1 00:00:02,560 --> 00:00:10,959 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:11,039 --> 00:00:14,560 Speaker 1: Daybreak Europe podcast, available every morning on Apple, Spotify or 3 00:00:14,600 --> 00:00:17,239 Speaker 1: wherever you listen. It's Monday, the twelfth, the May in London. 4 00:00:17,280 --> 00:00:19,919 Speaker 2: I'm Lizzie Burden and I'm Stephen Carroll coming up today. 5 00:00:20,079 --> 00:00:23,479 Speaker 2: Substantial progress may have been an understatement. The US and 6 00:00:23,600 --> 00:00:27,320 Speaker 2: China agree to significantly lower tariffs in a ninety day 7 00:00:27,400 --> 00:00:28,360 Speaker 2: cool augh period. 8 00:00:28,640 --> 00:00:31,480 Speaker 1: The US cuts its levees on Chinese goods from one 9 00:00:31,560 --> 00:00:34,720 Speaker 1: hundred and forty five percent to thirty percent, while China 10 00:00:34,760 --> 00:00:37,480 Speaker 1: reduces its duties from one hundred and twenty. 11 00:00:37,159 --> 00:00:38,760 Speaker 3: Five percent to ten percent. 12 00:00:39,200 --> 00:00:42,640 Speaker 2: Markets rejoice, SMP mini futures jump as much as three percent, 13 00:00:42,720 --> 00:00:46,320 Speaker 2: as equities power ahead and bonds and gold tumble. 14 00:00:46,640 --> 00:00:48,760 Speaker 3: Let's start with a roundup of our top stories. 15 00:00:49,120 --> 00:00:52,400 Speaker 1: The United States and China have agreed to significantly cut 16 00:00:52,479 --> 00:00:55,400 Speaker 1: tariffs on each other's goods in a ninety day pause 17 00:00:55,440 --> 00:00:58,480 Speaker 1: of the trade war between the world's two largest economies. 18 00:00:58,840 --> 00:01:01,360 Speaker 1: The US will reduce its tariffs from one hundred and 19 00:01:01,360 --> 00:01:04,880 Speaker 1: forty five percent to thirty percent on Chinese imports, while 20 00:01:04,959 --> 00:01:07,520 Speaker 1: China will bring its levees down to ten percent from 21 00:01:07,560 --> 00:01:10,839 Speaker 1: one hundred and twenty five percent. US Treasury Secretary Scott 22 00:01:10,840 --> 00:01:14,240 Speaker 1: Bessent says neither country wants to see trade between them stop. 23 00:01:15,000 --> 00:01:20,240 Speaker 4: The consensus from both delegations this weekend is neither side 24 00:01:20,600 --> 00:01:27,000 Speaker 4: wants a pecuplin and what had occurred with these very 25 00:01:27,080 --> 00:01:32,520 Speaker 4: high tariffs, as Investador Reverse said, was the equivalent of 26 00:01:32,560 --> 00:01:38,479 Speaker 4: an embargo, and neither side want set. We do want trade. 27 00:01:38,840 --> 00:01:42,200 Speaker 1: Bessent added that the US still wants supply chain independence 28 00:01:42,560 --> 00:01:45,600 Speaker 1: in six key industries and will continue with what he 29 00:01:45,720 --> 00:01:48,400 Speaker 1: called strategic rebalancing in those sectors. 30 00:01:48,760 --> 00:01:49,880 Speaker 3: The pause was announced in a. 31 00:01:49,920 --> 00:01:52,920 Speaker 1: Joint statement with China, with a Foreign Ministry spokesperson in 32 00:01:52,960 --> 00:01:55,280 Speaker 1: Beijing declining to give further details. 33 00:01:56,120 --> 00:01:58,480 Speaker 2: US Talk features if Sara's bonds are selling off and 34 00:01:58,520 --> 00:02:01,520 Speaker 2: the dollar is strengthening After the announcement from the US 35 00:02:01,560 --> 00:02:05,120 Speaker 2: and China, SMP five hundred SMP mini futures are up 36 00:02:05,160 --> 00:02:07,880 Speaker 2: two point six percent on Wall Street, the NASDAK features 37 00:02:07,880 --> 00:02:10,120 Speaker 2: are up by three point four percent, as the Bloomberg 38 00:02:10,120 --> 00:02:12,920 Speaker 2: Dollar Spot Index is up by nine tenths of one percent. 39 00:02:13,240 --> 00:02:16,200 Speaker 2: Benedict Low Equity and Derivative Strategist for Europe at BNP 40 00:02:16,360 --> 00:02:19,000 Speaker 2: Parri about markets three point sixty, says the move was 41 00:02:19,040 --> 00:02:21,400 Speaker 2: a pleasant surprise for investors. 42 00:02:21,800 --> 00:02:25,320 Speaker 5: We were actually surprised by the number that came out. 43 00:02:25,639 --> 00:02:27,760 Speaker 5: The kind of hearing all word on the street was 44 00:02:27,800 --> 00:02:30,120 Speaker 5: fifty to sixty percent on China. So I think that 45 00:02:30,320 --> 00:02:33,240 Speaker 5: was a net positive, and you're seeing huge reaction, especially 46 00:02:33,240 --> 00:02:35,520 Speaker 5: in the US equity market, which makes sense because that 47 00:02:35,639 --> 00:02:37,560 Speaker 5: was the market that was and the economy as a 48 00:02:37,560 --> 00:02:38,320 Speaker 5: whole that will be more. 49 00:02:38,280 --> 00:02:38,960 Speaker 3: Affected by it. 50 00:02:39,000 --> 00:02:41,320 Speaker 5: So I would say it's a bris coonstint at least 51 00:02:41,320 --> 00:02:42,400 Speaker 5: for the next few days. 52 00:02:42,680 --> 00:02:46,799 Speaker 2: That's BNP Parabos Benedict Low speaking there. As we are 53 00:02:46,880 --> 00:02:51,040 Speaker 2: seeing European stocks rising as well as the dollar has rallied. 54 00:02:51,040 --> 00:02:54,280 Speaker 2: The euros heading for its worst day this year against 55 00:02:54,360 --> 00:02:57,800 Speaker 2: the dollar, down currently one point two percent at one eleven, 56 00:02:58,120 --> 00:03:01,120 Speaker 2: the en also dropping by one point seven percent, goal 57 00:03:01,200 --> 00:03:04,480 Speaker 2: prices sliding two down two point nine percent, as crude 58 00:03:04,480 --> 00:03:05,360 Speaker 2: oil has rallied. 59 00:03:05,520 --> 00:03:08,200 Speaker 1: The Treasury Secretary also used the press conference to make 60 00:03:08,200 --> 00:03:10,280 Speaker 1: the case for the way in which the US likes 61 00:03:10,320 --> 00:03:13,360 Speaker 1: other nations to approach relations. Scott Bessent told the press 62 00:03:13,400 --> 00:03:16,200 Speaker 1: the positive mood music set by the UK and Swiss 63 00:03:16,200 --> 00:03:19,160 Speaker 1: teams was in stock contrast to that of the EU. 64 00:03:19,720 --> 00:03:23,080 Speaker 4: The UK and Switzerland have moved to the front of 65 00:03:23,120 --> 00:03:27,919 Speaker 4: the queue for the trade deals, whereas the EU has 66 00:03:27,960 --> 00:03:30,480 Speaker 4: been much slower, so we value. 67 00:03:30,160 --> 00:03:32,920 Speaker 1: That also, Treasury Secretary Scott Best sent speaking there in 68 00:03:33,000 --> 00:03:35,880 Speaker 1: Geneva after the US and UK last week secured an 69 00:03:35,880 --> 00:03:38,800 Speaker 1: agreement to roll back some of the Trump administration's recent 70 00:03:38,840 --> 00:03:40,520 Speaker 1: tariffs on the British economy. 71 00:03:40,680 --> 00:03:44,120 Speaker 2: Pharmaceutical stocks have dropped after President Trump announced plans to 72 00:03:44,160 --> 00:03:48,080 Speaker 2: sign an executive order later aimed at significantly reducing US 73 00:03:48,200 --> 00:03:51,960 Speaker 2: prescription drug prices in Europe. Obesity drug maker Novo Nordisk 74 00:03:52,000 --> 00:03:54,160 Speaker 2: fell by as much as eight point six percent at 75 00:03:54,240 --> 00:03:57,160 Speaker 2: the open, one of the steepest decliners in the stocks 76 00:03:57,240 --> 00:04:00,920 Speaker 2: six hundred Healthcare Index, which slid by three point three percent. 77 00:04:01,080 --> 00:04:02,960 Speaker 2: With more details here at Boombergs ta are. 78 00:04:02,880 --> 00:04:03,360 Speaker 6: At a bio. 79 00:04:03,640 --> 00:04:06,800 Speaker 7: While the details remain unclear, the President claims the order 80 00:04:06,840 --> 00:04:10,000 Speaker 7: will require that Americans pay no more than the lowest 81 00:04:10,040 --> 00:04:13,160 Speaker 7: price charged for the same medication in any other country. 82 00:04:13,640 --> 00:04:16,440 Speaker 7: In a post on truth Social Trump said the move 83 00:04:16,520 --> 00:04:19,720 Speaker 7: could lower US drug prices buy as much as eighty percent. 84 00:04:20,360 --> 00:04:23,479 Speaker 7: Americans currently pay the highest prices in the world for 85 00:04:23,560 --> 00:04:28,680 Speaker 7: prescription medications. However, drug makers argue that such reforms would 86 00:04:28,680 --> 00:04:32,560 Speaker 7: cut into their revenues and undermine the development of breakthrough 87 00:04:32,560 --> 00:04:36,120 Speaker 7: therapies that could extend and improve lives. In London, Tea 88 00:04:36,160 --> 00:04:38,640 Speaker 7: were at a bio Bloomberg Radio to earnings. 89 00:04:38,720 --> 00:04:42,800 Speaker 1: UniCredit has posted first quarter profit that topped analyst expectations, 90 00:04:43,040 --> 00:04:44,719 Speaker 1: as net income in the first three months of the 91 00:04:44,760 --> 00:04:47,680 Speaker 1: year rose to two point seven to seven billion euros. 92 00:04:48,000 --> 00:04:51,280 Speaker 1: The results strengthen the hand of CEO Andrea Orceell as 93 00:04:51,320 --> 00:04:55,000 Speaker 1: he pursues potential acquisitions, including Germany's comments Bank and an 94 00:04:55,080 --> 00:05:00,000 Speaker 1: unsolicited bid for ital Italy's Banco BPM. UniCredit, Italy's second 95 00:05:00,040 --> 00:05:03,479 Speaker 1: largest bank, is now forecasting annual profit exceeding nine point 96 00:05:03,520 --> 00:05:04,880 Speaker 1: three billion euros. 97 00:05:05,200 --> 00:05:06,960 Speaker 3: The shares are up more than three percent. 98 00:05:07,440 --> 00:05:10,560 Speaker 2: Vladimir Zelenski says he will be waiting for Vladimir Putin 99 00:05:10,600 --> 00:05:13,600 Speaker 2: in Turkey on Thursday. The leaders of Russia and Ukraine 100 00:05:13,600 --> 00:05:16,040 Speaker 2: are being pushed to begin peace talks by the United 101 00:05:16,040 --> 00:05:19,359 Speaker 2: States and Europe. Ukraine's president says, Kiev is ready to 102 00:05:19,600 --> 00:05:20,360 Speaker 2: end this war. 103 00:05:21,040 --> 00:05:23,080 Speaker 3: Your nas Vukrainian maa. 104 00:05:23,000 --> 00:05:27,479 Speaker 6: Ukraine which absolutely no problem engaging in negotiations. We're ready 105 00:05:27,560 --> 00:05:30,400 Speaker 6: for any format. I will be in Turkey this Thursday, 106 00:05:30,480 --> 00:05:33,599 Speaker 6: the fifteenth May. I expect Britain to come to Turkey 107 00:05:33,600 --> 00:05:33,960 Speaker 6: as well. 108 00:05:35,200 --> 00:05:38,839 Speaker 2: Zelenski's planned trip comes after US President Donald Trump insisted 109 00:05:38,880 --> 00:05:42,039 Speaker 2: the two leaders meet despite Moscow's reluctance to agree to 110 00:05:42,080 --> 00:05:45,479 Speaker 2: a thirty day ceasefire. The UK and other European countries 111 00:05:45,520 --> 00:05:49,200 Speaker 2: say they're a ready a dramatic increase in sanctions on 112 00:05:49,320 --> 00:05:52,919 Speaker 2: Russia should Putin not engage with negotiations. 113 00:05:53,440 --> 00:05:55,440 Speaker 3: Those are you top stories this morning? On the markets. 114 00:05:55,440 --> 00:05:58,120 Speaker 1: The stock six hundred is higher half of eight percent 115 00:05:58,400 --> 00:06:00,680 Speaker 1: on Wall Street, smp E many futures up two point 116 00:06:00,720 --> 00:06:02,560 Speaker 1: five percent. Now is that future is up three point 117 00:06:02,640 --> 00:06:05,680 Speaker 1: three percent, and the tenure US treasure reeled is up 118 00:06:05,720 --> 00:06:08,280 Speaker 1: seven basis points at four point four to four percent. 119 00:06:08,640 --> 00:06:10,719 Speaker 2: In a moment, we'll bring you analysis of the US 120 00:06:10,839 --> 00:06:12,880 Speaker 2: China trade war pause and take you through the big 121 00:06:12,920 --> 00:06:17,040 Speaker 2: reaction on markets. But Lizzie listening to the US Treasury 122 00:06:17,040 --> 00:06:19,880 Speaker 2: Secretary Scott Besant and Jemson Greer, the US Trade Representative, 123 00:06:19,920 --> 00:06:22,800 Speaker 2: speaking in Geneva announcing those measures that did strike me 124 00:06:22,800 --> 00:06:26,120 Speaker 2: that both yesterday and today they've mentioned the setting, they've 125 00:06:26,120 --> 00:06:28,000 Speaker 2: talked about. How you know, the fact that they were 126 00:06:28,000 --> 00:06:31,160 Speaker 2: in such a beautiful place with lots of tranquility really 127 00:06:31,200 --> 00:06:34,880 Speaker 2: helped to steer those discussions along. And even Jemeson Grier 128 00:06:34,880 --> 00:06:36,440 Speaker 2: going as far as sort of making a dig at 129 00:06:36,440 --> 00:06:40,080 Speaker 2: hotel diplomacy, saying that because they were in the Swiss 130 00:06:40,120 --> 00:06:45,159 Speaker 2: ambassador's residence, the Swiss delegation to the United Nations engineer, 131 00:06:45,240 --> 00:06:47,320 Speaker 2: that's where some of those talks took place, and he 132 00:06:47,400 --> 00:06:49,159 Speaker 2: was saying that really helped them get the deal across 133 00:06:49,160 --> 00:06:51,920 Speaker 2: the line. This is a new era for Mountain diplomacy. 134 00:06:51,960 --> 00:06:53,080 Speaker 2: Maybe late diplomacy a. 135 00:06:53,080 --> 00:06:55,000 Speaker 1: Bit harsh on the hotel, but look, we've got the 136 00:06:55,040 --> 00:06:56,679 Speaker 1: Peak District, the Lake District. 137 00:06:56,760 --> 00:06:57,920 Speaker 3: If anyone wants to come. 138 00:06:57,800 --> 00:07:01,240 Speaker 1: Here and negotiate build on that UK US trade packed, 139 00:07:01,279 --> 00:07:02,599 Speaker 1: I'm sure that they could do it. 140 00:07:02,880 --> 00:07:03,040 Speaker 6: Well. 141 00:07:03,040 --> 00:07:05,520 Speaker 2: That's bringing more details of what we heard from those 142 00:07:05,640 --> 00:07:09,679 Speaker 2: US representatives on this tariff poles between the US and China, 143 00:07:09,720 --> 00:07:11,920 Speaker 2: our trades are. Brandon Murray is with us for more 144 00:07:11,960 --> 00:07:15,800 Speaker 2: in studio. Brandon, good morning. How significant is the relief 145 00:07:15,840 --> 00:07:18,160 Speaker 2: for both economies from what we heard. 146 00:07:18,320 --> 00:07:21,280 Speaker 8: Well, it's very significant for the Chinese economy. What we 147 00:07:21,360 --> 00:07:24,640 Speaker 8: saw today was a major pullback in the trade war 148 00:07:24,680 --> 00:07:29,040 Speaker 8: that the US waged against China. Remember yesterday there were 149 00:07:29,040 --> 00:07:31,400 Speaker 8: one hundred and forty five percent tariffs on almost every 150 00:07:31,680 --> 00:07:34,840 Speaker 8: Chinese import into the US. That gets reduced down to 151 00:07:34,920 --> 00:07:38,560 Speaker 8: thirty percent, which, if you recalled, President Trump said just 152 00:07:38,600 --> 00:07:41,800 Speaker 8: a few days ago that eighty percent sounded reasonable. So 153 00:07:41,840 --> 00:07:44,440 Speaker 8: what the US walked out of there today with is 154 00:07:44,520 --> 00:07:47,440 Speaker 8: less than half of what Donald Trump said was reasonable. 155 00:07:47,800 --> 00:07:50,720 Speaker 8: If you're on the Chinese side, you got a great 156 00:07:50,760 --> 00:07:55,760 Speaker 8: deal in given what you gave up. Remember China's China 157 00:07:55,760 --> 00:08:01,000 Speaker 8: had duties on American imports into China, but much less 158 00:08:01,040 --> 00:08:04,480 Speaker 8: than the U that than China ships to the U S. So, uh, 159 00:08:04,560 --> 00:08:07,160 Speaker 8: if you're if you're in Beijing today, you might be 160 00:08:07,200 --> 00:08:10,920 Speaker 8: calling this uh uh just six weeks from Donald Trump's 161 00:08:10,920 --> 00:08:14,520 Speaker 8: liberation Day. Uh, the US retreat day in in a 162 00:08:14,600 --> 00:08:18,520 Speaker 8: large way because uh, the definitely the heat of the 163 00:08:18,560 --> 00:08:21,440 Speaker 8: trade war is much lower now, and it gives time 164 00:08:21,600 --> 00:08:25,760 Speaker 8: three months is what the this period of negotiation will 165 00:08:25,800 --> 00:08:28,880 Speaker 8: we'll move into next. And it gives, uh, it gives 166 00:08:28,880 --> 00:08:32,000 Speaker 8: to give them, gives the two sides a chance to 167 00:08:32,200 --> 00:08:37,040 Speaker 8: work through the pretty major agreement disagreements that they still have. 168 00:08:37,520 --> 00:08:40,800 Speaker 8: But I think the analysis at the end of the 169 00:08:40,880 --> 00:08:43,320 Speaker 8: day is going to be that the US gave up 170 00:08:43,320 --> 00:08:44,400 Speaker 8: a lot of its leverage. 171 00:08:44,720 --> 00:08:46,760 Speaker 1: Do you read anything, Brendan into the fact that the 172 00:08:46,880 --> 00:08:50,760 Speaker 1: China Foreign Ministry offered no further comment on the trade deal. 173 00:08:51,240 --> 00:08:55,040 Speaker 8: I'm no analyst of Chinese politics, but they you know, 174 00:08:55,080 --> 00:08:57,320 Speaker 8: they wouldn't want to be seen as grand standing. But 175 00:08:57,559 --> 00:08:59,120 Speaker 8: we'll have We'll have to wait and see what the 176 00:08:59,120 --> 00:09:01,320 Speaker 8: trade hawks and walk Shington say when they get up, 177 00:09:01,400 --> 00:09:03,960 Speaker 8: when they wake up this morning. But my guess is 178 00:09:03,960 --> 00:09:07,920 Speaker 8: that there it will be seen as a major, almost 179 00:09:08,240 --> 00:09:11,559 Speaker 8: too much of a retreat from Washington's perspective. 180 00:09:11,800 --> 00:09:15,120 Speaker 2: I mean, what does that mean for trade flows? We've 181 00:09:15,120 --> 00:09:18,600 Speaker 2: been reporting about how so many of Chinese goods had 182 00:09:18,640 --> 00:09:21,640 Speaker 2: been moving away from the US to other countries in 183 00:09:21,679 --> 00:09:24,640 Speaker 2: anticipation of these or as these tires have taken effect 184 00:09:25,080 --> 00:09:29,120 Speaker 2: as well. What about the prospect that a ninety day 185 00:09:29,160 --> 00:09:31,720 Speaker 2: pause could be enough for some of that damage to 186 00:09:31,720 --> 00:09:32,360 Speaker 2: be undone? 187 00:09:32,800 --> 00:09:36,440 Speaker 8: It could? You know, a thirty percent tariff on Chinese 188 00:09:36,840 --> 00:09:41,760 Speaker 8: imports into the US can be managed, one hundred and 189 00:09:41,840 --> 00:09:46,160 Speaker 8: forty five percent can't be. So you can divert, you 190 00:09:46,200 --> 00:09:49,680 Speaker 8: can divert products to other countries where you can ship 191 00:09:49,720 --> 00:09:53,040 Speaker 8: from to avoid tariffs. But this is going to be 192 00:09:53,920 --> 00:09:58,400 Speaker 8: Remember this thirty percent is divided into two segments, the 193 00:09:58,440 --> 00:10:01,600 Speaker 8: ten percent baseline that every other country gets and the 194 00:10:01,640 --> 00:10:04,840 Speaker 8: twenty percent fentanyl tariff that the US put on China. 195 00:10:05,360 --> 00:10:08,360 Speaker 8: China can get out of that fentanyl tariff if it 196 00:10:08,480 --> 00:10:12,319 Speaker 8: does what the US wants it to crack down on 197 00:10:13,000 --> 00:10:16,400 Speaker 8: the export of the materials used to make vents and all. 198 00:10:16,880 --> 00:10:18,920 Speaker 8: So at the end of the day, China is in 199 00:10:18,960 --> 00:10:22,440 Speaker 8: the same place as everybody else is it could be, 200 00:10:23,400 --> 00:10:27,280 Speaker 8: and most China Hawks in Washington would say they're the 201 00:10:27,320 --> 00:10:31,320 Speaker 8: biggest violator of trade rules. So it'll be interesting to 202 00:10:31,320 --> 00:10:35,600 Speaker 8: see how the Trump administration defends what it got here. 203 00:10:36,160 --> 00:10:40,640 Speaker 8: Certainly markets like it, that will be seen as a positive. 204 00:10:41,080 --> 00:10:46,480 Speaker 8: But if you're in a long term trade disagreement with 205 00:10:46,640 --> 00:10:50,880 Speaker 8: China to rebalance one point two trillion dollar trade and balance, 206 00:10:51,600 --> 00:10:55,320 Speaker 8: this is going to make it more difficult to apply 207 00:10:55,400 --> 00:10:56,400 Speaker 8: leverage to China. 208 00:10:56,480 --> 00:10:58,360 Speaker 1: So how much hope is this going to give to 209 00:10:58,559 --> 00:11:01,920 Speaker 1: other countries that they can negotiate good terms too. 210 00:11:02,400 --> 00:11:05,000 Speaker 8: Yeah, you would think that that that this would this 211 00:11:05,080 --> 00:11:08,600 Speaker 8: would give them, uh, you know, some sense of relief 212 00:11:08,679 --> 00:11:11,360 Speaker 8: between this deal and the and the deal that the 213 00:11:11,440 --> 00:11:14,240 Speaker 8: UK signed last week. Uh, you know, a lot of 214 00:11:14,280 --> 00:11:17,360 Speaker 8: these details are still kind of vague, and and you 215 00:11:17,400 --> 00:11:20,320 Speaker 8: know that there's no there's nothing, uh, there's not a 216 00:11:20,320 --> 00:11:22,839 Speaker 8: whole lot of fine print on on either of these two. 217 00:11:23,320 --> 00:11:25,280 Speaker 8: But you've got to think that the that the US 218 00:11:25,360 --> 00:11:29,920 Speaker 8: administration has felt, the has heard the concerns from US 219 00:11:30,000 --> 00:11:34,000 Speaker 8: businesses about how they came out of the gates fast 220 00:11:34,160 --> 00:11:38,559 Speaker 8: and high with their tariffs and that is applying economic 221 00:11:38,600 --> 00:11:41,560 Speaker 8: pain to the US and that they are now uh, 222 00:11:41,840 --> 00:11:45,920 Speaker 8: you know, in a in a situation where they you know, 223 00:11:45,960 --> 00:11:47,720 Speaker 8: they have to bring those down in a big way. 224 00:11:47,760 --> 00:11:51,360 Speaker 8: This is this is not uncharacteristic of Donald Trump's style. 225 00:11:51,720 --> 00:11:54,360 Speaker 8: He comes in big, with his hardest punch, and then 226 00:11:54,360 --> 00:11:56,800 Speaker 8: he says, you know, let's you know, then you know, 227 00:11:56,840 --> 00:12:00,520 Speaker 8: then then will then we'll uh you know, will negotiate things, 228 00:12:01,000 --> 00:12:04,080 Speaker 8: you know, in a calmer fashion. But and this seems 229 00:12:04,120 --> 00:12:07,000 Speaker 8: to be what we're hearing. We heard Scott Besson say 230 00:12:07,040 --> 00:12:12,200 Speaker 8: today that he and the US Trade Representative Jameson Greer say, 231 00:12:12,520 --> 00:12:15,560 Speaker 8: we don't want to decouple from China, we don't want 232 00:12:15,559 --> 00:12:20,400 Speaker 8: to trade embargo and what's what that's doing to the 233 00:12:20,480 --> 00:12:23,000 Speaker 8: US economy? Right now is causing a lot of disruption 234 00:12:23,480 --> 00:12:26,520 Speaker 8: and a lot of small companies can't do can't do 235 00:12:26,600 --> 00:12:29,360 Speaker 8: business if with tariffs of one hundred and forty five 236 00:12:29,360 --> 00:12:34,040 Speaker 8: percent on their Chinese parts and products. So I think 237 00:12:34,080 --> 00:12:36,599 Speaker 8: what we're seeing is a pretty sharp pullback from the 238 00:12:36,720 --> 00:12:39,439 Speaker 8: US administration. Now that could all that could all change 239 00:12:39,440 --> 00:12:42,319 Speaker 8: too this. You know, they can tariffs can come back 240 00:12:42,360 --> 00:12:46,280 Speaker 8: as soon as they go away. But it looks today 241 00:12:46,360 --> 00:12:49,760 Speaker 8: like the US gave more concessions than China did. 242 00:12:50,120 --> 00:12:52,480 Speaker 2: Okay, Brendon Murray, our trades are thank you very much. 243 00:12:52,920 --> 00:12:55,240 Speaker 1: Well, let's get to the market reaction now. Cridy Gupster, 244 00:12:55,240 --> 00:12:58,079 Speaker 1: who anchors the opening trade on Bloomberg Television, has been 245 00:12:58,120 --> 00:13:01,040 Speaker 1: watching the markets move in real time, and she joins 246 00:13:01,120 --> 00:13:03,920 Speaker 1: us now in the studio. Christy, what stood out for 247 00:13:04,000 --> 00:13:07,760 Speaker 1: you in the market reaction, particularly the equity maybe seem 248 00:13:07,800 --> 00:13:08,520 Speaker 1: pretty stoning. 249 00:13:08,800 --> 00:13:11,800 Speaker 9: So the bar was high going into this presser. There 250 00:13:11,840 --> 00:13:14,480 Speaker 9: was a lot of optimism baked in really starting on 251 00:13:14,600 --> 00:13:16,920 Speaker 9: Friday actually, and you saw it on both sides of 252 00:13:16,920 --> 00:13:19,720 Speaker 9: the Atlantic, and then over the weekend the substantial progress 253 00:13:19,800 --> 00:13:23,560 Speaker 9: line even Donald Trump's buy stocks on Friday was or 254 00:13:23,559 --> 00:13:26,760 Speaker 9: on Thursday night, I should say was quite telling. We 255 00:13:26,800 --> 00:13:29,360 Speaker 9: didn't expect this kind of optimism though, because, as Brendan 256 00:13:29,400 --> 00:13:31,640 Speaker 9: was saying, the expectation the line in the sand was 257 00:13:31,679 --> 00:13:35,559 Speaker 9: eighty percent. To come down to thirty is massive. A 258 00:13:35,640 --> 00:13:38,880 Speaker 9: one hundred and fifteen percent reprieve on that tariff freight 259 00:13:39,040 --> 00:13:41,920 Speaker 9: is enormous. The problem here, and the hiccup here that 260 00:13:41,960 --> 00:13:44,760 Speaker 9: you're going to see perhaps maybe filter through the markets 261 00:13:44,760 --> 00:13:46,679 Speaker 9: in the next couple of days, is that this is 262 00:13:46,720 --> 00:13:49,600 Speaker 9: only for ninety days, and those tariffs initially were meant 263 00:13:49,600 --> 00:13:51,680 Speaker 9: to be put on four ninety days. That one hundred 264 00:13:51,640 --> 00:13:53,920 Speaker 9: and forty five percent was meant to be for ninety days, 265 00:13:53,920 --> 00:13:56,320 Speaker 9: and we're not even I don't even think we're thirty 266 00:13:56,400 --> 00:13:58,840 Speaker 9: days through, maybe a little over thirty days, and already 267 00:13:58,840 --> 00:14:01,080 Speaker 9: we're seeing a reversal. So when you start to see 268 00:14:01,080 --> 00:14:04,000 Speaker 9: some of the commentary come from Donald Trump or Scott Bessend, 269 00:14:04,160 --> 00:14:05,839 Speaker 9: that's where the red herrings kind of. 270 00:14:05,800 --> 00:14:07,280 Speaker 3: Lie in some of the data. 271 00:14:07,320 --> 00:14:10,360 Speaker 9: But right now, again the bar was high, and Scott 272 00:14:10,400 --> 00:14:13,280 Speaker 9: Bessant already beat. So the optimism is showing up in 273 00:14:13,320 --> 00:14:16,200 Speaker 9: the equities picture, in the bonds picture, in the currency's picture, 274 00:14:16,440 --> 00:14:18,640 Speaker 9: and even in oil, which was really weighed down by 275 00:14:18,640 --> 00:14:19,520 Speaker 9: those growth concerns. 276 00:14:19,600 --> 00:14:23,040 Speaker 2: But how sustainable can this sentiment be? To your point 277 00:14:23,120 --> 00:14:25,880 Speaker 2: that this is only ninety days, so there are a 278 00:14:25,920 --> 00:14:26,520 Speaker 2: couple of things. 279 00:14:26,560 --> 00:14:28,680 Speaker 9: So now this has kind of shown, so you're right, 280 00:14:28,800 --> 00:14:31,280 Speaker 9: can't it's not sustainable because this can always you turn 281 00:14:31,320 --> 00:14:34,000 Speaker 9: and that is the kind of word on the street here. 282 00:14:34,240 --> 00:14:36,680 Speaker 9: But what it is showing is a mechanism with which 283 00:14:36,720 --> 00:14:39,160 Speaker 9: to de escalate. And that is a crucial piece because 284 00:14:39,720 --> 00:14:41,960 Speaker 9: thirty days ago we didn't have this mechanism. 285 00:14:42,360 --> 00:14:43,720 Speaker 3: We didn't have high level talks. 286 00:14:43,760 --> 00:14:46,840 Speaker 9: We didn't even have lower level talks for then ultimately 287 00:14:46,840 --> 00:14:49,520 Speaker 9: Scott bessen to go over to Geneva and sign the deal. 288 00:14:49,760 --> 00:14:52,440 Speaker 9: Both sides were not talking and I think that has 289 00:14:52,480 --> 00:14:55,120 Speaker 9: been the real game changer here, that if there was 290 00:14:55,160 --> 00:14:57,960 Speaker 9: some sort of hiccup in policy. For example, and you 291 00:14:58,000 --> 00:15:00,440 Speaker 9: heard that in the press conference from Scott Bessant that 292 00:15:00,520 --> 00:15:02,760 Speaker 9: he brought up the cartels in terms of the fentanyl 293 00:15:02,840 --> 00:15:06,120 Speaker 9: trade in Mexico, he brought up currency manipulation, He brought 294 00:15:06,200 --> 00:15:08,280 Speaker 9: up the fact that both sides, the US and China, 295 00:15:08,520 --> 00:15:12,040 Speaker 9: were acting in their national interests. So it wasn't exactly 296 00:15:12,200 --> 00:15:16,000 Speaker 9: the all friendly, all sunshine and rainbows. There were clear 297 00:15:16,200 --> 00:15:18,960 Speaker 9: pieces of concerns that were still meant to be the 298 00:15:19,000 --> 00:15:22,040 Speaker 9: Currncy manipulation is the piece of it. Notably absent was 299 00:15:22,080 --> 00:15:24,520 Speaker 9: the fact that the Treasury Secretary didn't talk about the 300 00:15:24,560 --> 00:15:28,320 Speaker 9: massive holdings of treasuries that China has. So you can 301 00:15:28,360 --> 00:15:30,280 Speaker 9: see that there are still sticking points. But now we 302 00:15:30,360 --> 00:15:32,800 Speaker 9: know that if things were to ratchet up, there is 303 00:15:32,840 --> 00:15:35,080 Speaker 9: a way back to de ratcheting. 304 00:15:35,440 --> 00:15:39,200 Speaker 1: Okay, Kritty group to opening trade anchor from Bloomberg Television, 305 00:15:39,280 --> 00:15:41,920 Speaker 1: we thank you. Let's bring in our Hong Kong News 306 00:15:41,920 --> 00:15:44,840 Speaker 1: Desk editor Jill de Sis Jill, good morning. 307 00:15:45,000 --> 00:15:47,000 Speaker 3: Does this count as a win for Beijing? 308 00:15:47,720 --> 00:15:49,440 Speaker 10: Here is just trying to parse through all of the 309 00:15:49,520 --> 00:15:52,160 Speaker 10: numbers along with everybody else, and I do think this 310 00:15:52,200 --> 00:15:55,240 Speaker 10: is a pretty significant improvement for China. I mean, obviously 311 00:15:55,280 --> 00:15:58,320 Speaker 10: there's just the headline number, right if you're reducing those 312 00:15:58,360 --> 00:16:02,240 Speaker 10: tariffs that significant for the next ninety days. I mean, 313 00:16:02,240 --> 00:16:05,480 Speaker 10: it does indicate that maybe relations are improving. Obviously it's 314 00:16:05,480 --> 00:16:08,680 Speaker 10: only temporary, but I think that you know, that does 315 00:16:08,720 --> 00:16:10,560 Speaker 10: indicate that there's you know, that's a step in the 316 00:16:10,600 --> 00:16:13,680 Speaker 10: right direction. It certainly isn't you know, I mean, removing 317 00:16:13,920 --> 00:16:15,680 Speaker 10: the you know, one hundred and twenty five and forty five 318 00:16:15,720 --> 00:16:18,840 Speaker 10: percent terriffs that we saw in China. That's that's that's 319 00:16:18,840 --> 00:16:20,800 Speaker 10: a that's a pretty good victory for China. So yeah, 320 00:16:20,800 --> 00:16:22,680 Speaker 10: I think we have to see where things go from here. 321 00:16:22,720 --> 00:16:25,400 Speaker 10: But the fact that the progresses even gotten to this point, 322 00:16:25,680 --> 00:16:27,520 Speaker 10: I think that's pretty promising. 323 00:16:27,960 --> 00:16:31,320 Speaker 2: How much could this bring relief for the Chinese economy, Joe, 324 00:16:31,360 --> 00:16:34,160 Speaker 2: because we've been seeing early signs of the effects the 325 00:16:34,200 --> 00:16:36,920 Speaker 2: tariffs had already been having, or at least the uncertainty 326 00:16:36,960 --> 00:16:39,480 Speaker 2: over the tariffs had been having on things like trade flows. 327 00:16:39,880 --> 00:16:41,920 Speaker 10: Yeah, I mean I think that you know, when you're 328 00:16:41,960 --> 00:16:45,720 Speaker 10: looking at you know exactly what this means for the 329 00:16:45,760 --> 00:16:48,000 Speaker 10: Chinese economy, and you know, taking a look at some 330 00:16:48,120 --> 00:16:51,640 Speaker 10: of the Bloomberg Economics data that we've been really putting out, 331 00:16:52,440 --> 00:16:55,920 Speaker 10: I mean, just that the fact that the shock on 332 00:16:56,800 --> 00:16:58,520 Speaker 10: you know, how much this meaning for US imports is 333 00:16:58,560 --> 00:17:00,920 Speaker 10: going down significantly. I think the that's you know, a 334 00:17:01,000 --> 00:17:04,600 Speaker 10: really really big improvement. I'm talking actually right now with 335 00:17:04,640 --> 00:17:07,320 Speaker 10: the some of our reporters who have been reaching out 336 00:17:07,320 --> 00:17:12,119 Speaker 10: to Chinese exporters who are absolutely elated at this news 337 00:17:12,560 --> 00:17:14,960 Speaker 10: so far. I mean we were, you know, just talking 338 00:17:15,080 --> 00:17:18,919 Speaker 10: to somebody who has a t moostore selling you know, 339 00:17:18,960 --> 00:17:21,639 Speaker 10: sort of face and body painting tools, saying that, you know, 340 00:17:21,720 --> 00:17:25,719 Speaker 10: their entire office was shouting horay. That particular Chinese exporter. 341 00:17:25,880 --> 00:17:29,040 Speaker 10: I mean, that's somebody that had a stockpile of about 342 00:17:29,040 --> 00:17:31,280 Speaker 10: five months supply and a US warehouse, just kind of 343 00:17:31,280 --> 00:17:34,120 Speaker 10: waiting to see what was ultimately going to happen in 344 00:17:34,160 --> 00:17:37,560 Speaker 10: this trade war. You know what that person was telling us, 345 00:17:37,840 --> 00:17:40,439 Speaker 10: you know, just a few minutes ago, is essentially that 346 00:17:40,880 --> 00:17:44,040 Speaker 10: they're elated because they were actually expecting this to drag 347 00:17:44,080 --> 00:17:45,639 Speaker 10: on for quite a bit longer. And the fact that 348 00:17:45,680 --> 00:17:48,440 Speaker 10: you already have this reprieve not too long, you know, 349 00:17:48,480 --> 00:17:51,040 Speaker 10: about a month and some change after these tarrots really 350 00:17:51,040 --> 00:17:54,000 Speaker 10: went into effect, that's actually been really promising for them. 351 00:17:54,040 --> 00:17:56,080 Speaker 10: So at least from the Chinese exporter side, I mean, 352 00:17:56,119 --> 00:17:59,040 Speaker 10: people that are doing direct business with American consumers that 353 00:17:59,040 --> 00:18:01,360 Speaker 10: are really really dependent on these types of trade flows, 354 00:18:01,720 --> 00:18:04,080 Speaker 10: We're already seeing a lot of encouragement there. Again, I 355 00:18:04,119 --> 00:18:08,040 Speaker 10: do have to stress obviously these tariffs, you know, this reprieve, 356 00:18:08,400 --> 00:18:09,040 Speaker 10: these cuts are. 357 00:18:09,000 --> 00:18:10,480 Speaker 3: Only in place for ninety days. 358 00:18:10,480 --> 00:18:13,320 Speaker 10: But again, the trajectory is certainly very positive, or at 359 00:18:13,400 --> 00:18:16,040 Speaker 10: least the sentiment here is that this has been very positive. 360 00:18:16,320 --> 00:18:18,800 Speaker 1: Well, Jill, some of those exporters out of China had 361 00:18:18,840 --> 00:18:23,040 Speaker 1: already moved trade to other countries in Asia worried about 362 00:18:23,080 --> 00:18:25,960 Speaker 1: the tariff war. We saw that in the data on Friday. 363 00:18:26,040 --> 00:18:28,119 Speaker 1: Do you think we now just hit undo on that. 364 00:18:28,680 --> 00:18:31,360 Speaker 10: Pleissie, I think, you know, obviously too early to say there, 365 00:18:31,400 --> 00:18:33,720 Speaker 10: because ultimately, you know, I mean, if you're some of 366 00:18:33,720 --> 00:18:36,000 Speaker 10: these exupporters, sure you do have those ones that are 367 00:18:36,000 --> 00:18:38,719 Speaker 10: you know, very elated by this, and we're really banking 368 00:18:38,720 --> 00:18:41,000 Speaker 10: on that business. But you also, you know, have a 369 00:18:41,040 --> 00:18:42,320 Speaker 10: lot of people that you know, at the end of 370 00:18:42,359 --> 00:18:44,360 Speaker 10: the day, there's still a lot of uncertainty here here, right, 371 00:18:44,400 --> 00:18:46,800 Speaker 10: I mean, you know, let's just park it and rewind, 372 00:18:47,119 --> 00:18:48,840 Speaker 10: you know to where we were about a month or 373 00:18:48,880 --> 00:18:50,639 Speaker 10: you know, two months ago. I mean, you know, you 374 00:18:50,760 --> 00:18:53,960 Speaker 10: had you know, these not just these tariffs on China, 375 00:18:54,040 --> 00:18:56,520 Speaker 10: but also these reciprocal tariffs that countries all over the 376 00:18:56,560 --> 00:18:58,600 Speaker 10: world were facing, and there was you know a lot 377 00:18:58,800 --> 00:19:01,879 Speaker 10: of confusion over what exactly that would ultimately mean for 378 00:19:01,920 --> 00:19:04,119 Speaker 10: how the United States is doing trade in business with 379 00:19:04,520 --> 00:19:06,679 Speaker 10: you know, countries worldwide. I mean, we saw during the 380 00:19:06,680 --> 00:19:09,119 Speaker 10: first Trump administration, you know, a lot of you know, 381 00:19:09,119 --> 00:19:13,119 Speaker 10: different companies that were already starting to diversify away from China, 382 00:19:13,200 --> 00:19:15,600 Speaker 10: trying to put the rigs in different baskets in Southeast Asia. 383 00:19:15,680 --> 00:19:18,399 Speaker 10: Some of those guys got burned, you know, just a 384 00:19:18,400 --> 00:19:21,119 Speaker 10: month or so ago when we saw really high tariffs 385 00:19:21,160 --> 00:19:24,159 Speaker 10: on Vietnam and others. Obviously, some of those have currently 386 00:19:24,200 --> 00:19:25,920 Speaker 10: been paused. But I think, you know, that's a long 387 00:19:25,960 --> 00:19:28,520 Speaker 10: way of saying that there's still a lot of uncertainty 388 00:19:28,560 --> 00:19:31,480 Speaker 10: in this environment. Obviously, the cuts that we've seen so far, 389 00:19:31,600 --> 00:19:34,280 Speaker 10: while dramatic, I'm still only in place for ninety days, 390 00:19:34,520 --> 00:19:37,160 Speaker 10: so I can imagine that if you're you know, an exporter, 391 00:19:37,560 --> 00:19:39,919 Speaker 10: if you're considering where exactly you're sort of setting up 392 00:19:39,920 --> 00:19:41,240 Speaker 10: shop and how you want to do business with the 393 00:19:41,320 --> 00:19:44,320 Speaker 10: United States, it's still a bit of an uncertain environment 394 00:19:44,359 --> 00:19:46,040 Speaker 10: until you have something that actually does feel like a 395 00:19:46,080 --> 00:19:46,840 Speaker 10: definitive deal. 396 00:19:47,040 --> 00:19:47,280 Speaker 3: Jill. 397 00:19:47,320 --> 00:19:50,080 Speaker 2: Another note of caution, perhaps too, from these comments from 398 00:19:50,080 --> 00:19:53,760 Speaker 2: Scott best and about the five or six strategic industries 399 00:19:53,880 --> 00:19:57,240 Speaker 2: where the US is going to seek supply chain independence 400 00:19:57,280 --> 00:20:01,479 Speaker 2: and this quote strategic rebalancing that he's promising, is that 401 00:20:01,560 --> 00:20:04,960 Speaker 2: suggests that there'll still be significant bones of contenent and 402 00:20:05,040 --> 00:20:07,440 Speaker 2: the trading relationship between the US and China. 403 00:20:07,720 --> 00:20:09,480 Speaker 10: Yes, Stephen, I think you know, we were talking about 404 00:20:09,480 --> 00:20:13,240 Speaker 10: this earlier. It's interesting, I think, particularly when you had 405 00:20:13,240 --> 00:20:16,440 Speaker 10: Scott Besn't call out industry such as pharmaceuticals and steel 406 00:20:16,960 --> 00:20:19,040 Speaker 10: saying that the US is going to seek supply chain 407 00:20:19,280 --> 00:20:21,800 Speaker 10: independence in these types of field. I mean, you know, 408 00:20:22,119 --> 00:20:24,480 Speaker 10: to go back, you know, just a few months ago 409 00:20:24,560 --> 00:20:27,600 Speaker 10: to the Biden administration obviously, so you saw a tremendous 410 00:20:27,640 --> 00:20:31,800 Speaker 10: focus from the United States on ensuring independence, and you know, 411 00:20:31,840 --> 00:20:35,960 Speaker 10: the strategy toward focusing on semiconductors and immense technology and chips. 412 00:20:36,119 --> 00:20:38,080 Speaker 10: The fact that the United States now appears to be 413 00:20:38,200 --> 00:20:40,720 Speaker 10: sort of broadening out the areas in which it's really 414 00:20:40,760 --> 00:20:43,119 Speaker 10: sort of pursuing supply chain independence, I think is a 415 00:20:43,119 --> 00:20:46,840 Speaker 10: pretty significant development. Obviously, we don't know exactly what went 416 00:20:46,880 --> 00:20:49,760 Speaker 10: on behind closed doors in Geneva this weekend, but that 417 00:20:49,840 --> 00:20:53,240 Speaker 10: does indicate that, you know, obviously the United States position 418 00:20:53,640 --> 00:20:56,920 Speaker 10: on trade protectionism, this idea of that supply chain independence 419 00:20:56,920 --> 00:21:00,679 Speaker 10: certainly seems to be strengthening. So I think, you know, 420 00:21:00,720 --> 00:21:02,680 Speaker 10: it's definitely something where to look out for again. I 421 00:21:02,680 --> 00:21:04,480 Speaker 10: think at the end of the day, while you know, 422 00:21:04,560 --> 00:21:07,760 Speaker 10: markets are obviously taking things, as you know, incredibly positive 423 00:21:07,760 --> 00:21:10,600 Speaker 10: from this weekend, you still have a reprieve that's really 424 00:21:10,640 --> 00:21:12,720 Speaker 10: only in place for the next ninety days. You still 425 00:21:12,720 --> 00:21:15,240 Speaker 10: have various areas that the United States says, let me 426 00:21:15,320 --> 00:21:17,880 Speaker 10: to negotiate on. I still think, you know, we're quite 427 00:21:17,880 --> 00:21:19,960 Speaker 10: a ways from being able to sit here and call 428 00:21:20,000 --> 00:21:21,920 Speaker 10: the saga over. It's certainly going to continue over the 429 00:21:21,920 --> 00:21:23,400 Speaker 10: next few months at least. 430 00:21:24,560 --> 00:21:27,280 Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the 431 00:21:27,320 --> 00:21:30,400 Speaker 2: stories making news from London to Wall Street and beyond. 432 00:21:30,680 --> 00:21:33,879 Speaker 11: Look for us on your podcast feed every morning, on Apple, 433 00:21:34,000 --> 00:21:36,720 Speaker 11: Spotify and anywhere else you get your podcasts. 434 00:21:36,720 --> 00:21:39,760 Speaker 2: You can also listen live each morning on London DAB Radio, 435 00:21:39,800 --> 00:21:42,480 Speaker 2: the Bloomberg Business app, and Bloomberg dot Com. 436 00:21:42,520 --> 00:21:45,320 Speaker 11: Our flagship New York station is also available on your 437 00:21:45,320 --> 00:21:50,040 Speaker 11: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. 438 00:21:50,280 --> 00:21:51,600 Speaker 3: I'm Caroline Heitka and. 439 00:21:51,520 --> 00:21:54,200 Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all 440 00:21:54,240 --> 00:21:56,640 Speaker 2: the news you need to start your day right here 441 00:21:56,680 --> 00:22:06,240 Speaker 2: on Bloomberg day Break Europe.