US Launches Tariff Refund Website & Robots Outrun Humans in Half-Marathon

0:00Toby Lavery:Get informed no matter where you are or what you're doing. Subscribe to Bloomberg News Now and get news when you want it on your schedule. Big tech dominating our headlines. Another win for Donald Trump. A key inflation report. These are short audio reports, five minutes or less, that bring you the latest headlines with context 24 hours a day. Stay on top of the latest news from around the world. Get it on your smartphone. Subscribe to Bloomberg News Now on Apple Podcasts, Spotify or anywhere else you listen. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the robots are running half marathons faster than humans.

0:39Neal Freyman:Then businesses rejoice. You can get in line for a tariff refund starting today. It's Monday, 420. Let's ride.

0:51Toby Lavery:Good morning and welcome back to the week. I look forward to this day all year. Marathon Day in Boston. Later this morning, more than 30 ,000 people are set to embark on a hilly 26.2 mile journey from Hopkinton to Boylston Street with 500 ,000 spectators cheering them on. This year's race hasn't been without a little brand controversy. Ahead of the marathon, Nike put up a sign at its Newberry Street store that read, Runners welcome, walkers tolerated. That sentiment was criticized by some local runners and disability advocates for not being inclusive. And by Friday, the sign was taken down.

1:27Neal Freyman:I see both sides of it, Neil. Tolerated felt like too harsh of a word, but also stick to your guns at Nike. If this is your brand identity, if you want to highlight winning, just do it. Don't get scared and back down because now you just look bad to everyone involved. Still, it shouldn't overshadow Marathon Day, which is awesome. We're finally getting some cool weather and even a little bit of a tailwind, so we should see some fast times.

1:54Toby Lavery:This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, host Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, analyze economic developments, and bring context to conversations around equities, fixed income, the economy, and more.

2:13Neal Freyman:Join Colin, Lizanne, and their guests as they share insights into what might be moving the markets and why, as well as what indicators they're watching for signs of change. They'll also answer investor questions on everything from how sectors are evolving to what the bond markets are telling us to where to look for opportunities and considerations for your portfolio.

2:32Toby Lavery:You can download the latest episode and subscribe at schwab.com slash on investing or wherever you get your podcasts.

2:39Neal Freyman:Refunds, get your refunds. Today is the start of the U.S. tariffs refunds process where the government will work to get money back to importers after the Supreme Court declared most of President Trump's tariffs unconstitutional two months ago. A tariff refund portal goes live today called CAPE for Consolidated Administration and Processing of Entries, where businesses will be able to submit claims to snag a share of the estimated$166 billion owed in refunds. This is a big win for the business world, which has been in limbo ever since the Supreme Court ruled that the Emergency Powers Act was not a suitable cover for issuing widespread tariffs, but then stop short of actually recommending how to process refunds.

3:21Neal Freyman:Finally, some clarity is here. Though business owners are not going to wake up with a chunk of change in their bank account, the refunds are not automatic. Businesses or customs brokers must manually opt in, then wait 60 to 90 days for approval. Still, if all goes to plan, companies will be able to recoup some of the tariffs that aid into their bottom line. Neil, is this the sort of thing that is going to trickle down to consumers? Are we going to see any of this money?

3:45Toby Lavery:I wouldn't hold your breath. Tariffs are paid by importers and the only the importer of record is entitled to money back. So unless you actually imported a sneaker yourself from China or Vietnam to the United States, then you are not eligible. Wait, maybe maybe companies could say, hey, we charge a little bit more to consumers for tariffs. We can perhaps share some of the spoils from the refunds with consumers. That doesn't seem likely to happen. Costco's CEO last month told investors that the company would return shoppers money through, quote, lower prices and better values. So that's sort of the tack that companies are going to take.

4:24Toby Lavery:And CNBC interviewed 25 CFOs about their plans if they got tariff refunds. Zero out of 25 said they would directly reimburse customers.

4:33Neal Freyman:Yeah, a lot of them are saying that it's very difficult to actually find the exact cost of tariffs because it's been woven into so many different parts of the supply chain. So it's not just as easy as saying like, hey, I am going to give you X amount of money because this is how much the tariffs cost. All up and down the supply chain, manufacturers, suppliers, importers, they all are eating some of those costs. So it's just not as cut and dry as saying, hey, here's a check. There is some customer and consumer pushback here. There's a few lawsuits that are out there against some of the companies, even the ones that you mentioned, including Costco and FedEx.

5:06Neal Freyman:FedEx has said to they they pledged to pass down any refunds it receives. You're also seeing this dynamic play out between retailers and wholesalers. So a retailer, for instance, if you're a furniture retailer, you had to pay elevated prices to get your products because tariffs made everything a little bit more expensive. As a retailer, you ate those additional wholesale costs, but you are not going to be able to apply for a tariff refund. So some of them are saying like, hey, manufacturers, you mind sharing a little bit of the love with us? Because like, hey, we ate some of these costs alongside you.

5:43Neal Freyman:Who knows how it's going to play out between retailers and wholesalers?

5:46Toby Lavery:It'll also be very interesting to look at this website that the government's been up because that's always an adventure. The apparently applying applying for one of these just to register your business. Fifty six thousand have done this said, well, actually, we're pretty impressed that the government got this up and running in two months. because they had a very expedited timeline. But they also said filling it out was very tough in the sense that you couldn't make any mistakes. Like if you wrote company versus CEO, you just kind of had to get everything right. And they also make you put in your bank account information, even though the government already has it for customs payments.

6:21Toby Lavery:A few businesses were irked a little bit that these refunds didn't come automatically and that they had to apply for them because the government has all this data in its systems already. So come 8 a.m. or 8.30 when this website goes live. We'll see how well it holds up.

6:37Neal Freyman:One thing to look out for is an alternative market of selling your claims to hedge funds, which has been kind of percolating over the past few months. The reason why you would do this, if I am a business owner and I can apply for a tariff refund claim, it takes a while, like, you know, 60 to 90 days. You can't make any mistakes. or what I can do is say like, hey, this is my piece of the pie that I am owed. Do you want to buy this from me, hedge fund owner, maybe for a little bit of a discount? But that puts money in my pocket immediately. I don't have to go through all the hoops, the rigmarole, and now hedge funds get to have, you know, income coming their way because they are willing to go through those hoops.

7:18Neal Freyman:So something to look out for is alternative markets of selling your tariff refund claims.

7:22Toby Lavery:It's always a big day when you get another.gov URL entered into the world. Okay, after a brief moment of hope, the Strait of Hormuz remains as close as a Chick-fil-A on a Sunday, dashing expectations that the worst energy crisis in history would begin to fade. It's been a dizzying 72 hours around the world's most important oil checkpoint. On Friday, Iran declared the Strait completely open after Israel and Lebanon agreed to a ceasefire, and several ships that were stuck on the other side made a break for the open seas. Oil prices tumbled about 10 % to$90 a barrel, while stocks surged to close at even more record highs.

7:56Toby Lavery:It seemed like oil and natural gas would finally be able to reach far-flung markets starved for energy supplies. But as those ships neared Hormuz, they abruptly pulled a Yui. Hours after declaring the strait open, Iran closed it up again, blaming the U.S. for continuing to enforce its blockade of Iranian ports. And several ships attempting to transit the strait were even fired upon by Iran's military. Even more escalation came last night when Trump said an American Navy destroyer fired on and disabled an Iranian-flagged cargo ship in the Gulf of Oman. showing that the U.S. blockade is real and being enforced.

8:29Toby Lavery:Yet President Trump is still seeking an end to the war. Yesterday morning, Trump said that U.S. negotiators led by J.D. Vance will head to Pakistan today for negotiations, but once again threatened to blow up Iran's power plants and bridges should they not agree to a deal. Toby, so much confusion, but the bottom line is probably the strait remains closed, 20 % of the world's oil and gas supplies still not going where they need to go.

8:49Neal Freyman:Yeah, my neck has whiplash because of just everything that's happened over the past 72 hours or so. So does the oil market. I mean, it did look like everything was mellowing out. Oil finally dipped below that$90 a barrel price point. But now, as of this morning, Brent crude futures are back up 6%. Oil is trading above$96 a barrel because every tweet that is sent out, every truth that is sent out does have these knock-on effects. And so now everything that seemed to happen over the weekend where oil stocks slumped, Fertilizer stocks also slumped. Cruise lines were jumping up because of cheaper fuel.

9:29Neal Freyman:Airline stocks were flying high because of cheaper fuel. All of that seems to be reversing just a few hours later. So it is looking like the market is just trading precisely on whether peace talks are happening, what truths are being posted. It really is just so sensitive right now.

9:45Toby Lavery:And I know I recommended Flight Radar 24 last Wednesday, which is a flight tracking app. But a lot more action is happening on marinetraffic.com, which is where you can track container ships. Actually, any ship that is in a water right now you can track. And people are locked in to see how many ships are even making a break for the Strait of Hormuz, which are turning back. And what was interesting was that on Friday and early Saturday, people identified four cruise ships going about, trying to transit the Strait of Hormuz just 45 minutes apart. These cruise ships were not actually in service. They did not have any people on board, but they've been stuck on the other side.

10:20Toby Lavery:And actually, four did go through. So if you want to see if any cruise ships or tankers are moving through the Strait of Hormuz, that's your website.

10:26Neal Freyman:One thing to look out for, too, is mine sweeping. The U.S. has been quietly deploying sea drones out there to try to clear some of the mines that the Iranian Navy left. Because when you have these dueling blockades going right now, you really need to know which, you know, available routes are safe for transit. So Iran is saying like, hey, you have to hug the coast. You have to come near Cargill and you got to go through these checkpoints. We are controlling the strait. The U.S. wants to enforce its own blockade. In order to do that, you need to be able to say like this is the safe passageway. You will be escorted by naval ships.

10:58Neal Freyman:But in order to do that, you have to make sure that the strait is free of mind. So mind sweeping is a big aspect to eventually determining who actually has control of the Strait of Hormuz.

11:10Toby Lavery:And meanwhile, the energy crisis continues apace because the strait is still closed. The European Commission is expected to meet this week and encourage companies to give their employees at least one day of remote work. And they're also going to give subsidies to public transport systems in order to discourage fossil fuel use. So that's happening in Europe, which is wild to think about. Also in Europe, the International Energy Agency, this happened last Friday, that European airports have maybe six weeks of jet fuel left. So come six weeks from now, there's going to be huge cuts in airline and airline transportation and airline services around Europe.

11:47Toby Lavery:So if you're thinking about going on vacation or you're in Europe, you know, this thing is about to get real in just six weeks. And then finally, Energy Secretary Chris Wright in the United States came on TV yesterday and said, look, gas prices, I don't see them necessarily coming down to below three dollars until next year. So very the whole global economy, especially Europe, is watching what happens with these talks in Pakistan on Tuesday.

12:09Neal Freyman:Yeah, you might be able to take your European vacation, but you might not be able to come back because there's no jet fuel. Welcome to Winners of the Weekend, the segment where Neil and I picked two stories that had a better weekend than someone who snagged a spot to MBD Trivia tomorrow. I won the pre-show game of hopscotch, so I'm up first. And my winner of the weekend is tripping because Trump is psyched for psychedelics. On Saturday, the president signed an executive order to accelerate research into the potential therapeutic benefits of drugs like LSD, MDMA, psilocybin, and ibogaine. The order peels away some of the red tape that has limited scientists' ability to dig into substances that have shown promise in treating severe depression, anxiety, and PTSD.

12:51Neal Freyman:Most psychedelics are classified as Schedule I drugs, defined as those with no currently accepted medical use and a high potential for abuse. But the administration says factors like the rise of opioid deaths and veteran suicides show it's time to speed up research and potential approval processes. Joe Rogan, who was in attendance for the signing, likely played a factor, too. Rogan has long advocated about the potential benefits of psychedelics, particularly the little-known substance Ibogaine, and texted the president asking about increasing access. Sometimes all you have to do is ask because apparently Trump responded saying, sounds great, do you want FDA approval?

13:30Neal Freyman:Now, this order does not immediately shift any psychedelics out from the Schedule I drug category, nor does it grant any FDA approvals. But it does do things like pave the way for more tests and pilot programs. Neil, it appears Trump is pretty on board with this, specifically Ibogaine, because at the signing, he said, can I have some?

13:49Toby Lavery:Oh, God, I don't know if he wants to. I mean, if he doesn't want to spend 24 hours in a very intense situation. So Ibogaine, I hadn't heard about it until learning about this particular story. is a psychedelic compound extracted from a Gabonese root bark. That Gabon is a country in West Africa. It's a trip that lasts sometimes up to 24 hours and is explained by many people who have done this as very intense, often distressing. But the thing is, you do it once, according to these people, and it completely eliminates drug withdrawal symptoms. It is a reset of your brain in 24 hours. And so there's a thriving industry in countries outside of the United States, particularly Mexico, where a lot of veterans and people with PTSD in the United States or other mental health conditions will go to Mexico and pay up to$15 ,000 for this treatment of Ibogaine, come back and say they're completely healed.

14:45Toby Lavery:And there's been a few promoters of it in the United States, including former Texas Governor Rick Perry. So that is maybe the all-star of this particular class of drugs that is being singled out for reducing red tape around research.

15:00Neal Freyman:Yeah, it also is getting a little money coming its way. This bill that Trump is signing provides$50 million for state-level research into Ibogaine. So Texas probably is the state that has gone the deepest on this particular substance. They've already committed$50 million to studying Ibogaine as well. But again, a lot of these research efforts run into red tape because if you are a Schedule 1 drugs, it is very difficult to get any sort of federal funding to conduct clinical trials to go through the hoops that you need to go through to obtain FDA approval. This is also a big win for something like MDMA, which has been inching towards FDA approval.

15:40Neal Freyman:They are currently undergoing additional phase three clinical trials there. So anytime you can strip away red tape from this industry, people who have been researching for a long time say it is a good thing because it is mighty difficult to overcome that schedule one classification.

15:55Toby Lavery:There's been pushback. some in the public health industry say, look, there's reason there's red tape. It's because these things are super intense, super dangerous, and there should be a lot of guidelines around experiments in this domain. And even in 2024, we were talking about MDMA. There was an MDA therapy up for approval at the FDA, and the FDA rejected it after studies supporting the approval missed serious side effects. And the Wall Street Journal came out with this big report showing that study subjects said they felt pressured to report positive outcomes because it would be such a historic moment for an MDMA therapy to be approved.

16:30Toby Lavery:And they kind of said they had a much better experience than they actually had. So there is a contingent of people who say there's a reason we're very much slow walking this entrance into psychedelics for therapy because it is extremely dangerous. On the other side, you have a lot of proponents saying we have a lot of veterans with PTSD, a lot of people in America with mental health problems. We got to try. We got to throw everything at the dartboard to see what sticks.

16:51Neal Freyman:All right, we're going to take a quick break and come back with Neil's winner of the weekend. Neil, it feels like everyone's trying to get more protein these days.

17:00Toby Lavery:Yeah, I've seen protein popcorn, protein cookies, and even a protein martini recently.