Morning Brew Daily - Trump Announces 90-Day Tariff Pause & Drones Deliver Your Packages?

Episode Date: April 10, 2025

Episode 558: Neal and Toby recap the markets’ reactions to Trump’s pause on sweeping tariffs for most countries…except for China. Then, Treasury yields are usually a safe haven when the economy is in the dumps…maybe that isn’t the case anymore. Also, this drone startup wants to beat Amazon to your doorstep. Meanwhile, Neal shares his favorite numbers from Japan’s train feat, microplastics, and The Great Gatsby. Finally, what makes the Masters golf tournament quite unique.  00:00 - Uber’s 2025 Lost & Found Index 3:00 - Trump pauses on tariffs 8:00 - Bond market not looking good 12:00 - Look to the sky for drone packages! 18:00 - Japan’s 3D train station 20:00 - Plastics in our brain!? 22:00 - ‘The Great Gatsby’ turns 100 24:30 - The Masters is here Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Checkout TaxAct for more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, Trump paused most tariffs and the S&P 500 had its best day since 2008. Hope you bought the dip. Then what the heck is going on in the bond market that has investors so spooked?

It's Thursday, April 10th. Let's ride. Who among us hasn't left something valuable in an Uber? Maybe it was your phone or AirPods that you're. had to scramble to recover. Others leave a lot weirder things behind. Uber just released

its lost and found index for 2025, which lists the most unique items, riders left in cars. They include a mannequin head with human hair, a chainsaw, a live pet turtle, tan live lobsters, a Viking drinking horn, a taxid

rabbit, and someone's divorce papers. Toby, kind of wish I shared a ride with a person drinking from the Viking horn. I love this report. every single year. It also goes through the most forgetful cities. Surprise, surprise. New York, New York is number one. Also, they kind of note some trends that emerge over the year. One big one was that a lot of people were leaving Nintendo switches behind. They recorded over 70 instances of that. So maybe Nintendo was looking at those figures and saying, we got to update the console because everyone's just

leaving them behind. And then also, here's one for you astrology lovers out there. During Mercury's April 2024, retrograde, lost items did spike. Over 7,000 riders lost items on April 5th alone. So if you are an astrology believer, look no further than Uber's loss and found report to, you know, justify your bullies. Now a word from our sponsored Tax Act. Neil, can I ask a dumb question?

You've never let that stop you before. Fire away. Am I allowed to do my taxes at night? Okay, that is a dumb question. It's just every time I open a W-2 after 8 p.m. It feels like I'm summoning something dark and dangerous. Well, Tax Act is available 24-7, so summon away. It's built for whenever you want to file day, night, 3 a.m. panic session.

Doesn't matter. What if I hit a wall emotionally or numerically? They've still got you. Tax Act's expert assist gives you access to real tax pros who can help with the tricky stuff no matter the time. That actually sounds kind of comforting. Do they make chamomile tea too? That is two strikes, Toby. One more bad question.

You're out of here. Oh, I'm just going to keep swinging. Tax Act makes it easy to file on your own terms. with help when you need it, and peace of mind when you're done. Just don't forget, filed by April 15th at Taxact.com. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars.

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found his universal tariff remote, and hit the pause button yesterday, halting his disruptive trade agenda and giving a shaking global economy a brief moment of respite. Just afternoon, the president announced that reciprocal tariffs on countries who hadn't retaliated against his levies would be paused for 90 days to allow for news.

negotiations. Who did that apply to? Literally every country except China. Under the updated trade plan, tariffs on global imports were lowered to just 10% across the board, while levies on China were raised to 125% effective immediately due to what Trump called a lack of respect that China has shown to the world's markets. Earlier in the day, Beijing said it was hiking its own retaliatory tariffs on the U.S. to 84% from 34%. Despite the still, frosty relationship with China, all three major indexes exploded higher after the announcement. The S&P 500 left by 9% to notch its ninth best day in history. Apple traded like a meme stock and had its best day since 1998, while the magnificent seven added over a trillion dollars

in market cap. Commerce Secretary Howard Ludnik posted a tweet that explained he sat next to Trump as he posted one of the most extraordinary truth posts of his presidency and judging from how the market reacted, Neil, he may have been right. The market did go ballistic. I mean, 24 hours ago, we were sitting here saying that retailers, big shift away from China for their production to Vietnam, Malaysia had backfired spectacularly because now these countries were being hit with tariffs of up to 46 percent in the case of Vietnam. 24 hours later, now that seemed like a much better bet because these tariffs have been mostly removed just 10 percent. And you're seeing that in the share prices of retailers. Nike up 12% Walmart up 11% Lulu Lemon, 16% gap, 19%. The S&P 500's Consumer Discretionary Index

had its largest gain since 2008. So those moves did seem to be okay after all. Another sector I want to point out is airlines. And that's because Delta earlier in the day, as these tariffs were supposedly in effect, set ripped up their full year financial forecast. So they said demand is weak. We have no idea what the heck is going to happen because of these tariffs and its impact on consumer spending a few hours later, its stock rises up 23% because there is a little more clarity, not a ton of clarity at all, but a little more clarity about the future direction of these tariffs. I do just want to dive deeper into these numbers, too. The NASDAQ closed up more than 12%. That was its second best day ever in history. Look at these

magnificent seven numbers. Tesla up 22%. InVIDIA up 18%. Apple up 15%. Meta, 14% all the way down to Alphabet up 10%. you really just saw these massive, massive companies just rocket upwards. And we're talking history here. So I said the second largest, second biggest jump in history. The top three spots belong to one January 3rd, 2001, where the NASDAQ jumped 14%. And then October 13, 2008, the NASDAQ jumped 11%. That's the one in the three spots. In both of those other instances, though, the NASDAQ ended up making a new low, sometimes shortly afterwards. So that is to say that this is not necessarily, saying that we're so back, mainly because there is still some uncertainty that hovers over the market right now, because this is still just a pause, so you never really know what's going to happen, even though for 90 days it looks like there is a bit of a respite. Yeah, you had analysts and economists coming out saying, well, this was very much of relief to markets. The damage is Dun KPMG's chief economist Diane Swank said market relief is a head fake

unless the administration makes a major course correction. uncertainty is its own tax on the economy. Analysts at Deutsche Bank said something very similar. They wrote, the administration is finally signaling responsiveness to the very extreme market conditions. But even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy. There's still huge tariffs on place, by the way, 125% on Chinese imports. This is the largest economy in the world, the U.S., putting a 125% tariff on the second largest economy in the world. Trade is going to come to a halt between these two countries unless a deal is reached. Twenty-five percent on steel aluminum autos and

all goods, not covered by the U.S.-Mexico-Canada trade agreement, 10 percent on nearly all other imports. So there's still very, very heavy tariffs across the board. If you had said that at the beginning of the year that we would have 125 percent tariffs on China, 25 percent tariffs on U.S., on Canada and Mexico, and 10 percent on nearly every single other good, that we would have, that is imported by the United States, you would have said, well, that is a lot of tariffs, and that is what these economists are saying is going to serve as an overhang for the economy going forward. In explaining his reversal on massive tariffs, President Trump pointed to the turmoil in the bond

market specifically, which he said was getting a little queasy. So here's what's been going on over there and why it likely forced his hand. Since last weekend, something very strange and very dangerous has been going on with U.S. Treasury yields. They've been spiking. In fact, the 10 years four-day jump through Wednesday was the biggest since 2008. Remember, soaring yields equates to a bond fire sale because yields run inversely to prices. This dynamic was rattling Wall Street. Investors have always bought American bonds when the global economy gets jittery. Treasuries are the bedrock of global finance and probably the safest asset money can buy. So investors were feeling like they just entered the upside down in stranger things. Why, the sell-off? Well, everyone has their own theory. Some said it was being driven by highly levered hedge fund trades that were being blown up. Others hypothesized that large foreign buyers of treasuries like China and Japan were dumping them in retaliation for tariffs.

And in the most pessimistic of scenarios, some claim that the selling of treasuries reflects a new era where the U.S. isn't considered the safe haven it used to be. Whatever the cause of the bond sell off, it was verging on a full-blown financial crisis that would require an emergency intervention by the Federal Reserve. and that would have been untenable for Trump. So according to multiple reports, the bond plunge, even more so than the stock plunge, led him to the 90-day pause because things were about to start breaking. Let's go big picture here for a second. In the past few decades, the U.S. has boasted just faster growth, more technological advancement, more cheap energy than any other really major economy. So that has caused worldwide investors to flock to, quote, American exceptionalism by buying a lot of its assets. But now suddenly that narrative is shifting a

little bit. The U.S. is just a little less predictable. It's more antagonistic. It's definitely getting more isolated. So foreign investors are looking around saying, huh, it doesn't feel as safe anymore. So there might be some of that coming forward to the front of why this bond market is behaving like it is. Obviously, technical factors probably played some role. You know, hedge funds are these institutions that might have been forced to liquidate some of its holdings because, like, their trades started going south on them. But technical factors can't go as far to explain why, you know, yields were behaving as they were, especially weeks prior to. So a lot of this is tied to, again, I'm still big picture here. U.S. dollar dominance. The dollar has always been the U.S. or not always, but recently it's been the world's reserve currency. And so investors in central banks use dollars to pay for things like imports, repay debt, in emergencies, businesses use it to facilitate cross-border payments, and all of that creates this huge need to hold dollars, which are typically invested in Treasury. So the fact that the dollars, the reserve status, has contributed to U.S. Treasuries being the safe haven asset. So all of these things

with a weakening dollar and, you know, treasury yields behaving so strangely, has really upended so much of the global order, which is why people are pointing to specifically the bond market as an explanation for why Trump instituted this 90-day pause, because it It just is the plumbing of the global financial system. And this is not the first time that a spiking yields or the bond market turmoil had led a world leader to capitulate on their big economic plans. Back in 2022, you might remember the new UK Prime Minister, Liz Trust unveiled this new budget, sweeping tax cuts, a lot of borrowing from the government from the government to pay for that. Government bonds spiked. It was a almost a full-blown financial crisis.

The Bank of England had to step in and she pulled that budget. off the table and then later resigned. So the bond market is extremely powerful. The Bank of England in that case had to intervene and the Federal Reserve might have had to in a few days if things didn't calm down. And, you know, that seems to have forced Trump's hand. Let's move on. It's a bird. It's a plane. No, it's an autonomous aircraft from a company called Zipline teaming up with Walmart to finally solve last mile delivery for good. The idea of drones filling in delivery gaps in distribution networks has long been a pipe dream for companies like Amazon and Walmart. Instead of using big traffic clogging trucks or people out on foot, drones can cover big chunks

of a metro area with minimal cost and footprint. It's the thesis behind Zipline and airborne delivery service that began rolling out in Dallas Fort Worth area this week. Zipline drones, which is actually a term they avoid preferring the name aircraft instead, come in two forms. One can hover in place using five propellers. and take off vertically with a range of about 10 miles. When it arrives somewhere, a little baby craft called a zip drops down a tether to deliver your goods. The other craft looks like a glider go up to 120 miles

and deliver its payload via parachute. The applications go beyond getting your toilet paper each month. Zipline has already worked to deliver life-saving medicines in places like Rwanda in Kenya, but it's also cutting its teeth in the U.S. market at a Walmart superstore in Mesquite, Texas. You know, there's always been this idea of drones stepping into augment delivery networks, but Zipline thinks it's finally cracked the code.

Yeah, some in the industry are saying that this is a logistics revolution that we haven't seen in many years. And Zipline is at the forefront, which is remarkable because it's competing against huge players like Amazon, who's been trying to get drone delivery going for a decade in Alphabet's wing that's under Google, so they have as much money in the world as they want. But Zipline is kind of this underdog that has come to be a leader. Fascinating company, they first started in Rwanda in 2016 delivering vaccines and other medical supplies over this vast expanse of Africa. And that's where they really cut their teeth. A 2023 study from the Wharton School found that Zipline's blood delivery service reduced deaths from postpartum hemorrhage by 51%.

So, you know, in an area where delivery via road is not feasible, you know, these drones have. been able to step in very successfully. And now they're going to an area where delivery on roads are feasible. And we'll see how many people start ordering via drones in Texas. And everything about Zipline is very automatic. They have so many sensors on board. One of them is they collect air through tubes to figure out if there's bad weather approaching. They will then use that data to reroute themselves to avoid the weather.

Also, just wind speed and direction is calculated as well. Once they're in the air, there's zipline operators like to say, we don't actually know which way they're going to fly because once they're airborne, it's up to them to kind of chart their path forward. So it is one of those companies that just figured, just has been working on this for over a decade at this point, and they have kind of the delivery numbers to back it up.

You look at a company like Amazon who's been, you know, flirting with drones. Obviously, they'd like it. They do about, they've done about 10,000 deliveries with them. Alphabet backed wing is another startup that I've done about half a million drone deliveries, which sounds like a lot. Zipline, on the other hand, is now well into one and a half million deliveries

over their lifetime. So they're clearly kind of the leader in the clubhouse when it comes to this new technology. And a lot of people are very bullish on this from Walmart, who's rolling out this partnership to customers like sweet green Chipotle. And we were kind of laughing before the show. We realized that the

two best applications for drone delivery service is one, life-saving medicine in places that are hard to reach, and two, getting you your burrito on time without leaving at your house. So the Zipland is kind of running the gamut of these applications. Up next, I'm going to hand it over to Neil for some Neal's numbers. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill three burner gas grill, or get $50 off a select Weber Spirit grill and bring

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It matters where you stay. Hilton for the stay. Welcome to Neal's numbers, the segment where I share three stats from the week's news that will hopefully take your mind off of tariffs for just a few minutes. My first number is under six hours, which is how long it took one city in Japan to build an entirely new train station.

And it's not just any train station. It's the world's first 3D, printed train station building, the railway operators say. It all went down a few weeks ago in the quiet seaside town of Arita. One night, the last train left the station at 1157 p.m. And that's when they got to work. Employees of the construction firm's serendix took the pre-pinted parts, which had been fabricated elsewhere and shipped in four parts,

and pieced them together using help from a large crane. By 5.45 a.m., when the first train arrived, they were done with a new station, which measures just over 100 feet. Well, mostly done. They still haven't furnished the interior with ticket machines and card readers, so travelers won't be able to use it until July. Still, the six-hour 3D printed train station could be a blueprint for how Japan and the rest of the world maintains railway infrastructure on the cheap,

and it's completely mind-blowing for those of us who watch San Francisco take three years to install a public bathroom. I mean, the headline here is great. Like, Japan builds a 3D station in just six hours before the next train comes. it's probably more of a shelter than an actual station. This thing is not a big building by any means, but also you don't need a big building to serve a relatively sparsely populated rail line. And it is plugging in a big need that Japan has right now. We've talked a lot about how Japan has this aging population.

Their workforce is shrinking. So a lot of it becomes harder to maintain railway infrastructure when you just don't have a worker. So if you can figure out a way to make these improvements quicker and with less manpower than even if it does look like a shelter, they're going to start pursuing this. So it is cool, but I just caution the word. It's more of a hut. Yeah, it's more of a hut.

But that's fine. Yeah, this train station serves 500 riders a day. But you do need to maintain it on the cheap. And maybe these 3D printed prefabricated huts or stations, if you will, will do just that. For my next number and warning, this is not going to make you feel great. A study from researchers in a New Mexico lab found that the median concentration of microplastics in a human brain was about seven grams of plastic per brain, or in other words, as much plastic as

in five water bottle caps or a disposable spoon. Some caveats, the researchers looked at 24 human brains from 2024, and there is a high degree of uncertainty because of the methods used. Still, it was alarming to the scientists nonetheless. Toxicologist Matthew Campin, who leads the lab, told the New York Times, I don't think I've talked to a single person who said, Fantastic, love to know that there's all this plastic in my brain. Campin and his team are on a mission to discover to what extent microplastics have infiltrated humans because it is rising at a breathtaking rate. The human brain samples from 2024 had almost 50% more microplastics than brain samples from 2016.

And it adds to other recent studies that have found microplastics in human testes, placenta, blood, semen, breast milk, and a baby's first stool. The health implications of microplastics are not yet well understood, but a first step to getting to that answer is just simply measuring the amount of plastic in the body. And it's an astonishing amount. It is an astonishing amount. I don't know about you, Neil, but I'm two bottle caps worth of plastic and this old noggin. You might have five, but I'm rocking it too. But one of the big findings from this study was that these fragments, these plastic that make it into your brain are so, so small, no more than 200 nanometers long, which is 400.

times less than the width of a human hair. So a lot of times you think about fresh plastic entering your body, which is like if you have a plastic cutting board, these big shards might come off if you're drinking from a water bottle. But those plastic pieces that are coming off, I say pieces, but they are still very small, are still way too big to pass through the blood barrier of your brain. But these 200 nanometer long ones,

they can get in much easier. They also are usually older plastics that have been eroded over time from, you know, like the 60s, and 80s. Polyethylene. Yeah, polyethylene, which was kind of came around in the 60s. And so you are seeing some of these studies, why they're so important, is just finding instruments sensitive enough to actually detect these really small pieces of plastic. Yeah, all that being said, not a great vibe to know you got a whole spork, you know, floating around in your noggin every day. Okay, time for a palate cleanser. My final number is 100, which is how old

the Great Gatsby is today. F. Scott Fitzgerald's masterful exploration of the American Dream was published exactly one century ago, April 10th, 1925, and has endured on high school reading lists and in culture till this day. Even though many of you read it

in your younger and more vulnerable years, the main characters will be forever etched in your memory. Nick Carraway, Daisy Buchanan, Jay Gatsby himself, and it feels like we're all still being watched by the blue and gigantic eyes of Dr. T. J. Egelberg. Lots of celebrations are planned, including the Empire State Building being lit green tomorrow night to reference the Great Gatsby's Green Light, which no one still knows how to interpret 100 years later.

Toby, I'm planning on saying happy birthday by buying two eggs because that's all I can't afford. How are you celebrating? I think I'm celebrating by pouring one out for F. Scott Fitzgerald because, you know, the famous story is that this book was actually a commercial disappointment. It didn't actually sell very well in the first year, let alone in F. Scott Fitzgerald. Fitzgerald's lifetime. So he actually died kind of thinking it was a bit of a failure. Today it's sold over, you know, 25 million copies. He basically got Van Goghut a little bit. I'm also just happy it's called the Great Gatsby because the lower behind it is some other possibilities where under the red, white, and blue among the ash heaps and millionaires and

the high bouncing lover. Those last two actually... Among the ash heaps and billionaires goes kind of hard. A little bit, yeah. But yeah, I think it's it is just one of those traditional American stories. that has endured that also just did not get off to a good start at all. And do you know why it actually did gain widespread popularity? No. It's the military kind of printed hundreds of thousands, millions of free paperbacks for soldiers to read, you know, as World War II was going on.

So it is like it got, I mean, it's a marketing story. Like distribution is king, but also just shows you how stories can have, mean, mean, people are literally reading this book before storming the beach. of Normandy, so it just shows how certain stories can just take a hold with our culture and endure for an entire century later. Finally, Neil, if it looks like I have a little tear in my eye, it's because I do from joy, because the best sporting event of the year is kicking off this morning, the Masters. Now, I love it because of the history and tradition and course design and competitiveness and announcers and theme song and aura and, okay, I'll stop. But even if you're

not a golf fan, this tournament is one that is bigger than the game itself. It is a perfectly manicured, hyper-exclusive ecosystem where cell phones are banned. Fans are politely called patrons, and the back nine is called the second nine. The idiosyncancies surrounding Augusta National don't stop on the fairways themselves, but extend to the food menu, where you can still get a pimento cheese sandwich for just $1.50, with the last price rise coming back in 2002. They extend to the merch tent, which is rumored to do $1 million an hour in sales and leave growing men scrambling, over garden gnomes. The exclusivity extends all the way up to the broadcast network, CBS and ESPN, who show up every year to bring you every shot without paying any rights fees. So yes, Neil,

I am crying over here, tears of happiness, because it's finally that time of year again, a tradition, unlike any other. It truly is, and I'm so excited. And so are many people who got the chance to go to Augusta, Georgia. The Airbnb market is insane right now. Sixty-four, 16,400 nights have been booked this week at Airbnb and VRBO, 11% higher than Masters Week in 2024 represents $8.5 million in booked revenue. There's a joke that goes around these neighborhoods saying that a family, you can rent your home during Masters Week and pay for that this year's mortgage. That airport is also overrun with private jets. Everyone wants a piece of this golf course and this tournament and this event because of the mystique around it. And maybe one day we'll go.

deal is just one of the more, again, idiosyncratic parts of this whole thing. Augusta is one of the Masters is one of the most watched golfing events of the year. So estimates say that Augusta is foregoing $125 million in a TV money every year under a standard media deal. But the reason why they give it away for free is because they want complete creative control over how the broadcast is presented to people, which is why you hear very little sponsorship ad reads, usually at a PGA tournament. you're kind of slam down the throat with commercials and ad reads.

They want to keep commercial load to a minimum. They don't want the announcers referencing sponsors. They want to create this very curated product. So they give it away for free. That being said, Augusta's probably going to clear about $150 million this weekend in gate merch and revenue and concession. So they're not exactly pinching pennies here, but they are leaving some money on the table. Yeah, it's a very interesting agreement with CBS and ESPN where they just say, like, let's handshake.

You don't have to pay us, but we do have full editorial control. Final thing, Scotty Schaeffler, who won last year, gets to curate the Champions Dinner, which takes place Tuesday night and he gets to, you know, make up a menu. And I want to hear you grade this. He cheeseburger sliders, firecracker, shrimp, and meatball and ravioli bites for appetizers, a Texas-style chili for the first course, wood-fired cowboy, ribeye or blackened redfish for the main course. And then for dessert, a warm chocolate chip skillet cookie. seems basic, first of all, but also seems delicious.

It does seem delicious. I will say the chocolate chip skillet cookie, that is an elite dessert choice right there. Absolutely delicious. The rest, though, a little too heavy for my blood before a competitive event. All right, let's wrap it up there. Thanks so much for starting your morning with us

and have a wonderful Thursday. For any questions, comments, or feedback, please send an email to Morning Brew Daily at MorningBrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Loo is our personal. producer. Our associate producers are

Olivia Graham and Olivia Lake. Garrapec is on audio. Hair and makeup beats on boats against the current born back ceaselessly into the past. Devin Emery is our president and our show is a production of Morning Brew. Great show day, Neil. Let's run it back tomorrow. Relax and let Ralph's delivery

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