Company Interview / "Trump Tax Day" to test tech giants

Hatem Dhiab from Gerber Kawasaki shares his views on potential economic impacts resulting from tax increases in the US, likening it to "Trump Tax Day." Hatem opines that these increases could challenge growth and margins, leading to significant uncertainty for the US and global economies.

Hatem highlights that higher tariffs may drive up prices, affecting consumption of imported goods like avocados and coffee. He argues that such tariffs disrupt supply chains and ultimately leave consumers with less money to spend, potentially stunting overall economic activity.

He points to Tesla's struggle, notably poor delivery numbers, amid this climate. Hatem suggests that despite avoiding US tariffs, Tesla (NASDAQ:TSLA) faces brand challenges and potential retaliatory measures in Europe and China. Companies like Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) may face spending cuts due to this environment of economic anxiety and uncertainty.

Below is the full unedited transcript of this interview:

0:00

Let's get into. Now, the impact, of course, of what we've been seeing

0:04

with some of the US stocks. And my next guest is this is not Liberation Day, but rather Trump Tax Day. And what we've seen from the white House could be potentially quite the worst case scenario. But Omdia from Gerber Kawasaki joining me now. Tim not good. When you look at futures markets. We're here in Asia and Asia-Pacific are falling quite hard. What are you expecting to see in terms of the fallout?

0:30

Well, the stock market. How are you. The stock market always reacts first right. So you shoot first and then ask questions later. But I think after after what happened this afternoon, everyone is wondering, this is really, uh, the

0:46

highest or the the biggest increase in taxes in America since the 40s. And frankly, that is not good for the economy. It challenges growth, it challenges earnings, it challenges margins. So a lot of questions remain to be around what this means for the US economy and frankly, the globe after. After today, you make a really good point because it is sort of becoming a tax, if you will, that that means people are going to consume less, particularly these products that you do get from other countries, the likes of avocado, coffee, clothing. Does that then in itself, if people are spending less than just overall hurt the overall economy in terms of, you know, as you put it, simple economics.

1:31

Yeah, this is economics 101. Right. All the product, there's a lot of products that we need to consume here that we're not going to be able to produce overnight in America. So all that's going to do is these products would be more expensive and people will consume less of them. And people actually would consume less of everything. Right? There's a lot of also products that are used to produce other products. There's in fact, there's very, very few products that are 100% made in America. So the reality is when you when you put tariffs like this, you're impacting the whole supply chains of consumer products of, of of of production. And as a result, you know, you create an environment where we, we, we, we, we have just less money to spend on things that we need and want. So it's it's definitely a, it's, it's a it's really conflicting with what they're doing. So let's talk then in terms of what we can see in the fallout potentially for some of these companies, you're saying everyone loses basically when it comes to some

2:31

of the car companies. But there could be a win for Tesla for President Trump's friend Elon, if if they're still friends, it's hard to tell. What do we see there. And particularly we're going to have these Tesla delivery numbers too.

2:45

Well, the Tesla deliveries numbers were out today and they were horrific. Uh, so I think they were down 13% year over year, down almost 35% quarter over quarter. Uh, the reality is Tesla is the only car that's made in America. So they do avoid traffic or tariffs. Sorry, but what. But also the brand is has taken such a massive hit. So people don't want to buy the cars. And Tesla doesn't only sell cars in America. They sell cars in Europe. They sell cars in China. And I think if you have tariffs here, there going to be some retaliation somewhere in Europe, somewhere in China, which basically would impact sales all over the world. So again, like you create an environment where, uh, the, the we're not we're not, we're not really trading with other partners. We're just everyone is fighting and it's going to impact, uh, uh, really everyone that's making products. How much do the tariffs then potentially change the trajectory for business spending too, particularly when we're just entered

3:45

into this, you know, I adoption acceleration phase.

3:50

Yeah. No that's a great, great point. Like we were super excited about this, uh, data center build out this. Basically I build out that's, you know, going to create almost $1 trillion in new your spending and the reality. Now, a lot of companies are going to have to dial down their spending because they don't know what their revenues are going to be. They don't know what their margins are going to be. This whole kind of environment of anxiety and really not knowing where the rules are and what things are going to be, is going to impact, uh, how how, how CEOs and executives make decisions about their spend, which ultimately already

4:29

reduces the economic activity in general. So, yeah, so I think Nvidia and Microsoft and I see all the all the tech companies, which by the way, were really the leaders. Right? They are our shining stars here in America. They are the best companies. They have the best margins. They literally printing money and they're exporting a ton of their products overseas. Will will actually struggle, I think going forward, because there is going to be some anxiety around where to spend, where the revenues are coming. Are we going to have some retaliation from our partners in Europe and other places?