1
00:00:00,120 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:10,119 --> 00:00:13,039
Speaker 2: This is the Big daybreak Up podcast, available every morning

3
00:00:13,039 --> 00:00:15,920
Speaker 2: on Apple, Spotify or whatever you listen. It's Wednesday, the

4
00:00:15,960 --> 00:00:18,560
Speaker 2: second of April in London. I'm Caroline Hipgiin.

5
00:00:18,440 --> 00:00:20,400
Speaker 1: And I'm Stephen Carroll. Coming up today.

6
00:00:20,560 --> 00:00:24,479
Speaker 3: Trump's team races to finalize the scale and scope of

7
00:00:24,560 --> 00:00:27,960
Speaker 3: so called reciprocal tariffs ahead of today's announcement.

8
00:00:28,280 --> 00:00:31,440
Speaker 2: The UK says it will take a calm and pragmatic

9
00:00:31,480 --> 00:00:34,680
Speaker 2: approach to US levies that could not more than one

10
00:00:34,760 --> 00:00:36,440
Speaker 2: percent of GDP.

11
00:00:36,560 --> 00:00:39,720
Speaker 3: Plus facing a bitter pill. Why Trump's threat of tariffs

12
00:00:39,760 --> 00:00:43,360
Speaker 3: on big pharmaceutical companies could cause more than a headache

13
00:00:43,360 --> 00:00:44,760
Speaker 3: for European drug bakers.

14
00:00:45,080 --> 00:00:47,120
Speaker 2: Let's start with a roundup of our top stories.

15
00:00:47,479 --> 00:00:50,080
Speaker 3: President Donald Trump and his team are said to still

16
00:00:50,120 --> 00:00:54,080
Speaker 3: be finalizing their plans for so called reciprocal tariffs, to

17
00:00:54,120 --> 00:00:57,640
Speaker 3: be unveiled later today. Sources have told Bloomberg that several

18
00:00:57,680 --> 00:01:01,720
Speaker 3: proposals are under consideration. They include a tiered tariff system

19
00:01:01,760 --> 00:01:04,240
Speaker 3: where countries would face an across the board levey of

20
00:01:04,319 --> 00:01:07,800
Speaker 3: ten or twenty percent. The Wall Street Journal reports that

21
00:01:07,840 --> 00:01:10,760
Speaker 3: Trump officials are studying a more targeted option of less

22
00:01:10,760 --> 00:01:13,840
Speaker 3: than twenty percent and a smaller group of countries, while

23
00:01:13,880 --> 00:01:17,440
Speaker 3: Fox News says a flat twenty percent global tariff is

24
00:01:17,560 --> 00:01:21,280
Speaker 3: also being considered. Here's Bloomberg editor Jill Desis with more.

25
00:01:21,520 --> 00:01:24,840
Speaker 4: The Trump administration has kind of pointed to various countries,

26
00:01:24,880 --> 00:01:28,600
Speaker 4: whether that be China, obviously, Canada, Mexico, the European Union,

27
00:01:28,640 --> 00:01:30,959
Speaker 4: which have been subject to tarrifts in the past, as

28
00:01:31,000 --> 00:01:34,160
Speaker 4: you know, ones that they're really looking at here in Japan, India.

29
00:01:34,280 --> 00:01:36,479
Speaker 4: I mean, you've got a lot of major trading partners

30
00:01:36,520 --> 00:01:38,959
Speaker 4: with the United States that could be considering some kind

31
00:01:38,959 --> 00:01:39,880
Speaker 4: of reciprocal action.

32
00:01:40,319 --> 00:01:43,800
Speaker 3: Trump's tariffs will take effect immediately after they're announced, with

33
00:01:43,840 --> 00:01:46,200
Speaker 3: the event due to start at four pm New York

34
00:01:46,280 --> 00:01:49,280
Speaker 3: time or nine pm in London, with a full coverage

35
00:01:49,320 --> 00:01:52,520
Speaker 3: of the announcement on Bloomberg Radio and further analysis and

36
00:01:52,600 --> 00:01:54,360
Speaker 3: reporting across Bloomberg's platforms.

37
00:01:54,920 --> 00:01:58,440
Speaker 2: More FED policymakers have been weighing in on the impact

38
00:01:58,520 --> 00:02:02,160
Speaker 2: of Trump's tariff plan. Head of today's announcement, The Richmond

39
00:02:02,200 --> 00:02:05,440
Speaker 2: FED President Thomas Barkins says President Trump's taris could raise

40
00:02:05,480 --> 00:02:09,720
Speaker 2: both inflation and unemployment, creating a big challenge for the

41
00:02:09,800 --> 00:02:10,680
Speaker 2: Central Bank.

42
00:02:11,120 --> 00:02:13,240
Speaker 5: I think you are going to see challenges on the

43
00:02:13,240 --> 00:02:15,440
Speaker 5: inflation side. I also think you're going to see challenges

44
00:02:15,880 --> 00:02:18,680
Speaker 5: on the employment side, and that of course creates challenges

45
00:02:18,720 --> 00:02:22,040
Speaker 5: for us from the Monterey policy side, because the business

46
00:02:22,080 --> 00:02:23,720
Speaker 5: is a lot easier if you're doing a framework in

47
00:02:23,760 --> 00:02:27,280
Speaker 5: twenty nineteen and employment, unemployment is low, and inflation is low.

48
00:02:27,320 --> 00:02:29,440
Speaker 5: It's harder if things move the other direction.

49
00:02:29,960 --> 00:02:33,960
Speaker 2: Barkin's comments were echoed by Chicago Fed President Austin Goolsby.

50
00:02:34,240 --> 00:02:36,880
Speaker 2: Speaking to Fox News. He said a slow down in

51
00:02:36,919 --> 00:02:40,320
Speaker 2: consumer spending all business investment as a result of tariffs

52
00:02:40,760 --> 00:02:42,840
Speaker 2: would quote be a bit of a mess.

53
00:02:43,320 --> 00:02:46,440
Speaker 3: I Like other countries, the UK is bracing for tariffs,

54
00:02:46,440 --> 00:02:49,480
Speaker 3: despite efforts to secure an exemption from the measures. The

55
00:02:49,560 --> 00:02:52,040
Speaker 3: Chancellor juries told the cabinet she'd spoken to the US

56
00:02:52,120 --> 00:02:55,239
Speaker 3: Treasury secretaries got bestent on Monday. While the Prime Minister

57
00:02:55,320 --> 00:02:59,280
Speaker 3: promised a calm and pragmatic approach, Business and Trade Secretary

58
00:02:59,360 --> 00:03:02,120
Speaker 3: Jonathan Reynold says he still helps a deal might be

59
00:03:02,280 --> 00:03:04,200
Speaker 3: done after the tariffs are imposed.

60
00:03:04,639 --> 00:03:08,280
Speaker 6: Look, only the President will himself know exactly what action

61
00:03:08,360 --> 00:03:10,240
Speaker 6: the US is going to take tomorrow, and you're right

62
00:03:10,320 --> 00:03:12,760
Speaker 6: to say it might not be possible for any country

63
00:03:12,800 --> 00:03:16,119
Speaker 6: in the world to be exempted from the initial announcements,

64
00:03:16,160 --> 00:03:18,240
Speaker 6: but I do believe the work we have done means

65
00:03:18,320 --> 00:03:21,200
Speaker 6: the UK is in the best possible position of any

66
00:03:21,240 --> 00:03:23,320
Speaker 6: country to potentially reach an agreement.

67
00:03:23,840 --> 00:03:27,640
Speaker 3: Brannolds led these trade negotiations in Washington. Bloomberg Economics estimates

68
00:03:27,639 --> 00:03:30,120
Speaker 3: that Breton faces a one point one percent drop in

69
00:03:30,240 --> 00:03:33,239
Speaker 3: GDP if it's subjected to a tariff increase of twenty

70
00:03:33,280 --> 00:03:36,360
Speaker 3: five percentage points, which would cut exports to the US

71
00:03:36,360 --> 00:03:37,360
Speaker 3: by seventy percent.

72
00:03:37,880 --> 00:03:41,720
Speaker 2: The uncertainty around the tariff plan continues to worry markets.

73
00:03:41,880 --> 00:03:44,560
Speaker 2: Three of Wall Street's most reliable bulls have said that

74
00:03:44,600 --> 00:03:47,720
Speaker 2: they were too optimistic in their estimates for the S

75
00:03:47,760 --> 00:03:50,720
Speaker 2: and P five hundred this year, and gold is near

76
00:03:50,800 --> 00:03:55,320
Speaker 2: a record high after its best quarter since nineteen eighty six. Cbore,

77
00:03:55,520 --> 00:04:00,160
Speaker 2: Head of Derivatives Market Intelligence, Mandy Shoe says the risk

78
00:04:00,160 --> 00:04:04,960
Speaker 2: has changed from being stock specific to wider fears around growth.

79
00:04:05,480 --> 00:04:09,000
Speaker 7: Investors have come to the realization that teriffs are not

80
00:04:09,080 --> 00:04:12,080
Speaker 7: a one time event. Right. There are very much ever

81
00:04:12,160 --> 00:04:15,680
Speaker 7: present risk with the trut administration. So whatever happens, yes,

82
00:04:15,720 --> 00:04:18,279
Speaker 7: it is meaningful, but let's not get ourselves you know,

83
00:04:18,320 --> 00:04:20,520
Speaker 7: could we get a change in policy, change in tar

84
00:04:20,600 --> 00:04:22,719
Speaker 7: of weights, you know, a week, a month, a year

85
00:04:22,720 --> 00:04:23,120
Speaker 7: from now.

86
00:04:23,360 --> 00:04:27,400
Speaker 2: Certainly, Mandy Schue there speaking as the US market closed.

87
00:04:27,800 --> 00:04:31,960
Speaker 2: Despite that, every major strategist tracked by Bloomberg still anticipates

88
00:04:31,960 --> 00:04:34,080
Speaker 2: a rise in the S and P five hundred between

89
00:04:34,080 --> 00:04:35,280
Speaker 2: now and the end of the year.

90
00:04:35,520 --> 00:04:38,240
Speaker 3: A candidate backed by Elon Musk lost an election to

91
00:04:38,279 --> 00:04:42,000
Speaker 3: Wisconsin's Supreme Court, despite the world's richest man pouring tens

92
00:04:42,040 --> 00:04:45,400
Speaker 3: of millions of dollars into the campaign. Susan Crawford, who

93
00:04:45,440 --> 00:04:49,400
Speaker 3: was supported by Democrats, defeated former state Attorney General Brad Schimmel.

94
00:04:49,560 --> 00:04:52,520
Speaker 3: The result may have major implications for future cases, including

95
00:04:52,560 --> 00:04:54,919
Speaker 3: on abortion rights and labor laws, as well as for

96
00:04:55,000 --> 00:04:59,000
Speaker 3: congressional redistricting plans ahead of next year's midterm elections. Meanwhile,

97
00:04:59,000 --> 00:05:01,600
Speaker 3: in Florida, Republicans held on to two House seats and

98
00:05:01,640 --> 00:05:05,000
Speaker 3: a pair of special elections, but with much smaller margins

99
00:05:05,000 --> 00:05:07,920
Speaker 3: than the party's candidates won in November's vote.

100
00:05:08,200 --> 00:05:11,200
Speaker 2: Now, according to a new Washington Post report, the White

101
00:05:11,200 --> 00:05:15,279
Speaker 2: House is assessing the cost of taking over Greenland. It's

102
00:05:15,279 --> 00:05:18,880
Speaker 2: the most significant effort yet to realize President Trump's desire

103
00:05:18,920 --> 00:05:22,680
Speaker 2: to acquire the Danish island. Here is Bloomberg's Tiama Adebaya

104
00:05:22,800 --> 00:05:23,600
Speaker 2: with more on.

105
00:05:23,640 --> 00:05:27,680
Speaker 8: His recent controversial visit to Greenland. US Vice President j

106
00:05:27,800 --> 00:05:31,640
Speaker 8: d Vance criticized Denmark and said American control would be

107
00:05:31,920 --> 00:05:37,479
Speaker 8: a lot better economically for the island's fifty seven thousand residents. Now,

108
00:05:37,520 --> 00:05:41,120
Speaker 8: it seems the Trump administration is taking the first steps

109
00:05:41,160 --> 00:05:45,320
Speaker 8: towards making that a reality. The Washington Post reports that

110
00:05:45,400 --> 00:05:48,400
Speaker 8: one option being considered is offering a better deal to

111
00:05:48,440 --> 00:05:51,919
Speaker 8: Greenland than the Danes, who currently subsidized services on the

112
00:05:51,960 --> 00:05:55,440
Speaker 8: island at a rate of about six hundred million dollars annually.

113
00:05:55,680 --> 00:06:00,320
Speaker 8: That's despite Greenland's new Prime Minister, Jens Frederick Nielsen saying

114
00:06:00,360 --> 00:06:05,120
Speaker 8: the Arctic island won't become American. Donald Trump has repeatedly

115
00:06:05,160 --> 00:06:08,680
Speaker 8: said that the US will get Greenland and didn't rule

116
00:06:08,720 --> 00:06:11,000
Speaker 8: out the use of force in a recent interview with

117
00:06:11,160 --> 00:06:15,480
Speaker 8: NBC News in London. To You, added by Bloomberg Radio.

118
00:06:15,520 --> 00:06:18,240
Speaker 3: Meta is ramping up work on a deluxe version of

119
00:06:18,240 --> 00:06:21,880
Speaker 3: its smart glasses. The new model, code named Hypernova, will

120
00:06:21,880 --> 00:06:26,680
Speaker 3: feature hand gesture controls and a screen for displaying photos

121
00:06:26,720 --> 00:06:29,680
Speaker 3: and apps. It could be introduced as early as this year,

122
00:06:29,680 --> 00:06:32,760
Speaker 3: with an expected price tag of over one thousand dollars.

123
00:06:32,800 --> 00:06:36,320
Speaker 3: According to Meta employees, the company is already working on

124
00:06:36,360 --> 00:06:39,760
Speaker 3: a second generation version hyper and Nov two with a

125
00:06:39,800 --> 00:06:43,200
Speaker 3: binocular display system planned for twenty twenty seven.

126
00:06:43,600 --> 00:06:45,880
Speaker 2: Those are some of our top stories for you this morning.

127
00:06:45,960 --> 00:06:49,800
Speaker 2: Looking at the market's trade is grappling with the possibility

128
00:06:49,839 --> 00:06:54,080
Speaker 2: of sweeping tariffs. A lot of uncertainty in markets this morning.

129
00:06:54,120 --> 00:06:57,640
Speaker 2: It seems Asian stocks though on mix the topics is

130
00:06:57,640 --> 00:06:59,960
Speaker 2: downfall tents of one sent the MSCI Aged Pacific Index

131
00:07:00,160 --> 00:07:03,880
Speaker 2: is down two tens. Chinese industries those seeing some small gains.

132
00:07:03,880 --> 00:07:06,280
Speaker 2: The CSI three hundred up by a tenth of one percent.

133
00:07:06,800 --> 00:07:09,160
Speaker 2: Tenure treasury yields adding a couple of basis points of

134
00:07:09,200 --> 00:07:11,800
Speaker 2: four nineteen. Gold and Sacks picks the yen as its

135
00:07:11,800 --> 00:07:15,320
Speaker 2: top hedge against US recession and the risks from tariff's.

136
00:07:15,440 --> 00:07:18,080
Speaker 2: The dollar is weakening this morning against most major currencies.

137
00:07:18,200 --> 00:07:21,880
Speaker 2: You're a little change a gold steady after the market

138
00:07:22,080 --> 00:07:24,600
Speaker 2: has seems to be taking a breather from the record

139
00:07:24,720 --> 00:07:27,280
Speaker 2: setting run. At Gold trades at three one hundred and

140
00:07:27,280 --> 00:07:31,200
Speaker 2: fifteen dollars, and oil is also pausing just barely about

141
00:07:31,200 --> 00:07:33,560
Speaker 2: a tenth of one percent for Wi creed futures. So

142
00:07:33,600 --> 00:07:35,120
Speaker 2: those are the markets this morning.

143
00:07:35,280 --> 00:07:37,120
Speaker 3: Well, in a moment, we'll get you fully briefed on

144
00:07:37,200 --> 00:07:40,440
Speaker 3: today's tariff announcements with our trades are Brendan Murray. Plus

145
00:07:40,480 --> 00:07:43,360
Speaker 3: we'll be speaking to our reporter Naomi Kraski about how

146
00:07:43,400 --> 00:07:46,040
Speaker 3: the pharmaceutical industry is high on the list of tariff

147
00:07:46,240 --> 00:07:49,080
Speaker 3: targets as well. But another story that caught our eye

148
00:07:49,160 --> 00:07:52,080
Speaker 3: this morning, which perhaps if you're either a regular listener

149
00:07:52,160 --> 00:07:54,640
Speaker 3: or someone who's been following this story closely, might identify

150
00:07:54,720 --> 00:08:00,000
Speaker 3: with our opinion newsletter writer Jessica carl has been right

151
00:08:00,280 --> 00:08:02,560
Speaker 3: about her perhaps we're all a bit sick of the

152
00:08:02,600 --> 00:08:04,040
Speaker 3: word tariff at this stage.

153
00:08:04,160 --> 00:08:08,000
Speaker 2: If I have to read the word tariff one more time, Jessica, I've.

154
00:08:07,840 --> 00:08:08,440
Speaker 9: Got news for you.

155
00:08:08,600 --> 00:08:11,160
Speaker 2: Kind of be reading and thinking about tariffs, perhaps ru

156
00:08:11,160 --> 00:08:16,440
Speaker 2: an awful lot longer. She writes very interestingly though, about

157
00:08:16,480 --> 00:08:20,840
Speaker 2: the usism manufacturing report, and about you know, this is

158
00:08:20,880 --> 00:08:24,320
Speaker 2: a kind of on the ground reading. It's a sort

159
00:08:24,320 --> 00:08:25,360
Speaker 2: of it's.

160
00:08:25,280 --> 00:08:26,080
Speaker 1: A sentiment guide.

161
00:08:26,120 --> 00:08:28,640
Speaker 3: Look, this is what we've seen in the run up

162
00:08:28,640 --> 00:08:30,120
Speaker 3: to these announcements, is there is a lot of the

163
00:08:30,160 --> 00:08:33,280
Speaker 3: sentiment indicator is tell us that business and consumers are

164
00:08:33,400 --> 00:08:36,199
Speaker 3: very worried. But it's not really translating into the hard

165
00:08:36,280 --> 00:08:39,040
Speaker 3: data yet, but often one happens before the other.

166
00:08:39,360 --> 00:08:42,000
Speaker 2: Yeah, and this is one of the key indicators. So yeah,

167
00:08:42,040 --> 00:08:45,600
Speaker 2: she writes very interestingly. She also is a fantastic person

168
00:08:45,679 --> 00:08:49,600
Speaker 2: to read because she puts all the opinion pieces into

169
00:08:49,679 --> 00:08:52,559
Speaker 2: perspective for you. She also ends with this linshe I

170
00:08:52,559 --> 00:08:56,480
Speaker 2: think is quite pithy. Just imagine how liberated you'll feel

171
00:08:56,520 --> 00:08:58,959
Speaker 2: without any money left in your bank account, the kind

172
00:08:58,960 --> 00:08:59,760
Speaker 2: of negative view the.

173
00:09:00,160 --> 00:09:03,439
Speaker 3: Indeed, well, let's talk about the potential shock that could

174
00:09:03,480 --> 00:09:08,800
Speaker 3: come in that announcement later on today four pm in Washington,

175
00:09:08,920 --> 00:09:11,559
Speaker 3: nine pm in London is when we're expecting it. Our

176
00:09:11,679 --> 00:09:14,200
Speaker 3: trades are. Brandon Murray is with us to help us

177
00:09:14,200 --> 00:09:17,680
Speaker 3: get briefed for that. Brandon, good morning. What do we

178
00:09:17,800 --> 00:09:21,400
Speaker 3: know at this stage about what to expect from Donald

179
00:09:21,440 --> 00:09:22,000
Speaker 3: Trump later?

180
00:09:22,120 --> 00:09:24,959
Speaker 10: What we know is that the administration is still hashing

181
00:09:25,000 --> 00:09:28,000
Speaker 10: out exactly what this is going to look like. There

182
00:09:28,000 --> 00:09:32,000
Speaker 10: are several options. One is that he will announce a

183
00:09:32,000 --> 00:09:36,400
Speaker 10: flat tariff on all major importers. Let's just say it's

184
00:09:36,440 --> 00:09:39,400
Speaker 10: twenty percent, and that applies to everyone. That's the universe.

185
00:09:39,440 --> 00:09:42,200
Speaker 10: The idea of the universal tariff that was discussed over

186
00:09:42,240 --> 00:09:45,000
Speaker 10: the past few months. There's another option that's more of

187
00:09:45,000 --> 00:09:49,160
Speaker 10: a customized version, where country X gets a twenty two

188
00:09:49,240 --> 00:09:52,440
Speaker 10: percent tariff, in country Y gets a sixteen percent tariff,

189
00:09:52,559 --> 00:09:55,640
Speaker 10: and every country gets a different number. There's a tier

190
00:09:55,920 --> 00:09:59,640
Speaker 10: option where you divide countries into three different baskets. You

191
00:09:59,679 --> 00:10:01,560
Speaker 10: get a fifteen percent tire, if you get a twenty

192
00:10:01,559 --> 00:10:04,080
Speaker 10: percent tariff, and you get a twenty five percent tariff.

193
00:10:04,080 --> 00:10:06,439
Speaker 10: One of the other options that seems to be coming

194
00:10:06,480 --> 00:10:10,040
Speaker 10: together at the last minute is one that's sort of narrower,

195
00:10:10,480 --> 00:10:13,920
Speaker 10: hits fewer countries, and would have a sort of lower

196
00:10:14,000 --> 00:10:16,880
Speaker 10: tariff rate applied to these countries. So this is the

197
00:10:16,920 --> 00:10:20,599
Speaker 10: option that would be least harmful, economists would say to

198
00:10:21,640 --> 00:10:24,680
Speaker 10: the global economy. But anywhere you slice it, none of

199
00:10:24,720 --> 00:10:28,240
Speaker 10: this looks to be positive for growth or inflation in

200
00:10:28,280 --> 00:10:28,760
Speaker 10: the short.

201
00:10:28,600 --> 00:10:32,120
Speaker 2: Run, okay, And is this upending the kind of global

202
00:10:32,160 --> 00:10:34,840
Speaker 2: trading system and there could be a major drop in

203
00:10:34,920 --> 00:10:39,360
Speaker 2: exports then to the US from a whole range of countries.

204
00:10:39,360 --> 00:10:42,000
Speaker 2: We don't really know how many. What are the risks

205
00:10:42,040 --> 00:10:43,120
Speaker 2: to those countries?

206
00:10:43,480 --> 00:10:47,000
Speaker 10: That's the big question is, you know how much of

207
00:10:47,040 --> 00:10:49,400
Speaker 10: a headwind is this going to be for countries that

208
00:10:49,480 --> 00:10:52,160
Speaker 10: are are more reliant on the US market than the

209
00:10:52,240 --> 00:10:55,680
Speaker 10: US market is reliant on them. That's where the President

210
00:10:55,679 --> 00:10:58,880
Speaker 10: Trump thinks his leverage comes from, is that you will

211
00:10:58,920 --> 00:11:02,160
Speaker 10: suffer more under this scenario than I will, and therefore

212
00:11:02,240 --> 00:11:05,600
Speaker 10: I will have leverage over you in negotiations.

213
00:11:06,040 --> 00:11:06,240
Speaker 8: You know.

214
00:11:06,280 --> 00:11:09,120
Speaker 10: The other part of this is the administration would argue

215
00:11:09,120 --> 00:11:12,559
Speaker 10: that this is going to create lots of manufacturing jobs,

216
00:11:12,640 --> 00:11:16,560
Speaker 10: hundreds of thousands of manufacturing jobs, Peter Navarro said recently,

217
00:11:17,000 --> 00:11:20,480
Speaker 10: and that this would rebalance not only the global trading system,

218
00:11:20,520 --> 00:11:24,880
Speaker 10: but this would restore the wealth of the middle class

219
00:11:24,920 --> 00:11:27,360
Speaker 10: in the US that's been hollowed out, they would argue

220
00:11:27,559 --> 00:11:29,480
Speaker 10: by China over the past few decades.

221
00:11:29,600 --> 00:11:30,079
Speaker 1: I suppose.

222
00:11:30,080 --> 00:11:32,520
Speaker 3: In terms of the response, what should we be expecting

223
00:11:32,880 --> 00:11:35,480
Speaker 3: from other countries as to how they'll deal with this.

224
00:11:35,679 --> 00:11:38,920
Speaker 10: Well, we've seen a range of responses leading up to this.

225
00:11:39,040 --> 00:11:42,439
Speaker 10: The European Union has said it will retaliate in kind,

226
00:11:42,559 --> 00:11:46,920
Speaker 10: basically in proportion to what they get hit with. Canada

227
00:11:46,920 --> 00:11:49,320
Speaker 10: has also said that they're going to come out swinging

228
00:11:49,720 --> 00:11:52,800
Speaker 10: against this as well. Other countries have said you know,

229
00:11:52,880 --> 00:11:56,559
Speaker 10: the UK, some countries in Asia, Japan and Korea have said,

230
00:11:57,040 --> 00:11:59,520
Speaker 10: this is a good opportunity for us to negotiate. We

231
00:12:00,440 --> 00:12:03,840
Speaker 10: will accept the tariffs that you put on our exports,

232
00:12:04,200 --> 00:12:06,240
Speaker 10: but this is the beginning of the of the process,

233
00:12:06,280 --> 00:12:08,360
Speaker 10: not the end of it. We'll we'll sit down and

234
00:12:08,440 --> 00:12:11,920
Speaker 10: negotiate the way you would a free trade agreement almost

235
00:12:12,240 --> 00:12:15,319
Speaker 10: you know, those take years and years to negotiate. But

236
00:12:15,600 --> 00:12:18,160
Speaker 10: this is this is something that the global trading system

237
00:12:18,200 --> 00:12:22,800
Speaker 10: took many decades to develop into the form it isn't today,

238
00:12:23,080 --> 00:12:27,160
Speaker 10: and President Trump is trying to rewire that system in

239
00:12:27,200 --> 00:12:29,560
Speaker 10: a matter of months, if not, you know, a year

240
00:12:29,679 --> 00:12:29,960
Speaker 10: or two.

241
00:12:30,320 --> 00:12:32,839
Speaker 2: What are US companies saying about the tariffs and also

242
00:12:32,880 --> 00:12:34,920
Speaker 2: the broader impact then on the US economy.

243
00:12:35,320 --> 00:12:38,600
Speaker 10: US companies are freaking out, and they won't tell you

244
00:12:38,679 --> 00:12:43,360
Speaker 10: this publicly because they're worried about being attacked, being targeted

245
00:12:43,840 --> 00:12:48,920
Speaker 10: by the administration, But there are lots of conversations going

246
00:12:48,920 --> 00:12:52,400
Speaker 10: on behind the scenes that say, yeah, we can understand

247
00:12:52,600 --> 00:12:55,600
Speaker 10: that this is a negotiating tactic to you know, help

248
00:12:55,679 --> 00:12:59,720
Speaker 10: Mexico increase its border security. Fine, that's that's one approach,

249
00:13:00,080 --> 00:13:03,079
Speaker 10: But if you really do this, if you really essentially

250
00:13:03,200 --> 00:13:06,840
Speaker 10: change the rules of the global trading system overnight. You

251
00:13:06,880 --> 00:13:09,720
Speaker 10: know that's going to be extremely disruptive. We're going to

252
00:13:09,760 --> 00:13:13,880
Speaker 10: have to pass those extra costs onto consumers, and ultimately,

253
00:13:14,280 --> 00:13:18,240
Speaker 10: you're going to hurt the very core base of your

254
00:13:18,280 --> 00:13:21,080
Speaker 10: support that you're trying to help, and that you don't

255
00:13:21,120 --> 00:13:23,040
Speaker 10: have to talk to too many economists to see that

256
00:13:23,360 --> 00:13:25,959
Speaker 10: if you believe that you know this is going to work,

257
00:13:26,200 --> 00:13:28,600
Speaker 10: that it's going to it's going to be at least

258
00:13:28,640 --> 00:13:31,280
Speaker 10: painful in the short term and perhaps you know even

259
00:13:31,320 --> 00:13:31,920
Speaker 10: longer than that.

260
00:13:32,320 --> 00:13:34,840
Speaker 1: Okay, Brandon Murray, our trades are thank you very much.

261
00:13:35,360 --> 00:13:37,960
Speaker 2: Well, let's focus in on one sector which may be

262
00:13:38,000 --> 00:13:41,800
Speaker 2: particularly hard hit by taris, the pharmaceutical industry. President Trump

263
00:13:41,880 --> 00:13:44,679
Speaker 2: is potentially planning to impose tarris on the sector, which

264
00:13:44,720 --> 00:13:47,679
Speaker 2: could raise prices for life saving and generic drug lead

265
00:13:47,720 --> 00:13:53,000
Speaker 2: to shortages, and also strain healthcare providers given the complex

266
00:13:53,080 --> 00:13:56,280
Speaker 2: global supply chains involved. Joining us now to discuss it's

267
00:13:56,280 --> 00:13:59,400
Speaker 2: been a big Senior reporter Nemi Krasky, Nemi, good morning.

268
00:14:00,120 --> 00:14:03,320
Speaker 2: How much anxiety is there? Good morning, How much anxiety

269
00:14:03,400 --> 00:14:07,360
Speaker 2: is there in the industry around tariffs and what do

270
00:14:07,400 --> 00:14:09,080
Speaker 2: we think the potential hate might be.

271
00:14:09,960 --> 00:14:13,040
Speaker 9: I mean, there's a tremendous amount of anxiety right now.

272
00:14:14,880 --> 00:14:19,360
Speaker 9: If you speak privately two people in the industry, they

273
00:14:19,400 --> 00:14:21,960
Speaker 9: will say that there's a lot of uncertainty. It's not

274
00:14:22,880 --> 00:14:28,400
Speaker 9: entirely clear what will be tariffed. You know, people are

275
00:14:28,480 --> 00:14:34,840
Speaker 9: running various, various potential scenarios. It's really a situation that

276
00:14:34,920 --> 00:14:38,200
Speaker 9: the industry hasn't had to face for more than three

277
00:14:38,240 --> 00:14:42,120
Speaker 9: decades because they've been protected from tariffs by a World

278
00:14:42,160 --> 00:14:46,200
Speaker 9: Trade Association agreement that was designed to limit the impact

279
00:14:46,920 --> 00:14:50,200
Speaker 9: of things like this on medicines. So there's a lot

280
00:14:50,240 --> 00:14:54,320
Speaker 9: of confusion about what could be tariffed if there would

281
00:14:54,360 --> 00:15:00,760
Speaker 9: be certain car carve outs on essential medicines. And this

282
00:15:00,840 --> 00:15:05,920
Speaker 9: is an industry that has in that time developed a

283
00:15:06,800 --> 00:15:09,480
Speaker 9: you know, a value chain that really goes all around

284
00:15:09,480 --> 00:15:14,440
Speaker 9: the world. US companies are making drug ingredients in Europe.

285
00:15:14,640 --> 00:15:19,240
Speaker 9: European companies produced drug ingredients sometimes in the US, and

286
00:15:19,320 --> 00:15:22,280
Speaker 9: so there's you know, just really a lot of anxiety

287
00:15:22,480 --> 00:15:24,280
Speaker 9: about about what this could mean.

288
00:15:24,760 --> 00:15:28,040
Speaker 3: For does this ultimately mean that patients will have to

289
00:15:28,080 --> 00:15:29,840
Speaker 3: pay more from Madison's.

290
00:15:30,320 --> 00:15:33,440
Speaker 9: It's you know that that is a very complex question,

291
00:15:33,520 --> 00:15:37,200
Speaker 9: and it depends on how the tariffs are imposed. But

292
00:15:37,680 --> 00:15:41,640
Speaker 9: the short answer, the simple answer, would would probably be yes,

293
00:15:42,960 --> 00:15:48,320
Speaker 9: the it may not be possible for producers not to

294
00:15:48,480 --> 00:15:52,200
Speaker 9: raise prices and looking you know, particularly for example, at

295
00:15:52,200 --> 00:15:55,560
Speaker 9: the generic drug industry, which has slim margins as it is,

296
00:15:56,920 --> 00:15:59,240
Speaker 9: and they may they may have little recourse you know,

297
00:15:59,560 --> 00:16:03,440
Speaker 9: to return manufacturing to the US. It takes three to

298
00:16:03,560 --> 00:16:06,200
Speaker 9: five years to build a drug factory. If you already

299
00:16:06,200 --> 00:16:09,880
Speaker 9: have a drug factory built with all of the complex

300
00:16:09,960 --> 00:16:15,200
Speaker 9: regulations that surround pharmaceutical manufacturing in Europe, and you look

301
00:16:15,240 --> 00:16:18,800
Speaker 9: at the numbers, that may not make sense to move

302
00:16:18,880 --> 00:16:23,040
Speaker 9: your entire setup to the US. And so yeah, higher

303
00:16:23,080 --> 00:16:27,640
Speaker 9: prices also maybe potential shortages and of course financial strain

304
00:16:28,320 --> 00:16:29,600
Speaker 9: on providers.

305
00:16:30,560 --> 00:16:33,960
Speaker 2: Meanwhile, what do we think companies are doing actually to

306
00:16:34,000 --> 00:16:37,200
Speaker 2: try to mitigate this possibility. You've been writing, for example

307
00:16:37,200 --> 00:16:41,320
Speaker 2: today about pharmaceutical companies moving to Spain. Is this part

308
00:16:41,360 --> 00:16:44,560
Speaker 2: of a kind of broader shift.

309
00:16:44,760 --> 00:16:50,480
Speaker 9: So that there has been that for the past decade

310
00:16:50,520 --> 00:16:56,400
Speaker 9: plus already a shift toward producing it in like sort

311
00:16:56,440 --> 00:17:00,560
Speaker 9: of in markets that are important. So that is one

312
00:17:01,200 --> 00:17:04,280
Speaker 9: thing that has already been happening in the pre dates tariffs.

313
00:17:04,720 --> 00:17:07,440
Speaker 9: The story that came out today was actually about clinical

314
00:17:07,440 --> 00:17:11,199
Speaker 9: trials and about how Spain has turned itself into a

315
00:17:11,240 --> 00:17:15,800
Speaker 9: really attractive place for companies to do clinical trials for

316
00:17:15,920 --> 00:17:22,439
Speaker 9: new medicines. And you know, we've seen multinationals throughout Europe

317
00:17:22,480 --> 00:17:24,960
Speaker 9: go to Spain to do these very important studies that

318
00:17:25,000 --> 00:17:28,359
Speaker 9: are necessary to get approval for medicines. And it's really

319
00:17:29,680 --> 00:17:33,760
Speaker 9: an example of how a country has been able to

320
00:17:34,119 --> 00:17:36,680
Speaker 9: build up, you know, a piece of a local pharmaceutical

321
00:17:36,680 --> 00:17:44,000
Speaker 9: industry despite a lot of change and broader issues in

322
00:17:44,040 --> 00:17:44,600
Speaker 9: the industry.

323
00:17:44,840 --> 00:17:48,040
Speaker 3: Another story, Naomi, that we know that looks like it

324
00:17:48,080 --> 00:17:50,840
Speaker 3: could be very significant for the pharmaceutical industry is coming

325
00:17:50,920 --> 00:17:52,879
Speaker 3: out of the United States. And these are the changes

326
00:17:52,920 --> 00:17:55,680
Speaker 3: that the new Health and Human Services Secretary, Robert F.

327
00:17:55,760 --> 00:17:59,399
Speaker 3: Kennedy Junior, has been making to the way that's the

328
00:17:59,440 --> 00:18:01,879
Speaker 3: health of an stration is run in the United States.

329
00:18:01,880 --> 00:18:04,840
Speaker 3: Some top officials being pushed out in the agency as well.

330
00:18:04,880 --> 00:18:07,360
Speaker 3: What do we know and what sort of impact could

331
00:18:07,400 --> 00:18:09,200
Speaker 3: that have for the pharmaceutical industry.

332
00:18:09,600 --> 00:18:12,159
Speaker 9: So my colleagues in the US were following this so

333
00:18:12,240 --> 00:18:18,680
Speaker 9: closely all day yesterday. So RFK Junior has ousted several

334
00:18:18,760 --> 00:18:22,400
Speaker 9: top officials. So this includes people who oversee vaccina, reviews,

335
00:18:22,480 --> 00:18:28,240
Speaker 9: drug approvals, tobacco regulation. There have been layoffs of about

336
00:18:28,280 --> 00:18:33,840
Speaker 9: ten thousand employees. So this has affected and basically gutted

337
00:18:34,000 --> 00:18:38,440
Speaker 9: entire divisions, including those that are working on sexually transmitted diseases,

338
00:18:38,640 --> 00:18:46,760
Speaker 9: environmental health, global health, this, you know, has it's just

339
00:18:46,840 --> 00:18:51,760
Speaker 9: really reshaping the agency. There's also a lot of concern

340
00:18:52,280 --> 00:18:55,879
Speaker 9: among drug makers about how this will any knock on

341
00:18:56,640 --> 00:18:59,520
Speaker 9: impact that this might have on them, because the FDA

342
00:18:59,680 --> 00:19:05,560
Speaker 9: is theency that's responsible for reviewing new medicines, which is

343
00:19:06,760 --> 00:19:11,200
Speaker 9: vitally important to the pharmaceutical industry. The agency has previously

344
00:19:11,240 --> 00:19:15,040
Speaker 9: said that drug and medical device workers will be exempted,

345
00:19:16,119 --> 00:19:18,680
Speaker 9: but we're really kind of waiting to see how this

346
00:19:18,760 --> 00:19:22,119
Speaker 9: will shake out for companies.

347
00:19:25,320 --> 00:19:28,040
Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

348
00:19:28,119 --> 00:19:31,160
Speaker 3: stories making news from London to Wall Street and beyond.

349
00:19:31,440 --> 00:19:35,440
Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify,

350
00:19:35,520 --> 00:19:37,480
Speaker 2: and anywhere else you get your podcasts.

351
00:19:37,520 --> 00:19:40,560
Speaker 3: You can also listen live each morning on London DAB Radio,

352
00:19:40,600 --> 00:19:43,280
Speaker 3: the Bloomberg Business app, and Bloomberg dot Com.

353
00:19:43,320 --> 00:19:46,080
Speaker 2: Our flagship New York station is also available on your

354
00:19:46,119 --> 00:19:50,840
Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

355
00:19:51,080 --> 00:19:53,119
Speaker 1: I'm Caroline Hepka and I'm Stephen Carroll.

356
00:19:53,160 --> 00:19:55,520
Speaker 3: Join us again tomorrow morning for all the news you

357
00:19:55,600 --> 00:19:58,280
Speaker 3: need to start your day, right here on Bloomberg day

358
00:19:58,280 --> 00:20:04,560
Speaker 3: Break Europe