PivotHow Trump's Tariff Chaos Is Costing America | Pivot
EVERY SPOKEN WORD
125 min read · 24,659 words- 0:00 – 4:37
Intro
- KSKara Swisher
I gotta get dressed for Whoopi Goldberg. You know who's on right after me? Donny Osmond.
- SGScott Galloway
Donny Osmond? That is literally, literally just when I thought your flexes couldn't get any weaker, you're bragging about that? (instrumental music)
- KSKara Swisher
Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
- SGScott Galloway
And I'm Scott Galloway.
- KSKara Swisher
How you doing, Scott? I just saw you last night when we were together.
- SGScott Galloway
Yeah.
- KSKara Swisher
It was fun. Did you like it? They love us together there on Anderson Cooper.
- SGScott Galloway
Yeah. What a thrill. Yeah, it was nice. We spent a lot of time together.
- KSKara Swisher
It was very nice to see you. It was very good to see you.
- SGScott Galloway
Nice to see you. Nice to see you.
- KSKara Swisher
We've seen a lot of each other at South by Southwest.
- SGScott Galloway
We have. We've been-
- KSKara Swisher
Yeah.
- SGScott Galloway
... hanging. We've been rolling. Yeah.
- KSKara Swisher
Yeah, yeah, yeah, yeah. Are you tired of me?
- SGScott Galloway
No. Uh, I mean, I was tired of you years ago, but no more-
- KSKara Swisher
Yes, that's what I felt. Yeah.
- SGScott Galloway
... tired of you, I should say. Yeah.
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
No, it's nice to see you.
- KSKara Swisher
Yeah.
- SGScott Galloway
I always enjoy seeing you. Uh, last night, literally, we went to dinner and George and I just, like, leaned back and let you and Jess go at it.
- KSKara Swisher
Yeah, I like her a lot. She's unusually tall. I didn't realize it until she got up.
- SGScott Galloway
Oh, really? Yeah, she's, uh-
- KSKara Swisher
Yeah, she's tall.
- SGScott Galloway
... I think she played basketball in high school.
- KSKara Swisher
Yeah, she's a tall gal. She's a tall gal.
- SGScott Galloway
Yeah.
- KSKara Swisher
Absolutely.
- SGScott Galloway
Yeah.
- 4:37 – 13:15
Amazon "Apprentice" Deal
- KSKara Swisher
talk about. Um, but first, Amazon announced this week that seven seasons of Donald Trump's reality show The Apprentice will soon be streaming on Prime Video. This follows Amazon paying a reported $40 million to license a Mela- not even own, license a Melania Trump documentary. Trump's cut of the new streaming deal hasn't been revealed, but he was an executive producer on the show and he actually is well compensated when it, when it was shown. Uh, Netflix also just made a deal with, uh, Tony Hinchcliffe, the comedian who sparked controversy with that racist joke at a Trump rally last O- October about, uh, Puerto Ricans. Um, talk, talk to me about this. I've watched all these seasons of The Apprentice. I'm kind of like... I can see why you would buy this 'cause he's the president, he's popular with half the country. I, I like the show, so I kinda get it. Um, I'm surprised that it wasn't available widely. I don't recall looking for it and I don't know why you'd watch it again necessarily. Um, the Tony Hinchcliffe I get. They're gonna, they're gonna invest in all these things like this going forward and they're gonna be behind the times 'cause the ones you wanna get are the Bill Burrs or whatever, which they already have, of course. But, um, what do you think of these programming moves?
- SGScott Galloway
So, uh, Tony Hinchcliffe, I, um, I'm, I'm happy for him. I like it with comedians even if...I, I think comedians doing really well is really important on both sides of the aisle. And so good for him, good for... Is it Netflix that's bringing him on?
- KSKara Swisher
Yeah, Netflix. Yeah.
- SGScott Galloway
Who is it? Yeah. The thing that's more troubling is the following. There's nothing wrong with if Amazon decides, in terms of programming, to bring on whatever shows they want from the past that help, um, cement their, their value proposition. The problem is, is that, okay, we have what appears to be Amazon paying, overpaying for the Melania Trump documentary.
- KSKara Swisher
Absolutely. In that case, yes.
- SGScott Galloway
We have Jeff Bezos giving a million dollars to the inaugural campaign and under what feels like duress. We have also, uh, the kind of strange ironic timing where the owner, the same guy of the Washington Post, has decided they don't need to have an opinion section.
- KSKara Swisher
Yeah.
- SGScott Galloway
Which feels very, very quite frankly like he's acquiescing to pressure from Trump. So the problem is, is that if we end up in a situation where every person in power starts to take, if, if you will, kinda soft bribes in exchange for possibly exonerating that company from certain regulation or tariffs, you just, you, you have, you end up with... One of the reasons India has not, quite frankly, kept pace with China... 20 years ago, most analysts would have said, half of analysts 20, 30 years ago would have said the next enormous growth economy, half would have said China, half would have said India. India's a democracy, English speakers, huge emphasis on education, strong with tech. It wasn't immediately obvious that China was gonna absolutely crush India in terms of growth. But here's one of the big problems with India. It is wildly fucking corrupt and local officials and politicians extract a lot of unfair rents from businesses, which makes everyone less competitive and creates incentives for more and more corruption. China, on a regular basis, finds corrupt officials and business people and executes them. And that is probably not the right way to go, but there is, they are very serious about corruption and that creates a more robust, competitive workplace. We are headed more towards India right now than we have been in the past.
- KSKara Swisher
Yeah. Oh, that's, I was not expecting this, this India move. This is really interesting. I would agree, the Melania thing is such, it feels like such grift. I mean, they don't own it. The money is ridiculous. They're not gonna get the watching out of it. I mean, it's, it's, it's, it's whack when that was used.
- SGScott Galloway
It's a bribe.
- KSKara Swisher
That felt like a bribe. The Washington Post thing certainly did, um, and continues to do by the way they lost their very, the, the, the very excellent head of, um, public relations there and communications left who was a pro. Um, so many people are leaving there. Ruth Marcus, also a columnist, great columnist, one of their most popular columnists left, uh, when they spiked a piece that was mild at best, um, which she published in the New Yorker, which was fine. She's an excellent columnist. Um, she's been there forever. Uh, she was there when I was at the Washington Post. The Apprentice, I'm gonna say it, it's, it's a reasonable enough decision, I guess, for that one. But you're right. This looks like, um, uh, it looks like payments to Donald Trump in some fashion or ways to get an advantage with him in some way-
- SGScott Galloway
Don't, don't forget-
- KSKara Swisher
... especially Amazon all told. Yeah.
- SGScott Galloway
Don't forget. This is the guy that essentially opened a Swiss bank account that any foreign entity could deposit money into and only Donald Trump gets the receipts and knows what is going into that bank account and it's called the Trump coin. He basically set up the ultimate vessel for quiet, off, off-record bribes. And where do we go? A lot of Republicans will claim, and I think there's a real argument here, "Scott, we're just less opaque about it than Democrats. We don't... We cut out the middleman of lobbyists and of special interest groups and of people giving speeches and what do you know-"
- KSKara Swisher
Oh, they get that too. What are you talking about? Yeah. Anyway.
- SGScott Galloway
Well, bu- but it's a, it's, theoretically, it's a fair argument. And this is where I just wanna bust the solutions. I think the right solution here is Singapore. And that is, I believe every congressperson and every senator should be paid a million to $3 million a year. I think the president should be paid $10 million a year. But in exchange for that, there is absolutely zero, zero corruption. No speeches, no payments, can't work for a lobbyist for five years after you get outta office. No trading of stocks, just fucking nothing because the incentives here are unfortunately, "I'm a very powerful person and I don't make enough money to have a home back in Newport Beach and in DC." And the incentives are quite frankly just to kind of file with the ethics committee. Maybe they say, "Oh, you're not supposed to trade stocks." The penalties are really low. We have to have a zero tolerance for this and dramatically increase their compensation.
- KSKara Swisher
Yeah, I think that's a great idea. I do, I, you know, it's what I was sort of yelling about last week is that they're not getting their advantage through innovation and products, they're getting their advantage through access. And that's a bad sign. It's a bad sign for an industry. Um, it's a bad sign that this is where they're putting their focus and not on, on what they're making. Um, and it just, it, it looks like, you know, pigs at the trough is what, what happens. Anyway, um, it's, um, it's not a surprise, but I, I, I'll be interested to see how, how The Apprentice does. Actually, I really like The Apprentice as a, as a program, although I knew it was all cooked. It was like watching wrestling. Um, and apparently he was handed every single remark he made on the, on The Apprentice. People who worked there told me that. Um-
- SGScott Galloway
I never watched The Apprentice. I never saw it.
- KSKara Swisher
Uh, I don't know how it would be interesting now. It'll feel like such a, such a throwback. I'm gonna watch a couple of them to see 'cause I, I did watch them all and I really enjoyed them at the time. But then when you go back and watch things you used to watch, you're like, "How in the world did I ever watch that?" Like Three's Company, it... Go do that for a little test for yourself and you'll be like, "Oh my God, this is not keeping up."
- SGScott Galloway
Come and knock on our door.
- KSKara Swisher
(sings) The door, come and knock on our door.
- SGScott Galloway
I love that, yeah.
- KSKara Swisher
We've been... You're, you're-
- SGScott Galloway
It's basically, the, the running joke was that the guy was supposed to be gay. I mean, that was-
- KSKara Swisher
Yes, it was so offensive.
- SGScott Galloway
It was incredibly homophobic, pretty sexist.
- KSKara Swisher
Offensive.
- SGScott Galloway
And yet you still really like John Ritter.
- KSKara Swisher
Yeah, you do.
- SGScott Galloway
You still just like-
- 13:15 – 26:41
Gavin Newsom's Bannon Interview
- KSKara Swisher
what she said. California Governor Gavin Newsom had none other than Steve Bannon on his podcast. The two kept up a reasonably friendly tone, and Newsom didn't push back when Bannon claimed Trump won the 2020 election. He, he did the same with, uh, Charlie Kirk and Michael Savage and things they said that were just absolute nonsense. Lies, really, essentially. And, and didn't mention, for example, Kirk's ah o- he has a, he has a wide range of terrible things he's said, um, that are really just awful actually, in a way that, um... I- I'll go into it in a minute. Their hour-long conversation was mostly focused, this is the Bannon one, on economic issues and areas of common ground. One of those areas, Elon Musk. Let's listen to a clip. I... Look, he wants to be the first trillionaire in the world. I mean, what's his endgame here?
- DTDonald Trump
Well, you know it. You guys cr- you created him a governor. I mean, you're, you guys-
- KSKara Swisher
By the way, in many respects, California did. (laughs) Okay. That, I guess so. Uh, Newsom isn't the only one, um, making podcasts this week. I'll, I'll do all of them. Former First Lady Michelle Obama has launched a video podcast with the Obama's media company, Higher Ground. It's, uh, with her brother. The podcast IMO!, which will focus on, um, it's In My Opinion, on thoughtful conversations about life, wi- is co-hosted with her brother, Craig Robinson. Um, so I- I'm not sure what's going on with hers. I'll talk about hers in a minute, because I did listen to it. Um, the Newsom one, I, uh, and I texted him about it, I had a lot of problem with, because I understood his need to talk across the aisle with people. First of all, there's a lot of people he could talk to that don't constantly lie, and his first three guests are really problematic in that regard. But if you're gonna do that, you have to like address the real differences and not debate them, but point them out, factual inaccuracies. And his sort of jocular tone, I feel like it's just a political... He's doing it only for politics and to reach out to MAGA, uh, voters perhaps. I, I was per- I'm perplexed by the entire endeavor, um, and, and said so to him. Uh, what are your thoughts?
- SGScott Galloway
I think it's really smart. Uh-
- KSKara Swisher
Yeah.
- SGScott Galloway
I- uh-
- KSKara Swisher
I do, I, I know you think that.
- SGScott Galloway
Really smart. Hey, look, first off, first off, it's super important that, that we, we mix. It's super important that people from the right and the left... I'd love to see a giant... I'm gonna go back, I'm, uh, as always, I like to root everything in a personal parable that's kind of, kind of relevant adjacent. I was president of the Interfraternity Council, which is like king of the jarheads back at UCLA. I was, quote/unquote, "the head of the governing body that oversaw the Greek system." And my big idea, it was a time when there was a lot of tension between the fraternities, which were mostly, most, obviously all male, mostly white. And we used to have these stupid theme parties that were racist and it would inflame special interest groups who saw us, and the administration that saw us as an easy target in the paper was always talking about what awful people we were. Some of it deserved. And my big idea was like let's take the Black Students Alliance and M.E.Ch.A., which was the Latino group, and let's all get together and have beers or get together and play sports together, but let's mix. And of course they're like, "We want nothing to do with you fucking weirdos." But I think it's really important that people from different political views get together.
- KSKara Swisher
Sure.
- SGScott Galloway
I think it creates empathy with one another.
- KSKara Swisher
Yeah.
- SGScott Galloway
Now, what you're saying is to let's just say Biden was not, Biden did not win the 2020, that requires a more honest, hard pushback that says, "Okay, what evidence actually do you have of that?"
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And you're saying he didn't do that. But in terms of just strategically for-
- KSKara Swisher
Himself.
- SGScott Galloway
... Governor Newsom-
- KSKara Swisher
Yeah.
- SGScott Galloway
... it's, it's super smart. He's leveraging a new medium. He's going after new voters. He's meeting voters and people where they are, on podcasts, and also, the tension and the conflict's somethin'... That's part of the reason this show is successful. We're not politically aligned on a lot of things. And the fact that th- he can talk about stuff, he, one, shows that he's smart. Two-
- KSKara Swisher
Yeah.
- SGScott Galloway
... he appeals to moderates. Three, three, he's very good going kind of, I don't wanna say behind enemy lines, but I think America is gonna want someone who-
- KSKara Swisher
But it wasn't... Okay.
- SGScott Galloway
Go ahead.
- KSKara Swisher
Go ahead. Finish, finish up first, and then I'll respond.
- SGScott Galloway
I think if he wants to be president, which I believe he does, America's gonna want someone that they think at the end of the day can sit down with people from pretty far differing perspectives and have a reasonable conversation. And he's showing that.
- KSKara Swisher
All right. Perspectives. Different perspectives, I agree. I think that's fine. I think that's great. But let me just read, I, I, Oliver Darcy wrote a column that I thought was perfect actually. "The harm, of course, isn't just that Newsom is failing to challenge his guests as they lie about important topics to a sizable audience. It's that he's actively contributing to the normalization of extremists by treating them as serious policy thinkers instead of dangerous right-wing talkers who have caused immense damage to our country. Figures like Bannon, Kirk, and Savage aren't merely conservatives with different policy views. They're performers whose platforms are built on deliberate deceptions, dangerous lies, and hostility towards basic democratic principles. By inviting them onto his show without seriously challenging their rhetoric, Newsom has introduced these dishonest figures to new audiences.""... and he's done it while portraying them as serious voices who deserve respect and consideration." Now, he also goes on, I'm gonna finish this part, is, um, "Newsom's friendly approach also represented a possible missed opportunity. Real dialogue across political divides can have value, but only when there's actual accountability. Hard-hitting questioning, challenging of false narratives, and yes, fact-checking would have made for interesting show." Imagine how Jon Stewart or John Oliver would have interrogated the positions of these t- uh, far, these far right, uh, wing personalities. "Had Newsom engaged in this, in this style of interview, his podcast would have served a valuable purpose, exposing rather than amplifying dishonest media figures. Um, it would have been far more interesting than watching him bro it up with MAGA World." I, and he, he did come to the same conclusion. "It's a move that frankly suggests he values his own political future more than holding some of the world's most toxic media figures accountable for their corrosive impacts on society. In a sense, this podcast revealed quite a lot about his character that he's willing to do in the pursuit of power." I really hate to say that, but I would agree with that. I, I, I don't see a plus... I, I see, I, you know I like when there's debates across things, but these are unreliable and disingenuous people that are doing things to advantage, stories that aren't true, and that's the... And this is what Jess and I argued about when you guys were staring at us-
- SGScott Galloway
Oh, okay then.
- KSKara Swisher
... because you spend all your time s- s- solving the lie, and then you don't actually have a discussion.
- SGScott Galloway
Yeah. I mean, I hear that and I'm like, let's clutch our pearls a little harder. That's what happens-
- KSKara Swisher
It's not clutch pearls. He, he-
- SGScott Galloway
Oh yeah, it is. For God sakes-
- 26:41 – 34:51
Tariff Roller Coaster
- KSKara Swisher
Scott, we're back with the ongoing tariff whiplash. The EU and Canada announced billions of dollars in retaliatory tariffs on Wednesday after President Trump lev- levies on, on steel and aluminum went into effect. Uh, the markets continue their rollercoaster ride, fluctuating, uh, with all the tariff pivots, speaking of pivots, um, which you and I called red light, green light on Anderson Cooper last night, but steadying slightly with positive, uh, inflation report, but people are still expecting inflation to rise. I'll note, we're recording this Thursday morning, so Trump may change his mind on tariffs several more times before our listeners hear this. We'll get into recession concerns, which I'm calling Trumpcession, in a bit. But what do you think will happen? Uh, w- w- what do, what do you think about these tariffs over the last few days? Are, are markets overreacting or are they getting it right? The Wall Street Journal reported on a closed-door gathering of CEOs this week at the Business Roundtable where an impromptu poll was taken about the economy. Oh, this was the Jeffrey Sonnenfeld one. 44% of the market said, uh, would, uh, have to fail 20% for them to speak out. 22% of stocks, uh, said stocks would have to fall 30% before they would take a stand. Um, Jamie Dimon finally did, after saying Trump's get-over-it on the tariffs. He's now saying this is a bad thing. Start with tariffs.
- SGScott Galloway
Uh, first off, I think Jeffrey Sonnenfeld is a gift and he wrote a fantastic, uh-
- KSKara Swisher
He is.
- SGScott Galloway
... opinion piece about how some of these corporate leaders who claim to be leaders and claim to care about America need to speak up, and there, there haven't been that many, many. And congratulations to Jamie for kind of stepping into the void and saying what's on everybody's mind. I think you're gonna see more of it. Look, tariffs are the following. Uh, uh, they're not universally bad. If, if, if China is charging a tariff on our cars, we get to charge a tariff on their cars until we both decide to lower tariffs. Free trade creates prosperity. You can also probably need a tariff to support certain strategic industries. We probably should have some, some level of domestic production of steel in case those supply chains are shut down and we need to build tanks or what have you. But when, for example, these aluminum and steel tariffs, we tried that when, in the last Trump administration, and what they found is the following. That okay, let's assume that the additional revenue created by the tariffs, let's assume that the additional revenue captured by Cleveland-Cliffs and US Steel, our two largest remaining steel manufacturers, their market, they become, their products become more competitive because foreign, foreign steel is more expensive, so they get more share, more money, more tax revenue, more jobs. All right, theoretically it all works. Here's the problem. One, consumers, prices get, get increased. Consumers have to pay up to 6, 8, $12,000 more for a truck with these tariffs, which takes down the demand, which takes down the gross profits of the domestic supplier because their products are more expensive relative to other people's products, because we have to increase our input costs. There is a reciprocal tariff almost always, meaning that our products become more expensive overseas. And what you found with the aluminum and steel tariffs is that the increase in the cro- cost of steel made that so many products across America had to increase their prices 'cause steel and aluminum were big inputs, that the increase in prices reduced demand much more than the incremental income gains from the companies that benefit from their products being more competitive. In sum, in almost every case, tariffs don't work. And if you look at what companies do thousands of times a year across the market, they are perfectly trying to calibrate... Nike is perfectly trying to calibrate volume times gross margin and figure out the exact peanut butter and chocolate combination for shareholders. "All right, if we sold, if we lowered our prices and took our margins down from 30 points to 10 points, we'd double our volume but we'd s- we'd end up with less profit." So they perfectly attempt, or attempt to perfectly calibrate across every market what is the optimal price relative to volume relative to margin? And when the government comes with tariffs, what they're saying is, "Hey company, you're stupid. We could take prices up and it wouldn't hurt demand."
- KSKara Swisher
Yep.
- SGScott Galloway
And it never works out that way. It usually suppresses demand and revenues in a much greater volume or amount than the increase in revenues. It makes us less competitive, it makes us less productive and it increases cost. If you're looking for an elegant way-... to increase consumer costs while reducing productivity and demand across our products in foreign markets, congratulations, this is- this is super-sizing Brexit. This is the most elegant, efficient way to reduce American prosperity. It makes-
- KSKara Swisher
And...
- SGScott Galloway
... absou-fucking-lutely no sense. Sorry, here's a period.
- KSKara Swisher
Boom. Boom.
- SGScott Galloway
E- even-
- KSKara Swisher
Professor Galloway-
- SGScott Galloway
Even worse-
- KSKara Swisher
... gives you his lecture in class for economics.
- SGScott Galloway
Even worse than this?
- KSKara Swisher
Yeah.
- SGScott Galloway
Even worse than this? Even worse than the tariffs.
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
If he said, "All right, I'm putting a 10% tariff on everything from China," American companies could go, "Okay, this is stupid, whatever, but he gets to make this decision." But they could plan, they could say, "Okay, the cost of our shoes and our cars is about to go up 12 or 15%. We estimate the demand will fall by this, and we could adjust and plan for this." But here's what's even worse than these ridiculously stupid tariffs, is the uncertainty means that foreign and domestic suppliers can't plan their goddamn business. When we were at SXSW, a lot of the digital media companies who were off to a great start of the year-
- KSKara Swisher
Yeah.
- SGScott Galloway
... right? The lack of- the lack of uncertainty because, okay, we know Trump's in office, we sorta know, we- we think we sorta know what to expect, let's get back to business and start spending money. The- 2025 started great for digital media companies dependent upon consumer advertising. And now their quarter has been blown because-
- KSKara Swisher
Blown.
- SGScott Galloway
... com- some of the biggest advertisers in America, including automobile companies, have all said the following, "We have no fucking idea what's going on, so we're doing nothing." They have told their media planners, "Until there's more clarity, stop spending money." And the lack of certainty, the lack of consistency as a trading partner means every large organization and company in the world is trying to reconfigure their supply chain to be less dependent upon America, which means less money for America. The tariffs are bad. The uncertainty is even worse.
- KSKara Swisher
Oh, wow. That was a lecture. This, I just felt like I was in macroeconomics back in college right now. That was a macroeconomics-
- SGScott Galloway
There you go, grad school.
- KSKara Swisher
... professor. Well, yeah, it felt like, yeah, I took macroeconomics in- in my freshman year. Um, thank you, Professor Galloway for that-
- SGScott Galloway
There we go.
- KSKara Swisher
... cogent analysis. It sucks is what I think.
- SGScott Galloway
Now come by my office hours and I'll help you-
- KSKara Swisher
No, oh, no-
- SGScott Galloway
... on the hard parts.
- 34:51 – 43:24
Recession Concerns
- KSKara Swisher
so the effects are everywhere. And so that's why there's been a lot of talk of recession lately, which I call a Trumpcession, um, I'm gonna keep saying that word til it catches on like Bidenomics. Um, though Trump is dancing around that language. Let's listen to what he told Fox Business's Maria Bartiromo earlier this week. By the way, Kara Swisher is not a fan of Maria Bartiromo, uh, when asked about the possibility of a recession.
- DTDonald Trump
I hate to predict things like that. There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing. And there are always periods of, uh, uh, uh, it takes a little time. It takes a little time. Uh, but I don't, I think it should be great for us.
- KSKara Swisher
Uh, this issue has been a real hair up his ass, the idea that tariffs will work. Um, he's, uh, way back in the Smoot-Hawley days. But Commerce Secretary Howard Lutnik had a different take on tariffs and recession, an interview with CBS News. Let's listen.
- DTDonald Trump
These policies are the most important thing America has ever had.
- JOJournalist/Interviewer
So it is worth it?
- DTDonald Trump
It- it is worth it. A, I don't think there'll... The only reason there could possibly be a recession is because of the Biden nonsense that we had to live with. These policies produce revenues.
- JOJournalist/Interviewer
So you're saying when it looks chaotic and unpredictable from the outside, that there actually is a master plan when it comes to these tariffs?
- DTDonald Trump
It is not chaotic, and the only one who thinks it's chaotic is someone who's being silly.
- KSKara Swisher
Oh, my God, he's such a clown. He's such a ridiculous, like-
- SGScott Galloway
The mo- I'm sorry-
- KSKara Swisher
... sucker upper eye. Go ahead.
- SGScott Galloway
... the most important thing in American history, uh, so our decision to, at huge cost, risk to our young men, risk to our economy, turning- turning washing machine factories into tank factories overnight, we decided for the second time to enter into World War II and push back on fascism. Oh, we decided that this incredible prosperity and right should be extended to non- civil rights. Oh, I'm sorry, but- but these fucking tariffs are the most important thing America's ever done? This-
- KSKara Swisher
I- I know. He said-
- SGScott Galloway
This, I mean, th- you just lose so much credibility when you say that, and this is so chaotic. I- I don't even know the status of the tariffs right now, and I follow this shit. So these guys come across... Have you... Uh, uh-
- KSKara Swisher
I know now know why this guy is not respected on Wall Street when, uh, he opens his mouth. He's such a clown. He's a suck up to Trump because he's finally relevant. He ta- goes around talking about how he's best friends to Trump in Washington all over the place. He is a, he is the thirstiest public official I've ever seen and it's because he's not beloved on Wall Street. Um, and secondly, he's say- he's spewing nonsense, just nonsense out of his mouth.
- SGScott Galloway
You know who's the big winner here, is China. You know what China... China has literally deployed dozens, if not hundreds, of their diplomats to the biggest European and Latin American companies and they've said the following, "You may not love us, but you can count on us. We're, we like trade, we like commerce, and we do what we say. And you know what you're dealing with, with us. You've been buying all these, this produce or products or finished products or soft, whatever it might be from the US, you have no idea how to plan and what to expect from these folks. You can count on us. This is the deal. We are open for business, we love commerce, we are a dependable-
- KSKara Swisher
Yeah.
- SGScott Galloway
... consistent partner."
- KSKara Swisher
Dependable.
- SGScott Galloway
Or even not China. Canada's going to do more business with M- This is literally a gift-
- KSKara Swisher
Yep.
- SGScott Galloway
... to every major economic power that would had to compete against America. What they're saying is America is not competitive because you can't believe what they say. And the biggest, the, the greatest level of damage here isn't even going to show up in the short run. Goldman Sachs already took their GDP prediction from 25 down from 2.4 to 1.7. It'll be the long-term impacts of when people reconfigure their supply chain and their relationships.
- KSKara Swisher
Right.
- SGScott Galloway
They're going to be somewhat, like, remissed to re-engage again.
- KSKara Swisher
Right.
- SGScott Galloway
This is going to be a structural step down in our credibility across our largest trading partners. And trade, no doubt, if you don't, if you don't think about who gets really hurt, you can end up with a, you know, really difficult situation. And that's where America, America has been really good on trade. Where we're bad is helping out and showing empathy for the people who get, quite frankly, who are on the wrong, wrong end of that. But on the whole, prosperity just grows. We, we just continue to see that economically over time. And people, when they stop buying our products, not because they might, they might be the most competitive in a year, but they might, "We don't know what's going to happen in the next year or two years-
- KSKara Swisher
So do you think a recession-
- SGScott Galloway
... with you guys."
- KSKara Swisher
... is likely at this point? Because, uh, again, with this fella in charge, I mean, I'm thinking Gina Raimondo is so smart and this guy is so dumb. Like, actually dumb. Like, I think he, when ma- macroeconomics was taking place, he was the one sleeping behind me, the dude sleeping on the desk behind me. That's what it feels like. He's not paying attention to almost any obvious thing. And you're right. We didn't take... When we did some of these trade deals, we didn't think of the effects here enough and figured out how to retrain and get people into new jobs and things that were more competitive and figure out what advanced manufacturing we could do here with our population and et cetera, et cetera. You're right, Chi- this is an opportunity for China. So do you... Uh, you know, and the second thing is people worried about their 401Ks and portfolios during this volatility. I mean, do you think there's going to be a recession, very briefly? And then what would you say to people with, uh, s- with the stock market? Warren Buffett looks like a genius. "Tariffs suck, I'm in cash." Look who looks like... He is the GOAT. He should be commer- he should be president. But anyway.
- SGScott Galloway
Look, uh, economists, and I don't consider myself like an economist, but quote unquote "academics" have predicted nine of the last three recessions. I- it's very hard to tell, because-
- 43:24 – 52:58
White House Tesla Ad
- KSKara Swisher
we're back with our second big story, the beautiful bromance of Elon and Truss continues. That's from our producers. The rest of us worry about dismantling of our government, President Trump is focused on a very important task, promoting sales of Teslas. After posting on Truth Social Tuesday morning, he said he would buy a Tesla to support Musk. I bet he hasn't. Trump welcomed Elon and a fleet of Teslas to the White House. The president had a cheat sheet of notes, and kudos to that photographer who got that picture, in his hands while praising the company. Uh, let's listen to what he thought when he sat, uh, in one of the cars. And by, by the way, he hates EVs. He said he actually hates EVs. He doesn't drive, et cetera, et cetera. So this was why this was precious.
- DTDonald Trump
That was That's- I'm sorry, you had a front? You had a front? This is a different panel than I've had. Everything's computer. That's beautiful, wow.
- KSKara Swisher
Oh my God, he hasn't ever been inside a, a, a car in like a long time. It's really, I mean a car that looks like that. Tesla stock is down 26% in the last month at the time of taping. It had a bump from Trump, but most people, uh, just there were two analyst reports showing, uh, that Tesla's in real trouble, um, that are, that are taking the stock price down quite considerably, although it's hard to bet against Tesla 'cause of like stunts like this. Um, Scott, did you know, um, that, um, that, that, that there's a computer in a Tesla? (laughs) I just, what the fuck? What, what do you think of this stunt?
- SGScott Galloway
Uh, look, uh, we, we have a bias, uh, but I, uh, this to me just seemed fucking ridiculous.
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
That the president of the United States would decide to do an infomercial for one brand and not all other American brands. It's one thing if he and the commerce secretary were to stand in front of a bunch of American-made EVs, including Tesla. I think Biden screwed up not including Tesla in the EV summit.
- KSKara Swisher
Agree.
- SGScott Galloway
That was just, that was punitive the other way. That was playing favorites the other way.
- KSKara Swisher
Yeah.
- SGScott Galloway
But when you basically do one of these bad local, you know, "I'm crazy Bob. Come down-"
- KSKara Swisher
(laughs)
- SGScott Galloway
"... to Bob's Ford and Lincoln-Mercury for-"
- KSKara Swisher
Yeah.
- SGScott Galloway
"... a crazy deal." I mean-
- KSKara Swisher
"No percent down," whatever, yeah, yeah.
- SGScott Galloway
Yeah, I, I was joking that, that you can lease to own America for $285 million.
- KSKara Swisher
Yeah.
- SGScott Galloway
It's just, this is stupid and goes back to the notion that this kinda shit should not be allowed. It, it reflects poorly on America. It reflects poorly on Trump. And I'm, I'm, the thing I don't get about Musk, who is so s- uh, obviously has such an unbelievable feel for business, is that 75% of Republicans say they would never buy an EV.
- KSKara Swisher
Yeah.
- SGScott Galloway
If he was just purely, quote unquote, "economically driven," which I think he is, I think he would've gone blue pill.
- KSKara Swisher
Yeah.
- SGScott Galloway
Because the marketplace, I always use the example, we talked about this, when Nike went political, it was a smart move 'cause they tickle the sensors of the core market. He's pissing off his core market.
- KSKara Swisher
He is.
- SGScott Galloway
I just don't, I don't understand his ending here is gonna be something-
- KSKara Swisher
I think he's uninterested in Tesla. I think he's uninterested in Tesla anymore. I don't, I di- I don't know what else, 'cause they haven't innovated on the product. I know everybody sort of looks at the polarization that he's created and he's re- he's, he's repulsing his customers and he's not gonna attract the ones who like him now, right? They don't want, they're not, they may like him, they're not gonna buy his car. Um, they might. I mean, they might, I guess, but I doubt it. Sean Hannity supposedly bought one, whatever, and he's like, "It goes, it go fast." I was like, these are good cars. I complained again to Dara Khosrowshahi. I was like, "I just ordered an, an Uber, uh, Black, and a Tesla showed up, and they're still not luxury cars." The- now I'm making the argument to him. It's not a luxury car. It's very tinny and a, and a bumpy ride. And if I wanted a luxury car, send me an actual luxury car if I'm paying for it. But that said, I think it's, uh, it was pathetic. But now interestingly, if support, um, uh, doesn't do what Elon was hoping in the long term, which was at least stabilize Tesla shares, which are drifting down, I suspect they're gonna be drifting down again, um, it's not the only way the president is attempting to help him. Uh, Trump also said he would label attacks against Tesla dealerships domestic terrorism. Uh, nobody likes these attacks. These are st- stupid what people are... They're allowed to protest and the fact that he's calling, he's trying to sort of link regular protests with, uh, domestic terrorism is ridiculous, but attacking, um, you know, charger facilities, et cetera, is just violent is what it is. It's, it's not terrorism, it's just obnoxious and, and illegal and those should be arrested. Um, and Elon Musk is paying back the favors. He reportedly plans to give $100 million to President Trump's political operation that Trump can, can control rather than, uh, uh, Musk. During the election, Musk donated over $250 million to his pro-Trump super PAC that he controlled. He made up that $100 million in the rise in Tesla stock, uh, after Trump did this infomercial. Um, but it feels so pay-to-play. It's like so right in front of you. Um, and I agree, Biden should've included a Tesla in that, that particular, uh, event at the White House. And, uh, you know, someone was arguing that, um, presidents always promote different pro- American products, but not like this. This was like, it was... Plus he didn't know how cars worked, which re- made him seem older and more like an old man in my... I think that also was weird. His, his discomfort, uh, inside of a car felt very, I don't know, it gave me like a, like a Biden feel, like a, a doddering old man kind of... And he's vi- I think he is much more vibrant obviously than Biden. Uh, any other thoughts about this money that, that's going back and forth between these two?
- SGScott Galloway
Uh, there's, uh, it really is, I mean, it's, it's so passe, but money in politics and just what feels like a straight pay-for-play. And all the incentives are... I mean, I've said this for a long time, that the thing that so has horrified me about our representatives and our Congress is not that they're whores, not that if you give them money, you get audience with them.
- KSKara Swisher
(laughs) Yeah.
- SGScott Galloway
I've known that for a long time. It's what incredibly cheap whores they are. And that is, if you give 10 to 25 grand-... to every senator, I bet more than half would meet with you when you swung by Washington. And, and influence is a function of proximity and intimacy. You have audience with people who get to, who get to levy or are the arbiters of the largest purse in history. So the incentives are... Jeff Bezos or E- or, or Mark Zuckerberg look at these investments and go, "This is the best investment in history. A million bucks for his inauguration campaign and he stops threatening to put me in jail, or he's gonna not try and break me up, or he's gonna tell the FTC or the DOJ to hands off Amazon, or whoever. This is the best money spent." Unless you have systemic laws and regulation that says, "No, we pass laws that affect all companies. We're not allowed to play, we're not allowed to play favorites," it's just a race to the bottom where everyone's like, "All right, let's give him a giant medal, an award, and build this gold statue of him, and give $10 million to his electoral campaign." And the problem is that favors the incumbents 'cause they're-
- KSKara Swisher
Yeah.
- SGScott Galloway
... the ones that have all the power. And anybody who says, "No, I'm standing up for American values. I'm not gonna take this money," they're at a huge disadvantage-
- 52:58 – 59:25
Predictions
- KSKara Swisher
Okay, Scott, let's hear your prediction, and just say you thought that they're gonna break up. Uh, do you still think that? You said Doj should be over and Elon would be gone. Um, but le- uh, let's, let's hear your prediction first.
- SGScott Galloway
Well, that's, uh, that is my prediction.
- KSKara Swisher
Yeah.
- SGScott Galloway
And that is, it, there's not gonna be a breakup. I think that essentially keep... People keep asking us, as Anderson did last night, "When does the relationship end?" I don't think the relationship ends with a bang. I think he just sorts... I think Musk just fades to black. One, if Doj... If the Trump is, uh, if the president is really serious about the cabinet, uh, secretaries now get to make the final decision and Musk is just an advisor to them, that means nothing is gonna happen. Because these s- cabinet secretaries have a very difficult job. They need all of their staff. The savings are minimal in comparison to, uh, for example, the increase in the deficits from the planned tax cuts. So there... I- i- if Elon Musk comes back, he's not gonna come back with a thoughtful... You could probably cut 1,000 of the 4,500 people from the Department of Education who have overseen national mandatory testing, which most people think has not worked. Right intentions-
- KSKara Swisher
Right.
- SGScott Galloway
... has not worked. If he came back with thoughtful recommendations, the Department of Education might say, "Okay, that might make sense." But he's not, he's not there to look at fraud and waste, which by the way, we've got a clean bill of health on so far, 'cause they can't find as much as everyone had anticipated.
- KSKara Swisher
(clears throat)
- SGScott Galloway
But also, these are not... This isn't about an audit. This isn't about efficiency. These are... This is a pol- these are political actions. When you cut off all US aid, it's a political action, and political actions are supposed to be, uh, left to our elected representatives representing the people. So if it was in fact about efficiency, fine. But what he said is... If he in fact is honest about now he's just an advisor, he's gonna have no power, nothing's gonna happen. And in addition, he is now probably doing the math and going, "I miscalculated." There are... Not only is his Tesla sales being hammered, but what he's really scared of has happened. And that is the virus here has jumped the lab-
- KSKara Swisher
Uh-huh.
- SGScott Galloway
... to Starlink.
- KSKara Swisher
Yeah.
- SGScott Galloway
And that is a lot of big customers are now rethinking their Starlink relationship. So, what initially was very accretive to his personal wealth has returned. He's lost all that money, and the momentum is downward. So I think he's basically gonna p- pull a Vivek and just slowly fade away out of... And I think Doj is gonna die a quiet death because he has... It, it looks as if his, his, his power has been emasculated, and two, he's just losing so much money right now 'cause of the negative brand hail.
- KSKara Swisher
Well, guess, and guess what country has alternatives? China. And Jeff Bezos is working on things. There's so... N- To Starlink. Now Starlink is dominant at this point, but... And he keeps saying there's no other alternative. He said that about Tesla. There's other alternatives. There's gonna be other alternatives, and then he is-... up the creek without that proverbial paddle. You're right, I agree with you. Interesting prediction. We'll see. There, there is a staying power. There's a weird relationship happening between these two, though, that he stays there, that he's at the White House, the kids around. There's something much different here, but I would agree, money. He's, he, he almost teared up when he was talking about the money that he was losing. Um, even the world's richest man doesn't like to lose tens of billions of dollars on any one day.
- SGScott Galloway
So Kara, you know what stock is up? The Starlink competitor in Europe, Eutelsat, has quadrupled in the last 30 days as these small inferior product competitors are now viable again because they have an enormous increase in interest from nations and companies that don't want to work with Starlink. I mean, this is so bad for Starlink. You're about to see a massive amount of capital go into other, um, satellite and communications providers that quite frankly weren't as competitive. They weren't-
- KSKara Swisher
No. They... Starlink-
- SGScott Galloway
... as good as Starlink.
- KSKara Swisher
... is a superior product. And by the way, Tesla was a superior product but he never, he hasn't improved it. And again, uh, as I say over and over again, a lot of people are banning Tesla because they're repulsed by Elon Musk, but they have not innovated their product. If you have a great product, and in this case it's the repulsiveness and the danger if you go with him in this case, and that's why Europe is going to abandon him. And, uh, so is Canada. Is Canada has, it's not just that. And there's plenty of, there's gonna be plenty of competitors in the Starlink business very soon. Anyway-
- SGScott Galloway
Anyways, there won't be a press, there won't be a press announcement but watch-
- KSKara Swisher
Yeah.
- SGScott Galloway
... in 30 or 60 days, Doge is gonna be-
- KSKara Swisher
Yeah. Doge.
- SGScott Galloway
... surprisingly, like, not in the news.
- KSKara Swisher
Okay. All right. We'll see. I'd be interested. That would be great. And then they can go to Mars and then it'll be great for them to do that. Um, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nyamag.com/pivot to submit a question for the show or call 855-51-PIVOT. Scott, that is the show. Are you, uh, I, you're going, when are you going back to London? Soon at some point?
- SGScott Galloway
I'm going away for the weekend and then-
- KSKara Swisher
Yes.
- SGScott Galloway
... I go back to London on Sunday.
- KSKara Swisher
Oh.
- SGScott Galloway
How about you?
- KSKara Swisher
Oh, good.
- SGScott Galloway
What are you up to?
Episode duration: 59:25
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