What Goods Will Be Impacted By Tariffs & Amazon Buying TikTok?
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Liberation Day was more like Liquidation Day as stocks plunged to their worst trading session since 2020. Then everyone is lining up to buy TikTok, but can a deal get done before the app has to go dark in the U.S.? It's Friday, April 4th. Let's ride. ♪

When all of you come to visit New York next, first of all, say hi to me and Toby. Second of all, you might notice something a little different on the walls of subway stations. The New York City subway got a new map this week, its first redesign in almost 50 years.

In many ways, the new map is a throwback to the 1972 Unimark map, which has a modernist, streamlined feel and features as many straight lines as possible. That was replaced in 1979 with Michael Hertz's so-called spaghetti diagram, which has remained in use until this week. Toby, on a scale of Jaguar to HBO Max, how would you rate this redesign?

I think it's very, very understandable, which is the main point here. Because think about a transit map. It has to be available to be seen by people with different levels of vision. It has to be seen by people who have different levels of understanding of what New York City is. It's not just locals taking it. So there's a lot of things to kind of take into account. And what this map is good at is that it finally gets away from traffic.

a little bit. It's a lot more abstract than the previous more geographically representative map. And it prioritizes visual clarity over pure accuracy, which I think is a good thing for a lot of people because the good thing it does too is improve the visibility of transfer points at the busiest hubs. You can clearly see, all right,

Union Square's got a lot of stuff going through it, so this is where I have to make my transfer. So I do think that this is not a new debate. I mean, you talked about the 72 map that changed over in 79. So we've been having this geographic versus visually representative debate for a long time now, and now we're swinging back towards visually representative. And it looks cool. That's my main baseline. It looks cool.

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that April 15th deadline. After President Trump unleashed the biggest hike in American tariffs in more than a century, markets responded similarly to when I tried Vegemite for the first time. It was a historically gruesome day on Wall Street. The S&P 500 tumbled 4.8%, erasing $2.5 trillion in value, and the Nasdaq plunged nearly 6%. That was their biggest one-day losses since March 2020, when the world was shutting down due to COVID.

Investors consider these tariffs a severe economic shock that threatens to crush corporate profits, raise prices for consumers and slow growth in the US and around the world. To recap, on Wednesday, aka Liberation Day, Trump upended decades of US trade policy when he instituted a 10% tariff on virtually all American imports with much higher duties on 60 countries he considers the worst trade offenders against the United States.

It is an earth rattling gambit by Trump to reshore manufacturing back to the U.S. and swallow short term pain for a longer term buildup of the industrial base. The president brushed off the market panic yesterday, saying his tariff plan is going very well and adding that I think our markets are going to boom. Got to give it a chance. Got to give it a little bit of time. But Toby, as it stands, it's the end of the economic order as we know it. And Trump feels fine. Investors, on the other hand, are panicking.

Right. The damage was immediate and it was widespread. Over 80% of the companies in the S&P 500 were in the red as of 10.20 a.m. in the morning. And then over 80% finished the day in the red as well. And the hardest hit companies were those that rely on manufacturing abroad. So think about your Apples, your Nikes of the world. Retailers, too, that source a lot of their products from abroad also took hit. Target was down over 10%. Dollar Tree was also down double digits.

Big tech was also feeling the pinch a lot. The Magnificent Seven saved more than $1 trillion off of their market cap, and Apple had its worst day in over half a decade. So those were just some of the biggest names, and why you saw such a deeply red day is that from the very top of tech—

of the tech world all the way down to Dollar Tree and the retail world, there was a lot of people feeling the pinch here. Yeah, let's talk about Apple for a sec because they really were the poster child of this sell-off, especially in tech. Apple has manufactured its iPhones and everything we buy from it in China for a long time. It has these vast factories from its suppliers there. And in 2018...

Over the past five or so years or decade, it's been trying to diversify away from China because Trump threatened tariffs on China in his first term. So where did they go? To Vietnam. So they set up all and India. So they set up these big factories to make iPhones and iPads, Macs and other accessories in Vietnam and India. And then what does Trump do? Yesterday is slaps a 46 percent tariff on China.

on Vietnam and a 26% tariff on India. So this diversification around Asia that Apple tried to do starting in 2017, 2018, just completely backfired and fell 9% yesterday because it is going to bear the brunt of tariffs. And overall, the hardware sector, everything we get from China, which is absolutely crushed. Yeah. Apple has some very tough choices to make now because it already is one of the more expensive phones and more of the expensive products on the market. So

They can't necessarily raise prices. I mean, maybe they can. They're Apple. Or they'll just have to eat the profits. That's what a lot of companies are kind of facing right now. It is fascinating, though, because big tech, even though we kind of lump them together, like Apple's business model is very different from Amazon's, which is very different from Amedda's. But yet we saw both of those companies also take a major hit. Amedda is actually exposed because, remember, we've talked about how much Chinese e-commerce retailers spend money on their platform. Xi'an, Taimu just

dump billions of dollars into meta advertising. And if they start to pull back due to these tariffs, then it hurts meta as well. So you start to see these effects kind of start... Even if meta doesn't manufacture anything... I mean, I guess they manufacture Ray-Ban glasses and headsets at this point, but they're mostly an advertising company. But that is...

another reason how these tariffs affect even companies that aren't manufacturing direct goods in those countries. And then another sector that was hit so badly was retail, as you mentioned, Five Below Gap, Urban Outfitters, Kohl's, Best Buy. They all posted losses of more than 15%. And if

Apple was the poster child of the tech wipeout. Then I think RH, formerly known as Restoration Hardware, will be the poster child of the retail wipeout. So they make high-end furniture in China. And on Wednesday, as Trump was announcing these tariffs, the CEO was on an earnings call, giving a pretty downbeat earnings call as it was. And what the transcript shows is that he looks at the screen and says, oh, bleep, as he's seeing these tariffs roll out.

And later, he's explaining to the analysts, anybody of scale in the home business has a high percentage of their content coming out of Asia. Among all furniture stocks that got wiped out, RH suffered a 40% drop. And then finally, one blip of green in that sea of red yesterday where some stocks did go up. Consumer staples was a big one because even...

That's the classic go-to protection in times of downturn. You still need to buy goods like toilet paper, food, etc. Then utility healthcare sectors also didn't fall as hard as the rest. Also, companies that make American-made products rose pretty well. Some automakers actually weathered the storm quite well. Ford did.

was a survivor, if you want to call it. They said yesterday that they're going to lower some prices on its vehicles to match the same level it charges employees to try to capitalize on this surge of Buy America. So there were a few companies there that were green, even though most of the market was red. The other angle of these

post-tariff shockwave that is reverberating through the economy is that a lot of things are on their way to becoming more expensive. According to the Yale Budget Lab, this round of tariffs could bump up fresh produce prices by 4% and overall food costs by nearly 3%. That means you can expect some sticker shock on your favorite foods and drinks. To name a few, coffee in the U.S. is almost

entirely imported with 99% grown outside U.S. borders. Same with shrimp, where over 90% comes from just four countries now facing new duties of up to 46%. Chocolate and vanilla, same story. Even a cheat day McDonald's burger could get more expensive thanks to a 10% tariff on Australian beef, which is blended with American cuts to create their patties.

Outside of the grocery aisle, tech is another industry that not only had a rough day in the market, but is also likely to see higher prices. China and Vietnam supplied the vast majority of laptops and tablets, nearly $47 billion worth last year, with new tariffs of up to 50%. Price hikes are likely to follow. And then finally, everyday things like shoes are also staring down higher input costs. China and Vietnam account for nearly 70% of shoes sold in the U.S.,

tariffs of 54 and 46 percent are going to hurt. So, Neil, those are some of the categories where economists are forecasting the tariffs to impact. And one other one that you didn't mention is toys. The Toy Association, which is the toy industry lobby group, estimates that 77 percent of all toys in the U.S. are manufactured in China alone. The toy industry operates on very slim margins, so you can't expect them like an Apple

Apple to absorb the hit that come from tariffs so the toy Association estimates that it will cost consumers at least 30 percent more to buy toys purchased from China than they currently do but yeah it's it's a very interesting education and where things are made I mean 94 of shrimp comes from not the U.S the shrimp Lobby is very happy the manufacturing Association here or the shrimp

producer uh... associations that we're grateful for the trump administration's actions today it will preserve american jobs food security in our commitment to ethical production so you see here

Things that the United States does make, at least in small quantities, the job creators here, the companies here are very happy. But for other things that we just simply can't make, bananas, vanilla all comes from Madagascar. Shrimp comes from India. Cocoa comes from everywhere else. Coffee beans, we import 99 percent. There's no American substitute for that. So if there are tariffs on these products, then their prices are likely to go up.

So now that Trump launched the trade war, the big question is how will the world react and what does that mean for the economy? The overall sentiment abroad was outrage, threats of retaliation, and bafflement over how these tariff rates were chosen. In the EU, a major trade partner of the U.S. that was hit with 20% tariffs

President of the European Commission Ursula von der Leyen said the global economy would, quote, massively suffer from the tariffs and urge negotiation. UK Prime Minister Keir Starmer promised to respond with cool and calm heads. In France, President Emmanuel Macron did not keep his cool, encouraging European companies to avoid investing in the United States because of the tariffs. Switzerland said it was confused why it was hit with a 32 percent tariff higher than other

other U.S. trade partners with similar economies, when 99% of U.S. goods can be imported into Switzerland without a duty, the calculations of the U.S. government are not clear to the federal council, the Swiss federal council said. Meanwhile, in developing countries that were walloped with tariffs, leaders are spooked, fearing the decimation of key industries centered on sending products to the U.S. Clothing-focused Cambodia, which counts the U.S. as its top export market, was hit with a 49% tariff.

As a small country, we just want to survive, said a spokesperson for Cambodia's ruling party. Toby, these tariffs reached every part of the globe. What you're seeing right now is sort of a jockeying period amongst world leaders where they, one, try to figure out if this is a jumping off point for negotiations with the United States or if it is something that is here to stay. That being said, you said it touched every corner of the earth, including some tropics.

truly random places, and I just want to highlight some of those. One of those are the Heard Island and McDonald Islands. They are in external Australian territory. They face what Trump is calling a reciprocal tariff of 10%. Even though the islands had zero trade with the U.S. last year, and the reason why they had zero trade with the U.S. last year is that they have no human population. They are home to only a large population of marine birds and mammals, including seals, albatrosses, and penguins.

penguins. So that was kind of held up as a meme yesterday of like, we are literally terrifying every corner of the earth, even those corners that don't have humans and just have penguins. All right. So the investors won't have any time to take a deep breath today because the March jobs report is out.

at 8.30 a.m., and we'll see what picture of the labor market that paints. But it's just been a wild week on Wall Street. Trump yesterday said that there would be room for negotiation. Remember, the tariffs are not going into effect until April 9th. Next week, his aides had been going out all over the media and saying, these are the final rates. We're not negotiating. They're not negotiable. And then Trump, two reporters yesterday, as he was

boarding his helicopter, said, you know, I'm down to negotiate. If somebody offers something spectacular in return, then we can talk. So you can bet they will be fielding calls. They will be negotiating for the next couple of days until these tariffs go into effect. But clearly a shockwave across global markets. Up next, we got a deadline for TikTok coming up.

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In some non-tariff news, TikTok's clock is getting mighty close to midnight. The April 5th deadline for ByteDance, the platform's Chinese parent company, to sell its U.S. operations or face a nationwide ban is less than a day away. The final countdown has a slew of bachelors from PE giants to big tech power players lining up to win the social media platform's final rose.

Right now, the leader in the clubhouse, according to the Financial Times, is a deal that would spin off TikTok's U.S. business into a new entity backed by investor powerhouses like Andreessen Horowitz, Blackstone, and Silverlake. Oracle would oversee U.S. data, while ByteDance would retain a minority stake under the 20% cap required by law.

Meanwhile, Amazon entered the chat late in the game, making a Hail Mary bid via letter to the Trump administration. They joined a bizarrely wide field of other suitors, including Perplexity AI, which wants to rebuild the app's algorithm from scratch, mobile tech company Applovin, and even MrBeast, who says he's been approached by some backers to be the face of a bid.

Whether a deal is actually completed by the deadline or the deadline is extended remains unclear, with a major sticking point being the app's all-important algorithm. ByteDance has floated an idea to license it out to new owners, while U.S. officials want it fully controlled domestically. What is clear, TikTok has become a geopolitical football to be tossed around until Trump can tush-push it across the finish line and get a deal done or get stuffed at the goal line for good. You said it wasn't tariff news, but in a way it is.

because everything ties back into tariffs now. Trump said that he would be willing to lower tariffs on China. Now, right now, they're at 54 percent if Beijing would approve a deal. And it's a very interesting quirk of this acquisition or buying process, because how do you buy a company that's not for sale? China does not want to sell this app. ByteDance does not want to sell this app. They're trying to force this to happen. Maybe they can use

tariffs as a negotiating tool. And then you have the host of major investors in the United States, like Blackstone, Andreessen, Horowitz, Silverlake, these big PE firms that appear to be able to step in to buy TikTok should there be a spin out. But just a quick recap of how we got here. I mean, this has been...

years in the making, and it could be extended even further. But last year, a bipartisan group of lawmakers in Congress passed this ban or sell, uh, law for Tik TOK, where you either had to, you know, the, they bite dance either had to sell Tik TOK to a U S owner, or it would go dark in the United States. The deadline was January 20th, the day after Trump was inaugurated, Trump extended the deadline for 75 days. As soon as he was in office, uh,

And so that's kind of where we're at. The 75 days is up. And J.D. Vance, who has been tasked by Trump, the vice president, with overseeing a potential TikTok deal, said it is highly unlikely that TikTok will go dark again. All signs point to a deal or another extension.

Yeah, Vance is being very confident that a deal will be reached before Saturday's ban enforcement deadline. I mean, literally... Coming up. Yeah, it is coming up. But literally yesterday, he said in an interview with Fox that it'll come out before the deadline. So it looks like he's saying that something is about to come together. Now, I do think maybe...

that talking point from Vance is the fact that they will have a bid lined up with that big PE conglomerate, not Mr. Beast, unfortunately, or fortunately, whatever your perspective is. But I don't know if that bid will actually be accepted. That's just another case. So I do think maybe the most likely thing is somehow the can will get kicked down the road once again, because this is just such a complex negotiation for a very valuable asset in this geopolitical trade war.

Today is a big birthday in the corporate world. Microsoft turns 50. The American tech juggernaut best known for creating Clippy and, well, I guess ushering in the PC revolution also, has managed to reinvent itself from one technological disruption to the next, amassing a market value that now stands at nearly $3 trillion and making its co-founder, Bill Gates, one of the richest people in the world.

He wasn't always that rich, of course. Back in the spring of 1975, Gates was a Harvard dropout who on April 4th of that year launched a tiny software company with his childhood friend Paul Allen in Albuquerque, New Mexico. Their mission was as simple as it was ambitious to put a computer on every desk in every home. But how they aimed to do that differentiated them from the pack, whereas all the other companies in the very small tech sector at the time were focused on hardwares.

hardware, Gates and Allen decided to go all in on software. That decision and the execution of it in the subsequent decades has made Microsoft a nearly ubiquitous part of the world's computing infrastructure from MS-DOS to Windows to the cloud and now AI.

All the while, it's been a model of stability in its 50-year history. Microsoft has had just three CEOs, Gates, Steve Ballmer, and the current one, Satya Nadella, who's occupied the corner office since 2014. Toby, it hasn't always been smooth sailing for Microsoft for the past half century, but it's been as proficient as my skills for OfficeSuite.

Very proficient, Neil. Yeah, I think you said it well. The real power of Microsoft has just been ubiquity. You cannot do knowledge work in the modern era without bumping into some product that Microsoft created. And it's also been able to find a way to reinvent itself throughout various tech cycles. It's basically actually created tech cycles. Its first act was probably Windows. Its second act was Office and then this dominance of the desktop. And then its third has been

cloud infrastructure and AI. So it's just very much a chameleon that has adapted to the new ways we work and has become just this absolute juggernaut that at one point became the most valuable company in the world. While also, I will say it's had more impact on culture than maybe we give it credit for. I know Apple is like the cool tech company that everyone wants an iPhone, but think about what Microsoft has done. Gaming, it's got Xbox,

Halo, Gears of War, some of the biggest franchise in history. The memes you can't overlook either. I mean, everyone knows Clippy, even if you never really interacted with Clippy. WordArt just has this second life on the internet as well. And then also, shout out to Encarta, which invented... It was basically Wikipedia before there was Wikipedia. So there's just... You cannot...

talk about the tech are really even the modern world without talking about microsoft it's just that big of a player and what's remarkable is it kinda missed the internet and mobile i mean steve ballmer in twenties two thousand seven has this very infamous quote where he says there's no chance that the iphone is going to get any significant market share microsoft exploiter net explorer their browser was complete completely eaten by google chrome and yet they continued to persist

Their stock took a beating for a while, but then Satya Nadella came in in 2014, wrote the stock price, got juiced by 10X over his first 10 years in the company. And now, you know, they made a $13 billion investment in OpenAI, and they are seen as one of the leaders in AI. Before we leave Microsoft, The Verge, a tech publication, ranked their top five

things that Microsoft has ever created. I'm just going to run them down and I want your take, Toby. Number five, Windows XP. Thought it would be higher, honestly. Number four, Xbox 360. Oh, that's good. That's solid. Number three, the Surface Pro 3. What?

The things that they look at on the sidelines of NFL games, that's number three. It's number three. Number two is Halo, which is perhaps the killer app for Xbox when it came out in 2001. And number one, Windows 95. That introduced sort of the modern desktop as we know it with File Explorer, the taskbar notification area, the start button, recycle bin. Now, I think one thing that's missing from this list is

the wallpaper from Windows XP. Oh, yes, that is iconic too. Yes, I forgot about that. But honestly, a pretty solid top five list, but they did my boy Clippy a little dirty right there. I think he's top five material.

If you're looking for a way to kill time and bond with your 12-year-old nephew this weekend, maybe we suggest heading to see the Minecraft movie this weekend. Starring Jack Black and Jason Momoa, it's hitting theaters today as the best-selling video game of all time looks to see if it can translate that success

to the big screen. Minecraft is massive, 140 million monthly players, over $3 billion in lifetime revenue, 1 trillion YouTube views of its content. Just by virtue of its subject matter, the Minecraft movie is shaping up to be one of the biggest box office swings in gaming to film history.

It has all the raw ingredients to be a billion dollar franchise. A global fan base that spans generations, marketing firepower from a big studio, and some beloved IP has usually been a recipe for success if you look across this genre. The most recent Sonic the Hedgehog movie pulled in $500 million running a similar playbook, while the Super Mario Bros. movie grossed over $1.36 billion worldwide, making it the most successful video game adaptation of all time. Now, will this movie be good? Who

knows. Rolling Stones described it as exactly what you think it will be and less. It's got Jack Black and is directed by the dude who made Napoleon Dynamite. So it's at least going to be weird, that's for sure. But weird might just be the ticket to the next billion dollar movie game at

video game adaptation, Neil. Minecraft owned by Microsoft, by the way, another sign of some of those savvy acquisitions made by the company we just talked about. What's interesting about Minecraft that differentiates it from the other video game adaptations that we've seen be successful in recent years is that it doesn't have

a narrative structure. The game has become so successful because it's called a sandbox game. You go in and play and it's a really choose your own adventure. You can do whatever the heck you want. So every person's experience who plays Minecraft is completely different. So there's not a, you know, popular set of characters like Super Mario Brothers can, can, uh,

rely on or there's not a propelling narrative that these filmmakers can use. So they said, we're calling it a Minecraft movie because we're respecting the fact that there's no one story that drives the game. We're not the official story. We're not canonizing anything. We're just one of a zillion stories. So that's what makes this a little bit different. But this is a very interesting IP because it really hasn't been tested outside of the video game sphere now. But there's been a run of successes in video game to movie franchises.

adaptations and we'll see whether this run can continue. And expectations for it have slowly risen. Three weeks ago, box office projections were sitting at around 58 million. Those slowly creeped up to 60 million. Now they're sitting at about $75 million conservatively. So there's clearly been some indicators in and previews that it's going to get off to a hot start. But also maybe people are talking crazy forecasts right now because it's been

a pretty long time since the movie industry has had a hit. I mean, only one weekend to date in 2025 has exceeded $100 million across all titles. And that was when Marvel's latest, you know, Hulk abomination movie came out. And so maybe some of this is manifestation on the movie industry's part that we're like, finally, we got some like,

reliable IP that we think can generate a big hit. So we'll see if it gets out of the gate pretty fast, but then that lack of narrative structure might lead it to fizzle or maybe the fan service that it provides will bring in this global audience. So I can see it going a lot of different directions. One thing is for sure is Jack Black has...

his weirdness factor turned up to 11. Everything I've read and everything I've seen, he's going hard in this movie. Yeah, and apparently he went full method because the director handed out Minecraft to everyone on set for their trailers, and he just went full in. He logged more than 100 hours playing Minecraft and was just obsessed with the game. You can imagine that every kid out there this weekend is going to be tugging on their parents' shoulder being like, we need to go see this movie, we need to go see this movie. So I am bullish on Minecraft.

Minecraft movie. Let's wrap it up there. Thanks so much for starting your morning with us. Have a great Friday and an even better weekend. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. We love hearing from you. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer.

Olivia Graham and Olivia Lake are our associate producers. Uchenna Waogu is our technical director. Scoop Sardaris is on audio. Hera Makeup needs a nap after that crazy week. Devin Emery is our chief content officer, and our show is a production of Morning Brew. Great show today, Neil. I wish you all well.