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

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Speaker 2: President Trump's trade war began in earnest. In April, when

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Speaker 2: he announced a raft of new tariffs.

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Speaker 3: Our country and its taxpayers have been ripped off for

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Speaker 3: more than fifty years, but it is not going to

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Speaker 3: happen anymore.

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Speaker 2: Trump said he'd impose reciprocal tariffs across the board, levies

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Speaker 2: on dozens of trading partners, including the European Union, Japan

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Speaker 2: and South Korea, and the United Kingdom.

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Speaker 3: Reciprocal That means they do it to us and we

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Speaker 3: do it to them. Very simple. Can't get any simpler

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Speaker 3: than that.

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Speaker 2: But after that announcement sparked market turbulence, the president changed course.

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Speaker 2: He announced a ninety day pause on the implementation of

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Speaker 2: those tariffs. On Fox Business, Trump's trade advisor, Peter Navarro,

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Speaker 2: presented it as an opportunity for those trading partners negotiate.

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Speaker 4: So we're going to run ninety deals in ninety days,

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Speaker 4: is possible. The Boss is going to be the chief negotiator.

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Speaker 4: Nothing's done without him looking very carefully at it.

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Speaker 2: Well, that pause is about to end on Wednesday, and

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Speaker 2: while the Trump administration has announced a few tentative trade agreements,

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Speaker 2: including one with the UK, then another with Vietnam. They

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Speaker 2: are nowhere near ninety so over the weekend on CNN's

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Speaker 2: State of the Union, Treasury Secretary Scott bessen't laid out

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Speaker 2: what's likely to happen next.

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Speaker 5: President Trump's going to be sending letters to some of

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Speaker 5: our trading partners saying that if you don't move things along,

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Speaker 5: then on August first, you will boomerang back to your

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Speaker 5: April second tariff level.

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Speaker 2: Brendan Murray oversees Bloomberg's trade coverage and he says, it

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Speaker 2: looks like August first is the new July ninth.

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Speaker 1: You know, ninety days was always an arbitrary sort of

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Speaker 1: number that they just pulled out of the a.

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Speaker 2: The move is in keeping with how the White House

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Speaker 2: has waged this trade war from the very beginning, moving deadlines,

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Speaker 2: putting tariffs in place, then taking them off, and adjusting

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Speaker 2: tariff levels with no explanation.

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Speaker 1: It feels like it's a little bit of groundhog Day.

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Speaker 1: Every day on the trade beat, to some extent, is

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Speaker 1: that we're going to go through this all over again.

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Speaker 2: I'm David Gura, and this is the big take from

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Speaker 2: Bloomberg News today.

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Speaker 6: On the show.

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Speaker 2: As President Trump's ninety day pause on his sweeping reciprocal

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Speaker 2: tariffs comes to an end, what comes next, What the

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Speaker 2: White House has accomplished, what it hasn't, and where the

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Speaker 2: trade war goes from here. The problem with counting how

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Speaker 2: many trade deals the White House has done is it

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Speaker 2: depends on how you define the word deal. Bloomberg's Brendan

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Speaker 2: Murray says the Trump administration reached an agreement with the

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Speaker 2: United Kingdom, and President Trump announced a trade deal with

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Speaker 2: Vietnam on social media, where on Monday afternoon, the President

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Speaker 2: also said he'd impose twenty five percent tariffs on imports

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Speaker 2: from Japan and South Korea and a thirty percent tariff

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Speaker 2: on imports from South Africa. But at the end of

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Speaker 2: this ninety day pause and years, Brendan says, we haven't

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Speaker 2: seen the fine print and we don't know the status

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Speaker 2: of other negotiations. From your vantage point, how much has

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Speaker 2: been accomplished here over the course of these eighty plus days, Well.

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Speaker 1: It's hard to say how far along the talks are

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Speaker 1: with all of these other countries, But the main ones China, Mexico, Canada,

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Speaker 1: those are the three biggest US trading partners. Those are

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Speaker 1: all still in flux, and we don't know where those

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Speaker 1: are headed. The President has said that he is going

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Speaker 1: to stick to his auto tariffs and his steel tariffs

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Speaker 1: and aluminum tariffs, and those are really important to Canada

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Speaker 1: and Mexico and they're going to try to negotiate those away.

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Speaker 6: Now.

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Speaker 1: The other big deal that really means more than any

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Speaker 1: of those three is one with the European Union. We

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Speaker 1: think of Canada, China, Mexico as the biggest US trading partners,

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Speaker 1: but the European Union as a block is really the

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Speaker 1: biggest and the most integrated when it comes to goods, trade, services, trade,

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Speaker 1: and investment that goes back and forth between the two economies.

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Speaker 2: How hard and fast is this deadline on Wednesday? We

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Speaker 2: heard from the President last week indicating that he didn't

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Speaker 2: intend to blow past it or offer any kind of extension.

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Speaker 2: What's the latest from him and his administration on the

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Speaker 2: hard and fastness of that July ninth deadline.

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Speaker 1: Well, as we're getting closer to that, they're inserting some

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Speaker 1: wiggle room in there now. The thinking is, and what

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Speaker 1: we've heard from some of the folks in the administration,

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Speaker 1: is that they've got a bottleneck of these deals that

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Speaker 1: are just on the very edge of being resolved and

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Speaker 1: being signed, but they can't get them all over the

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Speaker 1: line before July ninth, the original deadline, So it seems

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Speaker 1: like August first is becoming the new deadline. None of

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Speaker 1: this is a surprise to anybody who watches trade negotiations.

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Speaker 1: These are complicated deals that have to be done back

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Speaker 1: and forth between capitals over different time zones, and they

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Speaker 1: just take a long time, and they involve complicated things

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Speaker 1: that countries just aren't going to give up overnight. And

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Speaker 1: so we've seen the ninety deals in ninety days come

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Speaker 1: down to maybe a half dozen deals and probably one

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Speaker 1: hundred letters.

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Speaker 2: Broad strokes, What do you expect to play out between

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Speaker 2: now and July ninth or August first? What are we

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Speaker 2: likely to get from the White House? How should we

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Speaker 2: think about or read what's going to be in letters

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Speaker 2: or deal announcements to get a sense of what's actually

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Speaker 2: in these deals and agreements.

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Speaker 1: I think we're going to see if they release the

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Speaker 1: deals at all, We're going to see how basic they are,

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Speaker 1: how broad they are, how lacking in concrete commitments. There's

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Speaker 1: probably going to be some agreements to purchase a certain

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Speaker 1: amount of US ex sports of agriculture, for instance, or

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Speaker 1: Boeing airplanes. These are more commercial arrangements than they are

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Speaker 1: trade deals. But every country is now going to be

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Speaker 1: faced with a ten percent tariff on their exports to

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Speaker 1: the US. At least that's going to be across the board.

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Speaker 1: There doesn't seem to be any negotiating that away, So

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Speaker 1: in effect, President Trump is raising this tariff wall around

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Speaker 1: the US economy, over which countries will have to just

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Speaker 1: deal with or there'll be retaliation.

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Speaker 2: Brent, when you look at the negotiations between the US

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Speaker 2: and these major trading partners, how much are the points

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Speaker 2: of contention the same in all of those talks.

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Speaker 1: I think from the US's perspective, there are several issues

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Speaker 1: that bother them among the biggest, and Trump has been

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Speaker 1: pretty vocal about how he doesn't like that you can't

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Speaker 1: buy Ford pickup trucks in Tokyo, or you don't see

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Speaker 1: Cheves driving around Berlin. So cars is one of the

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Speaker 1: sort of regular sticking points with President Trump. He also

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Speaker 1: is trying to crack down on the proliferation of Chinese

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Speaker 1: products everywhere. That could be everything from raw materials like

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Speaker 1: steel to things like technological components that turn up in

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Speaker 1: a lot of consumer items that we see.

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Speaker 6: The Trump administration.

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Speaker 1: Takes real issue with agriculture barriers to other countries' markets.

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Speaker 1: India has very high protections around its agriculture industry where

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Speaker 1: there's a big constituency of the Modi government that are

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Speaker 1: subsistence farmers and they would be economically devastated if the

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Speaker 1: agriculture market of India were opened to the global trading system.

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Speaker 1: So those are barriers that are unlikely to go down

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Speaker 1: anytime soon or in any way that's significant. And then

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Speaker 1: then there are a whole host of other issues that

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Speaker 1: fall under this category of non tariff barriers, and these

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Speaker 1: are things like the tax system in the European Union

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Speaker 1: or the way businesses are regulated in a country like

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Speaker 1: South Korea.

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Speaker 6: Brendan.

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Speaker 2: Over the weekend, the President said he would charge an

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Speaker 2: additional ten percent tariff on any country aligning themselves with

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Speaker 2: the anti American policy of the Bricks Nations. This is

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Speaker 2: a group led by Brazil, Russia, India, and China. They

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Speaker 2: were meeting over the weekend. What does that say just

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Speaker 2: about what's motivating this trade war, what's motivating the levees

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Speaker 2: that the President is putting in place.

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Speaker 1: I think it just illustrates how broadly the President thinks

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Speaker 1: he can use tariffs to influence not just the trading

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Speaker 1: relationships the US has with another country, but geoeconomic forces

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Speaker 1: that are happening around him. Ironically, the Bricks organization is growing,

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Speaker 1: and it's growing because of the vacuum of what they

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Speaker 1: perceive as the vacuum of the leadership that the US

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Speaker 1: has had over the years to steering the global economy,

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Speaker 1: steering the global order in a certain directions. So the

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Speaker 1: Bricks now see themselves as the source of stability in

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Speaker 1: the world, the ones you can trust, the ones you

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Speaker 1: can count on, versus President Trump, who seems to be

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Speaker 1: filling the role of the sort of chief disruptor of

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Speaker 1: the global economy.

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Speaker 2: The US Court of International Trade blocked many of the

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Speaker 2: tariffs that President Trump had threatened or imposed on other countries.

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Speaker 2: I asked Brendan how that decision, which the administration has appealed,

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Speaker 2: has affected the White House's negotiations.

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Speaker 1: I think what it's done is slowed a lot of

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Speaker 1: them down. Countries would be looking at that, going that's

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Speaker 1: our get out of tariff free card. And they would

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Speaker 1: be looking at the date of that next court hearing going.

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Speaker 6: If we can just hold out that.

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Speaker 1: Long, then perhaps the laws of the United States will

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Speaker 1: strike down his authority to use those tariffs and will

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Speaker 1: be in a completely different world.

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Speaker 2: In the meantime, the Trump administration is leaning more heavily

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Speaker 2: on tariffs, not on countries, but on specific sectors.

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Speaker 1: Those sectoral tariffs can be used very broadly. For example,

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Speaker 1: the steel and aluminum tariffs that he rolled out a

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Speaker 1: few months ago were recently expanded to include appliances, washing machines,

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Speaker 1: the kinds of things that everyday Americans go to home

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Speaker 1: depot and buy because they contain steel and aluminum. So

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Speaker 1: you can use these sectoral tariffs very broadly. You can

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Speaker 1: hit a lot of imports with them, and so on

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Speaker 1: these two separate tracks, President Trump is trying to build

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Speaker 1: this tariff wall around the US economy, and he can

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Speaker 1: do so with either one. There are other sectual tariffs

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Speaker 1: coming for pharmaceuticals, which the European Union is a big

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Speaker 1: exporter of. There are secual tariffs coming for semiconductors. Now

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Speaker 1: imagine how broadly you could define what is contained in

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Speaker 1: a semiconductor. You could put the tariff on the technical

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Speaker 1: tiny little chip that is what we think of as

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Speaker 1: a semiconductor, or you could put it on the phone

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Speaker 1: which contains semiconductors. So either way, the administration feels like

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Speaker 1: it's going to rewire the global economy one way or

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Speaker 1: the other, and that president has what they believe is

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Speaker 1: the authority to do that.

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Speaker 2: After the break, the impact the threat of President Trump's

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Speaker 2: tariffs has already had on the global economy. Bloomberg's Global

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Speaker 2: Trade editor Brendan Murray has covered his fair share of

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Speaker 2: trade negotiations, and I wanted to know how these talks

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Speaker 2: stack up.

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Speaker 1: These negotiations are different because they're on this fast track.

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Speaker 1: Trade negotiations typically take years and they go chapter by chapter,

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Speaker 1: line by line. So I think it's the speed and

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Speaker 1: the complexity that are much different. They're much less complex

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Speaker 1: and they're much faster, and they're also they're not in binding.

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Speaker 1: They will die with a new administration from a different

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Speaker 1: party that doesn't follow the same trade policies that the

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Speaker 1: current administration does. So they're not complex, they're fast, and

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Speaker 1: they don't have a lot of longevity built into them.

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Speaker 2: I want to turn out to the effects these tariffs

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Speaker 2: these trade talks have had on the economy so far,

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Speaker 2: What have we seen in the data as this is

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Speaker 2: all progressed.

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Speaker 1: Well, The data on trade itself has been kind of

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Speaker 1: all over the place, but the broad trend is trade

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Speaker 1: is holding up pretty well. We've seen not as much

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Speaker 1: of an impact on inflation data. The big worry among

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Speaker 1: economists is that tariffs will cause inflation, but we haven't

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Speaker 1: seen that pressure appear in the data yet. So there's

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Speaker 1: a bit of a disconnect between the administration, which says, look,

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Speaker 1: we don't have any inflation, and the people who are

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Speaker 1: actually paying those tariff bills, who say, these tariffs are

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Speaker 1: killing me and I'm going to go out of business

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Speaker 1: if I don't raise my prices or someone lowers the tariffs.

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Speaker 1: So there's a school of thought and it's yet to

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Speaker 1: be born out in the data. So we don't know

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Speaker 1: yet that this is going to appear as inflation in

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Speaker 1: later this year early next year as those costs feed

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Speaker 1: through into the larger US economy. That's what we're hearing

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Speaker 1: from the Federal Reserve as well. They're sitting on their

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Speaker 1: hands trying to figure out how this is going to

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Speaker 1: play out, and they don't know if it's going to

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Speaker 1: be a benign scenario or if it's going to be

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Speaker 1: rampant inflation. But they are waiting, listening to their contacts

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Speaker 1: across the FED districts and trying to figure out what

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Speaker 1: the actual implication is going to be.

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Speaker 2: Brendan. Lastly, as we look for these letters, maybe deal announcements,

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Speaker 2: what is your advice on what we should want watch for,

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Speaker 2: who we should listen to As these trade talks continue

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Speaker 2: and these tariffs go into effect.

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Speaker 1: I think we should look very closely at how the

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Speaker 1: world responds to what is essentially a unilateral trade war

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Speaker 1: on each of their economies. Will we see retaliation. So far,

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Speaker 1: we've only seen it threatened, maybe put a little bit

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Speaker 1: of tariffs on US exports.

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Speaker 6: But for the most part.

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Speaker 1: The world has sat through the last three months and said, Okay,

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Speaker 1: you're threatening me with tariffs, let's negotiate.

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Speaker 6: And there hasn't been a.

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Speaker 1: Huge backlash, a collective backlash against the US's threats to

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Speaker 1: those economies. China has spen the exception. China is fighting

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Speaker 1: back in different ways. But I think the key thing

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Speaker 1: to watch is how countries respond and whether we see

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Speaker 1: the world just take it and adjust to it and

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Speaker 1: deal it, or whether we see the sort of building

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Speaker 1: of retaliation in a collective way where countries band together

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Speaker 1: and say, we can't sit back and take this for

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Speaker 1: very long, otherwise our own domestic political situations are going

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Speaker 1: to get harry.

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Speaker 2: This is the Big Take from Bloomberg News. I'm David Gura.

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