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

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Speaker 2: This is the Blue Bag Day BAQ podcast, available every

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Speaker 2: morning on Apple, Spotify wherever you listen. It's find at

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Speaker 2: the second of May here in London.

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Speaker 1: I'm Caroline Hepke and.

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Speaker 3: I'm Stephen Carroll. Coming up today. A razor thin victory

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Speaker 3: for Reform UK Nigel farajas party wins another seat in

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Speaker 3: Parliament by just six votes as they see a surge

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Speaker 3: of support in England's local elections.

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Speaker 2: China says it's considering trade talks with the US after

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Speaker 2: overtures from senior officials in the Trump administration.

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Speaker 3: Plus taking a bite out of the bottom line, Apple

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Speaker 3: Warren's tariffs will cost at nine hundred million dollars this

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Speaker 3: quarter as investor concerns mount.

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

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Speaker 2: UK has won a seat in Parliament in the northwest

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Speaker 2: of England, defeating the ruling Labor Party by just six votes.

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Speaker 2: It is the closest by election result since World War One,

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Speaker 2: and in area that Labour won by a fourteen seven

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Speaker 2: hundred vote majority only last year. On top of the

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Speaker 2: national seat, right wing Reform UK have also won fifty

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Speaker 2: eight councilors from both the Conservative and Labor parties in

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Speaker 2: England's local elections that took place on Thursday. Here is

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Speaker 2: Reforms Deputy leader Richard Tice, who was cautious but confident

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Speaker 2: about the party's gains.

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Speaker 4: I think we're going to have a very very good night.

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Speaker 4: The seismic shift going on in British politics where Reformers

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Speaker 4: taking huge chunks of votes and seats from both the

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Speaker 4: two main parties.

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Speaker 2: Although the final results for the local council elections are

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Speaker 2: still being counted, the large and consistent swing in votes

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Speaker 2: suggests that the two main traditional parties in British politics,

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Speaker 2: Conservatives and Labor, are out of favor with the public.

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Speaker 3: China has said it's assessing the possibility of trade talks

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Speaker 3: with the United States. In a statement, China's Commerce Ministry

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Speaker 3: said it had noted senior US officials repeatedly expressing their

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Speaker 3: willingness to talk to Beijing about tariffs, and to urge

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Speaker 3: them to show sincerity toward China. The remarks hinted at

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Speaker 3: potential de escalation in the trade war between the world's

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Speaker 3: two largest economies, but speaking to Fox News, US Secretary

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Speaker 3: of State Marco Rubio says it's China rather than the

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Speaker 3: US that wants the talks.

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Speaker 2: Can we reach some sort of short term accommodation with them?

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Speaker 3: That's what they want.

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Speaker 2: I mean, the Chinese are reaching out, they want to meet,

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Speaker 2: they want to talk.

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Speaker 3: Rubio's comments underscore how delicate even starting negotiations may prove,

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Speaker 3: with both sides eager to control the narrative and project strength.

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Speaker 2: Japan's finance minister has suggested the country's trillion dollar holdings

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Speaker 2: in US treasuries could serve as a bargaining chip in

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Speaker 2: future negotiations with the White House. Speaking to Tokyo TV,

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Speaker 2: Katanobu Kato has said that it does exist as a card.

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Speaker 2: Whether or not we use it is a different decision

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Speaker 2: in his words. Meanwhile, Japan's chief trade negotiator says the

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Speaker 2: country is aiming to secure a trade agreement with the

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Speaker 2: United States by June. Rio Sei aka Zawa spoke after

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Speaker 2: the latest round of talks in Washington. As the country

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Speaker 2: continues to face US tariffs of twenty five percent on cars, steel,

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Speaker 2: and aluminium, and a baseline ten percent tariffs on all

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Speaker 2: of its goods.

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Speaker 3: Apple has failed to soothe investor concern about the cost

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Speaker 3: of tariffs and a Chinese slowdown. With its latest earnings report,

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Speaker 3: the tech joint announced higher costs and worse than expected sales,

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Speaker 3: prompting shares to fall as much as four point two

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Speaker 3: percent in after hours trading yesterday. News of rising costs

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Speaker 3: comes as the iPhone maker looks to source more than

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Speaker 3: nineteen billion chips from the US this year in a

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Speaker 3: bid to lessen its reliance on China. Apple is set

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Speaker 3: to obtain tens of millions of advanced processors from a

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Speaker 3: TSMC facility in Arizona this year and manufacture the majority

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Speaker 3: of US bound iPhones in India.

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Speaker 2: Staying with the tech earnings, Amazon is bracing for a

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Speaker 2: tougher business climate due to tariffs and economic turmoil. The

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Speaker 2: firm warned of weaker than estimated profits for the current quarter,

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Speaker 2: citing trade policy and recessionary fears. Speaking to investors, CEO

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Speaker 2: Andy Jase highlighted growing uncertainty.

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Speaker 5: Obviously, none of us know exactly where tariffs will settle

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Speaker 5: or when.

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Speaker 1: We haven't seen any attenuation of demand yet.

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Speaker 5: To some extent, we've seen some heightened buying in certain

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Speaker 5: categories that may indicate stocking up in advance of any

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Speaker 5: potential tariff impact.

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Speaker 1: Andy Jasse speaking there.

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Speaker 2: Despite the headwinds, Amazon reported a nine percent increase in

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Speaker 2: sales over the first quarter of the year to one

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Speaker 2: hundred and fifty five point seven billion dollars. The company's

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Speaker 2: shares declined three percent in extended trading following the update.

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Speaker 3: Standard charter has joined the Group of Global Banks. His

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Speaker 3: profits have been boosted by the recent market violatility. The

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Speaker 3: Asia Focus Lends reported pre tax profit for the first

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Speaker 3: three months of the year of two point two eight

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Speaker 3: billion dollars, one hundred and thirty million dollars higher than estimates.

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Speaker 3: The gains were largely driven by the bank's financial Markets

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Speaker 3: and Wealth units, but CEO Bill Winters has warned they

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Speaker 3: are monitoring developments in the trade war. Standard Chartered stuck

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Speaker 3: to a plan to return at least eight billion dollars

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Speaker 3: to shareholders from twenty twenty four to twenty twenty six.

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Speaker 3: Mike Waltz is leaving his job as US National Security

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Speaker 3: Advisor after a few weeks after adding a journalist to

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Speaker 3: a private signal chat group. US President Donald Trump nominated

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Speaker 3: Waltz to be the next US ambassadors the UN over

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Speaker 3: social media, effectively sidelining him here's the moment. Reporters told

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Speaker 3: the State Departments spokesperson Tammy Bruce the news and this

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Speaker 3: has come out.

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Speaker 1: From the President. Yeah, all right, great Nie, and we're quick.

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Speaker 6: The President has just written on truth Social that Mike

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Speaker 6: Waltz is going to become the new US ambassador to

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Speaker 6: the United Nations.

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Speaker 3: Well, there we go, very fabulous.

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Speaker 6: And in addition to that, he says that in the

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Speaker 6: interim Secretary of State Marco Rubio will serve as National

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Speaker 6: Security Advisor while continuing his strong leadership at the State Department.

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Speaker 6: Do you know how long he's going to be serving

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Speaker 6: in both roles?

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Speaker 1: It is clear that I just heard this from you.

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Speaker 3: I had this is.

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Speaker 7: The MAGO heads up that this well, I have some

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Speaker 7: insights as to the potential of certain things that might happen.

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Speaker 3: Waltz's full from favor comes after he had a journalist

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Speaker 3: Jeffrey Goldberg to a signal chat group set up to

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Speaker 3: discuss military strikes on Yemen. The scandal has been damaging

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Speaker 3: to the White House's foreign policy team, haunting Defense Secretary

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Speaker 3: Pete Hegseth and raising questions over information security.

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Speaker 2: Those are top stories for you this morning. Looking at

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Speaker 2: stop features the S and P five hundred EMANI is

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Speaker 2: up eight tens of one percent, US sixty futures gaining

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Speaker 2: by one point three percent. The S and P five

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Speaker 2: hundred has logged eight straight sessions of gains, so overall

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Speaker 2: in the past nine days we would be close to

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Speaker 2: about a ten percent gain. Treasuries also ended their winning streak.

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Speaker 1: Yesterday.

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Speaker 2: We had the manufacturing data out of the US which

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Speaker 2: looked solid, so two year treasury yield rose ten basis points.

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Speaker 2: Big disappointment from Apple and Amazon. Both traded more than

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Speaker 2: three percent lower in the aftermarket because of disappointing results.

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Speaker 2: But there does seem to be a new energy in

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Speaker 2: the Asian equity markets. MASCI Asia Pacific Index at one

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Speaker 2: and a half percent. China is assessing the possibility of

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Speaker 2: negotiations with the US, and you've also got Japan stocks

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Speaker 2: positive again because of trade negotiations, trade talks expected or

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Speaker 2: ongoing with Japan. The Bloomberg Dollars Pot Index is weaker

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Speaker 2: three tenths of one percent. Oil prices are higher this morning.

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Speaker 2: That's the look at the markets.

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Speaker 3: In the moment. Will bring you more on the possibility

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Speaker 3: of thawing trade relations between the US and China, plus

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Speaker 3: an update on those election results here in England. But

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Speaker 3: first a word on another story that we've been reading

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Speaker 3: this morning, the latest Bloomberg Opinion newsletter from Jessica Carl

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Speaker 3: and an innovation in avoiding social anxiety not at work,

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Speaker 3: but by pretending to be at work.

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Speaker 2: I thought this was quite a strange and interesting story.

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Speaker 2: Jessica Carl's been writing about this, and it has a

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Speaker 2: great story from a tic from basically TikTok, from a

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Speaker 2: young worker who created an entire fake marketing strategy basically

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Speaker 2: to hide from the repair man who was coming to

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Speaker 2: see her, I think, to sort of show that she

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Speaker 2: was busy at work. But apparently this is a massive thing.

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Speaker 3: Well. I mean there's even apparently fake zoom meetings on YouTube,

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Speaker 3: so you can have something up on your screen and

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Speaker 3: act like you're in a zoom meeting so that you

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Speaker 3: don't have to very very people around it. I mean, Karly,

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Speaker 3: if you see me doing this, you'll know what's going

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Speaker 3: on now. Unfortunately, but this is also a symptom of

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Speaker 3: something that a couple of our opinion writers have been

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Speaker 3: talking about as well, which is the particular problem that

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Speaker 3: young people who have finished are particularly those who graduated

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Speaker 3: during COVID and have had difficulty entering the workforce and

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Speaker 3: their falling into this category that statisticians refer to its

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Speaker 3: neat so they're not an employment, education or training and

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Speaker 3: it's that sort of thing that once you get into

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Speaker 3: it can be very difficult to get out of. It's

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Speaker 3: a big problem in the US, but also as Matthew

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Speaker 3: Brooker has been writing about in the UK too.

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Speaker 2: Yeah, absolutely, it's a massive issue for young people in Britain,

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Speaker 2: and Matthew writes about how it goes alongside the kind

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Speaker 2: of mental health challenges that Britain has and it's particularly

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Speaker 2: affecting young people. I mean, I think that's the kind

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Speaker 2: of the not so funny, terrible kind of takeaway. But

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Speaker 2: he is more optimistic in some of his opinion pieces

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Speaker 2: about the future of gen z as though. Let's move on,

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Speaker 2: though and talk about what's happening here in the UK.

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Speaker 2: So Reform UK their candidate in the ron Corn by election,

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Speaker 2: so for a seat in Parliament. It looks like the

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Speaker 2: Reform UK candidate has now one above the Labor Party.

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Speaker 2: This amidst the local election campaign. Our UK correspondent Lizzie

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Speaker 2: Burden joins us. Now, good morning, Lizzie. Just let's reflect

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Speaker 2: on the fact that Reform UK look to have got

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Speaker 2: another MP in Parliament, so adding to the four MPs

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Speaker 2: that they have currently.

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Speaker 1: Yeah, and this was a really nail biting result.

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Speaker 8: So this by election, will remember, came about because the

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Speaker 8: Labor MP was convicted of assault.

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Speaker 1: And then it was down to four votes in.

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Speaker 8: The initial count separating Reform and Labor, so they had

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Speaker 8: to recount it. It's been one of the closest parliamentary

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Speaker 8: elections ever and then now it's been confirmed that Reformers

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Speaker 8: won that seat by six votes. So this is a

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Speaker 8: really bad look for Labor because of course, as with

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Speaker 8: all local elections, Caroline, in reality, for many it isn't

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Speaker 8: just a vote about their local representative.

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Speaker 1: It's a poll on the government.

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Speaker 8: We're still four or five years away from an election,

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Speaker 8: but this.

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Speaker 1: Is a health check on how Kitostamer is doing.

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Speaker 8: It's the first big electoral test since he came to

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Speaker 8: power last July, and this particular by election result being

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Speaker 8: so close, giving Reform another seat.

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Speaker 1: In Parliament is not a good look for the Prime Minister.

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Speaker 3: Of course, this was the only parliamentary seat up for

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Speaker 3: grabs in this round of elections. Elsewhere it was local

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Speaker 3: councils and England that were being voted on as well.

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Speaker 3: What other sort of trends are emerging from what we've

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Speaker 3: heard so far.

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Speaker 8: Yeah, so you've got six hundred and forty one council

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Speaker 8: seats up for grabs across twenty three local authorities in England,

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Speaker 8: Labor defending four out of six mayoral contests, the other

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Speaker 8: two newly created a lot of analysts, by the way,

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Speaker 8: expecting a wipeout for the Conservatives in this vote because

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Speaker 8: many of these seats were last contested at the height

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Speaker 8: of Boris Johnson's popularity, so they've got the most to

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Speaker 8: lose here. But as I say, it's also a test

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Speaker 8: of how much Nigel farautes Reform Party can translate the

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Speaker 8: polling into votes, and his party really has everything to gain.

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Speaker 8: It's never put into such a serious offensive and it's

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Speaker 8: trying to build on those seats that it won at

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Speaker 8: the general election.

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Speaker 3: Okay, Busie Burdner, UK Correspondent, thank you very much for

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Speaker 3: joining us with the latest as we're looking at those

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Speaker 3: results continue to come in this morning. But the main

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Speaker 3: headline from the elections that took place in England yesterday.

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Speaker 3: Is the Reform UK Party winning that by election by

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Speaker 3: that narrowest of margins six votes in it over the

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Speaker 3: labor candidate. Let's bring you more now, though, on hospitality

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Speaker 3: of trade talks between the US and China and Hong Kong.

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Speaker 3: New's desk editor Jill Deesis is with us for more.

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Speaker 4: Jill.

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Speaker 3: We've had these overtures or hints of overtures coming from

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Speaker 3: boat sides here, But what do we know at this

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Speaker 3: stage about who made the initial approach and what does

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Speaker 3: that matter?

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Speaker 1: Good morning?

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Speaker 7: Well, I think at this point you're hearing from either

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Speaker 7: side that they were the ones that were approached. I mean,

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Speaker 7: you know, really, I think kind of underscoring what we

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Speaker 7: were talking about earlier in terms of both the US

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Speaker 7: and China trying to control this narrative. I mean, you

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Speaker 7: just heard Marco Rubio say, you know, Chinese officials have

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Speaker 7: been coming in talking to the United States. On the

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Speaker 7: Chinese side, the Commerce Ministry, in a statement today, said

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Speaker 7: that senior US officials had repeatedly been expressing their willingness

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Speaker 7: to talk to Beijing about tariffs, and so kind of

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Speaker 7: implying that it's the US that's starting to court them.

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Speaker 7: I mean again, all of this kind of just boils

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Speaker 7: down to posturing teams, and it kind of does underscore that.

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Speaker 7: I mean, both of these you know, countries, use of

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Speaker 7: the world's two largest economies. They need to have a

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Speaker 7: conversation about trade, they need to figure out exactly how

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Speaker 7: they're going to negotiate, but they're both going to be

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Speaker 7: pretty stubborn about determining or trying to determine, you know,

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Speaker 7: who exactly is in control of the narrative. And it

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Speaker 7: really just kind of emphasizes how powerful of a point

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Speaker 7: it is for them each to feel like they've got

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Speaker 7: control of how this narrative is going to develop as

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Speaker 7: if and when they do end up negotiating.

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Speaker 2: Yeah. Absolutely, I mean, you say, stoppen. But it's fascinating

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Speaker 2: to see the differences in terms of style and strategy

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Speaker 2: from these two sides. How significant is it that President

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Speaker 2: Trump and present g though have not actually spoken since

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Speaker 2: Trump A returned to office.

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Speaker 7: Yeah, I think that's pretty significant. I mean, look, it

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Speaker 7: really does indicate that the relationship between the US and

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Speaker 7: China has cooled pretty significantly, especially over the last several years.

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Speaker 7: I mean, you know, dating back to the start of

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Speaker 7: the trade war under the Trump one, I know, the

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Speaker 7: first administration. I mean, you know, we also went pretty

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Speaker 7: long stretches of time during the Biden administration where she

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Speaker 7: and Biden weren't talking to each other. Really kind of

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Speaker 7: characterized by you know, these periods where there was a

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Speaker 7: lot of concern about retcheting up of tensions between these

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Speaker 7: two nations. Now you've got Trump basically saying that it's

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Speaker 7: really up to Shei Jinping that needs to contact him

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Speaker 7: in order to begin these trade talks. And the fact

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Speaker 7: that these two you know, leaders of the world's two

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Speaker 7: largest economies haven't spoken yet, I think again really just

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Speaker 7: does underscore how serious of a rift we really have here.

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Speaker 3: And look, one of the key illustrations of this trade

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Speaker 3: tensions small value packages from China to the US from

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Speaker 3: today will no longer be exempt from tariff's. How significant

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Speaker 3: is the end of this dominimous exception.

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Speaker 7: So I think what we're really going to see the

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Speaker 7: impact of this playout is in you know, sort of

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Speaker 7: how that impacts the American consumer when it comes to,

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Speaker 7: you know, some cheaper goods that they may purchase. So

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Speaker 7: the idea behind this loophole is that previously has allowed

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Speaker 7: items Hong Kong and China valued it no more than

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Speaker 7: eight hundred dollars US to enter the US without customs

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Speaker 7: declarations and import duties. This was a large part of

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Speaker 7: the business model behind Chinese marketplaces like Timu and Sheian

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Speaker 7: companies that were shipping really low cost goods, including clothing,

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Speaker 7: et cetera, to the United States. I mean, the fact

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Speaker 7: that there's no longer this loophole that they can use

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Speaker 7: to really sort of supply this business model or support

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Speaker 7: rather this business model does indicate that, you know, anyone

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Speaker 7: who is used to buying those types of goods from

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Speaker 7: those marketplaces in the United States is likely to see

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Speaker 7: some pretty significant price rises in terms of you know,

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Speaker 7: trying to buy those things. So I do think that

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Speaker 7: if you're an American consumer, there's a pretty big risk that,

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Speaker 7: you know, an American consumer that's really interested in buying

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Speaker 7: these chief goods, there's a pretty big risk that you

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Speaker 7: could see prices rise.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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