WEBVTT - Wealthy Exit UK Exclusive, Labour’s Growth Gamble, Unilateral Tariff Threat 0:00:00.080 --> 0:00:10.720 Bloomberg Audio Studios, podcasts, radio news. This is the. 0:00:10.680 --> 0:00:14.520 Bloomberg Daybacurate podcast, available every morning on Apple, Spotify or 0:00:14.560 --> 0:00:17.280 wherever you listen. It's Thursday, the twelfth of June in London. 0:00:17.360 --> 0:00:18.960 I'm Caroline Hepkip. 0:00:18.600 --> 0:00:20.440 And I'm Stephen Carroll. Coming up today. 0:00:20.600 --> 0:00:23.680 Exclusive Bloomberg reporting reveals a jump in the number of 0:00:23.720 --> 0:00:26.320 business leaders leaving the UK in the past year. 0:00:26.760 --> 0:00:30.840 Rachel Reeves pumps billions into areas outside London in a 0:00:30.840 --> 0:00:34.320 bid to counter the electoral threat Reform UK poses to 0:00:34.440 --> 0:00:36.280 Labour's traditional heartlands. 0:00:36.440 --> 0:00:40.320 Plus looking beyond the ninety day pause, President Trump plans 0:00:40.360 --> 0:00:43.240 to send letters to countries on the next fortnight, setting 0:00:43.280 --> 0:00:45.000 his unilateral Tara frights. 0:00:45.240 --> 0:00:47.320 Let's start with a roundup of our top stories. 0:00:47.840 --> 0:00:49.680 There are fresh signs the UK could be on course 0:00:49.720 --> 0:00:52.839 for the biggest exodus of wealth in the country's recent history. 0:00:53.000 --> 0:00:56.320 At Bloomberg, analysis of five million company filings shows a 0:00:56.360 --> 0:00:59.800 spike in business leaders leaving more than four thousand and four. 0:01:00.000 --> 0:01:02.680 Andrew disclosed an overseas move in the last year, up 0:01:02.680 --> 0:01:04.720 around twenty percent on previous years. 0:01:04.800 --> 0:01:06.480 Boomberg James Wilcock has more. 0:01:06.720 --> 0:01:10.039 The UK government is besting tax changes for non doms 0:01:10.080 --> 0:01:14.120 will bring in thirty three billion pounds in extra revenue, 0:01:14.280 --> 0:01:17.640 but that assumption is based on the vast majority staying. 0:01:18.080 --> 0:01:22.839 Bloomberg's latest data suggests exits are on the rise. Charlie 0:01:22.920 --> 0:01:26.280 Sosna heads that Michigan Private's wealth and tax teams. He 0:01:26.360 --> 0:01:28.880 told us last month, the wealthy are leaving. 0:01:29.200 --> 0:01:30.040 Pretty safe to say. 0:01:30.040 --> 0:01:33.040 It's an increasing percentage every day that goes by, and 0:01:33.080 --> 0:01:35.600 every year that goes by, and I absolutely wouldn't be 0:01:35.600 --> 0:01:38.360 surprised if it's twenty five percent plus heading into the 0:01:38.360 --> 0:01:40.920 forty percent mark. Sozna is one of more than a 0:01:41.000 --> 0:01:43.800 dozen lawyers and other advisors to the ultra rich who 0:01:43.840 --> 0:01:47.480 told Bloomberg between fifteen percent to two thirds of their 0:01:47.520 --> 0:01:50.880 non dom clients are out or making plans to depart 0:01:50.960 --> 0:01:54.720 the UK. The individuals who've already exited command or share 0:01:54.960 --> 0:01:58.040 part of Fortune's totaling at least one hundred and ten 0:01:58.240 --> 0:02:01.960 billion dollars. That's according to the Bloomberg Billionaires Index. The 0:02:02.000 --> 0:02:03.720 full extent of the moves won't be known for at 0:02:03.800 --> 0:02:07.360 least a year when official tax sat is published in London. 0:02:07.480 --> 0:02:09.160 James Wilcock, Bloomberg. 0:02:08.800 --> 0:02:13.880 Radio the UK government is investing billions of pounds meanwhile 0:02:13.960 --> 0:02:17.240 outside of London in a bid to drive growth and 0:02:17.320 --> 0:02:21.240 also to win back popularity. The Chancellor announced one hundred 0:02:21.280 --> 0:02:25.720 and thirteen billion pounds worth of infrastructure investment yesterday, much 0:02:25.760 --> 0:02:28.560 of it outside of the Capitol. Rachel Reeves says that 0:02:28.639 --> 0:02:31.760 voters now need to feel the benefit of Labour's choices 0:02:32.080 --> 0:02:33.920 on tax and spending policy. 0:02:34.560 --> 0:02:38.680 This government's task and the purpose of this spending review 0:02:39.080 --> 0:02:42.520 is to change that, to ensure that renewal is felt 0:02:42.560 --> 0:02:46.240 in people's everyday lives, in their jobs and on their 0:02:46.320 --> 0:02:47.000 high streets. 0:02:48.400 --> 0:02:52.080 Chancellor Rachel Reeves also repeatedly attacked to the far smaller 0:02:52.120 --> 0:02:56.480 Reformed UK Party during her announcement. The unusual prominence is 0:02:56.520 --> 0:02:58.960 a sign of how concerned the government is about the 0:02:59.000 --> 0:02:59.840 new challenger. 0:03:00.680 --> 0:03:03.280 US President Donald Trump says he's planning to send letters 0:03:03.280 --> 0:03:06.160 to trading partners within the next two weeks to set 0:03:06.240 --> 0:03:09.960 unilateral tariff freights. That move comes ahead of a July 0:03:10.080 --> 0:03:13.440 ninth deadline to reimpose higher duties on dozens of economies 0:03:13.480 --> 0:03:17.160 once the current ninety day pause expires. So far, the 0:03:17.160 --> 0:03:19.560 White House has only reached a yet to be implemented 0:03:19.639 --> 0:03:23.000 trade framework with the UK and a tariff truce with China. 0:03:23.040 --> 0:03:25.840 Speaking to reporters yesterday, President Trump had this to say. 0:03:26.160 --> 0:03:29.119 We're rocket in terms of deals. Now at a certain point, 0:03:29.200 --> 0:03:31.880 we're just going to send letters out. And I think 0:03:31.919 --> 0:03:34.880 you understand that saying this is the deal. You can 0:03:35.040 --> 0:03:37.320 take it or you can leave it. You don't have 0:03:37.400 --> 0:03:39.320 to use it. You don't have to shop in the 0:03:39.440 --> 0:03:40.680 United States, as I say. 0:03:41.880 --> 0:03:44.400 Trump was speaking as new data showed that US tariff 0:03:44.440 --> 0:03:46.920 revenue hit a fresh record last month of twenty three 0:03:47.040 --> 0:03:50.080 billion dollars. Figure marks a two hundred and seventy percent 0:03:50.160 --> 0:03:53.000 increase in the same month a year earlier. May's figer 0:03:53.040 --> 0:03:55.280 helped to reduce the US fiscal deficit for the month 0:03:55.320 --> 0:03:59.080 by seventeen percent to three hundred and sixteen billion dollars. However, 0:03:59.120 --> 0:04:02.240 Treasury Secretaries and says he still expects the deficit for 0:04:02.280 --> 0:04:04.640 the year to be between six point five and six 0:04:04.680 --> 0:04:06.480 point seven percent of GDP. 0:04:07.080 --> 0:04:07.240 Well. 0:04:07.280 --> 0:04:10.240 The latest news on tariffs comes as the US Commerce 0:04:10.240 --> 0:04:13.640 Secretary Howard Lutnik warned that the EU is likely to 0:04:13.680 --> 0:04:16.600 be among the last trade deals that the US complete. 0:04:16.760 --> 0:04:20.600 Speaking to CNBC, Lutnick said, I'm optimistic that we can 0:04:20.640 --> 0:04:23.039 get there with Europe, but Europe will be probably the 0:04:23.200 --> 0:04:27.279 very very end. Those comments come after European Union sources 0:04:27.320 --> 0:04:30.400 that told Bloomberg that they believe trade negotiations with the 0:04:30.480 --> 0:04:35.360 US will extend beyond President Trump's July ninth deadline. Lutnik 0:04:35.400 --> 0:04:38.800 added that he expects to see deals with other countries 0:04:38.800 --> 0:04:41.480 to quote start coming next week and the week after 0:04:41.600 --> 0:04:42.400 and the week after. 0:04:43.240 --> 0:04:45.160 The United States has ordered some staff to leave its 0:04:45.200 --> 0:04:49.359 embassy in Baghdad and authorized families of military service members 0:04:49.360 --> 0:04:52.240 to leave the region. Officials say the decision is due 0:04:52.279 --> 0:04:55.279 to heighten security risks after a round threatens to strike 0:04:55.320 --> 0:04:58.800 American bases if it is attacked over its nuclear program. 0:04:58.960 --> 0:05:02.279 The UK Navy also issued a rare warning yesterday stating 0:05:02.320 --> 0:05:04.920 that increased tensions in the Middle East could affect shipping, 0:05:04.960 --> 0:05:07.839 including through the Strait of Hormuz. Hormus is the world's 0:05:07.880 --> 0:05:11.120 most important oil choke point, and Aran has frequently threatened 0:05:11.160 --> 0:05:14.600 to close US during times of geopolitical strife. However, it's 0:05:14.640 --> 0:05:16.480 never followed through on those threats. 0:05:17.040 --> 0:05:21.040 Now, the Pentagon is reviewing a pact to develop nuclear 0:05:21.120 --> 0:05:24.080 powered submarines with Australia and the UK. 0:05:24.760 --> 0:05:25.880 Dubbed ORCUS. 0:05:25.920 --> 0:05:30.040 The twenty twenty one Biden era agreement was part of 0:05:30.080 --> 0:05:33.840 a pivot by Washington and London to strengthen their presence 0:05:33.880 --> 0:05:38.360 in the Indo Pacific region given China's military growth. According 0:05:38.360 --> 0:05:41.760 to a statement, the Pentagon is now considering whether that 0:05:41.960 --> 0:05:46.719 pact is quote aligned with the President's America First Agenda. 0:05:47.160 --> 0:05:51.119 Australian Deputy Prime Minister and Defence Minister Richard Males says 0:05:51.160 --> 0:05:54.480 his country is open to discussion with the US. 0:05:55.640 --> 0:06:00.520 We understand America seeking more from its friends and allies 0:06:00.520 --> 0:06:01.159 around the world. 0:06:01.640 --> 0:06:03.480 The answer is that as a conversation. 0:06:03.080 --> 0:06:06.680 We are very happy to engage in and we will 0:06:06.720 --> 0:06:10.200 and we obviously have engaged in a historic increase in 0:06:10.240 --> 0:06:12.719 our own defense spending to this point in time, but 0:06:12.839 --> 0:06:15.400 we will continue to have that conversation with the United States. 0:06:15.640 --> 0:06:19.680 Australian Defense Minister Richard Males speaking that any major revisions 0:06:19.760 --> 0:06:22.760 or even scrapping of the Orcus Pact would be a 0:06:22.880 --> 0:06:26.559 major blow to Australia's defense sector, which has already begun 0:06:26.680 --> 0:06:28.760 preparations for the new submarines. 0:06:29.400 --> 0:06:31.719 Northern Ireland has seen a third night of clashes between 0:06:31.800 --> 0:06:34.920 rioters and police and violence that's been described by officials 0:06:34.960 --> 0:06:38.920 has racially motivated. The unrest began after alleged sexual assault 0:06:38.960 --> 0:06:42.200 in Ballymena, County Antrum, but a sinse spread to other areas. 0:06:42.320 --> 0:06:44.280 In the town of lar In, a leisure center which 0:06:44.600 --> 0:06:48.080 was providing emergency accommodation to families displaced by the violence, 0:06:48.360 --> 0:06:51.440 was set on fire by master attackers. Mayor of Mid 0:06:51.480 --> 0:06:54.200 and East Antrum, Jack Minford, says there's growing fear in 0:06:54.240 --> 0:06:54.839 the community. 0:06:55.600 --> 0:06:58.320 I spoke to local people in there who are very scared. 0:06:58.680 --> 0:07:01.240 People are labeling their host that are in Filipino and 0:07:01.240 --> 0:07:04.120 British or whatever. That should not happen in this day 0:07:04.120 --> 0:07:06.440 and age that people have to label their house. But 0:07:06.480 --> 0:07:09.000 there were a lot of probleties damaged randomly. 0:07:09.320 --> 0:07:10.560 Jack Minford speaking there. 0:07:10.640 --> 0:07:13.240 During the first two nights of unrest, thirty two police 0:07:13.280 --> 0:07:16.160 officers were injured and six people arrested. Police have not 0:07:16.280 --> 0:07:18.440 yet given any details about Wednesday night. 0:07:19.520 --> 0:07:22.320 Now, those are top stories for you this morning. Let's 0:07:22.320 --> 0:07:25.920 get to the market. So stop futures are heading lower 0:07:26.160 --> 0:07:28.240 for the US. We're down by three times of one 0:07:28.280 --> 0:07:30.160 percent for both the S and P and NOWSTA I 0:07:30.240 --> 0:07:32.800 many futures your stocks fishy futures are also down by 0:07:32.800 --> 0:07:35.400 seven tenths of one percent. That is being propelled by 0:07:35.440 --> 0:07:39.320 the headlines that we were discussing about President Trump handing 0:07:39.320 --> 0:07:43.240 out effectively letters possibly around tariff rates in the next 0:07:43.480 --> 0:07:46.760 couple of weeks. It also does mean that the dollar's weakening. 0:07:46.960 --> 0:07:48.960 We are down by three times of one percent on 0:07:48.960 --> 0:07:51.040 the Boomberg Dollar Spot Index. We had a number of 0:07:51.040 --> 0:07:54.240 winners including the Japanese and the Euro as well against 0:07:54.320 --> 0:07:57.960 that a softening dollar. Gold as people look for safe 0:07:58.000 --> 0:08:02.160 havens around the uncertainties, that has also done well, so 0:08:02.480 --> 0:08:04.920 by half of one percent for the gold Spot Prize, 0:08:05.000 --> 0:08:06.920 and also the tensions in the Middle East that have 0:08:07.040 --> 0:08:09.440 had an impact, it would seem on the oil markets. 0:08:09.960 --> 0:08:12.800 So we see breakthrough features down by four tens of 0:08:12.840 --> 0:08:17.560 one percent after we saw those prices jumping earlier on 0:08:17.640 --> 0:08:19.880 Thursday or earlier this morning. 0:08:20.960 --> 0:08:22.840 Any moment, we'll bring you more on our story on 0:08:22.840 --> 0:08:25.360 the ultra wealthy leaving London, plus the latest on what 0:08:25.440 --> 0:08:27.760 Donald Trump has said about tariffs. But another story that 0:08:27.800 --> 0:08:29.960 caught a eye this morning. If you're thinking about your 0:08:30.160 --> 0:08:33.920 summer travel plans, France had a particular spike in tourism 0:08:34.000 --> 0:08:36.280 last year of course linked to the Olympics one hundred 0:08:36.360 --> 0:08:41.160 million visitors last year, which was a record, And Lindsay 0:08:41.160 --> 0:08:43.280 Tremuta has been writing about some of the places that 0:08:43.280 --> 0:08:45.520 if you're planning a trip to Paris course razy journey 0:08:45.520 --> 0:08:47.720 on the Eerstar from London, maybe some places you might 0:08:47.760 --> 0:08:50.120 want to visit as well. I like this because it's 0:08:50.160 --> 0:08:52.320 it's quite easy, which I think is the yes, and 0:08:52.400 --> 0:08:54.719 takes advantage of high speed trains around France, I think, 0:08:54.720 --> 0:08:56.600 which is kind of a good option as well. So 0:08:56.640 --> 0:08:59.560 there's a chateau that's, you know, thirty five minutes from 0:08:59.640 --> 0:09:00.720 by from. 0:09:00.920 --> 0:09:03.440 Paris, this Paris Plus so you get to do the 0:09:03.520 --> 0:09:06.000 kind of museums and all the wonderful things in Paris, 0:09:06.000 --> 0:09:07.760 and then you take a little mini break somewhere else, 0:09:07.840 --> 0:09:10.320 although there is one further afield. And if you can't 0:09:10.320 --> 0:09:11.840 be bothered with the trains, where did you just hop 0:09:11.840 --> 0:09:14.480 on a flight down to the coach Desire which definitely 0:09:15.679 --> 0:09:19.160 speaks to me. Lero was one of the recommendations. But 0:09:19.200 --> 0:09:22.319 there are lots of lovely places. I mean, that's it's 0:09:22.320 --> 0:09:24.360 got this very dramatic salt water. 0:09:24.960 --> 0:09:28.840 The swimming piol carved into the rockside on the on 0:09:28.920 --> 0:09:31.360 the sea. So yeah, pretty spectacular views from there as well. 0:09:31.480 --> 0:09:34.600 Great piece and lindsay very inspirational for this Thursday Morning. 0:09:34.640 --> 0:09:37.679 Five French countryside escapes that para perfectly with Paris. Will 0:09:37.679 --> 0:09:39.640 put a link to the story in our show notes. 0:09:40.080 --> 0:09:43.440 Now, more than four four hundred business leaders have left 0:09:43.440 --> 0:09:45.400 the UK in the past year. This according to the 0:09:45.480 --> 0:09:49.280 latest Bloomberg analysis as Britain accounts the cost of scrapping 0:09:49.320 --> 0:09:52.679 the non dom tax status. Joining us now to discuss 0:09:52.760 --> 0:09:56.640 is our ultranet Worth reporter Benjamin estupples Ben good morning. 0:09:56.800 --> 0:10:01.080 So Bloomberg has analyzed five million company filing is to 0:10:01.080 --> 0:10:04.360 get to this point? What does it actually show? 0:10:05.240 --> 0:10:08.080 Yeah, good morning and credit to my colleague, are very 0:10:08.120 --> 0:10:09.120 talented colleague. 0:10:08.840 --> 0:10:09.320 Max Harlowe. 0:10:09.400 --> 0:10:12.880 That data analysis, what it really shows is that it 0:10:13.000 --> 0:10:15.840 signals that the disruption that's going on amid the UK 0:10:15.960 --> 0:10:20.800 business community. What it boils down to is the number 0:10:20.840 --> 0:10:24.480 of departures. Number of individuals business leaders disclosing that they 0:10:24.720 --> 0:10:28.280 are now living overseas was up from April twenty twenty five, 0:10:28.400 --> 0:10:32.120 about seventy five percent from a year ago and the 0:10:32.240 --> 0:10:35.360 highest in four years. And why is that important? That 0:10:35.520 --> 0:10:39.400 month the UK scrapped it's centuries old nond regime and 0:10:39.480 --> 0:10:42.680 that effectively allowed wealthy foreigners living in the UK to 0:10:42.720 --> 0:10:45.440 get tax breaks for as long as fifteen years under 0:10:45.440 --> 0:10:48.319 the system that existed up until only a few weeks ago. 0:10:48.640 --> 0:10:50.120 So what we can see is for the. 0:10:50.080 --> 0:10:54.800 First time a real attempt from us to ascertain the 0:10:54.880 --> 0:10:57.400 damage that's going on and the ripple effects they're going 0:10:57.440 --> 0:11:00.800 to continue for the foreseeable future at the very least. 0:11:01.240 --> 0:11:03.719 Yeah, of course, that that figure year on year, as 0:11:03.720 --> 0:11:06.160 you say, a massive increase for that particular month, which 0:11:06.240 --> 0:11:09.000 of course is related to the tax changes, but averaged 0:11:09.040 --> 0:11:11.400 over a year, it's an increase of around twenty percent 0:11:11.520 --> 0:11:16.440 on departures from those company director filings. The government has 0:11:16.480 --> 0:11:19.360 put forward the idea of that attacks the Rich policy 0:11:19.360 --> 0:11:21.680 would bring in more fresh tax revenue that at last 0:11:21.679 --> 0:11:22.800 from those people who are leaving. 0:11:22.840 --> 0:11:25.440 What are we seeing on that CSAR A good. 0:11:25.360 --> 0:11:29.240 Question, Stephen. This really boils down to one crucial data point. 0:11:29.559 --> 0:11:34.480 There're about seventy four thousand nondoms based on the latest 0:11:34.640 --> 0:11:38.480 government data, and if the biggest category within that group, 0:11:39.200 --> 0:11:43.920 if about if half of them go, then what the 0:11:44.000 --> 0:11:46.880 UK has tried to do on the non reforms will 0:11:47.000 --> 0:11:50.559 end up costing the government money. Now where where are 0:11:50.559 --> 0:11:52.680 we there now? Some advisors are seeing as we heard 0:11:52.679 --> 0:11:55.440 earlier just a few minutes ago from our colleague, some 0:11:55.520 --> 0:11:58.440 advisers are seeing maybe forty as many as forty percent 0:11:58.480 --> 0:12:01.120 of their clients possibly going. Some are seeing even more 0:12:01.120 --> 0:12:03.600 than more than half of their clients who've specialized in 0:12:03.640 --> 0:12:06.120 this space, and we interviewed them for our big take today. 0:12:07.080 --> 0:12:09.319 We're not there yet or we can see the official data. 0:12:09.880 --> 0:12:11.640 It will come out in at least a year's time. 0:12:11.880 --> 0:12:14.040 But what we're seeing on the ground, the witnesses in 0:12:14.080 --> 0:12:16.920 the private wealth community, an influential part of Britain services 0:12:16.960 --> 0:12:19.480 heavy workforce, they're seeing the damage right now. 0:12:19.679 --> 0:12:22.480 Yeah, and this is also goes to the nove It 0:12:22.559 --> 0:12:25.160 doesn't it that the official data comes out with a 0:12:25.160 --> 0:12:27.880 big time lag, So it's about you know, what do 0:12:27.920 --> 0:12:31.040 we know now how reliable the data is. There has 0:12:31.120 --> 0:12:34.120 also been a tweak as well from the government and 0:12:34.360 --> 0:12:37.520 a new four year tax system available to the most 0:12:37.559 --> 0:12:40.400 recent non dom arrival, so there's also a question mark 0:12:40.440 --> 0:12:44.559 about whether that change helps matters. 0:12:45.960 --> 0:12:46.920 Again, that's a good point. 0:12:47.080 --> 0:12:49.720 I think what we had before was fifteen years and 0:12:49.760 --> 0:12:52.600 now We've got four other countries that arrivals to the 0:12:52.640 --> 0:12:56.520 UK as wealth hubs, like Italy, Greece, Cyprus, they have 0:12:56.600 --> 0:12:59.160 fifteen year regimes as well. They basically copy and pasted 0:12:59.200 --> 0:13:02.040 the UK's former non dom regime, took the best parts 0:13:02.080 --> 0:13:04.800 out of it, and a UK has gone right, we're 0:13:04.800 --> 0:13:09.439 actually going to cut more than by half. So what's 0:13:09.480 --> 0:13:12.640 happening now is the UK has already been seen in 0:13:12.679 --> 0:13:15.800 this starkically different perspective. Whilst you might have come here, 0:13:15.840 --> 0:13:18.960 for example as a foreign individual, set up a business 0:13:19.160 --> 0:13:22.120 or run part of your business mpath from London, send 0:13:22.120 --> 0:13:24.760 your kids to school here fifteen years, you've got enough time. 0:13:25.360 --> 0:13:28.719 Now it's maybe being seen perversely, almost as like a 0:13:28.840 --> 0:13:31.920 divin end extraction zone. Come here, have a great time 0:13:31.920 --> 0:13:34.120 in London for four years, go to the West End, 0:13:34.120 --> 0:13:37.360 go toal museums. But four years, you know, you can't 0:13:37.400 --> 0:13:39.760 really get your kids through school in that time, but 0:13:39.840 --> 0:13:41.120 maybe you can sell a business. 0:13:41.200 --> 0:13:41.760 And by the. 0:13:41.760 --> 0:13:43.560 Way, it takes about a year to set up in 0:13:43.559 --> 0:13:45.120 the UK and maybe about a year to leave, so 0:13:45.200 --> 0:13:47.840 really it boils down to maybe about two years. So 0:13:47.880 --> 0:13:50.360 the UK has radically changed the way it's perceived by 0:13:50.360 --> 0:13:51.360 the globally mobile. 0:13:51.720 --> 0:13:54.120 Okay, Ben, thanks so much for bringing us details of 0:13:54.120 --> 0:13:56.280 your reporter this morning. Our alter net worth report of 0:13:56.360 --> 0:13:57.240 their bands doubles. 0:13:57.480 --> 0:13:59.720 Now let's get it to the latest on the US tariff. 0:14:00.120 --> 0:14:02.120 President Trump says that he will send letters in the 0:14:02.160 --> 0:14:05.720 next week or two on unilateral tariff raids to the 0:14:05.840 --> 0:14:09.240 US's trading partners. This ahead of the deadline of the 0:14:09.320 --> 0:14:11.360 ninth of July. It's only US now to discuss. Has 0:14:11.360 --> 0:14:13.680 been a big senior at US Economics and Government editor 0:14:13.720 --> 0:14:16.640 Derek Wallbank, Derek, good morning. President Trump seems to be 0:14:16.720 --> 0:14:20.480 moving away then from the idea of negotiating over trade 0:14:20.480 --> 0:14:23.280 with all of the US's different partners, as he had 0:14:23.320 --> 0:14:25.600 indicated before the. 0:14:25.560 --> 0:14:28.600 End of this ninety day period. Is fast approaching. 0:14:28.840 --> 0:14:31.720 Right that Trump had had put out all of the 0:14:32.680 --> 0:14:37.240 tariffs on Liberation Day, the ten percent global minimum baseline 0:14:37.240 --> 0:14:39.760 for almost every US trading partner, and then several more 0:14:39.760 --> 0:14:45.640 reciprocal tariffs calculated based on trade gap, and then the 0:14:45.680 --> 0:14:49.960 negotiations start. Right now, we've got the United Kingdom on 0:14:50.000 --> 0:14:53.040 the board, and after that we're still waiting for the 0:14:53.080 --> 0:14:56.400 next one to drop. There's several countries that are in 0:14:56.440 --> 0:15:03.160 advanced talks, India, Japan, there are others, but we're still 0:15:03.160 --> 0:15:05.880 waiting for these next deals to come. And the idea, 0:15:06.520 --> 0:15:11.840 I think has been from Trump administration officials that at 0:15:11.880 --> 0:15:14.520 some point, when you get close to the end of 0:15:14.560 --> 0:15:18.040 that window in early July, you might see a whole 0:15:18.080 --> 0:15:20.680 lot of them kind of go together. Maybe they might 0:15:20.720 --> 0:15:24.040 come in some of a similar form. And we're getting 0:15:24.040 --> 0:15:26.720 to the end of this process now now. I think 0:15:26.720 --> 0:15:30.600 that it has been a daunting thing to take on. 0:15:30.760 --> 0:15:33.480 I think every analyst that I've talked to has said 0:15:33.960 --> 0:15:36.160 that it is a sort of mission impossible to try 0:15:36.240 --> 0:15:40.000 and come up with, you know, ninety plus individual trade 0:15:40.040 --> 0:15:42.720 deals or however many it would wind up eventually being 0:15:43.520 --> 0:15:47.440 all in a ninety day period. At the same point, 0:15:47.800 --> 0:15:50.600 the Trump administration has to figure out what this end 0:15:50.720 --> 0:15:53.960 game is and what they're going to wind up with, 0:15:54.000 --> 0:15:56.840 what they're going to settle with, and how that's all 0:15:56.880 --> 0:15:58.920 going to work. I think that there has been a 0:15:58.960 --> 0:16:02.400 thought that that they're not signaling that there's going to 0:16:02.440 --> 0:16:06.280 be a massive extension. That is always possible, but this 0:16:06.440 --> 0:16:09.480 is all toward how do we get to this endgame? 0:16:09.560 --> 0:16:12.320 How do we try and wrap things up? And the 0:16:12.600 --> 0:16:17.160 idea that there might be some sort of template that 0:16:17.240 --> 0:16:21.520 everyone kind of draws from or hughes close to. I 0:16:21.560 --> 0:16:24.320 think that's kind of where this is signaling. 0:16:24.720 --> 0:16:26.360 Yeah, and look at, as you say, a lot of 0:16:26.400 --> 0:16:28.640 signals being read at this point, as it is a 0:16:28.680 --> 0:16:31.520 story that is evolving. Some of the signals we have 0:16:31.520 --> 0:16:34.000 gotten in the past twenty four hours have been around 0:16:34.240 --> 0:16:38.480 the progress made with China, Donald Trump saying that there 0:16:38.560 --> 0:16:42.440 was a deal done with China awaiting sign off. 0:16:42.480 --> 0:16:43.480 Do we know what's in it? 0:16:44.000 --> 0:16:45.880 If you listen to the exact words, it's sort of 0:16:45.920 --> 0:16:49.800 like a framework to implement a consensus reached in the 0:16:49.800 --> 0:16:53.680 Geneva talks, now decided in the London talks. It still 0:16:53.720 --> 0:16:55.880 has to go through and get signed off by Trump 0:16:55.960 --> 0:17:02.040 and she Trump is seeming very positive on this. We 0:17:02.120 --> 0:17:04.920 haven't heard the same exact thing from the Chinese side. 0:17:04.960 --> 0:17:07.359 That will take the time that it will take, but 0:17:07.440 --> 0:17:10.760 that's trying to get the Geneva agreements on track. We're 0:17:10.800 --> 0:17:17.000 also hearing, you know, from from Howard Lutnik and Jamison Greer, 0:17:17.359 --> 0:17:20.200 who were two of the key negotiators from the United States, 0:17:20.600 --> 0:17:24.119 that this is kind of intended to pave a way 0:17:24.160 --> 0:17:30.800 towards a resolution over rare earths and over magnets and 0:17:30.840 --> 0:17:34.400 things of that nature, and that that that in turn 0:17:34.520 --> 0:17:37.639 could unlock some things that the Chinese want as well. 0:17:37.960 --> 0:17:39.639 I think one of the big things that came out 0:17:39.680 --> 0:17:42.000 of Geneva, one of the one of the big sticking 0:17:42.040 --> 0:17:47.040 points with the implementation of easing the rare earth shipments 0:17:47.480 --> 0:17:50.680 and getting those sort of back on track. The US 0:17:50.840 --> 0:17:53.960 very much did not feel that China was living up 0:17:54.040 --> 0:17:58.400 to its agreements and rapidly escalated in response. Everything sort 0:17:58.400 --> 0:18:01.000 of went back went off track. Trump and you have 0:18:01.080 --> 0:18:04.359 a call, they go and talk for two days in London. 0:18:04.760 --> 0:18:08.159 Now that's kind of back on track. That's where we 0:18:08.240 --> 0:18:11.560 are in sort of this framework. Do we have text 0:18:11.600 --> 0:18:15.520 of that framework now, but that's what's been described to us. 0:18:15.560 --> 0:18:17.280 And the other thing that I should mention when I 0:18:17.320 --> 0:18:21.080 say that is that when the Chinese side came out 0:18:21.160 --> 0:18:23.879 and read out their version of what happened, and then 0:18:23.920 --> 0:18:26.640 when the American side came out, it wasn't that they 0:18:26.640 --> 0:18:29.000 were different. I mean, that's something we've talked about. We 0:18:29.040 --> 0:18:30.919 have to judge whether or not they're the same or different. 0:18:31.359 --> 0:18:34.320 But the US side has been way more expansive on 0:18:34.320 --> 0:18:37.280 what they say was in this the Chinese have very 0:18:37.320 --> 0:18:40.600 much stuck to the idea of tone tone. 0:18:40.840 --> 0:18:44.679 Yes, okay, that is an interesting point, isn't it. In 0:18:44.800 --> 0:18:48.879 terms of the concrete numbers, though, the tariff revenue that 0:18:48.920 --> 0:18:53.480 the US is generating is quite significant, a record twenty 0:18:53.480 --> 0:18:56.879 three billion dollars in May. That's also helped to shrink 0:18:56.920 --> 0:19:00.880 the deficit just for that one month. Again, it's quite 0:19:00.960 --> 0:19:05.919 uncertain about whether those revenue streams are reliable, whether they'll remain. 0:19:06.200 --> 0:19:08.560 Well, yeah, no, and that and that's that's one of 0:19:08.640 --> 0:19:11.160 the things that I think that Trump administration has been 0:19:11.200 --> 0:19:15.320 clear about that tariffs are an anchor of their revenue 0:19:15.359 --> 0:19:18.720 strategy as they're going forward. Trump has been really clear 0:19:18.760 --> 0:19:21.199 about this that tariffs were meant to help pay for 0:19:21.280 --> 0:19:23.920 his one big, beautiful bill of the tax cuts and 0:19:24.160 --> 0:19:28.520 other policy moves and uh and and they have been 0:19:28.600 --> 0:19:32.119 expecting big revenue to come in. Even as that is 0:19:32.240 --> 0:19:35.400 quite a large amount of revenue, it is, i should say, 0:19:35.600 --> 0:19:41.720 nowhere in the ballpark of being able to offset the 0:19:41.760 --> 0:19:47.800 costings the projected costings of the tariff bill or not 0:19:47.880 --> 0:19:51.400 the tariff bill of the tax bill. So that is 0:19:51.560 --> 0:19:55.600 that still remains a gap there. So so when you're 0:19:55.680 --> 0:19:59.359 when you're sitting there looking at this, that that winds 0:19:59.440 --> 0:20:01.320 up being a dis connects. So even as there is 0:20:01.400 --> 0:20:04.439 quite a lot of revenue brought in, it's not necessarily 0:20:04.520 --> 0:20:08.480 quite enough to do that offset. And it bears mention 0:20:09.000 --> 0:20:12.720 that these tariff collections are still not the fullness of 0:20:12.840 --> 0:20:17.720 what of what the Trump administration has talked about, has threatened, 0:20:17.800 --> 0:20:20.840 has put forward, because we have seen sort of again 0:20:20.880 --> 0:20:23.600 and again through the first you know, six month window 0:20:23.640 --> 0:20:26.920 of this administration, a lot of threats of where they're 0:20:26.960 --> 0:20:30.200 going to be, and then a pullback, and eventually they 0:20:30.440 --> 0:20:34.520 land somewhere much softer than where they were aiming to 0:20:34.560 --> 0:20:37.080 do so. So I think one of the things to 0:20:37.160 --> 0:20:39.760 look for as we go through here is that if 0:20:39.800 --> 0:20:43.920 all of this tariff level kind of settles out somewhere 0:20:44.440 --> 0:20:48.080 well short of where the administration had threatened, they're also 0:20:48.240 --> 0:20:51.320 not going to get the revenue that would be implied 0:20:51.880 --> 0:20:57.879 by those sort of maximalist tariff policies. This is Bloomberg 0:20:57.960 --> 0:21:00.960 Daybreak Europe, your morning brief on this worries making news 0:21:00.960 --> 0:21:02.960 from London to Wall Street and beyond. 0:21:03.240 --> 0:21:06.399