WEBVTT - Netflix Says Tax Dispute Hurt Solid Quarter 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.680 --> 0:00:12.960 This is Bloomberg business Week, Daily reporting from the magazine 0:00:13.000 --> 0:00:17.639 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.680 --> 0:00:22.560 and trends shaping today's complex economy. Plus global business finance 0:00:22.600 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:26.000 --> 0:00:31.480 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.080 --> 0:00:34.720 Back to Netflix, where shares down five and a half 0:00:34.760 --> 0:00:38.400 percent as we speak. The company forecast revenue are for 0:00:38.520 --> 0:00:41.400 the full year. The guidance met the average analyst estimate. 0:00:41.760 --> 0:00:45.120 There were some questions though about profitability. The company out 0:00:45.240 --> 0:00:48.400 with a statement essentially saying that and this is the 0:00:48.440 --> 0:00:51.480 headline in the This is the way the letter begins. Carol, 0:00:52.000 --> 0:00:54.880 operating margin of twenty eight percent was below our guidance 0:00:54.920 --> 0:00:56.440 of thirty one and a half percent due to an 0:00:56.440 --> 0:01:00.400 expense related to an ongoing dispute with Brazilian taxi authorities 0:01:00.440 --> 0:01:02.840 that was not in our forecast. After to this expense, 0:01:02.840 --> 0:01:05.319 we would have exceeded our Q three twenty five operating 0:01:05.360 --> 0:01:08.000 margin forecast. We don't expect this matter to have material 0:01:08.040 --> 0:01:09.640 impact on future results, all right. 0:01:09.560 --> 0:01:10.560 So let's get to it. 0:01:10.640 --> 0:01:14.240 With our own Bloomberg Intelligence Senior media analyst, Guita Ringanathon. 0:01:14.600 --> 0:01:17.279 She's at BI headquarters in Princeton, New Jersey. Take it away, 0:01:17.440 --> 0:01:19.680 So tell us what we need to know and why 0:01:19.800 --> 0:01:20.800 is the stock really down? 0:01:20.880 --> 0:01:22.959 Is it because of that one time charge? 0:01:24.160 --> 0:01:25.080 Absolutely, Carol. 0:01:25.400 --> 0:01:29.280 So operating margin is now the new metric by you 0:01:29.720 --> 0:01:32.839 how investors kind of look at this company. We've seen 0:01:32.920 --> 0:01:35.360 just a tremendous increase in the way that they have 0:01:35.520 --> 0:01:38.240 kind of grown their profits, in the way that they've 0:01:38.240 --> 0:01:40.559 expanded their margins. It was up over six hundred basis 0:01:40.600 --> 0:01:43.640 points last year. We were really expecting them to actually 0:01:44.200 --> 0:01:47.280 exceed their guidance for both this quarter as well as 0:01:47.280 --> 0:01:50.280 to take up guidance for the full year. So this 0:01:50.360 --> 0:01:52.440 kind of really throws cold water and all of those 0:01:52.480 --> 0:01:57.080 expectations and overall kind of looks really really underwhelming. 0:01:58.000 --> 0:02:00.520 What's the biggest thing challenging the company right now? 0:02:01.960 --> 0:02:03.960 I mean, the biggest thing I think tim over the 0:02:04.000 --> 0:02:06.760 past few months has really been, you know, the growth 0:02:06.800 --> 0:02:09.080 of AI and whether that's going to be a headwind 0:02:09.160 --> 0:02:11.800 or a tailwind for Netflix. I think we've all kind 0:02:11.800 --> 0:02:14.839 of finally come to the you know, conclusion at least 0:02:14.840 --> 0:02:16.240 in the near term that it's going to be more 0:02:16.240 --> 0:02:19.120 of a tailwind. We've seen Netflix kind of really lean 0:02:19.240 --> 0:02:22.600 into AI, whether it's using a good user interface, whether 0:02:22.639 --> 0:02:26.440 it's improving that or using you know AI for you know, 0:02:26.520 --> 0:02:30.200 even more more and better content creation. So I think 0:02:30.240 --> 0:02:33.280 definitely in the near term, don't expect it to be 0:02:33.400 --> 0:02:36.119 much of a negative. But then, you know, I think 0:02:36.160 --> 0:02:38.639 over the longer term that's going to definitely be one 0:02:38.639 --> 0:02:41.240 of the concerns out there. For right now, I think 0:02:41.280 --> 0:02:44.800 what investors are really looking to and we need guidance, 0:02:44.840 --> 0:02:47.920 more guidance from Netflix management on this. There really wasn't 0:02:48.360 --> 0:02:51.920 much spoken about this in the newsletter, was you know, 0:02:52.000 --> 0:02:55.560 anything related to advertising. They talk about doubling their advertising revenue, 0:02:55.760 --> 0:02:58.680 but again there are no concrete metrics. There was no 0:02:58.880 --> 0:03:01.680 update in terms of monthly active users. The last time 0:03:01.680 --> 0:03:04.160 we got an update from them was in May. We 0:03:04.240 --> 0:03:07.000 really don't know what the number of subscribers are on 0:03:08.000 --> 0:03:10.640 the APD here or even what the revenue is, and 0:03:10.680 --> 0:03:15.840 I think that will definitely give investors some costs for concern. 0:03:16.200 --> 0:03:18.400 Yeah, they talked about ads, I feel like in the 0:03:18.400 --> 0:03:20.959 press release, but yeah, it sounds like we need a 0:03:20.960 --> 0:03:26.360 little bit more concrete. Hey, thirty seconds, Geita, Warner Brothers Discovery. 0:03:26.360 --> 0:03:29.120 Do you think Netflix to do something? And forgive me 0:03:29.200 --> 0:03:30.960 for just asking for you to be brief? 0:03:32.000 --> 0:03:33.200 Yeah, I know this is a little bit of a 0:03:33.200 --> 0:03:35.680 head scratcher, So I really don't think this is a 0:03:35.720 --> 0:03:37.640 make or break for them, Carol. Yes, it would be 0:03:37.720 --> 0:03:40.480 nice to have. Do they absolutely need it? No, not 0:03:40.640 --> 0:03:43.160 at all. So again there's a lot they can do 0:03:43.200 --> 0:03:45.720 with it, especially the studio a lot and all of 0:03:45.720 --> 0:03:47.880 the IP. But again I don't think it's do ordi. 0:03:47.920 --> 0:03:51.600 As always looking forward to reading your research that comes 0:03:51.600 --> 0:03:53.720 on the term a little bit later today and into tomorrow. 0:03:53.920 --> 0:03:55.360 Gets to ringingough On. Thank you so much. 0:03:55.400 --> 0:03:58.840 Bloomberg Intelligence senior media analyst with the breakdown and what 0:03:58.880 --> 0:04:01.360 you need to know about Netflix stock down about five 0:04:01.360 --> 0:04:02.920 point six percent in the aftermarket. 0:04:04.160 --> 0:04:06.960 Stay with us more from Bloomberg Business Week Daily coming 0:04:07.040 --> 0:04:07.960 up after this. 0:04:11.520 --> 0:04:15.520 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:04:15.600 --> 0:04:19.039 live weekday afternoons from two to five pm Eastern. Listen 0:04:19.080 --> 0:04:22.640 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:04:22.800 --> 0:04:25.120 or watch US live on YouTube. 0:04:25.480 --> 0:04:28.320 President Trump's administration is involved in talks for a US 0:04:28.400 --> 0:04:31.640 company to access one of the world's largest untapped deposits 0:04:31.640 --> 0:04:33.760 of tungsten. This is a metal used by the Pentagon 0:04:34.040 --> 0:04:37.320 to make ammunition, projectiles and other weapon Read this crossing 0:04:37.320 --> 0:04:40.440 the Bloomberg terminal just a little earlier today. Yeah, it's 0:04:40.480 --> 0:04:41.480 really interesting, right. 0:04:41.520 --> 0:04:46.119 We continue to see that Rare Earth's share space move 0:04:46.240 --> 0:04:48.760 as a result of these headlines coming out from the 0:04:48.800 --> 0:04:52.040 White House. Keep in mind, as to mention the news yesterday, 0:04:52.040 --> 0:04:55.760 President Trump signing that landmark pack with visiting Australian Prime 0:04:55.800 --> 0:04:59.599 Minister Anthony Albanize to boost America's access to Rare Earth's 0:04:59.600 --> 0:05:00.839 and other critical minerals. 0:05:00.839 --> 0:05:01.720 It's an effort to. 0:05:01.720 --> 0:05:05.240 Counter China's type grip on the supply chains of key metals. Now, 0:05:05.279 --> 0:05:07.800 the two governments will jointly invested in a swath of 0:05:07.880 --> 0:05:11.120 minds and processing projects in Australia to boost production of 0:05:11.120 --> 0:05:15.840 commodities used in advance technologies, everything from electric vehicles to 0:05:15.839 --> 0:05:17.360 setmicconductors and fighter plants. 0:05:17.360 --> 0:05:19.400 It goes into a lot of stuff toom. 0:05:19.360 --> 0:05:20.520 In a story on the Bloomberg. 0:05:20.560 --> 0:05:23.080 Our next guest says, quote, this is the most significant 0:05:23.120 --> 0:05:27.240 bilateral minerals minerals cooperation we have seen between two major 0:05:27.440 --> 0:05:30.719 Western countries. Here to explain why is Graceland Basker, and 0:05:30.760 --> 0:05:33.839 she's director of the Critical Minerals Security Program at the 0:05:33.839 --> 0:05:36.520 Center for Strategic and International Study. She joins us from 0:05:36.560 --> 0:05:40.479 the Washington, DC Bureau of Bloomberg News. Graceland, welcome back 0:05:40.480 --> 0:05:43.080 to Bloomberg Business Week Daily. It's always great to have 0:05:43.160 --> 0:05:45.120 you on the program. I do want to start with 0:05:45.400 --> 0:05:50.000 the bilateral minerals cooperation that we are seeing between the 0:05:50.120 --> 0:05:53.520 United States and Australia. Why is all of this happening 0:05:53.640 --> 0:05:54.120 right now? 0:05:55.880 --> 0:05:56.880 It's so great to be back. 0:05:56.920 --> 0:05:58.560 You know, this is a really big deal, and it's 0:05:58.560 --> 0:06:01.880 a big deal because this is mineral cooperation that's going 0:06:02.160 --> 0:06:04.800 not just from conversation and we've been doing years of 0:06:04.839 --> 0:06:07.920 talking about minerals to actually putting the resources in to 0:06:08.000 --> 0:06:11.719 develop really strategic projects. I mean, we've agreed to commit 0:06:11.920 --> 0:06:15.320 one billion dollars each to be deployed within six months 0:06:15.360 --> 0:06:19.880 on strategic projects. And this could be Alcoa's landmark gallium refinery. 0:06:20.160 --> 0:06:21.920 Keep in mind, China has cut us off of. 0:06:21.880 --> 0:06:26.360 Gallium, really crucial material for semiconductors, and this gallium refinery 0:06:26.400 --> 0:06:28.120 is going to produce one hundred tons a year in 0:06:28.120 --> 0:06:30.760 Western Australia. That may not sound like a lot, but 0:06:30.839 --> 0:06:33.600 remember the US only uses about twenty tons of gallium 0:06:33.680 --> 0:06:37.880 a year, so it's actually really significant to Australia announcing 0:06:37.920 --> 0:06:39.839 equity in a rare earth project there. 0:06:40.040 --> 0:06:41.240 But what we've also. 0:06:41.000 --> 0:06:44.039 Seen is the first time that these countries are making 0:06:44.080 --> 0:06:46.760 a concerted effort to counter China. So you may have 0:06:46.800 --> 0:06:50.800 seen that both countries have committed to preventing Chinese acquisitions 0:06:51.040 --> 0:06:53.920 of new projects, both within their own countries but also 0:06:54.000 --> 0:06:57.560 using diplomatic instruments. In other countries, we've seen a commitment 0:06:57.560 --> 0:07:01.040 to using price price support. So really, when you take 0:07:01.240 --> 0:07:03.560 the summation of all of these different efforts, we're really 0:07:03.560 --> 0:07:06.000 seeing rubber hit the road with a country that has 0:07:06.440 --> 0:07:09.960 enormous geological potential. We're talking about forty minerals that the 0:07:10.040 --> 0:07:13.760 US identified as critical. Incredible financial market gets in deep 0:07:13.800 --> 0:07:14.840 technical expertise. 0:07:15.000 --> 0:07:17.400 Is this all bottom line about putting kind of a 0:07:17.440 --> 0:07:20.240 hold on China? 0:07:20.400 --> 0:07:23.680 This is about countering China from a supply and a 0:07:23.720 --> 0:07:26.720 demand perspective. You know, let's be totally honest. This year 0:07:26.840 --> 0:07:29.160 was a wake up call for the whole world. Until now, 0:07:29.720 --> 0:07:32.360 a lot of the export restrictions on critical minerals were 0:07:32.400 --> 0:07:35.200 really targeted at US here in the United States, but 0:07:35.240 --> 0:07:38.960 the multiple rounds of restrictions this year actually hit companies 0:07:39.000 --> 0:07:42.080 around the world. Like these recent rare earth export restrictions, 0:07:42.200 --> 0:07:44.520 Australia is still on the other end of them. So 0:07:44.600 --> 0:07:47.000 what we're really doing is we're uniting with our allies 0:07:47.000 --> 0:07:49.720 and again Australia being the one country that has fought 0:07:49.760 --> 0:07:53.840 beside US in every war since nineteen eighteen, right to say, okay, 0:07:53.880 --> 0:07:56.160 if we work together, we can actually start to counter 0:07:56.240 --> 0:07:57.400 China in a meaningful way. 0:07:57.840 --> 0:07:59.240 Very then significant. 0:07:59.480 --> 0:08:01.680 Again, it feels like we have gone through a bunch 0:08:01.720 --> 0:08:03.640 of months where the US is like, we don't need you, 0:08:03.680 --> 0:08:05.080 We're going to do it alone. We're going to build 0:08:05.120 --> 0:08:07.720 up stuff, supply chain, so and so forth. At least 0:08:07.800 --> 0:08:09.920 this is coming from the administration to do stuff here 0:08:09.920 --> 0:08:13.080 in the United States. This feels like it's very significant 0:08:13.120 --> 0:08:16.240 the US saying wait, we actually need to have global 0:08:16.280 --> 0:08:17.040 partners on this. 0:08:17.160 --> 0:08:18.720 And this is kind of a big message. 0:08:18.760 --> 0:08:21.240 Again I'm going to point out to China and really 0:08:21.240 --> 0:08:22.480 the world at large. 0:08:23.120 --> 0:08:25.520 And this is a really important message because I want 0:08:25.560 --> 0:08:30.000 you to understand the historical relationship of Australian mining. Historically, 0:08:30.080 --> 0:08:34.400 Australian minerals have gone to China for processing, so it's 0:08:34.400 --> 0:08:38.240 a highly vertically integrated industry between these two countries. So 0:08:38.360 --> 0:08:40.560 this was a pretty big disruption. You know, if we 0:08:40.679 --> 0:08:43.760 roll out restrictions on China, no one really bat's an eye, 0:08:43.760 --> 0:08:46.800 But for Australia where those minerals go to China, this 0:08:46.880 --> 0:08:51.360 is a really important realignment with US in breaking from 0:08:51.360 --> 0:08:53.920 what has been their historical trade relationship as it relates 0:08:53.960 --> 0:08:54.920 to the mining industry. 0:08:55.520 --> 0:08:58.160 So I guess the question that we have is about 0:08:58.160 --> 0:09:01.480 the US companies that are a part of this, and 0:09:01.559 --> 0:09:04.680 we've spoken to quite a few of these. We spoke 0:09:04.800 --> 0:09:10.000 to US Antimony yesterday, Gary Evans over there a critical mineral, 0:09:10.080 --> 0:09:14.680 not a rare earth per se, but in the same space, 0:09:14.720 --> 0:09:17.760 and with the idea that they're getting a government contract, 0:09:17.800 --> 0:09:20.360 not investment from the government, but a government contract to 0:09:20.360 --> 0:09:24.560 actually buy antimony for Defense Department purposes. But I'm curious 0:09:24.559 --> 0:09:27.480 about US company's role and if there is such an 0:09:27.520 --> 0:09:31.640 opportunity for many different US companies right now to take 0:09:31.679 --> 0:09:33.880 advantage of this. And look, we have an investing audience. 0:09:34.200 --> 0:09:36.040 They want to know which are the companies that are 0:09:36.080 --> 0:09:38.880 best positioned right now to be in a place where 0:09:39.200 --> 0:09:41.920 they can be the ones that benefit from this increased 0:09:42.000 --> 0:09:44.200 need for critical minerals. 0:09:45.720 --> 0:09:48.079 So one of the big parts of this a new 0:09:48.160 --> 0:09:50.880 Framework agreement is that they will we will strategically together 0:09:51.120 --> 0:09:53.559 identify priority projects and companies. 0:09:53.840 --> 0:09:56.480 One of the early leaders here is Alcoa. 0:09:56.800 --> 0:09:59.240 Again, Alcoa is a Philadelphia based company who is now 0:09:59.280 --> 0:10:03.280 building this galleon refinery through support from the Department of War, 0:10:03.960 --> 0:10:07.640 and it was announced by the US and Australian governments yesterday. Again, 0:10:07.679 --> 0:10:09.320 I want to take you back to the fact that 0:10:09.360 --> 0:10:11.760 gallium is a no brainer of a priority for both 0:10:11.800 --> 0:10:14.520 sides because it was a commodity that China cut us 0:10:14.559 --> 0:10:16.000 off from earlier this year. 0:10:16.400 --> 0:10:17.400 So really, when we. 0:10:17.280 --> 0:10:19.880 Start to look at what are the winners going to be, 0:10:19.960 --> 0:10:22.720 I mean rare eerth Obviously we're going to see linus 0:10:22.760 --> 0:10:26.800 being really important. But broadly speaking, for some of these 0:10:26.880 --> 0:10:29.560 minor medals, which antimony is one of them, we've seen 0:10:29.600 --> 0:10:33.040 tungsten emerge in the news quite recently. These minor medals 0:10:33.080 --> 0:10:35.319 are going to be the ones where we're highly vulnerable 0:10:35.400 --> 0:10:38.440 and where we do not always have the geology to 0:10:38.480 --> 0:10:40.520 make it work and where Australia often does. 0:10:42.640 --> 0:10:44.920 We both have questions, but Carole, you go first. 0:10:45.000 --> 0:10:47.320 Well I want to go back forgive me for abouts 0:10:47.559 --> 0:10:49.400 round because it's just sometimes you know, the brain is 0:10:49.440 --> 0:10:52.160 a little slow and things settle in. But Grace, what 0:10:52.200 --> 0:10:54.760 I want to ask you is going back to, as 0:10:54.800 --> 0:10:57.600 you said, a big deal for Australia to do this 0:10:58.200 --> 0:11:02.120 because they have been so interested with China when it 0:11:02.240 --> 0:11:07.319 comes to Australia exporting large quantities of raw minerals and 0:11:07.360 --> 0:11:10.520 then China processing. I mean, this has been a very 0:11:10.520 --> 0:11:14.200 important trading relationship and so we know US and China 0:11:14.240 --> 0:11:17.280 has been antagonistic for a while. But to have them 0:11:17.440 --> 0:11:19.520 do that, that's really significant. 0:11:21.120 --> 0:11:22.480 It's extremely significant. 0:11:22.480 --> 0:11:25.640 But you've been seeing that growing tension for but probably 0:11:25.640 --> 0:11:28.760 the last seven years. Remember that Australia was the first 0:11:28.800 --> 0:11:32.280 country to theban howwey back into twenty eighteen. They also 0:11:32.360 --> 0:11:36.720 passed legislation to prevent foreign interference in their higher education sector. 0:11:36.880 --> 0:11:39.520 More recently, there was a one point twenty five billion 0:11:39.600 --> 0:11:43.400 dollar Australian loan that was given to build the Iluca 0:11:43.480 --> 0:11:46.280 refinery for Rare Earth. One of the t's and s's 0:11:46.320 --> 0:11:48.400 of that was that off take had to go to 0:11:48.880 --> 0:11:52.720 allied countries. But now what this really does now I mean, 0:11:53.040 --> 0:11:55.880 is it starts to potentially re architecture supply chains in 0:11:55.920 --> 0:11:59.280 a meaningful way. Australia, for example, is the biggest lithium 0:11:59.280 --> 0:12:01.959 producer in the world. They produce about close to sixty 0:12:02.000 --> 0:12:05.360 percent over world's lithium. Over ninety percent of that actually 0:12:05.400 --> 0:12:09.520 goes to China for refining. If that didn't happen, China 0:12:09.559 --> 0:12:12.439 would lose its grip on lithium ion batteries. 0:12:12.800 --> 0:12:14.800 So what this deal really. 0:12:14.520 --> 0:12:18.920 Stands to do is re architecture supply chains, not just 0:12:19.000 --> 0:12:21.480 from mind but down to the manufactured good. 0:12:22.080 --> 0:12:24.560 So if we think about this in the context of 0:12:24.800 --> 0:12:27.880 the leverage that China could still have even after the 0:12:28.000 --> 0:12:30.440 US makes deals such as this and deals with allies, 0:12:30.679 --> 0:12:32.320 where's that leverage. 0:12:33.280 --> 0:12:35.079 The leverage is still there in the short term with 0:12:35.200 --> 0:12:39.040 rare earths, for sure, no doubt, right although Australian Australia's 0:12:39.040 --> 0:12:42.200 Linus was the first company to separate heavy rare erths 0:12:42.200 --> 0:12:45.040 earlier this year outside of China, But it's going to 0:12:45.120 --> 0:12:47.640 go beyond that. There was a line in this framework 0:12:47.679 --> 0:12:50.880 agreement that actually said that the US and Australia will 0:12:50.920 --> 0:12:55.320 work with other international partners on price support mechanisms. So 0:12:55.480 --> 0:12:58.840 this conversation is likely to extend beyond these two countries 0:12:59.120 --> 0:13:01.679 to the G seven in later this year, to think 0:13:01.679 --> 0:13:05.880 about how do we scale these partnerships up even more so, Really, 0:13:05.920 --> 0:13:08.280 what we're starting to see is an economy of scale 0:13:08.320 --> 0:13:12.079 that we're creating for the minerals and the processing capabilities. 0:13:12.160 --> 0:13:15.079 I mentioned that i'll COED deal earlier, that our COED 0:13:15.080 --> 0:13:16.840 deal is also getting Japanese financing. 0:13:16.960 --> 0:13:18.520 It's actually a tripartheid effort. 0:13:18.800 --> 0:13:22.000 So an example of how this bilateral is going to 0:13:22.000 --> 0:13:24.480 set the stage for what's probably going to be a 0:13:24.559 --> 0:13:26.640 much bigger play of countries to counter China. 0:13:26.800 --> 0:13:30.440 How do we figure out, you know, especially as we 0:13:30.480 --> 0:13:34.400 see investors, you know, pushing up shares on all of 0:13:34.400 --> 0:13:38.480 these stories about the relationships, the investments by the US 0:13:38.559 --> 0:13:42.280 government and various critical mineral companies, how do we figure 0:13:42.320 --> 0:13:46.680 out which is investor speculation, you know, kind of chasing 0:13:46.679 --> 0:13:49.200 a trade. Do you think it's misplaced or is it 0:13:49.240 --> 0:13:54.199 a bit irrationally exuberant, or you think these investments, these relationships, 0:13:54.840 --> 0:13:57.439 this is the build out. It's happening, and with good 0:13:57.480 --> 0:13:59.120 reason because the demand's going to be there. 0:14:00.880 --> 0:14:03.839 The broader build out of the sector when it comes 0:14:03.840 --> 0:14:07.200 to mining being much more strategic, is absolutely here to stay. 0:14:07.440 --> 0:14:09.240 And it's here to stay for a couple of reasons. 0:14:09.320 --> 0:14:12.400 One of them is we are diversifying away from China, right. 0:14:12.720 --> 0:14:15.040 But the second thing we have to remember is that 0:14:15.120 --> 0:14:17.880 certain of these commodities, I need a lot more in 0:14:17.960 --> 0:14:21.440 objective terms, I need a lot more copper to electrify, 0:14:21.560 --> 0:14:24.440 to build data centers, to build defense technologies. 0:14:24.560 --> 0:14:26.120 So it's also the growing demand. 0:14:26.200 --> 0:14:29.920 So I'd say the larger macro trend in prioritization is 0:14:30.000 --> 0:14:33.800 here to stay. And again remember that the US Australia relationship, 0:14:33.800 --> 0:14:34.760 it's a continuation. 0:14:35.240 --> 0:14:38.000 It was being built under the Biden administration as well. 0:14:38.320 --> 0:14:39.160 But what you know. 0:14:39.200 --> 0:14:41.200 The other thing though, is you know there are going 0:14:41.280 --> 0:14:43.240 to be fads that come and go when it come 0:14:43.280 --> 0:14:46.200 to specific minerals. There's no doubt, right some things are 0:14:46.200 --> 0:14:48.680 going to you know, hit media attention. Certain deals are 0:14:48.680 --> 0:14:51.520 going to hit media attention and they're going to fall away. 0:14:51.680 --> 0:14:54.360 Not everything that this government is looking at is going 0:14:54.400 --> 0:14:56.880 to succeed, but what we are hoping is that the 0:14:57.000 --> 0:14:59.480 right number of them succeed to create a more resilient 0:15:00.000 --> 0:15:02.480 fly chain. But there are a lot of coming and goings. 0:15:02.560 --> 0:15:05.320 Yeah, certainly the relationship with Australia is on our radar 0:15:05.440 --> 0:15:08.480 right now given the visit of the Prime Minister. But 0:15:08.520 --> 0:15:12.000 I'm wondering what other countries the US could ally with 0:15:12.760 --> 0:15:15.880 that would be able to offer some sort of countermeasure 0:15:15.960 --> 0:15:17.520 to China and its capabilities. 0:15:19.040 --> 0:15:22.120 So countries that like I'm looking at with interest in 0:15:22.160 --> 0:15:26.920 South Korea, particularly because of their midstream and downstream capabilities. 0:15:27.040 --> 0:15:28.120 I'm looking at the UK. 0:15:28.800 --> 0:15:31.520 There have been you know, there's been some interesting acquisitions 0:15:31.560 --> 0:15:35.280 there least come metals by USA rare earth that's an 0:15:35.280 --> 0:15:36.040 interesting one. 0:15:36.880 --> 0:15:39.400 The EU again, it's an interesting jurisdiction. 0:15:39.440 --> 0:15:42.400 There's some there's some minerals, I mean things like Solvey 0:15:43.000 --> 0:15:45.920 for their permanent magnets in France, and interesting one again 0:15:45.960 --> 0:15:48.880 with some conversations happening with the US as well. So 0:15:48.920 --> 0:15:52.760 there's certain pockets of interesting transactions happening from a global north, 0:15:52.880 --> 0:15:55.400 obviously from the global south. Brazil is still a very 0:15:55.400 --> 0:15:58.440 interesting jurisdiction to US because they have the heavy rare 0:15:58.480 --> 0:16:00.520 earths that can come back and be separate rated here 0:16:00.520 --> 0:16:01.520 in the United States. 0:16:01.560 --> 0:16:03.360 Everything we need to know, Thank you. Thank you. 0:16:03.400 --> 0:16:06.240 Doctor gracelnd Basker and director of the Critical Mineral Security 0:16:06.240 --> 0:16:09.040 Program at the Center for Strategic and International Studies. 0:16:10.360 --> 0:16:11.120 Stay with us. 0:16:11.200 --> 0:16:19.000 More from Bloomberg Business Week Daily coming up after this. 0:16:19.000 --> 0:16:22.880 This is the Bloomberg Business Week Daily Podcast. Listen live 0:16:22.960 --> 0:16:26.160 each weekday starting at two pm Eastern on applecar Play 0:16:26.280 --> 0:16:29.080 and Android Auto with the Bloomberg Business app. You can 0:16:29.120 --> 0:16:32.320 also listen live on Amazon Alexa from our flagship New 0:16:32.400 --> 0:16:35.800 York station, just Say Alexa played Bloomberg eleven thirty. 0:16:37.520 --> 0:16:40.000 We wanted to talk about what is going on between 0:16:40.040 --> 0:16:43.880 the US and Argentina. We did mention that Argentina's pay 0:16:43.920 --> 0:16:46.360 so we can do our fresh record and bonds gave 0:16:46.360 --> 0:16:48.800 back most of their gains. As US Treasury Secretary Scott 0:16:48.840 --> 0:16:51.720 Passen's lead US boost to the nation proof short lived. 0:16:51.760 --> 0:16:55.440 The US Treasury signed an economic stabilization agreement with the 0:16:55.440 --> 0:16:59.400 Central Bank of Argentina, again coming from the Treasury Secretary 0:16:59.440 --> 0:17:02.600 Scott Best so he put that post out on x him. 0:17:02.720 --> 0:17:06.080 The Secretary characterized the Treasury's twenty billion dollar swap line 0:17:06.119 --> 0:17:08.560 with the crisis pro nation central Bank is a quote 0:17:08.640 --> 0:17:10.320 economic stabilization deal. 0:17:10.680 --> 0:17:10.960 He said. 0:17:11.000 --> 0:17:13.240 The agreement is quote a bridge to a better economic 0:17:13.280 --> 0:17:15.879 future for Argentina, not a bell out. 0:17:16.080 --> 0:17:16.840 We have a lot of. 0:17:16.840 --> 0:17:19.720 Questions, Carol, and one voice we wanted to get on 0:17:19.840 --> 0:17:20.760 the program today. 0:17:20.880 --> 0:17:22.520 He has no idea, but we were like, no, we're 0:17:22.560 --> 0:17:24.120 going to talk to Eric. We need to talk to Eric. 0:17:24.440 --> 0:17:26.600 Eric Shasker is who we are talking about. He's Bloomberg 0:17:26.600 --> 0:17:29.960 New Economy editorial director. He's covered numerous global financial market 0:17:30.000 --> 0:17:34.360 cycles and crises. He's interviewed various Latin American leaders, including 0:17:34.440 --> 0:17:38.520 Venezuela and President Maduro former Argentinian President Mauricio Macrie. 0:17:38.600 --> 0:17:40.720 Hopefully I'm saying it correctly. I probably am not. 0:17:41.160 --> 0:17:43.600 He also had the September cover story on Secretary Bessett 0:17:43.640 --> 0:17:44.720 form Bloomberg BusinessWeek. 0:17:44.760 --> 0:17:47.040 You are the voice we wanted to talk to. Thank 0:17:47.080 --> 0:17:48.320 you wow for me. 0:17:48.600 --> 0:17:50.960 No, I speak the truth. We speak the truth. Why 0:17:51.040 --> 0:17:53.720 is this happening now? And why Argentina? Why does the 0:17:53.840 --> 0:17:54.639 US want to do this? 0:17:55.080 --> 0:17:55.439 Well? 0:17:55.480 --> 0:17:57.679 Good, So there's I think we can unpack this in 0:17:57.720 --> 0:18:00.280 three ways. One is why is. 0:18:00.320 --> 0:18:01.199 The US doing this? 0:18:01.359 --> 0:18:05.680 The second is what exactly have we got here? And 0:18:05.720 --> 0:18:07.679 the third would be how. 0:18:07.640 --> 0:18:08.800 Might it all end? 0:18:08.920 --> 0:18:12.440 Perhaps in tears? I'll take on the why. 0:18:12.520 --> 0:18:15.199 And this actually goes back to that story you mentioned 0:18:15.240 --> 0:18:18.439 that I did about Scott Besson, the Treasury Secretary, for 0:18:18.440 --> 0:18:20.320 Bloomberg Business Week in September. 0:18:20.480 --> 0:18:22.600 I spoke to the Treasury Secretary. 0:18:22.160 --> 0:18:26.399 Back in late July, and at the time he told 0:18:26.400 --> 0:18:30.200 me that one of his overarching goals in office as 0:18:30.240 --> 0:18:32.720 the Secretary of the Treasury was to quote unquote lock 0:18:32.840 --> 0:18:36.240 in dollar supremacy. And I asked him, well, how do 0:18:36.280 --> 0:18:40.000 you do that? And he said, and I didn't appreciate 0:18:40.080 --> 0:18:44.040 the significance of it at the time, was by facilitating 0:18:44.760 --> 0:18:47.960 swaps through the Treasury Department, as opposed to the way 0:18:48.000 --> 0:18:51.480 that swaps have traditionally been facilitated, which is by the 0:18:51.520 --> 0:18:54.399 FED from central bank to central bank. Now there is 0:18:54.480 --> 0:18:57.840 precedent for this. The Treasury Department did that from Mexico 0:18:57.920 --> 0:19:01.320 back in the mid nineties during the Peso crisis, and 0:19:01.400 --> 0:19:05.320 it helped, and maybe it'll help Argentina. But it appears 0:19:05.440 --> 0:19:10.639 that under the Trump administration, the government's focus is on 0:19:10.760 --> 0:19:13.240 again cuts to the why. It's not just about locking 0:19:13.240 --> 0:19:17.080 in dollar supremacy. It's using the dollar as an economic 0:19:17.119 --> 0:19:21.200 tool to support countries with which the United States feel 0:19:21.240 --> 0:19:24.800 it has some kind of ideological kinship or some kind 0:19:24.840 --> 0:19:28.200 of trading relationship. It's not like Argentina has been one 0:19:28.200 --> 0:19:30.320 of America's major trading partners. 0:19:30.359 --> 0:19:30.840 It has not. 0:19:32.280 --> 0:19:34.400 The amount of bilateral trade that goes on between those 0:19:34.400 --> 0:19:36.760 two countries is a fraction of what it is with 0:19:36.800 --> 0:19:39.399 the United States in Mexico, or the United States and Canada, 0:19:39.560 --> 0:19:41.760 or even the United States and Europe. 0:19:41.800 --> 0:19:44.160 So in that respect, it's unusual. I think. 0:19:44.200 --> 0:19:46.800 If you think about it though, in terms of locking 0:19:46.800 --> 0:19:49.919 in dollar supremacy and using the dollar as an economic tool, 0:19:51.920 --> 0:19:56.399