Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
Speaker 2: are the stories we're following today.
Speaker 3: Karen, the Global Sella follows the announcement that Wall Street
Speaker 3: and the world had been waiting for four weeks. President
Speaker 3: Trump is raising tariffs around the world on a day
Speaker 3: he is dubbed Liberation Day for America.
Speaker 4: April second, twenty twenty five will forever be remembered as
Speaker 4: today American industry was reborn, the day America's destiny was reclaimed,
Speaker 4: and the day that we began to make America wealthy again.
Speaker 3: In remarks from the White House Rose Garden heard here
Speaker 3: on Bloomberg, the President announced at least a ten percent
Speaker 3: tariff on all exporters to the US. About sixty nations
Speaker 3: will see even higher duties. The biggest target of all
Speaker 3: is China. The President says, Beijing charges the US an
Speaker 3: effective sixty seven percent rate.
Speaker 4: So sixty seven percent, so we're going to be charging
Speaker 4: a discounted reciprocal tariff of thirty four percent.
Speaker 1: I think.
Speaker 4: In other words, they charge us we judge m chuge mls.
Speaker 4: So how could anybody be upset?
Speaker 3: President Trump is also slapping higher duties on the European Union, Japan, Vietnam,
Speaker 3: and more. All together, Bloomberg Economics estimates the effective tax
Speaker 3: rate on more than three trillion dollars in imported goods
Speaker 3: could rise to about twenty three percent. That is the
Speaker 3: highest in more than a century.
Speaker 2: Well iven, President Trump's tariffs have drawn a sharp reaction
Speaker 2: on Capitol Hill. House Minority Leader Hankem Jeffries spoke out
Speaker 2: even before the president's announcement, this is not liberation Day,
Speaker 2: It's recession day.
Speaker 5: In the United States of America.
Speaker 6: That's what the Trump tariffs are going to do, crash
Speaker 6: the economy.
Speaker 2: How's Minority Leader Hankem Jeffries. Republicans are mostly standing behind
Speaker 2: the president. Ashley Davis is a GEOP. He's strategist and
Speaker 2: partner at S three Group.
Speaker 7: He's ran on this for the last four years.
Speaker 2: Really is that he needs to make sure that the
Speaker 2: other countries are paying what they deserve Republicans strategist Ashley Davis.
Speaker 2: But not every Republican is on board. Kentucky Senator Ran
Speaker 2: Paul says tariffs are just another tax on Americans.
Speaker 4: Republicans used to be in Conservatives and particularly used to
Speaker 4: be against new taxes. I don't think it's going to
Speaker 4: be good for us politically, but it's not good for
Speaker 4: the country either.
Speaker 2: Senator Ran Paul and three other Republicans joined with Democrats
Speaker 2: on a bill opposing President Trump's tariffs on Canada. The
Speaker 2: bill is not likely to pass in the House.
Speaker 3: Well, Karen, President Trump's historic action risks inducing a worldwide
Speaker 3: trade war marked by tit for tax strikes. We spoke
Speaker 3: with Treasury Secretary Scott Besson, who urged other countries not
Speaker 3: to fight back.
Speaker 6: I would advise none of the countries to panic. I
Speaker 6: wouldn't try to retaliate because as long as you don't retaliate,
Speaker 6: this is the high end of the number, and I
Speaker 6: think there could have certainty that this is the number
Speaker 6: barring retaliation.
Speaker 3: Treasury Secretary Scott Besson went on to leave the door
Speaker 3: open to negotiations, telling Bloomberg quote, We'll see with regard
Speaker 3: to further talks. You can hear the full interview with
Speaker 3: Scott Besant on the Bloomberg Talks podcast and watch it
Speaker 3: on the Bloomberg podcast page on YouTube.
Speaker 2: So, Nathan, let's get the reaction from other countries around
Speaker 2: the world. Our first stop brings US to Asia, where
Speaker 2: China has been the biggest target of Trump tariffs, and
Speaker 2: Bloomberg deal Desis joins US from Hong Kong with more Jill.
Speaker 7: Yes, well, I think it's a lot to really digest
Speaker 7: here out of Asia. On the one hand, you do
Speaker 7: see those really high tariffs on China. This thirty four
Speaker 7: percent increase that Trump is now putting on China. If
Speaker 7: you were to take that into tality with all of
Speaker 7: the other levees that Trump has put on China that
Speaker 7: the US has put on China over the last several
Speaker 7: months years, you're looking at somewhere in the neighborhood of
Speaker 7: the average US tariff on Chinese goods being at least
Speaker 7: sixty five percent according to some economists. Bloomberg Economics estimates
Speaker 7: that as a result, that could lead to a one
Speaker 7: to two percentage point loss to growth in China. So
Speaker 7: certainly a big metric there that you're really looking at.
Speaker 7: Of course, we haven't really heard from China yet what
Speaker 7: their definitive actions will be to counter these tariffs. The
Speaker 7: Ministry of Foreign Affairs has said that there are going
Speaker 7: to be measures coming, we're just waiting to see them.
Speaker 7: But I would draw your attention, Karen too, elsewhere in
Speaker 7: Asia where you're also seeing incredibly high rates and likely
Speaker 7: even you know, higher economic shocks. Vietnam, for example, they
Speaker 7: were hit with a forty six percent tariff in this
Speaker 7: latest round. I mean, this is a country that you
Speaker 7: know is incredibly export dependent. They're among the world's most
Speaker 7: trade dependent nations. Or exports were equivalent to nearly ninety
Speaker 7: percent of economic output. I think that's why you're seeing
Speaker 7: such a big market reaction in that particular country today. So,
Speaker 7: you know, just a couple of examples there, but obviously
Speaker 7: all across Asia, we're seeing a lot of different economic shocks,
Speaker 7: just as nations respond to these tariffs that just been announced.
Speaker 3: Jill desis with the reaction from Hong Kong. Jill, thank you.
Speaker 3: Now let's head to Europe get the reaction there. Bloomberg Daybreak,
Speaker 3: you're a banker. Caroline Hepger is in London with the latest.
Speaker 3: Good morning, Caroline, good morning, Nathan and Karen.
Speaker 8: President Trump called the EU pathetic again and that the
Speaker 8: block rips off the US, as he imposed twenty percent
Speaker 8: tariffs on EU goods exported to America. The EU argues
Speaker 8: that America exports plenty of its services to the block
Speaker 8: and that it is the biggest single market in the
Speaker 8: world now. EU trade ministers are due to meet on
Speaker 8: Monday to discuss their response. Meanwhile, in the early hours
Speaker 8: this morning, Commissioned President as to Leavondeline warned that US
Speaker 8: actions would deal a blow to the global economy, and
Speaker 8: she urged further negotiations.
Speaker 9: We have always been ready to negotiate with the United
Speaker 9: States to remove the remaining barriers to transatlantic trade. At
Speaker 9: the same time, we are prepared to respond. We are
Speaker 9: already finalizing the first package of countermeasures in response to
Speaker 9: tariff's on steel, and we're now preparing for further countermeasures
Speaker 9: to protect our interests and our businesses.
Speaker 8: If negotiations fails, Vonderline speaking there the tariffs could wipe
Speaker 8: out the growth forecast by the ECB for this year
Speaker 8: and in twenty twenty six. Markets now see another rate
Speaker 8: cut in April as likely. Bloomberg Economics sees the tariffs
Speaker 8: cutting EU goods exports to the US by half in
Speaker 8: the medium term. By comparison, here in the UK, we
Speaker 8: were dealt with a bit more leniently, a ten percent tariff.
Speaker 8: Some including business lobby see it as a benefit from
Speaker 8: Prime Minister Keir Starmer's pragmatic approach to the White House.
Speaker 8: The UK Trade Secretary Jonathan Reynolds has told Bloomberg just
Speaker 8: this morning that Britain is still confident that tariffs will
Speaker 8: come off, and yet the US is inflicting pain on
Speaker 8: some of its closest allies. All told, it's more than
Speaker 8: just an economic shock.
Speaker 2: All right, Caroline, thank you well early Trump to targets
Speaker 2: hitded On in Mexico escaped the new round of tariff announcements.
Speaker 2: We spoke with Ontario Premier Doug Ford.
Speaker 1: I would highly recommend to the Prime Minister not the
Speaker 1: retaliate and let's carry on a strong relationship. Let's build
Speaker 1: the aim can fortress American Canadian fortress around both countries
Speaker 1: and be the wealthiestmans, prosperous, safest two countries in the world.
Speaker 2: Ontario Premier Doug Ford, speaking of the Bloomberg's Balance of power.
Speaker 2: While no new tariffs were announced to other levies Trump
Speaker 2: has already imposed on Canadian and Mexican goods remain intact.
Speaker 3: And Karen Well stocks are selling off around the world.
Speaker 3: The US has been the hardest hit so far. Let's
Speaker 3: continue our coverage now with Bloomberg's John Tucker.
Speaker 10: John, all right, Nathan, Let's do the biggest losers in
Speaker 10: the US. These are the companies most exposed in that
Speaker 10: source a lot of their products from Asia, such as
Speaker 10: Apple and some of its magnificent seven cohorts of the
Speaker 10: new tariffs will reach thirty four percent for China. Apple
Speaker 10: still produces the mudjority of its US OL devices in
Speaker 10: Chinese factories. India, where Apple's increasingly building iPhones and air pods,
Speaker 10: that's getting a twenty six percent TEARFF. And then there's Vietnam,
Speaker 10: where the company now makes air pods, iPads, Apple watches,
Speaker 10: and max that'll be hit with a forty six percent tax.
Speaker 11: Now.
Speaker 10: Apple shares this morning in the pre market down close
Speaker 10: to seven percent. Then there's in Vidia. In Vidia the
Speaker 10: most actively traded pre market. It relies on China for
Speaker 10: AI Chip sales of those shares right now down three
Speaker 10: point three percent. Let's move on to the world's largest
Speaker 10: footwear and apparel companies also facing a shock to their
Speaker 10: supply chains. Nike makes many of its sneakers in Vietnam,
Speaker 10: and Nike shares pre market they are down eight point
Speaker 10: four percent. Lululemon Athletico, which makes forty percent of its
Speaker 10: products in Vietnam seventeen percent in Cambodia, tumbled almost ten
Speaker 10: percent in late trading. Shares of Abercrombie and Fitch, they
Speaker 10: get thirty five percent of their merchandise from Vietnam A
Speaker 10: fell seven point seven percent. And then Gap, which buys
Speaker 10: twenty seven percent of its goods from Vietnamese factories at
Speaker 10: nineteen percent from Indonesia. That's slid about eleven percent. You
Speaker 10: know you yor income, John Tucker, Bloomberg Radio.
Speaker 2: All right, John, thank you well. Shortly after midnight, US
Speaker 2: auto import tariffs went into effect. Meanwhile, one industry was
Speaker 2: spared for now, and Bloomberg Lisa Matteo joins us with
Speaker 2: the very latest Lisa, Hey there, Karen.
Speaker 12: So let's start with the most recent chain, the twenty
Speaker 12: five percent tariff on US auto imports. Now, it's expected
Speaker 12: to increase costs and disrupt industry supply chains. But what's
Speaker 12: more certain auto parts will also be hit with a
Speaker 12: similar level no later than May third. And this morning
Speaker 12: you already have Volkswagen already announcing it plans to add
Speaker 12: import fees to the sticker prices of its vehicles that
Speaker 12: are shipped into the US. Now, Volkswagen shares down about
Speaker 12: half a percent. In Germany, you have Ford off about
Speaker 12: half a percent, General Motors down one percent, Tesla is
Speaker 12: lower by three percent. Chrysler Parents still land. It was
Speaker 12: down nearly two percent yesterday. This morning it's up about
Speaker 12: three tens of percent before the belt. The only good
Speaker 12: news is at imported cards and parts, will they escape
Speaker 12: the so called reciprocal tariffs? And speaking of being spared,
Speaker 12: you have the pharmaceutical sector and won this reprieve from
Speaker 12: sweeping tariffs. But here's the thing, it may not last long.
Speaker 12: Sources saying the White House plans to launch an investigation
Speaker 12: into the drug industry other sectors, and that includes semiconductors
Speaker 12: and potentially critical minerals, and that could lead to tariffs
Speaker 12: under the Trade Expansion Act. Now, if we take a
Speaker 12: look at chairs A Pfizer, they're down about two tens
Speaker 12: of percent. Eli Lilly off about two percent. Lisa Matteo, Bloomberg.
Speaker 3: Radio, Lisa, thank you all. In all, it is an
Speaker 3: aggressive suite of tariffs from President Trump, and it will
Speaker 3: significantly complicate the federal reserves job as it struggles to
Speaker 3: question inflation and avoid an economic downturn. This morning, Morgan
Speaker 3: Stanley pushed back. It's called for the next FED rate
Speaker 3: cut to next year. The firm's analysts cite inflation risks
Speaker 3: arising from tariffs. FED Governor Adriana Kougler says it's appropriate
Speaker 3: to keep in restraints unchanged until upside risks to inflation abate.
Speaker 13: I will support maintaining the current policy BRAID for as
Speaker 13: long as this upside race to inflation continue, while economic
Speaker 13: activity unemployment remain the stay.
Speaker 3: No, it was FED Governor Adriana Kugler. The Fed's next
Speaker 3: meeting May seventh.
Speaker 5: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
Speaker 5: and around the world on Bloomberg dot Com and the
Speaker 5: Bloomberg Business app. This is Bloomberg Daybreak.
Speaker 2: Good morning. I'm Karen Moscow alongside Nathan Hager, and we
Speaker 2: continue our coverage on tariffs with a conversation with US
Speaker 2: Treasury Secretary Scott Messant. He spoke with the Bloomberg Televisions
Speaker 2: and Marie hor Dern shortly after the tariffs were announced,
Speaker 2: urging other economies against taking retaliatory steps against the new
Speaker 2: set of America's retaliatory tariffs. Let's listen in.
Speaker 6: What I would say and Marie, I would advise none
Speaker 6: of the countries to panic. I wouldn't try to retaliate
Speaker 6: because as long as you don't retaliate, this is the
Speaker 6: high end of the number, and I think the market
Speaker 6: could have certainty that this is the number barring retaliation.
Speaker 6: So we've got a ceiling and then we can see
Speaker 6: if there's a different floor.
Speaker 14: So you sound like you're ready for a negotiation. A
Speaker 14: number of these partners. Has the European Union, has China?
Speaker 14: Has India? Have these countries reached out?
Speaker 6: Well, they've all reached out, but it's going to be
Speaker 6: up to President Trump to see what he wants to do.
Speaker 6: I think the mindset might be to let things settle
Speaker 6: for a while. Their terrifts or non tariff barriers have
Speaker 6: been on a long time, so we'll see where it
Speaker 6: goes from here.
Speaker 14: When it comes to China, they have a much higher
Speaker 14: rate on this list. On top of that, there's still
Speaker 14: that twenty percent fentanyl tariff rate. Is all of this
Speaker 14: coming together to be more than a fifty percent tariff
Speaker 14: rate for Beijing?
Speaker 6: Well, yes, I think it is, and I think it's
Speaker 6: a combination of things. And you know again that I
Speaker 6: think China said today that solving the fentanyl crisis depends
Speaker 6: on taking off the fentanyl tariffs, and I'm pretty sure
Speaker 6: that's not the way the sequencing is going to work.
Speaker 6: They're exporting the precursor chemicals, and every every day, every week,
Speaker 6: every month, Americans are dying and it's going to have
Speaker 6: to stop.
Speaker 14: When it comes to places like China, the President has
Speaker 14: mentioned he's willing to even look at things like TikTok
Speaker 14: to potentially do a negotiation with them. When it comes
Speaker 14: to tariffs, I'm sure you're looking at things like the
Speaker 14: u Wan. What's on the table when it comes to
Speaker 14: this trade realignment between Beijing and Washington.
Speaker 6: Well, we have, we haven't started anything yet. We've been
Speaker 6: busy with the with the tariffs. I've been busy, as
Speaker 6: we talked about it earlier. The tax bills going very well.
Speaker 6: So I think that we will move toward the bilateral
Speaker 6: relationship with China now that we've done the multilateral tariffs.
Speaker 14: Plan for conversations or a trip to Beijing. Nothing eminent
Speaker 14: when it comes to this negotiation. April ninth, these tariffs
Speaker 14: come in place, do you plan on having negotiations before
Speaker 14: that date?
Speaker 6: Again, I'm not part of the negotiation, so you know,
Speaker 6: we'll see. I am sure that there's going to be
Speaker 6: a lot of calls. I just don't know if they're
Speaker 6: going to be negotiations.
Speaker 2: And that was US Treasury Secretary's god Besson speaking with
Speaker 2: the Bloomberg TVs and Marie hord Durn after President Trump's
Speaker 2: tariff announcement. You can hear the full interview on the
Speaker 2: Bloomberg Talks podcast page and watch it on the Bloomberg
Speaker 2: podcast page on YouTube.
Speaker 3: Nathan Karen, we continue our coverage of these tariffs. We
Speaker 3: are joined now by Bloomberg News Global Trades are Brendan
Speaker 3: Murray and Terry Haynes, the founder of Pangaea Policy, for
Speaker 3: a roundtable this morning after the announcement. Great to speak
Speaker 3: with both of you, and I'll start with you, Brendan,
Speaker 3: because even as Treasury Secretary Scott Bessett is framing this
Speaker 3: as a negotiation, this seems like a really huge start
Speaker 3: to what could be coming.
Speaker 5: Good morning, Yeah, exactly. He said, you know, let's let
Speaker 5: this paraphrasing, he said, let's let this settle in for
Speaker 5: a while, so that you know, that doesn't seem like
Speaker 5: you know, a window for negotiating over the next four
Speaker 5: or five days. So these tariffs are going to take
Speaker 5: effect by early next week and countries are going to
Speaker 5: be scrambling to figure out do we want to retaliate,
Speaker 5: ratchet up the ratchet up the pressure, or do we
Speaker 5: want to you know, take a you know, a more
Speaker 5: negotiating posture and try to work this out. Either way,
Speaker 5: marcuts don't like it, and economists are marking down their
Speaker 5: outlook for growth and marking up their outlook for inflation.
Speaker 5: And you know the aftermath of it here even though
Speaker 5: President Trump said this is simple, reciprocity is about as
Speaker 5: simple as it gets, this still creates a lot of confusion.
Speaker 3: Terry, How does the negotiation go when the president is
Speaker 3: starting with this onslaught.
Speaker 11: Warning, Nathan, you know, the negotiations in a lot of
Speaker 11: ways have already started. My understanding in a lot of
Speaker 11: places is that Secretary of Commerce is the Lutnix team
Speaker 11: had already been giving wish lists, both tariffs and barriers
Speaker 11: to different countries who were already kind of parsing that
Speaker 11: and trying to figure out how they might respond to it,
Speaker 11: and a lot of countries, I mean major countries, both
Speaker 11: allies and non aligned, are going to have to frankly
Speaker 11: work through with their own industries there, whether it be
Speaker 11: agriculture or machine industries, to figure out exactly what they
Speaker 11: want to do and how they want to do it. So,
Speaker 11: you know, I think it's it's correct to say this
Speaker 11: is not going to magically disappear or be mitigated in
Speaker 11: the next few days. But all countries have had an
Speaker 11: advanced warning of what the United States might want and
Speaker 11: what the kind of the parameters for negotiations will be.
Speaker 11: So you know the number one, there's that number two.
Speaker 11: You've seen encouraging responses by a lot of countries. It
Speaker 11: was encouraged. I mean Canada of course got singled out
Speaker 11: for special treatment, but you had Premiere Ford on your
Speaker 11: air last night and he was urging Carneie not to
Speaker 11: retaliate it all. So you know, you'll have a lot
Speaker 11: of those kind of responses.
Speaker 3: Notwithstanding Canada and Mexico being spared at least this round, Brendan,
Speaker 3: just about every other country in the world, even some
Speaker 3: very very small ones, are being targeted in this long
Speaker 3: list that President Trump showed at the Rose Garden last night.
Speaker 3: What could the potential impact be for this kind of
Speaker 3: country by country tariff announcement.
Speaker 5: Well, one of the hardest hit regions was South Asia.
Speaker 5: Countries like Vietnam, Malaysia, Cambodia. These are places where a
Speaker 5: lot of the sort of lower skilled manufacturing has migrated
Speaker 5: from China over the past several years. And you know
Speaker 5: those are places is where you know, close clothes and
Speaker 5: shoes are made. And so you know, there are stories
Speaker 5: that we're reporting today about how you know, Nike, you know,
Speaker 5: you know, Nike tennis shoes and those kinds of things
Speaker 5: that are made in South Asia, you know are going
Speaker 5: to be more expensive. The other the other issue is
Speaker 5: you know electronics, Apple is starting to produce a lot
Speaker 5: more of their phones in India. India you know, got
Speaker 5: hit with a tariff in the twenty five percent range,
Speaker 5: I think, and so you know, if these can't be
Speaker 5: resolved by negotiation, you know, anytime soon, then you know,
Speaker 5: consumer prices could conceivably go up. Interestingly, Switzerland was singled out,
Speaker 5: got a bigger got a bigger tariff level than the
Speaker 5: rest of the than than the European Union around it.
Speaker 5: So you know, Rolex watches come next week are going
Speaker 5: to be about thirty one percent more expensive than they
Speaker 5: otherwise would be.
Speaker 3: Terry, we haven't heard much Republican reaction on Capitol Hill
Speaker 3: besides the four Republicans who voted with Democrats against Canada tariffs.
Speaker 3: What do you think the Republican reaction is going to
Speaker 3: be as these tariffs take a fact.
Speaker 11: I think there'll be two things that happened, David, One
Speaker 11: above board, one below board. The above board will be
Speaker 11: that there will be some concerns from Republicans from based
Speaker 11: on the situation in their own states, about making sure
Speaker 11: that they push Trump to resolve these issues lower tariffs,
Speaker 11: engage in the negotiations, do whatever they can, and frankly,
Speaker 11: you know, work with the other the other country as well.
Speaker 11: That's number one. Number two. I think another impact here
Speaker 11: is that it lights an additional hotfoot under the administration's
Speaker 11: broader economic agenda. And you can hear this from a
Speaker 11: lot of senators. You can also hear from Secretary Vessant,
Speaker 11: who continues to push the idea that the tax cuts
Speaker 11: may show up as soon as July or August or
Speaker 11: September something like that. Now I've got it at eighty
Speaker 11: percent by the end of the calendar year. But there's
Speaker 11: an opportunity should everyone wish on the Republican side to
Speaker 11: move these things along faster, and Besson will also be
Speaker 11: focusing on that. He has said that he's going to
Speaker 11: spend a lot of time pushing exactly that that agenda.
Speaker 11: Think of Bess and broadly, as in twenty twenty five,
Speaker 11: as Gary Cohne was in twenty seventeen, the guy who's
Speaker 11: constantly up there goosing things along, trying to make it
Speaker 11: go as fast as he can.
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