Tariffs Return & Silicon Valley’s AI Debate

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**Ann Berry** (0:26)
Cracker Barrel, a CEO shake up. Just as the turnaround shows signs of working, we have the latest. Jensen Huang, the impact of the Nvidia CEO's first ex-post is rippling across Silicon Valley. We break down the debate over access to AI models. And tariffs, trade tensions, they're back, they're heating up again. Can this market absorb yet another stress test? For Monday July 27th, it's Brew Markets Daily, and I'm Ann Berry.
Well, market details to come, but first tariffs. Back in the headlines with a new wave of levies fresh from the White House. That's with the expiration on Friday of a 10% baseline tariff that provided a stopgap after the Supreme Court ruled in February that certain Liberation Day tariffs were illegal. Well, the replacement tariffs impact imports from 60 trading partners and hit at a level of up to 12.5%.
Small businesses have already sued to halt the new tariffs, including Learning Resources, that's the family-owned educational toy company that took the last suit all the way to a Supreme Court victory. But the volume on tariffs even outside this news has been turning way on up in recent weeks. President Trump wrote in a post on Truth Social that a quote substantial tariff could be placed on the European Union at the earliest possible moment. That's after the EU fined Google 890 million euros, roughly a billion dollars, on Thursday for self-preferencing its own services, such as travel and local listings, over competitors when it came to Google search results, as well as for anti-steering restrictions on Google Play, which prevented app developers from directing users to cheaper purchasing options. Google, by the way, has been given 60 days to adjust its practices or face additional periodic fines.
Then, there's a new 50% tariff due to take effect on August 19th, and that's on a range of goods imported from Canada, from hockey sticks to commercial cement. And the reason for this is President Trump's concern over unequal treatment of American cars, dairy products and alcohol, all in all an escalation of tension with America's second biggest trading partner. Well, so far, the markets have not had the volatile reaction that we saw last year when trade policy unfolded fast and furious. I remember we were always rushing to catch up. But this is a moment we are watching. The outcome of the war in Iran remains uncertain. The AI trade is having to prove itself this earning season. Just take a look at today's chip sell-off. And there are whispers, whispers, faint whispers of a rate hike in September. So, can the market take multiple stresses at this moment of historically high valuations? It's the key question everyone's asking. We're going to keep on watching.
Well, on now to other headlines from the day's trading session. Kicking things off with the Hollywood mega merger that is getting ever more expensive.

**John Carteau** (3:23)
That's right. Paramount has officially delayed its proposed $110 billion takeover of Warner Brothers Discovery. That's after a coalition of 12 states sued to block the deal on antitrust grounds. The companies have agreed to pause the merger until the lawsuit is resolved or until June of next year, whichever comes first.

**Ann Berry** (3:40)
Well, that delay does come with a price tag. It's pretty hefty. Paramount had agreed to pay Warner Brothers Discovery shareholders a $0.25 per share quarterly ticking fee. And what that ticking fee means is if the deal isn't completed by the end of this September, then that extra payment gets going on the clock. So if the merger drags out until next June, we're talking about roughly $1.7 billion being added to the acquisition cost. Well, shares of both Paramount and Warner Brothers Discovery down round about 1% today.

**John Carteau** (4:10)
Elsewhere in media, NBCUniversal struck a multi-year distribution deal with YouTube that will bring Peacock's full line up from NFL games to The Real Housewives to YouTube premium subscribers. The deal dramatically expands Peacock's reach, putting its content in front of YouTube's 125 million premium members, far larger than Peacock's 48 million paying subscribers.

**Ann Berry** (4:31)
The timing is notable. It struck us. And that's because Comcast is preparing to spin off NBCUniversal, which makes partnerships like this one even more important as a way to strengthen Peacock's position as the streaming landscape continues to evolve. Shares of Comcast trading around 3% higher today. YouTube parent alphabet up 2% on the news.