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

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Speaker 2: This is the Bloomberg DAYBAQ podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Thursday, the thirteenth of

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Speaker 2: March in London. I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carroll. Coming up today. President Trump vows to

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Speaker 3: respond to the EA's metal terror retaliation. As companies across

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Speaker 3: the globe look for cover.

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Speaker 2: Economic uncertainty and higher taxes leave London facing the UK's

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Speaker 2: largest drop in home prices.

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Speaker 3: Plus placing a risky bet on Russia. As ceasefire talks accelerate,

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Speaker 3: investors are quietly backing Trump's overtures to Moscow.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: President Donald Trump says the US will respond to retaliatory

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Speaker 3: tariffs from the European Union. He spoke in the Oval

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Speaker 3: Office after the European Commission President our Slavanderlinon announced levies

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Speaker 3: on industrial and agricultural goods worth up to twenty six

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Speaker 3: billion euros.

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Speaker 1: The European Union treat us very badly. They have for years.

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Speaker 1: I saw that I had it out with them in

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Speaker 1: my first term. Did well, but we had to solve

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Speaker 1: other problems, and we did. But European Union has been

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Speaker 1: very tough and it's our turn too, you know, we

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Speaker 1: get a turn at that.

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Speaker 3: Also, tod Trump was speaking as Canada also announced twenty

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Speaker 3: five percent tariffs on around twenty billion dollars worth of

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Speaker 3: US made products in a bid to a match American

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Speaker 3: metal levees dollar for dollar, according to the finance Minister

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Speaker 3: Dominique LeBlanc. Meanwhile, France's economic outlook has already deteriorated due

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Speaker 3: to the anticipated impact of a global trade war. The

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Speaker 3: country Central Bank cut its twenty twenty five growth forecast

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Speaker 3: two point seven percent from point nine percent, citing US

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Speaker 3: driven uncertainty.

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Speaker 2: Well around the world, companies are preparing for the onset

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Speaker 2: of Person Trump's barrage of tariffs. That's his international backlash

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Speaker 2: to the measures ramps up. But he makes you what

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Speaker 2: ad to buy.

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Speaker 4: It has more.

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Speaker 5: Some of the world's biggest corporates are setting up tariff

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Speaker 5: task forces to mitigate the impact of incoming US trade policy.

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Speaker 5: While some firms are planning to pass on higher cost

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Speaker 5: to consumers, others may not be able to due to

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Speaker 5: intense competition and over capacity. Big names, including a Zepic

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Speaker 5: maker Novo Nordis and manufacturer Boeing have already shifted course

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Speaker 5: in anticipation of higher costs and supply chain pressures. The

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Speaker 5: news comes as trade relations remain under pressure, as President

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Speaker 5: Trump vowed yesterday to respond to the EU's retaliation against

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Speaker 5: his own measures in London Tia Adabio Ploomberg Radio.

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Speaker 3: US Senate Democratic leader Chuck Schumer says his party will

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Speaker 3: block a Republican spending bill to avert a government shutdown

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Speaker 3: on Saturday. Speaking on the Senate floor, he urged Republicans

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Speaker 3: to accept a Democratic plan to provide thirty days of

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Speaker 3: interim funding instead.

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Speaker 6: Funding the government should be a bypart effort, but Republicans

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Speaker 6: chose a partisan path, drafting their continuing resolution without any

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Speaker 6: input any input from congressional Democrats.

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Speaker 3: Schumer's move raises the stakes in an ongoing game of

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Speaker 3: chicken between congressional Republicans and Democrats, unlikely heightens the risk

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Speaker 3: of a shutdown this weekend. Some Democrats are looking to

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Speaker 3: use the prospect of a shutdown to constrain President Trump

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Speaker 3: and Elon Musk's efforts to dismantle entire federal agencies.

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Speaker 2: The prospect of a possible shutdown has pushed US equity

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Speaker 2: futures into the red, just as market sentiment on Wall

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Speaker 2: Street appeared to have stabilized after two weeks of heightened

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Speaker 2: volatility and a broad sell off. A cooler than forecast

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Speaker 2: February inflation print for the US pushed the stocks high

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Speaker 2: on Wednesday after two days of heavy losses, with tech

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Speaker 2: megacaps leading gains. Meanwhile, stratchers at JP Morgan argue that

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Speaker 2: the correction in the US stock market may be complete

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Speaker 2: as markets aren't pricing in recession risks.

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Speaker 3: The UK and France are scrambling to bolster Ukraine's negotiating

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Speaker 3: position as President Trump seeks to force through a settlement

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Speaker 3: in its war with Russia. The two countries are trying

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Speaker 3: to pull together a plan to help guarantee security for

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Speaker 3: Kiev as Moscow demands a massive scaling back of Ukraine's

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Speaker 3: military as part of any settlement. Speaking after talks with

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Speaker 3: his European counterparts in Paris, the UK's Defense Secretary John

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Speaker 3: Healey says the work is now accelerating to supply troops

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Speaker 3: if a peace steal is agreed.

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Speaker 7: The UK and France are jointly leading work on plans

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Speaker 7: to drive the push for peace and drive the arrangements

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Speaker 7: for security guarantees for Ukraine. We're doing this work together.

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Speaker 7: We're cooperating closely with partner nations and we're looking to

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Speaker 7: build a coalition of the willing from Europe and beyond.

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Speaker 3: John Healey. They're discussing a plan that would see countries

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Speaker 3: across Europe, the Commonwealth and Asia contribute either funding troops,

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Speaker 3: aircraft or naval vessels to help protect Ukraine from the

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Speaker 3: prospect of further Russian aggression.

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Speaker 2: Prime Minister Kirs Starma wants to use AI to save

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Speaker 2: billions in public spending and regulation. A statement from ten

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Speaker 2: Downing Street says that the UK leader plans to cut

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Speaker 2: the administrative costs of regulation by twenty five percent and

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Speaker 2: sees potentially forty five billion pounds of savings by using

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Speaker 2: artificial intelligence. Sarma will lay out his plan for a

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Speaker 2: digital revolution to reshape the state in a speech later today.

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Speaker 3: London has forecast to see the largest drop in house

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Speaker 3: prices in Britain over the next three months. State agents

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Speaker 3: are telling the Royal Institution of Chartered Surveyors that sales

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Speaker 3: have dropped by a third and they expect prices to

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Speaker 3: fall to biver Exchanmes. Wilcock has more.

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Speaker 4: If you own a house in London, statistics say it

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Speaker 4: lost nearly three percent of its real value last year.

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Speaker 4: It's part of a broader sload. Buyer inquiries across the

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Speaker 4: UK are at a low not seen since twenty twenty three,

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Speaker 4: but manly the factors that pushed London ahead in the

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Speaker 4: property market are now working against the capital experts say.

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Speaker 4: In top of tax increases high borrowing costs, London is

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Speaker 4: also getting hit both by its unaffordability and the uncertain

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Speaker 4: international politics, which is scaring away buyers in London. James Wilcock, Bloomberg.

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Speaker 2: Radio, and those are our top stories for you this morning.

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Speaker 2: On the markets, sentiment sours overnight amid the risk of

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Speaker 2: a US government shutdown. Equity markets did end in the

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Speaker 2: green on Wednesday. In the US, the S and P

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Speaker 2: five hundred, snapping two days of losses, and it climbed

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Speaker 2: half of one percent yesterday. It was helped by softer

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Speaker 2: than expected CPI data. Futures, though looking to erase most

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Speaker 2: of those gains. European stock futures are also down. Of course,

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Speaker 2: European stocks did see strong gains on Wednesday, with the

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Speaker 2: Ustox fifty up by close to one percent, and the

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Speaker 2: xetrojacks in Germany jumping over one and a half percent.

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Speaker 2: Asian stocks this morning under renewed pressure, the hang Saying

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Speaker 2: indexes down by almost one and a half percent. The

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Speaker 2: dollar and crude oil are steady, though with US Treasury

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Speaker 2: yields lower by a basis point across the curve. Those

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Speaker 2: are the markets.

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Speaker 3: In a moment, we'll bring you more on the latest

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Speaker 3: on Donald Trump's tariffs and our special report about how

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Speaker 3: some investors are making risky bets on Russia's return to

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Speaker 3: the markets, But first fill the story that caught our

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Speaker 3: eye this morning and how somehow Patrick's day is no

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Speaker 3: longer just one day, but apparently an entire season.

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Speaker 2: It's close to your heart.

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Speaker 3: Old Martin was in Washington yesterday meeting Donald Trump. That's

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Speaker 3: part of the news around tariffs that we're talking about today.

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Speaker 3: But our colleague ed Stably from our Pursued's team has

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Speaker 3: also been reporting about the continued popularity of Guinness, sparked

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Speaker 3: by the online trend called splitting the g which is

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Speaker 3: where you try and essentially drink as the exact amount

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Speaker 3: in the Guinness glass that the black line of the

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Speaker 3: stout meets the g in the glass. It's a big

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Speaker 3: thing on TikTok.

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Speaker 2: Yes, honest, I could not do this, no.

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Speaker 3: Like it is not something to be drunk in a hurry,

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Speaker 3: I would argue Guinness. But it has been very successful

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Speaker 3: for their sales. It has, and actually so much so

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Speaker 3: that Diagio is building another massive brewery in Ireland to

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Speaker 3: try and cope with the demand. We had all of

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Speaker 3: the course, those reports the end of last year about

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Speaker 3: how there were shortages of Guinness in some London pubs.

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Speaker 3: Much to the amusement they were wondering if Irish supplies

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Speaker 3: were going to be at diverted to Britain to meet

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Speaker 3: supplies as well. But look, it's been massively successful for them.

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Speaker 3: Really interesting though that Ed got the perspective of Tim

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Speaker 3: Martin from Weatherspoons about this, because of course Dagio will

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Speaker 3: tell you this is not a flash in the pan trend.

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Speaker 3: You know, this is something that could really last. Guinness

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Speaker 3: has been a popular drink for such a long time.

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Speaker 3: Tim Martin talks about look, he's seen everything come and

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Speaker 3: go in the pub trade over the years. Even though

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Speaker 3: it's a huge seller for them as well, he says that, Look,

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Speaker 3: if you go back ten twenty years, there's other drinks

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Speaker 3: that have risen in popularity and disappeared. Remember smirnoff Ice

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Speaker 3: and the Odds, you know, all of these things that

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Speaker 3: came and went.

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Speaker 2: So perhaps I've got no horse in this Guinness race.

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Speaker 3: Me neither are actually controversially for so would argue, so

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Speaker 3: we will. That's a great piece if you want to

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Speaker 3: read it on Bloomberg dot com and on the terminal

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Speaker 3: as well. Well, let's bring you the latest now on

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Speaker 3: the tariff's story. The US president promising to respond to

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Speaker 3: the EA's countermeasures that were announced yesterday. Bloomberg's credit gupts

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Speaker 3: with us for more on this story. What did we

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Speaker 3: hear from the president? Createy, What could Donald Trump do

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Speaker 3: next in this tit for tat escalation?

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Speaker 8: Well, that's the million dollar question, or the million euro question,

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Speaker 8: I should say, maybe billions of euro's question, we should say,

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Speaker 8: because he's already done so much of it. He's already

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Speaker 8: put it on on things like the auto equipment, on

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Speaker 8: things like the metals as well. Now he's talking about

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Speaker 8: again this idea of tit for tattoos, but he hasn't

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Speaker 8: specific specified what that actually looks like. Remember, the EU

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Speaker 8: countermeasures came as a response to his initial tariffs on

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Speaker 8: steel and aluminum. When we talk about where else those

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Speaker 8: pain points could potentially be, we're talking about looking at

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Speaker 8: the energy sector and the agricultural sector, and that's the

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Speaker 8: response where the EU has really looked for for potential

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Speaker 8: items on the US side, pharmaceutical equipment and medicinal equipment

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Speaker 8: is a big one because that is a key import

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Speaker 8: that the US brings in from the EU. So there

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Speaker 8: are just some of the places where they could be looking.

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Speaker 2: Yeah, different countries, different parts of the world, different strategies.

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Speaker 2: Look to Canada, they've announced with Tadie hree tariffs to

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Speaker 2: match the US ones dollar for dollar. According to the

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Speaker 2: Finance minister, there is there any hope of de escalation here.

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Speaker 8: It's unclear at the moment because there's also this rhetoric

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Speaker 8: of not just the economic kind of toll that's being

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Speaker 8: taken on both sides of that border, but also the

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Speaker 8: conversation around being a fifty first state, and this is

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Speaker 8: something that of course is feeding a lot of ill

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Speaker 8: will in Canada as well as well as some of

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Speaker 8: the energy infrastructure there as well. We have to remember

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Speaker 8: and remind our global audience that the energy relationship between

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Speaker 8: Canada and the United States, not just in the oil space,

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Speaker 8: but in the natural gas space, has been a point

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Speaker 8: of tension even under the Biden administration, where so many

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Speaker 8: of the pipelines that come from Canada into the United

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Speaker 8: States haven't actually been fully approved under the former administration.

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Speaker 8: So this is something one tool that the trumpet missed

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Speaker 8: can use when it comes to those negotiations with Canada.

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Speaker 8: I think a very interesting piece of this, though, is

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Speaker 8: that you can see the Bank of Canada take a

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Speaker 8: page out of the Powell playbook, not from twenty twenty

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Speaker 8: four or twenty twenty five, but back from the first

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Speaker 8: Trump administration in twenty nineteen when he first brought up

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Speaker 8: the idea of a trade war with China. The entire

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Speaker 8: world panicked and you started to see j. Powell at

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Speaker 8: the Federal Reserve talk about an insurance ratecut. We saw

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Speaker 8: that from the Tiff maclum over at the Bank of

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Speaker 8: Canada just yesterday, really citing that the reason for this

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Speaker 8: rate cut that they announced in the last twenty four

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Speaker 8: hours is the uncertainty spring out of the United States.

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Speaker 3: Okay, Critty goop to thank you very much for joining

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Speaker 3: us with the latest on that story, and of course

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Speaker 3: we're conategue to bring development start the program as they happen.

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Speaker 2: Now, we are still waiting for Vladimir Putin's response to

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Speaker 2: the truce proposal agreed between the United States and Ukrainian officials.

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Speaker 2: This is Bloomberg has learned that investors are quietly betting

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Speaker 2: that Donald Trump's overtures to Moscow will eventually translate into

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Speaker 2: Russia's return to the global financial markets. Rush Economics and

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Speaker 2: Government editor Greg Sullivan joins us now with more on this.

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Speaker 2: Good morning, Greg, what have we learned then about Vladimir

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Speaker 2: Putin and what he's considering in terms of these truth plans.

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Speaker 9: Well, we could learn a lot more in the next

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Speaker 9: twenty four hours, as Trump's Special envoy Steve Witkoff is

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Speaker 9: expected to be in Moscow and meet with Vladimir Putin

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Speaker 9: to discuss the truth that was agreed between Ukraine and

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Speaker 9: the US. But in the meantime, what we do know

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Speaker 9: is that Trump or Putin is expected to try to

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Speaker 9: drag out any kind of truce talks. He sees that

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Speaker 9: time is on his side. He wants to make certain

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Speaker 9: conditions to agree to any truce. He also wants to

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Speaker 9: dislodge Ukrainian soldiers from the Curse region where they had

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Speaker 9: that incursion and took territory inside Russia, and he would

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Speaker 9: like to do that before any potential truth. So he

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Speaker 9: sees that time is on his side and will probably

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Speaker 9: try to make some pretty harsh conditions to agree to

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Speaker 9: any truce and potentially stop halting weapons supplies to Ukraine

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Speaker 9: to secure any sort of agreement. But until then, we'll

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Speaker 9: wait and see what Witkoff says after his visit with Putin.

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Speaker 3: This as we've been reporting, the UK and France trying

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Speaker 3: to come up with a plan to bolster Ukraine's position

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Speaker 3: as these negotiations would progress.

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Speaker 9: Yeah, Ukraine and France really have taken the lead and

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Speaker 9: trying to rally Europe to bolster not only its own

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Speaker 9: defenses but also that of Ukraine. They've led talks on

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Speaker 9: the so called Coalition of the Willing. They're trying to

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Speaker 9: build a force that could act as peacekeepers in the

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Speaker 9: event of any truce. Of course, Russia does not want

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Speaker 9: NATO members stationed in Ukraine as part of any truth,

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Speaker 9: so that will have to be negotiated if there is

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Speaker 9: a cease fire. But the other thing that they're trying

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Speaker 9: to do there is this meeting of defense ministers from

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Speaker 9: five major powers in Paris yesterday, and they're trying to

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Speaker 9: canvass European countries and see who's willing to put boots

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Speaker 9: on the ground in Ukraine and if not, what otherwise

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Speaker 9: could they contribute that stationing landforces and countries next to

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Speaker 9: Ukraine or potentially supplying tanks, ships, airplanes, intelligence to Ukraine.

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Speaker 9: So they're really trying to rally it here, and that's

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Speaker 9: partly because they see Europe's own security architectures intertwined with

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Speaker 9: what is happening in Ukraine.

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Speaker 2: Our Big Takes story this morning, though, looks at how

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Speaker 2: some investors are now thinking about that. It's betting actually

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Speaker 2: on the outcome of the talks. What does it mean

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Speaker 2: for interest in Russia's economy and in Russian debt.

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Speaker 9: Well, there's certainly a heightened interest in a range of

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Speaker 9: Russian securities. It's a very unique situation because you have

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Speaker 9: Russian assets that are deeply discounted given this sanctions and

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Speaker 9: an aversion in the West amid the war. But yet

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Speaker 9: Trump's overtures are suddenly spurring thoughts that potentially lifting of

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Speaker 9: the sanctions could be on the horizon. We spoke to

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Speaker 9: traders who did say that there is renewed interest in,

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Speaker 9: for instance, a dollar to nominated bonds in Russia. That's

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Speaker 9: really that renewed interest is coupled with a limited demand,

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Speaker 9: so it's really helped drive down yields in some cases.

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Speaker 9: And it's not just bonds. The Russian ruble, for instance,

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Speaker 9: has appreciated thirteen percent against the dollars since the start

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Speaker 9: of the year, so, you know, a unique situation, but

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Speaker 9: it's still a massive gamble. There's no ceasefire yet, there's

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Speaker 9: no sustainable resolution to the crisis, and Trump's famously mercurial,

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Speaker 9: his overtures to Russia could end abruptly. He even threatened

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Speaker 9: sanctions last Friday on Russia if they don't cooperate in

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Speaker 9: the truce.

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Speaker 3: How quickly could Russia return to the markets if sanctions

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Speaker 3: are eased.

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Speaker 9: Well, potentially quickly, but with a lot of caveats. The

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Speaker 9: US is already weighing how they could ease sanctions as

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Speaker 9: part of any kind of negotiations. You know, we know

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Speaker 9: that the Kremlin has even been surprised by the intensity

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Speaker 9: of Trump's engagement with Putin. But while Trump could lift

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Speaker 9: some sanctions rather quickly through executive action, there are hurdles

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Speaker 9: for others. For instance, some sanctions will be subject to

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Speaker 9: a congressional review period, and that could trigger congressional vote

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Speaker 9: to try and overturn it and set up a fight

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Speaker 9: with Congress. Of course, these are US sanctions that we're

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Speaker 9: talking about, and Europe has shown no indication that there's

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Speaker 9: any appetite for lifting European sanctions. And Europe was Russia's

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Speaker 9: biggest pre war market, so those sanctions are important. But

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Speaker 9: even if the US acts unilaterally to lift sanctions, that

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Speaker 9: could weaken enforcement of other sanctions. So it's a pretty

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Speaker 9: complex dynamic, and of course a lot of caveats, and

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Speaker 9: the final caveat we'll just add it is that Russia

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Speaker 9: might impose its own restrictions, so a lot for investors

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Speaker 9: to weigh.

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