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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple Coarclay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: It's chicking with Mike mcglohan.

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Speaker 3: He's our commodity strategiest down there in Miami Beach.

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Speaker 2: Hey, microsceine.

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Speaker 3: I guess predictable and we get a little ease and

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Speaker 3: attentions in the Middle East, and we see.

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Speaker 2: Oil pull back here? How much should to the extent?

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Speaker 3: And let's assume that President Trump does want to find

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Speaker 3: an off rampire and cease operations in Iran. Where do

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Speaker 3: you expect oil to go and over what time frame by.

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Speaker 4: The time we get to the midterms, Paul, I think

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Speaker 4: that front crudial contract will be closer to fifty than

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Speaker 4: one hundred. Right now, it's seventy three dollars a barrow.

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Speaker 4: That's the December contract. So on futures and come on.

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Speaker 4: So like to say we're going where the pucks skating?

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Speaker 4: Where the pucks going, Well, that's where it's going. The

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Speaker 4: high was seventy eight, so the front contract was unable

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Speaker 4: to get above one hundred, and now it's taking down.

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Speaker 5: But we have good reasons.

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Speaker 4: So I think that high we put in this year

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Speaker 4: around one to twenty is going to last for years,

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Speaker 4: very similar one to thirty in twenty twenty two and

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Speaker 4: one forty seven in two thousand and eight.

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Speaker 5: And the key question is now we have the bottom

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Speaker 5: line is we have.

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Speaker 4: The leader of the world's most significant energy producer net

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Speaker 4: exporter of crudel natural gas who wants prices lower, and

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Speaker 4: there's election in November.

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Speaker 5: So to me, that's where it's going.

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Speaker 6: So you see it all lining up. How long does

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Speaker 6: it take before we see prices at the pump? How

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Speaker 6: diesel prices propean prices start to fall in tandem?

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Speaker 5: Scarlett, I'm glad you went there.

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Speaker 4: So we got to four or three ninety six or

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Speaker 4: so in the average gallon of gasoline country, I think

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Speaker 4: that's the peak, right around a four diesel, right around

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Speaker 4: five dollars and thirty cents.

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Speaker 5: I think that's probably the peak.

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Speaker 4: How much lower they go, good example, we've never gone

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Speaker 4: this high, and gasoline typically drops around two dollars a gallon.

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Speaker 4: I think that's going to happen. There's one key theme.

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Speaker 4: There's a key point this morning, our morning meeting, Chris Kane,

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Speaker 4: our equity strategies pointed one thing that's happening, and thats

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Speaker 4: CB five hundred drop below its two hundred day movement average.

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Speaker 5: But volatily is still too low.

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Speaker 4: So what I think is, once we have volatily coming

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Speaker 4: from the energy market and the gold market tricking over

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Speaker 4: the stock market, that's part of your pressure to make

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Speaker 4: all these prices go lower and potentially have crude aill

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Speaker 4: go back to the level I've been looking for forever,

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Speaker 4: which is forty.

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Speaker 5: Dollars a barrel.

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Speaker 4: That's been the bottom for three times since two thousand

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Speaker 4: and eight.

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Speaker 3: So, Mike, there are reports that there has been as

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Speaker 3: a result of the war and attacks by Israel Iran,

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Speaker 3: some damage to some of the infrastructure in the Gulf

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Speaker 3: region here, does that argue for maybe a little bit

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Speaker 3: higher than the normal levels given there might be a

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Speaker 3: supply constraint for a number of years.

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Speaker 4: Paul, that's part of that global recession that's really help

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Speaker 4: hurting the rest of the world.

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Speaker 5: World.

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Speaker 4: The US is a net exporter of crude o, natural gas,

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Speaker 4: corn soybeans and wheat, and the key theme.

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Speaker 5: There is probably natural gas.

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Speaker 4: For the rest of the world, most knownly Europe, that's

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Speaker 4: a problem a lot of that Qatar natural gas cut

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Speaker 4: out might take years to bring that back on. But

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Speaker 4: in the US it means a glowing glutt will have

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Speaker 4: to export, so that's why it's really significant. But this

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Speaker 4: to me is part of that trigger for that global

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Speaker 4: recession that we already are heading to, potentially hard because

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Speaker 4: they're all fighting tariffs. So now it's about as long

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Speaker 4: as the US can repress the ability for a RAN

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Speaker 4: to have an offensive capabilities to close the straight, which

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Speaker 4: we're kind of getting. Their goal's already figured that out,

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Speaker 4: then this is probably a peak we're going to see

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Speaker 4: for years.

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Speaker 5: And Crewdill this year.

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Speaker 6: I'm glad you bring up gold. I wanted to go

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Speaker 6: there next because we've seen gold parrots' losses. It's now

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Speaker 6: down only two point one percent, but it's still a

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Speaker 6: long way off from the peaks that it made at

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Speaker 6: the start of this year when it hit a closing

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Speaker 6: high fifty three fifty four. Has that bull run ended?

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Speaker 6: I mean, is that the top here?

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Speaker 7: I out of blame.

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Speaker 5: I think that bull runs over Scarlett.

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Speaker 4: It's very similarly Inklings to nineteen eighty and the peak

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Speaker 4: of twenty eleven.

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Speaker 5: As far as a high velocity.

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Speaker 4: Gold was the most expensive ever versus the Bloomberg Commodity

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Speaker 4: Index at the end of February and the highest and

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Speaker 4: almost fifty years versus sixty month moving average. So it

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Speaker 4: is a tremendous front runner indicator for what's happened. It

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Speaker 4: bought the rumor, now sign the fact, and now it's

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Speaker 4: just way too expensive. Same and silver, and typically when

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Speaker 4: you put in highs like this, you do at this

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Speaker 4: kind of velocity, they last for years.

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Speaker 5: So I think it's going to languish. Thank you very much.

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Speaker 5: Has been a great bull market and it's done.

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Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Applecarcklay and Android Auto

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Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: Here's the big take story.

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Speaker 5: I like it.

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Speaker 3: Tim Cook doesn't want to talk about retirement yet. John

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Speaker 3: Turnas is emerging as his most likely successor.

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Speaker 2: Who's to blame for that. That's Mark Dermott.

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Speaker 3: He's a managing entner for a global consumer tech He's

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Speaker 3: in Los Angeles, and that's the big take story.

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Speaker 2: Higgs. You know, we talk about Apple, you don't really talk.

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Speaker 3: About succession for mister Kim Cook, but he is sixty five,

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Speaker 3: and I guess you have to think about it.

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Speaker 6: Yeah, And I mean he's a consummate planner, so you

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Speaker 6: know that something's in the works there, yep.

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Speaker 3: And I think a lot of investors kind of looked

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Speaker 3: at the Disney situation and said, Bolly, I hope we

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Speaker 3: can do a better job in succession than they did

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Speaker 3: at Disney. So we'll see how this plays that. But

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Speaker 3: Mark Dermot, he is the man on the Apple story. Mark,

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Speaker 3: thanks so much for joining us here. I was just

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Speaker 3: mentioning miss Scarlett. We don't really talk about succession at

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Speaker 3: Apple too.

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Speaker 2: Often, but maybe we should. What's your story today?

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Speaker 5: You know?

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Speaker 8: I think, actually, I know you were just talking about Disney.

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Speaker 8: I think the Disney situation has actually made it a

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Speaker 8: bigger level of importance within Apple's executive team and within

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Speaker 8: the board there. They don't want a repeat of what happened,

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Speaker 8: and clearly they picked the wrong guy a few years ago,

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Speaker 8: and it seems like they got it right this time

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Speaker 8: with Josh Tomorrow and Dana Walden, and I think Apple

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Speaker 8: wants to get it right on its first try for

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Speaker 8: succeeding Tim Cook. Now, remember this is an interesting succession

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Speaker 8: because this is going to be the first planned CEO

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Speaker 8: transition in Apple's modern history, certainly post nineteen ninety seven

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Speaker 8: brink of bankruptcy Apple.

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Speaker 5: Remember Steve Jobs stepped.

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Speaker 8: Down prematurely due to health reasons unfortunately before passing away,

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Speaker 8: and Tim Cook was the COO at the time, so

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Speaker 8: Jobs appointed him as CEO, and Cook has done a

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Speaker 8: remarkable job over the last fifteen years. But this is

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Speaker 8: really going to be the beginning of a new era,

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Speaker 8: a real transition for the company. John Turnis, the senior

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Speaker 8: VP of Hardware Engineering, is at the center of the action.

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Speaker 8: He's about fifteen years younger than Cook, ten to fifteen

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Speaker 8: years younger than the rest of the other options on

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Speaker 8: Apple's executive teams charge of devices engineering, so eighty percent

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Speaker 8: of the revenue. The company brings in a brilliant mastermind engineer,

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Speaker 8: someone who's deeply ingrained in the Apple culture. And I

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Speaker 8: think as young as he is. This would be a

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Speaker 8: continuity pick for Apple.

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Speaker 6: A continuity pick. Is he someone that investors are familiar with.

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Speaker 6: Have they gotten enough exposure to him? Do they know

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Speaker 6: what he's like and feel that they can trust that

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Speaker 6: he can steer this company into the next century.

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Speaker 8: Well if they read my yeah, Well, if they read

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Speaker 8: my article today, they'll learn a lot about him and

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Speaker 8: perhaps become comfortable with the idea of a John Turnas

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Speaker 8: as CEO. They've been pushing him to the forefront in events.

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Speaker 8: The MacBook Neo that was introduced in early March March fourth,

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Speaker 8: it was Turnus who did the introduction of that, and

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Speaker 8: it was Turnus who went on Good Morning America to

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Speaker 8: talk about the launch of the MacBook Neo as well.

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Speaker 8: Obviously those are things that you would typically see Tim

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Speaker 8: Cook do himself. But obviously that Torch was past the

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Speaker 8: Turnus for major products introductions.

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Speaker 6: So in terms of John Turnis, what is his special distinction?

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Speaker 6: I mean, Steve Jobs was, you know, the head designer

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Speaker 6: in many ways, he kind of was the innovation guru

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Speaker 6: for Apple. Could see around corners in terms of figuring

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Speaker 6: out what people needed before they did. And Tim Cook

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Speaker 6: was a supply chain genius. That was his forte. What

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Speaker 6: does John Turns bring to the table, That is really

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Speaker 6: his distinction.

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Speaker 8: He's an engineering expert, right, he knows how to build

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Speaker 8: these products. He's the one who takes these products from

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Speaker 8: concept to manufacturing.

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Speaker 5: Right.

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Speaker 8: So this is someone who is really in charge of

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Speaker 8: the products. And if Apple's going to remain a hardware

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Speaker 8: centric company, a product centric company, he's the person to

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Speaker 8: take them into the next fifteen twenty years. If this

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Speaker 8: is going to turn into an AI company, a software company,

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Speaker 8: services company, certainly not the right pick. So it really

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Speaker 8: comes down to what Apple's board sees as the future

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Speaker 8: of the company, and I would bet that they continue

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Speaker 8: to see hardware as the very center of the action there.

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Speaker 2: Hey, Mark, When I think of Tim Cook, I think is.

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Speaker 3: Almost as much as a statesman as he is a

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Speaker 3: corporate CEO. A statesman in terms of dealing with maybe

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Speaker 3: the US administration as well as international partners, most notably China.

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Speaker 2: What do we know about mister Turnas in that regard, We.

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Speaker 5: Don't know much.

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Speaker 8: He does lots of meetings with regulators and some government

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Speaker 8: officials around the world. But I mean, I guess you're

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Speaker 8: asking about Trump that relationship is managed by one person

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Speaker 8: and one person only, and that's Tim Cook. There's some

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Speaker 8: government affairs folks involved with the Trump relationship, but this

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Speaker 8: is really a president to CEO relationship. And don't forget,

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Speaker 8: you know, Donald Trump is going to be President of

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Speaker 8: the United States until early twenty twenty nine, so we've got,

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Speaker 8: you know, several years left of that three years left

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Speaker 8: of that administration. And even if Tim Cook is no

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Speaker 8: longer CEO while Trump is in office, Cook is still

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Speaker 8: going to be managing that relationship.

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Speaker 5: Now.

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Speaker 8: I don't anticipate that Cook will be out before Trump

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Speaker 8: per se, but I do believe Cook will be part

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Speaker 8: of Apple, I would say for the next ten to

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Speaker 8: twelve years, even if that doesn't mean he's CEO. I

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Speaker 8: fully expect him to remain part of Apple as executive

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Speaker 8: chairman or some sort of president role, even post CEO tenure,

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Speaker 8: where he would be operating in that sort of government

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Speaker 8: official capacity.

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Speaker 6: Stay with us more from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 6: Poll Sweeney and scarletfu here on Bloomberg Intelligence with you

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Speaker 6: in New York City, And Paul, can you believe it's

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Speaker 6: been just over months since the Supreme Court basically said,

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Speaker 6: you know what, We're not going to go forward with

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Speaker 6: those a tariffs. Yeah, I mean, there's so much has

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Speaker 6: happened in March. It's kind of yes, kind of hard

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Speaker 6: to believe that it's been about a month. But since then,

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Speaker 6: we know a lot of retailers, we know a lot

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Speaker 6: of companies have been applying for refunds. They are seeking

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Speaker 6: refunds for those tariffs that they paid since the tariffs

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Speaker 6: were imposed. Steve Lamar is President and CEO of the

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Speaker 6: American Apparel and Footwear Association. Of course, many of his

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Speaker 6: members have a lot of money at stake here, Steve,

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Speaker 6: just give us a state of the state of the

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Speaker 6: world here when it comes to your members and how

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Speaker 6: they are trying to secure refunds from the government.

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Speaker 7: Well, yeah, and first off, thank you for having me on.

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Speaker 7: We were very appreciative of the Supreme Court taking this decision.

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Speaker 7: It was the right decision. Really confirms that Congress is

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Speaker 7: responsible for tariff policy article on section eight. You can

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Speaker 7: look it up if you don't believe me. And we're

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Speaker 7: really pleased to see the court made that decision. Our

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Speaker 7: attitude is that refunds should be returned the same way

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Speaker 7: they were collected, automatically, fully, quickly to the import of record.

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Speaker 7: You know, the individual that paid the tariffs, they should

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Speaker 7: be the ones that get the money back. They can

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Speaker 7: then decide what they end up doing with it, if

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Speaker 7: it gets passed along to the consumer, if it gets

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Speaker 7: passed to the workforce, if it's used for investment. A

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Speaker 7: lot of our manufacturers they've had to put investment on

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Speaker 7: hold for the last year because they haven't had the

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Speaker 7: money to be able to make those investments. And now

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Speaker 7: and probably one of the biggest pro manufacturing things that

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Speaker 7: have happened. All these manufacturers in our industry and in

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Speaker 7: other places are going to be able to see that

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Speaker 7: money again so they can be able to drive those

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Speaker 7: investments going forward.

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Speaker 3: I think, Steve, a lot of people are very skeptical

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Speaker 3: that this process of returning the terrors can.

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Speaker 2: Even work, will work. What do you guys think We

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Speaker 2: think it will work.

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Speaker 7: We think it has to work, you know, Congress. Well,

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Speaker 7: you know, whenever the US government takes money that they're

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Speaker 7: not allowed to take. I mean, it's a well established principle.

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Speaker 7: It's a very immutable law, probably more so than gravity.

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Speaker 7: You know, they have to return the money, and they

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Speaker 7: have to return the money with interest. In fact, probably

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Speaker 7: half a billion dollars of interest gets incurred by the

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Speaker 7: US government every month. There is a delay, so there's

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Speaker 7: a powerful incentive not only to repay the money that

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Speaker 7: they've already taken incorrectly, but to do it quickly so

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Speaker 7: they don't keep running up the bill at the taxpayer expense.

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Speaker 6: Do we have any evidence that the process has started that,

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Speaker 6: you know, some of your manufacturers are going to get

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Speaker 6: a refund in a week, two weeks.

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Speaker 7: Five weeks. I wish I could tell you those specific numbers.

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Speaker 7: I'll give you two data points. One is the US

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Speaker 7: government refunds customs tariffs every single day. They've been doing

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Speaker 7: it for years and years and years. It is part

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Speaker 7: of the natural rhythm. Companies import, they overpay their tariffs,

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Speaker 7: get the tariffs back. So and you can look this up.

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Speaker 7: The Treasury Department reports this on a daily basis. Reality

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Speaker 7: actually is the amount of tariffs that we're talking about,

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Speaker 7: and the amount of refund entities that we're talking about

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Speaker 7: is much less than what the US government does every

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Speaker 7: year when they refund taxes to individual tax filers about

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Speaker 7: one hundred and seventeen million tax filers in twenty twenty four,

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Speaker 7: three hundred and thirty one thousand importers record, So you

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Speaker 7: can tell the numbers are just a fraction when we

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Speaker 7: look at the tariff refunds. And the other thing is

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Speaker 7: that the Court of International Trade, which is the court

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Speaker 7: that has jurisdiction over these issues, directed by the Supreme Court,

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Speaker 7: is in a very far along in a process with

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Speaker 7: Customs and Border Protection to oversee the development of a

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Speaker 7: system to ensure the orderly repayment of the refunds, again

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Speaker 7: with interest to the importer's record. So that process is

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Speaker 7: well and well advanced.

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Speaker 2: President Trump.

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Speaker 3: The administration remains very hawkish as it remained it relates

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Speaker 3: to tariffs, talking about Section one twenty two, Section three

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Speaker 3: oh one, blah blah blah.

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Speaker 2: How is that going to play out?

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Speaker 7: Well, the President is a big fan of tariffs, as

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Speaker 7: you pointed out, and he is really looking at trying

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Speaker 7: to recreate the system that was struck down by the

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Speaker 7: Supreme Court. They've turned on one never used before provision

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Speaker 7: of trade law, the section one twenty two. A lot

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Speaker 7: of confusion, a lot of conflict about whether that's an

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Speaker 7: appropriate step to take. Section threeh one, which is a

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Speaker 7: more established provision of trade law, is being used here

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Speaker 7: in this situation as well, and there's a case there

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Speaker 7: where maybe it's being used in a way that it's

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Speaker 7: not normally being used. I mean, normally Section three oh

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Speaker 7: one is an investigation in search of answers, but right

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Speaker 7: now we sort of have an answer kind of in

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Speaker 7: search of an investigation, because they're literally trying to recreate

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Speaker 7: this system that they had in placed before.

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Speaker 6: Steve, we also have to ask you about the war

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Speaker 6: in Iran and what that means for your members. Certainly,

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Speaker 6: rising oil prices trickles through right away, and that has

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Speaker 6: increased our costs at a time when there were already

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Speaker 6: concerns about whether the economy was slowing down even before

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Speaker 6: the war began.

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Speaker 7: Yeah, so we're obviously it's a it's a it's a

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Speaker 7: terrible situation. We hope they'll be able to resolve this

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Speaker 7: as quickly as possible to you know, wars is always

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Speaker 7: is always really difficult. But you know, when you look

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Speaker 7: at it from the lens of oil, oil is oil

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Speaker 7: is more than just fuel. I mean it shows up

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Speaker 7: in fabric and fertilizer, in you know, so many different ways,

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Speaker 7: in freight, and and ultimately that can then become part

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Speaker 7: of the final price tag that you as consumers pay.

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Speaker 7: And again that's just not just in our industry. We

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Speaker 7: would see that really across the boards, I think, really

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Speaker 7: looking beyond just our industry, which is very globally folk,

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Speaker 7: you have really a lot of our economy is praying

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Speaker 7: for looking for a quick resolution. So not only do

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Speaker 7: we see the adverse impacts on oil, but also the

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Speaker 7: adversee impacts on the logistics that had been.

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Speaker 5: Created as a result of this.

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Speaker 7: And keep in mind we still have the problem with

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Speaker 7: the Red Sea, which hasn't fully returned to normal. There's

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Speaker 7: some tentative steps there, but that's far from where it

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Speaker 7: should be.

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Speaker 3: Steve about thirty seconds left with some hindsight, Now do

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Speaker 3: we know who paid tariffs?

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Speaker 2: Who is paying tariffs?

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Speaker 7: Well, with hindsight and foresight, tariffs are paid by the

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Speaker 7: importer of record. In some cases that gets passed along

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Speaker 7: in some cases that gets totally eaten by the manufacturer,

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Speaker 7: the importer whoever actually paid the tariffs. Really it is

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Speaker 7: a case by case thing where you have to each

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Speaker 7: individual company and infect on many of the different product

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Speaker 7: lines will have very very different answers, So.

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Speaker 3: We don't like, I guess a lot of folks are saying, hey,

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Speaker 3: it's certainly wasn't the exporter probably, So it's some combination

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Speaker 3: of consumer the corporate food chains.

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Speaker 2: That's kind of where it's all kind of dealt.

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Speaker 7: With exactly right. Some tariffs are a costs that's imposted

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Speaker 7: on the supply chain, and different companies will absorb or

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Speaker 7: pass that cost along, and that will change over time,

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Speaker 7: you know, ultimately, ultimately, ultimately over many years. Tariffs are

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Speaker 7: costs that, like every other cost, ultimately get passed along

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Speaker 7: to consumers, sometimes in the form of fire prices, but

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Speaker 7: they make their way really throughout the entire supply chain

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Speaker 7: a lot of differents.

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