WEBVTT - UPDATE: EU Will Impose 'Countermeasures' Against Trump Tariffs 0:00:02.560 --> 0:00:10.080 Bloomberg Audio Studios, podcasts, radio news. They say's the Bloomberg 0:00:10.160 --> 0:00:14.000 Daybreak Europe podcast, available every morning on Apple, Spotify or 0:00:14.040 --> 0:00:17.120 wherever you listen. It's Tuesday, the eleventh of February in London. 0:00:17.200 --> 0:00:18.320 I'm Stephen Carroll. 0:00:18.160 --> 0:00:20.000 And I'm Lizzie Burden. Coming up today. 0:00:20.079 --> 0:00:22.720 The EU says it will respond to Trump's tariff plan 0:00:23.040 --> 0:00:25.560 on steel and aluminium with countermeasures. 0:00:25.640 --> 0:00:27.800 Ahead of the EU's warning shot, Donald Trump warns that 0:00:27.880 --> 0:00:31.240 tariff right may go higher than twenty five percent. 0:00:30.920 --> 0:00:32.240 Plus wait and see. 0:00:32.320 --> 0:00:35.360 BP pledges to lay out plans for a strategy reset 0:00:35.560 --> 0:00:36.960 as results underwhelm. 0:00:37.280 --> 0:00:39.440 Let's start with the round up of our top stories. 0:00:39.760 --> 0:00:43.040 The European Union says it will respond to any tariffs 0:00:43.040 --> 0:00:45.880 the US might impose on it. The warning comes after 0:00:45.920 --> 0:00:48.400 President Trump pushed forward with his pledge to place a 0:00:48.479 --> 0:00:52.000 twenty five percent tariff on all US steel and aluminium imputs. 0:00:52.280 --> 0:00:55.400 The US Administration says the broad tariffs will go into 0:00:55.440 --> 0:00:58.200 effect on the twelfth of March, referring directly to the 0:00:58.200 --> 0:01:02.160 proposal of Metal Tariff's Europea Commission President Ursula Vonderlayon said 0:01:02.160 --> 0:01:05.080 that if imposed on the EU, they would quote trigger 0:01:05.120 --> 0:01:07.400 firm and proportionate countermeasures. 0:01:07.920 --> 0:01:11.240 The EU response comes after Trump insisted that the proposed 0:01:11.280 --> 0:01:14.880 tariffs on steel and aluminium imports would help boost domestic 0:01:14.959 --> 0:01:17.720 production and bring more jobs to the United States. 0:01:18.920 --> 0:01:21.760 Protecting are still at aluminum industries is a must. And 0:01:21.840 --> 0:01:25.399 today I am simplifying our tariffs and CEO and aluminum 0:01:25.480 --> 0:01:28.720 so that everyone can understand exactly what it means. It's 0:01:28.760 --> 0:01:33.560 twenty five percent without exceptions or exemptions, and that's all countries, 0:01:33.600 --> 0:01:36.400 no matter where it comes from, all countries. If made 0:01:36.440 --> 0:01:40.480 in the United States, however, there is no tariff for zero. 0:01:42.160 --> 0:01:44.960 Trump's move comes on top of new ten percent tariffs 0:01:44.959 --> 0:01:47.840 on goods from China and twenty five percent levies on 0:01:47.880 --> 0:01:50.800 Canada and Mexico that are currently paused for one month. 0:01:51.120 --> 0:01:53.040 The latest measures are meant to crack down on what 0:01:53.080 --> 0:01:56.160 White House officials said were efforts by countries like Russia 0:01:56.200 --> 0:01:59.040 and China to circumvent existing duties. 0:02:00.000 --> 0:02:03.360 Despite Trump's insistence that there would be zero exemptions, the 0:02:03.440 --> 0:02:06.160 US president says he will give consideration to a carve 0:02:06.280 --> 0:02:09.200 up for Australia. Those comments were also echoed by the 0:02:09.200 --> 0:02:11.880 country's Prime minister after a call between the two leaders. 0:02:13.440 --> 0:02:18.280 I presented Australia's case for an exemption, and we agreed 0:02:18.320 --> 0:02:23.079 on wording to say publicly, which is that the US 0:02:23.160 --> 0:02:27.400 President agreed that an exemption was under consideration in the 0:02:27.480 --> 0:02:29.840 interests of both of our countries. 0:02:30.400 --> 0:02:34.120 Anthony Albanezi there, who has been under intense political pressure 0:02:34.200 --> 0:02:37.440 to secure tariff exemptions for the country's steel and aluminium 0:02:37.440 --> 0:02:40.679 exports to the US. Both leaders cited the US trade 0:02:40.720 --> 0:02:43.519 surplus with Australia was a key reason for any carve out. 0:02:43.880 --> 0:02:46.120 The growing prospect of a trade war comes as the 0:02:46.240 --> 0:02:49.720 UK's new ambassador to the United States, Peter Mandelson, says 0:02:49.720 --> 0:02:53.680 it's important for allies to respect Trump's electoral mandate. The 0:02:53.720 --> 0:02:56.440 comments come after Trump suggested last week the UK may 0:02:56.480 --> 0:03:00.400 avoid tariffs, saying the relationship can be worked out. Here's 0:03:00.400 --> 0:03:03.360 what Lord Mandelson told the BBC on his first day 0:03:03.480 --> 0:03:04.000 in the role. 0:03:06.000 --> 0:03:08.799 We've got to take all these issues as they can. 0:03:09.800 --> 0:03:14.239 Realize that the president has a very strong and clear 0:03:14.320 --> 0:03:18.960 mandate for change in the United States. Now that doesn't 0:03:18.960 --> 0:03:20.960 mean to say that we're going to agree in Britain 0:03:21.000 --> 0:03:23.720 with every single detail of what he does, but we 0:03:23.840 --> 0:03:28.400 have to respect and understand what drives him, what is 0:03:28.480 --> 0:03:33.640 mandate is to do and how his allies need to 0:03:34.000 --> 0:03:35.480 adjust sometimes. 0:03:36.160 --> 0:03:39.160 Peter Mandilson also told the BBC that has passed criticisms 0:03:39.160 --> 0:03:42.640 of Trump were quote ill judged and wrong. In twenty nineteen, 0:03:42.680 --> 0:03:45.640 the labor politician reportedly called the US leader a danger 0:03:45.680 --> 0:03:46.280 to the world. 0:03:46.640 --> 0:03:48.720 In one interview to Turnings Now. 0:03:48.800 --> 0:03:52.200 BP has pledged to deliver major changes to its strategy 0:03:52.240 --> 0:03:54.800 as it reported results that will likely add to pressure 0:03:54.920 --> 0:03:57.680 on the oil major. Adjusted net income for the fourth 0:03:57.760 --> 0:04:00.600 quarter was one point one seven billion dollars, which is 0:04:00.640 --> 0:04:03.320 down from around three billion last year and a miss 0:04:03.360 --> 0:04:06.400 of the average analist estimate of one point three billion dollars. 0:04:06.600 --> 0:04:09.080 The Bloomerg Salmonstead says investors. 0:04:08.640 --> 0:04:11.000 Will need to wait for details of what the CEO 0:04:11.080 --> 0:04:12.560 has dubbed a reset. 0:04:12.920 --> 0:04:15.440 If you are hoping that today's BP results would have 0:04:15.560 --> 0:04:18.120 something to do with exactly what they're going to do 0:04:18.160 --> 0:04:20.320 with their strategy, what kind of changes they're going to make, 0:04:20.560 --> 0:04:23.200 I'm afraid you might be a touch disappointed because they 0:04:23.200 --> 0:04:25.800 are saving all of that until the twenty sixth of February. 0:04:25.880 --> 0:04:28.159 There is a line in the report saying that we 0:04:28.200 --> 0:04:30.600 are going to have a kind of fundamental reset of 0:04:30.600 --> 0:04:33.840 our strategy. That is broadly what everyone kind of already expects, 0:04:33.839 --> 0:04:36.599 and it's a question of whether that fundamental reset is 0:04:36.640 --> 0:04:40.480 going to meet what say Elliott and other shareholders want some. 0:04:40.480 --> 0:04:43.240 Understood there talking to us after Bloomberg learned that activist 0:04:43.320 --> 0:04:46.200 investor Elliott had built a significant holding in BP. 0:04:47.120 --> 0:04:50.400 Open Ai CEO Sam Altman has rejected a ninety seven 0:04:50.480 --> 0:04:53.880 point four billion dollar bid by an Elon Musk led 0:04:53.960 --> 0:04:57.640 group in a post Unmosqus x platform Atmann said no, 0:04:57.760 --> 0:05:00.520 thank you, instead offering to buy the social media company 0:05:00.560 --> 0:05:03.600 for a tenth of that price. Bloomberg Intelligence analyst Man 0:05:03.640 --> 0:05:05.800 Deep Saying says Musk's bid was unexpected. 0:05:06.440 --> 0:05:09.719 Everyone is fixated on, you know, lowering the costs, so 0:05:10.279 --> 0:05:12.919 our view is there will be more consolidation. But I 0:05:12.960 --> 0:05:16.039 didn't anticipate this form of consolidation where you end up 0:05:16.040 --> 0:05:19.159 seeing a hostile bid, you know where. Clearly, I think, 0:05:19.200 --> 0:05:22.840 given Microsoft's stake in open Ai, there's no way you 0:05:22.839 --> 0:05:24.360 could see a. 0:05:24.320 --> 0:05:27.920 Deal like this, Bloomberg Intelligence is man Deep saying, reacting 0:05:27.920 --> 0:05:30.120 to that news, which was first reported by the Wall 0:05:30.120 --> 0:05:32.719 Street Journal. Musk and Altman have been locked in a 0:05:32.800 --> 0:05:35.839 long standing feud over the direction of open Ai. The 0:05:35.880 --> 0:05:38.720 two man works together as founders, but animosity grew as 0:05:38.720 --> 0:05:43.200 the chat GBT creator moved towards becoming a for profit business. 0:05:43.680 --> 0:05:45.280 Those are you top stories this morning? 0:05:45.360 --> 0:05:47.960 On the markets, we have the stock six hundred flat 0:05:48.080 --> 0:05:51.040 to the upside smp E, many futures are down a 0:05:51.160 --> 0:05:54.400 quarter of eight percent, and head of Pal's testimony later, 0:05:54.520 --> 0:05:57.040 the US tenure treasure yield is hire a basis point 0:05:57.040 --> 0:05:58.320 at four point five percent. 0:05:59.720 --> 0:06:01.560 Well, in a moment, we'll bring you more on how 0:06:01.600 --> 0:06:05.160 the EU was planning to respond to those latest steel 0:06:05.240 --> 0:06:07.360 and aluminium tarifs in the United States. 0:06:07.360 --> 0:06:08.560 But Lizzia just wants to mention the. 0:06:08.480 --> 0:06:10.960 Story that I've been reading this morning on the Bloomberg terminal, 0:06:10.960 --> 0:06:13.920 and this is the new list of Michelin Stars restaurants 0:06:14.000 --> 0:06:14.719 in the UK. 0:06:14.600 --> 0:06:16.440 And Ireland in Hungary for this conversation. 0:06:17.560 --> 0:06:19.240 I mean, there's some good names on there, so we've 0:06:19.279 --> 0:06:21.880 got more haul in Lancashire that's got its third star. 0:06:22.800 --> 0:06:24.800 And our food editor Cake Crater has been writing about 0:06:24.839 --> 0:06:26.920 some of the dishes you might have there. For example, 0:06:27.000 --> 0:06:29.960 Local Dorset seek a Deer on the menu there sounds 0:06:30.000 --> 0:06:32.640 very tempting good and Ramsey's restaurant kept its three stars. 0:06:32.880 --> 0:06:35.000 He's just opened a new restaurant here in the city 0:06:35.400 --> 0:06:35.960 as well. 0:06:36.000 --> 0:06:37.680 Twelve seats, Yeah. 0:06:37.480 --> 0:06:39.320 What are you going to do with twelve seats? 0:06:39.800 --> 0:06:41.200 You're suggesting you have to fill them all? 0:06:41.279 --> 0:06:43.120 Yeah, you need more than twelve seats. 0:06:43.200 --> 0:06:47.520 Nah, exclusivity, So we are paying for quiet luxury. 0:06:47.680 --> 0:06:49.240 Look, it's a great list to read some of them. 0:06:49.480 --> 0:06:51.880 Nice to see the likes of oman Borough Market getting 0:06:51.880 --> 0:06:54.560 its first star as well, twenty two restaurants getting a 0:06:54.560 --> 0:06:56.120 new star across Britain and Ireland as well. A couple 0:06:56.160 --> 0:06:57.720 of great Irish names and there as well, Lignum and 0:06:57.760 --> 0:06:59.760 Galway on the Marrison Room and Carton House in Kildare 0:06:59.760 --> 0:07:02.440 get their first stars. A plenty to inspire you in 0:07:02.440 --> 0:07:04.240 that piece. You can read more on Bloomberg dot com 0:07:04.279 --> 0:07:05.359 and on the terminal. 0:07:05.800 --> 0:07:07.919 Well, let's get back to the latest on the tariff 0:07:07.960 --> 0:07:10.440 news and the European Union says that it will impose 0:07:10.560 --> 0:07:14.840 countermeasures against the latest US tariffs on steel and aluminium. 0:07:15.120 --> 0:07:18.200 We have our Brussels bureau chief Kevin Whitelaw with US 0:07:18.280 --> 0:07:21.720 now and from Berlin, our correspondent Oliver Crook and our 0:07:21.720 --> 0:07:25.840 markets reporter Valerie Title with US in studio, so all 0:07:25.880 --> 0:07:27.760 bases covered here, Kevin, I want to start with you. 0:07:28.320 --> 0:07:30.560 This is in response to the US tariffs on steel 0:07:30.560 --> 0:07:33.559 and aluminium. What exactly has the EU said? 0:07:34.840 --> 0:07:36.560 You know, the EU has said in the sort of 0:07:36.640 --> 0:07:39.800 tersiest way possible that this is it views this as 0:07:40.520 --> 0:07:47.960 unlawful and will impose countermeasures if if it stands. They're 0:07:48.040 --> 0:07:50.600 trying to avoid specifics and they are trying to leave 0:07:50.680 --> 0:07:54.680 room for negotiation. These tariffs don't take effect until March twelfth, 0:07:54.720 --> 0:07:58.120 which does give the EU, but every other country in 0:07:58.160 --> 0:08:00.760 the world at least some thing a medical time to 0:08:01.320 --> 0:08:03.960 have conversations with the Trump administration to see if there 0:08:04.040 --> 0:08:06.280 is something they're looking for that that could either lower 0:08:06.440 --> 0:08:07.920 or of the tariff threat. 0:08:09.560 --> 0:08:12.680 We know that the EU has been preparing for the 0:08:12.760 --> 0:08:16.160 potential of tariffs being imposed. What do we know about 0:08:16.240 --> 0:08:18.320 what has been prepared for? What are the likely next 0:08:18.360 --> 0:08:19.760 steps we could see the EU taking. 0:08:20.840 --> 0:08:22.760 Well, yeah, the you had been prepared to you know, 0:08:22.840 --> 0:08:25.800 detailed list of you know, potential retaliations, but it was 0:08:25.840 --> 0:08:28.960 also based off everything from across the board tariffs on 0:08:29.040 --> 0:08:31.600 all goods, which is one thing that Trump had floated 0:08:31.640 --> 0:08:33.959 at one point to obviously more specific issues. When it 0:08:34.000 --> 0:08:37.160 comes to the metals a luminum steel, this revives a 0:08:37.240 --> 0:08:40.120 fight from the first administration, and so when when when 0:08:40.559 --> 0:08:43.360 the Trump administration did tariffs on these medals the first 0:08:43.400 --> 0:08:47.440 time round, there were a set of retaliation, retaliatory measures 0:08:47.480 --> 0:08:51.559 that you took on things like you know, Harley Davidson motorcycles, 0:08:51.640 --> 0:08:56.920 Levi Jean's Kentucky Bourbon that could all come back, or 0:08:57.000 --> 0:08:58.640 it could be slightly different, or it could be a 0:08:58.679 --> 0:09:00.760 different set of things. So the EU has a couple 0:09:00.840 --> 0:09:04.640 of different options. But the truths that have been called 0:09:04.920 --> 0:09:08.280 under the Biden administration over this trade fight was due 0:09:08.320 --> 0:09:11.800 to expire at the end of March, so the you know, 0:09:12.080 --> 0:09:14.000 this fight was going to come back one way or another. 0:09:14.200 --> 0:09:16.680 Probably I think Trump has just made it come back faster. 0:09:17.240 --> 0:09:19.599 Ollie all of Schultz has also been speaking about this 0:09:19.960 --> 0:09:21.720 this morning. What's he been saying. 0:09:22.120 --> 0:09:24.240 I mean, listen, what we heard from Schultz is basically 0:09:24.280 --> 0:09:25.839 the usual stuff that we've been hearing from many of 0:09:25.880 --> 0:09:28.600 the European leaders, basically saying how harmful this is going 0:09:28.679 --> 0:09:30.880 to be, not just to the Europeans but also to 0:09:31.040 --> 0:09:34.080 the Americans. How basically that you will have to respond 0:09:34.120 --> 0:09:36.960 in kind but their option, that's not their preferred option 0:09:37.080 --> 0:09:39.160 to have a trade war, and that this is that 0:09:39.320 --> 0:09:41.360 they hope that they can fix the sort of misguided 0:09:41.440 --> 0:09:44.120 path of terists and that can still be sort of avoided. 0:09:44.160 --> 0:09:46.840 I think that the main question for everybody from the Europeans, 0:09:46.920 --> 0:09:49.800 you know, in Brussels or Berlin, it's basically what does 0:09:49.880 --> 0:09:50.400 Trump want? 0:09:50.520 --> 0:09:50.640 Right? 0:09:50.720 --> 0:09:52.640 What is the negotiation? Is this just going to be 0:09:52.679 --> 0:09:54.959 a pure negotiation. Is it just about closing the sort 0:09:55.000 --> 0:09:56.959 of trade gap. Is it going to be bigger than that? 0:09:57.000 --> 0:09:58.319 And I think that's going to be the main question. 0:09:58.440 --> 0:10:01.400 Is it going to be potentially about regulation, anti trust? 0:10:01.480 --> 0:10:03.600 Could it be about NATO spending, Could it be I mean, 0:10:03.800 --> 0:10:05.800 maybe Greenland. These are all going to be sort of 0:10:05.840 --> 0:10:07.679 the questions and trying to get an understanding of what 0:10:07.760 --> 0:10:10.520 this administration is thinking. The good news for the Europeans 0:10:10.559 --> 0:10:12.360 is that they're going to have their first basically high 0:10:12.440 --> 0:10:16.440 level contact with the Trump administration later this week in Munich, where. 0:10:16.280 --> 0:10:16.720 You have JD. 0:10:16.880 --> 0:10:19.199 Vance, you have Marco Rubio, you have Keith Kellogg, the 0:10:19.559 --> 0:10:22.360 chief Envoy for Ukraine and Russia that will be coming 0:10:22.400 --> 0:10:24.240 to Munich and to Germany and we'll be meeting with 0:10:24.280 --> 0:10:26.040 some of these leaders for the very first time. 0:10:27.679 --> 0:10:31.800 Oliver, how exposed is Germany's economy, in particular within the 0:10:31.840 --> 0:10:34.800 European Union to these tariffs on stealing aluminium? 0:10:35.040 --> 0:10:36.800 Yeah, so listen, whenever we talk about trade with the 0:10:36.920 --> 0:10:39.079 United States and the issues that it provokes for Europe, 0:10:39.120 --> 0:10:41.600 any issue it provokes for Europe is mainly an issue 0:10:41.679 --> 0:10:44.000 for Germany. So basically, the EU had a trade surplus 0:10:44.120 --> 0:10:46.240 with the United States of about two hundred and thirty 0:10:46.280 --> 0:10:49.079 billion dollars last year. If you look at just the 0:10:49.160 --> 0:10:52.120 surplus between Germany and the United States, it was more 0:10:52.160 --> 0:10:55.120 than seventy billion euros and that was a record last year. Right, 0:10:55.160 --> 0:10:57.240 And the total trade between Germany and the US is 0:10:57.240 --> 0:11:00.079 about a quarter trillion euros. So this is basically a 0:11:00.160 --> 0:11:03.120 tariff that really hits the Germans the hardest. But you know, 0:11:03.200 --> 0:11:04.880 this stuff flows both ways. I mean, I'll give you 0:11:05.000 --> 0:11:07.280 just one example. Mercedes Benz for example, Right, they have 0:11:07.400 --> 0:11:10.240 factories in Europe. Obviously they have factories in the United States, 0:11:10.440 --> 0:11:12.840 but many of the SUVs they sell in Europe which 0:11:12.840 --> 0:11:15.520 are being produced and assembled over in the United States. 0:11:15.600 --> 0:11:17.400 So of course a lot of the exports are going 0:11:17.440 --> 0:11:20.360 from Europe to the United States, but they go both ways. 0:11:20.440 --> 0:11:23.439 When you talk specifically about steel. You know, Germany's the 0:11:23.480 --> 0:11:26.400 seventh biggest exporter of steel into the United States, is 0:11:26.400 --> 0:11:29.599 about three billion dollars last year, so listen, in the 0:11:29.640 --> 0:11:31.680 scheme of things, it's not the sort of biggest category. 0:11:31.720 --> 0:11:33.880 But again it's another headwind for a German economy not 0:11:34.080 --> 0:11:35.000 in need of headwinds. 0:11:35.400 --> 0:11:37.439 So, Valerie, where are we seeing this showing up in 0:11:37.480 --> 0:11:38.360 the market if. 0:11:38.280 --> 0:11:42.840 Anywere look, the reaction is fairly muted here, Lizzie. There 0:11:43.080 --> 0:11:47.680 is some trade the downside in basic resources here in Europe, 0:11:47.760 --> 0:11:52.199 those exposed to the perhaps the metal trade, the aluminum 0:11:52.520 --> 0:11:54.719 and steal tariffs that tit for tat, But we're not 0:11:54.840 --> 0:11:57.880 really seeing a risk off move in the equity market. 0:11:57.880 --> 0:12:00.760 The eurostox six hundred is still whole holding up pretty well. 0:12:00.880 --> 0:12:03.360 S ANDP Future didn't really react, and then finally in 0:12:03.440 --> 0:12:07.800 the FX market, the reaction there hasn't been anything eye catching. 0:12:07.920 --> 0:12:10.360 Euro is still unchanged and there wasn't really. 0:12:10.200 --> 0:12:11.040 A jump in gold. 0:12:11.120 --> 0:12:13.079 So it seems like the market is reading through this 0:12:13.200 --> 0:12:15.480 for now, perhaps thinking that the ball is now in 0:12:15.559 --> 0:12:19.480 Trump's court. We know that he might announce reciprocal tariffs 0:12:20.000 --> 0:12:23.000 either today or tomorrow. Perhaps the market is just waiting 0:12:23.280 --> 0:12:26.320 for that announcement before drawing any conclusions from the EU's 0:12:26.360 --> 0:12:26.880 move today. 0:12:27.040 --> 0:12:28.640 Yeah, it is very interesting to see that that sort 0:12:28.640 --> 0:12:30.679 of muted market reaction again. And this is sort of 0:12:30.720 --> 0:12:32.880 in line with what we've had since we had these 0:12:33.120 --> 0:12:36.760 tires first mooted by Trump. On Sunday evening as well. 0:12:37.400 --> 0:12:40.520 The EUS Trade Commissioner Mao Chefcovic has been speaking in 0:12:40.559 --> 0:12:42.680 the European Parliament in Strasbourg this morning. 0:12:42.760 --> 0:12:44.120 Let's take a listen to what he had to say. 0:12:45.000 --> 0:12:48.480 We will always protect our interest from unjustified measures in. 0:12:48.559 --> 0:12:49.680 Line with our values. 0:12:50.360 --> 0:12:53.440 And this time has come and we are currently assessing 0:12:53.480 --> 0:12:57.800 the scope of the measures and overnight overnight and we'll 0:12:57.840 --> 0:13:02.600 be responding in firm and a proportionate way by countermeasures. 0:13:03.480 --> 0:13:07.400 We will act to safeguard our economic interests. We will 0:13:07.480 --> 0:13:11.800 protect our workers, businesses and consumers. 0:13:12.920 --> 0:13:15.679 That's Marschefsovitz. They're the executive Vice President of the European Union. 0:13:15.760 --> 0:13:17.880 Let's go back to our Russels we or Chief Kevin Whitelaw, 0:13:18.200 --> 0:13:22.000 Kevin the Hope or at least some countries in response 0:13:22.080 --> 0:13:24.079 to these tariffs, would they be able to carve out 0:13:24.480 --> 0:13:27.040 an exception or an exemption from them. We know that 0:13:27.200 --> 0:13:29.480 the Australian Prime Minister has already had a conversation with 0:13:29.600 --> 0:13:32.360 Donald Trump about it. What hopes will there be on 0:13:32.440 --> 0:13:35.040 the EU side that there is room to negotiate here 0:13:35.120 --> 0:13:37.480 without things getting Dare I say it out of hand? 0:13:38.600 --> 0:13:41.040 Well, obviously, I think you know, the EU has taken 0:13:41.080 --> 0:13:43.280 a certain amount of solace and in the notion that 0:13:43.360 --> 0:13:47.800 some of Trump's early tariff measures did result in negotiated 0:13:47.880 --> 0:13:50.600 truces or delays, and so I do think that they 0:13:50.840 --> 0:13:53.480 are optimistic, and I think that it does actually explain 0:13:53.559 --> 0:13:56.440 the sort of measured nature of the statement. Basically, they 0:13:56.559 --> 0:14:01.000 didn't threaten specifics, they didn't take an old really harsh tone, 0:14:01.080 --> 0:14:02.800 but they did make clear that like they're going to 0:14:02.840 --> 0:14:05.920 have to do something. So that's something is obviously going 0:14:05.960 --> 0:14:08.800 to depend a lot on how these conversations are going forward. 0:14:08.840 --> 0:14:11.120 But I think everyone who's dealing with this administration has 0:14:11.200 --> 0:14:15.280 to understand that the risk of continually getting into negotiations 0:14:15.400 --> 0:14:17.000 is that you just end up with a series of 0:14:17.120 --> 0:14:22.040 concessants that simply delays something without actually providing countries about 0:14:22.120 --> 0:14:25.880 with any certainty that they've actually escaped, you know, the 0:14:26.360 --> 0:14:27.960 entire cycle of this, and we're going to watch that. 0:14:28.040 --> 0:14:30.560 With Canada Mexico they only got a thirty day truce 0:14:30.640 --> 0:14:34.320 and in that first tariff threat from from from the 0:14:34.720 --> 0:14:37.720 from the Trump administration. So you know, if if if 0:14:37.760 --> 0:14:39.920 he just comes back and wants more, that's going to 0:14:40.520 --> 0:14:42.080 you know, the EU and others may have to take 0:14:42.080 --> 0:14:42.960 a different lesson from that. 0:14:43.160 --> 0:14:44.600 Welly, can we just talk about how this is going 0:14:44.680 --> 0:14:48.000 to play into the domestic politics in Germany? What might 0:14:48.120 --> 0:14:51.320 it do to change the election campaign in Germany. 0:14:52.800 --> 0:14:54.960 Or just impact on the election campaign in Germany. From 0:14:55.000 --> 0:14:57.120 the Trump camp has probably been Elon Musk and his 0:14:57.240 --> 0:14:59.680 sort of getting involved in backing the AfD and having 0:14:59.720 --> 0:15:03.080 these of strange outbursts and sort of participating very kind 0:15:03.120 --> 0:15:06.440 of actively as an advocate for the alternative for Deutsche Line, 0:15:06.480 --> 0:15:08.720 the far right group that wants to leave the Eurozone, 0:15:08.760 --> 0:15:10.920 that wants as much more protectionists and much more sort 0:15:10.960 --> 0:15:13.760 of nationalist, and all of it sort of and all 0:15:13.760 --> 0:15:15.720 of its sort of messaging in terms of what it 0:15:15.760 --> 0:15:17.880 will actually mean for the economy. Again, this is going 0:15:17.960 --> 0:15:20.440 to be absolutely huge sort of mood music if this 0:15:20.520 --> 0:15:22.560 stuff moves forwards. I mean, again, it's a big if, 0:15:22.800 --> 0:15:24.800 and there's no way around the fact that again, what 0:15:24.920 --> 0:15:27.040 Germany is staring down is a sort of couple of 0:15:27.160 --> 0:15:29.400 years of a coalition that has been very sort of clumsy, 0:15:29.480 --> 0:15:32.280 didn't get along. Obviously, it resulted in the government collapsing. 0:15:32.520 --> 0:15:34.840 We are now looking at potentially a third year of 0:15:34.920 --> 0:15:38.000 contraction in Germany that has literally never happened, three years 0:15:38.040 --> 0:15:41.240 of consecutive contraption since the fall of the Berlin Wall. 0:15:41.520 --> 0:15:44.520 The only possible silver lining, I think politically for Germany 0:15:44.600 --> 0:15:47.960 is that actually things get so bad that these political 0:15:48.040 --> 0:15:50.840 parties need to make really difficult compromises and really do 0:15:51.000 --> 0:15:53.160 something in order to turn the economy around, to stimulate 0:15:53.200 --> 0:15:56.000 the economy, and really think much more radically about what 0:15:56.080 --> 0:15:58.000 they need to do to turn the economy around. Maybe 0:15:58.040 --> 0:16:00.240 for the CDU and the Conservatives that means look at 0:16:00.280 --> 0:16:02.440 the debt break and thinking about other and more creative 0:16:02.440 --> 0:16:05.120 ways to simulate the economy. Potentially for the SPD it 0:16:05.160 --> 0:16:07.520 means cutting back some of the social welfare things. These 0:16:07.560 --> 0:16:09.920 have all been sort of chronic sticking points that have 0:16:10.000 --> 0:16:12.760 basically made it impossible for things to move forward politically, 0:16:12.920 --> 0:16:15.840 and potentially you know, Trump changes that potentially, though also 0:16:15.960 --> 0:16:18.480 it doesn't, and it just sort of slowly the economy 0:16:18.520 --> 0:16:20.160 sort of limps on and things get worse and worse 0:16:20.200 --> 0:16:20.520 and worse. 0:16:21.720 --> 0:16:24.080 Kevin, the EU is of course that it's based a 0:16:24.120 --> 0:16:28.440 trade block, so the response comes from Brussels. But could 0:16:28.520 --> 0:16:31.760 we see a situation where certain European countries will be 0:16:31.840 --> 0:16:35.600 trying to negotiate side deals or exemptions for products that 0:16:35.640 --> 0:16:37.040 would particularly affect them. 0:16:37.160 --> 0:16:39.280 Is there is there a European unity question here? 0:16:40.240 --> 0:16:42.840 I mean there definitely is, maybe less so on the 0:16:42.920 --> 0:16:45.200 metals tariffs than on sort of some of the bigger 0:16:45.280 --> 0:16:48.600 across the board conversations that are going down. But yes, 0:16:48.680 --> 0:16:52.120 there's a definite concern that that countries will have an 0:16:52.160 --> 0:16:55.320 incentive to to try to cut their own deals. And 0:16:55.360 --> 0:17:00.520 there is also some worry that Trump actually want that 0:17:00.680 --> 0:17:04.080 and may want to look to fracture the market, you know, 0:17:04.200 --> 0:17:07.320 the single market in European unity. So he may well 0:17:07.440 --> 0:17:10.280 start offering that. So you know, obviously that could happen 0:17:10.320 --> 0:17:15.240 with his closest allies, such as Hungary's Victor orbon Or, 0:17:15.359 --> 0:17:18.359 it could happen with individual economies and leaders who are 0:17:18.480 --> 0:17:21.320 who are worried about the impact, you know, particularly when 0:17:21.320 --> 0:17:24.320 you look at how many of Europe's economies are indeed 0:17:24.359 --> 0:17:25.119 struggling right now. 0:17:25.800 --> 0:17:28.520 So well, the back and forth has begun between the 0:17:28.680 --> 0:17:31.920 US and the EU. Well, the key points that markets 0:17:31.920 --> 0:17:34.320 are watching for now as this plays. 0:17:34.040 --> 0:17:37.960 Out, Well, look, Lizzie, if we go from just the 0:17:38.080 --> 0:17:42.120 one sided US announcing tariffs to a tit for tat 0:17:42.200 --> 0:17:45.320 trade war, that will really turn this trade from an 0:17:45.440 --> 0:17:49.320 FX trade to an equity market trade. Right We're not 0:17:49.480 --> 0:17:53.920 necessarily worried about dollar strength or euro weakness. If we 0:17:54.040 --> 0:17:58.080 do get combative tariffs from either side of the Atlantic, 0:17:58.200 --> 0:18:01.840 the risk really is going to show up in equity 0:18:01.880 --> 0:18:05.960 market sentiment souring and perhaps a further bid into gold. 0:18:07.119 --> 0:18:09.560 Okay, Faleriy ty Tyler, market supporter, thank you very much. 0:18:09.680 --> 0:18:12.240 Just a final question to Oliver Crook in Berlin. Of 0:18:12.280 --> 0:18:14.880 course we're talking about the impact on the election campaign 0:18:14.920 --> 0:18:18.040 here as well. Frederick Martz from the CDU is currently 0:18:18.119 --> 0:18:21.240 the leading candidate in the polls to be the next chancellor. 0:18:21.359 --> 0:18:25.119 There should we expect any divergence on this issue between 0:18:25.440 --> 0:18:27.439 Olof Schultz and Frederick Martz. 0:18:27.880 --> 0:18:29.440 I mean, listen, I think that the only sort of 0:18:29.480 --> 0:18:34.000 positive thing potentially if the Olaf Schultz gets replaced is 0:18:34.119 --> 0:18:35.600 just the fact that we know that there's a great 0:18:35.640 --> 0:18:39.000 disdain on the Trump side of things for Schultz. You know, 0:18:39.119 --> 0:18:41.119 in Germany we've had obviously, again most of that has 0:18:41.119 --> 0:18:43.960 been through Elon Musk through Twitter basically calling you know, 0:18:44.040 --> 0:18:47.359 Elon calling Olof Schultze a fool and being very very 0:18:47.400 --> 0:18:50.520 critical of the German government. I mean, listen, I don't 0:18:50.520 --> 0:18:53.520 know that Frederick Mertz is the sort of most dynamic, charismatic, 0:18:53.600 --> 0:18:55.399 sort of deal cutting kind of person that you know 0:18:55.480 --> 0:18:57.840 that Trump would like to work with. I think he 0:18:57.960 --> 0:19:00.000 tries to style himself as someone who could be who's 0:19:00.160 --> 0:19:02.920 closer politically as a conservative. But again, what I think 0:19:02.960 --> 0:19:04.879 what was interesting and he was stressing over the weekend 0:19:04.960 --> 0:19:07.719 in the debate of Frederick Mertz, that is, is despite 0:19:07.760 --> 0:19:09.960 the fact that again there was all this controversy about 0:19:10.040 --> 0:19:12.520 him voting with the AfD on this question of immigration, 0:19:12.640 --> 0:19:15.440 and the AfD is obviously a very anti immigration party, 0:19:15.760 --> 0:19:19.280 very anti europe party, Frederick Mertz is still very pro European. 0:19:19.320 --> 0:19:21.199