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Becker Private Equity & Business Podcast
Trump, Tariffs, TACO, & Tesla with David Pivnick of McGuireWoods LLP 6-4-25
00:16:30
In this episode, David Pivnick, Partner at McGuireWoods, joins Scott Becker to dissect today’s economic and political headlines.
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- [00:02]
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- [00:30]
Scott Becker
This is Scott Becker with the Becker Private Equity and Business podcast. We're talking today with one of our most brilliant guests who joins us regularly with David Pivnick, who's a partner at McGuire Woods. He also is the valedictorian of his law school class. He represents health care systems, healthcare companies, often in false claims cases, defending them, guiding them. He also works with private equity funds who invest in healthcare and trying to assess potential claims and challenges A really bright guy. We're going to go off scripts today a little bit and talk about some of the issues of the day. We're in a fascinating economic situation. We've got new jobs created this month, the worst in a long time, but open jobs still pretty high. At the same time, the stock market is up. There's this new discussion and today's discussion is really going to be around the the four T's, Taco, Trump tariffs, Tesla. I really want Elon Musk there, but he's not a T. But Tesla's a T. But David, they've talked about this thing called Taco, which is this concept or the narrative putting forth by pundits that President Trump, Trump attacks, then chickens out and they use that to describe some of these trade negotiations. And he makes a lot of noise, but maybe the park is bigger than the bite. Any senses? I mean, you've watched a million negotiators over the course of your career. A lot of negotiators dealing with high stakes litigation. What's your sense of that? Is that just a bad take on what's going on or is it true to that? Or do you have any feel for how you view this new narrative? Trump attacks and chickens out in there.
- [02:16]
David Pivnick
Yeah. I'll start with it from a bit of a side angle, which is I find the whole attack on that front and the coining of the phrase Taco, one part clever and one part incredibly stupid. The one part that's clever about it is clearly the folks who are pushing it recognize fully that it's the kind of thing that we'll get under President Trump's skin, will irritate him, will make him unhappy and, and they're doing it clearly to tweak him and to get under his skin. And so from that standpoint, like, you can see how it's a little bit clever because they're sort of succeeding in their goal. The flip side of that is the very people who are doing that are the same people who are, in the next breath would tell you what they don't like about President Trump is that he's mercurial and unpredictable and potentially will lash out. So it seems weird to criticize the tariffs and criticize the approach and then do something that is almost affirmatively prodding President Trump to take stronger action to avoid the taco name sticking. Like, I feel like the very folks who are upset about tariffs and how things have played out are creating a situation where they're almost priming the pump for President Trump to take a harder stand. So from that standpoint, I think I find it just clever in part, but almost too clever by half or too cute by half, where they're potentially going to make the problem. They're worried about worse by being provocative in terms of the actual.
- [03:53]
Scott Becker
Let me ask you a question about that, because I think that's exactly right. It's almost like waving the matador in front of the bull to try and get the bull to go. But is your sense that, that they don't really care. They're more interested in the excitement and what happens here than they are about what really happens? I mean, it seems like they find that in itself half the fun of it, it seems like to me, at least for part of the pundits. So they, they don't. I agree with you 100%. They're going to force him to take a harder line so he's not viewed as a chicken or not viewed as sort of pulling back. But what's your sense is I think you're right. It might inflame him. But in terms of the pundits, I guess it's hard to tell. But I sense that they don't really care that much.
- [04:32]
David Pivnick
You might be right. And I certainly that's not a point I would argue. What I would say is, if that's the case, and you are right, I find that disappointing and somewhat intellectually bankrupt of those folks because it's folks who are, again, fundamentally opposed to President Trump. And I think the most typical criticism that I hear about President Trump is some variation of he doesn't really care about what's good for the country, he's self interested and he just wants the chaos or to Protect his own self interest. And so for someone to be being provocative for the point of waving the red flag in front of him, to get him all riled up and have him do things improperly, those folks would be doing exactly what they claim to be concerned about President Trump doing, trying to inspire ratings and fun news bites for their own benefit. Which would be very disappointing if that was really the thought process. I think as much as anything else, it's trying to get clicks and less focused on the Trump reaction and viewing that as a happy side effect, a happy coincidence. And people are just, it's a click driven time period these days where people just want the attention and the eyeballs and almost, I think, approach things with let the chips fall where they may afterwards dynamic. And that is on the tariffs and the general initial question of what do I think about it? Look, I think there are definitely instances where the United States has been maybe taken advantage of is a bridge too far, but certainly has gotten the lesser side of trade deals and where I think addressing some of those imbalances and double standards that have existed made sense and was prudent. I think the unpredictability of tariffs and some of the unintended consequences of that, whether it's on the stock market or on domestic jobs or pricing inflation, etcetera, I think is unfortunate. And so, you know, look, as a general statement, I would like to have cohesive plans, whether it's on a sports tye cheer for a business, the firm I work for, you know, I'm a partner in or with government, you know, having a cohesive plan and then moving towards that plan, to me has value, if I felt truly in my heart of hearts that the instituting of tariffs and then retrading and then pulling back and then re institution, if I thought that was part of a grand plan to get from point A to point B, I'd feel a little bit more confident in it than where I think some of it is very much reactionary and feeling things out and trying to assess how bad things might be or how much you might be able to apply pressure. So I think trying to focus on trade and trying to correct some of the imbalances, broadly speaking, is good strategy. I think having a cohesive game plan for doing that would be better strategy. And I'm hoping to see a bit more of that going forward.
- [07:39]
Scott Becker
Thank you very, very much. In terms of this concept of, you know, so we talked about Trump's talk about tariffs. Where's the tariff thing going? Do you have a sense of that? Or it seems like ultimately, like we always talk about the economy looking for a soft landing. It looks like ultimately President Trump's trying to find a negotiated outcome in a soft landing. Do you have a sense of where this is all going?
- [08:02]
David Pivnick
No, I think that's right. It's going to be trying to figure out exactly what, what we can accomplish. And I think from his standpoint, what, what he can sell as a win and as being accretive to the American people. And I think as things progress, you know that that's going to be more difficult to sell if things like the deficit are not, and debt spending are not addressed. And I think there's been lots of consternation on both sides of the aisle regarding the budget and spending. And I think things like the tariffs are not going to be a one size fits all solution there. So I think really it's got to be figuring out a negotiated outcome that has at least incremental wins for the country. But just as importantly, I think it's recognizing tariffs aren't a cure all to the financial problems that exist. And a lot of that is going to have to come down to addressing spending and, and also strongly thinking about taxation in the country as well, which, which are much more complicated. Discussion.
- [09:11]
Scott Becker
Thank you. We've taken a talk around taco tears for a second, some on Trump. It all ties into Trump. And then let's talk about Tesla and Musk. It seems like the new budget that the Trump team has put together, that the House has passed, that the Senate's going through, continues to raise the deficit. In fact, this year we've got a nearly $1.9 trillion deficit projected after about the same last year. Elon Musk, to his credit, has broadly taken shots at this budget as saying this is exactly what we're not supposed to be doing and that there's so much waste in this budget and so forth and so on. What is your sense here of Tesla, Trump, the budget? Any initial thoughts on what you're seeing or any thoughts on what you have?
- [10:05]
David Pivnick
Yeah, I mean, look, I think my biggest thought on it really comes down to Elon and how he's personally reacting. I've seen the tweets that you're referencing and, or maybe the X's. I don't know what I'm supposed to call them these days, but I find Elon Musk endlessly fascinating because I think he is, on the one hand, an incredibly smart, capable person with an incredible ability to understand big picture issues and to think about them and to think about the future of the country, the planet, et cetera. And then I also see him sometimes as a guy who just wants to get on Twitter and post memes and troll people, which, frankly, I think should be beneath him relative to his wealth and intellectual capabilities and the fact that he could be spending his time making the world a better place rather than, you know, trolling the lips. And so I find him to be endlessly fascinating and puzzling, et cetera, because I have a generally high perspective of his capabilities, abilities, and his intellect. And he's a guy who, three years ago, four years ago, I would have said to you is the kind of guy who could be in charge of solving macro problems like global warming, climate change, and trying to help the planet and sustainability. And I don't see that now as much as someone who is interested in the attention as much as everything else. And I. I personally find that a bit disappointing because, again, I think his ceiling and capabilities are so incredibly high, and I'd like to see him get back to it. And so it'll be interesting. You know, he's taken a foray into politics with Doge and his active involvement in the Trump campaign and being involved with President Trump's administration. I think based on recent tweets and some of what we've seen, that seems to be dissipating a little bit. And he's clearly shown a capacity to pivot in his perspectives and approach. And it may be that we're. We're on the eve of another such pivot that might address and correct some of what I just raised. But, I mean, my. My main reaction to him more than anything else, is I have. I hold him in high regard in terms of his capabilities. And I have hope that he gets back to more of a core focus on things that are accretive and beneficial to the planet, rather than pounding his chest and sending out a constant message of how much money he has and that he doesn't care what other people are thinking about.
- [12:50]
Scott Becker
No, it's simply absolutely fascinating to watch. I mean, we've sort of covered Trump tariffs, Taco, Tesla. What about the impact on Tesla? Because we talked about Musk in his perspective as way to get to Tesla. Any thoughts? I mean, Tesla stocks rebounded a lot this year. They're not selling a lot of cars, not nearly what they were, but they've got all this other technology. Any thoughts? And will Elon being more engaged in it help? And what? Can he really be more engaged in it? He's got SpaceX, Starlink and all these Other things going on.
- [13:20]
David Pivnick
Yeah, I mean, I don't know that Elon being more engaged in Tesla at this point is necessarily beneficial because I think a lot of the problems for Tesla are at this point Elon caused, which is unfortunate. And it's not through his operation of the business so much as just there are aspects of day to day life in the United States that I don't think it's radical to say. Sticking with these theme of keywords that are somewhat tribal in nature and politics certainly fits very heavily into that category. And so where, you know, I want one of Haley's uncles who's a kind, smart person who drives a Tesla every couple weeks, post his long explanatory Facebook post or meta post or whatever the heck it's called about how he drove a Tesla before Elon, quote, unquote, went crazy and he's got a 75 paragraph essay justifying his choice of vehicle and that at this point it's too expensive for him to get out from that decision. You know, I read things like that and I think it creates a real risk for Tesla as a company because there's a whole bunch of people that are here that are existing customers or would be customers who are going to ultimately refuse to buy the vehicle, either because they don't agree with what one of the principles of the company stands for, or because they're worried that by driving the car they're communicating an agreement that they don't want to and they're going to have folks, you know, key their car or do other things that they don't want to deal with. And so I think when you have those forces posed against the business, I think that there's real risk because the ability to sell cars and the ability to unload used Teslas is obviously being severely impacted. And I think people are fairly dug in on their concerns on that front. So what that means it may be as simple as an additional pivot from Elon in a different direction that cures those particular problems. But I think absent something changing, there's a bit of a spiral there. And when the fundamental core business is selling vehicles and it's become harder to sell vehicles for political reasons, that that doesn't bode well for the company. And I don't think there's a quick fix.
- [15:45]
Scott Becker
No, I think there are fixes. There's got all this other technology that they're going to try and make a fortune off of in the autonomous vehicles and all those kinds of things. But in the Tesla point, it's a fascinating thing. As Elon went right, the original buyer base of Tesla was probably center to center left who embraced the climate concerns electronic vehicles early and now that's an audience he has really gotten sideways with. I mean in brands in Europe their vehicle sales have fallen by more than half and it is, it is literally fascinating to watch. In any event, David pivot that that.
- [16:21]
David Pivnick
Should be part of their marketing campaign. People in France don't want to drive our car. They should lean into that. I think it makes them a more appealing brand in the United States. That should be part of their platform.
- [16:32]
Scott Becker
It reminds me of back in the day when President Bush wanted to rename French fries freedom fries and I couldn't agree with that more because we're big fans of freedom fries. In any event, David, always great to visit with you again. David Pivnick on tacos, tariffs, Trump and Tesla. Thank you so much for joining us today on the Becker Private Equity Business Podcast. Always a pleasure to visit with you.
- [16:53]
David Pivnick
Gripping on. Thanks for having me, Scott.