1 00:00:12,480 --> 00:00:15,240 Speaker 1: This is Wall Street Week. I'm David Weston bringing you 2 00:00:15,400 --> 00:00:20,000 Speaker 1: stories of capitalism. President Trump threatens draconian tariffs on French 3 00:00:20,079 --> 00:00:23,680 Speaker 1: wines again what that could mean for the US companies 4 00:00:23,720 --> 00:00:26,480 Speaker 1: in the business. Plus, you may have to get your 5 00:00:26,480 --> 00:00:30,080 Speaker 1: favorite chocolate from some new places around the world. And 6 00:00:30,320 --> 00:00:33,479 Speaker 1: countries are buying more weapons from Israel than ever before, 7 00:00:34,040 --> 00:00:37,479 Speaker 1: even as many condemn its actions in Gaza. But we 8 00:00:37,600 --> 00:00:40,839 Speaker 1: start in Europe, as Presidents Trump and Zelensky met this 9 00:00:40,920 --> 00:00:44,479 Speaker 1: week in Davos, while the war in Ukraine continues apace. 10 00:00:44,960 --> 00:00:48,720 Speaker 1: Christian Friedland is former Deputy Prime Minister and Foreign Secretary 11 00:00:48,760 --> 00:00:52,479 Speaker 1: of Canada and recently became an unpaid economic advisor to 12 00:00:52,520 --> 00:00:59,040 Speaker 1: the Ukrainian president. She was there for the Trump Zelenski meeting. So, Christian, 13 00:00:59,080 --> 00:01:02,240 Speaker 1: you spent the week ind in part as an unpaid 14 00:01:02,280 --> 00:01:05,560 Speaker 1: economic advisor to President Zelensky of Ukraine. He had a 15 00:01:05,640 --> 00:01:09,480 Speaker 1: meeting on Thursday with President Trump. Did you get a 16 00:01:09,520 --> 00:01:13,480 Speaker 1: readout on that meeting and how it was perceived? Uh? 17 00:01:13,840 --> 00:01:19,680 Speaker 2: So, I'm not speaking for Ukraine, David, but as let's say, 18 00:01:19,720 --> 00:01:22,920 Speaker 2: as a friendly observer, what I am hearing and I 19 00:01:22,920 --> 00:01:27,240 Speaker 2: think what everyone else is hearing from the Ukrainians from 20 00:01:27,319 --> 00:01:31,679 Speaker 2: the Americans and indeed from the Europeans, is that at 21 00:01:31,720 --> 00:01:35,680 Speaker 2: this point the Ukrainians, the Americans, and the Europeans are 22 00:01:35,720 --> 00:01:38,160 Speaker 2: all pretty much on the same page when it comes 23 00:01:38,200 --> 00:01:44,800 Speaker 2: to this negotiation. And that's actually a remarkable outcome when 24 00:01:44,840 --> 00:01:48,360 Speaker 2: you think about how rocky the path has been to 25 00:01:48,400 --> 00:01:53,560 Speaker 2: get here. So, you know, it feels like there is 26 00:01:54,320 --> 00:01:58,720 Speaker 2: quite a lot of optimism from Ukrainians, from Americans, from Europeans, 27 00:01:59,320 --> 00:02:02,640 Speaker 2: and I really think the bottom line is that the 28 00:02:02,680 --> 00:02:03,800 Speaker 2: ball is in Pueakin's court. 29 00:02:04,240 --> 00:02:06,720 Speaker 1: You have been focused for some time on what comes 30 00:02:06,760 --> 00:02:12,079 Speaker 1: after the war, in the economic rebuilding of Ukraine, and 31 00:02:12,560 --> 00:02:15,880 Speaker 1: you're advising Presidents Olenski now on that subject. At what 32 00:02:16,000 --> 00:02:17,240 Speaker 1: point do we make that pivot? 33 00:02:18,320 --> 00:02:20,240 Speaker 2: I think we need to start making that pivot now. 34 00:02:20,639 --> 00:02:23,440 Speaker 2: And you know, I really think, David, you know, for 35 00:02:24,240 --> 00:02:28,840 Speaker 2: the past four years of war, we have been quite rightly, 36 00:02:28,880 --> 00:02:33,600 Speaker 2: I think, focused on Ukraine as the virtuous victim. But 37 00:02:34,000 --> 00:02:36,560 Speaker 2: I think this is going to be the year when 38 00:02:36,600 --> 00:02:40,320 Speaker 2: we pivot to seeing the Ukrainians quite differently, and when 39 00:02:40,320 --> 00:02:45,359 Speaker 2: we start seeing them as a really strong ally, as 40 00:02:45,639 --> 00:02:50,720 Speaker 2: Europe's military shield, as Europe's arsenal, the country that knows 41 00:02:50,800 --> 00:02:53,840 Speaker 2: how to build, knows how to wage modern war, and 42 00:02:53,919 --> 00:02:56,960 Speaker 2: knows how to build the weapons for modern war. And 43 00:02:58,040 --> 00:03:02,160 Speaker 2: in addition to all of that as a huge economic opportunity. 44 00:03:02,400 --> 00:03:04,800 Speaker 2: The opportunity has started now. There are a lot of 45 00:03:04,840 --> 00:03:12,079 Speaker 2: companies in Ukraine investing, particularly in defense technology. One investor 46 00:03:12,480 --> 00:03:18,280 Speaker 2: described defense tech as Ukraine's oil. So the investor said, 47 00:03:18,480 --> 00:03:21,240 Speaker 2: you know what oil has been to the Gulf States, 48 00:03:21,639 --> 00:03:25,640 Speaker 2: defense technology is going to be to Ukraine. It is now, 49 00:03:25,919 --> 00:03:27,919 Speaker 2: and when the war ends, that will be even more 50 00:03:27,919 --> 00:03:30,040 Speaker 2: the case. And I think that's absolutely true. 51 00:03:30,360 --> 00:03:33,960 Speaker 1: What level and type of investments required first to have 52 00:03:34,120 --> 00:03:37,440 Speaker 1: Ukraine play that role in the defense area, but then 53 00:03:37,480 --> 00:03:40,040 Speaker 1: presumably to go beyond that in its economy, to have 54 00:03:40,080 --> 00:03:43,040 Speaker 1: a more diversified economy, beyond high tech warfare. 55 00:03:45,600 --> 00:03:48,160 Speaker 2: It's going to take a lot of money. I think 56 00:03:48,640 --> 00:03:53,640 Speaker 2: the good news is we've seen what happens when countries 57 00:03:53,880 --> 00:03:58,360 Speaker 2: in the Warsaw Pact in the former Soviet Union reformed 58 00:03:58,360 --> 00:04:01,960 Speaker 2: their economies and joined to the European Union. You know, 59 00:04:02,160 --> 00:04:06,840 Speaker 2: in nineteen ninety when the Warsaw Pact collapsed, when the 60 00:04:06,880 --> 00:04:11,080 Speaker 2: Soviet Union collapsed, Poland and Ukraine had roughly the same 61 00:04:11,120 --> 00:04:16,120 Speaker 2: per capita GDP. Today, Poland's per capita GDP is five 62 00:04:16,400 --> 00:04:20,480 Speaker 2: times the per capita GDP of Ukraine. In two thousand 63 00:04:20,480 --> 00:04:23,919 Speaker 2: and four, you had countries of Eastern Europe and the 64 00:04:23,920 --> 00:04:29,720 Speaker 2: former Soviet Union joined the EU, and those countries saw 65 00:04:29,760 --> 00:04:35,520 Speaker 2: their GDP triple. One of the most important things about 66 00:04:35,640 --> 00:04:39,400 Speaker 2: the economic opportunity for Ukraine is that Ukraine is now 67 00:04:39,440 --> 00:04:41,840 Speaker 2: on a clear path to EU membership. 68 00:04:42,120 --> 00:04:43,920 Speaker 1: When you say it's going to take a lot of money, 69 00:04:44,920 --> 00:04:48,080 Speaker 1: how much of that will come from private investment as 70 00:04:48,120 --> 00:04:50,520 Speaker 1: opposed to governments such as the United States and various 71 00:04:50,560 --> 00:04:53,200 Speaker 1: European governments, how much public? How much of it will 72 00:04:53,240 --> 00:04:53,680 Speaker 1: be private? 73 00:04:53,680 --> 00:04:54,080 Speaker 3: Do you think? 74 00:04:54,680 --> 00:04:58,920 Speaker 2: There is a lot to rebuild, And there is a 75 00:04:59,080 --> 00:05:04,560 Speaker 2: very significant commitment already from the European Union to support Ukraine. 76 00:05:04,920 --> 00:05:09,920 Speaker 2: The World Bank has been doing a lot. Ukraine right 77 00:05:09,960 --> 00:05:14,159 Speaker 2: now is negotiating an IMF program of support as well. 78 00:05:14,600 --> 00:05:16,960 Speaker 2: And it is going to take some public money, some 79 00:05:17,080 --> 00:05:22,880 Speaker 2: public support from Ukraine's allies around the world. And you know, 80 00:05:23,040 --> 00:05:25,840 Speaker 2: I think it's very impressive the degree to which the 81 00:05:25,880 --> 00:05:29,159 Speaker 2: EU is there. But what I think, and I think 82 00:05:29,160 --> 00:05:31,880 Speaker 2: people get that, I think people understand that Ukraine is 83 00:05:31,920 --> 00:05:34,960 Speaker 2: going to need the support to rebuild. The opportunity that 84 00:05:35,040 --> 00:05:38,680 Speaker 2: I don't think people are fully focusing on right now 85 00:05:39,080 --> 00:05:42,480 Speaker 2: is there's going to be a tremendous economic opportunity. And 86 00:05:42,520 --> 00:05:45,880 Speaker 2: we've seen this story before. Some of the great investment 87 00:05:45,960 --> 00:05:50,920 Speaker 2: opportunities in the world happened in Poland in Eastern Europe 88 00:05:51,000 --> 00:05:53,960 Speaker 2: when you had the collapse of communism and the building 89 00:05:54,000 --> 00:05:57,039 Speaker 2: of a market economy and then joining the EU. And 90 00:05:57,080 --> 00:06:01,800 Speaker 2: you're going to see a version of that happening with Ukraine. 91 00:06:02,240 --> 00:06:04,599 Speaker 2: Some of it can some of the investment can start now. 92 00:06:04,960 --> 00:06:07,640 Speaker 2: What I'm hearing from a lot of investors is the 93 00:06:07,720 --> 00:06:10,800 Speaker 2: big investments are going to come when the war ends, 94 00:06:10,880 --> 00:06:15,159 Speaker 2: and that security is a precondition for major investment. And 95 00:06:15,200 --> 00:06:17,960 Speaker 2: I think that makes sense. But I think the smart 96 00:06:18,040 --> 00:06:21,680 Speaker 2: players are starting to look at Ukraine and see this 97 00:06:21,760 --> 00:06:24,680 Speaker 2: is going to be a place where you can really 98 00:06:25,560 --> 00:06:30,359 Speaker 2: make some very significant investments, earn some really really significant returns. 99 00:06:30,760 --> 00:06:33,000 Speaker 2: Defense tech, I think is going to be a really 100 00:06:33,279 --> 00:06:37,160 Speaker 2: really hot sector in Ukraine, and the smartest players are 101 00:06:37,200 --> 00:06:39,360 Speaker 2: already there. But I think you're going to see people 102 00:06:39,440 --> 00:06:42,680 Speaker 2: looking also at agriculture and agri food. I think you're 103 00:06:42,680 --> 00:06:45,080 Speaker 2: going to see people looking at forestry. I think You're 104 00:06:45,080 --> 00:06:48,320 Speaker 2: going to see people looking at technology more generally. Ukraine 105 00:06:48,360 --> 00:06:51,080 Speaker 2: is a very high tech society. It's part of the 106 00:06:51,120 --> 00:06:52,880 Speaker 2: reason that they've been able to do so well in 107 00:06:52,920 --> 00:06:55,120 Speaker 2: the drone Wars, and so I think you're going to 108 00:06:55,120 --> 00:07:01,160 Speaker 2: see investments in technology more generally, including some technologies going 109 00:07:01,200 --> 00:07:06,200 Speaker 2: from military use into civilian use, including with AI. And 110 00:07:06,240 --> 00:07:07,920 Speaker 2: then I think you're going to see a really big 111 00:07:07,960 --> 00:07:12,960 Speaker 2: privatization program. Ukraine has three thousand state owned enterprises. It 112 00:07:13,040 --> 00:07:16,080 Speaker 2: has a plan to privatize them, so, you know, I 113 00:07:16,080 --> 00:07:19,240 Speaker 2: think this is going to be a version of the 114 00:07:19,240 --> 00:07:22,960 Speaker 2: emergence of market economies in Eastern Europe in the nineteen 115 00:07:23,080 --> 00:07:27,400 Speaker 2: nineties at the beginning of this century, and that is 116 00:07:27,440 --> 00:07:30,560 Speaker 2: going to be a huge opportunity for investors and also 117 00:07:31,280 --> 00:07:32,880 Speaker 2: really great for the people of Ukraine. 118 00:07:32,960 --> 00:07:37,120 Speaker 1: We began your weekend Davos focused really on Greenland and 119 00:07:37,160 --> 00:07:39,400 Speaker 1: what President Trump was saying about Greenland and dealing with 120 00:07:39,440 --> 00:07:43,360 Speaker 1: the Europeans. That seemed to have shifted on Wednesday when 121 00:07:43,440 --> 00:07:45,400 Speaker 1: President Trump said that they had a framework for an 122 00:07:45,400 --> 00:07:50,200 Speaker 1: agreement of some sort. What is that allied reaction? You 123 00:07:50,240 --> 00:07:53,120 Speaker 1: talk to all of the allies, the European countries, what 124 00:07:53,240 --> 00:07:55,600 Speaker 1: is a reaction to the drama we saw over Greenland 125 00:07:55,680 --> 00:07:56,240 Speaker 1: this week. 126 00:07:57,160 --> 00:08:02,120 Speaker 2: You know, it was a very volatile weak and I 127 00:08:02,120 --> 00:08:06,280 Speaker 2: think there were a lot of experts here and across 128 00:08:06,320 --> 00:08:12,680 Speaker 2: Europe who suddenly became experts in Greenland. There were a 129 00:08:12,720 --> 00:08:16,000 Speaker 2: lot of ups and downs. I would judge the mood 130 00:08:16,000 --> 00:08:19,720 Speaker 2: of the Europeans to be right now, a feeling of 131 00:08:19,760 --> 00:08:22,600 Speaker 2: relief and that a bullet has been dodged. And I 132 00:08:22,600 --> 00:08:25,840 Speaker 2: think people are very happy that an off route seems 133 00:08:25,840 --> 00:08:29,440 Speaker 2: to have been found. But I do think the whole 134 00:08:29,480 --> 00:08:34,560 Speaker 2: episode has been another has been just the latest wake 135 00:08:34,640 --> 00:08:37,560 Speaker 2: up call for Europe. And I think you know what 136 00:08:37,800 --> 00:08:42,560 Speaker 2: the Europeans are feeling more and more is that they 137 00:08:42,640 --> 00:08:47,600 Speaker 2: have to become united, that they have to strengthen their 138 00:08:47,640 --> 00:08:52,320 Speaker 2: ability to militarily ability to militarily defend themselves, that they 139 00:08:52,360 --> 00:08:55,560 Speaker 2: have to strengthen their economies to do that. You know, 140 00:08:55,640 --> 00:09:01,320 Speaker 2: I would say the most popular writer and this week 141 00:09:02,640 --> 00:09:08,240 Speaker 2: in Davos has been the Greek general who wrote about 142 00:09:08,240 --> 00:09:11,920 Speaker 2: the history of the Peloponesean wars. The Athenians said, look, 143 00:09:12,080 --> 00:09:14,720 Speaker 2: we're stronger than you. We're going to do whatever we 144 00:09:14,760 --> 00:09:18,920 Speaker 2: want to you. The strong do what they will, and 145 00:09:18,960 --> 00:09:21,600 Speaker 2: the weeks suffer what they must. This is the line 146 00:09:21,800 --> 00:09:26,679 Speaker 2: everyone is repeating, and Ukraine actually fits in here because 147 00:09:26,720 --> 00:09:30,960 Speaker 2: I think the Europeans are now seeing Ukraine not just 148 00:09:31,280 --> 00:09:34,880 Speaker 2: as needing to be defended, because the rule of law 149 00:09:34,920 --> 00:09:38,760 Speaker 2: needs to be defended, just needing to be defended because 150 00:09:38,840 --> 00:09:42,640 Speaker 2: Ukraine is on Europe's border, but the Europeans are really 151 00:09:42,720 --> 00:09:47,240 Speaker 2: starting to see Ukraine as a very important strategic ally. 152 00:09:47,920 --> 00:09:50,600 Speaker 2: I've heard a lot of people saying, you know, Ukraine 153 00:09:50,600 --> 00:09:55,120 Speaker 2: actually has the strongest army in Europe. Ukraine has held 154 00:09:55,160 --> 00:09:58,880 Speaker 2: off the Russians for four years. We need the Ukrainians 155 00:09:58,960 --> 00:10:01,280 Speaker 2: right now much as they need us. 156 00:10:03,520 --> 00:10:06,280 Speaker 1: Coming up, President Trump ended his first year back in 157 00:10:06,400 --> 00:10:07,760 Speaker 1: office the way he started it. 158 00:10:08,240 --> 00:10:12,200 Speaker 4: I'll put a two twer for his wines and champagnes. 159 00:10:12,240 --> 00:10:16,079 Speaker 1: Threatening tariffs on European wine. This time, because of France's 160 00:10:16,160 --> 00:10:19,920 Speaker 1: reluctance to join his Board of Peace. We revisit what 161 00:10:19,960 --> 00:10:23,120 Speaker 1: that would mean for US producers and distributors if he 162 00:10:23,160 --> 00:10:36,559 Speaker 1: follows through. This is a retelling of a story we've 163 00:10:36,600 --> 00:10:41,200 Speaker 1: heard before about the bottled poetry we call wine. President 164 00:10:41,240 --> 00:10:44,079 Speaker 1: Trump put prohibitive tariffs on European wine back on the 165 00:10:44,120 --> 00:10:47,520 Speaker 1: agenda this week when He lashed out at President Macron 166 00:10:47,840 --> 00:10:51,400 Speaker 1: for refusing to pony up one billion dollars to join 167 00:10:51,440 --> 00:10:54,640 Speaker 1: the Council for Peace he's putting together to rebuild Gaza. 168 00:10:55,960 --> 00:10:58,040 Speaker 3: Well, nobody wats him because he's going to be out 169 00:10:58,040 --> 00:10:58,880 Speaker 3: of office very soon. 170 00:10:59,040 --> 00:11:01,680 Speaker 4: So you know that's all right. What I'll do is, 171 00:11:01,720 --> 00:11:02,719 Speaker 4: if they feel like. 172 00:11:02,760 --> 00:11:06,120 Speaker 1: Costo, I'll put a two hundred percent tariffoot his wines 173 00:11:06,200 --> 00:11:12,120 Speaker 1: and champagnes and you'll join. Stocks reacted dramatically, with shares 174 00:11:12,160 --> 00:11:16,960 Speaker 1: of Paris based luxury goods maker LVMH tumbling after the comments. 175 00:11:17,280 --> 00:11:20,160 Speaker 1: If it all sounds a bit familiar, that's because it is. 176 00:11:20,760 --> 00:11:24,480 Speaker 1: Last March, President Trump threatened similar tariffs, prompting our story 177 00:11:24,520 --> 00:11:27,439 Speaker 1: about the business of wine and what tariffs could mean 178 00:11:27,520 --> 00:11:30,400 Speaker 1: for the people who make and sell it, people like 179 00:11:30,600 --> 00:11:31,440 Speaker 1: Victor Schwartz. 180 00:11:33,120 --> 00:11:35,280 Speaker 5: It's been a mess. 181 00:11:35,640 --> 00:11:39,440 Speaker 1: In New York. Importer Victor Schwartz has spent nearly forty 182 00:11:39,559 --> 00:11:43,280 Speaker 1: years supplying restaurants and wine shops with hand picked bottles 183 00:11:43,280 --> 00:11:48,200 Speaker 1: from small European vineyards. Now tariffs threatened to upend the business. 184 00:11:48,840 --> 00:11:51,280 Speaker 5: That was ten percent, and they threatened fifty percent. 185 00:11:51,440 --> 00:11:53,360 Speaker 1: Well, how different is the effect on your business of 186 00:11:53,360 --> 00:11:54,440 Speaker 1: a twenty versus a ten. 187 00:11:54,960 --> 00:11:58,000 Speaker 5: I mean, in our industry, end of the day, we 188 00:11:58,120 --> 00:12:02,240 Speaker 5: might make five percent as a net profit, five to 189 00:12:02,280 --> 00:12:06,120 Speaker 5: ten percent. So obviously we can't afford ten percent. We 190 00:12:06,160 --> 00:12:10,319 Speaker 5: can't afford twenty percent. But twenty percent is really egregious. 191 00:12:11,120 --> 00:12:15,079 Speaker 5: Twenty percent, I mean, think about what that does. God, 192 00:12:15,120 --> 00:12:17,800 Speaker 5: you know it makes a twenty dollars wine, you know, 193 00:12:17,840 --> 00:12:20,520 Speaker 5: twenty five dollars basically, because you know there's kind of 194 00:12:20,559 --> 00:12:23,199 Speaker 5: a multiplier effect as it goes through the system. You know, 195 00:12:23,360 --> 00:12:26,600 Speaker 5: it's a much bigger impact. And don't forget when we 196 00:12:26,720 --> 00:12:31,960 Speaker 5: raise a price, it's not as if the consumer just 197 00:12:32,080 --> 00:12:32,679 Speaker 5: accepts it. 198 00:12:33,040 --> 00:12:36,520 Speaker 1: Where do American customers for wine go if they decide 199 00:12:36,559 --> 00:12:38,560 Speaker 1: the price is too high. I'm not going to buy that. 200 00:12:39,240 --> 00:12:41,520 Speaker 5: Where you're going to find champagne, where you're going to 201 00:12:41,559 --> 00:12:44,760 Speaker 5: find shot enough to pop, where you're going to find Kyanti. 202 00:12:44,880 --> 00:12:47,000 Speaker 5: You're not going to find it in Oregon or California. 203 00:12:47,160 --> 00:12:50,360 Speaker 5: A Finger Lakes wine, let's just be clear, is nothing 204 00:12:50,480 --> 00:12:55,000 Speaker 5: like a Napa Valley wine, nothing like a wine from 205 00:12:55,040 --> 00:12:58,840 Speaker 5: southern Italy or northern Italy or the center of Spain, 206 00:12:58,880 --> 00:13:04,120 Speaker 5: et cetera. Is that these products are so connected to 207 00:13:04,160 --> 00:13:08,959 Speaker 5: their place, and that's what's wonderful and interesting about wine. Otherwise, 208 00:13:09,320 --> 00:13:12,240 Speaker 5: be the wine company of the world, and it will 209 00:13:12,240 --> 00:13:16,480 Speaker 5: come out of a spigot, red white rose and sparkling 210 00:13:16,920 --> 00:13:20,360 Speaker 5: done right. But that's not why we love wine. 211 00:13:20,679 --> 00:13:24,360 Speaker 1: And Americans do love their wine. In twenty twenty three, 212 00:13:24,600 --> 00:13:27,960 Speaker 1: we consumed just under nine hundred million gallons of it, 213 00:13:28,320 --> 00:13:31,040 Speaker 1: more than any other country in the world, with the 214 00:13:31,120 --> 00:13:35,000 Speaker 1: value of over one hundred and seven billion dollars. More 215 00:13:35,040 --> 00:13:37,480 Speaker 1: than a third of that is shipped in from abroad, 216 00:13:37,880 --> 00:13:41,760 Speaker 1: making tariffs a real issue for importers. But those in 217 00:13:41,760 --> 00:13:44,480 Speaker 1: the business say it's not just the imports that will 218 00:13:44,480 --> 00:13:49,520 Speaker 1: be hit, it's the entire wine ecosystem. Or to Ben 219 00:13:49,520 --> 00:13:53,280 Speaker 1: anf Is, President of the US Wine Trade Alliance. He 220 00:13:53,360 --> 00:13:56,640 Speaker 1: has a shop in Tribeca that sells fine wine, which 221 00:13:56,679 --> 00:13:59,400 Speaker 1: typically goes for over twenty dollars per bottle. 222 00:14:01,080 --> 00:14:04,240 Speaker 6: Distributors and importers, even those by the way, that represent 223 00:14:04,520 --> 00:14:08,520 Speaker 6: US domestic wines, about seventy five percent of their revenue 224 00:14:08,520 --> 00:14:12,240 Speaker 6: comes from imported wine. So that's one of the really 225 00:14:12,280 --> 00:14:15,600 Speaker 6: interesting things about this on the tariff front. All of 226 00:14:15,640 --> 00:14:19,880 Speaker 6: the major domestic wine producing organizations, from Wine Institute to 227 00:14:19,960 --> 00:14:23,720 Speaker 6: NAPA Valley vintners to Wine America, they're all against tariffs 228 00:14:23,760 --> 00:14:29,440 Speaker 6: on imported wine because they understand their domestic growers. Their 229 00:14:29,440 --> 00:14:33,960 Speaker 6: producers rely on healthy wine distributors for access to market. 230 00:14:34,880 --> 00:14:38,880 Speaker 1: Put another way, because state laws prevent domestic vineyards from 231 00:14:38,880 --> 00:14:43,680 Speaker 1: supplying restaurants and wine shops, they need distributors, and the 232 00:14:43,720 --> 00:14:48,560 Speaker 1: distributors rely critically on selling imports alongside their domestic wines. 233 00:14:49,400 --> 00:14:52,960 Speaker 1: That's why those who import fine wines like Victor Schwartz 234 00:14:53,120 --> 00:14:55,520 Speaker 1: and those who sell it to us like Ben Anniff, 235 00:14:56,040 --> 00:14:59,200 Speaker 1: have no doubt that tariffs will cripple their business selling 236 00:14:59,240 --> 00:15:02,760 Speaker 1: both foreign and domestic wines. But there's another part of 237 00:15:02,800 --> 00:15:06,680 Speaker 1: the business, the value wine business, or a bottle or 238 00:15:06,720 --> 00:15:12,240 Speaker 1: its equivalent typically costs less than eleven dollars, and producers 239 00:15:12,280 --> 00:15:16,000 Speaker 1: for this segment, like Stuart Spencer in California's Central Valley, 240 00:15:16,440 --> 00:15:19,960 Speaker 1: say they need protection from multinational companies bringing in cheap, 241 00:15:20,280 --> 00:15:24,640 Speaker 1: subsidized imports that force American growers out of business. 242 00:15:25,840 --> 00:15:28,120 Speaker 7: There is a lot of what we call bulk wine 243 00:15:28,160 --> 00:15:31,400 Speaker 7: coming in these big twenty foot bladder containers, and it 244 00:15:31,480 --> 00:15:33,960 Speaker 7: is this bulkwine that is really undercut in California. 245 00:15:34,000 --> 00:15:37,760 Speaker 1: Grapegrowers there's a lot of talk about the difference between 246 00:15:37,800 --> 00:15:42,480 Speaker 1: free trade and fair trade. From your experience as a grower, 247 00:15:42,520 --> 00:15:46,520 Speaker 1: but also from your dealing with Lodi, there are unfairnesses 248 00:15:46,640 --> 00:15:48,720 Speaker 1: in some of the exports to the United States. 249 00:15:49,480 --> 00:15:52,000 Speaker 7: I mean it's a completely unfair market. I mean we 250 00:15:52,040 --> 00:15:55,800 Speaker 7: are competing in a global marketplace. The European Union spends 251 00:15:56,120 --> 00:15:59,800 Speaker 7: over two billion year between EU money and member state 252 00:15:59,840 --> 00:16:03,880 Speaker 7: money propping up their wine sector. They are not only 253 00:16:03,920 --> 00:16:08,000 Speaker 7: paying growers to inventnors to distill excess wine and buy 254 00:16:08,000 --> 00:16:10,320 Speaker 7: it up, but they're also paying them to plant new vineyards. 255 00:16:10,760 --> 00:16:12,920 Speaker 7: And they spend hundreds of millions of dollars in market 256 00:16:12,960 --> 00:16:15,120 Speaker 7: promotion all around the world, and the US is the 257 00:16:15,160 --> 00:16:18,840 Speaker 7: number one target market. They also have trade barriers, so 258 00:16:19,000 --> 00:16:21,440 Speaker 7: it gets really complex when you get in the weeds. 259 00:16:21,480 --> 00:16:23,480 Speaker 7: But we are not playing on a level field. 260 00:16:23,920 --> 00:16:27,720 Speaker 1: Last year, California wineries, which make nearly ninety percent of 261 00:16:27,840 --> 00:16:31,200 Speaker 1: US wine, we're stuck with more than five hundred thousand 262 00:16:31,320 --> 00:16:35,600 Speaker 1: excess tons of grapes. Now seventy seven million gallons of 263 00:16:35,600 --> 00:16:38,120 Speaker 1: wine are sitting in storage tanks, and you. 264 00:16:38,120 --> 00:16:40,320 Speaker 7: Can still see some of the grapes on the vines. 265 00:16:40,880 --> 00:16:43,520 Speaker 7: We have thousands of acres of grapes that are being 266 00:16:43,560 --> 00:16:46,840 Speaker 7: torn out right now. And we have small farms and 267 00:16:46,920 --> 00:16:49,560 Speaker 7: family businesses that are up for sale because there's just 268 00:16:49,760 --> 00:16:53,360 Speaker 7: not a prospect for them moving forward. My family's been 269 00:16:53,400 --> 00:16:55,040 Speaker 7: in this for fifty years, and I talked to old 270 00:16:55,080 --> 00:16:57,440 Speaker 7: timers that have been in it for multi generations. They've 271 00:16:57,480 --> 00:17:00,520 Speaker 7: never seen it as challenging as we are now. Seventy 272 00:17:00,520 --> 00:17:03,000 Speaker 7: percent of all wine sales in this country is controlled 273 00:17:03,000 --> 00:17:07,159 Speaker 7: by about a handful of five to six large multinational companies. 274 00:17:07,400 --> 00:17:10,480 Speaker 7: They're bringing wine in bulk, They're blending it in with 275 00:17:10,600 --> 00:17:14,240 Speaker 7: California wine up to twenty five percent and calling American 276 00:17:14,320 --> 00:17:18,680 Speaker 7: appellation it's a federal loophole. We have, you know, millions 277 00:17:18,680 --> 00:17:21,520 Speaker 7: of gallons filled up in tanks right now in California 278 00:17:21,560 --> 00:17:24,720 Speaker 7: that don't have a home. But simultaneously, twenty four million 279 00:17:24,720 --> 00:17:27,639 Speaker 7: gallons of bulk wine is poured into California, coming in 280 00:17:27,680 --> 00:17:30,800 Speaker 7: at super low prices and undercutting the California grapegrower. 281 00:17:31,280 --> 00:17:34,200 Speaker 1: Are you in favor of the tariffs the President Trump 282 00:17:34,240 --> 00:17:35,320 Speaker 1: is talking about. 283 00:17:35,119 --> 00:17:37,360 Speaker 7: Well, I think if I was to speak to our 284 00:17:37,440 --> 00:17:40,240 Speaker 7: seven hundred grape growers that I represent, I think many 285 00:17:40,280 --> 00:17:42,639 Speaker 7: of them would support the tariffs to help level the 286 00:17:42,680 --> 00:17:45,439 Speaker 7: playing field, and I think what we would really hope 287 00:17:45,480 --> 00:17:48,439 Speaker 7: is that would bring these other trading partners to the 288 00:17:48,440 --> 00:17:51,879 Speaker 7: table to negotiate fair trade. The challenge we see with 289 00:17:51,920 --> 00:17:54,160 Speaker 7: what's going on with a lot of the trade negotiations 290 00:17:54,200 --> 00:17:56,760 Speaker 7: now is wine is just upon in a larger story 291 00:17:57,080 --> 00:17:59,520 Speaker 7: and the issues are about bigger issues. But I think 292 00:17:59,600 --> 00:18:02,040 Speaker 7: none of us, you know, want to see tariffs in 293 00:18:02,160 --> 00:18:04,800 Speaker 7: place permanently. I think what we really want to see 294 00:18:04,840 --> 00:18:06,640 Speaker 7: is really free and fair trade. 295 00:18:07,359 --> 00:18:12,320 Speaker 1: Some domestic producers chicking in California complain about unfairness from 296 00:18:12,440 --> 00:18:17,679 Speaker 1: Europe because there are subsidies given to vineyards over in Europe. 297 00:18:18,520 --> 00:18:20,720 Speaker 1: Are tariff's a effective way to deal with that problem. 298 00:18:21,080 --> 00:18:23,639 Speaker 6: I feel really, really really bad for those guys. But 299 00:18:23,800 --> 00:18:25,960 Speaker 6: a tariff is not going to solve their problem. Farmers 300 00:18:26,000 --> 00:18:29,320 Speaker 6: that grow grapes to sell until, for instance, grocery store 301 00:18:29,359 --> 00:18:33,400 Speaker 6: boxed wine, and that's terrific for them, It's a great 302 00:18:33,400 --> 00:18:37,440 Speaker 6: product for certain customers. The demand for those products is collapsing. 303 00:18:37,960 --> 00:18:40,600 Speaker 6: You know, people aren't buying bulk wine the way they 304 00:18:40,680 --> 00:18:40,960 Speaker 6: used to. 305 00:18:43,240 --> 00:18:46,400 Speaker 1: Whether tariffs could give some relief to bulk wine producers 306 00:18:46,480 --> 00:18:50,000 Speaker 1: or not, they certainly would have unintended effects on the 307 00:18:50,040 --> 00:18:53,840 Speaker 1: American economy overall. You have spent some of your time 308 00:18:53,880 --> 00:18:58,320 Speaker 1: down in Washington trying to explain to lawmakers policymakers exactly 309 00:18:58,359 --> 00:19:01,680 Speaker 1: what this would mean for the wine business. What would 310 00:19:01,760 --> 00:19:04,080 Speaker 1: you want them to understand that maybe they don't understand 311 00:19:04,160 --> 00:19:06,600 Speaker 1: right now about the business and the effects of tariffs. 312 00:19:06,880 --> 00:19:10,359 Speaker 6: The United States has been talking about their concerns with 313 00:19:10,440 --> 00:19:14,360 Speaker 6: respect to a trade deficit. We import more European wines 314 00:19:14,480 --> 00:19:17,280 Speaker 6: than we sell American wines Europe, But the reality is 315 00:19:17,440 --> 00:19:21,280 Speaker 6: we have a huge economic surplus on the sale of 316 00:19:21,280 --> 00:19:24,520 Speaker 6: European wines in the United States. You know, we import 317 00:19:24,560 --> 00:19:27,800 Speaker 6: about five point three billion dollars worth of wine from 318 00:19:27,800 --> 00:19:32,520 Speaker 6: the European Union into the United States, but American businesses 319 00:19:32,640 --> 00:19:36,960 Speaker 6: make almost twenty three billion dollars from the sale of 320 00:19:36,960 --> 00:19:41,280 Speaker 6: those products, making a big margin on wine. For a restaurant, 321 00:19:41,359 --> 00:19:45,160 Speaker 6: it is not a luxury, it is an absolute necessity 322 00:19:45,320 --> 00:19:46,919 Speaker 6: for their very survival. 323 00:19:47,160 --> 00:19:50,840 Speaker 1: If in fact tariff's do get imposed, what are the 324 00:19:51,320 --> 00:19:53,920 Speaker 1: likely long term effects on the wine business? 325 00:19:53,960 --> 00:19:58,280 Speaker 6: Contraction? And then you know what that means. Contraction means 326 00:19:59,280 --> 00:20:02,680 Speaker 6: American businessiness is closing and firing all their employees. 327 00:20:02,880 --> 00:20:06,160 Speaker 1: What about the uncertainty itself quite apart from the tariffs. 328 00:20:06,440 --> 00:20:09,280 Speaker 6: I mean, I'll tell you I had phone calls from 329 00:20:09,720 --> 00:20:13,199 Speaker 6: you know, wine distributors who said, you know, my grandfather 330 00:20:13,320 --> 00:20:17,320 Speaker 6: started this business. We were in terrific shape and growing 331 00:20:17,359 --> 00:20:21,199 Speaker 6: and hiring in January, and now I might have to 332 00:20:21,240 --> 00:20:24,119 Speaker 6: decide if I'm going to close the doors in two weeks. 333 00:20:24,480 --> 00:20:27,720 Speaker 6: You know, when they're they're put into this position when 334 00:20:27,760 --> 00:20:30,560 Speaker 6: their choice is either to pay a tariff that they 335 00:20:30,560 --> 00:20:34,440 Speaker 6: cannot afford because these these are small businesses, or don't 336 00:20:34,440 --> 00:20:37,480 Speaker 6: bring in wine. Don't bring in the wine that represents 337 00:20:38,000 --> 00:20:40,440 Speaker 6: seventy five percent of the revenue for your next three 338 00:20:40,520 --> 00:20:42,800 Speaker 6: or six months. You know, we had restaurants from South 339 00:20:42,840 --> 00:20:46,919 Speaker 6: Florida say in the summertime, we need sancer and rose. 340 00:20:47,280 --> 00:20:50,639 Speaker 6: That's what keeps our businesses alive. And there really is 341 00:20:51,280 --> 00:20:54,640 Speaker 6: no substitute for these products and one of our favorite. 342 00:20:55,160 --> 00:20:58,560 Speaker 1: So in your wine store you have Bordeaux. If you 343 00:20:58,640 --> 00:21:01,520 Speaker 1: can't get the Bordeaux, will a customer say that's okay, 344 00:21:01,560 --> 00:21:02,280 Speaker 1: I'll take the cab. 345 00:21:02,680 --> 00:21:04,240 Speaker 6: The answer, flat lay is now. 346 00:21:04,800 --> 00:21:08,080 Speaker 5: We talk about terra war. It's a word that gets 347 00:21:08,080 --> 00:21:11,040 Speaker 5: bandied about. It sounds fancy, it's foreign, but it really 348 00:21:11,080 --> 00:21:14,600 Speaker 5: all it means terrawar land terror, and it just means 349 00:21:14,640 --> 00:21:19,040 Speaker 5: the place, right, It's just geography. Part of terrawar is 350 00:21:19,080 --> 00:21:22,639 Speaker 5: the human element, the culture, the civilization, the people, the 351 00:21:22,720 --> 00:21:26,040 Speaker 5: people who've been on this piece of land in southern 352 00:21:26,080 --> 00:21:30,320 Speaker 5: Italy for multiple generations. They cook certain kinds of food, 353 00:21:30,480 --> 00:21:33,199 Speaker 5: they make certain kinds of wine that go with those foods, 354 00:21:33,200 --> 00:21:36,960 Speaker 5: and it's very specific, right, I mean, don't you love 355 00:21:37,040 --> 00:21:39,920 Speaker 5: to drink an Italian wine when you're having your spaghetti 356 00:21:39,920 --> 00:21:40,560 Speaker 5: and meat sauce. 357 00:21:41,480 --> 00:21:44,000 Speaker 1: Schwartz is trying to hold off the administration as the 358 00:21:44,119 --> 00:21:47,359 Speaker 1: lead plaintiff in a lawsuit challenging the tariffs. The US 359 00:21:47,400 --> 00:21:50,320 Speaker 1: Court of International Trade ruled in his favor, but the 360 00:21:50,400 --> 00:21:53,919 Speaker 1: case has been consolidated with Learning Resources versus Trump, the 361 00:21:53,960 --> 00:21:57,240 Speaker 1: Supreme Court case on the President's use of emergency powers 362 00:21:57,320 --> 00:22:01,320 Speaker 1: to levy tariffs. If the tariff's going to effect for 363 00:22:01,680 --> 00:22:04,240 Speaker 1: European wines, how long will it take before we see 364 00:22:04,280 --> 00:22:05,040 Speaker 1: it in our lives? 365 00:22:05,400 --> 00:22:07,439 Speaker 6: You're gonna start seeing those prices come now, You're going 366 00:22:07,480 --> 00:22:09,560 Speaker 6: to start seeing a lot less choice. You know, there 367 00:22:09,560 --> 00:22:12,560 Speaker 6: are importers and distributors that have halted all of their 368 00:22:12,560 --> 00:22:14,320 Speaker 6: shipments because they're not sure they can afford to bring 369 00:22:14,359 --> 00:22:16,919 Speaker 6: them in now. At the same time, they have no 370 00:22:17,080 --> 00:22:21,080 Speaker 6: substitutes for them. They're not buying more domestic wine, for instance, 371 00:22:21,160 --> 00:22:23,760 Speaker 6: they can't afford to. They need to sell these European 372 00:22:23,800 --> 00:22:25,920 Speaker 6: wines in order to buy more American wine. And in 373 00:22:26,000 --> 00:22:30,040 Speaker 6: a nutshell, American businesses are incredibly good at selling European 374 00:22:30,080 --> 00:22:32,200 Speaker 6: wine and they support huge numbers of jobs in the 375 00:22:32,280 --> 00:22:34,640 Speaker 6: United States. So some of the most famous importers actually 376 00:22:34,640 --> 00:22:37,639 Speaker 6: got into the business because they were in France or 377 00:22:37,720 --> 00:22:40,160 Speaker 6: Italy during World War Two, said oh my god, I 378 00:22:40,320 --> 00:22:41,919 Speaker 6: love this. This is what I do want to do 379 00:22:42,000 --> 00:22:47,120 Speaker 6: with my life, and their classic American entrepreneurial success stories. 380 00:22:47,200 --> 00:22:49,320 Speaker 6: As a matter of fact, many of the most famous 381 00:22:49,359 --> 00:22:53,240 Speaker 6: European wines in the world, they're famous today because they 382 00:22:53,280 --> 00:22:58,080 Speaker 6: were discovered by American wine importers and they were brought back. 383 00:22:58,160 --> 00:23:01,040 Speaker 6: They tasted ten thousand wines, said these three are the best, 384 00:23:01,200 --> 00:23:03,400 Speaker 6: and they were right. Funny story. One of the first 385 00:23:03,440 --> 00:23:05,280 Speaker 6: guys to do that, by the way, was Thomas Jefferson. 386 00:23:05,480 --> 00:23:08,080 Speaker 6: You know, he went to Burgundy. He bought Mohersche and 387 00:23:08,160 --> 00:23:11,480 Speaker 6: Mahrsokudor for he and George Washington. He bought Chateau Decm 388 00:23:11,520 --> 00:23:13,520 Speaker 6: for he and George Washington, and today those are still 389 00:23:13,520 --> 00:23:15,320 Speaker 6: some of the greatest wines on the planet. He had 390 00:23:15,320 --> 00:23:16,440 Speaker 6: a pretty good palette. 391 00:23:16,119 --> 00:23:21,320 Speaker 1: I think, and now, ironically, American's affinity for European wines, 392 00:23:21,400 --> 00:23:24,760 Speaker 1: nurtured by the likes of George Washington and Thomas Jefferson, 393 00:23:25,280 --> 00:23:28,560 Speaker 1: may be challenged by the most recent occupant of their 394 00:23:28,640 --> 00:23:32,240 Speaker 1: high office and perhaps make it more difficult for us 395 00:23:32,240 --> 00:23:36,080 Speaker 1: to enjoy that bottled poetry they discovered two hundred and 396 00:23:36,080 --> 00:23:44,080 Speaker 1: fifty years ago in fine French wines. Next, hot chocolate 397 00:23:44,119 --> 00:23:46,800 Speaker 1: is a nice treat when it's cold outside, but hotter 398 00:23:46,840 --> 00:23:49,120 Speaker 1: weather may get in the way of growing the cocoa 399 00:23:49,119 --> 00:23:52,159 Speaker 1: beans we need for our treats. How a warring planet 400 00:23:52,240 --> 00:23:56,360 Speaker 1: is creating new winners and losers in the chocolate growing business. 401 00:24:07,840 --> 00:24:09,960 Speaker 1: This is a story about what happens when it gets 402 00:24:10,000 --> 00:24:13,320 Speaker 1: too hot for your chocolate. A warming globe is making 403 00:24:13,400 --> 00:24:16,720 Speaker 1: weather less predictable and changing where we can grow our food, 404 00:24:17,040 --> 00:24:20,440 Speaker 1: with some areas becoming too hot for certain crops, allowing 405 00:24:20,480 --> 00:24:24,280 Speaker 1: other regions to come in and compete. Our colleague, Scarlet Food, 406 00:24:24,280 --> 00:24:27,680 Speaker 1: traveled to Ecuador to bring us the story. 407 00:24:31,080 --> 00:24:33,879 Speaker 8: In the foothills outside the port city of Guaycill, the 408 00:24:33,920 --> 00:24:37,040 Speaker 8: economic capital of Ecuador, just one hundred and fifty miles 409 00:24:37,080 --> 00:24:40,359 Speaker 8: south of the equator, the landscape is dominated by the 410 00:24:40,440 --> 00:24:44,200 Speaker 8: leafy green cocal plant. This is a ripe cacao fruit. 411 00:24:44,240 --> 00:24:45,480 Speaker 9: Yes, this is a ripe cacao fruit. 412 00:24:46,960 --> 00:24:51,840 Speaker 8: That's wow. And these are the beans are inside right? 413 00:24:52,200 --> 00:24:55,120 Speaker 9: Yes, prefer to beans and around them it's the pulp. 414 00:24:55,520 --> 00:24:58,320 Speaker 8: This is a golden age of cocoa production in Ecuador, 415 00:24:58,680 --> 00:25:01,560 Speaker 8: with output expected to reach eight hundred thousand tons by 416 00:25:01,600 --> 00:25:04,919 Speaker 8: twenty thirty, more than double twenty twenty three levels. The 417 00:25:05,000 --> 00:25:07,760 Speaker 8: reason stems back to the changing climate. 418 00:25:10,640 --> 00:25:14,240 Speaker 10: So if there's an extreme heat event, it can kill plants. 419 00:25:14,720 --> 00:25:19,760 Speaker 10: Extreme rains can prevent farmers from planting or harvesting their crops, 420 00:25:19,920 --> 00:25:23,000 Speaker 10: and things like dry soils or overly moist soils can 421 00:25:23,040 --> 00:25:26,119 Speaker 10: affect the quality of plants that are grown. Back in 422 00:25:26,160 --> 00:25:30,160 Speaker 10: twenty ten, there was a major heat wave across Russia 423 00:25:30,280 --> 00:25:34,760 Speaker 10: that affected wheat production in sort of the global bread 424 00:25:34,840 --> 00:25:38,879 Speaker 10: basket for wheat, which have severely affected wheat prices as well. 425 00:25:39,320 --> 00:25:42,200 Speaker 10: Just a few years ago in the United States, there 426 00:25:42,280 --> 00:25:46,959 Speaker 10: was really widespread spring flooding across the Midwest that caused 427 00:25:47,320 --> 00:25:49,920 Speaker 10: millions and millions of dollars in crop losses. 428 00:25:51,800 --> 00:25:54,280 Speaker 8: Cocoa is grown in a narrow band of the tropics, 429 00:25:54,440 --> 00:25:57,439 Speaker 8: and when extreme weather in West Africa, home to about 430 00:25:57,480 --> 00:26:00,399 Speaker 8: seventy percent of the world's cocoa beans I did with 431 00:26:00,440 --> 00:26:03,760 Speaker 8: outbreaks of swollen shoot disease in twenty twenty four, the 432 00:26:03,880 --> 00:26:08,280 Speaker 8: industry was hit hard. Christina dol is vice president for 433 00:26:08,359 --> 00:26:11,639 Speaker 8: science at Climate Central. She tracks how climate change is 434 00:26:11,680 --> 00:26:14,840 Speaker 8: pushing cocoa growing conditions past their comfort zone. 435 00:26:15,240 --> 00:26:19,600 Speaker 10: There's an optimal range for cocow trees and that range 436 00:26:19,640 --> 00:26:23,920 Speaker 10: goes up to about thirty two degrees centigrade or ninety 437 00:26:23,920 --> 00:26:29,240 Speaker 10: degrees fahrenheit, And we looked into how often climate change 438 00:26:29,400 --> 00:26:33,840 Speaker 10: is causing hot temperatures that exceed that optimal temperature range 439 00:26:34,080 --> 00:26:36,800 Speaker 10: for the cacao trees. And what we found is that 440 00:26:36,880 --> 00:26:40,639 Speaker 10: over the last ten years or so, because of climate change, 441 00:26:40,720 --> 00:26:44,760 Speaker 10: there's an additional three weeks worth of days each year 442 00:26:45,200 --> 00:26:48,080 Speaker 10: that are above that optimal temperature range in the West 443 00:26:48,119 --> 00:26:48,879 Speaker 10: African region. 444 00:26:49,080 --> 00:26:51,800 Speaker 8: And what does that mean for the growth of those 445 00:26:51,840 --> 00:26:52,520 Speaker 8: cacaw trees. 446 00:26:52,560 --> 00:26:56,280 Speaker 10: Then these hot temperatures cause the leaves of the tree 447 00:26:56,320 --> 00:27:00,159 Speaker 10: to shrivel, and then those leaves don't provide a to 448 00:27:00,200 --> 00:27:03,800 Speaker 10: quit shade for the pods in which the cocoa beans 449 00:27:03,840 --> 00:27:08,000 Speaker 10: actually are produced, and so that can cause the pods 450 00:27:08,040 --> 00:27:11,480 Speaker 10: to rot, to dry up, and all of that affects 451 00:27:11,520 --> 00:27:15,159 Speaker 10: the yield that you get from those trees and ultimately 452 00:27:15,320 --> 00:27:17,840 Speaker 10: down the line how much cocoa there is in the 453 00:27:17,880 --> 00:27:18,560 Speaker 10: global market. 454 00:27:22,040 --> 00:27:24,920 Speaker 8: The result a shortage of beans that triggered a historic 455 00:27:24,960 --> 00:27:27,520 Speaker 8: price bike. In the span of just a few months, 456 00:27:27,720 --> 00:27:31,199 Speaker 8: coco surged almost eighty percent past twelve thousand dollars a 457 00:27:31,200 --> 00:27:34,359 Speaker 8: ton in the US market. Though prices have since fallen 458 00:27:34,400 --> 00:27:37,120 Speaker 8: back to around five thousand dollars a ton, they're still 459 00:27:37,160 --> 00:27:40,000 Speaker 8: more than double where they were three years ago, and 460 00:27:40,040 --> 00:27:44,400 Speaker 8: as West Africa's production struggles, growers across the Atlantic, especially 461 00:27:44,440 --> 00:27:48,720 Speaker 8: in Ecuador, are stepping in to fill the gap. Cacawa 462 00:27:48,760 --> 00:27:51,359 Speaker 8: is believed to have originated in the Upper Amazon in 463 00:27:51,440 --> 00:27:54,160 Speaker 8: what is now Ecuador and made its way to Africa 464 00:27:54,240 --> 00:27:57,520 Speaker 8: in the early eighteen hundreds. It's now come full circle 465 00:27:57,720 --> 00:28:01,359 Speaker 8: as Ecuadorian farmers ramp up production, putting the country in 466 00:28:01,400 --> 00:28:05,400 Speaker 8: position to soon surpass Ghana as the world's number two producer. 467 00:28:05,160 --> 00:28:08,639 Speaker 3: And right now ECUADORI is the is in the old 468 00:28:08,840 --> 00:28:13,439 Speaker 3: Tupoleteer's formula in the world because for our volume that 469 00:28:13,560 --> 00:28:16,959 Speaker 3: offered to the market, we saw to Europe, to United States, 470 00:28:17,000 --> 00:28:22,119 Speaker 3: to Asia, to Japan to everywhere. The Ecuador is recognized 471 00:28:22,160 --> 00:28:26,399 Speaker 3: for the very good coca producers for a different parts. 472 00:28:26,119 --> 00:28:26,560 Speaker 11: Of the world. 473 00:28:26,800 --> 00:28:31,160 Speaker 8: Von Onteneda is chairman of Ecuador's Coco Exporters Association as 474 00:28:31,160 --> 00:28:33,960 Speaker 8: well as CEO of Eco Cacao, one of the country's 475 00:28:34,040 --> 00:28:37,879 Speaker 8: largest exporters. He says Ecuador is also vulnerable to the 476 00:28:37,960 --> 00:28:38,720 Speaker 8: changing climate. 477 00:28:39,000 --> 00:28:42,440 Speaker 3: Two thousand and two two four, it was a very 478 00:28:42,520 --> 00:28:46,480 Speaker 3: challenging year for everybody around the world, in the industry, 479 00:28:46,480 --> 00:28:49,840 Speaker 3: for the farmer, for the supporters, for the traders, for 480 00:28:49,920 --> 00:28:54,680 Speaker 3: the industry because never seen the prices over ten thousand 481 00:28:54,720 --> 00:28:58,800 Speaker 3: dollars for Medri town Epwador has two seasons, rainy seasons 482 00:28:58,840 --> 00:29:03,120 Speaker 3: and so seasons more. But in the last two years 483 00:29:03,240 --> 00:29:04,880 Speaker 3: that are changing a lot. 484 00:29:05,280 --> 00:29:08,640 Speaker 8: How are you preparing your members of your association to 485 00:29:08,720 --> 00:29:11,560 Speaker 8: work with that and to address that challenge. 486 00:29:11,720 --> 00:29:15,840 Speaker 3: I think we need to continue to invest in genetics 487 00:29:16,360 --> 00:29:20,479 Speaker 3: because you see the progress right now in with South 488 00:29:20,480 --> 00:29:28,200 Speaker 3: Africa is about diseass We Equador need to prepare for. 489 00:29:28,120 --> 00:29:29,280 Speaker 4: Some diseases as well. 490 00:29:30,040 --> 00:29:32,640 Speaker 8: But there are some ways Ecuador is looking to safeguard 491 00:29:32,680 --> 00:29:35,880 Speaker 8: its cocoa industry from the changing climate. The genetics that 492 00:29:35,960 --> 00:29:39,840 Speaker 8: currently relies on is CCN fifty one, a high yield 493 00:29:39,880 --> 00:29:43,760 Speaker 8: cacawstrin developed in the nineteen eighties, price for its productivity 494 00:29:43,800 --> 00:29:47,120 Speaker 8: and relative heartiness, making it a go to for growers 495 00:29:47,120 --> 00:29:51,080 Speaker 8: like Johann Zellar. How long will this mountain. 496 00:29:50,760 --> 00:29:51,960 Speaker 4: Of beings sit here for? 497 00:29:52,920 --> 00:29:53,680 Speaker 9: Until next week? 498 00:29:54,400 --> 00:29:56,760 Speaker 8: And then it all gets put into big burlap sacks? 499 00:29:57,120 --> 00:30:00,760 Speaker 9: That is correct. We move anywhere between three hundred to 500 00:30:00,800 --> 00:30:01,880 Speaker 9: a thousand tons per week. 501 00:30:04,600 --> 00:30:06,959 Speaker 8: It's not just a strain of cacao, but also the 502 00:30:07,000 --> 00:30:10,200 Speaker 8: way Ecuadorian farmers grow the crop that can reduce risk. 503 00:30:10,680 --> 00:30:13,920 Speaker 8: They plant cacao alongside other trees and shrubs, a more 504 00:30:13,960 --> 00:30:18,000 Speaker 8: sustainable method that also helps prevent disease, a problem frequently 505 00:30:18,040 --> 00:30:21,680 Speaker 8: associated with monoculture farming, as seen in West Africa. 506 00:30:22,480 --> 00:30:24,160 Speaker 9: So in the months whards there's a lot of wind, 507 00:30:24,760 --> 00:30:27,280 Speaker 9: the leaves get too dry. So if you have bigger 508 00:30:27,320 --> 00:30:30,600 Speaker 9: trees around, then it's going to prevent them from getting 509 00:30:30,640 --> 00:30:31,080 Speaker 9: too dry. 510 00:30:31,200 --> 00:30:32,920 Speaker 8: I see, and it's going to increase. 511 00:30:32,640 --> 00:30:36,640 Speaker 9: Yields The second thing that happens is that cocaw gets 512 00:30:36,680 --> 00:30:40,000 Speaker 9: eaten here by squirrels. So if you have toll trees, 513 00:30:40,040 --> 00:30:42,240 Speaker 9: you get hawks and the hawks get swirls. 514 00:30:42,280 --> 00:30:45,160 Speaker 8: Ah life cycle Okay, I got it. 515 00:30:45,720 --> 00:30:49,840 Speaker 9: And overall health of the farm. I mean, you want 516 00:30:49,880 --> 00:30:54,080 Speaker 9: to keep the ecosystem as vibrant and moving as you can. 517 00:30:56,040 --> 00:30:59,400 Speaker 8: In addition to growing cacao, Zeller also processes the fruit 518 00:30:59,520 --> 00:31:02,400 Speaker 8: on site, serving as a key link for chocolate your 519 00:31:02,440 --> 00:31:07,320 Speaker 8: Odad Brenner's latest venture, a company called Blue Stripes. Brenner, 520 00:31:07,360 --> 00:31:10,959 Speaker 8: who turned chocolate retail into an immersive theater experience around 521 00:31:10,960 --> 00:31:13,920 Speaker 8: the globe with his Max Brenner Chocolate concept stores in 522 00:31:13,960 --> 00:31:16,760 Speaker 8: the early two thousands, has since pivoted to building a 523 00:31:16,800 --> 00:31:20,640 Speaker 8: new cacao business. Why do you use cacao from Ecuador 524 00:31:20,760 --> 00:31:24,160 Speaker 8: solely as opposed to West African cacao or Indonesian cacao? 525 00:31:24,320 --> 00:31:32,000 Speaker 12: Ecuador for us, they were really innovative and cooperative with 526 00:31:32,200 --> 00:31:36,840 Speaker 12: discovering the cacao fruit. And it happened. I mean it 527 00:31:36,960 --> 00:31:39,959 Speaker 12: just happened. Somebody introduced me to somebody in Ecuador. I 528 00:31:40,000 --> 00:31:44,760 Speaker 12: came here, this guy, Johannes Zeller. He was already working 529 00:31:44,800 --> 00:31:47,520 Speaker 12: with cacao fruit and trying to do things with cacao 530 00:31:47,600 --> 00:31:50,920 Speaker 12: fruit and trying to penetrate the US market. Then he 531 00:31:51,040 --> 00:31:54,160 Speaker 12: kept on investing, and we kept on investing, and together we. 532 00:31:54,280 --> 00:31:55,800 Speaker 10: Just it just took off. 533 00:31:57,120 --> 00:32:01,160 Speaker 12: So in general people say that cacao is one of 534 00:32:01,160 --> 00:32:03,280 Speaker 12: the best in the world in terms of quality. 535 00:32:04,880 --> 00:32:08,240 Speaker 8: It's not just a changing climate that's driving Ecuador's cocoa boom. 536 00:32:08,440 --> 00:32:11,320 Speaker 8: As the middle class grows rapidly across the developing world, 537 00:32:11,560 --> 00:32:13,640 Speaker 8: chocolate is one of the first products to see a 538 00:32:13,720 --> 00:32:16,640 Speaker 8: surge in demand. One way Blue Stripes hopes to meet 539 00:32:16,640 --> 00:32:18,880 Speaker 8: that demand is by using more of the fruit. 540 00:32:19,520 --> 00:32:20,320 Speaker 11: Look at this fruit. 541 00:32:20,360 --> 00:32:25,600 Speaker 12: It's a giant, almost like a football size fruit. That 542 00:32:25,720 --> 00:32:29,120 Speaker 12: they grow this entire fruit and use only the little 543 00:32:29,160 --> 00:32:32,920 Speaker 12: seeds to make chocolate. This was maybe okay when the 544 00:32:32,960 --> 00:32:36,600 Speaker 12: world was less than billion people, But when the world 545 00:32:36,680 --> 00:32:41,520 Speaker 12: is nine billion people, eight billion people and everybody loves chocolate, 546 00:32:41,880 --> 00:32:44,200 Speaker 12: is it okay to use only the little seeds and 547 00:32:44,240 --> 00:32:47,400 Speaker 12: throw seventy five percent when you can do so much 548 00:32:47,440 --> 00:32:50,000 Speaker 12: with it, Let's use everything that we put, the energy, 549 00:32:50,080 --> 00:32:54,080 Speaker 12: the effort, the money, the time for us because it's 550 00:32:54,080 --> 00:32:55,480 Speaker 12: so delicious and nutritious. 551 00:32:56,320 --> 00:33:00,520 Speaker 8: Extreme weather has become a recurring risk around the world. Agriculture, 552 00:33:00,680 --> 00:33:04,640 Speaker 8: including coco, is among the most exposed. What's your single 553 00:33:04,680 --> 00:33:06,880 Speaker 8: biggest concern when it comes to the impact of climate 554 00:33:06,960 --> 00:33:08,280 Speaker 8: change on the chocolate industry. 555 00:33:08,560 --> 00:33:10,280 Speaker 12: There's not going to be caca. I mean, talk to 556 00:33:10,320 --> 00:33:15,200 Speaker 12: farmers here. You know what I'll tell It's it's scary 557 00:33:15,480 --> 00:33:19,040 Speaker 12: because when I came first to Ecuador four years ago, 558 00:33:19,920 --> 00:33:23,960 Speaker 12: I could see how the seasons and how the climate is. 559 00:33:24,160 --> 00:33:25,120 Speaker 1: I could see it. 560 00:33:25,040 --> 00:33:27,840 Speaker 12: In my own eyes. I can see that the rainy 561 00:33:27,880 --> 00:33:31,960 Speaker 12: season is not coming. I could see that suddenly cacao 562 00:33:32,160 --> 00:33:36,040 Speaker 12: from if cacao season was almost ending at end of 563 00:33:36,120 --> 00:33:41,280 Speaker 12: December January, suddenly there is cacao until whatever end of January, 564 00:33:41,280 --> 00:33:43,440 Speaker 12: beginning of February. But then you don't have cacao. It's 565 00:33:43,480 --> 00:33:45,880 Speaker 12: already June and there is no cacao. There is less 566 00:33:45,880 --> 00:33:48,240 Speaker 12: cacao on the trees. You see it in your own eyes. 567 00:33:48,880 --> 00:33:51,480 Speaker 8: What does the cocoa story tell you about where climate 568 00:33:51,520 --> 00:33:55,680 Speaker 8: and agriculture are headed in the next ten years twenty years? 569 00:33:56,080 --> 00:34:00,000 Speaker 10: So as a planet, all of us who consume chocolate 570 00:34:00,320 --> 00:34:04,960 Speaker 10: essentially rely on a small handful of nations that have 571 00:34:05,040 --> 00:34:11,600 Speaker 10: a climate today that's suitable for cocal production. The decentralization 572 00:34:12,040 --> 00:34:16,760 Speaker 10: of cocoa production would help to make the market more robust, because, 573 00:34:17,960 --> 00:34:20,800 Speaker 10: for example, if you have a year when West Africa 574 00:34:20,880 --> 00:34:24,560 Speaker 10: is being heavily affected by erratic heavy rains at the 575 00:34:24,560 --> 00:34:27,200 Speaker 10: wrong time of the year, it's unlikely you're going to 576 00:34:27,200 --> 00:34:30,520 Speaker 10: be having the same thing happening halfway across the globe 577 00:34:30,560 --> 00:34:35,360 Speaker 10: in Ecuador, where conditions are different, and so being able 578 00:34:35,440 --> 00:34:40,120 Speaker 10: to source cocal from many different parts of the globe 579 00:34:40,200 --> 00:34:44,040 Speaker 10: would help to make for a more resilient commodity overall. 580 00:34:44,480 --> 00:34:48,080 Speaker 10: And unfortunately, with continued climate change, we can expect to 581 00:34:48,160 --> 00:34:53,160 Speaker 10: see more shocks to our global crops like we saw 582 00:34:53,200 --> 00:34:55,680 Speaker 10: with cocoa production in twenty twenty four. 583 00:34:58,480 --> 00:35:01,680 Speaker 1: Coming up, the horrific war in Gaza has caused nations 584 00:35:01,680 --> 00:35:05,439 Speaker 1: to condemn Israel's actions, but have those countries curbed their 585 00:35:05,440 --> 00:35:23,360 Speaker 1: appetite for Israeli made weapons. This is a story about 586 00:35:23,440 --> 00:35:26,719 Speaker 1: walking the walk. Last week we told you about how 587 00:35:26,719 --> 00:35:29,080 Speaker 1: the Israeli tech sector has fared in the wake of 588 00:35:29,120 --> 00:35:32,080 Speaker 1: the war in Gaza. This week we focus on the 589 00:35:32,120 --> 00:35:35,920 Speaker 1: defense tech industry specifically and how it's been affected by 590 00:35:35,960 --> 00:35:39,000 Speaker 1: over one hundred and fifty countries around the world speaking 591 00:35:39,040 --> 00:35:42,359 Speaker 1: out against Israel for the way it has prosecuted the war, 592 00:35:42,880 --> 00:35:49,359 Speaker 1: with some imposing sanctions. 593 00:35:49,920 --> 00:35:51,040 Speaker 13: We are at war. 594 00:35:54,880 --> 00:35:57,360 Speaker 1: It was a war born out of the worst terrorist 595 00:35:57,400 --> 00:36:01,200 Speaker 1: attack in Israel's history, and the ensuing conflict left tens 596 00:36:01,239 --> 00:36:06,520 Speaker 1: of thousands dead, with much of Gaza in ruins. Countries 597 00:36:06,600 --> 00:36:09,320 Speaker 1: around the world say they have had enough. 598 00:36:16,280 --> 00:36:20,800 Speaker 14: Two years of unspeakable suffering endured by the Palestinians in Gaza. 599 00:36:22,160 --> 00:36:25,640 Speaker 1: The urgent approval of a royal decree log that legally 600 00:36:25,680 --> 00:36:30,680 Speaker 1: consolidates the arms embargo on Israel. Despite talking the talk 601 00:36:30,760 --> 00:36:34,480 Speaker 1: of criticizing Israel, what if countries actually done to walk 602 00:36:34,520 --> 00:36:39,080 Speaker 1: the walk since the war began. Well, it turns out 603 00:36:39,120 --> 00:36:42,280 Speaker 1: that the world wants more Israeli weapons than ever before. 604 00:36:42,880 --> 00:36:45,719 Speaker 1: In twenty twenty four, defense exports were valued at nearly 605 00:36:45,800 --> 00:36:49,400 Speaker 1: fifteen billion dollars. That's the highest in the country's history, 606 00:36:49,920 --> 00:36:52,520 Speaker 1: and though much of that demand comes from the United States, 607 00:36:52,840 --> 00:36:56,000 Speaker 1: it's far from the only country lining up at Israel's door. 608 00:36:56,880 --> 00:36:59,560 Speaker 13: Chancellor merce in Germany has said that his goal by 609 00:36:59,600 --> 00:37:02,879 Speaker 13: twenty five to have Germany be the most powerful army 610 00:37:02,920 --> 00:37:06,120 Speaker 13: in Europe. The problem is something like forty to fifty 611 00:37:06,160 --> 00:37:08,359 Speaker 13: percent of young Germans say they don't want to serve 612 00:37:08,400 --> 00:37:10,400 Speaker 13: in the army. So if they don't have the personnel, 613 00:37:10,520 --> 00:37:13,000 Speaker 13: what exactly is Germany going to be investing in. They're 614 00:37:13,040 --> 00:37:17,200 Speaker 13: going to be investing in technology capabilities, and Israel is 615 00:37:17,239 --> 00:37:19,840 Speaker 13: on the cutting edge of those technology capabilities. 616 00:37:20,239 --> 00:37:23,319 Speaker 1: Dan Seenor is host of the Call Me Back podcast 617 00:37:23,560 --> 00:37:27,839 Speaker 1: and authored Startup Nation and The Genius of Israel. How 618 00:37:27,880 --> 00:37:31,360 Speaker 1: do you square the continued strength and even growth of 619 00:37:31,400 --> 00:37:35,000 Speaker 1: the tech startup sector in Israel with some of the 620 00:37:35,080 --> 00:37:39,200 Speaker 1: denunciations from other countries during the war, even calls for boycotts. 621 00:37:40,200 --> 00:37:43,279 Speaker 13: I think a lot of those calls for boycotts have 622 00:37:43,480 --> 00:37:47,799 Speaker 13: been largely performative. So, for instance, at the height of 623 00:37:47,840 --> 00:37:51,360 Speaker 13: the war, you had countries like France and Germany say 624 00:37:51,760 --> 00:37:55,080 Speaker 13: we are going to stop supplying arms to Israel, We're 625 00:37:55,120 --> 00:37:57,400 Speaker 13: going to change our defense relationship with Israel. Now, the 626 00:37:57,480 --> 00:38:00,279 Speaker 13: reality is most of those countries that you heard make 627 00:38:00,320 --> 00:38:03,000 Speaker 13: those performance statements weren't selling much to Israel. 628 00:38:03,239 --> 00:38:08,160 Speaker 11: I would say that an embargo is never, never the 629 00:38:08,719 --> 00:38:11,640 Speaker 11: way to impose things on another county. 630 00:38:12,920 --> 00:38:16,120 Speaker 1: Bo As Levy is the CEO of Israel Aerospace Industries, 631 00:38:16,280 --> 00:38:20,680 Speaker 1: the second largest defense contractor in israel IAI was the 632 00:38:20,719 --> 00:38:24,280 Speaker 1: company to make the largest arms export deal in Israel's history, 633 00:38:25,640 --> 00:38:28,560 Speaker 1: selling the Aero three missile defense system to Germany for 634 00:38:28,800 --> 00:38:31,640 Speaker 1: three point five billion dollars late last year. 635 00:38:32,080 --> 00:38:34,719 Speaker 11: We are not afraid from embargo, but we don't like 636 00:38:34,800 --> 00:38:38,440 Speaker 11: it as well. So when the German applied on Israel, 637 00:38:39,160 --> 00:38:45,320 Speaker 11: we first understood that Germany is an ally to Israel. 638 00:38:45,560 --> 00:38:50,560 Speaker 11: As an allies, sometimes we can think different, but in 639 00:38:50,680 --> 00:38:55,160 Speaker 11: general it's a big and strong partnership. That's why it 640 00:38:55,280 --> 00:39:00,400 Speaker 11: never influenced our capabilities. It never stopped the project, it 641 00:39:00,560 --> 00:39:06,320 Speaker 11: never reduced any effort, and that's why after two years, 642 00:39:06,440 --> 00:39:08,799 Speaker 11: on the very same day that we promised that the 643 00:39:08,880 --> 00:39:12,719 Speaker 11: system will be deployed on a German soil, we did it, 644 00:39:13,080 --> 00:39:14,719 Speaker 11: and we did it very successful. 645 00:39:16,480 --> 00:39:19,880 Speaker 13: Keep in mind, there are two laboratories today for the 646 00:39:19,880 --> 00:39:23,800 Speaker 13: future of warfare. It's Ukraine and it's Israel. Many governments 647 00:39:23,840 --> 00:39:25,799 Speaker 13: in many countries they may be critical of how Israel 648 00:39:25,800 --> 00:39:28,520 Speaker 13: conducted some of its warfighting, some of its defense, but 649 00:39:28,640 --> 00:39:30,319 Speaker 13: at the end of the day, they all find it 650 00:39:30,360 --> 00:39:33,680 Speaker 13: extremely impressive. They understand it's the future of warfare and 651 00:39:33,719 --> 00:39:37,200 Speaker 13: they want to piggyback onto Israel's success. Because it has 652 00:39:37,239 --> 00:39:39,080 Speaker 13: implications for their own countries. 653 00:39:40,000 --> 00:39:42,920 Speaker 1: It's not just Europe turning to Israel for its defense needs. 654 00:39:43,360 --> 00:39:47,320 Speaker 1: India has developed increasingly strong ties with Israel as well. 655 00:39:47,800 --> 00:39:51,200 Speaker 11: Aia is working in India in the last forty years, 656 00:39:52,000 --> 00:39:55,719 Speaker 11: a lot of capabilities that we've moved over there and 657 00:39:55,800 --> 00:39:59,360 Speaker 11: a lot of fenders that we are working toward the 658 00:39:59,560 --> 00:40:03,200 Speaker 11: require elements of the Indian and Air Force, Navy or army. 659 00:40:03,880 --> 00:40:08,640 Speaker 11: I believe that the relationship between Israel and India is 660 00:40:08,760 --> 00:40:13,759 Speaker 11: very strong and is based on these commercial capabilities that 661 00:40:13,840 --> 00:40:15,120 Speaker 11: we've built together. 662 00:40:15,880 --> 00:40:18,840 Speaker 13: When Modi came to power in India, he basically said 663 00:40:19,440 --> 00:40:22,840 Speaker 13: India should be working closely with Israel. The diplomatic tensions 664 00:40:22,840 --> 00:40:26,720 Speaker 13: were long behind them. India really had Israel's back during 665 00:40:26,760 --> 00:40:30,520 Speaker 13: the last two years of this war. I know Israel 666 00:40:30,560 --> 00:40:34,799 Speaker 13: sees India as one of the key customers of many 667 00:40:34,840 --> 00:40:38,600 Speaker 13: of the interesting technologies. Israel can provide the technology and 668 00:40:38,640 --> 00:40:41,520 Speaker 13: the capabilities to this big country with a big population. 669 00:40:42,480 --> 00:40:45,280 Speaker 1: As with all business, it's a question of both demand 670 00:40:45,520 --> 00:40:49,200 Speaker 1: and supply. The demand for armaments is up in places 671 00:40:49,239 --> 00:40:53,040 Speaker 1: like Europe, and Israel is supplying more and better weapons 672 00:40:53,080 --> 00:40:55,600 Speaker 1: in response to the urgent needs of the battlefront. 673 00:40:56,320 --> 00:40:59,720 Speaker 14: We're always in conflict and constantly fighting, and that allows 674 00:40:59,800 --> 00:41:01,120 Speaker 14: us to have a battlefield lab. 675 00:41:02,160 --> 00:41:05,319 Speaker 1: Colonel Yeshai Cohen is the head of Planning, Economics and 676 00:41:05,400 --> 00:41:07,800 Speaker 1: IT at the Israel Ministry of Defense. 677 00:41:08,640 --> 00:41:12,680 Speaker 14: All our systems are all going through this conflict and 678 00:41:12,719 --> 00:41:16,480 Speaker 14: really being tested in the field, so that learning curve 679 00:41:16,760 --> 00:41:19,800 Speaker 14: that we always improve our systems during that conflict allows 680 00:41:19,840 --> 00:41:22,520 Speaker 14: us to really reach not only combat proving systems, but 681 00:41:22,640 --> 00:41:26,280 Speaker 14: combat improving systems, that is that they've been improved throughout 682 00:41:26,280 --> 00:41:29,200 Speaker 14: the course of the conflict and we reach the next 683 00:41:29,200 --> 00:41:30,440 Speaker 14: phase of a better system. 684 00:41:31,400 --> 00:41:35,480 Speaker 11: What's happened during the last war, I believe that we 685 00:41:35,600 --> 00:41:40,640 Speaker 11: demonstrated to ourself and to the world that this technology 686 00:41:40,880 --> 00:41:44,920 Speaker 11: really worth. It's worth to invest in that because at 687 00:41:44,960 --> 00:41:48,080 Speaker 11: the end of the day, it gives you some superiority. 688 00:41:48,760 --> 00:41:52,320 Speaker 11: And now we take those systems that are combat proven 689 00:41:52,600 --> 00:41:55,560 Speaker 11: and actually delivered them to the world in order to 690 00:41:55,600 --> 00:42:00,680 Speaker 11: protect their people against babilistic missiles against other as well. 691 00:42:00,960 --> 00:42:03,160 Speaker 14: Israel is known to be the startup nation, and many 692 00:42:03,200 --> 00:42:05,319 Speaker 14: of these startups have a lot to bring to the 693 00:42:05,480 --> 00:42:08,600 Speaker 14: entire ecosystem in the world. With the rise of many 694 00:42:08,680 --> 00:42:11,520 Speaker 14: defense startups here in as well. I'd say we are 695 00:42:11,560 --> 00:42:15,320 Speaker 14: currently engaging with more than three hundred startups. Just before 696 00:42:15,320 --> 00:42:16,920 Speaker 14: the war the number was almost half of that was 697 00:42:16,920 --> 00:42:17,840 Speaker 14: one hundred and seventy. 698 00:42:19,080 --> 00:42:21,640 Speaker 1: One of the defense technology companies born of the war 699 00:42:21,680 --> 00:42:26,359 Speaker 1: in Gaza is eyes Atop, launched by Udi oster. 700 00:42:26,680 --> 00:42:29,840 Speaker 15: Ees a Top is a platform we built to help 701 00:42:30,280 --> 00:42:35,160 Speaker 15: bring new drones technology into the battlefield. We want to 702 00:42:35,160 --> 00:42:38,600 Speaker 15: bring the best technology that exists out there to the 703 00:42:38,600 --> 00:42:41,160 Speaker 15: warfighter at the age and I believe many of the 704 00:42:41,160 --> 00:42:44,719 Speaker 15: other Western country you realize it's not just about who 705 00:42:44,760 --> 00:42:48,160 Speaker 15: has the best technology, it's who is capable of bringing 706 00:42:48,160 --> 00:42:50,800 Speaker 15: the best technology that is out there to the hands 707 00:42:50,800 --> 00:42:52,000 Speaker 15: of the soldier actually needed. 708 00:42:52,719 --> 00:42:55,880 Speaker 1: Auster was inspired by his brother who died on the 709 00:42:55,960 --> 00:42:57,160 Speaker 1: Lebanon warfront. 710 00:42:57,440 --> 00:43:01,520 Speaker 15: This is my younger brother Atan. It was twenty three 711 00:43:01,600 --> 00:43:04,040 Speaker 15: years old, almost twenty three years old when he was 712 00:43:04,320 --> 00:43:07,000 Speaker 15: killed in action. His team was the first one to 713 00:43:07,000 --> 00:43:10,160 Speaker 15: go into Lebanon and he was basically the first casualty 714 00:43:10,200 --> 00:43:12,440 Speaker 15: of the war in the North and Front after the 715 00:43:12,480 --> 00:43:23,160 Speaker 15: ground invasion started. And the story sorry, one of the 716 00:43:23,200 --> 00:43:26,080 Speaker 15: things we learn after the fact. With all the technologies 717 00:43:26,080 --> 00:43:29,920 Speaker 15: that Israel has, evacuation was impossible. You can bring Chopper 718 00:43:30,160 --> 00:43:32,759 Speaker 15: to save him because of the clouds and the topography. 719 00:43:33,120 --> 00:43:37,279 Speaker 15: So his evacuation took six hours of heroic effort from 720 00:43:37,320 --> 00:43:39,560 Speaker 15: his teammates until they were able to bring him back. 721 00:43:40,160 --> 00:43:41,880 Speaker 15: And that's where I ended up trying to kind of 722 00:43:41,880 --> 00:43:42,680 Speaker 15: bridge this gap. 723 00:43:43,320 --> 00:43:47,080 Speaker 1: The Israeli multifront war drove Israelis like auster to create 724 00:43:47,160 --> 00:43:51,480 Speaker 1: new companies, but for others it's meant redirecting their efforts 725 00:43:51,480 --> 00:43:53,640 Speaker 1: from civilian to military purposes. 726 00:43:55,560 --> 00:43:58,600 Speaker 4: In four October and seven, if you'll ask me what 727 00:43:58,680 --> 00:44:01,360 Speaker 4: will be our focus, will never tell you that defense 728 00:44:01,400 --> 00:44:05,480 Speaker 4: would be part of our portfolio of products. 729 00:44:06,200 --> 00:44:09,880 Speaker 1: Mohel Biton is the CEO of Idianics, a company that 730 00:44:09,920 --> 00:44:13,840 Speaker 1: focuses on optimizing batteries. He pivoted to working in defense 731 00:44:13,880 --> 00:44:16,280 Speaker 1: tech right after the war and Gaza started. 732 00:44:16,680 --> 00:44:20,160 Speaker 4: You can always look on the bright on anything that 733 00:44:20,239 --> 00:44:22,799 Speaker 4: you have in life, and we are looking on that 734 00:44:23,160 --> 00:44:27,399 Speaker 4: specific part how we can maximize the success. Maybe it's 735 00:44:27,440 --> 00:44:31,960 Speaker 4: a bit it's not fair, and I agree from that 736 00:44:32,239 --> 00:44:35,120 Speaker 4: very dark moment, we want to grow and to build 737 00:44:35,680 --> 00:44:37,719 Speaker 4: a positive and to bring light to the world. 738 00:44:38,480 --> 00:44:43,080 Speaker 15: Being in San Francisco, everybody talks about mission. So in 739 00:44:43,120 --> 00:44:47,120 Speaker 15: a previous company called Topingo, we basically got college student 740 00:44:47,160 --> 00:44:50,480 Speaker 15: in America, they're food faster. But the vibe or the 741 00:44:50,600 --> 00:44:53,880 Speaker 15: narrative was we're changing the world. And I think in 742 00:44:53,920 --> 00:44:56,840 Speaker 15: a sense we did make some changes, but it was 743 00:44:56,960 --> 00:45:01,320 Speaker 15: very different and now we were actually dealing with human lives. 744 00:45:01,560 --> 00:45:02,719 Speaker 15: I think it changes a lot. 745 00:45:03,560 --> 00:45:07,480 Speaker 1: For defense primes like IAI and Albert Systems, the demand 746 00:45:07,600 --> 00:45:11,960 Speaker 1: is higher than ever. Kobe Kagen is Albut Systems CFO. 747 00:45:12,280 --> 00:45:15,080 Speaker 16: We have three billion dollar increase in our order book 748 00:45:15,239 --> 00:45:18,600 Speaker 16: from around twenty two billion dollar to twenty five billion dollars, 749 00:45:19,080 --> 00:45:23,399 Speaker 16: mostly from international orders, which we just two weeks ago 750 00:45:23,480 --> 00:45:26,239 Speaker 16: announced the two point three billion dollars. This is the 751 00:45:26,440 --> 00:45:31,160 Speaker 16: biggest order Albit has ever received an additional one point 752 00:45:31,160 --> 00:45:34,840 Speaker 16: six billion dollar order from a European customer which we 753 00:45:34,920 --> 00:45:39,000 Speaker 16: announced back three months ago. That is an evidence to 754 00:45:39,040 --> 00:45:43,560 Speaker 16: the growing interest in our solutions in the international market. 755 00:45:44,680 --> 00:45:49,520 Speaker 11: MII is delivering eighty percent of its goods to overseas. 756 00:45:49,840 --> 00:45:53,719 Speaker 11: Only twenty percent is for Israel requirements, so we are 757 00:45:53,719 --> 00:45:57,000 Speaker 11: doing a lot of export. We are doing a lot 758 00:45:57,040 --> 00:46:01,400 Speaker 11: of production for our customers overseas, and we kept doing 759 00:46:01,480 --> 00:46:05,080 Speaker 11: that during the war as well. In third quarter of 760 00:46:05,120 --> 00:46:09,520 Speaker 11: twenty twenty five, we could see there twenty seven billion 761 00:46:09,640 --> 00:46:15,160 Speaker 11: dollars of new orders, and this is actually the largest 762 00:46:15,200 --> 00:46:16,520 Speaker 11: backlock we have had. 763 00:46:17,360 --> 00:46:20,400 Speaker 1: Despite all the talk around the world about condemning Israel's 764 00:46:20,440 --> 00:46:23,600 Speaker 1: prosecution of the war, it turns out that when it 765 00:46:23,640 --> 00:46:26,680 Speaker 1: comes to defense, what really matters for any country is 766 00:46:26,800 --> 00:46:30,520 Speaker 1: walking the walk of protecting its people, and that comes 767 00:46:30,520 --> 00:46:33,680 Speaker 1: down to what will work and what's been proven to 768 00:46:33,760 --> 00:46:35,800 Speaker 1: work in combat situations. 769 00:46:36,160 --> 00:46:39,360 Speaker 14: We've seen our technology working. I mean seeing that qualitative 770 00:46:39,440 --> 00:46:42,279 Speaker 14: edge that I speak of working. Whether it's with air 771 00:46:42,320 --> 00:46:47,320 Speaker 14: defense systems versus ballistic missiles versus UAVs and drones, whether 772 00:46:47,400 --> 00:46:51,239 Speaker 14: it's space capabilities, and whether it's attack systems, those are 773 00:46:51,239 --> 00:46:52,960 Speaker 14: all technologies that worked excellently. 774 00:46:54,080 --> 00:46:56,399 Speaker 15: You want to save the lives and protect the lives 775 00:46:56,440 --> 00:46:59,480 Speaker 15: of your civilians, and if the best technology that does 776 00:46:59,520 --> 00:47:03,040 Speaker 15: it is built in Israel, you will buy the technology 777 00:47:03,320 --> 00:47:05,560 Speaker 15: and whether you do it beneath the table, and this 778 00:47:05,600 --> 00:47:09,840 Speaker 15: is happening. So for us, I think from an Zionism standpoint, 779 00:47:10,160 --> 00:47:12,239 Speaker 15: the best thing we can do in this company is 780 00:47:12,239 --> 00:47:13,800 Speaker 15: built the best technology ever. 781 00:47:14,480 --> 00:47:18,319 Speaker 11: October seven was an horrific date, and we should be 782 00:47:18,400 --> 00:47:22,319 Speaker 11: aware and we should be well prepared. And technology is 783 00:47:22,360 --> 00:47:25,600 Speaker 11: the name of the game. From one hand, we don't 784 00:47:25,640 --> 00:47:28,080 Speaker 11: want to be in more. We are seeking for peace. 785 00:47:28,640 --> 00:47:31,080 Speaker 11: In the other hand, we are happy that we've been 786 00:47:32,280 --> 00:47:37,640 Speaker 11: able to take this technology and to defend our population. 787 00:47:39,520 --> 00:47:41,279 Speaker 1: That does it for us. Here at Wall Street Week, 788 00:47:41,400 --> 00:47:44,600 Speaker 1: I'm David Weston. See you next week for more stories 789 00:47:44,680 --> 00:48:00,240 Speaker 1: of capitalism.