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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Right now,

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Speaker 1: there is a lot of focus on media companies, particularly

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Speaker 1: as the shift from cable networks to online advertising takes hold,

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Speaker 1: and we are very lucky to have with us today.

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Speaker 1: Porter bib managing partner Media Tech Capital Partners in New York.

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Speaker 1: He is better known as being the first publisher of

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Speaker 1: Rolling Stone. He has been on both sides of the industry,

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Speaker 1: from the content side at Rolling Stone as well as

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Speaker 1: being an investment banker specializing in media, entertainment and to

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Speaker 1: chnology ventures. H Porter, thank you so much for joining us. Uh.

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Speaker 1: You know, after Time Warner reported earnings yesterday, shares across

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Speaker 1: the board of Walt Disney, twenty Century Fox, CBS, Viacom

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Speaker 1: all fell because Time warners showed that they expect AD

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Speaker 1: sales that were far below where analysts were expecting. A

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Speaker 1: bit yes, a bit. Well they were a bit, but

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Speaker 1: but the trend that was already down, that's right, already

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Speaker 1: ratcheted down. I'm wondering, in five years, do you think

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Speaker 1: that these behemous Walt Disney, twenty for Century, Fox, etcetera.

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Speaker 1: Will all exist as independent companies. I think that's unlikely.

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Speaker 1: UM NBC already is not an independent company. ABC is

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Speaker 1: already not an independent company. You have CBS UH standing alone,

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Speaker 1: and Fox and Fox foxes desperately trying to become a

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Speaker 1: global media company with the rest of Sky Broadcasting, which

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Speaker 1: they're trying to acquire in the UK. So they answer

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Speaker 1: is no, they're not going to be any more independent

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Speaker 1: linear networks standing alone anymore. Porter Who are the big advertisers?

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Speaker 1: Are they automobile companies? I mean, are they the ones

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Speaker 1: that really power most of this ad revenue. Historically that

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Speaker 1: has been the case. It's it's packaged goods products like

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Speaker 1: Procter and Gamble or Gillette, UH and autos. But today

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Speaker 1: they are not the big advertisers. Big advertisers are UH,

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Speaker 1: Internet companies like Travago, insurance companies, UM and pharmaceutical products.

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Speaker 1: And basically because they they little known secret is that

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Speaker 1: The people who are watching linear television are baby boomers

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Speaker 1: and and beyond, and they're the prime prospects for all

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Speaker 1: this pharma and the meds. It's true whenever I watch

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Speaker 1: certain shows that my husband and they have, you know,

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Speaker 1: add after ad if every disease you can think about,

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Speaker 1: I think maybe we're not the demographic they're trying to reach.

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Speaker 1: You know. I don't know why they have that golden

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Speaker 1: retriever in every yet either, but that's enough. I'm waiting

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Speaker 1: for Congress to say, we can make a health program

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Speaker 1: work if we just eliminate the hundreds of millions of

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Speaker 1: dollars that each farmer company is spending on on television advertising. Well,

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Speaker 1: so let's talk about whether there is anything that could

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Speaker 1: revive the ad sales for these companies or is this

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Speaker 1: just the beginning of it even more rapid decline. Well,

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Speaker 1: it's it's a transition, it's not a decline. Advertising actually

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Speaker 1: is up. The upfronts that that the major networks have

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Speaker 1: just experienced. UH posted a low single digit UH increase

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Speaker 1: in terms of total advertising sold and also the cost

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Speaker 1: for a thousand the rates that they're charging. The real

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Speaker 1: message though, is that those rates are twenty five or

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Speaker 1: thirty below what they were even five years ago. So

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Speaker 1: that's that's because the audience, the network audience of linear

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Speaker 1: television networks is shrinking faster than the cable cutters are

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Speaker 1: are cutting out of cable television pay TV and going

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Speaker 1: to the internet. Porter, I wanted to throw a couple

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Speaker 1: of names at you and just get your thoughts. Start

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Speaker 1: off with Amazon. Well, Amazon is probably the smartest player

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Speaker 1: right now, and they they are one of the new

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Speaker 1: media companies. You have Google, Facebook, Netflix, um, uh and Amazon.

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Speaker 1: And Amazon is essentially using Amazon Prime as a an

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Speaker 1: inducement to buy products through uh Amazon's network, uh and

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Speaker 1: and offering you entertainment and media content that is actually terrific.

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Speaker 1: And Amazon Prime now has a hundred million subscribers paying

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Speaker 1: the same price as as Netflix charges and get and

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Speaker 1: and the bonuses you get free shipping if you buy

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Speaker 1: anything through the Amazon network. So uh, they're they're probably

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Speaker 1: the most uh lucrative and potentially most profitable player in

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Speaker 1: the new media world. Netflix net. Netflix has also got

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Speaker 1: about a hundred million subscribers uh in the US, and

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Speaker 1: they're growing there. There's their static here, but they're growing

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Speaker 1: globally because they're they're new, and they're they're offering uh

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Speaker 1: a unique product, streaming product that hasn't been introduced in

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Speaker 1: most of the rest of the world. So they will

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Speaker 1: continue to grow, but financially or economically, Netflix is is

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Speaker 1: not sustainable. The model that they have uh is uh

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Speaker 1: it's it's it's a ticket to bankruptcy because they own

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Speaker 1: right now off balance sheet more than twenty billion dollars

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Speaker 1: of liabilities for content that they're buying, contracting, or creating

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Speaker 1: as original content, and the subscriber base is not going

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Speaker 1: to support that. Netflix will have to, in my opinion, uh,

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Speaker 1: introduce advertising, which will all of a sudden send the

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Speaker 1: subscriber numbers through the floor. Well back up, because this

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Speaker 1: is actually quite a big deal. You're saying that netflix

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Speaker 1: Is current business model is a ticket to bankruptcy and

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Speaker 1: that they are going to have to start advertising, at

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Speaker 1: which point they will attract fewer users, which is not

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Speaker 1: which is infeasible. So in other words, they're bankruptcy. No

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Speaker 1: matter what, advertiser are going to drive subscribers away. So

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Speaker 1: in other words, you think that they're doomed. I think

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Speaker 1: that they're a target for acquisition by a Google and Amazon,

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Speaker 1: A Facebook or one of the telecoms they do not

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Speaker 1: have economically a sustainable business model, but right now be

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Speaker 1: incredibly expensive for any of those behemoths to acquire Netflix,

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Speaker 1: and they could potentially build out some of their own contexts.

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Speaker 1: Why nobody is making offers for Netflix because their stock

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Speaker 1: price and the pe is so extraordinarily high, but that

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Speaker 1: that will not support uh high level going forward. When

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Speaker 1: do you think this sort of hits a tipping point?

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Speaker 1: Because so far people seem to have endless appetite for

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Speaker 1: Netflix's debt and for anything that Netflix does. As we're

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Speaker 1: in a transition period right now, linear television is still

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Speaker 1: attracting significant audience, and it's a huge amount of advertising,

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Speaker 1: even though that advertising is in decline UH and the

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Speaker 1: cost per thousand is plummeting as well. But everybody is

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Speaker 1: if you're a major advertiser and you want to reach

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Speaker 1: a significant audience, you're going to buy network television. Netflix

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Speaker 1: is offering more and more television content and drawing away

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Speaker 1: the audiences from the linear networks. And and that's because

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Speaker 1: it's seven's affordable, and and it's very easy to go

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Speaker 1: in and out. But nobody talks about the turn at Netwick. Netflix.

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Speaker 1: They never release any numbers. They don't really tell you

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Speaker 1: how many people, UM use somebody else's password. Um, there

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Speaker 1: are probably another ten or fifteen percent of people who

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Speaker 1: don't pay for Netflix and who won't if there's advertising

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Speaker 1: that comes in. So I would say in the next

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Speaker 1: three to five years, you're gonna see Netflix hit the wall,

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Speaker 1: and then the stock price is going to come down

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Speaker 1: and somebody's going to pick up the pieces. Thank you

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Speaker 1: very much for coming in and being with us. Porter

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Speaker 1: bib is managing partner of Media Tech Capital Partners. You

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Speaker 1: can follow him on Twitter at Porter three. All right,

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Speaker 1: let's visit with someone who knows a lot about hedge

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Speaker 1: funds and alternative investor and strategies. Ron Biscardi is the

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Speaker 1: co founder and the chief executive of Context Capital Partners

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Speaker 1: and he joins us here in our studio. Ron, thanks

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Speaker 1: very much for coming in, Thanks for having them tell

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Speaker 1: people what is Context Capital Partners and just add in

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Speaker 1: the summits that you put together so they understand that

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Speaker 1: it's more than just a standalone company. Sure so, Context

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Speaker 1: Capital Partners is a an alternative investment specialist. Uh we

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Speaker 1: in essence, launch and accelerate alternative fund products, So we

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Speaker 1: work in private equity structures, hedge fund structures. We launched

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Speaker 1: a liquid alternatives platform a few years ago, and of course,

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Speaker 1: UH one of the centerpieces now of our entire business

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Speaker 1: model is context Summits, which is our conference UH that

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Speaker 1: focuses exclusively on capital introduction. So these are events where

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Speaker 1: investors from around the world are coming together with hedge

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Speaker 1: fund managers and alternative managers to go through a one

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Speaker 1: on one me format where they get to spend a

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Speaker 1: half hour with each other and learn about each other

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Speaker 1: and figure out if there's a match, and if there is,

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Speaker 1: they can spend more time following the event speed dating

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Speaker 1: basically speedype left spe right. As part of one of

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Speaker 1: the recent conferences that you held, you did a survey

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Speaker 1: which I thought was pretty interesting, and this conference was

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Speaker 1: held earlier this year in Barcelona. I believe in UH,

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Speaker 1: and I thought that the results of this survey we're

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Speaker 1: fascinating because it showed that an increasing number of small

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Speaker 1: family offices and wealthy individuals are are gravitating toward new

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Speaker 1: funds rather than the big established ones. And I thought

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Speaker 1: that was interesting. Why can you talk a little bit

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Speaker 1: about how pervasive this desire for smaller startups is so

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Speaker 1: I absolutely I can tell you that what's been interesting

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Speaker 1: to watch is how each one of our summits events

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Speaker 1: has grown over the attendance in the prior year, in

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Speaker 1: the midst of one of the worst periods for hedge

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Speaker 1: fund performance, and I think the reason for that is

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Speaker 1: twofold number one. After the crash, you saw investors largely

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Speaker 1: uh flee to safety. Uh They wanted to allocate into

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Speaker 1: the asset class, but they only wanted to do so

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Speaker 1: into the biggest funds. So the largest funds in the

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Speaker 1: industry accumulated the vast majority of assets following the crash,

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Speaker 1: and I think that has changed. I think investors are

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Speaker 1: now more focused on returns. They're more focused on making

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Speaker 1: sure they're getting alpha with their investment, and that has

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Speaker 1: led them to go downstream more towards smaller funds. So

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Speaker 1: this is interesting because a lot of people say that

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Speaker 1: in this current environment, the idea of the big macro

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Speaker 1: bet is losing its allure. It's also not performing particularly

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Speaker 1: well and on average. So is this sort of indications

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Speaker 1: an indication that investors see more value in smaller funds

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Speaker 1: that can target specific smaller opportunities over bigger ones that

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Speaker 1: are forced to go for go bigger, go home with

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Speaker 1: large bets. Yeah. I think that's exactly what's happening. I

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Speaker 1: think most investors believe that it is generally easier to

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Speaker 1: find alpha and generate alpha in smaller, niche er strategies.

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Speaker 1: And some of the top hedge funds in the world

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Speaker 1: are largest hedge funds in the world. It's just like

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Speaker 1: turning an aircraft carrier trying to run these things. So, uh,

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Speaker 1: they have obviously underperformed as a as a group, and

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Speaker 1: I think that's a big part of the driver behind

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Speaker 1: investors coming downstream. Does any of your money go into

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Speaker 1: any of these strategies? Oh? Yes, I mean in in

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Speaker 1: the core business, uh, where we're launching and accelerating funds,

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Speaker 1: we do a few things. First, we deploy capital. You know,

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Speaker 1: that's largely why everyone wants to talk to us. Uh.

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Speaker 1: And you say deploy capital. Is that the people who

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Speaker 1: you invite you think are great and you've invested with them. Yeah.

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Speaker 1: So in on the asset management side of the business,

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Speaker 1: we are actually accelerating and launching new fund products with

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Speaker 1: the portfolio managers who run those funds. So our partner

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Speaker 1: capital at context goes into those those specific products and

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Speaker 1: then as necessary, will also wrap services around them so

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Speaker 1: that their institutional quality on day one, because that has

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Speaker 1: also changed post crash. Precrash, you could start in your

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Speaker 1: apartment in this business with five or ten million bucks

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Speaker 1: and accumulate money over time. But nowadays they really want

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Speaker 1: to see a real business with compliance and technology and investment.

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Speaker 1: Was that the Jensen partners combination that you did, so Jensen,

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Speaker 1: Our partnership with Jensen was really about sort of bringing

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Speaker 1: another offering to this marketplace and adding to our ecosystem.

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Speaker 1: So Jensen specializes in search for marketing executives in particular,

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Speaker 1: and obviously all the funds who are attending our events

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Speaker 1: are in the market trying to get better at marketing.

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Speaker 1: So we thought that was a really nice complement to

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Speaker 1: the Summits business, providing that search capability as well. So

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Speaker 1: what are some of the smaller niche businesses that are

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Speaker 1: popular right now? Uh? So, you know, you can't look

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Speaker 1: anywhere in the hedge fund industry without people talking about

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Speaker 1: quant I mean it's really become uh must have in

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Speaker 1: certain categories. And the you know, whether they are small

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Speaker 1: funds are big funds. At our events, the quant strategies

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Speaker 1: are collecting lots of meetings. You know, the the average

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Speaker 1: meeting count that our Miami Flagship event in February was

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Speaker 1: about twenty, but the quant strategies, a lot of them

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Speaker 1: were thirty to thirty five. What what what? What? What

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Speaker 1: would count as a quant strategy? And if they use

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Speaker 1: an algorithm, does that mean that they could call themselves quants?

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Speaker 1: I mean, you know, I guess at the simplest level

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Speaker 1: that's true, but uh, there are certain strategies where it's

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Speaker 1: just a human can't compete with a computer. And I

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Speaker 1: think if you don't have a quant capability, uh that

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Speaker 1: you can demonstrate to investors that you have an expertise

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Speaker 1: in you're just not gonna You're not going to accumulate.

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Speaker 1: Do the investors understand the models generally speaking? Probably not so.

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Speaker 1: Like basically the wheel here there based sickly saying, okay,

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Speaker 1: you've handed me a document. Everybody has invested, we love you,

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Speaker 1: we think you're very smart. You've got twenty pH d

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Speaker 1: s on staff, And by the way, here are your

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Speaker 1: back tested results. Because I haven't been in business long enough,

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Speaker 1: and go ahead, there's my money. So I think this

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Speaker 1: came out of a survey we did in Miami. Investors

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Speaker 1: really are focused on your investment process. To your point,

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Speaker 1: pen they can't really evaluate the code. I mean some

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Speaker 1: are trying to hire software developers to actually dig into

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Speaker 1: the code when the when the manager will let them.

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Speaker 1: But in general they're focused on an investment process because

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Speaker 1: if you have a good process, you can weather lots

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Speaker 1: of different markets. I think to look at just the

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Speaker 1: performance of a back test or anything like that in

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Speaker 1: isolation is probably a mistake, because every strategy will encounter

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Speaker 1: a market where it doesn't work, and you need to

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Speaker 1: know that the team is prepared to deal with that

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Speaker 1: when it occurs. Just really quick. Any emerging market strategy

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Speaker 1: is getting hot right now. UH so at in our

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Speaker 1: European survey, UH there was more interest from investors just

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Speaker 1: slightly in UH developed market equities, and so nothing that

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Speaker 1: immediately comes to mind for me. Thank you so much

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Speaker 1: for joining us. Ron Biscardi, co founder and chief executive

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Speaker 1: officer of Context Capital Partners in chief basically UH couple

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Speaker 1: maker between hedge funds and big wealthy institutions. UH. The

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Speaker 1: Allocator Trends report on Europe from this year's meeting is

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Speaker 1: really quite interesting and demonstrates a lot of counter intuitive

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Speaker 1: trends and Lisa A. Bram Woid's, along with pim Fox,

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Speaker 1: this is Blueberg. Right now, I'm looking at a British

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Speaker 1: pound versus the Euro that is down as its weakest

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Speaker 1: level since October. Comes after Bank of England's Mark Carney

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Speaker 1: said basically the economy is at the mercy of Brexit

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Speaker 1: and downgraded his expectations for growth. To get a little

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Speaker 1: bit better perspective, I want to bring in Mark Chandler,

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Speaker 1: Global Head of Currency Strategy at Brown Brothers Harriman in

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Speaker 1: New York City. Mark, thank you so much for joining us.

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Speaker 1: You know, we have seen this pervasive weakness in the pound,

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Speaker 1: which is pretty close at this point to the lowest

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Speaker 1: level since two thousand nine versus the euro. How much

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Speaker 1: further can it weaken? And a good question. I think

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Speaker 1: that what was saying, really it's not just sterling weakness

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Speaker 1: here or the dollars weakness, but we're really seeing euro

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Speaker 1: strength as well. To me that really the move did

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Speaker 1: not begin because it woul happened in the UK, but

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Speaker 1: it really began in April when it became clear that

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Speaker 1: this populoust nationalist wave was not really sweeten across the world.

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Speaker 1: That was primarily a U. S UK event, and that

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Speaker 1: Europe was going to turn its back on it. And

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Speaker 1: that's what happened. As soon as Kim claid that mccon

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Speaker 1: was going to win, the euros took off and really

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Speaker 1: hasn't looked back. And so this is still for me,

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Speaker 1: I think partly the Euro over But you know, back

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Speaker 1: in two thousand and eight, two thousand and nine euro

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Speaker 1: sterling got above. You just said that the euro, that

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Speaker 1: the euro has overshot, so you're expecting it to reverse

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Speaker 1: at some point. Yes, I think that what we saw,

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Speaker 1: you know, you know, one of the big drivers now

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Speaker 1: UH that has put the bottom on sterling was the

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Speaker 1: softer than expected us I s M for the service sector.

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Speaker 1: Well today the Eurozone reported it's weakest p M I

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Speaker 1: composite UH form basically over a year. And so I

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Speaker 1: think that the mcclem story is so that the bloom

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Speaker 1: is off the rose there, he's the honeymoon is over.

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Speaker 1: I think we people have exaggerated how how close the

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Speaker 1: the e c B is to really exiting their policies.

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Speaker 1: I know the leading you had you quote someone someone

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Speaker 1: is talking from Bloomberg talking about how other central banks

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Speaker 1: are getting are like signingly that they also are getting done.

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Speaker 1: But I think what we're gonna get in September is

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Speaker 1: the ECB to say that they're not done. They're not

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Speaker 1: done expanding their balance sheet this year, but they will

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Speaker 1: continue to buy bonds, perhaps at a slower pace, through

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Speaker 1: the first half of next year. The US balance sheet

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Speaker 1: is going to be shrinking, probably beginning in October, but

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Speaker 1: I think could raise rates again in December, could raise

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Speaker 1: rates again early next year before the ECB even gets

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Speaker 1: done with expanding their balance sheet or raising rates. Hey Mark,

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Speaker 1: I'm wondering if you could explain who or what group

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Speaker 1: of traders actually moves the needle when it comes to

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Speaker 1: exchange rates. And I'm thinking about dollar euro right now,

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Speaker 1: because we're at one eighteen and if you've got this

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Speaker 1: bid underneath bonds coming from the European Central Bank, you

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Speaker 1: can make the argument that that's not a really natural situation.

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Speaker 1: Well yeah, I mean so, I think it depends on

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Speaker 1: the time from that you're looking at. I often find

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Speaker 1: and that's why I tracked the commitmentive traders that you

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Speaker 1: can use on Bloomberg I p SP or the c

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Speaker 1: O T function because I think in the short term, uh,

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Speaker 1: the speculators and have a big role to play in

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Speaker 1: a sort of momentum traders, trend followers. But what's also

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Speaker 1: happening this year, PAIM is that global investors, the clients

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Speaker 1: here at Broun, these are real money, These are mutual funds,

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Speaker 1: asset managers, unit trust and what these people have been

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Speaker 1: doing have been the big play has been buying European

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Speaker 1: stocks on an unheedged basis and buying emerging market stocks.

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Speaker 1: And so I think that those those portfolio flows are

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Speaker 1: more of a medium term uh more, more of a

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Speaker 1: medium term driver, you know, markets. It's interesting when you're

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Speaker 1: talking about different flows. I have to think about recent

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Speaker 1: data showing that foreign investors have increased their purchases of

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Speaker 1: US bonds in part because of the weaker dollar gives

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Speaker 1: them a more attractive price point. It makes me wonder,

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Speaker 1: at what point will that end up causing more dollar strength,

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Speaker 1: just because if there is more demand flooding in you

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Speaker 1: would expect that to be a sort of corollary consequence. Yeah,

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Speaker 1: I know, you're right, that's that's always the funny thing

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Speaker 1: I have to find with the closes. It's almost like

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Speaker 1: for me, like an onion and the closer I. The

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Speaker 1: closer I look at it, take off a layer and

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Speaker 1: peel back. I just have more layers. Like very I

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Speaker 1: think money is very much mysterious like that, especially these flows,

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Speaker 1: but in general, I think that the the problem is

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Speaker 1: that when the dollar is weak like it is like

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Speaker 1: it has been in the last several months, foreign central

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Speaker 1: banks typically buy the dollar from the basically buying it

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Speaker 1: from the private sector, and so the central bank ownership

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Speaker 1: of treasuries which is going up. There's another important function

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Speaker 1: that you have on Bloomberg where you can track the

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Speaker 1: Federal Reserve acts of custodian for foreign central banks and

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Speaker 1: their holdings of treasuries and mortgage backed securities. It has

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Speaker 1: been going up quite sharply this year, particularly for China

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Speaker 1: and Japan. China and Japan, but also you know, I'm

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Speaker 1: not sure in these we think that in the pick data,

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Speaker 1: but in the Federal Reserve custody we don't. Really it's

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Speaker 1: not public who which central banks used the Federal Reserve

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Speaker 1: as a custodian. I personally be surprised if China was

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Speaker 1: a user of the federal reserves, custodial services, but any

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Speaker 1: of it. It's true that central banks have been buying

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Speaker 1: more treasuries, and they've been buying them because the market

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Speaker 1: wants to sell them. The market wants to sell the dollars,

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Speaker 1: and the central banks ACIEM like those dollars and put

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Speaker 1: them into treasuries. We gotta leave it there, But I

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Speaker 1: want to thank you very much. Mark Chandler, Global head

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Speaker 1: of Currency Strategy, Brown Brothers Harriman. He can be followed

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Speaker 1: on Twitter at Mark making Sense. I want to turn

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Speaker 1: out to trade between the United States and China. And

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Speaker 1: Caitlyn Webber are a government analyst for global trade policy

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Speaker 1: for Bloomberg Intelligence. Caitlin, thank you very much for being

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Speaker 1: with us. Tell us the current state of US China

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Speaker 1: trade relations and what is at stake for both sides. Well,

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Speaker 1: at this point we're really seeing UM that relationship has

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Speaker 1: it cheerated a lot, really over the last month or so.

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Speaker 1: It's interesting because in the first six months of the

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Speaker 1: year UM it looked like the relationship was improving. Trump

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Speaker 1: the Trump administration declined to name China currency manipulator after

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Speaker 1: threatening to do so on the campaign trail. Trump Trump

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Speaker 1: administration really linked UM that trade relationship with China, UM

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Speaker 1: oftensibly trying to help ease tensions on the Korean peninsula,

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Speaker 1: try to rein in Piyongyang. Over the past months, UM,

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Speaker 1: after we saw North Korea test to intercontinental ballistic missiles,

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Speaker 1: you saw that, you saw President Trump come out and

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Speaker 1: say you were disappointed in China that they haven't been

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Speaker 1: successful in sort of controlling North Korea. More. UM, we

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Speaker 1: think that we could potentially see some actions on trade

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Speaker 1: and so UM. There are a couple of investigations that

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Speaker 1: have already been launched on steal an aluminum against that

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Speaker 1: really target China, And over the past couple of days

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Speaker 1: have been there's been a lot of porting that there

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Speaker 1: will be potentially another investigation launched, this time going after

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Speaker 1: alleged Chinese violation of US intellectual property. Well, Caitlin, I'd

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Speaker 1: love to get some details on the progress that US

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Speaker 1: officials have made on this whole Bioamerica steel plan that

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Speaker 1: President Trump has touted. I mean, how far along are

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Speaker 1: we on that type of initiative or has it fallen

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Speaker 1: by the wayside. It seems to have fallen by the wayside,

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Speaker 1: at least in the attention that it's getting when that

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Speaker 1: when that proposal was announced back up, I think it

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Speaker 1: was in April, it was you know, there was a

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Speaker 1: lot of news around it, a lot of excitement from

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Speaker 1: the U S steal industry. Um, this is a plan

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Speaker 1: to include steal in all US pipelines. Now, the Commerce

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Speaker 1: Department was supposed to provide a report to the President

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Speaker 1: UM on the status at that plan, just UM in

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Speaker 1: the last week or so, and we didn't hear really

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Speaker 1: a peep out of the Commerce Department or the President

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Speaker 1: on the results of that review. UM. So I say,

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Speaker 1: get this at this point, it seems like that, you know,

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Speaker 1: that plan may have stalled, and I think you're seeing

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Speaker 1: a lot of frustration from the U. S. Steel industry

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Speaker 1: into not seeing more results around that plan and around

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Speaker 1: a larger investigation UM targeting imported U S steal that's

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Speaker 1: often referred to as Section two three. They're really hoping

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Speaker 1: for more action to take on these surging steel imports,

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Speaker 1: and they're just at this point not getting it from

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Speaker 1: the Trump administration. You know, I'm wondering also what pressure

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Speaker 1: President Trump faces from, say representatives from Louisiana and Tennessee.

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Speaker 1: There two extremes on either side of the spectrum here,

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Speaker 1: because louis and Louisiana exports a lot of soybeans to

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Speaker 1: China and has a positive trade balance with China, whereas

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Speaker 1: Tennessee has an extreme negative one and is importing a

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Speaker 1: lot of things and would suffer from many tax that

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Speaker 1: the US would put on Chinese goods. I mean, are

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Speaker 1: Congressman or other representatives maybe governors getting up in arms

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Speaker 1: at all about this. There's a lot of consensus in

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Speaker 1: Congress and among the business community UM in support for

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Speaker 1: the Trump administration going after China's alleged violation of US

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Speaker 1: UM intellectual property property. UM that's going to complaint for

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Speaker 1: a really long time. There's a lot of consensus around

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Speaker 1: something needs to be done. So we need to do

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Speaker 1: something to rain in China UM basically stealing our i P.

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00:26:30,280 --> 00:26:32,399
Speaker 1: What there is not a lot of agreement on is

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00:26:32,440 --> 00:26:35,040
Speaker 1: what the U s should do. You know, what sort

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Speaker 1: of actions we should take in order to compel China

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Speaker 1: to do that? UM. And you know, as you mentioned,

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00:26:42,400 --> 00:26:45,399
Speaker 1: if if these talks do fail and the US decides

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00:26:45,440 --> 00:26:50,960
Speaker 1: to impose tariffs on Chinese imports and China responds and kind,

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00:26:51,640 --> 00:26:56,120
Speaker 1: there will be um, you know, collateral damage potentially. Um.

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Speaker 1: The US is so dependent on China for consumer goods,

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Speaker 1: for for phones and computers, UM that you know, sort

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Speaker 1: of a broad action against Chinese imports would probably not

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00:27:08,200 --> 00:27:12,120
Speaker 1: be very politically popular. UM. So you know, a lot

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00:27:12,119 --> 00:27:15,119
Speaker 1: of consensus around something needs to be done, not a

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00:27:15,119 --> 00:27:18,280
Speaker 1: lot of agreement on what exactly we should target and

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00:27:18,320 --> 00:27:20,680
Speaker 1: how we should make sure that China isn't going after

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00:27:20,720 --> 00:27:24,160
Speaker 1: our exports. Just quickly, give you about twenty seconds. What's next?

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00:27:24,240 --> 00:27:26,560
Speaker 1: What do we need to pay attention to? So let's

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00:27:26,600 --> 00:27:30,600
Speaker 1: look for the Trump administration's messaging on this so called

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00:27:30,640 --> 00:27:34,560
Speaker 1: Section three oh one investigation into I p UM. Let's

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00:27:34,560 --> 00:27:37,040
Speaker 1: look to see where they not they're going to promise

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Speaker 1: them some deliverables on that in the next three months.

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Speaker 1: So far this year, it's been a lot of investigations,

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00:27:42,000 --> 00:27:43,800
Speaker 1: a lot of talks, but not a lot of action.

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00:27:43,880 --> 00:27:45,800
Speaker 1: We need to see if they're actually going to promise

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00:27:46,359 --> 00:27:49,480
Speaker 1: deadlines in terms of delivering some some new limits or

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Speaker 1: some new restrictions. Caitlin Webber, thank you so much for

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00:27:52,160 --> 00:27:55,280
Speaker 1: joining us. A truly important topic that we will continue

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00:27:55,320 --> 00:27:58,719
Speaker 1: to discuss in the weeks and months to come. Caitlin

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Speaker 1: Webber is governed, an analyst covering global trade policy for

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Speaker 1: Bloomberg Intelligence, and uh, definitely, the rhetoric at least is

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Speaker 1: definitely rattioning up between China and the US with respect

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Speaker 1: to its trade relationship. Thanks for listening to the Bloomberg

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Speaker 1: P and L podcast. You can subscribe and listen to

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00:28:19,240 --> 00:28:23,800
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.

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Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm

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00:28:27,800 --> 00:28:31,080
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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Speaker 1: You can always catch us worldwide on Bloomberg Radio