Walter Bloomberg at the Wheel for the Whole Stock Market

27:20And instead, they become academics where it's like, I've been reading everything that they want to humor it so bad. And I don't get the impulse. Tom, is it just getting batpacks from Trump and they need to stay close? Or why is there such the intellectual humility with Trump when you never see it with the left? Because one, it remains a contrarian standpoint, which is very appealing to all these people. They love it. They love it. They love it. Like they're foundationally, you know, you can psychoanalyze that all you want and they're unhappy childhoods, but like being contrarian is extremely appealing to these people.

27:58And then there's also this obsession from a lot of business people, but tech specifically in trying to position themselves as the intellectual side of Trump, you know, the intellectual, what's the line? I can't remember it, but, you know, basically the intellectual argument in favor of Trumpism. And it is, since he's been like a national political figure a loser's bet every person that has wanted to be the intellectual side of trump has lost has ended up completely blowing up because there is no intellectual side to trump that's justifiable it's inherently a contradiction and like and so they make all these stories when it's like some guy like it is like this guy trump decided this like and and they're just like it's just like elaborate you know it's like oh i mean right now what's happening is they're like this is all about china and like clear i mean at first they were like we're gonna get out of this but we're going to say Navarro came up with this, not Trump.

28:48So we're all going to hate Navarro to give Trump the out. Then we take the out. And then Bessent is like, oh, this was all part of the plan. And Trump's like, oh, we saw the treasuries. They're all trying to make it seem like there's a plan. And then Trump himself is pretty open that it's like, oh no, I changed my mind. I read the room. Right. The only thing dumber than trying to be the intellectual argument in favor of Trumpism is trying to be the fourth, 10 dimensional chess argument in favor of what what his policies are, because like this motherfucker upends the chessboard every day. There is no there is no game that is going on here that you can that you can look at that many steps in advance because no part in the process of describing this guy's 10th, you know, 10 dimensional chess was it ever.

29:31And then we're going to back off without making any deals. Well, also, he he admits that that's like Trump is open about this being his procedure, too. Like even with the 90 day pause, he said his reasoning was like looking at the bond markets and was like, oh, nope, that's why we did it. And all these people were making excuses for like how genius it was. And this was this negotiation tactic. And he just comes out and says, like, basically it's because the markets freaked out. So like, what are you working with here? You can't like reason with this. I do love, by the way, just as an aside that it's like what it's like a Japanese was a hedge fund or bank that seemingly was like they had to get out of treasuries.

30:08Isn't that like, you know, Japan's treasury movements ended up saving or at least moving us away from tariffs. I think, as we were saying at the top of the show, still pretty heavy tariffs. Honestly, two of the people that I'm embarrassed to admit this. Well, one, I'm not embarrassed to admit. Tyler Cowen and Richard Hania. Like, it is refreshing to have these like conservatives be like the Trump support is totally like, you know, they're just lying constantly. And they're required to sort of contort this way and that to defend the situations. And I just don't understand why get so rich and powerful and have to have a public reputation that's so...

30:48I mean, Bill Ackman, what's the point? Why do it? What do you need? Why do you want that to be your reputation? Because fundamentally, they're not that powerful. And I think that's what gets revealed in all of this is that Trump, you can't wrangle him and also benefit yourself. so you might as well just try to attract your reputation to his star and hope that that benefits you in some way and that's allowed people like sean mcguire to become you know somewhat national figures even though as an investor he wasn't that significant i don't think people thought of him as like one of the more important people at sequoia he's sort of in the come up but yeah you know but the reason people think about him is that he is attached to trump is that he is an elon yeah yeah yeah an elon yeah but which again like which side are you on here, Sean, because Elon isn't even supporting Trump.

31:36I do hope there's more of a chasm there. Right. If you really want to attach your reputation to one of these people and there's going to be a fissure between them, that's going to be tough, Sean. Good luck to you. Because it's not benefiting you economically. It's not good for Sequoia. It's not good for your investments. So this is strictly about your reputation and trying to find relevancy. This is your wish casting now. The reality is We're still year one of Trump. You know, it's like four years. We're not even 100 days into Trump. So I'm saying there's still going to be a lot of upside in staying Team Trump.

32:12Like we want to be like, oh, he's a loser. Give up on him now. And certainly I do think like come midterms, hopefully it'll be good for Democrats. And like certainly the reckoning post-Trump too is going to be insane. But, you know, they have four more years to, I don't know, make a fortune and get out of there. I don't want to go too far into the predictions market, but it seems like, I mean, Trump two versus Trump one is a very different animal. And I think a lot of the problems that Trump one was encountering was resistance from Democrats, right? A lot of it had to do with Russiagate and investigations from the House and people kind of looking for ways to impeach him.

32:51Whereas everything that's gone wrong this time has been self-inflicted wounds. It's been the unpopularity of Doge, Elon's increasing unpopularity, and now the market's turmoil. And so it's hard for me to see what the upside is going to be at this point through. Like for Trump, one, you could argue like, well, the Democrats, if their attempts to ostracize and impeach Trump don't really go anywhere, then he can continue to carry out his agenda. And like the general trend of America's upward economic direction is going to benefit him and people will like him. I'm just saying if you want a pardon, if you want your factory to be placed somewhere, if you want anything out of the government, if you don't want an antitrust investigation, like they're going to be in this balance where if you're just purely extractionist, You're like, oh, Trump's got a lot of room to run.

33:41I need to be close to him, but not like so close that when there's a reckoning over the fact that they're literally rounding people up and disappearing them to El Salvador without any like recourse. Yeah, it's good. It's pretty dark. Well, let's just keep in mind also that there's a 90 day pause. And then how does this end up being something that is what the tech people want? The bull case for this whole catastrophe is that the tariffs were always too high on us. And we could negotiate line by line in the rapid fire negotiation and actually get everything down to zero tariffs. And that's, I think, what some of these Silicon Valley people want.

34:19That's what Ryan Peterson would want, right? Right. Right. Sure. We all want zero tariffs. But it's not clear that the Trump position is like that they want. You know, it's like, do they want zero tariffs or are we introducing tariffs? Well, that's what, you know, his Silicon Valley backers would want. The Trump position seems much less clear and honestly pretty still pro tariff. So like he just likes tariffs. He's been talking about it for 40 years. Right. You can look back. This is kind of one of his pet issues that America is getting a raw deal and we need to, you know, bully people with this.

34:50So I guess my point is that I'm skeptical of the Silicon Valley people's kind of wish casting bull case that this will even happen. All I can really say after what's happened in the last week and a half is that America's negotiating hand to get to this place is like significantly weakened. No, we won. We won the negotiation. Like, what are you saying? There were many leaders that called. There were many leaders that called. He was on the phone all weekend, Tom. He was on the phone all weekend. I've never seen a man work so hard. I guess it's unfair for me not to say that. The president of Mexico has been very nice to Trump.

35:26He loves her. Yeah. No one plays Trump better than Scheinbaum, really. She should teach some sort of a paid Zoom course. I know. I want to move to Mexico. I love Mexico City. They're going to get money from China and the United States. It's a left-wing government. Man. Yeah. Wait, is she left-wing? Yeah, she's left-wing. She's a socialist, dude. Yeah. Yeah. You're going to have to reckon with that yourself. Oh, yeah. It's too left-wing. Yeah. In Mexico City, they might say that, but most people are working on the black market. It is the most capitalist place in the world. I mean, they invest in public housing.

36:03She's certainly more leftist, I think, than even AMLO. But yeah, I guess we were able to get Cambodia to bend the knee. So I don't want to sell short the effectiveness of Trump's market chaos and terrorist policy. But I think we've created a world in which China is a very appealing option for a lot of these countries if they are able to consume at the rate that Americans are. And I don't really see the path now towards like a zero tariff or significant changes in the way that trade is done that benefits the US other than maybe some onshoring of some manufacturing. But I don't see that even happening in the next couple of years.

36:40Right. That was always the problem. Like, does Trump have the constitution? Even if you think he's right are they really going to stick with the painful medicine long enough to get what they want but trump is never the painful medicine guy i mean that was always the problem with this argument is that like even if you were in favor of this stuff which i think a lot of leftists really are and you saw like the uaw president coming out in favor right not very probably not very strategically whitmer like made an appearance with him yeah i showed up there yeah yeah there is like a strong leftist streak inside the belief that onshore manufacturing benefits the working class.

37:16The problem is that Trump as the avatar of this is horrible. And his appeal to certainly his supporters was never, this is going to be really hard. And like, remember you saw Democrats talking at the outset of the Ukrainian war, like we'd be willing to pay more money for gas. That's the Putin tax. And Democrats like hurting themselves. They love self-flagulation. They love making their How is Trump thing now? Which is like, you know, some of the right wing influencers like you don't need money. Money is like a made up. You can handle that. What is money? The ones and zeros. Yeah. They're like the hard labor will set you free kind of posting nowadays.

37:57What is going on? They're third world is now like it's just totally flip. All right. Let's let's take our medicine. One thing. Talk about business for one second. Okay, sectors that win. Obviously, American dynamism. I don't think we need to say that. It's like everybody's ready to buy every gun they can and ship it to Washington. That's clearly going to go strong. I think robotics is strong. I think the question I have, why is it good or not good for AI? Oh, I mean, I think anything that increases the cost, I understand they weren't directly impacted. But if we're in a place in which we are having bad trade relations with Taiwan, and the ability to import GPUs, which are still at a deficit to demand, is going to be impacted at all, AI is in a really shitty space.

38:44And these are companies that have terrible margins, all the AI foundational model companies. And if you do anything to make it worse, it changes like the cost structure of these things. and i don't even know with even the best of them how they're going to get to being profitable but if the you know core technology behind it and the gpus are suddenly made more expensive or the infrastructure in some way is harder to build um they're you're in such a shitty spot uh so i i don't know if ai is immediately impacted by it but like they need to fix this stuff fast because they're already operating on like extremely tiny bad margins that if made worse is only going to like cause more pain to the businesses and their investors.

39:27Let me just jump in and say separate from the tariffs, other Trump policies, I think, hurt the AI boom, too, especially if there's this whole goal of construction around data centers. They're also just like culling the labor force of people that typically do these jobs by with mass deportations and rounding people up and And like, not just to be kind of direct about it, like that's how this kind of functions. And it's like, how are we going to have this amazing manufacturing boom in places where people are not trained to do this work? And a lot of our labor force that we're currently reliant on, if you wanted to ramp it up really quickly, you're actively getting rid of like violently.

40:01I just don't see how this is like good. I'm going to take the other side of this. I think just AI is going to be in this sort of national security. Like if this is we're reshaping the tariffs into from a tariff war with the world to a tariff war with China, that's clearly happening. We're going to be in this tense China fight. And it's going to be like, we're going to talk about like the Cold War. And everybody in Silicon Valley is going to be like, you know, our go to the moon is having the best models. Deep Seek is a big threat. And so I think there's just gonna be a lot of nationalism thrown behind AI.

40:32You know, David Sachs is an AI czar. The Trump administration, J.D. Vance is big on AI deregulation. I think there's just a lot of energy from the top. The GPUs got exempted from the tariffs. And so I think it's clear that the administration is very supportive of AI. And so I think Silicon Valley and the government right now are just going to say, oh, actually, AI, at least the foundation model piece of it, is part of our Cold War. And so it's important to national security, and we're going to invest a ton. Yeah, I guess I could add on to that with if they wanted to have some kind of hard reset on trade and policy after this whole disaster, they could make an argument that like, look, the way it was carried out was not effective and not strategic.

41:21But in this came up during the Biden administration, like we probably should be manufacturing chips domestically. It actually is an issue. It's a chess act. Yeah. No one's against strategic like that. Yeah, exactly. That was the Chips Act. Exactly. Right. So they can do it. And like that maybe could be a way. I mean, I still think like the Trump bowl is like impossible to wrestle and get exactly, you know, the way you want it to go. But they could probably start like that would be a smart argument to start circulating. Rename the Chips Act to the Trump Act and get like double the money. Yeah. Because none of this stuff is a new problem.

41:55And I agree with you, Madeline. I think specialization of the workforce is a major issue with the construction of data centers. And you have people like Brad Smith and Microsoft talking about how the biggest thing we need to do in America now is train electricians so that these guys can be equipped to build the data centers. And that is not like an undocumented labor thing. I mean, the people that would be taking these jobs are very likely educated people, somewhat middle class and above, upward mobility. So that's a workforce you could be focusing on. It's not the core of Trump's base. So it's hard to get, his team excited about it.

42:29But sure, that's a reasonable approach to all of it. All right. Well, Tom, great to have you back on the show. Hopefully, for at least a couple more episodes. Madeline, enjoyed it. All right. Stick around. In the second half of the show, I interview Ryan Peterson, the CEO of Flexport. He is Silicon Valley's whisperer on all things logistics, whether it's a canal trap or the president jacking up tariffs all over the world. listen to my conversation with Ryan from earlier this week. Ryan, thanks for joining. Yeah, my pleasure. I'm like a hurricane reporter. He's just like, oh, he's in the middle of a Trump mess.

43:05Exactly. Whenever there's a canal jammed up or weird policies, yeah, we come to you. So do you think like the Silicon Valley set is sort of aligned with Trump? Do you think all of us are like pretty free marketer? Or do you think there is a subset here that agrees with the tariffs? or what's your read on like the Silicon Valley, like point of view on, on the tariffs? Folks I've talked to are big advocates of the Trumps and some of whom have gone to work for Trump are pretty upset about the tariffs themselves. Right. Sort of violate some of the, they were hoping for a very libertarian, like let's deregulate.

43:42It wasn't just about pronouns. They were like, can we deregulate the economy and shift towards like, we're all about growth. That's my core view is that growth is the most important economic issue because so many of our other problems with 7 % growth for 10 years, you're twice as rich. If you could achieve that, like everybody was twice as rich, even if it was not equally distributed, if the government would have twice as much tax revenue, we'd solve so many of our social... That's why you have one party that says we'll definitely not blow up the economy, but maybe we'll slightly slow it down.

44:16Another says 20%, we blow it up. And then like a bunch of funds. I don't know. But yeah. Another thing, you know, I sort of try not to engage in any argument unless I think I can argue the other side's point of view better than they can. And so I think there's some valid reasons. Certainly they're after some noble goals here is like the United States should industrialize more tariffs. By the way, we have a two trillion dollar deficit every year that's unsustainable. So like tariffs are another form of taxes. Maybe it's better than income tax. I feel like the problem with the tariff argument is that the Trump administration is not doing a good job of successfully articulating one coherent argument.

44:56Like some of the arguments contradict themselves. There are three or four good ones for it. In a national security environment, I mean, you don't, we got to have some manufacturing because you're, you know, you're not being able to make any ships in America or any, you know, like anything else. It's not good in a situation where there's a war. So there's plenty of good arguments for it. And yet it's just a very complex system that they don't, nobody understands. I'm not even saying because they're dumb. It's just, there's no one can understand all that. It's, you know, just look at one of these infographics.

45:25That's the beauty of markets and not central planning. You know, it feels like the Republican communist Mao, Mao, all of a sudden, it's like, we're going to tell you how to build your like iPhones. And it's certainly the government sets the rules and like, you know, rule of law. And there's lots of reasons why government wants to change course and drive things and have a national strategy and all of that. but markets need a time to adapt they need to be able uh you know we're a bit like the analogy i've been using is we're like a 60 year old man who hasn't been to the gym in 30 years and he's like back and remembers how good he was when he was 30 and he could deadlift you know 600 pounds and and he herniates gets a herniated disc and so we gotta like ease into we're not a 60 year old man we're like a great you know banker and a great coder and a great like uh money lender to all the world you know it's just like on a lot of uh domains we're in the best shape of the world and sure we're not ready to like go work in a manufacturing but anyways i'm selling my own book tariffs are bad for my business so obviously i how much is silicon valley and like startups how much are they gonna be hit by this like how much do you think they're really dependent on supply chains or it's just you know it's a software business no tariffs or how do you think about the effect for silicon well chips semiconductors in general were accepted uh so i think that was people uh were they dodged a bullet there that's the probably the biggest deal but you know um computers were not so you now have to import the chip i'm seeing a lot of conversations going between um technologists who were like oh i can't import a graphics card would be taxed even though the graphics card by far the most expensive part of it is the gpu is uh duty-free but the graphics card is not and you're going to pay on the full amount of the graphics includes the semiconductor so now there i mean maybe this is galaxy brain incentive to create you know graphics cards in the united states because the you can import the chip uh duty free but now you have to assemble it in the u.s if we become the people that are like oh yeah in america you always have to assemble your computer at the last mile because you know of some weird government regulation it It just feels antithetical.

47:37They need to study more like how East Asia actually succeeded in industrializing. Because, yeah, of course you can do those kinds of rules. And America has the power because we have such a big consumer market. And so people will play the game and you can build a big company. But to actually know you're building a good company, you've got to be able to export. That was the rule that these Asian governments set. The ones who succeeded in building up industries was where they actually exported. Because export is proof that you're making a competitive product, a competitive company. No one around the world buys your stuff.

48:15Then all you've done is protected your market and hurt your own consumers to create some moved wealth around inside your own country. But if your policies are really working for industrialization, the test is do people abroad buy your products? And you can see the difference like in Malaysia, they tried to industrialize, but nobody wanted, you never heard of a Malaysian car. Only if you go to Malaysia, you would see them. They were unsuccessful in creating a competitive company that could export, whereas Hyundai, you know, Japan, Japan and Korea famously, and now China become really good at exporting cars.

48:50So, you know, as the United States embarks on re-industrializing to the extent that we're capable, the ultimate test is do people in other countries buy our stuff? Not can we just manufacture some GPUs here because the law requires it like that, or rather some graphics cards assembling parts from other countries. Let's dive into the American auto industry for a second, because in some ways it's like we're failing to get other countries. You know, Trump is making a big deal of Japan not buying American cars. Do you have, this is a little far afield, but do you have a point of view on whether these countries are really setting up barriers that mean that the American automakers are fighting an unfair fight?

49:31Or you think it's just our product is not competitive with what they can buy? Well, Teslas are pretty competitive. They're pretty awesome cars. Tesla's done really well in China, but they make them in China, the ones that are sold. And by the way, Tesla, if you actually, when you go to China, Tesla's way behind. Their cars are so well beyond in quality and build quality and features. And I haven't actually driven by them. What is it, BYD? Everyone is so excited about them. In some ways, the US, we're getting denied now. We're the ones with the sort of second rate products. Yeah. I'm afraid to drive on Chinese roads, but riding in the backseat, they're freaking amazing.

50:08And, you know, it doesn't take much to just get into one of the Detroit automakers and say that these products aren't as good. But how did that happen? And I think, you know, how did the Chinese or the Koreans or Japanese get so good at manufacturing? And I think there's definitely some of what the administration is alleging is valid. They did a great job in their industrial policies, a great job from their perspective. They provided subsidies, free land, factories. They repressed labor movements. They made organized labor illegal in Korea. Korea mandated a six-day work week. I mean, these are things that helped the manufacturing sector go.

50:47And so, yeah, currency, likely there's evidence for that. I mean, Vietnam has been booming. Like I think they've had 8 % annual GDP growth for the last several years in a row. And yet their currency has gone down in value. It's kind of weird, you know, I mean, that much you would think your currency got so many dollars are flowing in. The currency should appreciate, but it goes down. So clearly there's something going on there. I'm not like a macro economist on any level, but I can kind of basic logic. Like if you grow that much and so much manufacturing is coming, more dollars are flowing in, it should increase your currency.

51:22So, yeah, there's some validity to a lot of this stuff. Some of the challenge becomes like, well, we're supposed to be like this free market country. We don't want our government to be involved in these in private industry. And so we don't really TSMC is a great example where the guy, Morris Chang, was working for Texas Instruments and spent 30 years in the U.S. and decided he wanted to start a foundry. And nobody in the U.S. wanted to back such a capital intensive business. And so he went to Taiwan and he's the Taiwanese government funded it. So like, yeah, you sort of brought a bunch of more free market solutions up.

51:57You know, it's like, oh, the government could have its own investment bank. We're back. Some of these projects or we could have, you know, not be so friendly to unions or at least, you know, create some some resistance to them. There are things that would we could do that would allow the markets to roam more free to deliver results. Yeah. And I think it's a reasonable, you know, if the other side is not embracing free markets, then you're sort of dumb if you allow yourself to have dogma that just makes you lose your companies lose. I mean, even Boeing is a good example. Boeing, private market company emerged from the private markets.

52:36Airbus was created by four governments that decided they wanted to have it. And they got tons of subsidies in the US. Boeing sued at the World Trade Organization and won the suit and it's still going through endless long, you know, process. Yeah, I'm not like no terrorist. I mean, I do think it's like if you're going to do central planning, you need to be able to do the planning and focus on a particular goal and sort of think it through and understand what the objective is and going after every country at the same time makes that very difficult. Well, see, I think a lot of this is I hope a lot of this is negotiating and Trump doesn't make deals.

53:09So hopefully the next few weeks, we see some deals get done to bring these tariffs back down. And a lot of countries - Do you think we could end up in a better place than we started before he announced the tariffs? Or are we just trying to dig out of this hole? It's really hard to say because it's hard to know because their stated goal is re-industrialization. And they allege that the reason America de-industrialized was these people took our jobs because of free trade. So then if you come out and you're like, oh, we made these deals for more free trade. Right. It's a little, it's a little incongruous with the, with the stated goal or the stated disease of what caused it.

53:42I'm hopeful. Cause I don't really believe that narrative. I'm hopeful that, yeah, we might like EU and now if they would go to zero tariffs. So is Vietnam, Cambodia said five, Israel, India, like a lot of these countries have said that. So would that be an improvement and, and zoom in on Europe for a second? Like what's, what, what is, We've talked about Asia and Latin America. What's all this meant for Europe? And if we're doing zero tariffs with Europe, is that a better outcome than where we started? It would be. I mean, for my view, yeah, I mean, I would prefer to have low tariffs. I mean, I don't think that's going to be enough to satisfy the Trump administration.

54:18their view is Europe has all these non, and in general, their view is that there's all these non-tariff barriers, industrial policies, like what I was getting at, subsidized credits, these in general for manufacturing, organized, oppressing labor, currency, or like in Europe's case, their big allegations are around non-scientific allegations of like, they don't accept American GMO corn. You can't export anything to be genetically modified to Europe. The American argument has always been, well, these things have been proven safe by science. But it's insane because at the same time, you've got RFK saying like, oh, American food, you eat it and like things go bad.

54:55But if you go to Europe, you're fine. It's like, what, we're going to force them to eat the corn that we're like worried about? Well, it is a bit of a band of misfits in there with RFK. I know. Yeah. You could make hay all day of their inconsistencies. But that's been the longest running feud between the United States and Europe because they won't accept our farm products. Now, how much of that is truly about science and how much of it is like, yeah, the European farmer will get wiped out by America's Midwest, like the plains are insane, the Great Plains and we produce so much food that they'll probably wipe out all the farmers in France.

55:28And then, you know, you like going to France and seeing those nice farms and stuff. And they like having jobs. So I get their point of view from that stance too. Are you bullish or bearish on the stock market or your general sense that we've like taking our medicine versus like there's a lot of pain to go or what's your general read on i i don't know man i i'm not i don't i don't own any i only own one public stock it's a game stop i still have my shares from you're like that shows your sort of nihilism about the markets it's like the only the only stock i bet on is pure gambling it admits i'm letting it ride uh no i have no idea i i'm not a public market investor for probably i mean i should have some in the index or something but mostly I've just been worked in Flexport.

56:13Everything's tied up in Flexport. I'm definitely like, I don't, this is really ugly for, you know, they're going to have to do a lot of magic to repair things and allow not to have mass bankruptcy in really very large sectors of our economy, of companies that buy international, buy and sell. I think there's a lot of stuff in this that's going to hurt US export. Obviously, you know, I'm very close to that problem because it's a lot of our own customers. So worried about our customer base, how they're going to make it through this. thankfully flex sports in a well-capitalized situation so we're gonna be able to ride out the other side being hopefully in a better place than ever in a couple years when when we get i you know i think we get to the other side of this and we've been through worse as a civilization you know it's not world war ii level catastrophe it's i don't think it's great depression or anything like that but it'll in our sector it's going to be pretty brutal are you purely international like or like what does this mean for flex sports business is there a we'll do stuff inside the U.S.

57:08or you rely on doing things cross-border? We've made a couple acquisitions that have made us a big player in the domestic side. So we bought Convoy and Shopify Logistics. So both of those are U.S. domestic plays. So we do about 200 ,000 truckloads this year domestically, moving freight around the country. 97 % hands off the wheel, automated, just tech only. So we love that business. And Shopify Logistics does e-com fulfillment. Now that's going to be hurt by these merchants because a lot of the good, most of the goods are made internationally. They'll be hurt there. But, but I think that that business has a tailwind now because the fulfillment that was being done in Mexico and Canada is going to come back to the U S.

57:48So it'll be balanced by that. I think that, that business will be in a good place, but we're definitely on the international side. Our customers are going to feel this and that'll flow through to us to less volumes, probably lower prices, et cetera. You think you'll like have revenue fall? Yeah. we're modeling that we're modeling that i mean our revenue is volume times price so right both of those are likely to fall so yeah it could be financially it's going to be tough we're going to have to dig in and uh you know flexport's been through some rough periods over our lifetime so we'll be fine we'll find a way to get through it all and uh make sure the main key is just focus on the customers and like get everybody talking to every customer you can and solve problems for them bring new customers in etc do you feel like you're spending a lot of time like in one guy's head or it's like watching Trump's tweets to sort of see see where this goes or how much do you do watch?

58:41I don't have to watch Trump's tweets too much they will always get forwarded to you so you know someone will send it to me when it's relevant but I've been watching all the videos of the and reading white papers and stuff from like his policy walks to try to get inside their head and understand what they're thinking so some of the interviews with Bessent and Lighthizer and this guy Stephen Moran who was like kind of the he was a treasury official in the first administration. He's like an economist who's kind of providing some of the underlying philosophical background for it all. Lutnik has done some interviews.

59:13So I'm just trying to just see how they think. Definitely spending time with that. And I read all the orders myself, like executive orders and rules and stuff. Don't rely on anybody. I'm going to read it myself and understand the text of it. And you think that what you're reading is deciding the decision, is sort of going into the decision here or it's sort of a Trump affinity for tariffs and then sort of backing in an explanation? You know, Lighthizer was his USTR in the first term and his protege is the current USTR. Jameson Greer worked, who was the chief of staff for Bob Lighthizer in the first administration.

59:49So when Lighthizer did an interview on Tucker Carlson like two weeks ago, it's like an hour long. And yeah, I think he gives you a lot of context, at least, you know, again, to my point of like, don't argue with people unless you can make their own argument better than they can. I want to be sure I can understand is I'm not saying I can make the argument better than Lighthizer. He's a good arguer. But I want to at least understand his point of view so I can be capable. I mean, it doesn't matter if I defeat him in battle. He's got all the power. I don't. But I can at least understand where they're coming from.

1:00:18Start to think about, all right, if that's how they think, what does that imply that's coming next, et cetera. So much of the Silicon Valley mentality is like, don't over-orient around government. or like build, obviously you have a company that has to deal with what government does. But like, if I'm a startup founder right now, like are there businesses you think that people could be building to take advantage of this moment? Or like, I don't know, what should Silicon Valley be building given what's happening right now? I mean, there's a lot of them are doing manufacturing. So that seems to make a lot of sense.

1:00:52Defense stuff seems to make sense. We seem to be trying to pick fights from people all over the world. Build guns, you know, get ready. We need some more weapons if we can't. So, yeah, I'm sure there's some signal to take from it all. I don't spend a lot of time thinking about it. We're mostly like trying to figure out, you know, from our perspective, how do we adapt Flexport? It's certainly need to diversify, be in more countries. We should be a network that ships everything everywhere. We shipped to and from 147 countries last year. Europe is our fastest growing market somehow. I guess there's opportunity for you if the tariffs keep, percentages keep changing.

1:01:26It's like, oh, you can slide to this country and slide to the country. We need to shift. And so we've launched a program for, I called it the Marco Polo program, but getting people from all over our offices, our existing network. We have offices in 37 cities, getting people from those locations to go out to the next 10 countries that we're launching, get them to move there. So we're accelerating that because you need to be more diversified. We have offices, a big one in Vietnam and in China. Today, those are mostly focused on exporting goods to the United States and to Europe. But like Vietnam and China are big trading partners.

1:02:02We should get them working well to ship to and from each other. So we're starting to think these are long term things that we needed to do anyways, but we're definitely pulling some of those plans forward. How do we accelerate that? We're also accelerating our roadmap in customs tech. Our team that builds technology there has been really focused on automation and like lowering the cost of customs transactions. Today, that's less important than like quality of data reporting. How, you know, normally you just like don't need to have like, oh, how good am I at cutting over the duty rate from today to tomorrow?

1:02:38These things have been more stable. Now you're like, oh, I better build much better technology for reporting, for visualizing changes over time in the custom, you know, in your duties and calculating your landed costs of the goods. So like we're definitely reprioritizing a lot of stuff in our tech roadmaps. My last question, is this good for robotic startups in the United States? I mean, on the one hand, it's like, OK, we're going to have to build more here. On the other hand, you were talking earlier about if the machine that makes the robots is from somewhere else, that hurts it. Are you optimistic about robotic startups given the tariffs?

1:03:17I've been a robotic skeptic for a long time. I'm not saying that, not on the long run. It's just a very high bar to clear. Humans are very smart, very dexterous, and not that expensive. They're good machines. Yeah, you know, they're just not that expensive and they are pretty cool. Like you feed them well and you're nice to them. They're, you know, they're fine. So I think it's a very high bar to clear for these like humanoid robotics. I mean, you can invert. Charlie Munger always says, always invert, invert, always invert, invert the problem. So you invert this, you go, hey, if there was a robot that you didn't have to buy, you could just pay it, pay it$20 an hour.

1:03:58And it had the IQ of a human. and you have the dexterity of a human and it could just do any task you asked it within the warehouse, you'd be like, oh, cool, I'll take 500 of them and I'll put them in my warehouse. It's a high bar to clear. So you were not bullish about robots pre-tariffs and now it's like, this isn't going to change the calculation. It's not that I'm not bullish. I think it'll happen over time. It's just a really high bar and it's difficult to make that capex. I think the renting model, if you're a buyer of a robotic system, which we would be, we're not developing robots, but we're a potential buyer of these systems, then I don't want like also the rapid pace of change also hurts adoption in some level.

1:04:37Because I don't want to go spend$50 million on some system that three years from now, there's way better system because of how - It's like electric cars. You want to lease them because they're going to keep changing. Yeah. And so that, you know, there's a lot of flaws. I'm not, it's certainly not anti-robot by any means. I mean, I hope all this stuff becomes, I'm a big advocate, for example, in port terminal automation and robotics and all. And so, but I don't know if this is net good or bad. I think anything that I think a recession is likely here. That's probably bad for everybody. I think that - Because of this, like you think a self-inflicted recession is coming or?

1:05:15I do. And I mean, JP Morgan has now made that their default forecast as a result of the tariffs. And they spend more time - You're very fatalist about it. early? I mean, you know, you know, people who are hop, skip and jumping away. Are you, you know, when you're talking to them, trying to get them to put a little more heat on the administration that this is, this is, I think is so central. I mean, even Elon, he's posting Milton Friedman videos about, you know, Valley does not have sway on this. There is no amount of basking Peter Thiel to like scream.

1:05:49I'm definitely hopeless. And they know I'm selling I'm bad for my business, so no one should listen to me. I'm promoting my own interests here. Right. Well, I wrote after the election, I'm certainly not pro-Trump, but I was like, I hope tech wins. I'd rather the tech influence over Trump than anything else. But I literally said, but if he does tariffs, it's going to overwhelm any pro-business thing he did. I didn't even expect that he would do some of the like union stuff, trying to block like automation of, you know, of, yeah, that one really pissed me off. Yeah. Um, and the terror, you know, long list, but, um, anyway, thanks for coming on and helping us navigate it.

1:06:32And, uh, we'll, we'll see what happens tomorrow. The market, you know, uh, crazy one day, flat the next, uh, yeah, a lot of it waiting to see. What happened to my GameStop shares? I haven't checked it out. I got 10 shirts. All right, Ryan. Thanks so much. All right. Thank you.