Article Summary
Bill George, former Medtronic CEO and board member of several prominent companies, shared his insights on the recent US-China trade agreement on the Opening Bell podcast. George believes that CEOs should approach this truce with caution and use this opportunity to invest and build their companies, but also be mindful of the uncertainty and potential for new tariffs. He emphasizes the importance of a balanced supply chain and encourages companies to have a global perspective when it comes to trade.
What This Means for You
- Take advantage of the current trade truce to invest in your business, but be prepared for potential future tariffs and uncertainty.
- Consider diversifying your supply chain and aim for balance, instead of relying too heavily on one country.
- Adopt a global perspective when it comes to trade and strive to understand the complexities of the global market.
- Stay informed about key terms and concepts related to trade, such as decoupling and supply chain diversification.
Original Post
0:04 spk_0 Welcome to a new episode of the Opening Bell podcast. I’m Yahoo Finance executive editor Brian Sai. Like I always say, this is the podcast that will make you a smarter investor, period. And of course, opening bell sponsored by our friends at Vanguard. I would love to, uh, bring in our featured guest here. No strangers to opening bell in Yahoo Finance more broadly. That is former Medtronic CO Bill George. Uh, of course, Bill, uh, successfully led, uh, Medtronic for 10 years as CEO, was on the Starbucks board, Exxon Mobil board, Goldman Sachs board. Bill, did I leave anything out?
0:33 spk_1 Uh, uh, uh, well, yeah, it’s actually not Starbucks, it was Target, Target and, and, uh, Goldman Sachs. OK,
0:40 spk_0 there, thanks for correcting me, because during the break we were talking about Starbucks, so I think it was still, uh, stuck in my head, but nonetheless, uh, good to see you as always and look, um.I call you the CEO whisper. I mean, this is what you do. You know how these CEOs think with good reason. Now we have a trade agreement between the US and China. It’s 90 days. At the
0:59 spk_1 time of
0:59 spk_0 this taping, it’s in 89 days. What should CEOs be doing in this moment?
1:06 spk_1 CEOs are relieved, I can tell you that, that what I would call a truce, I wouldn’t call it a trade agreement. I would call it a truce, uh, that we’re not gonna continue this ridiculous tariffs, 145% on China and they retaliate 125%. That can’t work.Uh, but I think it’s still a wait and see. Are things go stable down. You can’t have new news every day and, uh, that much uncertainty if people really want to invest. I think CEOs are eager to invest. I think the market is eager to see them invest too. I think the response to the market, uh, since then would be clear indication of, let’s stop this, uh, foolishness and let’s get back to building the country.
1:46 spk_0 If you’re a CEO in this environment, Bill, and youLet’s say 2 months ago, you start to move your supply chain out of China. Now it’s 25% in India, and now it’s in Vietnam, and you’ve moved a little bit to Malaysia. What what do you do? Do you move it back to China?
2:04 spk_1 No, I’m a believer in balance supply chains. I think you shouldn’t have everything in China. I, I worry about Tim Cook, Apple having everything there on the iPhones. And I think it’s good to have some in Vietnam or Malaysia or wherever you want to go. And also having a supply chain in the US. I I’ve always felt that, uh, where you don’t have all the logistical issues that you would have on shipping from Asia.
Key Terms
- Trade agreement
- Truce
- Balanced supply chain
- Decoupling
- Global market perspective
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