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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: weekdays at ten am Easter on Apple car Play and

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Speaker 3: All right, let's go to the topic du jour, and

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Speaker 3: that's about Trump tariffs and how it actually could affect growth.

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Speaker 3: For example, we're looking at economists kind of reevaluating the

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Speaker 3: impact of policies on the US economy and then the sequencing, Right,

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Speaker 3: if you have tariffs now, but then you have tax

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Speaker 3: cuts later, what that winds up looking like then for growth?

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Speaker 3: And the current is Bloomberg's a global economy reporter and

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Speaker 3: he joins us now from DC. What's the scuttle butt

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Speaker 3: among economists when it comes to President Trump's tariffs policy.

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Speaker 1: I think moving faster and expected alex is one way

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Speaker 1: to think about it. I mean, to be clear, there

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Speaker 1: is no you know here that the President is either

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Speaker 1: imposing tariffs or that he believes in tariffs as a

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Speaker 1: tool of trade policy. But I think there is a

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Speaker 1: sense of a shock at the pace of the moves.

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Speaker 1: Remember a couple of things. His trade team isn't actually

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Speaker 1: a confirmed in office yet it converce actory Howard Lopnik

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Speaker 1: and Jameson Greers trade represent that of be formally appointed

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Speaker 1: to their roles there. There was an executive order on

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Speaker 1: day one of the organization setting out this the remit

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Speaker 1: for a study in the US trading policy with partners

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Speaker 1: around the world. But already we've had threats of tariffs

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Speaker 1: on Columbia, threats of tariff on Mexico and Kinada, actual

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Speaker 1: tariffs implemented on China ten percent across the board. Also

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Speaker 1: that's new territory, not just intermediate goods across the board.

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Speaker 1: And of course now we have the expected announcement of

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Speaker 1: tariffs and steel aluminium that the President took yesterday, and

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Speaker 1: the reciprocal tariff idea that he's also flooded, due for

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Speaker 1: detail again this week. So you know, it's easy to

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Speaker 1: say this isn't a shock. He spoke about it during

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Speaker 1: the campaign. But the breath and pace that I think

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Speaker 1: is catching people off guard.

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Speaker 4: So initially on Friday morning, when we got the report

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Speaker 4: from Reuters that Trump was considering reciprocal tariffs that day,

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Speaker 4: there wasn't really any indication of which country he was

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Speaker 4: referring to.

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Speaker 5: How are you all.

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Speaker 4: Thinking about this whole concept of reciprocal tariffs and what

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Speaker 4: the implications could be globally.

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Speaker 1: Well, reciprocal tariff idea is going to be a very

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Speaker 1: technical one. You know, we really need to see the

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Speaker 1: exact details of what the President is thinking about. But

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Speaker 1: the rough analysis from people following this trade expert is

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Speaker 1: essentially what President is saying is if a the US

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Speaker 1: puts the tariff on one country's goods of say two percent,

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Speaker 1: and that country puts a tariff on US goods of

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Speaker 1: say ten percent, the President wants to.

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Speaker 6: Level that up to level of playing field.

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Speaker 1: And I think is that this might be a replacement

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Speaker 1: to the universal tariff of ten percent that he spoke about.

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Speaker 1: So different different ideas there in the mix. But again

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Speaker 1: that's a technical one we're going to have to wait

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Speaker 1: and see in detail. Where it certainly adds to thee

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Speaker 1: of more tariffs coming.

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Speaker 3: So the idea that the tariffs center them cells are

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Speaker 3: knows surprise, But it's the speed at which President Trump

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Speaker 3: is mood but moving on tariffs that is a surprise,

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Speaker 3: which then raises the question of the quote unquote positive

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Speaker 3: parts of the administration like deregulation and lower corporate taxes

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Speaker 3: to then offset the hit we might take from tariffs.

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Speaker 3: What do you guys expect in terms of the speed there.

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Speaker 1: Yeah, I mean to clear to President and his team

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Speaker 1: say that this trade policy, this hole is trade policy

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Speaker 1: will drive investment in the US, will bring manufacturing back home,

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Speaker 1: It will raise revenue for the government, and it will

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Speaker 1: balance trading books.

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Speaker 6: With the rest of the world.

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Speaker 1: Along with, as you say, this deregulation policy, and you know,

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Speaker 1: making it easier to build things, make it easier to

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Speaker 1: extract resources and energy from the ground, getting infrastructure projects moving,

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Speaker 1: and you know, it's kind of a pro business deregularty

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Speaker 1: attitude writ large. So there is a case that the

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Speaker 1: new administration is will at least animal spirits. Economists haven't

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Speaker 1: yet down graded their forecast, right anything like that. You

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Speaker 1: know that I'm f single out to you experts perform

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Speaker 1: once back in January. But you know, nonetheless, there's also

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Speaker 1: feeling that, wait a minute, right now, we seem.

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Speaker 6: To be at the very least pain stage of this.

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Speaker 1: We're seeing those spending cuts this federal level of staff

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Speaker 1: lost staff, job cuts at federal level, the terriffs. Of course,

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Speaker 1: the sweeteners if you have too wrong in the economy,

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Speaker 1: that's the deregulation. Just mentioned that the tax cuts that,

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Speaker 1: of course haven't yet been agreed by Congress. So, you know,

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Speaker 1: supporters saying, look, this is a big program here, ultimately

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Speaker 1: will lead to a stronger and faster going economy, but

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Speaker 1: a lot of skeptics are saying that there's potential for

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Speaker 1: significant disruption and.

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Speaker 6: Pain along the way.

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Speaker 1: Very early saying yet, but certainly plenty of skepticism, unspecoid

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Speaker 1: support on both sides of this.

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Speaker 4: So there's a lot of conversation about what tariffs can

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Speaker 4: mean for different countries across the globe. But if we

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Speaker 4: were to bring it back to the consumer, how exactly

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Speaker 4: would that impact the consumer. Would we see countries just

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Speaker 4: passing off tariff costs onto consumers? What does that look like?

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Speaker 6: Yeah, it depends on the level of the tier and

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Speaker 6: depends on the type of goods.

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Speaker 5: Right.

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Speaker 1: So, for example, the last trade war between President Trump's

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Speaker 1: administration in China was mostly intermediate goods that components and

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Speaker 1: materials that factories are buying off of China, you know,

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Speaker 1: ultimately didn't have that much of an impact on the

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Speaker 1: mainStreet inflation this time around the president that's put ten

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Speaker 1: percent tariffs and all the goods coming out of China

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Speaker 1: and coming into the US, so that's like consumer goods,

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Speaker 1: typical household baskets. Similarly, from Mexico, a big portion of

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Speaker 1: exports from Mexico to the US was on food, food

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Speaker 1: stuff like fruit and veg and an apparel. So if

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Speaker 1: you start putting tariffs on those kind of products, then

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Speaker 1: the question becomes who's going to absorb it. Is the

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Speaker 1: seller going to cut their prices and absorb that tariff

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Speaker 1: or will the buy Will the buyer absorbed the tariff

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Speaker 1: in the US, and or will it be passed along

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Speaker 1: to consumers? And that's where Commas saying, hang on, some

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Speaker 1: of this will surely have to plats on the consumers,

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Speaker 1: and that's why they say in the first round, effect

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Speaker 1: at least will be inflationary.

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Speaker 4: Well, and that's the interesting part.

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Speaker 3: I was talking about this a little earlier with Isabelle

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Speaker 3: and Nora about commodities, is but commodities are efficient markets,

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Speaker 3: so they'll just rerate, So the price of the commodity

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Speaker 3: will rebrate to account for the tax. In order to

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Speaker 3: have the consumer or the company, whomever's buying it want

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Speaker 3: to buy it. If I'm buying a coat, that's not

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Speaker 3: the same thing, Like that's not an efficient market. I'm

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Speaker 3: just not going to buy the coat. And so there's

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Speaker 3: different distinctions based on what's actually.

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Speaker 6: Being taxed, very different distinctions.

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Speaker 1: And you hear some FED officials make the point that

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Speaker 1: even if FED officials have different views, like some make

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Speaker 1: the point it's a one off, we kind of look

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Speaker 1: through that impact. Others saying, wait a minute, this could

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Speaker 1: be the kind of start of setting off a longer

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Speaker 1: term consumer inflation Expectations that University of Michigan surveyed the

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Speaker 1: end of last week show that consumers.

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Speaker 6: Are a bit worried about inflation now, especially due to tires.

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Speaker 6: So it's you know, it's not a very clear cut

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Speaker 6: impact on this and for either side of the argument.

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Speaker 1: But remember again there's also a bigger picture of view

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Speaker 1: that you have those people who argue this will drive

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Speaker 1: investment and employment, but there are also those who say

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Speaker 1: will hurt consumer confidence and business confidence because they don't

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Speaker 1: have certainty, don't know how to invest. So there'll be

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Speaker 1: a lot of confusion in the meantime on tell this

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Speaker 1: trade policy to settle down.

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Speaker 4: So how are other global leaders responding to this? I know,

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Speaker 4: when I was watching the Super Bowl last night, I

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Speaker 4: actually saw an ad for from Canada about tariffs, and

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Speaker 4: I missed that. Really it was super interesting a cowboy hating.

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Speaker 7: No it was not.

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Speaker 4: There was no stash flying around, there was no mustaches,

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Speaker 4: but it was a really interesting ad. And I'm just curious.

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Speaker 4: What are you all seeing in terms of the response

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Speaker 4: from other world leaders.

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Speaker 1: Well, you know, again early days you get different response

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Speaker 1: from different capitals. But broadly speaking, when it comes to

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Speaker 1: merchandise goods trade, a lot of the messaging has been

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Speaker 1: you know, what do you want us to buy?

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Speaker 6: We're willing to step up.

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Speaker 1: Mexico stepped up with putting troops in the border for

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Speaker 1: that Fentanel and immigration issue, as in Canada, but Canada

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Speaker 1: has also made clear that you know, they're in the

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Speaker 1: market to buy US goods. The European Union has said

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Speaker 1: that they're willing to step up and buy maybe more

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Speaker 1: US gas or other products you have. Japan here last

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Speaker 1: week prominent s Orshiba talking about one trillion worth an

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Speaker 1: investment in the US. And this goes around. If all

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Speaker 1: of these world leaders make the point. They're willing to

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Speaker 1: invest in buy goods, but they're also making it clear

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Speaker 1: that they will retaliate in kind as well if the

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Speaker 1: US pushes this faith policy too far. China has already

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Speaker 1: retaliate literally today, those tariffs from China have gone into

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Speaker 1: fact on agricultural goods, agricultural machinery coming out of the

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Speaker 1: US into into China. And of course I've got some

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Speaker 1: anti trust measures going on against some US companies as well.

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Speaker 1: You have a playbook ready to retaliate if they want to.

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Speaker 1: Canada head threatend to Italian as in Mexico. So you know,

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Speaker 1: there's a there's a kind of a play nice we'll

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Speaker 1: we'll come and see what can we do deal all this,

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Speaker 1: but if that does mark out, they're willing to respond

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Speaker 1: as well.

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Speaker 3: All right, and I really appreciate always the best and

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Speaker 3: the current Bloomberg Global Economy reporter joining us on Trump

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Speaker 3: tariffs and what that does to growth.

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Speaker 2: You were listening to the Bloomberg Intelligence Podcast. Catch the

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Speaker 2: program live weekdays at ten am Eastern on Apple car

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Speaker 2: You can also listen live on Amazon Alexa from our

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Speaker 2: flagship New York station just say Alexa played Bloomberg eleven thirty.

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Speaker 3: All right, I wanted to get a broader take on

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Speaker 3: the Trump administration and some deeper changes at taking place nationally,

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Speaker 3: particularly when it comes to diversity, equity and inclusion. Mark Morioll,

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Speaker 3: CEO of a National Urban League, joins us now on

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Speaker 3: this and side note. Mark was mayor of New Orleans

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Speaker 3: from nineteen ninety four to two thousand and two. Mark,

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Speaker 3: did you watch the Super Bowl?

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Speaker 4: Were you there?

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Speaker 6: Hey?

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Speaker 7: I was there, and I was an Eagles fan because

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Speaker 7: I lived in Philadelphia during my days in college at

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Speaker 7: U Penn.

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Speaker 5: And I tell you what, I didn't expect that outcome.

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Speaker 7: I felt Philadelphia would win, but I thought it was

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Speaker 7: going to be a competitive game all the way down

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Speaker 7: to the end. It wasn't really a competitive game. The

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Speaker 7: Eagles really really dominate.

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Speaker 4: Yeah, they took it.

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Speaker 5: It was surprising.

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Speaker 3: It was from somebody who like literally just started to

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Speaker 3: understand football yesterday. I'm actually not kidding.

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Speaker 4: I was like, what is this Jeeves?

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Speaker 6: Huh?

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Speaker 3: What what is that team? Anyway, side, I'm glad you went.

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Speaker 3: I'm glad you got to see it. Either way, it

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Speaker 3: was always a fun experience.

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Speaker 4: To watch. Mark.

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Speaker 3: You are CEO of the National Urban League. It's the

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Speaker 3: largest historical civil rights and urban advocacy organization in the country.

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Speaker 3: What are you guys doing right now to combat sort

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Speaker 3: of anti DEI rhetoric and policy from DC.

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Speaker 7: So, we are working very hard to get institutions, leaders,

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Speaker 7: corporations to reaffirm their commitment. Jamie Diamond and JP Morgan

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Speaker 7: Chase have done so. Roger Bigodell in the National Football

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Speaker 7: League have done so. Companies like Delta and Target, and

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Speaker 7: there's an entire list. Those that have reaffirmed their commitment

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Speaker 7: may not have gotten as much media attention as those

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Speaker 7: that have walked away. I'm dismayed by those who say

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Speaker 7: they have walked away. What every company in America should

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Speaker 7: be doing is living up to the meaning of the

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Speaker 7: Civil Rights Act of nineteen sixty four prevents non discrimination,

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Speaker 7: or rather is a non discrimination law which prevents discrimination

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Speaker 7: based on race, creed.

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Speaker 5: Color, religion, and national origin.

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Speaker 7: Many of those who are promoting from behind the scenes

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Speaker 7: the antide and I movement are trying to roll back

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Speaker 7: progress this nation is made over the last seventy years. Women,

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Speaker 7: African Americans, latinos Asians, indigenous Americans, disabled Americans, LGBTQ Americans

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Speaker 7: have had a chance over the last seventy years to

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Speaker 7: participate in the mainstream of American life, in jobs and

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Speaker 7: business opportunities, around corporate board tables, in elected office. This

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Speaker 7: is a full scale attack on all of that progress

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Speaker 7: based on a false and misleading narrative that somehow diversity

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Speaker 7: equity and inclusion promotes quotas and undermines narritive. I take

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Speaker 7: great exception to that, because what diversity equity inclusion says

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Speaker 7: is give everyone with merit a chance, not just some,

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Speaker 7: not just men, not just white men. Give everybody, including

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Speaker 7: a chance for the opportunities that America represents.

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Speaker 5: That's what this is all about.

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Speaker 7: And so we are going to continue to work and

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Speaker 7: fight and advocate for continuation of this country's commitment to

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Speaker 7: equal opportunity.

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Speaker 4: Well, market sounds like last week was a really big

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Speaker 4: week for you. You were inducted into the Nola Wall

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Speaker 4: of Walk of Fame on Thursday, and you received a

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Speaker 4: Humanitarian Award the first time a non sports person was

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Speaker 4: chosen for this award at the Super Bowl party on Saturday.

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Speaker 4: So very big week for you. But back on the

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Speaker 4: notion of companies walking back their commitments. Do you think

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Speaker 4: this is really just a sigh of relief for companies

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Speaker 4: that weren't necessarily genuine about these commitments, or do you

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Speaker 4: think maybe corporations just want to have the freedom to

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Speaker 4: make their own decisions without having to necessarily report and

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Speaker 4: be held accountable in those ways.

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Speaker 7: Well, reporting being accountable is what the law requires, It's

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Speaker 7: always required that. That's our system of laws, our systems

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Speaker 7: of the constitution. But I think some companies are frankly

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Speaker 7: being intimidated. There's a behind the scenes ever to intimidate,

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Speaker 7: to deveain, to threaten companies. I heard one story where

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Speaker 7: a company was told that if they did not walk

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Speaker 7: back their Dee and I, this group would launch a

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Speaker 7: social media campaign and show some lewde and lascivious videos

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Speaker 7: that may have taken place at an event that the

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Speaker 7: company co sponsored.

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Speaker 5: This is what we're faced.

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Speaker 7: We're faced with a smear campaign, a campaign of attacks,

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Speaker 7: a campaign of division, and yes, it is a campaign

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Speaker 7: of hate. Major corporations in America operate under rubric of law.

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Speaker 7: They follow that law. That law makes things fair and

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Speaker 7: equitable for everyone. All diversity, equity, inclusion is is a

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Speaker 7: program to implement non discrimination laws.

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Speaker 5: That's what it represents, and this nation cannot walk back.

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Speaker 7: And we are going to battle and fight and work

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Speaker 7: in the courts and in every way, shape or form

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Speaker 7: possible to ensure that this nation remains committed to equal opportunity.

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Speaker 3: Hey, Mark, it's really good to catch up with you.

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Speaker 3: Congratulations on the host of the awards. Congratulations on the

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Speaker 3: Eagles winning as well. Thank you so much for your

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Speaker 3: time today. Mark Mariral joining us their CEO of the

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Speaker 3: National Urban League.

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Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern Apple car Play and Android

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Speaker 2: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 2: you get your podcasts, or watch us live on YouTube.

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Speaker 4: Today we are joined by Michael Hale, and he is

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Speaker 4: Bloomberg Intelligence senior restaurant and food service analysts here to

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Speaker 4: talk about McDonald's earnings. So we have McDonald's sales that

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Speaker 4: improved on stronger international results. What is your broad read

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Speaker 4: on this, Michael?

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Speaker 8: You know, the most important piece of the report really

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Speaker 8: is the US recovery post E Coli, and we got

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Speaker 8: some good news on that front. So traffic was actually

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Speaker 8: positive in December, so I think that was much better

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Speaker 8: than anyone had expected. They cited kind of a choppy

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Speaker 8: January here, but the only region is still impacted by

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Speaker 8: E COLI seems to be the Rocky Mountain region where

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Speaker 8: the outbreak occurred. And they expect a full US recovery

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Speaker 8: by the beginning of the second quarter.

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Speaker 6: Which is good news.

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Speaker 3: What about the rest of the world versus the US,

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Speaker 3: It was the rest of the world that really performed

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Speaker 3: well yeah, yeah.

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Speaker 8: And a big part of that was just lapping like

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Speaker 8: pretty weak year ago results, right, so we wrapped the

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Speaker 8: start of the of the Israel Hamas war, and so

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Speaker 8: the Middle East was stronger. Countries with large Muslim populations

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Speaker 8: were also stronger. And then also China lapped a very

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Speaker 8: weak result last year and management cited some stabilization in

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Speaker 8: that market, which is encouraging for them. So the easy

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Speaker 8: comps was what really fueled international sales. You know, we're

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Speaker 8: kind of more bullish on the US moving forward than international,

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Speaker 8: you know, because outside of the Middle East, in China,

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Speaker 8: Europe we think is going to continue to kind of

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Speaker 8: be an issue for them. The Arizona is experienced it's

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Speaker 8: seeing much higher inflation than the US, and that's really

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Speaker 8: crimping low income and family spending on the continent.

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Speaker 4: Are people still buying the Big Mac?

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Speaker 8: They don't break out Big Mac sales, but they cited

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Speaker 8: pretty strong results out of the Chicken Big Mac, which

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Speaker 8: I was kind of surprised about. You know, my associate

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Speaker 8: tried it, he was not a big fan. But but yeah,

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Speaker 8: they cited you know, pretty strong results out of the

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Speaker 8: Chicken Big Mac in the United States and other markets.

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Speaker 8: I think France was who they called out specifically and

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Speaker 8: to the point where they're going to continue to to

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Speaker 8: you know, bring it back as a limited time offare

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Speaker 8: in the future.

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Speaker 3: So I was actually talking to an IB user, a

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Speaker 3: Bloomberg user about this. Why are McDonald's franchises elsewhere like

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Speaker 3: a rest of world so much better than in the US,

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Speaker 3: and that like you can get like super good food

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Speaker 3: that doesn't take like fast food.

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Speaker 4: Why is that?

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Speaker 8: Yeah, Jonathan Farrowe asked me the same thing this morning.

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Speaker 8: He said he wants them all to be like the

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Speaker 8: you know McDonald's in Italy, you know, And the answer

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Speaker 8: I had there was just more discerning tastes.

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Speaker 3: Right, that might be it, no, but really, like is

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Speaker 3: it I mean, does it affect margins, Like, what are

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Speaker 3: the margins like in the US versus rest of the world.

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Speaker 8: We don't we don't have that information, you know what

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Speaker 8: I mean. It's a franchise business, right, So you know

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Speaker 8: what I mean, So we don't have a ton of

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Speaker 8: color on all the different franchise markets and what kind

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Speaker 8: of margins they pull in. You know, the US generally

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Speaker 8: is a lower margin for the franchise business, just because

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Speaker 8: they have a lot more franchisees and need a lot

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Speaker 8: more oversight. The international franchise business tends to generate wider margins.

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Speaker 4: So I always used to think about McDonald's is a

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Speaker 4: really cheap place, a discount fast food place, but prices

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Speaker 4: are getting higher. Are we still seeing demand from lower

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Speaker 4: income consumers for the brand?

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Speaker 8: You know, it continues to be the weak spot at

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Speaker 8: McDonald's and for anyone that has a lot of exposure

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Speaker 8: to low income consumers. So the entire QSR space, right,

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Speaker 8: Jack in the Box, Wendy's, Burger King, you know, a

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Speaker 8: lot a lot of chains, you know struggled last year

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Speaker 8: because of their inability to draw low income consumers. You know,

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Speaker 8: they're impacted most by inflation, right, We've had four plus

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Speaker 8: years of restaurant price hikes and higher costs across the board, right,

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Speaker 8: and so you know, chains that are exposed to low

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Speaker 8: income consumers are going to continue to press on value

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Speaker 8: to try to bring them into the fold. You know,

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Speaker 8: it seemed like it didn't seem like restaurants and sales

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Speaker 8: did improve for a quick service in the fourth quarter,

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Speaker 8: and we think a big part of that is just

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Speaker 8: a re establishing of their value proposition.

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Speaker 6: Right.

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Speaker 8: McDonald's early last year got a lot of shade about

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Speaker 8: the eighteen dollars big mac meal in Connecticut, right, and

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Speaker 8: so they decided to push hard on value, and prior

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Speaker 8: to the E Coli outbreak, you know, October had some

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Speaker 8: really good results. They were drawing customers in with that

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Speaker 8: five dollars meal deal, and traffic was positive for the

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Speaker 8: first time during the year. So value pushing on value

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Speaker 8: has been successful for McDonald's. That's not good for their

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Speaker 8: competitors because Donald's has the most scale, right, But we

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Speaker 8: think this is going to continue throughout twenty twenty five

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Speaker 8: in the quick service industry.

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Speaker 4: So just to confirm you're seeing, there was a meal

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Speaker 4: that came up to eighteen dollars. You totally missed this.

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Speaker 3: She totally missed this one.

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Speaker 8: Yeah, yeah, it was one franchisee in Connecticut. Of course

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Speaker 8: it was Connecticut, right, no comment, no, fair enough, fair enough.

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Speaker 8: But he was he was pushing back because he, you know,

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Speaker 8: he was dealing with a lot of inflation and he

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Speaker 8: was just you know, he wanted to make some money

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Speaker 8: on the big mcneilie was trying to make a point in.

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Speaker 6: The frintage specialty.

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Speaker 3: Oh wow, so many things I think about on that.

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Speaker 4: All right, Michael, thanks a love. Were gonna leave it there.

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Speaker 3: Michael Halen, a Bloomberg Intelligence in Your Restaurant and Food

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Speaker 3: Service analyst, joining us on McDonald's.

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Speaker 2: This is a Bloomberg Intelligence podcast, available on Apple, Spotify,

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Speaker 2: weekday ten am to noon Eastern on Bloomberg dot Com,

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Speaker 7: M