WEBVTT - What Trump's Tariffs Are Already Doing to World Trade 0:00:02.480 --> 0:00:14.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:18.040 --> 0:00:21.400 Hello and welcome to another episode of the Odd Thoughts Podcast. 0:00:21.520 --> 0:00:23.000 I'm Tracy Allaway. 0:00:22.680 --> 0:00:23.920 And I'm Joe Wisenthal. 0:00:24.280 --> 0:00:25.280 Joe tariffs. 0:00:25.840 --> 0:00:27.080 One word. One word. 0:00:27.320 --> 0:00:29.440 This is going to start all the episodes by saying 0:00:29.520 --> 0:00:32.000 tariffs from now on, at least for the foreseeable future. 0:00:32.120 --> 0:00:33.200 No, there's no other story. 0:00:33.320 --> 0:00:34.000 There really isn't. 0:00:34.240 --> 0:00:37.560 It's only tariffs for the foreseeable future. And I think 0:00:37.640 --> 0:00:39.400 you know, we talked about a little bit last week 0:00:39.440 --> 0:00:43.360 with Brad. I believe plausibly, I don't know in terms 0:00:43.400 --> 0:00:45.720 of quote damage and all that stuff, but plausibly, this 0:00:45.800 --> 0:00:46.560 is the biggest. 0:00:46.240 --> 0:00:47.080 Story of our lives. 0:00:47.320 --> 0:00:51.479 The thing I don't want to say like about the story, 0:00:51.520 --> 0:00:54.520 but one notable thing about this story is it hits 0:00:54.520 --> 0:00:57.640 both markets, which you and I have been financial journalists 0:00:57.680 --> 0:01:01.400 for a very long time, as well as the world economy, right, 0:01:01.560 --> 0:01:03.520 and we kind of got really into that during the 0:01:03.560 --> 0:01:08.920 pandemic when we saw all these supply chain disruptions, ports, rerouting, 0:01:09.000 --> 0:01:11.840 ships and things like that. So this is a chance 0:01:11.920 --> 0:01:15.039 for us to unite two of our major interests. 0:01:15.080 --> 0:01:15.520 That's right. 0:01:15.680 --> 0:01:18.640 This is what every guest that we talked to for 0:01:18.840 --> 0:01:21.520 years about how supply chains work. It's like, all right, 0:01:21.640 --> 0:01:24.039 let's just go down the list and call them all 0:01:24.120 --> 0:01:26.720 back up again and find out what's happening. Run it 0:01:26.760 --> 0:01:27.240 all back. 0:01:27.560 --> 0:01:28.680 Let's do it all right. 0:01:28.800 --> 0:01:30.800 In the spirit of running it all back, we are 0:01:30.959 --> 0:01:33.080 going to be speaking to someone we've spoken to quite 0:01:33.080 --> 0:01:35.640 a bit before. Actually, this was one of our first 0:01:35.720 --> 0:01:40.559 ever sort of ports shipping disruption guests back in the 0:01:40.800 --> 0:01:44.399 early twenty twenty days, and I remember he came recommended 0:01:44.440 --> 0:01:46.000 to me back when. Do you remember when I was 0:01:46.000 --> 0:01:48.760 trying to ship a Teddy Bear I do from Hong 0:01:48.840 --> 0:01:51.120 Kong to the US and I failed miserably. Well, someone 0:01:51.160 --> 0:01:53.720 said you should talk to Ryan Peterson. He's the guy 0:01:53.760 --> 0:01:56.440 who knows exactly what's going on. So we're going to 0:01:56.480 --> 0:01:59.280 be talking to him again today. That's Ryan Peterson, founder 0:01:59.320 --> 0:02:02.200 and CEO of Flexport. Welcome back to the show. 0:02:02.720 --> 0:02:04.720 Great to be back. It seems like whenever there's something really. 0:02:04.560 --> 0:02:05.960 Bad, call you up. 0:02:06.200 --> 0:02:10.360 That's right, that's right. Okay, So first question, let's see 0:02:10.360 --> 0:02:14.360 we are recording this on Monday, April seventh. The ten 0:02:14.440 --> 0:02:17.400 percent tariffs went into effect on Saturday, I think, and 0:02:17.440 --> 0:02:21.800 then the higher reciprocal tariffs like up to fifty percent 0:02:21.840 --> 0:02:26.320 are due to take effect on Wednesday, April ninth. How 0:02:26.440 --> 0:02:32.520 are tariffs actually enacted and communicated? Like, yeah and collected? 0:02:32.560 --> 0:02:36.440 What exactly happens when tariffs are increased? Like, walk us 0:02:36.480 --> 0:02:37.600 through the process? 0:02:38.480 --> 0:02:41.600 Yeah, so, well, the terifts are applied in this case 0:02:41.880 --> 0:02:43.920 as a blanket based on the country of origin for 0:02:43.960 --> 0:02:47.000 the products, but typically they're applied based on the category 0:02:47.000 --> 0:02:49.320 of the product. So these new arriffs get added to 0:02:49.360 --> 0:02:52.080 those product category tariffs, so it's cumulative. 0:02:52.120 --> 0:02:54.200 These are additional tariffs, and. 0:02:54.280 --> 0:02:58.560 It happens with an acch payment to the US Treasury that. 0:02:58.480 --> 0:03:01.520 You make via the CP the Customs of Border Protection. 0:03:02.200 --> 0:03:05.080 Most of the time you can send a check to Actually, 0:03:05.080 --> 0:03:07.960 interestingly enough, if you get a refund on duties, you 0:03:08.000 --> 0:03:10.639 apply and make some change and they approve it, they'll 0:03:10.680 --> 0:03:12.040 actually send you a check in the mail. 0:03:12.040 --> 0:03:13.760 And those have keep getting lost. But that's a story 0:03:13.800 --> 0:03:14.480 front of the time. 0:03:15.040 --> 0:03:17.040 I think it's worth noting I don't want to have 0:03:17.160 --> 0:03:20.760 to re record a bunch of intros to episodes because 0:03:20.800 --> 0:03:24.160 things could theoretically change so fast. So we are recording 0:03:24.160 --> 0:03:26.880 this literally at nine oh six. If something about this 0:03:27.000 --> 0:03:29.440 conversation is out of date by the time you listen 0:03:29.480 --> 0:03:32.240 to this in a few hours. Sorry, but we're doing 0:03:32.240 --> 0:03:35.160 the best that we can. But given all of that, 0:03:35.400 --> 0:03:37.560 who pays the tariffs? If something is on the water 0:03:37.720 --> 0:03:40.320 right now but it's not going to get here until 0:03:40.320 --> 0:03:42.760 the tenth, do they pay the tariffs? What actually is 0:03:42.800 --> 0:03:44.960 going to get tariffed? And what can avoid the tariffs 0:03:44.960 --> 0:03:46.320 that hit on April nine. 0:03:46.920 --> 0:03:50.280 Yeah, this is a really interesting and important point for normally, 0:03:50.440 --> 0:03:53.800 under normal circumstances, the duties rates or the duty is 0:03:53.880 --> 0:03:56.920 due based on when the goods enter into the United States, 0:03:56.920 --> 0:03:59.400 when they arrive at the port, and your clear customs. 0:03:59.480 --> 0:04:01.040 For these reciprocal. 0:04:00.560 --> 0:04:03.160 Tariffs, they made the rule that it's based on when 0:04:03.200 --> 0:04:04.320 the vessel departs. 0:04:05.440 --> 0:04:08.960 And so therefore there's a mad scramble right now here 0:04:09.000 --> 0:04:10.360 we are is April seventh. 0:04:10.800 --> 0:04:13.040 It was went on over the weekend to get cargo 0:04:13.120 --> 0:04:15.600 loaded and ships out the you know, out of the 0:04:15.600 --> 0:04:19.240 port or planes taking off before that April fifth deadline. 0:04:19.240 --> 0:04:22.360 And that's happening again right now before the April ninth deadline. 0:04:23.040 --> 0:04:24.760 The difference being, you know, if you got out before 0:04:24.760 --> 0:04:26.800 April fifty, you paid no additional duty. 0:04:27.279 --> 0:04:28.040 You get it out by. 0:04:27.960 --> 0:04:30.240 The ninth, it's ten percent, and then it'll go up 0:04:30.240 --> 0:04:32.240 to whatever your country's duty rate is. 0:04:32.400 --> 0:04:32.880 That's new. 0:04:32.920 --> 0:04:35.479 That's something that's a little different for this time around. 0:04:35.600 --> 0:04:37.960 Usually it's based on when the goods enter the United States, 0:04:38.160 --> 0:04:41.039 So we actually won't see those payments made until the 0:04:41.080 --> 0:04:43.840 goods arrive, right because it's that's the date that they're 0:04:43.920 --> 0:04:47.440 using to trigger what duty rate road. But it won't 0:04:47.480 --> 0:04:49.960 hit the federal government's treasury until, you know, for another 0:04:50.000 --> 0:04:50.599 month usually. 0:04:51.520 --> 0:04:53.440 So one of the reasons we like talking to you 0:04:53.520 --> 0:04:55.800 is because we get a sort of early read on 0:04:55.839 --> 0:04:59.480 what's app actually happening with shipping traffic as well. But okay, 0:04:59.480 --> 0:05:02.159 so we had this is a little boost, you know 0:05:02.200 --> 0:05:04.800 in the first quarter, people trying to build up their 0:05:04.839 --> 0:05:07.880 inventories potentially get ahead of the tariffs. What are you 0:05:07.920 --> 0:05:10.640 seeing now that they've been actually announced. 0:05:11.279 --> 0:05:13.960 So we Flag Sports were one of the largest customs 0:05:14.000 --> 0:05:16.960 brokers in the United States. So helping these companies deal 0:05:17.000 --> 0:05:18.880 with this is like what we do every day. We 0:05:19.200 --> 0:05:22.080 obviously are very worried about our customer base and how 0:05:22.080 --> 0:05:24.320 they're going to adapt to this and push through it. 0:05:24.360 --> 0:05:27.760 So on Thursday Friday last week, we did a call 0:05:27.839 --> 0:05:30.640 down we called as many customers as we could and 0:05:30.800 --> 0:05:32.800 just ask them what they're doing, what their plan is, 0:05:32.880 --> 0:05:35.440 what bookings are coming through with, what we should expect. 0:05:35.480 --> 0:05:36.440 And what we. 0:05:36.440 --> 0:05:38.680 Found is that twenty eight percent of the companies that 0:05:38.720 --> 0:05:41.440 we got a hold of told us that they're pausing 0:05:41.440 --> 0:05:46.599 all ocean freight bookings. Now that's pretty catastrophic, but we 0:05:46.600 --> 0:05:49.360 don't want to read too much into it, because one 0:05:49.440 --> 0:05:52.080 is what you said, Tracy, is that they have been 0:05:52.080 --> 0:05:54.560 importing quite a lot. This date was known for a while, 0:05:54.920 --> 0:05:58.520 since the January twentieth or so, and so they're well 0:05:58.520 --> 0:06:00.600 stocked on inventory. They bought it, they brought as much 0:06:00.640 --> 0:06:03.000 stuff as they could in before the higher duty rates hit. 0:06:03.120 --> 0:06:05.800 So that's one thing is that they've got a lot 0:06:05.839 --> 0:06:08.200 of inventory. They planned for this. And then the second 0:06:08.279 --> 0:06:12.880 is there's a lot of ongoing negotiations happening. And you know, 0:06:12.920 --> 0:06:16.760 a cabinet member told me that they that liberation Day 0:06:16.839 --> 0:06:19.279 is the beginning and not the end of the process, 0:06:19.680 --> 0:06:22.599 and that they will be negotiating deals and that you know, 0:06:22.640 --> 0:06:25.920 over the weekend we heard over fifty countries have come 0:06:26.279 --> 0:06:29.640 to try to negotiate something. And so if you think 0:06:29.680 --> 0:06:31.880 your duty rate might come back down. You're you know, 0:06:31.920 --> 0:06:34.920 you're kind of pause. Pausing is what I would do too. 0:06:35.480 --> 0:06:37.560 You know, I'm a little unclear, you know, I know 0:06:37.640 --> 0:06:40.320 that there are those headlines about other leaders having come 0:06:40.360 --> 0:06:44.080 to negotiate, and some people are talking about negotiating position, 0:06:44.360 --> 0:06:47.040 et cetera. At other times you hear from people in 0:06:47.080 --> 0:06:49.440 the White House like there's not a negotiation or there 0:06:49.440 --> 0:06:52.640 we're certainly not in a hurry to negotiate, regardless of 0:06:52.720 --> 0:06:55.880 like what the actual truth is or to the extent 0:06:55.920 --> 0:06:59.719 that truth can be divined. In the meantime, I just 0:06:59.720 --> 0:07:01.640 can't measure doing any business. 0:07:01.960 --> 0:07:03.880 Yeah, I mean, you got to run your business, okay, 0:07:04.440 --> 0:07:06.799 but it's very hard to make longer term decisions. 0:07:06.800 --> 0:07:09.159 You know, every decision is kind of week to week, 0:07:09.640 --> 0:07:13.040 and supply chains need much longer term planning. You know, 0:07:13.760 --> 0:07:15.800 if the goal is to get manufactured, the goal is 0:07:15.880 --> 0:07:18.320 the stated goal is to move manufacturing back to the 0:07:18.440 --> 0:07:20.920 United States, but you can't do that in a world 0:07:20.960 --> 0:07:23.680 where you don't know what duty rates are going to 0:07:23.800 --> 0:07:27.640 change next week, next month, or next administration, right, I mean, 0:07:27.680 --> 0:07:31.040 so it's just a really hard environment to actually operate in. 0:07:31.760 --> 0:07:33.800 And all this time, you know, people have been moving 0:07:33.840 --> 0:07:38.880 manufacturing out of China into Southeast Asia, India, Mexico, and 0:07:38.920 --> 0:07:40.680 then they find out out that duties are coming for 0:07:40.760 --> 0:07:43.760 all those places too. So it's just like a very 0:07:43.800 --> 0:07:45.800 tricky to have any kind of long term view in 0:07:46.120 --> 0:07:46.840 this market. 0:07:47.200 --> 0:07:49.560 Speaking of long term views, I have to ask you 0:07:49.840 --> 0:07:54.960 sort of I guess personal question, but flexports business model 0:07:55.120 --> 0:07:59.000 is basically all about global trade, right and bringing stuff 0:07:59.000 --> 0:08:02.160 into and out of America. How much of an issue 0:08:02.240 --> 0:08:04.280 is this for your own business? 0:08:04.840 --> 0:08:05.720 Definitely a challenge. 0:08:05.720 --> 0:08:08.600 I mean, our revenue is the price times the volume, 0:08:08.640 --> 0:08:10.840 and if the volume goes down and the price goes down, 0:08:10.880 --> 0:08:12.560 our revenue is going to be under threat. So we 0:08:12.560 --> 0:08:14.880 don't want to sugarcoat it. It's a challenge for sure. 0:08:15.440 --> 0:08:17.520 At the same time, we take I look at two things. 0:08:17.520 --> 0:08:19.960 One is you can look at the long run, the 0:08:20.040 --> 0:08:22.680 truly long run. We've had four percent annual growth of 0:08:22.680 --> 0:08:27.320 global trade since the Mongol invasions and four percent annual 0:08:27.320 --> 0:08:29.040 growth over eight hundred years. It gets you a hockey 0:08:29.040 --> 0:08:30.880 stick curve like you you know, you wouldn't believe it 0:08:30.880 --> 0:08:33.760 looks like it looked like a straight vertical line basically. 0:08:34.559 --> 0:08:39.360 And so the result of that is what I into 0:08:39.400 --> 0:08:41.559 it from that is, I have pretty strong conviction you 0:08:41.640 --> 0:08:43.720 fast forward ten years, people will want to do more 0:08:43.760 --> 0:08:44.679 trade than they do now. 0:08:44.679 --> 0:08:45.400 I don't need that. 0:08:45.320 --> 0:08:47.280 To be true for Flexport to be successful, but that 0:08:47.360 --> 0:08:51.200 is my conviction what I know for certain will be true, 0:08:51.520 --> 0:08:54.079 because I don't know for certain that will be growth 0:08:54.080 --> 0:08:56.360 in trade, but I am certain that people will value 0:08:57.040 --> 0:09:00.560 lower costs, everything that we're doing to automate trans actions 0:09:00.600 --> 0:09:06.440 and eliminate costs. They'll appreciate more reliable service, higher quality 0:09:06.520 --> 0:09:08.720 data so they can make plans on how much, how 0:09:08.760 --> 0:09:11.439 many units to order, when to buy the goods, how 0:09:11.440 --> 0:09:14.120 to ship them, where to ship them, so they'll value 0:09:14.200 --> 0:09:16.439 compliance technology, So all the stuff. 0:09:16.200 --> 0:09:18.679 That we're building will be incredibly valuable. 0:09:18.760 --> 0:09:20.480 Right now, we're saying, okay, we got to focus really 0:09:20.480 --> 0:09:23.240 hard on our customers, make sure that we help them 0:09:23.240 --> 0:09:26.320 and we earn every single shipment that they do, and 0:09:26.360 --> 0:09:28.000 then we have to go really hard after growth. 0:09:28.080 --> 0:09:31.400 You know, prices are going to fall. Price of freight 0:09:31.480 --> 0:09:32.120 is going to fall. 0:09:32.400 --> 0:09:34.760 We have a pretty strong conviction of that that the 0:09:34.800 --> 0:09:37.080 price of ocean freight's going to be really low, possibly 0:09:37.200 --> 0:09:40.959 historically low, later this year, and that gives us an opportunity. 0:09:40.960 --> 0:09:43.120 We should be the ones that are passing that through 0:09:43.160 --> 0:09:45.760 to customers and making ourselves, you know, the best place 0:09:45.800 --> 0:09:48.400 to get affordable ocean freight in the world, and that 0:09:48.440 --> 0:09:50.280 should lead to growth. We've seen that in the past 0:09:50.320 --> 0:09:53.040 when we've had market disruptions, twenty sixteen being the most 0:09:53.040 --> 0:09:56.320 obvious example. Is probably before odd lots of time, but 0:09:56.360 --> 0:09:58.360 in twenty sixteen the price of ocean freight was so 0:09:58.440 --> 0:10:01.240 cheap that a ocean carrier went bank rupped, Hanjin, the 0:10:01.320 --> 0:10:04.480 Korean carrier, and that was a year that Flexport grew 0:10:04.559 --> 0:10:06.440 sixteen x in volume that year. 0:10:06.480 --> 0:10:08.400 So we know, you know, we haven't been through. 0:10:08.240 --> 0:10:10.160 Something exactly like this, but we've definitely seen you know, 0:10:10.360 --> 0:10:23.760 history rhymes. 0:10:27.080 --> 0:10:30.280 I've always wanted to declare force measure in my life, 0:10:30.360 --> 0:10:32.839 but I've never had the opportunity for it to come up. 0:10:33.120 --> 0:10:35.520 There was a headline that I think hit Friday about 0:10:35.520 --> 0:10:38.960 how met Aerospace saying it could halt orders declaring a 0:10:39.040 --> 0:10:41.440 force measure. I don't know what how whether you know 0:10:41.480 --> 0:10:44.280 that could go through legally. Do you anticipate though, like, 0:10:44.360 --> 0:10:46.880 let's just say again the possibility, which I think is 0:10:46.960 --> 0:10:48.840 very real, that you know, the tariffs are sort of 0:10:48.880 --> 0:10:51.760 fixed in place. Did you see like we're you know, 0:10:51.880 --> 0:10:55.319 companies to play even and that's a US based manufacturer, 0:10:55.720 --> 0:10:58.720 but obviously presumably it has you know, intermediate goods that 0:10:58.800 --> 0:11:02.440 it imports, like serious, various types of players trying to 0:11:02.440 --> 0:11:05.680 get out of existing contracts or existing relationships. 0:11:06.200 --> 0:11:07.800 You're going to see a lot of that, yeah, because 0:11:08.080 --> 0:11:12.200 you know, let's say you're a vendor to a big 0:11:12.240 --> 0:11:15.079 box retailer and you sign the contract and sell something 0:11:15.120 --> 0:11:16.839 at this price and then all of a sudden and 0:11:16.880 --> 0:11:20.160 there was no clause in there about tariff changes, and 0:11:20.160 --> 0:11:22.600 all of a sudden, you're way underwater on contract and 0:11:22.640 --> 0:11:24.520 you have to choose. You're going to either go bankrupt 0:11:24.640 --> 0:11:27.079 or hurt your reputation. Almost everyone's going to choose to 0:11:27.160 --> 0:11:28.320 hurt their reputation. 0:11:28.000 --> 0:11:29.080 Rather than die. 0:11:29.160 --> 0:11:30.679 So I think you'll see a lot of those types 0:11:30.720 --> 0:11:33.960 of things. There may be some We do a lot 0:11:33.960 --> 0:11:35.839 of air freight out of China and a lot of 0:11:35.920 --> 0:11:40.200 it is for e commerce companies. Yeah, and so we're 0:11:40.360 --> 0:11:44.000 looking hard. It's not a force mature situation, I don't think, 0:11:44.040 --> 0:11:46.959 but like we're looking hard at do we redeploy those 0:11:47.000 --> 0:11:50.880 aircraft to fly from other places? Maybe Taiwan to take 0:11:50.880 --> 0:11:53.120 advantage of all the chip growth growth in. 0:11:53.120 --> 0:11:56.199 Chips, maybe Vietnam. We're going to study the teriffs and 0:11:56.240 --> 0:11:58.080 see what makes the most sense. 0:11:58.080 --> 0:11:59.800 I mean, it's possible we stay in China and just 0:12:00.120 --> 0:12:02.360 continue to do what we're doing, but I suspect there 0:12:02.400 --> 0:12:03.720 just won't be enough volume. 0:12:04.800 --> 0:12:08.440 On this note. You touched on the earlier round of 0:12:08.520 --> 0:12:12.360 tariffs back during Trump's first presidency. What are the big 0:12:12.360 --> 0:12:17.000 differences between now versus then, Because my impression is okay, Obviously, 0:12:17.040 --> 0:12:20.920 the tariffs the first time around, you know, around twenty eighteen, 0:12:21.480 --> 0:12:24.240 those weren't as high as the ones being talked about 0:12:24.360 --> 0:12:27.000 right now. But also, and I think you mentioned this 0:12:27.080 --> 0:12:29.679 earlier as well, we had a lot of companies who 0:12:29.679 --> 0:12:33.800 adjusted to the China tariffs just by rerouting some manufacturing 0:12:33.920 --> 0:12:38.240 into places like Vietnam or Mexico. That doesn't seem to 0:12:38.240 --> 0:12:40.040 be an option this time around. 0:12:40.679 --> 0:12:42.520 Yeah, I mean, so that's the most obvious you hit 0:12:42.600 --> 0:12:45.040 on it. The first thing is these tariffs are much 0:12:45.120 --> 0:12:48.600 higher so China. Even twenty five percent eight years ago 0:12:48.720 --> 0:12:51.000 seemed like a really big deal on China like that, 0:12:51.120 --> 0:12:54.320 people did reorient their whole supply chain. And now for 0:12:54.679 --> 0:12:57.080 those same products that got hit with twenty five percent. 0:12:57.280 --> 0:13:00.440 This stacks fifty four percent on top of that. So 0:13:01.559 --> 0:13:03.440 you know, it's just it's so far from China has 0:13:03.480 --> 0:13:06.240 a seventy nine percent duty, and if you're importing that 0:13:06.240 --> 0:13:08.480 from Vietnam it's now forty six percent duty. 0:13:08.480 --> 0:13:11.400 It's probably it's still worth going to Vietnam. I don't 0:13:11.440 --> 0:13:11.800 know yet. 0:13:11.840 --> 0:13:13.600 I haven't run the math if it's worth coming back 0:13:13.600 --> 0:13:16.320 to North Carolina. I think that's a The furniture industry 0:13:16.360 --> 0:13:18.840 is one to watch because those we used to manufacture 0:13:18.840 --> 0:13:21.280 all this furniture down in North Carolina. Maybe odd lots 0:13:21.280 --> 0:13:23.040 to do an episode from the North Carolina they have. 0:13:23.080 --> 0:13:24.160 That we did? We did? 0:13:24.160 --> 0:13:27.960 We actually funny use so you did last year Tracy 0:13:28.000 --> 0:13:30.880 and I were not only in North Carolina, but we 0:13:31.000 --> 0:13:34.600 went to multiple textile operations there. So thank you for 0:13:34.679 --> 0:13:38.000 the opportunity. Thank you for the opportunity to let us 0:13:38.040 --> 0:13:39.760 plug our own work. But actually that makes me I 0:13:39.800 --> 0:13:42.080 was going to ask you, you know, one region that 0:13:42.160 --> 0:13:46.200 seems relatively spared is Latam. Could you see just sort 0:13:46.240 --> 0:13:49.160 of like a more hemispheric supply chain for a lot 0:13:49.160 --> 0:13:49.600 of stuff? 0:13:50.000 --> 0:13:51.760 Yeah, And TERNSA was getting at that is like well, 0:13:51.800 --> 0:13:54.880 companies moved their supply chain, some to Mexico, some to Vietnam. 0:13:54.920 --> 0:13:57.240 I think before I an said the lattipe thing, I 0:13:57.280 --> 0:13:59.160 think it's possible that's part of why they put high 0:13:59.200 --> 0:14:00.760 terrace on these other kinds trees, is that a lot 0:14:00.760 --> 0:14:03.280 of what was happening with the Chinese good Chinese companies 0:14:03.320 --> 0:14:08.120 were shipping components to in many cases subsidiaries companies that 0:14:08.160 --> 0:14:11.840 they owned in those other countries in doing assembly there. 0:14:12.679 --> 0:14:15.320 And maybe the US looked at that and said, hey, 0:14:15.360 --> 0:14:16.600 we've got a. 0:14:16.440 --> 0:14:17.719 Kind of like leaky bow here. 0:14:17.760 --> 0:14:19.600 We got to plug all these holes and put terrace 0:14:19.640 --> 0:14:22.800 on everybody. But they did go pretty light on Latin 0:14:24.320 --> 0:14:28.920 ten percent tariff across Latin America except for I look 0:14:28.960 --> 0:14:31.360 at the bat, but I think that's Guyana, which is 0:14:31.400 --> 0:14:33.400 like an oil producer, and so I guess we buy 0:14:33.440 --> 0:14:35.000 too much oil from them, and we want them to 0:14:35.000 --> 0:14:36.880 buy stuff from US or something. But it was basically 0:14:36.880 --> 0:14:41.000 ten percent across all of Latin America on the first read. 0:14:41.040 --> 0:14:42.840 When I first saw that, That's what I thought, is like, Oh, 0:14:42.840 --> 0:14:44.400 I guess they're trying to send a signal this is 0:14:44.400 --> 0:14:46.280 going to be like our strategic backyard. 0:14:46.320 --> 0:14:47.840 You should manufacture in Latin America. 0:14:47.880 --> 0:14:51.120 But then you look at actually how they calculated the formula, 0:14:51.120 --> 0:14:53.240 and I think it might just be an accident of like. 0:14:53.400 --> 0:14:55.600 Right right, right, that they just don't sell that much 0:14:55.640 --> 0:14:56.320 to US, And so. 0:14:56.400 --> 0:14:58.920 Yeah, yeah, I got it. I don't know if that 0:14:59.000 --> 0:14:59.600 was strategic. 0:14:59.600 --> 0:15:02.840 It looks I was hoping now was like, hey, there's 0:15:02.880 --> 0:15:04.880 some forethought to how this is all gonna work, But 0:15:05.080 --> 0:15:05.720 I don't think so. 0:15:06.560 --> 0:15:09.800 No, the penguins would suggest otherwise. So, actually, Joe, do 0:15:09.840 --> 0:15:11.960 you remember one of the companies we spoke to in 0:15:12.000 --> 0:15:16.160 North Carolina, like a relatively small textile producer. They had 0:15:16.200 --> 0:15:19.000 moved a bunch of production out of the US into Mexico, 0:15:19.120 --> 0:15:21.080 and when we talked to them, they were in the 0:15:21.120 --> 0:15:24.000 process of moving from Mexico to I think it was 0:15:24.040 --> 0:15:27.280 El Salvador. And now, I mean, I don't know what 0:15:27.360 --> 0:15:30.680 they're planning now. But on that note, Ryan, is there 0:15:30.720 --> 0:15:36.680 any scenario where like shifting some capacity to the US 0:15:36.960 --> 0:15:42.280 to prepare for a boom in exports? You know, ostensibly 0:15:42.360 --> 0:15:45.120 that's what Trump is aiming for here, the return of 0:15:45.320 --> 0:15:49.000 manufacturing to America. Is there any scenario that you planned 0:15:49.040 --> 0:15:52.320 for where you're sort of reorienting some of your capacity 0:15:52.760 --> 0:15:55.600 to the US to prepare for that export boom. 0:15:56.320 --> 0:15:58.200 I don't really believe in it. Firstly. 0:15:58.240 --> 0:15:59.800 I mean I've talked to two different people who had 0:15:59.840 --> 0:16:03.120 to really pause their factory buildouts because of the tariffs, 0:16:03.120 --> 0:16:05.520 because the machines that they were going to buy too expensive. 0:16:05.600 --> 0:16:07.200 Now, you know, like. 0:16:07.200 --> 0:16:10.760 Factories require machinery and components from other countries, So if 0:16:10.760 --> 0:16:13.360 you make that really expensive, you're gonna have less manufacturing, 0:16:13.440 --> 0:16:13.880 not more. 0:16:13.920 --> 0:16:16.600 So I think this is just like very unlikely to 0:16:16.960 --> 0:16:18.240 yield the results that they want. 0:16:18.520 --> 0:16:22.120 It's darkly funny, but there's really grim all right. There's 0:16:22.160 --> 0:16:27.880 this wide, bipartisan, so strongly held view that reindustrialization should 0:16:27.920 --> 0:16:30.640 be some sort of priority. And the first thing you're 0:16:30.680 --> 0:16:34.280 I mean, that's very dark that already you're hearing about 0:16:34.360 --> 0:16:38.600 companies putting paws on their factory efforts for obvious reasons. 0:16:38.640 --> 0:16:41.560 And it's the same reason I mentioned with that aircraft supplier. 0:16:41.920 --> 0:16:42.760 But that's pretty dark. 0:16:43.960 --> 0:16:46.440 Yeah, I mean, these machines like Germany makes the best machine. 0:16:46.600 --> 0:16:50.200 One of our customers makes the machines that you put 0:16:50.480 --> 0:16:51.200 that fill. 0:16:51.200 --> 0:16:53.920 Beer bottles and water cans and stuff. 0:16:54.120 --> 0:16:56.200 And this company, I got to see one of these 0:16:56.200 --> 0:16:58.080 machines in person because I was asking the guy, I'm like, 0:16:58.120 --> 0:16:59.480 how many bottles can it fill? 0:16:59.520 --> 0:16:59.640 These? 0:16:59.640 --> 0:17:04.000 One hundred and forty thousand per hour? He's like a billion, 0:17:04.040 --> 0:17:05.639 you know, doing a billion bottles. 0:17:05.400 --> 0:17:06.240 Of year per machine. 0:17:06.280 --> 0:17:08.199 I'm like, we don't make a machine like that. And 0:17:08.240 --> 0:17:12.000 if you want to cite that does it beer bottling? 0:17:12.760 --> 0:17:15.600 You gotta have that machine, like you know, and we 0:17:15.640 --> 0:17:19.439 want these plants. You can't just manufacture every aspect of 0:17:19.480 --> 0:17:22.440 it all overnight. It reminds me a little bit of like, 0:17:22.960 --> 0:17:24.639 you know, you're a guy who. 0:17:24.480 --> 0:17:27.359 Hasn't been to the gym in thirty years. Yeah, and 0:17:27.440 --> 0:17:28.480 like you see to. 0:17:28.480 --> 0:17:33.280 Go to the gym, but like, don't try to deadlist. 0:17:31.720 --> 0:17:32.480 In a marathon. 0:17:32.640 --> 0:17:35.520 No, No, he could do it. He's totally fit. He 0:17:35.520 --> 0:17:35.920 could do it. 0:17:36.040 --> 0:17:38.800 I went to an exercise class last summer and I 0:17:38.840 --> 0:17:41.200 was like a little too vigorous, and the teacher of it, 0:17:41.560 --> 0:17:43.879 I was like, swing some kettlebells, like, bro, I know 0:17:43.920 --> 0:17:47.320 what you're trying to do, but seriously, like he's awful 0:17:47.400 --> 0:17:50.080 little bit he was like he's like he's like, I 0:17:50.119 --> 0:17:51.919 know your psych to get in shape for this summer, 0:17:51.960 --> 0:17:54.040 but like, trust me, you want to slow down a 0:17:54.080 --> 0:17:54.520 little bit. 0:17:54.600 --> 0:17:58.240 So yeah, I can relate Ryan, what are you watching 0:17:58.280 --> 0:18:01.640 out for next in terms of the sequence of events here? 0:18:01.680 --> 0:18:04.800 So I guess obviously all of this could turn around 0:18:04.920 --> 0:18:08.320 very quickly if you know, some phone calls are made 0:18:08.560 --> 0:18:11.639 and either you know, a big trading partner announces some 0:18:11.760 --> 0:18:15.560 new amazing deal for the US, or if Trump starts 0:18:15.600 --> 0:18:18.000 to you know, back away from the tariffs, maybe water 0:18:18.119 --> 0:18:18.720 things down. 0:18:19.160 --> 0:18:19.760 But what are you. 0:18:19.720 --> 0:18:23.160 Watching for specifically in the sort of shipping and transportation 0:18:23.240 --> 0:18:27.520 and logistics world, for the next stage of how this unfolds? 0:18:28.440 --> 0:18:30.640 Yeah, I mean apart from watching everything the White House 0:18:30.720 --> 0:18:32.680