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

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Speaker 2: This is the blom Big Day baq At podcast, available

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Speaker 2: every morning on Apple, Spotify or wherever you listen. It's Wednesday,

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Speaker 2: the sixteenth of April in London. I'm Caroline Hepcare.

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Speaker 3: And I'm Stephen Carroll coming up today, Growing, Growing, gone.

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Speaker 3: China's GDP beats estimates, but tariff's signal a looming economic cliff.

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Speaker 2: Bloomberg finds US importers are paying almost one hundred percent

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Speaker 2: of tariffs on overseas imports.

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Speaker 3: Plus Donald Trump's push to reshape global trade as driving

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Speaker 3: investors to Europe as confidence in the America First Trade evaporates.

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Speaker 4: Let's start with a roundup of our top stories.

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Speaker 3: China's economy grew by a faster than expected five point

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Speaker 3: four percent in the first three months of the year.

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Speaker 3: The surprising strength in the world's second largest economy comes

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Speaker 3: as concerns mount over the potential impact of one hundred

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Speaker 3: and forty five percent US tariffs on Chinese goods. Bloomberg

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Speaker 3: understands Beijing as considering stimulus measures to cushion the shock

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Speaker 3: of the American levies. Our market's Live stratt as Mark

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Speaker 3: Cranfield says investors are closely watching how China chooses to respond.

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Speaker 5: China will have to be seen to be keeping up

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Speaker 5: the stimulus for quite a long time. That's what investors

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Speaker 5: will be looking for. They'll be looking for soothing words.

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Speaker 5: Prison Siegingping is in Malaysia now, he's completing an Asian tour.

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Speaker 5: He's trying to encourage a lot of support for China

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Speaker 5: on a trade basis. That are something that investors will

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Speaker 5: certainly respond to.

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Speaker 3: Mark Cranfield speaking there as economists that several international banks,

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Speaker 3: including UBS, Gulbin, Sachs, City Group, and Socity General, have

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Speaker 3: all lowered their China growth forecast in recent weeks to

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Speaker 3: around four percent or lower.

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Speaker 2: The latest economic data out of China comes as President

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Speaker 2: Chump called on Beijing to reach out to him as

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Speaker 2: triple digit tariffs threatened to effectively eliminate trade between the

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Speaker 2: two nations. Here is the White House Press Secretary Caroline

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Speaker 2: Levitt reading what she said was a statement dictated by

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Speaker 2: President Trump.

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Speaker 6: The ball is in China's court. China needs to make

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Speaker 6: a deal with us. We don't have to make a

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Speaker 6: deal with them. There's no difference between China and any

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Speaker 6: other country except they are much larger, and China wants

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Speaker 6: what we have. What every country wants what we have

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Speaker 6: the American consumer, or to put another way, they need

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Speaker 6: our money.

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Speaker 2: Trump's comments, delivered there by his Press secretary, come as

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Speaker 2: China ordered airlines not to take further deliveries of Boeing jets.

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Speaker 2: Neither side has offered much indication that they want to

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Speaker 2: be the first to blink in a growing trade will

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Speaker 2: between the world's two biggest economies. Speaking to Blueberg today,

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Speaker 2: China's former deputy finance Minister Xuguang Yeo said that the

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Speaker 2: US had left them with little choice but to respond

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Speaker 2: with their own tariffs.

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Speaker 7: We fully respect the US, We fully follow the instruction

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Speaker 7: by President CDP. We do everything in the healthy, stable

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Speaker 7: and the sole relation with the US.

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Speaker 4: But it is time we must.

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Speaker 7: Picked action retaliate because we don't want the whole world

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Speaker 7: wepin for the jungle of jungle law.

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Speaker 2: That was China's former depthy finance minister speaking there to

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Speaker 2: Bloomberg as JP Morgan's Jamie Darman once again waded into

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Speaker 2: the growing trade war. Speaking to the FT Diamond called

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Speaker 2: on Washington and Beijing to engage with each other, saying

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Speaker 2: it doesn't have to wait a year, could start tomorrow,

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Speaker 2: adding also that Trump's trade war is creating uncertainty that

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Speaker 2: is challenging US credibility.

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Speaker 3: The Trump administration is banned in video from selling its

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Speaker 3: HAGE twenty chip to China and escalation of Washington's tech

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Speaker 3: battle with Beijing. In video, warned it will write, it

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Speaker 3: will report a write down of about five point five

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Speaker 3: billion dollars in the current quarter tied to the H twenty.

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Speaker 4: Chips.

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Speaker 3: Shares in the videos fell by more than six percent,

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Speaker 3: and after ours, trade and semiconductor stocks in the US

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Speaker 3: and Asia have fallen after the news. Here's Bimberg's Anabel Droolers.

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Speaker 8: This is important because it's a chip that Nvidia has

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Speaker 8: created specifically to meet the export controls that are already

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Speaker 8: in place on advanced technology to China. Now this brings

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Speaker 8: this new technology into the fray. And so the concern

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Speaker 8: from the White House and from the Trump administration is

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Speaker 8: essentially the H twenty is just too advanced. Essentially it

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Speaker 8: can still be diverted or used to create some sort

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Speaker 8: of supercomputer in China.

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Speaker 4: That's the concern from officials.

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Speaker 3: Bloomberg's Anabel Droolers speaking there, and Vidia has said further

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Speaker 3: tightening of restrictions will only reinforce China's determination to make

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Speaker 3: itself independent of US technology.

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Speaker 2: The Dutch chip equipment maker ASML has reported first quarter

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Speaker 2: bookings that missed estimates. The company saw bookings of three

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Speaker 2: point nine four billion euros's versus four point nine billion

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Speaker 2: that analysts were expecting. ASML's CEO says that the the

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Speaker 2: US tariff announcements have increased uncertainty for the firm. The

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Speaker 2: company's guidance is being keenly watched for the impact of

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Speaker 2: the trade wars. President Trump has threatened to impose tariffs

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Speaker 2: on the semiconductor supply chain, so ASML, of course the

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Speaker 2: leading provider of advanced lithography machines used to produce the

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Speaker 2: smallest chips used in AI and other sensitive applications.

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Speaker 3: Donald Trump has launched a probe into the need for

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Speaker 3: tariffs on critical minerals, citing national security and resilience concerns.

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Speaker 3: The order signed by the President yesterday calls for the

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Speaker 3: Commerce Secretary to investigate imports including rare earth elements considered

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Speaker 3: the building blocks of US defense by the government. If

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Speaker 3: the Secretary finds impairments to national security, Trump could impose

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Speaker 3: tariffs on the suppliers, which would replace current so called

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Speaker 3: reciprocal duties. According to the White House, the US's import

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Speaker 3: reliant when it comes to at least fifteen critical minerals,

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Speaker 3: while seventy percent of imports of rare er it's come

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Speaker 3: from China.

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Speaker 2: The European Union expects the majority of US taris will

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Speaker 2: not be removed. After making little progress during talks in

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Speaker 2: Washington earlier this week, Bloomberg understands that the EU's trade

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Speaker 2: chief Maosseevkovich left the meeting with US Commerce Secretary Howard

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Speaker 2: Lutnik and Trade Representative Jamison Greer with little clarity on

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Speaker 2: their position. Meanwhile, the US President's most recent comments on

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Speaker 2: the matter this week from the Oval Office criticized the

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Speaker 2: trading relationship between the two regions.

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Speaker 9: But the European Union has taken terrible advantage. They don't

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Speaker 9: take our food products. They don't take our cars. We

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Speaker 9: have millions of their cars BMW, Volkswagen, Mercedes, Benz, many others.

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Speaker 9: They come in by the minions. They don't take. There

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Speaker 9: are no Chevrolets in Munich.

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Speaker 2: I can tell you that President Trump speaking there while

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Speaker 2: in those discussions. US officials indicated that the twenty percent

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Speaker 2: so called reciprocal tariffs, which have been reduced to ten

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Speaker 2: percent for ninety days, would not be removed outright. The

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Speaker 2: EU has said previously that its countermeasures on around twenty

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Speaker 2: one billion euros of US goods will kick in following

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Speaker 2: the ninety days pause if discussions don't yield satisfactory results.

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Speaker 3: Two months into the trade war, US importers have taken

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Speaker 3: nearly all of the damage. That's the view of Bloomberg Economics,

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Speaker 3: which has built a tariff inclusive import price index. It

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Speaker 3: found that import prices had increased by almost the exact

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Speaker 3: amount of the tariffs, meaning that exporters are not lowering

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Speaker 3: their costs. Gilbin Sachs, chief US equity stratet as David

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Speaker 3: Costin says equity investors aren't clear which companies are going

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Speaker 3: to cope with tariffs.

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Speaker 10: I think the bigger issue the investors really are focusing

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Speaker 10: on is what is the growth prospects for the coming year.

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Speaker 10: We're looking around three percent earnest growth, So if there

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Speaker 10: was more confidence that you could have better projectory of

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Speaker 10: corporate profits, that would be one reason for money to

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Speaker 10: come into the equan market.

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Speaker 3: Cast and ads that dolblin I sees the chance of

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Speaker 3: a recession this year at forty five percent. The week

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Speaker 3: O dollar is adding to the higher costs from businesses

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Speaker 3: importing from the EU, UK and Japan.

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Speaker 2: Now, Americans are increasingly looking for jobs here in Britain

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Speaker 2: as the US second Ike outlook gets gloomier. Job Site

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Speaker 2: indeed says that interest from US job seekers is bouncing

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Speaker 2: back faster than any other country. Bloombergs James Walcock has more.

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Speaker 11: If you go on to a job site and click

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Speaker 11: on an ad, they track it and indeed say of

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Speaker 11: all the people abroad looking at jobs in Britain, nearly

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Speaker 11: one in ten of those clicks were from the US

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Speaker 11: in the first three months of this year. That's the

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Speaker 11: largest share in two years, and it's being driven by

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Speaker 11: people looking for roles in scientific research. The shift comes

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Speaker 11: as the US government announces billions of dollars of cuts

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Speaker 11: to federal science projects in London. James Walcock, Bloomberg Radio.

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Speaker 3: Those your top stories on the markets on Wall Street.

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Speaker 3: Equity markets were mixed and ASTAK finished up two tenths

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Speaker 3: of one percent. The S and P five hundred two

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Speaker 3: tenths of one percent lower that we had in Vidia

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Speaker 3: sinking by six percent and after hours trade on those

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Speaker 3: new China chip curbs. European stocks had a strong Tuesday close,

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Speaker 3: with the stock six hundred finishing up by one point

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Speaker 3: six percent futures, though today pointing sharply lower, down one

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Speaker 3: percent for eurostocks fifty futures this morning. The US dollar

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Speaker 3: ending its five day losing street, gaining four tens of

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Speaker 3: one percent on Tuesday, but reversing that on the Bloomberg

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Speaker 3: Dollar Spot Index today, Treasuries gaining for a second day

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Speaker 3: in a row. The ten year yields declined four basis

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Speaker 3: points today, they're then another one at four point three

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Speaker 3: to three percent, and we had Goal prices hit another

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Speaker 3: record high overnight, up one point eight percent on the day,

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Speaker 3: three thousand, two hundred and eighty eight dollars a triads.

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Speaker 4: Those the markets.

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Speaker 2: In a moment, we're going to bring you more on

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Speaker 2: the latest economic data out of China, plus bring you

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Speaker 2: on latest reporting on how European markets are winning from

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Speaker 2: investors moving out of view assets.

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Speaker 4: But maybe Seef, like me.

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Speaker 2: You need some inspiration to do your daily toil to

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Speaker 2: get out of bed today, Absolutely.

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Speaker 4: Love it real, Caroline. Yes, we love being here. I

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Speaker 4: do love being here.

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Speaker 2: But the thing that surprises me every morning is when

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Speaker 2: I go to bed, I think that I've read all

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Speaker 2: the news, and then I wake up in the morning

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Speaker 2: and so much has happened in those a few hours

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Speaker 2: that I've been asleep.

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Speaker 3: One good way to escape the news go on a cruise.

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Speaker 4: Yes, exactly.

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Speaker 2: And one of our colleagues has been writing about this,

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Speaker 2: so this is it's not just any old cruising though.

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Speaker 2: This is cruising for real holiday snove, so we get

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Speaker 2: the kind of mass market thing, you know, massive.

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Speaker 4: Sort of buffet.

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Speaker 2: Bloomberg's Fran Golden has been writing about the boom in

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Speaker 2: ultra luxury cruise ships. These are the ships that have

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Speaker 2: between one hundred and nine hundred and fifty passengers. She's

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Speaker 2: got lovely photographs, it's spacious, it's beautiful, pools of endless champagne.

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Speaker 4: Just sounds like what I need today.

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Speaker 3: And some of the big luxury names getting involved on this.

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Speaker 3: The Writ's Carleton, for example. Be Arnau's Orient Express brand

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Speaker 3: also getting in on the act too, and they're even

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Speaker 3: going as far as trying to rebrand as the people

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Speaker 3: aren't talking about cruises and a nation from Explorer, one

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Speaker 3: of the companies involved in this as well, saying that

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Speaker 3: the word cruise does have a slight mass market connotation,

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Speaker 3: and she prefers to say she's in the business of

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Speaker 3: ocean travel.

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Speaker 4: Oh, that sounds good anyway.

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Speaker 2: It's a piece from Frank Golden that you can read

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Speaker 2: about in Bloomberg Business Week, and.

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Speaker 4: You can look at the prices as well that she

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Speaker 4: has listed.

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Speaker 3: Well, let's go to the Chinese economic data. Now, China's

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Speaker 3: economy expanding at a faster pace than expected in the

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Speaker 3: first three months of the year, but the outlook deteriorating

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Speaker 3: rapidly due to Trump's massive tariffs. Our Asia economic supporter

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Speaker 3: Katie Demitrieva joins us for more. Katia, let's dig into

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Speaker 3: the detail. Then, what does the data tell us? It

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Speaker 3: looks strong on the face of it.

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Speaker 12: Yes, it is, and we had sort of a raft

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Speaker 12: of data coming out this week from China which gave

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Speaker 12: us a really good look at what's happening. But of

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Speaker 12: course the problem is that it is kind of in

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Speaker 12: the rearview mirror already in a bit backward looking. So

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Speaker 12: what it did show positive stuff. So GDP ticked up

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Speaker 12: in the first quarter, it was up five point four percent,

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Speaker 12: and that was led by production and consumption, which is

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Speaker 12: kind of a rare mix when you're China's usually exports production,

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Speaker 12: but consumption actually had a really good period. It was

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Speaker 12: actually the best since December twenty twenty three, and that

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Speaker 12: was really because of government subsidies. So if you look

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Speaker 12: through the data home appliances and furniture, those sales were

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Speaker 12: actually up thirty percent, which is astounding. So unfortunately it

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Speaker 12: is no longer likely the case because as we know,

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Speaker 12: tariffs came in the highest tariffs in a century, and

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Speaker 12: investors seemed to be thinking about that too, because despite

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Speaker 12: how positive the numbers were, we saw stocks actually extending

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Speaker 12: losses in Hong Kong and China after it came out.

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Speaker 12: So in addition to that, there was some not so

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Speaker 12: great news from data that was not on the GDP

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Speaker 12: report but kind of came out at the same time,

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Speaker 12: which is that property investment contracted about ten percent, and

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Speaker 12: even though the unemployment rate actually looks better it's around

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Speaker 12: five point two instead of five point four, it's still

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Speaker 12: a bit too high for some economists liking.

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Speaker 2: Indeed, and so if the GDP and the other data

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Speaker 2: sort backward looking. Let's think about the cliff edge, the

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Speaker 2: damage that taras could do and are doing now. Really

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Speaker 2: can try to get to that five percent growth goal?

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Speaker 4: That is the question.

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Speaker 12: That is a very good question, and there's two camps

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Speaker 12: that are kind of developing around that. So one says no,

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Speaker 12: and we've seen that from UBS. Most recently they revise

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Speaker 12: their growth outlook for three point four, which would be

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Speaker 12: a pretty big miss from around five percent, which is

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Speaker 12: what officials Chinese officials have targeted, which is the same

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Speaker 12: as twenty twenty four. And they've joined Goldman Sachs and

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Speaker 12: Morgan Stanley and a number of other banks that say

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Speaker 12: that this five percent growth target is just there's no way,

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Speaker 12: there's no way with this level of tariffs and with

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Speaker 12: such a export dependent economy that still hasn't really gotten

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Speaker 12: the consumer part quite right yet. But then there's also

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Speaker 12: a camp of experts, and these are folks China watchers

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Speaker 12: who've been watching this economy for decades for their entire careers,

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Speaker 12: who say, well, we have to remember that China has

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Speaker 12: said they want to get around five percent growth, and

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Speaker 12: in the past they've been able to get it, except

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Speaker 12: for you know, the pandemic, which no one could really expect,

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Speaker 12: and so they're going to get it, whether it's through

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Speaker 12: more government subsidies or trade agreements. You know, she is

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Speaker 12: currently traveling around Southeast Asia. There's a group of European

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Speaker 12: officials coming over the summer to China. There's a thought

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Speaker 12: that no matter what, they're going to have to orchestrate something.

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Speaker 3: Katie, what about the hopes for Anny talks over these tis?

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Speaker 3: We heard Donald Trump say that he's waiting for China

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Speaker 3: to reach out to start negotiations.

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Speaker 12: It's basically a game of chicken right now, and it's

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Speaker 12: whoever blinks first, right, So we have Trump saying, i

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Speaker 12: think over a dozen times since he was elected, you know,

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Speaker 12: she really wants to have these negotiations, and he really

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Speaker 12: wants to trade deal bad And you know, the Press

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Speaker 12: secretary just there saying China wants and needs to make

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Speaker 12: a deal with us. We don't need to make a

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Speaker 12: deal with China. But you know, China is kind of

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Speaker 12: saying the exact same thing. And China, for at least

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Speaker 12: the near term, kind of has the upper hand because

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Speaker 12: US consumers are going to be feeling the inflationary effects

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Speaker 12: US businesses that Bloomberg Economics report saying that US importers

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Speaker 12: are facing the biggest challenges and payment sort of pain

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Speaker 12: right now. You know they're going to have to at

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Speaker 12: some point come to the table. They have not spoken yet.

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Speaker 12: US president, Chinese president have not spoken yet. So until

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Speaker 12: that happens, you know, that will be the big trade

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Speaker 12: agreement to watch, but so far doesn't look likely.

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Speaker 2: Katyap, thank you so much for being with us today.

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Speaker 2: Blueberg's Asia Economics reporter Kattia Dmitrieva.

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Speaker 3: Donald Trump's push to reshape global trade and security as

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Speaker 3: shocked European markets into life, driving investors to assets, from

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Speaker 3: stocks to bonds and the Euro in a way that

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Speaker 3: few could have imagined just six months ago. Joining us

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Speaker 3: now from more of Bloomberg's FX and Rates reporter Alice

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Speaker 3: glad Hill. Alice, good morning, talk us through first of all,

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Speaker 3: the scale of this move into European assets.

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Speaker 1: Good morning, Yeah, I mean it's been a fascinating start

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Speaker 1: to the year for European assets. So for a long time,

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Speaker 1: European markets were viewed as this slightly sort of sluggish

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Speaker 1: backwater where growth was challenged. For such a long time.

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Speaker 1: We quote an investor in the piece who describes European

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Speaker 1: markets as this museum, but she said, you know, this year,

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Speaker 1: you know, this museum suddenly burst into life. So you've

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Speaker 1: got the strong the euros at the strongest in three

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Speaker 1: years against the dollar. Last week you saw this huge

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Speaker 1: sell off in treasuries. German bonds were resilient, and you know,

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Speaker 1: European shares have been not by the trade war, but

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Speaker 1: they are. They're doing very well this year. They're moving

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Speaker 1: far more resilient than American ones. And I think there's

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Speaker 1: a few things going on here. I think you've got

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Speaker 1: to push out of US markets, but also a pull

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Speaker 1: into European markets. So just in terms of the US,

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Speaker 1: I think, you know, Donald Trump's predictable tariff policy and

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Speaker 1: fiscal policies have forced investors to start thinking about whether

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Speaker 1: or not the US treasuries and the dollar are going

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Speaker 1: to be the haven they've been for decades going forwards.

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Speaker 1: And then in terms of the pull into Europe, a

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Speaker 1: month ago we saw Germany announce this huge fiscal package

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Speaker 1: with package which I think will be a game changer

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Speaker 1: for the region's growth. So investadors suddenly thinking very differently

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Speaker 1: about European markets.

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Speaker 4: Yeah, it is extraordinary.

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Speaker 2: Isn't it that that US exceptionalism is sort of faltering,

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Speaker 2: that there does seem to be a question mark hanging

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Speaker 2: over US dollar dominance.

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Speaker 1: Yeah, it is extraordinary, But I think there is a

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Speaker 1: widespread acknowledgement that we are in the middle of a

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Speaker 1: regime shift for global trade and markets here. Just thinking

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Speaker 1: back to late last year, it was all about Trump,

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Speaker 1: and it was all about US exceptionalism and America first.

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Speaker 4: And that's not all anyone wants to talk about.

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Speaker 1: You know, sort of the hot AI stocks, you know,

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Speaker 1: the ascendant dollar, King dollar, you know, wave of tax

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Speaker 1: cuts and doulation. But last week you saw the dollar,

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Speaker 1: US government bonds, US equities all selling off in tandem.

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Speaker 1: And that's something that you see more often in an

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Speaker 1: emerging market, not you know, not the US, but you know,

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Speaker 1: I think clearly the outlook is tricky for the US here.

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Speaker 1: There was a Bank of America survey out this week

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Speaker 1: that found a record number of respondents are going to

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Speaker 1: cut their exposure to US stocks. Markets have stabilized a

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Speaker 1: little bit this week, but you know, some of the

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Speaker 1: price wings in US treasuries have been so severe.

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Speaker 4: That markets are unwatchful. Intervention for in the Federal Reserve.

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Speaker 1: But in comparison, you've seen European bonds and the euro

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Speaker 1: really acting like a haven. And let's not forget you know,

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Speaker 1: Europe is a large liquid market and I think it

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Speaker 1: does have capacity to absorb a lot of these flows

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Speaker 1: out of the US. You know, the EU is also

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Speaker 1: a lot more resilient than in the past, and you've

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Speaker 1: seen evidence of that in markets in terms of some

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Speaker 1: of the periphery countries. Their yields have been much more

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Speaker 1: anchor than you might expect during the recent volatility. So,

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Speaker 1: you know, Europe does have its challenges, but I think

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Speaker 1: there's a lot more optimism over the long term.

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