WEBVTT - Instant Reaction: Trump Tariffs Hit Mexico, Canada and China

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>This is breaking news from Bloomberg. We are seeing a

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<v Speaker 2>sharp cell often stocks around the world with President Trump

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<v Speaker 2>said to follow through on his threat of tariffs against

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<v Speaker 2>America's closest trading partners. On Saturday, the President announced twenty

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<v Speaker 2>five percent duties on products from Canada and Mexico and

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<v Speaker 2>ten percent on China, starting just after midnight tonight. Trump

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<v Speaker 2>admits American consumers might take a hit.

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<v Speaker 3>We may have short term so a little pain, and

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<v Speaker 3>people understand that. But long term, the United States has

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<v Speaker 3>been ripped off by virtually every country in the world.

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<v Speaker 3>We have deficits with almost every country, not every country.

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<v Speaker 2>But all most and Republican lawmakers are signaling they support

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<v Speaker 2>the president's efforts. Senator Lindsey Graham had this reaction on

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<v Speaker 2>Fox News Sunday.

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<v Speaker 4>If you want tariffs to go away, Mexico and China,

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<v Speaker 4>stop poising Americans, stop sending ventanyl into America to kill Americans.

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<v Speaker 4>If you want to have a better relationship in Mexico

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<v Speaker 4>with the United States, do your report on the other

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<v Speaker 4>side of the border.

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<v Speaker 2>But Democratic Senator Mark Warner says tariffs amount to what

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<v Speaker 2>he calls a Donald Trump Super Bowl tax less than

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<v Speaker 2>a week before the big game. Remember, Donald Trump got

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<v Speaker 2>hired trying to lower grow saying he was going to

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<v Speaker 2>lower grocery prices.

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<v Speaker 3>Right two weeks in, He's doing something that's going to

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<v Speaker 3>do the absolute opposite.

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<v Speaker 2>Senator Warner spoke to CBS as Margaret Brennan on Face

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<v Speaker 2>the Nation, and you can hear both Face the Nation

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<v Speaker 2>and Fox News Sunday every Sunday on Bloomberg Radio.

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<v Speaker 5>Well, Nathan Trump says he will have separate calls this

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<v Speaker 5>morning with Canadian Prime Minister Justin Trudeau as well as

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<v Speaker 5>with the Mexican leadership. The Canadian leader has already pledged

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<v Speaker 5>twenty five percent retaliatory tariffs on one hundred and seven

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<v Speaker 5>billion dollars worth of US goods. Trudeau says Trump's action

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<v Speaker 5>now risks job losses and price rises for Americans.

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<v Speaker 6>If President Trump wants to usher in a new golden

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<v Speaker 6>age for the United States, the better path is to

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<v Speaker 6>partner with Canada, not to punish US.

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<v Speaker 5>Canadian Prime Minister Justin Trude do other Canadian officials announce

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<v Speaker 5>their own measures. David Eby, the Premiere of British Columbia,

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<v Speaker 5>directed to provincially owned a liquor distributor, to remove some

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<v Speaker 5>alcohol brands made in Republican led States from the shelves

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<v Speaker 5>of retail stores and to cease further purchases.

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<v Speaker 2>Well, as you mentioned, Karen, the PAESO is dropping to

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<v Speaker 2>its lowest level in almost three years. Mexican President Claudia

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<v Speaker 2>Shanbaum says she'll set out her response to US tariffs

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<v Speaker 2>later today. She says she hopes a resolution can be

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<v Speaker 2>found quickly.

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<v Speaker 1>That's a bit Anian noise.

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<v Speaker 4>Nibo sovereignty is not negotiable to this end.

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<v Speaker 1>Yesterday, in my statement, I proposed to President Trump, though

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<v Speaker 1>we establish a working group, it is not with the

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<v Speaker 1>imposition of tariffs that the problems are resolved, but speaking

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<v Speaker 1>and dialoguing.

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<v Speaker 7>As we did.

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<v Speaker 2>Mexican President Claudia Shanbaum spoke there through an interpreter. President

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<v Speaker 2>Trump has said he may escalate US tariff's further in

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<v Speaker 2>response to any retalients.

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<v Speaker 5>Well Nathan, China's reaction to Trump's tariffs, which come in

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<v Speaker 5>the middle of Lunar New Year holiday celebrations, has been

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<v Speaker 5>more muted. The country's Commerce Ministry issued a statement expressing

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<v Speaker 5>strong dissatisfaction and vowing corresponding countermeasures without elaborating. Our Chief

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<v Speaker 5>North Asia correspondent Stephen Engels says China's reaction could yet

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<v Speaker 5>ramp up.

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<v Speaker 6>This is going to be a protracted process, so Beijing

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<v Speaker 6>has to process exactly what's going to be the end

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<v Speaker 6>result of tariffs. Is it going to go up to

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<v Speaker 6>sixty percent? It's ten percent right now, and there's going

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<v Speaker 6>to be an economic impact to that. And I think

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<v Speaker 6>right now, especially as they're coming out of the long

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<v Speaker 6>Lunar New Year holiday, kind of crafting their message obviously.

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<v Speaker 5>And Leutz Bloomberg Steven Angel are reporting from Hong Kong.

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<v Speaker 2>And after he announced those duties on China, Mexico and Canada, Karen,

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<v Speaker 2>President Trump also ramped up threats to the European Union,

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<v Speaker 2>citing that block's large surplus with the US.

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<v Speaker 3>It will definitely happen with the European Union, I can

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<v Speaker 3>tell you that because they've taken advantage of US. Said,

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<v Speaker 3>you know, we have over three hundred billion dollar deficit.

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<v Speaker 3>They don't take our cars, they don't take our farm products.

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<v Speaker 3>They take almost nothing, and we take everything from the

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<v Speaker 3>millions of cars, tremendous amounts of food and farm product.

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<v Speaker 2>President Trump's remarks came after an EU spokesperson said that

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<v Speaker 2>the BLOCK would respond firmly to any trading partner that

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<v Speaker 2>unfairly or arbitrarily imposes tariffs on EU goods.

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<v Speaker 5>Well, Nathan, President Trump's tariffs against Canada and Mexico may

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<v Speaker 5>result in consumers paying more for cars, and we get

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<v Speaker 5>that angle up the tariff story with Bloomberg's John Tucker

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<v Speaker 5>and John how much are we talking about here?

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<v Speaker 8>Well, Karen Research from automotive consultant Alex Partners says the

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<v Speaker 8>tariffs will add sixty billion dollars in cost to the

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<v Speaker 8>auto industry, a lot of which likely to be passed

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<v Speaker 8>on to consumers. Wolf Research analysts so the average price

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<v Speaker 8>of a new car may climb by about three thousand dollars.

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<v Speaker 8>The duties would immediately hit almost a quarter of the

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<v Speaker 8>sixteen million vehicles that are sold in the US every year,

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<v Speaker 8>as well as the parts and components that go into them. Now,

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<v Speaker 8>car components can make their way back and forth across

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<v Speaker 8>the US borders as many as eight times during the

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<v Speaker 8>production of the car. Automakers in Mexico they've been preparing

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<v Speaker 8>by preemptively importing both more components and vehicles that could

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<v Speaker 8>ease the blow in the first few weeks. But Flavio Volpi,

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<v Speaker 8>he's the president of Canada's Automotive Parts Manufacturers Association, predicts

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<v Speaker 8>his words now the auto sector is going to shut

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<v Speaker 8>down within a week. This morning, shares of GM down

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<v Speaker 8>seven percent, Stalantes is off almost six percent, and Ford

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<v Speaker 8>is down four percent. John Tucker Bloomberg Radio.

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<v Speaker 1>Coast to Coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 1>and around the world on Bloomberg dot Com and the

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<v Speaker 1>Bloomberg Business app. This is Bloomberg Dabreak.

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<v Speaker 2>Good morning, I'm Nathan Hager. President Donald Trump's promise of

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<v Speaker 2>tariffs on America's closest trading partners is rippling through markets.

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<v Speaker 2>After announcing twenty five percent duties on Canada and Mexico

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<v Speaker 2>and ten percent on China, the President says the European

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<v Speaker 2>Union is next.

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<v Speaker 3>They don't take our cars, they don't take our farm products,

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<v Speaker 3>they take almost nothing. Can we take everything?

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<v Speaker 5>From?

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<v Speaker 2>The President spoke to reporters outside Washington last night. Joining

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<v Speaker 2>us this morning from the nation's capital, Terry Haynes, the

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<v Speaker 2>founder of Pangaea Policy. As we watch stocks sell off

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<v Speaker 2>and the dollar rally this morning, Terry, Should the market

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<v Speaker 2>have seen this coming?

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<v Speaker 7>Good morning, Hi, Good morning, Nathan, And yes, I think

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<v Speaker 7>they should have. Markets have spent the last few months

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<v Speaker 7>talking themselves into a gradualistory even you know, this isn't happening.

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<v Speaker 7>It's all negotiation stance, and yes it is negotiation, but

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<v Speaker 7>it's negotiation based not from a trade war perspective, but

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<v Speaker 7>I think from an overall conflict perspective, a broader geopolitical context,

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<v Speaker 7>among others.

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<v Speaker 2>So what is the chance, then, Terry, that the president

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<v Speaker 2>that it actually does follow through on these He announced

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<v Speaker 2>they're going to kick in just after midnight tonight. At

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<v Speaker 2>the same time he's saying that he will have discussions

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<v Speaker 2>with Canada and Mexico today.

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<v Speaker 7>I think the markets should assume that some tariffs are coming.

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<v Speaker 7>I think the size and shape are still very much

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<v Speaker 7>up in the air, and markets are going to have

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<v Speaker 7>to get used to volatility here. Frankly, in the realm

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<v Speaker 7>of political decision making. You know, my instinct, and it

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<v Speaker 7>is only instinct, is that it's not at all beyond

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<v Speaker 7>the question that the tariffs go in as announced. It's

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<v Speaker 7>also not beyond the question that they go in with

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<v Speaker 7>some lowered modifications. You can look One way you can

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<v Speaker 7>look at this is Trump testing the markets on reaction,

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<v Speaker 7>and he's also testing politically the reaction of our border

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<v Speaker 7>partners to do specific things to actually improve the border

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<v Speaker 7>and stop the flow of fentanyl.

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<v Speaker 2>Is this a test on fellow Republicans as well?

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<v Speaker 7>It is to some extent, yes, but I think it's

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<v Speaker 7>in so far they've been supportive. But what you got

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<v Speaker 7>to remember over the last decade, and it's been a

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<v Speaker 7>decade since since tariff policy became part of geopolitical policy

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<v Speaker 7>in the United States, is that Congress has has supported

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<v Speaker 7>the means in which the how Trump imposes these tariffs,

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<v Speaker 7>whether it was Trump won, whether it was Biden when

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<v Speaker 7>then now whether it's Trump too. You know, Congress supports

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<v Speaker 7>the how. There will be some dissent on the when

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<v Speaker 7>or why. That's rooted as much in the partisan politics

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<v Speaker 7>as anything else. But there's not going to be any

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<v Speaker 7>serious move to try to stop Trump from doing any

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<v Speaker 7>of these things.

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<v Speaker 2>Do you think there are any further concessions that Canada

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<v Speaker 2>or Mexico could make after the concessions that they've say

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<v Speaker 2>that they have made even before the President announced these duties,

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<v Speaker 2>over the weekend.

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<v Speaker 7>My unsolicited advice to those countries is very simple is

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<v Speaker 7>that as you get as specific if they want to

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<v Speaker 7>stop the tariffs, get as specific, and to talk about

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<v Speaker 7>how well and how much you can partner as possible.

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<v Speaker 7>If Trump realizes, I think, unlike the first that he's

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<v Speaker 7>going to need support from his border partners and very

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<v Speaker 7>much wants those things.

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<v Speaker 2>And in just thirty seconds, is this about partnerships? Is

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<v Speaker 2>this about the fentanyl and immigration flows or is this

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<v Speaker 2>more about the trade deficits.

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<v Speaker 7>I think it's about both. But at root, you know,

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<v Speaker 7>Trump always says that his top priority is securing the border,

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<v Speaker 7>and I think you have to take the border strategy

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<v Speaker 7>both seriously and literally as part of the broader geopolitical

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<v Speaker 7>strategy and the broader economic strategy which are out there,

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<v Speaker 7>which exists, even if they're being ignored by markets.

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<v Speaker 5>Today. This is Bloombery Daybreak, your morning podcast on the

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