Morning Brew Daily
Markets Rally On US-China Deal & Big Pharma Grapples with Price Cuts?
Tue, 13 May 2025
Episode 581: Neal and Toby recap the aftermath of the US-China trade deal that essentially de-escalates the tariff volley between each superpower. Then, Trump vows to slash drug prices for Americans, which has Pharma companies worried about their bottomline. Also, the President takes his first foreign trip of the second term to the Gulf states to close some deals…hopefully. Meanwhile, Toby dives into the trend of remote workers getting their ish done but maybe at a cost to mental health? 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. Visit endthecampaign.com for more Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - AMC 50% off on Wednesdays 03:10 - Markets React to China-US Deal 07:10 - American Drug Prices Drop? 12:10 - Trump Visit into the Gulf 17:45 - Remote Employees Are Stressed 21:00 - Headlines
Chapter 1: What is the impact of the US-China trade deal?
The promotion, which is available to members of its loyalty program, AMC Stubs, kicks off on July 9th and means Wednesday will join Tuesday as the two weeknights where you can score discounted tickets at AMCs. Toby, half off enough to get you out on a weeknight?
I think so. Actually, I love the idea of a of a Wednesday movie because I also love the idea of a solo movie night. I've done one of those recently and it just I don't know. It's just a time for yourself. But I think AMC needs this. Their first quarter admissions revenue fell almost. 11% from a year earlier. Outside the pandemic, it was their worst first three months of the year since 1996.
So they're pulling all the levers that they can to try to get people to come out. That being said, AMCCO Adam Aran said that their first quarter was an anomaly and they're already seeing people start to come back to the movies. So maybe you just need a lot of teenagers who love screaming chicken jockey rather than any big promotion to bring people back to the theaters.
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Chapter 2: How will Trump's executive order affect drug prices?
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Need to find me a date that understands that. Go to endthecampaign.com and meet customers where they are, not where your calendar thinks they should be. It was Christmas in May on Wall Street yesterday after the U.S. and China announced a major de-escalation in a trade war that threatened to topple global commerce. Following a weekend meeting that could not have been an email, The U.S.
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Chapter 3: What are the implications of Trump's Gulf visit?
said it would lower tariffs on China from 145% to 30%, while China will lower tariffs on the U.S. from 125% to 10%. Those new rates will be in effect for a 90-day period so that talks can continue. And with that, the sell America trade that had been running since Liberation Day turned into buy America once again. The S&P 500 popped over 3%.
The Nasdaq officially entered a bull market and the Dow gained one thousand one hundred points while traders piled into the dollar and oil and out of gold, a safe haven. The ramping down of tariffs signaled to investors that for now, the worst case economic scenario was likely averted and the scale of the tariff reduction was even more than they had expected. The general feeling among investors.
economists was, we're not sure why this trade war was launched in the first place or what it has accomplished besides sowing chaos, but we are glad to be waking up from April's nightmare. Over in China, they were almost as ecstatic as on Wall Street, touting the deal as a 12 rounds with the world's top economy in the trade ring and held it to a split decision.
What happens next is the big question mark hanging over all of this. The U.S. still has 30 percent tariffs on Chinese goods, eight times higher than when Trump took office. And it's unclear what it would take to lower those even further. For now, though, a big sigh of relief for businesses across the Pacific.
Yeah, still the sigh of relief is coming as the U.S. tariff rate is now just 17.8%, the highest since 1934. So people are celebrating returning to literal Smoot-Hawley level tariffs right now. And the big question was, was this even really hurting China beforehand? A little bit. Chinese shipments of goods to the U.S. dropped 21% from a year earlier.
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Chapter 4: Are remote employees facing increased stress?
in as a result of the increased tariffs but then you look at where beijing was sending other goods and you see that their exports to the block of south asia southeast asian nations surged 21 so 21 lower to the united states 21 higher maybe they were finding demand elsewhere obviously the u.s is their biggest trade partner so it's not a like for like sort of thing that
all that being said, though, this does seem like a dream scenario because just a few days ago, Trump was suggesting that 80% tariffs was where things were going to normalize. 30% is obviously a lot lower than that. So all things being considered, you could see why it was a very green day on Wall Street yesterday.
Yeah, let's talk about that. I mean, stocks that were exposed most to China and that had been hurt since April 2nd shot up yesterday. Apple, which was the face of the trade war because they make a lot of their iPhones and other products in China, shot up more than 6%, which drags all of the indexes bigger because Apple is the most valuable company in the world.
Williams, Sonoma, Estee Lauder, Best Buy, Lululemon, Nike were all up at least 7% as traders sort of breathed that sigh of relief and said, wow, all these companies that we had knocked because they were so exposed to China are now getting, you know, we're sending them back up because things seem to be calming down.
Chapter 5: What are the latest headlines in finance?
Yeah, the dollar and bond yields also rose as well. Now there's this expectation that the U.S. will grow faster once again now that these trade tensions have died. And if you look at the odds of a recession, too, on Polymarket, on Kalshi, those dipped below 40% for the first time since back in April.
So it really is just, I mean, sigh of relief is the word that you keep hearing here because it did come out a little bit softer than people expected. Like, This level of thawing was not necessarily something that people thought was going to happen when Scott Besant entered Geneva to do those talks over the weekend. So a lot of just people going, whew, is not the worst case scenario.
We're in a manageable position now.
We'll be right back. probability that there still will be inflation and price hikes because there's going to be a surge in shipping from China to the US. We saw a huge amount of front-loading in March and April to get ahead of Liberation Day tariffs. Now tariffs are still high. There's this 90-day pause, but they could go back up. We don't know
So you're going to see all of these containers, there are thousands and thousands of containers in Shanghai, in Shenzhen, waiting to come over to the United States that they had just not come over because of these massive tariffs.
Now there's going to be a huge spree and all that demand could drive up freight rates, which could lead to higher prices on shelves this summer and back to school for back to school shopping and holidays. So you see retailers being like, OK, this is great. 30% is still, you know, a big chunk of change that we need to pay.
and also we're going to have to pay so much more in freight rates, at least as this huge shipping surge comes across the Pacific over the next days and weeks.
Drug pricing has long been a controversial aspect of the American healthcare system, one that President Trump is targeting with an equally controversial policy. Yesterday, he signed an executive order that, amongst other things, brings back the most favored nation policy when it comes to drug pricing. Basically what we're doing, Trump said to the press on Monday,
We will get whoever is paying the lowest price, and that's the price we're going to get. The proposed policy gives pharmaceutical companies price targets to reach over the next 30 days, with the goal of ending what Trump describes as systemic overcharging of Americans. The data does back up what he's saying. The U.S.
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