1 00:00:02,520 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,880 --> 00:00:13,000 Speaker 2: This is the Bloomberg dba Q podcast. Good morning, It's Tuesday, 3 00:00:13,000 --> 00:00:16,120 Speaker 2: the twenty fourth of March. I'm Caroline Hetkut in London. 4 00:00:16,120 --> 00:00:19,239 Speaker 1: And I'm Stephen Carolin Brussels. Coming up today, the new 5 00:00:19,239 --> 00:00:22,919 Speaker 1: report suggests that the UAE and Saudi Arabia are considering 6 00:00:23,079 --> 00:00:24,720 Speaker 1: joining the war against Iran. 7 00:00:25,239 --> 00:00:28,960 Speaker 2: Bloomberg has learned that President Trump's decision to pause strikes 8 00:00:29,000 --> 00:00:33,760 Speaker 2: and attempt talks came after Ally's warned of a potential regional. 9 00:00:33,360 --> 00:00:37,440 Speaker 1: Disaster, plus tighter ties the EU and Australia agree a 10 00:00:37,560 --> 00:00:41,040 Speaker 1: free trade deal and defense partnership in the face of 11 00:00:41,159 --> 00:00:43,280 Speaker 1: rising geopolitical uncertainty. 12 00:00:43,760 --> 00:00:45,760 Speaker 2: Let's start with a roundup of our top stories. 13 00:00:46,400 --> 00:00:48,519 Speaker 1: The price of oil is climbing again today, and it 14 00:00:48,640 --> 00:00:52,040 Speaker 1: reports that more Gulf countries are considering joining the war 15 00:00:52,120 --> 00:00:55,760 Speaker 1: against Iran. It follows US President Donald Trump's decision to 16 00:00:55,840 --> 00:00:59,960 Speaker 1: delay threatened strikes on the Islamic Republic's energy infrastructure, which 17 00:01:00,120 --> 00:01:05,559 Speaker 1: had sent crude prices plunging yesterday, while shares and bonds rallied. However, 18 00:01:05,600 --> 00:01:08,200 Speaker 1: in a sign that significant escalation could now be on 19 00:01:08,280 --> 00:01:10,560 Speaker 1: the cards, The Wall Street Journal is reporting that Saudi 20 00:01:10,560 --> 00:01:13,160 Speaker 1: Arabia and the United Arab Emirates have taken. 21 00:01:12,959 --> 00:01:14,559 Speaker 3: Steps towards joining the war. 22 00:01:14,880 --> 00:01:17,560 Speaker 1: The paper site sources saying that Saudi recently agreed to 23 00:01:17,600 --> 00:01:20,399 Speaker 1: let American forces use one of its air bases, while 24 00:01:20,440 --> 00:01:22,840 Speaker 1: Saudi Crown Prince Muhamed bin Salman is said to be 25 00:01:22,880 --> 00:01:26,399 Speaker 1: close to a decision and participating in the attacks. Jennifer 26 00:01:26,400 --> 00:01:30,880 Speaker 1: Parker is a maritime security expert at Australia's National Security College. 27 00:01:31,360 --> 00:01:34,479 Speaker 4: That would be significant, and we have seen late last 28 00:01:34,480 --> 00:01:36,959 Speaker 4: week we did see Saudi Arabia make a statement that 29 00:01:37,720 --> 00:01:42,679 Speaker 4: after Iran had continued to attack oil infrastructure in Saudi Arabia, 30 00:01:42,720 --> 00:01:46,160 Speaker 4: that they were going to pursue both political and non 31 00:01:46,160 --> 00:01:49,760 Speaker 4: political means, and non political being a vail for potentially 32 00:01:49,880 --> 00:01:55,360 Speaker 4: military attacks on Iran. If they did undertake attacks on Iran, 33 00:01:55,440 --> 00:01:59,680 Speaker 4: of course they are able to defend themselves onto international law. 34 00:02:00,160 --> 00:02:04,640 Speaker 4: This will see a significant expansion and escalation of his conflict. 35 00:02:06,520 --> 00:02:09,480 Speaker 1: Jennifer Parker was speaking as the reported moves by America's 36 00:02:09,480 --> 00:02:13,160 Speaker 1: golf partners indicate they're growing frustrated with Iran, which has 37 00:02:13,200 --> 00:02:16,440 Speaker 1: responded to US and Israeli attacks by hitting targets in 38 00:02:16,480 --> 00:02:17,119 Speaker 1: their countries. 39 00:02:18,000 --> 00:02:21,520 Speaker 2: President Trump's decision to back down from his threat to 40 00:02:21,560 --> 00:02:25,600 Speaker 2: destroy Iran's power infrastructure came after US allies and golf 41 00:02:25,639 --> 00:02:28,840 Speaker 2: countries privately warned the president of the dangers of following 42 00:02:28,919 --> 00:02:33,400 Speaker 2: through with his threat. Bloomberg understands that calming the markets 43 00:02:33,440 --> 00:02:35,760 Speaker 2: and reassuring allies in the Middle East played a key 44 00:02:35,880 --> 00:02:39,320 Speaker 2: role in the president's thinking. Trump is pointing to new 45 00:02:39,440 --> 00:02:42,120 Speaker 2: talks with Tevan as a sign that his goals in 46 00:02:42,160 --> 00:02:43,360 Speaker 2: the war can be achieved. 47 00:02:44,440 --> 00:02:50,720 Speaker 5: We are now having really good discussions. They started last night, 48 00:02:51,000 --> 00:02:55,440 Speaker 5: a little bit the night before that, and I think 49 00:02:55,440 --> 00:02:58,640 Speaker 5: they're you know, I think they're very good. They want 50 00:02:59,360 --> 00:03:02,040 Speaker 5: to they want peace. They've agreed they will not have 51 00:03:02,080 --> 00:03:04,920 Speaker 5: a nuclear weapon, you know, et cetera, et cetera. But 52 00:03:05,000 --> 00:03:06,480 Speaker 5: we'll see. You have to get it done. But I 53 00:03:06,480 --> 00:03:07,880 Speaker 5: would say there's a very good chance. 54 00:03:09,520 --> 00:03:14,440 Speaker 2: But despite Trump's assertion, multiple Iranian officials have since said 55 00:03:14,480 --> 00:03:18,600 Speaker 2: publicly that no direct talks are taking place. Iran's parliament 56 00:03:18,680 --> 00:03:23,320 Speaker 2: speaking Mohammed Burgaga Libaf posted on social media that the 57 00:03:23,440 --> 00:03:27,480 Speaker 2: US president's claims were fake news used to manipulate the 58 00:03:27,480 --> 00:03:31,959 Speaker 2: financial and oil markets. Senior fellow at the Carnegie Endowment 59 00:03:32,000 --> 00:03:35,760 Speaker 2: for International Peace. Aaron David Miller says Trump is looking 60 00:03:35,800 --> 00:03:36,800 Speaker 2: for an off ramp. 61 00:03:37,880 --> 00:03:40,640 Speaker 6: What the President has done here, it seems to me, 62 00:03:41,240 --> 00:03:43,440 Speaker 6: is to turn a war of choice into a war 63 00:03:43,480 --> 00:03:47,240 Speaker 6: of necessity. He now has no choice but to find 64 00:03:47,280 --> 00:03:52,200 Speaker 6: a way into a negotiation that will result in significant 65 00:03:52,200 --> 00:03:56,000 Speaker 6: American compromises in order to open up the straits. 66 00:03:56,520 --> 00:04:01,080 Speaker 2: Aaron David Miller, speaking there, Bloomberg understands Pakistan, Egypt, and 67 00:04:01,160 --> 00:04:03,800 Speaker 2: Turkey are among the countries in the Middle East hoping 68 00:04:04,160 --> 00:04:07,400 Speaker 2: to use the five day pause to actors into mediuries 69 00:04:07,440 --> 00:04:09,320 Speaker 2: and encourage peace talks. 70 00:04:09,560 --> 00:04:12,000 Speaker 1: The supply sharkwaves from the war in Iran are spreading 71 00:04:12,040 --> 00:04:15,600 Speaker 1: across the global economy, raising concerns about an inflation hit 72 00:04:15,680 --> 00:04:19,400 Speaker 1: that will require policymakers to raise borrowing costs. Bloomberg has 73 00:04:19,400 --> 00:04:21,760 Speaker 1: been looking at some of the surprising effects the energy 74 00:04:21,800 --> 00:04:25,559 Speaker 1: price shark as having on consumers. Bloomberg's Ewan Parts has more. 75 00:04:26,360 --> 00:04:29,440 Speaker 7: While President Trump's tariff campaign took months to filter through 76 00:04:29,480 --> 00:04:33,760 Speaker 7: supply chains, this time spiking prices for energy, aluminum, fertilizers, 77 00:04:33,760 --> 00:04:37,360 Speaker 7: and chemicals are already being felt, reaching industries that might 78 00:04:37,400 --> 00:04:41,080 Speaker 7: have seemed insulated from the fallout producers of a sixty 79 00:04:41,080 --> 00:04:44,239 Speaker 7: five million dollar movie in Bengaluru have delayed its release 80 00:04:44,279 --> 00:04:46,279 Speaker 7: by three months for fear of missing out on the 81 00:04:46,279 --> 00:04:49,920 Speaker 7: massive cinema going South Asian diaspora in the Gulf region. 82 00:04:50,520 --> 00:04:53,520 Speaker 7: In Pakistan, fans of the country's top cricket tournament have 83 00:04:53,560 --> 00:04:56,440 Speaker 7: been instructed to stay home and watch matches on television 84 00:04:56,680 --> 00:04:59,880 Speaker 7: in order to save power. And in Australia, an inflation 85 00:05:00,080 --> 00:05:03,320 Speaker 7: driven rate ike has already added about seventy US dollars 86 00:05:03,360 --> 00:05:06,280 Speaker 7: to the average mortgage. All this less than a month 87 00:05:06,320 --> 00:05:08,680 Speaker 7: since hostilities began in Hong Kong. 88 00:05:08,760 --> 00:05:10,200 Speaker 3: I'm you in pots Bloomberg Radio. 89 00:05:11,200 --> 00:05:13,839 Speaker 2: The British Prime Minister Kis Starmer is preparing for the 90 00:05:14,000 --> 00:05:17,039 Speaker 2: fallout from a longer conflict in the Middle East. He 91 00:05:17,200 --> 00:05:20,120 Speaker 2: was asked by lawmakers if President Trump was right to 92 00:05:20,160 --> 00:05:23,239 Speaker 2: talk about the war ending in days or weeks. 93 00:05:24,800 --> 00:05:28,280 Speaker 8: Hard to answer that question, if I'm honest about it. 94 00:05:28,760 --> 00:05:31,359 Speaker 8: I think all of our focus and energy has to 95 00:05:31,400 --> 00:05:34,280 Speaker 8: be in the swifty escalation. But we've got to plan 96 00:05:34,760 --> 00:05:37,320 Speaker 8: on the basis that it could go on for some time, 97 00:05:37,360 --> 00:05:39,479 Speaker 8: and that's the way in which we'll plan this afternoon. 98 00:05:39,800 --> 00:05:42,520 Speaker 8: And since the conflict started, I've been really clear with 99 00:05:42,600 --> 00:05:45,520 Speaker 8: the team that we mustn't fall in to the sort 100 00:05:45,560 --> 00:05:48,280 Speaker 8: of false comfort of thinking that there will necessarily be 101 00:05:48,680 --> 00:05:49,760 Speaker 8: a quick and early end to this. 102 00:05:50,880 --> 00:05:53,520 Speaker 2: Starmer has come under pressure to and out support for 103 00:05:53,800 --> 00:05:57,000 Speaker 2: UK households as the price of energy is forecast arise 104 00:05:57,080 --> 00:06:00,880 Speaker 2: by twenty percent in July. Chancellor l is expected to 105 00:06:00,920 --> 00:06:04,760 Speaker 2: set out the principles behind any help for households later today, 106 00:06:05,000 --> 00:06:08,039 Speaker 2: as well as push for a faster green transition that 107 00:06:08,200 --> 00:06:11,279 Speaker 2: comes as an oil industry lobby group says that the 108 00:06:11,360 --> 00:06:14,400 Speaker 2: UK could produce nearly twice as much all in gas 109 00:06:14,520 --> 00:06:15,760 Speaker 2: if it deregulated. 110 00:06:17,640 --> 00:06:21,360 Speaker 1: European Center Bank policymaker of Baris Voichch is warning that 111 00:06:21,400 --> 00:06:25,080 Speaker 1: the ECB must remain very agile and vigilant to keep 112 00:06:25,160 --> 00:06:29,600 Speaker 1: prices in check as the Iran war raises stagflation risks. Voichich, 113 00:06:29,600 --> 00:06:32,760 Speaker 1: who will become ECB Vice president in June, told Bloomberg 114 00:06:32,800 --> 00:06:35,839 Speaker 1: that officials should soon know whether fallout from the conflict 115 00:06:35,880 --> 00:06:39,680 Speaker 1: will require higher interest rates. He said recent developments point 116 00:06:39,720 --> 00:06:44,039 Speaker 1: to growing risks of elevated consumer price growth alongside weak 117 00:06:44,120 --> 00:06:47,440 Speaker 1: economic expansion. Markets are currently pricing in a more than 118 00:06:47,520 --> 00:06:49,920 Speaker 1: sixty percent chance of a rate ike from the ECB 119 00:06:50,040 --> 00:06:50,960 Speaker 1: at its next meeting. 120 00:06:51,880 --> 00:06:54,800 Speaker 2: Well. The European Union and Australia have a greed a 121 00:06:54,920 --> 00:06:58,479 Speaker 2: free trade deal after almost a decade of negotiations. Both 122 00:06:58,520 --> 00:07:01,960 Speaker 2: parties are working to shield their economies from US tariffs 123 00:07:01,960 --> 00:07:06,520 Speaker 2: and China's restrictions on critical minerals. Announcing the deal in Canberra, 124 00:07:06,560 --> 00:07:11,040 Speaker 2: European Commission President Osula Vonderline took a thinly veiled swipe 125 00:07:11,080 --> 00:07:12,040 Speaker 2: at those moves. 126 00:07:12,720 --> 00:07:15,920 Speaker 9: Today we are telling an important story to a world 127 00:07:16,080 --> 00:07:20,400 Speaker 9: that is deeply changing, a world where great powers are 128 00:07:20,480 --> 00:07:25,160 Speaker 9: using tariffs as a leverage and supply chains as vulnerabilities 129 00:07:25,200 --> 00:07:30,600 Speaker 9: to be exploited. In our story, open wars based trade 130 00:07:31,040 --> 00:07:36,560 Speaker 9: deliver US positive sum outcomes. Trust met us more than transactions. 131 00:07:37,560 --> 00:07:40,600 Speaker 2: Ursula Vondeline was speaking as the deal will open up 132 00:07:40,600 --> 00:07:44,240 Speaker 2: market access and eliminate tariffs on many products, but has 133 00:07:44,320 --> 00:07:48,360 Speaker 2: drawn criticism from agricultural groups in Australia. The two sides 134 00:07:48,360 --> 00:07:51,280 Speaker 2: also signed a security and defense partnership and reached a 135 00:07:51,320 --> 00:07:56,239 Speaker 2: framework to cooperate more on critical minerals. The agreement will 136 00:07:56,360 --> 00:07:59,240 Speaker 2: now need the to be signed off by EU countries 137 00:07:59,280 --> 00:08:01,520 Speaker 2: and also by both parliaments. 138 00:08:02,480 --> 00:08:04,600 Speaker 1: Voters in Denmark are heading to the polls today in 139 00:08:04,640 --> 00:08:08,280 Speaker 1: a general election dominated by President Trump's threats over Greenland. 140 00:08:08,560 --> 00:08:11,960 Speaker 1: Debate in Denmark has centered on stability following the diplomatic 141 00:08:12,000 --> 00:08:15,920 Speaker 1: crisis over the Arctic territory in January. Bloomberg's Copenhagen reporter 142 00:08:16,000 --> 00:08:17,920 Speaker 1: Sana Vas has more on the vote, which is called 143 00:08:17,960 --> 00:08:19,200 Speaker 1: by the incumbent prime minister. 144 00:08:19,760 --> 00:08:22,840 Speaker 10: It is quite common to call the election early when 145 00:08:23,320 --> 00:08:27,800 Speaker 10: the prime minister sees that the timing looks politically favorable, 146 00:08:28,000 --> 00:08:31,400 Speaker 10: and that is the case right now for metaphi X 147 00:08:31,480 --> 00:08:34,199 Speaker 10: now prime minister, and it's all tied to Trump. And 148 00:08:34,440 --> 00:08:38,000 Speaker 10: she performed very poorly in the polls in December, and 149 00:08:38,040 --> 00:08:41,960 Speaker 10: then she got this massive boost when Trump he started 150 00:08:42,000 --> 00:08:44,400 Speaker 10: making new threats over Greenland in early January. 151 00:08:45,720 --> 00:08:49,080 Speaker 1: Our reporters Sanavas and Denmark Social Democratic Prime Minister Meta 152 00:08:49,120 --> 00:08:51,800 Speaker 1: Fredericson is vying for a third term in power and 153 00:08:51,800 --> 00:08:54,120 Speaker 1: has stated that she no longer sees the US as 154 00:08:54,160 --> 00:08:57,120 Speaker 1: Denmark's closest ally. The first eggs of polls will be 155 00:08:57,160 --> 00:09:01,640 Speaker 1: published after voting concludes at eight pm local time time now. 156 00:09:01,679 --> 00:09:06,080 Speaker 2: In terms of the markets this morning, from the relief 157 00:09:06,240 --> 00:09:08,880 Speaker 2: yesterday of the possibility of de escalation. We have much 158 00:09:08,880 --> 00:09:12,760 Speaker 2: more fragile markets again today, Brank crude futures rising two 159 00:09:12,760 --> 00:09:15,360 Speaker 2: point eight percent to one hundred and two dollars a bow, 160 00:09:15,559 --> 00:09:17,679 Speaker 2: even though we saw that eleven percent drop in all 161 00:09:17,720 --> 00:09:21,640 Speaker 2: prices yesterday. WCI creed futures again three and a half 162 00:09:21,640 --> 00:09:25,199 Speaker 2: percent high, are above ninety one dollars about You do 163 00:09:25,280 --> 00:09:28,120 Speaker 2: see that the MSCI Ash Pacific Index is up this 164 00:09:28,200 --> 00:09:31,440 Speaker 2: morning one point five percent, but gold, for example, on 165 00:09:31,559 --> 00:09:35,280 Speaker 2: track for its longest losing streak on record in terms 166 00:09:35,320 --> 00:09:38,520 Speaker 2: of daily losses four thousand, three hundred and sixty nine. 167 00:09:38,920 --> 00:09:41,920 Speaker 2: The dollar the moment is gaining two tenths of one percent. 168 00:09:41,960 --> 00:09:45,960 Speaker 2: Stop futures for the market open in Europe are down 169 00:09:46,040 --> 00:09:48,560 Speaker 2: half of one percent. And you've also seen the worries 170 00:09:48,600 --> 00:09:52,880 Speaker 2: around inflation and big moves in bond markets, including on 171 00:09:53,080 --> 00:09:55,880 Speaker 2: US tenure yields continuing to rise three basis points this 172 00:09:55,960 --> 00:10:00,360 Speaker 2: morning and on the two year treasury yield also rising today. 173 00:10:00,440 --> 00:10:01,280 Speaker 2: Those are the markets. 174 00:10:01,760 --> 00:10:03,439 Speaker 1: In a moment, we'll bring you the latest from the 175 00:10:03,440 --> 00:10:05,680 Speaker 1: Middle East and the risk of escalation now, plus that 176 00:10:05,720 --> 00:10:08,440 Speaker 1: you use a new trade deal with Australia, but just 177 00:10:08,440 --> 00:10:10,880 Speaker 1: a moment to reflect on some of those market moves, Carlin, 178 00:10:10,960 --> 00:10:14,120 Speaker 1: you were just talking about in those wild five minutes yesterday. 179 00:10:14,120 --> 00:10:17,880 Speaker 1: Following President Trump's social media post, Bloomberg's Alexandra Semenova and 180 00:10:17,920 --> 00:10:20,880 Speaker 1: colleagues have been writing about those massive moves that we're 181 00:10:20,920 --> 00:10:23,880 Speaker 1: seen and the doubts that are creeping in from market participants, 182 00:10:23,880 --> 00:10:26,880 Speaker 1: as well as to whether President Trump will be able 183 00:10:26,920 --> 00:10:28,839 Speaker 1: to end the war as easily. 184 00:10:28,840 --> 00:10:30,320 Speaker 3: As he began it. 185 00:10:30,480 --> 00:10:33,400 Speaker 1: Many investors have been wondering how long the war could 186 00:10:33,400 --> 00:10:35,880 Speaker 1: go on, given the fact that it's presenting things like 187 00:10:35,920 --> 00:10:39,760 Speaker 1: inflation risks for the Trump administration. The likes of Jordan 188 00:10:39,840 --> 00:10:41,880 Speaker 1: Rochester from a Zooho being quoted as saying that we're 189 00:10:41,920 --> 00:10:45,000 Speaker 1: left where market confused as to whether it's a credible 190 00:10:45,080 --> 00:10:48,720 Speaker 1: sign of the endgame nearing or another very complete, pretty 191 00:10:48,800 --> 00:10:50,720 Speaker 1: much moment, is the way that he describes it. 192 00:10:51,120 --> 00:10:56,040 Speaker 2: Yeah. Absolutely, the uncertainty is only really being heightened. But 193 00:10:56,160 --> 00:10:59,720 Speaker 2: yes yesterday was an extraordinary day, the most volatile day 194 00:10:59,760 --> 00:11:02,800 Speaker 2: that we seen since the start of this war. Now 195 00:11:02,920 --> 00:11:05,960 Speaker 2: in the Middle East there is a confusion and fear 196 00:11:05,960 --> 00:11:09,760 Speaker 2: of escalation as President Trump holds off on an energy 197 00:11:09,840 --> 00:11:13,760 Speaker 2: infrastructure strikes for five days, but Iran has rejected the 198 00:11:13,880 --> 00:11:18,520 Speaker 2: US idea that there have been talks. Let's discuss the 199 00:11:18,640 --> 00:11:23,200 Speaker 2: main story for markets today. The managing our managing editor 200 00:11:23,280 --> 00:11:26,080 Speaker 2: for Middle East Economics and Government coverage, Paul Wallace, joins 201 00:11:26,120 --> 00:11:29,520 Speaker 2: US now. Paul, good morning. Let's start with a confusion. Firstly, 202 00:11:29,720 --> 00:11:32,679 Speaker 2: what are these negotiations that the US President has been 203 00:11:32,720 --> 00:11:33,400 Speaker 2: talking about. 204 00:11:33,720 --> 00:11:37,480 Speaker 11: It seems that there have been indirect talks between the 205 00:11:37,600 --> 00:11:40,840 Speaker 11: US and Iran, and it's difficult to know at what 206 00:11:40,920 --> 00:11:44,960 Speaker 11: level exactly. We've reported that Steve Witcock, Trump's, one of 207 00:11:44,960 --> 00:11:48,120 Speaker 11: Trump's special envoys, has been needing those talks on the 208 00:11:48,240 --> 00:11:51,040 Speaker 11: US side. He was the one needing the talks with 209 00:11:51,120 --> 00:11:55,560 Speaker 11: Iran before before this war started, those talks mediated by Omin. 210 00:11:56,000 --> 00:11:58,800 Speaker 11: Now we don't quite know who the mediator is this time. 211 00:11:58,880 --> 00:12:01,120 Speaker 11: It seems as if Turkey is involved in some way 212 00:12:01,200 --> 00:12:05,200 Speaker 11: or another. Some outrets are reporting that the Iranian Speaks 213 00:12:05,200 --> 00:12:07,760 Speaker 11: of Parliament is the one needing the Uranian side of 214 00:12:07,760 --> 00:12:11,000 Speaker 11: the talks, which would make sense given how prominent and 215 00:12:11,120 --> 00:12:14,640 Speaker 11: powerful he's become, especially with the assassination of many other 216 00:12:14,720 --> 00:12:17,280 Speaker 11: leaders during during this war. So it seems as if 217 00:12:17,360 --> 00:12:20,800 Speaker 11: something is going on. Trump is probably jumping the gun 218 00:12:21,040 --> 00:12:22,839 Speaker 11: in terms of I think it was us them that 219 00:12:22,880 --> 00:12:25,319 Speaker 11: said earlier in the segment, making out that it will 220 00:12:25,360 --> 00:12:27,960 Speaker 11: be pretty easy to get a deal to end this 221 00:12:28,040 --> 00:12:30,839 Speaker 11: war and get it within a matter of days. There 222 00:12:30,880 --> 00:12:35,920 Speaker 11: will be a lot for these two sides to hammer out, 223 00:12:36,440 --> 00:12:38,840 Speaker 11: and certainly no guarantee of a deal. And I think 224 00:12:38,840 --> 00:12:42,400 Speaker 11: the fact that a lot of Iranian media and some 225 00:12:42,679 --> 00:12:46,000 Speaker 11: Uranian officials are sort of denying the existence of talks, 226 00:12:46,000 --> 00:12:50,680 Speaker 11: it all goes to show just how fragile these negotiations are, 227 00:12:50,679 --> 00:12:53,520 Speaker 11: on which there's certainly no guarantee that they will end 228 00:12:53,600 --> 00:12:56,360 Speaker 11: up ending this war or in the ceasefire within you know, 229 00:12:56,600 --> 00:12:57,560 Speaker 11: within a few days. 230 00:12:57,720 --> 00:12:59,720 Speaker 1: And we've been watching these reports in the Wall Street 231 00:12:59,800 --> 00:13:03,160 Speaker 1: Journal talking about the potential for Saudi Arabia UAE to 232 00:13:03,480 --> 00:13:06,839 Speaker 1: move closer to joining the fight. How significant would that 233 00:13:06,920 --> 00:13:08,160 Speaker 1: be if. 234 00:13:08,040 --> 00:13:12,840 Speaker 11: Either of them did join the war and start attacking Iran, 235 00:13:12,920 --> 00:13:18,000 Speaker 11: that would be significant. They've ratcheted up their rhetoric quite 236 00:13:18,040 --> 00:13:21,160 Speaker 11: a bit in both cases since the start of the war. 237 00:13:21,240 --> 00:13:23,720 Speaker 11: They are, i think it's fair to say, furious with 238 00:13:23,800 --> 00:13:27,960 Speaker 11: Iran because of all the chaos that's caused in their countries. 239 00:13:28,040 --> 00:13:31,080 Speaker 11: In both Saudi Arabia and the UAE, the deaths that's 240 00:13:31,160 --> 00:13:35,400 Speaker 11: caused with its missile and drone. Drone attacks have been 241 00:13:35,480 --> 00:13:38,480 Speaker 11: dozens of deaths across the Gulf Arab states since this 242 00:13:38,559 --> 00:13:41,400 Speaker 11: war started because of Iran's counter strikes. 243 00:13:42,120 --> 00:13:44,040 Speaker 3: But they would still. 244 00:13:43,640 --> 00:13:46,600 Speaker 11: Fit a very high bar to joining this war because 245 00:13:46,760 --> 00:13:49,720 Speaker 11: there would be nervous that it would escalate things and 246 00:13:49,840 --> 00:13:55,439 Speaker 11: make Iran retaliate with even more intensity against their energy infrastructure, 247 00:13:55,679 --> 00:14:00,959 Speaker 11: perhaps against things like their power and water plants, and 248 00:14:01,000 --> 00:14:05,800 Speaker 11: maybe even you know, deliberately going for civilian areas. So 249 00:14:05,880 --> 00:14:08,480 Speaker 11: I think for all their frustration, I think in an 250 00:14:08,559 --> 00:14:11,600 Speaker 11: ideal world, they will stick it out and they will 251 00:14:11,640 --> 00:14:16,319 Speaker 11: hope that these talks that Trump mentioned yesterday do result 252 00:14:16,360 --> 00:14:18,760 Speaker 11: in a ceasefire very very soon. That would be their 253 00:14:18,840 --> 00:14:21,640 Speaker 11: ideal situation. And of course they want the straight to 254 00:14:21,800 --> 00:14:25,280 Speaker 11: form was open and completely safe for commercial traffic. 255 00:14:25,680 --> 00:14:28,560 Speaker 2: Well, how are the economic strains from the war being felt? 256 00:14:28,560 --> 00:14:30,920 Speaker 2: And obviously that's a big question given the impact that 257 00:14:30,960 --> 00:14:32,760 Speaker 2: it has on the world. But what would you pick. 258 00:14:32,600 --> 00:14:35,880 Speaker 11: Out in terms of well, in terms of the Gulf 259 00:14:35,720 --> 00:14:39,840 Speaker 11: if I narrow it down to that part of the world, 260 00:14:39,960 --> 00:14:42,920 Speaker 11: certainly it is very big. We wrote the story some 261 00:14:43,080 --> 00:14:46,080 Speaker 11: days ago, and this was before some of the most 262 00:14:46,120 --> 00:14:49,240 Speaker 11: recent Alian attacks. That said, you know a country, a 263 00:14:49,320 --> 00:14:51,520 Speaker 11: country is like Kuwait and cut out, could see their 264 00:14:51,560 --> 00:14:56,000 Speaker 11: GDP dip by forty or contract by fourteen percent, almost 265 00:14:56,040 --> 00:14:59,240 Speaker 11: fifteen percent this year if this war carries on for 266 00:14:59,480 --> 00:15:02,040 Speaker 11: another few weeks, and there's a high chance of that. 267 00:15:02,320 --> 00:15:04,680 Speaker 11: And like I said, that was before you saw attacks 268 00:15:04,720 --> 00:15:07,320 Speaker 11: like the one, the most recent one on usler find 269 00:15:07,400 --> 00:15:12,600 Speaker 11: the Katari LNG production site, which has cost tens of 270 00:15:12,640 --> 00:15:16,040 Speaker 11: billions of dollars worth of damage and will take years 271 00:15:16,080 --> 00:15:16,440 Speaker 11: to fix. 272 00:15:16,480 --> 00:15:20,000 Speaker 3: According to the Qataris. The UA in Saudi Arabia. 273 00:15:19,680 --> 00:15:23,600 Speaker 11: Have more diverse economies, more industrialized economies, and they will 274 00:15:23,680 --> 00:15:27,520 Speaker 11: probably see smaller contractions if this war goes on for 275 00:15:27,760 --> 00:15:31,000 Speaker 11: several weeks longer. But still you're still talking about contractions 276 00:15:31,640 --> 00:15:34,600 Speaker 11: and big, big hits to the economy. If you think 277 00:15:34,640 --> 00:15:37,760 Speaker 11: of all these countries, what tourism they had has been 278 00:15:37,840 --> 00:15:40,800 Speaker 11: wiped out for the time being. The hotel sector is 279 00:15:42,280 --> 00:15:46,480 Speaker 11: in big problems in places like the UAE and cities 280 00:15:46,560 --> 00:15:52,000 Speaker 11: like Dubai. So it's been this war is economically, it 281 00:15:52,440 --> 00:15:55,800 Speaker 11: is a nightmare for these countries. Most of them they 282 00:15:55,840 --> 00:15:58,640 Speaker 11: have good buffers, you know, in terms of their southern wealth, 283 00:15:58,680 --> 00:16:00,320 Speaker 11: funds which are some of the biggest in the world, 284 00:16:00,320 --> 00:16:04,080 Speaker 11: and the levels of reserves, so they're not facing crisis situations, 285 00:16:04,360 --> 00:16:07,840 Speaker 11: and there hasn't been much in a way of evidence 286 00:16:07,840 --> 00:16:12,000 Speaker 11: of big, big capital outflows, but certainly this economically, this 287 00:16:12,120 --> 00:16:14,080 Speaker 11: is a huge hit to them as long as it's 288 00:16:14,080 --> 00:16:14,640 Speaker 11: wore loss. 289 00:16:14,880 --> 00:16:16,360 Speaker 3: Okay, Paul, thank you very much. 290 00:16:16,400 --> 00:16:19,160 Speaker 1: Paul Wallace, there are Managing editor for Middle East Economics 291 00:16:19,160 --> 00:16:20,480 Speaker 1: and Government Coverage. 292 00:16:21,200 --> 00:16:21,840 Speaker 3: Stay with us. 293 00:16:21,960 --> 00:16:26,680 Speaker 1: More from Bloomberg Daybreak Europe coming up after this. Let's 294 00:16:26,760 --> 00:16:29,800 Speaker 1: bring you more now on the European Union has agreed 295 00:16:29,920 --> 00:16:33,240 Speaker 1: a free trade deal with Australia after almost a decade 296 00:16:33,320 --> 00:16:36,240 Speaker 1: of talks. It comes ahead of a key European Parliament 297 00:16:36,320 --> 00:16:39,320 Speaker 1: vote on the US trade deal on Thursday. Our chief 298 00:16:39,360 --> 00:16:42,200 Speaker 1: euro of correspondent Oliver Krupp joins us now for more. 299 00:16:42,200 --> 00:16:43,480 Speaker 1: Oliver our high significant days. 300 00:16:43,480 --> 00:16:46,720 Speaker 12: This deal with Australia, another trade deal for the European Union. 301 00:16:46,760 --> 00:16:49,400 Speaker 12: We had India, we had Murkosor, we now have Australia. 302 00:16:49,440 --> 00:16:51,960 Speaker 12: All of these many many, many many years in the making, 303 00:16:52,000 --> 00:16:53,720 Speaker 12: and it really takes the sort of pressure that has 304 00:16:53,760 --> 00:16:56,600 Speaker 12: been exerted by the Trump administration to get them over 305 00:16:56,640 --> 00:16:59,960 Speaker 12: the lines. We have ursula vonderline in Australia. There, let's 306 00:17:00,160 --> 00:17:02,000 Speaker 12: through the two sides of kind of what each side 307 00:17:02,040 --> 00:17:03,880 Speaker 12: is going to say that they got out of this deal. 308 00:17:03,920 --> 00:17:06,879 Speaker 12: For the Australians, it is access to the European market 309 00:17:07,000 --> 00:17:09,880 Speaker 12: for beef, for sheep meat. This is they've got quotas 310 00:17:09,920 --> 00:17:12,320 Speaker 12: now they can import into the European Union. Those will 311 00:17:12,359 --> 00:17:14,639 Speaker 12: be phased in over time. This is actually what we 312 00:17:14,720 --> 00:17:17,240 Speaker 12: understand was the biggest sticking point to this deal over 313 00:17:17,240 --> 00:17:19,000 Speaker 12: the time was the meat imports because as we know, 314 00:17:19,280 --> 00:17:23,240 Speaker 12: the agricultural sector very very sensitive for every sort of country. 315 00:17:23,640 --> 00:17:26,560 Speaker 12: The EU will also drop terraffs on vegetables, fruits for 316 00:17:26,600 --> 00:17:29,800 Speaker 12: many things coming in from Australia, potatoes, onions, apples, pairs, 317 00:17:29,800 --> 00:17:32,040 Speaker 12: those sorts of things and also nuts. You know, this 318 00:17:32,119 --> 00:17:34,200 Speaker 12: is again with things that are produced in high volume 319 00:17:34,240 --> 00:17:37,320 Speaker 12: in Australia will now be gaining access to the European 320 00:17:37,359 --> 00:17:39,480 Speaker 12: market and dairy will be losing a lot of it's 321 00:17:39,480 --> 00:17:42,280 Speaker 12: sort of tariffs on about eighty eighty seven percent of 322 00:17:42,320 --> 00:17:45,959 Speaker 12: the goods from the European side. Their largest imports or exports, 323 00:17:46,000 --> 00:17:50,240 Speaker 12: i should say to Australia are machinery, transport, equipment, pharmaceuticals, chemicals, 324 00:17:50,280 --> 00:17:52,920 Speaker 12: metals and those sorts of things terriffs, so that will 325 00:17:52,920 --> 00:17:55,640 Speaker 12: go to basically zero percent. They're up to about five 326 00:17:55,680 --> 00:17:57,840 Speaker 12: percent on some of those goods. They will go down 327 00:17:57,880 --> 00:18:00,639 Speaker 12: to zero with the notable exception in both directions to 328 00:18:00,720 --> 00:18:02,720 Speaker 12: steal because steel, of course being seen as that very 329 00:18:02,720 --> 00:18:06,119 Speaker 12: important strategic sector for everybody in terms of building, you know, 330 00:18:06,119 --> 00:18:08,680 Speaker 12: whether it's cars or the defense industry, so that's still 331 00:18:08,680 --> 00:18:12,280 Speaker 12: staying protected from the European side. They're also signing this 332 00:18:12,359 --> 00:18:15,600 Speaker 12: critical raw materials deal with the Australians, trying to diversify 333 00:18:15,880 --> 00:18:18,280 Speaker 12: away from China. But again this builds on that larger 334 00:18:18,359 --> 00:18:21,320 Speaker 12: narrative of this sort of Trump administration sort of dismantling 335 00:18:21,359 --> 00:18:23,760 Speaker 12: the world order that the United States started, and the 336 00:18:23,800 --> 00:18:27,600 Speaker 12: other countries like Australia, Canada, the European Union trying to 337 00:18:27,640 --> 00:18:29,440 Speaker 12: expand it through those free trade agreements. 338 00:18:29,840 --> 00:18:33,320 Speaker 2: Yeah, very interesting. This is the European Parliament is preparing 339 00:18:33,359 --> 00:18:36,679 Speaker 2: to vote on the EU's trade deal with the US 340 00:18:36,840 --> 00:18:40,520 Speaker 2: on Thursday. Now, You've been speaking to the US ambassador 341 00:18:40,560 --> 00:18:43,639 Speaker 2: to the EU and he had a warning for lawmakers 342 00:18:43,640 --> 00:18:46,000 Speaker 2: of what could happen if they don't approve this. 343 00:18:46,400 --> 00:18:48,360 Speaker 12: Yeah, absolutely. I mean, let's go back in time here. 344 00:18:48,359 --> 00:18:50,720 Speaker 12: This is an agreement that was agreed to back in July. 345 00:18:50,840 --> 00:18:53,000 Speaker 12: The United States put it to put it on their 346 00:18:53,080 --> 00:18:56,119 Speaker 12: side into effect in August, and has been deliberated at 347 00:18:56,200 --> 00:18:58,800 Speaker 12: great length here in the European side, first because it 348 00:18:58,840 --> 00:19:01,360 Speaker 12: was delayed because of the Greenland threats over terrifs. Then 349 00:19:01,400 --> 00:19:04,960 Speaker 12: there was the Supreme Court striking down the legal framework 350 00:19:05,520 --> 00:19:08,479 Speaker 12: for the American teriff regime, and now the Europeans were 351 00:19:08,480 --> 00:19:10,760 Speaker 12: sort of left scratching their heads. Now we understand this 352 00:19:10,840 --> 00:19:13,080 Speaker 12: will go to Parliament on Thursday, and here's what the 353 00:19:13,200 --> 00:19:15,800 Speaker 12: US Ambassador to the European Union had to say. We 354 00:19:15,800 --> 00:19:18,199 Speaker 12: should say his focus has been one hundred percent on 355 00:19:18,240 --> 00:19:19,520 Speaker 12: this trade deal and getting it through. 356 00:19:20,240 --> 00:19:22,919 Speaker 13: I think there's been a lot of political delays in 357 00:19:22,960 --> 00:19:25,760 Speaker 13: getting this approved, and really not approving this deal would 358 00:19:25,800 --> 00:19:29,200 Speaker 13: be be economic malpractice. Now, some people are going to 359 00:19:29,359 --> 00:19:31,760 Speaker 13: find that they have a maybe a political advantage in 360 00:19:31,800 --> 00:19:35,600 Speaker 13: their home country by trying to teach americal lesson, but 361 00:19:35,600 --> 00:19:38,120 Speaker 13: you're really going to be teaching Europe a lesson economically. 362 00:19:38,200 --> 00:19:42,320 Speaker 13: This is clearly in Europe's best interest and I'm very 363 00:19:42,320 --> 00:19:45,400 Speaker 13: hopeful it will get through the process. 364 00:19:45,040 --> 00:19:46,840 Speaker 12: And there are also going to be some other amendments 365 00:19:46,840 --> 00:19:48,760 Speaker 12: that might be added to the trade deal that could 366 00:19:48,760 --> 00:19:51,399 Speaker 12: cause some issues from the American side, for example, a 367 00:19:51,440 --> 00:19:54,280 Speaker 12: so called sunrise clause. So this is the idea that 368 00:19:54,320 --> 00:19:58,000 Speaker 12: basically there needs to be clear legal footing from the 369 00:19:58,040 --> 00:20:00,560 Speaker 12: American terriff regime, which we don't have in terms of 370 00:20:00,560 --> 00:20:02,800 Speaker 12: what it will actually be based on after the Supreme 371 00:20:02,880 --> 00:20:05,280 Speaker 12: Court struck down the bulk of it in order for 372 00:20:05,359 --> 00:20:07,920 Speaker 12: the Europeans to pass it. That could cause more delays 373 00:20:08,200 --> 00:20:10,760 Speaker 12: that could cause some tensions with Washington, DC, to say 374 00:20:10,800 --> 00:20:12,480 Speaker 12: nothing of some of the other regulations they're trying to 375 00:20:12,520 --> 00:20:14,639 Speaker 12: bring down, namely on say methane, and now they have 376 00:20:14,680 --> 00:20:16,680 Speaker 12: a lot more leverage given this sort of energy crisis 377 00:20:16,680 --> 00:20:18,560 Speaker 12: because a lot of those energy assets come from the 378 00:20:18,640 --> 00:20:19,280 Speaker 12: United States. 379 00:20:19,760 --> 00:20:22,520 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 380 00:20:22,560 --> 00:20:25,640 Speaker 1: stories making news from London to Wall Street and beyond. 381 00:20:25,960 --> 00:20:29,159 Speaker 2: Look for us on your podcast feed every morning on Apple, 382 00:20:29,280 --> 00:20:32,080 Speaker 2: Spotify and anywhere else you get your podcasts. 383 00:20:32,119 --> 00:20:35,200 Speaker 1: You can also listen live each morning on London DAB Radio, 384 00:20:35,240 --> 00:20:37,919 Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. 385 00:20:37,960 --> 00:20:40,719 Speaker 2: Our flagship New York station is also available on your 386 00:20:40,760 --> 00:20:45,479 Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty. 387 00:20:45,720 --> 00:20:47,120 Speaker 2: I'm Caroline Hepka. 388 00:20:46,880 --> 00:20:49,280 Speaker 1: And I'm Stephen Carroll. Join us again tomorrow morning for 389 00:20:49,440 --> 00:20:51,800 Speaker 1: all the news you need to start your day right 390 00:20:51,840 --> 00:21:00,440 Speaker 1: here on Bloomberg day Break Europe