WEBVTT - Markets Whipsaw on Tariff Uncertainty, Apple Might Hike Prices 0:00:02.520 --> 0:00:09.760 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.800 --> 0:00:15.520 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.960 --> 0:00:20.160 This is Bloomberg Technology with Caroline Hyde. 0:00:19.800 --> 0:00:37.360 And Ed Ludlow live from New York. I'm Caroline Hyde 0:00:37.640 --> 0:00:38.080 and I'm. 0:00:38.000 --> 0:00:40.840 Ed Ludlow in San Francisco. This is Bloomberg Technology. 0:00:41.120 --> 0:00:44.519 And it's another day ed of US stocks whip soaring 0:00:44.600 --> 0:00:48.199 following President Trump's tariffs. This is nervy investors respond to 0:00:48.200 --> 0:00:51.400 the speculation on tariff delays since refuted by the White 0:00:51.400 --> 0:00:54.760 House and reports of a legal challenge to those libbes. 0:00:55.080 --> 0:00:57.360 Well in the context of tariffs in this market and 0:00:57.440 --> 0:00:59.760 the technology sector, it is the mag seven Names that 0:00:59.880 --> 0:01:02.640 the focus think about Nvidia and Gain, a name that 0:01:02.800 --> 0:01:05.600 was significantly lower swung to a gain. It's held that 0:01:05.720 --> 0:01:08.640 game and list downgrades and cuts is part of the 0:01:08.680 --> 0:01:10.640 story in Apple and Tesla, but at one point in 0:01:10.680 --> 0:01:13.440 the session, Apple was on track for its biggest three 0:01:13.480 --> 0:01:16.560 day drop since October of two thousand. I want to 0:01:16.600 --> 0:01:18.480 show you some data that was brought up by Apollo 0:01:18.520 --> 0:01:21.080 Global in their newsletter this morning, and it is the 0:01:21.120 --> 0:01:24.200 mag seven Names, and then North America are US revenues 0:01:24.240 --> 0:01:27.840 and Amazon's case sixty one percent majority in North America 0:01:27.959 --> 0:01:31.319 excluding AWS, but for most of them, most of those 0:01:31.360 --> 0:01:34.880 sales come from outside the US and jurisdictions where taris 0:01:34.880 --> 0:01:37.280 will be held hardest. And that's why there's concern in 0:01:37.360 --> 0:01:39.800 part that it will be a hit to earnings going forward. 0:01:40.319 --> 0:01:43.360 And boy, hasn't that been a story for Apple. Now, 0:01:43.440 --> 0:01:46.200 let's just return to the keystock that renowned tech bull 0:01:46.280 --> 0:01:48.920 Dan ives and Webbush has cut his price target for 0:01:48.960 --> 0:01:51.040 the iPhone maker. He's gone way down to two hundred 0:01:51.040 --> 0:01:53.680 and fifty dollars from three hundred and twenty five while 0:01:53.760 --> 0:01:58.360 maintaining though an outperform rating. Johnny us now Bloomberg's ran Vlastellaca. 0:01:58.480 --> 0:02:01.440 Apple has been in the io of the storm, and 0:02:01.600 --> 0:02:04.400 Dan I's singling that out over the course of the weekend. 0:02:05.760 --> 0:02:07.960 Yeah, good morning, thanks for having me. Apple is really 0:02:08.000 --> 0:02:10.920 sort of a poster child for terrif related risk right now. 0:02:11.160 --> 0:02:14.680 It does so much manufacturing overseas, especially in countries like 0:02:14.800 --> 0:02:17.320 China and Vietnam, which are some of the countries that 0:02:17.360 --> 0:02:19.400 have been hit with some of the highest tariff rates. 0:02:19.480 --> 0:02:23.079 So there is so much uncertainty surrounding the company, surrounding 0:02:23.080 --> 0:02:25.840 its earnings potential in this kind of environment. What are 0:02:25.880 --> 0:02:27.920 they going to do? What are tariffs going to look like? 0:02:28.080 --> 0:02:30.200 Are they going to have to raise prices? If they do, 0:02:30.320 --> 0:02:32.320 what is that going to mean for demand? Are they 0:02:32.320 --> 0:02:34.040 going to have or are they going to absorb these 0:02:34.120 --> 0:02:36.600 higher costs? If so, what does that mean for margins 0:02:36.600 --> 0:02:39.760 and earnings? There are so much uncertainty here Because we're 0:02:39.760 --> 0:02:42.960 talking about Apple, which is still the biggest company in 0:02:43.000 --> 0:02:45.760 the world, It's obviously has a lot of implications for 0:02:45.800 --> 0:02:46.600 the market overall. 0:02:47.480 --> 0:02:49.320 We were talking before the show about is this a 0:02:49.480 --> 0:02:52.640 historic Monday or not? Biggest three day drop for Apple 0:02:52.680 --> 0:02:54.839 going back to two thousand. That gives me a sort 0:02:54.840 --> 0:02:57.000 of sense of scale, but talks to me about the 0:02:57.000 --> 0:02:59.799 stock Ryan, I mean, our colleagues at Bloombag Intelligence don't 0:02:59.840 --> 0:03:03.280 think Apple raises prices. It has used mechanisms around the 0:03:03.320 --> 0:03:07.480 world to stay competitive on the services side, in particular. 0:03:07.680 --> 0:03:08.680 How's the stock viewed? 0:03:10.120 --> 0:03:10.280 Well? 0:03:10.280 --> 0:03:12.480 I think so much of this really depends on what 0:03:12.600 --> 0:03:15.760 happens with tariffs. There's so much uncertainty on that point. 0:03:15.800 --> 0:03:18.520 And if they stay in place as they currently are, 0:03:19.080 --> 0:03:21.240 you know, the outlook is very grim. But if they 0:03:21.280 --> 0:03:24.240 come off tomorrow, which you know doesn't seem like it's honestly, 0:03:24.240 --> 0:03:26.800 you see who knows. You know, people are still pretty 0:03:26.840 --> 0:03:30.800 positive about the company's longer term potential, maybe eventually with AI, 0:03:31.040 --> 0:03:33.600 with services, growth, with earnings. It still has a bunch 0:03:33.680 --> 0:03:36.080 of cash, a very strong balance sheet. There's certainly reasons 0:03:36.080 --> 0:03:38.160 to be optimistic, but a lot of people I talk 0:03:38.240 --> 0:03:40.120 to are just very skeptical about it. 0:03:40.240 --> 0:03:40.360 Now. 0:03:40.360 --> 0:03:42.040 I will say that if you look at its RSI, 0:03:42.240 --> 0:03:45.440 it's trading at some of the most oversold levels in years. 0:03:45.520 --> 0:03:47.480 So there is certainly an argument to be made here 0:03:47.600 --> 0:03:50.240 that some people feel like it's gotten oversold, Like you said, 0:03:50.280 --> 0:03:52.400 biggest three day drop at least at one point since 0:03:52.440 --> 0:03:54.280 before the iPod. So that tells you the kind of 0:03:54.320 --> 0:03:56.600 buying opportunity if you like the stock that you could 0:03:56.640 --> 0:03:57.320 be looking at here. 0:03:58.360 --> 0:04:01.040 Welcome to this Monday Bloom those rights Plaseelica, Thank you 0:04:01.440 --> 0:04:03.400 very much. Let's get more on the wider market tat 0:04:03.520 --> 0:04:07.320 term Or. Angela Zeo, CFRA Research VP, Senior ecuty analyst 0:04:07.400 --> 0:04:07.840 joins us. 0:04:07.880 --> 0:04:09.080 Now and I want. 0:04:08.960 --> 0:04:10.400 To go back to the point that we raise at 0:04:10.400 --> 0:04:11.880 the top of the show that if you put the 0:04:11.880 --> 0:04:14.760 mag seven side by side, Angelo, and look at the 0:04:14.800 --> 0:04:18.000 revenues they derive from outside of the United States. Apple 0:04:18.080 --> 0:04:20.080 catches the eye right, there's a lot of it coming 0:04:20.400 --> 0:04:23.320 x USA or x North America. How are you modeling 0:04:23.320 --> 0:04:23.960 that this morning? 0:04:25.279 --> 0:04:27.560 Yeah, now, thanks for having me. So as far as 0:04:27.560 --> 0:04:29.760 that's concerned, yeah, I mean, look, listen, listen, I mean, 0:04:29.800 --> 0:04:33.159 Apple is it's really tough to be a technology hardware 0:04:33.160 --> 0:04:36.359 a company right now, and to us, Apple is probably 0:04:36.520 --> 0:04:39.960 facing its toughest tests in about two decades, it's called 0:04:40.000 --> 0:04:42.560 since the financial crisis, where it actually prospered because of 0:04:42.560 --> 0:04:44.760 the iPhone launch at that point in time. But when 0:04:44.760 --> 0:04:47.440 you kind of look at Apple specifically here to your point, 0:04:47.480 --> 0:04:50.440 forty three percent of sales here in the US the 0:04:50.480 --> 0:04:53.599 rest internationally. So it is a true global company. And 0:04:53.680 --> 0:04:55.440 the fact that they do have you know that most 0:04:55.440 --> 0:04:58.000 of their iPhone production in the in China is the 0:04:58.120 --> 0:05:00.240 issue out here. We do think as far as the 0:05:00.279 --> 0:05:03.799 tariff concerns are concerned. Right now, there's essentially this twenty 0:05:03.880 --> 0:05:07.320 billion dollar or so deficit that they're going to have 0:05:07.400 --> 0:05:10.479 to make up in terms of you know, if you 0:05:10.480 --> 0:05:12.520 were a look at over the last twelve months and 0:05:12.920 --> 0:05:15.440 kind of extract the type of tariff hit that they 0:05:15.440 --> 0:05:18.760 would have gotten from importing all those goods the in 0:05:18.880 --> 0:05:21.320 terms in the US. So when you think about that 0:05:21.520 --> 0:05:23.440 and you look at the potential of what they could 0:05:23.480 --> 0:05:27.920 do here in terms of offsetting that twenty billion dollar increase, 0:05:27.960 --> 0:05:29.560 I think there are a number of things that they 0:05:29.600 --> 0:05:32.880 can do, but I don't think personally it's something along 0:05:32.920 --> 0:05:35.520 the lines of them increasing iPhone prices by about thirty 0:05:35.520 --> 0:05:38.159 percent or so across the line here in the US, 0:05:38.279 --> 0:05:40.919 because that's just going to cause way too much demand destruction. 0:05:41.560 --> 0:05:45.080 So they swallow a marginhead But right now the investor 0:05:45.120 --> 0:05:49.240 base is having to swallow serious headline pressure. We're being 0:05:49.240 --> 0:05:51.479 whip swored by the latest. We don't know whether this 0:05:51.560 --> 0:05:53.680 could suddenly on a dime spin into the green. We're 0:05:53.720 --> 0:05:55.640 off by two and a half percent. How do you, 0:05:55.680 --> 0:05:58.480 as a long term investor hold the trade? Angelou? 0:05:59.279 --> 0:06:01.560 Yeah, I mean you look at where the stock is 0:06:01.600 --> 0:06:02.080 at now. 0:06:02.120 --> 0:06:05.160 I mean we've seen essentially a thirty percent plus correction 0:06:05.400 --> 0:06:08.400 in the shares, So in our view, it's at this 0:06:08.480 --> 0:06:11.600 point it's too late to sell the shares if you're 0:06:11.600 --> 0:06:15.080 an Apple investor. We've told investors we think there's downside 0:06:15.080 --> 0:06:16.680 to about one hundred and fifty five to one hundred 0:06:16.680 --> 0:06:19.800 and sixty five dollars a share. That would essentially apply 0:06:19.960 --> 0:06:21.920 a peak to trough of about forty percent. 0:06:22.200 --> 0:06:24.200 And those are declines that we've seen in the. 0:06:24.080 --> 0:06:27.200 Past from Apple stock, and they've recovered and hit new 0:06:27.279 --> 0:06:30.120 highs back then. We think this is a point in 0:06:30.160 --> 0:06:32.800 time where Apple is going to be able to adjust 0:06:32.839 --> 0:06:36.920 to whatever new scenario that we see. If these fifty 0:06:36.920 --> 0:06:40.279 percent plus tariffs from China are here to stay, we 0:06:40.320 --> 0:06:43.320 think they're going to adjust their business model for that, 0:06:43.440 --> 0:06:46.280 whether it be increasing their iPhone prices by one hundred 0:06:46.320 --> 0:06:50.040 dollars across the board with the iPhone seventeen cycle, and 0:06:50.040 --> 0:06:52.240 then you know, potentially kind of you know, when you 0:06:52.279 --> 0:06:55.520 look at it from an installment cost perspective, that's fairly 0:06:55.600 --> 0:06:58.719 limited to the consumer out there. But nonetheless, there are 0:06:58.720 --> 0:07:00.560 a number of things we think Apple can do here 0:07:00.600 --> 0:07:01.960 to kind of right size their model. 0:07:02.440 --> 0:07:04.359 Let's go to the other areas that you focus. You 0:07:04.400 --> 0:07:06.920 will focus on a lot of chip names, and many 0:07:06.880 --> 0:07:10.080 are worried about the exposure of semiconductors to supply chain 0:07:10.080 --> 0:07:11.760 in Asia, even though there was a carve out of 0:07:11.840 --> 0:07:15.280 semi conductors coming from Asia from a tariff perspective, they're 0:07:15.280 --> 0:07:18.200 in the green today, Angelou. Is that the right way 0:07:18.240 --> 0:07:19.760 to be analyzing the sell off of Lake? 0:07:20.680 --> 0:07:21.600 Yeah, it's interesting. 0:07:21.640 --> 0:07:23.160 So you kind of when we were looking at the 0:07:23.520 --> 0:07:25.840 shares this morning for a lot of these names, specifically 0:07:25.840 --> 0:07:29.560 a namelike Nvidia, we thought it was essentially overdone. But 0:07:29.640 --> 0:07:31.480 you kind of look at the decline we've seen from 0:07:31.520 --> 0:07:34.240 peak to trough on the semiconductor side of things, it's 0:07:34.240 --> 0:07:36.320 been about a forty percent of climb, which is actually 0:07:36.440 --> 0:07:38.440 similar to the decline that we saw from peak to 0:07:38.520 --> 0:07:41.960 trough back in twenty twenty twenty two. And again it's 0:07:42.000 --> 0:07:44.080 one of those situations you never know where the bottom 0:07:44.280 --> 0:07:46.640 is on the chip side of things, but there is 0:07:46.760 --> 0:07:51.679 clearly some very strong secular opportunities tied to the chip sector, 0:07:51.960 --> 0:07:54.160 specifically on the AI side of things. 0:07:54.720 --> 0:07:57.000 We think that infrastructure build out continues. 0:07:57.000 --> 0:08:00.400 Clearly, it's going to be somewhat ratcheted down because those. 0:08:00.240 --> 0:08:02.840 Of the tariff situation we're in right now. 0:08:03.120 --> 0:08:06.360 But nonetheless, I mean, it is an opportunity that you know, persists, 0:08:06.400 --> 0:08:09.000 we think over the next decade or so, and you 0:08:09.040 --> 0:08:11.280 know in video clearly at that top of the list. 0:08:11.320 --> 0:08:13.480 But when you look at the profitability of these companies 0:08:13.880 --> 0:08:17.400 on that AI trade that is going to remain in tact, 0:08:17.800 --> 0:08:20.480 of course, with some downside to the estimates. But again, 0:08:20.640 --> 0:08:23.800 the forty in production we've seen in the share prices reflective. 0:08:24.520 --> 0:08:25.400 Let me jump in here. 0:08:25.560 --> 0:08:27.840 The bigger question to me is is not just where 0:08:27.840 --> 0:08:31.280 the infrastructure build out continues, it's whether the hyper scalea 0:08:31.360 --> 0:08:35.440 capex moderates, because profit estimates for many of these companies 0:08:35.440 --> 0:08:37.760 in the semi space are predicated on that. 0:08:37.960 --> 0:08:39.760 What's your call on that investment cycle? 0:08:40.520 --> 0:08:42.680 Yeah, so, I mean we do think that it's going 0:08:42.760 --> 0:08:43.440 to be challenged. 0:08:43.480 --> 0:08:46.760 So you kind of look at a year ago and 0:08:46.920 --> 0:08:49.280 essentially the capex numbers just continue to go higher and 0:08:49.360 --> 0:08:53.240 hire and our view it actually we've probably seen, you know, 0:08:53.280 --> 0:08:56.920 somewhat of a peak type capex number here in the 0:08:57.000 --> 0:08:57.520 near term. 0:08:57.840 --> 0:09:00.920 We don't think you're talking peak levels at all. Long term. 0:09:00.960 --> 0:09:03.520 We actually think as you go into twenty twenty six, 0:09:03.559 --> 0:09:05.960 we're looking at a capex increase of about four percent 0:09:06.040 --> 0:09:08.720 for the high purpose scalers. On a combined basis, it's 0:09:08.720 --> 0:09:10.640 going to be north of thirty percent this year. It 0:09:10.720 --> 0:09:14.080 starts to level out though, absolutely, but nonetheless I mean 0:09:14.120 --> 0:09:16.800 you kind of look at the secular themes that drive 0:09:16.920 --> 0:09:20.640 infrastructure spending. It is the cloud, it is digital ad spend, 0:09:20.760 --> 0:09:23.080 and long term, those are going to be trends that 0:09:23.120 --> 0:09:24.720 continue to see higher revenue. 0:09:24.400 --> 0:09:28.680 World Angela, How does this technology market compare to ninety eight, 0:09:28.840 --> 0:09:31.480 two thousand and two thousand and eight and every day 0:09:31.480 --> 0:09:33.240 of your working life that's gone before it. 0:09:34.800 --> 0:09:36.560 Yeah, that's a great question. 0:09:36.720 --> 0:09:40.280 I think, you know, specifically from a valuation perspective, I 0:09:40.280 --> 0:09:42.120 think the good news is we don't have a valuation 0:09:42.800 --> 0:09:45.839 problem in tech, and I think historically that has been 0:09:45.880 --> 0:09:49.240 an issue. These are historically very high growth oriented type names, 0:09:49.240 --> 0:09:51.280 and you always have to worry about how much can 0:09:51.360 --> 0:09:53.880 these names really kind of decline. I think the great 0:09:53.920 --> 0:09:56.400 thing is when you look at tech here specifically, if 0:09:56.440 --> 0:09:59.120 it's driving it, it is big tech, and big tech 0:09:59.160 --> 0:10:01.120 has massive cash flow generation. 0:10:01.480 --> 0:10:02.640 Even if we kind. 0:10:02.520 --> 0:10:07.120 Of discount some of the tariff issues at hand, right now, 0:10:07.400 --> 0:10:10.439 you're still talking about an Apple, if they don't offset 0:10:10.480 --> 0:10:12.680 that twenty billion or so, it's still going to generate 0:10:12.720 --> 0:10:16.720 potentially ninety billion or so on an annualized basis. That 0:10:16.760 --> 0:10:19.240 would be your worst case scenario. So when we start 0:10:19.240 --> 0:10:21.959 thinking about the drivers here of tech. The discount now 0:10:22.000 --> 0:10:24.680 that you've seen here over the last nine to ten 0:10:24.800 --> 0:10:27.800 months on the valuation side of things now trading less 0:10:27.800 --> 0:10:31.760 than twenty times on a calendar twenty six pass Again, 0:10:31.880 --> 0:10:34.719 those estimates have to go down. But when we kind 0:10:34.720 --> 0:10:36.600 of look at things here, you got to look at 0:10:36.640 --> 0:10:38.600 it from a long term perspective. You look at that 0:10:39.080 --> 0:10:42.200 twenty percent or so discount on broader tech and I 0:10:42.240 --> 0:10:45.560 think you know, overall, if you're a long term investor, 0:10:45.600 --> 0:10:47.320 I think there's an opportunity here over. 0:10:47.200 --> 0:10:49.959 The next couple of days weeks. You just got to 0:10:49.960 --> 0:10:52.160 be willing to lose some money in the near term. 0:10:52.440 --> 0:10:55.400 Rite that volatility. Angelo Zino of CFIRA, Great to have 0:10:55.440 --> 0:10:57.439 you on the show. Thank you. Coming up, we're going 0:10:57.440 --> 0:10:59.720 to check in on Teslas stock price following a dramatic 0:10:59.760 --> 0:11:02.720 price target cut from Wedbush. We're on that next, and 0:11:02.800 --> 0:11:03.680 what are you drilling into? 0:11:04.360 --> 0:11:05.520 So I think it's fair to say a lot of 0:11:05.520 --> 0:11:08.120 people work this Sunday, and one of the only markets 0:11:08.160 --> 0:11:10.800 open to look at was crypto and bitcoin in particular. 0:11:11.040 --> 0:11:13.000 We went from like eighty eight thousand US dollars per 0:11:13.040 --> 0:11:16.800 token Friday night down now to around seventy eighty five hundred. 0:11:16.840 --> 0:11:20.920 It's moderated, but there's divergence with gold. There is the 0:11:20.960 --> 0:11:24.360 tariff story hitting crypto assets, and we'll continue to track 0:11:24.400 --> 0:11:25.959 it because that was a lot of the focus over 0:11:25.960 --> 0:11:28.080 the weekend. Just in case you missed it, stick with us, 0:11:28.080 --> 0:11:44.080 we'll be right back. This is Bloomberg Technology tesler trading 0:11:44.120 --> 0:11:46.480 at one point in this session below two hundred and 0:11:46.520 --> 0:11:49.440 eighteen dollars a share, a price at which COMMAS secretary 0:11:49.440 --> 0:11:53.920 Howard Lutnik predicted they'd never fall to again. That decline 0:11:54.000 --> 0:11:57.960 followed a forty three percent price target cut by Webbush 0:11:57.960 --> 0:12:01.480 Securities analyst Daniel Iive, citing Trump's trade policies and a 0:12:01.559 --> 0:12:06.320 brand crisis created by Elon Musk, Bloomberg's Global Auto's Edisi 0:12:06.360 --> 0:12:09.120 Crazydales here for more from London. When I was reading 0:12:09.120 --> 0:12:12.240 the Ives, note there were some very specific points, which 0:12:12.280 --> 0:12:14.760 is that, for example, in China, it's not just the 0:12:14.840 --> 0:12:20.520 tariffs themselves, it's the reputation and association of Musk with 0:12:20.679 --> 0:12:23.640 the policy that might drive Chinese consumer is to buy 0:12:23.640 --> 0:12:24.480 domestic models. 0:12:25.760 --> 0:12:28.040 Yeah, that's right, and I mean I think what we've 0:12:28.080 --> 0:12:30.720 seen from the Trump administration is that they've really sort 0:12:30.760 --> 0:12:37.000 of you know, stoked this nationalistic sentiment in other countries already. 0:12:37.080 --> 0:12:39.600 You think about Canada being a great example of this, 0:12:40.800 --> 0:12:43.840 maybe not great, but an example of this, where you know, 0:12:43.880 --> 0:12:46.960 at hockey games suddenly you know there's a booing of 0:12:46.960 --> 0:12:49.440 the national anthem, and you know, we don't have to 0:12:49.480 --> 0:12:52.160 go that far back in history to think of other 0:12:52.240 --> 0:12:56.120 companies that you know, have felt the brunt of sort 0:12:56.160 --> 0:13:01.040 of nationalistic sentiment in China and and you know, felt 0:13:01.080 --> 0:13:03.920 blowback from that. And so I think that's what I 0:13:04.040 --> 0:13:06.719 was maybe was alluding to here, And it's maybe a 0:13:06.800 --> 0:13:10.520 risk that we haven't seen necessarily in China, where you know, 0:13:10.800 --> 0:13:14.760 whereas we've seen these Tesla takedown protests in other countries, 0:13:15.160 --> 0:13:17.520 it's not something that we're seeing on the streets of say, 0:13:17.720 --> 0:13:18.959 you know, Shanghai or Beijing. 0:13:19.760 --> 0:13:23.600 He calls for Elo Musk to step up Craig and 0:13:23.640 --> 0:13:26.520 to show leadership. Now, last time I check. I don't 0:13:26.520 --> 0:13:28.800 think el must particularly cares what Wall Street analysts think 0:13:28.920 --> 0:13:32.160 or ask of him, But are we anticipating a return 0:13:32.760 --> 0:13:34.719 to leading this business rather than his role at the 0:13:34.760 --> 0:13:35.200 White House. 0:13:36.760 --> 0:13:38.480 I think there was a lot of sort of hope 0:13:38.520 --> 0:13:42.679 and optimism last week right when Politico reported that Musk 0:13:42.840 --> 0:13:45.920 you know, was on the cusp of stepping back officially 0:13:45.960 --> 0:13:48.240 from his roles. But I think, you know, not only 0:13:48.240 --> 0:13:50.839 did we hear Musk dispute that and say it's you know, 0:13:50.920 --> 0:13:54.040 fake news, we also heard you know, from jd Vance, 0:13:54.080 --> 0:13:56.560 the Vice President, talk about this idea that you know, 0:13:56.679 --> 0:14:00.280 Doje is nowhere near done, and allude to the idea 0:14:00.320 --> 0:14:03.439 that Musk is going to continue to advise this administration 0:14:03.960 --> 0:14:06.760 you know, for you know, long into the future, and 0:14:06.800 --> 0:14:09.320 so even if officially he is no longer a special 0:14:09.320 --> 0:14:12.640 government employee. I think this, this notion that he would 0:14:12.679 --> 0:14:17.520 fully step back from politics seems you know, seems like 0:14:17.559 --> 0:14:20.880 a stretch, given given how sort of assertive and hands 0:14:20.880 --> 0:14:24.040 on he's been to this point. Maybe he does go 0:14:24.320 --> 0:14:27.000 back to spending more time, you know, say in Austin 0:14:27.480 --> 0:14:31.520 or at facilities like in California. But I think the 0:14:31.520 --> 0:14:34.720 bigger problem here is the sort of daily drumbeat of 0:14:34.720 --> 0:14:37.360 his posts on X that could be really divisive. 0:14:38.000 --> 0:14:40.960 Crater Dal, thanks so much for joining us as always. Meanwhile, 0:14:40.960 --> 0:14:42.880 coming up, we're going to take a closer look at 0:14:42.880 --> 0:14:45.520 how the US China trade tensions could also be playing 0:14:45.520 --> 0:14:49.080 into the negotiations for TikTok. Sam Sak, senior fellow at 0:14:49.120 --> 0:14:51.680 New America joining US ed, what are you keeping an eye. 0:14:51.480 --> 0:14:54.040 On market's over in Asia overnight? 0:14:54.080 --> 0:14:56.120 And also a piece of news, this is the mc 0:14:56.240 --> 0:15:01.840 i AC Asia Pacific Information Tech in debt. Clearly heavy clients, 0:15:01.880 --> 0:15:05.040 but this as President Trump said that he has spoken 0:15:05.480 --> 0:15:08.880 to the Japanese Prime minister. Also getting some headlines crossing 0:15:08.880 --> 0:15:12.600 the Bloomberg terminal. Relating to Asia, Trump says China must 0:15:12.640 --> 0:15:16.680 back off thirty four percent tariff increases by April eighth. 0:15:16.720 --> 0:15:19.840 Trump says that talk to China on possible meetings will 0:15:19.880 --> 0:15:23.920 be terminated, and he threatens a fifty percent additional tariff 0:15:24.160 --> 0:15:27.800 on China starting April ninth if they don't meet an 0:15:27.880 --> 0:15:30.560 Eightril eight deadline. He's talking about to back off of 0:15:30.600 --> 0:15:32.880 the thirty thirty four percent. I think we call them 0:15:33.120 --> 0:15:36.960 reciprocal tariffs right Carrow that were put in place by 0:15:37.000 --> 0:15:52.520 the Chinese. 0:15:47.440 --> 0:15:48.160 The reporters. 0:15:48.360 --> 0:15:50.400 We had a deal pretty much with Jake jack nadded 0:15:50.480 --> 0:15:53.720 deal but pretty close, and then China changed the deal 0:15:53.800 --> 0:15:54.640 because of tariffs. 0:15:56.240 --> 0:15:58.600 If I gave a little of jarriffs, A proven a 0:15:58.680 --> 0:16:01.720 deal at fifteen Brothers which shows you the power of derives. 0:16:03.520 --> 0:16:06.080 There was President Trump speaking last night of allD Air 0:16:06.080 --> 0:16:09.800 Force one, saying China's objections to US tariffs stored a 0:16:09.880 --> 0:16:10.880 deal to sell. 0:16:10.680 --> 0:16:12.960 Off TikTok and keep it operating in the US. 0:16:12.960 --> 0:16:15.680 In the last two minutes, the President has posted on 0:16:15.760 --> 0:16:21.240 truth social threatening a fifty percent additional tariff on China 0:16:21.760 --> 0:16:25.600 if they don't remove the thirty four percent reciprocal tariffs 0:16:25.600 --> 0:16:28.480 that China had put in place by April eighth. You 0:16:28.560 --> 0:16:30.840 said a deadline that post. I think Carry was seeing 0:16:30.840 --> 0:16:33.800 all kinds of assets react. Some that I'm seeing, for 0:16:33.840 --> 0:16:37.280 example God and Dragon index and as that modern edgines is, we. 0:16:37.320 --> 0:16:39.080 Have more boers, go for it. 0:16:39.120 --> 0:16:39.800 Carry pick it up. 0:16:39.800 --> 0:16:42.560 President Trump saying that all talks with China have been 0:16:42.640 --> 0:16:46.520 terminated unless tariffs are pulled. So thus far, unless there 0:16:46.600 --> 0:16:49.000 is a change of sentiment coming from China and they 0:16:49.080 --> 0:16:52.120 withdraw as you were just articulating that extra thirty four 0:16:52.120 --> 0:16:56.120 percent that they put on on Friday, then all China 0:16:56.200 --> 0:17:00.240 talks are terminated unless those tariffs are pulled. 0:17:01.200 --> 0:17:02.680 Yeah, I'm going to look at some of the assets, 0:17:02.720 --> 0:17:05.720 just really quick shares like Ali Barba's US listed ADRs 0:17:06.040 --> 0:17:09.120 clearly getting hit, but the Nazet Golden Dragon China Index 0:17:09.480 --> 0:17:10.919 down almost four percent. 0:17:11.040 --> 0:17:12.000 So it's important. 0:17:12.520 --> 0:17:14.280 Let's get back to the story we're talking about, and 0:17:14.320 --> 0:17:17.520 that is the future of TikTok in the United States. 0:17:17.560 --> 0:17:20.639 Bloombos Kirk Wagner joins us, and essentially, Kurt, what the 0:17:20.680 --> 0:17:23.840 President said last night on Air Force One confirmed what 0:17:23.880 --> 0:17:27.200 you had reported a couple of days earlier that the 0:17:27.240 --> 0:17:31.399 tariff policy of this White House derailed a deal that 0:17:31.520 --> 0:17:35.960 was being negotiated with China to have US investor ownership 0:17:36.000 --> 0:17:37.280 of TikTok in the US. 0:17:37.320 --> 0:17:41.200 Take it from there, Well, that's exactly right. This deal, 0:17:41.400 --> 0:17:43.440 as Trump said, was close to being done. They had 0:17:43.440 --> 0:17:46.919 the framework in place, and you know, the tariffs hit. 0:17:46.960 --> 0:17:49.480 The tariffs are announced, and China said, you know, we're 0:17:49.480 --> 0:17:51.440 going to pause on this thing. And the news you 0:17:51.560 --> 0:17:54.680 just shared Ed and Caroline makes me think that we're 0:17:54.880 --> 0:17:56.760 we're definitely nowhere close to a deal now. 0:17:56.840 --> 0:17:57.000 Right. 0:17:57.359 --> 0:18:00.879 Things are getting more intense, not less intense on this 0:18:01.000 --> 0:18:03.679 traf war. And so you know, as Trump said, the 0:18:03.720 --> 0:18:06.280 tariffs work, I would say tariffs have consequences. Right in 0:18:06.280 --> 0:18:08.720 this case, the deal for TikTok is sort of in 0:18:08.760 --> 0:18:09.840 the crosshairs of this thing. 0:18:10.080 --> 0:18:12.240 We knew that would be the case. 0:18:12.280 --> 0:18:13.800 I think I'm not sure if we knew it would 0:18:13.800 --> 0:18:15.679 be quite this much in the middle of all this, 0:18:16.080 --> 0:18:19.680 but you know, part of the geopolitical fight here, Kit. 0:18:19.640 --> 0:18:21.920 Wagner, we thank you. We have now got the perfect 0:18:22.000 --> 0:18:25.560 voice to discuss the implications of US and China on 0:18:25.640 --> 0:18:29.240 technology and more broadly, Sam Sas is with US senior 0:18:29.240 --> 0:18:32.400 fellow at New America. You have worked for tech giants 0:18:32.440 --> 0:18:35.160 like Zeemans setting up their businesses over in Asia, who 0:18:35.160 --> 0:18:38.960 speak the language, interpret what is going on at the 0:18:38.960 --> 0:18:41.560 moment and how China is going to fight the US 0:18:41.560 --> 0:18:41.800 on this. 0:18:42.359 --> 0:18:46.200 China anticipated the tariffs, but they were shocked by the scale. 0:18:46.560 --> 0:18:48.960 And what we're seeing now is the leadership in Beijing 0:18:49.119 --> 0:18:52.240 is trying to both signal resolves. They say we've got 0:18:52.240 --> 0:18:56.520 this under control, We've diversified our economy, but they're also 0:18:56.640 --> 0:18:59.640 still hoping for some space for a deal. And let's 0:18:59.680 --> 0:19:02.639 watch how they navigate doing both at the same time. 0:19:03.119 --> 0:19:05.760 In you know, TikTok, the deal was ready to come, 0:19:06.600 --> 0:19:09.840 but tariffs derailed it. And now China's saying we still 0:19:09.880 --> 0:19:11.919 can maintain leverage at this key moment. 0:19:13.119 --> 0:19:14.920 Sam I'm just going to remind our audience of the 0:19:14.960 --> 0:19:17.800 breaking news of literally the last thirty seconds, which is 0:19:18.160 --> 0:19:20.639 that President Trump is saying that all talks of China 0:19:20.680 --> 0:19:24.439 have been terminated. He had threatened an additional fifty percent 0:19:24.560 --> 0:19:29.080 tariff if China had not removed the thirty four percent reciprocal. 0:19:28.600 --> 0:19:30.320 Tariff by April eighth. 0:19:30.640 --> 0:19:34.320 The question who's in the stronger position here, the United 0:19:34.320 --> 0:19:35.119 States or China. 0:19:36.920 --> 0:19:39.880 Well, first of all, there were no talks actually planned 0:19:39.920 --> 0:19:42.800 with China, so I'm not sure where that's coming from. 0:19:43.480 --> 0:19:45.679