This is what the flux.
I'm Brett and I'm Justin and it's Monday the seventh.
Today, Pril Juzzy boy, it is tariff, central, left, right and the center. Now companies and investors are cleaning up the mess from Liberation Day. In fact, last week, nearly four trillion dollars was wiped from the NASDAQ one hundreds and that's the biggest drop since twenty twenty.
We know what happened then, b Man Fox am March on the ASEX was not a pretty month. It dropped more than four percent, but there were still four companies that saw their share price jump more than ten percent. And interestingly, there is one particular industry that dominated. We've got it all covered in the Flux at this month, So if you want to learn which industry outperform the rest, make sure to check out and the Fox out.
Three spectacular stories today, Juzzy boy, let's do it for our first. The owner of KFC stores in Australia, Collins Foods, has seen it shares drop nearly three percent, as Trump's tariffs might result in more beef eaters in Australia.
US politics actually changing how we pick up fast food meals now b man anymore?
Well, Colin's Foods is the ASX listed restaurant operator that runs KFC and Taco Bell restaurants.
We'd be talking more than two hundred and seventy five kfsa's in Australia, sixteen in Germany, fifty six in the Netherlands.
Don't you dare forget those twenty seven Taco bells. Juzzy Boy irrelevant?
Now me man. We know that Donald J. Trump whacked a ten percent tariff on Australian goods, including beef exports, and now the share price of Colin's Foods has dropped nearly three percent. Interesting. Colin's Foods does chickens? How does that wear well?
With Australian beef looking likely to become more expensive in the US, Australian beef producers are looking likely to sell beef domestically instead, and at more competitive prices.
Think two for one whoppers two dollars quarter pounders. It is a burger bonanza.
And Juzzy Boy this aimed fingerlicking good use for Colin's Foods investors.
No, they're more than a little worried about a price war between fried chicken and burger.
Chains, and this could hurt the profit margins of fried chicken big time.
Yep, So what is the key leading here?
When a major export destination becomes less attractive, supply often shifts back to a domestic market.
Get this, bee Man. In twenty twenty four alone, nearly thirty percent of Australian beef exports were headed to the US.
And with a ten percent tariff on these exports, it could lead to a sharp reduction in demand from the US and.
A sharp reduction in the profit margin for Australian beef producers. Ultimately, leading beef produces selling it cheaper locally.
Now, that's a win for burger chains like McDonald's and Hungry Jacks, which may benefit from lower beef costs.
But for chicken centric businesses like Collins Foods, it's a different story.
You see, approximately ninety five percent of Australia's chicken is consumed domestically.
So the poultry industry's cost structures are already set up for the Australian market.
And they aren't set up for a trade war against the big producers of beef.
So be Man. That means a switch from a Zingerberger to a quarter pounder burger might become even more appealing.
For our second story, Nike has seen at share price plummet after Donald Trump's new tariff on Vietnamese imports.
Jeez, just as Nike was limping already, be Man not what they need right now, So tell me more.
Well, Josey boy, we know that DJT whacked tariffs on more than ninety countries around the world on Thursday.
Kind of felt like he was picking names out of a hat with his eyes closed.
Some countries, like Australia in the UK were hit with ten percent standard tariffs.
While other countries were hit with much bigger tariffs, including Vietnam, which was whacked with a forty six percent of tariff.
But now, Josey boy, Nike has seen its share price tumble six percent after this big news.
That's because Nike produces fifty percent of a choose and twenty eight percent of its apparel in you guessed, Vietnam.
And given this monstrous tariff, Nike needs to find a way to bring its goods into the US at a reasonable price and be man.
This continues from Nike's rocky March as well, where they saw a twenty percent dip in their share price.
Guess it goes to show you you just got to spread the love when it comes to manufacturing.
So what is the key learning here?
When companies rely heavily on one country for production, any disruption can trigger big financial consequences.
It might be tariffs, it might be political tension. It might even be the risk of an actual disaster in that country.
And the irony is that Nike moved a lot of its production to Vietnam during Trump's first presidency.
That was when trade tensions with China were heating up.
At the time, it was seen as a smart hedge against relying too much on China.
But Beman, sometimes even friendly trading partners like Vietnam can find themselves on the receiving end of economic pressure.
Ultimately, companies can diversify their supply chain to reduce their risk.
That means spreading production across multiple countries and even more regions.
And Jugie Boy Nike ain't the only clothing company that invested big time in Vietnam.
Now Addedas also produces nearly forty percent of its footwear in Vietnam. But the man Nike's breathing a small sigh of relief after Trump claimed he had a constructive call with Vietnam, so maybe it won't hit them as hard as they thought. Neil for our third and final story, Apple has become one of the biggest losers of the global tariffs, with its largest one day valuation wipeout on record.
Apple shehare Price just experienced the same sinking feeling that I feel when I dropped my iPhone face down on the floor, A very scary moment, Juzzi Boy, So tell me more.
Okay, So we know Apple as the world's most valuable company.
We're talking hardware like iPhone and iPad, wearables like the Apple Watch.
And software like Yicloud and even Apple TV Plus.
In fact, Jazzy Boy, Apple's iPhone division alone is big enough to rank in the Fortune five hundred's top thirty companies.
Wow, but now, b Man, Apple's lost over three hundred billion US dollars in market value, and.
That's the biggest one day drop in history.
I'm assuming you're going to drop the big T word for the reason, b Man, correct.
A mundo, Juzzy Boy. Trump has announced a thirty four percent tariff on Chinese imports as part of Liberation Day and while.
Apple loves to say it's products are designed in California, the assembly actually happens in China.
As a result, Apple was hit hard by this tariff.
In fact, did share price drop more than nine percent.
And while Apple's currently in the pain cave right now, the ripple effect might hit consumers and competitors next.
Yep. So what is the key learning here?
Tariffs might start as a tax on imports, but they end up as a tax on consumers.
You see, b man, When tariffs is slapt on imported goods, businesses face high costs.
And let me tell you one thing, juzyboy, businesses don't just happily absorb.
The hitt No, no, no, they raised their prices.
We'd be talking everything from phones and electronics to food and household items.
And they man at tariffs tend to make everything more expensive.
In fact, take the twenty eighteen US China trade war.
During this period, the US impoves tariffs on a broad range of Chinese imports.
And studies by the Fed Reserve Bank of New York they actually showed that these tariffs were largely passed on to consumers.
They estimated that by May twenty nineteen, these tariffs were costing the average American household more than four hundred US dollars per year.
And jugeboy, those tariffs were nothing compared to the Liberation Day tariffs.
Fox Am, there was one big industry that absolutely smashed the markets in March on the ASX and got many others. If you want to learn what that industry was and why and forth so well, make sure to check out our article in the Flux out.
Thanks for listening, and we'll see you on Wednesday