WEBVTT - Climate Policy under Second Trump Term 0:00:02.920 --> 0:00:10.639 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business 0:00:10.720 --> 0:00:13.960 Week Inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.319 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.000 --> 0:00:28.960 As I mentioned, we are covering all angles of what 0:00:29.040 --> 0:00:31.360 Donald Trump returning to the White House means, what it 0:00:31.360 --> 0:00:35.120 means for the markets, the courts, for trade, for international alliances, 0:00:35.120 --> 0:00:38.159 and of course for the climate too. Mark Gongloff, an 0:00:38.200 --> 0:00:41.040 editor at Bloomberg Opinion who writes about climate change, does 0:00:41.080 --> 0:00:43.600 not have great news, at least in his opinion. He 0:00:43.640 --> 0:00:46.320 writes that quote for the climate, the best we can 0:00:46.360 --> 0:00:48.920 hope for is that the aftermath of the twenty twenty 0:00:48.920 --> 0:00:52.880 four election will remain just short of catastrophic. Mark joins 0:00:52.960 --> 0:00:57.200 us here in the Bloomberg Interactive at Brokers Studio. So, Mark, 0:00:57.200 --> 0:00:59.200 where do we begin with the climate and a second 0:00:59.200 --> 0:01:01.200 Trump administration? And because I think we can kind of 0:01:01.200 --> 0:01:04.400 look to what he did in his first administration and 0:01:04.440 --> 0:01:07.840 what comments he's made since then, not necessarily a priority 0:01:07.880 --> 0:01:08.400 for him. 0:01:09.240 --> 0:01:11.400 You could say that, to say the least it is 0:01:11.440 --> 0:01:13.640 not a priority for him. In fact, he was actively 0:01:13.680 --> 0:01:15.840 hostile to it in his first term, And as far 0:01:15.840 --> 0:01:17.600 as we can tell, we have two things to go by. 0:01:17.640 --> 0:01:19.760 We have his first term where he was actively hostile 0:01:19.760 --> 0:01:21.880 to it, pulled us out of the Paris Climate Accord, 0:01:22.480 --> 0:01:25.800 gutted environmental regulations, tried to put a bunch of climate 0:01:25.840 --> 0:01:29.559 deniers in the government, on and on the Project twenty 0:01:29.600 --> 0:01:32.279 twenty five, this blueprint that the Heritage Foundation put together 0:01:32.319 --> 0:01:35.080 that he disavowed, but then it has been written by 0:01:35.080 --> 0:01:38.840 a lot of his former advisors, calls for doing that 0:01:39.120 --> 0:01:43.200 on steroids and privatizing the National Weather Service, and doing 0:01:43.240 --> 0:01:46.600 a whole bunch of other stuff, drilling for oil, and 0:01:46.600 --> 0:01:48.120 a whole bunch of stuff like that. So none of 0:01:48.160 --> 0:01:52.000 it looks great. On the other hand, there are some 0:01:52.160 --> 0:01:53.280 reasons for hope. 0:01:53.880 --> 0:01:57.680 You've also written about how Americans clearly care about climate change. 0:01:57.720 --> 0:02:00.440 But then the second time, in three different presidential elections, 0:02:00.480 --> 0:02:03.720 you've seen someone come in that's elected, that obviously has 0:02:03.720 --> 0:02:06.800 a different opposition towards that. What's the conundrum there? Why 0:02:06.840 --> 0:02:07.920 is there a divergence? 0:02:08.360 --> 0:02:13.000 Yeah, it's crazy. Consistently people say we really care about 0:02:13.000 --> 0:02:14.760 climate change, we really want to do something about it, 0:02:14.800 --> 0:02:17.120 and then they turn around to vote against that. It's 0:02:17.440 --> 0:02:20.200 weird dichotomy that you've seen in this election of many others. 0:02:20.480 --> 0:02:20.840 People. 0:02:20.960 --> 0:02:24.680 You know, inflation is an enormous problem, and that that 0:02:24.760 --> 0:02:27.560 is something that affects people's daily lives. Climate is affecting 0:02:27.560 --> 0:02:29.600 their daily lives if there's a big hurricane, if there's 0:02:29.639 --> 0:02:31.840 a drought, if there's a wildfire. But that's not a 0:02:31.880 --> 0:02:34.160 constant drumbeat. How do I feed my kids? So I 0:02:34.240 --> 0:02:36.080 understand that if you're going to go to the polls 0:02:36.080 --> 0:02:37.919 and be mad about inflation, you're going to vote about 0:02:37.919 --> 0:02:41.360 inflation or the economy. The difficult thing we need to 0:02:41.480 --> 0:02:44.760 message is that this is an economic issue. Climate change 0:02:44.840 --> 0:02:47.440 is going to raise prices in the future and cause 0:02:47.480 --> 0:02:50.280 economic loss in the future, but it's it's and it's 0:02:50.280 --> 0:02:55.119 causing those losses as we speak, you know, insurance, insurance exactly, 0:02:55.320 --> 0:02:58.440 building costs are going up. All these things are problems 0:02:58.680 --> 0:03:01.440 and in the now, and so we have to express 0:03:01.480 --> 0:03:03.920 that message better. And that's one of the things about 0:03:04.000 --> 0:03:07.360 Trump taking over again and cutting off the US government 0:03:07.400 --> 0:03:11.240 sort of activism in climate is that we have to 0:03:11.240 --> 0:03:13.200 sort of take up that mantle ourselves. 0:03:13.600 --> 0:03:16.560 Well, you mentioned it's not hopeless, and I wonder about 0:03:16.600 --> 0:03:18.680 the people that he has around him right now, and 0:03:18.720 --> 0:03:20.520 that could change. We know how he was in his 0:03:20.560 --> 0:03:23.080 first term and what some of those folks are saying 0:03:23.120 --> 0:03:26.880 now about the former president and president elect. But what 0:03:26.880 --> 0:03:29.120 about someone like Elon Musk being so close to him 0:03:29.120 --> 0:03:31.800 because he's I think it's fair to say, done a 0:03:31.840 --> 0:03:37.600 lot for the transition to cars run on by electricity. 0:03:37.680 --> 0:03:40.000 It's such a weird thing. Yes, I mean, he made 0:03:40.600 --> 0:03:44.040 his fortune is based on Tesla, and one of the 0:03:44.040 --> 0:03:46.120 weird things those that if you cut off the IRA, 0:03:46.320 --> 0:03:50.600 cut off the Inflation Reduction Act and in subsidies for 0:03:50.640 --> 0:03:53.520 other electric car makers, suddenly Tesla is king of the 0:03:53.600 --> 0:03:56.240 hill without that many competitors. So there are some competing 0:03:56.280 --> 0:03:59.080 interests there. It is possible though that he could kind 0:03:59.080 --> 0:04:01.400 of bend Trump's on that, but I don't know if 0:04:01.400 --> 0:04:03.160 we can rely on that at this point. We may 0:04:03.200 --> 0:04:06.080 have to rely on state and local governments. You know, 0:04:06.240 --> 0:04:09.440 Washington kept alive a carbon tax, a cap and trade 0:04:10.240 --> 0:04:12.480 scheme that they have there to help sort of like 0:04:12.840 --> 0:04:16.559 make carbon more expensive. That's a huge thing to help 0:04:17.279 --> 0:04:20.480 keep fossil fuel use down. Other state and local governments 0:04:20.520 --> 0:04:23.360 are doing that. And the other thing, the ironic thing 0:04:23.440 --> 0:04:25.800 is that you know, Trump is called climate change in 0:04:25.880 --> 0:04:31.000 Chinese hoax. If we stop subsidizing green tech production in 0:04:31.040 --> 0:04:33.760 the US, a lot of that business is going to 0:04:33.800 --> 0:04:35.359 go overseas, and a lot of it is going to 0:04:35.400 --> 0:04:38.680 be dominated by nobody, none other than China. It already 0:04:38.720 --> 0:04:41.240 is to some extent. They're making super cheap evs or 0:04:41.240 --> 0:04:44.679 making super cheap solar panels, and they're spreading them around 0:04:44.720 --> 0:04:47.640 the world, and we risk missing the US when I 0:04:47.640 --> 0:04:51.279 say we, the US risks missing out on that business. 0:04:51.320 --> 0:04:54.720 And you know that ability that manufacturing in those jobs 0:04:55.040 --> 0:04:58.159 that the IRA did start was starting to provide, and 0:04:58.160 --> 0:05:00.280 that's another reason to hope. A lot of those jobs 0:05:00.279 --> 0:05:02.360 are being created in Republican districts, and so a lot 0:05:02.360 --> 0:05:06.480 of Republican lawmakers are already saying, hey, maybe keep your 0:05:06.480 --> 0:05:07.240 hands off of this. 0:05:07.240 --> 0:05:10.760 Please, so project twenty twenty five because there's a lot 0:05:10.800 --> 0:05:13.320 of discussion about this. It's unclear about everything that's in it. 0:05:13.400 --> 0:05:17.400 But how does climate change end up fitting into this specifically? 0:05:17.839 --> 0:05:20.800 Well, they really talk about the NAA, which runs the 0:05:20.880 --> 0:05:22.880 National Weather Service, and a bunch of other things. They 0:05:22.880 --> 0:05:25.679 talk about taking that, breaking it up, stripping it down. 0:05:26.200 --> 0:05:29.960 The National Weather Service, which provides you know, all tons 0:05:29.960 --> 0:05:33.279 and tons of data climate data, they want to sort 0:05:33.320 --> 0:05:35.680 of they don't privatize that, but they want to commercialize 0:05:35.680 --> 0:05:38.320 it so that it sells all that stuff, sells all 0:05:38.320 --> 0:05:40.800 of its data to like Acuweather, for example, which is 0:05:40.839 --> 0:05:44.400 like a private company. Acuweather says it doesn't want any 0:05:44.400 --> 0:05:45.800 part of this, but it's of course saying that now 0:05:45.880 --> 0:05:47.240 because it wants to stay out of that. Who knows 0:05:47.279 --> 0:05:49.520 what's going to happen. But if it wants to take 0:05:49.560 --> 0:05:52.640 pull climate change out of the science that the National 0:05:52.720 --> 0:05:56.520 Weather Service and THENAA perform, and that will be a 0:05:56.600 --> 0:05:58.760 huge loss for scientists here and all around the world. 0:05:58.800 --> 0:06:01.760 They'll have to scramble for other data sources. And it's just, 0:06:01.880 --> 0:06:03.640 you know, we all need to be rowing in the 0:06:03.680 --> 0:06:06.840 same direction. We've got four years in order to really 0:06:06.839 --> 0:06:09.200 close the window. We've got a window of four years 0:06:09.520 --> 0:06:13.000 to cut fossil fuel emissions down enough to keep warming 0:06:13.080 --> 0:06:14.960 to the window that we've all said we want like 0:06:15.000 --> 0:06:19.200 two degrees celsius or less. You know, everybody needs to 0:06:19.240 --> 0:06:21.000 be growing in the same direction to make that happen. 0:06:21.080 --> 0:06:23.560 If the US pulls its data out of that fight. 0:06:24.200 --> 0:06:27.120 It's powers out of that fight, and it doesn't help anybody. 0:06:27.160 --> 0:06:30.000 I'm wondering where markets come in here, Mark, because you know, 0:06:30.040 --> 0:06:32.280 we mentioned the rising costs of insurance and I don't 0:06:32.320 --> 0:06:34.120 know if you've been on since I found this out 0:06:34.160 --> 0:06:37.440 about a friend of mine, but apparently he can't sell 0:06:37.480 --> 0:06:42.880 his condo in Florida because it keeps flooding their insurance issues. 0:06:43.600 --> 0:06:46.040 And to me, that sounds like the market is kind 0:06:46.040 --> 0:06:46.600 of taken. 0:06:46.440 --> 0:06:46.920 Care of this. 0:06:47.400 --> 0:06:50.719 Yeah, it's anecdotal, but you are seeing some issues, especially 0:06:50.720 --> 0:06:53.839 with some other regulations in Florida related to the collapse 0:06:53.839 --> 0:06:55.560 of that building and surfside a few years ago, that 0:06:55.560 --> 0:06:57.320 are making it really difficult to sell real estate in 0:06:57.320 --> 0:06:57.960 certain areas. 0:06:58.600 --> 0:07:01.640 Donald Trump's a real estate guy. Yeah, Like, is that 0:07:01.680 --> 0:07:02.640 message and in Florida? 0:07:02.760 --> 0:07:05.559 Like, is that message going to get to him that Okay, 0:07:05.600 --> 0:07:08.359 this is an issue because it is affecting the cost 0:07:08.920 --> 0:07:10.600 of housing and he wants to bring that down. 0:07:10.800 --> 0:07:12.720 I don't know what messages will get to him, but 0:07:12.800 --> 0:07:15.840 I do think because who knows what, but messages will 0:07:15.880 --> 0:07:18.400 get to politicians in Florida. I mean, they already see 0:07:18.640 --> 0:07:22.280 that the real estate market is having problems, especially in 0:07:22.280 --> 0:07:26.360 the coastal areas. Insurance rates are going up, so that 0:07:26.520 --> 0:07:28.800 is going to be a big market and you can 0:07:28.840 --> 0:07:32.280 see that in other parts of California, wildfire prone areas 0:07:32.320 --> 0:07:36.680 in California, flood prone places in Louisiana and Texas. It's 0:07:36.720 --> 0:07:38.360 going to be an issue all around the country, not 0:07:38.440 --> 0:07:41.240 just in Florida, and it will be an economic issue. 0:07:41.640 --> 0:07:43.680 On the other hand, I guess if you pull away 0:07:43.800 --> 0:07:46.880 government support and subsidies for clean tech, then that becomes 0:07:46.920 --> 0:07:49.880 another sort of the countervailing market thing. We're already seeing 0:07:49.920 --> 0:07:51.640 hedge funds making a bunch of money by betting a 0:07:51.640 --> 0:07:54.000 glimpse against clean tech this week. 0:07:54.320 --> 0:07:54.840 Is that going to. 0:07:54.880 --> 0:07:57.680 Keep going if the government? If the US government pulls 0:07:57.440 --> 0:08:00.960 it stops away, will VC's keep put money into that stuff? 0:08:01.000 --> 0:08:03.559 So that's another market wrinkle that we have to think about. 0:08:03.680 --> 0:08:06.160 We've talked a lot broadly about the US government, but 0:08:06.200 --> 0:08:08.520 what about when it comes to local government and what 0:08:08.560 --> 0:08:10.920 they can do for those types of policies or initiatives 0:08:10.920 --> 0:08:12.120 when it comes to climate change. 0:08:12.240 --> 0:08:15.640 Yeah, there's so much that they can do. Nashville and Columbus, 0:08:15.640 --> 0:08:20.000 Ohio both past mass transit bills this week and others. 0:08:20.160 --> 0:08:23.600 Two states that voted for Trump, Yeah, exactly, Ohio and Tennessee. 0:08:23.640 --> 0:08:26.400 Those are deep red states, but there are local governments 0:08:26.400 --> 0:08:29.520 in these two towns, past mass transit bills, Washington, as 0:08:29.520 --> 0:08:32.240 I mentioned, past this cap and trade bill. So there 0:08:32.240 --> 0:08:34.040 are lots of things going on. But then at the 0:08:34.080 --> 0:08:37.720 same time, again it's difficult because I think with South 0:08:37.760 --> 0:08:42.960 Dakota voted against a pipeline that would pipe carbon dioxide. 0:08:43.000 --> 0:08:45.160 So you have these carbon capture Another big thing we're 0:08:45.160 --> 0:08:47.520 going to need maybe is carbon capture and storage, which 0:08:47.520 --> 0:08:49.679 we'd gone on about how effective that is. But if 0:08:49.679 --> 0:08:51.280 you have that, you want to pipe that carbon to 0:08:51.360 --> 0:08:53.800 other places. South Dakota said no, we don't want that 0:08:54.160 --> 0:08:57.400 pipeline in our backyard. And so it is a fight. 0:08:57.480 --> 0:09:00.280 But local governments can do a lot. California State of 0:09:00.320 --> 0:09:02.800 California has done so much to affect the US audio, 0:09:02.840 --> 0:09:08.040 the entire US auto industry with its environmental regulations, and 0:09:08.080 --> 0:09:10.400 so states can have that kind of power. 0:09:10.400 --> 0:09:12.559 I'm gonna throw a curveball at you, Mark. But we 0:09:12.600 --> 0:09:15.480 talked to Elon Musk, what about someone like RFK Junior 0:09:15.520 --> 0:09:19.479 who has a history of in environmentalism. 0:09:19.880 --> 0:09:23.560 Yeah, again, I don't know our FK Junior Elon Musk, 0:09:23.679 --> 0:09:25.679 Donald Trump. These are people who have brains that are 0:09:25.720 --> 0:09:29.040 more complicated than I fully understand, So I don't know 0:09:29.240 --> 0:09:31.120 maybe how those three will work together. 0:09:32.000 --> 0:09:34.040 They It is possible that he could. 0:09:33.840 --> 0:09:35.960 Also have some sort of an influence onto He already 0:09:35.960 --> 0:09:38.800 has had some an influence on Trump, helped Trump get elected. 0:09:39.080 --> 0:09:41.600 Trump feels like maybe he owes him something and so 0:09:41.920 --> 0:09:43.920 he may be more willing to listen to an environmental 0:09:43.920 --> 0:09:45.640 pitch from him who knows. It does sound like his 0:09:46.040 --> 0:09:48.319 focus has been less about the environment in the last 0:09:48.360 --> 0:09:50.440 few years, much more about health. 0:09:51.000 --> 0:09:55.400 Yeah, health and FDA and Moer vaccines. Yeah. 0:09:55.480 --> 0:09:58.079 Well, we certainly do live in interesting times. Mark on Luff, 0:09:58.080 --> 0:10:00.600 we are grateful to have you writing a it. Mark 0:10:00.720 --> 0:10:03.560 is an editor at Bloomberg Opinion. He writes about climate change. 0:10:03.800 --> 0:10:06.840 Check out his columns and more on the Bloomberg Terminal 0:10:06.880 --> 0:10:10.640 opin Go and at Bloomberg dot com slash Opinion. 0:10:11.440 --> 0:10:15.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:15.040 --> 0:10:18.280 live weekday afternoons from two to five pm Eastern. Listen 0:10:18.280 --> 0:10:21.320 on Applecarplay and and broud Auto with a Bloomberg Business 0:10:21.400 --> 0:10:24.600 app or watch US live on YouTube. 0:10:25.280 --> 0:10:28.080 Well, the Associated Press reporting this afternoon at the shoe 0:10:28.080 --> 0:10:30.839 company Steve Madden is set to cut imports from China 0:10:30.880 --> 0:10:33.400 by as much as forty five percent. This is a 0:10:33.440 --> 0:10:36.560 result of this week's election of Donald Trump. The ATHV 0:10:36.720 --> 0:10:38.959 reporting that Steve Madden has been building a factory network 0:10:38.960 --> 0:10:42.280 in Cambodia, Vietnam, Mexico, and Brazil. So those jobs not 0:10:42.280 --> 0:10:45.200 necessarily coming to the US, but certainly the supply chain 0:10:45.520 --> 0:10:48.079 being changed. I would imagine that c suites all over 0:10:48.120 --> 0:10:50.040 the US are scrambling right now to figure out what 0:10:50.040 --> 0:10:52.480 they're going to do to prepare for the next Trump administration. 0:10:52.520 --> 0:10:54.680 And that's why we've got Nina Trattman with us. We 0:10:54.720 --> 0:10:57.120 know she's all over this. She's Bloomberg News senior editor 0:10:57.200 --> 0:11:00.400 who writes the Bloomberg CFO Briefing newsletter. You can ascribed 0:11:00.440 --> 0:11:04.280 to it by going to Bloomberg dot com slash CFO Briefing. 0:11:04.360 --> 0:11:07.360 She joins us here in the Bloomberg BusinessWeek studio. We're 0:11:07.360 --> 0:11:10.560 also joined by Mandy Fields. She's CFO at elf Beauty. 0:11:10.640 --> 0:11:15.040 She joins us from Oakland, California. Nina, why was Mandy 0:11:15.720 --> 0:11:18.880 a good person to talk to? You this week after 0:11:19.240 --> 0:11:20.760 the victory by Donald Trump. 0:11:21.200 --> 0:11:24.400 Yeah, thanks for having me again, and thanks Mandy for joining. 0:11:25.080 --> 0:11:27.440 I think, well, of course, we are looking for companies 0:11:27.480 --> 0:11:31.080 who can tell us how this will influence their planning 0:11:31.120 --> 0:11:33.640 strategy and their finances. And I think ELF is an 0:11:33.679 --> 0:11:36.760 interesting company because, and we'll talk to Mandy more about 0:11:36.800 --> 0:11:39.839 this in a second, they import a lot from China. 0:11:40.200 --> 0:11:43.440 They have a sort of price point customer that is 0:11:43.480 --> 0:11:46.920 sort of basically one that is sort of exposed potentially 0:11:46.960 --> 0:11:47.560 to inflation. 0:11:47.640 --> 0:11:49.319 So like the average product. 0:11:49.000 --> 0:11:52.280 I think Mandy told me before is sort of paying 0:11:52.320 --> 0:11:54.640 six dollars fifty and so of course there's a sensitivity 0:11:54.679 --> 0:11:59.400 to potential inflation and increases in prices. So yeah, why 0:11:59.440 --> 0:12:02.360 don't we turn to you, right, Mendy talk to us 0:12:02.360 --> 0:12:04.720 a little bit about how you navigated the first round 0:12:04.720 --> 0:12:08.760 of tariffs under Trump's first administration and how that could 0:12:08.880 --> 0:12:11.280 could help as a playbook for this time round. 0:12:12.320 --> 0:12:14.920 Well, thank you so much for having me this afternoon. 0:12:15.559 --> 0:12:19.360 We are certainly familiar with tariffs. We were impacted by 0:12:19.400 --> 0:12:23.600 tariffs back in twenty nineteen, and we experienced them at 0:12:23.600 --> 0:12:26.160 about a twenty five percent level on the majority of 0:12:26.160 --> 0:12:30.040 our product that we import. From China, and at that time, 0:12:30.280 --> 0:12:32.680 we had a couple different tools in our toolkit to 0:12:32.679 --> 0:12:36.400 help offset the impact of tariffs. We had call savings 0:12:36.400 --> 0:12:39.840 and concessions with our suppliers. We saw the foreign exchange 0:12:39.920 --> 0:12:42.960 rate between the US and the Chinese Wan move into 0:12:43.000 --> 0:12:45.800 our favor. I mean, we also had pricing. We took 0:12:45.840 --> 0:12:47.880 pricing on about a third of our portfolio at that 0:12:47.960 --> 0:12:52.320 time to help mitigate the impact of tariffs. I would say, 0:12:52.320 --> 0:12:56.600 now continue, yeah, I would just say now that you know, 0:12:56.760 --> 0:12:59.400 back in twenty nineteen, I would say maybe ninety nine 0:12:59.400 --> 0:13:02.360 percent of our product what's coming out of China. We've 0:13:02.400 --> 0:13:05.679 made a lot of progress now about eighty percent coming 0:13:05.720 --> 0:13:09.040 out of China. But we also have diversification in our 0:13:09.080 --> 0:13:14.240 back pocket, and so we have identified suppliers in other 0:13:14.320 --> 0:13:17.640 parts of Asia outside of China, and then also working 0:13:17.640 --> 0:13:20.679 with suppliers here in the US and in Europe also 0:13:20.760 --> 0:13:24.800 helping to produce our products. And we also have further 0:13:24.840 --> 0:13:28.640 diversification from a top line standpoint with in this latest quarter, 0:13:28.679 --> 0:13:31.079 we just reported twenty one percent of our net sales 0:13:31.120 --> 0:13:34.840 coming out of other countries outside of the US that 0:13:35.000 --> 0:13:37.520 when we import into those countries are also not subject 0:13:37.559 --> 0:13:40.160 to tariffs, so that also will help us mitigate any 0:13:40.160 --> 0:13:41.880 incremental tariffs that we might face. 0:13:42.240 --> 0:13:44.200 What about how this hits the bottom line of the 0:13:44.240 --> 0:13:46.840 company and sort of where it's absorbed the changes. Are 0:13:46.840 --> 0:13:51.559 they absorbed through price increases or would traff be absorbed 0:13:51.559 --> 0:13:54.679 through price increases or do you just get this hit 0:13:54.720 --> 0:13:56.640 on this with the bottom line. 0:13:56.880 --> 0:14:01.280 Well, in the twenty nineteen instance of tear, we actually 0:14:01.640 --> 0:14:04.600 were able to expand our gross margins during that time 0:14:04.679 --> 0:14:08.119 because we did take pricing, we had the cost savings, 0:14:08.200 --> 0:14:10.200 we had FX move into our favor. Now, some of 0:14:10.240 --> 0:14:13.760 those things like FX, we're not in control of, so 0:14:13.840 --> 0:14:16.199 that was just an additional help that we had during 0:14:16.200 --> 0:14:19.320 that time period. So I guess I would say it's 0:14:19.360 --> 0:14:22.320 too early to tell what this next round of tariffs 0:14:22.320 --> 0:14:27.000 may look like, but certainly we had the playbook from 0:14:27.040 --> 0:14:29.320 twenty nineteen when we got the twenty five percent level. 0:14:29.600 --> 0:14:33.000 So what kind of preparations could you potentially do in 0:14:33.000 --> 0:14:35.080 in advance of this, especially when you're thinking about what 0:14:35.160 --> 0:14:38.160 shareholders are looking toward when it comes to these types 0:14:38.160 --> 0:14:39.120 of potential issues. 0:14:40.480 --> 0:14:44.320 Well, I think many companies are just scenario planning. You know, 0:14:44.400 --> 0:14:47.160 what can you potentially expect to see on the road 0:14:47.200 --> 0:14:51.520 ahead and certainly leveraging the history that you have in 0:14:51.520 --> 0:14:56.320 this area. You know, we treat our pricing very seriously, 0:14:56.400 --> 0:14:59.720 and we actually have only taken pricing in response to 0:14:59.800 --> 0:15:02.560 kind of macro things, the tariffs back in twenty nineteen 0:15:02.960 --> 0:15:05.240 and the twenty twenty one twenty twenty two period in 0:15:05.240 --> 0:15:09.000 response to the container cost increases that we were seeing 0:15:09.880 --> 0:15:14.080 just with travel on ocean, and so we really take 0:15:14.160 --> 0:15:18.080 that very seriously. As Nita mentioned, our average price point 0:15:18.080 --> 0:15:21.000 at six dollars and fifty cents, and so we're very 0:15:21.120 --> 0:15:23.360 much a value price point and we want to maintain 0:15:23.440 --> 0:15:27.160 that value. And so even in twenty nineteen when we 0:15:27.200 --> 0:15:30.480 took pricing on a third of our portfolio, we were 0:15:30.520 --> 0:15:32.360 not the only ones that took pricing. I mean there 0:15:32.440 --> 0:15:34.760 was pricing across the board. As we know, we went 0:15:34.800 --> 0:15:38.480 through a period of inflation posts that time, and so 0:15:39.280 --> 0:15:43.880 certainly want to take that very seriously and minimize what 0:15:43.920 --> 0:15:45.840 we'd have to do from a pricing standpoint. 0:15:46.520 --> 0:15:50.280 Mandy, how do you think about inflation and the impact 0:15:50.280 --> 0:15:53.240 on consumer confidence. We talked about this when we spoke 0:15:53.280 --> 0:15:55.960 earlier this week that you said, of course tariffs can 0:15:56.680 --> 0:15:59.160 drive inflation and of course, this country has just gone 0:15:59.200 --> 0:16:01.360 through a massive wave of inflation. Like, how do you 0:16:01.400 --> 0:16:04.400 think your consumers would potentially react to that? 0:16:05.520 --> 0:16:08.160 Yeah, So I do think that there is broadly, not 0:16:08.280 --> 0:16:10.200 just in beauty and not just with ELF, but just 0:16:10.320 --> 0:16:13.960 a broader fatigue from inflation. I think you're seeing that 0:16:14.760 --> 0:16:19.040 with many companies talking about value being of utmost importance 0:16:19.080 --> 0:16:22.160 to consumers. And even when you look at the beauty category, 0:16:23.120 --> 0:16:26.400 category overall is down five percent, but ELF, you know, 0:16:26.440 --> 0:16:30.640 we just delivered a forty percent quarter, continue to resonate 0:16:30.720 --> 0:16:33.840 with consumers, and I do believe our value proposition is 0:16:34.000 --> 0:16:37.560 as a key differentiator for us in the market. And 0:16:37.640 --> 0:16:41.240 so I think consumers are fatigued on price increases and 0:16:41.280 --> 0:16:44.240 all those things and are going to be seeking value 0:16:44.880 --> 0:16:46.280 in an inflationary period. 0:16:46.680 --> 0:16:46.880 Yeah. 0:16:47.000 --> 0:16:48.560 I think that for a lot of people who are 0:16:48.560 --> 0:16:50.360 looking at sort of a post mortem of the election, 0:16:50.400 --> 0:16:53.760 they would certainly agree with that. And voters certainly voted 0:16:54.720 --> 0:16:58.479 expressing that. It seems like I'm wondering about other policies 0:16:58.480 --> 0:17:01.400 that within the Newtrump administration that you've got your eye on, 0:17:01.440 --> 0:17:03.400 apart from tariff. So, I mean, what does a second 0:17:03.400 --> 0:17:06.560 Trump administration mean for ealth beauty. 0:17:07.000 --> 0:17:09.840 Well, I think irrespective of who is in office, you know, 0:17:09.880 --> 0:17:12.960 we're really focused on what we can control, and we 0:17:13.040 --> 0:17:17.520 know that our investors, our employees, everyone is focused on 0:17:17.720 --> 0:17:21.600 what we're able to do from a net sales growth standpoint, 0:17:21.680 --> 0:17:25.520 what we're able to do from an EBITDA expansion standpoint, 0:17:25.560 --> 0:17:28.560 and really continuing to build market share in this environment. 0:17:28.600 --> 0:17:30.520 Those are the things that we can control and are 0:17:30.520 --> 0:17:31.920 focused on at this time. 0:17:32.480 --> 0:17:34.359 We only have about thirty seconds left. But how do 0:17:34.400 --> 0:17:36.480 you view the trajectory when it comes to the debate 0:17:36.560 --> 0:17:38.520 around what could happen with corporate taxes? 0:17:40.160 --> 0:17:43.119 Yeah, you know, I would say that, you know, we 0:17:43.560 --> 0:17:46.199 have been more focused on the tariff impact because we 0:17:46.280 --> 0:17:50.040 do know that that is a bigger potential for us 0:17:50.080 --> 0:17:53.639 to have to scenario plan against. From a corporate tax standpoint, 0:17:53.920 --> 0:17:56.159 I think a little bit of a less of an 0:17:56.200 --> 0:17:59.200 issue for us. We're pretty vanilla when it comes from 0:17:59.320 --> 0:18:03.720 a tax a tax basis, and so not have not 0:18:03.800 --> 0:18:06.560 been as focused or see that as much of an 0:18:06.560 --> 0:18:08.240 issue for us as we look out. 0:18:08.760 --> 0:18:11.679 All Right, Mandyfield's the CFO at elf Beauty joining us 0:18:11.680 --> 0:18:12.800 from Oakland, California. 0:18:12.840 --> 0:18:13.159 Also here. 0:18:13.240 --> 0:18:16.480 Bloomberg News Senior Editor Nina Trettman. She writes the Bloomberg 0:18:16.600 --> 0:18:19.160 CFO Briefing newsletter. You can sign up for that at 0:18:19.160 --> 0:18:22.200 Bloomberg dot com slash CFO Briefing. 0:18:27.160 --> 0:18:31.040 You're listening to the Bloomberg Business Week podcast. Listen live 0:18:31.160 --> 0:18:34.399 each weekday starting at two pm Eastern on Applecarplay and 0:18:34.480 --> 0:18:37.520 Android Auto with the Bloomberg Business App. You can also 0:18:37.600 --> 0:18:40.760 listen live on Amazon Alexa from our flagship New York 0:18:40.800 --> 0:18:44.520 station just say Alexa Play Bloomberg eleven thirty. 0:18:45.720 --> 0:18:47.800 For so much discussion, especially on the back of that 0:18:47.840 --> 0:18:50.840 Federal Reserve decision as widely expected obviously yesterday where the 0:18:50.840 --> 0:18:53.640 Fed did cutreads by a quarter point here, but some 0:18:53.960 --> 0:18:56.040 other bright spots that we might look more broadly in 0:18:56.080 --> 0:18:58.600 the economy. The worst period of stress for underlying credit 0:18:59.000 --> 0:19:02.800 for credit borrow is actually behind investors, and the beginnings 0:19:02.840 --> 0:19:05.359 of a more constructive credit cycle are showing signs of 0:19:05.440 --> 0:19:08.880 becoming clear, according to Kroll bond Ratings agency, who ended 0:19:08.960 --> 0:19:11.480 up analyzing the three most recent years of data for 0:19:11.560 --> 0:19:14.480 fifteen hundred companies. But of course I have to point 0:19:14.480 --> 0:19:16.840 out that there's still a problem even as interest rates 0:19:16.880 --> 0:19:20.560 have fallen in recent months, because many Americans are still 0:19:20.600 --> 0:19:23.359 feeling the strain of higher borrowing costs from everything for 0:19:23.440 --> 0:19:26.600 mortgages to credit card rates. So who better to walk 0:19:26.680 --> 0:19:29.800 us through the dynamics Here Bill Cox, global head of Corporate, 0:19:29.840 --> 0:19:32.720 Financial and Government Ratings at the bond rating firm k 0:19:33.240 --> 0:19:36.119 b r A, joining us from Bucks County, Pennsylvania to 0:19:36.200 --> 0:19:39.840 discuss why rate cuts will help most but not all borrowers. 0:19:40.160 --> 0:19:41.920 You know what, Bill, I was actually looking at the 0:19:41.960 --> 0:19:45.040 latest Freddie McData. When you're looking at fixed mortgage rates, 0:19:45.040 --> 0:19:47.240 whether you're looking at the thirty or the fifteen year, 0:19:47.440 --> 0:19:49.280 I mean the thirty year right now, it's around six 0:19:49.320 --> 0:19:51.240 point eight percent in the latest weeks of data. The 0:19:51.280 --> 0:19:53.280 fifteen years around six percent. I know, we saw it 0:19:53.320 --> 0:19:55.680 come down just marginally in recent months, but now they're 0:19:55.720 --> 0:19:57.920 back higher. Kind of set the scene here on the 0:19:57.960 --> 0:20:00.000 back of the Federal Reserve decision and sort of the 0:20:00.080 --> 0:20:02.280