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

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Speaker 2: This is the Bloomberg daybreakurate podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Thursday, the twenty ninth

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Speaker 2: of May in London. I'm Caroline Hepcot. Coming up today.

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Speaker 2: Trump's tariffs blocked. A US trade court rules that most

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Speaker 2: of the US presidents sweeping global levies are illegal. Markets

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Speaker 2: gain as traders digest the latest twist in the trade story,

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Speaker 2: as well as upbeat Nvidia earnings. Plus the UK government

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Speaker 2: says that it is prepared to use legislation to force

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Speaker 2: pension funds to invest in private markets and the domestic economy.

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Speaker 2: Let's start with a roundup of our top stories. A

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Speaker 2: US trade court has blocked most of President Donald Trump's

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Speaker 2: global tariffs. A panel of three judges at the US

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Speaker 2: Court of International Trade in Manhattan issued a unanimous ruling

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Speaker 2: that they were illegally in posed under an emergency law.

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Speaker 2: The judges rejected the government's argument that President Trump had

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Speaker 2: authority to unilaterally issue tariffs under a law intended to

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Speaker 2: address financial transactions during national emergencies. The court has ordered

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Speaker 2: the tariffs to be stopped within ten calendar days. We

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Speaker 2: got reaction from the former IMF Chief economist Olivier Blanchard.

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Speaker 3: A not a legal scholar, but it was clear that

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Speaker 3: the so called reciprocity tariffs, which was ten percent of

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Speaker 3: cost of ward, doesn't have a national security justification, which

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Speaker 3: is when he has used to actually put tariffs.

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Speaker 2: So I think this one is.

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Speaker 3: Probably in trouble and there's going to be legal steps, right,

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Speaker 3: but I suspect that he will have to think this

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Speaker 3: one off. You're replaced by something he will basically, I

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Speaker 3: think tried to get tariffs against particular countries. We'll see

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Speaker 3: how it goes. It's just one more level of uncertainty.

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Speaker 2: Olivier Blanchard, now of the Peas Institute, speaking there to

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Speaker 2: Bloomberg as President Trump's Justice Department said that it will

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Speaker 2: appeal the ruling. A White House spokesperson added that it

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Speaker 2: is not for unelected judges to decide how to properly

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Speaker 2: address a national emergency. The order covers President Trump's global

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Speaker 2: ten percent flat tariff increased rates on China and other countries,

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Speaker 2: as well as fentanyl related levees on China, Canada, and Mexico.

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Speaker 2: Other tariffs imposed under different powers by President Trump, including

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Speaker 2: on steel, aluminium, and vehicles remain in place now. The

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Speaker 2: court's ruling has led to a surge in stock markets,

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Speaker 2: the S and P five hundred and Nasdaka futures gaining

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Speaker 2: one point six percent and two percent, respectively, while shares

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Speaker 2: in Asia are rising zero point six percent on the news. Meanwhile,

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Speaker 2: the dollar strengthened on the decision, but it remains significantly

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Speaker 2: down from its February high. Timothy Murray is Chief Asia

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Speaker 2: Pacific equitiesash is at Goldman Sachs. He's urging caution on

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Speaker 2: the possible upside for markets.

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Speaker 4: With the SMP and other global market serving rallied well

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Speaker 4: over twenty percent from the lows in early April. April seventh,

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Speaker 4: the SMP aple night for the mscaa Asia Pacific Extrapan Index,

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Speaker 4: a lot of optimism has already been priced in, so

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Speaker 4: I think it's we have to say this is a

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Speaker 4: fundamentally constructive development from the standpoint of lowering tariff risk,

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Speaker 4: but not all the risk is off the table and

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Speaker 4: markets have well priced there.

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Speaker 2: Timothy Murray as that while this might be considered a

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Speaker 2: body blow, it's not the final rendering. Now. The comments

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Speaker 2: come after President Trump's century high tariffs and his plan

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Speaker 2: to cut taxes in the US, which has spooked investors

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Speaker 2: who caught onto a Cell America trade and mid concerns

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Speaker 2: that the trade will would hurt global growth. Now, in

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Speaker 2: other news this morning, billionaire Elon Musk has announced that

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Speaker 2: he's stepping down from President Trump's administration. The Tesla CEO

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Speaker 2: shared on x yesterday that his time i'm as a

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Speaker 2: formal advisor in the White House is over. By law,

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Speaker 2: Musk's status as a temporary government worker was set to

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Speaker 2: expire as soon as tomorrow, the exact date determined by

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Speaker 2: the number of days worked. This was raised questions about

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Speaker 2: the Department of Government efficiency effort that he spearheaded, which

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Speaker 2: fell short of its own high expectations for cost savings.

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Speaker 2: His departure comes shortly after Musk criticized the Presiden's flagship

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Speaker 2: tax bill in a recent interview, and after he told

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Speaker 2: Tesla investors in April that he would devote more time

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Speaker 2: to the firm. In earnings news, n Vidia CEO Jensen

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Speaker 2: Wong says that Chinese AI rivals are taking on US

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Speaker 2: firms as their technology develops. Speaking to Blueberg, he warned

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Speaker 2: the companies like Huawei and others are filling the void

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Speaker 2: left by the American departure from the Chinese market.

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Speaker 4: Without American technology, the availability of Chinese technology will fill

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Speaker 4: the market.

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Speaker 2: And so you know, whatever we offer has.

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Speaker 4: To at least at least be competitive and has to

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Speaker 4: add value to the market.

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Speaker 2: That was Nvidia's Jensen Wong speaking their too Bloomberg. He

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Speaker 2: went on to highlight the shrinking gap between US products

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Speaker 2: and their Chinese alternatives, pointing to similarities between Huilawei's latest

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Speaker 2: AI chip and Nvidia's own Age twenty product. US restrictions

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Speaker 2: on experts to China have effectively locked Nvidia out of

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Speaker 2: the country, and this is the largest market for chips

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Speaker 2: in the world, causing expected losses of eight billion dollars

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Speaker 2: in sales for Nvidia this quarter alone. Bed officials back

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Speaker 2: to patient stance on interest rates, blaming the rising risk

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Speaker 2: from tariffs to both inflation and unemployment in the US.

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Speaker 2: The minutes from the Central Bank's May meeting pointed to

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Speaker 2: an increase in economic uncertainty since April. Federal Reserve reporter

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Speaker 2: Amara mcquai says that the document underlines that wait and

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Speaker 2: see approach from many policy made and.

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Speaker 5: The minutes underscore once again just how much tariffs are

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Speaker 5: complicating the economic outlook and how focused FED officials are

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Speaker 5: on ensuring that teriffs do not lead to persistent inflation

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Speaker 5: or inflation expectations becoming unchecked.

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Speaker 2: FED reporter Amara Omaqui speaking there, even with the latest

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Speaker 2: tariff reprieve, duties on imports do remain historically elevated, and

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Speaker 2: many businesses have put hiring and investment decisions on hold

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Speaker 2: in the US. So that's on those FED minutes, as

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Speaker 2: I say here. In the UK though, very interesting story.

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Speaker 2: So the government says that it is planning to require

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Speaker 2: pension funds to invest in private markets and the domestic economy.

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Speaker 2: It's a move that's widely opposed by the City of

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Speaker 2: London's investment managers Bloombergs, James Orcock has more now.

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Speaker 6: Two weeks ago, Chancellor Rachel Reeves gathered with Britain's major

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Speaker 6: pension funds to agree to put five percent of their

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Speaker 6: assets into UK private markets. Bloomberg aster at the time

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Speaker 6: if she would ever force them into it.

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Speaker 7: We don't need to mandate them if people are willing

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Speaker 7: to sign a voluntary accord, and today we've shown that

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Speaker 7: that is possible. With seventeen businesses representing ninety percent of

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Speaker 7: active savers signing up voluntarily to this.

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Speaker 6: Now the Chancellor plans to legislate to give herself the

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Speaker 6: power to set legally binding targets anyway, just in case

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Speaker 6: some of the CEOs who signed up to the pact

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Speaker 6: are worried they fit acting in the best interests of

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Speaker 6: their savers will clash with investing in the government's priorities.

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Speaker 6: In London, James Wilcock, Bloomberg Radio.

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Speaker 2: So those are a few of our top stories for

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Speaker 2: you this morning. Let's think about the markets then, as

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Speaker 2: we do see this another tariff bombshell. Mascias specific INDATEX

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Speaker 2: up by six cents of one percent. You've got the

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Speaker 2: cost beat up by one point seven percent. Japanese stocks

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Speaker 2: hired this morning, and the stock futures are flying right now.

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Speaker 2: Nasdaq futures up almost two percent. S and P five

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Speaker 2: hundred evenly features up one point six percent. European stop

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Speaker 2: which is also up by one point three percent this

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Speaker 2: morning on this ruling by the court in Manhattan. As

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Speaker 2: for ten yere treasury yields, they trade currently at four

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Speaker 2: point five percent by a couple of basis points this morning,

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Speaker 2: and the dollar is also stronger by a quarter of

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Speaker 2: one percent on the Bloomberg Dollar Spot Index this morning.

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Speaker 2: There is still, though, you have to lay into the

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Speaker 2: enthusiasm in markets for the reversal of tariffs, the fact

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Speaker 2: that it could also set up a major clash effectively

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Speaker 2: between the US judiciary and the executive branch. So maybe

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Speaker 2: there's more uncertainty for tariffs to come. Anyway. We're going

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Speaker 2: to talk a bit more in a moment with all

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Speaker 2: the analysis about that US Trade Court decision blocking President

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Speaker 2: Trump's global tariffs, and we'll also get you the market

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Speaker 2: reaction to it. It's hugely important story. But before we

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Speaker 2: get to that, there's something else that has caught my

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Speaker 2: eye this morning. Traders do always love a pithy term

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Speaker 2: for a big idea, don't they, Tina, there's no alternative

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Speaker 2: fomo fear of missing out and now Taco Trump always

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Speaker 2: chickens out. Have you heard this phrase? It has been

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Speaker 2: adopted by traders investors basically seizing on market declines right

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Speaker 2: after the president makes tariff threats because they expect him

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Speaker 2: ultimately to relent. For example, when he did that last

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Speaker 2: week with Europe and the thread of fifty percent tarifs

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Speaker 2: and he delayed it. Well, he was asked about this

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Speaker 2: very issue. A reporter asked President Trump about this, and

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Speaker 2: he sounded pretty annoyed about this idea, and he went

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Speaker 2: on to explain why he was doing this and the

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Speaker 2: idea about negotiation. Have listened to what he said.

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Speaker 8: It's called negotiation. You set a number, and if you

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Speaker 8: go down. You know, if I set a number at

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Speaker 8: a ridiculous high number and I go down a little bit,

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Speaker 8: you know a little bit, they want me to hold

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Speaker 8: that number. One hundred and forty five percent tariff even.

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Speaker 8: I said, man, that really got up. You know how

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Speaker 8: it got because of fent and all and many other things,

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Speaker 8: and you hit it it up. I said, where are

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Speaker 8: we now? We're one hundred and forty five percent. I said, whoa,

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Speaker 8: that's high.

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Speaker 2: President Trump there, Well, he bristled. Really the idea that

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Speaker 2: traders sort of see his draconian trade threats as blustered

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Speaker 2: by any big sell off related to Trump tariff threats.

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Speaker 2: But of course that was before the tariffs were blocked

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Speaker 2: by a panel of three judges in the United States.

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Speaker 2: So one story that really caught my eye today. But

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Speaker 2: speaking of that, court decision. Let's get more details on it.

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Speaker 2: Because those judges blocking most of President Trump's global tariffs,

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Speaker 2: deeming them illegal something that Trump administration is appealing. So

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Speaker 2: what does the ruling mean? Joining us now our Hong

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Speaker 2: Kong News Desk editor Jill Desis, Good morning, Jill. Which

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Speaker 2: tariffs is the court blocking and which remain? Can you

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Speaker 2: sort through them?

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Speaker 9: Yes, Good morning, Caroline. So, as you just said, this

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Speaker 9: is a pretty significant ruling because it actually does affect

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Speaker 9: most of the Trump tariffs. This is specifically targeting the

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Speaker 9: ones that he invoked through executive order. The idea behind

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Speaker 9: it was that he was declaring the use of some

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Speaker 9: emergency powers in order to affect these tariffs that the

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Speaker 9: court is saying was illegal. And so this is mostly

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Speaker 9: the global flat rate tariff that Trump you know, orchestrated,

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Speaker 9: also all of those elevated rates on China, some others,

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Speaker 9: the fentanyl related tariffs on China, Canada and Mexico. So

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Speaker 9: what it doesn't include are tariffs imposed under different powers.

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Speaker 9: So there's you know, levees that are unaffected. That included

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Speaker 9: tariffs on steel, aluminum, and automobiles. But aside from that,

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Speaker 9: I mean, when we're talking about that big blanket global

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Speaker 9: tariff rollout that Trump was talking about. That really being

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Speaker 9: the target of this in what's now in question in

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Speaker 9: the courts is I think very significant.

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Speaker 2: Yeah. Absolutely. This is the IEPA law that President Trump

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Speaker 2: cited as a justification for the tariffs, so law dating

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Speaker 2: back to nineteen seventy seven. Look, the court has given

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Speaker 2: the administration ten calendar days to act, but then the

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Speaker 2: government's also appealing the ruling. So what does that mean?

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Speaker 9: Well, so this is where it gets very murky. So

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Speaker 9: what that court order says is that the administration has

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Speaker 9: ten days to you know, basically follow this effectuate they said,

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Speaker 9: you know, to effectuate the order. But the order also

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Speaker 9: didn't provide any specific directions of steps that the Trump

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Speaker 9: administration must take to unwind the tariffs. I mean, you know,

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Speaker 9: it's it's, you know, sort of this idea of okay, well,

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Speaker 9: if you've got ten days, that just mean in ten

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Speaker 9: days time, are all the border agents going to stop

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Speaker 9: collecting duties on anything crossing over. I mean it's kind

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Speaker 9: of you know, difficult to imagine how exactly the Trump

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Speaker 9: administration would enforce that, or you know, whether it wants

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Speaker 9: to enforce that. I guess for one thing. The other

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Speaker 9: thing that's really in question here is obviously, because the

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Speaker 9: Trump administration is appealing this, so the Trade Court in

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Speaker 9: New York that we've been talking about, that's part of

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Speaker 9: the US federal court system. So you can imagine a

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Speaker 9: scenario where, you know, the Trump administration, which is now

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Speaker 9: doing this, it's appealing this to a federal appeals court.

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Speaker 9: It could it's something that could end up in front

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Speaker 9: of the Supreme Court of the United States. And so

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Speaker 9: really the question there is whether you know, an appellate

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Speaker 9: court or if it does end up before the Supreme Court,

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Speaker 9: whether they you know, institute a motion to stay any

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Speaker 9: lower court decisions so that you know, we can you know,

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Speaker 9: kind of continue to see how all of this is

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Speaker 9: going to play up. But again, I think that's just

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Speaker 9: a long rambling way of saying it's still very murky

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Speaker 9: on how exactly you know this this all plays out

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Speaker 9: right now?

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Speaker 2: Yeah, okay, So then any response about tariff relief from China,

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Speaker 2: of course a major issue between the US and China.

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Speaker 9: Yeah, I mean, obviously we're still you know, waiting for

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Speaker 9: a response there. I mean, you know, we're we've obviously

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Speaker 9: reached out to those relevant channels. But you know, I imagine,

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Speaker 9: you know, there's got to be something coming down the

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Speaker 9: pipeline here. I think at this point, Caroline like just

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Speaker 9: you know, obviously this isn't the end of the tariff story,

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Speaker 9: and you know, any chance that you know that you know,

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Speaker 9: a higher court does ultimately say that Trump can go

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Speaker 9: ahead with these tariffs, but I do think that it's

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Speaker 9: just worth highlighting that you know, this this still remains

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Speaker 9: a blow in the sense that, you know, it adds

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Speaker 9: to that additional uncertainty over whether Trump can enforce you know,

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Speaker 9: what was really kind of the signature piece of his

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Speaker 9: tariff agenda. And when you consider the fact that I think,

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Speaker 9: you know, really two things to mention here. I mean,

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Speaker 9: first of all, there's still a lot of trade deals

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Speaker 9: with countries around the world that have not yet been completed,

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Speaker 9: so a big question as to how this actually enters

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Speaker 9: the negotiations there. And then also, I mean, you know,

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Speaker 9: the tariffs were kind of held up. Is this idea

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Speaker 9: of providing revenue to offset you know, the impact from

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Speaker 9: tariffs from Trump's you know, big beautiful tax bill. So

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Speaker 9: I think that there's still a lot to kind of

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Speaker 9: juggle here, and I think it's going to be really

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Speaker 9: really interesting to see whether this goes forward and you know,

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Speaker 9: whether these tariffs actually end up taking effect.

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Speaker 2: Yeah, absolutely, and what the reaction film businesses might be

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Speaker 2: also whether they could be front loading of impults again

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Speaker 2: for example, I mean the Federal Reserve minutes yesterday. Also

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Speaker 2: they cut down on the growth expectations for the US

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Speaker 2: twenty twenty six. But that all of that now looks

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Speaker 2: again a bit out of date, doesn't it.

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Speaker 10: Yeah.

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Speaker 9: I mean, you know, it reminds me of back when

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Speaker 9: you know, originally you were seeing some of these tariffs

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Speaker 9: go into a factor. You had you know, Trump announcing

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Speaker 9: you know, just higher tariffs or lower tariffs are changing

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Speaker 9: his mind on different things. And you know how many

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Speaker 9: different you know really started investment banks were just revising

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Speaker 9: their global growth forecasts, you know, left, right and center.

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Speaker 9: I mean, it does I think just add to this,

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Speaker 9: you know, continued story of a lot of uncertainty, as

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Speaker 9: you mentioned, particularly for a lot of those exporters that

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Speaker 9: have to worry about whether they should continue front loading

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Speaker 9: things or whether they should change from their strategies. And

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Speaker 9: I think yeah, just really really adds to that that

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Speaker 9: overall volatility picture.

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Speaker 2: It certainly does. Yeah, indeed, and the Fed minutes also

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Speaker 2: showed that policymakers were boosting their inflation expectations too. But

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Speaker 2: as you say, it pointed policymakers pointed to uncertainty, you'll

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Speaker 2: point into uncertainty. Jill, thank you so much for being

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Speaker 2: with me this morning, our Hong Kong News Desk editor

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Speaker 2: Jill de sis Well. Investors, of course, are scrambling to

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Speaker 2: understand the consequences of the court ruling. Stop futures are

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Speaker 2: celebrating the dollar's caught a bid, But does it mean

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Speaker 2: more uncertainty in markets in the days ahead? Our Markets

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Speaker 2: Live shash is Mary Nicola joins me. Now, Mary, good morning.

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Speaker 2: How are markets reacting? How do you see what's going

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Speaker 2: on with investors?

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Speaker 1: Oh, as you pointed out, they're celebrating this. It's just

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Speaker 1: been such a good day for stocks. It's been good

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Speaker 1: day for resentiments, with equity futures rising. You've seen across

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Speaker 1: the board green even in Asia. So it has been

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Speaker 1: a really strong day in terms of the Essentially, the

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Speaker 1: Trump administration has been dealt a big blow on tariffs,

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Speaker 1: and the market is realizing that this is great news,

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Speaker 1: especially for growth not only for growth in the US

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Speaker 1: but growth globally, So there could be an unwine of

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Speaker 1: just what expectations are for growth, and that's what's really

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Speaker 1: fueling sentiment.

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Speaker 2: Yeah, does it change things though structurally when it comes

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Speaker 2: to the US dollar, which has been on this big

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Speaker 2: leg lower this morning, we're up a little bit. Does

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Speaker 2: it change the structural set up? So?

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Speaker 1: I don't think so, because I think there's still a

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Speaker 1: lot of uncertainty out there in terms of how this

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Speaker 1: all plays out. Does of course, now we're in an

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Speaker 1: environment where the Trump administration is going to appeal with

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Speaker 1: the courts. Then we're going to see what if it

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Speaker 1: gets to the Supreme Court, So it's going to be

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Speaker 1: a long drawn out battle and how it ends ends

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Speaker 1: will be difficult to gauge as of now. So there's

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Speaker 1: still and then of course you have an added concern

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Speaker 1: over you know, does does the Trump administration even abide

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Speaker 1: by the rules of the court and the and the

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Speaker 1: court order as we've seen in the in some cases

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Speaker 1: recently where they haven't. So it's and that would really

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Speaker 1: bring up concerns about the US's rule of law, the

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Speaker 1: and and just bring back that Cell America concern the

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Speaker 1: Sell America trade and concern over policies and how they

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Speaker 1: are unfolding in the US.

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Speaker 2: Yeah, so that's what's happening in the US. But of course,

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Speaker 2: closer to where you are, the response in China and Asia,

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Speaker 2: what would you pick out?

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Speaker 1: Yeah, I think what has been the clearest thing because

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Speaker 1: especially in Asia, we've had both the combination of Nvidia

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Speaker 1: results and then of course this this terriff reprieve. But

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Speaker 1: I think what's interesting is just how currencies have reacted

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Speaker 1: because obviously dollar downside was a big, big, big trade

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Speaker 1: and then of course we had comments from the Bank

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Speaker 1: of Korea governor who said that FX was discussed. So

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Speaker 1: there is still a lot of appreciation pressure on these currencies,

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Speaker 1: especially to fix these the imbalances that they have with

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Speaker 1: the US, and that Yes, sure today we're seeing the

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Speaker 1: dollar as a rising star, but it still doesn't take

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Speaker 1: away the appreciation pressures on the currencies in the region,

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Speaker 1: and that's not going to go away.

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