1
00:00:00,240 --> 00:00:07,200
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:08,520 --> 00:00:11,440
Speaker 2: The United States's trading partners are trying to navigate a

3
00:00:11,480 --> 00:00:15,720
Speaker 2: global trade landscape that's being radically reconfigured by the Trump administration.

4
00:00:16,360 --> 00:00:19,759
Speaker 2: Over the weekend, President Trump announced a thirty percent across

5
00:00:19,800 --> 00:00:23,000
Speaker 2: the board tariff on imports from Mexico and a thirty

6
00:00:23,040 --> 00:00:26,440
Speaker 2: percent tariff on imports from the European Union. It comes

7
00:00:26,440 --> 00:00:29,600
Speaker 2: on the heels of another major trade announcement. Last week.

8
00:00:29,680 --> 00:00:32,159
Speaker 2: President Trump held a cabinet meeting at the White House.

9
00:00:32,600 --> 00:00:36,040
Speaker 2: Now this is something his predecessors did behind closed doors,

10
00:00:36,440 --> 00:00:40,800
Speaker 2: but Trump beckoned in reporters with their cameras and their microphones.

11
00:00:40,920 --> 00:00:42,800
Speaker 1: You could leave the cameras there. It's fun.

12
00:00:43,640 --> 00:00:46,560
Speaker 3: Trump is a fairly accessible individual.

13
00:00:46,840 --> 00:00:49,800
Speaker 2: Jode reports on mining and metals at Bloomberg, where his

14
00:00:49,880 --> 00:00:52,120
Speaker 2: beat is economic state craft.

15
00:00:52,600 --> 00:00:56,160
Speaker 3: I've covered steel workers for almost the entirety of my career,

16
00:00:56,200 --> 00:00:58,640
Speaker 3: and he will go to a mill and just like

17
00:00:59,040 --> 00:01:01,920
Speaker 3: chat with the guys who worked the shop floor, and

18
00:01:01,960 --> 00:01:04,600
Speaker 3: then he'll also like talk to the billionaire CEO. And

19
00:01:04,640 --> 00:01:08,480
Speaker 3: it's like an incredible talent. So he invited the press

20
00:01:08,560 --> 00:01:12,279
Speaker 3: into this cabinet meeting, and somehow the question of copper

21
00:01:12,319 --> 00:01:14,840
Speaker 3: tearfs came up, and we haven't heard about copper tairas

22
00:01:14,959 --> 00:01:17,040
Speaker 3: for a long time. He hasn't said anything about him

23
00:01:17,040 --> 00:01:19,520
Speaker 3: in a while, and so this time he just said, yeah,

24
00:01:19,520 --> 00:01:20,520
Speaker 3: we're doing copper tears.

25
00:01:20,959 --> 00:01:22,800
Speaker 1: I believe the tariff on copper. We're going to make

26
00:01:22,840 --> 00:01:24,640
Speaker 1: it fifty percent.

27
00:01:24,720 --> 00:01:27,280
Speaker 4: And the market went wild.

28
00:01:29,040 --> 00:01:32,000
Speaker 2: US copper features search to a record of the President.

29
00:01:32,000 --> 00:01:34,880
Speaker 2: Trump says he'll put a fifty percent tariff on the metal.

30
00:01:34,920 --> 00:01:37,720
Speaker 2: There's nervous sort of scramble to get metal from the

31
00:01:37,760 --> 00:01:41,039
Speaker 2: rest of the world to US destinations.

32
00:01:41,520 --> 00:01:43,000
Speaker 4: Before the tariffs kick.

33
00:01:42,840 --> 00:01:46,679
Speaker 3: In, Copper prices rose in New York by seventeen percent

34
00:01:46,920 --> 00:01:49,600
Speaker 3: at one point. I mean, I've covered copper for a decade.

35
00:01:49,880 --> 00:01:53,400
Speaker 3: I've never seen a seventeen percent move in copper prices.

36
00:01:53,640 --> 00:01:56,640
Speaker 2: Joe says he looked up copper prices on the Bloomberg terminal,

37
00:01:56,880 --> 00:01:59,320
Speaker 2: hoping to find out the last time prices rose by

38
00:01:59,320 --> 00:02:00,080
Speaker 2: this much.

39
00:02:00,200 --> 00:02:02,960
Speaker 3: It gave me an answer, which was in a gray color,

40
00:02:03,160 --> 00:02:06,160
Speaker 3: which means it only knows, going back to data from

41
00:02:06,240 --> 00:02:09,040
Speaker 3: nineteen eighty eight, that it's never been that much of

42
00:02:09,040 --> 00:02:09,399
Speaker 3: a move.

43
00:02:09,919 --> 00:02:13,440
Speaker 2: The reason for that move is copper is everywhere, and

44
00:02:13,480 --> 00:02:17,000
Speaker 2: to change in how it's priced could upend everything from

45
00:02:17,040 --> 00:02:20,160
Speaker 2: the production of cars and electronics to the construction of

46
00:02:20,240 --> 00:02:28,520
Speaker 2: homes and offices and military installations. I'm David Gura, and

47
00:02:28,560 --> 00:02:31,120
Speaker 2: this is the big take from Bloomberg News today on

48
00:02:31,160 --> 00:02:34,600
Speaker 2: the show The Anatomy of a Tariff. What President Trump's

49
00:02:34,600 --> 00:02:37,960
Speaker 2: decision to target a key commodity reveals about his evolving

50
00:02:38,000 --> 00:02:40,959
Speaker 2: approach to trade and how a renewed push to return

51
00:02:40,960 --> 00:02:48,400
Speaker 2: to America's industrial past could dampen its economic future. To

52
00:02:48,560 --> 00:02:52,440
Speaker 2: understand why this new copper tariff has rocked markets, take

53
00:02:52,440 --> 00:02:54,440
Speaker 2: a second to think about how much of what you

54
00:02:54,600 --> 00:02:56,880
Speaker 2: use every day includes it.

55
00:02:56,880 --> 00:03:00,160
Speaker 3: It's all over your house because every electrical outlet is

56
00:03:00,160 --> 00:03:04,560
Speaker 3: connected to wiring, and all wiring is copper wiring in

57
00:03:04,600 --> 00:03:05,040
Speaker 3: your house.

58
00:03:05,280 --> 00:03:09,760
Speaker 2: Bloomberg's Jode says, it's in electronics, wires, cars.

59
00:03:09,680 --> 00:03:15,760
Speaker 3: It's in every skyscraper, these microphones, it's in every computer, automobile, iPhone.

60
00:03:15,840 --> 00:03:19,560
Speaker 2: These are the first processors using copper technology that will

61
00:03:19,600 --> 00:03:22,880
Speaker 2: ever be shipping in a product. That's Steve Jobs in

62
00:03:22,960 --> 00:03:26,560
Speaker 2: nineteen ninety nine announcing a new line of Apple computers.

63
00:03:27,000 --> 00:03:29,919
Speaker 4: So we are extremely happy. These things are speed demons.

64
00:03:30,480 --> 00:03:34,720
Speaker 2: Copper is in the rivets on Levi's jans.

65
00:03:33,760 --> 00:03:36,200
Speaker 3: Those fashionable copper rhythms.

66
00:03:36,840 --> 00:03:39,680
Speaker 2: There was a time many decades ago when much of

67
00:03:39,720 --> 00:03:43,680
Speaker 2: that copper came from the US of a Chevrolet boasted

68
00:03:43,720 --> 00:03:46,360
Speaker 2: about that in this film. The car company produced in

69
00:03:46,400 --> 00:03:47,960
Speaker 2: the nineteen fifties.

70
00:03:47,880 --> 00:03:52,880
Speaker 3: Copper from Utah and Montana, from Michigan and Wyoming. Copper

71
00:03:53,160 --> 00:03:55,960
Speaker 3: is one of those industries where the United States was

72
00:03:56,480 --> 00:04:01,320
Speaker 3: a dominant producer of what it mestically consumed.

73
00:04:01,720 --> 00:04:05,560
Speaker 2: But as the world became increasingly electrified, demand for copper

74
00:04:05,680 --> 00:04:09,760
Speaker 2: shot up, and US producers couldn't keep up with that demand,

75
00:04:09,920 --> 00:04:13,840
Speaker 2: so they turned to other countries to help fill the gap. Today,

76
00:04:14,040 --> 00:04:16,680
Speaker 2: more than forty percent of the copper the United States

77
00:04:16,760 --> 00:04:18,200
Speaker 2: uses is imported.

78
00:04:18,720 --> 00:04:22,800
Speaker 3: Chile is like the copper producing country in the world,

79
00:04:22,960 --> 00:04:28,640
Speaker 3: and with all mineral resources, there's just like luck. Like

80
00:04:28,760 --> 00:04:31,919
Speaker 3: the United States sits on a lot of oil, that's lucky,

81
00:04:33,040 --> 00:04:35,240
Speaker 3: Chile sits on a lot of copper, and for them,

82
00:04:35,720 --> 00:04:39,000
Speaker 3: that's lucky. The grades are depleting, but it had been

83
00:04:39,120 --> 00:04:40,920
Speaker 3: very high grade where you can just scrape it off

84
00:04:40,960 --> 00:04:44,560
Speaker 3: the top of the earth and easily pull off the

85
00:04:44,640 --> 00:04:46,880
Speaker 3: rock part and get the copper and send them off

86
00:04:46,920 --> 00:04:51,360
Speaker 3: as a product. So the United States one, you have

87
00:04:51,520 --> 00:04:56,560
Speaker 3: your own depleting copper ore bodies. There's surge of demand

88
00:04:56,680 --> 00:05:00,280
Speaker 3: right as globalization really takes hold. You realize this far

89
00:05:00,320 --> 00:05:03,040
Speaker 3: more that you need to make than was previously expected.

90
00:05:03,480 --> 00:05:06,320
Speaker 3: And so if you can't do it, you look elsewhere

91
00:05:06,560 --> 00:05:09,560
Speaker 3: and you say, well, great, there's this fairly great trading

92
00:05:09,600 --> 00:05:13,000
Speaker 3: partner in Chile. They do some good stuff. Canada are

93
00:05:13,120 --> 00:05:17,200
Speaker 3: wonderful too, Mexico, other parts of the world. You say, okay,

94
00:05:17,200 --> 00:05:20,359
Speaker 3: well they'll fill in what we can't produce. And so

95
00:05:20,480 --> 00:05:22,520
Speaker 3: you realize at some point that you can't be the

96
00:05:22,520 --> 00:05:24,400
Speaker 3: sole distributor of that, and that's.

97
00:05:24,240 --> 00:05:28,320
Speaker 2: Okay, but it's not okay with President Trump. Joe says,

98
00:05:28,400 --> 00:05:30,719
Speaker 2: it's hard to know why the President has decided to

99
00:05:30,760 --> 00:05:34,200
Speaker 2: focus on copper now, but this is part of what's

100
00:05:34,279 --> 00:05:35,760
Speaker 2: motivating him.

101
00:05:36,080 --> 00:05:38,080
Speaker 3: The President of United States has made clear for both

102
00:05:38,080 --> 00:05:41,279
Speaker 3: of his terms that he wants on shoring of manufacturing

103
00:05:41,320 --> 00:05:43,279
Speaker 3: in the United States of America. Bring it back, bring

104
00:05:43,320 --> 00:05:46,240
Speaker 3: it back, come back to America, and make America great again.

105
00:05:46,320 --> 00:05:49,800
Speaker 3: Really is about a period of United States history of

106
00:05:49,839 --> 00:05:53,200
Speaker 3: manufacturing that's like really like nineteen fifty to like nineteen

107
00:05:53,279 --> 00:05:54,160
Speaker 3: seventy nine.

108
00:05:54,360 --> 00:05:56,120
Speaker 4: Right, like Buffalo is a great example.

109
00:05:56,279 --> 00:05:59,120
Speaker 3: The peak population of a city like Buffalo was in

110
00:05:59,160 --> 00:06:03,520
Speaker 3: the nineteen fifty es. So the President heres, hey, this

111
00:06:03,680 --> 00:06:06,840
Speaker 3: was a industry that we were once dominant in, and

112
00:06:06,880 --> 00:06:09,640
Speaker 3: he probably thinks, well, why can't we be that again?

113
00:06:10,080 --> 00:06:13,359
Speaker 2: So Trump announced this fifty percent tariff on copper imports,

114
00:06:13,600 --> 00:06:17,280
Speaker 2: writing on truth social quote, this fifty percent tariff will

115
00:06:17,320 --> 00:06:21,960
Speaker 2: reverse the Biden administration's thoughtless behavior and stupidity. America will

116
00:06:22,120 --> 00:06:26,200
Speaker 2: once again build a dominant copper industry. The thing is

117
00:06:26,560 --> 00:06:30,200
Speaker 2: boosting US copper production is unlikely to be easy.

118
00:06:30,480 --> 00:06:32,520
Speaker 3: I can tell you it takes ten to twenty years

119
00:06:32,560 --> 00:06:36,800
Speaker 3: to get a mine from Okay, here's the deposit to

120
00:06:37,640 --> 00:06:42,320
Speaker 3: We're now rolling off commercial scale copper to the biggest

121
00:06:42,320 --> 00:06:43,880
Speaker 3: wire companies in the United States.

122
00:06:44,040 --> 00:06:47,600
Speaker 2: Take a mine out in Arizona called Resolution Copper as

123
00:06:47,640 --> 00:06:51,120
Speaker 2: an example. It assumed control of the historic Magma mine

124
00:06:51,160 --> 00:06:54,120
Speaker 2: in two thousand and four and began the permitting process

125
00:06:54,240 --> 00:06:55,440
Speaker 2: about ten years later.

126
00:06:55,680 --> 00:06:58,839
Speaker 3: It has faced so many hurdles. It's a copper owned

127
00:06:58,880 --> 00:07:02,120
Speaker 3: by Rio Tinto and part owned by BHP, big conglomerate,

128
00:07:02,320 --> 00:07:05,080
Speaker 3: the two biggest miners on planet Earth. So this is

129
00:07:05,080 --> 00:07:08,200
Speaker 3: a very serious deposit. If that mine were to start tomorrow,

130
00:07:08,400 --> 00:07:10,560
Speaker 3: it won't it would be able to push out the

131
00:07:10,600 --> 00:07:14,400
Speaker 3: equivalent of one quarter of US demand of copper just

132
00:07:14,440 --> 00:07:17,480
Speaker 3: from that mine. So it's a big deal and it

133
00:07:17,560 --> 00:07:21,600
Speaker 3: is still trying to get to production.

134
00:07:22,240 --> 00:07:25,600
Speaker 2: Here's the CEO of Rio Tinto on Bloomberg Television last year.

135
00:07:25,800 --> 00:07:28,360
Speaker 4: You're still dealing with just the permitting of this project.

136
00:07:28,520 --> 00:07:30,520
Speaker 2: When could we actually see it working.

137
00:07:31,720 --> 00:07:33,400
Speaker 4: Yeah, it's a long process.

138
00:07:33,480 --> 00:07:36,840
Speaker 2: So we are talking towards the end of the decade

139
00:07:37,120 --> 00:07:38,120
Speaker 2: that we can have production.

140
00:07:38,560 --> 00:07:41,440
Speaker 3: And that's the problem with mines. President United States says

141
00:07:41,480 --> 00:07:45,320
Speaker 3: do this now. That'd be great, but you have permitting processes.

142
00:07:45,480 --> 00:07:47,400
Speaker 3: And even if the President United States were to just

143
00:07:47,480 --> 00:07:53,600
Speaker 3: completely obliterate the permitting processes, you also have communities. Resolution

144
00:07:53,920 --> 00:07:55,720
Speaker 3: has had so much trouble getting up off the ground

145
00:07:55,760 --> 00:08:00,200
Speaker 3: because it is built next to an indigenous sacred site.

146
00:08:00,320 --> 00:08:02,840
Speaker 3: And that's just one example of the fights you will face.

147
00:08:03,560 --> 00:08:05,640
Speaker 3: It doesn't matter if you're on a red state or

148
00:08:05,680 --> 00:08:11,040
Speaker 3: a blue state. You do not like mines or big

149
00:08:11,040 --> 00:08:12,840
Speaker 3: manufacturing facilities in your backyard.

150
00:08:13,000 --> 00:08:14,480
Speaker 2: Nimby, not in my backyard.

151
00:08:14,520 --> 00:08:17,320
Speaker 3: Not my backyard. And like this is not just like

152
00:08:17,360 --> 00:08:22,080
Speaker 3: an American thing. This is people nimby in particular to

153
00:08:22,320 --> 00:08:28,040
Speaker 3: industrial activity is everywhere, and there is no expert in

154
00:08:28,040 --> 00:08:31,040
Speaker 3: this space that I have spoken to who thinks these

155
00:08:31,080 --> 00:08:32,640
Speaker 3: tears will go into place. And suddenly you're going to

156
00:08:32,679 --> 00:08:37,040
Speaker 3: see copper mind projects coming up on the list. You're

157
00:08:37,080 --> 00:08:41,400
Speaker 3: probably just gonna have a situation where Freeport mcmaran and

158
00:08:41,559 --> 00:08:44,520
Speaker 3: Rio Tinto continue to produce in the United States at

159
00:08:44,520 --> 00:08:46,720
Speaker 3: the same pace that they have, maybe a little bit more,

160
00:08:47,240 --> 00:08:50,040
Speaker 3: and you're going to remain dependent on half of your

161
00:08:50,080 --> 00:08:52,920
Speaker 3: copper coming from outside the country, and that copper will

162
00:08:52,960 --> 00:08:56,559
Speaker 3: be more pricey. And then we deal with the fallout.

163
00:08:56,640 --> 00:09:00,880
Speaker 2: Fallout that has already started. There are three different categories

164
00:09:00,880 --> 00:09:04,800
Speaker 2: of copper rack copper, refined copper, and semi finished copper

165
00:09:04,840 --> 00:09:09,080
Speaker 2: products things like wires, metal sheets, tubes, and plates. And

166
00:09:09,120 --> 00:09:13,400
Speaker 2: the president's announcement immediately raised questions about what would be tariffed.

167
00:09:13,920 --> 00:09:16,719
Speaker 3: Are you getting a tariff on raw copper? Are you

168
00:09:16,800 --> 00:09:20,480
Speaker 3: getting it on semi fabricated products like wire and tube

169
00:09:20,800 --> 00:09:23,000
Speaker 3: and copper faucets.

170
00:09:22,840 --> 00:09:24,559
Speaker 4: Out totally right?

171
00:09:24,880 --> 00:09:28,240
Speaker 3: And then like what about scrap, because you know, the

172
00:09:28,320 --> 00:09:32,400
Speaker 3: least cost ton to make new copper is scrap copper.

173
00:09:32,679 --> 00:09:34,959
Speaker 3: It's a great thing about metal, like you just once

174
00:09:35,000 --> 00:09:36,640
Speaker 3: you're done with it, you pull it out, you can

175
00:09:36,720 --> 00:09:40,959
Speaker 3: remelt it down to molten liquid, and then you can

176
00:09:41,040 --> 00:09:44,520
Speaker 3: recast it with other copper and it's new copper.

177
00:09:45,000 --> 00:09:47,800
Speaker 2: Joe says, the President has answered some of those questions.

178
00:09:48,120 --> 00:09:51,360
Speaker 2: He's reported those fifty percent tariffs will include both refined

179
00:09:51,440 --> 00:09:55,240
Speaker 2: and semi finished copper. Refined copper is widely used in

180
00:09:55,280 --> 00:10:00,240
Speaker 2: electrical grids, construction, car manufacturing, and consumer electronics, while sem

181
00:10:00,240 --> 00:10:03,760
Speaker 2: i finished copper is important to the military industrial supply chain.

182
00:10:05,960 --> 00:10:09,360
Speaker 2: After the break, Joe explains how copper suppliers are rushing

183
00:10:09,400 --> 00:10:12,679
Speaker 2: to beat the president's August first deadline, plus what this

184
00:10:12,720 --> 00:10:15,640
Speaker 2: tariff tells us about how the administration plans to approach

185
00:10:15,679 --> 00:10:28,840
Speaker 2: tariffs on other sectors. In the past week, as news

186
00:10:28,840 --> 00:10:32,280
Speaker 2: about President Trump's copper tariff has thrown producers and traders

187
00:10:32,280 --> 00:10:36,760
Speaker 2: for a loop, we've seen some winners emerge commodity traders, miners,

188
00:10:36,840 --> 00:10:39,440
Speaker 2: and banks that have managed to ship copper to the

189
00:10:39,559 --> 00:10:42,559
Speaker 2: US ahead of August first, when the tariff is scheduled

190
00:10:42,559 --> 00:10:45,280
Speaker 2: to be put in place. The value of the metal

191
00:10:45,440 --> 00:10:48,719
Speaker 2: has skyrocketed. Some traders have described getting more than one

192
00:10:48,720 --> 00:10:52,079
Speaker 2: thousand dollars on every ton of copper, which is more

193
00:10:52,120 --> 00:10:54,240
Speaker 2: than ten times what it usually goes for.

194
00:10:54,720 --> 00:10:58,920
Speaker 3: I talked to one of my shipping sources and they said,

195
00:10:58,960 --> 00:11:02,440
Speaker 3: you heard about right, You heard about Puerto Rico, right,

196
00:11:02,440 --> 00:11:04,800
Speaker 3: And I was like, well, what do you mean. He

197
00:11:04,840 --> 00:11:08,600
Speaker 3: goes people are already shipping metal on the water on

198
00:11:08,720 --> 00:11:12,320
Speaker 3: boats to those locales because they can't get to the

199
00:11:12,360 --> 00:11:14,839
Speaker 3: mainland in time, or they're concerned they won't get to

200
00:11:14,880 --> 00:11:17,640
Speaker 3: the mainland in time. And I said, well, like, is

201
00:11:17,679 --> 00:11:22,960
Speaker 3: that a problem? And the best answer he gave me was, well,

202
00:11:22,960 --> 00:11:26,520
Speaker 3: think about it. Not every harbor or not every dock

203
00:11:26,840 --> 00:11:30,440
Speaker 3: is prepared to handle copper. And why is that important?

204
00:11:30,480 --> 00:11:34,520
Speaker 3: Because copper is one of the most valuable products that

205
00:11:34,720 --> 00:11:37,640
Speaker 3: thieves like to take out of warehouse.

206
00:11:37,720 --> 00:11:38,200
Speaker 2: Is that right?

207
00:11:39,000 --> 00:11:41,600
Speaker 3: Yeah, like you hear every I feel like every few

208
00:11:41,640 --> 00:11:44,080
Speaker 3: years there's a story that comes out that's like the

209
00:11:44,120 --> 00:11:47,160
Speaker 3: copper from X was stripped out of this thing, and

210
00:11:47,360 --> 00:11:49,040
Speaker 3: you know it was a big heist and somebody made

211
00:11:49,080 --> 00:11:51,680
Speaker 3: a lot of money off of it. Copper per pound

212
00:11:51,800 --> 00:11:55,840
Speaker 3: is at about five dollars and fifty cents, and you know,

213
00:11:55,920 --> 00:11:57,520
Speaker 3: if you can strip it out or if you can

214
00:11:57,600 --> 00:11:59,199
Speaker 3: steal it in cathode form.

215
00:11:59,559 --> 00:12:00,760
Speaker 4: You're gonna make a pretty penny.

216
00:12:00,760 --> 00:12:05,000
Speaker 3: And so he said, listen, the guys in Hawaii don't

217
00:12:05,040 --> 00:12:10,600
Speaker 3: handle copper imports. So one of the struggles that shippers

218
00:12:10,960 --> 00:12:13,920
Speaker 3: and brokers are going to have to do is call

219
00:12:14,040 --> 00:12:17,760
Speaker 3: up the dock and say, you have to handle this

220
00:12:17,840 --> 00:12:20,520
Speaker 3: with care, and there has to be security around this

221
00:12:20,679 --> 00:12:24,199
Speaker 3: copper because it's going to be sitting in your port

222
00:12:24,280 --> 00:12:25,520
Speaker 3: for X period of time.

223
00:12:26,520 --> 00:12:29,720
Speaker 2: That copper is already piling up in port cities like

224
00:12:29,800 --> 00:12:33,680
Speaker 2: New Orleans, which is getting increasingly close to capacity. The

225
00:12:33,720 --> 00:12:36,160
Speaker 2: sudden push to get copper to the US as quickly

226
00:12:36,160 --> 00:12:40,000
Speaker 2: as possible has also left places like China with dangerously

227
00:12:40,040 --> 00:12:43,400
Speaker 2: low inventory. It's just the latest example of how the

228
00:12:43,520 --> 00:12:46,960
Speaker 2: US president's actions have caused turmoil in the global economy.

229
00:12:47,520 --> 00:12:50,319
Speaker 2: And in that same cabinet meeting last week, President Trump

230
00:12:50,320 --> 00:12:53,320
Speaker 2: previewed another tarif announcement in a way that seemed off

231
00:12:53,320 --> 00:12:53,800
Speaker 2: the cuff.

232
00:12:54,120 --> 00:12:58,640
Speaker 1: And we'll be announcing something very soon on pharmaceuticals. We're

233
00:12:58,679 --> 00:13:00,400
Speaker 1: going to give people about a year a year and

234
00:13:00,440 --> 00:13:02,120
Speaker 1: a half to come in, and after that they're going

235
00:13:02,160 --> 00:13:04,439
Speaker 1: to be tariffed if they have to bring the pharmaceuticals

236
00:13:04,480 --> 00:13:08,040
Speaker 1: into the country, to drugs and other things into the country,

237
00:13:08,040 --> 00:13:10,240
Speaker 1: they're going to be tarriffed at a very very high rate,

238
00:13:10,320 --> 00:13:11,280
Speaker 1: like two hundred percent.

239
00:13:11,840 --> 00:13:14,000
Speaker 2: I asked Joe what we know about how those tariffs

240
00:13:14,040 --> 00:13:16,760
Speaker 2: and pharmaceuticals could play out and how they're part of

241
00:13:16,760 --> 00:13:20,640
Speaker 2: a broader strategy when it comes to sectoral tariffs, levies

242
00:13:20,640 --> 00:13:23,920
Speaker 2: that aren't specific to countries but to whole sectors.

243
00:13:24,400 --> 00:13:26,720
Speaker 3: I was talking to a trade lawyer some weeks ago

244
00:13:26,920 --> 00:13:30,400
Speaker 3: who said, look at pharmaceuticals.

245
00:13:29,480 --> 00:13:32,200
Speaker 4: And copper and rare earths.

246
00:13:32,000 --> 00:13:34,800
Speaker 3: And these are all the Section two thirty two's, among

247
00:13:34,840 --> 00:13:38,440
Speaker 3: many others right now lumber that are being researched by

248
00:13:38,440 --> 00:13:39,480
Speaker 3: the Commerce Department.

249
00:13:39,200 --> 00:13:40,880
Speaker 2: And these are tariffs that the president could put in

250
00:13:40,880 --> 00:13:42,280
Speaker 2: place on national security grounds.

251
00:13:42,280 --> 00:13:44,040
Speaker 4: Correct, that's exactly right.

252
00:13:44,080 --> 00:13:47,120
Speaker 3: The law passed during the Kennedy administration back in nineteen

253
00:13:47,200 --> 00:13:50,400
Speaker 3: sixty two. This trade lawyer said, we call these the

254
00:13:50,480 --> 00:13:56,000
Speaker 3: problem child trade issues. There's a reason Trump didn't touch

255
00:13:56,040 --> 00:13:57,920
Speaker 3: all of these with Section two thirty two during his

256
00:13:57,920 --> 00:14:00,240
Speaker 3: first term. He only did steal an aluminum, and that's

257
00:14:00,240 --> 00:14:03,079
Speaker 3: because steel and aluminum are actually pretty easy to fit

258
00:14:03,120 --> 00:14:06,400
Speaker 3: into that law, which is there's a national security importance

259
00:14:06,440 --> 00:14:08,240
Speaker 3: to those two different products.

260
00:14:07,960 --> 00:14:09,960
Speaker 2: Got to build ships, go, yeah, yeah.

261
00:14:09,760 --> 00:14:13,000
Speaker 3: It's pretty straightforward, like steal is steel and aluminum is aluminum,

262
00:14:13,080 --> 00:14:18,920
Speaker 3: and like it's easy to implement, But pharmaceuticals and lumber

263
00:14:19,760 --> 00:14:24,840
Speaker 3: and copper are far more complex. And I think the

264
00:14:24,880 --> 00:14:28,040
Speaker 3: struggle right now inside the Commerce Department is they're trying

265
00:14:28,040 --> 00:14:30,200
Speaker 3: to get it right. They're trying to figure out how

266
00:14:30,240 --> 00:14:33,960
Speaker 3: they get around these nuances, and I think the career

267
00:14:33,960 --> 00:14:38,960
Speaker 3: officials are saying, it's just not one number, it's just

268
00:14:39,040 --> 00:14:41,760
Speaker 3: not one policy that will solve this issue.

269
00:14:41,960 --> 00:14:45,080
Speaker 2: Is there a commensurate amount of fear in that industry

270
00:14:45,200 --> 00:14:47,080
Speaker 2: to what we're seeing in the metals industry as well?

271
00:14:47,080 --> 00:14:49,040
Speaker 2: About what that would mean if you saw two hund

272
00:14:49,040 --> 00:14:51,520
Speaker 2: percent tariffs on pharmaceutical ingredients, right.

273
00:14:51,640 --> 00:14:51,920
Speaker 4: Yeah.

274
00:14:52,040 --> 00:14:53,600
Speaker 3: One of these trade sources told me is, like, do

275
00:14:53,640 --> 00:15:00,720
Speaker 3: you think Pfizer really wants to worry about producing generic drugs? Like, no,

276
00:15:01,240 --> 00:15:04,880
Speaker 3: they don't. It's low margin. They'll lose money making these things.

277
00:15:04,880 --> 00:15:07,440
Speaker 3: And like there's a reason this is like so many

278
00:15:07,440 --> 00:15:10,920
Speaker 3: other things. Why did X industry go abroad, you know,

279
00:15:11,000 --> 00:15:13,560
Speaker 3: to India or to China or wherever.

280
00:15:13,240 --> 00:15:13,680
Speaker 4: It might be.

281
00:15:13,760 --> 00:15:17,200
Speaker 3: Well, because smart people in the United States said, this

282
00:15:17,320 --> 00:15:20,120
Speaker 3: is not worth it for us to do this thing anymore.

283
00:15:20,200 --> 00:15:22,280
Speaker 3: There's no profit there, or if there is a profit,

284
00:15:22,400 --> 00:15:24,920
Speaker 3: it's such a slight margin that we feel like we're

285
00:15:24,920 --> 00:15:27,880
Speaker 3: wasting our time, in our shareholder's time.

286
00:15:28,080 --> 00:15:30,600
Speaker 2: Could you talk about the broad strategy here. There's been

287
00:15:30,640 --> 00:15:32,920
Speaker 2: so much focus in recent weeks on these country by

288
00:15:32,960 --> 00:15:36,000
Speaker 2: country trade policies. We've seen the letters, we've heard the

289
00:15:36,000 --> 00:15:39,400
Speaker 2: president's threats, and now we have these sectoral tariffs. How

290
00:15:39,440 --> 00:15:42,960
Speaker 2: does that fit into the president's broader trade strategy? Is

291
00:15:43,240 --> 00:15:45,520
Speaker 2: it being forced in effect by this court decision that

292
00:15:45,560 --> 00:15:48,200
Speaker 2: we saw a few weeks ago that by using the

293
00:15:48,240 --> 00:15:51,200
Speaker 2: Section two thirty two, this National security law, they're an

294
00:15:51,200 --> 00:15:53,280
Speaker 2: effect easier for him to put in place and have

295
00:15:53,280 --> 00:15:55,040
Speaker 2: confidence that they'll stay in place.

296
00:15:55,160 --> 00:15:56,680
Speaker 4: That's absolutely correct.

297
00:15:56,960 --> 00:16:00,320
Speaker 3: I spoke to Wilbur Ross, the former Commerce secretary under

298
00:16:00,360 --> 00:16:03,880
Speaker 3: Trump's first administration, some months ago, right when the president

299
00:16:04,000 --> 00:16:06,480
Speaker 3: took office, and I asked him, like, is Trump going

300
00:16:06,520 --> 00:16:09,040
Speaker 3: to go ahead with tariffs? And what Barros said, The

301
00:16:09,080 --> 00:16:12,440
Speaker 3: President knows he can use Section two thirty two tariffs

302
00:16:12,480 --> 00:16:16,520
Speaker 3: in Section three oh one tariffs, and the courts won't

303
00:16:16,560 --> 00:16:20,640
Speaker 3: stop him because the courts already heard the cases in

304
00:16:20,680 --> 00:16:23,240
Speaker 3: Trump one point zero and said yes, three oh one

305
00:16:23,280 --> 00:16:26,800
Speaker 3: and two thirty two are written into US law and

306
00:16:26,840 --> 00:16:29,240
Speaker 3: allows the President of United States to utilize these on

307
00:16:29,640 --> 00:16:30,840
Speaker 3: grounds of national security.

308
00:16:32,120 --> 00:16:33,880
Speaker 2: Joe says, it's hard to say how it's going to

309
00:16:33,920 --> 00:16:37,960
Speaker 2: play out and if these tariffs will actually have staying power.

310
00:16:38,160 --> 00:16:41,320
Speaker 3: Once the tariff is implemented, and how does it actually

311
00:16:41,320 --> 00:16:46,560
Speaker 3: affect purchasing, How does it actually affect potential inflation, How

312
00:16:46,640 --> 00:16:50,600
Speaker 3: does the President and his team react to that, and

313
00:16:51,480 --> 00:16:56,040
Speaker 3: where do they feel generous in giving some sort of

314
00:16:56,040 --> 00:17:00,160
Speaker 3: break or or the opposite.

315
00:17:01,560 --> 00:17:04,000
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gura.

316
00:17:04,359 --> 00:17:06,760
Speaker 2: To get more from The Big Take and unlimited access

317
00:17:06,840 --> 00:17:10,160
Speaker 2: to all of Bloomberg dot com, subscribe today at Bloomberg

318
00:17:10,160 --> 00:17:13,680
Speaker 2: dot com slash podcast offer. If you like this episode,

319
00:17:13,800 --> 00:17:15,840
Speaker 2: make sure to follow and review The Big Take wherever

320
00:17:15,840 --> 00:17:18,240
Speaker 2: you listen to podcasts. It helps people find the show.

321
00:17:18,640 --> 00:17:19,399
Speaker 2: Thanks for listening.

322
00:17:19,560 --> 00:17:20,480
Speaker 4: We'll be back tomorrow.