WEBVTT - Trump’s Exact Tack On Tariffs Still Cloudy: Bloomberg’s Webber 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.080 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Traders 0:00:33.080 --> 0:00:37.360 have had some time to digest the possibility of tariffs 0:00:37.640 --> 0:00:41.640 by the US on steel and aluminum imports. The results 0:00:41.760 --> 0:00:44.760 inconclusive and here to help us understand what's at stake, 0:00:44.840 --> 0:00:47.400 what we need to look for going forward, and how 0:00:47.640 --> 0:00:51.480 widely this could turn into a trade war. As Caitlin Webber, 0:00:51.680 --> 0:00:56.320 government analyst focusing on US trade policy for Bloomberg Intelligence, Caitlin, 0:00:56.680 --> 0:00:59.560 help us, where are we at this point with these 0:00:59.640 --> 0:01:02.360 teriff What has the response been like and how severe 0:01:02.400 --> 0:01:06.600 are they? Well? The response U after our President Trump 0:01:06.640 --> 0:01:10.720 announced that he UM intends to impose these tariffs on 0:01:10.800 --> 0:01:14.200 imported steel and tim percent tariffs and imported aluminium was 0:01:14.280 --> 0:01:19.280 really severe and dramatic. UM both from UM, you know 0:01:19.520 --> 0:01:27.039 US downstream UM consumers, industries, everything from automakers to UM 0:01:27.200 --> 0:01:31.560 even beverage makers were really UM negative in saying that 0:01:31.600 --> 0:01:35.520 these would um, you know, increase their costs and and 0:01:35.520 --> 0:01:38.559 and eventually increased costs for consumers. There's also a really 0:01:38.600 --> 0:01:42.160 negative reaction from trading partners who would likely be targeted 0:01:42.160 --> 0:01:46.880 by UM these these measures, saying that they were UM 0:01:46.920 --> 0:01:50.720 immediately preparing some sort of retaliation and response. UM. But 0:01:50.840 --> 0:01:52.920 at this point, you know, we really need to look 0:01:52.960 --> 0:01:56.600 for the details and what the tariffs will actually look like. 0:01:57.240 --> 0:02:00.960 Trump yesterday yesterday was very very dramatic, but also vague. 0:02:01.000 --> 0:02:02.960 We need to see if they're going to be any 0:02:02.960 --> 0:02:05.560 countries excluded. You know, is you going to give any 0:02:05.560 --> 0:02:07.400 indication of how long these are going to apply? And 0:02:07.440 --> 0:02:09.200 these are going to be some sort of process where 0:02:09.200 --> 0:02:13.920 companies or countries can apply for exemptions from the tariffs. Caitlin, 0:02:14.000 --> 0:02:19.120 Our trade wars as easily one, as President Trump tweeted today. 0:02:20.000 --> 0:02:23.800 Uh uh no, I I would not say so. I mean, 0:02:23.840 --> 0:02:27.120 there's certainly winners and losers, but trade in the twenty 0:02:27.160 --> 0:02:30.840 one century is not a zero sum game. Uh So, yeah, 0:02:30.919 --> 0:02:32.720 you know, you could certainly see the U. S. Steel 0:02:32.720 --> 0:02:35.440 and aluminum producers being winners from this sort of action, 0:02:35.919 --> 0:02:38.600 but losers would you know, be all of those US 0:02:38.639 --> 0:02:43.120 industries that are importing those products and then ultimately consumers. 0:02:43.120 --> 0:02:45.840 And then that doesn't even you know, speak to the 0:02:45.960 --> 0:02:48.000 U S exporters that aren't even sort of part of 0:02:48.040 --> 0:02:51.280 this fight, you know, U S exporters and agriculture um, 0:02:51.320 --> 0:02:54.320 you know, motorcycles, bourbon that could be targeted in other 0:02:54.360 --> 0:02:57.560 countries because of this. So, you know, trade is is. 0:02:58.080 --> 0:03:00.280 You know, it's really not a zero sum game. It's 0:03:00.360 --> 0:03:04.040 it's really not clear that it can be easily one, 0:03:04.200 --> 0:03:07.800 as Trump um seemed to portroy this morning. You know, Caitlin, 0:03:07.840 --> 0:03:10.960 one thing I was struck by was how President Trump's 0:03:11.000 --> 0:03:17.160 proclamation goes against UH decades of GOOP policies. And indeed 0:03:17.360 --> 0:03:20.840 a number of Republican Congress members have come out and 0:03:21.160 --> 0:03:25.079 been vocal in their opposition to these tariffs. What recourse 0:03:25.120 --> 0:03:28.160 do they have? Yeah, it was really jarring yesterday to 0:03:28.240 --> 0:03:32.720 see a Trump's traditional allies and Congress come out very 0:03:32.760 --> 0:03:35.920 strongly against these tariffs, saying they're they're seally a giant 0:03:35.960 --> 0:03:40.160 talks on consumers. But you know, unlike the solar tariffs 0:03:40.200 --> 0:03:42.760 and the washing machine tariffs that came out in January, 0:03:42.800 --> 0:03:46.640 Congress really doesn't have much resource or excuse recourse on 0:03:46.680 --> 0:03:50.280 this issue. I mean, they could hypothetically pass a law 0:03:50.400 --> 0:03:54.160 that would UM undo any tariffs, or even they could 0:03:54.400 --> 0:03:57.720 pass a law that would remove the president's authority UM 0:03:57.760 --> 0:04:00.600 to impose these what are called sexual and two thirty 0:04:00.600 --> 0:04:02.920 two tariffs. But then you know those are going to 0:04:02.960 --> 0:04:05.160 be obviously vetoed by Trump and they don't have the 0:04:05.240 --> 0:04:09.160 votes to override those videos because many Democrats support these 0:04:09.160 --> 0:04:12.480 tariffs kind of ironically, So at this point, what they 0:04:12.480 --> 0:04:15.600 can really do is continue to complain and continue to 0:04:15.600 --> 0:04:17.920 to lobby the president UM not unlike sort of what 0:04:17.960 --> 0:04:21.680 they're doing at the same time on gun potential gun restrictions. 0:04:21.680 --> 0:04:24.360 But you know, they're they're their hands are kind of 0:04:24.400 --> 0:04:28.200 tied in terms of legislative solutions here, Caitlin. You know, 0:04:28.240 --> 0:04:31.800 you talk about gun policies, and we hear one thing 0:04:31.839 --> 0:04:33.720 out of President Trump, and then we hear another thing 0:04:33.760 --> 0:04:35.960 after he speaks with the n r A or I'm 0:04:36.000 --> 0:04:38.960 just trying to understand who given that, who's in charge 0:04:39.000 --> 0:04:43.599 here with the trade discussion, who's writing this policy? You know, 0:04:43.720 --> 0:04:46.680 I think that changes from day to day, and it 0:04:46.800 --> 0:04:49.919 seems like, you know, whoever maybe is in the lead 0:04:50.440 --> 0:04:53.000 UM you know, on one particular day, is is the 0:04:53.040 --> 0:04:55.880 person who has the most influence, And it seems like 0:04:55.960 --> 0:04:58.080 maybe in the past couple week that weeks, that person 0:04:58.160 --> 0:05:01.599 is Peter Navarro, UM, who has getting promoted to be 0:05:01.680 --> 0:05:04.919 Special Assistant to the President on trade, who's who's very 0:05:05.120 --> 0:05:10.400 critical of China, UM, very much critical of free trade agreements. UM. 0:05:10.440 --> 0:05:13.560 But we you know, we've seen so much flux and 0:05:14.000 --> 0:05:17.760 Trump's trade agenda over the past year. UM, So I 0:05:17.760 --> 0:05:22.360 don't think that we're done seeing that those that that change. 0:05:22.839 --> 0:05:24.920 Even in terms of these tariffs which he said he's 0:05:24.920 --> 0:05:27.440 going to finalize as of next week. I think it's 0:05:27.560 --> 0:05:30.919 very likely that UM, other parties in the White House, 0:05:31.320 --> 0:05:33.800 like Gary Cohen are going to appeal to him successfully 0:05:33.880 --> 0:05:37.240 to have some some limits here that would really narrow 0:05:37.360 --> 0:05:41.040 the impact of those once they're they're ultimately applied. Caitlin, 0:05:41.200 --> 0:05:45.040 just about the twenty seconds, any aty bitty movement on 0:05:45.160 --> 0:05:49.720 a to renegotiations. You know, these steel and aluminium tariffs, 0:05:49.800 --> 0:05:52.560 if they do not exempt Canada and Mexico would not 0:05:52.760 --> 0:05:55.000 be very helpful at all. There hasn't been much movement. 0:05:55.000 --> 0:05:57.440 There's actually uh talks abom on right now. This this 0:05:57.520 --> 0:06:00.960 week and they've been completely overstandoed are this tariff talk? 0:06:01.240 --> 0:06:02.520 I think that they're going to wait and see what 0:06:02.520 --> 0:06:05.080 happens next week when these when you steal aluneum tariffs 0:06:05.080 --> 0:06:07.600 come out, and if those are very punitive and don't 0:06:07.600 --> 0:06:11.159 exclude NAFTA partners, we could see NAFTA talks really grind 0:06:11.200 --> 0:06:13.840 to a hold. I think much appreciate it as always. 0:06:13.880 --> 0:06:16.919 Caitlin Webber is our government analysts for US Trade Policy 0:06:16.960 --> 0:06:20.840 for Bloomberg Intelligence, joining us from our Bloomberg ninety nine 0:06:20.839 --> 0:06:23.600 one studios in Washington, d C. And you can follow 0:06:23.880 --> 0:06:41.679 Caitlin Webber on Twitter at Caitlin Webber. Using social media 0:06:41.800 --> 0:06:45.480 in order to spread disinformation, it is a topic of 0:06:45.560 --> 0:06:48.040 the day and here to help us understand a little 0:06:48.040 --> 0:06:49.840 bit more about it is David Garretty. He is the 0:06:49.880 --> 0:06:53.080 chief executive of g v A Research and he can 0:06:53.120 --> 0:06:58.560 be followed on Twitter at g v A Research. David, 0:06:58.760 --> 0:07:01.920 let's first have you set out what do you believe 0:07:02.000 --> 0:07:04.919 to be the current problem and what are some of 0:07:04.960 --> 0:07:07.080 the solutions. I mean, the problem is is that if 0:07:07.080 --> 0:07:09.400 we look at the United States of America, the social 0:07:09.440 --> 0:07:14.280 media companies which we know that Twitter, Facebook, YouTube, which 0:07:14.320 --> 0:07:17.720 is part of Google now known as Alphabet pretty much 0:07:17.720 --> 0:07:19.400 have all scaled up and have not gotten to a 0:07:19.440 --> 0:07:23.920 point where, according to some surveys, UH respondents are using 0:07:24.000 --> 0:07:28.120 Facebook or other social media feeds as their primary news source. Okay, Now, 0:07:28.160 --> 0:07:32.640 as we understand that law binding organizations such as this network, UH, 0:07:32.720 --> 0:07:36.480 you know, there are regulatory requirements that have to be met, 0:07:36.520 --> 0:07:39.480 and from the standpoint if there's political advertising, there has 0:07:39.480 --> 0:07:42.840 to be attribution. This has to be made known beforehand, 0:07:43.200 --> 0:07:46.240 and you know, there's also a responsibility in some respects 0:07:46.240 --> 0:07:48.840 to make sure that there are verifiable facts that are 0:07:48.880 --> 0:07:52.040 being communicated. Uh. We certainly understand that if we look 0:07:52.040 --> 0:07:55.640 at organizations perhaps such as Twitter, that at least fifteen 0:07:55.680 --> 0:07:58.160 percent if not more, of the accounts on Twitter, by 0:07:58.200 --> 0:08:02.800 some estimates, are are not backed by real individuals, that 0:08:02.880 --> 0:08:05.760 these are in effect what are called bots, and to 0:08:05.840 --> 0:08:09.400 the extent that we have bots that are being manipulated 0:08:09.480 --> 0:08:11.559 or being programmed in such a way as to take 0:08:12.040 --> 0:08:15.560 UH news which is not factually supported, which is politically biased, 0:08:15.600 --> 0:08:21.440 without attribution, and communicating those across um millions of people 0:08:21.480 --> 0:08:24.480 who are using Facebook and other social media we lead 0:08:24.520 --> 0:08:28.520 to very very successful disinformation and disinformation and an election 0:08:28.600 --> 0:08:32.000 contest either leads people to have a skewed point of view, 0:08:32.040 --> 0:08:34.240 a divisive point of view, or just to check out 0:08:34.280 --> 0:08:38.680 and not vote and participate. Whatsoever serves to undermine we 0:08:38.800 --> 0:08:42.720 might argue, the liberal democratic process and of our society 0:08:42.920 --> 0:08:46.320 which has nurtured these companies. So the question is do 0:08:46.320 --> 0:08:49.559 we need social media or form I think the answers yes. Okay, So, 0:08:49.679 --> 0:08:55.160 if say Twitter and Facebook were treated as news organizations, 0:08:55.760 --> 0:08:59.880 how much would that cut into their bottom line and 0:09:00.160 --> 0:09:03.400 how would that transform their business model? Well, I mean, 0:09:03.720 --> 0:09:06.800 they're making the argument that they're protected by the First Amendment. 0:09:06.880 --> 0:09:09.680 They're making the argument that they're protected by free speech 0:09:09.679 --> 0:09:12.680 of the Commons. But as we note and you point out, 0:09:13.120 --> 0:09:16.840 they are supported by advertising sufficiently, so this might arguably 0:09:16.840 --> 0:09:18.800 be seen as being more of a form of commercial 0:09:18.800 --> 0:09:22.680 free speech. If they needed to adopt the standards of 0:09:22.800 --> 0:09:26.960 other news organizations, certainly their costs of doing business would 0:09:27.000 --> 0:09:29.800 be going up. But clearly, given the scale that they 0:09:29.840 --> 0:09:32.760 have attained, they have the resources to be able to 0:09:32.800 --> 0:09:36.679 sustain those overhead costs in order to be better participants 0:09:36.920 --> 0:09:39.400 in our liberal democratic system. But what are those costs? 0:09:39.920 --> 0:09:42.439 The costs arguably would be from a staffing standpoint, We've 0:09:42.440 --> 0:09:46.040 already had indications from Facebook as well as also Google 0:09:46.360 --> 0:09:49.559 that they would be putting people on their payroll uh 0:09:49.600 --> 0:09:52.240 twenty thousand. I think, in the case of Facebook, in 0:09:52.400 --> 0:09:55.760 order to do a better job of policing the content 0:09:56.120 --> 0:09:59.640 that was coming across of their platform. Uh. We haven't 0:09:59.720 --> 0:10:04.320 yet seen evidence that those individuals have been hired. So 0:10:04.640 --> 0:10:06.880 we may be looking at something which is really lip service, 0:10:07.040 --> 0:10:09.680 and that the dollars that are being provided by these 0:10:09.720 --> 0:10:12.640 companies are going more towards lobbying Congress to try to 0:10:13.040 --> 0:10:18.520 delay or postpone that day of inevitability. David, the Federal 0:10:18.600 --> 0:10:26.800 Communications Commission is able to designate specific entities as public utilities, 0:10:27.640 --> 0:10:31.320 and I believe the telephone companies used to be designated 0:10:31.400 --> 0:10:34.480 maybe still aren't designated in that way because of the 0:10:34.559 --> 0:10:37.000 reach at the time of a T and T when 0:10:37.040 --> 0:10:41.720 there was no competition, uh, And there's a format for 0:10:41.800 --> 0:10:44.000 that to take place. Is it possible that the f 0:10:44.200 --> 0:10:47.760 c C would be able to do that with these 0:10:47.880 --> 0:10:52.400 kinds of companies and that they would then have to 0:10:52.480 --> 0:10:56.680 be treated in a similar way. It's entirely possible based 0:10:56.720 --> 0:10:59.600 upon historical president precedent. But if we were to look 0:10:59.600 --> 0:11:03.520 at there and staffing of the Federal Communications Commission under 0:11:03.559 --> 0:11:06.840 a jet Pie who certainly has seen fit to repeal 0:11:06.880 --> 0:11:09.960 net neutrality and certainly has been implicated in terms of 0:11:09.960 --> 0:11:14.080 taking UH money not only from Sinclair Broadcasting with respect 0:11:14.080 --> 0:11:16.600 to the expansion of their efforts in terms of local radio, 0:11:16.880 --> 0:11:19.760 but also taking gifts out right from the National Rifle 0:11:19.800 --> 0:11:23.680 Association or n r A. UH. One might argue that 0:11:23.720 --> 0:11:27.080 we're not really with a good staffing to make that happen. 0:11:27.280 --> 0:11:29.760 So we had earlier on the show. Today we had 0:11:29.840 --> 0:11:34.360 Randall Rothenberg, the chief executive officer of the Interactive Advertising Bureau, 0:11:34.520 --> 0:11:37.480 on the show, and he was saying that UH, that 0:11:37.559 --> 0:11:41.880 it would actually be beneficial to have some government regulation 0:11:42.000 --> 0:11:48.080 if they were looking for perhaps a way to certify 0:11:48.360 --> 0:11:51.600 the voices on the web or basically have basically something 0:11:51.640 --> 0:11:54.920 like a fingerprint or identifier UH to where the source 0:11:54.960 --> 0:11:57.680 of the information is coming. Do you agree and what 0:11:57.679 --> 0:12:00.800 would that look like? Now? I agree entirely, and I think, 0:12:00.840 --> 0:12:03.600 you know, having attribution in terms of political comments, I mean, 0:12:03.600 --> 0:12:06.840 whether this is necessarily political advertising or whether it's political 0:12:06.880 --> 0:12:09.120 messaging would be important. I think the first thing that 0:12:09.160 --> 0:12:12.760 needs to be done is to try to establish reliable 0:12:13.000 --> 0:12:16.400 identities behind the various accounts that are out on social media. 0:12:16.640 --> 0:12:19.920 And from that standpoint, you know, looking towards other liberal democracies, 0:12:19.920 --> 0:12:23.200 in this case, looking over towards Asia South Korea, they 0:12:23.240 --> 0:12:27.360 have very stringent requirements in terms of people using their identification, 0:12:27.440 --> 0:12:30.839 their registered resident number as a means before you can 0:12:30.880 --> 0:12:32.760 open up an account. The same thing is true with 0:12:32.800 --> 0:12:35.800 respect of looking at other liberal democracies such as Japan. 0:12:36.120 --> 0:12:39.000 The question is whether we here in the United States 0:12:39.040 --> 0:12:43.280 are so you know, wedded to unbridled First Amendment rights 0:12:43.640 --> 0:12:47.359 even for companies that have scaled to massive commercial success, 0:12:47.800 --> 0:12:50.720 you know, to basically put in place elements of responsibility 0:12:51.000 --> 0:12:55.760 and to encourage good corporate citizenship. Well, in that context, 0:12:56.280 --> 0:13:02.240 what has been the response, if anything, from Apple, Microsoft, Google. 0:13:02.760 --> 0:13:05.560 You could make the case that all of these companies 0:13:05.679 --> 0:13:11.000 depend on their financial well being by having people sit 0:13:11.360 --> 0:13:14.800 down or stare at a screen and do things using 0:13:14.840 --> 0:13:18.040 the Internet. No, certainly, one might argue, I mean Google 0:13:18.040 --> 0:13:21.600 clearly with YouTube, has a direct interest by maintaining a 0:13:21.640 --> 0:13:25.400 social media channel which has been implicated in terms of disinformation. 0:13:25.760 --> 0:13:27.880 We look at Microsoft, we look at Apple. Yes, these 0:13:27.880 --> 0:13:30.559 are the technology platforms that serve to enable the delivery 0:13:30.600 --> 0:13:33.240 these types of services. You know, does that perhaps put 0:13:33.280 --> 0:13:36.280 them too much of a remove um clearly, you know 0:13:36.320 --> 0:13:39.360 we have instances here where you know, Microsoft has been 0:13:39.400 --> 0:13:42.959 subject to sanction because of any competitive practices both domestically 0:13:43.000 --> 0:13:45.120 as well as overseas in the past, but it hasn't 0:13:45.120 --> 0:13:48.760 extended necessarily to putting out disinformation. One might argue that 0:13:48.800 --> 0:13:51.560 there really is a need first and foremost for the 0:13:51.600 --> 0:13:54.760 social media community UH to perhaps do a better job 0:13:54.800 --> 0:13:57.880 of policing themselves or have others do it for them. 0:13:57.920 --> 0:14:00.280 Perhaps in this regard, we might have other in the 0:14:00.280 --> 0:14:05.400 broader technology community here in the US also encourage this 0:14:05.440 --> 0:14:10.040 type of appropriate and collaborative behavior. Well, we will look 0:14:10.040 --> 0:14:11.600 out for that, and I'm sure this is a conversation 0:14:11.640 --> 0:14:14.880 that will be continuing for the months to come. David Garretty, 0:14:14.920 --> 0:14:16.920 thank you so much for your perspective on this and 0:14:16.960 --> 0:14:19.600 for filling us in on where we are here today 0:14:19.640 --> 0:14:23.200 on this Chief executive Officer of g v A Research, 0:14:39.040 --> 0:14:42.680 are you ready for the sixth second? Ad Well, Randall Rothenberg, 0:14:42.720 --> 0:14:46.520 the chief executive of the Interactive Advertising Bureau, is here 0:14:46.520 --> 0:14:49.360 to tell us more about this. Randall it's a pleasure 0:14:49.400 --> 0:14:52.440 to have you here in our eleven three oh studios. UM, 0:14:52.640 --> 0:14:55.680 so tell us about the sixth second ad, the lack 0:14:55.760 --> 0:15:00.040 of attention that consumers seem to be able to to 0:15:00.080 --> 0:15:02.080 be able to pay attention for more than six seconds, 0:15:02.240 --> 0:15:06.400 and what this means for advertising, most from the market perspective, 0:15:06.440 --> 0:15:10.320 but also for the platforms like Google and Facebook. Well, 0:15:10.360 --> 0:15:13.200 at the root of the six second ad is the 0:15:13.280 --> 0:15:19.120 fact that digital video is becoming the experience platform for 0:15:19.240 --> 0:15:24.240 UM for brands uh more than any other form of platform. 0:15:24.600 --> 0:15:26.920 And it's been an ongoing adjustment to try to figure 0:15:26.920 --> 0:15:31.280 out what is the natural standard for digital video advertising. 0:15:31.480 --> 0:15:33.480 The six second ad has been with us for about 0:15:33.520 --> 0:15:37.800 ten years. UM. You know, Vine was the pioneer of 0:15:37.840 --> 0:15:41.400 the six second spot, and it's kind of been evolving 0:15:41.440 --> 0:15:46.280 into what you might even think of as a natural standard. UM. 0:15:46.320 --> 0:15:48.560 There's been a reasonable amount of research done on it. 0:15:48.640 --> 0:15:51.040 We've done research at i EB on it and it 0:15:51.040 --> 0:15:54.840 seems to indicate that it's pretty sticky with consumers. You know, 0:15:54.920 --> 0:15:57.880 whether it goes forward as a real standard or not, 0:15:57.920 --> 0:16:01.400 we just have to see what's the best distribution platform 0:16:01.560 --> 0:16:04.720 for these videos digital videos. Oh, there's lots of them. 0:16:04.720 --> 0:16:08.440 I mean, obviously YouTube is a very dominant uh platform. 0:16:08.720 --> 0:16:11.600 It's effective for many marketers and it's not effective for others. 0:16:11.640 --> 0:16:14.560 It depends upon the category, depends upon the brand, depends 0:16:14.600 --> 0:16:18.080 upon the message, depends upon the creativity. UH So I 0:16:18.120 --> 0:16:21.000 would say is less about the platform than it is 0:16:21.040 --> 0:16:24.040 about the amalgamation of all the factors. The reason why 0:16:24.040 --> 0:16:26.400 I ask us because whenever I see you can skip 0:16:26.400 --> 0:16:28.760 this at in five seconds, I'm counting down the seconds 0:16:28.800 --> 0:16:30.560 before I could skip it. How do you how do 0:16:30.600 --> 0:16:33.880 you measure the efficacy? Well, you do it using both 0:16:33.920 --> 0:16:36.960 traditional means and non traditional means. Traditional means is all 0:16:36.960 --> 0:16:41.640 the research that goes into awareness preference. But the non 0:16:41.720 --> 0:16:45.160 traditional means, which is where digital's power actually is, is 0:16:45.200 --> 0:16:49.680 the ability to attribute a post hoc action to it. 0:16:50.040 --> 0:16:53.080 I mean, did people look at the the A, did 0:16:53.240 --> 0:16:56.760 people click? Did they buy? And that's really where the 0:16:57.320 --> 0:17:00.840 movement is moving to what we call dire act brands. 0:17:01.240 --> 0:17:05.240 I mean, there are enormous numbers thousands of companies that 0:17:05.280 --> 0:17:09.960 are now establishing themselves across every consumer facing category using 0:17:10.160 --> 0:17:12.439 this form of online advertising. All right, I want to 0:17:12.440 --> 0:17:14.480 mention a couple of companies to you and get your Thoughts, 0:17:14.480 --> 0:17:19.720 Warby Parker, Casper, Dollar Shave Club, bark Box, Glossier. These 0:17:19.720 --> 0:17:22.439 are companies that you just described as being direct to 0:17:22.560 --> 0:17:26.639 the consumer brands. Right. We just released a massive year 0:17:26.680 --> 0:17:30.640 long study on what we call direct brands, and um, 0:17:30.680 --> 0:17:35.119 those are all representative of this this direct brands phenomenon, 0:17:35.200 --> 0:17:38.800 And fundamentally, this is not about digital advertising. This is 0:17:38.840 --> 0:17:42.159 about a uh kind of an apocal shift in the 0:17:42.200 --> 0:17:46.800 way UH industrial supply chains themselves are put together and 0:17:46.880 --> 0:17:50.520 managed for value. And our thesis, which we believe the 0:17:51.080 --> 0:17:56.240 research proves, is that the owned and operated, high barrier 0:17:56.280 --> 0:18:00.440 to entry capital intensive supply chains that have dominated really 0:18:00.480 --> 0:18:03.760 since the late nineteenth century have been replaced are being 0:18:03.800 --> 0:18:08.879 replaced by low barrier to entry capital, flexible least and 0:18:08.960 --> 0:18:12.600 rented supply chains. So the whole form of value creation 0:18:12.840 --> 0:18:16.760 in consumer facing, in the consumer facing economy is shifting 0:18:16.840 --> 0:18:20.240 massively in this direction, which is what allows the Warby 0:18:20.280 --> 0:18:23.200 Parkers and the Caspers and thousands of other companies whose 0:18:23.240 --> 0:18:26.080 names you don't even know to come into existence. One 0:18:26.560 --> 0:18:30.840 barrier to entry that certainly isn't There are many restrictions 0:18:30.920 --> 0:18:34.359 by the social media companies that end up being the 0:18:34.359 --> 0:18:37.560 distribution platforms for a lot of these advertisements, and right 0:18:37.560 --> 0:18:39.960 now Congress is calling for a lot more UH. Some 0:18:40.000 --> 0:18:43.439 commerce members are calling for more regulation. What what do 0:18:43.480 --> 0:18:46.080 you think is the appropriate measure, especially as we hear 0:18:46.119 --> 0:18:50.520 more about Russian advertising on Facebook. Well, Russian bots are 0:18:50.280 --> 0:18:54.479 a serious issue. Bots themselves are a serious issue. But 0:18:54.520 --> 0:18:57.520 you also have to remember that bots are just a technology. 0:18:57.640 --> 0:19:00.639 There are bad bots meeting UH things that can be 0:19:00.720 --> 0:19:05.440 used for nefarious purposes because the digital marketing and media 0:19:05.520 --> 0:19:09.760 supply chain isn't well policed by some companies, and the 0:19:09.840 --> 0:19:11.760 bots that can be used for good purposes as well 0:19:11.880 --> 0:19:15.480 to amplify a message. Basically, it's another form of automation. 0:19:15.960 --> 0:19:21.280 So UM. The congressional UM legislation that's being bandied about, 0:19:21.359 --> 0:19:24.919 for example, the war Uh Warner Klobisher bill in the 0:19:25.000 --> 0:19:29.080 Senate gets at some things, but it doesn't actually help, 0:19:29.800 --> 0:19:34.879 uh fix the supply chain problems that are there. The 0:19:34.960 --> 0:19:38.159 Warner Klobascher bill and most of the other legislation that 0:19:38.200 --> 0:19:45.000 you're seeing basically aims specifically at paid electioneering advertising. The 0:19:45.040 --> 0:19:48.760 election ads vote for Trump, vote for Hillary that appear 0:19:48.800 --> 0:19:54.160 in formatted spaces and time slots doesn't really address UH. 0:19:54.200 --> 0:19:58.040 The social media infiltration and supply chain infiltration beyond that 0:19:59.560 --> 0:20:07.280 supply chain infiltration, meaning so you've got you've got. Uh. 0:20:07.680 --> 0:20:11.720 You have in the Internet a very open ended supply 0:20:11.840 --> 0:20:15.919 chain in which anyone, almost anyone can plug and play. 0:20:16.480 --> 0:20:22.119 And uh, you don't have enough companies qualifying their suppliers 0:20:22.240 --> 0:20:26.080 downstream and their customers upstream. And you need in any 0:20:26.160 --> 0:20:30.880 other industry, any other industry, the food industry, the textile industry, 0:20:31.119 --> 0:20:34.760 you have that supplier qualification taking place. Randa Rothenburg, thank 0:20:34.760 --> 0:20:36.000 you so much. We'll have to have you back on 0:20:36.280 --> 0:20:41.359 fascinating discussion. Randal Rothenberg, chief executive officer of Interactive Advertising Bureau, 0:20:41.400 --> 0:20:58.200 which is based in New York. Shares of US automakers 0:20:58.280 --> 0:21:02.120 are falling yet again. General Motors, for example, is experiencing 0:21:02.440 --> 0:21:06.240 the biggest four day drop in its shares since at 0:21:06.240 --> 0:21:10.200 one point it's recouped a little bit of of those losses. 0:21:10.200 --> 0:21:12.439 But here to help us understand what the impact of 0:21:12.440 --> 0:21:16.000 trade tensions could be on the auto industry, as Jamie Butters, 0:21:16.240 --> 0:21:19.479 us autos reporter for Bloomberg, Jamie, thank you so much 0:21:19.560 --> 0:21:23.480 for joining us. So the reaction in equity markets seems 0:21:23.520 --> 0:21:28.400 to be highly negative toward auto companies with the looming 0:21:28.480 --> 0:21:31.800 potential aluminum and steel tariffs, Can you walk us through 0:21:32.480 --> 0:21:36.359 just why people are so negative? Well, sure, hey, good morning. 0:21:36.400 --> 0:21:41.320 So you know, steel and aluminum, Steel traditionally, right is 0:21:41.400 --> 0:21:45.119 what cars were made of. We we rely less on 0:21:45.160 --> 0:21:48.440 steel now over time, and partly by replacing it with 0:21:49.000 --> 0:21:52.400 other materials such as aluminum, which can be more expensive 0:21:52.440 --> 0:21:55.240 but are lighter and therefore you know, better for fuel 0:21:55.240 --> 0:21:59.600 economy and another efficient use of the vehicle. But these 0:21:59.600 --> 0:22:03.280 are these are huge components, and the you know, and 0:22:03.359 --> 0:22:07.399 most of what the automakers buy for building vehicles in 0:22:07.440 --> 0:22:10.080 the U S is U S steel. But the nature 0:22:10.080 --> 0:22:12.520 of markets, if you're going to raise the used terrorists 0:22:12.560 --> 0:22:14.840 to raise the price of imported steel, the price of 0:22:14.880 --> 0:22:16.680 domestic steal is going to go up. So all the 0:22:16.720 --> 0:22:19.960 steel and all the aluminum that goes in the whatever 0:22:20.080 --> 0:22:22.880 fifteen million vehicles a year that we make around here 0:22:23.760 --> 0:22:27.000 is gonna get more expensive. Okay, Jamie, I mean I 0:22:27.040 --> 0:22:29.679 understand the argument that you know, the global nature of 0:22:29.720 --> 0:22:32.800 steel and so on, But you know, if GM purchases 0:22:33.720 --> 0:22:37.680 of the steel for US production from US suppliers, couldn't 0:22:37.720 --> 0:22:40.359 they then make the public argument that g you know, 0:22:40.440 --> 0:22:44.000 we didn't impose tariffs in order to raise prices for 0:22:44.040 --> 0:22:48.520 our customers. We agreed or the president put forth these 0:22:48.520 --> 0:22:50.960 tariffs in order to save the eighty thousand jobs that 0:22:51.000 --> 0:22:54.600 are in the steel industry. Well, but but where is 0:22:54.640 --> 0:22:56.119 that going to get paid for? Is it going to 0:22:56.200 --> 0:22:58.520 be paid for out of GM's bottom line or is 0:22:58.560 --> 0:23:00.480 it going to come out of the customer? But I'm saying, 0:23:00.760 --> 0:23:03.120 but you're saying that this is like a global global 0:23:03.119 --> 0:23:06.080 purchasing agreement, Well it's no. Well what the point is 0:23:06.119 --> 0:23:09.240 that they're buying it locally and the price they pay 0:23:09.280 --> 0:23:12.880 locally is going to go up, right, because the only 0:23:12.920 --> 0:23:16.359 thing keeping it down is is this uh, you know, 0:23:16.480 --> 0:23:21.359 arguably underpriced foreign steel. Yeah, well, I just want you 0:23:21.359 --> 0:23:24.639 to walk us through if there have been any estimates 0:23:24.720 --> 0:23:29.120 of just how much uh the steel and aluminum tariffs 0:23:29.160 --> 0:23:32.159 could potentially increase either the cost of a car to 0:23:32.440 --> 0:23:35.399 make or the cost of a car to buy for 0:23:35.440 --> 0:23:38.639 the consumer. Right. Uh, you know, there's a lot that 0:23:38.680 --> 0:23:40.959 we don't know because there will be exemptions and there 0:23:41.000 --> 0:23:43.399 will be you know, how how it actually gets implemented. 0:23:44.000 --> 0:23:46.120 But if you look at it just kind of broadly, 0:23:46.440 --> 0:23:50.200 it might not be that bad. So if you figure 0:23:50.280 --> 0:23:54.560 there's eight hundred dollars worth of steel in the average vehicle, 0:23:54.600 --> 0:23:56.600 of course, look I mean arrange of the average, right, 0:23:56.680 --> 0:23:58.880 you can have a Toyota Yaris that's a tiny lawyer, 0:23:58.960 --> 0:24:01.080 you know, Chevy Cruise that's a little thing, or a 0:24:01.080 --> 0:24:03.879 great big you know, Silverado on fifty. But on average, 0:24:03.920 --> 0:24:06.320 let's say there's eight hundred to a thousand dollars worth 0:24:06.400 --> 0:24:09.920 of steel and aluminum in a vehicle. You know, if 0:24:09.920 --> 0:24:13.160 it's a what are we talking about tariff, that might 0:24:13.200 --> 0:24:16.520 only be two hundred two fifty dollars worth of extra 0:24:17.080 --> 0:24:21.080 taxes per vehicle, which on a thirty six months lease, 0:24:21.400 --> 0:24:23.320 you know, works out to about six dollars a month. 0:24:23.800 --> 0:24:26.680 You know, so maybe that's not so much. It's sort 0:24:26.720 --> 0:24:28.919 of but I guess it raises the question the bigger 0:24:28.960 --> 0:24:31.879