00:00Let's bring in Santosh Rao, head of research at Manhattan Venture Partners.
00:04Hello, Santosh. So much reaction. What are you watching most keenly?
00:10Yes, a lot of reactions. This was a big news. I mean, it's it is very it wasn't surprising.
00:21I mean, the betting markets, if you follow that, they had already predicted that Trump had a 25 percent chance
00:26of winning
00:26to the extent that you believe in this betting markets. But that's besides the point.
00:31I think this is a good ruling for the economy. I think this randomness, this indiscriminate tariffs,
00:41this punitive tariffs are not acceptable. The Supreme Court has pretty much said that.
00:45So I think in that sense, there is some certainty as to where the tariffs are landing.
00:50And that was one of the big reasons why the uncertainty in the economy and the stock market also,
00:55the investors didn't know where that was going to land and who's going to win and where that's going to
00:59happen.
01:00And the companies didn't know whether to raise prices, lower prices.
01:03So all that uncertainty, I think, is gone to some extent.
01:07But now the Trump has, as usual, kept that uncertainty there.
01:11It's kept that hammer there. He's saying that he has options.
01:15Let's see what that is. It's definitely not what it was before.
01:19So he'll have to really come down and really negotiate and come to a better, better terms and more fair
01:25terms.
01:25So overall, I would say it's good for the emerging markets.
01:28It's good for the U.S. market as well in terms of prices.
01:33But let's see how Trump reacts on that.
01:35It's interesting. There's already been response from the British Chambers of Commerce.
01:39And they're saying, you know, this could open the way for refunds.
01:43And this could, you know, these claims for refunds could come from many different areas,
01:47from small businesses to states within the U.S. to, you know, global entities.
01:53Do you believe that we are going to see that next?
01:57Yes. To some extent, you will see refunds.
01:59But let's say what shape. You know, he's not going to give dollar for dollar back, I think.
02:04My guess is that maybe he'll start giving some credits, trade credits down the road and made whole other countries.
02:10Because the money that was raised has already been spent on various projects, from what I was told, from what
02:15I read also.
02:15So I don't think it's there, sitting there in the bank somewhere.
02:19So he will, they will have to work it out.
02:22And it's going to be a long, drawn-out process.
02:25There are some loopholes.
02:27There are some gray areas that Trump can challenge.
02:30And so, and he can impose tariffs based on national security interests and strategic interests.
02:37So there are some loopholes there that he will work on.
02:40So there will be some uncertainty.
02:42The Nijung reaction is positive for the rest of the world, who are paying heavy tariffs when they had nothing
02:48before.
02:48So that's, it'll come down, I think, marginally.
02:52A lot of them have been negotiated, renegotiated, and come to a consensus.
02:56And companies have agreed to invest in the U.S. based on the tariffs and all that.
03:00So there are a lot of tag-on effects down the road if he just takes away the tariffs.
03:04So a lot of things going on.
03:05It's too early to say that the things are all clear.
03:07But the net effect is that it's positive.
03:10They have Supreme Court on their side.
03:11And the negotiating table is going to look a lot different because all the countries are having more leverage in
03:16their negotiations.
03:17At the same time, today, we've seen U.S. GDP figures for the fourth quarter.
03:22They are lower than they were hoped to be, was expected at 3%.
03:25They've come in lower at 1.4%.
03:28Is there an implication on growth around this decision?
03:32What are your expectations?
03:34No, I think the GDP was really a function of the government shutdowns.
03:39I think that really had an impact on the GDP growth.
03:42So I think it'll come back.
03:44I think the U.S. is growing at a good pace.
03:47I don't think because of the tariffs, the GDP grew.
03:49So even if it does, it's marginally to lower stuff, lower the rate, but not much.
03:56So I think the bigger thing is that the productivity is up.
03:59AI is really having a good impact.
04:02And things are improving.
04:03But the biggest thing is with this overhang gone and the companies having some visibility,
04:07they can start hiring and start planning and start spending, and that'll be good overall for the economy.
04:13But will it?
04:13Sorry to jump in.
04:14Will it?
04:15Because the Trump administration has said all along, if we lose in this ruling, we've got to work around.
04:20Doesn't it actually just usher us into a new period of uncertainty?
04:25Yes, that's true to Trump form.
04:27That's what he does.
04:28He always leaves everything hanging.
04:31So people are kept guessing in every sphere, in wars, in economy, in every place.
04:36So I think he's true to form.
04:38But I think the Supreme Court has put some red lines.
04:41So he has to work within that time, within those lines.
04:44So that certainty is there.
04:47Yes, he's going to fight it out all the way, come out and said,
04:50and the Treasury Secretary has said all along that we have options.
04:53We have plan B.
04:54So let's see what that is.
04:55But it's not just straight executive orders saying that it's 20% here, 40% there.
05:00It has to be well thought out, well documented,
05:02because the Supreme Court has pretty much laid the groundwork for a more rationale tariff regime.
05:09And Santosh, Nick did touch on this just a little while ago.
05:12But what are you seeing in the market reaction to the tariff ruling?
05:16I think the market is reacting positively.
05:19The last time I saw, like I said, it's going to have a good impact in terms of the pricing.
05:27It has a disinflationary impact because companies were raising prices to pass down the costs.
05:34So things like that, I think there it will come down.
05:38Overall, I'm going to say there are some cross currents here and there.
05:41But overall, all things considered, it is going to have a positive impact on the economy overall.
05:47Thank you so much for your views.
05:48That is Santosh Rao, Head of Research at Manhattan Venture Partners.
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