WEBVTT - Trump’s Threat of ‘Secondary Tariffs’ Invents New Trade Tool 0:00:00.040 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy, plus global business finance 0:00:22.800 --> 0:00:26.520 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.640 --> 0:00:31.720 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:33.040 --> 0:00:35.440 Let's get to something that we really got into, our 0:00:35.479 --> 0:00:38.280 started to get into yesterday, as President Trump appeared to 0:00:38.320 --> 0:00:42.000 invent a new weapon of economics state craft by threatening 0:00:42.000 --> 0:00:45.280 what he dubbed secondary tariffs on countries that buy oil 0:00:45.280 --> 0:00:48.120 from Venezuela to choke off its oil trade with other 0:00:48.240 --> 0:00:52.360 nations with moron the what, where, when and why with 0:00:52.479 --> 0:00:55.520 US as Bloomberg News US Treasury reporter Dan Flatley, he's 0:00:55.560 --> 0:00:57.680 out there in a Washington, DC beer. All right, Dan, 0:00:57.760 --> 0:01:00.800 what exactly do we know about possible secondary tariffs? And 0:01:00.840 --> 0:01:02.960 why are they kind of secondary tariffs? 0:01:04.720 --> 0:01:04.880 Yeah? 0:01:05.000 --> 0:01:08.679 No, it's interesting. So it appears that Trump has sort 0:01:08.720 --> 0:01:11.319 of taken this idea of secondary sanctions. It's been around 0:01:11.319 --> 0:01:15.160 for a while, and his sort of fondness for tariffs 0:01:15.160 --> 0:01:18.400 and kind of combined the two. And it's understandable if 0:01:18.440 --> 0:01:21.080 you look at it from Trump's perspective. He's talked for 0:01:21.120 --> 0:01:24.160 the last several months about how sanctions could hurt the 0:01:24.240 --> 0:01:27.120 US dollar, and you know how he wants to protect 0:01:27.160 --> 0:01:29.640 the US dollar, and he's certainly made no secret about 0:01:29.640 --> 0:01:32.360 his fondness for tariffs, and so what he's kind of 0:01:32.360 --> 0:01:34.920 come up with here, and we're still trying to understand 0:01:34.920 --> 0:01:37.800 some of the details here, is essentially an idea to 0:01:37.920 --> 0:01:41.600 use tariffs as a sanction. And one of the features 0:01:41.640 --> 0:01:46.440 that tariffs as a sanction have or has that sanctions 0:01:46.480 --> 0:01:48.320 don't have is the ability to sort of ramp them 0:01:48.400 --> 0:01:51.120 up and ramp them down depending on how the target 0:01:51.200 --> 0:01:54.320 nation is responding. So if Trump doesn't get what he 0:01:54.320 --> 0:01:56.240 wants out of Venezuela, he could take them up to 0:01:56.280 --> 0:01:59.440 thirty percent or forty percent. If things look like they're 0:01:59.480 --> 0:02:02.520 improving and he's getting what he wants, he could reduce them. 0:02:03.080 --> 0:02:05.800 So it's sort of a combination of what he has 0:02:06.040 --> 0:02:08.400 talked about as his favorite word in the dictionary, this 0:02:08.600 --> 0:02:12.079 very powerful tool the tariff uh with with sanctions, and 0:02:12.120 --> 0:02:14.600 more traditional kind of use of sanctions. So you know, 0:02:14.639 --> 0:02:17.040 it's it's it's it's certainly interesting, and I think, just 0:02:17.080 --> 0:02:18.720 to you know, kind of bring it all together, that 0:02:18.880 --> 0:02:21.280 a lot of this is aimed at China because China 0:02:21.360 --> 0:02:23.360 is one of the big buyers of Venezuelan oil, so 0:02:23.639 --> 0:02:25.560 you know, it kind of fits into that whole trade discussion. 0:02:25.680 --> 0:02:27.720 Well that's that's where I wanted to get because we 0:02:27.760 --> 0:02:30.640 said that it's on countries that buy oil from Venezuela 0:02:30.720 --> 0:02:32.640 to choke off it's oil trade with other nations. 0:02:32.960 --> 0:02:37.359 It's really just about China, right, Yeah, I mean I 0:02:37.400 --> 0:02:39.000 think that a lot of you know, folks that have 0:02:39.120 --> 0:02:43.080 reached out to me in the UH, in the you know, 0:02:43.120 --> 0:02:45.040 since the story went out, we're kind of making that 0:02:45.080 --> 0:02:49.240 point that this is really about China and the Chinese UH. 0:02:49.840 --> 0:02:52.480 Some Chinese officials did respond to the story and oppose 0:02:52.600 --> 0:02:55.919 the use of what they call or characterize as extra 0:02:56.080 --> 0:02:59.800 territorial use of US economic statecraft tools like sanctions and 0:03:00.000 --> 0:03:02.640 tariffs and things like that. And so basically what we 0:03:02.680 --> 0:03:05.600 know at this point is Trump has imposed successive rounds 0:03:05.600 --> 0:03:09.480 of ten percent, two successive rounds of excuse me, tariffs 0:03:09.480 --> 0:03:12.240 of ten percent each on China. So we're at twenty 0:03:12.280 --> 0:03:14.800 percent right now. And if these tariffs were to go 0:03:14.840 --> 0:03:18.320 into effect, these secondary tariffs, then we'd be looking at 0:03:18.400 --> 0:03:21.799 potentially an additional twenty five percent on top of that, 0:03:22.000 --> 0:03:24.840 So you know, we're talking about forty five percent tariffs 0:03:24.880 --> 0:03:28.480 on Chinese goods and services potentially. But you know, we 0:03:28.560 --> 0:03:30.760 still are kind of sorting through some of those details here, 0:03:30.800 --> 0:03:33.520 and of course, all of this stuff is very much 0:03:34.200 --> 0:03:38.280 subject to change, depending on how the government in Venezuela responds, 0:03:38.360 --> 0:03:41.040 what Trump thinks he's getting out of them, and all 0:03:41.080 --> 0:03:43.160 of that. So you know, it's it's like many of 0:03:43.160 --> 0:03:45.240 the things that have been rolled out in the last 0:03:45.280 --> 0:03:47.960 couple of months, you know, it's all kind of subject 0:03:48.040 --> 0:03:48.600 to change. 0:03:48.800 --> 0:03:53.480 How is this enforceable, Dan, Well, it's a good question. 0:03:54.320 --> 0:03:58.040 You know, sanctions are primarily enforced really by the banks 0:03:58.080 --> 0:04:04.000 and the big financial institutions who safeguard there the channels 0:04:04.000 --> 0:04:07.720 that are used to uh transmit money and other forms 0:04:07.720 --> 0:04:12.440 of transactions under a fear of penalties big finds and 0:04:12.440 --> 0:04:16.599 stuff like that imposed by the US government. Secondary tariffs 0:04:17.400 --> 0:04:21.920 would in theory be potentially imposed or or enforced by 0:04:21.960 --> 0:04:25.960 a similar mechanism, but it would have to be kind 0:04:26.000 --> 0:04:28.480 of set up in a new form because this has 0:04:28.520 --> 0:04:31.240 never really been tried before. So I think that all 0:04:31.279 --> 0:04:33.280 of this, all of these details are sort of things 0:04:33.279 --> 0:04:36.039 that will have to be ironed out. But again, you know, 0:04:36.160 --> 0:04:38.839 this is assuming that they ultimately go into effect as 0:04:38.920 --> 0:04:39.640 as announced. 0:04:41.480 --> 0:04:45.720 I think about kind of longer term in terms of 0:04:45.800 --> 0:04:50.560 the implications. Can we expect some kind of retaliation? I'm 0:04:50.600 --> 0:04:53.080 curious how we are kind of gaming out what we 0:04:53.200 --> 0:04:54.800 might get then from China. 0:04:55.960 --> 0:04:58.960 Yeah, it's interesting. I spoke last night with somebody who 0:04:59.000 --> 0:05:04.480 worked in the first Trump and illustration who raised this point, 0:05:04.520 --> 0:05:10.880 which is, if secondary tariffs are used more frequently, it 0:05:10.960 --> 0:05:16.000 does kind of give other countries the option of using 0:05:16.040 --> 0:05:19.839 tariffs in retaliation for the secondary tariffs, which they don't 0:05:19.880 --> 0:05:24.200 necessarily have in the same way with sanctions. So there's 0:05:24.320 --> 0:05:29.159 there's a retaliatory element to this that becomes more operative 0:05:29.279 --> 0:05:31.720 or whatever you want to call it with tariffs than 0:05:32.720 --> 0:05:35.160 might be the case with sanctions. So that is kind 0:05:35.200 --> 0:05:38.000 of an interesting wrinkle in all of this, and so 0:05:38.080 --> 0:05:39.800 we'll have to kind of see how this plays out. 0:05:39.920 --> 0:05:42.919 I mean, dan tariffs makes so much sense for the 0:05:43.040 --> 0:05:45.719 United States, be it President Trump or somebody else, because 0:05:45.720 --> 0:05:48.920 we buy so much. Is that also fair in terms 0:05:48.960 --> 0:05:51.080 of how we think about this, and this is why 0:05:51.440 --> 0:05:54.919 maybe it's making it all so uncomfortable globally, we buy 0:05:55.080 --> 0:05:55.920 so much stuff. 0:05:57.760 --> 0:06:00.600 Yeah, it's a great point. I mean, even myra In, 0:06:00.960 --> 0:06:04.800 the President's chief of the Council of Economic Advisors, made 0:06:04.800 --> 0:06:07.800 this point yesterday when he was here speaking with my 0:06:07.839 --> 0:06:10.760 colleague Salaia Mosen about the fact that the US does 0:06:11.080 --> 0:06:13.039 buy so much from other countries and so we do 0:06:13.080 --> 0:06:15.560 have a point of leverage there. I think what Trump 0:06:15.600 --> 0:06:18.720 has kind of identified as well is that, you know, 0:06:18.800 --> 0:06:23.000 even if these tariffs don't work, if they don't have 0:06:23.080 --> 0:06:26.440 the intended effect like a sanction, might you still get 0:06:26.520 --> 0:06:30.240 some revenue in theory from the tariffs themselves. So it's 0:06:30.360 --> 0:06:33.960 kind of a win win situation in his mind. So 0:06:34.040 --> 0:06:37.320 I definitely think that gives the US some leverage, but 0:06:37.360 --> 0:06:41.000 it does potentially have some unintended consequences, as we were 0:06:41.000 --> 0:06:43.480 talking about with the retaliatory terifts. 0:06:43.560 --> 0:06:46.640 One last question, Dan, so again another reason for us 0:06:46.640 --> 0:06:48.720 all to focus on April second next week? 0:06:50.680 --> 0:06:53.640 Yes, absolutely, I mean April second is, as Trump has 0:06:54.040 --> 0:06:58.679 described it, liberation Day. So we're expecting some more tariffs, 0:06:58.680 --> 0:07:03.480 some reciprocal tariffs on April second. There's been a lot 0:07:03.520 --> 0:07:05.720 of activity behind the scenes, and my colleagues have done 0:07:05.720 --> 0:07:09.320 some great reporting on this about how within the administration 0:07:09.520 --> 0:07:11.880 there's sort of the hawks, the trade hawks, and some 0:07:11.920 --> 0:07:14.600 people who are more of a moderating influence that are 0:07:14.640 --> 0:07:16.600 all kind of trying to make sure that this works 0:07:16.640 --> 0:07:19.520 in the way that it's intended. And just by sort 0:07:19.560 --> 0:07:22.040 of doing that and by sort of following the letter 0:07:22.080 --> 0:07:24.119 of the law, by making sure that you're on solid 0:07:24.200 --> 0:07:27.640 legal footing, it does appear to have somewhat of a 0:07:27.760 --> 0:07:31.240 potentially moderating effect on the tariffs themselves, because you want 0:07:31.240 --> 0:07:33.040 to make sure that when you put tariffs in place, 0:07:33.320 --> 0:07:36.000 that they stick, that they work, and that they're not 0:07:36.560 --> 0:07:38.840 subject to legal challenges and other things like that. So 0:07:38.880 --> 0:07:41.840 that does kind of appear to be limiting the scope 0:07:41.880 --> 0:07:44.760 of maybe some of the maximalist tariffs that we were 0:07:44.800 --> 0:07:47.920 expecting a month or two ago. But you know, caveat 0:07:47.960 --> 0:07:51.200 empdor Trump could you know, with his the authorities that 0:07:51.240 --> 0:07:55.960 he has impose still very stiff tariffs, you know, basically 0:07:56.800 --> 0:07:59.520 you know, on his own discretion, at his own discretion, 0:07:59.880 --> 0:08:02.320 And that is something that I think still has markets 0:08:02.320 --> 0:08:02.880 a little. 0:08:02.640 --> 0:08:04.520 Bit nervous, all right, good stuff, and so glad we 0:08:04.560 --> 0:08:06.080 could check in with you. Dan. Thank you so much. 0:08:06.160 --> 0:08:08.960 Dan Flatley. He's US Treasury reporter here at Bloomberg News. 0:08:08.960 --> 0:08:11.679 He is joining us from our DC bureau. 0:08:12.160 --> 0:08:15.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:15.800 --> 0:08:19.239 live weekday afternoons from two to five pm Eastern. Listen 0:08:19.280 --> 0:08:22.840 on Applecarplay and the Android Auto with the Bloomberg Business app, 0:08:23.000 --> 0:08:24.760 or watch us live on YouTube. 0:08:25.880 --> 0:08:28.600 For more than two decades, Google Search has definitely ruled 0:08:28.640 --> 0:08:31.440 the web. Search is also Google's beating heart, generating more 0:08:31.480 --> 0:08:33.880 than one hundred and ninety eight billion dollars in revenue 0:08:34.200 --> 0:08:38.000 in twenty twenty four. Almost sixty percent of Alphabet's annual 0:08:38.080 --> 0:08:42.120 sales tim though enter into the AI race, chatchipt and more, 0:08:42.160 --> 0:08:44.720 and Google is searching for its next game. 0:08:45.080 --> 0:08:47.240 It is the cover story of the new upcoming issue 0:08:47.240 --> 0:08:49.800 of Bloomberg Business Week, which you can read now at 0:08:49.840 --> 0:08:52.880 Bloomberg dot com and on the Bloomberg terminal and soon 0:08:53.000 --> 0:08:55.040 on newstands. To get directly to this story, just go 0:08:55.080 --> 0:08:58.480 to Bloomberg dot com slash BusinessWeek. It's also the Big Take, 0:08:58.520 --> 0:09:01.559 which means our editorial team has singled it out as 0:09:01.640 --> 0:09:04.280 a must read for all and I absolutely agree with that. 0:09:04.520 --> 0:09:07.280 The reporters on the story Bloomberg News Technology reporter Julia 0:09:07.400 --> 0:09:10.720 Love and Bloomberg News Big Tech reporter Davey Alba. Julia 0:09:10.800 --> 0:09:12.760 is in our San Francisco bureau. Davy here with us 0:09:12.760 --> 0:09:14.719 in our New York studio. Julia, I do want to 0:09:14.720 --> 0:09:18.320 start with you because Google is synonymous with search. We 0:09:18.400 --> 0:09:19.000 google things. 0:09:19.040 --> 0:09:19.480 It's a verb. 0:09:19.559 --> 0:09:22.640 Now, it's ubiquitous, It's dominant for what seems like forever. 0:09:22.720 --> 0:09:25.559 That was then, But there are some new players in town, 0:09:25.920 --> 0:09:28.160 enter the AI era. What's going on? 0:09:29.640 --> 0:09:32.280 Yeah, so the search market has really gotten a lot 0:09:32.360 --> 0:09:35.800 more interesting over the past few years. There's been a 0:09:35.880 --> 0:09:38.640 rush of new players. A lot of people use chat, 0:09:38.679 --> 0:09:43.760 GPT for search. There are also startups like Perplexity, and 0:09:43.840 --> 0:09:47.960 those new companies have really challenged Google to use generative 0:09:48.000 --> 0:09:52.440 AI to rethink what the core product should look like 0:09:52.520 --> 0:09:54.120 for the first time in many years. 0:09:54.640 --> 0:09:57.760 So what's kind of wild, Julia, is that it sounds 0:09:57.840 --> 0:10:01.000 like Google and Alphabet had an opportunit unity to maybe 0:10:01.040 --> 0:10:04.120 beat CHATCHYBT at its own game, and yet it kind 0:10:04.160 --> 0:10:05.920 of passed. Take us back there. 0:10:06.720 --> 0:10:11.319 Yeah, so with this story, we are really shining a 0:10:11.400 --> 0:10:16.840 light on the attempts that Doodle employees made to incorporate 0:10:16.960 --> 0:10:20.840 generative AI in search to have a chatbot that would 0:10:21.559 --> 0:10:25.120 provide answers along side links. They were trying to do 0:10:25.200 --> 0:10:30.000 this well before the launch of chat GPT. Doodle invented 0:10:30.040 --> 0:10:34.760 the AI technology that makes this possible, but the search 0:10:34.840 --> 0:10:38.880 team that proposed this encountered a lot of resistance. Internally, 0:10:39.320 --> 0:10:43.440 the company was really loath to reconsider its business model. 0:10:43.920 --> 0:10:48.000 They also had some concerns about the accuracy just because 0:10:48.320 --> 0:10:50.640 Doodle is held to such a high bar. It's a 0:10:50.679 --> 0:10:54.280 critical utility, not just a fun novelty like a startup 0:10:54.320 --> 0:10:55.360 might be, Well Davie. 0:10:55.440 --> 0:10:58.440 The story also explores over the last couple of years, 0:10:59.000 --> 0:11:02.000 the complaints that people have had when it comes to 0:11:02.240 --> 0:11:05.400 Google Search, and the idea that it hasn't become as 0:11:05.480 --> 0:11:09.560 useful for some people because of the way that publishers 0:11:09.679 --> 0:11:14.079 and website developers have really started to game the system. 0:11:14.160 --> 0:11:17.680 Yeah, yeah, I think that's something that we explored the story. 0:11:18.840 --> 0:11:22.520 Even before generative AI sort of exploded onto the scene, 0:11:23.040 --> 0:11:27.079 there was already a sense that you could make Google 0:11:27.160 --> 0:11:31.319 more useful than it just on its own by doing 0:11:31.360 --> 0:11:34.000 things like typing your search query and then adding Reddit, 0:11:34.960 --> 0:11:39.200 and then you know, Google was also contending with site 0:11:39.240 --> 0:11:44.400 owners and sort of spammers who just knew Google's rules 0:11:44.440 --> 0:11:47.559 and wanted to gain the system to get right up 0:11:47.640 --> 0:11:51.480 top on search results, but those results weren't necessarily the 0:11:51.480 --> 0:11:55.160 best quality results. So that was sort of the scene 0:11:55.400 --> 0:11:58.679 in which you know, chat GPT came on, and then 0:11:58.720 --> 0:12:01.680 Google also had to figure out how does it respond 0:12:01.720 --> 0:12:06.320 to this existential threat and also improve itself so that 0:12:06.520 --> 0:12:11.600 some of these quality issues are addressed. And I think 0:12:11.600 --> 0:12:15.040 it's kind of an open question whether people like what 0:12:15.080 --> 0:12:18.760 they're doing with generative AI, you know, because of market 0:12:18.760 --> 0:12:24.000 pressures they have added on these generative AI features, whether 0:12:24.120 --> 0:12:28.640 or not users have asked for them. And right now, 0:12:29.040 --> 0:12:31.680 a lot of the things that would have been you know, 0:12:31.720 --> 0:12:35.720 sort of experimental in the past, or that Google might 0:12:35.760 --> 0:12:37.920 not have launched because it has such a high bar 0:12:38.000 --> 0:12:42.040 and accuracy. Right, that's right in the main product. 0:12:42.160 --> 0:12:44.880 You like it, Carol, what Google? Yeah, the Google AI 0:12:45.200 --> 0:12:45.840 search results? 0:12:48.559 --> 0:12:50.320 Because Tim is like, where did you get this from? 0:12:52.480 --> 0:12:54.000 Like take us in Like I feel like when we 0:12:54.080 --> 0:12:57.079 do a big techt story and there's like disruption going on, 0:12:57.280 --> 0:13:00.520 and you know, execs or pitch something and they kind 0:13:00.520 --> 0:13:04.240 of passed. There's internal discussions about, hey, we kind of 0:13:04.240 --> 0:13:07.680 missed the mark. Take us inside alphabet Google and what's 0:13:07.720 --> 0:13:10.079 going on right now? Are they being like, wait a minute, 0:13:10.200 --> 0:13:12.920 the employees, we've got this, we need to move on. 0:13:14.360 --> 0:13:18.320 Yeah, So Doodle is coming off of a rocky few years. 0:13:18.720 --> 0:13:21.920 Davey and I have heard from our sources that chat 0:13:21.960 --> 0:13:25.480 GPT really sparked a panic inside the company. It was 0:13:25.679 --> 0:13:29.600 very painful for Doodle to see someone else taking its 0:13:29.600 --> 0:13:35.640 invention and finding the product hit. And so they've really 0:13:35.679 --> 0:13:39.200 turned up the heat on their employees to ship products faster. 0:13:39.840 --> 0:13:42.720 And the woman really at the center of it all 0:13:42.880 --> 0:13:46.560 when it comes to search is Liz Reid. She's in 0:13:46.600 --> 0:13:49.880 the top search job now. And what's interesting about her 0:13:50.160 --> 0:13:53.400 is she's a long time Doodle executive, but she's spent 0:13:53.520 --> 0:13:56.680 most of her time in Google Maps, and so that 0:13:56.840 --> 0:13:59.559 means that she's a little bit less wedded to some 0:13:59.600 --> 0:14:02.640 of the old ways of doing things in search. She's 0:14:02.679 --> 0:14:05.520 a little more willing to experiment, and I think that 0:14:05.520 --> 0:14:09.920 that sensibility has really come in handy as Google kind 0:14:09.920 --> 0:14:10.960 of enters this new era. 0:14:11.280 --> 0:14:13.000 I think what is wild and I think we've seen 0:14:13.040 --> 0:14:16.000 this was it with either electric cars or something Tim 0:14:16.040 --> 0:14:18.400 will remember better than I will. But you guys writing 0:14:18.480 --> 0:14:21.280 the story. One thing that really stung about chatchpt's rise 0:14:21.360 --> 0:14:24.720 was that it was built on Google's own inventions. Open 0:14:24.720 --> 0:14:28.160 AI's chatbot uses an AI architecture that Google detailed in 0:14:28.200 --> 0:14:32.000 a now legendary research paper published back in twenty seventeen. 0:14:32.080 --> 0:14:35.280 I mean, Davy, that's we've seen this before, where all 0:14:35.280 --> 0:14:39.040 of a sudden, like a company had the research and 0:14:39.080 --> 0:14:42.560 then passed on it. Yeah, that's got to kill absolutely. 0:14:42.640 --> 0:14:47.080 I mean Google runs two of the most advanced AI 0:14:47.240 --> 0:14:52.040 labs in the world, Google deep Mind, which has since 0:14:52.160 --> 0:14:56.280 joined into Google deep Mind, I should say, and a 0:14:56.320 --> 0:15:00.520 lot of the AI developments that they have rolled out 0:15:00.600 --> 0:15:03.320 over the years has been really under the hood of 0:15:03.360 --> 0:15:09.000 these consumer facing products. So, you know, AI is something 0:15:09.080 --> 0:15:13.240 that CEO Sundar Pichai has said he wanted to orient 0:15:13.280 --> 0:15:17.240 the company around even by the mid twenty tens. But 0:15:17.400 --> 0:15:20.120 not the kind of generative AI that we see in chat, 0:15:20.120 --> 0:15:26.520 GBT and you know, major products today, but more like 0:15:27.000 --> 0:15:30.240 improvements to search that are under the hood, things like 0:15:30.280 --> 0:15:35.280 making search faster, right, making it more return more relevant results, 0:15:35.320 --> 0:15:39.160 things like that. So yeah, really stung when chat GBT 0:15:39.280 --> 0:15:42.560 came out and became so popular among Well. 0:15:42.440 --> 0:15:44.600 You two make the point in the piece that he 0:15:44.720 --> 0:15:47.720 thinks that we're at the really, really early innings when 0:15:47.760 --> 0:15:50.920 it comes to AI's effect, in AI's role not just 0:15:51.000 --> 0:15:53.120 on the company, but also on the world, in the 0:15:53.120 --> 0:15:56.120 way that we interact with the world. Julia, it makes 0:15:56.160 --> 0:16:01.040 sense that Google would be so protective of Google and 0:16:01.080 --> 0:16:03.920 what its search page looks like. After all, it accounts 0:16:04.000 --> 0:16:06.600 for so much of the company's revenue and profit. It's 0:16:06.680 --> 0:16:09.320 really the thing that they need to guard. That said, 0:16:09.960 --> 0:16:13.200 what are they doing moving forward in a few months 0:16:13.640 --> 0:16:17.920 that will potentially upend the way that consumers see search results? 0:16:19.160 --> 0:16:22.480 Yeah, I think that we see Goodle testing a few 0:16:22.560 --> 0:16:25.720 different paths right now. It seems to me like they 0:16:25.760 --> 0:16:29.200 aren't entirely certain yet of what the best way is 0:16:29.240 --> 0:16:34.040 to incorporate this into Google Search. They've got the AI overviews, 0:16:34.320 --> 0:16:37.360 which Carol is a fan of, where they're often topping 0:16:37.400 --> 0:16:40.360 the search results with an answer that was drafted by 0:16:40.440 --> 0:16:45.120 artificial intelligence. Those are there whether or not you choose them, 0:16:45.160 --> 0:16:49.360 they just appear automatically. But then they've also announced that 0:16:49.360 --> 0:16:53.600 they're experimenting with this new tab called AI mode that 0:16:53.680 --> 0:16:55.960 you'll be able to click to, you know, similar to 0:16:56.120 --> 0:16:59.720 photos and the other you know features in Goodle Search, 0:17:00.160 --> 0:17:02.440 and you'll be able to go there for kind of 0:17:02.480 --> 0:17:06.280 like a chat GPT experience, like when you really want 0:17:06.320 --> 0:17:09.159 to go deep and have a back and forth with 0:17:09.280 --> 0:17:14.480 Doodle's artificial intelligence to explore a particular topic. And so 0:17:14.520 --> 0:17:17.080 I think it's interesting to see them rolling out that 0:17:17.560 --> 0:17:21.560 dedicated mode and we'll see how that goes over. People 0:17:21.560 --> 0:17:26.200 who pay for Doodle's premium AI features are getting an 0:17:26.200 --> 0:17:27.760 early crack at it now. 0:17:28.080 --> 0:17:31.000 I mean we talked some numbers at the introduction to 0:17:31.040 --> 0:17:33.639 you guys, one hundred and ninety eight billion dollars in 0:17:33.680 --> 0:17:38.200 revenue in twenty twenty four search. Whenever they report earnings, 0:17:38.280 --> 0:17:40.480 we go to those search numbers because at the heart 0:17:40.480 --> 0:17:42.840 of their business, that's what it's all about. Julia, I 0:17:42.880 --> 0:17:45.600 want you to first weigh in on this, you know, 0:17:45.720 --> 0:17:50.480 this cover story. How important is it that Google gets 0:17:50.520 --> 0:17:55.040 this right as the world continues to move forward and 0:17:55.080 --> 0:17:56.440 embrace AI. 0:17:57.680 --> 0:18:01.640 It's critical. I think that the success of the company 0:18:01.960 --> 0:18:06.679 depends on it. Goodle has made some progress in recent 0:18:06.760 --> 0:18:13.320 years in diversifying its revenues. Goodle Cloud is now profitable, 0:18:13.440 --> 0:18:16.560 which was a big win for them. But search is 0:18:16.600 --> 0:18:22.159 still the heart of the company. They need to remain 0:18:22.960 --> 0:18:27.399 relevant to users daily lives. They still want to be 0:18:27.520 --> 0:18:30.879 that thing that you turn to reflectively when you have 0:18:31.520 --> 0:18:37.200 a passing question. And analysts have begun to tell Davy 0:18:37.440 --> 0:18:42.280 and me that they are concerned that search growth going 0:18:42.359 --> 0:18:44.440 forward may start to level off a bit. 0:18:44.680 --> 0:18:47.159 We know things can change, remember AOL, I mean, and 0:18:47.280 --> 0:18:48.960 other things. I'm just gonna say. 0:18:48.840 --> 0:18:51.080 Right, oh, that's what happens. 0:18:50.760 --> 0:18:54.320 Exactly exactly, Davey got about thirty seconds left. Your final 0:18:54.359 --> 0:18:56.760 thoughts on this story and kind of what comes next? 0:18:56.960 --> 0:19:00.320 Yeah, I mean, I think that this story shows what 0:19:00.440 --> 0:19:03.440 a critical piece of infrastructure in a lot of ways 0:19:03.480 --> 0:19:09.600 Google Search is to the web, and as AI marches forward, 0:19:10.720 --> 0:19:12.240 what is sort of the future? 0:19:12.920 --> 0:19:14.679 Google is a reflection of the web. 0:19:15.320 --> 0:19:19.879 Uh, And it's also sort of, you know, a utility 0:19:19.960 --> 0:19:25.560 to explore the web. But if both are degrading, which 0:19:25.600 --> 0:19:28.040 is sort of the sense that we get from from 0:19:28.200 --> 0:19:30.359 our sources, then what next. 0:19:30.600 --> 0:19:32.639 Yeah, it's a big question. And you know, this is 0:19:32.640 --> 0:19:34.520 why it's such an interesting time period when we look 0:19:34.520 --> 0:19:36.600 at all of these big tech play big tech players. 0:19:37.160 --> 0:19:39.280 Davey thank you so much. Davey Alba, big tech reporter 0:19:39.280 --> 0:19:41.359 at Bloomberg News here in studio, and of course Julia 0:19:41.400 --> 0:19:43.800 Love out there in our San Francisco bureau. She is 0:19:43.840 --> 0:19:48.400 our technology reporter here at Bloomberg News. 0:19:49.040 --> 0:19:49.680 You let me drive. 0:19:50.200 --> 0:19:55.200 No, no, no no, this is not a toy, honey, please, 0:19:55.320 --> 0:19:56.600 I'll do the gravel. 0:19:57.840 --> 0:19:58.560 I want to drive. 0:20:00.840 --> 0:20:02.720 It's a good question, good time. 0:20:05.640 --> 0:20:07.840 This is the drive to the clothes. 0:20:07.720 --> 0:20:08.560 Punks and music. 0:20:08.640 --> 0:20:09.680 Well, Brier runs. 0:20:09.920 --> 0:20:11.679 Down on Bloomberg Radio. 0:20:12.040 --> 0:20:14.639 All right, TikTok, everybody. You are up to speed on 0:20:14.680 --> 0:20:17.960 the markets thanks to Charlie Pellett and Bill Maloney. And 0:20:18.200 --> 0:20:20.720 we're bouncing around here. A little change though on the 0:20:20.840 --> 0:20:22.520 S and P five hundred, slightly lower in the Dow 0:20:22.600 --> 0:20:25.600 Jones Industrial Average, and just up about four ten percent 0:20:25.640 --> 0:20:28.640 on the Nasdaq one hundred. So yeah, as we kicked 0:20:28.680 --> 0:20:30.840 off a couple of hours ago, or almost two hours ago, 0:20:31.080 --> 0:20:33.360 market's really searching for some direction here, Tim. 0:20:33.520 --> 0:20:35.960 Well, let's see what Julie Beale has to say about this. 0:20:36.000 --> 0:20:39.480 She's chief market strategist in portfolio manager at Kane Anderson Rudnick. 0:20:39.520 --> 0:20:42.600 She joins us from Santa Monica. We just heard from 0:20:43.040 --> 0:20:46.280 Barry Redholts about sort of the twists and turns of 0:20:46.320 --> 0:20:49.920 the market since the election was yesterday, in your view, 0:20:50.000 --> 0:20:52.719 a turning point, given the rally that we saw, the 0:20:52.720 --> 0:20:57.000 conviction that we saw based on potentially more targeted US tariffs. 0:20:58.720 --> 0:21:00.679 I think that for sure, there was a lot of 0:21:00.840 --> 0:21:03.840 enthusiasm and excitement that you know, maybe this is really 0:21:03.840 --> 0:21:06.879 the moment where there's going to be more clarity and 0:21:06.960 --> 0:21:09.080 we're going to be moving a little bit less quickly 0:21:09.200 --> 0:21:13.040 and more thoughtfully. I think that still remains to be seen, 0:21:13.080 --> 0:21:15.840 and I think the much bigger issue is less how 0:21:15.880 --> 0:21:20.199 the market reacts and more how companies and consumers react, 0:21:20.240 --> 0:21:22.479 because that's really what's going to be driving the markets 0:21:22.480 --> 0:21:25.840 on the long term horizon. And I think you can 0:21:25.960 --> 0:21:29.200 say to most companies, hey, we're going to add these tariffs. 0:21:29.480 --> 0:21:32.240 Oh just kidding, We're not going to do them. You're 0:21:32.280 --> 0:21:35.680 going to be fine now. I think most capital allocators 0:21:35.720 --> 0:21:38.320 are like, there's still the risk that this will change 0:21:38.359 --> 0:21:41.000 really quickly, and I don't want to be caught sideways 0:21:41.040 --> 0:21:43.439 on that. So I think there's a lot of still 0:21:43.560 --> 0:21:46.560 underlying concern that even if you do roll back these 0:21:47.480 --> 0:21:50.760 tariffs and make them less deep or less broad, there's 0:21:50.800 --> 0:21:54.360 still this underlying concern. Hey, I don't really know what's 0:21:54.400 --> 0:21:57.640 going to be coming down. It hasn't necessarily been well communicated, 0:21:57.920 --> 0:21:59.600 and I don't want to put myself in a risky 0:21:59.600 --> 0:22:01.520 position and where I'm on the wrong side of that. 0:22:01.800 --> 0:22:05.879 All right, So does that mean, Julie, move into cash? 0:22:06.000 --> 0:22:10.040 Move into cash like investments, don't play the equity side 0:22:10.040 --> 0:22:12.200 of things, Like, what do you do then in this environment? 0:22:13.119 --> 0:22:17.879 I think your previous guests really said. What I truly 0:22:17.920 --> 0:22:20.440 believe is that it's really impossible to try to time 0:22:20.480 --> 0:22:24.960 this kind of a market. It is so much desire 0:22:25.119 --> 0:22:28.520