Sage Chandler  

Good afternoon, everybody. Thank you for coming to our trade panel. It's a discussion topic that's been in the news more than ever in my trade policy. Life. We've got a star studded cast here today, briefly introduced to you Everett Eissenstat, the VP of global public policy for GM. Next to Everett is Deena Ghazarian. She is the CEO of a fabulous startup company of ours called Austere. Scotty Greenwood. Next Scotty is the CEO of the Canadian American Business Council and also with Crestview strategies. And then Vanessa Stiffler-Claus who's the Vice President of international policy and strategy with john deere. Trade has been really touching every segment of our economy and our industries. Just last year, I think was the first time we had john deere. At the show. This year, we had an influx, even more farmer, farmers and farm tech. We did a trade panel on farm tech just a couple days ago. And we're hearing about it all over the show all over the news. It's International. It's not just the US. So I think that we'll just start off I'll ask each of the panelists just described their jobs a little bit what they do, and what it is their company does and how trade,how they do trade within their company. And then we'll get into some more of the meat. But I think it would be helpful for you to understand what their roles are within their respective companies, so ever.


Everett Eissenstat  

Right? Well, thank you, sage. And thanks, everybody for being here this afternoon. This is really a impressive group that my first time at CES and sages told me repeatedly, you've got to come. It's incredible. And it really is. There's just so much going on and a lot of really interesting things in relationships. So I'm the Senior Vice President for global public policy. I've been doing trade on and off for many years. And, as you know, Jim's a homegrown company, General Motors based in Detroit, that's where our home is. We do a lot of work in Michigan, Ohio across the United States. But of course, we're also a global company. We have over 180,000 employees around the globe. six continents speaking over 70 languages. Frequently, when we do our all people meetings, we literally start every day with good morning, good afternoon, good night, depending on where you are, because we want everybody to know that we respect that they are across all time zones, and that we are all one team. But as the senior vice president for global public policy, I manage both a international trade portfolio, but also the international regulatory issues. And I think one of the things we've seen at GM and just in trade generally is that while will used to be very discreet, where you could separate trade, from international regulations, and maybe even labor, environment, all those issues, it's much harder to do that today than it used to be. And so really, almost anything we do if you if you peer into it a little deeply, you'll find it does have international importation. So it's part of my everyday work and really enjoy it. Excited to be here, the panelists and have a chance to discuss the topic and hear about your work as well. Right.


Deena Ghazarian  

Hi, everybody. I'm Deena Ghazarian. I'm the CEO of a startup called us Dear. And though I might be a startup, I've actually been coming to see us for almost 20 years and been in the industry for a very long time. And austere is a home theater accessories company. It's about a little over a year old. So when the idea of this company started, there was not even a trade issue that was on my forefront. By the time and got into the middle of this, my entire catalog of assortment of product was impacted by the tariffs. So as the CEO and leader of the company, though, we are trying to bring this great product to market and work with the retail partners globally. And having a brand that's successful and profitable for them as they attach it to all their video or any other screen device. I'm as the leader struggling and working very hard to take and leverage how we're going to continue to build the business and grow while you have different and political issues such as tariffs and or the penalties that are involved with those tariffs. As I'm trying to grow a business and working through that and making decisions for the business unfortunately, that really caused A lot of disruption and change versus me being focused on innovation and growth.


Scotty Greenwood  

Good afternoon, everybody. Thank you so much Sage for the invitation to be here. It's my first year here. And I'm really excited. So I'm with Crestviewi strategy, which is a consultancy and Public Affairs and campaigns. It started in Canada. I opened up the US business a few months ago. And we also opened up a business in the UK. And what Crestview does is help private sector entities, cope with government engage with government and never would have thought that trade policy would be at the forefront of what all of our clients are looking for. But it really is. And so, that's that's that hat. I also, as Sage mentioned, run something called the American Business Council, which is based in Washington and Ottawa. And the Canadian American Business Council was really born when the North American Free Trade Agreement was being negotiated and the Canadian embassy and why Washington at the time thought, you know, we hear a lot of naysayers for trade where the champions and so they thought they needed to create a voice that would really be a cheerleader for free trade. And so I've been involved with the American Business Council since 2001. When I came out of government, and for a while there, I would say we were sort of Canada famous and us obscure. And then the 2016 election happened, trade, trade policy disruption, confusion, anxiety came to the forefront and the mission of the Canadian American Business Council became came to the forefront and so we've been working really hard on the successor to the NAFTA and what it means and and and it's sort of like we're relevant now, but for not a very good reason, if I can say that, but really happy to be here and having this conversation.


Vanessa Stiffler-Claus  

Good afternoon, everybody. I'm Vanessa Stiffler with john deere and As Sage mentioned, this is the second year that john deere is at CES. And, you know, I walk through the exhibit halls, there's all this glittering tech stuff. And I don't think a lot of people say why is john deere here. And I hope that after we have this discussion, people will be more clear to everybody why we in fact, technology innovation are pillars for our business as well. But nonetheless, as a company, it's 183 years old. We've spent many, many, many, many years growing globally and serving customers around the world and we manufacture in more than 30 countries. So we like GM are also starting all of our conference calls with Good morning. Good afternoon, good evening. And we are very worried and engaged in a lot of these this trade mitigation and the trade dispute that's going on right now in the United States, but also in the perspective side, handling trade opportunities and agreements around the world representing countries where we do manufacture. My team is based globally, I direct our international policy and strategy which means all the non US Government Affairs that we do as well as the US bilateral relationships. So we've got people in all of our key markets where we manufacture around the world. And we're trying to navigate these these volatile times while we also continue doing our day jobs. For those of us who are in public affairs and government relations, trade has always been important for us, but it hadn't got the attention, I think of the business community and the business leaders as much as it has. So it's been a bit of a blessing in that sense is that our business leaders certainly recognize the value in the impact of engaging on public policy particularly that relates to creating greater and more open markets for the company. But it's, it has certainly suck the water the oxygen out of the room for other opportunities and engagement in the last three to four years. 


Sage Chandler  

Do they ask you why you haven't fixed Washington yet? Or why is the swamp not drained? Yes.


Vanessa Stiffler-Claus  

You know, coming here yesterday, leaving Washington was a bit of a relief. You know, you get on the plane despite our snow storm we had in Washington this week. I made it out to Las Vegas, and it is nice to sort of get away from it.


Scotty Greenwood  

I have to, I have to say Vanessa's the only one that walks onto the floor. And you hear john deere Green playing, you know, suddenly it's what the music swells. It's pretty cool.


Sage Chandler  

Right? So I just wanted to hear from each of you as well how sort of broadly speaking, a trade dispute impacts your business models. I mean, there's many different ways. So it's it's a, it's a very broad question, but sort of top line. What is it about a china trade war or any problem with trade and being able to move your goods across the border easily? What is it that that is most difficult for your company? I think I'll start with Deena and because from our experience, we have about 2300 member companies. And from where I sit as the VP of trade for this trade association. It's our small and startup companies that we hear about getting hurt quick, so they're really the front line and then it's sort of a trickle up, if you will, to the mid sized companies and the larger companies and eventually the consumer, but it's usually the small companies. That start to struggle the fastest we'll hear from the universe.


Deena Ghazarian  

So thanks he came out for CEO of a company when you think about starting a company and the concept of it and what you want to bring and how you want to make a difference, thinking that tariffs would take up more than half of my time and thought process on how I'm going to work with it and or make it as part of something that we kind of have to deal with every day is not something I would have ever put money down on a roulette table in bed on I guess. So we're going to use a Vegas analogy. So I guess what's very interesting about the process and the way that the different lists came out for me and how I've kind of learned how to work through this since we started being a home theater accessories company and being that accessories. Every single one of the skews that I make just to kind of give a background where cable provider home theater being the biggest focus for us, so a cable provider so your HDMI, any of your audio cables to search protection and power and as well as clean. And so when we started off with our mix assortment, the very first list that came out, and as you guys know from the list, it was the things where there was IP potential conflict and that, again, as I support in the homework that's done, if that IP was infringed upon, then it's something that obviously that tariff was put in place for which I agreed, but was nice about that first list, though, we only had one skew on it and that skew, it made it very easy for us to make the change and or movement to shift that business into a different country versus working with China on that scale. Now what happened was when list three and four came out, which is where the majority of my products were impacted, unfortunately, that homework wasn't done and it was much more of what it felt like to me as a business owner was really kind of a trade war that wasn't really about the IP but more about the war between the two countries and the conflict that I kind of felt like I got stuck in the middle of that kind of conversation. 


Sage Chandler  

And if I could just jump in for a second, I wanted to clarify something in case, you probably are all aware of this, but the China trade war, the administration came out with four different lists of products. And that's what Deena means by list. So the first list of product was 50 billion worth of Chinese goods that got a 25% tariff. And then we had a second list a third list, and now we're on a fourth list. And at this point, we're virtually all trade with China has a tariff on it. So when she's speaking about the list, that's what she means.


Deena Ghazarian  

Sorry, thank you for clarifying. So, with that, and with the every single skew on my list impacted I felt and as a part of the CTA, and I'm a member on the board and it was really important to me to then leverage my, through my membership, my relationship with CTA to try to make a difference when it came to policy and how could I go onto the hill, meet with my congressman and talk about why that issue was important to me as a business. Honor, how as my representatives representing me, what could you do for me as this business owner who's really trying to start a business, employ people around me impact families in a good way, which was really what I thought would be the most exciting things about creating a business, besides touching the consumer was really kind of building a family within our work and supplying, you know, a lifeline to other families in the United States. And then, when those conversations didn't seem to go anywhere, it put me then in this mode, where I've now feel like I'm very much more on a reactive side of things versus that proactive, not only around focusing on innovation, what's next? But then more importantly, how do I find a different way where that tariff doesn't financially impact my business. So now, instead of spending my time on building a new product, I'm going to different countries, I'm looking at different factories. And the crazy thing is the innovation in those different countries don't exist at the level that China does. One of my favorite conversations to talk about, is here you have hdmi.org, who sets the standards for one of my products. If you go look at the list of where the certified companies they want you to work with are 95% of them are based in China. So kind of as a business owner, then you're in the situation where you're torn on, how do I make the right decision? More importantly, I don't want to take that tariff, raise my price points impact the consumer, because that was never my intent. So how do I figure out different ways in the model? And it just becomes very time consuming, instead of really focusing on what's right for a business as a CEO.


Sage Chandler  

Every I mean, ever it's in a bigger company, GM tariffs


Everett Eissenstat  

and hopefully not the CEO, obviously.


Sage Chandler  

But it's more than just tariffs. I know when you're talking about larger companies.


Everett Eissenstat  

It is and I think it's, you know, I really appreciate a lot of what what's been said about the impact of tariffs and particularly when you've got something you really need, ready access to and whether you're a small business or a big business. The key is predictability and transparency so you can make decisions in the best interest of your organization and Your customer and so the trade disputes are they're part of a bigger conversation that's going on. I know there's going to be a phase one and everyone's like, list one. Phase One. Phase One is the agreement between China and the Trump administration on trying to reduce the tensions in the US China relationship and having a beginning of what we hope is a sustainable us China trade conversation. But you know, we we just have to work with what we have we do a lot of our production is for the markets we serve. So on the import export side, we're not as hurt is readily but it definitely is something we monitor and follow very. The the fact that the usmca or the NAFTA 2.0. Some people like to call it has been passed by the House of Representatives is fantastic. We love the certainty that agreement brings and I'm sure you know you probably pretty happy about that as well and it's pending in the Senate and one second So with the finish line, I think that'll be really good for the three countries and for predictability and transparency in the operation of a business. So it's the world we live in. And we have to work in the world we live in and out the world we want to be in and it's definitely part of what we watch for. But I'd say the two things that we seek at the end of the day, our transparency and governance and predictability so we can make decisions on how to allocate capital and where to invest our resources.


Scotty Greenwood  

Well, sage, if I could just step back for a second for we all live in, in the trade space, but like, why do you need a trade agreement at all? Like, why are we talking about this? So I just want to step back for half of a second and talk about that. So after World War Two, there was a view that was bad, don't want to do that again. And that really if we could become more economically interdependent, we countries of the world could combine our economies more we would be less likely to go to war. And that's been sort of the common understanding that free trade or trade agreements. economic integration is generally a good thing. And then a lot of things happened since World War Two technologically and everything else. And the world just became more interconnected and trade became trade policy trade agreements became really the rules of the road. And for that, it's sort of like, what sport are we playing? Like, what game are we going to play? And what what are the rules of that game? Because, you know, in the United States, we might be playing American football, Canadians might be playing Canadian league football that's not that different. So you could have you know, Doug Flutie, government, you'd have some players, but in the UK, maybe they're playing cricket. You know, in Australia, maybe they're playing rugby here at this conference. They're playing friggin Quidditch, right? And so you have to have trade agreements globally to decide what's the what are the What game are we playing and why What are the rules? And how are we going to engage with each other? And so that's the process that we're going through. And that's why you have to have that's why it's necessary to have a trade agreement. And what happens when trade agreements break down? Are you get into this world of tariffs? And I just wanted to comment on what Dina said, because it's so true. So, so free trade agreements are, you know, I can sell to you you can sell to me and the government doesn't get involved, tariffs, or when countries are trying to disincentivize something coming in from another country. And so the United States and the Trump administration has used tariffs as a tool. Remember, President Trump said I'm tariff man. And the President makes a fundamental mistake in thinking that tariffs are attacks on foreigners. He thinks he you know, and he still thinks that and his advisors, I think, have told him that's not really the case. So attacks on Americans and American businesses like yours, Dina and I'll just wrap up this part stage with an example. I was at the New England governors Eastern Canadian Premier's conference last summer and talking about trade and and the gentleman sitting next to me made lobster traps. And if you think about lobster traps, they used to be made of wood. You know, you can go to Maine now and get one of those vintage ones and it's a coffee table. It's wood, but but these days they're made of metal. And so the United States and Canada and several other countries were in the middle of steel and aluminum tariffs. And so this lobster trap manufacturer from Massachusetts was really hurting because of the cost of his inputs had gone up by 30% overnight with like with one tweet one policy, but he was doubly hit because so there's steel aluminum tariffs at that moment. Were geared towards Mexico and Canada to try to Get more leverage in the trade negotiation that was coming on. So Trump wanted more leverage. So he lays on tariffs. So So this lobster trap manufacturers inputs went up 30%. But then he was hit again, because at the same time we were we, the United States, were fighting a war with China trade war, and what you experienced. And so Chinese retaliated and said, we're not going to buy any more lobsters. So this guy's market, you know, his inputs were hit, and then and then the need for his product was hit doubly. And he was at wit's end. And it's really, it's real, you know, that he's a real family. He's got real employees in the United States. And so, when trade goes awry, after so many years of going pretty well, there are real impacts and there are real consequences in each country that's engaged in it.


Sage Chandler  

And I think to your lobster trap manufacturer, example, I think of all the companies sitting on the stage right now. JOHN DEERE is probably the closest to the lobster trap example in that, I'm sure you were hit by steel and aluminum tariffs. I'm sure you are being hit by some tariffs from China, but I'm sure you also have your farmers. And what happens with retaliation when the United States puts on a tariff on a product that comes in from China. China said, well, same to you. And they retaliate with some kind of measure and times that will hit our companies or our farmers and farming has been one of the most readily hit areas because one, it's a district where the administration, it's the voting base, so they want to hit them or the bases. But the farmers are the ones who've really been feeling a struggle and I thought maybe you'd want to talk a little bit about both john deere and the and the people that you serve.


Vanessa Stiffler-Claus  

Thank you. I was I was going to mention that sort of asymmetric or or sort of being hit from both sides, things happening for us as a manufacturer steel tariffs are imported tariffs, our supply chain tariffs impact us directly. But the bigger hit is really on our customer base because the United States is a huge agriculture export, or we don't send a whole lot of other stuff to China. And so when China chose to retaliate on agriculture products, being commodities that can be grown in other markets around the world, that opened the door for markets, particularly Brazil and Argentina, but also Australia, Canada to come in and fill that void. And the concern that I have, and that we think about a lot in our customer base thinks about as long as when those markets are filled by other suppliers. How long or if ever, does that market come back to the United States? You know, the soybean producers in the Midwest, the United States have seen dramatic decrease in exports to China. And so will that market come back now that China is seeing those demands met from Latin America largely. And that's a large amount of money that's come out of the sector and out of the system, which translates into less purchases for products for Companies like deer or chemical inputs suppliers. And so we, we do have to look at it from the direct impact of the trade war and the tariffs. And we can sometimes mitigate that with different suppliers or moving moving production or moving, moving where we procure products. But as Everett said to we produce a lot in the markets for the country, or the region that serves those use those types of products. So we don't have a lot of flexibility to move our internal products around as much as we would if we were making products that were more uniform globally. But the again, the grassroots or the lower impact the impacts at the base level of our customer really worth worrisome because they translate into multi year hesitancy for customers to procure product.


Sage Chandler  

It's interesting, and if, if anybody here has not yet seen all of the booths where these companies you should you should look them up but john deere is especially impressive, they've got this, this boom and this whole huge farming Down in South Hall, its massive. And what I was thinking is that, you know, when we have an audience looking at a startup company and automotive company, trade consultants and farming, the first thing you might not think of is technology. But there's technology intersected. And in every group of business up here, and so maybe, Vanessa, you want to start on this and just talk about where trade and tech intersect for you. 


Vanessa Stiffler-Claus  

Yeah, absolutely. I mean, I think that technology is undergirds everything that we do it dear. You know, everyone, you we have a lot of people that work in the factories, assembling products are the typical manufacturing footprint. We have actually many more people that are working on coding and software and a new product development and technology. We're going to have to feed roughly nine and a half billion people by century mid century and the only way to do that with the limited land and resources that we have and with pressures to be ever more sustainable. Globally, is going to require greater uptake of technology and innovation. You know, a farmer, if you look at what they do, they're managing millions of inputs, each plant in their field that they could think about how they maximize the output of that plant is really analogous to I think managing a factory of any other. They're looking at how do we take the investment we make, whether it's in seed fertilizer, chemicals, or in the machinery? And how do we manage our footprint on our field to get the most output for the least amount of cost to grow that crop? And so that that technology is critical to what they're doing and delivering value and the critical our new products coming out, like you mentioned, the boom that has 400 micro sensors and 100 processors or so on and it's phenomenal. But trade then links with that very directly because we don't, with with a world that's growing and population expanding, diets are changing, people are eating higher quality proteins around the world. We need trades, deliver products and agriculture commodities. To the places where it is demanded is not always the same places where it has grown. And so trade is very critical to getting those products that our customers are producing to this consumer around the world and the most efficient and effective way.


Sage Chandler  

And it's striking me to that, like for Deena, you have just a smaller cables and things like that. But your products actually help enable people to use tech. 


Deena Ghazarian  

We keep everyone connected, but that's the best way and honestly, it protected and connected.


Sage Chandler  

So without your technology, people cannot be doing things like e commerce correct. 


Deena Ghazarian  

So we are the tech that supports tech, it's the best way that we know how to explain it. And what's interesting enough, too, though, is as technology is advancing on the software side, I mean, in order for us to be more efficient in order for us to be able to work kind of on a 24 seven clock with all of our partners all over the world. You know, we leverage tech in multiple ways, not only how we analyze the business, ironically because tariffs are so much part of my forefront my mind where are we on costing? How's that shifting? When we are looking at different areas of the world in order to move somewhere where it is a trade free into United States, how much is that going to save me? how efficiently Can I go into moving into that country. And then just to go back one second, when the both of you were talking about the fact that, you know, once a country moves, it's a lot of work. But once we move, we're going to move, I don't think we'll ever go back to China. And that's where the technology exists there today, you know, making that move once it's kind of you're done. But what makes me very sad is that when you work and look to move to a different country, the Chinese are the one who are taking us into that country. So interestingly enough in looking at Vietnam as an option, it's really them hiring their people in China. They're moving them to Vietnam, there's providing them the stipend, they're the one paying the money to work with the government in the country to build the roads to get to those factories. So even though it seems like as a as a startup like myself, you have to move somewhere. Else, really the Chinese are the ones still staying by my side as a partner and just taking it somewhere else. So that is that really solving the problem that we wanted to in regards to this tear for, it's actually making them even more powerful. So it's it's a nervous factor being for me and where I am. But again, it's kind of balancing that and my political duty to my country and what I think is important, versus running my business and running a global business at that.


Scotty Greenwood  

Well, and you can't you can't write off China, right. You can't say, Gosh, I wish I didn't have to work with China, the second largest economy in the world. It's a huge population. China, every country is here to stay. China is a rather large, impactful country. So it's, you know, the politics. It's interesting, the politics in the United States or around trade have been, you know, beat up on countries that are cheating or, or not playing by the rules. And the President's gotten a lot of support, even among farmers who have been really hurt in the short term by his policies with this tough talk. What what will be interesting From my point of view, as somebody who is a supporter of free trade is when we get through this, and we're looking back, so in a few years sage, we come back to this, you know, will we have come up with better trade agreements. And, you know, the new North American trade agreement, for example, if it passes, is a more modern deal. It's a, you know, went from cars and cows to bits and bytes, you know, there's a digital chapter their rules of the road that makes sense for the modern economy. And, you know, I don't like how we got here, but the result I think, is, is is going to be better if we can get it done. And and that will be true of other big multilateral agreements, if we can get there.


Sage Chandler  

Yeah, I think ever probably has a lot to say about that. I mean, we're gonna get there or we're gonna get there. And of course, maybe maybe you could actually back up for a second and explain to the audience when we talk about NAFTA, the the benefits of trade between those three countries, the US, Mexico and Canada is that you are are trading with zero tariff. But there's also other parts of that agreement that take down regulations and recognize each other certifications and so on. But there are content requirements and that gets the auto guys kind of caught.


Everett Eissenstat  

I mean, look, there's there's rules of origin in every trade agreement. And, you know, we will work with those and we're comfortable, we're ready to abide by the new USMCA agreement as soon as it goes into force. Hopefully, fingers crossed, hopefully.

 

But I do want to just touch a bit on the tech question, because it's really interesting as I kind of learned more and more and have been with GM now for for over a year, and I've looked back and its history led john deere, we're over 100 years old and and you think about technology and what it means and how it changes people's lives. The founder of our company actually didn't start out with automobiles. He started out with horse drawn carriages, and he saw a suspension system that gave people a smooth ride, and it was the The only one on the market and he patented it. mass produced it wildly successful. I mean, people love this and that's what you want to do with tech right is bringing something to the market to people are gonna love that that provides removes a pain point whether it's in a, you know, a horse drawn buggy or something else and throughout our history, that's what we've tried to do a GM. A couple of things we might surprise you is we have done some things you probably wouldn't think about, for example, we were one of the first companies to produce the ability to have open heart surgery by creating a mechanism where we can keep the heart functioning during surgery. And that was a GM invention. We were part of the lunar landing back in the 70s. And that was obviously the height of tech. And I think what we're doing today is equally is is fascinating both in the electric vehicle where we've been the first company to mass market and affordable electric vehicle with the bolt and we've got a lot more coming. I mean, you'll see this year there's going to be really interesting product coming out that I think it's going to be very exciting. We're very excited about


Sage Chandler  

everybody gets a volt who can't who came today, right?


Everett Eissenstat  

Everybody wants a bulb come talk to me, happy to help. But also, of course, the autonomous which you see throughout CES, and then it brings in, you know, the suppliers and the policy and then you talk about technology and trade, and it all gets mixed in together again. And it's hard to separate. And one of the things that we find interesting in the technology, trade space is the degree of support that governments give industry in r&d, and where they put that money and we really believe that governments can be a good partner and help you to advance technology and we've called for a national zero emission vehicle program because we think we need a national policy to advance electric vehicles across the United States. We'd love to see more research and development in the and autonomy as you saw Secretary Chow with her or 4.0 initiative. came out with a couple of days ago. So this is all together, government has a very important role to play there and technology. So it's something that we are very excited about, we are going to continue working with the government, but at the same time, you got to recognize that there are countries that do favor state champions. And that's, you know, obviously not an advantage to somebody who's not domiciled in that country. So it's a complicated mix of things. And but it makes it work very interesting.


Sage Chandler  

And you do quite a bit in AI artificial intelligence. And I know there's a big AI industry in Canada.


Everett Eissenstat  

Absolutely.


Sage Chandler  

You know, that that whole workforce there and the products that are connecting to AI are all using the cloud and e commerce and digital and maybe Scott, you want to talk a little bit more about the digital chapter of NAFTA and sure some of what that what the new stuff there is.


Scotty Greenwood  

yeah, happy to any and just to put in perspective, so the North American neighborhood is 490 million people that economic activities 1.4 trillion a year. It's It's the largest economic bloc in the world. It's It's bigger than almost all the other blocks put together. So it's it's and people don't think of that, you know, but it's, it's, it's true. So so the digital I have to look at my notes age because there are some digital things that I forget unless I read it so that they're there. The the new North American trade agreement, the USMCA, as it's called in the United States, is the first agreement to have a digital chapter. So one thing it does is prohibit customs and other charges on digital products, such as music, games, videos and ebooks. governments can can can still tax you know, at the provincial level if they do, but but now you can transfer these things across North North American borders, completely duty free, second thing that it does, which is interesting because it sets up a divergence with Europe is it prohibits data localization requirements. So governments cannot require the use of local, the use or location of computing facilities in their jurisdiction as a condition of business. So the idea here is you want to while you want to protect data, you don't want data protectionism. And it's it's it's kind of the Asia Pacific approach to data and privacy as opposed to the European approach. And so for countries like Canada and Mexico, that already have transatlantic trade deals, it'll be interesting to see how how they sort all of that out. And of course, the US and the UK are going to have a conversation about that, too. The third thing that I'll say that the new agreement does is it provides what what's known as safe harbor, which is it requires governments to distinguish between internet platforms and content creators when they're trying to determine liability for something. Unlike the US, Canada, as an example, doesn't have an online legal protection for third party content. So this is a new innovation. And these are some of the reasons why people say that the usmca is modern. And they also say that it's a template for future agreements. But we shall see, it may or may not be a template for future agreements, because we may, and I don't know how your companies feel about GDPR and the European model versus the North American Asia Pacific model, but but it sets up a conversation that policymakers and constituents like us will be having, I think, for years to come to figure out how to flush these things out.


Vanessa Stiffler-Claus  

To the sky. The one of the nice provisions in USMCA was not just the cross border data flows, but included cross border financial data flows to which I think for a first time in a trade agreement, that's really a good piece of framework to have for all companies including john deere who deal in finance or financial instruments for our customers.


Scotty Greenwood  

Absolutely, and, you know, getting into the weeds on that a little bit. So you can have cross border financial data flow like for banks, for example as, but in the Canada's case, the regulator still gets to have visibility into, in this case, the US or the Mexican regime. So there's going to be a lot of work to be done to figure out how to operationalize this because there are some lofty ideas that are now as soon as this is ratified by the United States and Canada, this new agreement, there's going to be a lot of detail to be worked out.


Sage Chandler  

I think a lot of this is just common sense. I mean, there are a lot of our small companies when you talk to them about trade agreements and what's in them. The things that Scotty and we were just talking about his really pretty wonky stuff, but conceptually for any company doing business, it's just get out of my way. Let me do my banking. Let me access my data. Let me do with it what I want you know within the realms privacy. And I'm thinking again of you, Deena, when you make decisions about where someday you'll export, or what kind of country you're doing business with, I'm, I'm guessing you might not know every country that we have a trade agreement with, but you probably have a pretty good sense of what countries are difficult to work in, and which are easier. And that probably is a good point or two, which agreements, which countries we have agreements with. And I'm just wondering, in your decision making, is that something that you will look at into the future? 


Deena Ghazarian  

Oh, we already are hundred percent. So it is easy to be and the good news is, though, I have a startup I've been doing business for a really long time. So you tend to know who the players are that are very easy to work with with who are not and 100% the structure in the strategy of the company is following those global partners all throughout the world. Right. So you know, first of all, for us, it was obviously, the United States and Canada. super simple, super easy tend to get along with Very well. And it makes it very easy to do business working through, across the border sending goods up and down, etc. Next rest after that was going was ironically going into the Middle East, which was actually in a very easy partnership for us, as well. And then moving into the UK and Ireland, Europe is probably the toughest. It makes it very difficult and hard, just because all the rules are so different. And what's even, I guess, more entertaining, if you come back and look at the US being from the state of California, the company is based out of Oregon, it's very interesting and working through when California sets the rules and then trying to follow that, knowing that that's probably the way it'll kind of work itself throughout the United States. But really kind of staying true to what it is we do because some of those guidelines on a small little company like me, I don't have the resources to back me up to read through. I mean, I wish I could have the three of you with me at all times. I mean, let me die. So it's kind of you have to make decisions for the business. Not necessarily having all of that skill, their expertise by yourself. died. So you don't, you know, kind of break the law. It's It's It's very difficult sometimes as a as a little guy to wear lots of hats and hope you're making the right decision for the business.


Sage Chandler  

Yeah. What are some of the other big decisions that your companies make in terms of where you go and why?


Everett Eissenstat  

You know, let me just, I want to you You reminded me of something in the supplier network in the supply chain and trade and technology that I think it's a really interesting phenomena. And we're seeing it play out in the Midwest today. And I've got a couple of good examples. So you've all heard about the rust belt, and you've heard about factories closing in the old technologies been going, you know, going overseas? Well, we've had a couple of really interesting investments in Michigan and Ohio one where we put in 400 million into Lake Orion Michigan to produce a new Chevy electric vehicle. 400 new jobs, it's a brand new will be coming out soon. And then we also did the only one of the major most significant investments with a A joint venture with LG cam to produce battery cells in Ohio in northeastern Ohio, very economically challenged part of the country. And what we're seeing in Detroit and in Michigan in Pennsylvania is a resurgence of technology, joining with manufacturing, and so all the technology that's been developed on the coast is now being applied in the manufacturing sector. And I'm sure john deere has many, many examples as well. And so the engineering starting to come into the into the Midwest, this the universities are responding, the workforce is responding, and you're really seeing the transformation of the economy's and I think that's a trend that's going to continue to grow. And we're pretty excited about it. So we're putting a lot in the United we're putting we're investing a lot of money here in the United States, because we see the opportunity, we think the workforce is here, we want to help nurture that workforce, we want to create that opportunity. So it's really exciting to see what the companies are doing and how we can partner and continue to advance together


Scotty Greenwood  

well and it's no longer with all the visibility in the world now, right everybody, anywhere in the world, you know, has the ability to record and share information. It's no longer acceptable to do business in a way that abuses people, you know, or that is really toxic and polluting. And so modern trade agreements, set labor and environmental standards, and try to elevate the, you know, the way governments operate. But even if they didn't, it's it's just a reality of today. I think that you can't just do business any way you want, anywhere you want and hope people won't notice there is a higher level of accountability that we all hold ourselves to. And I think that's a good thing. This is a little bit unrelated to trade, but but sort of part of public policy. And I'm reminded here at Sage we talk a lot about electric vehicles, and they're very exciting. One of the things you think about with batteries of electric vehicles is is kind of the rare earth elements that go into them. And there's a whole other panels, discussion and a whole other dialogue to be had. We're working on this American Business Council of where do critical minerals and rare earths come from? How are they processed? Is it done in a way that's in keeping with our values? And and is there another way to go so anyway, that's just a related policy on shake us down rare and I'm just


Sage Chandler  

That actually does tell an interesting that they're about I think it was maybe seven years or so ago. So China is that they're called rare earth minerals, but as rather a misnomer because they're not very rare. We have plenty of them in the United States. It's just really dirty business to get that to get them and China realized they had a pretty strong lock on the rare earth minerals market and so they decided to do the reverse of tariffs. They did act export controls, meaning that they We're only going to ship out small amount of product there by driving the prices up. What we saw happen in the tech industry was no, I look at companies and I think of them like water, they're going to flow they're going to figure out a way to make it happen. So while China had this big idea that they're going to get a lot more money from companies because they're going to hold their product back we watched companies innovate and change the way they manufactured. And I saw a number of companies stop using those rare earth minerals. So while there was some pain for a short time, the companies just went around. But something you said back to to autonomy and and driverless vehicles. I mean, I want to go back to john deere for a minute. seeing some of the technology that you guys have on your tractors is absolutely fascinating the way they talk to each other across huge swathes of field and they know where the other one is at all times and and how you use sensor technology to know when you're going to do the project. into some people are using drones. Maybe you could talk a little bit about all that.


Vanessa Stiffler-Claus  

Yeah. Why would say john deere has more line of code in a normal combine or tractor than it is in the space shuttle This is we've had autonomous vehicles for 20 years, I mean, largely on if you've gone out to large farms in the Midwest, it since the mid 90s, or early 2000s, tractors have been able to navigate themselves. Because you're you're doing this very precise work in the field. And you don't want to make double passes. You don't want to spray extra chemicals if you can avoid it. And so there there's always been a commercial driver and economic driver to bringing that technology into the interplay. And so a lot of this this really cool new big technology that's it's really getting, it's becoming sort of just par for the course if you will, if you go to our booth, you'll see you can you can look on your iPad, you can figure out where your tractors are, where your combines are, what they're harvesting, what they're planting what they're spraying in real time, which is very important if you're a farm manager and you're operating multiple thousands of years. makers that are not all contiguous. And I would say you know, we think about environmental benefits that come from that a lot of those becoming more efficient and more effective on the on the acreage that we're growing is enabling us also to reduce chemical inputs to reduce the petroleum that we're using in the tractors to reduce the the emissions that are coming off the field or off the equipment because they're being they're leveraging the planting technology in the most effective and efficient way, putting the fertilizer and when the plant needs it not spraying it all over the field to evaporate when when it rains or the sun hits it. So I think that that it's it's really quite exciting for me as I didn't grow up on a farm but I've been at deer for 12 years and I really find it exciting to think about how something as basic as growing our wheat to make bread and for our food is really among the most high tech sectors that there is. And you know, I when I travel and visit customers and you see that they've got multiple slave, slave and what do we call them. master and slave configurations right when you've got the one tractor leading a cadre of compounds or tractors following behind. And then when you bring in new technologies like drones, and you think of the great opportunities for flying over the field, taking some remote sensing, not having to get the big equipment out there, how much more effective and cost effective that can be for the farmer when they can take a picture with it with a small drone and know where they need to go and what the problem spot is in the field, rather than gearing up the entire kit and getting out there all at once.


Sage Chandler  

It's very exciting. And so what's so interesting about everything that we're talking about here is that none of this exists in a world without trade. And so when we have open trade policies that these companies can innovate and grow and have these ideas and move their products around the world and make decisions that they feel are best for their company, they can come up with these innovations, these they can be better competitors. And so I think maybe we only have a few minutes left, I just want to see Is there anything any of you want to touch on or anything any of you want to say that we might have left out? And if not, I'll ask you a question. I'm wondering if there are any winners or losers in a trade war or in winners and in good trade policies and what your sort of top line takeaway from any of this would be.


Scotty Greenwood  

So my own view is that in trade disputes, everybody loses. And when things are when you have trade agreements, everybody wins. A problem with the current environment in the United States is we have a leader in the United States, who doesn't like Win Win scenarios if he wants to win and he wants you to lose and he wants you to be embarrassed. And that's hard when you're negotiating a deal. And it's amazing how cool the cool customers our trading partners have been about not worrying about the rhetoric and Washington and Not being baited by the latest tweet, but just sitting down and having negotiators and we have a couple of former negotiators here on the stage, just do their work and come up with a good agreement that works out for everybody. So you end up with a win win win, even if you have to let one of the parties claim that it was only a win for him. But But if we're in disputes and in in tariffs land, everybody loses. And if we have agreements and people can just do business and governments out of the way, then I think everybody wins.


Sage Chandler  

All right. 


Deena Ghazarian  

I don't feel like I'm winning. I'm gonna say I'm a small business owner. I don't feel like I'm winning. I think I'm trying to change and be nimble. But I definitely think that I'm taking a lot of the grunt, unfortunately. And so it makes it really tough to, to keep going. But hopefully that will change. Fingers crossed, take to it.


Sage Chandler  

Take to it. So I think we have, well, we're out of time, but I see a bunch of hands going up. So maybe we'll take a few questions.

 

I saw you first 


Speaker 1  

Yeah, hi, Margaret Alrighty. Duke Energy. Georgia, the country, just like General Motors and just like john deere reasons country happy about your announcement at LG Kevin, your partnership because no cells are made in this country in this country, I understand that the battery companies could ask for an exemption in DC for the lithium coming over for those cells until we can get her going in this country?

 

Everett Eissenstat  

You know, that's a good question. And we can find out I don't know today. But I think the the broader point you make is that there is a global competition for not just the advancing technology, but setting up the ecosystem where technology can thrive. And part of that goes to what you know, sage was talking about is how do we how do we develop a system where we can ensure the United States is able to achieve leadership in battery technology. And that's one of the reasons that we decided to do the investment here in the United States is because we think there's a lot of opportunity there. Yeah, and there's there are lithium there are deposits the United States. It's a complicated discussion, but it goes to supply chains. And as as was noted here, it doesn't just come down to the cheapest because you want to be sure it's sustainably mind you want to do it in accordance with environmental standards with labor standards. It's very, very complex, which goes back to the original point, that trade you can't segment it anymore. It's it's in everything we do. And it all comes together. So


Scotty Greenwood  

So so so it's interesting that Canada has stepped up on the question of batteries lithium and and on the question of some of these more challenging minerals Canada as a resource rich place and as a place that has been developing its resources in a responsible way and learning from its mistakes, years and years. Canada developed the rather carbon intensive oil sands and made made such progress in the innovation to make oil sands development more sustainable that that, you know, California, Bakersfield crude is heavier and, you know, more difficult than Canadian oil sands, people don't really realize that. So, Canada, the United States have entered into an agreement to try to look at not not just batteries, but also some of these other challenging, challenging to develop materials. And we're going to hold a roundtable on it and Washington this quarter. So reach out to me,


Sage Chandler  

and I can talk to you later about exemptions, but there are there is an exemption process whereby the the US government is accepting proposals from the various lists lithium ion batteries, I believe is on list one. And that process is ongoing and list one is actually they're looking for exemption requests. Now, I saw a question over here.


Speaker 2  

Just on on on the trade, trade, trade barriers are always. I was in Vietnam recently. And of course it is true that Chinese men are transferring from China and looking down into Vietnam setting up businesses there is actually hurting a lot in China and people are going off in droves, like there's actually. And he says they're cutting their costs. So you can say, Well, you know, the American trade, but the truth is the Chinese are suffering at least some portion of that because they gotta stay competitive. Look at the inflation rate, we haven't seen really genuine inflation.


Deena Ghazarian  

Yeah, it's hurting their business owners just like it's hurting our business owners, right. So if you think about it, the manufacturers that I'm working with are small business owners just like me. And in order to stay alive, they're trying to do what they need to do to be a good partner with me to be able to kind of go somewhere else and try to keep it working, versus me just absolutely bending them and hurting them. I do think in some cases, I mean, I will say I was just there in October. And I don't know how many of you have been and done the Hong Kong China going back and forth side. When you drive across the border, there's a you have to go through customs. Usually there's long lines usually and of course, it was also during the not the riots, but when they were actually kind of liked protesting as well. I've never been in that custom center where there was not a single person but myself and the two other people I was with going back and forth. It was like a ghost. So yes, you're right there absolutely being impacted too. But the person who's being impacted isn't necessarily I think, the government and the government's in it for a long game, right? These guys don't get elected. They're in there for a long time. They're willing to wait out any kind of rhetoric or anything that comes from our and so those business owners are like, Listen, I can't count on our government. It sounds like you in some cases, can't wait around for your government either. So let's go make the best business decisions to go where we need to go and we're all just trying really hard to stay alive.


Scotty Greenwood  

Absolutely, yes. Totally agree with you there. There are problems to solve and there are reasons why the administration and its predecessors do what they do in terms of Going after certain governmental behaviors that are unacceptable.


Sage Chandler  

We're going to get pulled off the stage in like 45 seconds. So one more question back there. I'd like to give one more person, somebody back there you are. No problem.


Speaker 4  

*Question being asked*


Sage Chandler  

Let's talk about what section 231 and 232 or for just a second section 232 is when a government puts barriers up against something coming in from another country based on national security concerns section 301 of the trade law is where it's considered unfair trade practices. And you're alleging that the country in question then their products have are coming into your country unfairly and then you can put a tariff on it. In terms of precedent, you're right. I mean, we know people in the ITC, they're the ones investigating all these cases and the Department of Commerce, it's gone up, probably 1000 fold. I worried that other countries around the world might get some bad ideas and start following our example. But ever it's a good person to ask about.

 

Everett Eissenstat  

Well, it's it's a great question. It is not a 45 second answer. But it's it goes to a fundamental point that I think you'd made about the international trading system and how it evolved post World War Two and where we where we were then and where we are now. It's not coming back. I mean, it was a it was a really useful mechanism. It provided a lot of prosperity a lot. Peace. But it was something that apparently, there was some dissatisfaction with it. And you saw it in different countries being manifested in different ways. And now we've got new tools on the table. And yeah, I think other countries are likely to take a look at those. And I think other politicians are likely to look at them as well. So it's unfortunately, we're probably in a transition period toward a different kind of a global economy. But the cool thing, I want to say the cool thing about that, what's good about that is we were we can make the difference and we can help shape it. And so you know, we all have a voice at the table, and we can help define what the future is going to look like. And technology is definitely going to be part of that. And the trade conversations are definitely part of that. So so this is just one part of a conversation. 


Sage Chandler  

Yeah, and I mean, this is a an area that everybody is really starting to get engaged and I've been doing trade policy for 22 years in DC and I know these everybody up here is probably the policy wants have been doing it about as long And the business people, this is not going to go away anytime soon. It's a little bit exciting because it's the first time trade has ever been considered sort of cool and people are talking about it. But we would really encourage you to continue the conversations continue asking your questions to your representatives. You know, it's it's you're right in the Constitution, the right to petition your government. If you are having issues, if you have questions, pick up the phone call your rep. Representative, it is it is imperative that they understand how these policies are impacting you. And with that, obviously, we're being kicked out. So thank you very much.

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