WEBVTT - Tech Stocks Sell Off Amid Tariff Backlash 0:00:00.880 --> 0:00:05.119 From the heart of where innovation, money and power collide 0:00:05.400 --> 0:00:10.719 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.840 --> 0:00:39.400 Caroline Hyde and Ed Ludlow. 0:00:27.200 --> 0:00:30.480 Live from New York. I'm Caroline Hayden. This is Bloomberg Technology. 0:00:30.800 --> 0:00:31.320 Tariffs. 0:00:31.560 --> 0:00:33.800 They have come for Big Tech, the sector among the 0:00:33.920 --> 0:00:37.360 worst hit as higher duties target their Asian supply chain 0:00:37.560 --> 0:00:41.479 and investors brace for retaliation. Bloomberg spoke with Treasury Secretary 0:00:41.520 --> 0:00:44.839 Scott Lesson yesterday, who says the tech sell off is 0:00:44.840 --> 0:00:46.440 actually not a MAGA problem. 0:00:47.080 --> 0:00:50.720 In my old business, I was very concerned about market movements, 0:00:50.760 --> 0:00:53.080 and I'm trying to be a Secretary of Treasury, not 0:00:53.159 --> 0:00:56.400 a market commentator. What I would point out is that 0:00:56.560 --> 0:01:02.120 especially the nasdeck peaked on deep set day. That so 0:01:02.320 --> 0:01:04.800 that's a mag seven problem, not a MAGA problem. 0:01:05.280 --> 0:01:09.760 But today investors do think the tariffs a mag seven's problem. 0:01:10.000 --> 0:01:11.360 Let's check in on those markets. 0:01:11.520 --> 0:01:14.360 We fall hard on the NAZAT one hundred Tech underperformance. 0:01:14.400 --> 0:01:17.319 The other benchmarks, We're off by almost five percent. This 0:01:17.440 --> 0:01:20.440 is the worst day for the benchmark since twenty twenty two. 0:01:20.800 --> 0:01:24.880 We move on to those Magnificent seven players, which we're 0:01:25.040 --> 0:01:29.080 all in the red even the software services sector being 0:01:29.120 --> 0:01:32.200 hit by anticipation of what the EU levies back in 0:01:32.280 --> 0:01:36.399 terms of digital services taxes. Alphabet lower, Meta off by 0:01:36.400 --> 0:01:38.720 eight percent, Amazon off by eight point eight percent. 0:01:38.959 --> 0:01:40.520 We move on and have a look at what the 0:01:40.600 --> 0:01:43.039 hardware impact is in Vidia. 0:01:43.200 --> 0:01:48.120 Even though semiconductors are exempt from current tariffs, we anticipate 0:01:48.360 --> 0:01:49.680 further to come and retaliation. 0:01:49.720 --> 0:01:51.000 We're off by almost seven percent. 0:01:51.200 --> 0:01:54.680 Tesla wipes out seven percent, and Apple falls the hardest. 0:01:54.960 --> 0:01:57.280 We're off by almost nine percent. We are having the 0:01:57.320 --> 0:01:59.320 biggest erasion. 0:01:59.520 --> 0:02:01.000 Of mark kick cap for Apple. 0:02:02.000 --> 0:02:05.280 Ever, it's on pace for the biggest single day wipeout 0:02:05.360 --> 0:02:08.480 in the company's history, more than three hundred billion dollars 0:02:08.840 --> 0:02:11.799 in one go. Apple supply chain w was we dig 0:02:11.840 --> 0:02:15.519 into them. Blomberg's Dana Woolman is with us, Dana, why 0:02:15.720 --> 0:02:18.040 is Apple in the eye of the storm here? We 0:02:18.080 --> 0:02:20.880 thought they were diversifying out of China, but that has 0:02:20.919 --> 0:02:22.160 backfired at this moment. 0:02:23.600 --> 0:02:26.760 Yes, diversity, diversifying out of China does not mean so 0:02:26.880 --> 0:02:30.359 much in this moment, especially given that the Trump administration 0:02:30.400 --> 0:02:32.920 has just taken aim at, if not every country in 0:02:32.919 --> 0:02:35.440 the world, seemingly every country in the world, and certainly 0:02:36.240 --> 0:02:39.120 levying very high tariffs on some of the very countries 0:02:39.160 --> 0:02:43.120 where Apple thought it was making progress by diverting some 0:02:43.160 --> 0:02:47.079 of its manufacturing countries like Vietnam, Thailand, others, even Ireland, 0:02:47.840 --> 0:02:51.160 not a company necessarily think of as core to Apple 0:02:51.280 --> 0:02:55.600 supply chain. So Apple did spend years trying to reduce 0:02:55.639 --> 0:02:59.000 its dependence on China, only to have bits as the outcome. 0:02:59.480 --> 0:03:03.799 I mean a certain analyst reaction Rosenblat Securities, for example, 0:03:03.919 --> 0:03:07.920 saying this just blows up Apple's business model that you 0:03:08.080 --> 0:03:12.080 question how Trump could be targeting such an iconic company. 0:03:12.120 --> 0:03:14.080 They say, it's hard for us to imagine Trump blowing 0:03:14.160 --> 0:03:17.280 up an American icon. But at this moment it looks 0:03:17.320 --> 0:03:20.520 pretty tough. Many out there think eventually they'll get some 0:03:20.600 --> 0:03:24.440 sort of exemption. But for the here and now, it 0:03:24.520 --> 0:03:27.480 seems as though Tim Cook tried to be at the inauguration. 0:03:27.680 --> 0:03:30.600 He's promised investment in the United States, but it's not enough. 0:03:31.960 --> 0:03:33.679 Absolutely, and I would not go so far as to 0:03:33.720 --> 0:03:36.680 say this these measures were targeted at Apple, but certainly, 0:03:36.720 --> 0:03:38.560 as we can see Apple as one of the hardest hits, 0:03:38.560 --> 0:03:42.640 and as you said, Tim Cook's personal efforts to curry 0:03:42.640 --> 0:03:45.520 favor the Trump administration clearly did not yield the outcomes 0:03:45.520 --> 0:03:48.560 that her investors would have wanted or expected. 0:03:49.480 --> 0:03:51.800 Dane Woman, we thank you for the update on all 0:03:51.800 --> 0:03:54.760 things Apple, and then we turn our attentions to the 0:03:54.800 --> 0:03:58.480 services side, the software side too. France, Germany, they are 0:03:58.520 --> 0:04:01.560 pushing for a stronger response as President Trump's taris pushing 0:04:01.560 --> 0:04:04.320 for the EU to target US tech companies in particular, 0:04:04.520 --> 0:04:07.760 and Alan Katz can tell us exactly how this seems 0:04:07.800 --> 0:04:10.760 to be coming down to the digital services tax in particular. 0:04:11.040 --> 0:04:13.440 They really want to target big tech as the way 0:04:13.480 --> 0:04:14.080 forward here. 0:04:17.360 --> 0:04:19.120 Well, they do really want to target a big tech 0:04:19.160 --> 0:04:22.240 but it's actually broader than that. So Emanuel maccin is 0:04:22.240 --> 0:04:24.920 actually meeting with a whole variety of industries that are 0:04:24.920 --> 0:04:26.880 going to be affected by the tariffside meeting is happening 0:04:26.960 --> 0:04:29.960 right now, and speaking just before the meeting, he actually 0:04:30.000 --> 0:04:33.839 asked EU companies to pause all investment in the United 0:04:33.880 --> 0:04:35.720 States for the moment. So this is not just this 0:04:35.800 --> 0:04:38.320 is not tech specific, this is all companies in all 0:04:38.360 --> 0:04:40.680 sectors saying, you know, if the US is hitting us 0:04:40.960 --> 0:04:43.760 right now, how can you be investing in the United States? 0:04:43.800 --> 0:04:48.000 And you need cohesion among these sectors that are being 0:04:48.080 --> 0:04:50.120 affected by the United States. But to come back to 0:04:50.160 --> 0:04:53.719 your point about tech, the EU and more specifically France 0:04:53.720 --> 0:04:56.600 and Germany, and France, I suppose more than anyone else, 0:04:56.640 --> 0:05:00.240 really thinks that going after digital services is the way 0:05:00.279 --> 0:05:01.920 to hit the United States. Now this has come up before, 0:05:01.960 --> 0:05:03.920 It's been a fight before between Francs the United States. 0:05:03.960 --> 0:05:06.839 France does have a digital services tax on companies like 0:05:06.960 --> 0:05:11.080 Google and Amazon, which levies which makes about seven hundred 0:05:11.120 --> 0:05:13.679 million dollars a year for France's coffers, and it wants 0:05:13.720 --> 0:05:16.360 to use that or it thinks that is the way 0:05:16.400 --> 0:05:20.560 to respond the best way to respond to the US 0:05:20.760 --> 0:05:23.680 decision to Donald President Donald Trump's decision that said, it's 0:05:23.720 --> 0:05:26.479 going to be difficult to get everyone to agree. Those 0:05:26.520 --> 0:05:29.479 digital taxes that exist in Europe are pretty different country 0:05:29.480 --> 0:05:32.120 by countries, say France versus Polands, for example, are quite different, 0:05:32.640 --> 0:05:35.520 and some countries have really been very, very reluctant within 0:05:35.600 --> 0:05:38.240 Europe to impose that kind of tax. So if France 0:05:38.360 --> 0:05:41.320 getting sort of everybody on board, all twenty seven members 0:05:41.320 --> 0:05:43.400 of the EU really is a tall task. 0:05:43.720 --> 0:05:45.960 And I suppose what's interesting is Germany seems to be 0:05:46.000 --> 0:05:49.040 aligned on wanting to go hard in response. In Germany 0:05:49.320 --> 0:05:52.440 was one of the company's countries that hadn't want to 0:05:52.520 --> 0:05:55.800 align itself on this sort of a tax. Will we 0:05:55.920 --> 0:06:00.400 see big tech pull and retrench from Europe? Even willing 0:06:00.440 --> 0:06:03.360 to mentally get round that, are we going to start 0:06:03.400 --> 0:06:04.600 to see bifurcation here? 0:06:08.000 --> 0:06:10.840 That's that's not a million dollar question, that's a multi 0:06:10.839 --> 0:06:14.920 trillion dollar question. It would be impossible to say at 0:06:14.920 --> 0:06:16.640 the moment. I mean, your point is a good one, right. 0:06:16.680 --> 0:06:19.200 Germany really was pretty opposed to the idea of digital 0:06:19.240 --> 0:06:21.880 taxation before now it seems to have come around to it. 0:06:21.920 --> 0:06:24.640 Habek was quite strong, the Economy Minister was quite strong 0:06:24.640 --> 0:06:27.520 in his comments earlier today. So it does seem that 0:06:27.560 --> 0:06:29.719 Germany at least is on board with the idea. That 0:06:29.720 --> 0:06:32.120 doesn't mean again, that all other European countries will be 0:06:32.160 --> 0:06:35.320 on board. And Europe is trying to do this with 0:06:35.400 --> 0:06:37.840 more or less one voice, if not exactly one voice, 0:06:38.200 --> 0:06:39.880 because the things it will be much stronger if it 0:06:39.920 --> 0:06:42.839 responds that way. So even if France and Germany, which 0:06:42.839 --> 0:06:45.040 traditionally are the motor for the European Union, even if 0:06:45.040 --> 0:06:47.360 they agree on something, it doesn't it doesn't necessarily mean 0:06:47.560 --> 0:06:50.240 that's going to happen on the question of bifurcation. That's 0:06:50.279 --> 0:06:52.640 of course the question immediately came to me too. France 0:06:52.720 --> 0:06:56.720 has four years tried to create alternatives to you know, 0:06:57.080 --> 0:07:01.679 search engines and AI companies, and it's generally hasn't worked 0:07:01.680 --> 0:07:04.479 out because France is too small a market, and it 0:07:04.520 --> 0:07:08.240 hasn't There hasn't really been one single European market functionally 0:07:08.800 --> 0:07:11.920 for these digital services. Will that come as a result 0:07:12.000 --> 0:07:14.200 of these tariffs? That's that's It's a good question and 0:07:14.240 --> 0:07:15.960 one that many people are asking themselves. Will We really 0:07:16.000 --> 0:07:17.160 don't have an answer to that yet. 0:07:17.480 --> 0:07:19.440 And Kat's great to catch up with you. Thank you 0:07:19.520 --> 0:07:21.840 for giving us the tech nuance. I mean, while joining 0:07:21.920 --> 0:07:24.520 us now for more on the global tariff impact, Mark 0:07:24.600 --> 0:07:28.040 Mahaney ever core is I seenior managing director joining us now, 0:07:28.160 --> 0:07:32.160 and I start with retaliation. Many of the Internet names 0:07:32.160 --> 0:07:34.680 that you cover could well be in the eye of 0:07:34.680 --> 0:07:38.480 the storm if Europe does increase those digital services at 0:07:38.560 --> 0:07:39.760 taxes that they already hate. 0:07:42.240 --> 0:07:46.240 I think that's right, Caroline. I don't have any particular 0:07:46.280 --> 0:07:48.520 insight into that, but that makes logical sense to me. 0:07:48.600 --> 0:07:51.800 What I senses the way these stocks are trading today. 0:07:51.880 --> 0:07:54.560 The degree of sell off is kind of determined by 0:07:54.640 --> 0:07:58.280 retaliatory risk and recession risk. So there are companies that 0:07:58.320 --> 0:08:00.640 I look at that are just off modestly because they're 0:08:00.640 --> 0:08:05.200 perceived to have relative they're received to be relatively recessionary resilient. 0:08:05.600 --> 0:08:09.480 That's names like a Netflix or Spotify, which are inexpensive 0:08:09.480 --> 0:08:12.480 consumer subscription businesses. But at the other end are the 0:08:13.400 --> 0:08:17.679 three megacap names that I look at, Amazon, Google, and Meta, 0:08:17.720 --> 0:08:22.080 which are trading off ford to nine percent. Amazon at 0:08:22.080 --> 0:08:25.640 the top of that list because of pure terrif exposure. 0:08:25.680 --> 0:08:30.480 There's most of those products that they sell are produced, manufactured, 0:08:30.520 --> 0:08:34.080 and then exported from Asia, so there's going to be 0:08:34.080 --> 0:08:35.800 costs that Amazon's going to have to decide whether to 0:08:35.800 --> 0:08:38.439 eat or pass al on to consumers and therefore depressed demand. 0:08:39.040 --> 0:08:42.800 Meta also has this exposure to she and Timu, some 0:08:42.840 --> 0:08:46.280 of those kind of exporters retailers that got hit by 0:08:46.280 --> 0:08:49.400 the removal of the Deminimus exemption. So there's a lot 0:08:49.400 --> 0:08:52.880 of different issues in here, but retaliation and recessionary risks 0:08:53.000 --> 0:08:56.160 are sort of bifurcating some of the stock movements today. 0:08:56.720 --> 0:08:58.240 How do you foreseen this mark? 0:08:58.520 --> 0:09:02.640 Many have been surprised by the aggression shown in the 0:09:02.679 --> 0:09:06.000 reciprocal tariffs. But do we think this is knee jerk? 0:09:06.160 --> 0:09:07.840 Is this in any way a buying opportunity? 0:09:12.000 --> 0:09:14.560 Okay, then yes, I think it's a buying opportunity if 0:09:14.559 --> 0:09:17.440 you can, if you tell me that I can buy 0:09:17.600 --> 0:09:20.640 Meta at less than twenty times earnings and Google at 0:09:20.640 --> 0:09:24.040 fifteen times earnings and Amazon at twenty three times earnings. 0:09:24.679 --> 0:09:26.520 Even I know, I understand that there's going to be 0:09:26.559 --> 0:09:30.040 earnings risk from the imposition of tariffs, from a slow 0:09:30.080 --> 0:09:33.280 down economy, from a recession. You know, you're talking about 0:09:33.280 --> 0:09:37.400 mid single digit percent earnings growth you step in and 0:09:37.559 --> 0:09:40.160 take on a full position today? Absolutely not, But like 0:09:40.200 --> 0:09:42.800 at these levels, yeah, this is you know, I hunt 0:09:42.800 --> 0:09:46.040 for what I call d HQ's, dislocated high quality companies. Look, 0:09:46.080 --> 0:09:48.120 we had a two and a half year bullmarket, uper 0:09:48.160 --> 0:09:50.679 bowl market and tech stocks, particularly in some of these 0:09:50.960 --> 0:09:53.000 internet stocks that went through the end of last year. 0:09:53.240 --> 0:09:56.520 Here's your negative catalyst, and you know, you now got it. 0:09:56.559 --> 0:09:58.679 You didn't have any real dhq's at the beginning of 0:09:58.720 --> 0:10:00.679 the year, but now you do, And so you want 0:10:00.679 --> 0:10:03.199 to step in on the highest quality names when they're 0:10:03.200 --> 0:10:05.439 trading at trough multiples. So yeah, I think you want 0:10:05.440 --> 0:10:07.240 to be picking away at these. I think what you 0:10:07.360 --> 0:10:09.600 have to also be very cognizant of is there's going 0:10:09.600 --> 0:10:10.959 to this terrify is she is going to play out 0:10:10.960 --> 0:10:13.319 for a while with retaliations, so you can get all 0:10:13.320 --> 0:10:16.720 that volatility. Then you've got increasing risk of recession. So 0:10:16.720 --> 0:10:18.600 you're going to have to be careful about those estimates 0:10:18.760 --> 0:10:20.720 and they're going to come down you know, probably mid 0:10:20.800 --> 0:10:23.920 singles dit you percent again in a modest recessionary environment. 0:10:24.640 --> 0:10:27.040 But with these kinds of multiples, Yeah, you want to 0:10:27.040 --> 0:10:28.240 start picking away at them. 0:10:28.760 --> 0:10:30.960 Could you in the next earning season. 0:10:30.640 --> 0:10:34.199 As soon as that see a retrenchment in purchasing of 0:10:34.360 --> 0:10:35.520 it right now? 0:10:39.080 --> 0:10:40.880 See we see that in the earning season. I think 0:10:40.920 --> 0:10:42.520 most of these companies are going to be we're just 0:10:42.520 --> 0:10:44.520 finishing up our previews now, or most of these companies 0:10:44.559 --> 0:10:47.600 are going to be reporting reasonably solid March quarter results. 0:10:47.840 --> 0:10:51.400 My guess is that what's going to be consistent across 0:10:51.440 --> 0:10:54.880 almost all these tech earnings is cautious commentary about end 0:10:54.880 --> 0:10:57.840 market demand for the June quarter, and therefore you're going 0:10:57.880 --> 0:11:00.840 to see cautious guidance that's in life with her below 0:11:01.120 --> 0:11:04.000 the street for most of these estimates. The only silver 0:11:04.120 --> 0:11:06.880 lining here is currency, which was a massive which looked 0:11:06.880 --> 0:11:08.840 to be a massive headwind for the year, doesn't look 0:11:08.840 --> 0:11:10.160 like it's going to be as much of a headwind 0:11:10.160 --> 0:11:12.240 as thoughts, So there's a little bit of help there. 0:11:12.520 --> 0:11:14.840 But at the whole, I think the March quarter results, 0:11:14.880 --> 0:11:16.520 I think we're going to be fine. I think there's 0:11:16.600 --> 0:11:18.720 just the guidance is just going to be cautious about 0:11:18.720 --> 0:11:20.959 the June quarter. So I don't think there's any particular 0:11:21.000 --> 0:11:24.040 reason for the stocks to trade up on the upcoming prints. 0:11:24.120 --> 0:11:27.720 You can totally understand why enterprises would just slow down 0:11:27.760 --> 0:11:29.960 their commitment to spend on some of your names and 0:11:30.000 --> 0:11:32.280 some of the technology that they sell. 0:11:32.840 --> 0:11:34.559 What about the AI trade, though. 0:11:34.400 --> 0:11:36.680 Mark it does affect some of your names like Meta, 0:11:36.800 --> 0:11:37.400 like Amazon. 0:11:37.880 --> 0:11:39.760 Does the wind come out of the sales there too? 0:11:41.960 --> 0:11:43.800 I think it has been coming out. I saw that 0:11:44.480 --> 0:11:48.800 Treasury Secondary's comments about deep seek being one of the 0:11:48.880 --> 0:11:53.360 key factors behind the mag seven trade on wine. I 0:11:53.400 --> 0:11:55.760 think there's some truth to that now. I think there's 0:11:55.760 --> 0:11:59.040 also policy that's just been just as much, probably more 0:11:59.040 --> 0:12:01.640 of a factor in the in the in the in 0:12:01.679 --> 0:12:06.400 the market sell off and then the mag seven unwind 0:12:06.840 --> 0:12:09.640 the AI trade. I don't think these companies are going 0:12:09.720 --> 0:12:13.040 to be slowing down their AI capex anytime soon, and 0:12:13.120 --> 0:12:14.840 I think we're going to see more and more evidence 0:12:14.880 --> 0:12:17.600 that they're getting a return on that. On that, you know, 0:12:17.600 --> 0:12:19.800 we're going to get a lot of these good productivity 0:12:19.880 --> 0:12:22.320 data points. Google is telling you twenty five percent of 0:12:22.360 --> 0:12:24.840 their code now is being generated by AI, which means 0:12:24.840 --> 0:12:27.400 that their programmer headcount is probably going to be flat 0:12:27.520 --> 0:12:30.439 for a couple of years. Amazon telling you that they 0:12:30.440 --> 0:12:33.280 have twenty five percent lower cost to serve in their 0:12:33.280 --> 0:12:37.600 most advanced automated distribution centers. That's a massive efficiency gain 0:12:37.760 --> 0:12:39.960 for a name like Amazon. So I think that's going 0:12:40.000 --> 0:12:42.280 to come through in terms of margins. The question is 0:12:42.320 --> 0:12:45.679 what's happening to demand and is that going to depress 0:12:45.720 --> 0:12:49.000 the margin expansion we would normally expect from the AI trade. 0:12:49.120 --> 0:12:50.640 That's the big unknown to me. But I don't think 0:12:50.640 --> 0:12:52.880 these companies are going to slow down their AI expenses. 0:12:53.440 --> 0:12:56.560 Mark as someone who is every day having to respond 0:12:56.600 --> 0:12:57.680 to the headlines that we're. 0:12:57.520 --> 0:13:01.040 Going to get, many feel that you will come there'll 0:13:01.080 --> 0:13:01.720 be carve outs. 0:13:01.760 --> 0:13:05.200 Potentially Nearly every analyst anticipating that for Apple, for example, 0:13:05.480 --> 0:13:07.560 with your names, how are you going to keep abreast 0:13:07.600 --> 0:13:11.480 of how this changes, how we see other countries respond 0:13:11.600 --> 0:13:14.600 and try and carve out certain names, or at least 0:13:15.000 --> 0:13:17.400 will try and curry favor with the administration. 0:13:18.920 --> 0:13:21.600 Well, I think I'm going to focus. I mean the 0:13:21.640 --> 0:13:25.480 sector I look at Internet sector has very little direct 0:13:25.760 --> 0:13:29.760 terrific exposure except for you know, the retailers like particularly Amazon. 0:13:30.280 --> 0:13:33.160 It's really kind of the indirect exposure. What impact the 0:13:33.320 --> 0:13:38.040 terriffs have on consumer confidence and on consumer spend and 0:13:38.120 --> 0:13:40.319 so then what you really want to do is look 0:13:40.360 --> 0:13:42.000 at the stocks that I look at, and I kind 0:13:42.000 --> 0:13:45.000 of put it together a recessionary spectrum, like who's the 0:13:45.040 --> 0:13:49.400 most recessionary resistant, who's the most recessionary exposed? And you know, 0:13:49.440 --> 0:13:52.839 I think names like Netflix and Spotify are the least 0:13:53.760 --> 0:13:56.520 recession they are the most recessionary resistant. That's why they're 0:13:56.559 --> 0:13:59.200 trading off better today. They'll hold up better. The stocks 0:13:59.200 --> 0:14:02.000 have here todayta actually outperform the market materially. You're to 0:14:02.040 --> 0:14:03.560 date because of this, PODi. 0:14:03.480 --> 0:14:06.120 Spify for example, Mark just to jump in a Shopif 0:14:06.120 --> 0:14:08.400 I would be on the other end of that, yes. 0:14:08.240 --> 0:14:10.120 It would be and so with the travel names too, 0:14:10.120 --> 0:14:13.400 your Bookings, your expedias, your Airbnb, the kind of discrete 0:14:13.480 --> 0:14:16.640 consumer discretionary spends also advertising names with a lot of 0:14:16.679 --> 0:14:20.000 exposure to brand advertising. Brand advertising always gets cut before 0:14:20.000 --> 0:14:23.440 performance marketing. So that's why I particularly find Meta very 0:14:23.440 --> 0:14:26.240 intriguing here. You brought it down to a very attractive 0:14:26.280 --> 0:14:29.680 price point. It's the largest performance marketing platform out there 0:14:29.720 --> 0:14:31.880 that isn't called Google, and I think it actually will 0:14:31.880 --> 0:14:35.040 hold up fundamentally better than most assets. So that's why 0:14:35.040 --> 0:14:36.960 I'd be chipping away at the stock here. 0:14:37.080 --> 0:14:39.920 Mart mahoney with news you can use. We thank you 0:14:39.960 --> 0:14:40.320 so much. 0:14:40.400 --> 0:14:43.520 Ever caught ISI coming up, will take a look at 0:14:43.560 --> 0:14:46.160 how the twenty five percent auto tariff is going to 0:14:46.160 --> 0:14:47.960 be impacting the electric vehicle market. 0:14:48.560 --> 0:15:00.120 This is blue meg technology. 0:15:01.560 --> 0:15:03.440 Now let's take a look at how tariffs from the 0:15:03.520 --> 0:15:06.720 auto industry. That's Trump's twenty five percent tariff on the 0:15:06.800 --> 0:15:10.760 US imports is already taking effect, expected to increase costs 0:15:10.760 --> 0:15:14.200 and disrupt industry supply chains from most Credudell joins US. 0:15:14.240 --> 0:15:17.560 Now these aren't promises, these are delivered. And how much 0:15:17.560 --> 0:15:20.240 we already seeing auto sector and EV's respond to it. 0:15:21.800 --> 0:15:26.320 Yeah, I think we will see significant disruptions to supply chains. 0:15:26.360 --> 0:15:28.080 I think that is part of why you're seeing some 0:15:28.120 --> 0:15:32.280 of these stocks trade down. I think you're also likely 0:15:32.360 --> 0:15:36.800 going to see some of these companies caught up in retaliation, 0:15:37.600 --> 0:15:39.800 you know, potentially in the in the days and weeks 0:15:39.840 --> 0:15:43.680 to come. We haven't necessarily seen that, you know, from 0:15:44.120 --> 0:15:47.920 countries that are newly you know, newly facing higher tariffs 0:15:48.120 --> 0:15:51.240 from the Trump administration. But we did get at least 0:15:51.280 --> 0:15:54.120 a whiff of that already with you know, Canada, for instance, 0:15:54.760 --> 0:15:57.360 kind of taking aim at Elon Musk's companies as a 0:15:57.400 --> 0:16:00.640 result of the tariffs that do you is put on 0:16:00.880 --> 0:16:03.040 Canada and Mexico in the last few weeks. 0:16:03.080 --> 0:16:06.720 So yeah, go there for us because Tesla is down hard, 0:16:06.880 --> 0:16:09.280 even though many would anticipate, look, it makes more of 0:16:09.320 --> 0:16:13.400 its cars here in the United States should be less exposed. 0:16:13.400 --> 0:16:16.640 But you think it's a retaliation trade here, I. 0:16:16.640 --> 0:16:19.800 Think retaliation is likely something that the market would be, 0:16:19.920 --> 0:16:22.360 you know, concerned about. I do wonder too looking at 0:16:22.400 --> 0:16:25.600 Tesla's shares. You know, they really were down quite a 0:16:25.600 --> 0:16:28.720 bit yesterday. They had this you know, really furious rally 0:16:28.720 --> 0:16:31.520 and response to this report by Politico that maybe Musk 0:16:31.800 --> 0:16:36.040 would be looking to exit his roles in you know, 0:16:36.120 --> 0:16:38.760 advising the Trump administration. And I think you know, not 0:16:38.840 --> 0:16:41.920 only did the White House Press Secretary and Musk himself, 0:16:42.000 --> 0:16:43.880 you know, sort of knock that down, but you heard 0:16:44.240 --> 0:16:46.520 jd Vance today, you know, come out and say that, 0:16:46.560 --> 0:16:50.000 you know, he will continue to kind of have our 0:16:50.120 --> 0:16:53.080 ear even after he you know, officially leaves. And so 0:16:53.560 --> 0:16:56.360 this notion that that that TESLA is you know, going 0:16:56.400 --> 0:16:59.040 to make a clean break from this situation where it's 0:16:59.120 --> 0:17:03.040 CEO so closely tied to the Trump administration just seems 0:17:03.200 --> 0:17:04.119 pretty misguided. 0:17:04.160 --> 0:17:06.000 I think the one other thing I would. 0:17:05.760 --> 0:17:08.679 Point out is, you know, Tesla likes to and you 0:17:08.680 --> 0:17:11.399 know rightfully so likes to to tout you know how 0:17:12.080 --> 0:17:15.280 you know US you know, made in America, it's its 0:17:15.320 --> 0:17:18.960 cars are. But in order to rely on this parts 0:17:19.040 --> 0:17:21.560 content to you know, share that data with folks, it 0:17:21.600 --> 0:17:24.520 relies on US government data that loops in US and 0:17:24.680 --> 0:17:27.560 Canadian parts content. So you know, that just speaks to 0:17:27.600 --> 0:17:30.880 this notion that I think, you know, for decades we've 0:17:30.920 --> 0:17:33.640 sort of thought of, you know, what happens in Canada 0:17:33.680 --> 0:17:35.560 and what happens in the US. It's sort of one 0:17:35.600 --> 0:17:37.879 and the same in this you know automotive supply chain, 0:17:38.280 --> 0:17:40.520 and you know for us to move to this you 0:17:40.560 --> 0:17:43.520 know new paradigm where that's no longer the case is 0:17:43.560 --> 0:17:46.639 really disruptive to everybody, even companies that make all their 0:17:46.680 --> 0:17:47.840 vehicles in the US. 0:17:48.080 --> 0:17:52.040 Really thoughtfully put crejd ow thank you. Let's get more 0:17:52.080 --> 0:17:54.480 for you on auto tariffs how they could impact electric 0:17:54.560 --> 0:17:55.440 vehicles in particular. 0:17:55.600 --> 0:17:56.480 John Desusar is. 0:17:56.400 --> 0:17:58.960 With US co founder and president of Ample, which is 0:17:59.000 --> 0:18:02.080 working to accelerate the transition to electric mobility. And what's 0:18:02.080 --> 0:18:04.879 so interesting about you is you basically offer to swap 0:18:04.920 --> 0:18:09.400 out the actual batteries to make charging that much swifter 0:18:09.520 --> 0:18:13.560 and cleaner. But John, you've made real inroads into building 0:18:13.560 --> 0:18:15.399 in America. How is this going to back far for 0:18:15.440 --> 0:18:16.680 you with tariffs? 0:18:17.520 --> 0:18:19.240 So as you look at the tariffs, there are actually 0:18:19.280 --> 0:18:21.119 three things that you need to look at. One is 0:18:21.119 --> 0:18:23.080 where do you go through and produce it whereo factories. 0:18:23.480 --> 0:18:25.480 The second thing is where you get your materials from, 0:18:25.520 --> 0:18:27.480 and the third is what you do to finnshurds. 0:18:28.040 --> 0:18:29.399 So I think we were ahead of the curve. We 0:18:29.440 --> 0:18:31.600 do all of our production in the US in California. 0:18:31.640 --> 0:18:32.840 We have our factories there. 0:18:33.680 --> 0:18:35.359 The two other parts though, one is where do you 0:18:35.359 --> 0:18:37.720 get the goods When you don't have the capacity or 0:18:37.760 --> 0:18:41.119 you don't have the necessary skill set domestically to go 0:18:41.200 --> 0:18:44.399 through and form itt you buy those things from abroad. 0:18:44.720 --> 0:18:47.440 So the tariff for us, that means everything we bring 0:18:47.440 --> 0:18:49.359 into this country, we need to go pray tariffs on 0:18:49.400 --> 0:18:52.040 it because we're doing all our production in the US. 0:18:52.320 --> 0:18:53.959 The last part of it is once you produce it, 0:18:54.240 --> 0:18:57.800 we export, and export helps our trade surplus. But I 0:18:57.800 --> 0:19:00.199 think part of the tariffs has this new provision and 0:19:00.240 --> 0:19:03.399 where it takes back duty drawbacks. Duty drawbacks says you 0:19:03.400 --> 0:19:05.239 get your tariffs back, so you paid the trattfs when 0:19:05.240 --> 0:19:06.639 you bring it in, but when you explot. 0:19:06.400 --> 0:19:08.560 It you get it back. If you take that back 0:19:09.080 --> 0:19:09.320 or if. 0:19:09.240 --> 0:19:11.880 You take it away, it makes you goods exceedingly expensive 0:19:11.880 --> 0:19:14.280 and uncompetitive. So I think as we think about the 0:19:14.320 --> 0:19:17.600 full cycle, it's important to look at all three components. 0:19:18.160 --> 0:19:20.600 We are doing all the production in the US, but 0:19:20.640 --> 0:19:22.800 the tariff sitters on two paths. The stuff that we 0:19:22.880 --> 0:19:24.600 buy in and then when we send stuff off you 0:19:24.600 --> 0:19:25.920 don't get any full stars back. 0:19:26.240 --> 0:19:28.960 How hard does this make your decision making is uncertainty. 0:19:30.600 --> 0:19:31.960 I think there are three things, and I think what 0:19:32.000 --> 0:19:35.119 COVID shows is that the full supply chain is very complicated. 0:19:35.560 --> 0:19:37.880 So the three things that I think make it difficult 0:19:38.000 --> 0:19:41.480 is one is the number the number of different tariffs 0:19:41.520 --> 0:19:44.280 that are coming out there. They're also complicated. Second is 0:19:44.280 --> 0:19:46.040 the speed at which they come out and change, and 0:19:46.080 --> 0:19:47.840 I think the third is the speed at which they 0:19:47.880 --> 0:19:50.960 are implemented. So supply chains have a very long life cycle, 0:19:51.000 --> 0:19:53.080 so it's hard to go through and change it quickly. 0:19:53.320 --> 0:19:55.560 So think where the difficulty comes when you put those together. 0:19:56.000 --> 0:19:58.400 We try to make long term decisions on our supply chain, 0:19:58.680 --> 0:20:01.000 but with the speed at which come out change and 0:20:01.040 --> 0:20:03.560