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Bloomberg Terminal and the Bloomberg Business App. Mike Wilson of Morgan Stanley writing this week's reciprocal tariff announcement is likely a stepping stone for further negotiations as opposed to a clearing event. Mike joins us now for more. Mike, good morning, Good morning John. What is that distinction important?
Well, I think that you know, everybody's looking for like a final piece here is this is gonna take time, you know, and not unlike a lot of the other policies that have come out this year.
Like this is this is what we kind of signed up for, right.
I don't think what so far what the President has done has really been surprising. All of the policy changes so far have been growth negative. And that you know, we've likened this to a new CEO coming in, right they have. They're one a restructure to company. They are restructuring the company. They're going to kitchen sink it, and then they're going to try to make you know, their plan work for next year.
So this is a this is going to take some time.
And you know, this level that we're at now is critical from a market standpoint, not so much from the administration standpoint.
I think that's also something of knowledge.
It's also very on brand for Trump to take a maximalist approach in the very beginning. But how messy could it be if he comes in with this maximalist, aggressive approach and then we have retaliation from trading partners.
Well, look, it's the NAFTA and so like you know, it's the best alternative to a negotiated agreement and the batna and that is that is classic negotiating tactic. You you come in and way over here to the right with the hope of kind of settling in the middle. So I don't think that's unusual either. The response from trade partners is that means they're engaging.
Okay.
So that's how you get people to engage in your discussion. You come out with a big splash. They have to come to the table and negotiations begin.
We're not even at the table yet, okay. So that's why this is going to be very uncertain for a period of time.
I think some countries think that they are at the table because they sent a few representatives here in the past few weeks. But I agree with you, it really hasn't started.
So what do you do if you're an investor.
Well, you've done what we've sort of done.
You avoid the areas that are going to be most effective consumer discretionary goods, and that area has been hit the hardest. So maybe that's getting a little bit extreme. I would say, you know, defensively position high quality. That's been our core portfolio. Now we've made some trading calls lately that would have gone against that. Some of those works, some of those didn't work. But I think at this point,
you want to be up the quality courves. Want to be in businesses that can kind of mitigate some of these concerns. You have pricing power, you have the ability to kind of move production around you can take inventory on to kind of buffer this for sixty or ninety days, which you've seen all those mitigation strategies somemp to work wrote about in our note today. Those are the kind of companies we want to own in this period of time. I do believe there will be a clearing event at some point this.
Year, but we're not there yet.
Some of the changes you have made the artwork, and let's talk about them. International NEX this morning down two percent, nie K overnight down four percent. International starting to turn subtle change from where we were over the last month or so.
What's changing?
Well, that's right, and so last week's note we kind of made the call that US probably does better than these other regions because at the end of the day, those reasons you mentioned are most sensitive to global trade, particularly Japan. So the fact that that was down four percent, I think is another sign that, hey, actually the market now is laser focused on this terror for trade issue as opposed to some of the other issues that it's been kind of worrying about here. So that relative value,
if you will, looks still looks good to us. It may happen in a downtape, okay, which is also somebody to consider, because the US is still the highest quality market in the world. In a uncertain world, high quality will outperform.
But you think those European long sort of built up over the past few months there might be in trouble here.
Think that's right.
I think there's a little extension. You know, our European strategy team is in the same page. I mean, there are some good things going on in Europe that haven't been happening for decades potentially, But boy, that's gonna take that's gonna take even longer than this, you know, sort of tariff negotiation you're talking about, you know, country spending more money on fiscal deregulation. I mean, this is a
multi year transition in the stock market. You know, some cases are fifteen to twenty percent.
So besides Ryan Mattel or any other industrial military company in Europe, do you like anything there?
Well, I mean, I think the financials have been still a place to think about that have a potential structural change or benefit in that regard. I think things that have levered to the consumer. But once again, these are these kind of got extended, you know, and from my standpoint, I think there's better value now in the US and some of these areas.
I'm sure you saw the new numbers coming out Goldman Saxon, the same new foal costs from Yonhtsias.
If we can just throw them up on the screen.
One percent on GDP, three point five percent on PCA, that's a siflation remix. What are you a ton of clients that ross? Can you about how we would try stackflation in America?
We're not quite in the stagflation camp. We're more in the camp that you know, expectations are probably not where reality is, which is that growth is worse than people thought and inflation is a bit stickier.
And that's how we came into this year.
So we don't we didn't mess around with our year end targets, but we have been messing around with our short term targets. So we're in that fifty five hundred to I would say fifty eight to fifty nine. Now we've kind of chopped off the upper end of that for the first half of this year. I'm not willing to throw in the towel yet completely on the full year, because, as we've been saying, the good stuff of you know, the policy changes that we expect could start to feed
into the equity markets by year end. Could we pushed that timing out, you know, three six months?
Sure?
But you know, right now we're still in that fifty five hundred to sixty one hundred range with the probably a truncated upper band. And now if you get universal terrafs, which is something that we talked about in this morning's note, then that lower half, that lower end of the band.
Maybe comes down.
So we're you know, if we if we break down this week and universal terrors for the reason, we could see something even lower than fifty five in the short term.
Can we talk about the rebalancing your expecting though, the ultimate vision of this administration and why you still believe the more complete policy mix is still bullish.
Yeah, I think, well, I think it's constructive. I'm not sure it's wildly bullish, because you know, valuations were probably the biggest constraint coming in. I think it's bullish for a lot of parts of the market that have underperformed for the last three or four years. I mean, you know, our vision, or I think the administration's vision quite frankly, it's very simple. They want to affect a slowdown in government.
They want to kind of liberate the private economy through things like deregulation, keeping tax rates lower.
Maybe tarifts are part of that storyline.
Fine, and that transition from kind of public government allocation of resources to private enterprise allocation of resources actually at least atart broadening out something that's been absent really for the last two or three or something. You know, we've talked about here many times, this crowding out feature of the government crowding out small businesses, crowding out the average consumer. And look, I think they've been crystal clear in their
in their and sort of their messaging. It's not going to be fun foreriod of time. Okay, we have to sort of detox. As the Secretary Treasury mentioned, you know that there's going to be an adjustment period, as a president has said.
So it's been crystal clear what they've been.
Doing the whole Eat your vegetables, then get a dessert. When it comes to dessert, we're only talking about current policy extension. How exciting is that for the market if you're just talking about an extension of TCJA. When it comes to tax cuts and not actual additional tax cuts.
Well that's okay.
So what you're talking about is fiscal stimulus, and that's what we have to detox from. So we don't need more fiscal stimulus. We need less fiscal stimulus. We need the private enterprise of America doing organic growth.
If taxes are going up on sales goods, don't need more tax cuts for individual Well.
That's the idea, is that we're going to keep taxes lower, maybe lower than further if tariffs A bring in revenue and B there's a negotiating ploy so we'll see. I mean, this is going to be very messy, and this is not going to be easy transition. But John asks, what is the bullet story you know over the next twelve months. I think it's that, and it's going to be a lot of uncertainty, but I still think that is the plan.
I still think what I see so far is a is a direction in that in that manner, and looks stock operators and financial market operators just gonna have to deal with this adjustment. And that's that's what's the that's the consternation right now.
We're attempting to deal with it right now. Marks good to see it. So here's the laces. This morning, President Donald Trump planning to stand his reciprocal tariff push on all countries, Tempering hopes that the initial scope could be limited. On Wednesday, hendrit Trace of Vada Pantas joins US right now for more Henrietta, So let's start with the Triton dollar question.
What happens on April second.
April second, at midnight, lots of tariffs start going on.
So it's going to be a really long day. We'll obviously get.
The reports from USTR, Commerce and Treasury on the first. I think there's going to be a lot of advanced warning provided by those documents. You know, we have trade agreements with twenty different countries, and I think when the President says we're going to tear if everybody that we're talking about, he means those twenty countries.
So I'm expecting to pull out.
Of the Phase one China deal or call them out in violation of the deal, which means that all the Section three oh one tariffs covering over three hundred and fifty billion dollars worth of goods from China will go up. I think we're going to see new tariff investigations start on India, for example, pharmaceuticals I think there's going to be new tariffs under Section two thirty two and AIPA across the auto sector.
I'm very wary about auto parts.
I think that'll be sort of a secondary event that happens in a couple months time. Should any of the nations like the EU not come to the nego of shooting table sufficiently.
It takes a long time to get through.
There's a lot coming, Henrietta, what do we see that can happen almost immediately when it comes to AIPO or three three eighth. Is that going to specific countries or is that going to industries?
AIFA is specific countries and industries.
Although Section two thirty two, the National security justification is really where a lot of the sector specific items go. Copper, dairy, things along those lines'd be a Section two thirty two tariff. My biggest concern with any rationale that's not AIPA or even three thirty eight is that there's no time horizon to take them off. The Section two thirty two tariffs on steel and aluminium have been in effect.
For almost eight years. The Section three oh one tariffs against China have been in.
Effect for almost eight years, So once those tariffs come on with the rationale, like the Auto investigation that they completed during Trump's first term. Those tariffs don't come off, so those are the most pernicious. The AEPA pieces on Canada and Mexico, for example, theoretically can come off in three to six months.
The others have very serious standing power Henrietta.
When it comes to how the president is approaching Wednesday, he said we're going to start with all countries. Is that where he's going to end?
I think that's a fair question.
I think we start with about the twenty countries that we have trade agreements with. That's what the agencies have been tasked with doing. But I see the potential for expansion before we see any pullbacks. So, for example, there's no investigation into India. I mentioned that at the outset. I think we have a lot of issues with India, from trade in pharmaceuticals, genetic drugs to generic drug excuse me, the trade and services deficit.
Those are all.
Sort of institutional issues that we know usdr Career had during Trump's first term, and I would expect to see a really long drag to any approach to India. So I think a lot more are going to come on in the next four years of Trump's term than necessarily come off, although Canada and Mexico should be excluded, especially USMC eight compliant pieces.
That trade deal needs to be reagreed to by next summer.
When it comes to what the Senate is also going to do tomorrow, there's supposed to be a vote on a Democratic resolution blocking Trump's use of AEPA when it comes to Canada. How difficult is that going to be for some Republicans, Whether or not they're going to say yay or nay.
Well, just think about it.
There's already reporting that we're going to see a bailout for the farmers, which is widely represented by Republican lawmakers in the United States Senate, including the Majority leader John Thune.
I think it's fascinating to see tariffs go on our closest trading partners, and Republicans who just for a couple of years ago where a party of free trade and zero percent tariffs, now have to get behind the President's justification for fentanyl from Canada being an international economic emergency.
So you're going to see some serious backpedaling, which is compounded by the election losses that Republicans are seeing across the country, obviously with the Atlas Stephonics seat and upstate New York, but just this past weekend on four amendments in the deep red state of Louisiana, where Democratic voters turned out after being sleepy for six years and crushed four amendments. We're going to see that in Florida in two different districts, the first and the sixth, to see
what the margins look like. Is it's still Trump plus thirty plus forty or is it now something that Republicans should be more concerned about going into the midterm.
It's a very big vote next tomorrow.
How much pressure Republicans under to make sure they get TCGA extension done sooner rather than later.
Tons of pressure, it has to be done. I think the best triggering mechanism is the.
X state for Treasury.
So we know that we've gotten estimates from outside advisors and CBO that suggest late July to even mid October.
As the time horizon.
But all the staff on the hill you know, which I used to be one, are making sure that we're hearing from Treasury Secretary Bessett and he is not going to report that date.
Until may, and it really is going to depend on tax re seats.
So it's disconcerting when you see Doge going in and firing IRS employees. It's expands the tax gap and that's really what's going to determine what the X date is. And that's I think the linking mechanism for passing this tax bill, which as you pointed out before, is just an extension of the status quo.
There are not and there will not be tax cuts in this bill.
Darrel Kronk of wels Fango seeing tariffs having a measured impact. Rising tariffs hurt the economy by complict kit and CAPEX decisions about the future. But today the issue is mainly price increases, which we foresee as incremental and dilute. Darrell joins us now for more. Darren good Mornick and Morning John.
I have to say this the more constructive view from you. What does that come from? What underpins that view?
Well, I think it's you know, obviously Wednesday will be big. We're looking at it through kind of three lenses. One is what is the universe?
Right?
So think tariffs are on imports themselves. I'm really focused on things like the VAT as item too. Right, then you've got non tariff subsidies things like you know, where you subsidize an industry. And then you can also have some noise around currency manipulators. Countries are labeled by Treasury as currency manipulator or at least.
Put on watchlists.
Right, that universe will will break down between your universal and sectoral And then I think what we really want to focus on on Wednesday is what's known versus unknown?
Right, So we know the autos right at.
Twenty five percent, you know, imported autos and autoparts. We know we're probably going to see the additional tariffs on Venezuelan oil, right, and we know that there's going to be some impact on Mexico and Canada, the USMCA coming
back maybe twenty five percent, maybe less. The key is do we buy another kind of month of negotiation time as the Treasury secretary to say escalate to de escalate, right, and some room to negotiate, or do we just on April second, let them have it right and kind of implement those tariffs.
Do you think that it's going to be reciprocity for each individual country or universal across the board.
I think it's country by country. I mean, I know there was a lot of banter about universal over the weekend and the.
Entire campaign trail.
I understand, and I think that's part of that escalate to de escalate. It's trying to send kind of the worst case message and scenario. But I think what the President and the administration is really interested in doing is negotiating country by country on very specific things like what we still haven't seen is tariffs on pharmaceuticals. We haven't seen tariffs on semiconductors. We haven't seen it on copper, timber, lumber.
Right.
A lot of those sectoral elements that people are talking about are still forthcoming. So whether we get some of that on Wednesday or not, I think is important. But I don't know that i'd look for just broad based universal tariffs. I think it's a it's a negotiation point country.
I think some countries say they have a massive export of copper, they will face both, yes, so they will be doubly tariff doubly taxed.
Yeah.
I think if you break down so very interested in closing trade deficits. Right, if you look at the top three trade deficits, China runs about a two hundred ninety five billion dollars trade deficit number one, Mexico number two at one hundred and seventy five billion, Vietnam number three at one hundred and twenty five billion, right, and then you go down. Actually, Canada's number eight on the list
of actual goods trade deficit. If you close that and only close that at the same tariff rates as what they charge us, it's about fifty billion dollars worth of tariffs. If I add in the vat right, the value add attacks. Now we're talking three x that number. It's about one hundred and seventy billion dollars by our math, So that that matters, I think in how they're going to play this out in the coming week.
This is a relative game, but who wins who loses? Relatively speaking? I think what's interesting about the call from you and the team at wels Faranko at the moment is you're sticking with the US economic leadership.
Yes, that's the theme for you.
Guys coming into the and you're staying with it as other people change their forecasts. What's interesting about this morning if you're just tuning into the program, yes, you'll see equity futures down across the board, the S and P down one percent, but check out Japan down four percent, check out Germany down one point eight percent. Starting to see and I know it's very early days, and we've seen some massive outperformance in those parts of the world over the year so far.
But thing's about to change.
Yeah, I think there's a lot of chasing that happened earlier this quarter. Particularly let's pick on Europe for example, and the German fiscal spend on defense and everything else.
If you go back since two thousand and.
Seven, So go back, you know, literally, you know, almost twenty years, eighteen years the time period of sustained European outperformance relative to the US. I threw a chart in my notes today shows that it's on average about ninety to one hundred and eighty days, and then it fades. Why does it fade Because you need a sustained lower dollar for that trade to work over any long period of time, and you need earnings to deliver.
Right.
If I went back again to that same time period and said, show me aggregate US S and P earnings one hundred and seventy five percent, show me aggregate Euro earnings seven that's the differential over that time aggregate right of earnings growth. So if I don't get earnings growth and I don't get a weeker dollar over any period of time, that trade invariably fades on you.
So far this trade story has led to a wake a dollar. Do you believe that reverses and why.
We think it stabilizes here?
Right?
So I would not look for, you know, the dixie to go back to one ten across the broad batthkets.
But I do think you can have it go.
Back to kind of the one o six one oh seven kind of range and just stabilize here. I wouldn't look for you just continued week week week dollar, right, And if and if we are that kind of flies in the face of this growth scare, right, because obviously, if you're going to get growth scare, what's going to happen? Flight to quality, US treasuries, rally dollar rallies, right, all.
That stuff that just doesn't make a lot of sense to us.
This administration do you think want a week dollar because they want to see, you know, a rejuvenation of exports.
I think they're quintessentially the same as a lot of administrations that that say they want a strong dollar. But actually want a week dollar, right, because the week dollar favors you know, economic growth to an extent, as long as it's not a as long as it's not a debasement of the currency or something like that. It's just a sustained kind of steady weakness.
I think you can live with it.
I think what people miss here in the economic story in the near term of US over some of the other parts of the world is you do have rates coming down. You do have the dollar that has come down, right, Labor markets are still okay. You know, we're just about ready to roll into Q two or Q wondering season. Excuse me, right, you know today's the end.
Of the quarter.
Yep.
So we'll see what people say about earning.
Do you think we have reset expectations for earnings low enough?
Not yet.
I still think that has to come. And I think what happens is whether it's consumer spending. If you look at the drivers of what's been the growth drivers in the US economy, it's AI cap X, it's the high end consumer, consumer spending broadly, but particularly the high end consumer, and it's the fiscal impulse.
Right.
So if I lose those engines, right, am I am I losing AI cap X, am I losing the high end consumer, am I losing some of.
The fiscal impulse?
Right?
Something else has to.
Step into that void at this point, right, which means that growth is going to be a neema care for a while, and it's going to be hard to generate a.
Question marks I've roll three, Yes, which one of those engines are you most concerned about right now? Because the one that I don't think it's talked enough about is the AI story. We're all obsessing over to trade headlines, but over the past few weeks we've had some pretty damage headlines for that part of the market, and it's an important part of the equity market.
Yeah, if you take the top ten names obviously in the S and P five hundred, they still account for fifty percent of the net income growth in the index. Fifty percent, right, I mean talk about the skew right and lack of breadth that we've talked about many times. So obviously the broadening out of that what's not discussed, John, is so we're going to probably put at the end of today one of the weakest quarters as a whole for technology as a sector in probably thirty to forty years.
Right.
Energy's up seven percent.
Right.
Financials and comm services on a relative basis are doing quite well, right compared to the endscy and everything else. It's really centered in tech and consumer discretionary right.
So I agree with you on the AI cap X.
I'll tell you what though, I watch very very closely that high end consumer, actually high end consumer spending and expectations now have dipped below the middle quintile tiers, right, So it's hooking harder than even the low and middle quintile. So that's where your discretionary spend comes from. And the question isnt are they able to spend? They're still able to spend, it's just are they willing to spend?
That's the big question going into NX season. I've got some good news. Bonds are working.
Yes.
This has been the allocatus dilemma over the past few weeks, and we said repeatedly on this program on down days in the equity market, bonds haven't behaved in predictable ways. Sometimes you use it up, sometimes you havese it down. They're down this morning by six bass points. Can you depend on that in the year ahead?
I don't think so, because I think What happens is eventually we get a little bit past this growth scare in the near term, and we really the inflation narrative really starts to come back to the table. So when you look at the long side of the curve, it's really three premiums. Right, It's a term premium, it's a growth premium, and it's an inflation premium.
Right.
So if I hold term premium even I bring growth premium down a little bit also equal. That's what's driving alongside of the of the curve down. But I'm pushing up on inflation expectations and premiums in that longside.
The question is which one wins the day? Right? Does the growth scare carry the day?
And that's why you see the kind of dilemma that happens. If it's a particular day where a piece of economic data suggests the growth scare is.
A problem, right, you get a flight to quality rates.
Down, right, you get a bad inflation reading like we got, although it wasn't bad, but you know, a little higher inflation reading last week, right, two point eight percent on inflation.
All of a sudden, you know, rates move higher.
Tara Krunk Flas Fanca Don Murphy of Banks for American writing. Vehicle prices could increase as much as ten thousand dollars if automakers pass on the tariffs in full.
John joins us now for more. It's good to see, it's good, good to see here.
I'm look.
I'm sure you're exhausted, so thanks for being with us.
Yes, I'm very exhausted. It's a lot going on.
And you're going to have be exhausted this way. So let's start with the tariffs. Twenty five percent, how much we passed through and the same expected.
Well, I mean, it's really unclear, like you kind of let in there ten thousand bucks on imported autos as someone elsewhere outside of the US would be subject to potentially as much as ten thousand if they decided to pass if passed through the tariffs completely, if they decide to break even in the interim, right they make a decision, listen, we're going to keep making vehicles. We're going to try
to maintain our market share. They may pass through about forty five hundred bucks, or if they do something, you know, even more extreme, they might decide, listen, we're not gonna be able to make money on these vehicles, we're not going to import any and we've got risk of the seven point six million vehicles that are imported to the United States potentially being at risk. So there's a lot of layers of how this kid get passed through and the impact on sales.
The management seems imagine outstanding. Still, I'm sure that you've been in touch with many of them over the past week or so.
Stillansis for GM, Tesla, Tesla limited impact here of the other three, how are they preparing for Thursday?
What do they do well?
I mean, I think we've got the answers for the moment for Thursday. We don't necessarily have the answers for Friday or the follower week yet. So the volatility in the in sort of what's going to happen here or
the uncertainty is pretty extreme. And I think when you look at this, you're making a product and plant decision about three to four years out, and then you're going to live with that for about seven years out from that as the product is launched in the market and produced, so you have a ten plus year window of committing capital. So it's very difficult on a weekly, monthly or an even annual basis for them to make very significant shifts.
So I think at the moment they're going to look at increasing some employment here in the US, trying to ramp up the utilization of their plants here.
In the US to offset this.
But from a large degree, they're not actually doing anything just yet because they don't know the rules of the game and they're long term capital allocators.
Who's best positioned going into Wednesday.
So I think if you look at Tesla, Lucid, Arrivian, the startup ev names here in the US, they basically are are largely unexposed except for some of the electronic components that they would import. Ford is actually in pretty good a pretty good position. They're only importing twenty percent of their volume or vehicle volume in the US, and none of that is really the big ticket items like the Expedition Navigator F one fifty or even super duties. But you go down the list, GM is about fifty
fifty to fifty imports domestic to the US. But then you have companies like Nissan, you know, Mazda, Subaru, some of the other names that are reasonably well, reasonably exposed, and I think there's a lot of sort of mid to long term sort of game theory you have to play here of where the market will go. And I think most of these manufacturers are going to produce higher end, higher mixed vehicles to try to offset this incremental costs.
And I think that's really important to recognize the low end consumer is not going to be served, so basic transportation is going to be less available to the American consumer,
and if it's available, it's at a higher price. I think the real long term thing to think here is this is the door opening to the Chinese at the entry level and potentially coming here and building plants, employing Americans, potentially bringing their entire supply chain here and entering at the low And I think if you sort of run this forward a couple of years, that's the thing we really need to think about.
Are you basically talking about the Chinese companies doing what Japanese companies did two three decades ago.
Correct.
We saw the Japanese do it in the seventies and eighties, We saw the Koreans do it eighties and nineties. It takes ten to twenty years once you're here in the US market actually really gain a foothold. But I think that's probably what we're We're staring down the barrel of if this holds, so.
The price war already starts, it s implements. Take a big step back here and think about what the last two years looked like. We were talking about a real price war in China. We were talking about automakers cutting prices because the demand wasn't there. So when the President comes out and says things like, I don't care if they raised prices, is the consumer price tolerance even there in this economy for them to raise prices.
Well, we're already drifting off of all time highs in autopricing over the last couple of years. So I think if we were to look at this and really spread everything that we know right now as best we can, we're talking about a five to fifteen percent on average price increase in vehicles.
The consumer is not.
Really there for that, so that would have a very significant impact. We kind of roughly were assuming it's a two and a half to three million unit hit to saw are just based on price pass throughs, right so that's you know, that's a pretty big hit to the market. That's about sixteen million units right now.
I'd have to go back tomorrow. What the President said over the weekend.
To Jonathan's point, he's talking about I couldn't care if these automakers raise prices. He said that then they're going to start buying American cars. The number one car being sold right now in America is a Toyota Wrap four, but it's produced in America. So say, would Toyota get exemption our carve out?
Well, I think that Wrap four would be wouldn't be tariff save maybe the power train and electronic components that are that are in it that might that might be imported. We have to kind of dig through that, and everybody's still digging, digging through this. So yes, it might be non US companies, but it would be US workers that would benefit. And I think that's kind of the ultimate endgame.
I mean, our rough estimate is you could have one hundred and five thousand direct jobs if you brought all that seven point six million units of production or demand slash production back to the US, create another sort of almost a million in sort of another million indirect jobs.
So there's a big focus on.
Creating jobs, but there's greater greater automation at the plant level, So will that actually be sort of a net job gain or will it just be bringing that manufacturing back here to the US.
You mentioned when it comes to the American producers forwards in maybe more decent shape than GM. The issue at GM is their foreign components are Canada and Mexico. Will there be a USMCA carve out for these autos?
Do we know yet?
So?
Right now what we know is on parts that are imported from Canada and Mexico, as long as their USMCA compliant basically seventy five percent of their content is North American. That the percentage of the components that are of the subcomponents that are produced in the US wouldn't be tariffed. Going through that right now is sort of my numbing.
Nobody actually has the exact answer on that at at the supplier level, the folks that are actually doing this, and that's why we have a tape delay on the tariffs being put on USMCA compliant components.
This wasn't my numbing, This was ready thoughtful. John Murphy of Banks of America want the future of this CAINR industry in this country. This is the Bloomberg Surveillance Podcast bringing you the best in markets, economics, and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and, as always, on the Bloomberg Terminal and the Bloomberg Business app.