The global fallout from Trump's tariffs
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This episode of the Times Tech Podcast is sponsored by Vanta. Let's talk about something that might be keeping you up at night, cybersecurity. According to Vanta's latest State of Trust report, it's the number one concern for UK businesses, and that's where Vanta comes in. Whether you're a startup, growing fast, or already established, Vanta can help you get ISO 27001 certified and more without the headaches.

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Because when it comes to your business, it's not just about keeping the lights on. It's about keeping everything secure. I'm quitting. I'm quitting the podcast. This is my final episode. No, you can't. We've only been going, what, five months or something? You know what? I found my calling and I'm just going to roll the tape that I've sent to producer Callum and then I'll tell you what I'm going to do next.

No! You guys are working as a team. This is actually kind of fun, Dad. Yeah? I like how you made it. So, thank you. So, is that meatball mania? Thumbs up or thumbs down? Thumbs up. Thumbs up.

For me, I think double thumbs up. Double thumbs up. I think love thumbs up. That's because you're family. There you go. This is meatball mania. This is meatball mania. This is my video game. I am now a video game developer. Okay. So that's it. You're not a journalist anymore. Nope. I have... Money's in tech. I've been, you know, searching in the desert for years and years looking for my true calling and it is to...

make very simple very bad video games with ai you know and i'm gonna sell them so the boys love it the boy so now you're cool dad they love it video game developer yes exactly and my eldest uh he's eight he went he came home from school first day back he's like dad i told everybody about meatball mania like everybody and i was like wow

This is it. This is my new thing. I played Meatball Mania. I'd give it a thumbs up too. Double thumbs up? I'm not family. He only gave you double thumbs up because you're family. I heard him.

Hello and welcome back to the Times Tech Podcast. I'm Danny Fortson in Silicon Valley. And I'm Katie Prescott in the City of London. Which means, let me look at my chart, there'll be a 10% tariff on everything you say in today's episode. You're welcome. 10%? That's quite, I've done quite well. It is a tariff special episode today and I'm curious to hear how you think that putting

putting a tariff on what I say is actually going to work. That's not important. No one's thought this through. Last week, we decided not to talk about tariffs when we recorded because we didn't know whether what we were going to say was still going to be relevant or correct. And actually, that was probably quite a good decision given what's happened since. So is everything...

Is everything sorted your side then? We know what President Trump's thinking and what he's going to do next? Yeah. Yeah, it's all clear. Super, super clear. Oh, good. No, but we've got a guest today who will be joining us who's perhaps...

He's very well placed, I'll say, to give us a sense of what is happening now kind of on the ground and kind of amid the terror of madness and where this might all go. Well, should we go back to what has happened? Because it's been quite a journey. It has been a journey. As they say. Yes. So first up, on the 2nd of April, there was...

Liberation Day. I feel so free right now. I feel really, really free. I didn't realize how chained I felt before, but. Unliberated. So yeah, so on Liberation Day, April 2nd,

Trump announced a 10% universal tariff on all imports effective from April 5th. So three days later. Additionally, higher tariffs ranging from 11% to 50% on imports from 57 countries were scheduled to begin on April 9th. So a week later. And it was supposed to, you know, spark this new economic era, this new boom. But everything went bust. Indeed. Indeed. It was...

Biggest single day loss on the S&P 500, the Dow and the Nasdaq since COVID. And even Elon Musk said it wasn't a good idea. Yes, indeed. Then the pause. After Trump had said it was a great time to buy, he truthed it out or tweeted it out or whatever. And then he announces this pause, 90-day pause, and the markets went up again. However...

They've recovered, right? But not gone back to where they were before at all. So Tim Cook at one point appeared to maybe have pulled in some favors or made some phone calls. Who knows? He was one of the...

the tech people who were very much on the scene at the inauguration and the tariffs on smartphones and computers were pulled. But it did seem to be one of those things that no one had really thought through. I mean, Apple's always been their kind of conceived in Cupertino, made in China company. Yeah. And they've been moving some of their manufacturing for a while, but it is still very much the... It's China, very China focused. The American made in China business. Yes, yes. And, you know, America's...

biggest business. Am I right in saying that? It's the biggest in the world. It's the most valuable company in the world. And the company vying for that was NVIDIA. Yeah.

which this week has also said it's going to be seriously hit by tariffs. And on Wednesday, last time I checked, its stock price was down about 7%. So maybe Jensen Huang should have been at the inauguration. Maybe he should have, yes. I don't think he was there. But just to kind of muddy the picture further, Trump said this past weekend that the delays are temporary and that, quote unquote, nobody, all caps, is getting off the hook.

So, you know, here we are. This is all a very, very fluid situation. But something that's not fluid is obviously the impact that it's having on people who are trying to ship stuff around the world. So we've brought in a special guest today who's at the front line of all this. He's the founder and CEO of Flexport. And they basically deal with the logistics of moving goods around the world, the paperwork and planning and managing shipping. And

And he is Ryan Peterson, who started the business less than 20 years ago. Hello, thanks for having me on. I was going back to the archives. I think we spoke when the world was on fire for a different reason during the early, early in COVID.

That's like my role and apparently my role in the world now is the hurricane reporter. Yeah, exactly. We're bringing you on to make sense of the entire world. So thank you for doing that. Well, that's a bad thing. It means when you pop up, we know something's wrong. Oh my God.

Global shipping is collapsing. So Flexport's in a really unique position here because you plan and manage shipping and you deal with all of the paperwork around that. What has the reaction been of your customers over the past few weeks? Is everyone completely freaking out? Yeah, it might be an understatement. I mean, anyone who's sourcing goods from China, which is a large percentage of businesses in the United States, are facing problems.

What looks like a catastrophic result if this holds, they just, you know, the business models don't work anymore with almost zero notice, just instantly vaporized decades of work, people's whole life building their business. So, yeah, there's a lot of panic, a lot of helplessness, a lot of prayers probably.

So like, let's make a deal. It's not, it just can't be the way this all goes down. So, so is there just, is it just paralysis? Because I guess the question is, is like, as we talked about, there is tariffs on, tariffs off, and then there's a minimum level tariffs on everybody, including the penguins. And then everything's delayed, but not taken away, just delayed for 90 days. And then we have the China tariffs, which as you say, are just extraordinary tariffs.

And so I'm just wondering as a business, what are you seeing people doing? If, you know, there's just a swirl of chaos and every day brings a different, different story. Yeah. It's well, the, the, the China ones are the big, the big thing right now. And in 90 days, I think most people feel like the rest of the world will get worked out and those will actually come live the

that might be we might be wrong on that maybe maybe they do come back but the china ones are are the big factor and then the other big one is they killed the de minimis program so a lot of companies were using that that's what lets you import goods into the us that were under 800 dollars per item if it's shipped all the way to the

to the final consumer store from overseas. You didn't pay any duty at all on those. So that's ending. So direct from China to my house, if it's $800 or less, there was no duty. Correct. And it didn't have to be direct from China. It just had to come from overseas. So actually, the famous brands doing this are Timu and Sheen and a few others, TikTok. And they're shipping direct from China. But actually, a huge number of small, medium-sized businesses

set up fulfillment centers in Mexico and have been fulfilling goods from Tijuana across the border and then going direct to your house from even those Chinese goods shipped into Mexico and then because it's about the country of origin not the right the shipment origin now May 2nd that ends for Chinese made goods but they also announced it's going away for everybody else

So Vietnam doesn't matter where it's made. So when you say going away in May, what is it? What is it replaced by? You'll now have to pay duties like 10, the minimum 10 percent or the if it's Chinese, it's going to be 125 plus 20 plus. I mean, it's 145 minimum for China, but the rest of the world would be 10 percent plus whatever the duty rate was already preexisting. By the way, a lot of European brands use this, too.

um shipping from europe european-made goods where they'll ship direct to consumer or fly it in now may 2nd it doesn't hit europe may 2nd is just chinese made goods

But coming soon thereafter, we don't know when they didn't give us a date. It'll go away for the rest of the world, too. And you'll have to start paying duties on everything. Those you ask what people are doing. So those companies are scrambling to go, OK, I need to put up fulfillment center in the U.S. By the way, this part's been good for Flexport's business. The one saving grace in all this is that we have U.S. fulfillment centers and those have been getting a lot of demand. We also have a customs business. We do brokerage and trade advisory. So help people navigate these tariffs effectively.

help them with solutions to minimize and be compliant on their duties. But the bad side of our business and really impact our customers is bookings are way down. So people have paused freight out of China. We see industry wide around a 35% decline in ocean freight bookings.

- From China. - 35%. - So people are just throwing up their hands and saying, "Not right now." - Yeah, they're saying a few things. One is a lot of them knew this, everyone knew this date was coming, so people pre-ordered and kind of have inventory stocks. So that's one scenario. Two is they really feel like this can't last, this can't be the final state.

So let's hold off as long as we can and wait for a deal to get negotiated, hopefully, and then import the goods. Three is if you have multiple factories, which many of these companies do, have like a China plus one strategy, they've shifted all their orders down to Vietnam or wherever else.

So we saw three in Flexport's business, we saw a 3x growth of our bookings out of Vietnam. - Wow. - Week over week, like unprecedented. China is now bigger than Vietnam for Flexport for the first time in our history. - Vietnam's bigger than China. - Sorry, yeah, that's what I meant. Vietnam's bigger than China. And then the fourth possibility is your business doesn't work anymore and you're screwed. And that I think it's too early to, no one's gonna throw in the towel this early, but there will be some. I think if this holds, you're gonna see

a large wave of bankruptcies from companies that might surprise you that, you know, because even I have friends who do manufacturing in America who have said, hey, I'm going to stop manufacturing this product in the US because I have to pay duties on the components.

But if I have another site in a different country, I don't have to pay duties on the components. I import the product there. It's now cheaper to sell to the rest of the world. So it's going to crush the U.S. export manufacturing market, which is like the whole point of all this is to promote industrialization. So it's a well-intentioned policy, perhaps, but just terrible results. And we've got to judge things by their results, not their intentions. And when you talk about industries that might surprise you, what do you mean? Industry.

in terms of who might be hit? You know, I don't want to speak to any specific company, but like car factories, American-made cars are like got components that come from other countries. And Boeing airplanes have like all kinds of parts coming out of China. You know, it's like an American-made company. I'm not saying Boeing's going to go bankrupt, but you might see some surprising, they're probably too big to fail and will get bailed out. But the little business, the little guy doesn't get the bailout. And that's what really frustrated people with the carve-out that they did for smartphones. Yeah.

Last week. This is the whole point was to like bring high tech manufacturing on shore, right? And then they're like, okay, it points to everything but the thing that we were talking about. Yeah. And then meanwhile, there's like small SMBs, nobody, you know, I guess they didn't donate enough to Trump's inauguration or something. That's, that's,

the meme. I'm not trying to be too critical here. No one's picking up the phone. Not everyone has the Tim Cook hotline. Here's the thing. I think we have to understand Trump's style. We've been around long enough. We should all know by now that his style is like, take a very extreme position. It's very erratic and unpredictable, so you don't know what he actually wants.

leaving lots of room for a bargain, for a deal to get made, but be willing to walk away. And so you're like, okay, we're still right in the middle of all of that. And like, if you're judging the thing by where we are today, you're probably reading the room wrong. And like, at the same time, you know, what else do you have to judge it by? So people are kind of sitting here going, and business craves uncertainty. You used the word, Danny, of paralysis.

And there is a lot of that right now because you're like, you're certainly not going to start manufacturing in the U.S. when like we're still in the middle of dealmaking. You're not going to move to Vietnam or Mexico when, you know, we have a 90 day hiatus on those tariffs and they might go way up. So like you can't set up your supply chain until all of this is worked out. And that might be many months from now. And so in the meantime, you're like.

What do we do? We kind of just sit on our hands, raise prices. We've seen that. In fact, I saw it's going viral in like a lot of, I'm not really in these mom groups, but I heard about them. Alpha Baby is like the big like high-end stroller manufacturer. And I saw, I was reading about some stories where they had to raise their prices this week and it's kind of going viral amongst the moms of like,

The stroller prices are going up. Uppa Baby has raised its prices. Those are expensive. I know, and they had to because of tariffs. And, you know, don't mess with the moms. Trump might find out soon, like, American moms are going to get pissed. The next thing after the iPhone. And on the...

On the point of paralysis, are you seeing anything happen to goods that are already being shipped? Like are ports getting clogged up? Is that starting to be a problem with people kind of goods that are already on their way? People don't want them to leave. Not yet, but what's going to happen? So there was a scramble ahead of, you had to get the goods out by April 9th and there was a scramble to kind of get everything loaded ahead of time, but there wasn't that much time to do anything about it anyways. It was announced on April 2nd.

To actually get cargo onto a ship that's leaving by the 8th, you have to gate it in to the port. You have to deliver the container to the port by, call it, the 4th. Right. So you had like, you know, you had 48 hours to do something before it was too late. What you're going to see, I predict, first off, with volumes declining this much, carriers are going to do what's called a blank sailing. And that's where they just cancel the sailing. The ship just doesn't sail anymore.

And all of those containers then get, we call it getting rolled. It's like getting bumped when your flight gets canceled or something. So all those containers are going to get rolled to the next ship, which is going to be overflowing. And they just have to pull capacity from the market because if they don't, the price will collapse and the ocean carriers themselves will be at risk.

Right. So they're going to pull a lot of capacity out of the market. That's going to lead to bad service and cancellations. And then where and then you're going to see these weird shifts, because if you have a three X surge in Vietnam, I mean, it's not like there's three X more ships leaving Vietnam.

So you're going to have like pockets of ports with just like massive amounts of backlogs of containers they can't move and price spikes and craziness. On the destination side in the U.S., yeah, it's like a big decline. Everything should be smooth. I don't think any – it'll be the opposite. Like truck drivers are going to be out of work. The price of trucking in the U.S. is down significantly.

I was just looking at this graph. It's down about 30% per mile in the last week. Wow. And truck drivers are the number one source of employment in the United States. Number one job in the United States. 30 cents decline. You know, that's per mile. Their cost doesn't go down. I mean, fuel prices are down a little bit, but basically the cost is the same. So you're going to see waves of bankruptcies in the trucking sector. Like, none of this can last. It just can't be that this is their problem.

They can't last. The administration won't be able to hold out. There's just going to be too much pressure once they start seeing all the economic data come through. American moms and truck drivers. Yeah, exactly. Now, I'm curious, because we referenced it at the beginning, the last time you and I spoke was during COVID, which was a very different shock. Is this the kind of...

Or are there any echoes of what was happening to the global economy then that you're seeing now? It is sort of an opposite. I mean, it feels more like the initial couple of weeks of COVID when everyone thought the sky was falling and the world was going to fall apart. Yeah. But what actually happened in COVID, at least in the goods economy...

was people were stuck in their houses and didn't know what else to do with themselves. So they started buying stuff and they got a lot of subsidies from the government. They were getting checks. They had a loose balance sheet. They had a lot of money or extra excess cash and, you know, no other way to get dopamine besides clicking the buy button on Amazon. So people were just buying stuff. And you had a 20% increase in the number of containers entering the country.

Wow. So that is kind of the opposite of what we're about to see. We'll probably see a 20% decrease in the number of containers. But that first couple weeks of COVID before that happened, nobody, no economist predicted that, by the way.

I can't find one economist who predicted with COVID that global trade was going to go up. Everybody who said, you know, recession is coming, trade's going to go down, we're going to have this collapse. So be wary of experts and their predictions, including mine. I don't know. You know, the economics profession kind of everybody's letting them get a free pass on that. But like they all missed what was going to happen. And it's very interesting because you're kind of in this game of chicken between the United States and China. And I don't know if you know what the game of chicken actually is.

Where it comes from. It's like... It's the two cars driving toward each other, right? Yeah. And who's going to drive off the road into the ditch? First one to blink loses and the other one gets the girl. Like, that's the game. Or if they don't, they both die. Famously. Yeah. They both die. If you're in a game of chicken, like, against China, it's just not great for the United States because, well, Trump...

is going to have all these people, all these moms with their stroller prices going up who are pissed off and going, hey, you did this to yourself. Whereas the Chinese can look at it and go, hey, these imperialist Americans did this to us. Like we all have to, you know, in Chinese they call it eat bitter, but we all have to kind of like,

take it on the chin and suck up. And they've been through worse as a country and just muscle it out and you'll be okay. But it's, this is these bad people over there doing this to us. Whereas in the US side, everyone's just pointing at our own leadership going, why are we doing this to ourselves? Right. It's just like the wrong, you know, not a great dynamic for a game of chicken. One side has to, is probably going to give in before the other. This episode of the Times Tech Podcast is sponsored by Vanta.

Let's talk about something that might be keeping you up at night. Cybersecurity. According to Vanta's latest State of Trust report, it's the number one concern for UK businesses. And that's where Vanta comes in. Whether you're a startup, growing fast or already established, Vanta can help you get ISO 27001 certified and more without the headaches.

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Available on selected devices. Ryan Reynolds here for Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistants assistants switch you to Mint Mobile today. I'm

I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of $45 for three-month plan, equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. Two questions. One is, you know, you talk about the truck drivers, which is a huge, as you say, huge sway to the economy, huge source of employment. You have the moms with their strollers.

When you look at where you are kind of in the middle of this whole world of goods coming in and out and moving around the world, when you're thinking about, okay, what's the domino that could be like the kind of the uh-oh moment for either side? You know what I mean? Like, do you think there's a...

There is this thing out here that if that happens, if this collapses, then that will be like a kind of an event that will force the issue. Yeah. I mean, it's probably things in the bond markets. U.S. interest rates on our bonds going way up. And we have $10 trillion or $9 or $10 trillion of debt that we have to refinance this year. And if the interest rate goes way, way up on the bonds...

The government just basically is crushed by debt. It's already kind of crushed by debt load. But if it were to go way up, and this already started to happen, and that's likely what caused them to back off of the tariffs on the rest of the world, was something that we haven't really seen before. I'm not an economic historian, so I don't know when the last time this happened. But it's been very, very unusual where stock prices went down and bond prices went down at the same time.

Usually when stock prices go down, people are moving money over to the bond market and saying, hey, I don't trust the companies. Let me put it somewhere safer with the government. But this time they were going, wait, I don't trust the stock. There's something's bad in the economy. I don't trust these companies with my money. I also don't trust the government. Let me just take my money out of the market altogether.

Maybe put it overseas. Now, I don't know that that was retail investors. I think there was probably some major countries that were like selling U.S. bonds, et cetera. So but that's the kind of thing that like forces the government's hand because they have to finance their the government. And that's also a large reason why they're doing some of these things is like tariffs are a major source of revenue. They're trying to make it a bigger source of revenue. The U.S. government has a sovereign debt problem. Our deficits are two trillion dollars a year. And

the interest income plus entitlement, so like welfare programs, are now, those two things alone are more than all of the tax revenue we bring in. - Yeah. - So there's nothing left for defense or anything, any other programs, science, research, anything else. So it's all financed by debt.

And so there's one reasonable argument for like, we should have some tariffs to help pay for this. It's like, it's either that or income tax or, you know, the austerity of cutting costs. - Yeah, it's all right. AI is going to save us all. It's fine. We're fine. - Maybe, maybe.

AI is not going to be driving the trucks yet. But I wanted to ask you about the change in the mood music in Silicon Valley. It wasn't that long ago we had the inauguration, this massive kind of love-in between tech and Trump. And then, as you say, the tariffs on iPhones, and then maybe Tim Cook made a phone call, but we saw overnight that NVIDIA is going to be massively hit by tariffs and their stock price is down pretty sharply today. Do you feel like...

that honeymoon is over? A bit, yeah. I think a lot of people in tech felt like,

Well, after the last four years of just like heavy regulation and like very anti-corporate, non-friendly behavior from the Biden administration, a lot of people felt like, oh, we definitely need this. Trump came in with saying a lot of the good things that people wanted to hear about deregulation. I mean, I still think there's a good story there, a really positive story that the country needs. But a lot of those types of people are kind of libertarian ethos people.

Yeah, let's deregulate. Let's have more economic freedom. And then you slap crazy tariffs and what looks like central planning coming out of the White House without listening to market reactions or understanding second order effects and the complexity of global supply chains. And now you start going, oh, I have a real second. I'm seeing a lot of second doubt, a second guessing and doubt about this. And beyond that, like actual opposition and people going, oh, this is not what I thought I was voting for. When did you start Flexport? What year?

Around 2008 was the first idea that I started working on. But 2013 is when we got our license from Customs and Border Protection. So the first five years, we didn't have any customers or money or employees. It was just me being a little crazy. Just you and your, as the Brits would say, your garage. Yes. I'm curious because you've been doing this now, well, effectively for 17 years then. Yeah.

This is a long time. And I would guess that the whole conceit of your entire idea is global trade, this interconnected global economic order.

And I'm just wondering, because again, you know, I listened to a podcast the other day about a woman who's making a different baby product, but she was making it in China. And now she's like, this doesn't work. I can't sell this product anymore. I can't make it with these tariffs, you know? And just wondering, you know, it, it feels to me like the global economic economy is a little bit like a bowl of spaghetti. Like it's just, everything's crossing and all these different ways, but,

Do you think there is a realistic prospect to pull all those strands apart and to kind of turn back inward? Is there a kernel there that you're like, yeah, we can actually do this and it makes sense? Or is it, you know, is this to use another food analogy, is the cake already baked? It's a question of our age, really. You know, you go back. Global trade has gone up 4% annually, not just since World War II, but actually since World

the Mongol invasions of 1200 AD. You've just had this like steady compounding growth for 800 years, at least. And if you look at that curve, you know, exponential growth curves are non-intuitive. You literally don't even notice the Black Death when 30% of everybody died. World War II is a blip because 4% growth- When you're looking at the graph.

Yeah, because 4% growth on today's huge dollars is more than the decline that we had in World War II. So it doesn't show up. So I think nothing that we're going through right now, you know, God help us, is anything like that. I think you'll see that there's an innate desire by humans to trade. We want to find our best customer and our best vendor, and we're not that concerned of –

where they happen to be located, where all businesses are trying to make money and water flows downhill. So that piece alone is just like, it's very hard for a government. Governments are very powerful. Trump's very powerful. The US government, Chinese government, they're very powerful. But at the end of the day, it takes an immense amount of force to rein in this market impulse. And I'm not sure it's there, certainly not in a country like the United States where we can vote people out of office if they are anti-markets.

That's not to say that there's nothing good about the Trump administration's plans or what they would like to do. You know, I have this principle, like don't get in arguments with people unless you can make their argument for them better than they can. And so I do think there's some valid reasons. I already mentioned one, like we need to generate some more tax revenue from our government and tariffs are a reasonable place to do that. We also, from a national security standpoint, need to manufacture products.

things so that in a time of war we have industry that can create armaments. This is great negotiating leverage. I mean,

He's it's worse. We're right in the middle of him negotiating. So we should be withhold a little bit of judgment until, you know, see what the deals come out. But we've already got governments lining up to say that they'll lower their tariffs on U.S. products and other things. So I don't know. Maybe there's some part of the deal magic that we that we should wait. Let the artist, you know, you're watching. You're judging Picasso. Let the chef cook. Yeah. He's still cooking. He's in the middle of cooking. Maybe it's going to be a beautiful cake. And then.

Yeah, there's probably there's there's an element to where those deals are kind of necessary. A lot of countries have done created industrial policies that the government does. U.S. administration does have a point like there's industrial policies where whether it's environmental regulations, labor regulations, etc.

You know, I mean, they've got a six day work week mandatory in Korea. They had that for decades. They've eased up on it, but it used to be mandatory run by a dictatorship. Like, that's not really fair. We're trying to compete with that. Like, you know, and they subsidize manufacturing to give cheap credit and loans. So, like, there's some valid points to all of this, but.

It's a bit reckless the way it's been managed, very reckless. And it's going to likely not have the intent. You know, you're probably not actually going to address those problems because you're in, if you go through with the current state, you're going to end up in some kind of a massive recession or depression. Yeah. And in the middle of all of that cake baking or Picasso drawing or whatever we're calling it, are all your customers. Didn't you try and get them together when the tariffs were announced and spoke to them about it?

Well, we did like a live stream the next day. How did that go down? What happened? What did people say? Well, we usually we do live streams every couple of weeks for our customers on different topics, like kind of education around global logistics and customs and stuff. But usually we get like 300 companies to show up. We had 2,600 companies show up to this thing. So a lot of desire to find out what's happening.

we had a ton of questions probably most of them were too technical i didn't take that many like a lot of people were like what about this you know i'm importing this part what's my new duty rate or something more like better for a one-on-one conversation with our trade advisory team but the main sentiment that i was trying to convey to everyone was like hey stay calm well i don't i didn't think that i still don't think this is the final deal you know we should stay calm don't freak out and that's like a very good rule for leaders in general in a crisis it's okay to freak out on the inside or like

You should have some outlet. You can freak out to your, you know. As Trump said, be cool. Be cool. Be cool. He's right. I mean, in a crisis, everybody rallies around the calmest person in the room. You know, if you're leading a company and you're freaked out, which you probably rightly should be, you should not convey that to your whole company. They should see you as like cool as a cucumber. Nothing flusters this guy like, you know. Yeah.

So, yeah, that was the message I was trying to convey to everybody. And I was right about the deal getting cut for non-China stuff. I still hope I'm right that there's a deal going to get cut on the China side of things, but we will see. Right. And how much of your business was exporting from China to the U.S. or the rest of the world? China to U.S. is 35% of Flexport's business, and that's down 30%.

something like the 25% already. So that's a pretty big hit for Flexport. Now we're growing, you know, I said Vietnam's up 3x. We're going to see growth in other parts of the world. And Flexport has a great balance sheet. We've raised a lot of money. We're in a good place financially to ride this out. I think we come out stronger at the end. But, you know, it's super painful for our customers. And I don't know, we're just trying to spend as much time with our customers solving problems as we can right now. That's like one principle we have.

Two is like don't lose sight of the long term. We're building a lot of incredible technology. We know, I don't know if there's gonna be more trade or not. I believe there will be because of that long run trend. But I think in 10 years there'll be more trade, but we don't need that to be true for FlexSport to succeed. What I do know is that people want better technology to manage this more efficiently, to cut costs, like have better visibility and control over their trade, better data flows, better compliance tools, all those things. So we're like, all right, let's not lose sight of the long-term goal even as we,

kind of reposition our short-term roadmap in a lot of ways. Well, thank you so much for joining us, Ryan. It's been fascinating to hear from you. I hope things calm down a bit. Yeah, I mean, you know, like we said, I'm a bit of a hurricane reporter, so they call me in whenever things are going terrible. So I hope I don't see you again for a long time. There's a war reporter in the UK who's very famous called Kate Adie, and it was like every time she appeared on the screen, you knew things were really serious. I feel like you're the Kate Adie of tariffs. Oh, no, no.

all right well it's great to see you guys yeah thank you so much for taking the time and um last question you so are you feeling i know you're a founder so maybe you're just default optimist you're feeling optimistic or when you get off this call you're gonna be like throwing stuff against the wall and screaming and being like oh my god the world the sky is falling no no no channel that energy i think there's a lot of um

In a crisis, one, you got to stay cool so you can make good decisions. Be very decisive. There's a lot of action we can take right now. We can't afford to be helpless and sit around and wait for things to happen to us. So there's a lot of actions that we can take to set ourselves up to win. And in a lot of ways, this is true for all the businesses going through some of this stuff right now. It's like same things happen to your competitors.

And we live in a competitive world. Yeah, that's fair. Well, we live in a competitive world. Like, you know, the point of business, yeah, you're trying to make money, but you're also trying to beat your competitors. And if you're better at responding to this situation, making better decisions, taking better action, having a better impact, then you out-compete your competitors and some people will come out ahead. And, you know, I already used the Black Death analogy once, but after the Black Death incident,

Like 30% of people died in the Black Death, but the people who survived, like their wages went up, they did great. There was like excess land available. I mean, I can't believe you're making that comparison. So we got to be one of those people that comes out the other side of this ready to, you know, have a century of glory. Awesome. Well, we wish you luck navigating the madness and thank you again for taking the time. All right. See you guys. Bye.

My overwhelming memory of trying out prams was the lady who was showing them to me bringing out different terrains so you could try out your pram on gravel, on turf. Yes. Because as you say, they all have different size wheels and some are better, I guess, like buying a bike for cities and some are better for rural areas.

But if you want the cot and the pram, it's a thousand pounds. But that's, I mean, that's kind of to his point. I think that's what's so fascinating about what is happening here is like, I think everybody's like, you know, at least his supporters, Trump supporters are like, yeah, we need to kind of reorder the financial economic order. We need to kind of rebalance the scales and you can have a very long or actually very short argument about, you know, the merits of that.

But when you start making prams more expensive, when, as he mentioned, 30 million truck drivers are all of a sudden going to be struggling to find work. These are not small things. And I think that's, you know, we're still to his point. I think we're still in this phase of OMG, what is happening here?

But I think a lot of people in anticipation pre-ordered a bunch of stuff, pre-shipped a bunch as much as they could. Like we're not feeling it yet. We're feeling the chaos, but we're not feeling the, you know, like the increase in prices or the lack of availability of things. And I think that's when the rubber hits the road. And I think it's also the two very different groups of people that you're describing, you know, the upper middle class moms who will spend that much money on a pram system and

who are getting furious about it, and then the truck drivers as well. And so how this starts to bubble out into all sectors of society and comes back to bite the administration is interesting to watch. Yeah, for sure. But it's good to get kind of a sense from, you know, somebody, you know, on the coalface, so to speak, of just like right in the middle of all of this and having, as you said...

I'm going from 300 people on a normal call to, you know, 2,500 and everybody being like, what does this mean for me, for my business, for my employees? You know, it's just, it's quite extraordinary. Well, I'm sure next week we'll bring something else. Yeah, that's the one thing we know is that there's always going to be something that awaits us. See you next week. Bye. This episode of the Times Tech Podcast is sponsored by Vanta.

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