1 00:00:02,560 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. They say's the Bloomberg 2 00:00:10,160 --> 00:00:14,000 Speaker 1: Daybreak Europe podcast, available every morning on Apple, Spotify or 3 00:00:14,040 --> 00:00:17,120 Speaker 1: wherever you listen. It's Tuesday, the eleventh of February in London. 4 00:00:17,200 --> 00:00:18,320 Speaker 1: I'm Stephen Carroll. 5 00:00:18,160 --> 00:00:20,000 Speaker 2: And I'm Lizzie Burden. Coming up today. 6 00:00:20,079 --> 00:00:22,720 Speaker 3: The EU says it will respond to Trump's tariff plan 7 00:00:23,040 --> 00:00:25,560 Speaker 3: on steel and aluminium with countermeasures. 8 00:00:25,640 --> 00:00:27,800 Speaker 1: Ahead of the EU's warning shot, Donald Trump warns that 9 00:00:27,880 --> 00:00:31,240 Speaker 1: tariff right may go higher than twenty five percent. 10 00:00:30,920 --> 00:00:32,240 Speaker 2: Plus wait and see. 11 00:00:32,320 --> 00:00:35,360 Speaker 3: BP pledges to lay out plans for a strategy reset 12 00:00:35,560 --> 00:00:36,960 Speaker 3: as results underwhelm. 13 00:00:37,280 --> 00:00:39,440 Speaker 4: Let's start with the round up of our top stories. 14 00:00:39,760 --> 00:00:43,040 Speaker 3: The European Union says it will respond to any tariffs 15 00:00:43,040 --> 00:00:45,880 Speaker 3: the US might impose on it. The warning comes after 16 00:00:45,920 --> 00:00:48,400 Speaker 3: President Trump pushed forward with his pledge to place a 17 00:00:48,479 --> 00:00:52,000 Speaker 3: twenty five percent tariff on all US steel and aluminium imputs. 18 00:00:52,280 --> 00:00:55,400 Speaker 3: The US Administration says the broad tariffs will go into 19 00:00:55,440 --> 00:00:58,200 Speaker 3: effect on the twelfth of March, referring directly to the 20 00:00:58,200 --> 00:01:02,160 Speaker 3: proposal of Metal Tariff's Europea Commission President Ursula Vonderlayon said 21 00:01:02,160 --> 00:01:05,080 Speaker 3: that if imposed on the EU, they would quote trigger 22 00:01:05,120 --> 00:01:07,400 Speaker 3: firm and proportionate countermeasures. 23 00:01:07,920 --> 00:01:11,240 Speaker 1: The EU response comes after Trump insisted that the proposed 24 00:01:11,280 --> 00:01:14,880 Speaker 1: tariffs on steel and aluminium imports would help boost domestic 25 00:01:14,959 --> 00:01:17,720 Speaker 1: production and bring more jobs to the United States. 26 00:01:18,920 --> 00:01:21,760 Speaker 5: Protecting are still at aluminum industries is a must. And 27 00:01:21,840 --> 00:01:25,399 Speaker 5: today I am simplifying our tariffs and CEO and aluminum 28 00:01:25,480 --> 00:01:28,720 Speaker 5: so that everyone can understand exactly what it means. It's 29 00:01:28,760 --> 00:01:33,560 Speaker 5: twenty five percent without exceptions or exemptions, and that's all countries, 30 00:01:33,600 --> 00:01:36,400 Speaker 5: no matter where it comes from, all countries. If made 31 00:01:36,440 --> 00:01:40,480 Speaker 5: in the United States, however, there is no tariff for zero. 32 00:01:42,160 --> 00:01:44,960 Speaker 1: Trump's move comes on top of new ten percent tariffs 33 00:01:44,959 --> 00:01:47,840 Speaker 1: on goods from China and twenty five percent levies on 34 00:01:47,880 --> 00:01:50,800 Speaker 1: Canada and Mexico that are currently paused for one month. 35 00:01:51,120 --> 00:01:53,040 Speaker 1: The latest measures are meant to crack down on what 36 00:01:53,080 --> 00:01:56,160 Speaker 1: White House officials said were efforts by countries like Russia 37 00:01:56,200 --> 00:01:59,040 Speaker 1: and China to circumvent existing duties. 38 00:02:00,000 --> 00:02:03,360 Speaker 3: Despite Trump's insistence that there would be zero exemptions, the 39 00:02:03,440 --> 00:02:06,160 Speaker 3: US president says he will give consideration to a carve 40 00:02:06,280 --> 00:02:09,200 Speaker 3: up for Australia. Those comments were also echoed by the 41 00:02:09,200 --> 00:02:11,880 Speaker 3: country's Prime minister after a call between the two leaders. 42 00:02:13,440 --> 00:02:18,280 Speaker 6: I presented Australia's case for an exemption, and we agreed 43 00:02:18,320 --> 00:02:23,079 Speaker 6: on wording to say publicly, which is that the US 44 00:02:23,160 --> 00:02:27,400 Speaker 6: President agreed that an exemption was under consideration in the 45 00:02:27,480 --> 00:02:29,840 Speaker 6: interests of both of our countries. 46 00:02:30,400 --> 00:02:34,120 Speaker 3: Anthony Albanezi there, who has been under intense political pressure 47 00:02:34,200 --> 00:02:37,440 Speaker 3: to secure tariff exemptions for the country's steel and aluminium 48 00:02:37,440 --> 00:02:40,679 Speaker 3: exports to the US. Both leaders cited the US trade 49 00:02:40,720 --> 00:02:43,519 Speaker 3: surplus with Australia was a key reason for any carve out. 50 00:02:43,880 --> 00:02:46,120 Speaker 1: The growing prospect of a trade war comes as the 51 00:02:46,240 --> 00:02:49,720 Speaker 1: UK's new ambassador to the United States, Peter Mandelson, says 52 00:02:49,720 --> 00:02:53,680 Speaker 1: it's important for allies to respect Trump's electoral mandate. The 53 00:02:53,720 --> 00:02:56,440 Speaker 1: comments come after Trump suggested last week the UK may 54 00:02:56,480 --> 00:03:00,400 Speaker 1: avoid tariffs, saying the relationship can be worked out. Here's 55 00:03:00,400 --> 00:03:03,360 Speaker 1: what Lord Mandelson told the BBC on his first day 56 00:03:03,480 --> 00:03:04,000 Speaker 1: in the role. 57 00:03:06,000 --> 00:03:08,799 Speaker 7: We've got to take all these issues as they can. 58 00:03:09,800 --> 00:03:14,239 Speaker 7: Realize that the president has a very strong and clear 59 00:03:14,320 --> 00:03:18,960 Speaker 7: mandate for change in the United States. Now that doesn't 60 00:03:18,960 --> 00:03:20,960 Speaker 7: mean to say that we're going to agree in Britain 61 00:03:21,000 --> 00:03:23,720 Speaker 7: with every single detail of what he does, but we 62 00:03:23,840 --> 00:03:28,400 Speaker 7: have to respect and understand what drives him, what is 63 00:03:28,480 --> 00:03:33,640 Speaker 7: mandate is to do and how his allies need to 64 00:03:34,000 --> 00:03:35,480 Speaker 7: adjust sometimes. 65 00:03:36,160 --> 00:03:39,160 Speaker 1: Peter Mandilson also told the BBC that has passed criticisms 66 00:03:39,160 --> 00:03:42,640 Speaker 1: of Trump were quote ill judged and wrong. In twenty nineteen, 67 00:03:42,680 --> 00:03:45,640 Speaker 1: the labor politician reportedly called the US leader a danger 68 00:03:45,680 --> 00:03:46,280 Speaker 1: to the world. 69 00:03:46,640 --> 00:03:48,720 Speaker 4: In one interview to Turnings Now. 70 00:03:48,800 --> 00:03:52,200 Speaker 3: BP has pledged to deliver major changes to its strategy 71 00:03:52,240 --> 00:03:54,800 Speaker 3: as it reported results that will likely add to pressure 72 00:03:54,920 --> 00:03:57,680 Speaker 3: on the oil major. Adjusted net income for the fourth 73 00:03:57,760 --> 00:04:00,600 Speaker 3: quarter was one point one seven billion dollars, which is 74 00:04:00,640 --> 00:04:03,320 Speaker 3: down from around three billion last year and a miss 75 00:04:03,360 --> 00:04:06,400 Speaker 3: of the average analist estimate of one point three billion dollars. 76 00:04:06,600 --> 00:04:09,080 Speaker 2: The Bloomerg Salmonstead says investors. 77 00:04:08,640 --> 00:04:11,000 Speaker 3: Will need to wait for details of what the CEO 78 00:04:11,080 --> 00:04:12,560 Speaker 3: has dubbed a reset. 79 00:04:12,920 --> 00:04:15,440 Speaker 8: If you are hoping that today's BP results would have 80 00:04:15,560 --> 00:04:18,120 Speaker 8: something to do with exactly what they're going to do 81 00:04:18,160 --> 00:04:20,320 Speaker 8: with their strategy, what kind of changes they're going to make, 82 00:04:20,560 --> 00:04:23,200 Speaker 8: I'm afraid you might be a touch disappointed because they 83 00:04:23,200 --> 00:04:25,800 Speaker 8: are saving all of that until the twenty sixth of February. 84 00:04:25,880 --> 00:04:28,159 Speaker 8: There is a line in the report saying that we 85 00:04:28,200 --> 00:04:30,600 Speaker 8: are going to have a kind of fundamental reset of 86 00:04:30,600 --> 00:04:33,840 Speaker 8: our strategy. That is broadly what everyone kind of already expects, 87 00:04:33,839 --> 00:04:36,599 Speaker 8: and it's a question of whether that fundamental reset is 88 00:04:36,640 --> 00:04:40,480 Speaker 8: going to meet what say Elliott and other shareholders want some. 89 00:04:40,480 --> 00:04:43,240 Speaker 3: Understood there talking to us after Bloomberg learned that activist 90 00:04:43,320 --> 00:04:46,200 Speaker 3: investor Elliott had built a significant holding in BP. 91 00:04:47,120 --> 00:04:50,400 Speaker 1: Open Ai CEO Sam Altman has rejected a ninety seven 92 00:04:50,480 --> 00:04:53,880 Speaker 1: point four billion dollar bid by an Elon Musk led 93 00:04:53,960 --> 00:04:57,640 Speaker 1: group in a post Unmosqus x platform Atmann said no, 94 00:04:57,760 --> 00:05:00,520 Speaker 1: thank you, instead offering to buy the social media company 95 00:05:00,560 --> 00:05:03,600 Speaker 1: for a tenth of that price. Bloomberg Intelligence analyst Man 96 00:05:03,640 --> 00:05:05,800 Speaker 1: Deep Saying says Musk's bid was unexpected. 97 00:05:06,440 --> 00:05:09,719 Speaker 9: Everyone is fixated on, you know, lowering the costs, so 98 00:05:10,279 --> 00:05:12,919 Speaker 9: our view is there will be more consolidation. But I 99 00:05:12,960 --> 00:05:16,039 Speaker 9: didn't anticipate this form of consolidation where you end up 100 00:05:16,040 --> 00:05:19,159 Speaker 9: seeing a hostile bid, you know where. Clearly, I think, 101 00:05:19,200 --> 00:05:22,840 Speaker 9: given Microsoft's stake in open Ai, there's no way you 102 00:05:22,839 --> 00:05:24,360 Speaker 9: could see a. 103 00:05:24,320 --> 00:05:27,920 Speaker 1: Deal like this, Bloomberg Intelligence is man Deep saying, reacting 104 00:05:27,920 --> 00:05:30,120 Speaker 1: to that news, which was first reported by the Wall 105 00:05:30,120 --> 00:05:32,719 Speaker 1: Street Journal. Musk and Altman have been locked in a 106 00:05:32,800 --> 00:05:35,839 Speaker 1: long standing feud over the direction of open Ai. The 107 00:05:35,880 --> 00:05:38,720 Speaker 1: two man works together as founders, but animosity grew as 108 00:05:38,720 --> 00:05:43,200 Speaker 1: the chat GBT creator moved towards becoming a for profit business. 109 00:05:43,680 --> 00:05:45,280 Speaker 2: Those are you top stories this morning? 110 00:05:45,360 --> 00:05:47,960 Speaker 3: On the markets, we have the stock six hundred flat 111 00:05:48,080 --> 00:05:51,040 Speaker 3: to the upside smp E, many futures are down a 112 00:05:51,160 --> 00:05:54,400 Speaker 3: quarter of eight percent, and head of Pal's testimony later, 113 00:05:54,520 --> 00:05:57,040 Speaker 3: the US tenure treasure yield is hire a basis point 114 00:05:57,040 --> 00:05:58,320 Speaker 3: at four point five percent. 115 00:05:59,720 --> 00:06:01,560 Speaker 1: Well, in a moment, we'll bring you more on how 116 00:06:01,600 --> 00:06:05,160 Speaker 1: the EU was planning to respond to those latest steel 117 00:06:05,240 --> 00:06:07,360 Speaker 1: and aluminium tarifs in the United States. 118 00:06:07,360 --> 00:06:08,560 Speaker 4: But Lizzia just wants to mention the. 119 00:06:08,480 --> 00:06:10,960 Speaker 1: Story that I've been reading this morning on the Bloomberg terminal, 120 00:06:10,960 --> 00:06:13,920 Speaker 1: and this is the new list of Michelin Stars restaurants 121 00:06:14,000 --> 00:06:14,719 Speaker 1: in the UK. 122 00:06:14,600 --> 00:06:16,440 Speaker 2: And Ireland in Hungary for this conversation. 123 00:06:17,560 --> 00:06:19,240 Speaker 1: I mean, there's some good names on there, so we've 124 00:06:19,279 --> 00:06:21,880 Speaker 1: got more haul in Lancashire that's got its third star. 125 00:06:22,800 --> 00:06:24,800 Speaker 1: And our food editor Cake Crater has been writing about 126 00:06:24,839 --> 00:06:26,920 Speaker 1: some of the dishes you might have there. For example, 127 00:06:27,000 --> 00:06:29,960 Speaker 1: Local Dorset seek a Deer on the menu there sounds 128 00:06:30,000 --> 00:06:32,640 Speaker 1: very tempting good and Ramsey's restaurant kept its three stars. 129 00:06:32,880 --> 00:06:35,000 Speaker 1: He's just opened a new restaurant here in the city 130 00:06:35,400 --> 00:06:35,960 Speaker 1: as well. 131 00:06:36,000 --> 00:06:37,680 Speaker 4: Twelve seats, Yeah. 132 00:06:37,480 --> 00:06:39,320 Speaker 2: What are you going to do with twelve seats? 133 00:06:39,800 --> 00:06:41,200 Speaker 4: You're suggesting you have to fill them all? 134 00:06:41,279 --> 00:06:43,120 Speaker 2: Yeah, you need more than twelve seats. 135 00:06:43,200 --> 00:06:47,520 Speaker 1: Nah, exclusivity, So we are paying for quiet luxury. 136 00:06:47,680 --> 00:06:49,240 Speaker 4: Look, it's a great list to read some of them. 137 00:06:49,480 --> 00:06:51,880 Speaker 1: Nice to see the likes of oman Borough Market getting 138 00:06:51,880 --> 00:06:54,560 Speaker 1: its first star as well, twenty two restaurants getting a 139 00:06:54,560 --> 00:06:56,120 Speaker 1: new star across Britain and Ireland as well. A couple 140 00:06:56,160 --> 00:06:57,720 Speaker 1: of great Irish names and there as well, Lignum and 141 00:06:57,760 --> 00:06:59,760 Speaker 1: Galway on the Marrison Room and Carton House in Kildare 142 00:06:59,760 --> 00:07:02,440 Speaker 1: get their first stars. A plenty to inspire you in 143 00:07:02,440 --> 00:07:04,240 Speaker 1: that piece. You can read more on Bloomberg dot com 144 00:07:04,279 --> 00:07:05,359 Speaker 1: and on the terminal. 145 00:07:05,800 --> 00:07:07,919 Speaker 3: Well, let's get back to the latest on the tariff 146 00:07:07,960 --> 00:07:10,440 Speaker 3: news and the European Union says that it will impose 147 00:07:10,560 --> 00:07:14,840 Speaker 3: countermeasures against the latest US tariffs on steel and aluminium. 148 00:07:15,120 --> 00:07:18,200 Speaker 3: We have our Brussels bureau chief Kevin Whitelaw with US 149 00:07:18,280 --> 00:07:21,720 Speaker 3: now and from Berlin, our correspondent Oliver Crook and our 150 00:07:21,720 --> 00:07:25,840 Speaker 3: markets reporter Valerie Title with US in studio, so all 151 00:07:25,880 --> 00:07:27,760 Speaker 3: bases covered here, Kevin, I want to start with you. 152 00:07:28,320 --> 00:07:30,560 Speaker 3: This is in response to the US tariffs on steel 153 00:07:30,560 --> 00:07:33,559 Speaker 3: and aluminium. What exactly has the EU said? 154 00:07:34,840 --> 00:07:36,560 Speaker 10: You know, the EU has said in the sort of 155 00:07:36,640 --> 00:07:39,800 Speaker 10: tersiest way possible that this is it views this as 156 00:07:40,520 --> 00:07:47,960 Speaker 10: unlawful and will impose countermeasures if if it stands. They're 157 00:07:48,040 --> 00:07:50,600 Speaker 10: trying to avoid specifics and they are trying to leave 158 00:07:50,680 --> 00:07:54,680 Speaker 10: room for negotiation. These tariffs don't take effect until March twelfth, 159 00:07:54,720 --> 00:07:58,120 Speaker 10: which does give the EU, but every other country in 160 00:07:58,160 --> 00:08:00,760 Speaker 10: the world at least some thing a medical time to 161 00:08:01,320 --> 00:08:03,960 Speaker 10: have conversations with the Trump administration to see if there 162 00:08:04,040 --> 00:08:06,280 Speaker 10: is something they're looking for that that could either lower 163 00:08:06,440 --> 00:08:07,920 Speaker 10: or of the tariff threat. 164 00:08:09,560 --> 00:08:12,680 Speaker 1: We know that the EU has been preparing for the 165 00:08:12,760 --> 00:08:16,160 Speaker 1: potential of tariffs being imposed. What do we know about 166 00:08:16,240 --> 00:08:18,320 Speaker 1: what has been prepared for? What are the likely next 167 00:08:18,360 --> 00:08:19,760 Speaker 1: steps we could see the EU taking. 168 00:08:20,840 --> 00:08:22,760 Speaker 10: Well, yeah, the you had been prepared to you know, 169 00:08:22,840 --> 00:08:25,800 Speaker 10: detailed list of you know, potential retaliations, but it was 170 00:08:25,840 --> 00:08:28,960 Speaker 10: also based off everything from across the board tariffs on 171 00:08:29,040 --> 00:08:31,600 Speaker 10: all goods, which is one thing that Trump had floated 172 00:08:31,640 --> 00:08:33,959 Speaker 10: at one point to obviously more specific issues. When it 173 00:08:34,000 --> 00:08:37,160 Speaker 10: comes to the metals a luminum steel, this revives a 174 00:08:37,240 --> 00:08:40,120 Speaker 10: fight from the first administration, and so when when when 175 00:08:40,559 --> 00:08:43,360 Speaker 10: the Trump administration did tariffs on these medals the first 176 00:08:43,400 --> 00:08:47,440 Speaker 10: time round, there were a set of retaliation, retaliatory measures 177 00:08:47,480 --> 00:08:51,559 Speaker 10: that you took on things like you know, Harley Davidson motorcycles, 178 00:08:51,640 --> 00:08:56,920 Speaker 10: Levi Jean's Kentucky Bourbon that could all come back, or 179 00:08:57,000 --> 00:08:58,640 Speaker 10: it could be slightly different, or it could be a 180 00:08:58,679 --> 00:09:00,760 Speaker 10: different set of things. So the EU has a couple 181 00:09:00,840 --> 00:09:04,640 Speaker 10: of different options. But the truths that have been called 182 00:09:04,920 --> 00:09:08,280 Speaker 10: under the Biden administration over this trade fight was due 183 00:09:08,320 --> 00:09:11,800 Speaker 10: to expire at the end of March, so the you know, 184 00:09:12,080 --> 00:09:14,000 Speaker 10: this fight was going to come back one way or another. 185 00:09:14,200 --> 00:09:16,680 Speaker 10: Probably I think Trump has just made it come back faster. 186 00:09:17,240 --> 00:09:19,599 Speaker 3: Ollie all of Schultz has also been speaking about this 187 00:09:19,960 --> 00:09:21,720 Speaker 3: this morning. What's he been saying. 188 00:09:22,120 --> 00:09:24,240 Speaker 11: I mean, listen, what we heard from Schultz is basically 189 00:09:24,280 --> 00:09:25,839 Speaker 11: the usual stuff that we've been hearing from many of 190 00:09:25,880 --> 00:09:28,600 Speaker 11: the European leaders, basically saying how harmful this is going 191 00:09:28,679 --> 00:09:30,880 Speaker 11: to be, not just to the Europeans but also to 192 00:09:31,040 --> 00:09:34,080 Speaker 11: the Americans. How basically that you will have to respond 193 00:09:34,120 --> 00:09:36,960 Speaker 11: in kind but their option, that's not their preferred option 194 00:09:37,080 --> 00:09:39,160 Speaker 11: to have a trade war, and that this is that 195 00:09:39,320 --> 00:09:41,360 Speaker 11: they hope that they can fix the sort of misguided 196 00:09:41,440 --> 00:09:44,120 Speaker 11: path of terists and that can still be sort of avoided. 197 00:09:44,160 --> 00:09:46,840 Speaker 11: I think that the main question for everybody from the Europeans, 198 00:09:46,920 --> 00:09:49,800 Speaker 11: you know, in Brussels or Berlin, it's basically what does 199 00:09:49,880 --> 00:09:50,400 Speaker 11: Trump want? 200 00:09:50,520 --> 00:09:50,640 Speaker 7: Right? 201 00:09:50,720 --> 00:09:52,640 Speaker 11: What is the negotiation? Is this just going to be 202 00:09:52,679 --> 00:09:54,959 Speaker 11: a pure negotiation. Is it just about closing the sort 203 00:09:55,000 --> 00:09:56,959 Speaker 11: of trade gap. Is it going to be bigger than that? 204 00:09:57,000 --> 00:09:58,319 Speaker 11: And I think that's going to be the main question. 205 00:09:58,440 --> 00:10:01,400 Speaker 11: Is it going to be potentially about regulation, anti trust? 206 00:10:01,480 --> 00:10:03,600 Speaker 11: Could it be about NATO spending, Could it be I mean, 207 00:10:03,800 --> 00:10:05,800 Speaker 11: maybe Greenland. These are all going to be sort of 208 00:10:05,840 --> 00:10:07,679 Speaker 11: the questions and trying to get an understanding of what 209 00:10:07,760 --> 00:10:10,520 Speaker 11: this administration is thinking. The good news for the Europeans 210 00:10:10,559 --> 00:10:12,360 Speaker 11: is that they're going to have their first basically high 211 00:10:12,440 --> 00:10:16,440 Speaker 11: level contact with the Trump administration later this week in Munich, where. 212 00:10:16,280 --> 00:10:16,720 Speaker 4: You have JD. 213 00:10:16,880 --> 00:10:19,199 Speaker 11: Vance, you have Marco Rubio, you have Keith Kellogg, the 214 00:10:19,559 --> 00:10:22,360 Speaker 11: chief Envoy for Ukraine and Russia that will be coming 215 00:10:22,400 --> 00:10:24,240 Speaker 11: to Munich and to Germany and we'll be meeting with 216 00:10:24,280 --> 00:10:26,040 Speaker 11: some of these leaders for the very first time. 217 00:10:27,679 --> 00:10:31,800 Speaker 1: Oliver, how exposed is Germany's economy, in particular within the 218 00:10:31,840 --> 00:10:34,800 Speaker 1: European Union to these tariffs on stealing aluminium? 219 00:10:35,040 --> 00:10:36,800 Speaker 11: Yeah, so listen, whenever we talk about trade with the 220 00:10:36,920 --> 00:10:39,079 Speaker 11: United States and the issues that it provokes for Europe, 221 00:10:39,120 --> 00:10:41,600 Speaker 11: any issue it provokes for Europe is mainly an issue 222 00:10:41,679 --> 00:10:44,000 Speaker 11: for Germany. So basically, the EU had a trade surplus 223 00:10:44,120 --> 00:10:46,240 Speaker 11: with the United States of about two hundred and thirty 224 00:10:46,280 --> 00:10:49,079 Speaker 11: billion dollars last year. If you look at just the 225 00:10:49,160 --> 00:10:52,120 Speaker 11: surplus between Germany and the United States, it was more 226 00:10:52,160 --> 00:10:55,120 Speaker 11: than seventy billion euros and that was a record last year. Right, 227 00:10:55,160 --> 00:10:57,240 Speaker 11: And the total trade between Germany and the US is 228 00:10:57,240 --> 00:11:00,079 Speaker 11: about a quarter trillion euros. So this is basically a 229 00:11:00,160 --> 00:11:03,120 Speaker 11: tariff that really hits the Germans the hardest. But you know, 230 00:11:03,200 --> 00:11:04,880 Speaker 11: this stuff flows both ways. I mean, I'll give you 231 00:11:05,000 --> 00:11:07,280 Speaker 11: just one example. Mercedes Benz for example, Right, they have 232 00:11:07,400 --> 00:11:10,240 Speaker 11: factories in Europe. Obviously they have factories in the United States, 233 00:11:10,440 --> 00:11:12,840 Speaker 11: but many of the SUVs they sell in Europe which 234 00:11:12,840 --> 00:11:15,520 Speaker 11: are being produced and assembled over in the United States. 235 00:11:15,600 --> 00:11:17,400 Speaker 11: So of course a lot of the exports are going 236 00:11:17,440 --> 00:11:20,360 Speaker 11: from Europe to the United States, but they go both ways. 237 00:11:20,440 --> 00:11:23,439 Speaker 11: When you talk specifically about steel. You know, Germany's the 238 00:11:23,480 --> 00:11:26,400 Speaker 11: seventh biggest exporter of steel into the United States, is 239 00:11:26,400 --> 00:11:29,599 Speaker 11: about three billion dollars last year, so listen, in the 240 00:11:29,640 --> 00:11:31,680 Speaker 11: scheme of things, it's not the sort of biggest category. 241 00:11:31,720 --> 00:11:33,880 Speaker 11: But again it's another headwind for a German economy not 242 00:11:34,080 --> 00:11:35,000 Speaker 11: in need of headwinds. 243 00:11:35,400 --> 00:11:37,439 Speaker 2: So, Valerie, where are we seeing this showing up in 244 00:11:37,480 --> 00:11:38,360 Speaker 2: the market if. 245 00:11:38,280 --> 00:11:42,840 Speaker 12: Anywere look, the reaction is fairly muted here, Lizzie. There 246 00:11:43,080 --> 00:11:47,680 Speaker 12: is some trade the downside in basic resources here in Europe, 247 00:11:47,760 --> 00:11:52,199 Speaker 12: those exposed to the perhaps the metal trade, the aluminum 248 00:11:52,520 --> 00:11:54,719 Speaker 12: and steal tariffs that tit for tat, But we're not 249 00:11:54,840 --> 00:11:57,880 Speaker 12: really seeing a risk off move in the equity market. 250 00:11:57,880 --> 00:12:00,760 Speaker 12: The eurostox six hundred is still whole holding up pretty well. 251 00:12:00,880 --> 00:12:03,360 Speaker 12: S ANDP Future didn't really react, and then finally in 252 00:12:03,440 --> 00:12:07,800 Speaker 12: the FX market, the reaction there hasn't been anything eye catching. 253 00:12:07,920 --> 00:12:10,360 Speaker 12: Euro is still unchanged and there wasn't really. 254 00:12:10,200 --> 00:12:11,040 Speaker 4: A jump in gold. 255 00:12:11,120 --> 00:12:13,079 Speaker 12: So it seems like the market is reading through this 256 00:12:13,200 --> 00:12:15,480 Speaker 12: for now, perhaps thinking that the ball is now in 257 00:12:15,559 --> 00:12:19,480 Speaker 12: Trump's court. We know that he might announce reciprocal tariffs 258 00:12:20,000 --> 00:12:23,000 Speaker 12: either today or tomorrow. Perhaps the market is just waiting 259 00:12:23,280 --> 00:12:26,320 Speaker 12: for that announcement before drawing any conclusions from the EU's 260 00:12:26,360 --> 00:12:26,880 Speaker 12: move today. 261 00:12:27,040 --> 00:12:28,640 Speaker 1: Yeah, it is very interesting to see that that sort 262 00:12:28,640 --> 00:12:30,679 Speaker 1: of muted market reaction again. And this is sort of 263 00:12:30,720 --> 00:12:32,880 Speaker 1: in line with what we've had since we had these 264 00:12:33,120 --> 00:12:36,760 Speaker 1: tires first mooted by Trump. On Sunday evening as well. 265 00:12:37,400 --> 00:12:40,520 Speaker 1: The EUS Trade Commissioner Mao Chefcovic has been speaking in 266 00:12:40,559 --> 00:12:42,680 Speaker 1: the European Parliament in Strasbourg this morning. 267 00:12:42,760 --> 00:12:44,120 Speaker 4: Let's take a listen to what he had to say. 268 00:12:45,000 --> 00:12:48,480 Speaker 13: We will always protect our interest from unjustified measures in. 269 00:12:48,559 --> 00:12:49,680 Speaker 4: Line with our values. 270 00:12:50,360 --> 00:12:53,440 Speaker 13: And this time has come and we are currently assessing 271 00:12:53,480 --> 00:12:57,800 Speaker 13: the scope of the measures and overnight overnight and we'll 272 00:12:57,840 --> 00:13:02,600 Speaker 13: be responding in firm and a proportionate way by countermeasures. 273 00:13:03,480 --> 00:13:07,400 Speaker 13: We will act to safeguard our economic interests. We will 274 00:13:07,480 --> 00:13:11,800 Speaker 13: protect our workers, businesses and consumers. 275 00:13:12,920 --> 00:13:15,679 Speaker 1: That's Marschefsovitz. They're the executive Vice President of the European Union. 276 00:13:15,760 --> 00:13:17,880 Speaker 1: Let's go back to our Russels we or Chief Kevin Whitelaw, 277 00:13:18,200 --> 00:13:22,000 Speaker 1: Kevin the Hope or at least some countries in response 278 00:13:22,080 --> 00:13:24,079 Speaker 1: to these tariffs, would they be able to carve out 279 00:13:24,480 --> 00:13:27,040 Speaker 1: an exception or an exemption from them. We know that 280 00:13:27,200 --> 00:13:29,480 Speaker 1: the Australian Prime Minister has already had a conversation with 281 00:13:29,600 --> 00:13:32,360 Speaker 1: Donald Trump about it. What hopes will there be on 282 00:13:32,440 --> 00:13:35,040 Speaker 1: the EU side that there is room to negotiate here 283 00:13:35,120 --> 00:13:37,480 Speaker 1: without things getting Dare I say it out of hand? 284 00:13:38,600 --> 00:13:41,040 Speaker 10: Well, obviously, I think you know, the EU has taken 285 00:13:41,080 --> 00:13:43,280 Speaker 10: a certain amount of solace and in the notion that 286 00:13:43,360 --> 00:13:47,800 Speaker 10: some of Trump's early tariff measures did result in negotiated 287 00:13:47,880 --> 00:13:50,600 Speaker 10: truces or delays, and so I do think that they 288 00:13:50,840 --> 00:13:53,480 Speaker 10: are optimistic, and I think that it does actually explain 289 00:13:53,559 --> 00:13:56,440 Speaker 10: the sort of measured nature of the statement. Basically, they 290 00:13:56,559 --> 00:14:01,000 Speaker 10: didn't threaten specifics, they didn't take an old really harsh tone, 291 00:14:01,080 --> 00:14:02,800 Speaker 10: but they did make clear that like they're going to 292 00:14:02,840 --> 00:14:05,920 Speaker 10: have to do something. So that's something is obviously going 293 00:14:05,960 --> 00:14:08,800 Speaker 10: to depend a lot on how these conversations are going forward. 294 00:14:08,840 --> 00:14:11,120 Speaker 10: But I think everyone who's dealing with this administration has 295 00:14:11,200 --> 00:14:15,280 Speaker 10: to understand that the risk of continually getting into negotiations 296 00:14:15,400 --> 00:14:17,000 Speaker 10: is that you just end up with a series of 297 00:14:17,120 --> 00:14:22,040 Speaker 10: concessants that simply delays something without actually providing countries about 298 00:14:22,120 --> 00:14:25,880 Speaker 10: with any certainty that they've actually escaped, you know, the 299 00:14:26,360 --> 00:14:27,960 Speaker 10: entire cycle of this, and we're going to watch that. 300 00:14:28,040 --> 00:14:30,560 Speaker 10: With Canada Mexico they only got a thirty day truce 301 00:14:30,640 --> 00:14:34,320 Speaker 10: and in that first tariff threat from from from the 302 00:14:34,720 --> 00:14:37,720 Speaker 10: from the Trump administration. So you know, if if if 303 00:14:37,760 --> 00:14:39,920 Speaker 10: he just comes back and wants more, that's going to 304 00:14:40,520 --> 00:14:42,080 Speaker 10: you know, the EU and others may have to take 305 00:14:42,080 --> 00:14:42,960 Speaker 10: a different lesson from that. 306 00:14:43,160 --> 00:14:44,600 Speaker 3: Welly, can we just talk about how this is going 307 00:14:44,680 --> 00:14:48,000 Speaker 3: to play into the domestic politics in Germany? What might 308 00:14:48,120 --> 00:14:51,320 Speaker 3: it do to change the election campaign in Germany. 309 00:14:52,800 --> 00:14:54,960 Speaker 11: Or just impact on the election campaign in Germany. From 310 00:14:55,000 --> 00:14:57,120 Speaker 11: the Trump camp has probably been Elon Musk and his 311 00:14:57,240 --> 00:14:59,680 Speaker 11: sort of getting involved in backing the AfD and having 312 00:14:59,720 --> 00:15:03,080 Speaker 11: these of strange outbursts and sort of participating very kind 313 00:15:03,120 --> 00:15:06,440 Speaker 11: of actively as an advocate for the alternative for Deutsche Line, 314 00:15:06,480 --> 00:15:08,720 Speaker 11: the far right group that wants to leave the Eurozone, 315 00:15:08,760 --> 00:15:10,920 Speaker 11: that wants as much more protectionists and much more sort 316 00:15:10,960 --> 00:15:13,760 Speaker 11: of nationalist, and all of it sort of and all 317 00:15:13,760 --> 00:15:15,720 Speaker 11: of its sort of messaging in terms of what it 318 00:15:15,760 --> 00:15:17,880 Speaker 11: will actually mean for the economy. Again, this is going 319 00:15:17,960 --> 00:15:20,440 Speaker 11: to be absolutely huge sort of mood music if this 320 00:15:20,520 --> 00:15:22,560 Speaker 11: stuff moves forwards. I mean, again, it's a big if, 321 00:15:22,800 --> 00:15:24,800 Speaker 11: and there's no way around the fact that again, what 322 00:15:24,920 --> 00:15:27,040 Speaker 11: Germany is staring down is a sort of couple of 323 00:15:27,160 --> 00:15:29,400 Speaker 11: years of a coalition that has been very sort of clumsy, 324 00:15:29,480 --> 00:15:32,280 Speaker 11: didn't get along. Obviously, it resulted in the government collapsing. 325 00:15:32,520 --> 00:15:34,840 Speaker 11: We are now looking at potentially a third year of 326 00:15:34,920 --> 00:15:38,000 Speaker 11: contraction in Germany that has literally never happened, three years 327 00:15:38,040 --> 00:15:41,240 Speaker 11: of consecutive contraption since the fall of the Berlin Wall. 328 00:15:41,520 --> 00:15:44,520 Speaker 11: The only possible silver lining, I think politically for Germany 329 00:15:44,600 --> 00:15:47,960 Speaker 11: is that actually things get so bad that these political 330 00:15:48,040 --> 00:15:50,840 Speaker 11: parties need to make really difficult compromises and really do 331 00:15:51,000 --> 00:15:53,160 Speaker 11: something in order to turn the economy around, to stimulate 332 00:15:53,200 --> 00:15:56,000 Speaker 11: the economy, and really think much more radically about what 333 00:15:56,080 --> 00:15:58,000 Speaker 11: they need to do to turn the economy around. Maybe 334 00:15:58,040 --> 00:16:00,240 Speaker 11: for the CDU and the Conservatives that means look at 335 00:16:00,280 --> 00:16:02,440 Speaker 11: the debt break and thinking about other and more creative 336 00:16:02,440 --> 00:16:05,120 Speaker 11: ways to simulate the economy. Potentially for the SPD it 337 00:16:05,160 --> 00:16:07,520 Speaker 11: means cutting back some of the social welfare things. These 338 00:16:07,560 --> 00:16:09,920 Speaker 11: have all been sort of chronic sticking points that have 339 00:16:10,000 --> 00:16:12,760 Speaker 11: basically made it impossible for things to move forward politically, 340 00:16:12,920 --> 00:16:15,840 Speaker 11: and potentially you know, Trump changes that potentially, though also 341 00:16:15,960 --> 00:16:18,480 Speaker 11: it doesn't, and it just sort of slowly the economy 342 00:16:18,520 --> 00:16:20,160 Speaker 11: sort of limps on and things get worse and worse 343 00:16:20,200 --> 00:16:20,520 Speaker 11: and worse. 344 00:16:21,720 --> 00:16:24,080 Speaker 1: Kevin, the EU is of course that it's based a 345 00:16:24,120 --> 00:16:28,440 Speaker 1: trade block, so the response comes from Brussels. But could 346 00:16:28,520 --> 00:16:31,760 Speaker 1: we see a situation where certain European countries will be 347 00:16:31,840 --> 00:16:35,600 Speaker 1: trying to negotiate side deals or exemptions for products that 348 00:16:35,640 --> 00:16:37,040 Speaker 1: would particularly affect them. 349 00:16:37,160 --> 00:16:39,280 Speaker 4: Is there is there a European unity question here? 350 00:16:40,240 --> 00:16:42,840 Speaker 10: I mean there definitely is, maybe less so on the 351 00:16:42,920 --> 00:16:45,200 Speaker 10: metals tariffs than on sort of some of the bigger 352 00:16:45,280 --> 00:16:48,600 Speaker 10: across the board conversations that are going down. But yes, 353 00:16:48,680 --> 00:16:52,120 Speaker 10: there's a definite concern that that countries will have an 354 00:16:52,160 --> 00:16:55,320 Speaker 10: incentive to to try to cut their own deals. And 355 00:16:55,360 --> 00:17:00,520 Speaker 10: there is also some worry that Trump actually want that 356 00:17:00,680 --> 00:17:04,080 Speaker 10: and may want to look to fracture the market, you know, 357 00:17:04,200 --> 00:17:07,320 Speaker 10: the single market in European unity. So he may well 358 00:17:07,440 --> 00:17:10,280 Speaker 10: start offering that. So you know, obviously that could happen 359 00:17:10,320 --> 00:17:15,240 Speaker 10: with his closest allies, such as Hungary's Victor orbon Or, 360 00:17:15,359 --> 00:17:18,359 Speaker 10: it could happen with individual economies and leaders who are 361 00:17:18,480 --> 00:17:21,320 Speaker 10: who are worried about the impact, you know, particularly when 362 00:17:21,320 --> 00:17:24,320 Speaker 10: you look at how many of Europe's economies are indeed 363 00:17:24,359 --> 00:17:25,119 Speaker 10: struggling right now. 364 00:17:25,800 --> 00:17:28,520 Speaker 3: So well, the back and forth has begun between the 365 00:17:28,680 --> 00:17:31,920 Speaker 3: US and the EU. Well, the key points that markets 366 00:17:31,920 --> 00:17:34,320 Speaker 3: are watching for now as this plays. 367 00:17:34,040 --> 00:17:37,960 Speaker 12: Out, Well, look, Lizzie, if we go from just the 368 00:17:38,080 --> 00:17:42,120 Speaker 12: one sided US announcing tariffs to a tit for tat 369 00:17:42,200 --> 00:17:45,320 Speaker 12: trade war, that will really turn this trade from an 370 00:17:45,440 --> 00:17:49,320 Speaker 12: FX trade to an equity market trade. Right We're not 371 00:17:49,480 --> 00:17:53,920 Speaker 12: necessarily worried about dollar strength or euro weakness. If we 372 00:17:54,040 --> 00:17:58,080 Speaker 12: do get combative tariffs from either side of the Atlantic, 373 00:17:58,200 --> 00:18:01,840 Speaker 12: the risk really is going to show up in equity 374 00:18:01,880 --> 00:18:05,960 Speaker 12: market sentiment souring and perhaps a further bid into gold. 375 00:18:07,119 --> 00:18:09,560 Speaker 1: Okay, Faleriy ty Tyler, market supporter, thank you very much. 376 00:18:09,680 --> 00:18:12,240 Speaker 1: Just a final question to Oliver Crook in Berlin. Of 377 00:18:12,280 --> 00:18:14,880 Speaker 1: course we're talking about the impact on the election campaign 378 00:18:14,920 --> 00:18:18,040 Speaker 1: here as well. Frederick Martz from the CDU is currently 379 00:18:18,119 --> 00:18:21,240 Speaker 1: the leading candidate in the polls to be the next chancellor. 380 00:18:21,359 --> 00:18:25,119 Speaker 1: There should we expect any divergence on this issue between 381 00:18:25,440 --> 00:18:27,439 Speaker 1: Olof Schultz and Frederick Martz. 382 00:18:27,880 --> 00:18:29,440 Speaker 11: I mean, listen, I think that the only sort of 383 00:18:29,480 --> 00:18:34,000 Speaker 11: positive thing potentially if the Olaf Schultz gets replaced is 384 00:18:34,119 --> 00:18:35,600 Speaker 11: just the fact that we know that there's a great 385 00:18:35,640 --> 00:18:39,000 Speaker 11: disdain on the Trump side of things for Schultz. You know, 386 00:18:39,119 --> 00:18:41,119 Speaker 11: in Germany we've had obviously, again most of that has 387 00:18:41,119 --> 00:18:43,960 Speaker 11: been through Elon Musk through Twitter basically calling you know, 388 00:18:44,040 --> 00:18:47,359 Speaker 11: Elon calling Olof Schultze a fool and being very very 389 00:18:47,400 --> 00:18:50,520 Speaker 11: critical of the German government. I mean, listen, I don't 390 00:18:50,520 --> 00:18:53,520 Speaker 11: know that Frederick Mertz is the sort of most dynamic, charismatic, 391 00:18:53,600 --> 00:18:55,399 Speaker 11: sort of deal cutting kind of person that you know 392 00:18:55,480 --> 00:18:57,840 Speaker 11: that Trump would like to work with. I think he 393 00:18:57,960 --> 00:19:00,000 Speaker 11: tries to style himself as someone who could be who's 394 00:19:00,160 --> 00:19:02,920 Speaker 11: closer politically as a conservative. But again, what I think 395 00:19:02,960 --> 00:19:04,879 Speaker 11: what was interesting and he was stressing over the weekend 396 00:19:04,960 --> 00:19:07,719 Speaker 11: in the debate of Frederick Mertz, that is, is despite 397 00:19:07,760 --> 00:19:09,960 Speaker 11: the fact that again there was all this controversy about 398 00:19:10,040 --> 00:19:12,520 Speaker 11: him voting with the AfD on this question of immigration, 399 00:19:12,640 --> 00:19:15,440 Speaker 11: and the AfD is obviously a very anti immigration party, 400 00:19:15,760 --> 00:19:19,280 Speaker 11: very anti europe party, Frederick Mertz is still very pro European. 401 00:19:19,320 --> 00:19:21,199 Speaker 11: He's saying that basically, the only way that we're going 402 00:19:21,240 --> 00:19:23,080 Speaker 11: to be able to stand up to the United States 403 00:19:23,400 --> 00:19:25,119 Speaker 11: is if we work together as a block, and to 404 00:19:25,200 --> 00:19:27,199 Speaker 11: sort of Kevin's point what we were talking about, there 405 00:19:27,320 --> 00:19:29,840 Speaker 11: is of course always the fear that this can draw 406 00:19:29,960 --> 00:19:33,360 Speaker 11: fragmentation within the European Union because in moments of economic 407 00:19:33,520 --> 00:19:36,240 Speaker 11: and sort of political instability, many people tend to go 408 00:19:36,359 --> 00:19:38,199 Speaker 11: towards a nationalist sort of view. But I think there 409 00:19:38,280 --> 00:19:40,320 Speaker 11: is a consciousness, certainly from the CDU, that the only 410 00:19:40,359 --> 00:19:41,840 Speaker 11: way that Europe, that Jermy is going to make it 411 00:19:41,880 --> 00:19:44,240 Speaker 11: out of this is in sort of solidarity with Europe. 412 00:19:45,440 --> 00:19:48,159 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 413 00:19:48,240 --> 00:19:51,240 Speaker 1: stories making news from London to Wall Streets and beyond. 414 00:19:51,560 --> 00:19:55,520 Speaker 14: Look for us on your podcast feed every morning, on Apple, Spotify, 415 00:19:55,640 --> 00:19:57,520 Speaker 14: and anywhere else you get your podcasts. 416 00:19:57,640 --> 00:19:59,840 Speaker 1: You can also listen live each morning on London d 417 00:20:00,000 --> 00:20:03,040 Speaker 1: A Radio, the Bloomberg Business app, and Bloomberg dot Com. 418 00:20:04,520 --> 00:20:07,239 Speaker 14: Our flagship New York station is also available on your 419 00:20:07,320 --> 00:20:11,960 Speaker 14: Amazon Alexa devices. 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