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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the.

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Speaker 3: Bloomberg Day ba Q podcast, available every morning on Apple,

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Speaker 3: spotifyle wherever you listen. It's Monday, the twenty seventh of

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Speaker 3: January in London on Caroline Hepcare.

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Speaker 1: And I'm Stephen Carroll. Coming up today, Donald Trump and

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Speaker 1: kirstarmertop trade as the US President uses Columbia as a

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Speaker 1: test case for his use of tariffs.

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Speaker 3: Four weeks before Germany's election, the campaign shifts onto contentious

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Speaker 3: terrain over migration.

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Speaker 1: Plus No Longer the Smartest AI in the Room, a

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Speaker 1: Chinese artificial intelligence startup, rocks global tech stocks with its

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Speaker 1: low cost, large language model.

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Speaker 3: Let's start with a round up of our top stories.

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Speaker 3: Keir Starmer and Donald Trump have discussed trade in the

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Speaker 3: Middle East in their first conversation since President Trump re

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Speaker 3: entered office. While the US and UK are historically close allies,

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Speaker 3: Trump's policy agenda puts him at odds with the British

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Speaker 3: government in several areas. Before the call, Trump told reporters

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Speaker 3: on Air Force One the two leaders had a quote

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Speaker 3: very good relationship.

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Speaker 4: I like a Malani's liberal which is a little bit

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Speaker 4: different from me, but I think he's a very good person.

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Speaker 3: I think he's a.

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Speaker 1: He's done a very good.

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Speaker 4: Job this well.

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Speaker 3: Trump's Whitehouse says the two leaders discussed how both countries

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Speaker 3: can promote a fair bilateral economic relationship. In Britain, there

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Speaker 3: is hope that the US trade surplus with the UK

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Speaker 3: could spare it from the worst of Trump's protectionist instincts. However,

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Speaker 3: the labor leader will have to tread a fine line

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Speaker 3: as he balances the competing interests of the EU and US.

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Speaker 1: For Britain, business activity in British firms are slum to

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Speaker 1: its lowest level since February twenty twenty one, according to

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Speaker 1: new research. Boom Brooks t At of Bio has the details.

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Speaker 5: UK businesses are facing slowing demand and rising profit warnings.

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Speaker 5: That's according to two separate reports from the Confederation of

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Speaker 5: British Industry and eypath On, which say both trends are

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Speaker 5: at their worst level since the pandemic. Despite government ambitions

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Speaker 5: to go further and faster on growth, private sector activity

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Speaker 5: fell again in the three months to January, say the CBI,

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Speaker 5: and one in five companies have struggled to meet their

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Speaker 5: financial goals, issuing warnings a ratio only exceeded during the

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Speaker 5: COVID lockdown and after the bursting of the dot com bubble.

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Speaker 5: The figures are the latest in a raft of weak

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Speaker 5: economic data which will make sobering reading for labor ministers

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Speaker 5: hoping to boost economic expansion. In London, tiwa Adebayo Bloomberg Radio, in.

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Speaker 3: The space of a few hours, person Trump threatened to

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Speaker 3: impose a twenty five percent TWERF on all Columbian goods

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Speaker 3: entering the US, before abruptly pulling the threat. Columbia had

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Speaker 3: refused to allow two military planes carrying deported migrants to land,

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Speaker 3: objecting to the use of shackles and handcuffs on detainees,

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Speaker 3: but then agreed to a deal, according to the White House,

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Speaker 3: to accept the return of all deported migrants. Bloomberg's Bill

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Speaker 3: Ferries says the events confirm the role of tariffs in

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Speaker 3: Trump's policy tool books.

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Speaker 2: The US is Columbia's biggest export trading partner, it had

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Speaker 2: very little leverage in this fight, and it also gave

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Speaker 2: President Donald Trump an opportunity to showcase that his threats

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Speaker 2: were not just bluff, that he will institute tariffs on

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Speaker 2: very short notice for almost whatever reason he deems fit.

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Speaker 2: So this has resolved already within a matter of just hours,

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Speaker 2: the White House announcing that Columbia back down, and Columbia's

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Speaker 2: president in fact reposted the White House Press Secretary's statement

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Speaker 2: on social media. So very quick turnaround, but also a

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Speaker 2: warning for other countries out there if they crossed this administration.

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Speaker 3: OH Senior editor Bill Ferrie speaking there as the news

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Speaker 3: left a cloud over global markets even after the decision

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Speaker 3: was reversed, as the dollar strengthened against most of its peers,

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Speaker 3: so those that is story from the US one.

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Speaker 1: Thousands of people in Germany took part in protests over

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Speaker 1: the weekend against the far right AfD party and a

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Speaker 1: crackdown on migration from the conservative CDU party. CDUs plans

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Speaker 1: include permanent border checks and a faster deportation of people

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Speaker 1: who've entered Germany illegally. Meanwhile, Elon Musk stepped up his

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Speaker 1: support for the far right, making a virtual appearance of

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Speaker 1: the AfD's campaign launch. The tested CEO called on Germans

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Speaker 1: to preserve their culture as he appeared to refer to

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Speaker 1: the country's Nazi past.

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Speaker 4: It was like, frankly, too much of a focus on

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Speaker 4: past guilt and we need to move beyond that people

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Speaker 4: who children should not be guilty of the sins of

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Speaker 4: their parents, or even little on their parents, their great grandparents, maybe.

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Speaker 1: Even Elon Musk speaking there, Polish Prime Minister Donald Tusk

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Speaker 1: said on x that the message heard during the event

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Speaker 1: was all too familiar and ominous, adding that it took

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Speaker 1: place just hours before the anniversary of the liberation of Auschwitz.

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Speaker 3: Chinese Deep Seek is building competitive AI models for a

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Speaker 3: fraction of the costs of its US rivals. The company's

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Speaker 3: AI assistant is now top of the iPhone download charts,

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Speaker 3: despite being hobbled by sanctions. Capital dot COM's senior market analyst,

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Speaker 3: Carl Roder says that it raises questions about the market

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Speaker 3: narrative around US tech dominance.

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Speaker 6: Anyone's on a sort of group chat with equity investors

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Speaker 6: or any kind of equity strategist, phones are running hot,

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Speaker 6: effectively talking about well, what is this product, how they

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Speaker 6: achieve these outcomes, and what does this mean for the

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Speaker 6: AI investment boom in the United States. It raises concerns

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Speaker 6: about overinvestment in artificial intelligence. It raises concerns that perhaps

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Speaker 6: the United States might have the competitive advantage that it

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Speaker 6: has over the rest of the world. It raises concerns

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Speaker 6: that chip demand won't be as great going forward, either

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Speaker 6: in companies like Inn Video or overvalue.

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Speaker 3: For Roder Deep Seek success might even make the Trump

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Speaker 3: administration revisit tariffs. Now's that one hundred futures tumbled as

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Speaker 3: much as one point nine percent on the news, and

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Speaker 3: the Hank saying tech in x climbed by a similar amount.

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Speaker 1: The Kansas City Chiefs have a chance to become the

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Speaker 1: first team in history to win three Super Bowls in

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Speaker 1: a row after beating the Buffalo Bills in the AFC

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Speaker 1: Championship Game. Patrick Mahomes and Travis Kelsey combined to help

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Speaker 1: deliver a result which also saw Mahomes run through the

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Speaker 1: Buffalo defense for two of the scores. Here's one of those,

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Speaker 1: brought to you by NFL's ninety six to five The

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Speaker 1: Fan first down play.

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Speaker 7: Mahomes keeps it on an RPO at the five.

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Speaker 1: It's a league plan, pick us out of the hands

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Speaker 1: on this hun touchdown. Chas City.

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Speaker 7: Patrick Mahomes of sixteen York.

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Speaker 2: Run his second rushing touchdown of the game.

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Speaker 1: Mahomes Chiefs will play the Philadelphia Eagles in the Super

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Speaker 1: Bowl Final they beat the Washington Commanders fifty five twenty

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Speaker 1: three in the NFC Conference Championship game.

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Speaker 3: And those are your top stories this morning. Let's get

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Speaker 3: to the markets, where at the moment, stop futures for

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Speaker 3: the US, particularly the NASDAC are sinking two point four

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Speaker 3: percent lower s and p FO one hundred EMI futures

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Speaker 3: also down one point four percent. US SOOX fifty futures

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Speaker 3: down by one percent. The threat of a big AI rival,

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Speaker 3: cheaper AI rival out of China. Masci ash Pacific indexes

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Speaker 3: down two tenths of one percent. On the bond markets,

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Speaker 3: we see treasuries rising. Full fifty six is where we

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Speaker 3: are for teny US yields down five and a half

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Speaker 3: basis points. The Bloomberg Dollar Spot index is stronger three

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Speaker 3: tenths of one percent. At all prices are also a

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Speaker 3: fraction lower this morning.

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Speaker 1: Well, in a moment, we'll get you more on that

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Speaker 1: phone call between Donald Trump and Keir Starmer, and also

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Speaker 1: the latest in the politics in Germany. But another story

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Speaker 1: that we've been reading this morning, can you be nostalgic

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Speaker 1: about old apps on your phone? This is something our

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Speaker 1: colleague Aston Car has been writing about in Bloomberg's weekend

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Speaker 1: edition as well. He explains that he has a whole

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Speaker 1: range of discontinued apps that he still helds in his

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Speaker 1: song even though they don't work, including four Square and

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Speaker 1: Flappy Bird, which was a huge thing in about twenty

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Speaker 1: thirteen of being like an extremely basic game on an

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Speaker 1: extremely advanced piece of technology. It's getting a relant to

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Speaker 1: this year as well, but it opens the doors the

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Speaker 1: idea of this is this what nostalgia is and twenty

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Speaker 1: twenty five, So that are holding on to, you know,

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Speaker 1: old CDs long after you have a CD player.

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Speaker 3: A DVD player, or an old walkman.

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Speaker 1: I mean, yeah, well I think walking probably goes for

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Speaker 1: a decent amount of money now, does Yeah.

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Speaker 3: I mean I get that maybe keeping the old tech

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Speaker 3: or you know, your very first computer or something like that.

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Speaker 3: But no, he's keeping hold of these ghost apps and.

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Speaker 1: Just because he likes looking at the icons, I mean,

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Speaker 1: they don't don't work. I have to say I'd quite

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Speaker 1: enjoy that. He talked about Yo though, which was one

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Speaker 1: of the most silly apps ever where all you could

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Speaker 1: do is send some message that said YO, which was

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Speaker 1: a big thing for I think about twenty five minutes

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Speaker 1: in the mid twenty tens.

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Speaker 3: Yeah, I really like that story because it's a great

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Speaker 3: one on the terminal that you can read a bit

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Speaker 3: more about, you know, the Internet that wasn't I suppose

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Speaker 3: is what he's pointing to as well with those obsolete apps.

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Speaker 5: Right.

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Speaker 3: Let's turn our attention though to what's happening here in

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Speaker 3: the UK. I mean it's a Sarma and President Donald

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Speaker 3: Trump discussed trade in their first conversation since Trump returned

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Speaker 3: to the White House. The UK, along with Saudi Arabia,

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Speaker 3: could be President Trump's first overseas destination joining US now

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Speaker 3: has been bigs UK CO responded Lizzie Burden, Okay, before

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Speaker 3: we get onto whether or not we'll be seeing President

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Speaker 3: Trump having tea, you know, in one of the royal palaces.

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Speaker 3: What actually emerged from that call in terms of trade

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Speaker 3: and other issues, Well.

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Speaker 8: They were on for forty five minutes. I'd love to

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Speaker 8: get a breakdown of who did the talking. But Trump

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Speaker 8: praised Starmer as a very good person despite their ideological differences.

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Speaker 8: So that's encouraging given all the criticism Elon Musk has

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Speaker 8: been doing of Keir Starmer, and Trump said that he's,

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Speaker 8: as you said, considering a trip to the UK as

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Speaker 8: his first destination abroad, it's here or Saudi Arabia, so

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Speaker 8: that's a compliment as well for London. But Caroline, I'd

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Speaker 8: say what's striking here is what was not discussed, tariffs

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Speaker 8: and Peter Mandelson, Starmer's pick for US ambassador to watch Washington.

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Speaker 8: The UK is hoping to dodge Trump's tariffs because we

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Speaker 8: send less to the US than they send here. But

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Speaker 8: I'd say from what happened to Columbia this morning, that

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Speaker 8: just shows that the UK is not safe even if

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Speaker 8: the UK is the David to the US's goliath in

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Speaker 8: this situation. Actually, the US is the UK's biggest single

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Speaker 8: nation trade partner. Britain is America's fifth. But if you

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Speaker 8: look at the Columbia example, that imbalance meant it had

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Speaker 8: to capitulate to Trump's demands. So perhaps still not safe

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Speaker 8: from Trump's tariffs.

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Speaker 1: You mentioned Peter Mandelson there, I mean, is there a

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Speaker 1: chance that his appointment as ambassad could be rejected?

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Speaker 8: Well, our columnist Rosa Prince has a really good one

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Speaker 8: on this. She says that he's very much the presumptive

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Speaker 8: next UK ambassador to Washington. Emphasis on presumptive because that

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Speaker 8: question mark still lingers over whether he's going to be confirmed. Certainly,

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Speaker 8: the gossip in diplomatic circles on both sides of the

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Speaker 8: pond is that he could be the first ambass oorial

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Speaker 8: nominee to be rejected by a US president, and this

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Speaker 8: is because, for one, Peter Mandelson has long advocated closer

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Speaker 8: ties with Beijing. He also used to be an EU commissioner,

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Speaker 8: you'll remember Steven and in twenty eighteen he wrote an

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Speaker 8: article warning Trump's China policy was putting free trade at risk.

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Speaker 8: He is not somebody who has been pro Trump over

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Speaker 8: the years. Notably, he wasn't at Nigel Farage's pre inauguration

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Speaker 8: for Trump in Washington, the party he held, but Karen Pierce,

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Speaker 8: the outgoing UK ambassador to Washington was. Nonetheless, the expectation

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Speaker 8: remains that Trump is not going to oppose Mandalson's appointment,

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Speaker 8: and he is due to start in the post next month,

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Speaker 8: so it's one we keep.

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Speaker 6: An eye on.

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Speaker 3: Yeah, absolutely, I mean Trump's campaign manager Chris Lasceevita said,

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Speaker 3: you know that Mandelson should stay home, So that really

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Speaker 3: kind of got a lot of attention. That was a

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Speaker 3: couple of weeks ago. Meanwhile, at home this week, the

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Speaker 3: Chancellor Rachel Reeves is going to be trying to reset

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Speaker 3: the echo message from Starmer and Reaps.

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Speaker 8: Yeah, and for good reason, because the gloomy messaging post

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Speaker 8: election really has weighed on the economy. And we've seen

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Speaker 8: in the recent data. You know, on Friday we had

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Speaker 8: the UK consumer confidence figures lowest in more than a year,

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Speaker 8: jobs being cut at the fastest pace since the financial crisis,

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Speaker 8: public borrowing overshooting, forecasts, private sector activity stagnating. He had

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Speaker 8: Sainsbury's cutting three thousand jobs on Thursday. So it's a

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Speaker 8: question of whether this pivot's coming too late, six months

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Speaker 8: too late, but it kind of started. In our Davos interview,

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Speaker 8: we've sitting down with our editor in chief John Micklethwaite.

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Speaker 8: She says she wants the regulators to factor in growth

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Speaker 8: as well as risk. That's why she's acted the Competition

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Speaker 8: of Markets Authority chair. She's delayed the introduction of stricter

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Speaker 8: bank capital rules. You could say that all of that's

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Speaker 8: necessary when you've got Donald Trump back in the White

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Speaker 8: House with a deregulatory agenda. We've also reported that she's

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Speaker 8: going to approve this third Runway at Heathrow and an

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Speaker 8: interview yesterday, she signaled that the UK is open to

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Speaker 8: membership of the Pan Pan Euro Mediterranean Convention as it

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Speaker 8: tries to ease trade tensions with the EU. So we're

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Speaker 8: likely to hear more about all of this in a

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Speaker 8: speech she's giving on Wednesday, which is going to be

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Speaker 8: all about growth.

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Speaker 1: Okay, Lizzie Burden are UK correspondsent, thank you very much.

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Speaker 3: Now, as Europ's leaders are figuring out how to react

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Speaker 3: to the first week of the Trump presidency, Germany's election

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Speaker 3: campaign is hitting up. Tens of thousands of people took

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Speaker 3: part in marches over the weekend to protest against the

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Speaker 3: far right AfD party. This as Elon Musk made a

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Speaker 3: virtual appearance at an AfD rally. Our correspondent Oliver Crookers

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Speaker 3: in Berlin for US, Good morning, Olie. Elon Musk has

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Speaker 3: been a vocal supporter for AfD. What did he say

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Speaker 3: at that rally? How important is it to the party?

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Speaker 9: Yeah, so listen. I mean he reiterated many of the

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Speaker 9: points that were sort of being made for the last

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Speaker 9: sort of month and a half that he's been coming

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Speaker 9: out and sort of supporting the AfD. I mean a

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Speaker 9: lot of the stuff is on economic policy. It's really

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Speaker 9: wanting a sort of smaller government and deregulation, all that

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Speaker 9: sort of thing that it's not sort of shocking to

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Speaker 9: hear from elon Musk a lot of Brussels bashing talking

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Speaker 9: about the sort of too much bureaucracy and the really

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Speaker 9: sort of you know, too much power in the hands

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Speaker 9: of the in the control of the global elite, which

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Speaker 9: of course is coming from the richest man on the planet.

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Speaker 9: But it's clearly not just that. There's also this sort

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Speaker 9: of other thread about sort of a pride in being

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Speaker 9: German and not losing oneself and sort of the multiculturalism

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Speaker 9: that dilutes everything in the world. And then you know,

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Speaker 9: sort of going a little bit later into sort of

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Speaker 9: basically this idea that there is too much focus on

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Speaker 9: past guilt within Germany and that children should not be

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Speaker 9: guilty of the sins of their parents, their grandparents, their

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Speaker 9: great parent, great great parates and so on. And this

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Speaker 9: again is coming as you sort of you say, there's

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Speaker 9: been protests over the weekend, you know, just outside of

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Speaker 9: the office here in front of the Brandenburg Gate, there

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Speaker 9: were tens of thousands of people on Saturday protesting the

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Speaker 9: sort of move to the right. And again all of

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Speaker 9: this comes in the context of the fact that you know,

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Speaker 9: there are these very strange sort of moments politically within Germany,

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Speaker 9: and particular with Elon Musk speaking to Alice Videl, the

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Speaker 9: head of the AAFD, in which you know, they had

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Speaker 9: their twins a couple of weeks ago, in which you

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Speaker 9: started talking about sort of Hitler and how he wasn't

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Speaker 9: really part of the far right and he was part

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Speaker 9: of the far left. And this meanwhile, as the AfD

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Speaker 9: is trying to distance itself from being far right. So

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Speaker 9: there's all this sort of muddle that comes in extreme

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Speaker 9: sort of discomfort for the German political establishment in the mainstream,

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Speaker 9: but even a lot of German citizens, particularly when you

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Speaker 9: have again today you have the anniversary of the liberation

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Speaker 9: of Auschwitz. You have the Chancellor in Poland right now

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Speaker 9: with Donald Tuisk and really sort of calling attention to

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Speaker 9: all of this happening all at once, and again coming

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Speaker 9: to a sort of party the AfD that though most

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Speaker 9: of its members or many of its members may not

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Speaker 9: have sort of extreme political reviews, there are members within

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Speaker 9: that have been sort of taken up for having frankly

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Speaker 9: and Nazi sympathetic views and sort of really being open

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Speaker 9: to that sort of that sort of political message. As

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Speaker 9: far as how much it's moving the polls, the answer

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Speaker 9: is not very much. But we'll have to see when

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Speaker 9: the sort of you know, the final poll is counted

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Speaker 9: in a couple of weeks time.

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Speaker 1: Yeah, indeed, very interesting to see how much attention el

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Speaker 1: Almosk's participation is getting versus the impact as you just

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Speaker 1: describe as Oliver and egligible in polling. Our corresponded to

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Speaker 1: Oliver Krook Live in Berlin for US this morning. So

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Speaker 1: what have investors found in the Chinese startup deep Seek?

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Speaker 1: The AI assistant app has rocketed at the top of

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Speaker 1: the Apple fivephone download charts, and it's starring Doubts and

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Speaker 1: Silicon Valley. Is about the strength of America's lead in AI.

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Speaker 1: We're seeing those nasdak futures sinking, as Carolyn just mentioned,

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Speaker 1: but an agent tech share is getting a boost from this.

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Speaker 1: To discuss, we're joined by our executive editor for Markets Live, Markhudmore. Mark,

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Speaker 1: Good morning, So much excitement it seems in the market

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Speaker 1: about deep Seek. Does this look like a game changer

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Speaker 1: for tech stocks for you.

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Speaker 7: Yeah, it does. I mean, I know that sounds like

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Speaker 7: a very big call, and obviously wobotide anyone who's tried

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Speaker 7: to premptively or prematurely call the kind of the end

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Speaker 7: of the AI tech boom before. But I think there's

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Speaker 7: a couple of things here that are massive. I I

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Speaker 7: think the story has been, first of all, a little

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Speaker 7: bit mismistered, So let's recap with happened essentially over the

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Speaker 7: last week or so, but particularly in the last few days,

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Speaker 7: it's been clear that this Chinese built AI is performing

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Speaker 7: competitively with the big US names opening CHATCHABT, Claude, et cetera.

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Speaker 7: But that's not the real point here. I think a

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Speaker 7: lot of people going, oh my god, it's about challenging

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Speaker 7: to US hedge money in the kind of the tech space.

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Speaker 7: I think the two bigger aspects are it was done

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Speaker 7: very cheaply, so why the crazy amounts of spending that

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Speaker 7: are happening from the US big tech companies. And I

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Speaker 7: think the second aspect is it's it's open source, So

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Speaker 7: who's going to pay loads of money for really expensive

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Speaker 7: US models when China just said we've done an open

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Speaker 7: source and we'll let everyone use it. So I think

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Speaker 7: this is this is, this is massive, and I think,

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Speaker 7: you know, it's actually good for global stocks, but it

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Speaker 7: deeply undermines the massive premium in US stocks. And I've

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Speaker 7: used a lot of hyperbole there and kind of its

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Speaker 7: strong statements, but I mean them like US share of

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Speaker 7: global marcacarp workp just peaked out last Thursday and made

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Speaker 7: a record high above fifty percent, and it's just it's

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Speaker 7: it's in crazy how much US stocks are valued versus

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Speaker 7: the rest of the world. They're valued very kind of

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Speaker 7: moderately relative thrown here or relative to the US And

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Speaker 7: I think this is probably a game changing moment because

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Speaker 7: I think suddenly the whole US stocks exceptionalism of the

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Speaker 7: last fourteen to fifteen years is probably undermined by this

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Speaker 7: because it's simultaneously is good for productivity and growth from

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Speaker 7: the rest of the world, good for companies all over

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Speaker 7: the rest of the world, and undermines the whole US

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Speaker 7: tech phenomenon. So I think it it hits from both sides.

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Speaker 7: So I think actually last Thursday probably saw that the

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Speaker 7: long term peak in US share of global market cap.

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Speaker 3: That is a big, cool, very interesting mark and as

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Speaker 3: you say, it very much pertains to the trade story

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Speaker 3: as well, the rivalry between US and China, where you've

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Speaker 3: seen the US sort of tried to and indeed bloc

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Speaker 3: China's access to the kind of cottage cutting edge chips,

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Speaker 3: and really the attitude to trade of the current White

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Speaker 3: House is hugely important and also having an impact on markets.

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Speaker 3: I mentioned the Mexican pay so the reaction to the

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Speaker 3: threat of tariffs against Columbia and then there is a

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Speaker 3: rapid U turn. What did you make of that whole

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Speaker 3: back and forth between the Columbian president and the US.

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Speaker 7: Yeah, this is important. It's another incremental step in it

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Speaker 7: in a story it's been running for a while. But

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Speaker 7: the point is that no one can have faith in

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Speaker 7: any of their supply chain plans when dealing with the

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Speaker 7: US anymore. That is an added cost to business with

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Speaker 7: dealing with the US with US companies, and this is

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Speaker 7: another negative out there and another reason why I'm kind

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Speaker 7: of making that big call of the end of US

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Speaker 7: stocks exceptionalism. You know, the Columbia is a long time

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Speaker 7: ally of the US, probably it's longest longest ally in

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Speaker 7: South America, and it also has a trades plus the US,

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Speaker 7: so it's not meant to be one of the big

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Speaker 7: targets here. So if you had to put a list of,

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Speaker 7: you know, all the countries in the world that might

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Speaker 7: be vulnerable to to Trump's whimsor attack, you probably would

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Speaker 7: have put Columbia relatively low in the list. But suddenly

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Speaker 7: it's getting you know, twenty five percent tarifs that was

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Speaker 7: going to be fIF percent in a week. Now, of

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Speaker 7: course it's all changed back, but it shows that that

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Speaker 7: Trump is willing to kind of bandy this about at

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Speaker 7: a moment's notice, quite aggressively. And that means that every

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Speaker 7: company that does business with US companies now has to

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Speaker 7: add in and this extra and certainly premium. They can't

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Speaker 7: plan for the long term. And I think that's extremely damaging.

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Speaker 7: And that means if there is any alternative that's similarly

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Speaker 7: priced or even slightly more expensive, you're going to prefer

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Speaker 7: to do business with those other companies rather than trading

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Speaker 7: with US companies. And that means President Trump is adding

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Speaker 7: a cost of business for the US and that is

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Speaker 7: another negative for US companies when they're priced exorbitantly expensive.

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