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

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Speaker 2: This is the Bloomberg Day Bake podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Monday, the

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Speaker 2: tenth of March in London. I'm Caroline Hepke and.

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Speaker 3: I'm Stephen Carroll. Coming up today.

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Speaker 4: Donald Trump deflects concerns about recession risks as his on again,

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Speaker 4: off again tariff policies rattle markets.

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Speaker 2: Mark Corney says Canadian tariffs will stay until the US

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Speaker 2: shows respect as he wins the race to lead the country.

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Speaker 4: Plus an identity crisis eighty years in the making, we

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Speaker 4: have a special report on Germany's struggles to jumpstart growth

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Speaker 4: and restore competitiveness as the political center shrinks.

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

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Speaker 4: President Donald Trump has sought to sidestep growing concerns about

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Speaker 4: the risk of a US recession as his policies continue

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Speaker 4: to sap market confidence that late US to inside into

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Speaker 4: how the US leader views the economy comes as his

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Speaker 4: team increasingly pivots to a no pain, no gain message,

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Speaker 4: with Treasury Secretary Scott best And claiming America needed some

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Speaker 4: detox to wean itself off dependence on public spending. Asked

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Speaker 4: on Fox News' Sunday Morning Futures whether he's expecting a

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Speaker 4: recession this year, President Trump said.

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Speaker 5: This, I hate to predict things like that. There is

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Speaker 5: a period of transition because what we're doing is very big.

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Speaker 5: We're bringing wealth back to America. That's a big thing,

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Speaker 5: and there are always periods of.

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Speaker 3: It takes a little time.

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Speaker 5: It takes a little time.

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Speaker 4: Trump's latest Fox News comments come after fed Church own

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Speaker 4: Powell on Friday acknowledged increase increased uncertainty in the US outlook,

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Speaker 4: while also saying the economy remains in a good place.

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Speaker 4: You know, while the S and P five hundred index

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Speaker 4: has wiped out all of its gains since Trump was

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Speaker 4: re elected president.

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Speaker 2: Concerns about the US economy and the impact of a

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Speaker 2: growing global trade war comes as Chinese tariffs on a

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Speaker 2: slew of American farm products officially came into effect. China

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Speaker 2: remains a key export market for largely Republican states in

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Speaker 2: the Midwest farm belt, and the tariffs range from ten

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Speaker 2: to fifteen percent on a long list of items including grains, proteins, cotton,

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Speaker 2: and fresh produce. In a separate move, Beijing also imposed

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Speaker 2: with tali a toe tariffs on a range of Canadian

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Speaker 2: agricultural goods that will come into effect on the twentieth

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Speaker 2: of March. The move comes after Canada imposed tariffs last year,

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Speaker 2: including a one hundred percent levee on electric vehicles and

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Speaker 2: twenty five percent tariffs on steel and aluminium from China.

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Speaker 4: The tariffs will be another headache from Mark Karney, as

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Speaker 4: he won the race to become Canada's next prime minister

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Speaker 4: and pledged to keep his government's retaliatory tariffs on US goods.

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Speaker 4: The former Bank of Canada and Bank of England governor

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Speaker 4: will take over from Justin Trudeau after winning the contest

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Speaker 4: to lead the country's Liberal party with nearly eighty six

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Speaker 4: percent of the vote. The victory comes as Trump's decision

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Speaker 4: to impose US tariffs on Canada has been massed with

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Speaker 4: patriotic fury and widespread boycotts of American goods. In his

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Speaker 4: acceptance speech, Carney said he would protect the country's economy

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Speaker 4: and sovereignty.

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Speaker 6: The Canadian government has rightly retaliated and is rightly retaliating

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Speaker 6: with our own tariffs that will have maximum impact in

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Speaker 6: the United States and minimum impact here in Canada. My

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Speaker 6: government will keep our tariffs on until the Americans show

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Speaker 6: us respect.

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Speaker 4: The transfer of power from Carney to Carney from Justin

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Speaker 4: Trudeau is expected to take place within days, and it's

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Speaker 4: possible he will call a national election soon after well.

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Speaker 2: President Trump says that he has largely lifted an intelligence

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Speaker 2: sharing band that he imposed on Ukraine after his public

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Speaker 2: row with President Vlodomisolinsky. The apparent reversal comes as US

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Speaker 2: in Ukrainian officials prepare to meet on Tuesday in Saudi

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Speaker 2: Arabia in a bid to restore ties, including the possible

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Speaker 2: resurrection of a critical minerals deal. Speaking to reporters, Trump

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Speaker 2: said that he expects Zelinsky to make a natural resources

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Speaker 2: deal with the US.

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Speaker 5: I think they will sign the minerals deal, but we

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Speaker 5: want I want them.

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Speaker 7: To want peace.

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Speaker 2: Trump's administration argues that the proposed deal on critical minerals

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Speaker 2: represents a US economic commitment to Ukraine's security, as Trump

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Speaker 2: presses Zolinski to agree to a cease far with Russia.

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Speaker 2: The comments come as one of Trump's closest confidants, Elon Musk,

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Speaker 2: called for a US exit from NATO, posting online that quote,

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Speaker 2: it doesn't make sense for America to pay for the

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Speaker 2: defense of Europe.

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Speaker 4: UK pay growth is that a four year low ahead

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Speaker 4: of the government's tax on employers coming into effect. The

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Speaker 4: Recruitment and Employment Confederation survey shows starting pay growth as

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Speaker 4: deteriorated to levels last scene during the COVID pandemic.

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Speaker 3: Make Bloomberg Change Wilcock has.

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Speaker 8: More companies warned higher taxes would feed through into lower wages.

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Speaker 8: The RAC's data suggests that's taking place. They also reported

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Speaker 8: decline in job postings and hiring activity, and with Britain's

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Speaker 8: official economic statistics under review, the Recruiting Lobby's survey is

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Speaker 8: one of several being monitored by the Bank of England

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Speaker 8: for signs of underlying cost pressures in London. James Wilcock

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Speaker 8: Bloomberg Radio.

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Speaker 2: UK civil servants could be asked to quit with pay

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Speaker 2: rise is capped for senior officials if they failed to

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Speaker 2: meet performance targets. It's part of the government's plan to

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Speaker 2: fundamentally reshape Whitehall using artificial intelligence to make it more productive.

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Speaker 2: Cabinet Office Minister Pat McFadden told Sky Newses Trevor Phillips

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Speaker 2: the plans may involve redundancies.

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Speaker 9: I think boris Johnson said he get rid of ninety

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Speaker 9: one thousand. A later Conservative governments at sixty six thousand.

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Speaker 9: What happened after that hiring when the state has to reform, No,

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Speaker 9: some of this is about a number of central civil servants.

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Speaker 9: What I'd like to see, So.

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Speaker 3: There could be a reduction in the headcount.

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Speaker 2: There could be Pat McFadden there. Also he signaled plans

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Speaker 2: to reform the UK's welfare system to get more people

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Speaker 2: back to work. In Britain, there were more than half

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Speaker 2: a million civil servants at the end of last year,

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Speaker 2: a third more than in twenty sixteen.

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Speaker 4: Those are top stories on the markets. We saw equities

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Speaker 4: drop and treasuries rise on growth concerns in the United States,

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Speaker 4: so a risk offs start to Monday's trade. SMP five

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Speaker 4: hundred futures are down by half of one percent after

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Speaker 4: dropping by over three percent last week. Treasuries have been rallying.

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Speaker 4: The two year is two basis points lower in yield

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Speaker 4: this morning. The US dollar slightly stronger, crude oil falling

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Speaker 4: again today, brankcruids down by half of one percent after

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Speaker 4: Donald Trump warn again on that transition period ahead.

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Speaker 3: In Asia.

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Speaker 4: We're seeing the hangs sang down by one point nine percent,

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Speaker 4: the Tech index in Hong Kong down by two point

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Speaker 4: seven percent.

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Speaker 2: Now, in a moment, we'll bring you more on Donald

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Speaker 2: Trump and what he had to say about the state

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Speaker 2: of the US economy. Plus can Germany's next government really

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Speaker 2: reverse its economic decline the decline that we've seen in

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Speaker 2: recent years. We'll get to those though. There was another

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Speaker 2: story that caught our eye this morning, a really interesting

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Speaker 2: deep dive.

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Speaker 4: Yeah, our Colie Patrick Gillespian Buenos Aires went to meet

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Speaker 4: the man who made the custom chainsaw that Haveavimla gave

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Speaker 4: to Elon Musk, of course, used to symbolize as cast

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Speaker 4: cutting efforts. Youmlay is also used one of these as well,

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Speaker 4: or brandish one, I should say, rather than necessarily use it.

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Speaker 4: Mariano Detayer is the man who makes these chainsaws. He

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Speaker 4: does it in has one bedroom apartment and at Malay's request,

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Speaker 4: he's now working on one for Donald Trump. It's a

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Speaker 4: fascinating conversation and insight into the He describes himself as

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Speaker 4: an artist. Yes, the man who makes these changes.

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Speaker 2: Taking money either for the creation of these chainsaws, and

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Speaker 2: they have been you know, a hugely symbol haven't they

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Speaker 2: For what these both of these governments want to do.

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Speaker 7: Yeah.

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Speaker 4: Look, it's a really interesting I suppose insight into someone

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Speaker 4: who's now created a symbol that's become so important politically

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Speaker 4: detailed to say that he voted from LA and supports

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Speaker 4: his efforts to turn around Argentina's economy, but doesn't identify

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Speaker 4: himself as a libertarian or a parentist or any other

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Speaker 4: political banner. As well, each of the chainsaw's custom about

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Speaker 4: five hundred dollars in expenses that he tends to cover himself.

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Speaker 2: Yeah, but it was also fascinating that he said that

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Speaker 2: he wouldn't want the chainsaws to become a symbol of cuts,

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Speaker 2: of making people suffer, maybe lose their jobs or lose

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Speaker 2: their incomes or livelihoods. He says that he sort of

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Speaker 2: wants it to be a positive symbol for necessary reforms,

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Speaker 2: at least when he was talking about Argentina. But look

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Speaker 2: the sort of reporting that you can read about this

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Speaker 2: money on the Blueberg terminal and on our website.

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Speaker 3: Well that's bringing more.

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Speaker 4: Now on Donald Trump's latest comments on the US economy

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Speaker 4: after the market, jitters that we've seen a senior writers

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Speaker 4: or Bill Ferries joins us now for more. Donald Trump

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Speaker 4: talking now about a period of transition for the economy,

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Speaker 4: he wouldn't be drawn as we just heard on the

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Speaker 4: risk of a recession. Is this an admission from the

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Speaker 4: US president about the effects of his policies.

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Speaker 7: It definitely seems to be a shift in messaging from

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Speaker 7: the White House and basically in an acknowledgment that it's

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Speaker 7: not going to be super smooth sailing if they really

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Speaker 7: continue to go forward with these policies of putting tariffs

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Speaker 7: on trade partners but also putting them on, taking them off,

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Speaker 7: putting them back on again. The unpredictability has rattled markets

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Speaker 7: at this point, almost as much as the actual policies themselves.

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Speaker 7: So yeah, Donald Trump said he would hate to predict

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Speaker 7: things like a recession, but he said there's going to

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Speaker 7: be some transition. What we're doing is a big deal.

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Speaker 7: You heard his Treasury secretary saying that the US economy

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Speaker 7: needs to He's use the word detox from public spending.

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Speaker 7: So I think there's a realization there's going to be

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Speaker 7: a big impact. Donald Trump has always been someone who

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Speaker 7: looked at the stock market. I think he's also trying

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Speaker 7: to say maybe I'm not going to pay as much

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Speaker 7: attention to the stock market, although I think the market

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Speaker 7: maybe doesn't quite believe that yet.

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Speaker 2: In that Fox News interview, he also talked about Ukraine.

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Speaker 2: Are there signs of any compromise or any discussions with

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Speaker 2: President Zelenski?

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Speaker 7: Yeah, I mean, he seems to continue to think that

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Speaker 7: they're going to reach a deal. It could come as

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Speaker 7: soon as this week. We don't really know a lot

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Speaker 7: about the details of that agreement, that critical minerals agreement,

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Speaker 7: how much money might be raised, how it's going to

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Speaker 7: be governed in terms of the use of it. But

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Speaker 7: he has said that, you know, he said that he

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Speaker 7: thinks he seems to be acknowledging the walk back that

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Speaker 7: we've seen from Zelensky in terms of saying he wants

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Speaker 7: to have peace and work with the US, and Trump

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Speaker 7: seems to be open to that.

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Speaker 4: I mean, while Donald Trump's also having an effect on

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Speaker 4: policies outside of the UA, Yes, he or his policies

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Speaker 4: have been a central focus of Mark Carney's successful campaign.

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Speaker 4: He's now going to be Canada's next Prime minister. What

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Speaker 4: should we be expecting in terms of his approach to

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Speaker 4: the White House.

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Speaker 7: Well, Mark Carney is already pushing back if anyone thought

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Speaker 7: that he was going to fold under the tear of pressure.

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Speaker 7: He said that Canada's tariffs are going to stay in place.

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Speaker 7: The ones that are there will remain until the US

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Speaker 7: starts treating Canada with more respect. In terms of the

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Speaker 7: situation he's inheriting. This is a guy who was at

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Speaker 7: the Bank of England during Brexit. He was at the

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Speaker 7: Bank of Canada of course, during the global financial crisis.

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Speaker 7: So probably as strong a resume as you could hope

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Speaker 7: to have going into this very unpredictable situation with the US.

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Speaker 2: Yeah, Bill, thank you so much for being with us

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Speaker 2: this morning and for those explanations that latest them from

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Speaker 2: the Trump White House. I've senior editor Bill Ferries.

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Speaker 4: Now, Germany's Conservatives and Social Democrats are moving closer to

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Speaker 4: forming a coalition and anything. Over the weekend they deepen

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Speaker 4: talks over joining forces in a new government. They face

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Speaker 4: massive challenges though, to restart growth after two years of contraction.

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Speaker 4: They also have to boost defense spending and face the

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Speaker 4: risk of trade tars from Donald Trump joining us from

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Speaker 4: Berlin for Boris Bloomberg's Chris Reiser, who's written a book

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Speaker 4: with his colleague Will Wilks on the subject called Broken Republic,

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Speaker 4: The inside story of Germany's descent into crisis. Chris, great

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Speaker 4: to have you with us this morning. Can you bring

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Speaker 4: us up to date on the coalition talks? How close

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Speaker 4: are the parties to a deal?

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Speaker 1: Well, this weekend they moved to the second stage of talks,

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Speaker 1: which was sort of a formality really because it's the

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Speaker 1: only possible outcome for a centrist government between Friedrich Meritis

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Speaker 1: Conservatives and the Social Democrats. So on Saturday they moved

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Speaker 1: to They had an exploratory paper which you know was

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Speaker 1: largely criticized to be honest. And so the next stage

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Speaker 1: those going into really detailed talks and that's probably still

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Speaker 1: weeks away before an agreement comes about, and that's where

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Speaker 1: that's where the the tension really will will start.

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Speaker 2: But Friedrich Mertz is also indicated that he wants to

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Speaker 2: unleash a massive spending program for infrastructure and defense, abandon

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Speaker 2: years of austerity in Germany. Is this being seen as

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Speaker 2: the sort of turnaround that Germany needs?

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Speaker 1: Well, it's definitely a very critical time. I mean, Germany

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Speaker 1: has for years obviously underinvested in infrastructure and its defense,

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Speaker 1: like it's it's hardly invested in defense at least at

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Speaker 1: least not up to NATO standards, and so it needs money.

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Speaker 1: I mean, so that's definitely important. It's a step in

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Speaker 1: the right direction. It's a it's a question of of

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Speaker 1: then how this money is invested in, and there's a

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Speaker 1: lot of risk involved in that in that project because

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Speaker 1: in order to get this spending packaged through, he's using

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Speaker 1: the old government, so basically the government that has been

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Speaker 1: the parliament that has been voted out of office, and

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Speaker 1: he needs to get the Greens on board still and

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Speaker 1: it's a risky situation because if if, if this doesn't

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Speaker 1: work out, it will be used by the far right

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Speaker 1: and the fringe to rally, to rally, to gain more

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Speaker 1: support crisis U Konkler, in your book, Germany has been

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Speaker 1: in and out of crisis for the last twenty years.

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Speaker 3: What makes this period any difference.

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Speaker 1: I think there's there's a different quality to the crisis

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Speaker 1: that Germany faces right now. I mean, you just saw

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Speaker 1: that in the federal election a couple of weeks ago,

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Speaker 1: where seven parties were vying for seats in Parliament, only

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Speaker 1: five made it in. But the fact that seven parties

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Speaker 1: had a viable chance to get into government, which that

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Speaker 1: wasn't the case decades ago. There was always this like

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Speaker 1: political stability within Germany with like the two main parties,

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Speaker 1: the Social Democrats and the CDU dominating politics. That's no

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Speaker 1: longer the case. The SPD, the Social Democrats is in

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Speaker 1: third place, AfD is in second place. They doubled support.

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Speaker 1: So the political fragmentation that Germany faces is a risk

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Speaker 1: because when there's fragmentation in politics, then Germany needs coalition

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Speaker 1: governments in order to function. And so you have unstable

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Speaker 1: coalition governments, which we saw in the last government under Schultz,

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Speaker 1: which had three parties, and so the ability for politics

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Speaker 1: to act and to kind of rally the populace together,

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Speaker 1: it gets more and more difficult. I mean we're seeing

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Speaker 1: that already in the talks right now over the debt

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Speaker 1: the spending package, where the Greens are are sort of

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Speaker 1: putting conditions over their support for this package. The SPD

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Speaker 1: already has like imposed quite a lot of policies on

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Speaker 1: the exploratory talks and the coalition. So that's the risk.

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Speaker 1: So it is like for us, there's definitely a different

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Speaker 1: feel about the crisis that Germany faces now than how

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Speaker 1: it has faced in the past, and on top of

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Speaker 1: that you have you have crisis in every major sector

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Speaker 1: basically from autos to energy.

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Speaker 4: This has been Daybreak Europe, your morning brief on the

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Speaker 4: stories making news from London to Wall Street and beyond.

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Speaker 3: I'm Caroline Hepka and I'm Stephen Carol.

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Speaker 4: Join us again tomorrow morning for all the news you

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Speaker 4: need to start your day right here on Bloomberg day

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Speaker 4: Break Europe