WEBVTT - Bloomberg Surveillance TV: March 26, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.360 Terminal and the Bloomberg Business App. Let's turn to tariffs. 0:00:37.400 --> 0:00:40.479 Ocean First Financial CEO Chris Mars saying, while the direct 0:00:40.520 --> 0:00:44.080 impact on businesses isn't concerning at present, the volatility and 0:00:44.200 --> 0:00:47.360 uncertainty is clearly evident. The longer the period of uncertainty, 0:00:47.520 --> 0:00:51.640 the more likely the perceptions translate into reality. Chris joins 0:00:51.720 --> 0:00:53.599 us now for more. Chris can morning, Marian, John, been 0:00:53.600 --> 0:00:55.240 so long, It's going to see you again, sir. Let's 0:00:55.240 --> 0:00:57.600 start with the reality, your reality and your business at 0:00:57.640 --> 0:00:58.920 the moment. What do you see there? 0:00:58.920 --> 0:01:01.960 It is interesting because we'll read about taris, tarist tariffs. 0:01:02.240 --> 0:01:05.720 Our clients are not particularly concerned about them. And I 0:01:05.720 --> 0:01:07.720 think you have to look from their perspective. They've been 0:01:07.760 --> 0:01:11.280 through the first Trump administration and they have been through COVID. 0:01:11.360 --> 0:01:14.160 So I like to say, our folks got a PhD 0:01:14.240 --> 0:01:17.640 In supply chains during COVID. They figured out I have 0:01:17.760 --> 0:01:20.720 remarkably small businesses at bank with US. We cover clients 0:01:20.720 --> 0:01:24.440 between Boston and Washington. I have a pet foods business. 0:01:24.760 --> 0:01:28.640 This guy can explain to you the supply chains in China, Cambodia, Vietnam. 0:01:28.680 --> 0:01:31.319 He understands the tariffs, he knows where he's going to 0:01:31.360 --> 0:01:33.920 get his stuff, and it is not looming large in 0:01:33.920 --> 0:01:36.360 their minds. So it's more the perception than the reality. 0:01:36.400 --> 0:01:38.280 It's her sentiment, we say in the survey. At a 0:01:38.280 --> 0:01:41.280 consumer level, we're having this debate about whether it's hurting activity. 0:01:41.400 --> 0:01:43.440 So these companies that came into the new year with 0:01:43.520 --> 0:01:46.720 investment plans, with hiring plans, are they on hold or 0:01:46.720 --> 0:01:47.760 they go on forward with them? 0:01:48.080 --> 0:01:48.960 They're on hold. 0:01:48.960 --> 0:01:51.880 They're a little bit cautious and concerned. They want to 0:01:51.880 --> 0:01:53.720 make sure they see how things going to pan out. 0:01:54.000 --> 0:01:56.320 You talked about the continuation of the tax cuts earlier. 0:01:56.400 --> 0:02:00.360 Right for those customers, these are higher income house that 0:02:00.440 --> 0:02:03.400 own these businesses. They're trying to figure out the whole puzzle. 0:02:03.480 --> 0:02:05.880 So it'll be okay for a little while. You know, 0:02:05.920 --> 0:02:07.920 we have we have days, we probably have weeks, but 0:02:08.000 --> 0:02:10.359 I don't think we have months before that confidence starts 0:02:10.360 --> 0:02:11.280 to impact the economy. 0:02:11.360 --> 0:02:13.280 I want just to elaborate a little bit further on 0:02:13.280 --> 0:02:16.360 the point that John was making. There was an estimate 0:02:16.520 --> 0:02:19.560 of some of the small business confidence, a survey that 0:02:19.600 --> 0:02:22.520 showed just nineteen percent of small business owners in February. 0:02:22.520 --> 0:02:25.800 We're planning the capital outlies in the sixth next six months, 0:02:25.800 --> 0:02:29.560 which matches the lowest level since April twenty twenty. How 0:02:29.560 --> 0:02:32.400 do you match that with what you're telling us that 0:02:32.520 --> 0:02:35.840 actually they're okay, they're taking it in stride. Is there 0:02:35.880 --> 0:02:38.639 a sense that they really are going to re engage 0:02:38.639 --> 0:02:41.720 with all of those capital outlays immediately within the next 0:02:41.760 --> 0:02:43.359 six months, as soon as there is some. 0:02:43.360 --> 0:02:45.000 Clarity, Well, you know, we so. 0:02:45.160 --> 0:02:48.800 I think that these small business owners, right the company 0:02:48.880 --> 0:02:51.640 and their own personal financials are really closely tied, so 0:02:51.840 --> 0:02:54.520 they tend to be more cautious. They've built up liquidity 0:02:54.600 --> 0:02:57.720 since the since kind of COVID happened, understood the uncertainty, 0:02:58.360 --> 0:03:02.000 they have plans. We're talking about loan pipelines are improving 0:03:02.000 --> 0:03:06.160 and increasing, but there is a range of hesitancy around 0:03:06.200 --> 0:03:09.800 some kind of the edge con like a residential construction 0:03:09.960 --> 0:03:12.160 is an area where people are kind of holding back. 0:03:12.160 --> 0:03:13.639 They want to make sure that we don't kind of 0:03:13.639 --> 0:03:15.680 head into a recession. There isn't a demand issue down 0:03:15.680 --> 0:03:16.000 the road. 0:03:16.040 --> 0:03:18.840 So are they concerned about the competitive advantage that they 0:03:18.880 --> 0:03:22.920 have versus large companies given their a negotiating position with 0:03:23.000 --> 0:03:27.480 potential contractors, with potential supply chains dealers. We hear about 0:03:27.480 --> 0:03:31.120 Walmart going to China and saying, guys, lower your prices, 0:03:31.160 --> 0:03:32.360 and they can do it because they are an eight 0:03:32.440 --> 0:03:34.240 hundred pound grilla and even they are getting pushed back. 0:03:34.320 --> 0:03:36.480 I mean, how much does that really issue for your clients? 0:03:36.840 --> 0:03:39.600 It is an issue, we said in a very different way, 0:03:39.680 --> 0:03:41.880 so we have I used the home building example, so 0:03:41.920 --> 0:03:44.000 we work with some of the largest home builders in 0:03:44.000 --> 0:03:47.400 the country. They can stock warehouses full of appliances, so 0:03:47.400 --> 0:03:49.520 they just kind of immune to where the appliance has 0:03:49.560 --> 0:03:52.800 come from. But in a different way, the small builders 0:03:53.520 --> 0:03:55.640 just move where they're buying stuff from. So, you know, 0:03:55.720 --> 0:03:59.320 ge appliances has a pretty strong US domestic manufacturing base, 0:03:59.560 --> 0:04:01.840 so they're going to buy Ge instead of some other brands. 0:04:01.840 --> 0:04:03.720 Some of the other brands have a bigger base in 0:04:03.760 --> 0:04:08.120 say Canada, So the small businesses are more nimble. The 0:04:08.200 --> 0:04:10.440 big businesses are able to do kind of more bold 0:04:10.440 --> 0:04:14.160 supply chain things, stocking up inventories and kind of planning ahead. 0:04:14.240 --> 0:04:17.040 Our materials going up. Are they already seeing this price effects? 0:04:17.240 --> 0:04:20.159 Sure, avery they've gone up. Lumber's gone up three different 0:04:20.160 --> 0:04:22.400 price hikes in the last couple of months, so lumber's 0:04:22.400 --> 0:04:26.960 certainly up. You're seeing anything with steel or aluminum. Although 0:04:27.080 --> 0:04:29.119 I'd make the comment that we tend to talk about 0:04:29.160 --> 0:04:32.800 steel for our clients, there's like fifty different kinds of steel. 0:04:33.279 --> 0:04:35.599 Some steel is going to be an issue, other kinds 0:04:35.600 --> 0:04:38.559 of steel are not. And although we're talking with many 0:04:38.880 --> 0:04:42.559 international parties, your steel can be sourced from South Korea, 0:04:42.640 --> 0:04:46.279 can be stores from Latin America. So there's very interesting 0:04:46.400 --> 0:04:48.320 kind of subset as you get under the covers and 0:04:48.400 --> 0:04:52.200 look for one company, steel may matter, for another company, 0:04:52.200 --> 0:04:52.599 it doesn't. 0:04:52.720 --> 0:04:55.840 I was speaking to the head of a toy manufacturer 0:04:56.080 --> 0:04:57.600 and he was saying, well, it's not that big of 0:04:57.600 --> 0:04:59.320 a deeal because we can kick up prices and if 0:04:59.360 --> 0:05:01.200 people are buying a doll they can pay an extra 0:05:01.240 --> 0:05:04.039 two dollars and they don't really care. Do your business 0:05:04.040 --> 0:05:06.240 clients feel the same way that they can really pass 0:05:06.279 --> 0:05:07.480 it mostly along to clients? 0:05:08.160 --> 0:05:11.160 Generally, no, they're very concerned about passing it along, although 0:05:11.440 --> 0:05:14.680 we're starting to see contracts now have a language in 0:05:14.720 --> 0:05:16.880 the contract that would say, you know, we're going to 0:05:16.880 --> 0:05:19.520 pass along the price increases. So generally know, there are 0:05:19.560 --> 0:05:23.600 some cases that we have a special metal manufacturer. Their 0:05:23.640 --> 0:05:28.000 products going to jet engine turbines. We need them, so yes, 0:05:28.000 --> 0:05:29.640 the price is going to go up. It'll be a 0:05:29.680 --> 0:05:32.360 small increase to a bigger part of a larger engine. 0:05:32.480 --> 0:05:33.800 So they're just going to have to raise prices. 0:05:33.800 --> 0:05:35.360 So this is where the rubber meets the road. They 0:05:35.360 --> 0:05:39.280 increase prices. Are you hearing direct feedback that consumers are 0:05:39.400 --> 0:05:42.279 unwilling to absorb those higher prices. 0:05:42.360 --> 0:05:44.920 I think in consumer products you're seeing substitution, so people 0:05:44.960 --> 0:05:47.680 are choosing one thing versus another thing. We have a 0:05:47.880 --> 0:05:51.040 seafood supplier. They get snow crabs, right, so they get 0:05:51.080 --> 0:05:53.279 them from Canada. They have already told us if the 0:05:53.320 --> 0:05:55.920 tariffs go in, they're not going to sell snow crabs. 0:05:55.920 --> 0:05:58.360 You'll be eating something else, so you won't notice that 0:05:58.440 --> 0:06:01.200 your menu has changed. The snow crabs won't be on 0:06:01.279 --> 0:06:02.880 it because they're just going to go up to a 0:06:02.960 --> 0:06:05.240 price that restaurant tours we're not going to want to buy. 0:06:05.279 --> 0:06:07.360 Hey, Chris, this was an important conversation. Let's do it 0:06:07.360 --> 0:06:20.359 again soon. Richard Chris ma ev Ocean First Bank shift 0:06:20.360 --> 0:06:23.680 the focus bank to commodities. Oil edging high following an 0:06:23.720 --> 0:06:27.360 industry report which signaled a large decline in US crewed stockpiles. 0:06:27.400 --> 0:06:30.800 Traders also weighed the prospect of a Russian Ukraine ceasefire 0:06:31.000 --> 0:06:33.680 in the Black Sea, and readercent of Energy Aspects joined 0:06:33.720 --> 0:06:35.760 us Now for more and Resa, welcome to the program. 0:06:35.839 --> 0:06:38.159 Let's get to that potential ceasefire that we could see 0:06:38.160 --> 0:06:41.400 between Ukraine and Russia on a much larger scale. What 0:06:41.440 --> 0:06:43.800 would that do to energy prices? What would that do 0:06:43.920 --> 0:06:44.839 to the flow of energy? 0:06:46.240 --> 0:06:48.839 Firstly, I don't think we're going to get a seas 0:06:48.920 --> 0:06:51.159 far anytime soon in the true sense of the world, 0:06:51.279 --> 0:06:52.840 like you guys were discussing. I think there'll be a 0:06:52.880 --> 0:06:55.479 lot of noise, and I think we have to remember 0:06:55.520 --> 0:06:59.599 that both sides, Russia and Ukraine are going to tread 0:06:59.640 --> 0:07:02.760 this kind of line where they are all appear very 0:07:02.800 --> 0:07:05.400 positive and you know that all the outcomes are very positive, 0:07:05.400 --> 0:07:08.280 but if you actually look at it, nothing has moved. 0:07:09.279 --> 0:07:12.160 I think the positive spin we are seeing out of 0:07:12.240 --> 0:07:17.480 DC on very very minimal gains has been impressive, no doubt, 0:07:18.080 --> 0:07:21.160 But if you actually read through the details, there has 0:07:21.360 --> 0:07:24.600 been no shift from either side on their red lines. 0:07:24.880 --> 0:07:28.280 And I think that's the critical thing. Remember, the headlines 0:07:28.360 --> 0:07:31.400 will have to put a positive spin so that neither 0:07:31.520 --> 0:07:34.440 side angers the current president. I think we need to 0:07:34.600 --> 0:07:37.160 look at the whole thing through that lens. In terms 0:07:37.320 --> 0:07:41.320 of sanctions lifting, Remember we haven't lost any Russian oil 0:07:41.360 --> 0:07:44.320 because of sanctions. India and China continue to buy that oil. 0:07:44.360 --> 0:07:47.280 Any Russian oil we've lost is because of OPEC plus policy. 0:07:47.640 --> 0:07:50.040 That's not changing. OPEK is going to continue to bring 0:07:50.080 --> 0:07:52.920 back barrels over the summer months. Russia gets a part 0:07:52.960 --> 0:07:56.160 of that. That's fine. Beyond that, nothing one last thing. 0:07:56.880 --> 0:08:00.200 US sanctions on Russia, if they were to be remove 0:08:00.640 --> 0:08:04.600 without europe going ahead, that is actually bullish for oil, 0:08:04.680 --> 0:08:08.200 not bearish, because the original European sanctions were designed so 0:08:08.240 --> 0:08:12.280 that Russian oil couldn't flow at all through Western shipping sanctions. 0:08:12.720 --> 0:08:15.840 The price cap was designed to allow that to flow. 0:08:16.120 --> 0:08:19.640 If you take away the price cap, the European sanctions 0:08:19.720 --> 0:08:23.720 kick in without this caveat, and therefore really no Russian 0:08:23.720 --> 0:08:25.360 oil will be able to move other than in the 0:08:25.440 --> 0:08:27.680 dark fleet. People forget that, Amrita. 0:08:27.720 --> 0:08:30.760 Are they even enforcing the price cap right now though? 0:08:31.760 --> 0:08:31.960 No? 0:08:32.200 --> 0:08:34.280 But the whole point is the price cap gives you 0:08:34.360 --> 0:08:37.400 the ability. You can claim whatever the price it is, 0:08:37.640 --> 0:08:39.560 but you can say, oh, because of the price cap, 0:08:39.600 --> 0:08:41.200 we are able to move it. If you take the 0:08:41.240 --> 0:08:45.120 price cap away, the European sanctions say they cannot use 0:08:45.240 --> 0:08:50.800 any any Western shipping or insurance services. That's the critical thing, 0:08:50.840 --> 0:08:52.600 because at least the price cap gives you a way 0:08:52.600 --> 0:08:53.520 to get away from it. 0:08:53.760 --> 0:08:56.760 When it comes to other potential energy flows, we can 0:08:56.800 --> 0:08:59.320 see if they were to get closer to a ceasefire agreement. 0:08:59.400 --> 0:09:03.040 Certain rav talking to task News Russian state media yesterday 0:09:03.320 --> 0:09:06.840 said that nord Stream there is talk of nord Stream 0:09:06.880 --> 0:09:09.760 coming back online and Rita, what do you make of that? 0:09:10.760 --> 0:09:12.800 I think again there's going to be a lot of noise, 0:09:12.920 --> 0:09:16.160 a lot of headlines in terms of again gas, I 0:09:16.160 --> 0:09:17.960 think it is going to be more important for gas 0:09:18.040 --> 0:09:21.439 than it is for oil, just given the volumes loss. Right, 0:09:21.480 --> 0:09:24.280 Like I said, oil we haven't lost, but we keep forgetting. 0:09:24.360 --> 0:09:28.000 This is Russia also trying to create a wedge between 0:09:28.000 --> 0:09:31.280 Europe and the US, and that's why certain statements like 0:09:31.320 --> 0:09:32.760 that that of course you know, we're going to bring 0:09:32.800 --> 0:09:34.920 north stream and by the way, Europe, you need our gas. 0:09:35.120 --> 0:09:37.080 Europe has a big say in this, and the European 0:09:37.120 --> 0:09:40.920 sanctions are actually the main sanctions on Russia, much more 0:09:40.960 --> 0:09:42.920 than the US. Once it's the opposite for Iran. 0:09:43.240 --> 0:09:46.560 But how much will European gas actually be helpful to Europe? 0:09:46.679 --> 0:09:48.920 I mean, although Europe has a lot of tough rhetoric 0:09:48.960 --> 0:09:51.959 when it comes to Russia, they're still importing Russian gas. 0:09:52.480 --> 0:09:55.440 Oh yeah, And look, I think this is the biggest 0:09:55.880 --> 0:09:58.200 question mark that I don't think anybody will have a 0:09:58.920 --> 0:10:01.800 like true answer to in the sense that we are 0:10:01.880 --> 0:10:05.240 losing so much industrial demand and we have lost I 0:10:05.240 --> 0:10:08.000 would say fifteen percent of gas demand we believe is 0:10:08.040 --> 0:10:10.400 never going to come back in Europe because of the 0:10:10.480 --> 0:10:13.600 high gas prices and the relocation of industry to places 0:10:13.600 --> 0:10:16.720 like the US. So the question then becomes, yes, Europe 0:10:16.800 --> 0:10:19.320 is talking about more renewables and kind of tripling down 0:10:19.320 --> 0:10:22.480 on it. But if it's again not our basis. But 0:10:22.520 --> 0:10:25.520 if you suddenly start to get a ceasefire and sanctions 0:10:25.520 --> 0:10:28.640 get removed, does Europe actually change that. We do think 0:10:28.760 --> 0:10:32.000 some European countries will go back to Russian gas, but 0:10:32.040 --> 0:10:34.320 we're not going to get the volumes back anywhere close 0:10:34.360 --> 0:10:35.800 to where we used to be pre war. 0:10:36.080 --> 0:10:37.560 Are you saying, I'm rita that if there is an 0:10:37.760 --> 0:10:40.319 end to the war between Ukraine and Russia, then it 0:10:40.320 --> 0:10:42.760 will have an immaterial effect on the price of oil. 0:10:43.720 --> 0:10:46.520 What's going to happen is that Russian differentials, which now 0:10:46.559 --> 0:10:49.000 trade at a discount, will go up because Russia no 0:10:49.120 --> 0:10:51.720 needs no longer needs to discount its oil, right because 0:10:51.800 --> 0:10:53.920 right now it's having to discount to clear but on 0:10:53.960 --> 0:10:57.840 a volume metric basis, No, because Russia is already producing 0:10:58.000 --> 0:11:00.640 as much as it can within the the OPEC last 0:11:00.640 --> 0:11:04.200 framework is just sending it to China and India. 0:11:04.280 --> 0:11:06.040 Before I let you go, I did want to get 0:11:06.080 --> 0:11:08.560 your take on copper and what we heard overnight from 0:11:08.559 --> 0:11:13.160 President Trump and the likelihood of pretty aggressive tariffs on copper. 0:11:13.440 --> 0:11:15.920 This goal to bring manufacturing back to the United States. 0:11:15.960 --> 0:11:18.080 Shift building is a big piece of that. It's also 0:11:18.160 --> 0:11:20.480 a part of the steel and aluminum tariffs. How much 0:11:20.480 --> 0:11:23.200 does that shift the cost of copper in the United States. 0:11:23.280 --> 0:11:25.840 We've seen a real departure of what's traded in the 0:11:25.960 --> 0:11:28.600 US and what's traded on the London's Metals Exchange. 0:11:28.920 --> 0:11:30.520 Yeah, and I think this is I mean, it's not 0:11:30.559 --> 0:11:33.000 just copper, like you mentioned steel and aluminum. Look, I'm 0:11:33.040 --> 0:11:35.319 in the Midwest myself. I've been meeting with a lot 0:11:35.360 --> 0:11:38.160 of the producers, including some who were in the meeting 0:11:38.240 --> 0:11:41.320 in the White House just last week, and I think 0:11:41.600 --> 0:11:44.880 the shift in metals prices is becoming a real talking 0:11:44.920 --> 0:11:48.760 point for both upstream and downstream, and ship building is 0:11:48.880 --> 0:11:51.720 I'm including them in the downstream just in terms of 0:11:51.880 --> 0:11:54.080 like certain producers are telling me their costs of got 0:11:54.160 --> 0:11:56.920 raw material costs of have gone up anywhere between fifteen 0:11:56.960 --> 0:11:59.400 and twenty percent. And I think that's why you are 0:11:59.440 --> 0:12:02.680 going to get prize discrepancy between US metals markets and 0:12:02.720 --> 0:12:06.360 the rest of the world, simply to kind of basically 0:12:06.440 --> 0:12:09.160 price that in. And I think metals markets are going 0:12:09.200 --> 0:12:11.560 to go through this huge period of volatility until we 0:12:11.600 --> 0:12:13.280 have more clarity on the second of April. 0:12:13.400 --> 0:12:15.560 I'm Rita. I appreciate your view. Thank you. I'm Rita. 0:12:15.640 --> 0:12:28.360 Send their energy aspects. Jeanette Lodge Tatiga is a bad company, 0:12:28.360 --> 0:12:31.120 writing when we added up what has already been announced 0:12:31.160 --> 0:12:33.360 in terms of tariffs, we found that it would be 0:12:33.360 --> 0:12:35.959 a two hundred and thirty five billion dollar impact over 0:12:36.000 --> 0:12:39.320 twelve months, or zero point seven percent of GDP, which 0:12:39.360 --> 0:12:42.520 is more than many investors we're expecting. Jeanette joined us 0:12:42.559 --> 0:12:45.199 now for more. Janet, welcome to the program. Certainly surprising 0:12:45.240 --> 0:12:47.880 how hard and fast they've moved since they walked into 0:12:47.880 --> 0:12:50.000 the White House. Are you seeing any signs over the 0:12:50.040 --> 0:12:53.120 last couple of days that maybe they're just softening their tone, 0:12:53.559 --> 0:12:54.880 just maybe back in a way of touch. 0:12:56.080 --> 0:12:56.320 Yeah. 0:12:56.320 --> 0:12:58.600 Absolutely, I think they are trying to start to walk 0:12:58.640 --> 0:13:01.120 back a little bit. I think it there hadn't been 0:13:01.120 --> 0:13:03.040 a lot of numbers put out there of what the 0:13:03.120 --> 0:13:06.520 actual impact was, and so we really try to take 0:13:06.559 --> 0:13:09.400 what has actually been levied already on China and Canada 0:13:09.440 --> 0:13:12.319 and Mexico when it's steel and aluminum, and then add 0:13:12.400 --> 0:13:15.280 in reciprocal tariffs and then sectoral tariffs, and I think 0:13:15.320 --> 0:13:18.240 that that number started to surprise some folks, and if 0:13:18.240 --> 0:13:20.600 you see all of that coming in at once, that can. 0:13:20.440 --> 0:13:22.880 Actually be negative for the administration. 0:13:23.280 --> 0:13:25.880 Now, obviously we're still getting mixed signals, so we don't 0:13:25.920 --> 0:13:29.720 necessarily know will some sectoral tariffs and maybe auto still 0:13:29.760 --> 0:13:32.960 be announced. That is kind of up and play. And 0:13:33.040 --> 0:13:35.680 you also have we have reciprocal tariffs that it's just 0:13:35.800 --> 0:13:39.240 focused on higher rates that other countries charge. But then 0:13:39.240 --> 0:13:42.480 the administration also wants to include what those countries charge 0:13:42.480 --> 0:13:45.719 in that taxes and put that into the equation and 0:13:45.760 --> 0:13:47.920 some other non teriff farriers, and that I think is 0:13:47.920 --> 0:13:50.400 the question. So they need to kind of figure out 0:13:50.520 --> 0:13:53.360 what pieces do they actually want to include and then 0:13:53.400 --> 0:13:55.720 how that actually can be structured, because it could be 0:13:55.880 --> 0:13:58.400 quite a shock if we come on April second, depending 0:13:58.400 --> 0:14:01.360 on what is announced. They don't pair some of this back. 0:14:01.559 --> 0:14:03.560 Well, when you mentioned that, I immediately think of the 0:14:03.559 --> 0:14:06.559 European Union and the Commissioner for Trade yesterday is all 0:14:06.600 --> 0:14:10.559 smile standing alongside Howard Lutnik and Jamison Greer Kevin Hassett 0:14:10.840 --> 0:14:13.800 after their intents and negotiations what he's calling it, and 0:14:13.840 --> 0:14:16.679 he says the EUSE priority is a fair balanced deal 0:14:17.000 --> 0:14:18.560 instead of unjustified terriffs. 0:14:18.600 --> 0:14:20.720 Do you think he's going home to Europe with a deal? 0:14:21.760 --> 0:14:23.920 Yeah? I mean so this is what's interesting because I 0:14:23.960 --> 0:14:26.160 think you know, we did sit here some talk about 0:14:26.160 --> 0:14:29.280 lowering the tariff rate on autos and also trying to 0:14:29.320 --> 0:14:31.800 get the US to lower its tariff rate on pickup trucks. 0:14:32.080 --> 0:14:34.040 That's something that obviously can be done, that has been 0:14:34.040 --> 0:14:37.760 a bonu in contention for a President Trump for some time. 0:14:38.120 --> 0:14:40.040 But I think you also have to really watch this 0:14:40.240 --> 0:14:42.960 that piece because I think overall, if you look at 0:14:43.120 --> 0:14:46.280 just applying higher teriff rates on European goods, it's not 0:14:46.320 --> 0:14:48.480 going to be as much of a significant impact. If 0:14:48.520 --> 0:14:51.520 you start to add in that taxes and that impact, 0:14:51.840 --> 0:14:55.040 that's much higher of an impact on the European Union, 0:14:55.320 --> 0:14:58.000 And it's also more difficult for them to change that. 0:14:58.040 --> 0:15:01.000 They're not going to be able to easily change those 0:15:01.040 --> 0:15:04.480 taxes for the Trump administration, So it's harder to see 0:15:04.520 --> 0:15:06.720 where that negotiation could come into play. And I think 0:15:06.840 --> 0:15:09.080 that's going to be important as we move closer to 0:15:09.120 --> 0:15:10.600 April second and get more details. 0:15:10.600 --> 0:15:13.320 When we get more details in April second, what kind 0:15:13.360 --> 0:15:16.120 of terrorsts do you think we will see immediately, and 0:15:16.160 --> 0:15:18.520 then what other legal measures will they rely on that 0:15:18.560 --> 0:15:20.680 will take weeks or months, say two thirty two or 0:15:20.720 --> 0:15:21.280 three oh one. 0:15:22.320 --> 0:15:24.000 Yeah, I mean I think that they are going to 0:15:24.040 --> 0:15:27.479 try to announce several reciprocal tariffs immediately. 0:15:27.960 --> 0:15:30.040 Now I think the question is is it a. 0:15:30.000 --> 0:15:32.600 Thirty day implementation period, kind of like what we've seen 0:15:32.640 --> 0:15:35.440 for some of the other pieces earlier this year. But 0:15:35.480 --> 0:15:37.440 it might be more on select countries. So they're not 0:15:37.480 --> 0:15:39.760 going to probably go for a universal tariff, which is 0:15:39.800 --> 0:15:42.520 what they were talking about doing earlier this year. We've 0:15:42.560 --> 0:15:45.480 moved much more from that universal tariff to this reciprocal piece. 0:15:45.720 --> 0:15:48.240 If it's reciprocal, it could also be country by country, 0:15:48.320 --> 0:15:50.520 which means maybe you can apply it to a handful 0:15:50.520 --> 0:15:53.200 of countries at one time and then add in other 0:15:53.240 --> 0:15:54.320 countries down the road. 0:15:54.560 --> 0:15:55.920 Allows for more negotiation. 0:15:56.160 --> 0:15:59.040 And that piece Trump has also been talking about, you 0:15:59.040 --> 0:16:01.080 know that he wants to do tariffs on autos, and 0:16:01.120 --> 0:16:03.320 he says that he's going to announce that soon. If 0:16:03.360 --> 0:16:06.160 you add in of that on the EU, that kind 0:16:06.160 --> 0:16:10.200 of also hits the European Union on autos, particularly Germany. 0:16:10.880 --> 0:16:13.600 It would hit Ireland in terms of pharmaceuticals, so that's 0:16:13.600 --> 0:16:15.440 going to be important piece. And I think the other 0:16:15.520 --> 0:16:17.720 thing that's really important too is what happens with Canada 0:16:17.720 --> 0:16:20.560 and Mexico. There are significant tariffs right now, if we're 0:16:20.600 --> 0:16:23.560 talking about whether or not Goods or USA compliant or not, 0:16:24.000 --> 0:16:25.880 and are those changed. 0:16:25.560 --> 0:16:27.120 On April second, engine they go. 0:16:27.280 --> 0:16:29.920 Just to reciprocal tariffs, which is much more manageable, or 0:16:29.960 --> 0:16:32.040 do we have reciprocal on top of what has already 0:16:32.080 --> 0:16:34.720 been announced for Canada and Mexico and that could actually 0:16:34.720 --> 0:16:37.440 be much more burdensome and much more troublesome for the market. 0:16:37.560 --> 0:16:39.000 I feel like we're all trying to put together a 0:16:39.040 --> 0:16:41.320 tariff puzzle and figure out what pieces people are saying 0:16:41.320 --> 0:16:43.400 and then put it in its correct place. And if 0:16:43.400 --> 0:16:45.600 we were creating that kind of puzzle, where would this 0:16:45.640 --> 0:16:49.880 copper tariff piece really get put? Yesterday when President Trump 0:16:49.920 --> 0:16:51.840 announced that he is going to put tariffs on copper 0:16:51.880 --> 0:16:55.200 and has previously discussed something like twenty five percent of 0:16:55.240 --> 0:16:56.960 all incoming copper imports. 0:16:58.160 --> 0:16:59.680 Yeah, I mean, so this is something that they are 0:16:59.680 --> 0:17:00.760 trying to rush, right. 0:17:00.800 --> 0:17:02.600 So usually you have two hundred and seventy days to 0:17:02.640 --> 0:17:05.439 do this kind of investigation, and this is something that 0:17:05.480 --> 0:17:08.240 he did with steel and aluminum, so but they it 0:17:08.400 --> 0:17:10.919 follows at least a little bit more of a process 0:17:10.960 --> 0:17:13.920 with regard to having input from the public and from 0:17:13.960 --> 0:17:15.440 companies that would be impacted. 0:17:15.720 --> 0:17:17.200 But I think this is something that he is. 0:17:17.160 --> 0:17:20.520 Trying to target certain areas and he feels like the 0:17:20.680 --> 0:17:23.399 stealing aluminum tariffs. You saw that we now got rid 0:17:23.440 --> 0:17:26.080 of the exemptions with the copper, that could be a 0:17:26.119 --> 0:17:26.960 similar story. 0:17:27.040 --> 0:17:29.960 It also could be potentially somewhat. 0:17:29.560 --> 0:17:32.280 Of a negotiating tool if you can announce it and 0:17:32.320 --> 0:17:34.320 then it kind of hits certain partners and there's an 0:17:34.359 --> 0:17:37.560 opportunity there. But it seems like with the commodity tariffs 0:17:37.600 --> 0:17:40.080 in particular, Trump looks to be looking to focus on 0:17:40.119 --> 0:17:41.720 putting those into place and. 0:17:41.640 --> 0:17:44.119 Not allowing as many exemptions. So that's something we're definitely 0:17:44.119 --> 0:17:45.359 going to be watching and going forward. 0:17:45.560 --> 0:17:48.200 Jet there has been this shift in tone more generally, 0:17:48.240 --> 0:17:50.479 and John started the show talking about it. We've been 0:17:50.520 --> 0:17:53.120 feeling it in terms of market performance, and we're hearing 0:17:53.200 --> 0:17:56.000 it not just from the White House and Tarifa negotiations, 0:17:56.280 --> 0:17:59.639 but also from the House, with House Speaker Mike Johnson 0:17:59.640 --> 0:18:02.280 coming out yesterday saying we have to bring stability to markets, 0:18:02.280 --> 0:18:05.440 saying that negotiators around the budget not necessarily terriffs, need 0:18:05.480 --> 0:18:07.760 to give people certainty so that they can quote make 0:18:07.800 --> 0:18:11.240 decisions about expanding their businesses and jobs. How much are 0:18:11.240 --> 0:18:15.080 we hearing a kind of around the table feeling of 0:18:15.119 --> 0:18:19.040 concern about the uncertainty in Washington, DC. That is a 0:18:19.080 --> 0:18:21.879 material shift than say, even a couple days ago. 0:18:22.520 --> 0:18:24.600 Absolutely, I definitely think that this is definitely a part 0:18:24.600 --> 0:18:27.280 of the conversation for policy makers. And if you think 0:18:27.320 --> 0:18:30.840 back to the first Trump term, you had them passing 0:18:30.840 --> 0:18:34.000 a tax bill first and then going in and putting 0:18:34.040 --> 0:18:36.600 on tariffs, primarily on China. So there are much more 0:18:36.640 --> 0:18:39.320 modest and scope than they are today, and that created 0:18:39.400 --> 0:18:42.120 a cushion for the market. This time we have the opposite. 0:18:42.200 --> 0:18:44.760 We have tariffs coming into place first. We're not obviously 0:18:44.800 --> 0:18:47.280 going to have a tax bill done by April, so 0:18:47.359 --> 0:18:49.920 you're going to have that more difficult piece coming in 0:18:50.040 --> 0:18:51.120 first before you get some. 0:18:51.119 --> 0:18:53.760 Of that fiscal policy to help balance it out. 0:18:54.040 --> 0:18:56.520 I think you do see members of Congress thinking about 0:18:56.560 --> 0:18:59.159