The Tariff Buzzsaw Is Coming For Hardcore Gamers

SPEAKER_2 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy, this has come up on the podcast, but one of the things with the tariffs is I still think for the most part, people are talking about them from a fiscal standpoint, which is, okay, prices are gonna go up. What does that do to inflation? What does that do to sales? What does that do to employment? And less about the potential for actual economic chaos, because something isn't getting to somewhere else that it needs to be.

Tracy Alloway (0:49)

You wanna go more micro instead of the macro?

Joe Weisenthal (0:51)

Yeah, okay, I'm good with that. We can talk to economists all day, and they all have their estimates, et cetera, but there's a limit to...

Tracy Alloway (0:59)

I think we should. So one of the things we obviously learn during the pandemic is real things exist in the world, and they have to come from some place where they're made and be shipped over, and if there are disruptions, then those can snowball in quite a big way. And there's one product in particular that I think kind of embodies a lot of what we talk about when it comes to tariffs and manufacturing and disruptions, and that's computers, right?

Joe Weisenthal (1:26)

Totally.

Tracy Alloway (1:27)

And if you look at one of those supply chain graphics for computers, it's just a bunch of lines crisscrossing the world, basically, like the raw materials coming from Africa or South America going over to China, and then chips being made in Taiwan, and then all of those components heading over to the US where they're put together. It is extremely complex. And again, like, you look at it on a map, it just looks like a spiderweb.

Joe Weisenthal (1:53)

It's a total spiderweb, because then the chips get made, and then they go to Malaysia for packaging, and then they go back to somewhere else for...

Tracy Alloway (2:00)

No, I skipped a bunch of steps.

Joe Weisenthal (2:02)

I think a lot of people like this idea of reshoring more tech. And that's obvious. We saw it during the Biden administration, various efforts on chips, et cetera. But it certainly can't be done overnight, certainly. And again, because, as you say, it's this such intense spiderweb, it's not even as simple as like, oh, let's move it from China to the US or something like that. It's just so many different links and parts of what's assembly and packaging and components and all that, et cetera, that you're going to announce a new set of tariffs one day, and then industry will just digest those tariffs and then...

Tracy Alloway (2:38)

Open up a US factory the next day.

Joe Weisenthal (2:40)

Or put a little markup on it. It's like, okay, here's the tariff rate, it's 25 percent. Add 25 percent to what we sell, to the selling price. The idea that it could be that simple is unrealistic.

Tracy Alloway (2:53)

We should talk about it. Let's get granular.

Joe Weisenthal (2:56)

I am very excited. We are going to be speaking with Steve Burke. He's the editor-in-chief of a publication, YouTube channel, et cetera, called Gamers Nexus. They do a lot of technical coverage of computer hardware, et cetera, which is a world that I basically know nothing about. I don't know much about gaming. I know that gamers, you know, they buy their own chairs and they buy their own speakers and they buy, you know, decked out cooling towers so that they can play, you know, super high speed. But I really don't know much about it. But Steve and his team at Gamers Nexus, about a week ago, actually two weeks ago, I think it was April 14th, put out an insane documentary, three hour long documentary on YouTube called The Death of Affordable Computing and the Tariff's Impact on the World of Gaming Hardware. It's a truly extraordinary piece of journalism and we wanted to talk to the creator behind it and what he did and what he learned. So, Steve Burke, thank you so much for coming on Odd Lots.

Steve Burke (3:54)

Oh, thanks for having me. Yeah, I'm excited.

Joe Weisenthal (3:57)

When Tracy and I do an episode of the podcast, we talk about tariffs, we're worried that it's going to be out of date and irrelevant by the very next day. That's just like a 40-minute conversation sometimes with like one economist. Just tell us, how did you quickly within basically 12 days of, quote, liberation day, unquote, put together and what did you put together this three-hour documentary about this world of computer hardware, gaming hardware? What was this project?