Valuetainment - May 14, 2025


“$400 Billion Tariff Tax” - How Smart Entrepreneurs Compete in This Market


Episode Stats


Length

12 minutes

Words per minute

223.89775

Word count

2,727

Sentence count

218

Harmful content

Misogyny

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, we discuss how to deal with the impact of tariffs on your business and what you can do to mitigate the impact. The tariffs have a big impact on your bottom line, but there are a lot of ways you can work around them.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
00:00:00.000 We had a meeting at Mar-a-Lago, and there was a lot of business owners doing $100 million a year,
00:00:03.100 all the way up to $855 million, top-line revenue from 15 employees to 1,000-plus employees.
00:00:09.180 Everybody was being asked, how are the tariffs affecting you?
00:00:12.200 And everybody gave me challenges.
00:00:14.060 And I said, how are you addressing this?
00:00:15.520 What are you doing about it?
00:00:16.440 How are you handling this?
00:00:17.580 They gave a bunch of great ideas.
00:00:18.860 I want to share it with you.
00:00:20.000 But this is the data.
00:00:21.100 The tariffs, according to Statista, is expected to decrease exports by 77% for China
00:00:29.180 and lower imports by 77% for U.S., according to the World Trade Organization.
00:00:36.080 Now, I don't wake up every morning trusting what the WTO says,
00:00:39.620 but it is the data that we have that's being given to us through Statista.
00:00:43.040 However, the key on why a few entrepreneurs make it and why most don't
00:00:48.060 is because they are very creative in disruptive times like today.
00:00:52.300 If you're not, there's a reason why less than 5% of entrepreneurs make it,
00:00:56.780 and we're going to talk about that today.
00:00:59.180 If you get value out of this video, give it a thumbs up and subscribe to the channel
00:01:05.320 and stick around to the very end.
00:01:06.660 We're going to allow you to get all this stuff in our Menecht circle for entrepreneurs only.
00:01:11.260 Let's get into it.
00:01:12.040 10 obstacles tariffs create for entrepreneurs.
00:01:15.480 Number one, increased cost of goods.
00:01:17.960 Now, this is something we're all experiencing.
00:01:20.100 I buy stuff from all over the world.
00:01:21.780 We're experiencing that.
00:01:22.840 That 145% doesn't help, and according to JP Morgan, adds a $400 billion tax on businesses,
00:01:30.180 which makes the margins smaller and smaller.
00:01:32.860 You heard Adidas talking about, well, because of this, we're going to have to increase the prices on this.
00:01:37.220 You hear some people are saying, we're going to eat it.
00:01:38.980 You hear other people saying, we're going to be fine.
00:01:40.760 You hear some of the people saying, we're moving all our stuff out to a different place.
00:01:44.280 So for you, if you're watching this, what do you do?
00:01:46.680 One, you try to renegotiate.
00:01:48.880 Most likely, you're not going to be successful.
00:01:50.880 But two, you have to find a way to move out of China.
00:01:54.900 Just the same way where you don't want to have all your money in one stock only,
00:01:59.540 you want to diversify.
00:02:00.700 Maybe you have a mutual fund or find a way.
00:02:02.520 If you're not a full-time trader, you don't want to have all your money in one stock.
00:02:05.460 You want to be able to diversify.
00:02:06.900 You have to find a way to diversify where your goods are coming in from.
00:02:09.780 Call other people.
00:02:10.500 Look what Apple did. 0.98
00:02:11.200 Apple moved 60 million phones that they make per year in China to India.
00:02:15.600 They're looking elsewhere.
00:02:17.160 If a $3 trillion company can do that, so can you.
00:02:20.840 Number two, unpredictable pricing.
00:02:22.420 When you're looking at something like this that happens, you're like, oh my God, what do we do?
00:02:25.720 You know, if the price, I'm usually buying this at $25, it just went to $32.
00:02:30.120 What do I do with this?
00:02:31.220 In 2018, 2019, when we were going through the same thing with tariffs,
00:02:34.680 JP Morgan said that most businesses, they just passed on that price to the customer.
00:02:40.080 So if it was, you bought it for $25, now it's $32, you're selling it at $60,
00:02:44.540 now they're selling it at $67 to make up for a difference.
00:02:47.880 What Apple did, Apple found a way to see how much of that they can absorb.
00:02:52.380 So this is a part where you have to get very good at talking to the vendors and the partners
00:02:57.060 and have those types of conversations.
00:02:59.040 They're going through a challenge just like you are, and they also don't want to lose you.
00:03:02.720 You call, hey Johnny, look, we all know what's going on with tariffs.
00:03:05.560 How are you guys being impacted by it?
00:03:06.980 Pat, in a big way.
00:03:08.200 Totally get it.
00:03:08.760 I am as well.
00:03:09.580 I know this what prices you put here.
00:03:11.040 I can't do nothing about that.
00:03:12.480 Johnny, I would like to have a long-term relationship with you.
00:03:15.540 What if we extend this for me to do a four-year term with you,
00:03:20.060 three-year term with you, instead of just a buy-to-buy?
00:03:22.420 Would you be willing to lower this to a number like this for me
00:03:24.980 over the next four years if I commit to doing this?
00:03:27.320 Okay, I've never thought about that.
00:03:28.900 Can you send me some numbers?
00:03:30.080 Let me think about it because I'm also talking to other vendors in other countries.
00:03:33.480 But I would like to do business with you
00:03:35.040 because we've been doing business together for the last six years.
00:03:37.380 Let me get back to you.
00:03:38.480 That's the script that you need to be having with people.
00:03:41.360 By the way, they know that you're calling them.
00:03:44.600 If you don't, they're surprised you're not.
00:03:47.100 They're expecting a call from you.
00:03:49.300 Number three, delays at customs.
00:03:50.660 This is very annoying.
00:03:51.560 We went through it as well when we bought a bunch of merch that was coming in for us.
00:03:54.700 At SLS, a couple of the items were being delayed on what was coming here.
00:03:57.600 So what do we do?
00:03:58.440 We sat there and we went through a couple different things.
00:04:00.520 How much is cost by plane versus ship?
00:04:03.000 And you kind of sit there and say, okay, the cost here is four times as much as this.
00:04:06.040 I need to pre-plan for what's going to be happening with some of the purchases.
00:04:08.480 I need to make three months, six months, nine months in advance.
00:04:11.380 So you may be saying, Pat, I'm still stuck with some of the things that I have at the port.
00:04:15.140 What do I do about that?
00:04:16.120 Totally get it.
00:04:16.860 What in 2018 Hasbro, which they sell toys,
00:04:19.960 they were having a problem because the terrorists were causing
00:04:22.800 some of the toys to be stuck at the ports.
00:04:25.800 They're like, we got to get this stuff because it's Christmas.
00:04:28.100 We got to sell some of the stuff that they have.
00:04:29.480 They called a customs broker.
00:04:32.400 The customs broker calls and talks to these guys on how they can accelerate.
00:04:36.700 There's two weeks, three weeks, four weeks.
00:04:39.200 It's someone's job to do this regularly.
00:04:41.420 And some companies decided to move from moving the stuff to a bigger port to a smaller port.
00:04:46.860 I'll give you an idea.
00:04:47.500 Last week, we were at the Kentucky Derby.
00:04:49.160 My pilot says, hey, let's go to this airport.
00:04:51.880 Why are we going to this airport?
00:04:53.000 Because Louisville has decided that's the bigger airport.
00:04:56.220 They're charging everybody, Kentucky Derby weekend, $20,000 to just land.
00:05:01.860 I said, what?
00:05:02.640 Yeah, because they're the bigger airport.
00:05:04.080 What's a closer airport?
00:05:05.280 Go to this airport.
00:05:06.200 We went to the other airport.
00:05:07.480 And then guess what we realized?
00:05:08.600 We're looking around and seeing all these athletes and celebrities getting off the plane.
00:05:11.620 Other people are thinking the same way as well.
00:05:13.580 But Louisville Airport, because it's the bigger one,
00:05:16.360 they said, we're passing the $20,000 to my pilot.
00:05:18.540 So we can always go to this place.
00:05:19.880 It's not a big deal.
00:05:20.540 We did.
00:05:20.820 So that additional questioning of identifying with the brokers,
00:05:24.980 you're able to save money, but you need to do the due diligence and the research,
00:05:28.660 or else nobody cares more about your money than you do.
00:05:31.000 Number four, supplier volatility.
00:05:32.540 So let's just say you're working with China,
00:05:34.200 and China decides to be disruptive.
00:05:35.980 They're pissed off at Trump, and they're like, you know what?
00:05:37.960 Here's what we're going to put.
00:05:39.100 And it's like, wait a minute.
00:05:40.060 I need that stuff.
00:05:40.840 What do I do?
00:05:41.860 Well, this is, again, goes back to you need additional places to look.
00:05:46.240 You can't just rely on one place.
00:05:47.800 If you rely on one place, it's kind of like a business.
00:05:50.900 I'm consulting for an engineer guy.
00:05:52.960 This guy's doing $22 million a year.
00:05:54.600 His number one client does $19 million of the $22 million.
00:05:57.700 I said, hey, just out of curiosity, how big is your business?
00:06:00.980 $22 million a year.
00:06:02.180 Great.
00:06:02.660 Of the $22 million, who is your biggest client?
00:06:04.800 He gives me the name.
00:06:05.800 How much of the $22 million do they do?
00:06:07.920 $19 million.
00:06:08.840 I said, you don't have a $22 million out of your business.
00:06:10.820 He says, yes, I do.
00:06:11.800 I said, no, you don't.
00:06:12.500 You got a $3 million out of your business,
00:06:14.160 and you got lucky with a $19 million out of your business.
00:06:16.320 I said, you better hurry up and get other businesses,
00:06:19.180 because if that $19 million out of your business finds out they're your only customer,
00:06:23.340 they will do this to you to save so much money,
00:06:26.400 or else they're going to threaten to leave.
00:06:28.180 You don't have a lot of time.
00:06:29.720 Let's go.
00:06:30.960 Right?
00:06:31.220 That created urgency.
00:06:32.260 If you got supplier volatility, you got to call and get other options,
00:06:36.020 or else the supplier owns you.
00:06:37.720 Number five, loss of competitive advantage.
00:06:39.420 This is very important, folks,
00:06:40.520 because if for you every conversation is about price, price, price, price, price,
00:06:44.500 you're like everybody else.
00:06:45.700 There's nothing unique about you.
00:06:47.240 If you don't have something different,
00:06:48.900 because when you think about a couple other companies that went through this in 2018,
00:06:52.180 Caterpillar being one of them,
00:06:53.440 there's a price that China's putting all these tariffs on the products that they're buying,
00:06:56.160 and we got to raise the prices.
00:06:58.060 What do we do?
00:06:58.860 Are we like everybody else?
00:06:59.860 They started talking about the history of their brand.
00:07:01.720 They started talking about the projects they've worked on.
00:07:03.640 They sold history.
00:07:04.960 They sold stories.
00:07:06.260 They told about how many amazing things they've built.
00:07:08.480 They sold the credibility of how they deliver on the product that's superior.
00:07:11.980 They went there.
00:07:13.900 In moments like this, when you panic,
00:07:16.160 you have to find a way to be a differentiator that's more than just money,
00:07:19.360 because if it's just money,
00:07:20.900 you're probably going to go out of business eventually.
00:07:23.060 Next one is difficult scaling internationally.
00:07:25.060 This doesn't apply to everybody,
00:07:26.300 but let's just say you have a product that you sell to China,
00:07:28.020 like Boeing was.
00:07:28.840 In 2018, they're like,
00:07:29.760 what am I going to be doing?
00:07:31.220 25% export.
00:07:32.260 Why am I doing this?
00:07:33.220 They sat there and they thought about it in a couple different ways.
00:07:35.220 One, they targeted focusing,
00:07:37.080 taking their business more to EU,
00:07:38.540 which was a non-tariff environment.
00:07:39.920 Number two, they sat there and they said,
00:07:41.580 what do we need to do to sell some digital products?
00:07:43.860 Maybe SaaS, maybe software,
00:07:45.800 instead of a physical product that I have to constantly go through a China.
00:07:49.020 And those were some of the strategies that they made.
00:07:51.100 And it's something that you may want to consider as well.
00:07:52.840 This one probably doesn't apply to everybody,
00:07:54.440 but it's currency fluctuations.
00:07:55.620 When some of the companies that are doing business internationally,
00:07:58.500 you're watching the dollar,
00:07:59.520 you're like, wait a minute,
00:08:00.180 I may be affected by this.
00:08:01.320 This is where you may be buying futures,
00:08:03.060 similar to how in options,
00:08:04.840 say you own a stock and you're like,
00:08:06.220 worry, this company could go down.
00:08:07.720 I own the stock, but what do I do to protect myself?
00:08:10.240 Maybe you buy a put,
00:08:11.260 maybe you'll buy some options to protect yourself against it.
00:08:14.020 Again, 95% of people watching this,
00:08:16.860 it doesn't apply to you at all.
00:08:18.320 But for the small percentage of people that are watching this,
00:08:20.700 you're probably already having those conversations with your board.
00:08:24.400 Next one is confusing regulatory changes.
00:08:26.560 So think about this.
00:08:27.280 Every year, say the new government,
00:08:29.340 new administration launches new tax changes, right?
00:08:31.760 Here's what we're going to be doing for corporate taxes,
00:08:33.780 small business owner income taxes, all these things.
00:08:35.500 I have a long meeting with my investment advisor,
00:08:38.460 my accountants, lawyers, everybody we get on,
00:08:41.360 and we have a two, three hour call to see what's changing,
00:08:44.040 what's going on, let's be prepared for it.
00:08:45.880 Well, here's what's got to change.
00:08:47.000 We don't have this anymore.
00:08:47.800 We don't have that tax write-off anymore.
00:08:49.540 Compliance with tariff,
00:08:50.520 sometimes your accountants don't know,
00:08:52.220 your CFOs don't know.
00:08:53.300 This is where you invest into compliance
00:08:54.900 or even bringing in your accounting firm to say,
00:08:57.660 look, with all the stuff that's taking place,
00:08:59.180 what should we be looking at for?
00:09:00.620 How are we being affected to stay in compliance?
00:09:03.680 Well, I don't know if we need to spend that money or not.
00:09:05.480 If you don't, and then later on it gets nasty,
00:09:08.280 it could end up costing you a lot more
00:09:09.740 rather than you making the investment now in compliance.
00:09:12.760 So this next one is about cashflow crunches
00:09:14.820 that a business owner may have.
00:09:15.900 Let's just say you raised capital,
00:09:17.120 you borrowed some money,
00:09:18.340 you got $500,000, a million dollars,
00:09:20.120 $10 million, $50 million.
00:09:21.460 And now you're looking at the stuff like,
00:09:22.860 wait a minute, what am I going to be doing
00:09:23.940 with all this stuff that's going on?
00:09:25.120 You have the conversation with whoever gave you the money
00:09:27.840 and maybe even your partners,
00:09:29.440 the people that you buy stuff from.
00:09:30.720 And you say, look,
00:09:31.220 is there any way we can lower the payments
00:09:34.060 that I'm making here for the next six, 12 months?
00:09:36.260 So I stay afloat and I pay everyone's salary.
00:09:39.080 In 2007, 2008,
00:09:40.780 when mortgages were going through challenges,
00:09:42.680 everybody's sitting there saying,
00:09:43.820 I'm about to lose my house.
00:09:44.660 I can't pay my mortgage payment.
00:09:45.860 Banks started doing modification with certain people.
00:09:48.320 And they said, hey, your interest rate is here.
00:09:50.020 Let's bring it down here.
00:09:50.880 Let's give you 12 months of deferment.
00:09:52.440 You can do that today
00:09:53.920 if you're a good partner
00:09:55.420 with some of the vendors and partners
00:09:57.020 you do business with.
00:09:57.860 Last but not least is domestic supplier inflation.
00:10:00.180 So say you're selling a product.
00:10:01.780 I'm talking to a guy who's like,
00:10:03.120 Pat, my prices have gone up.
00:10:04.920 What do I do?
00:10:05.500 I said, call your clients and talk to them honestly.
00:10:08.680 What do you mean?
00:10:09.340 Tell them what happened?
00:10:10.080 Yes.
00:10:10.860 Tell them what happened.
00:10:12.060 Oh my God, Pat, that's so scary.
00:10:13.500 I get it.
00:10:14.420 Let's sit there and say,
00:10:15.160 hey, before this is what it was costing me,
00:10:18.520 $48,000.
00:10:19.980 It's not costing me $67,000.
00:10:22.500 It's coming out of my pocket.
00:10:23.960 There is nothing I can do about it.
00:10:25.520 My labor costs, if you notice,
00:10:27.440 I'm charging you the same labor costs.
00:10:29.520 I don't have a higher labor cost.
00:10:31.300 I'm charging you the same.
00:10:32.480 I'm just wanting to be transparent with you
00:10:33.960 because I hope you appreciate the fact
00:10:35.520 that I'm being straight up with you
00:10:36.680 with this inflation,
00:10:37.400 that I'm directly being impacted by inflation.
00:10:39.340 Then that customer is going to say,
00:10:40.540 well, listen, I appreciate partnership
00:10:42.340 and we've been together for many years.
00:10:44.200 I respect the fact that you've been open about it.
00:10:46.020 Perfect.
00:10:46.460 Let's move forward with this.
00:10:47.560 Perfect.
00:10:48.040 Can you also make sure we're honest about
00:10:49.640 if the prices go lower?
00:10:50.960 I will show it to you in six months
00:10:52.100 if it goes lower as well.
00:10:53.160 Fantastic.
00:10:53.740 Let's move forward.
00:10:54.340 You move forward.
00:10:55.060 Sometimes clients and customers
00:10:57.060 will appreciate you being honest with them,
00:10:58.800 especially in times like this.
00:11:00.220 Okay, so if you want these notes,
00:11:01.620 we started an entrepreneur circle on Manect.
00:11:04.060 We almost have 300 people on there right now.
00:11:06.820 We've decided we're going to go first.
00:11:08.480 500 people that join that circle
00:11:11.360 will stay at $5.
00:11:12.720 At exactly 501,
00:11:14.840 we're raising it to a higher number
00:11:16.700 to be in that circle.
00:11:17.780 I love what's going on.
00:11:18.980 Everyone's communicating,
00:11:20.100 interacting with each other.
00:11:21.440 I'm posting videos and content in there as well.
00:11:23.520 If you want these notes,
00:11:25.280 click on his QR code
00:11:26.360 or go to the link in the description.
00:11:29.300 Get there, join the circle
00:11:30.320 and be with all these other folks
00:11:32.120 that follow this content as well.
00:11:33.460 And if you enjoyed this video,
00:11:35.040 there's another video I want you to watch.
00:11:36.620 It's about the tariffs,
00:11:37.660 how Trump's tariffs are impacting the economy.
00:11:40.080 If you've never seen it,
00:11:41.080 click here to watch that video.
00:11:42.820 Take care, everybody.
00:11:43.560 Bye-bye, bye-bye.
00:11:44.020 Bye-bye.
00:11:44.520 Bye-bye.
00:11:45.220 Bye-bye.
00:11:46.040 Bye-bye.
00:11:46.880 Bye-bye.
00:11:47.080 Bye-bye.
00:11:49.260 Bye-bye.
00:11:49.460 Bye-bye.
00:11:49.760 Bye-bye.
00:11:50.460 Bye-bye.
00:11:51.600 Bye-bye.
00:12:03.960 Bye-bye.
00:12:04.760 Bye-bye.
00:12:09.900 Bye-bye.