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

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Speaker 2: This is the new Big Day BAQ podcast, available every

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Speaker 2: morning on Apple, Spotify or whatever you listen. It's Thursday,

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Speaker 2: the third of April here in London.

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Speaker 3: I'm Caroline Hepka.

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Speaker 1: And I'm Stephen Carroll. Coming up today. Trump Tariff's everyone.

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Speaker 1: The US imposes steep levees on all imports, ranging from

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Speaker 1: ten to fifty percent.

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Speaker 2: Countries around the world prepare their responses to US levees

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Speaker 2: that are upending a global trading system.

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Speaker 1: Plus fear grips Market says tariffs raise risks to global

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Speaker 1: growth in a worst case scenario for Wall Street, Let's.

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Speaker 2: Start with a roundup of our top stories.

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Speaker 1: President Donald Trump has imposed these steepest US tariffs on

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Speaker 1: trading partners in more than one hundred years. The minimum

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Speaker 1: levee will be ten percent, with the UK, Brazil, Turkey

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Speaker 1: and many others in that group. The EU is being

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Speaker 1: hit with a twenty percent levee, while faces twenty four percent. Meanwhile,

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Speaker 1: China is facing a tariff rate of thirty four percent

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Speaker 1: on top of current charges. Bloomberg Economics says this means

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Speaker 1: Chinese goods heading to the US will now face an

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Speaker 1: average tariff rate of sixty seven percent. President Trump underlined

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Speaker 1: the scale of the changes as he announced the plan.

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Speaker 4: This is one of the most important days, in my opinion,

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Speaker 4: in American history. It's our declaration of economic independence. For years,

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Speaker 4: hard working American citizens were forced to sit on the

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Speaker 4: sidelines as other nations got rich and powerful, much of

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Speaker 4: it at our expense.

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Speaker 1: President Trump has embraced tariffs as a tool to assert

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Speaker 1: US power, revive American manufacturing, and exact geopolitical concessions from

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Speaker 1: trading partners. The measures announced on Wednesday are based on

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Speaker 1: the administration's assessment of all kinds of barriers and levees

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Speaker 1: that other countries impose on American goods. The ten percent

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Speaker 1: baseline tariff comes into force from Saturday, while the higher

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Speaker 1: duties will kick in from next Wednesday.

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Speaker 2: Trump and his trade advisors argue that tariffs will encourage

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Speaker 2: companies to shift manufacturing operations to the US, rebuild the

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Speaker 2: country's industrial base, and create jobs. Using Federal Reserve calculations,

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Speaker 2: these measures are expected to shave two point three percent

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Speaker 2: off American GDP. Bloomberg Economics calculates that the effective tax

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Speaker 2: rate that the US now charges on trillions of dollars

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Speaker 2: of imported goods may climb to around twenty three percent,

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Speaker 2: higher than at any point in more than a century.

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Speaker 2: Diane Swank, TIV Economists that KPMG says the announcement is

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Speaker 2: basically the worst case scenario for Americans.

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Speaker 5: These tariffs are across the board.

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Speaker 6: They're going to touch everything from going to the grocery store,

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Speaker 6: to going out to restaurants, to even having to go

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Speaker 6: to places like the movie theater and trying to have

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Speaker 6: a little time art because everywhere you go there's some

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Speaker 6: aspect that they have to import to do that.

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Speaker 2: Diane Swank says that the tariffs now raised the likelihood

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Speaker 2: of an economic slow down in the US. Following the announcement,

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Speaker 2: investors added to beds for at least three FED rate

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Speaker 2: cuts this year. But for FED officials still working to

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Speaker 2: rein in the price gains that spiked during the pandemic,

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Speaker 2: the inflationary fallout from the President's actions may limit their

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Speaker 2: ability to step in and bolster the economy with cuts.

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Speaker 1: Blueberg Economics says the impact of the accumulated US tariffs

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Speaker 1: on China would be enough to wipe out most US

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Speaker 1: China trade by the end of this decade. China's Commerce

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Speaker 1: Ministry condemned the US levies, but did not specify what

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Speaker 1: measures it might use against them. Goldbn Sachs, China Portfolio

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Speaker 1: straschis CIFU says the scale of the move is more

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Speaker 1: than what many investors had priced in.

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Speaker 7: Definitely today's new city. I would say it would be

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Speaker 7: a surprise to most of the investors. It's out of expectation,

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Speaker 7: definitely in and near Charma. It caused more volatility, especially

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Speaker 7: in terms of mental evaluation. Impact is unavoidable, especially when

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Speaker 7: US market a global markets are all correcting. Then definitely

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Speaker 7: for China, we are expecting more volatility.

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Speaker 5: Goldman Seafood, speaking there.

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Speaker 1: Earlier this week, Bloomberg Reporter that China had taken steps

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Speaker 1: to restrict local companies investing in the United States, in

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Speaker 1: a move that could give Beijing more leverage for potential

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Speaker 1: trade negotiations with the Trump administration. US president has yet

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Speaker 1: to speak with this Chinese counterpart, more than two months

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Speaker 1: after his inauguration.

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Speaker 2: The European Union says that it is ready to retaliate

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Speaker 2: against the twenty percent tariffs on the bloc. EU trade

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Speaker 2: ministers are due to meet on Monday to discuss a

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Speaker 2: response that could further strain the world's largest bilateral trading relationship.

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Speaker 2: European Commission President of Slavondelion warned that US actions would

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Speaker 2: deal a blow to the global economy, and she urged

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Speaker 2: further trade negotiations.

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Speaker 8: We have always been ready to negotiate with the United

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Speaker 8: States remove the remaining barriers to transatlantic trade. At the

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Speaker 8: same time, we are prepared to respond. We are already

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Speaker 8: finalizing the first package of countermeasures in response to tariffs

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Speaker 8: on steel, and we're now preparing for further countermeasures to

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Speaker 8: protect our interests and our businesses if negotiations fail.

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Speaker 2: Osla Vonderline, speaking earlier in Europe, the American measures threatened

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Speaker 2: to wipe out much of the euro Area's expansion that

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Speaker 2: the European Central Bank forecast for this year and for

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Speaker 2: next year. The impact on inflation is less clear cut,

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Speaker 2: which has kept easy be official so committing to any

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Speaker 2: outcome at their next policy meeting on the seventeenth of April.

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Speaker 1: The UK government says it will continue to push for

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Speaker 1: a trade deal with the US as it faces tariffs

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Speaker 1: of ten percent less than its European neighbors.

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Speaker 5: The business and Trade Secertary.

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Speaker 1: Jonathan Reynolds said the government would remain calm, while acknowledging

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Speaker 1: the UK would still suffer from the tariffs on vehicle

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Speaker 1: and autoparts, steel and aluminium. UK's approach has been backed

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Speaker 1: by business. The manufacturing lobby Make UK said in a

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Speaker 1: statement that this isn't the time for a trade war.

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Speaker 1: W Chavon Havlin, the Director General of the British Chambers

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Speaker 1: of Commerce, commended the government's cool head but underlines the

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Speaker 1: havoc the US decision will wreak on businesses around the world.

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Speaker 2: Donald Trump's historic action risks inducing a worldwide trade war

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Speaker 2: marked by tit for tat strikes that destabilize supply chains

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Speaker 2: and hurt US exporters. Speaking after the president's announcement, his

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Speaker 2: Treasury Secretary Scott bessent urged other countries not to fight back.

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Speaker 9: I would advise none of the countries to panic. I

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Speaker 9: wouldn't try to retaliate because as long as you don't retaliate,

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Speaker 9: this is the high end of the number, and I

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Speaker 9: think the market could have certainty that this is the

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Speaker 9: number barring retaliation.

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Speaker 2: Scott Bessen went on to leave the door open for negotiations,

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Speaker 2: telling Bloomberg we'll see with regards to further talks. Countries

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Speaker 2: have already reached out to Washington to engage in discussions,

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Speaker 2: but the Treasury chief indicated the administration would let things

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Speaker 2: settle first.

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Speaker 1: Global financial markets are being hit by a sweeping sell

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Speaker 1: off after President Trump's bid to remake the world trading

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Speaker 1: order proved more aggressive than expected. US and European equity

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Speaker 1: index features are falling along with the dollar, while Asian

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Speaker 1: shares have tumbled, with an index in Japan sinking to

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Speaker 1: the lowest level in eight months. Tenure treasury yields have

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Speaker 1: slum to the lowest level in more than five months,

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Speaker 1: with the flight to haven's including strengthening the Japanese yen

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Speaker 1: and gold, which touched another record high. Kyle Rada is

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Speaker 1: senior market analyst at Capital dot Com.

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Speaker 10: The absolute level of tariffs is higher than expected. The

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Speaker 10: markets are going to have to price in this growth

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Speaker 10: shock now, and there's still high degrees of ambiguity about

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Speaker 10: what the sort of long term objective here is for

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Speaker 10: the Trump administration. I mean, is this supposed to be

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Speaker 10: a radical restructuring and shaking up of the global trade

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Speaker 10: order in the global economy. You know, we've seen some

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Speaker 10: indications that maybe they're willing to negotiate with trading parts

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Speaker 10: and as on certain tariffs that lives in riggal room.

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Speaker 10: On top of that, though, it sort of opens questions about,

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Speaker 10: you know, the reciprocal tariffs in the United States and

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Speaker 10: whether tariffs can actually be raised from here, as you know,

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Speaker 10: the sort of tip for tech dynamic plays out Kyle.

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Speaker 1: Rader speaking there as traders across asset classes are bracing

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Speaker 1: for what premises to be a grueling stretch of trade

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Speaker 1: negotiations as companies and consumers adjust to Trump's tariff offensive.

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Speaker 2: Those are our top stories this morning. On the markets,

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Speaker 2: the SCI Asia Pacific Index has slumped as much as

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Speaker 2: one point seven percent, currently down one and a half percent,

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Speaker 2: the lowest level since February USTOX fifty futures are down

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Speaker 2: one point eight percent, the S and P five hundred

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Speaker 2: emni futures down two point seven percent, the NASDAK even

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Speaker 2: more three point two percent. Individual names moving after markets

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Speaker 2: Apple something seven percent and Vidia down more than five percent.

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Speaker 2: The ten year US treasury yield this morning, currently trading

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Speaker 2: at four sports zero five, a decline of seven and

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Speaker 2: a half basis points for that benchmark yield to those

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Speaker 2: of the markets.

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Speaker 1: We have everything you need to know about the US

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Speaker 1: tariff announcement today, what Donald Trump has said he will do,

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Speaker 1: how other countries are responding, and what markets are doing.

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Speaker 1: It is a day of superlatives if you want an

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Speaker 1: example of how countries around the world are scrambling to

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Speaker 1: the Arcel Vanderlion stood up at five fifteen am and

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Speaker 1: Brussels and gave her statement two reporters in three languages,

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Speaker 1: as she does on occasions like this as well, saying,

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Speaker 1: of course, the US preparing countermeasures, but also had harsh

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Speaker 1: words for the announcements from Donald Trump, talking about there

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Speaker 1: seems to be no order in this disorder, no clear

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Speaker 1: path through the complexity and chaos that's been created.

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Speaker 2: Yeah, the Chinese have called it unilateral bullying and Bloomberg

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Speaker 2: opinion columnists Leonelle Laurent writing about this from the perspective

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Speaker 2: of boardrooms, that they can't wish away a hostile and

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Speaker 2: unpredictable environment that mixes mercantilism and maga, that European executives

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Speaker 2: now sort of questioning whether or not they can work

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Speaker 2: with US firms given the current climate, so lots to

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Speaker 2: think about today.

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Speaker 1: Indeed, and John Arthur's also in Bloomberg Opinion, chose to

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Speaker 1: quote John McEnroe, the tennis player, as you cannot be

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Speaker 1: serious with these announcements as well. Full coverage across Bloomberg platforms,

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Speaker 1: of course, and on our website you'll find our tariff tracker,

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Speaker 1: where you can navigate every Trump tariff and its economic effect.

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Speaker 2: Now, President charms sweeping tariffs have shaken markets, threatening to

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Speaker 2: upend the world economy, reignite inflation and stall growth in

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Speaker 2: the United States. Joining us now to discuss this is

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Speaker 2: Bloomberg's trades are Brendan Murray. Good morning, Brendan. The tariff

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Speaker 2: announcement seems to be worse than the worst case scenario.

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Speaker 2: Can you just talk us through the announcement and what

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Speaker 2: you make of it?

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Speaker 11: Yeah, it was quite a spectacle in the Rose Garden yesterday.

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Speaker 11: President Trump spent at least forty five minutes or an

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Speaker 11: hour speaking, some scripted, some nuts ed. There was a

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Speaker 11: bit of a maga rally, sort of a vibe about

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Speaker 11: the whole thing.

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Speaker 9: There was.

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Speaker 11: There was a group of twenty or so US automakers

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Speaker 11: who were there, and almost his full Cabinet was there,

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Speaker 11: Vice President Vance was there, and as he spoke, the

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Speaker 11: world came to grips with the fact that this wasn't

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Speaker 11: just going to be a flat rate on a you know,

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Speaker 11: across the board. It was going to be many different

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Speaker 11: tariff rate numbers depending on which country we're talking about.

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Speaker 11: Chinese imports into the US face of fifty four percent tariff,

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Speaker 11: whereas two months ago, you know, that number was zero.

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Speaker 11: So we have gone from you know, kind of zero

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Speaker 11: to sixty kilometers an hour in terms of the effect

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Speaker 11: on the global economy. So, yeah, it was it was

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Speaker 11: interesting to watch the market reaction as Trump spoke, all

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Speaker 11: the market new was the ten percent baseline rate, and

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Speaker 11: then eventually, once it absorbed all the other numbers, the

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Speaker 11: much higher numbers, you know, stocks turned down, so, you know,

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Speaker 11: the sentiment really kind of whipsawed there. In the aftermath

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Speaker 11: of it, we heard from.

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Speaker 1: The US Treasury Secretary Scott Bass and he spoke to

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Speaker 1: Bloomberg shortly after the announcement, warning against retaliation. But already

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Speaker 1: we're seeing other countries ramping up their response to this

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Speaker 1: as well. Talk us through some of the responses.

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Speaker 11: We've heard one of the few areas to avoid a

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Speaker 11: big hit was Canada and Mexico. Canada, they already have

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Speaker 11: there under another sort of terriff regime, so they did

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Speaker 11: not get hit with these reciprocal tariffs, and so that

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Speaker 11: you would think that there would be room for negotiation there,

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Speaker 11: and Doug Ford, a Canadian politician, said he would urge

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Speaker 11: the Prime minister not not to retaliate, so maybe there's

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Speaker 11: some room for negotiation there. We heard a similar kind

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Speaker 11: of tone from Japan who said this was regrettable, but

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Speaker 11: we look forward to sitting down with the Trump administration

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Speaker 11: and working through this. The European Union, as you mentioned,

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Speaker 11: was out very early this morning saying we have a

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Speaker 11: big response if talks fail. So they are leaving the

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Speaker 11: door open. You know that never has there been a

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Speaker 11: better telegra trade beginning of a trade war than April second,

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Speaker 11: twenty twenty five. So the EU could have come back

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Speaker 11: immediately with a package of retaliation. But they came in

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Speaker 11: this morning and they said, will we'll give talks a chance.

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Speaker 11: So those are the three between Asia, North America and Europe.

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Speaker 11: There seems to be a tone of Okay, let's sit down.

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Speaker 11: This is the worst case scenario. But let's try to

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Speaker 11: talk through it.

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Speaker 2: Yeah, we're getting fresh lines from Japan from Ishaba saying

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Speaker 2: that Japan has take to talk directly with Trump. If

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Speaker 2: necessarily deeply concerned over the consistency of US tariffs with

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Speaker 2: the wto the World Trade Organization, will strongly urge the

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Speaker 2: US to review tariff measures. President Trump is following through though,

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Speaker 2: as you say, long telegraphed long promise campaign to reshape

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Speaker 2: global trade. So a question domestically in the US will

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Speaker 2: it help the US in the long run.

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Speaker 11: What matters in politics is not the long run, in

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Speaker 11: the short runs. So when you look at the countries

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Speaker 11: that got hit, you're talking about the hardest. You're talking

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Speaker 11: about Vietnam, Malaysia, places where Apple, an iconic American company,

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Speaker 11: has shifted its production. So everyone who wants to buy

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Speaker 11: an Apple iPhone going forward is going to pay whatever

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Speaker 11: that tariff rate now is on Vietnam. It's and that

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Speaker 11: high forty percent, I think it's very high. So during

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Speaker 11: the first trade war, a lot of companies, a lot

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Speaker 11: of Chinese companies moved to these places in South Asia

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Speaker 11: to avoid the tariffs, and now the second Trump administration

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Speaker 11: is catching up with them and so and try to

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Speaker 11: sort of block that end run around tariffs that they

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Speaker 11: were trying to do. So you got to wonder what

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Speaker 11: the effect is going to be in the short term

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Speaker 11: on the economy. And as we heard some previous guests say,

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Speaker 11: this doesn't clear up the uncertainty cloud that's been hanging

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Speaker 11: over markets and companies for the past couple of months.

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Speaker 11: In some cases, it makes it even worse.

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Speaker 5: Our trades are Brandon Murray, thank you very much.

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Speaker 2: Well, that is have sparked a sweeping sell off across

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Speaker 2: global financial markets. Trade as an hour preparing for negotiations

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Speaker 2: against an economic backdop that has already shown signs of softening.

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Speaker 2: Joining us now, as Bloomberg opinion columnist Daniel Moss, Daniel,

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Speaker 2: welcome to the program. You've reported on many major market

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Speaker 2: moments for Bloomberg. Of course, how significant is what we're

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Speaker 2: seeing today in markets?

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Speaker 3: Well, it's very significant. As Brendan just said, there's a

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Speaker 3: big performative aspect to this. I think President Trump at

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Speaker 3: one point said this was possibly the most important day

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Speaker 3: in modern American history. Well, okay, it's got a few

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Speaker 3: rivals there. Look, I think the temptation on days like

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Speaker 3: this particularly when, as Brendan said, there's been such a

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Speaker 3: big countdown as to do the be four times after times.

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Speaker 3: You know, this is the fundamental break, But I think

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Speaker 3: we have to see where some of the pieces settle here.

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Speaker 3: It's still early days, believe it or not. We're less

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Speaker 3: than three months into this administration. So on January nineteen,

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Speaker 3: the economy that Trump inherited the next day from Joe Biden.

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Speaker 3: By January nineteen, the US economy was doing very very well,

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Speaker 3: certainly far better than expected. This didn't attract much attention

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Speaker 3: at the time, but on the last working day before

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Speaker 3: Trump's inauguration, IMF released some updated numbers to its world

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Speaker 3: economic outlook. The big story there was not so much

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Speaker 3: the numbers. According to the Fund's chief economists. The big

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Speaker 3: story was the way the US had broken away from

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Speaker 3: the rest of the pack. Its performance was head and

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Speaker 3: shoulders above its peers. So in a way, the US

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Speaker 3: is kind of counting on. Well, you want access to

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Speaker 3: the market here, You want access to the world's largest economy.

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Speaker 3: People are no longer ooing and aer ring about you

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Speaker 3: know how rapidly China's growing. You want access to the US,

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Speaker 3: You've got to pay you know, late last month, there

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Speaker 3: was a very interesting interview that our Bloomberg News colleague

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Speaker 3: Salaiyah Mosen did with Steve Miron, chair of the White

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Speaker 3: House Council of Economic Advisors. He said this quote, countries

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Speaker 3: that sell to the United States are inflexible. They've only

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Speaker 3: got the United States to sell to. In other words,

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Speaker 3: you want to come here, well, okay, now you have

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Speaker 3: to pay out. And you know there is an element

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Speaker 3: of bullying about this, you know, Scott Besson was saying, well,

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Speaker 3: we strongly advise people not to reciprocate. If you don't reciprocate,

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Speaker 3: you know, this is near the top end of the

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Speaker 3: tariff regime being be good little boys, be good little girls,

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Speaker 3: go away, take your medicine, sit in the corner and

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Speaker 3: be quiet, and all will be well. But like, how

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Speaker 3: can you take that as any kind of a guarantee?

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Speaker 1: Well, challenges does this present for the Federal Reserve, who

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Speaker 1: have to react to the announcements out they've come, and

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Speaker 1: indeed for central bankers around the world.

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Speaker 3: So in terms of the Fed, look, I mean, I'll

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Speaker 3: clear my throat with this by saying that you know

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Speaker 3: this what was announced Wednesday is not necessarily where things settle.

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Speaker 3: I think there's a big performative component of this. Whatever

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Speaker 3: the tariff regime looks like, will it be higher than

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Speaker 3: what it was last week?

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Speaker 5: Sure? Will it be higher than what it was on January.

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Speaker 3: Nineteen, Yes, absolutely, doesn't mean it's as high as this.

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Speaker 3: I mean, if these numbers stay and there's no scope

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Speaker 3: for negotiation, no scope for deals, which I don't really believe,

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Speaker 3: but if they do, then this is a very significant hit.

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Speaker 3: Not just in terms of easy to define metrics like GDP.

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Speaker 3: There is inflation that markdown growth forecasts x basis points.

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Speaker 3: I mean, this is a drawing up of I was

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Speaker 3: going to say, the drawing up of the drawbridge. I'm

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Speaker 3: mixing my metaphors. I'm really reluctant to say this is

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Speaker 3: a declaration of economic warfare on the rest of the world.

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Speaker 3: That feels like it's going too far. But there's some

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Speaker 3: kind of break here. Is it retrievable? We'll see how

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Speaker 3: much is performative. We'll see. So, having cleared my throat

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Speaker 3: with all that, it is generally seen as closing the

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Speaker 3: door to interest rate cuts by the Federal Reserve and

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Speaker 3: the near term. I'm not sure I agree with that.

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Speaker 5: Entirely.

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Speaker 3: It depends what else is going on. The economy has

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Speaker 3: been softening. Data for the last couple of weeks has

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Speaker 3: not been great. Things aren't falling apart, but there's a softening.

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Speaker 3: People have raised their projections for the likelihood of a recession.

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Speaker 3: Let's not forget the Fed has a dual mandate. It

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Speaker 3: also has to promote maximum sustainable employment. Labor markets already softened.

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Speaker 3: If there is a material weakening from here in the

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Speaker 3: labor market, they're not necessarily going to worry about whether

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Speaker 3: the PCE is at two point seven or two point six.

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Speaker 3: Remember it's an average of two percent over time.

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Speaker 2: Yeah, so that's the kind of maybe some of the

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Speaker 2: thinking for the Federal Reserve. I mean, I'm glad you

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Speaker 2: talked about the question, which is it. I think in

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Speaker 2: the back of people's minds, is it economic warfare or not.

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Speaker 2: I mean, on your point though about US exceptionalism again,

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Speaker 2: are people being too quick to write off US exceptionalism.

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Speaker 3: Well, if you go back to Steve Merrin's quote from

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Speaker 3: late March, he's saying the US economy is exceptional, so

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Speaker 3: therefore pay up if you want to come here. That's

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Speaker 3: not how most people would define it. American exceptionalism has

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Speaker 3: come to mean many things over the years, over the weeks, heck,

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Speaker 3: over the centuries. There are still some things about the

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Speaker 3: US that are unique. It is an engine, or has

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Speaker 3: been certainly an engine for innovation. It has the world's

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Speaker 3: reserve currency, bar none. That was the point I was

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Speaker 3: making in a column that attracted your attention from last week.

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Speaker 3: We'll see what happens here as a result of this.

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Speaker 3: But dollar exceptionalism as manifested in terms of the US

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Speaker 3: currency and its ability to give you things that other

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Speaker 3: currencies don't have, and it's resilient.

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Speaker 5: To shocks, It's going to take a bit more than this.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 6: Europe