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Hey Max Schafkin here, co host of elon Inc. You're about to hear a pilot of a new show that I've been working on for the past few months. It's called Everybody's Business. It features me and the great business and financial journalist Stacy Vanick Smith, plus just a huge contingent of some of the smartest, most interesting journalists we know. These include Lucas Shaw, Amanda Maul, brad Stone, Randall Williams.
Each week, we're going to be taking the big business stories that everyone is talking about and we're going to spin them forward with fresh reporting, with analysis, with smart takes. It's a little bit like elon Ink, but a much broader look at the world. We've been working on it for months and just having a lot of fun, and we think you're going to enjoy it too. The show
officially debuts on May sixteen. It'll be in its own podcast feed, but for now, for the next few weeks, it'll be here in the e lining feed every Friday, and we really hope you'll listen and let us know what you think.
This is Everybody's Business from Bloomberg BusinessWeek.
I'm Max Chafkin and I'm Stacy Vanixsmith. Hey, Stacy, Hello, I have a question for you, Max.
What is your question?
Fine morning? Are you feeling liberated?
Well, I mean I am, because yesterday was Liberation Day.
Was liberation now, but I am not sure what I feel liberated from.
It almost feels like I'm liberated from any sense of normalcy.
Yeah, reality, Yes, I feel like a lot of people are feeling that way. I think that has to be the theme of our show this week, liberation, because, of course, the big economic news like you just said, or maybe even kind of like an economic bombshell. It felt more like President Trump on Wednesday aka Liberation Day, unveiled our country's new tariff policy and it was pretty shocking. Markets are panicking, companies are panicking, countries are panicking.
I am panicking also too. We can talk about that.
I am not panicking, Stacy, but I'll tell you on the rest of the show, we're going to continue the liberation theme.
We're going to talk about.
The prospect that TikTok might be liberated from China.
Yet one person's liberation is another person's acquisition.
Indeed, and I've got an underrated story about liberating ourselves from the constraints of how we think about baseball bats that has loomed.
So large in my mind for so many years. I'm glad to know that. But first, of course, you know, this is everybody's business.
We wanted to see how everybody was feeling about the tariff news out of the White House this week, so we had our producer Stacy Wong and Magnus Hendrickson go out into the streets to ask the people, are you worried that tariffs are going to cause prices to go up?
I am worried about prices going up.
Yes, I'm very concerned about prices going up.
I think it just feels like out of my control.
On a scale of like one to ten, I'll probably say like middle of the.
Pack, five. I haven't really thought of it that much. I expect to be surprised.
I'm like, Okay, well, prices are growing up.
I need to make some adjustments in life.
I work in real estate construction. This affects especially like lives of New Yorkers. Have you been hoarding anything?
Oh?
No, honestly, I've thought about it.
I am currently in the process of planning a wedding, so.
Right now, I don't have a lot of purchasing capacity, and.
Living in New York City, we have very little space to hoard anything.
Toilet paper, beans, finny fish, the residual pandemic hoarding.
Oh wow, I mean, do you think people people are really hoarding beans and toilet paper?
That's crazy.
I mean, if I sort of thought about it, I started to think about what products I really love that are from overseas that might get enormously more expensive in the next couple weeks.
Honestly, like listening to that, I just feel deficient because I did not make any purchasing changes, no rewarding hallowing the incredible economic uncertainty, the chaos regime or whatever to just wash over me.
All right, Max, let's get into it.
Liberation Day tariffs The numbers that got unveiled this week were pretty shocking, I think, higher than anybody thoughts.
Let's just listen to a snippet from this incredible event, my fellow Americans.
This is Liberation Day waiting for a long time. April second, twenty twenty five will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed and the day that we began to make America wealthy again.
L Day, Stacy L Day, A liberation Day, make America wealthy again. I mean, I hesitate to point this out, but like we are already the wealthiest country in the world.
I don't even know what to say. I'm at a loss. I'm at a loss.
Stacy's having trouble articulating here because what is happening is so weird and so surprising and so outside of the norms of what somebody who follows the economy, like having nothing to do with politics, expects out of a government. It's it's like we've instantly gone back in time. I don't know what, like one hundred and twenty years or something to.
Do the time of mercantilism? Is that baby?
So let's take a look at what exactly happened on Liberation Day. Let's let's look at these numbers. Thirty four percent tariffs on goods from China, twenty percent tax on anything from the EU to twenty four percent tax on goods from Japan. Those are our top trading partners, along with Canada and Mexico.
Yeah, and the other thing, Stacy like, thirty four percent of good of tariffs on goods from China. But that's on top of tariffs are already there. So that's fifty four percent.
Most of the stuff we import from China. That is fifty four percent tax on a.
Lot okay stuff.
And not only that, but over the past decade or so, a lot of companies have moved manufacturing away from China because they saw this coming.
They moved it to places like Vietnam now there or.
Apple moved a lot of its operations to India.
Yeah, big tariffs on those countries as well. So the timing, it's not immediate immediate, but it's going to happen in the next couple of weeks.
Basically, yes, I was really, really shook.
I was not expecting the numbers to be as high as they were. And I've talked to economists of all political stripes for a lot of years, and I have to say, no serious economists thinks that like large scale protects of tariffs are a good idea.
It's bad for an economy.
I mean, it would be like finding a doctor that said smoking was good for your health, Like it just doesn't really exist. I think you can find economists say in certain situations like very targeted tariffs.
But can you just explain quickly why, because like you've spent a lot of time supporting on the economy, why are they so against it.
Well, tariffs are at tax essentially, right, I mean, this is the tax. JP Morgan actually came out saying this is the largest tax like the USS and since nineteen sixty eight. So if you think of it like a tax, it's pretty simple. So basically, you are taxing the things that we import. Two thirds of our economy is consumer spending. That is the load bearing beam of the US economy is you and me buying stuff. So anything that gets in the way of that really threatens to compromise our
whole economy. So when prices go up by fifty percent, even twenty percent, thirty percent, we've all been through inflation from COVID. Those prices go what people buy less, which means companies sell less, they make less money, They stop expanding, which means they stop hiring, which means they can start firing people, which leads to economic contraction.
And then like we're in.
The situation of at least like darkness and dragons, except like, I'm not sure we can afford dragons.
It's bad.
It's bad, yeah, I mean.
Writing in his Odd Lots newsletter this morning, our colleague and fellow Bloomberg podcaster Joe Wisenthal said it was one of the craziest days he could remember. You saw the stock market kind of tip in real time as they figured out just how.
Big Trump had gone.
There had been all these reports kind of over the last couple of weeks and even beyond that, about is it just gonna be a little tariff, is this a negotiating thing.
And is it gonna be kind of vague?
You had all these contingents both within the White House and maybe on Wall Street, who I think we're kind of wish casting, right, and of just hoping somehow they would be able to bring Trump around to the consensus view, the one that you just expressed, which is that, of course, tariffs are bad for our economy, as can instructed, it's like a massive tax on consumers. Trump had this weird moment during the event where he talked about groceries.
He's like, I love that word groceries.
Oh my god.
It was a very strange.
It was very long.
It's like a policy designed to make groceries.
More expensive moments of poetry.
Many of these things that are being tariffed are things we do not grow in the United States. So that's why everyone was hoping it would be less bad.
And here we are. It's sort of what the normy business types feared.
I was watching the announcement here at Bloomberg in the newsroom, and here at Bloomberg, everybody's got like five computer screens. They're all covered in various charts and graphs at all moments. And I looked out across the newsroom and all the charts were read, Like as Trump was talking, all the charts were read.
But this is where I was sort of hoping you.
Could offer a ray of light, Max, because you have covered the people in this administration Trump, Trump's interactions with business for a long time. And I I thought, maybe, like, is this typical Trumpian blusters? This is shot across the bow, throw us some hope.
I'm also just by nature like disagreeable, and my tendency when like all of these economics are like this is bad, I'm like.
It must be good.
Then I think there are two ways you can go here, and but they don't agree with one another. So one is this contingent I just talked about, which is like Scott the Scent, the Treasury Secretary, the CEOs of major banks, probably like many of the business journalists people like us who write about the economy and share this kind of consensus view is that Trump is actually not going to go through with this. Like the stock market is down as we speak on Thursday morning, but it's not down that much.
It's like down four or five percent.
You're talking like he just broke the world, and the S and P five hundred.
It's a little bit that way when I was watching it, Yes.
I know.
So my point is clearly there are many people who think this is yet another negotiating post. We saw this with the situation with Mexico and Canada where he announced these huge tariffs and kind of basically pulled many of them back. You have people in Trump's inner circle already signaling that this is sort of a starting point of a negotiation that is not the ending point of a negotiation.
He's making him an offer they can't refuse.
And maybe that could work.
The other thing, and this is a sort of different reason which you might feel optimistic, is like, look, there are things about this economy that you describe this consensus view that are very bad, like a world, a world where we just buy all this cheap crap and pay huge sums of money to ship it often by air, creating huge climate consequences around the world. Like it is not good for the world. It's arguably like a bad way for us to go through life. And maybe like
this kind of consensus view did that to us. And if we were able to like move towards a world where more of our stuff is made locally, like that would be a stronger and more sustainable country. I could almost believe that the problem is that the other point I just made kind of undercuts it because businesses don't really believe.
This is going to happen.
Even now, We're not going to see like shoe factories or whatever open in the United States because no one's going to invest years and years and years to set up a whole new supply chain when they could just wait till the next election or till when you know, Trump changes his mind.
Also, wages are really high in this country. I read a great article in Forbes about how much an iPhone would cost if it were entirely made inside of the US, and the estimate was between thirty and one hundred thousand dollars. So moving manufacturing back to the US and you know, making everything here, yes, you're right, it would be sustainable, but things would get massively more expensive. That's why we've outsourced in the first place, and it's made all kinds
of goods affordable. I think you make a great point that maybe our economy is over dependent on US consumers, and in fact, sixteen percent of the global economy is Americans buying stuff.
But I just want to say that kind of thought experiment and you just gave. Even somebody who's for these tariffs is not like, oh, yeah, we should pay one hundred thousand dollars for an iPhone. Now, they're just saying you should pay fifty percent more for some of these components. You should ask consumers to pay a tax for the downstream consequences of this supply chain. Like I only, that's crazy. We talk about that with environmental stuff all the time.
I think a lot of these businesses and economists and so on don't think the idea of a carbon tax, for.
Instance, is crazy, which also is just a massive drain on consumer spending.
So yes, but then you put things way out of reach of a lot of people, especially lower income people, middle income people. Suddenly cars and smartphones are out of reach for them.
That is not a great situation, I would argue, Okay, I want to.
Stop defending this for a second.
We have to talk about this formula, the science that produced these tariffs, the.
Science that produce these tariffs. Actually, there was a formula that was used so that you take the trade deficit for the US in goods with a particular country, you divide that by the goods that that country imports.
Wait, yeah, you take it's the train deficit divided by imports divided by two.
For some reason.
Okay, listeners, if we got that wrong, send us an email. Everybody's at Bloomberg dot net. But you know this is weird because number one, they talked about reciprocal tariffs. And you might think, oh, so that means like, if one country is charging a twenty percent tax on imports from our country, will.
Charge yes, twenty percent on theirs. That is not what's happening.
We're basing this on like how much stuff do we export to them? If we export a lot to them, the tariff's going to be lower. Yeah, and now maybe that makes sense from a negotiating perspective, but it's just kind of crazy because it creates all these weird situations where these like very poor countries are gonna have huge tariffs, gonna be all the harder for them to grow their economies.
And also, like US consumers buying stuff is also like one of the biggest parts of is economy, Japan's economy, but also of Vietnam's economy, Mexico's economy. It's going to be a really tough situation for us and for everyone in the world. Like I can't think of a country that's not affecting all right.
One other thing on this formula.
And again this is speculation, but there are people suggesting, and I think this is plausible that the formula was created by chat gpt, because we're true. If you plug like how would you do a tariff into some of these chatbots, they give like these kind of similar formulations. And if this is true, which it very well might may not be, I think that it is maybe the first step in seeing the limits of AI.
AI.
Yeah, AI should not be setting tariffs, but I did want to end on the kind of a positive note, which is I did find a few silver linings in our tariff situation, and I brought them in to the studio.
Are these like a good old fashioned American made products or what?
No, quite the opposite. So one of them is this.
It's a can of coke. It's like a tall boy of coke.
It's like it's a can of diy coke. It was the only one I could find at the Dwayne read. President Trump apparently drinks twelve of these a day, twelve. But there was an exemption on aluminium steel, okay, which is really good because aluminium steel are literally in everything from buildings to home appliances to cans of coke.
So that is one silver lining okay.
And then there were a couple when you calculated out the formula, a couple countries that came out looking pretty okay. One of them flowers flowers from Columbia.
So Columbia exempt or what ten percent?
Okay?
So these flowers, this is Dwyane Raid, so they're nineteen ninety nine, so they will you know, we're talking about like maybe twenty one dollars or twenty two dollars.
Are there any other products, Stacy, Yes, that are are final.
I think you're going to be very excited about this one. It's a bag of something idiot. It's Eastern candy Cadbury. So the UK ended up looking okay in all this. It's like the only moment where Brexit seemed like a good economic idea was on Liberation Day. Because because they don't you has like twenty plus percent tariffs, the UK got off with a ten percent tariff, meaning that chocolate from Cadbury and products from the UK, the prices will go up less than the prices for other things.
We can eat our feelings a little bit.
Drink them and get ourselves flowers.
It's not.
Okay, Stacey.
Do you remember like when we were younger and more innocent, like two months ago, and the.
Big source a couple of days ago of.
Business uncertainty was TikTok, like wood trump band, TikTok, the very popular, very large social media Well, people probably missed it with all the excitement of Liberation Day. But two days from today, as we're recording, this is Liberation Day, park Dood.
It's the day that TikTok.
I think you have to pay a tax if you use friends to sell itself.
It's the deadline for the Chinese owners of TikTok Byte Dance to sell it assumingly to a US owner. There's been a lot of news here and I want to talk about it, but because it's kind of related to the conversation we had, but also just because this is a huge story in its own right. And we have my favorite technology journalist Bradstone, who also is my boss, the editor of Bloomberg Business Week.
Yes, indeed here with us virtually today. How are you doing, Brad?
Hi?
Guys happy TikTok almost TikTok.
Liberation Day is part liberation part two?
Is that right?
That sounds right?
So Brett, just to.
Catch us up, like, where do things stand with TikTok right now?
So April fifth? What do we expect to happen or what has to happen?
Well, it may happen before then.
It almost seems like as we speak right now in the Oval Office, there are discussions, led in part by Vice President jd Vance, evaluating some of these deals to buy the US arm of TikTok, And there is reporting that there is a coalition led by some very Trump friendly allies, including the venture capital firm Entries and Horowitz, Blackstone, of course, Steve Schwartzman, who sort of famously endorsed Trump during the campaign, Silver Lake, other large private capital investors
to buy TikTok's US business, and then I guess licensed the algorithm from bytem Still a couple of questions about how that will work.
So I encountered this story in the This Morning and like, honestly one of the crazier deal stories I've ever read. So Brad, you you hit part of it, which is that you have this collection of like Trump adjacent venture capitalists, like people who are either have like donated huge sums of money to Trump's campaign or are like in at mar Lago pretty much on the regularly, like Mark Andresen.
So that's fifty percent of this proposed deal. And I did mention Oracle right right, there's this line, and there's a line in a story out of nowhere Oracle, co founded by Trump ally Larry Elson, would secure TikTok's US data as part of the deal. So like somehow Oracle gets the data, the algorithm goes someplace else. There's also
a line in this story which I enjoyed. One person caution that the situation remained fluid, and that was possible, the White House would abruptly change its plans, which like, do.
You have to write that I know a Trump's story anymore?
Can't we just like that's just the paragraph you can cut and paste into any story right now?
But my question if bite Dance is remains a twenty percent owner of the business and is in some way licensing the algorithm to these US investors, these new owners, then how are we resolving the privacy questions the war gaming of Is TikTok a safe kind of social network? If it's partially owned by the Chinese government? How are we resolving any of the fundamental issues that Donald Trump identified I think rightfully identified almost eight years ago. Does
this deal really resolve it? I think that's still an open question.
And Bye Dance has said that they are not going to sell right.
I think they've they've softened it a little bit, particularly with this still ambiguous maybe understanding that they would retain They're not selling the algorithm, they're merely licensing it.
That was the sticking point.
Can we just quickly talk about some of these other bids, I mean, Brad, first of all, there's this Frank mccor former owner of the La Dodgers crypto bid. I think that's still around, and I think no one anyone is taking.
That seriously, maybe besides Frank mccorn. I'm not sure that sounds right.
He wanted to put it in some equivalent of like an open source, public trust source the algorithm make it a little bit more accountable. That does not seem to be where the current conversation is going.
I have to say, speaking of accountability, Brad Jeff Bezos swooping in at the last minute with a letter to Vice President jd Vance, I believe, offering that he could take it over himself.
Right.
Well, the deal comes from Amazon, right, And I don't know how Jeff Bezos kind of propelled this is. I mean, I think a Milania Trump forty million dollar documentary that Amazon is funding does feel like a Bezos project. But you know Amazon, Amazon does have a record of trying to come into these deals to give itself.
Some optionality to be part of the process.
I mean, I'm old enough to remember when Amazon was rumored to be buying AMC theaters or Dish networks. But here it would make a lot of sense. I mean, Amazon, you know, sees a shopping is becoming social. It experimented with its own short form video service called Inspire, which it had to shut down. TikTok shop is massive, like
thirty billion in gross merchandise sales last year. And then you've got to remember Amazon's becoming an advertising juggernaut, and they would basically be unifying like the number three and number four players behind Google and Meta, So that makes a lot of sense.
It was sort of immediately dismissed.
I mean, the thing is that you know jd Evance to the extent that he is leading this project is you know, sort of shared some of the antitrust values with the Biden White House, and it's really hard to believe, you know, despite however many dinners. Jeff Bezos has had a mar a lago that the Trump administration would hand over this valuable asset to a big tech company like Amazon.
Now, there was a potential other buyer who came up a couple months ago, which which made a certain sense,
which is Elon Musk. And the reason, I know that's crazy side why not, But beyond the fact that hey, he runs a lot of businesses, he's close to Donald Trump, Musk was seen and This is how it was reported at the time as someone that Beijing that the Chinese government which is going to have to prove this deal because it would be the sale of a major, very valuable Chinese company, basically the force sale of a major Chinese asset into US hands. Do we think that Beijing
could get comfortable with either of these deals, Brad? I mean, like, I don't know about Bezos. Maybe that's one of the reasons these the venture capitalists sort of make sense. Like a lot of these guys have track records of doing business in China, and maybe it's easier to kind of get with a consortium where the Chinese company still has like a substantial stake in the whole enterprise.
I don't know.
I mean, I recall from earlier this year that Elon made a public statement that he was not interested in buying TikTok. I don't know if we take that at face value. I think for the Chinese government, right the options are limited. I mean, it has become clear or now for many years that they were going to be forced to divest this asset, and I think what they're negotiating for now is less a particular buyer and more of the ownership stake and that crucial control over the algorithm.
And if Trump is willing to allow that, which you know, as I said before, feels like it defeats the whole purpose, then the Chinese government, I think, is going to come out of this feeling like it had a minor win.
Well.
Also, I mean, maybe it could be part of a bargaining chip in like renegotiating.
Some of these tariffs on China.
I mean, would you have to pay a tariff if you bought TikTok, because really expensive. But maybe, I mean, I don't know, could this be a bargaining chip in a larger conversation.
I mean, I think for sure, right, like, TikTok is a major asset. It's not only valuable in the sense that like it's a lot of money and those are jobs and so.
On, but valuable in a kind of cultural sense.
Yeah, this is like a really important Chinese cultural export, which is of course part of the reason why a lot of conservatives and even Donald Trump, you know, back many years ago, forced this conversation in the first place. I mean, the weirdest thing about this story is Trump suggested banning TikTok. Biden went ahead and did it. And then Trump, probably not entirely coincidentally, after receiving a massive donation from a TikTok investor, just totally changed his position.
Well, he also got an account and the account did really well, and I think that actually may have tipped the scale too. He mentioned it like explicitly a couple of times. Yeah, you get that little dopamine hit.
It's hard to say no.
Actually, zone.
Zone. All right, let's move on to our final segment. Brad, we're gonna have you stick around for this. This is where Stacy or I will find an underrate story of the week and present it to the others. And I want to start with, you know, just a great moment in television history.
Let's give a listen, guys kidding, it's not about muscle.
In simple physics, calculate the velocity V in relation to the.
Trajectory T in which G gravity of course remains a constant.
It's not complicated. Stacy, had you seen that one?
I mean this is from Seinfeld, clearly George Costanza giving Baseball.
Lessons, Season eight, episode nine of Seinfeld the Abstinence, to be specific.
He works for the Yankees.
You remember that the plot of this episode.
I'll just to refresher memory. I'm sure it'll come back to you in a second. But George stops having sex and becomes a genius. And among the genius discoverers he has is he figures out the physics of home runs and is in the scene teaching Yankee Grades, Derek Jeter, and Bernie Williams how to hit a.
Baseball how to hit a baseball. So I'm bringing this up because.
That's a little old for an underreait.
This is happening right now in real life. Torpedo bats.
These are a new invention on innovation in the world of baseball. This is a bat where the barrel is like sort of closer to the handle. It was invented by a sort of obscure coach on the Miami Marlins, an MIT physicist. So we got the physics in there, and he hired an MIT physicist. The baseball team did yes.
His career trajectory is just frankly amazing. He was an MIT physics PhD. He worked as a minor league coach for a while in the Atlantic League, community college coach, and then he hits it big in the majors and he invents the torpedo bat and these things. Brad, I'm sure you're aware of this because you're a baseball fan. It's like some people believe this is like breaking the game of baseball. This is the world will never be the same.
I don't think it will break the game of baseball, because I think the game of baseball is already broken.
I'm really bummed.
I feel like this season, I mean there's there's almost, to my mind, no drama. I mean, the competitive balance has never been more lopsided. The Dodgers are going to win the World Series again. The formerly Oakland A's are playing in like a stadium in West Sacramento, not even Sacramento Sacramento, but occupied by a team called the river Cats.
By the way, because emotionally.
And my team is the Cleveland Guardians. They're off to a terrible start. But more importantly, you can't watch the games on TV, like baseball's lost all its TV contracts. Oh and by the way, the league's probably going to strike again next year.
Right. They've never been able to figure.
Out things like a salary cap and so yeah, torpedo bats again. It's like some teams hacking the game and to me more evidence that than maybe Ma's Opening Day.
Everybody ano they're great spring and major League baseball, but I just feel like, you know, particularly compared to basketball, the NBA and the NFL, major League baseball has lost its way.
Okay, maybe the torpedo bat is the moment that turns it all around and brings people back to the great sport of baseball.
I'm with you, Stacy.
This is great news, a great innovation. Like I said, dreams can come true. You can be an MIT physicist and get a job as an assistant coach for one of the worst teams in baseball. But I do think, like I think, this is very exciting. I love the story. I love the fact that the Yankees. I'm not a Yankees fan a Mets fan, but they hit like nine home runs when they were using these bats.
Oh yeah, what do the bats do that's so special? Like, why are they better than a regular bat? I mean they looking at them, they're.
It's so stupid. It's like as stupid as George Cassandra.
Basically, the ball hits closer to your hands, so why not put the big part of the.
Bat closer to your hands. That's it. That's it.
Yeah, it's physics, that's what that's what an MIT degree.
So these bats you can buy them now, the Torpedo Pro Reserve. You can buy these for two hundred nine dollars. And the best part of all Stacy made right here. No tariffs, No tariffs all right.
Brad Stone, thanks for being here.
Thank you guys.
The show was produced by Stacy Wong.
Magnus Hendrickson is our supervising producer, Amy Kean is our editor, and Brendan Francis Newnham is our executive producer.
Sage Bauman heads Bloomberg Podcasts.
And if you have a story that you think should be our business, send us an email. It's at everybody's at Bloomberg dot net. That's everybody's without an apostrophe, everybody's at Bloomberg dot net. And if there's something that you buy that you're worried that tariffs are going to affect, we definitely want to hear from you. Send us an email or a voice memo. We would love to know what's on your mind. Thank you for listening. See you next week.