Podcast Summary: The Prof G Pod with Scott Galloway Episode: Prof G Markets: Global Pushback on Tariffs + Can the FTC Beat Meta? Release Date: April 21, 2025

1. Introduction

In this episode of Prof G Markets hosted by Scott Galloway and Ed, the discussion delves into the recent developments in global trade tensions, market movements, and significant legal battles within the tech industry. The conversation offers insightful analyses on the impact of tariffs, the Federal Reserve's stance, and the ongoing Meta antitrust trial.

2. Market Overview

2.1 S&P 500 Declines and Market Movements

The episode begins with a rundown of the current market situation:

• S&P 500: Experienced a decline.
• US Dollar: Struggled to recover from a three-year low.
• Bitcoin: Remained volatile, tracking closely with the stock market and down 10% year-to-date.
• 10-Year Treasuries: Yields fell.

2.2 Gold Hits Record High

Gold reached a record high, exceeding $3,300 per ounce for the first time in history. Goldman Sachs projects prices could soar to $4,500 by the end of 2025. Additionally, data from the Bank of America Fund Manager survey indicates:

• 50% of Fund Managers: Believe long gold is the most crowded trade globally.
• 42% of Managers: Anticipate gold will be the best-performing asset class in 2025.

Scott's Insight (10:00):

"Gold is really sort of an uncertainty index. And the reason why the trade is so crowded is not only because of uncertainty, but because of greed."

He emphasizes that while gold has historically been a safe haven during economic downturns, the current crowded trade suggests potential overvaluation.

2.3 Chip Export Restrictions to China: Impact on Nvidia and AMD

The Trump administration announced new restrictions on chip exports to China, affecting major companies like Nvidia and AMD:

• Nvidia: Faces a projected loss of $5.5 billion due to backlogged expenditures on H20 chips, with an anticipated revenue loss of approximately $15-17 billion from halted sales to China.
• AMD: Expected to incur losses of around $800 million.
• Market Reaction: Shares of both companies fell about 7%, dragging the NASDAQ down by 2%.

Ed's Clarification (15:59):

"What they're essentially saying is China is now off limits for Nvidia."

Scott criticizes the administration's approach, suggesting that such policies may inadvertently benefit domestic competitors like Huawei and ultimately bolster China's AI market.

3. Federal Reserve and Tariffs

3.1 Jerome Powell's Comments

Jerome Powell, Chair of the Federal Reserve, addressed the challenges posed by the newly imposed tariffs:

"Tariffs are a challenging scenario for the Federal Reserve, warning they will likely lead to higher prices and rising unemployment." (Timestamp: 08:06)

3.2 Trump's Response

In response, former President Trump took to Truth Social, expressing strong opposition:

"Powell's termination cannot come fast enough!" (Timestamp: 08:06)

Scott discusses the potential ramifications of such political interference:

"One of the most brilliant business minds has decided that he can buy his way out of regulation by giving money to the Trump administration... I hope he's wrong." (Timestamp: 58:47)

He underscores the importance of keeping the Federal Reserve insulated from political pressures to maintain economic stability.

4. Global Pushback on Tariffs

4.1 China's Response

China led the economic pushback by:

• Instructing state-owned banks to reduce US Dollar purchases.
• Ordering airlines to halt deliveries of Boeing jets.
• Curtailing rare earth mineral exports to the US.

4.2 Other Countries' Actions

Other nations followed suit with strategic countermeasures:

• Canada: Began boycotting US goods like American whiskey.
• Brazil: Passed legislation imposing its own tariffs.
• Denmark: Its largest grocer labeled European products to encourage a boycott of American goods.

Scott's Analysis (34:33):

"Donald Trump's actions are actually going to inspire some growth over the medium and long term... Relative to US performance, China is going to outperform."

He predicts that the US's broad tariffs will strain international relationships and hinder economic growth, suggesting that cooperation and deregulation might be more beneficial in the long run.

5. Leadership and Political Commentary

5.1 Corporate Leadership Amidst Political Turmoil

Scott and Ed discuss the potential for corporate leaders to take a stand against the administration's policies:

"There's an enormous opportunity for one of these guys to stand up and say, enough is enough... There is never the wrong time to do the right thing." (Timestamp: 21:55)

They highlight Nike as a prime candidate for leading this change, given its history of political engagement and strong brand identity.

5.2 Scott Galloway's Presidential Consideration

The conversation shifts to the idea of Scott running for president. While there are public calls for him to enter politics, Scott expresses reservations:

"I have considered it... You have to be. You have to like people. I don't have that." (Timestamp: 43:17)

He emphasizes the importance of supporting qualified individuals rather than seeking office himself, advocating for influencing change from outside the political arena.

6. Meta Antitrust Trial

6.1 Overview of the Case

The episode covers the ongoing Meta antitrust trial focusing on whether Meta's acquisitions of Instagram and WhatsApp violated competition laws. Key points include:

• Potential Remedies: Meta may be required to sell WhatsApp and Instagram, which constitute over half of its ad revenue.
• FTC's Position: Strong evidence from internal emails indicating that Meta intended to suppress competition by acquiring potential rivals.

Ed's Perspective (50:22):

"Mark Zuckerberg in 2008... 'It is better to buy than to compete.' That is basically case closed right there."

6.2 Potential Outcomes and Implications

Scott discusses the broader implications of the trial:

"Breaking up big tech would lower monopoly rents and benefit society by increasing competition and shareholder value." (Timestamp: 54:01)

He argues that dismantling monopolistic structures within big tech would foster a healthier economic and social environment.

Ed's Insights (58:47): He highlights the strategic missteps by Meta's leadership in attempting to curry favor with the Trump administration, ultimately strengthening the case against them.

7. Predictions and Conclusions

Scott provides his predictions for the market and political landscape:

• Leadership Vacuum: An opportunity arises for new leaders to emerge and guide the nation through economic and political challenges.
• Big Tech Regulation: Continued momentum on antitrust actions against major tech companies like Meta and Google.
• Economic Impact: Tariffs and trade wars may lead to increased uncertainty and ongoing market volatility.

Scott's Final Thoughts (60:16):

"There's an enormous vacuum for leadership here that someone is going to step into it and reap enormous rewards... this has gotten so bad. My prediction is in the next 1, 2, 4 weeks we're going to see some prominent leaders step into this void of leadership."

He draws parallels to historical events, emphasizing the critical need for unified and ethical leadership in addressing current challenges.

Notable Quotes with Timestamps

• Scott Galloway (03:56):

  "I can't stand Harvard. You know what I hate the most?... I wanna strangle them."

• Scott Galloway (22:02):

  "The first guy who does this, the juice is squeezed... It's never wrong to do the right thing."

• Scott Galloway (43:57):

  "Our job is to prop those people up... We can absolutely take our time, treasure and talent to help some of the amazing people who are out there and see what man or woman rises to the moment and get behind them."

• Ed (28:52):

  "It is going to be literally everyone's going to blame everything on this."

Conclusion

This episode of Prof G Markets offers a comprehensive analysis of the intricate web of economic policies, market responses, and legal challenges shaping the current global landscape. Scott Galloway and Ed provide thought-provoking insights into the consequences of trade wars, the importance of independent regulatory bodies, and the pivotal role of leadership in navigating through turbulent times. The discussion underscores the necessity for strategic responses from both corporate and political leaders to foster a resilient and equitable economic environment.

For more insights and updates, listen to the full episode on the Prof. G Markets podcast feed.