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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blueberg Daybreak You podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Friday, the

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Speaker 2: twenty eighth of February in London. I'm Caroline Hepkeb Coming

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Speaker 2: up today. Stocks fall as President Trump sticks to his

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Speaker 2: tariff timeline and adds plans for additional levies on China.

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Speaker 2: Keir Starmer shares warm words with Donald Trump as the

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Speaker 2: two men float up possible UK US trade deal. Plus

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Speaker 2: Chocolate's bitter after Taste. Why record high cocoa prices are

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Speaker 2: pushing Europe's historic confectioners to the brink. Let's start with

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Speaker 2: a roundup of our top stories. Global stocks have sold

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Speaker 2: off of the dollar strengthened after President Trump doubled down

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Speaker 2: on his commitment to implement broad tariffs next Tuesday. The

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Speaker 2: US leader says twenty five percent tariffs on can and

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Speaker 2: Mexico will come into effect on the fourth of March,

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Speaker 2: while Chinese imports will face a further ten percent levy

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Speaker 2: from the same day. The S and P five hundred

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Speaker 2: tumbled on the news and is now down on the year,

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Speaker 2: underperforming benchmarks in Europe. The US equities benchmark has lost

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Speaker 2: two and a half percent this week and three percent

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Speaker 2: for this month. It's just another one point four percent

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Speaker 2: decline away from being wiped out of all the gains

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Speaker 2: since President Trump's election. Alessio Delonguez of Investo Solutions says

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Speaker 2: that recent events have given the markets a reality check

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Speaker 2: on previous bullish sentiment.

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Speaker 3: What is happening is a relative to expectations, relative to

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Speaker 3: what markets have baked in up until a couple of

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Speaker 3: months ago. There is a realization now that the narrative

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Speaker 3: is changing.

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Speaker 2: Alesia Delongue is speaking there. As US treasury yields edged lower,

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Speaker 2: with the ten year dropping to around for twenty three,

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Speaker 2: a level not seen since December. President Donald Trump and

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Speaker 2: his announcement of an additional ten percent tariffs on Chinese

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Speaker 2: imports came as a surprise to investors and also officials

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Speaker 2: in Beijing. The new levees come on top of a

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Speaker 2: previous ten percent duty implemented earlier this month. China responded

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Speaker 2: to those tariffs with targeted steps, but at the time

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Speaker 2: signaled room for more forceful countermeasures if needed. Is Bloomberg's

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Speaker 2: mid min low.

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Speaker 4: Bloomberg Economics had crunched the numbers. They said that the

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Speaker 4: original ten percent tariffs might still be manageable for China,

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Speaker 4: but the additional ten percent then would be equivalent to

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Speaker 4: about double the scale of the first trade war. It

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Speaker 4: could cut China's exports to the US by about fifty percent,

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Speaker 4: and of course the most immediate reaction we have seen

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Speaker 4: in markets is a slide in the.

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Speaker 2: Un Bloomberg's mid min Low says that the new tariffs

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Speaker 2: will come into force just one day before President Shijingping

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Speaker 2: heads into the party's biggest political meeting of this year, ye,

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Speaker 2: where his lieutenants will unveil their blueprint for the economy.

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Speaker 2: In twenty twenty five, UK Permani is a kias Starmer

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Speaker 2: left his meeting with Donald Trump with promises of a

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Speaker 2: trade deal. The US President said that he would restart

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Speaker 2: trade talks between the two countries and heaped praise on Starmer.

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Speaker 2: Trump was asked if the British leader had convinced him

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Speaker 2: not to impose tariffs.

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Speaker 5: He tried, he was working hard. I'll tell you that

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Speaker 5: he earned whatever the hell they pay him over there,

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Speaker 5: but he tried.

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Speaker 6: I think there's a very good chance that in the

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Speaker 6: case of these two great friendly countries. I think we

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Speaker 6: could very well end up with a real trade deal

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Speaker 6: where the tariffs wouldn't be necessary.

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Speaker 2: President Trump had promised the UK a trade deal in

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Speaker 2: his first term, but got bogged down in negotiations. The meeting, though,

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Speaker 2: is being seen as a diplomatic coup for the British leader,

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Speaker 2: despite his failure to secure American security guarantees for Ukraine.

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Speaker 2: Kis Starmer told reporters that he pushed for Ukraine to

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Speaker 2: be part of any peace discussions.

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Speaker 3: We've discussed a plan today to reach a piece that

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Speaker 3: is tough and fair that Ukraine will help shape, that's

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Speaker 3: backed by strength to stop Putin coming back for more.

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Speaker 3: I'm working closely with other European leaders on this, mister President,

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Speaker 3: in this new era, you're also right that Europe must

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Speaker 3: step up. And let me tell you now, I see

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Speaker 3: the growing threats we face, and so the UK.

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Speaker 7: Is all in.

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Speaker 2: Despite Starmer's promise, Trump avoided saying that he would provide

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Speaker 2: US support for a peacekeeping force, calling the idea premature.

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Speaker 2: Ukraine and its allies in Europe see the promise of

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Speaker 2: US military involvement as critical to prevent Russia from invading again.

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Speaker 7: In the future.

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Speaker 2: Trump instead focus on a deal on critical mineral sharing

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Speaker 2: expected to be approved later today, and I've walked back

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Speaker 2: criticism of Ukraine's leader, Vlodomis Zelenski. The Ukrainian president is

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Speaker 2: headed to Washington today to sign the agreement and to

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Speaker 2: try to convince the US to provide security guarantees as

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Speaker 2: part of any peace deal with Russia. In the Oval Office,

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Speaker 2: Donald Trump was asked by a reporter if he still

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Speaker 2: thinks Zelenski is a Dictator's Lensky's dictator?

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Speaker 7: Did I show that?

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Speaker 1: I can't believe I said that?

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Speaker 2: Next Roatia, the US president made the allegation in a

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Speaker 2: social media post, accusing him of not holding elections while

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Speaker 2: his country is at war with Russia. A White House

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Speaker 2: National security official tells The New York Times that the

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Speaker 2: deal doesn't include any guarantee of future war funding, a

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Speaker 2: difference that is expected to be the center of the

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Speaker 2: meeting between the US and Ukrainian leaders. Bitcoin's value has

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Speaker 2: dropped more than twenty five percent from its all time high,

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Speaker 2: which was set six weeks ago. These sell off underscores

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Speaker 2: a swift change of fortunes for the digital asset. Bitcoin

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Speaker 2: hit its all time high of more than one hundred

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Speaker 2: and nine thousand dollars in January, as the US President

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Speaker 2: drove bullish sentiment with talk of wanting to make America

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Speaker 2: quote the crypto capital of the planet. However, worries about

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Speaker 2: the president's combative stands and broader concerns about the US

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Speaker 2: economy have since driven a rapid reversal. The token is

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Speaker 2: currently priced at around eighty thousand dollars. Those are some

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Speaker 2: of your top stories this morning. In terms of the markets,

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Speaker 2: Then a lot happened yesterday. We saw US equities sinking

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Speaker 2: at the close, the S and P five hundred and

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Speaker 2: first one point six percent, the NAZAC drop two point

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Speaker 2: eight percent, Nvidia stock plummeting over eight percent this as

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Speaker 2: the US dollar rose as President Trump ratcheted up those

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Speaker 2: tariff threats to China and to Europe. In terms of

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Speaker 2: what's been moving this morning, stock futures sinking for the

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Speaker 2: U stocks fifty futures down one percent after we saw

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Speaker 2: one percent decline for the European indices yesterday, and Asian

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Speaker 2: equities and currencies rattled this morning. The MSCI Asia Pacific

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Speaker 2: indexes down a significant two point one percent. Right now,

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Speaker 2: the Japanese yen trades week at a tenth of one

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Speaker 2: percent one forty nine to ninety three. The CSI three

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Speaker 2: hundred indexes also down one and a half percent. US

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Speaker 2: stock features that are in the green, and Bitcoin now

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Speaker 2: down twenty five percent from its all time high actually

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Speaker 2: is crossed below eighty thousand dollars.

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Speaker 7: So those are the markets now.

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Speaker 2: In a moment, we are going to be talking about

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Speaker 2: the warm words that were exchanged between President Trump and

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Speaker 2: Prime Minister at Starma, and also the impact of high

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Speaker 2: cocoa price is a story that we've been following for

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Speaker 2: you for many months, but I want to bring you

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Speaker 2: the latest details before that though, something that caught this

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Speaker 2: morning on the Bloomberg terminal. Alva Ray has been writing

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Speaker 2: about this, the kind of artery at the heart of London.

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Speaker 7: This is Oxford Street.

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Speaker 2: Of course, London Mayor Sadie Kahan has begun a consultation

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Speaker 2: on a plan to pedestrianize Oxford Street. Apparently it's the

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Speaker 2: biggest busiest shopping street in the whole of Europe. It's

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Speaker 2: not the first time that the London mayor has tried

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Speaker 2: to pedestrianize and ban traffic from Oxford Street. It's thought

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Speaker 2: to be between Marble Arch and Oxford Circus. So this time,

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Speaker 2: of course he's got the support of the Labor government,

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Speaker 2: so there is a consultation. Now it's going to run

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Speaker 2: until the second of May. I think this is going

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Speaker 2: to get so much attention in London. Traffic issues always do,

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Speaker 2: and you know residents in the past have been against

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Speaker 2: banning traffic. Maybe it would clog the streets around it.

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Speaker 2: Others say it would be fantastic revitalize Oxford Street. So

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Speaker 2: one of the stories that had my attention. Well there's

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Speaker 2: another major issue for Britain though, waking up this one day.

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Speaker 7: Pri is a Keir.

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Speaker 2: Starmer managed a diplomatic coup, charming President Trump with a

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Speaker 2: personal invitation from King Charles for a second state visit,

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Speaker 2: but he didn't obtain America's security backstop or guarantee to

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Speaker 2: protect Ukraine joining US. How to discuss his balloon books,

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Speaker 2: EMA news director Rosley matheson Good Morning was the stakes

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Speaker 2: could not have been hired, could they? For the Prime

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Speaker 2: Minister yesterday? But he seemed to manage to win the

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Speaker 2: favor of Trump and perhaps even avoid trade tariffs for Britain.

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Speaker 7: Well that's right.

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Speaker 8: If this meeting probably went as good as he could

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Speaker 8: have imagined it was going to go in that Yes,

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Speaker 8: he dodged Trump's ire again on tariff. So though he

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Speaker 8: is helped by the trade picture between the UK and

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Speaker 8: the US, perhaps the one upside from Brexit is that

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Speaker 8: the UK's in a less obvious trade position with US

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Speaker 8: to draw Trump's ire.

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Speaker 7: But yes, he did manage to pull this meeting off.

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Speaker 8: And it's interesting because they're not necessarily a natural pair,

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Speaker 8: are they. They're not up to who you'd see who

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Speaker 8: would automatically have a good rapport, but they do seem

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Speaker 8: to have hit it off. And certainly the invitation to

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Speaker 8: come to the UK for a visit and to meet

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Speaker 8: with the King was a master stroke because Trump obviously

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Speaker 8: is a big fan of the royal family. We know

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Speaker 8: that for sure, and so certainly that was an appeal.

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Speaker 8: And you know, the one thing he didn't manage to

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Speaker 8: get though and all of that, was what he wanted

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Speaker 8: on Ukraine, and that was a deliberate message that the

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Speaker 8: US would be willing to provide that security backstop on

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Speaker 8: Ukraine in the event of a sea's far. It's just

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Speaker 8: very clear that what Donald Trump wants is Europe to

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Speaker 8: be solely responsible for Ukraine's security in the military sense,

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Speaker 8: at least in the event of a seas.

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Speaker 2: Far even though the language was watered down, wasn't it

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Speaker 2: from you know, a guarantee to just a backstop was

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Speaker 2: the request, which sort of leads the questions about the

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Speaker 2: offer of putting troops after a piece deal in Ukraine.

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Speaker 2: UK and France has done the same offering troops really,

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Speaker 2: you know, is quite therefore even more significant. Do you

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Speaker 2: think that it creates more of a wedge between the

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Speaker 2: UK and Europe? I mean, President Trump said he got

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Speaker 2: along famously with Kis Starmer, and you know that he

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Speaker 2: thought that breaks it would work out, you know, So

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Speaker 2: does that create a divide?

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Speaker 8: Well, in a way, it's interesting because it seems as

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Speaker 8: though Trump is listening to perhaps two people right now

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Speaker 8: in Europe when it comes to Ukraine, and that's the

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Speaker 8: French President and the British Prime Minister. And obviously we

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Speaker 8: don't really have a government at the moment aside from

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Speaker 8: a careteker one in Germany. But you know, Europe is

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Speaker 8: really saying we need to speak with one voice here

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Speaker 8: and we need to be talking together as a collective,

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Speaker 8: including the UK, even though it's no longer in the

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Speaker 8: EU and we need to be putting forward our plans

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Speaker 8: with one voice to Donald Trump. And if Kirs Starmer

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Speaker 8: is taking lead on that alongside the French president, where

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Speaker 8: does it leave the rest of the leaders of Europe,

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Speaker 8: you know, the leaders of Eastern Europe for example, perhaps

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Speaker 8: Georgia Maloney in Italy. And perhaps some concern coming in

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Speaker 8: that the person who's got Donald Trump's hear on this

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Speaker 8: is Kis Starmer. I mean, obviously Kiirs Starmer is a

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Speaker 8: fierce advocate for Ukraine and for supporting Ukraine, and the

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Speaker 8: UK has been one of the countries that has said

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Speaker 8: very publicly they'll be willing to put troops on the

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Speaker 8: ground in Ukraine in the event of a cease far Again,

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Speaker 8: is that actually going to be feasible? Though given the

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Speaker 8: domestic political mood in the UK, that's not something that

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Speaker 8: Starmer is completely road tested in getting that over the

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Speaker 8: line with the British people and whatever approvals will be

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Speaker 8: needed to do so. But it does seem as though

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Speaker 8: really Donald Trump is looking to Kis Starma for guidance

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Speaker 8: on that, and again the French president perhaps less so.

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Speaker 7: The rest of the leaders of Europe.

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Speaker 2: Yeah, indeed, okay, let's see how that develops, of course,

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Speaker 2: ahead of a major European leaders meeting that is taking

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Speaker 2: place next week. Thank you so much, Rols for being

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Speaker 2: with us. That is Blomberg's Amba News director Roslind Matheson.

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Speaker 2: Now to another story, the fifty billion dollar chocolate market.

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Speaker 2: Europe imports about half of global cocoa beans, most of

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Speaker 2: it from West Africa, but harsh weather and crop diseases

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Speaker 2: have hit harvests hard. They've driven cocoa prices to record highs,

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Speaker 2: forcing chocolate tears out of business. Joining us now is

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Speaker 2: Bloomberg's Soft Commodities reporter Mumbi Guitar.

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Speaker 7: Good morning, Mumbee.

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Speaker 2: You were in the radio studio last year about March

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Speaker 2: April last year talking to us about the surge in

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Speaker 2: cocoa prices. They nearly tripled over the course of twenty

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Speaker 2: twenty four. You warned that it would have an impact.

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Speaker 2: What have you found.

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Speaker 9: I think it was only a matter of time before

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Speaker 9: the pin drops. In the first half of the year,

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Speaker 9: the coco market was very hot, and the physical side,

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Speaker 9: which is now their retail in the consumer side, was

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Speaker 9: trying to adapt to the high prices, and so in

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Speaker 9: the second half, that's when we started to see now

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Speaker 9: the physical side heat up and companies are now contending

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Speaker 9: with really record high prices. In April, prices reached a

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Speaker 9: record of about twelve thousand tents twelve thousand dollars a time,

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Speaker 9: and then in December nearly hit thirteen thousand dollars a time,

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Speaker 9: So that's been very high prices for some of the

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Speaker 9: chocolate companies were used to twenty five hundred dollars a turn.

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Speaker 9: That was nearly tripling of prices. So what we found

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Speaker 9: is that companies have started to fold. Companies are really

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Speaker 9: feeling the pressure of the record prices, and it's now

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Speaker 9: a balance of do we raise prices, and if we

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Speaker 9: raise prices too much, we're going to lose consumers. We're

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Speaker 9: going to lose our clients. And we talked to a

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Speaker 9: couple of chocolate tearers who say it's a really tight rope.

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Speaker 9: You increase too much, consumption goes down. You don't increase,

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Speaker 9: then you risk folding your company and going home. And

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Speaker 9: for some of these companies, they're really brand companies. They've

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Speaker 9: existed for such long years. They've existed before the world

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Speaker 9: War one, World War two, and if they could survive that,

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Speaker 9: they thought they feel maybe you should survive even this

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Speaker 9: Coco crisis.

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Speaker 7: Okay, wow, Coca crisis.

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Speaker 2: Well, then in terms of alternative production or sources, you

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Speaker 2: have reported two on demand for beans from South America.

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Speaker 9: Yes, so Ecuador, Columbia, Peru are countries that are coming

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Speaker 9: up in terms of production, but it really takes time

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Speaker 9: before they ramp up production. And even though they can

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Speaker 9: provide that alternative sauce for coco, West Africa still remains

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Speaker 9: the dominant prayer. It accounts for nearly half of global production,

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Speaker 9: so it really is a tight place for them to be.

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Speaker 2: Just very briefly, are the weather conditions in the half

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Speaker 2: is improving? This here in West Africa?

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Speaker 9: They did improve and that's why we're seeing a rebound

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Speaker 9: in production, but that's not enough to get us out

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Speaker 9: of the deficit from the last season.

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Speaker 7: I'm Caroline Hepka and.

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