Who’s in the consumer-spending driver’s seat?

Summary

Marketplace Podcast Summary: "Who’s in the Consumer-Spending Driver’s Seat?"

Release Date: February 25, 2025
Host: Kai Ryssdal

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**1. Consumer Spending Dominated by High-Income Households

[01:01] Kai Ryssdal opens the episode by highlighting the crucial role of consumers in driving the U.S. economy, noting that consumer spending accounts for nearly 70% of the Gross Domestic Product (GDP). However, Kai emphasizes a shifting trend where a small, affluent segment—the top 10% income earners making $250,000 or more annually—now accounts for almost half of all consumer spending. This marks the highest share recorded by Moody's in their data collection history.

Key Insights:

• The concentration of spending in high-income brackets is reshaping economic dynamics.
• Increased spending by the wealthy is not equally matched by the lower and middle-income groups, potentially leading to economic vulnerabilities.

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2. The Widening Spending Gap and Its Economic Implications

[02:17] Matt Levin delves deeper into the expanding spending gap, supported by insights from Michael Brown, Principal U.S. Economist at Visa. Brown points out that since 2023, the disparity in consumer spending has widely increased, particularly noticeable during peak travel seasons.

Notable Quotes:

• [03:35] Kai Ryssdal: "If their spending is being driven by record stock prices, you know, I wouldn't count on that for sustaining long-term economic growth."
• [03:42] Matt Levin: "Some economists argue that richer households tend to spend more on labor-intensive goods and services, which is good for the job market."

Economic Concerns:

• High earners often spend on luxury and labor-intensive services, which benefits certain sectors but may not provide sustainable economic growth.
• Mark Zandi from Moody's warns that reliance on high-income spending tied to volatile stock markets like Nvidia shares can make the economy more susceptible to downturns.

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3. Data Center Expansion and Energy Consumption

[04:20] Kai Ryssdal transitions to discuss Apple’s investment in expanding its data center facilities to support AI products. Megan McCarty Carino elaborates on the environmental and economic impacts of this expansion.

Key Points:

• Apple plans to invest $500 billion over four years in data centers, significantly increasing energy demands.
• Northern Virginia's Data Center Alley houses over 250 facilities, highlighting the region's pivotal role in the tech infrastructure.
• Environmental Concerns: Data center growth is projected to triple energy demand, potentially leading to higher electricity costs and increased reliance on fossil fuels.

Notable Quotes:

• [06:27] TurboTax Expert: "Essentially, more demand means the need to build more energy infrastructure, and all ratepayers could be stuck with the bill."

Policy Implications:

• States like Virginia and California are considering regulations to ensure transparency and accountability in data center expansions.
• Logan Burke from the Alliance for Affordable Energy criticizes the shift towards natural gas generation, delaying the closure of coal plants.

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4. U.S. Economic Sanctions and Global Economic Warfare

In a segment exploring U.S. foreign policy, Kai Ryssdal interviews Edward Fishman, a Columbia University professor and former State and Treasury Department official specializing in economic sanctions.

Key Insights:

• Choke Points: Fishman defines choke points as critical areas of the global economy where the U.S. holds significant influence, such as the U.S. Dollar and advanced microchips.
• Economic Warfare Evolution: The ease of imposing sanctions has transformed economic tools into potent weapons, potentially destabilizing global economic relations.

Notable Quotes:

• [10:37] Kai Ryssdal: "Sanctions are like antibiotics. They work well when used correctly, but cause a host of problems when used excessively or inappropriately."
• [12:29] Kai Ryssdal: "The days of globalization are over. We are now living in an age of economic warfare."

Concerns:

• Overuse of sanctions can lead to economic backlash and prompt other nations to develop alternatives to the U.S. Dollar, weakening its global dominance.
• Fishman warns of a chaotic global economic order where nations prioritize self-interest, increasing the risk of imperialism and great power conflicts.

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5. Stock Market Movements and Nvidia’s Central Role in AI

[15:57] Kai Ryssdal provides an update on the stock market, focusing on Nvidia's pivotal role in the AI industry.

Key Points:

• Nvidia’s Influence: Eric Gordon, a professor at the University of Michigan, notes that Nvidia accounted for 22% of the S&P 500’s total gain last year.
• AI Leadership: Nvidia dominates the AI chip market with 90% market share, making it a bellwether stock for AI investments.

Notable Quotes:

• [19:32] Eric Gordon: "Nvidia dominates because its graphics processing units make up around 90% of the market."
• [20:50] Kai Ryssdal: "China's development suggested that you can do more with fewer hardware resources, so in this case, fewer Nvidia GPUs."

Industry Challenges:

• Deepseek, a Chinese AI firm, launched an AI model requiring fewer Nvidia GPUs, causing Nvidia’s stock to plunge 17%.
• Matt Bryson of Wedb Deepseek indicates that such developments could make AI more affordable and increase overall demand, potentially stabilizing Nvidia’s position.

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6. North American Supply Chains and Trade Agreements

[21:36] Kai Ryssdal explores the interconnected supply chains between the United States, Mexico, and Canada, emphasizing the complexity and economic interdependence fostered by the North American Free Trade Agreement (NAFTA) and its successor, USMCA.

Key Insights:

• Automotive Superclusters: Regions like San Antonio have become hubs for advanced manufacturing, relying on a binational ecosystem of suppliers across borders.
• Trade Dependencies: Automakers like Toyota, GM, Tesla, Kia, and BMW depend on seamless cross-border component flows to maintain production efficiency.

Notable Quotes:

• [23:38] Matt Levin: "We are creating the largest, richest, and most productive market in the entire world."
• [24:34] TurboTax Expert: "It includes companies like Toyota, GM, Tesla, Kia, BMW, which depend on networks of suppliers in both countries that provide thousands of component parts."

Future Outlook:

• USMCA Review: With the agreement up for review, there's uncertainty about potential tariffs on auto parts, which could disrupt established supply chains.
• Mike Wall of S&P Global Mobility suggests that while some companies might adapt by reshoring components, the overall complexity makes it challenging to reverse decades of integrated operations.

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7. Hawaii’s Struggles with Post-Pandemic Recovery

The episode concludes by addressing the economic challenges faced by Hawaii, particularly in the tourism sector, as illustrated through the experiences of Manu Powers, co-owner of SeaQuest Hawaii.

Key Points:

• Pandemic Impact: The tourism industry saw significant downturns during the pandemic, and recovery has been slow due to staffing shortages and high living costs.
• Economic Strain: Businesses are grappling with increased operational costs, limited workforce availability, and sustained low visitor numbers.

Notable Quotes:

• [27:05] Manu Powers: "We're understaffed, as we continue to be and have been since the pandemic."
• [27:05] Manu Powers: "We know that we'll be okay because we do have this data set of 30 years under our belt where we can kind of look back and say, okay, we've survived all of this, including three tsunamis and a pandemic."

Broader Implications:

• Labor Market Tightness: Hawaii faces a universal hiring challenge, exacerbated by escalating living costs.
• Resilience and Future Challenges: While businesses like SeaQuest Hawaii remain optimistic based on historical resilience, ongoing and future challenges require adaptive strategies.

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Conclusion

The Marketplace episode "Who’s in the Consumer-Spending Driver’s Seat?" offers a comprehensive analysis of the current economic landscape, emphasizing the dominance of high-income consumer spending, the expanding gaps in economic influence, and the intricate web of global trade and technological dependencies. Through expert interviews and real-world examples, the episode underscores the complexities and vulnerabilities inherent in today's economy, providing listeners with valuable insights into the forces shaping future economic trends.

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Notable Contributors:

• Kai Ryssdal: Host, Marketplace
• Matt Levin: Marketplace Reporter
• Michael Brown: Principal U.S. Economist, Visa
• Mark Zandi: Economist, Moody’s
• Megan McCarty Carino: Marketplace Reporter
• Edward Fishman: Professor, Columbia University; Author
• Eric Gordon: Professor, University of Michigan’s Business School
• Matt Bryson: Wedb Deepseek
• Jenna Salceda Herrera: Greater SATX Regional Economic Partnership
• Manu Powers: Co-owner, SeaQuest Hawaii

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This summary captures the key discussions, insights, and conclusions from the Marketplace podcast episode, providing a coherent narrative for listeners and non-listeners alike.

Transcript

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[Kai Rysdal]

Yes, consumers drive this economy. Which consumers though? From American Public Media, this is Marketplace in Los Angeles. I'm Kai Rysdal. It is Monday today, 24th February. Good as always today. Have you along everybody, if you are even a semi regular listener to this program, you know that the American consumer is the beating heart of this economy. Repeat after me because you've heard me say it often. Spending by or on behalf of consumers accounts for almost 70% of U.S. gross domestic product. Turns out though, that in the past couple of years that spending has increasingly been driven by a relatively small group of people. Moody's did some analysis for the Wall Street Journal that shows in the top 10% incomes, those consumers making $250,000 or more a year, they account for nearly half of all consumer spending, the highest share since they've been collecting that kind of data. Marketplace's Matt Levin explains how those consumption patterns are shaping our economy now and might in the future.

[Matt Levin]

You know how there are certain words or turns of phrase that you only really associate with the top end of the income scale, like using a season as a verb, as in we typically summer in the south of France or last Christmas we wintered in St. Barts. Apparently there's been more summering and wintering lately. When you look at the dynamics, I think there is certainly evidence to support that. Michael Brown is principal US Economist at Visa. Obviously there's always been a spending gap between rich and not as rich, but Brown says the chasm really started widening in 2023 and it's been the widest during summer and winter. If you're summering and you're in this affluent category, you're probably traveling abroad. If you're, say, lower income or maybe even lower middle income, maybe you're driving to some of those destinations, particularly given, you know, the costs of things going up. While inflation and a softening labor market have crimped lower income budgets, it hasn't really restrained high earners from splurging. That's partly because richer households tend to own stocks. And maybe the only thing rising faster than the price of eggs the past couple of years has been Nvidia shares. Economist Mark Zandi at Moody says that makes the economy overall more vulnerable.

[Kai Rysdal]

I mean, if their spending is being driven by record stock prices, you know, I wouldn't count on that for sustaining long term economic growth.

[Matt Levin]

Some economists argue that richer households tend to spend more on labor intensive goods and services, which is good for the job market. But Josh Bivens at the Economic Policy Institute says a more equal distribution of incomes and consumption could reorient what jobs get created in the first place. Maybe we'd have fewer people working in really high end hotels and resorts and a lot more people working in sort of elder care and childcare because all of a sudden people had the ability to pay for those things, he says with a more even distribution of incomes, more people could actually afford care for their parents and children. I'm Matt Levin for Marketplace on Wall.

[Kai Rysdal]

Street today a little bumpy and then a slide into the close also, just because honestly, it's kind of amazing. Warren Buffett's holding company Berkshire Hathaway, up 4% today on a solid quarterly profit report over the weekend. Should you be contemplating buying? Berkshire closed today at $747,485.50 for one share. We'll have the details when we do the numbers. Apple said today it's going to spend $500 billion over the next four years to speed up work on a manufacturing facility in Houston that supports its artificial intelligence products. It's going to expand existing data centers in five other states as well. Setting aside for a second the political setting of Apple's announcement, the fact is that the boom in AI brings with it an explosion in demand for electrical power for those data centers. The Department of Energy predicts that in the next couple of years, data center growth is going to require double or triple the amount of energy those data centers do now. Marketplace's Megan McCarty Carino has more on that one.

[Megan McCarty Carino]

Northern Virginia is known as Data Center Alley. It's home to more than 250 facilities, the biggest concentration in the world.

[Matt Levin]

It's like walking through the inside of a computer.

[Megan McCarty Carino]

Julie Bolthouse is the director of land use with the nonprofit Piedmont Environmental Council. She says the hulking concrete campuses have taken over the landscape in Loudoun County.

[Matt Levin]

The impact really goes well beyond just the footprint of the data centers themselves.

[Megan McCarty Carino]

A December report commissioned by the Virginia State Legislature projected data center growth could nearly triple the state's electricity demand in the next 15 years. Lauren Bridges is a professor of media studies at the University of Virginia who researches the social and environmental costs of technology.

[TurboTax Expert]

Essentially, more demand means the need to.

[Megan McCarty Carino]

Build more energy infrastructure, and all ratepayers could be stuck with the bill.

[TurboTax Expert]

This might represent a form of cost shifting where residents are seen to subsidise.

[Sponsor Voice]

The cost of the data center industry.

[Megan McCarty Carino]

Those costs aren't just financial. Many tech companies are investing in nuclear and renewable energy, but demand is spurring growth in natural gas generation and delaying the closure of coal plants, says Logan Burke at the alliance for Affordable Energy.

[TurboTax Expert]

What is it costing us to continue.

[Megan McCarty Carino]

To invest so much money in fossil gas? It's costing us an awful lot. Data centers are an economic boon in many regions, but policymakers are starting to pay closer attention to the energy issue, says Ike Brannan, senior fellow at the Jack Kemp Foundation.

[Kai Rysdal]

Politicians on both sides do not want to face the wrath of consumers if they're told that their energy prices are going to go up by 30% or they start having occasional drown outs.

[Megan McCarty Carino]

From Virginia and California to Ohio and Texas, states are considering measures to increase data centers, transparency and accountability. I'm Megan McCarty Carino for Marketplace.

[Kai Rysdal]

The foreign policy of the United States isn't just military and political strategy. Economic sanctions are an essential part of how this country tries to get things to happen internationally. In point of fact, an analysis by the Washington Post shows the United States imposes three times as many economic sanctions as does any other country in the world. And as America's role in the world changes here in the second Trump administration, it's worth spending some time, I think, on our economic diplomacy. Edward Fishman's at Columbia University now. He's also a former official in the State and Treasury Departments doing sanctions work. And he's got a new book out. It's called Choke American Power in the Age of Economic Warfare. Welcome back to the program. Good to have you on.

[Edward Fishman]

Thanks, Kai. Great to be here.

[Kai Rysdal]

Define for us, first of all, I suppose the idea, the modern idea of choke points.

[Edward Fishman]

So, Kai, a choke point is an area of the global economy where one country has a dominant position and there's very little redundancy. So, for instance, if you're cut off from the US Dollar, there's not a readily available substitute from the US Dollar. The same is true of the most advanced microchips and semiconductors. So that is what defines choke points today. Historically, they were geographic features like the Bosphorus. Today they are really these parts of the global economy that are almost invisible, but the US can weaponize.

[Kai Rysdal]

All right, so we're going to get back to the dollar in a minute because that obviously has repercussions and manifestations, in fact, on what's playing out now in sort of global economic warfare. But the point that you make in this book is economic warfare has been a thing, and now it's even more critical that the way we use it is considered and exercise with some restraint.

[Edward Fishman]

Yes, that's exactly right. You know, up until very recently, honestly, even at the turn of the 21st century, using sanctions and other tools of economic warfare in an impactful way, there was a pretty high threshold to it because you needed to either have broad international unity, for instance, backing from the entire United Nations Security Council, or the use of naval force. So even thinking back to the 1990s UN embargo on Iraq, that's very famous, that was implemented by a multinational naval force that was patrolling the Persian Gulf 247 for 13 years. What the choke points that I discussed earlier created is it gave officials in the US Government the power to impose economic pain on foreign countries even more dramatic than those blockades of old, just by signing documents in the Oval Office or in the Office of Foreign Assets Control in the Treasury Department. So it's made it much easier for the United States to deploy economic warfare.

[Kai Rysdal]

There's a great line in this book about sort of the overuse of sanctions and economic warfare. And you say, quoting you here, sanctions are like antibiotics. They work well when used correctly, but cause a host of problems when used excessively or inappropriately. Talk about that a little bit.

[Edward Fishman]

Sure. When you use sanctions too much, you inspire a backlash. Not only does it hurt the US Economy, but more importantly, it encourages other countries to hedge. They start building alternatives to the dollar. So, for instance, in China, the Chinese government has. Has launched a digital version of the rmb, a central bank digital currency that's explicitly designed to evade US Financial infrastructure. The other thing, though, Kai, there's a flip side of that is that, you know, as with antibiotics, you know, if you have a really bad bacterial infection, you need to go big. You need to hit it with the right drug for the right amount of time. And you can't, you know, stop taking that course of antibiotics too soon. I think that's what really happened with Russia. It's the real tragedy of the Russia sanctions, which is that if you go back to 2014, and look, I was involved in negotiating the original Russia sanctions after the annexation of Crimea with the European Union in 2014. Russia's economy that winter was really suffering, and we really had the Russians close to a deal that potentially would have gotten them out of Ukraine. And at that time, the Europeans were so scared of the impact of the sanctions were having on their own economies that they basically threw in the towel and said, we can't escalate sanctions. And the Nord Stream 2 deal was signed a few months later. And so what happened after that, the final year and a half of Obama's administration, he didn't do anything to increase sanctions. And then for all four years of the first Trump administration, Trump did not increase sanctions on Russia. And so by the time we get to 2022, Russia's had six years basically in which sanctions have stagnated. They've fully adapted. And so by then, you know, you basically had this antibiotic resistance that had developed. So, as I say in the book, sometimes with sanctions, you have to go big or go home.

[Kai Rysdal]

So what do you make then of this current moment where the Trump administration is, at a minimum, resetting what the global economic engagement of the United States is? When the Europeans, as we saw in the German elections this weekend, are working toward independence from the United States. Do you suppose this moment generates momentum to move away from the dollar and the Americans unique control over the global economy?

[Edward Fishman]

I do, and as I argue in choke points, we are headed for a new international economic order. The days of globalization are over. We are now living in an age of economic warfare. I think that the age of economic warfare could really evolve in two different ways. One scenario is one in which the US Leads a bloc of democratic countries that continue to integrate their economies, continue to use the dollar, whereas you have another bloc led by China, Russia, and other autocracies that, you know, moves away from the dollar and US Economic dominance. I think where Trump is taking us, Kai, is a much different and darker scenario. Trump, of course, is not only threatening sanctions and tariffs against the likes of Russia and China, but also against our allies, Canada, Mexico, Europe. And of course, this could damage American prosperity at home. And I think that's why these tariffs have gotten so much domestic opposition. But the thing I'm even more concerned about is what that augurs is a much more chaotic breakdown of the global economy in which every nation is for itself. Every sort of diplomatic deal is just a business transaction and no economic relations are permanent. And the thing that makes that so challenging and so scary is that as history shows, if states can't feel confident that they can secure markets through open trade, the temptation for imperialism and conquest rises significantly and the risk of great power war rises. So that's what I really worry about.

[Kai Rysdal]

Edward Fishman, he's at Columbia now. He was at State and Treasury working on Russia sanctions. Eddie, thanks a lot for your time. I appreciate it.

[Edward Fishman]

Thanks guy. I really appreciate you having me on.

[Kai Rysdal]

Coming up, we've survived all of this.

[Sponsor Voice]

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[Kai Rysdal]

That's a lot though. But first, let's do the numbers. Dow industrials inched up 33 points, just under a tenth percent. $43,461 on the blue chips. The NASDAQ down 237 1.2%. 19,286. The S&P 500 dropped 29 points, about a half percent. 59 and 83. Megan McCarty Carino was talking about electricity costs in data centers, so some electric stocks. Shall we? Pacific Gas Electric, PG&E rose a 10th%. Virginia based Dominion Energy descended 1%. Apple added 6. 10%. Amazon down 1.8% today. Bond prices went up. When that happens, the yield goes down. The 10 year T Note sits at 4.40% today and you are listening to Marketplace.

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[Kai Rysdal]

I'm Kai Ryssdal. We get earnings reports from publicly traded companies all the time, quarterly, in point of fact, and most of them come and most of them go without much fanfare. This week, though, it's the company that everybody is watching, Nvidia reports. On Wednesday, Marketplace's Kelly Wells explains why the AI chip design giant is getting so much attention.

[Eric Gordon]

There are two main reasons to watch Nvidia, says Eric Gordon. He's a professor at University of Michigan's business school.

[Kai Rysdal]

The first is its sheer size and.

[Eric Gordon]

Its influence on the stock market, Gordon says. Last year, Nvidia stock made up 22% of the S&P's total gain. The other reason?

[Kai Rysdal]

Nvidia is sort of the poster stock for AI. It's the way most of us can invest in AI.

[Eric Gordon]

Nvidia dominates because its graphics processing units make up around 90% of the market.

[Matt Levin]

During the dot com era, there was something like 2,888 startups that went public. So far, there have been zero startups.

[Kai Rysdal]

That have gone public for generative AI.

[Eric Gordon]

That's not normal, says Peter Cohen. He teaches management practices at Babson College and authored a book on generative AI. Nvidia became such a gorilla in part because it got its start long before AI took off, Cohen says. Its GPUs were originally used for gaming.

[Matt Levin]

Then used for crypto mining, and then.

[Edward Fishman]

Now it has proliferated to be used.

[Matt Levin]

By data centers that are training and operating large language models like ChatGPT.

[Eric Gordon]

This quarterly report is getting more attention because it might not be an unfettered success story. One problem, says Matt Bryson with wedb. Deepseek, the Chinese AI company, launched its AI model and Chatbot in January.

[Kai Rysdal]

China's development suggested that you can do.

[Edward Fishman]

More with fewer hardware resources, so in this case, fewer Nvidia GPUs.

[Eric Gordon]

Nvidia's stock plunged 17% after Deepseek's announcement. The second is Nvidia's new superchip for the next generation of AI.

[Matt Levin]

There have been some fits and starts.

[Kai Rysdal]

In terms of production.

[Eric Gordon]

There's But Bryson isn't concerned. He says the new chip is ramping up after a slow start, and if Deepseek makes AI more affordable to more companies, it could actually increase demand for AI hardware. I'm Kayley Wells for Marketplace.

[Kai Rysdal]

We're being reminded here in the second Trump administration that in this globalized economy, supply chains are everything, and disruptions to them can be. Well, let's just leave it at disruptive. There are few supply chains as closely linked as the ones between Mexico, Canada and the United States. Businesses in all three countries have made billions of dollars worth of business decisions with the understanding that trade across those borders is going to remain free. Exhibit A cars and trucks from Texas, which has been a big winner in the free trade game, Marketplace's Elizabeth Troval reports.

[TurboTax Expert]

I'm standing on the sidewalk outside a car dealership next to a Houston highway. Rice University's Tony Payan is here with me.

[Kai Rysdal]

Well, we're here outside of Toyota dealers in Houston, right on 610 loop.

[TurboTax Expert]

The lot is full of shiny new vehicles like Tundras made here in Texas or Tacomas made in Baja California, though Payan points out these are not American.

[Kai Rysdal]

Vehicles that are not Mexican vehicles or.

[TurboTax Expert]

Japanese vehicles for that matter.

[Kai Rysdal]

When you see a plant where a vehicle is being built, what you see is parts coming from many different places.

[TurboTax Expert]

Take a manufacturing plant in Mexico, where.

[Kai Rysdal]

Labor is cheap, you see a lot, lot of different component parts that are coming in from the United States. They get to the plant and then they get assembled in Mexico.

[TurboTax Expert]

Like labor intensive harness assembly.

[Kai Rysdal]

Then the software gets installed in the United States. And so it's a very circuitous route.

[TurboTax Expert]

Having component Parts cross the US Mexico border 1, 2, 3 or more times is economical because of the North American Free Trade Agreement which was signed in 1992. In nearby San Antonio, President George H.W. bush and leaders of Mexico and Canada gathered for an initialing ceremony captured by C Span.

[Matt Levin]

We are creating the largest, richest and most productive market in the entire world.

[TurboTax Expert]

Fast forward 30 plus years after NAFTA and then USMCA renegotiated under President Trump, San Antonio has become an anchor to an automaker's corridor that runs from Dallas all the way to San Luis Potosi in central Mexico, almost a thousand miles.

[Kai Rysdal]

NAFTA was a big part of what's allowed our manufacturing ecosystem to grow.

[TurboTax Expert]

Jenna Salceda Herrera with the Greater satx Regional Economic Partnership says now greater San Antonio is a hub for advanced manufacturing.

[Eric Gordon]

And the companies produce a diverse range.

[Kai Rysdal]

Of vehicles, including SUVs, pickup trucks, heavy duty trucks, buses.

[TurboTax Expert]

There's even a special name for the binational manufacturing ecosystem. San Antonio is a part of the.

[Kai Rysdal]

Texas Mexico automotive supercluster.

[TurboTax Expert]

It includes companies like Toyota, gm, Tesla, Kia, BMW, which depend on networks of suppliers in both countries that provide thousands of component parts. Networks that just might be too complex to unscramble.

[Kai Rysdal]

We can't undo 30 plus years of.

[Eric Gordon]

Free trade overnight, right?

[Kai Rysdal]

Businesses have built their operations around the.

[Eric Gordon]

Principles of free trade.

[TurboTax Expert]

And it's not just automakers, but an entire region's economy could be at stake. Just two and a half hours south, uncertainty looms large in Laredo, where component parts cross back and forth across the border constantly. IBC Bank's Jerry Schwebel says the auto sector is one of the drivers of Laredo's ascent to number one port in the US that trade supports many local businesses.

[Kai Rysdal]

Transportation company, the trucking company that moves those parts, the warehouse where you store those parts temporarily, you know, and pick them up, the customer broker who has to process that business.

[TurboTax Expert]

The USMCA trade agreement is up for review next year. In the meantime, if auto parts coming in from Mexico do end up facing tariffs, Mike Wall with S and P Global Mobility says sure, some companies may take a closer look at their US Operations and ask, is there some low.

[Matt Levin]

Hanging fruit that can be brought back to the US Quote, unquote, cheaply and quickly. But overall it's incredibly difficult because the moment you start putting up new brick and mortar, that is a much longer term kind of either decision and or.

[Kai Rysdal]

Prospect to get it up and running.

[TurboTax Expert]

He says automakers are making business plans years into the future. 14 year presidential term can only sway them so much. In Houston, I'm Elizabeth Trovall for Marketplace.

[Kai Rysdal]

Hawaii was hit especially hard in the early days of the pandemic as everybody stayed home and tourism came to a screeching halt. We started talking to Manu Powers right around then about what it meant for her business. She and her husband run SeaQuest Hawaii, which offers boat and snorkeling tours from Kona. And we called her the other day for an update. And suffice it to say, it has been a long haul.

[Sponsor Voice]

I'm doing fine and sequest is doing pretty good, as well as could be expected, I suppose. So numbers at sequest are down and those numbers reflect what's happening in the state. Numbers of visitors to the islands across the board are down over the winter. The surface was huge and it just doesn't seem to stop, which is fantastic if you're a surfer and Kona is known for having, you know, virtually no surf. The number of cancellations we've had to make are crazy. And so I think that's why you can hear that laughter in my voice right now, because we've never seen anything like this. It doesn't help that, you know, we're understaffed, as we continue to be and have been since the pandemic. And so therefore, even when we are capturing, you know, the visitors that are coming to the island, we're still not able to run at full capacity. I'm tired of talking about this problem five years later, to be honest. It's. It's a legitimate argument to say, you know, why can't you find qualified workers? But I think that it's universal. There's hiring signs in every window of every business in this state, really. Hawaii's always had, you know, a smaller job pool to work with. That hasn't changed. But some of the things that have changed are cost of living, which has just gone through the roof. It's so expensive to rent a home here. If you don't have two jobs, you have two roommates. We know that we'll be okay because we do have this Data set of 30 years under our belt where we can kind of look back and say, okay, we've survived all of this, you know, and that includes three tsunamis, a pandemic. So we're okay? Could it be easier? Absolutely. But we'll get back there again and some point. And then of course, another set of challenges will present themselves. But we'll tackle those when they come too.

[Kai Rysdal]

Manu Powers, co owner of SeaQuest Hawaii, based in Kona. This final note on the way out to day eggs again, Denny's. This time an as yet unspecified surcharge depending on where you live. Our daily production team includes Andy Corbin, Nicholas guillon, Maria Hollenhorst, Iru Ekpanobi, Sarah Leeson, Sean McHenry and Sophia Terenzio. I'm Kyle Rysdal. We will see you tomorrow. Everybody, this is APM Ryan Reynolds here from Mint Mobile with a message for everyone. Paying big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a try. @mintmobile.com Switch upfront payment of $45 for.

[TurboTax Expert]

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