WEBVTT - Daybreak Weekend: US Jobs Preview, NATO, RBA's Rate Decision 0:00:00.080 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio News. 0:00:09.039 --> 0:00:11.360 This is Bloomberg day Break Weekend, our global look at 0:00:11.360 --> 0:00:13.440 the top stories in the coming week from our Daybreak 0:00:13.480 --> 0:00:16.360 anchors all around the world. Straight Ahead on the program, 0:00:16.360 --> 0:00:19.200 we'll look ahead to the March Jobs Report and Q 0:00:19.400 --> 0:00:22.239 one auto sales and what President Trump's tariffs on auto 0:00:22.320 --> 0:00:25.960 imports could mean to future sales. I'm Tom Busby in 0:00:26.040 --> 0:00:26.479 New York. 0:00:26.600 --> 0:00:29.120 I'm Caroline Hetcke here in London, where we're assessing the 0:00:29.160 --> 0:00:32.840 position of NATO amidst growing global tensions. 0:00:33.080 --> 0:00:36.360 I'm Doug Krisner previewing next week's rate decision from the 0:00:36.400 --> 0:00:37.760 Reserve Bank of Australia. 0:00:38.159 --> 0:00:42.200 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.240 --> 0:00:45.960 eleven three Yeero, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.440 --> 0:00:50.680 Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 0:00:51.120 --> 0:00:54.320 Sirius XM one twenty one, and around the world on 0:00:54.400 --> 0:00:57.480 Bloomberg Radio, dot Com and the Bloomberg Business App. 0:01:02.360 --> 0:01:04.560 Good day to you. I'm Tom Busby. We begin today's 0:01:04.560 --> 0:01:06.720 program with a look at the March Jobs Report out 0:01:06.760 --> 0:01:09.640 this coming Friday. The same day We're gonna hear from 0:01:09.680 --> 0:01:13.080 Federal Reserve Chair Jerome Powell. What could all this mean 0:01:13.160 --> 0:01:16.920 for the US labor market and for FED policy moving forward? Well, 0:01:16.920 --> 0:01:19.280 good news for more. We're joined by Michael McKee of 0:01:19.319 --> 0:01:23.480 Bloomberg International Economics and Policy correspondent. Michael, thank you for 0:01:23.480 --> 0:01:26.080 being here. Well, let's start with that job's report. What 0:01:26.120 --> 0:01:27.959 do you expect to see? 0:01:29.160 --> 0:01:35.160 We expect to see a slowdown in job creation. We're 0:01:35.280 --> 0:01:38.360 still a week out, so there will be a lot 0:01:38.360 --> 0:01:42.120 of data that comes in on employment from other indicators 0:01:42.120 --> 0:01:46.840 that will go into the general forecast. Right now, we 0:01:46.880 --> 0:01:49.880 have one hundred and thirty five thousand as the forecast, 0:01:49.920 --> 0:01:53.560 and it was one hundred and fifty one thousand in February, 0:01:53.920 --> 0:01:56.400 but that could bounce around a little bit. The key 0:01:56.440 --> 0:01:59.280 for the Fed is unemployment and unemployments not expected to 0:01:59.400 --> 0:02:02.440 change state four point one percent. The question is is 0:02:02.440 --> 0:02:06.200 anybody going to care about the jobs report by next Friday? 0:02:06.960 --> 0:02:10.680 Well, well, I guess they'll care because, I mean, with 0:02:10.800 --> 0:02:15.280 the Trump policies, the tens of thousands of federal workers 0:02:15.360 --> 0:02:18.760 being laid off, the you know, and things are changing 0:02:18.840 --> 0:02:21.440 every day. There were tiiffs. I mean, all this adds 0:02:21.560 --> 0:02:23.480 up to the you know what we're going to see. 0:02:23.280 --> 0:02:27.120 In terms of the jobs report. Yes, the real question 0:02:27.240 --> 0:02:30.560 is whether we see a lot in this month because 0:02:30.600 --> 0:02:34.519 of the timing of it. All, the jobs report taken 0:02:34.560 --> 0:02:38.040 in the first weeks of the month, and we don't 0:02:38.080 --> 0:02:41.240 really have a good handle on how many people have 0:02:41.480 --> 0:02:46.240 been fired. Last week the government reported we had only 0:02:46.440 --> 0:02:49.960 eight hundred and twenty one federal workers filing new claims 0:02:50.000 --> 0:02:54.040 for unemployment. Part of it is that people get laid off, 0:02:54.200 --> 0:02:58.160 they get unlaid off, they get laid off again. I imagine 0:02:58.080 --> 0:03:00.840 many federal workers don't know what their jobs situation is, 0:03:01.240 --> 0:03:06.600 so expect to see a lot of cuts in federal employment, 0:03:06.680 --> 0:03:08.240 but maybe not this month. 0:03:08.760 --> 0:03:09.040 Wow. 0:03:09.160 --> 0:03:12.400 And there's other data that we saw come out PCE 0:03:12.720 --> 0:03:17.200 for March indicative of where jobs are maybe coming or going. 0:03:17.520 --> 0:03:19.120 I mean with consumers pulling back. 0:03:19.520 --> 0:03:21.960 Consumers have pulled back just a little bit. It isn't 0:03:22.760 --> 0:03:26.520 a huge drop because we had seen a huge shop 0:03:26.800 --> 0:03:32.800 in spending in January and this was a four tenths rise, 0:03:33.520 --> 0:03:36.760 not too bad. But it did come mostly in durable goods, 0:03:37.080 --> 0:03:39.680 so it suggests maybe people were afraid of tariffs and 0:03:39.880 --> 0:03:44.280 running out and buying stuff. I don't know, refrigerators, stoves 0:03:44.360 --> 0:03:48.080 or something cars before prices went up. And then the 0:03:48.200 --> 0:03:51.600 University of Michigan Sentiment Indicator came out and normally doesn't 0:03:51.640 --> 0:03:53.720 move much between the preliminary and the final, but in 0:03:53.720 --> 0:03:56.720 this case it did. We saw a big drop in 0:03:57.240 --> 0:04:00.960 overall sentiment and in expectations, and then we saw inflation 0:04:01.160 --> 0:04:06.080 expectations rise significantly to five percent over the next year. 0:04:06.200 --> 0:04:11.760 So Americans are anticipating bad news from Liberation Day next week. 0:04:11.840 --> 0:04:15.840 Yeah, that's a lot of inflation fears right there. Well, 0:04:15.920 --> 0:04:19.920 let's talk about Liberation Day and President Trump's tariffs. We 0:04:20.279 --> 0:04:22.440 know they change week to week, day to day, sometimes 0:04:22.560 --> 0:04:26.760 hour to hour, but what is the impact right now 0:04:26.800 --> 0:04:30.120 on the economy on jobs. I mean, clearly people are worried, 0:04:30.160 --> 0:04:31.520 consumers are concerned. 0:04:31.800 --> 0:04:34.480 Right now. It has people concerned, it has businesses concerned. 0:04:34.480 --> 0:04:39.279 We've seen that in business leaders surveys and obviously the 0:04:39.360 --> 0:04:42.359 Michigan and Conference Board numbers show US consumers are feeling 0:04:42.400 --> 0:04:46.039 the same way. They haven't in the hard data acted yet, 0:04:46.080 --> 0:04:49.800 but that's what we're expected to see over the next 0:04:49.800 --> 0:04:53.120 couple of weeks. Especially if people go to the store 0:04:53.200 --> 0:04:58.880 and see prices higher, that really drives consumer behavior, particularly 0:04:58.920 --> 0:05:02.120 for things like gasoline food, which may take a little 0:05:02.160 --> 0:05:04.440 longer to work their way into this. And of course 0:05:04.480 --> 0:05:06.559 you don't buy a car every day, but if you notice, 0:05:06.640 --> 0:05:10.080 prices are going up, so it's something that the FED 0:05:10.120 --> 0:05:12.920 has to worry about. There are all kinds of estimates 0:05:13.279 --> 0:05:18.520 on what this could do to inflation, could push it 0:05:18.600 --> 0:05:22.120 up by one and a half two percent for the year. 0:05:23.279 --> 0:05:26.440 One forecast that came out this last week from a 0:05:26.480 --> 0:05:29.080 Wall Street firm was we would see inflation over four 0:05:29.120 --> 0:05:33.000 percent for the next three four five months. That would 0:05:33.000 --> 0:05:35.000 not go over well with the American public. 0:05:35.120 --> 0:05:39.000 No well, And Susan Collins from the FED Boston Bank said, 0:05:39.120 --> 0:05:39.960 it's coming. 0:05:40.080 --> 0:05:42.880 It's coming. And the thing is the FED doesn't know 0:05:42.920 --> 0:05:48.279 what to do yet because they don't have handle on 0:05:48.400 --> 0:05:51.720 exactly what the president's tariffs are going to do. And 0:05:51.760 --> 0:05:57.320 the best line came from the Richmond Fed president who said, 0:05:58.040 --> 0:06:00.880 this is not a fog of under certainty like you 0:06:01.000 --> 0:06:03.839 normally see. This is a pull over to the side 0:06:03.880 --> 0:06:06.080 of the road and put on your high beams kind 0:06:06.160 --> 0:06:10.040 of fog of uncertainty because we have no idea. Tom 0:06:10.080 --> 0:06:12.960 Barkin saying that we have no idea, what's going to happen. 0:06:13.279 --> 0:06:16.120 Well, let's hope Jerome Powell gives us a little clarity. 0:06:16.160 --> 0:06:18.120 He is speaking this Friday. We're gonna hear from HM. 0:06:18.120 --> 0:06:19.320 Why don't you tell us what you expect. 0:06:19.680 --> 0:06:22.320 That's why the church lady line comes in. How convenient 0:06:22.680 --> 0:06:25.840 that the FED chair is speaking the same week as 0:06:26.200 --> 0:06:30.080 Independence Day. He is speaking on Friday, and we will 0:06:30.120 --> 0:06:33.200 get probably. I don't see how he can avoid giving 0:06:33.279 --> 0:06:36.240 us some view on what impact the tariffs are going 0:06:36.279 --> 0:06:38.800 to have on the economy, both on inflation and growth. 0:06:39.279 --> 0:06:42.400 And if that's the case, then there's going to be 0:06:42.440 --> 0:06:45.839 a lot for investors to try to parse in terms 0:06:45.839 --> 0:06:49.360 of what it means for FED action. So it's going 0:06:49.400 --> 0:06:52.640 to be a very very busy week. Powell and jobs 0:06:52.720 --> 0:06:55.159 on the same day. So all of you who thought 0:06:55.160 --> 0:06:57.240 you were going to get away to the Hamptons or 0:06:57.360 --> 0:07:01.040 upstate early not on Friday this week. 0:07:01.279 --> 0:07:04.479 Well, the March non farm payrolls numbers out this Friday, 0:07:04.520 --> 0:07:07.560 eight thirty am Wall Street Time our thanks to Michael McKee, 0:07:07.760 --> 0:07:11.880 Bloomberg International Economics and Policy correspondent. We turned now to 0:07:11.880 --> 0:07:14.720 the US auto sector ahead of first quarter vehicle sales 0:07:14.760 --> 0:07:18.880 out this Tuesday, just before President Trump's punishing twenty five 0:07:18.960 --> 0:07:22.160 percent tariffs are slated to go into effect on all 0:07:22.520 --> 0:07:25.840 imported autos. For more on how those tariffs, if they 0:07:25.880 --> 0:07:30.360 go into effect, could impact consumers, investors, US and foreign automakers, 0:07:30.360 --> 0:07:33.880 and more, were joined by Steve Mann Bloomberg Intelligence, Global 0:07:33.960 --> 0:07:38.400 Autos and Industrial Research analysts. Steve, thank you for being here, 0:07:38.440 --> 0:07:41.040 and boy, is there a lot to unpack here. Well, 0:07:41.120 --> 0:07:43.720 let's start with look back. It looks like the industry 0:07:43.800 --> 0:07:46.280 was off to a pretty solid start, not spectacular to 0:07:46.320 --> 0:07:50.480 the new year, despite high sticker prices and elevated borrowing rates. 0:07:50.520 --> 0:07:54.480 But boy, if these tariffs, if implemented, things could really change. 0:07:54.520 --> 0:07:55.880 How would that change everything? 0:07:56.280 --> 0:07:59.960 Well, we actually just published a report and we lowered 0:08:00.160 --> 0:08:04.280 our sales forecast for the US passenger vehicle sales. We 0:08:04.360 --> 0:08:07.720 were at down half a percent. Now we're looking at 0:08:07.800 --> 0:08:11.360 down at least three percent for the year. Well, prices 0:08:11.400 --> 0:08:15.160 are going to go up. We're hearing dealerships out there 0:08:15.200 --> 0:08:17.960 telling their customers that prices are going to go up. 0:08:18.040 --> 0:08:20.640 There's different numbers out there, depending on the price of 0:08:20.640 --> 0:08:23.760 the vehicle, could be thirty five hundred or as much 0:08:23.840 --> 0:08:27.080 as ten thousand dollars. So it's gonna really put a 0:08:27.160 --> 0:08:30.280 dent on sales. On the flip side, it's going to 0:08:30.320 --> 0:08:32.520 help use car sales. So if you look at you know, 0:08:32.640 --> 0:08:36.480 Avis and Hurts, they're actually responding positively to the news 0:08:36.520 --> 0:08:39.440 because you know, if they sell their used fleet, they're 0:08:39.440 --> 0:08:41.760 going to get more money for it. And the balance 0:08:41.760 --> 0:08:45.720 sheet Imprus and the other thing that's reacting positively are 0:08:46.080 --> 0:08:49.120 you know, the retail sales part sales companies like O'Reilly 0:08:49.320 --> 0:08:53.839 Advanced autoparts. You know, they're actually bucking the trend. So 0:08:53.920 --> 0:08:55.960 if consumers are not going to buy new cars, they're 0:08:55.960 --> 0:08:58.160 going to have to probably have to fix up the 0:08:58.480 --> 0:09:00.000 old one and keep you a little bit longer. 0:09:00.120 --> 0:09:01.840 So it sounds like a lot of cars are going 0:09:01.840 --> 0:09:03.280 to stay on the road a lot longer. And the 0:09:03.320 --> 0:09:05.640 average now is like eleven and a half twelve years, 0:09:05.679 --> 0:09:06.040 isn't it. 0:09:06.640 --> 0:09:10.160 Yeah, that's right. So you know you kind of mentioned 0:09:10.200 --> 0:09:13.360 it earlier. The consumer is already hesitating by a new 0:09:13.400 --> 0:09:18.199 car because prices have gone up quite a bit, especially 0:09:18.240 --> 0:09:22.720 on those big pickup trucks and SUVs, you know, leasing 0:09:23.400 --> 0:09:26.920 upwards of one thousand to two thousand dollars, So it's 0:09:27.080 --> 0:09:29.679 becoming out of reach for a lot of consumers. 0:09:29.679 --> 0:09:32.760 Now, yeah, the consumer consumer definitely appears to be the 0:09:32.800 --> 0:09:37.600 loser here. Let's talk about the automakers, especially Detroit's Big three, 0:09:37.880 --> 0:09:40.760 and how they'll be impacted, and will they each be 0:09:40.800 --> 0:09:42.680 impacted in the same way. I know, for IT makes 0:09:42.720 --> 0:09:44.800 a lot more of its cars in the US than 0:09:44.840 --> 0:09:45.360 the other two. 0:09:45.880 --> 0:09:51.319 Yeah, look, I think all three, No, silentis, FOURD and 0:09:51.400 --> 0:09:56.960 GM will be impacted by a lot, you know, not 0:09:57.240 --> 0:10:01.959 just just on the initial cost of the tariff. You know, 0:10:02.320 --> 0:10:05.800 also if they have to reshore some of their plants. 0:10:05.880 --> 0:10:09.320 We have an analysis out there that that tells us 0:10:09.400 --> 0:10:12.800 it could cost as much as four billion dollars if 0:10:12.840 --> 0:10:16.720 they have to build a new plant in the US, 0:10:17.040 --> 0:10:19.920 you know, shift that plant back into Mexico and build 0:10:19.920 --> 0:10:23.280 a new one. And in the US, that's a lot 0:10:23.320 --> 0:10:25.559 of spending. That's only for one plan. You know, they 0:10:25.559 --> 0:10:29.760 have multiple plants in Mexico and Canada that they can reshore. 0:10:30.200 --> 0:10:33.800 So it's it's it's it's huge. The other thing for 0:10:33.800 --> 0:10:36.600 Ford specifically too, is one of the things we're looking 0:10:36.640 --> 0:10:41.800 at is their EV sales have been generating huge losses 0:10:41.840 --> 0:10:44.560 for the company in the last two three years, and 0:10:45.240 --> 0:10:48.960 especially for example, the Machi one of the most popular ones. 0:10:49.000 --> 0:10:52.280 They're actually built in Mexico. So if they have to 0:10:52.679 --> 0:10:58.040 lose another ten thousand dollars on that vehicle, it begs 0:10:58.040 --> 0:11:01.600 the question is should they even continue you're building that vehicle, 0:11:02.000 --> 0:11:04.640 and what that means is it's you know, the Big 0:11:04.679 --> 0:11:08.520 three four as well as GM could actually lose EV 0:11:08.679 --> 0:11:11.520 market share to the pure place, not just Tesla, but 0:11:11.559 --> 0:11:12.880 to also Rivian Lucid. 0:11:13.840 --> 0:11:16.720 Well, let's talk about Tesla and the EV's. Tesla makes 0:11:16.880 --> 0:11:19.640 every car it sells in the US in the US 0:11:19.640 --> 0:11:23.480 at plants in Texas and California, and how does it 0:11:23.559 --> 0:11:27.400 stand to win? And as you said, Rivian Lucid, Faraday Future, 0:11:27.400 --> 0:11:30.800 all these other ones, smaller ones, niche ones, are they 0:11:30.800 --> 0:11:31.920 going to be the winners here too? 0:11:32.960 --> 0:11:33.440 Yeah? 0:11:33.760 --> 0:11:37.200 I think so, because you know, they have a very 0:11:37.240 --> 0:11:43.160 different manufacturing footprint or different business model than the legacy automakers. 0:11:43.520 --> 0:11:46.840 They're more vertically integrated. So a lot of the most 0:11:46.920 --> 0:11:53.800 expensive components in an EV, the batteries, right, the charging systems, 0:11:53.960 --> 0:11:57.240 the battery management system, they're actually built in house. The 0:11:57.320 --> 0:12:00.880 motors are actually built in house, so they have much 0:12:00.920 --> 0:12:04.720 better control of the cost. And obviously because they are 0:12:04.720 --> 0:12:08.000 bill in the House. In in the US, they're not 0:12:08.120 --> 0:12:11.680 subject to the tariff as high as the legacy automakers. 0:12:12.120 --> 0:12:15.200 Interesting to watch if it all goes into effect. First 0:12:15.240 --> 0:12:18.280 corder auto sales out this Tuesday. Those twenty five percent 0:12:18.320 --> 0:12:22.240 tariffs on all imported autos kicking in Thursday morning, twelve 0:12:22.280 --> 0:12:25.920 oh one am Wall Street Time. Our thanks to Steve Mann, 0:12:25.960 --> 0:12:30.840 Bloomberg Intelligence, Global autos and industrials research analysts. Coming up 0:12:30.880 --> 0:12:33.720 on Bloomberg day Break weekend. Calls for unity at a 0:12:33.880 --> 0:12:38.000 NATO summit this week. I'm Tom Busby and this is Bloomberg. 0:12:49.320 --> 0:12:51.800 This is Bloomberg day Break Weekend, our global look ahead 0:12:51.800 --> 0:12:54.160 at the top stories for investors in the coming week. 0:12:54.320 --> 0:12:57.720 I'm Tom Busby in New York. Up later in our program, 0:12:57.760 --> 0:13:01.080 A big decision this week from Australia Bank. But first 0:13:01.160 --> 0:13:04.280 at a fraud time for Geopolitical security. Defense is front 0:13:04.280 --> 0:13:07.760 of mind for world leaders and bolstering protection will be 0:13:07.880 --> 0:13:10.920 certainly high on the agenda at the NATO headquarters in 0:13:10.960 --> 0:13:14.600 Brussels this week, where Allied Foreign Affairs ministers meet for 0:13:14.679 --> 0:13:18.120 talks chaired by Secretary General Mark Ruda. Now for more, 0:13:18.400 --> 0:13:20.360 let's go to London and bring in Bloomberg day Break. 0:13:20.400 --> 0:13:23.280 Europbanker Caroline hepgar Tom speaking. 0:13:22.960 --> 0:13:26.200 To Bloomberg earlier this month, the NATO chief Mark Russia 0:13:26.320 --> 0:13:30.000 expressed his desire for relations with Russia to return to 0:13:30.120 --> 0:13:34.880 normal once fighting subsides in Ukraine, but the body's Secretary 0:13:34.960 --> 0:13:38.000 General was quick to acknowledge that there's a long way 0:13:38.040 --> 0:13:42.000 to go before proceedings reached that stage. He is preparing 0:13:42.040 --> 0:13:46.319 to share discussions between allied foreign ministers in Brussels, the 0:13:46.440 --> 0:13:50.280 latest event on a recent packed schedule for Rutsa, who 0:13:50.280 --> 0:13:53.680 has flown around the world to discuss the ongoing war 0:13:53.760 --> 0:13:58.679 in Ukraine with numerous world leaders. Included in his travels 0:13:58.840 --> 0:14:01.280 was a stop in Washington, d C. Where he met 0:14:01.280 --> 0:14:05.200 with the US President Donald Trump. Russia has been engaging 0:14:05.320 --> 0:14:09.800 in intense diplomacy in recent weeks to keep the Transatlantic 0:14:09.920 --> 0:14:14.440 alliance together, as Trump has pared back support for Ukraine 0:14:14.520 --> 0:14:17.679 and has indicated that the US will step back from 0:14:17.720 --> 0:14:22.800 its traditional security role in Europe. The surprise move has 0:14:22.840 --> 0:14:27.320 sent European countries scrambling to boost defense spending and to 0:14:27.520 --> 0:14:31.680 rethink their military positioning. The NATO chief has said that 0:14:31.760 --> 0:14:35.840 he is confident Trump is committed to NATO and that 0:14:35.880 --> 0:14:39.160 there is no room for doubt there. In his words, 0:14:39.680 --> 0:14:44.160 whilst also praising Trump for breaking the deadlock between Russia 0:14:44.200 --> 0:14:48.920 and Ukraine, the delicate situation between President Trump and his 0:14:49.080 --> 0:14:53.240 counterparts in Europe and its impact on markets is something 0:14:53.240 --> 0:14:56.960 that we've been discussing with Carl Tannenbaum, who is chief 0:14:57.080 --> 0:14:59.440 economist at Northern Trust. 0:15:00.080 --> 0:15:03.960 For many reasons, a truce between Ukraine and Russia would 0:15:03.960 --> 0:15:06.280 be very much welcome, but there are some hard yards 0:15:06.320 --> 0:15:10.280 to be walked before we achieve that outcome. And absolutely 0:15:10.320 --> 0:15:14.120 the forecasts for Europe are actually going up when they 0:15:14.320 --> 0:15:16.760 for major centers elsewhere in the world they're going down. 0:15:17.600 --> 0:15:20.720 I'm sure that the Europeans would have preferred to stimulate 0:15:21.960 --> 0:15:25.320 other than at the end of a figurative bayonet. But 0:15:25.360 --> 0:15:28.040 the fact is that the prompting that this did to 0:15:28.280 --> 0:15:31.520 have the Germans and the Europeans open their budgets will 0:15:31.520 --> 0:15:34.120 be favorable for their growth picture and their markets. 0:15:34.160 --> 0:15:34.640 Reflect that. 0:15:36.240 --> 0:15:40.040 You've said that it's difficult and that you underestimated, along 0:15:40.080 --> 0:15:44.440 with many others, the reality of the tariff I'll call 0:15:44.480 --> 0:15:48.640 it a tariff war from President Trump. In terms of 0:15:49.360 --> 0:15:52.200 the tensions, How do you think about the tensions between 0:15:52.240 --> 0:15:54.160 the US and the EU. The EU says that there 0:15:54.160 --> 0:15:57.520 really wasn't any negotiation, particularly that they had no success 0:15:57.520 --> 0:16:00.560 with negotiating with the Trump White House. What does that 0:16:00.640 --> 0:16:04.880 mean economically that those ties are now so much more difficult? 0:16:06.520 --> 0:16:10.720 The risk of the current strategy is that the alienation 0:16:11.040 --> 0:16:13.520 that comes from the first steps will make it very 0:16:13.560 --> 0:16:17.760 difficult to come back together in any meaningful way. There's 0:16:17.800 --> 0:16:21.120 an injury felt by counterparts the United States and the 0:16:21.160 --> 0:16:24.840 way that this is being done, and voices that might 0:16:24.920 --> 0:16:28.240 have normally been heard have yet to be accounted for. 0:16:29.400 --> 0:16:32.200 I certainly hope that the damage done is not lasting, 0:16:32.400 --> 0:16:34.440 and that there is a phase to come yet this 0:16:34.600 --> 0:16:40.000 year where there will be more consultation and less provocation. 0:16:41.240 --> 0:16:43.720 But I hope that comes right soon. It's taken longer 0:16:43.760 --> 0:16:44.560 than I would have thought. 0:16:44.960 --> 0:16:48.480 That was called tannem Bound, chief economist at Northern Trust, 0:16:48.520 --> 0:16:52.960 speaking to me and to Bloomberg's Stephen Carroll. So how 0:16:53.000 --> 0:16:56.960 will these dynamics play out during the upcoming meeting of 0:16:57.160 --> 0:17:03.240 foreign ministers? I've been speaking to BLOOMBERG'SMEA News director Roslyn Matheson. Well, 0:17:03.240 --> 0:17:06.640 it's good to speak to you. What normally happens at 0:17:06.680 --> 0:17:09.159 these NATO meetings, well. 0:17:09.000 --> 0:17:11.600 It depends whose meeting, because some of them are minister 0:17:11.760 --> 0:17:14.199 or level and some are obviously leader level, which are 0:17:14.240 --> 0:17:18.639 the big shebang, And it depends which ministers are meeting. 0:17:18.720 --> 0:17:21.479 In this case, as you say, it's foreign ministers meeting, 0:17:21.960 --> 0:17:24.639 and their task tends to be well a little bit thankless, 0:17:24.680 --> 0:17:27.280 to be honest, they are often the ones who are 0:17:27.280 --> 0:17:30.840 meeting to pave the way into the leader's summit, which 0:17:30.840 --> 0:17:34.000 we know is coming up some months later, and so 0:17:34.160 --> 0:17:37.200 their job is to iron out any of the kinks 0:17:37.280 --> 0:17:39.520 ahead of that, to work out what's going to be 0:17:39.560 --> 0:17:43.080 on the agenda, to do some behind the scenes agreements 0:17:43.119 --> 0:17:46.199 and understandings, and then take all of that back in 0:17:46.240 --> 0:17:50.080 a way to their headquarters at home. And that's all 0:17:50.119 --> 0:17:53.000 about laying the table for that meeting. I mean, obviously 0:17:53.040 --> 0:17:57.760 they discuss a broad array of topics, and for foreign 0:17:57.760 --> 0:18:01.080 ministers it can be a very broad church indeed, and 0:18:01.160 --> 0:18:03.399 for this meeting it will be about a bunch of 0:18:03.440 --> 0:18:07.080 stuff that's very topical at the moment, but will also 0:18:07.240 --> 0:18:12.639 be about all those kind of sideline conversations, hallway conversations 0:18:13.000 --> 0:18:15.160 to get a bit of an understanding about what they're 0:18:15.200 --> 0:18:17.320 going to be looking like going into a leader's summer. 0:18:18.000 --> 0:18:22.560 So will all member states be in attendance. 0:18:22.760 --> 0:18:26.200 At this stage It appears so, including the US Secretary 0:18:26.240 --> 0:18:28.760 of State Mark Rubio. I mean, it's an interesting question 0:18:28.800 --> 0:18:33.520 because we've seen at some gatherings, including G twenty meetings 0:18:33.560 --> 0:18:36.240 and so on, that the US has opted not to 0:18:36.320 --> 0:18:40.399 attend or to send a lower level official questioning it 0:18:40.440 --> 0:18:44.080 seems that you know whether these forums do anything that 0:18:44.119 --> 0:18:46.359 matters or whether they need to be there. But it 0:18:46.400 --> 0:18:48.800 looks like Mark Rubio will turn up. And obviously he's 0:18:48.840 --> 0:18:52.639 been quite engaged with NATO and with Europe as a whole. 0:18:52.680 --> 0:18:55.360 He recently met with a bunch of ministers from the Baltics, 0:18:55.359 --> 0:18:58.600 for example. He recently met with the Turkish foreign minister 0:18:58.680 --> 0:19:01.880 who was visiting him in the US. So he's certainly 0:19:01.920 --> 0:19:06.520 engaging with his counterparts across Europe. So we are expecting 0:19:06.840 --> 0:19:08.200 a full bench for this meeting. 0:19:08.640 --> 0:19:12.080 Is it possible was that there might be something of 0:19:12.119 --> 0:19:15.960 a tense atmosphere between the US and EU members given 0:19:16.000 --> 0:19:19.359 that the meeting comes hot on the heels of these 0:19:19.600 --> 0:19:24.320 leaked messages on the Signal app which featured senior members 0:19:24.359 --> 0:19:28.440 of the Trump administration describing EU States as quote freeloaders. 0:19:28.880 --> 0:19:30.920 What's going to be an interesting meeting in the backdrop 0:19:31.080 --> 0:19:36.040 of those revelations around the signal chat, and for European 0:19:36.200 --> 0:19:39.240 ministers who are there, no doubt questioning Marco Rubio quite 0:19:39.280 --> 0:19:43.160 a bit about how secure intelligence is that they're sharing. 0:19:43.240 --> 0:19:46.399 I mean, there's a lot of communications that have to 0:19:46.440 --> 0:19:48.840 go on in a circle of trust and understanding that 0:19:48.880 --> 0:19:52.440 whatever you talk about or whatever is shared is within 0:19:52.480 --> 0:19:55.160 a certain cone of silence because you can talk more 0:19:55.200 --> 0:19:59.000 candidly as a result. And so if you have European 0:19:59.160 --> 0:20:03.040 ministers even more worry than they probably already were about 0:20:03.080 --> 0:20:05.879 how to communicate with the US, how to talk openly 0:20:05.920 --> 0:20:11.520 and honestly with officials, including Marco Ribio, what about how 0:20:11.600 --> 0:20:15.120 secure intelligences that get shared? And so all of that 0:20:15.760 --> 0:20:19.800 will be aired in that meeting. No doubt you're unlikely 0:20:19.840 --> 0:20:23.400 to see Europeans stop sharing intelligence with the US. They 0:20:23.480 --> 0:20:26.720 just need each other too much to do so. But 0:20:26.840 --> 0:20:30.160 you will get certainly expressions of concern about that at 0:20:30.160 --> 0:20:30.560 the meeting. 0:20:31.640 --> 0:20:34.639 Now, we did see the NATO chief Mark Rutter in 0:20:35.440 --> 0:20:38.480 the White House in the Oval Office with President Trump 0:20:38.520 --> 0:20:41.200 when they had that discussion. He was talking about being 0:20:41.240 --> 0:20:44.760 confident of the President's continued support talk US through the 0:20:44.800 --> 0:20:49.119 complications though of the relationship. Are things still on the 0:20:49.200 --> 0:20:49.919 right path. 0:20:50.760 --> 0:20:53.240 What was interesting to see that meeting actually because it 0:20:53.280 --> 0:20:56.879 seems as though Rita and Trump kind of hit it off, 0:20:57.320 --> 0:20:59.000 like they at least had a bit of a rapport 0:20:59.040 --> 0:21:02.760 and Ritter was treading carefully in his comments and seemingly 0:21:02.800 --> 0:21:06.240 knowing how not to press Donald Trump's buttons, and so 0:21:06.359 --> 0:21:10.240 that is obviously a plus to have that relationship seemingly 0:21:10.280 --> 0:21:13.000 on a positive footing. But the overall relationship between the 0:21:13.080 --> 0:21:15.720 US and NATO is pretty poor right now. I mean, 0:21:15.760 --> 0:21:19.960 Donald Trump has been repeatedly critical of NATO, be it 0:21:20.040 --> 0:21:24.600 over how much other nations spend on their defense, you know, 0:21:24.640 --> 0:21:27.359 the collective nature of NATO, whether it's worth what he 0:21:27.400 --> 0:21:30.600 sings as the US investment in NATO, What does the 0:21:30.760 --> 0:21:33.200 US get out of it? I mean, it's worth pointing 0:21:33.240 --> 0:21:36.640 out the only time that Article five, the collective responsibility 0:21:37.600 --> 0:21:41.000 area of NATO, has been invoked was by the US 0:21:41.040 --> 0:21:43.879 in its many decades. But you know, Donald Trump is 0:21:44.240 --> 0:21:48.479 repeatedly called into question NATO, what it's for, what it serves, 0:21:48.520 --> 0:21:53.320 where it's going, and so you know, personal relationship with Route, 0:21:53.440 --> 0:21:56.840 which is quite positive, is not going to really negate 0:21:57.240 --> 0:22:00.159 all of that. So there are fundamental questions here for 0:22:00.200 --> 0:22:01.960 the US about their future role in NATO. 0:22:02.040 --> 0:22:05.880 Either way, What do you think might emerge from these talks? 0:22:06.000 --> 0:22:08.879 Will it be focused on Ukraine? Will it be again 0:22:09.040 --> 0:22:12.760 back to the amount of defense spending. I mean we've 0:22:12.800 --> 0:22:15.800 had Germany, for example, bring out a really big defense 0:22:15.880 --> 0:22:19.360 Berzuka in terms of how much spending they're going to 0:22:19.400 --> 0:22:23.520 try to enact. What do you think might emerge from 0:22:23.520 --> 0:22:26.040 these discussions? Will there be any resolutions? 0:22:27.040 --> 0:22:30.679 Well, I'd likely to be anything you'd call a breakthrough 0:22:30.720 --> 0:22:35.840 because Marco Ribio has not been so centrally involved in 0:22:35.880 --> 0:22:38.679 the conversations that the US is having with Russia and 0:22:38.720 --> 0:22:41.720 the US is having with Ukraine. Other officials in the 0:22:41.800 --> 0:22:45.080 US seem to be taking the lead on that, So 0:22:45.200 --> 0:22:48.639 he's not been directly involved in many of the conversations 0:22:48.680 --> 0:22:51.880 around that necessarily or even potentially seen as a decision 0:22:51.920 --> 0:22:54.600 maker on it. And so you can expect a lot 0:22:54.600 --> 0:22:58.879 of conversation, as you say, around security issues, particularly the 0:22:58.920 --> 0:23:02.600 future of the war in Ukraine. Is there a cease far? 0:23:02.880 --> 0:23:04.560 Is it going to be tangible? How to get it 0:23:04.600 --> 0:23:09.320 to be broader than just the Black Sea or energy infrastructure, 0:23:09.320 --> 0:23:11.439 and either of those don't seem to be particularly secure 0:23:11.440 --> 0:23:14.200 at the moment anyway. And those issues, as you say, 0:23:14.280 --> 0:23:19.320 around European defense, defense spending, NATO, but because it's foreign ministers, 0:23:19.359 --> 0:23:21.719 it's also a pretty broad church. So you can imagine 0:23:22.240 --> 0:23:26.320 topics around trade coming up, tariffs so obviously, and the 0:23:26.359 --> 0:23:31.800