Pivot Podcast Episode Summary

Title: Market Meltdown, Tariff Winners and Losers, and TikTok Deadline Delayed
Host/Authors: Kara Swisher & Scott Galloway
Release Date: April 8, 2025
Podcast Network: New York Magazine and Vox Media Podcast Network

Introduction

In this episode of Pivot, tech journalist Kara Swisher and NYU Professor Scott Galloway delve into the tumultuous landscape of the US economy, exacerbated by recent tariff implementations under President Trump. The discussion navigates through the repercussions of these tariffs on the stock market, big tech companies, and international trade relations, culminating in the delayed deadline for TikTok's operational status in the US. Their candid conversation is peppered with sharp insights, humorous exchanges, and critical analyses of current economic policies.

Market Meltdown and Tariff Instability

The episode kicks off with a vivid portrayal of the recent volatility in US markets. Following the announcement of Trump’s tariffs, the Dow and S&P 500 witnessed a dramatic plunge, with a market value loss totaling approximately $6 trillion. Scott Galloway emphasizes the severity of the situation, stating:

• Scott Galloway [15:00]: "The two day drop wiped out $31 billion in net worth for Elon Musk, $23 billion for Jeff Bezos, and $27 billion for Mark Zuckerberg."

The tariffs, deemed poorly structured and reactionary, have not only destabilized the stock market but also heightened fears of an impending recession. Goldman Sachs has alarmingly raised the probability of a US recession to 45%, with notable economist Larry Summers condemning the tariffs as a "self-inflicted wound" on the economy.

Impact on Big Tech

A significant portion of the discussion centers around the detrimental effects of tariffs on major technology firms. Companies like Apple, Meta, and Amazon have borne the brunt, experiencing substantial declines in market capitalization:

• Scott Galloway [18:36]: "For every billion dollars in reductions in trade of Tesla, we lose $8 billion in market cap, they lose $77 million."

Galloway expounds on how tariffs increase the cost of goods, making products like the iPhone less competitive globally. He forecasts a potential $3,500 cost for an iPhone if produced domestically, compared to the current $1,300, which could lead to a 30-40 billion dollar reduction in Apple’s revenues alone.

Moreover, he underscores the significant disparities in valuation between US and international companies, attributing higher P/E multiples to the robust US brand, rule of law, and entrepreneurial culture. The erosion of these factors due to inconsistent policies could result in a drastic re-rating of the S&P 500 from a multiple of 26 down to approximately 15.

Winners and Losers from Tariffs

The conversation shifts to identify the beneficiaries and casualties of Trump's tariff policies. While big tech giants suffer, industries reliant on high-margin, high-value exports from the US are somewhat insulated. However, the overall impact remains overwhelmingly negative, with multinational trade disruptions fostering economic uncertainty.

• Kara Swisher [22:05]: "Why don't they buy American cars? Because Toyotas are better, you dumbass."

This exchange highlights the misguided rationale behind protective tariffs, emphasizing that consumer preferences and global competitiveness cannot be coerced through policy alone.

TikTok Deadline Delayed

A pivotal segment addresses the postponement of the TikTok operational deadline in the US. Originally slated for enforcement within a specific timeframe, the deadline has been delayed for a second time due to failed negotiations between Oracle, Blackstone, and Andreessen Horowitz following Trump's tariff announcements.

• Scott Galloway [44:55]: "President Trump delayed the ban on TikTok for 75 days for a second time. How ridiculous."

Galloway criticizes the administration's handling of the situation, suggesting that the delay only serves to undermine national security objectives and inadvertently benefits Chinese interests by providing more time for TikTok to entrench itself in the US market.

Kara Swisher concurs, expressing skepticism about the potential effectiveness of future negotiations and the overall strategic missteps.

Economic and Political Ramifications

The duo delves deeper into the broader implications of Trump's economic policies, particularly focusing on the erosion of the US's position in global trade and the internal economic discord. Galloway warns of a "multiple contraction" in the US stock market, where even well-performing companies face declining stock prices due to falling P/E ratios.

• Scott Galloway [27:08]: "The biggest beneficiary of global trade over the last 30 or 40 years has been the US because the products we export are high margin, high value."

He laments the administration's disregard for the fundamental benefits of free trade, emphasizing that the protectionist approach is counterproductive and detrimental to the nation's economic prosperity.

Kara Swisher adds to the critique, highlighting the inconsistency and unpredictability of Trump's policies, which breed uncertainty among investors and undermine business confidence.

Investor Advice Amidst Turmoil

Addressing the concerns of listeners grappling with investment decisions amidst market instability, Scott Galloway offers pragmatic advice:

• Scott Galloway [22:05]: "What to do as an investor? Nothing."

He advises against making hasty decisions driven by emotion, advocating for diversification and a long-term perspective. Galloway emphasizes the importance of not reacting impulsively to market fluctuations, which could lead to significant financial losses.

Further, he recommends considering diversification into international markets to mitigate the risks associated with US-specific economic policies, suggesting that a balanced portfolio incorporating European and Asian stocks could provide better stability.

Conclusion

The episode concludes with a somber reflection on the state of the US economy and the dire consequences of misguided tariff policies. Kara Swisher and Scott Galloway underscore the critical need for coherent and strategic economic policies that prioritize long-term stability over short-term political gains. Their discourse serves as a cautionary tale about the pitfalls of protectionism and the paramount importance of maintaining robust international trade relations.

• Kara Swisher [57:47]: "We have no ability to say we're good people if we're doing things like that."

This powerful closing statement encapsulates their concern over America's moral and economic trajectory, urging a reassessment of policies that jeopardize both economic prosperity and ethical standing on the global stage.

Notable Quotes with Timestamps

• Scott Galloway [15:00]: "The two day drop wiped out $31 billion in net worth for Elon Musk, $23 billion for Jeff Bezos, and $27 billion for Mark Zuckerberg."
• Scott Galloway [18:36]: "For every billion dollars in reductions in trade of Tesla, we lose $8 billion in market cap, they lose $77 million."
• Kara Swisher [22:05]: "Why don't they buy American cars? Because Toyotas are better, you dumbass."
• Scott Galloway [27:08]: "The biggest beneficiary of global trade over the last 30 or 40 years has been the US because the products we export are high margin, high value."
• Scott Galloway [44:55]: "President Trump delayed the ban on TikTok for 75 days for a second time. How ridiculous."
• Kara Swisher [57:47]: "We have no ability to say we're good people if we're doing things like that."

This episode of Pivot offers a critical examination of current economic policies and their far-reaching implications, providing listeners with a nuanced understanding of the complexities shaping today's market dynamics.