Why Trump Will Back Down on China Tariffs — ft. Ryan Petersen | Prof G Markets

About this Video

• Video Title: Why Trump Will Back Down on China Tariffs — ft. Ryan Petersen | Prof G Markets
• Channel: The Prof G Pod – Scott Galloway
• Speakers: Scott Galloway, Ryan Peterson
• Duration: 01:02:20

Introduction

This episode of Prof G Markets features Scott Galloway in conversation with Ryan Peterson, CEO of Flexport, a global supply chain management company. They discuss the impact of Trump's tariffs on China, focusing on the effects on businesses, global supply chains, and the potential for future economic shifts.

Key Takeaways

• Devastating Impact of Tariffs: The 125% tariff on goods from China is causing significant harm, particularly to small businesses lacking the resources to diversify their supply chains. Many are facing potential bankruptcy, and massive job losses are predicted.
• Tariff Rates and Impact: The current tariff rates are highly variable, with some goods facing duties as high as 145%. While these are applied to the cost of goods, the ultimate price increase for consumers depends on the markup practices of individual companies and can lead to shortages and inflation.
• China's Response and Global Shift: China's halting of investments in US private equity signals a potential shift in global capital flows away from the US. This, combined with the tariff impact, could lead to a significant rerating of American assets and a reallocation of investments toward Europe and other regions.
• Flexport's Strategy: Flexport is adapting by shifting resources to emerging markets in Southeast Asia, particularly Vietnam. They are also reconfiguring their air freight network to account for the decreased trade volume between China and the US.
• Muted CEO Response: Despite the potential economic consequences, the public response from business leaders regarding the tariffs has been relatively muted, possibly due to fears of political reprisal. Ryan Peterson is an exception, openly criticizing the policies.