Prof G Markets: Liberation Day 2.0 Is Here — When Will We See the Tariff Fallout?

Release Date: July 14, 2025
Host: Vox Media Podcast Network
Episode Title: Liberation Day 2.0 Is Here — When Will We See the Tariff Fallout?

1. Tariff Fallout and Market Reactions

Overview:
In this segment, Scott Galloway and Claire Miller delve into the resurgence of tariffs initiated by former President Trump, dubbed "Liberation Day 2.0." They analyze the potential economic repercussions and market responses to the latest round of tariff implementations.

Key Points:

• Introduction of New Tariffs:
  Trump extended his tariff pause from July 9 to August 1 and introduced new tariffs, including a 50% tariff on copper imports and a 35% tariff on Canadian goods. In total, tariffs up to 50% have been notified to at least 23 countries, aiming to pressure them into new trade agreements with the U.S. (Timestamp: 08:26)

• Market Impact Analysis:
  Scott emphasizes that except for the copper market, global markets are largely indifferent to Trump's tariff threats. "The markets have yawned," he states (09:51), highlighting the market's lack of serious concern regarding these measures.

• Case Study – Nvidia:
  Highlighting Nvidia's achievement as the first company to hit a $4 trillion market cap, Scott contrasts it with the potential negative impact of tariffs on such high-performing tech companies. He argues that tariffs disrupt beneficial global trade relationships that have disproportionately advantaged the U.S. in terms of innovation and economic growth. (12:14)

• Predictions on Tariff Enforcement:
  Scott predicts that the tariffs are likely to result in "a bunch of empty threats" and stalled negotiations. He likens the situation to a "drunk uncle at a family barbecue," suggesting that Trump's aggressive stance may alienate international partners without yielding substantial results. (15:38)

• Copper Market Reaction:
  The copper market reacted strongly with a price spike, indicative of traders taking Trump’s threats seriously. Scott recommends shorting copper as a speculative move, forecasting that prices will retract as the reality of enforcing such high tariffs sets in. (19:10)

• Trump’s Understanding of Trade Dynamics:
  Scott criticizes Trump’s simplistic view of trade agreements, emphasizing their complexity and the long timeframes required to negotiate and implement them successfully. He underscores the necessity of congressional approval and expert negotiations, which Trump seems to overlook. (22:00)

Notable Quotes:

• Scott Galloway:
  "A bunch of empty threats, a bunch of extended deadlines, and we're about to go into what I call the ultimate jazz hands phase." (15:38)
  "He doesn't even have the fucking cards." (17:36)

2. Health and Wellness Movement

Overview:
The hosts shift focus to the burgeoning health and wellness trend sweeping across the United States. They explore the decline in junk food sales, the rise of GLP1 drugs, and the political push behind the "Make America Healthy Again" (MAHA) campaign.

Key Points:

• Decline in Junk Food Consumption:
  Recent data from Nielsen IQ shows significant drops in sales of salty snacks, chocolate candies, and sweet treats, correlating with declining stock performances of major food companies like J.M. Smucker, Hershey, PepsiCo, and Campbell’s. (29:09)

• Impact of GLP1 Drugs:
  Scott highlights the transformative potential of GLP1 drugs in combating obesity and related health issues. He notes that these drugs could not only improve public health but also significantly reduce healthcare costs by addressing the root causes of obesity and diabetes. (31:21)
  “GLP1 drugs would be an absolute game changer for us.” (31:21)

• Make America Healthy Again (MAHA) Campaign:
  RFK Jr.’s campaign aims to tackle processed foods and artificial ingredients, aligning with broader consumer and governmental pushes for healthier lifestyles. However, Scott criticizes the movement for promoting conspiracy theories and fear instead of evidence-based solutions. (35:20)

• Junk Food Industry’s Response:
  Companies like PepsiCo are gradually shifting towards healthier products, such as acquiring probiotic drink brands. However, Claire points out that these pivots may be too slow to counteract the rapid decline in traditional junk food sales. (39:44)

• Economic Benefits of a Healthier America:
  Improving public health could add $3 trillion to the U.S. GDP by 2040, with corporate profits rising by $763 billion and up to 5 million fewer people exiting the workforce early due to illness. (42:13)

Notable Quotes:

• Scott Galloway:
  "If you are really serious about health, more money in the pockets of people who don't have money to be healthy." (31:21)
  "The MAHA movement is more about conspiracy and creating fear where there doesn't need to be any." (35:20)

• Claire Miller:
  "Artificial food dyes and processed foods… they are under attack by the government." (36:04)
  "We've got the 25% on the steel and aluminum. And then supposedly on August 1st, all of those numbers are going to spike…" (22:00)

3. Second Quarter Earnings Preview

Overview:
As the episode progresses, Scott and Claire examine the upcoming second quarter earnings reports from major financial institutions and tech companies, discussing potential impacts from recent tariffs and economic policies.

Key Points:

• Key Earnings to Watch:
  Major banks such as JP Morgan, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs, along with tech giants like Netflix, TSMC, and ASML, are set to release their Q2 earnings. (44:57)

• Impact of Tariffs on Earnings:
  Preliminary data suggests that 60% of U.S. firms reported decreased gross margins due to tariffs, with 25% experiencing drops greater than 6-10%. However, the stock market's resilience, exemplified by the Nasdaq hitting record highs, raises questions about the immediate financial impact. (44:57)

• Netflix as a Potential Giffen Good:
  Scott introduces the concept of a "Giffen good" using Netflix as an example—consumption of which may increase despite economic downturns, as people turn to affordable entertainment options. He speculates that Netflix might continue to thrive even amidst economic uncertainties. (54:41)
  “I wonder if Netflix is a Giffen good.” (54:29)

• Consumer Price Index (CPI) and Fed Policy:
  The upcoming CPI release is expected to provide insights into inflation trends. Scott critiques Trump's misunderstanding of interest rates, highlighting Chairman Jerome Powell's cautious approach in response to uncertain economic indicators influenced by tariffs. (59:23)

• Forecast for Q2 Earnings:
  Claire and Scott anticipate that while current earnings may appear solid, the true impact of tariffs and economic policies may not manifest until Q3 or Q4. They predict that the strong earnings reports might lead to continued market optimism, potentially masking underlying economic challenges. (57:01)

Notable Quotes:

• Scott Galloway:
  "The companies that drive the market now are global companies and they have such incredible points of differentiation that they continue to churn on." (49:07)
  "I kind of believe 98% of our economy is below the insanity in tariff threats of the administration." (55:03)

• Claire Miller:
  "It's hard to understand where we are in terms of tariffs right now." (35:18)
  "These earnings are going to be fine because I don't, I don't think we're going to see any impact yet." (54:04)

4. Conclusion and Final Thoughts

Overview:
Wrapping up, Scott and Claire reflect on the interconnectedness of current economic policies, market resilience, and emerging health trends, emphasizing the need for strategic adaptations in both government and corporate sectors.

Key Points:

• Fed’s Independence:
  Claire underscores the importance of the Federal Reserve's independence, especially in the face of political pressures from figures like Trump. Scott echoes this sentiment, advocating for trust in expert-led economic policies. (60:51)

• Ongoing Economic Resilience:
  Despite political turmoil and aggressive tariff policies, the economy and stock market continue to demonstrate resilience, driven by technological advancements and robust corporate strategies. (51:24)

• Future Predictions:
  Scott anticipates that the economic impacts of tariffs and policies will become more evident in the latter half of the year, influencing future earnings and market dynamics. (53:44)

Notable Quotes:

• Scott Galloway:
  "The economy has become so productive and technology has become so resilient that it just continues to churn on." (51:24)
  "He’s like cleaning up your fucking soiled diapers everywhere and you try to start intimidating that person." (60:51)

• Claire Miller:
  "We all agree that the earnings are going to be pretty subdued just because you've got a very slow M&A market." (44:57)

Final Thoughts:
This episode of Prof G Markets provides a comprehensive analysis of the renewed tariff policies under "Liberation Day 2.0," their limited immediate impact on global markets, and the broader economic implications. Additionally, the hosts explore the transformative shift towards health and wellness in America, driven by both pharmaceutical advancements and political movements. As Q2 earnings approach, Scott and Claire offer insightful predictions on how these multifaceted issues will shape the economic landscape in the coming months.

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