Tariffs, Prediction Markets, and the AI Race: Live from CAO Summit

Kara Swisher and Scott Galloway recorded this episode live at the CAO Summit in Los Angeles, a venue Swisher noted as the site of her last interview with Steve Jobs and the moment she introduced a young Mark Zuckerberg to him. The setting was fitting for a wide-ranging conversation covering Trump's revived tariffs, the rise of prediction markets, AI companies pouring money into politics, and the accelerating competition with China.

Trump's Tariffs Return with a Vengeance

Donald Trump imposed a 50% tariff on Canadian goods including alcohol, milk, and hockey sticks, justifying the move through an unused provision of the 1930 Smoot-Hawley Act. Galloway called this "an elegant way to reduce the prosperity of Americans," noting that roughly 90% of tariff costs are borne by U.S. consumers. He estimated the tariffs would cost the average household about $1,200.

The economic logic, Galloway argued, is perverse. The U.S. sells high-margin products like iPhones and financial services into Canada, while Canada sells commodities like timber and oil. "For every dollar we ship over, we get about 20%," he said, referring to shareholder value creation. "For every dollar they sell their stuff, they're getting two or three." The asymmetry favors America, making tariffs on Canada economically irrational.