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

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Speaker 2: This is the Bloomberg Daybreak You podcast. Good morning, It's Tuesday,

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Speaker 2: the first of July. I'm Caroline Hepca in London.

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Speaker 1: And I'm Stephen Caroline Brussels. Coming up today, Bloomberg learns

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Speaker 1: the EU is willing to accept Donald Trump's ten percent

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Speaker 1: baseline tariff, but wants lower levees on key sectors.

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Speaker 2: European banking stock see their biggest gains this century as

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Speaker 2: investors pile into the region's lenders.

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Speaker 1: Plus looking for the benefit of the doubt. Keirstarmer's UK

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Speaker 1: welfare overhaul hangs in the balance ahead of today's key vote.

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

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Speaker 1: Bloomberg has learned that the European Union is willing to

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Speaker 1: accept Donald Trump's ten percent universal tariff on goods it

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Speaker 1: sends to the US.

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Speaker 3: However, the EU is.

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Speaker 1: Pushing for quotas and exemptions to effectively lower the levees

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Speaker 1: on specific sectors. If no deal is reached by trump'slin

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Speaker 1: It's deadline, tariffs on nearly all of the EU's exports

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Speaker 1: to the US will jump to fifty percent. Bloomberg's senior

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Speaker 1: Genomics analyst Adam Farrer says the EU and other countries

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Speaker 1: are now using the UK's deal as a benchmark for

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Speaker 1: negotiations with the White House.

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Speaker 3: The tariffs are here to stay.

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Speaker 4: The only deal we've had in this ninety days sprint

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Speaker 4: so far was with the United Kingdom, and what we

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Speaker 4: saw from that, well, maybe a little more flexibility and sectorals.

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Speaker 4: With the quota put forward for autos coming to the

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Speaker 4: United States, the ten percent baseline remained, and that sent

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Speaker 4: the message across the board. The ten percent was likely

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Speaker 4: to remain the lowest that the United States was willing

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Speaker 4: to go. But I think we're also seeing right now

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Speaker 4: that some countries are likely to get higher tariffs than

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Speaker 4: that for the long term. What we're hearing right now

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Speaker 4: is that Vietnam, one of the largest US trade partners,

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Speaker 4: is likely to accept somewhere near twenty or twenty five percent.

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Speaker 1: Adam farr was speaking as President Trump threatened to increase

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Speaker 1: tariffs on Japan, citing the country's unwillingness to accept US

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Speaker 1: rice exports despite massive rice shortage.

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Speaker 2: Europe's banking sector has recorded its biggest first half stock

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Speaker 2: gain this century. Investors have piled into the continents lenders

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Speaker 2: for their strong returns and resilient earnings, but it makes

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Speaker 2: tia Adebayo has more.

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Speaker 5: The stock six hundred Banks index has jumped twenty nine

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Speaker 5: percent since the beginning of the year. That's the lender's

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Speaker 5: strongest first half showing since nineteen ninety seven, making them

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Speaker 5: the top performing subgroup in Europe. It's thought that an

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Speaker 5: increase in deal making spurred the surge, particularly in Italy,

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Speaker 5: where UniCredit is up forty eight percent as it pursues

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Speaker 5: peer Banco BPM while doubling its stake in a Greek lender.

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Speaker 5: Looking ahead, some analysts remain bullish on the sector's chances of.

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Speaker 6: Increasing its gains.

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Speaker 5: Despite macroeconomic uncertainty and trade related risk. In London, ta

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Speaker 5: Ada Baio Bloomberg Radio, the.

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Speaker 1: UK's Prime Minister Kris Starmer is bracing for a crunch

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Speaker 1: vote on his overhaul of the country's welfare system. Parliament

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Speaker 1: votes later today on a watered down version of the

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Speaker 1: government's reforms after labor MPs mutinied over cuts to disability benefits.

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Speaker 1: Work and Pension Secretary Liz Kendall says she's heard their concerns.

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Speaker 7: Our plans are rooted in fairness for those who need

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Speaker 7: support and for taxpayers. They're about ensuring the welfare state survives,

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Speaker 7: so there is always a safety net for those who

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Speaker 7: need it, and so it lasts for generations to come.

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Speaker 1: Kendall's defense comes as some key rebels have said they

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Speaker 1: were not impressed by the details, despite initially welcoming the changes.

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Speaker 1: While government officials initially expected a rebellion would be limited

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Speaker 1: to roughly sixty MPs after the changes, many labor politicians

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Speaker 1: say they're still making up their minds.

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Speaker 2: Bloomberg has learned that Apple is in talks with Open

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Speaker 2: AI and Anthropic to power a new version of Siri.

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Speaker 2: The decision is yet to be made, but the talk

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Speaker 2: suggests that Apple is considering abandoning its own AI models.

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Speaker 2: Bloomberg's chief technology correspondent Mark German says the firm fears

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Speaker 2: that being behind in the AI race would affect iPhone sales.

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Speaker 8: There are people who buy their first smartphone every day.

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Speaker 8: There are families getting their firstmartphones every day, right and

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Speaker 8: those people have a decision make to make about which

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Speaker 8: ecosystem they want to enter. And right now all the

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Speaker 8: talk is about how Apple's AI is completely behind the times,

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Speaker 8: and so that decision right is a lot easier when

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Speaker 8: you realize that the ender ad ecosystem is a big

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Speaker 8: step ahead in what is perceived as the future of technology.

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Speaker 2: Mark German adds that the parties still disagree on how

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Speaker 2: much Apple would pay to license the technology. Representative some

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Speaker 2: Apple Anthropic and Open Ai declined to comment.

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Speaker 1: Growing worries about cybersecurity or fueling a rift between the

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Speaker 1: US Treasury Department and the banks that regulates Bloomberg's Ewan

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Speaker 1: Paths reports the.

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Speaker 9: US Treasury has experienced three major hacks in the past

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Speaker 9: five years, including two that have come to light since December.

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Speaker 9: A Bloomberg News review previously unreported government documents and interviews

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Speaker 9: with more than a dozen people has uncovered new details

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Speaker 9: that underscore longstanding concerns about the Treasury's cybersecurity defenses. In

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Speaker 9: all three instances, Bloomberg's investigation shows the department failed to

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Speaker 9: deploy security measures that might have prevented the breaches or

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Speaker 9: flagged the intruders sooner. The Treasury's ranks of cybersecurity staff

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Speaker 9: have been decimated this year by departures pushed by Elon

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Speaker 9: Musk's Department of Government Efficiency Bloomberg's findings raised first questions

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Speaker 9: about the department's ability to protect sensitive financial data and

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Speaker 9: how it spends an annual cybersecurity budget of more than

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Speaker 9: one billion dollars.

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Speaker 3: In London, I'm you in pots of Bloomberg Radio.

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Speaker 1: US senators are voting through the night on a series

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Speaker 1: of amendments to President Trump's three point three trillion dollar

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Speaker 1: tax and spending bill.

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Speaker 3: There are currently eight major Republican holdouts.

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Speaker 1: The Majority leader, John Kuhne can only spare three votes

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Speaker 1: if he wants to pass the measures. US Treasury Secretary

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Speaker 1: Scott Besson says he's confident the bill will move forward.

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Speaker 10: It'll be on the presence desk to sign on fourth,

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Speaker 10: so Senate will vote pass it over to the House.

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Speaker 10: We've seen incredible leadership, and this is what leadership looks like.

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Speaker 1: Scott Beson' speaking on Bloomberg Television. Bloomberg understands the White

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Speaker 1: House remains optimistic that the legislation will get to the

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Speaker 1: President by Friday. The outcome is likely to test Donald

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Speaker 1: Trump's deal making abilities and determine the bill's fate, with

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Speaker 1: Senate majority leader uncertain about having enough support for the proposals.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: Will the markets certainly don't seem to be too bothered

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Speaker 2: about a President Trump's tariff for gender. THEMSCI All Country

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Speaker 2: World Index closed at a record high on Monday, and

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Speaker 2: it continues to see gains this morning. Were up another

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Speaker 2: tenth of one percent. Also for the S and P

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Speaker 2: five hundred that reached an all time high on Monday,

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Speaker 2: up twenty five percent from the April lows. Are we

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Speaker 2: top six two hundred on Monday, Apple climbing the most

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Speaker 2: among the megacabs. European stocks Okay, they didn't do so

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Speaker 2: well yesterday, down four tenths of one percent. European stock

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Speaker 2: futures are up this morning by a tenth of one percent,

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Speaker 2: but of course, Europe had a very solid first half

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Speaker 2: of the year, out performing the US in dollar terms,

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Speaker 2: speaking of which, the dollar down ten point eight percent

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Speaker 2: in the opening six months of the year. The bloom

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Speaker 2: Book Dollar Spot Index this morning is down a tenth

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Speaker 2: of one percent.

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Speaker 3: Japanese stocks it down.

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Speaker 2: We've got a stronger yen because of the Trump threats

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Speaker 2: of more tariffs on Japan in particular. All of this,

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Speaker 2: of course, ahead of the non fun pay rolls on Friday, Stephen.

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Speaker 1: In a moment, we'll bring you more on what the

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Speaker 1: EU is expecting from its trade talks with the US,

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Speaker 1: plus we'll look ahead to a big day for the

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Speaker 1: UK Prime Minister in Westminster as well. But first, Caroline,

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Speaker 1: it's the first day of a brand new era for

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Speaker 1: US and for daybreak Europe. As I'm coming to you

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Speaker 1: from our brand new radio studio in Brussels.

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Speaker 6: I love it.

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Speaker 2: I can actually see you because we've also got a link,

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Speaker 2: a video link too, so I can see you in

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Speaker 2: the radio studio.

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Speaker 3: It's great.

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Speaker 2: Has anything changed in Brussels since in Bruges? And why

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Speaker 2: Brussels now?

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Speaker 1: I think Brussels is giving me a very warm welcome.

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Speaker 1: And by that I'm a heat wave because it is

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Speaker 1: even hotter here that it is in London. But it

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Speaker 1: is a good moment to be arriving here. I mean,

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Speaker 1: look at our top story today. You know these were

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Speaker 1: into the crunch moments for EU trade negotiations and so

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Speaker 1: much because even if this deal what we're talking about,

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Speaker 1: we're going to go to details of it in just

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Speaker 1: a moment.

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Speaker 3: You know, this is only the.

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Speaker 1: First step of what we'll likely to be long and

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Speaker 1: further negotiations that will be driven out of here in Brussels.

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Speaker 1: So great for us to be here in the center

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Speaker 1: of all of that. Lots of other big questions also,

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Speaker 1: of course, you know the EU's climate targets, where they're

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Speaker 1: going to be pushed back. Where are they going to

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Speaker 1: find the compromise for that, given that the US is

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Speaker 1: going in a different direction on that front. You've got

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Speaker 1: budget negotiations are about to kick off for the EU.

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Speaker 1: That's always a very long and difficult political process.

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Speaker 3: And the whole question of competitiveness.

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Speaker 1: Will Europe drive these big changes that so many of

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Speaker 1: the big reports drag Eletta and so on have called

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Speaker 1: for as well? We're here, We're going to be bringing

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Speaker 1: you more of our reporters from across Europe, are experts

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Speaker 1: here in Brussels as well, and speaking to some of

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Speaker 1: those important key newsmakers. We're Bloomberg Daybreak Europe with even

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Speaker 1: more Europe Now.

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Speaker 2: Yeah, I like it, very excited to have you in Brussels.

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Speaker 2: So let's talk a bit more in depth than about

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Speaker 2: the latest on the US trade talks now, as time

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Speaker 2: is running out for countries to do deals ahead of

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Speaker 2: President Trump's July ninth deadline, Blueberg has learned that some

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Speaker 2: of what the EU is hoping to achieve. Our EMEA

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Speaker 2: news director was in Matheson joins us Now for more

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Speaker 2: on this. L was, good morning. What have we learned

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Speaker 2: about what the EU is and is not willing to

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Speaker 2: accept in these talks?

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Speaker 11: Well, as you were noting they were weighing this ten

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Speaker 11: percent universal tariff, whether that would be the baseline for retaliation, and.

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Speaker 6: It's seemingly not at this point.

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Speaker 11: What we're hearing is they're willing to accept ten percent,

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Speaker 11: but in turn they want lower rates on.

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Speaker 6: Some key sectors. They are really the big.

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Speaker 11: Ones, including pharmaceuticals, chips, aircraft, alcohol, and on top of that,

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Speaker 11: the EU wants various mechanisms which would effectively lower the

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Speaker 11: twenty five percent tariff on autos and car parts and

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Speaker 11: the fifty percent hit on aluminum and steel.

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Speaker 6: So that would still obviously be an impact.

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Speaker 11: For the block, but one that as a collective they

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Speaker 11: feel they could potentially tolerate. This would have been in principal framework,

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Speaker 11: I imagine, so the hope would be to use this

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Speaker 11: as a jumping off point for further negotiations and to

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Speaker 11: perhaps dangle non tariff changes.

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Speaker 6: There as a trade off.

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Speaker 11: So this would be to have a deal that's in

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Speaker 11: place and then negotiate further from there.

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Speaker 1: What is the likelihood that the US is going to

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Speaker 1: accept this kind of offer as well, given that the

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Speaker 1: timeline is now so short before the next increase in

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Speaker 1: tariff is due to take place.

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Speaker 11: Well, that's right, because these proposals have been going back

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Speaker 11: and forth. So the EU sends a proposal over, the

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Speaker 11: US looks that it sends it back.

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Speaker 6: But we are hearing that the mood.

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Speaker 11: Music is a bit better, that both sides are keen

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Speaker 11: to get a deal, and we know that the EU

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Speaker 11: trade chief are Setshevich will lead a delegation to Washington

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Speaker 11: this week. So it sounds like they're getting very much

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Speaker 11: to the point end of trying to get something something

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Speaker 11: done on both sides. As you say, the question is

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Speaker 11: what is the US response to this? The EU belief

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Speaker 11: is that the latest proposal from them, that the idea

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Speaker 11: from them is still.

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Speaker 6: Slightly favorable to the US. Will the US see it

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Speaker 6: that way?

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Speaker 11: Will the US say, hang on, no, we're not agreeing

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Speaker 11: to all these terms and conditions. But it's clear that

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Speaker 11: both sides are looking to get a deal.

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Speaker 6: But equally, the EU is a big.

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Speaker 11: Block, and the feeling is it still has some negotiating

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Speaker 11: power here.

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Speaker 2: What about the other negotiations that the White House is conducting.

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Speaker 2: What do we know about progress there?

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Speaker 11: Well, we know there's a trade talks back on with Canada.

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Speaker 11: There was that hitch over the Digital Services tax, so

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Speaker 11: they're pushing there and on countries in Asia. We keep

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Speaker 11: hearing a lot about progress with say, for example.

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Speaker 6: Vietnam and India.

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Speaker 11: But an emerging question mark is over Japan, which seems

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Speaker 11: to be getting singled out. I mean, Donald Trump had

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Speaker 11: a great relationship with a former prime minister, the late

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Speaker 11: Shinzo Abe, but here.

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Speaker 6: Things seem to be going a bit wrong.

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Speaker 11: I mean, mostly over what Trump himself says is Japan

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Speaker 11: being unwilling to accept US rice exports despite a shortage

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Speaker 11: of rice in Japan, and the response from Japan's being muted,

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Speaker 11: probably trying to stop a public spat or something coming

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Speaker 11: from it. But it's clear that Trump now sees rice

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Speaker 11: as his lever with Japan, a bit like possibly the

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Speaker 11: Digital Services tax was with Canada. But agriculture is a

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Speaker 11: really sacred sector in Japan. It's often been accused of

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Speaker 11: being highly protected for many generations.

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Speaker 6: So that's going to be a very tricky one.

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Speaker 11: So we are seeing signs of progress, you know, in

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Speaker 11: other countries in Asia for example, and it looks like

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Speaker 11: possibly with the EU, but Japan is one that's really

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Speaker 11: starting to stout out as being problematic.

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Speaker 3: Okay, all right, Emmy, and he's director Rosalind Mathison, thank you.

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Speaker 2: Now Here in the UK, Kirs Starmer faces perhaps the

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Speaker 2: most important vote since becoming Prime Minister tonight, MP's vote

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Speaker 2: on the welfare Bill, and despite concessions from government, it

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Speaker 2: still risks defeat. Joining us now is putting both politics.

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Speaker 2: Report to James Walcott, Good morning, James. This is an

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Speaker 2: extraordinary position for a government with a one hundred and

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Speaker 2: sixty five seat majority to be in. What do the

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Speaker 2: rebels say?

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Speaker 12: I think you have to separate this out from the

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Speaker 12: Stanic kind to what they're saying short term and sort

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Speaker 12: of the chaos of the past couple of days and

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Speaker 12: long term, so long term in broad strokes, the fear

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Speaker 12: has been that the government is putting the fiscal cart

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Speaker 12: before the moral and political horses, and so these reforms

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Speaker 12: to welfare are intended to get people back into work.

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Speaker 3: But the fear from labor MPs.

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Speaker 12: They point to humanity areans, I think tact research saying

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Speaker 12: the reforms will push people out of care and not

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Speaker 12: into work. There's no public consultation around disabled people. They

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Speaker 12: say it hits people in their sort of areas where

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Speaker 12: they're worried about reform taking over. So it's a political

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Speaker 12: problem too, and they say sort of the government is

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Speaker 12: making a mistake, and they're joined in that for what

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Speaker 12: it's worth by London Merthidique can and Manchester mayor Andy Burnham.

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Speaker 12: So it's a broad based rebellion. That's where we were

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Speaker 12: last week. Now, over the past kind of forty eight

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Speaker 12: hours or so, there have been these crunch talks about

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Speaker 12: bringing back kind of the governments, drawing down the sort

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Speaker 12: of bail watering it down, and then trying to get

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Speaker 12: people back on side. Now this is where the two

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Speaker 12: stories meet. One of the ways of bringing people back

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Speaker 12: on side is this thing called the Tim's Review, which

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Speaker 12: is where they would review these policies and see if

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Speaker 12: they worked a few months down the line. A few

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Speaker 12: of the rebels have said, overnight, we thought this was

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Speaker 12: a good idea. Now we've seen the details on the

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Speaker 12: day of the vote, because they've come out so last minute.

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Speaker 12: We're not convinced this review is serious. We think the

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Speaker 12: review is instead merely a kind of rubber stamping as

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Speaker 12: a way of getting past fiscal rules.

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Speaker 3: They fear the.

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Speaker 6: Fyscal rules will always mean this.

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Speaker 12: Review is going to have to add up by the

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Speaker 12: end of the day to saving five billion. So they're

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Speaker 12: not convinced.

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Speaker 3: And James briefly, I mean, is this good going to pass?

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Speaker 12: Your guess is really as good as mine at this point, Stephen,

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Speaker 12: there is so much uncertainty. There is anger at Kiss

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Speaker 12: Starmer for how this has all been handled, and there

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Speaker 12: are MPs just making their minds up as we speak, effectively,

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Speaker 12: and they're going to be watching the debate today to

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Speaker 12: decide if this is something they decide to bring down

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Speaker 12: the government over, or at least put a massive hole

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Speaker 12: in Kiss Starmer's credibility.

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