Upside #42 - Worlds Biggest Trade + EU Scale-err-up Strategy + The Jony & Sam Love-in

Trade Wars, Tariffs, and Tech Shifts – The Big Picture Shaping European Startups

With Dan Bowyer, Mads Jensen & Lomax Ward

00:00 – Intro: The Need to Talk Tariffs

• Dan kicks off the episode with a reminder: No groans, we need to talk tariffs.
• Taco tariffs, international trade deals, and looming US-EU trade tensions.

00:29 – Federal Judges, EU-US Trade, and Startup Impacts

• The EU-US trade deal cajoled activity: what does it mean for investors, startups, and Europe?

00:59 – Lomax’s Context: The Behemoth US-EU Trade Relationship

• $1.5 trillion annual trade; US-EU dwarfs US-China.
• Why has there never been a formal trade deal? Regulatory misalignments and subsidy wars (Airbus-Boeing).
• Harmonisation of standards as a critical issue—hardware startups especially at risk.

02:12 – Regulatory Divergence and Why It Matters

• EU’s precautionary principle vs. US’s risk-based model.
• Trade deals aren't just tariffs—harmonising standards can unlock growth.

03:50 – Hardware Startups & the Tariff Threat

• 10% of EU startups are hardware—“they will struggle if tariffs hit 50%.”

04:28 – The China & Russia Factor in Trade Rebalancing

• Trump’s chaotic policies, stock markets up despite tariff shocks.

06:01 – Inflation, Deficits, and Market Volatility

• Residual tariffs could push US inflation by .5-1%.
• “Congress looking to add $3-4 trillion over 10 years.”
• The importance of EU sophistication in trade negotiations

08:55 – Direct vs. Indirect Impact on Startups

• Tariffs affect hardware directly; inflation and interest rates indirectly.
• Interest rates impact M&A, liquidity, DPI, and venture capital flows.

11:27 – Markets’ Schism: Bond Traders vs. Equity Investors

• Bond traders panic over risk; equity investors bet on AI’s promise.

12:09 – Trump’s Amplifier Effect: Deregulation vs. Chaos

• The paradox of Trump’s anti-regulation stance fuelling optimism vs. destabilisation.

13:42 – EU’s Startup & Scale-Up Strategy: Will It Work?

• €10B blended fund, blue carpet initiative for talent, regulatory simplification.

17:23 – The Slow Pace of EU Policy: 2026-27 Timelines

• Lomax: “28th regime sounds like a Robert Harris novel—big thanks to Andreas Klinger for pushing it.”

19:50 – Employee Stock Options: Europe’s Broken System

• The need for harmonisation—“It’s key to unlocking talent.”

21:49 – Big Tech Announcements: AI’s Velocity

• Google I/O, Microsoft Build, Nvidia’s blowout quarter.
• AI’s exponential growth—“50x increase in token processing in a year.”

27:30 – The Application Layer: Opportunities and Disruptions

• AI’s impact on startup building: velocity of product cycles, risk of obsolescence.
• Dan: “Will SaaS die as AI tools empower in-house builds?”

36:54 – OpenAI + Johnny Ive: Hardware, Form Factors, and Speculation

• A $6.5B stock deal, secretive hardware project—pendant? Phone? Glasses? A new paradigm?
• “I hope it’s not a pendant!”

39:10 – The Race for the Next Form Factor

• Apple’s stagnation; OpenAI’s ambition to dethrone them.

41:10 – Wrap-Up: EU Urgency, Munich’s Tech Momentum, and the Week Ahead

• Munich as a growing hub: TSMC, Apple, Quantum Systems.
• Lomax: “Bright Flag’s $425M exit is a big deal for the European ecosystem.”