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Speaker 1: Good morning.

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Speaker 2: It's Wenesday, the twenty seventh of September here in London.

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Speaker 2: This is the Bloomberg Daybreak you at podcasts. I'm Caroline Hepker.

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Speaker 3: And I'm Stephen Carroll. Coming up today, the UK sits

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Speaker 3: down for EV tariff talks with the European Union, as

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Speaker 3: Tesla finds itself and the crosshairs of the blocks Chinese

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Speaker 3: subsidy probe.

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Speaker 2: US regulators are suing Amazon, accusing it of monopolizing the

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Speaker 2: online marketplace.

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Speaker 3: And we'll bring you exclusive reporting on how tanker tricks

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Speaker 3: on the high seas expose the shadowy trade for Russian oil.

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

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Speaker 2: and European Union officials are meeting today to discuss looming

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Speaker 2: post for exit tariffs on electric vehicles, set to come

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Speaker 2: into force from January. Evs have become a major focal

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Speaker 2: point of global trade tensions in just the last few weeks,

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Speaker 2: after the EU launched and anti subsidy probe into the

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Speaker 2: ones that are made in China. UK Industry Minister nus

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Speaker 2: Ghani told our UK Politics program that between the Bloc

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Speaker 2: and China make a deal with the UK. More attractive.

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Speaker 4: This is an issue that's a far more significance than

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Speaker 4: you would believe within the EU. And don't forget that

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Speaker 4: EU car manufacturers import more into the UK than we

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Speaker 4: export into the EU, so it will impact those cars

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Speaker 4: much more than we would be led to believe.

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Speaker 2: If you've read some of the UK pres you can

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Speaker 2: hear the full interview with Nascani on the Blueberg UK

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Speaker 2: Politics podcast.

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Speaker 3: I mean, while Bloomberg has learned that the EU probe

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Speaker 3: into Chinese built electric vehicles is focused on one car

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Speaker 3: maker in particular, and it's an American company. Our Global

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Speaker 3: Autos editor Craig Trudell has the details.

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Speaker 5: One company release sort of booms largest there as a

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Speaker 5: result of the fact that they are shipping more EBS

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Speaker 5: from China into the European Union than anybody else, and

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Speaker 5: that is Tesla. So this is a company that opened

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Speaker 5: a plant in Germany in March of last year, but

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Speaker 5: it continues to supplement the output from that plant with

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Speaker 5: production from a lower cost facility in Shanghai that has

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Speaker 5: an awful lot of capacity to make quite a few

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Speaker 5: electric vehicles.

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Speaker 3: Craig Urdial says the investigation aims to determine whether and

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Speaker 3: the degree to which China has subsidized Tesla and domestic manufacturers.

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Speaker 2: Now, China will just about meet its five percent growth

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Speaker 2: target this year. That's according to the latest Bloomberg survey

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Speaker 2: of economists, But those polls say that fresh turbulence in

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Speaker 2: China's property market is raising the risk of a miss.

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Speaker 2: The analysis comes as Beijing place the billionaire chairman of

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Speaker 2: beliagued property developer ever Grand, under effective house arrest. Brian

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Speaker 2: Curtis has more on this.

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Speaker 1: Bloomberg Scoop sources say Hui kai Yan was taken away

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Speaker 1: by police and is being held at a designated location.

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Speaker 1: It's not clear why he's under a so called residential surveillance.

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Speaker 1: That's a police action that falls short of arrest, and

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Speaker 1: it also doesn't mean that Hi will eventually be charged

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Speaker 1: with a crime. Still, it means that he's unable to

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Speaker 1: leave the location, meet or communicate with others without approval.

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Speaker 1: It's another sign that Evergrand has entered the criminal justice system.

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Speaker 1: Other former executives have reportedly also been detained in Hong Kong.

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Speaker 1: Brian Curtis, Bloomberg Radio.

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Speaker 3: The US competition regulator is suing Amazon for monopolizing online

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Speaker 3: Marketplace Services. Federal Trade Commission Charley Nakan has told Bloomberg

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Speaker 3: the e commerce giant is using a range of tactics

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Speaker 3: to hurt sellers and consumers.

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Speaker 6: Ultimately, Amazon has pursued them to deprive actual and potential

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Speaker 6: competitors of the ability to gain the scale and momentum

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Speaker 6: needed to effectively compete online, and having achieved and protected

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Speaker 6: its monopoly power. Our complaint details how Amazon is now

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Speaker 6: exploiting that monopoly power in ways that harm customers.

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Speaker 3: Can stop short of calling for Amazon to be broken

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Speaker 3: up but out of it. If the regulator wins this suit,

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Speaker 3: it would seek to restore competition in them. Amazon says

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Speaker 3: that will defend itself against the claims and that the

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Speaker 3: FTC's remedy would lead to higher prices and hurt businesses.

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Speaker 2: Open Ai, the creator of chat GPT, is reportedly talking

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Speaker 2: to investors about a potential share sale that would value

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Speaker 2: the startup between eighty and ninety billion dollars. The Wall

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Speaker 2: Street Journal says that the valuation would be almost three

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Speaker 2: times what the company was worth earlier this year. Evaluation

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Speaker 2: of at least eighty billion dollars would make open ai,

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Speaker 2: co founded by Sam Altman, one of the most valuable

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Speaker 2: startups in the world.

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Speaker 3: ECB Governing Council member Robert Holtzman says it's unclear whether

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Speaker 3: the bank has reached peak rates. Speaking at a Bloomberg

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Speaker 3: event in Vienna, Holtzman said he's not ruling out more

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Speaker 3: rate rises.

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Speaker 7: Inflation is full of surprises, and as a result that

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Speaker 7: we could not show for Schuner now we have reached

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Speaker 7: the peak and no more increase. The reason is that

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Speaker 7: the inflationary breasure is still on and that just the

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Speaker 7: recent days we have seen how much nership price have surprised.

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Speaker 8: That.

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Speaker 3: Robert Holsman's remarks come as investors become increasingly convinced by

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Speaker 3: the ECB's pledge to keep borrowing costs higher for longer.

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Speaker 3: Thirty year German BoNT yields hit a twelve year high

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Speaker 3: in trading on Tuesday.

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Speaker 2: Donald Trump has been found liable for exaggerating his net

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Speaker 2: worth by billions of dollars a year on financial records

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Speaker 2: submitted to banks and insurers. The fraud ruling by a

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Speaker 2: court in Manhattan resolves New York State's biggest claim against

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Speaker 2: the former president, ahead of a civil case that's expected

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Speaker 2: to start next month. The trial will now focus on

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Speaker 2: claims including falsifying business records and issuing false financial statements.

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Speaker 2: Now I have my eye very much on the Conservative

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Speaker 2: and Labor Party conferences that are going to happening. I

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Speaker 2: am already yeah and getting up to Manchester in Liverpool.

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Speaker 2: But of course party covered season has really started. The

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Speaker 2: Liberal Democrats had theirs over the weekend. We spoke to

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Speaker 2: the deputy leader, Daisy Cooper. Yes, she was very interesting

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Speaker 2: and we spoke about lots of things they're housing. Target

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Speaker 2: For one, they won't reveal how many MP seats they're

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Speaker 2: targeting in any next general election. They've got fifteen MPs,

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Speaker 2: so they're very much the third party in UK politics.

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Speaker 2: But on the Bloomberg dot co dot uk website and

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Speaker 2: on the Blueberg terminal, we've got you know, I think

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Speaker 2: the definitive guide or the kind of definitive definitive summary

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Speaker 2: from Kitty Donaldson, our Blueberg UK politics reporter on kir Starmer,

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Speaker 2: the Labor Party leader, of course, the former prosecutor, the

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Speaker 2: first to attend University nineteen in twenty fourteen, who's moved

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Speaker 2: his party to the center, hoping basically for a Blair

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Speaker 2: style win it's a very good read. Yeah.

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Speaker 3: Look, it takes a look at not only the challengers

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Speaker 3: but also more about Starmer himself. And I suppose the

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Speaker 3: strategy behind labor at the moment when they are in

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Speaker 3: this almost if you're looking at the polls, government and

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Speaker 3: waiting phase, or at least that's what they're trying to portray.

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Speaker 3: But the economics complicated. We dig into how the what

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Speaker 3: Kiirs Starmer, if he becomes Prime Minister, would inherit in

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Speaker 3: terms of British economy when compared to Tony Blair back

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Speaker 3: in nineteen ninety seven. Look just at the levels of

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Speaker 3: government debt ninety eight point eight percent at the moment

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Speaker 3: in nineteen ninety seven that was thirty seven point two percent.

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Speaker 3: The financial situation very different as well. Some nice bits

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Speaker 3: of insidernloge as well. Apparently one Starmer met Emanuel Macron

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Speaker 3: last week, he gave him a Arsenal shirt.

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Speaker 2: Well, we do know that Kirs Starmer is genuinely football mad.

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Speaker 2: It would seem so. Yes, perhaps that's the kind of

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Speaker 2: moment of bonding. I mean, those are very important in geopolitics. Anyway,

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Speaker 2: it's a nice political story. I think one worth keeping

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Speaker 2: an eye on certainly for English politics. And having said that,

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Speaker 2: let's also talk about business electric vehicles.

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Speaker 3: Yeah, meeting happening today between Britain, British and European officials

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Speaker 3: looking at the looming post bregs at Tariff's. Part of

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Speaker 3: the UK's post brags a trade deal which would see

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Speaker 3: a ten percent tariff and imposed on electric vehicles traded

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Speaker 3: between the UK and the EU from next year, depending

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Speaker 3: on where the parts of the car are made. This

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Speaker 3: follows Bloomberg's scoop on Tuesday that Tesla will be a

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Speaker 3: focus of the probe coming from the EU and to

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Speaker 3: Chinese subsidies for EV manufacturers. Boomberg's Oliver Crook has more

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Speaker 3: on this story from Berlin forst This Morning. Oliver on

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Speaker 3: these post breggs At talks the UK government and European

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Speaker 3: car makers want to delay. Is this something that's open

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Speaker 3: to negotiation.

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Speaker 8: Well, what's interesting is that you know the U is

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Speaker 8: playing pretty hardball on this, and you know that may

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Speaker 8: have now changed a little bit given this probe into

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Speaker 8: the Chinese evs and not wanting to give basically more

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Speaker 8: market share ups. So just to remind people, this is

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Speaker 8: down to the rules of origin legislation that comes into

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Speaker 8: force at the end of the year, and basically, if

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Speaker 8: forty five percent of the value of the car is

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Speaker 8: sourced from within the EU and the UK, you don't

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Speaker 8: get teriffs. But no one can do that because the

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Speaker 8: batteries they just don't have the capacity. So the question

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Speaker 8: is now that they've launched this probe into China, which

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Speaker 8: is really at its core supposed to target not flooding

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Speaker 8: the EU market with quote, you know, cheap evs from

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Speaker 8: China and they don't have the capacity, Well, does this

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Speaker 8: give them a little bit of incentive to maybe delay

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Speaker 8: this give a little bit more breathing room for the

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Speaker 8: automakers who have been arguing that this is just going

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Speaker 8: to hand market share to other global competitors read China.

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Speaker 1: Yeah.

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Speaker 2: So if it's about then being able to produce EV batteries,

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Speaker 2: how quickly is that ramping up?

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Speaker 7: Yeah?

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Speaker 8: Well, the question is this three year is enough time?

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Speaker 8: I mean, this is such a complex issue. So you

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Speaker 8: have the upstream, you have raw materials, where do you

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Speaker 8: source all the stuff that you need to do? You

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Speaker 8: need to deal then with the processing. Most of the

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Speaker 8: lithium that is processed in the world is still processed

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Speaker 8: in China something to seventy to eighty percent of it,

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Speaker 8: and you have companies that have come into the European markets.

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Speaker 8: They're breaking ground on facilities to process this sort of stuff.

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Speaker 8: And you need to process it near where you build

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Speaker 8: the batteries because some of this stuff, lithium hydroxide, for example,

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Speaker 8: is very reactive, so it can't travel these great distances.

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Speaker 8: So this is a part of a whole new supply

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Speaker 8: chain and sort of new industrial kind of energy chain

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Speaker 8: that they need to figure out. You have plants from

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Speaker 8: Coatl North Vault, you have some others. But to give

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Speaker 8: you some of the scale here, China has ten times

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Speaker 8: europe at battery capacity. It has ten times the US is.

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Speaker 8: It has ten times the rest of the world's, and

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Speaker 8: more than if you combine everybody US, China, rest of

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Speaker 8: the world, they still have more than three times and

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Speaker 8: by twenty thirty China is still going to dominate seventy

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Speaker 8: percent of the battery market.

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Speaker 3: Well, on that notes, we've been looking at this exclusive

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Speaker 3: reporting from Loomberg, Selbersta and our Daddy and Craig Traudal

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Speaker 3: about the EUS probe into Chinese ev subsidies that it's

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Speaker 3: going to include Tesla as well as domestic Chinese names.

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Speaker 8: So this is not a shock in the sense that

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Speaker 8: this investigation what it needs to do is look at

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Speaker 8: any car company that is producing cars within China and

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Speaker 8: then exporting them. So it's going to be obviously we

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Speaker 8: know that this has been prompted by the fear of

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Speaker 8: cheap Chinese evs, but need to look at all of

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Speaker 8: the car companies that potentially could have received subsidies from China.

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Speaker 8: What we have learned from according to people familiar is

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Speaker 8: that in the lead up to the announcement here, they

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Speaker 8: have found that that Tesla was one of those companies

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Speaker 8: that has likely benefited from these subsidies. And we know

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Speaker 8: that Tesla's had pretty unique treatment in China. For example,

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Speaker 8: they are one of the companies that is allowed to

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Speaker 8: fully own their domestic operations within China, didn't have to

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Speaker 8: do a joint venture. But then you know, there's a

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Speaker 8: sort of irony to this, right that China's biggest EV

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Speaker 8: exporter to Europe is an American company. So Tesla shipped

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Speaker 8: almost one hundred thousand cars this year that were made

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Speaker 8: in China to Europe to supplement you know, the output

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Speaker 8: that they have here in Brandenburg, just outside of Germany.

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Speaker 8: But again, this is going to continue to expand this

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Speaker 8: is probably going to capture also some European companies and

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Speaker 8: you know, as this develops over the next year or so.

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Speaker 2: Yeah, absolutely. A last word then, also on what's going

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Speaker 2: on stateside, actually with the UAW strike, President Biden with

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Speaker 2: that loud speaker and his visit to Michigan.

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Speaker 8: Yeah, I mean, listen, this is sort of motor diplomacy

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Speaker 8: everywhere around the world. He says, you know, to the workers,

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Speaker 8: you save the automobile industry, you gave up a lot.

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Speaker 8: They're doing incredibly well. You should do so as well.

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Speaker 8: This is kind of what we expected from Biden. What's interesting,

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Speaker 8: Sean Fain standing next to him, smiling. He has not

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Speaker 8: yet endorsed Biden for twenty twenty. Trump will speak later today.

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Speaker 8: You know, he's probably gonna slam Biden's ev policy, saying

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Speaker 8: that that is the real threat to the auto sector.

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Speaker 8: But I don't know that that's going to move at

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Speaker 8: least the leadership of the Union, which has really been

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Speaker 8: very critical of Donald Trump and people like him.

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Speaker 3: Okay, Oliver Crook in Berlin, thank you very much.

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Speaker 2: Now on a sunny day off the southern coast of

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Speaker 2: Greece last week, two aging tankers settled next to each

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Speaker 2: other with Russian oil on board. It was pumped from

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Speaker 2: one to the other, helping to keep Moscow's petroleum flowing.

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Speaker 2: As far as the global satellite tracking systems could tell, though,

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Speaker 2: this never happened. But Bloomberg's Aleck Nightingale, who runs our

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Speaker 2: all trading team here in London, was there to witness

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Speaker 2: it and he joins, now, Alec, you've written a big

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Speaker 2: story about this. What did you see?

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Speaker 9: So we spent a couple of days in the Gulf

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Speaker 9: of Laconicos and in this bay there are more than

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Speaker 9: a dozen tankers, all kind of ferrying fuel from one

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Speaker 9: to the other. In the case of this particular vessel,

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Speaker 9: called a turba, it was next to another tanker, yeah,

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Speaker 9: switching its oil. Now we could see them next to

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Speaker 9: each other, but if you looked on global satellite tracking

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Speaker 9: systems where they kind of give a signal to the

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Speaker 9: world of where they are, they were about four miles apart.

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Speaker 9: So it was a case of something called spoofing, which

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Speaker 9: is where you know precisely this. There is a deceptive

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Speaker 9: practice too hide what's going on?

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Speaker 3: What do we know about how unusual this sort of

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Speaker 3: operation is?

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Speaker 9: So it is unsually we know there are a lot

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Speaker 9: of transfers. Is harder to say how unusual the spoofing

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Speaker 9: is because you know, what you can see easily is

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Speaker 9: the what you see on satellite signals. But the very

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Speaker 9: first hanker we saw, the very first pair of tankers

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Speaker 9: we saw included the Turber, and that the Turber was spoofing.

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Speaker 9: So it tells you something, right, the very first thing

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Speaker 9: you see is something that's deceptive. It kind of gives

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Speaker 9: you a clue of what's really going on.

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Speaker 2: So it is going on. Then when it comes to

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Speaker 2: the trade in Russian oil, what does it tell us

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Speaker 2: about that? Do you think?

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Speaker 9: Well, it tells you that there are still nervy buyers,

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Speaker 9: that people still want to have a degree of separation

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Speaker 9: and try and kind of create a bit of obscurity

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Speaker 9: about where the fuel loaded from. So you know, some

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Speaker 9: people clearly pretty comfortable dealing with Russia and some people

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Speaker 9: less so. And the two tankers that we're talking about

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Speaker 9: here were older ships, and you know, maybe even that's

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Speaker 9: something that not everybody is completely comfortable with. And so

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Speaker 9: you know that they've kind of done these things to

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Speaker 9: just create a degree of separation about the cargo and

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Speaker 9: what's known about it.

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Speaker 3: Where does all of this fit in with the G

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Speaker 3: seven oil price cap on Russia's oil and fuelac sports.

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Speaker 9: Right, So these two ships are not almost certainly have

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Speaker 9: no connection to the Group of seven, which means they're

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Speaker 9: not kind of subject to the price cap. The price

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Speaker 9: cap prevents European and Western companies from providing services, including shipping,

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Speaker 9: including insurance, to the Russian oil trade. Now these vessels

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Speaker 9: are not part of that, and that means that the

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Speaker 9: fuel on board doesn't have to comply with pricegat. That

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Speaker 9: means that effectively, these kinds of tankers are a way

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Speaker 9: to get Russian fuel and oil to the global market

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Speaker 9: without any kind of constraint of a Western price cap.

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Speaker 2: Yeah, absolutely, Alex, thank you so much for being with

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Speaker 2: us this morning. You can read more about this Tanka

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Speaker 2: tricks on the high seas Alec Nightingale's piece on the

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Speaker 2: Blueberg terminal really fascinating on Russian oil.

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