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

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Speaker 2: This is the Bloomberg Day BAQ podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Friday, the

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Speaker 2: twenty seventh of Junior London. I'm Caroline Hepca and.

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Speaker 3: I'm Stephen Carroll. Coming up today, the US Treasury pulls

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Speaker 3: the so called revenge tax from Trump's Big Beautiful Bill,

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Speaker 3: following a G seven deal exempting American companies from the

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Speaker 3: Global minimum tax.

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Speaker 2: UK Prime Minister Kiss Damer waters down plans to cut

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Speaker 2: welfare in a bid to quell a growing labor rebellion.

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Speaker 3: Plus degrees of separation, growing political pressure on US universities,

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Speaker 3: Bush's American students to look beyond the Ivy League and

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Speaker 3: towards the UK.

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Speaker 4: Let's start with a roundup of our top stories.

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Speaker 3: The US Treasury has announced a deal with G seven

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Speaker 3: countries to remove a controversial revenge tax from President Donald

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Speaker 3: Trump's Big Beautiful Bill Section eight nine nine what have

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Speaker 3: targeted countries his tax policy were deemed discriminatory by the

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Speaker 3: United States, applying higher rates exclusively to those jurisdictions. Under

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Speaker 3: the agreement announced late last night, American firms will be

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Speaker 3: exempted from an OECD broker to fifteen percent global minimum

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Speaker 3: tax rate for big companies. Bloomberg's Capitol Hill reporter Eric

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Speaker 3: Wasson says the eight nine to nine threat got other

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Speaker 3: nations to back down.

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Speaker 5: The revenge tax was never really designed to go into effect.

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Speaker 5: It was meant as a cudgel to get an agreement

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Speaker 5: on things like the Digital services tax. These are efforts

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Speaker 5: that really impact Meta, Google, Amazon, Uber and others providing

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Speaker 5: digital services. It would be a major win for those

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Speaker 5: companies if there's agreement to get rid of those or

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Speaker 5: to lessen them.

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Speaker 3: Bloomberg's Capitol Hill reporter Eric Wasson says section eight ninety

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Speaker 3: nine had sparked fears on Wall Street and beyond that

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Speaker 3: it would make it much more expensive for foreign individuals

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Speaker 3: and companies to invest in the United States. Meanwhile, a

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Speaker 3: Republican plan to slash medicaid and healthcare spending hit a

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Speaker 3: major hurdle in the Senate. The Chambers Legislative Referee ruled

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Speaker 3: key provisions ineligible for fast track consideration, complicating President Trump's

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Speaker 3: push to pass the tax and spending bill by the

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Speaker 3: fourth of July.

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Speaker 2: Now, the US and China have finalized their trade understanding,

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Speaker 2: which includes Beijing's commitment to deliver rare earths used in

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Speaker 2: various industries. The US Commerce Secretary Howard Lutnik says the

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Speaker 2: deal was signed two days ago. Speaking to Blueberg's balance

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Speaker 2: of power, Lutnik also said that President Trump is ready

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Speaker 2: to complete several trade deals within two weeks ahead of

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Speaker 2: his July ninth deadline to bring back higher tariffs that

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Speaker 2: were paused back in April.

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Speaker 6: What we're going to do is we'll announce some deals,

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Speaker 6: but basically the deals we're going to announce are are

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Speaker 6: sort of the head of the class, the structural spot

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Speaker 6: in the line, and then all the other countries will

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Speaker 6: fit behind those categories, right, So we're going to do

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Speaker 6: top ten deals, put them in the right category, and

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Speaker 6: then these other countries will fit behind.

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Speaker 2: And you can hear the full conversation with the US

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Speaker 2: Commerce Secretary Howard Lotnik on our Bloomberg Talks podcast all

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Speaker 2: of our key interviews in one place. Lotnik, though did

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Speaker 2: not specify which countries will be part of that first

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Speaker 2: wave of trade packs. Earlier on Thursday, President Trump suggested

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Speaker 2: the US was nearing an agreement with India.

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Speaker 3: The European Commission President Arslavanderlyne says the EU is prepared

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Speaker 3: for all outcomes of its trade negotiations with the United States.

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Speaker 3: Speaking at a press conference, the European Commission president said

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Speaker 3: nothing is yet ruled out.

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Speaker 4: We are ready for a deal.

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Speaker 7: At the same time, we are preparing for the possibility

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Speaker 7: that no satisfactory agreement is reached. This is why we

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Speaker 7: consulted on a rebalancing list and we will defend the

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Speaker 7: European interest as needed. In short, all options remain on

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Speaker 7: the table.

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Speaker 3: Arsla vanderlyn speaking there her comments commas EU officials way

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Speaker 3: whether to accept an asymmetrical trade deal with the United

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Speaker 3: States or retaliate, risking and escalating trade war. At a

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Speaker 3: summit in Brussels this week, most member states argued that

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Speaker 3: a quick EU US agreement would be better than waiting

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Speaker 3: for a perfect one. He needs to reach an agreement

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Speaker 3: with President Trump by the ninth of July, when Levy's

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Speaker 3: on nearly all of the block sax bots to the

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Speaker 3: US increase to fifty percent.

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Speaker 2: UK promen it's a kiss Starmer capitulated to rebels in

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Speaker 2: his party angry about his plan to cut welfare, setting

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Speaker 2: up a one point five billion pound fiscal hole for

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Speaker 2: the government.

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Speaker 4: Bloomberg has learned that.

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Speaker 2: The Labor leader agreed to pare back the controversial plan

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Speaker 2: after nearly a third of his own MPs warned that

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Speaker 2: they would vote against the government. Treasury Select Committee chair

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Speaker 2: Make Hillier, who led the rebellion, says that she will

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Speaker 2: likely back the bill now big.

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Speaker 8: Change since last week and massive changes to ensure that

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Speaker 8: the most vulnerable people are protected in terms of their

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Speaker 8: personal independence payments and the health element of universal credit

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Speaker 8: and crucially involving disabled people themselve in the design of

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Speaker 8: future benefit changes.

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Speaker 2: Hillys changes mark of the government's second major u turn

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Speaker 2: in as many months, after it dropped a controversial cut

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Speaker 2: to winter fuel payments. Both reversals leave Chance of Rachel

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Speaker 2: Reeves needing to raise even more money to be able

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Speaker 2: to stick to her fiscal rules.

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Speaker 3: The Bank of Governor Andrew Bailey says the government's new

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Speaker 3: payroll tax is costing the UK jobs and pushing up

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Speaker 3: food prices. Tax data suggests employment fell at the fastest

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Speaker 3: pace in five years in May, with more than a

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Speaker 3: quarter of a million jobs lost since the Labor government's

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Speaker 3: policies were announced last October. The Governor's comments help explain

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Speaker 3: his recent decision to leave interest rates unchanged. Markets are

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Speaker 3: pricing in an eighty percent probability of a quarter point

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Speaker 3: reduction to four percent next month.

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Speaker 2: And lastly, Impossible Foods is one step closer to compete,

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Speaker 2: completing a six year quest to enter the world's biggest

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Speaker 2: meal alternate market. So the move would be a major

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Speaker 2: breakthrough for the California based company.

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Speaker 4: Bluebigs. Here at a Bio has the details.

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Speaker 9: Demand for meat in the US is on the rise,

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Speaker 9: fueled by maga, masculinity, rhetoric and.

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Speaker 4: Weight loss drugs.

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Speaker 9: The surge is driving alternative protein retailer Impossible Foods to

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Speaker 9: look elsewhere in a bid to boot sales. According to

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Speaker 9: CEO Peter McGinnis, the firm is on the verge of

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Speaker 9: rolling out its food to countries including Germany and the UK,

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Speaker 9: pending regulatory approval. He says sustainability conscious consumers on the

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Speaker 9: continent are more open to plant based eating than their

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Speaker 9: American counterparts. However, the brand still has to navigate strict

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Speaker 9: EU regulations on new ingredients and genetically modified food before

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Speaker 9: its products can feature on European menus. In London, he

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Speaker 9: were at a Bio Bloomberg Radio.

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Speaker 4: And those are top stories for you this morning.

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Speaker 2: Looking at the market's Asian socks, rising optimism about trade deals.

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Speaker 2: How Latinnik mentioning those ten We still don't have details,

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Speaker 2: but the Old country World indexes up, the MSCI Aged

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Speaker 2: Specific indexes up four tenths of one percent, The COSTP

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Speaker 2: is a lower this morning. Stop futures for you're also

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Speaker 2: very pulsive, up half of one percent. And you've also

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Speaker 2: got the S and P five hundred, which gained eight

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Speaker 2: tens of one percent, within striking distance of another new

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Speaker 2: record high. That is just really remarkable, isn't it In

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Speaker 2: terms of what stocks have done.

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Speaker 4: Blue Big Dollar Spot.

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Speaker 2: Indexes up a tenth of one percent, Tenure treasure yields

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Speaker 2: at four twenty five up a basis point, so increased.

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Speaker 2: The expectations of Fed interest rate cuts now also worth

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Speaker 2: mentioning for the bond markets.

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Speaker 3: In a moment, we'll bring you more on the US

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Speaker 3: abandoning its plans for a revenge tax, plus why Donald

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Speaker 3: Trump's campaign against Harvards and other American colleges are feeling

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Speaker 3: interest in British universities.

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Speaker 4: But other story caught our eye.

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Speaker 3: I mean, this was a surprise, perhaps not to people

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Speaker 3: in the industry, but the name at who has been

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Speaker 3: synonymous with Vogue for decades and a Winter is going

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Speaker 3: to be stepping down from her role as editor in

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Speaker 3: chief of American Vogue.

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Speaker 2: Absolutely, we still claim her as British born English, although

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Speaker 2: of course she is the doyenne of American fashion. Yeah,

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Speaker 2: an amazing career those seven years. That she's only stepping

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Speaker 2: back one for one role of her jobs, it's one

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Speaker 2: of many, many jobs. Absolutely, this is Dame Anna Winter,

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Speaker 2: of course, and she will still basically be the chief

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Speaker 2: content officer for this huge stable of magazines at Conde, Nasty, Ward, Vanity, Fair, GQ,

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Speaker 2: glamor Tatler. I think the most remarkable thing about it is,

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Speaker 2: you know, most people don't even really buy magazines if

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Speaker 2: you look at circulation numbers, but Vogue is one of

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Speaker 2: the ones that has remained, you know, at the forefront,

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Speaker 2: and so you know, keeping hold of that empire and

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Speaker 2: keeping hold of eyeballs I think is really amazing.

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Speaker 4: Yeah, I quite like that.

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Speaker 3: Apparently the staff meeting where she made this announcement, she

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Speaker 3: said it goes that, saying that I planned to remain Vogues,

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Speaker 3: Tennis and theater editor in perpetuity, and why not after

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Speaker 3: that sort of tenure running that job. Good luck to

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Speaker 3: annointour Well, let's bring you more now. In our top

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Speaker 3: story this morning, the US Treasury announcing a deal with

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Speaker 3: G seven countries that will exclude US companies from the

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Speaker 3: Global Minimum corporate tax, the fifteen percent rate that was

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Speaker 3: the greatest part of a deal at the OECD. This

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Speaker 3: is in exchange for removing the so called revenge tax

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Speaker 3: proposal section eight nine to nine from Donald Trump's tax bill.

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Speaker 3: That's bringing our News desk editor Jill Lisis for more

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Speaker 3: on this. Jill, what do we know about the deal

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Speaker 3: the US did with its G seven allies.

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Speaker 10: Yes, well, I think, just as you outlined essentially here,

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Speaker 10: the big news is that those US companies are going

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Speaker 10: to be excluded from that pillar two, that that's the

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Speaker 10: Global Minimum tax that was implemented in twenty twenty four.

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Speaker 10: I do believe at this point you've got obviously the

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Speaker 10: US saying that they've they've reached this deal with G

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Speaker 10: seven nations. I think this still has to be formally

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Speaker 10: approved by the OECD at some point within the next

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Speaker 10: week or so. But again, you know, the big trade

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Speaker 10: off here is of course scrapping that revenge tax proposal.

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Speaker 10: So I mean, you know, that's the one that was

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Speaker 10: you know, really looking at the idea of creating a

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Speaker 10: new provision in the US tax code boosting taxes on

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Speaker 10: US income of non US based businesses and individuals, and

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Speaker 10: you know, obviously was really really kind of it created

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Speaker 10: quite a stir on Wall Street. So I think, you know,

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Speaker 10: at this point, removing that is obviously quite quite a

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Speaker 10: lot of relief to a lot of corporations.

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Speaker 4: Yeah, to anyone paying attention.

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Speaker 2: Wuld have seen references to this, you know, lots of times,

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Speaker 2: the idea that this had spooked investors. How much relief

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Speaker 2: is there at the moment do we think around this

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Speaker 2: the fact that the eight nine to nine section, the

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Speaker 2: threat of that has been removed.

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Speaker 10: Well, I think at this point, I mean, obviously critics

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Speaker 10: for arguing pretty heavily against the revenge tax provision, saying

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Speaker 10: that they were worried about how much investment it would

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Speaker 10: deter coming from outside the US. I mean, particularly at

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Speaker 10: this point in time, you still have a lot of

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Speaker 10: open questions about what's happening, which trade policy, you know,

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Speaker 10: concerns about you know, deteriorating fiscal accounts of the United States.

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Speaker 10: I mean, you know, markets were already there's there's been

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Speaker 10: quite a lot of volatility over the past few months

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Speaker 10: just with regard to some of the trade policy. Had

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Speaker 10: point out that, you know, it's really over the next

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Speaker 10: week or so that Trump is even hoping to, you know,

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Speaker 10: bring in more trade deals, but that's uncertain. So I think,

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Speaker 10: you know, removing that level of uncertainty over foreign investment

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Speaker 10: in the United States certainly is providing some level of

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Speaker 10: relief here. I mean, you had investors that you know

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Speaker 10: who tied up in trillions of dollars worth of investments

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Speaker 10: that could have been infected had that gone into effect.

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Speaker 10: Although I think, as we've covered in this program, you know,

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Speaker 10: there's a there's quite an argument to be made for

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Speaker 10: the fact that, you know, maybe it was just you know,

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Speaker 10: the idea of this being a big this this uh

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Speaker 10: this real being a big deterrent and not something that

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Speaker 10: was actually intended to go into effects in the first place.

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Speaker 3: Yeah, I mean, I wonder this was an agreement at

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Speaker 3: the OSDA that took many, many years to negotiate, and

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Speaker 3: I wonder without the US companies being affected, who were

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Speaker 3: set to be most of those that were going to

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Speaker 3: be covered by the Global minimum tax. Does that do

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Speaker 3: you look dead now?

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Speaker 10: Yeah? I mean obviously it's huge for US companies to

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Speaker 10: not be involved in this anymore. And I think that

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Speaker 10: what this does is kind of harkened back to a

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Speaker 10: huge part of Donald Trump's agenda, right, I mean, you

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Speaker 10: know that agreement for that global minimum fifteen percent tax

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Speaker 10: that was broken back in twenty twenty one under the

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Speaker 10: Biden administration and at the time Treasury Secretary Janet Yellen.

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Speaker 10: I mean, you know, this is something that you know,

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Speaker 10: Trump certainly had taken issue with. He often, as we

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Speaker 10: saw during his first term in office following the Obama administration,

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Speaker 10: often you know, wants to rewrite the rules of his predecessors.

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Speaker 10: And so I do think that that's you know, certainly

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Speaker 10: an open question there that I mean, you know, going

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Speaker 10: ahead with this, if this is ultimately approved, you know,

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Speaker 10: you've kind of removed US involvement in something that they

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Speaker 10: were quite heavily involved with just a few years ago.

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Speaker 2: Yeah, Jill, thank you so much for being with us

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Speaker 2: this morning.

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Speaker 4: That has been big steal.

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Speaker 2: Desis there just taking us through well happened with the Treasury.

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Speaker 2: US Treasury Department agreeing that idea of ditching maybe the

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Speaker 2: eight nine nine section as part of the Big Beautiful Bill.

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Speaker 3: President Trump's attempts to reshape higher education in the US

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Speaker 3: by revoking foreign students' visas and cutting funding has led

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Speaker 3: to an upsurge in interest in universities in Britain. More

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Speaker 3: American students are now showing an interest in coming to

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Speaker 3: study in the UK and that could provide a much

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Speaker 3: needed boost for the university's sector. Here a UK economy

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Speaker 3: reporter in angel Is with us for more on this.

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Speaker 3: Are ina, who are the students coming or considering coming

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Speaker 3: to the UK and how are we measuring their interest?

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Speaker 1: Well, it's American and international students, and it's people who

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Speaker 1: otherwise would have wanted to go to a US university,

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Speaker 1: but now that dream was crushed by Trump's crackdown on

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Speaker 1: the American higher education sector. Many of those who have

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Speaker 1: already been accepted by a US university now feared they

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Speaker 1: won't get a visa.

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Speaker 4: And of course you know this.

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Speaker 1: Is after Trump asked mbscs worldwide to stop scheduling visa

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Speaker 1: appointments for students and also decided to implement stricter reviews

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Speaker 1: of applicants social media profiles. And this last point has

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Speaker 1: been particularly worrying for students from the Middle East, some

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Speaker 1: of whom have been active on social media with pro

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Speaker 1: Palestine posts. And of course this broader climate is also

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Speaker 1: discouraging both international and American students who are just seeking

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Speaker 1: a multicultural learning environment and freedom of speech and freedom

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Speaker 1: of talk more broadly, and you know, we've talked about

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Speaker 1: university admissions consultants with UK university deans and to students themselves,

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Speaker 1: and for example, he had this one college admissions consultant,

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Speaker 1: Donald Minnen, who has been advising students to get into

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Speaker 1: top US universities for fifteen years. But now he's finding

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Speaker 1: that half of his Middle Eastern clients and about fifteen

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Speaker 1: percent of his American students are you know, looking outside

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Speaker 1: of the US.

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Speaker 4: Well why are they looking then at the UK?

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Speaker 1: I guess in the English speaking world. UK universities have

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Speaker 1: long fought neck to neck with US institutions in global

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Speaker 1: rank so they're kind of positioned as the natural replacements

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Speaker 1: almost or you know, the natural rivals of US universities.

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Speaker 1: And then you know, Oxford and Cambridge the brand is

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Speaker 1: perhaps the only one that can match Harvard and Yale's

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Speaker 1: cultural cloud and the ability to capture the public imagination. And

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Speaker 1: of course finally, UK universities are cheaper and MBA at

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Speaker 1: businesses is about fifteen thousand pounds a year and you

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Speaker 1: know at Harvard is almost eighty thousand dollars. So all

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Speaker 1: of this is making UK universities an attractive refuge, let's say,

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Speaker 1: from the Trump piers.

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Speaker 3: This is, as I mentioned, coming at a time when

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Speaker 3: the university sector in the UK is facing an awful

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Speaker 3: lot of challenges, particularly in terms of funding. What could

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Speaker 3: this mean for British universities if this interest being expressed

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Speaker 3: by more foreign students actually comes to fruition.

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Speaker 1: I don't think it's an overstatement to say this would

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Speaker 1: be a blessing for UK universities. Their finances have been

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Speaker 1: squeak in recent years.

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Speaker 4: You know, the mass situation.

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Speaker 1: Feels the fees failed to keep pace with rising costs

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Speaker 1: and you know over forty percent of them had deficits in.

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Speaker 4: Twenty twenty four.

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Speaker 1: And this pressure could continue if foreign students income from

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Speaker 1: foreign students doesn't rise as much as expected. However, the

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Speaker 1: challenge is that the Labor government has stopped short of

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Speaker 1: opening welcoming international students with open arms as opposed to

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Speaker 1: the EU for example. And you know, in fact, because

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Speaker 1: of political pressure from Nigel Faraja's Reform Party, Starmar has

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Speaker 1: actually been taking steps that could discourage international student enrollment.

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Speaker 1: You know, the government is considering imposing a six percent

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Speaker 1: le lev university income from international students and also cutting

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Speaker 1: the amount of time that international students can stay in

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Speaker 1: the UK after graduating. That being said, these are still

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Speaker 1: smallest incentives compared to what Trump and the station is doing.

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Speaker 2: Yeah, Arena, thank you so much for being with us

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Speaker 2: our UK economy reporter. Arena, and girl, what an interesting report.

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Speaker 2: I mean, you and I have spoken to a number

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Speaker 2: of university chancellors, the president of the London School of Economics,

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Speaker 2: and the vice chants of Cambridge and in some senses

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Speaker 2: there is a there is a question mark about whether

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Speaker 2: the UK government is doing that outreach to all of

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Speaker 2: those possible students sort of well enough, you know, there's

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Speaker 2: a big question on you know, you know, what sorts

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Speaker 2: of visas to offer people who are coming to study

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Speaker 2: and who maybe want to stay in the ukn then

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Speaker 2: work it.

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Speaker 3: And this is in some ways, what follows up on

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Speaker 3: the conversation that we were having with the head of

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Speaker 3: the LSE here about the interest from academics in the

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Speaker 3: US who are looking at jobs in UK universities as well,

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Speaker 3: and perhaps this is the logical next step that if

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Speaker 3: students are feeling under pressure and their applications for the US,

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Speaker 3: some of the people that are spoke to for a

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Speaker 3: story as well were those who were who had multiple

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Speaker 3: options and students who are looking at perhaps you know,

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Speaker 3: the top of the universities ever and this is the

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Speaker 3: nudge factor that's moving them towards studying in the UK, which,

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Speaker 3: as Arena points out, is really the you know, something

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Speaker 3: that could provide real boom for the sector here. We

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Speaker 3: know there's huge strength. You know that some of the

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Speaker 3: topless universities in the world are here in the UK.

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Speaker 3: So for a chance for those places to be able

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Speaker 3: to attract the best students that they would normally be

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Speaker 3: competing with the American universities could be a very interesting

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Speaker 3: opportunity there as well. At a time when we know

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Speaker 3: that the sector is trying to shore up perhaps some

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Speaker 3: of those challenges that they're having financially and elsewhere, some

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Speaker 3: really interesting reporting from Arena Angel. You can read the

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Speaker 3: full details on Bloomberg dot com and on the terminal.

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Speaker 3: Trump's anti Harvard campaign fuels interest in UK universities.

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Speaker 4: Is the title of the piece.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 4: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carol. Join us again tomorrow morning for all

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