Morning Brew Daily
Tariffs Hitting Hollywood? & Air Traffic Control Shortage Delays Newark
Tue, 06 May 2025
Episode 576: Neal and Toby dive into Trump’s call to place 100% tariffs on any films produced outside of the US in an effort to rein in foreign tax incentives. Then, Newark International Airport faces crisis-level delays and cancellations due to air traffic control staffing shortages. Also, student loan borrowers who have trouble paying may have to face collections as the Trump administration is starting to crackdown on defaulted loans. Meanwhile, Toby examines the trend of autonomous freight trucks hitting the road. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. 00:00 - Pulitzer Prize Winners 2:45 - Warren Buffett is retiring 3:00 - Hollywood Tariffs 08:40 - Newark Air Traffic Control Issues 12:15 - Student Loans Heading to Collections 17:40 - Driverless Trucks 21:40 - Headlines Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative and involves a high degree of risk. Cryptocurrency holdings are not protected by the FDIC or SIPC. APY as of 3/18/25, subject to change. *Terms and Conditions apply. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What awards were announced recently?
The Pulitzer Prizes were handed out yesterday for excellence in journalism, and Toby, we were snubbed again. Just remember, Hitchcock was never given an Oscar for Best Director. Fortunately, all the awardees were more than worthy. The Wall Street Journal won an award for its coverage of Elon Musk's rise to power.
The Washington Post won the Breaking News Prize for its reporting on the attempted assassination of Donald Trump. And ProPublica won the most prestigious prize for public service, with its coverage of the impact of state abortion bans across the country. In literature, the book James by Percival Everett, a retelling of the story of Huckleberry Finn from Jim's perspective, won the fiction prize.
And I read this book a few months ago. Great book if you're looking for a wreck.
Neil, one of these days our ships will come in, Toby's Trends will be honored for national reporting, or Neil's numbers will snag that public service award. We will get there. But seriously, a lot of the research that goes into producing our show, Morning Brew Daily, comes from the on-the-ground reporting that these reporters are doing.
So if you've ever learned something new or felt just a little bit smarter after a morning listen, you've got them to thank as well. And now a word from our sponsor, Planet Oat. Neil, everyone's talking about how this is the age of AI. Smart fridges, smart vacuums, smart-aleck kids who think ChachiBT know the answers to everything.
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Chapter 2: What are Trump's proposed tariffs on foreign films?
The unsweetened ones, wild. Zero grams of sugar and still somehow tastes like a treat. Meanwhile, Barista Lovers was basically built to impress your espresso machine. So yeah, welcome to the future. Less about robots and self-driving cars and more about oat milk that just makes sense.
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Well, get ready for the fast and the furious Kansas City drift because President Trump floated 100% tariffs on foreign produced movies. In a Sunday Night True social post, Trump said that the tariffs would save the dying American movie industry. Quote, other countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States.
Hollywood and many other areas within the USA are being devastated. He said he directed the Commerce Department and US Trade Representative to immediately begin the process of instituting a 100% tariff on any and all movies coming into our country that are produced in foreign lands.
This threat sent shockwaves across the global entertainment industry yesterday, with blindsided studio heads holding emergency calls to determine what it all means. And really, no one's sure what it means to tariff a movie, which is essentially a digital good distributed virtually that doesn't pass through ports.
But by bringing up the decimation of Hollywood, Trump is touching on the movie industry's least well-kept secret. Many movies aren't made in LA anymore. Leard by tax incentives and lower costs, studios have increasingly shifted production to places like Canada and the UK. Some of their biggest recent blockbusters, Deadpool and Wolverine Wicked,
Gladiator 2, a Minecraft movie, were mostly shot abroad. It's unclear whether Trump will move forward with the tariffs on movies. And yesterday, the White House appeared to walk it back a little, saying no final decisions on foreign film tariffs have been made. But it certainly sparked a discussion about what it would take to get movies made in America again.
First, let's dive into all the questions around this proclamation. Would it apply to American productions that are mostly filmed in the U.S., but have some scenes shot over in other countries? Or would it apply to movies where post-production work, like editing and that visual effects? If those are handled outside the U.S., does that count as well?
And then also, does it apply to just American-owned movies or does it apply to all movies across the world? So a lot of people kind of went down some of these rabbit holes and found nothing at the end of them, which is why maybe we saw a little bit of the walking back. So probably the broader conversation to have here is just the flight forward. from the U.S.
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Chapter 3: Why is Newark Airport facing operational issues?
75% of Netflix's entire content slate is internationally. Some of those are literally international films because they have a very widespread audience. But A significant part of its domestic production stuff that you think was made in America was actually made in places like Canada or the United Kingdom.
So Netflix is very exposed should this, you know, undefined tariff kind of apply to entertainment filmed outside of the U.S. So that is why potentially they are a little bit nervous and we're kind of coalescing and saying, what do we do about this thing? Even though maybe nothing is going to come of it.
Right, because you had movie executives from abroad saying this will devastate our industry from New Zealand, Australia, UK, Canada, saying this would be awful for us. But then also American moviemaking heads also said this would be terrible for us because as opposed to other goods where the U.S. runs a trade deficit with other countries, the U.S. is terrible.
remains the global hub of filmmaking. We have a $15.3 billion trade surplus in 2023 with the rest of the world. We sell our movies. It's a huge export. We sell our movies to the other parts of the country. We have a positive balance of trade in moviemaking with every major foreign market.
If we put tariffs on foreign-made films, then they will certainly reciprocate and put tariffs on Hollywood films. Hollywood makes most of their money in foreign markets, so it could devastate the American industry. as well. So that's why Trump was saying yesterday, kind of walked it back, these tariffs, and said he would talk with movie executives to see a plan forward.
Gavin Newsom of California, the governor, introduced a $7.5 billion tax incentive to lure people back. So maybe, I know Trump and Newsom don't really get along, but maybe they'll work on a particular tax incentive instead of tariffs to bring this industry back.
For years, Newark Airport has been the ugly stepchild of New York's three major airports, and it's done nothing to shake that reputation recently. For more than a week, the airport has been gripped by chaos as a cascading series of problems led to hundreds of flight delays and cancellations, frustrating travelers, and sparking calls for an overhaul by the federal government.
On Sunday, over one third of inbound and outbound flights at Newark were delayed and more than 10% were canceled. The crisis continued yesterday when more than 150 flights were canceled and over 250 delayed. United Airlines, which dominates this airport, has even taken the step of canceling 35 daily round-trip flights from Newark, with the CEO saying he had no choice.
The airport, quote, cannot handle the number of planes that are scheduled to operate there in the weeks and months ahead. That's because of a number of intertwined crises, including construction on a runway, chronic air traffic controller shortages, and technology failures from antique equipment.
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Chapter 4: What is happening with student loan collections?
a situation that is affecting Newark, but also the broader conversation here is just the chronic staffing delays, the technology, the outdated technology that the FAA is still relying on.
Yeah. The U S needs more than 3000 new air traffic controllers to reach adequate staffing. They're at 70% levels right now. They have 10,000 professional controllers. They need 3000 more. So you have Sean Duffy who's the secretary of transportation really, uh, has keyed into this problem. And he said, he's going to roll out a modernization, uh, plan this week.
So we'll hear what the FAA or the Transportation Department has in store for the FAA to improve staffing levels, because right now the situation at Newark is pretty dire and things weren't good beforehand. It came in last in the Wall Street Journal rankings of best large airports in terms of reliability, convenience and value.
People were already, you know, not happy with Newark because of its location. And it's, you know, there were there were a lot of delays there before this happened. So, yeah, If you're flying out of Newark, I mean, maybe look for somewhere else at this point.
Unfortunately, I have some bad news for about one in five of you listening who have student loan debt. Check your mailbox because the bills are coming. The Trump administration started its push to resume collections on defaulted student loans yesterday, threatening the financial health of millions of borrowers whose loans have gone belly up.
According to the Education Department, about 5 million people fall into this category, with most having not made a payment since the pandemic. Millions more sit on the brink of default as well. Restarting student debt payments has been a major push of the Trump administration, in direct contrast to the Biden administration, who moved to forgive billions in loans.
As to be expected, firing up collections and instituting penalties for not paying is is going to be an unwelcome financial burden for lots of Americans, sapping spending at a time when consumer confidence is already at a multi-year low.
Credit scores are also under threat, with a new report from TransUnion saying that borrowers who previously had excellent credit may see their scores deemed by as much as 171 points. What comes next if you're one of those millions?
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Chapter 5: Why are driverless trucks becoming more prevalent?
Borrowers in default should have been notified by an email to contact the education department's default resolution group and take action, like making payments or entering a repayment plan to avoid harsher penalties. If you don't, the government may garnish wages or withhold tax refunds and benefits. Neil, an ominous Monday announcement for the 42 million Americans with federal student loans.
This has been five years coming back when the pandemic started. The Trump administration paused student loan repayments and then Biden came in and delayed it nine times. So this was going until 2024 at the end of the election. So there was a big break given to people who had student loans for many years. Now they maybe forgot about it, as we're seeing with these high delinquency rates.
And now finally, the machinery has completely has been turned on here on yesterday. And so a lot of people are getting a rude awakening with how much they owe.
Yeah. A student loan borrower enters default once they're behind on payments for more than 270 days. So that is kind of the magic number here. That's where that 5 million people come from. But 4 million people are on the brink of reaching that. So as we move into the summer, because the last kind of on-ramp period for getting rid of or for prolonging student loans was back in October 2024.
So if you count forward, you start to realize that the summer is when that 270-day mark starts to hit, which is when you will see another flood of people kind of realizing that they were behind and or had defaulted on their student loans. So yeah, you start looking into the personal finance angle of this, and a lot of people are saying, hey, I would love to pay it back, but I cannot right now.
I do not make enough, and they're going to start garnishing wages, and they're going to start dinging my credit score. So it is a little bit of a moment of panic for millions of Americans out there as they try to figure out how to navigate these murky waters ahead.
And if you're listening to this thinking, well, I don't know what's going on with my student loans, you can check a dashboard by logging into your account on the federal website, studentaid.gov. Go to that website, check out, see how much you owe. Hopefully it's not that much. But yeah, check that out, studentaid.gov. That will give you a snapshot of your student loan picture.
Let's take a quick break and come back and talk about trucks. Toby, you ever get served an ad that just makes no sense whatsoever?
Yes. One particular platform thinks I'm obsessed with Fabergé eggs.
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