce platforms who are lying that business model.

680
00:34:37,200 --> 00:34:39,360
Speaker 13: That's one, but two will also impact the course to

681
00:34:39,400 --> 00:34:43,759
Speaker 13: consumers here who've been buying those goods at a cheaper price. Now, again,

682
00:34:43,800 --> 00:34:47,359
Speaker 13: the Trump administration says this is necessary, it's all about

683
00:34:47,440 --> 00:34:51,760
Speaker 13: driving investment, creating more manufacturing at home, and creating jobs

684
00:34:51,760 --> 00:34:52,840
Speaker 13: at home in the US.

685
00:34:53,360 --> 00:34:55,360
Speaker 7: But near term, e columns are saying.

686
00:34:55,200 --> 00:34:57,080
Speaker 13: That at the very least, there's going to be prices

687
00:34:57,120 --> 00:34:58,279
Speaker 13: going up for consumers.

688
00:34:58,520 --> 00:35:00,560
Speaker 2: And to Karen, thank you so much much for that

689
00:35:00,680 --> 00:35:04,719
Speaker 2: deep dive. Let's talk more about the consumer impact. Verizon,

690
00:35:04,800 --> 00:35:07,200
Speaker 2: in fact, has just announced an offer for a three

691
00:35:07,280 --> 00:35:10,799
Speaker 2: year price lock free phone trade in as it tries

692
00:35:10,840 --> 00:35:13,560
Speaker 2: to win customers in a facely competitive wireless market, and

693
00:35:14,000 --> 00:35:18,080
Speaker 2: of course when they're experiencing inflation somewhere. And Nrian Sampath

694
00:35:18,320 --> 00:35:21,040
Speaker 2: is the CEO of Verizon's consumer business, joining us now

695
00:35:21,040 --> 00:35:24,920
Speaker 2: on the back of these announcements and just having changed

696
00:35:24,960 --> 00:35:27,440
Speaker 2: the timeline on this because of a consumer that is

697
00:35:27,520 --> 00:35:30,480
Speaker 2: currently facing a lot of inflationary headwinds.

698
00:35:31,040 --> 00:35:33,520
Speaker 14: Calin we've over the last three or four quarters, we've

699
00:35:33,560 --> 00:35:35,879
Speaker 14: been listening to our customers and they're telling us two

700
00:35:35,880 --> 00:35:39,240
Speaker 14: things pretty consistently. The first thing is they want price certainty.

701
00:35:39,360 --> 00:35:41,560
Speaker 14: There's so much uncertainty in their lives, but on the

702
00:35:41,600 --> 00:35:44,399
Speaker 14: category that they love most, which is connectivity, they want

703
00:35:44,440 --> 00:35:47,560
Speaker 14: price certainty. The second thing is flexibility. No one wants

704
00:35:47,600 --> 00:35:50,200
Speaker 14: to pay for things they don't use. So a combination

705
00:35:50,320 --> 00:35:53,279
Speaker 14: of those two made us get to this point where

706
00:35:53,320 --> 00:35:56,040
Speaker 14: we have this really incredible value prop for our customer.

707
00:35:56,239 --> 00:35:58,200
Speaker 14: And this was always in our plan. You know, we

708
00:35:58,360 --> 00:36:01,440
Speaker 14: have a sustained turnaround start for the consumer group, and

709
00:36:01,480 --> 00:36:04,000
Speaker 14: this was always in our plans to do it right.

710
00:36:03,880 --> 00:36:05,960
Speaker 3: Now, the investors like it.

711
00:36:06,000 --> 00:36:08,960
Speaker 2: Shares push higher on the news of this focus, But

712
00:36:09,120 --> 00:36:11,640
Speaker 2: tell us about the costs you incur because of that.

713
00:36:11,800 --> 00:36:13,880
Speaker 2: If I'm suddenly able to trade in my phone no

714
00:36:13,920 --> 00:36:16,120
Speaker 2: matter what the damage and get a new one for free,

715
00:36:16,200 --> 00:36:18,520
Speaker 2: if I'm able to lock in prices, how do you

716
00:36:18,560 --> 00:36:20,000
Speaker 2: bear that from a cost perspective.

717
00:36:20,760 --> 00:36:24,400
Speaker 14: Look, largely, we are an American company. We have almost

718
00:36:24,440 --> 00:36:27,080
Speaker 14: no export revenue. We are an American company. We you know,

719
00:36:27,120 --> 00:36:29,640
Speaker 14: we rely on America for all our revenues, So we're

720
00:36:29,719 --> 00:36:32,440
Speaker 14: very comfortable with that second thing on costs. Look, we

721
00:36:32,480 --> 00:36:34,440
Speaker 14: work with our partners on this. You know, we work

722
00:36:34,480 --> 00:36:36,960
Speaker 14: with handset partners, we work at the suppliers, so we

723
00:36:37,000 --> 00:36:38,759
Speaker 14: will work to mitigate a lot of the risk on

724
00:36:38,760 --> 00:36:42,000
Speaker 14: the inflationary pressure that we get. But more importantly, we

725
00:36:42,040 --> 00:36:44,839
Speaker 14: want to offer customers something they really like and love,

726
00:36:45,080 --> 00:36:47,280
Speaker 14: and we want to take away uncertainty in their life,

727
00:36:47,320 --> 00:36:49,279
Speaker 14: at least in the category that we are involved in.

728
00:36:49,840 --> 00:36:52,719
Speaker 2: I'm really interested in your working with the partners. We

729
00:36:52,760 --> 00:36:56,360
Speaker 2: are looking today at Apple, which Rosenblat Securities are saying,

730
00:36:56,760 --> 00:36:59,280
Speaker 2: this is going to blow up their entire business model

731
00:36:59,360 --> 00:37:01,640
Speaker 2: if they can't are exposed to the sort of tariffs

732
00:37:01,640 --> 00:37:06,000
Speaker 2: you're getting from China imposed on Vietnam and where India

733
00:37:06,080 --> 00:37:08,560
Speaker 2: as well. Do you think Apple will have any more

734
00:37:08,560 --> 00:37:10,560
Speaker 2: pressure to increase the prices on their phones?

735
00:37:10,560 --> 00:37:11,560
Speaker 3: And how do you respond?

736
00:37:12,239 --> 00:37:14,600
Speaker 14: Look, we had a big partner to Apple. It's a

737
00:37:14,600 --> 00:37:16,920
Speaker 14: great relationship and you put the best network together with

738
00:37:16,960 --> 00:37:19,359
Speaker 14: a great handset, you know, it creates a really good

739
00:37:19,400 --> 00:37:21,759
Speaker 14: value prop for customers. You know, last year we had

740
00:37:21,760 --> 00:37:24,279
Speaker 14: said that, you know, our upgrade rate, which is code

741
00:37:24,360 --> 00:37:27,320
Speaker 14: for how long people keep the handsets, is probably reached

742
00:37:27,320 --> 00:37:29,719
Speaker 14: its highest point in twenty twenty four, and in twenty

743
00:37:29,760 --> 00:37:32,000
Speaker 14: twenty five you're going to see that dropping people keep

744
00:37:32,000 --> 00:37:34,400
Speaker 14: the handsets for a little over forty months. Right now,

745
00:37:34,520 --> 00:37:36,279
Speaker 14: we think in twenty twenty five we're going to see

746
00:37:36,280 --> 00:37:38,360
Speaker 14: that number fall a little bit. So the low point

747
00:37:38,480 --> 00:37:41,120
Speaker 14: was last year, and we'll work with them to mitigate

748
00:37:41,200 --> 00:37:43,640
Speaker 14: all the price and other risks that we have in

749
00:37:43,680 --> 00:37:45,640
Speaker 14: the piece. But we do think there's going to be

750
00:37:45,719 --> 00:37:48,520
Speaker 14: a slightly higher upgrade rate in twenty five compared to

751
00:37:48,560 --> 00:37:50,279
Speaker 14: twenty twenty four, and a lot of that has to

752
00:37:50,320 --> 00:37:52,640
Speaker 14: do with how well we work with our partners.

753
00:37:53,040 --> 00:37:55,440
Speaker 2: Samav I'm going to go to your experience here because

754
00:37:55,560 --> 00:37:58,040
Speaker 2: you have such a long tenure as a management consultant,

755
00:37:58,239 --> 00:38:01,480
Speaker 2: then when around the enterprise business side of Arizon before

756
00:38:01,520 --> 00:38:04,920
Speaker 2: moving to the consumer side, as just someone looking at

757
00:38:04,920 --> 00:38:07,000
Speaker 2: the market right now, do you have optimism that you'll

758
00:38:07,000 --> 00:38:09,759
Speaker 2: be able to have resiliency for those businesses that you

759
00:38:09,920 --> 00:38:12,400
Speaker 2: serve and indeed the consumers that you serve at this time.

760
00:38:13,000 --> 00:38:14,839
Speaker 14: Look, we think so because part has to do with

761
00:38:14,840 --> 00:38:18,279
Speaker 14: our category. You know, we provide connectivity, we provide resiliency,

762
00:38:18,320 --> 00:38:21,520
Speaker 14: We provide cybersecurity both to our business customers and to

763
00:38:21,680 --> 00:38:24,680
Speaker 14: retail customers everywhere. This is a core category. I mean,

764
00:38:24,680 --> 00:38:27,160
Speaker 14: this is a category people don't have a much choice.

765
00:38:27,160 --> 00:38:29,560
Speaker 14: They're going to have to rely on the best offer

766
00:38:29,600 --> 00:38:31,239
Speaker 14: they have and that's with Verizon for.

767
00:38:31,200 --> 00:38:31,759
Speaker 7: The last part.

768
00:38:31,880 --> 00:38:34,640
Speaker 14: So I do think it creates a very resilient business

769
00:38:34,640 --> 00:38:35,239
Speaker 14: model for us.

770
00:38:35,440 --> 00:38:36,239
Speaker 7: But you're going to.

771
00:38:36,239 --> 00:38:38,839
Speaker 14: See our customers having to zig and zag a lot more,

772
00:38:38,840 --> 00:38:41,759
Speaker 14: having to mitigate risks, be more flexible where they can

773
00:38:41,800 --> 00:38:44,080
Speaker 14: and supply chain and other pieces. But as far as

774
00:38:44,160 --> 00:38:47,000
Speaker 14: our category is concerned, we see a lot of resiliency in.

775
00:38:46,960 --> 00:38:48,319
Speaker 3: That and investors like it.

776
00:38:48,360 --> 00:38:51,840
Speaker 2: They're coming into you because you're deemed haven in this trade.

777
00:38:51,880 --> 00:38:55,319
Speaker 2: But very briefly, some have what about your willingness to

778
00:38:55,400 --> 00:38:58,799
Speaker 2: invest in your business right now, particularly around AI and

779
00:38:58,960 --> 00:39:01,600
Speaker 2: more data revenueded, Have you got the certainty to do that?

780
00:39:02,640 --> 00:39:03,080
Speaker 7: Definitely.

781
00:39:03,120 --> 00:39:05,239
Speaker 14: Look, we play a long game here, you know, whether

782
00:39:05,239 --> 00:39:08,719
Speaker 14: it's investment in our spectrum, it's investment in fiber, whether

783
00:39:08,719 --> 00:39:11,640
Speaker 14: it's investment in AI. Those are big three themes for

784
00:39:11,760 --> 00:39:14,239
Speaker 14: us where we make really long term investments, and they're

785
00:39:14,360 --> 00:39:16,880
Speaker 14: using a I'll give you a sense for this current announcement.

786
00:39:17,080 --> 00:39:19,520
Speaker 14: You know, we have hundreds of thousands of our customers

787
00:39:19,520 --> 00:39:22,640
Speaker 14: who call us every single day. We now using generative AI,

788
00:39:22,640 --> 00:39:25,600
Speaker 14: are able to capture every morning at nine am, I

789
00:39:25,600 --> 00:39:28,360
Speaker 14: get a report that tells me exactly what the sentiment

790
00:39:28,600 --> 00:39:31,560
Speaker 14: was yesterday from our customers. We use that in real

791
00:39:31,680 --> 00:39:34,680
Speaker 14: time to make decisions. So I think it's part of

792
00:39:34,680 --> 00:39:36,920
Speaker 14: our operating model, and we want to be the world's

793
00:39:36,920 --> 00:39:40,000
Speaker 14: best AI applied company. So we are very comfortable with

794
00:39:40,000 --> 00:39:43,719
Speaker 14: our investment profile and long term status for that.

795
00:39:44,160 --> 00:39:46,080
Speaker 2: Somehow, it's always great to catch up with you. Thank

796
00:39:46,120 --> 00:39:50,920
Speaker 2: you very much, Verizon's consumer CEO. There currently seeing market

797
00:39:51,040 --> 00:39:54,799
Speaker 2: sell off in response to tariff's announced yesterday by the

798
00:39:54,800 --> 00:39:57,480
Speaker 2: White House. Much more aggressive than many and thought, particularly

799
00:39:57,480 --> 00:40:00,400
Speaker 2: facing Asian nations. We therefore see tech fool hard four

800
00:40:00,440 --> 00:40:02,160
Speaker 2: and a half percent. Now's that one hundred having its

801
00:40:02,160 --> 00:40:06,320
Speaker 2: worst day since September thirteenth, twenty twenty two. Bitcoin another

802
00:40:06,360 --> 00:40:09,640
Speaker 2: risk sentiment for off by almost five percent eight hundred

803
00:40:09,640 --> 00:40:11,719
Speaker 2: and sixty eight is where we trade. Let's get you

804
00:40:11,760 --> 00:40:14,680
Speaker 2: to another story geopolitical in nature and one that might

805
00:40:14,719 --> 00:40:17,399
Speaker 2: be embroiled in taris in some way. TikTok owner Byte

806
00:40:17,480 --> 00:40:20,200
Speaker 2: Dance set to be hit by a privacy fine of

807
00:40:20,239 --> 00:40:22,279
Speaker 2: close to five hundred and fifty five million dollars for

808
00:40:22,320 --> 00:40:24,760
Speaker 2: I legally shipping European users data to China.

809
00:40:25,400 --> 00:40:26,279
Speaker 3: This adds to the.

810
00:40:26,239 --> 00:40:29,279
Speaker 2: Growing global backlash over the video sharing app. This is

811
00:40:29,320 --> 00:40:31,040
Speaker 2: the app, of course, faces potential ban here in the

812
00:40:31,120 --> 00:40:33,879
Speaker 2: United States on Saturday, Blue Mergs Kurt Wagner can piece

813
00:40:33,920 --> 00:40:36,920
Speaker 2: it all together for US. First that EU find basically

814
00:40:37,280 --> 00:40:39,680
Speaker 2: they're taking issue with exactly what the US has been

815
00:40:39,680 --> 00:40:40,800
Speaker 2: fearing for a long while.

816
00:40:42,200 --> 00:40:45,560
Speaker 15: This is the concern, and this is the driver of

817
00:40:45,600 --> 00:40:48,720
Speaker 15: this band that you mentioned, Caroline, which is that can

818
00:40:49,000 --> 00:40:51,120
Speaker 15: the US government do they feel that they can trust

819
00:40:51,160 --> 00:40:55,759
Speaker 15: TikTok and parent company by Dance to handle American user data. Appropriately,

820
00:40:55,800 --> 00:40:58,440
Speaker 15: when you see headlines and stories like this, it just

821
00:40:58,560 --> 00:41:01,919
Speaker 15: adds fuel to that fire of, you know, the idea

822
00:41:01,960 --> 00:41:03,880
Speaker 15: that this company can't be trusted, and that's what we

823
00:41:03,960 --> 00:41:07,840
Speaker 15: saw elected officials vote for last year when they passed

824
00:41:07,840 --> 00:41:10,560
Speaker 15: this law that will ban the app on Saturday unless

825
00:41:10,560 --> 00:41:12,160
Speaker 15: there's a deal struck. So I think this is the

826
00:41:12,239 --> 00:41:13,840
Speaker 15: kind of thing people were worried about.

827
00:41:14,000 --> 00:41:18,760
Speaker 2: If there's a deal struck, are though suddenly that has accelerated.

828
00:41:19,000 --> 00:41:21,200
Speaker 2: Talk to us about the Amazon offer, whether it's a

829
00:41:21,239 --> 00:41:24,280
Speaker 2: real one, and what's going on with jd Vance in particular.

830
00:41:25,440 --> 00:41:27,239
Speaker 15: Yeah, everyone's sort of coming out of the woodwork at

831
00:41:27,239 --> 00:41:29,759
Speaker 15: the last minute here because we've been talking about a

832
00:41:29,800 --> 00:41:33,239
Speaker 15: deal for months now. But you know, I think the

833
00:41:33,280 --> 00:41:37,520
Speaker 15: expectation at this point is that the deal that's being

834
00:41:37,560 --> 00:41:40,480
Speaker 15: considered by Trump is a lot of the existing by

835
00:41:40,560 --> 00:41:44,640
Speaker 15: Dance investors from the US Oracle would be involved, Blackstone

836
00:41:44,640 --> 00:41:48,440
Speaker 15: would be involved, and it would sort of minimize by

837
00:41:48,560 --> 00:41:50,719
Speaker 15: Dance's ownership stake and TikTok, so it would bring it

838
00:41:50,800 --> 00:41:55,319
Speaker 15: below that twenty percent threshold that the law requires, and

839
00:41:55,360 --> 00:41:57,160
Speaker 15: so it would sort of fill in the other eighty

840
00:41:57,200 --> 00:41:59,919
Speaker 15: percent with a bunch of US investors. Now, I think

841
00:42:00,200 --> 00:42:02,919
Speaker 15: we're still a ways away from an actual resolution because

842
00:42:02,920 --> 00:42:06,759
Speaker 15: even if Trump presents this solution, it requires approval not

843
00:42:06,800 --> 00:42:09,080
Speaker 15: only from ByteDance but from the Chinese government. And we

844
00:42:09,160 --> 00:42:12,680
Speaker 15: don't know the specifics around the algorithm, you know, does

845
00:42:12,680 --> 00:42:13,319
Speaker 15: that change hands?

846
00:42:13,320 --> 00:42:14,279
Speaker 7: Who gets to control that?

847
00:42:14,360 --> 00:42:17,040
Speaker 15: So we're kind of hearing I think, the thinking from

848
00:42:17,080 --> 00:42:18,680
Speaker 15: one side of the fence, but we don't know what

849
00:42:18,800 --> 00:42:19,440
Speaker 15: China is thinking.

850
00:42:19,440 --> 00:42:20,680
Speaker 7: And that's a big player here.

851
00:42:20,880 --> 00:42:23,319
Speaker 2: Thirty seconds, Kurt met to under pressure your.

852
00:42:23,280 --> 00:42:28,000
Speaker 15: Name too, goshcha, Yeah, I feel like you know, we

853
00:42:28,040 --> 00:42:30,439
Speaker 15: saw that headline yesterday that Mark Zuckerberg is trying to

854
00:42:30,600 --> 00:42:34,160
Speaker 15: ask Donald Trump to help them with THEFTC trial. Not surprising.

855
00:42:34,160 --> 00:42:37,120
Speaker 15: Why else would you build that relationship with Trump if

856
00:42:37,160 --> 00:42:39,160
Speaker 15: you're not going to make that request. But I also

857
00:42:39,200 --> 00:42:41,279
Speaker 15: don't think Trump has a lot of incentive to do

858
00:42:41,320 --> 00:42:42,919
Speaker 15: that right now. He may as well hang that over

859
00:42:42,960 --> 00:42:44,520
Speaker 15: Meta's head for a little longer.

860
00:42:44,960 --> 00:42:46,520
Speaker 2: Meta in the eye the storm when it comes to

861
00:42:46,560 --> 00:42:49,719
Speaker 2: Taris instead and an EU potential response. Kurt Wagner, We

862
00:42:49,800 --> 00:42:51,920
Speaker 2: thank you so much. That does it for this addition

863
00:42:51,920 --> 00:42:55,279
Speaker 2: of bloombog technology quite check on these markets a sea

864
00:42:55,320 --> 00:42:58,600
Speaker 2: of red, particularly for the technology space. This is Bluemberg

865
00:42:58,640 --> 00:43:00,480
Speaker 2: Technology