Trump Unveils Steep New Tariffs, TikTok Develops App for U.S. & CoreWeave’s $9B Acquisition

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2:31The major indices all fell after Trump renewed trade tensions. We'll talk more about that in just a second. The Dow and the Nasdaq dropped roughly 1%. The S &P fell 0.8%. The dollar gained and the yield on 10-year treasuries rose. And meanwhile, Tesla shares fell nearly 7%, shedding$68 billion in value after Elon Musk said he was forming a new political party. Okay, what else is happening? Trump announced a new slate of tariffs yesterday. Those tariffs include a 25 % tariff on South Korea, a 25 % tariff on Japan, a 30 % tariff on South Africa, and several more tariffs on countries including Malaysia, Kazakhstan, Indonesia, and Myanmar.

3:16This comes as the 90-day tariff pause approaches its end. As a reminder, the Liberation Day tariffs, which were enacted on April 2nd, were later paused by Trump, And that pause is set to expire tomorrow, on Wednesday. The administration has discussed extending that deadline, but as of this morning, unless new trade deals are reached, the original Liberation Day tariffs will go back into effect. Okay, so we have our first confirmed tariffs of the week. 25 to 40 % tariffs on what looks like 14 countries right now, and these will likely be the first of many. Trump said over the weekend, quote, I am pleased to announce that the United States tariff letters and or deals with various countries from around the world will be delivered starting Monday, July 7th.

4:05So as of Monday, we are 14 for 14 on tariffs. There was some possibility based on what he'd said that we'd get some deals too. But as of right now, no, we're not getting any deals. All we're getting is tariffs or tariff letters, as he put it. And in this case, the tariffs will be applied to two of our largest trading partners. We have Japan, which accounted for more than$200 billion worth of trade last year, our fifth largest trading partner, and also South Korea, which accounted for$180 billion worth of trade, our sixth largest trading partner. So these are two very important players in our economy.

4:47In addition, they are also two of our closest allies. I mean, you just look at our military relationship, for example. America has 50 ,000 troops stationed in Japan, and we also have nearly 30 ,000 troops in South Korea. So aside from Germany, there is no other nation that hosts more American soldiers than Japan and South Korea. Meanwhile, these two countries are very important partners in space exploration, in semiconductors, in AI, in clean energy, the list goes on. And now we have decided, actually, no, they're not a partner. They are, in fact, a threat. As he said, a threat to our economy and a threat to our national security.

5:29I'm not going to act surprised here. I don't think anyone's really that surprised. I think we've seen this all before. This is essentially Liberation Day Part 2. But, you know, we did see some market impact. As I mentioned, the S &P fell around 1%, so did the NASDAQ. And there are questions now as to what this will do to America and to our economy. So for more on that, our producer Claire spoke with Barry Appleton. He is the co-director of the Center for International Law at New York Law School. I think the markets have misunderstood what this week's about and what's going on. And I think it's better to get a sense of the context because the markets keep moving.

6:09They keep going ahead and keep pulling back, retrenching. And it's because they don't understand the game. What you need to understand is that, you know, President Trump is a real estate guy and he also runs golf clubs and Mar-a-Lago. So he understands about people wanting to pay for access. So what he's decided to do, disrupt the games. We had all these trade agreements, all these things that said everyone would get market access for free. And in exchange, the U.S. would get access for services or access for certain market and other things, but we didn't ask for money. Now he says, no, you want to come to our game?

6:46You want to come to my club? You want to come to Mar-a-Lago and eat the chocolate cake? You got to pay. The payment's going to be the tariff. And so the question was, everybody had to put in an application. Those applications were due today. And so what he did is he had the first set of letters to people that he wasn't going to give preferential pricing. So he would look at his application and decide, am I going to give you the friends and family rate? Am I going to charge you like the supermarket rate? Am I going to give you any discount or no discount at all, right? If you give him an invite to go meet at the palace with the king, then he makes it really cheap.

7:20If you're going to say bad things like South Africa, he just made it 30%, right? So that's what's going on. So the applications, they're in. He then has a series of letters. So he's decided that he's got at least seven countries out of 70 that say they wanted to deal with things. At least seven, he wanted to teach them a lesson. They're the ones that got the truth social tweet today. Okay. So out of the goes to them, he says, I'm going to charge you what the market will pay. And you're going to pay for market access. In fact, you're going to pay search pricing. It's like going to a Taylor Swift concert.

7:57You are paying extra to be able to get those seats. So that's going on. And that is supposed to come out on the 9th. So on Wednesday, he's supposed to give all these countries their letters. So you're going to see what I call a policy striptease. He's going to take one veil off at a time, letter after letter, coming out on through social. And each country is going to find out what's going to happen. But markets don't like uncertainty. And they actually don't like policy coming in dribs and drabs. So the market doesn't know how to react. But if you understand that's part of a show, it's part of an act, and it's just the first part of it, then you might react in a different way than if you think it's the end of the game.

8:43So the markets didn't like this on the weekend. They started to hear what was going on. Then they saw more today, and they started selling off again. But there's no difference in the market today than there was yesterday or on Friday. Okay. What you want to know about is what's going to happen at the end of the week and the end of this month. So the first thing is, do you believe that Trump wants tariff revenue? It's pretty clear now after the one big beautiful bill and listening to the Treasury Secretary, he wants some tariffs. So no one's getting in for free. Anybody that thinks they're getting into Mar-a-Lago for free is going to be very mistaken.

9:17Everyone pays something now. That was Professor Barry Appleton, co-director of the Center for International Law at New York Law School. Very chaotic once again. I mean, this whole tariff policy is being played out online on Truth Social. As he said, these tariff letters aren't really being sent to these countries. These tariff letters are being posted online on Truth Social. They're essentially screenshots. And we are watching the show play out in real time. And so I think he's certainly correct on that point. One thing is for certain, though, and that is that this story is not over yet. July 9th has yet to come.

9:54We've still got lots of tariffs in the pipeline, potentially lots of deals in the pipeline. I don't know. We'll see. We haven't seen that many so far, but we'll be keeping very close tabs on this throughout the week, so stay tuned.

10:11TikTok is reportedly building a new app for American users ahead of a potential sale to American investors. The company plans to launch the new app on September 5th, although the existing app will work until March 2026. And this new app is part of a broader effort to make the platform more appealing and ultimately more transferable to a US buyer. As a reminder, TikTok was going to be banned in America unless it was sold by its Chinese owner ByteDance. That was until Trump decided to delay that ban and he allowed TikTok to continue operating. operating. However, he is now reportedly working on a deal to get TikTok into the hands of a US investor.

10:51And the fact that TikTok is now building this US version of the app, well, that is probably more evidence that a TikTok sale may indeed be on the horizon. Meanwhile, the timing of all of this is quite convenient for Trump. As we just discussed, he's working through these trade negotiations with many countries, including China. And according to Alice Hahn, China economist and director at Greenmantle, this deal could be another bargaining chip in those negotiations. The biggest question mark, which is Beijing's reaction function. On that topic alone, I sense that there could be more concessions from China, meaning that they could decide to allow this subsidiary of a US TikTok to be spun out of by dance itself, and that that unit of the business, the US operations that is, could be sold to US parties.

11:46I sense that the Chinese at a macro fundamental level want to try to reduce tensions on trade with Trump because they are worried by their erratic nature. Again, we just saw in the last day or so that he's talking about another 10 % BRICS tax. And so I think he's applied pressure on transplants for a couple of these Southeast Asia countries. So I could see the Chinese potentially offering this as a concession very quietly. That was Alice Hahn, China economist and director at Green Mantle. Bargaining chip or not, there is a growing sense that TikTok will at some point be sold to an American investor.

12:22And the question then becomes, one, when, two, how, and three, to whom? Those are all the questions that we're all asking and we can't really answer right now. There have been some rumors. Oracle has been floated as a buyer, for example. So has Amazon. And there have also been some more outlandish rumors. Kevin O 'Leary, for example, Mr. Wonderful, he's been floated as a buyer. And Alexis Ohanian, the co-founder of Reddit. Now, I don't doubt that those guys have made bids. Kevin O 'Leary, for example, has spoken about his bid on TV. But I think the question you have to ask is, do you have the money?

13:03And the answer for those guys and for many people is probably no. This deal is going to be a lot. This deal is expected to be north of$50 billion. And there are very few entities out there, let alone people, that can actually afford that. So in terms of buyers, no, I don't think Kevin O 'Leary is going to own TikTok. But there is definitely a world in which a company like Oracle could own it. And that would be a huge shake-up to the social media economy, which is, of course, as of today, totally dominated by Meta. So let's check in with Scott on this. As you probably know, he has been calling for TikTok to be banned for several years now.

13:43I'm sure he has some opinions on this. Plus, it's been a while since we've heard from him. He's been off on vacation with his family, but I am happy to report that he is as of today back to work. So let's give Scott a call.

14:00Hey, Scott. How are you, Ed? I'm doing well. How are you? It's been a while. Yeah, it has been a while. I had a nice weekend and I'm wrapping up our trip. Oh, you're still in Ibiza? Yeah, still here. Okay. Still here. Head to Los Angeles on Wednesday, but yeah, still here. Good stuff. What's the plan for LA? Well, I don't know if you've heard this, Ed, but I'm working on an original scripted program from a little company called Netflix. Oh, there we go. Little company called Netflix that I bought at$12 a share and then sold at$10 and now it's trading at$1 ,400. So I want to find a time machine so I can go in that time machine, go back, kill me, and then come back and kill myself.

14:37When is that coming out? It's coming out in fall of next year, fall 2026. Oh, that's pretty soon. That is quite exciting. Okay, well, we'd like to get your take on this TikTok news. TikTok is building this new app. probably the best evidence we've gotten so far that they will sell to an american investor what's your take scott uh my gut is that it's the mother of all jazz hands that it's a giant's head to say that it's essentially bullshit but they're going to try and rebrand it say it's a different app come up with a bunch of reasons for why it's unique maybe allow some additional investors create a new entity but as long as the algorithm is controlled out of beijing or there's backdoors into the algorithm and they can continue to raise a generation of military nonprofit and business leaders and teach them to basically hate each other and hate America, which is, I think, too valuable a propaganda machine for them to give up.

15:35I don't think they're going to want to unplug a neural jack from the wet matter of all of America's youth. And I think the president has proven himself that he is not a serious person with regards to threats to ban things. So I think it's going to be performative and branding. But at the end of the day, I think the CCP will continue to control the algorithm. So for me, it all comes down to ownership. So we'll see. So what would your prediction be? How do you think this plays out? Are you saying that we'll see a sale of the app, but the CCP will still have control of the algorithm, but the sale will happen, or we won't see a sale at all?

16:15How do you see this playing out? I don't know if they'll come up with some jazz hands around a new app, new branding, some additional security measures. But I just get the sense that the CCP would rather have a call President Trump's bluff and say, OK, ban the app and perhaps lose 20 percent of revenue, which they don't really care. Then give up what has become the most the propaganda dream of MI6 and Mossad and the CIA. I just don't think I don't think the CCP is going to give it up. So that's my prediction that at the end of the day, this thing is either banned because they refuse to give up control of the algorithm or effectively it's performative.

16:56I think that basically that Trump's hand, he's overplayed his hand. It's getting weaker and weaker. I mean, just thinking about the tariffs, Ed, I believe, and there's evidence that there's been more dollar volume of trade deals done outside of the U.S. between third parties that have been inspired by Trump's threats. So the EU in Mercosur, the EU in India, Southeastern nations, African nations are talking and doing regional trade deals. I believe the dollar volume of deals inspired by Trump's hostile rhetoric and threats of a trade war is much greater than the actual deals that have been consummated so far between the U.S.

17:36and nations. I mean, I think his hand is just getting weaker and weaker. Yeah, I think that makes sense. Before you go, Scott, can we just get a vibe check on Ibiza and Europe and the Mediterranean? How are things over there? Well, I mean, income inequality rages on. I'm with, I'm on an island. There's sort of this. It's fine to say it's nice. Well, yeah, okay. It's really nice, but the douche circuit lives on, whether you're in St. Barts or Ibiza or Mykonos. You know, this isn't the real world. This is the 1 % and the children are the 1%. So I don't know if this is a decent indication. What I will say is that inflation, and nobody talks about this, inflation at the high end has been greater than any other segment.

18:26Rich people inflation. Yeah, because these people are pretty much price insensitive, and it's not easy to spin up one of these global hotspots. But this is definitely—it reminds me of the last 20 years, whenever I go skiing, I ask myself, how does a middle-class family afford this? And the answer is they can't. but there appears to be no slowdown amongst kind of these very uh i don't know high prestige elite places what ibiza has done and i'm glad you asked and i'm sure you're regretting asking what ibiza has done that's really interesting is a lesson in branding and that is they have done a great job of creating a kind of a global hotspot or a party island that has the best djs in residence.

19:11So they've kind of become known for having the best DJs in the world. And it's a really interesting brand positioning, which results in great margin. But it's just a super interesting strategy that they've figured out that, all right, we're going to be the party place that has the best DJs in residence. And how does it compare to Mykonos? Well, I'm older, so I enjoy Mykonos more because I think it has more character in the individual islands with no cars and more interesting. But if you're your age and you're being overpaid by a boss who has affection for you for no real reason or no real tangible reason, you're going to want to come.

19:42Like you and the team would come to Ibiza. Like Greece is a little bit more interesting, a little bit more classy, which is, you know, you're none of those things. So I would say Ibiza. Okay. Noted. Thank you, Scott. Enjoy your night. Thanks, Ed. After the break, a$9 billion acquisition from CoreWeave. Stay with us.

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22:49We're back with ProfG Markets. AI company CoreWeave is acquiring Bitcoin mining company Core Scientific for$9 billion. The all-stock deal will value Core Scientific at roughly$20 per share. That represents a 66 % premium to its closing price before the transaction. The deal is expected to close in the fourth quarter of this year. Just a reminder on CoreWeave. What is CoreWeave? This is the company that went public in March of this year. It was the biggest American IPO of the year. They raised$1.5 billion. And as we've discussed, since going public, the stock is up nearly 300%. So it is absolutely ripping.

23:33Now, what does CoreWeave actually do? Well, put simply, they sell compute. CoreWeave operates 33 data centers around the world, and they have roughly 250 ,000 NVIDIA chips, and they sell access to those chips to tech companies, companies like OpenAI and Meta and Google and Microsoft. People call it an AI company. It probably makes more sense to call it a data center company. They're not building AI, but they are selling the compute that is needed to build AI. So why would CoreWeave, this data center company or this AI company, why would they want to buy Core Scientific, which is a Bitcoin mining company?

24:15Well, the answer actually makes more sense than you might think, because it turns out that Bitcoin mining and AI actually have quite a lot in common, and that is they both require tons of compute. As we've discussed, the Bitcoin network consumes more than 200 terawatt hours per year, And that is more than the annual electricity consumption of Argentina. So if you want to mine Bitcoin, well, basically you need chips, and ideally lots of them. And that is exactly what Core Scientific offers. They have nine data centers across the US, and those data centers were originally supposed to be used for Bitcoin.

24:54But suddenly the AI revolution happened, and then the company realized, well, those same data centers are actually just as useful for AI as they are for Bitcoin. So the company pivoted, and they started renting out their compute to AI companies, and now Core Scientific will become part of this AI company that is CoreWeave. Interesting side note, by the way, CoreWeave has a very similar history to Core Scientific. It also started out as a Bitcoin company, but then as AI took over, they suddenly realized, oh, these data centers, they can actually be used for AI, so they pivoted to AI as well. So there's a lot of overlap between these two companies.