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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg daybaq At podcast. Good morning, It's Tuesday,

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Speaker 2: the fifth of August. I'm Caroline Hepcat in London.

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Speaker 1: And I'm Stephen Carroll. Coming up today. India faces a

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Speaker 1: new tariff threat over Russian oil. President Trump targets New

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Speaker 1: Delhi to stop Putin's war in Ukraine.

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Speaker 2: Switzerland, Germany, and Japan push for more favorable trade deals

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Speaker 2: with the Trump White House ahead of Levi's taking effect.

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Speaker 1: Plus haggling with AI. Why consumer rights advocates are concerned

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Speaker 1: about what generative artificial intelligence could do to flight prices.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Days ahead of his next phase of tariffs coming into effect,

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Speaker 1: the US President is ratcheting up trade pressure again. Donald

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Speaker 1: Trump said on social media that he plans to substantially

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Speaker 1: increase levees on Indian exports due to the country's purchases

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Speaker 1: of Russian oil. The warning comes ahead of an American

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Speaker 1: deadline for Russia to reach a truce with Ukraine by Friday.

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Speaker 1: The US ambassad NATO Matthew Whitaker says using tariffs as

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Speaker 1: the next tool to try to end the war.

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Speaker 3: There's no resolution on the battlefield. A diplomatic solution is

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Speaker 3: the only way. I think Secondary sanctions and tariffs against

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Speaker 3: those that are paying for this war, like China, India

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Speaker 3: and Brazil by buying the oil that Russia is producing

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Speaker 3: is an obvious next step to try to bring this

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Speaker 3: war to an end. Russia is very good at avoiding

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Speaker 3: sanctions and evading these things, but I think this is

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Speaker 3: going to really hit them where it counts, and that

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Speaker 3: is in their main revenue source, which is the sale

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Speaker 3: of oil to these countries.

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Speaker 1: That's the US ambassad NATO speaking to Bloomberg, India's Prime

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Speaker 1: Minister in Randromodi, has been defiant, urging Indians to buy

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Speaker 1: local goods and signaling that his country will continue to

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Speaker 1: buy Russian oil. In a social media posts, India's Foreign

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Speaker 1: ministry describes the targeting of the country is unjustified and unreasonable.

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Speaker 2: US allies are headed to America to press the Trump

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Speaker 2: administration to reduce tariffs. Switzerland announced yesterday it is ready

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Speaker 2: to make a more attractive offer to the US after

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Speaker 2: being hit with thirty nine percent tariffs on its exports

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Speaker 2: into the US. Bloomberg's senior editor Derek Wallbank says that

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Speaker 2: the Swiss failure to get a trade deal despite being

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Speaker 2: a close ally, has shaken the country.

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Speaker 4: Switzerland and the US have a long standing relationship where

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Speaker 4: Switzerland is even a protecting power for the United States

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Speaker 4: and dealing with some countries that the US doesn't have

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Speaker 4: diplomatic relations with, So there's a lot of tight relations there,

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Speaker 4: and Switzerland had been seen as a country that might

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Speaker 4: be on the fast track, that was going to be

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Speaker 4: one of the first ones to get a deal. From

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Speaker 4: all accounts of swissworld blindsided.

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Speaker 2: Derek Wahbank, who ads that unlike India, Switzerland is not

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Speaker 2: talking about retaliation. Germany's finance minister Lars Klingbeil is planning

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Speaker 2: to push for there are free quotas for some EU

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Speaker 2: steal with US Treasury Sectory Scott Bessend. Politicians from both

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Speaker 2: Germany and Switzerland have stressed the need to develop stronger

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Speaker 2: ties in Europe and that the US is no longer

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Speaker 2: a reliable partner. Meanwhile, Japan's top trade negotiator is also

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Speaker 2: heading to the US to push for a cut to

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Speaker 2: Japanese car tariffs.

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Speaker 1: Some of Wall Street's most well known analyst of warning

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Speaker 1: clients to prepare for stocks to drop as sky high

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Speaker 1: equity valuations meet souring economic data. Morgan Stanley's strash as

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Speaker 1: Mike Wilson sees a correction of up to ten percent

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Speaker 1: this quarter as tariff's take effect. Ever Core is at

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Speaker 1: Julian Emmanuel forecast the declines could be as large as

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Speaker 1: fifteen percent. A team at Deutsche Bank lad By parag

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Speaker 1: That notes that the small draw down and equities is overdue.

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Speaker 1: The warnings come after the S and B five hundred

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Speaker 1: has rallied more than twenty five percent in the past

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Speaker 1: three months to hit record highs.

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Speaker 2: Tesla has approved a thirty billion dollar interim stock award

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Speaker 2: for COEO Lawn Musk, despite an ongoing legal dispute over

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Speaker 2: his pay. According to a regulatory filing, the new agreement

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Speaker 2: includes ninety six million shares that will vest if Musk

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Speaker 2: stays in the top job for another two years. Bloomberg's

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Speaker 2: technology editor Ed Ludlow says that arrangement is only temporary.

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Speaker 5: What's really interesting about it is that the exercise price

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Speaker 5: twenty three dollars thirty four cents, so for each share

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Speaker 5: he would pay twenty three dollars thirty four cents, but

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Speaker 5: the share price is above three hundred now right, three

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Speaker 5: hundred and ten dollars. You know that's where the comp is.

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Speaker 5: But we have a vote in November at the annual

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Speaker 5: shareholder meeting for a much fuller, longer term package.

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Speaker 2: Bloomberg Technologies Ed Ludlow, who was speaking as Tesla's board,

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Speaker 2: in a letter to shareholders, emphasized the importance of retaining Musk.

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Speaker 2: It said that the pay award was a first step,

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Speaker 2: good faith payment. It comes as Tesla has been struggling

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Speaker 2: with falling electric vehicle sales and a slumping stock price.

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Speaker 1: The Governor of Texas, Greg Abbott, has ordered the arrest

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Speaker 1: of Democratic lawmakers who left the state in order to

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Speaker 1: block a controversial vote on new congressional maps. The Texas

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Speaker 1: House of Representatives has authorized the arrest warrants so they

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Speaker 1: don't carry any criminal charges and can't be enforced across

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Speaker 1: state lines. Abbott said that Democrats had quote abandoned their

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Speaker 1: duty to Texans. Democrats described the move as gerry mandering

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Speaker 1: designed to give more seats in the US Congress to Republicans.

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Speaker 1: Is gen Wu, the Democratic leader in the Texas House.

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Speaker 6: We're really hoping that in this time, we can buy

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Speaker 6: an opportunity with our absence, buy an opportunity for Texans

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Speaker 6: all over the state to stand up and tell the

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Speaker 6: governor we want you to protect us and not just

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Speaker 6: play your political games.

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Speaker 1: Jean Wu, speaking as President Trump continues to push the

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Speaker 1: proposed revamp of five of Texas's congressional seats in order

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Speaker 1: to boast in Republican power in next year's midterms. Republicans

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Speaker 1: in Missouri are mudding a similar redistricting, and Democratic governors

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Speaker 1: such as California's Gavin Newsom and New York's Kathy Hokel

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Speaker 1: have discussed retaliating with new maps of their own.

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Speaker 2: Here in the UK, the government has said that it

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Speaker 2: will begin detaining migrants on small boats quote within days

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Speaker 2: to be sent back to France as part of a

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Speaker 2: one in, one out treaty as part of efforts to

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Speaker 2: fix the asylum system. Officials expect the pilot scheme to

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Speaker 2: begin with an unspecified number of migrants before rising over time.

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Speaker 2: Ministers want to bring an end to a fought period

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Speaker 2: of summer protests in the UK around hotel housing asylum seekers.

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Speaker 2: Border Security Minister Angela Eagle spoke highly of the initiative,

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Speaker 2: which has been approved by the EU Commission.

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Speaker 7: It's the first time we've had a returned scheme with

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Speaker 7: any country in Europe since we came out of the

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Speaker 7: European Union, to pilot scheme to see what works, and

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Speaker 7: we're looking forward to starting ri soon.

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Speaker 2: Border Security Minister Angela Eagle, as the Prime Minister Kiss

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Speaker 2: Darma says anyone who comes to the UK illegally on

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Speaker 2: a small boat will face being set in back to France.

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Speaker 2: The number of small boat arrivals hit an all time

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Speaker 2: high in the first six months of this year, some

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Speaker 2: fifty percent high than those recorded last year.

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Speaker 1: Those are your top stories on the markets. Asian stairs

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Speaker 1: are advancing as a wave of dip buying combined with

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Speaker 1: growing bout some potential interest rate cuts in the United States.

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Speaker 1: So we're looking at the Mscish Pacific Index up by

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Speaker 1: six tenths this morning. The Hangsang is four tenths higher.

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Speaker 1: European stock future is also pointing higher, up a quarter

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Speaker 1: of one percent for eurostocks fifty futures. The ten your

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Speaker 1: treasury yield is up a basis point at four point

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Speaker 1: two percent. The Bloomberg Dollar Spot index is slightly higher

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Speaker 1: this morning, the Euro trading at one fifteen to fifty

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Speaker 1: five against the dollar.

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Speaker 2: Any moment, we'll bring you the latest on the trade

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Speaker 2: story ahead of new tariffs coming into effect on Thursday.

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Speaker 2: Plus what is the world going to do about Iran's uranium.

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Speaker 2: We're going to look at all of the options coming

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Speaker 2: up next. But there's another story that has also got

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Speaker 2: our attention, got us kind of scratching our heads and

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Speaker 2: trying to work it out. The new system or a

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Speaker 2: new system for flight pricing that uses artificial intelligence, and

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Speaker 2: it has caused some controversy.

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Speaker 1: Yeah, Avers Max Chafkin have been reporting about this. It's

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Speaker 1: a pilot AI program called Fetcher, which creates this new

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Speaker 1: pricing structure which features more fair classes and prices that

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Speaker 1: swing wildly from one moment to the next. Now the

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Speaker 1: White company, the white paper rather than the company, has

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Speaker 1: shared a perspective Customers describes the system as being so

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Speaker 1: complex that it goes beyond human cognitive limits. Designed to

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Speaker 1: ingest complex information about markets and create pricing strategies that

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Speaker 1: the paper says can dramatically raise revenue. Fetcher is working

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Speaker 1: with our Lines and Kutting Delta in the US, but

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Speaker 1: it has faced criticism from politicians, notably over privacy concerns.

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Speaker 1: Is this surveillance pricing, as one congressman has described it.

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Speaker 2: Well, the company says no, the company's it's not taking

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Speaker 2: people's private data. But when you start talking about AI,

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Speaker 2: that is so difficult to understand that it's going to

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Speaker 2: bamboozle any human being. You can understand why politicians are

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Speaker 2: quite wide about what that's going to mean for prices.

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Speaker 1: Yeah, exactly, and I suppose something that people already find

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Speaker 1: quite opaque as trying to figure out, you know, how

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Speaker 1: flight prices evolve and how complex it can be to

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Speaker 1: get a cheap flight to go anywhere, and the idea

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Speaker 1: that AI is one step ahead of you and coming

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Speaker 1: up with your own deciding essentially how much you are

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Speaker 1: willing to pay as an individual for a flight.

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Speaker 2: Which I hate to be dramatic, but you know, the

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Speaker 2: basis of catitalysm is is the ability to understand what

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Speaker 2: price you're being charged and for that to be sort

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Speaker 2: of fair to all people are for there to be

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Speaker 2: you know, visibility on pricing, so you can also see

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Speaker 2: why there are bigger ramifications, I mean, flight prices, tickets

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Speaker 2: of any kind maybe could use a system like this,

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Speaker 2: So yes, lots of questions, but you know, rapid rolla

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Speaker 2: of aar, lots of thinking to be done around it.

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Speaker 1: Yeah, certainly, and it's an interesting piece on that funt

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Speaker 1: affecting flight prices. We'll put a link to the article

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Speaker 1: in our podcast show notes. Well, let's bring you up

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Speaker 1: to date then, on the trade story today, Donald Trump

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Speaker 1: threatening higher tariffs for products from India because of the

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Speaker 1: country's purchases of Russian oil, while several other countries are

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Speaker 1: trying to improve their trading situation. Our economic supporter Katie

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Speaker 1: Maitrieva is with us for more. Kati, are good to

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Speaker 1: talk to you. How serious then, is this threat of

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Speaker 1: higher tariffs for India.

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Speaker 8: Well, it's pretty serious at least right now. And we

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Speaker 8: saw local markets reacting pretty much immediately, and you know,

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Speaker 8: they've been pretty passive in the past on trade news.

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Speaker 8: But we saw the Indian rupee falling to what was

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Speaker 8: close to a record low, and some traders even saying

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Speaker 8: it indicated the central bank was stepping in and defending

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Speaker 8: the currency. But with a lot of these announcements from

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Speaker 8: the Trump administration, there's a lot of uncertainty as well.

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Speaker 8: So one of the things that we were asking immediately afterwards, is,

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Speaker 8: you know, is the threat of higher tariffs on top

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Speaker 8: of the twenty five percent, because you remember last week

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Speaker 8: with the reciprocal tariffs announced of twenty five that was

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Speaker 8: higher than a lot of other countries on that list,

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Speaker 8: in addition to this idea of secondary tariffs that that

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Speaker 8: Trump has threatened. So are we talking about a higher

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Speaker 8: rate or is that already the higher rate? And we've

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Speaker 8: seen some defiance, you know, Prime Minister Modi is saying

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Speaker 8: to his citizens that they should just buy more Indian

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Speaker 8: made products, you know, holding his ground and saying that

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Speaker 8: India will continue to purchase Russian oil. And the latest

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Speaker 8: statement from officials in India is that it's unjustified and unreasonable,

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Speaker 8: this latest tariff news. So it you know, it is

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Speaker 8: looking bad. At the same time, we've kind of been

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Speaker 8: here before with this back and forth between two countries,

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Speaker 8: between Trump and another country. One thing that might help

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Speaker 8: in this case is that India has promised to purchase

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Speaker 8: more items so natural gas, gold, communications equipment from the US.

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Speaker 8: So we'll see if that potentially helps in Panzel. But

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Speaker 8: right now, of course, attentions are really high.

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Speaker 2: They are, Yeah, I thought it was interesting also that

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Speaker 2: India talked about how they've been buying more Russian oil

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Speaker 2: because international flows you know, went to Europe and the

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Speaker 2: US encouraged that, you know, in the aftermath of the

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Speaker 2: Ukraine War. So they you know, they had a number

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Speaker 2: of explanations, didn't they. Meanwhile, Switzerland's also hoping for a

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Speaker 2: better deal because there again there was quite a lot

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Speaker 2: of shock in Switzerland about a thirty nine percent tiphon

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Speaker 2: goods exported into the US from Switzerland.

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Speaker 8: Yeah, this was the other country that we were talking

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Speaker 8: about last week. Got dinged pretty bad. You know, a

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Speaker 8: lot of countries got better deals, but Switzerland was way

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Speaker 8: out there, and we had this interesting story from colleagues

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Speaker 8: saying that. But basically, there was this last minute, sort

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Speaker 8: of midnight, close to the eleventh hour call where Trump became

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Speaker 8: very upset because of the trade surplus deficit with Switzerland.

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Speaker 8: I mean that's really driven by gold. There's also pharmaceuticals

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Speaker 8: and coffee. You know, these are things that Americans use

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Speaker 8: every day. But apparently Trump became very upset about that.

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Speaker 8: He's looking to close that gap like he is with

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Speaker 8: other countries, and so the thirty nine percent tariff level.

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Speaker 8: According to one source. Familiar said that it was completely

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Speaker 8: arbitrary and it was really driven by Trump being upset

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Speaker 8: about this gap. So, you know, perhaps cooler heads will prevail.

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Speaker 8: There's already been a statement from the Swiss government saying,

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Speaker 8: you know, we are looking to we're looking to make

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Speaker 8: a better deal, We're looking to make more concessions. The President,

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Speaker 8: the Finance, Minister Health an emergency meeting to discuss that.

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Speaker 8: So with the highest tariffs currently, you know, Switzerland has

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Speaker 8: the highest tariffs in the industrial world, there's quite a

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Speaker 8: lot at risk, so hopefully they can find a middle

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Speaker 8: ground there.

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