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

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

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

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Speaker 2: fourteenth of January in London. I'm Caroline Hipki.

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Speaker 3: And I'm Stephen Carroll. Coming up today, Bloomberg has learned

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Speaker 3: that Donald Trump's economic team is considering a gradual ramp

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Speaker 3: up of trade tariffs.

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Speaker 2: The UK government is due to sell more bonds, as

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Speaker 2: Prime Minister Kiss Starmer says his chancellor is doing a

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Speaker 2: fantastic job.

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Speaker 3: Plus, Chinese officials consider potentially selling TikTok's American arm to

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Speaker 3: Elon Mosque if it's banned in the United States.

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

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Speaker 3: Some of Donald Trump's economic team are considering a plan

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Speaker 3: to increase trade tariffs month by month. Bloomberg has learned.

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Speaker 3: The discussions are looking at the incoming administration ratcheting up

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Speaker 3: levies by about two to five percent each month. The

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Speaker 3: uncertainty her Trump's trade plans is unsettled investors, with the

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Speaker 3: S and P five hundred nearly losing all gains since

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Speaker 3: the US election and treasuries selling off Goldman Sachs's chief

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Speaker 3: economist Jan Hatzias says some form of tariff is now

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Speaker 3: their baseline.

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Speaker 4: I think tariffs on China and probably on auto imports

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Speaker 4: from Europe are probably coming. That is part of our baseline,

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Speaker 4: and that is going to have an impact on inflation

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Speaker 4: and on growth, not a huge impact.

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Speaker 3: Goldman Sachs chief economist Jan Hatzius there sources told Bloomberg

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Speaker 3: that's got bessent. Kevin Hassett and Stephen Mirin are working

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Speaker 3: on the plan, but the gradual tariff hike proposals in

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Speaker 3: its early stages and has not yet been presented to Trump.

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Speaker 3: A spokesman for Trump's transition team referred to the President

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Speaker 3: Elect's previous public comments and social media posts about tariffs.

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Speaker 2: Here in the UK, the Chancellor of Rachel Reeves is

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Speaker 2: expected to face MP's today for the first time since

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Speaker 2: Britain was rocked by turbulence. It comes as the Prime

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Speaker 2: Minister has been forced to defend her position. Blueberg's team

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Speaker 2: at Adebayo has more.

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Speaker 5: Rachel Reeves's week of reckoning continues today as opposition parties

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Speaker 5: get the chance to quiz her on rising guilt yields.

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Speaker 5: The speech officially about the Treasury Chief's recent trip to

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Speaker 5: China coincides with the country's first bond sales since turmoil

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Speaker 5: gripped the market last week. The billion pound auction will

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Speaker 5: be an important test of investor appetite after UK assets

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Speaker 5: were hit the hardest amongst developed economies during the recent

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Speaker 5: market selloff. Despite growing pressure on Reeves, the Prime Minister

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Speaker 5: has publicly defended her record.

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Speaker 6: Rachel Rives is doing a fantastic job. She has my

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Speaker 6: full confidence and she has the full confidence of the

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Speaker 6: entire party. She was given an incredibly challenging task the budget.

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Speaker 6: We had a twenty billion pound black hole.

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Speaker 5: After she navigates today's probe in Parliament, Reeves must contend

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Speaker 5: with the possibility of an inflation over sheet when figures

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Speaker 5: are released on Wednesday. Economists have worn that numbers above expectations,

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Speaker 5: combined with weaker than anticipated growth data on Thursday, could

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Speaker 5: even force the Bank of England to intervene in London.

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Speaker 7: Do you add a bay? At Bloomberg Radio.

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Speaker 3: Chinese officials are discussing selling the US arm of TikTok

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Speaker 3: to Elon Musk if the company gets banned in America.

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Speaker 3: Bloomberg has learned that Beijing strongly prefers these short video

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Speaker 3: app remaining under the ownership of parent Byte Dance, but

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Speaker 3: is debating contingency plans. Under one scenario, Musk's social media

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Speaker 3: company X would take control of TikTok Us and run

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Speaker 3: the business as jointly. The US Supreme Court signals last

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Speaker 3: week they're likely to uphold the ban in a coming ruling.

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Speaker 2: The European Union meanwhile, is considering expanding its investigation into

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Speaker 2: elon Musk's X. The Commission's executive vice president, Henava Kunnen

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Speaker 2: says that the upcoming German election has prompted concerns over

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Speaker 2: the risks posed by the social media company.

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Speaker 8: When it comes to X, it means that it shouldn't boost,

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Speaker 8: for example, certain contents, or favor certain political parties or

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Speaker 8: opinions or candidates.

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Speaker 2: Mccunnan's department has started an investigation into X just over

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Speaker 2: a year ago. Scrutiny is ramped up as Musk, now

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Speaker 2: a key US advisor, started endorsing far right politicians, such

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Speaker 2: as The Alternative for Germany's Alice Vital. Big tech bosses,

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Speaker 2: in turn, are lobbying Presidents Elect Trump to push back

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Speaker 2: against EU regulation.

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Speaker 3: Extreme winds forecast across southern California could worsen wildfires, which

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Speaker 3: are already some of the costliest and modern US history.

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Speaker 3: Crews are struggling to contain the blazers that have paralyzed

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Speaker 3: Los Angeles nearly a week and killed at least twenty

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Speaker 3: four people. The estimated economic classes could be as high

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Speaker 3: as two hundred and seventy five billion dollars.

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Speaker 2: Donald Chance says he believes and Israel Hamas CEESFA deal

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Speaker 2: could come before his inauguration on Monday. The President elects

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Speaker 2: comments come hours after President Joe Biden said both sides

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Speaker 2: were on the brink of a proposal during an address

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Speaker 2: at the US State Department. US National Security Advisor Jake

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Speaker 2: Sullivan is also positive about the prospects for a deal.

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Speaker 9: I think the pressure is building for Hamas to come

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Speaker 9: to yes. I think Israel also has achieved a huge

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Speaker 9: amount of its military objectives in Gaza, and therefore they

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Speaker 9: are in a position to be able to say yes.

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Speaker 9: So there is a distinct possibility that we can get

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Speaker 9: this deal done this week.

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Speaker 2: Jake Sullivan, speaking there to Blueberg Television. The agreement with

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Speaker 2: Hamas would see the release of thirty three hostages, some

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Speaker 2: of whom may not be alive in its first phase.

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Speaker 2: That's according to senior Israeli officials. However, Jake Sullivan said

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Speaker 2: that he wasn't ready to make any promises to get

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Speaker 2: a deal that would end the fighting that began with

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Speaker 2: Hamas's attack on Israel on the seventh of October twenty

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Speaker 2: twenty three.

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Speaker 3: Those are your top stories on the markets on Wall

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Speaker 3: Street on Monday, stocks were mixed. The S and P

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Speaker 3: five hundred clod back its earlier losses to finish up

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Speaker 3: two tenths of one percent. The Nasdak finished down three

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Speaker 3: tenths The treasury markets are slight losses, Yields higher across

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Speaker 3: the curve by one to two basis points, and in

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Speaker 3: trading today, the ten year yield down two basis points

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Speaker 3: to four point seven six percent. Guilt yields continued their

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Speaker 3: rise ahead of the auction later today, ten year yields

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Speaker 3: five basis point higher and have now risen over thirty

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Speaker 3: basis points so far this year. Oil prices rallied the

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Speaker 3: highest in five months. Today, Brent crude is trading slightly

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Speaker 3: lower at eighty dollars and fifty seven a barrel. In

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Speaker 3: Asian trading today, Japanese shares returning after their market holiday.

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Speaker 3: The Nike's down one point eight percent in Tokyo, Japan's

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Speaker 3: forty year yield, hitting its highest since its two thousand

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Speaker 3: and seven debut. European stock futures are pointing higher, up

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Speaker 3: eight tenths of one percent for eurostocks fifty.

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Speaker 2: Those are the markets. In a moment, we are going

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Speaker 2: to bring you more about what we have learned about

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Speaker 2: the tariff plans being prepared by Donald Trump's team and

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Speaker 2: how the markets have been reacting to that news. But

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Speaker 2: before we get to that, another story that we've been

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Speaker 2: reading about this morning. Spain's government wants to impose a

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Speaker 2: one hundred percent tax or non EU residents who are

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Speaker 2: buying property in the country. We've written a lot about

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Speaker 2: how Spain and Portugal in fact, have been trying to

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Speaker 2: attract foreign investors. This looks like a total reversal.

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Speaker 3: Yeah, I mean, it's a move that could particularly affect

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Speaker 3: buyers from the UK and from Latin America as well.

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Speaker 3: British citisens are actually the biggest group of Nanau property

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Speaker 3: buyers in Spain. Pedro Sanchez, the Prime Minister, said that

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Speaker 3: in twenty twenty three Nanau residents bought twenty seven thousand

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Speaker 3: homes and apartments in Spain that they didn't live, in

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Speaker 3: his words, either, they did it to speculate. That's what

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Speaker 3: this policy is trying to tackle. This as a made

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Speaker 3: a housing shortage being experienced. Of course, as we know

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Speaker 3: in many places across Europe. At the moment, Spain has

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Speaker 3: a severe year shortage of new homes. The Bank of

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Speaker 3: Spain estimates the country is going to need some five

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Speaker 3: hundred and fifty thousand new residents to be built to

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Speaker 3: meet demand over the next two years. So this is

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Speaker 3: part of a broader package being announced to try and

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Speaker 3: tackle a brewing housing crisis in Spain, including things like

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Speaker 3: moving thousands of homes in the country's bad bank to

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Speaker 3: a new housing agency as well. But could this be

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Speaker 3: something that will dent the economic growth in Spain largely

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Speaker 3: fueled of course by immigration into the country.

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Speaker 2: Yeah. Absolutely, It's a story that we've been that caught

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Speaker 2: our attention on the Blueberg terminal and on the website

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Speaker 2: this morning. But of course let's get into our top

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Speaker 2: story now. Bloomberg reporting on how Donald Trump's top team

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Speaker 2: are discussing a gradual ramp up of tariffs after he

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Speaker 2: takes office. Bloomberg TV ancha critic Gupta joins us now

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Speaker 2: to discuss what are the options that are being discussed

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Speaker 2: and how would it actually work.

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Speaker 1: Well, this is I think a key way to get

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Speaker 1: Donald Trump's TEARFF policy actually enacted without having.

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Speaker 7: To go through Congress. And I think that's the key

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Speaker 7: bit that you need to know here.

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Speaker 1: And we should just emphasize before we get started that this,

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Speaker 1: of course is still a proposal that's being reported on.

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Speaker 1: It's not official yet, and it's also being proposed by

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Speaker 1: people who are not in power just yet.

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Speaker 7: So there are a lot of ifs and butts involved.

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Speaker 1: But the crux of the idea simply that it uses

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Speaker 1: an act that grants emergency powers to the present when

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Speaker 1: declaring that the country is in a national emergency. And

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Speaker 1: if you look at the history of this act, I

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Speaker 1: won't bore you with the politics, but there have been

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Speaker 1: thirty nine times more than that, but thirty nine ongoing

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Speaker 1: national emergencies in the United States. So the verbatim here

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Speaker 1: is that when a country is in time of crisis

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Speaker 1: a nineteen seventies oil embargo, for example, a cold war

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Speaker 1: a World War One, those are moments in history where

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Speaker 1: the American president has enacted this law. It was then

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Speaker 1: kind of have on the crux of the fact that

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Speaker 1: there are national emergencies at play, national emergencies that have

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Speaker 1: not ended just yet and are ongoing.

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Speaker 7: So the analysis here is that in theory.

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Speaker 1: This kind of bypasses a lot of the legal jargon

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Speaker 1: and and context and long awaited kind of debate around

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Speaker 1: tariffs through Congress and go straight to Donald Trump so

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Speaker 1: he can enact it on a personal basis.

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Speaker 3: Who is working on this plan at the moment, Well,

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Speaker 3: there are.

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Speaker 1: Three key names that you need to know and what,

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Speaker 1: of course is Scott bessen To the nominee for Treasury Secretary,

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Speaker 1: Kevin Hassett, who's expected to be the director of the

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Speaker 1: National Economic Council, And Stephen Moran nominate to lead the

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Speaker 1: Council of Economic Advisors. So basically the trifecta of people

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Speaker 1: you need on your side to design some of these

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Speaker 1: not only tariffs, but sanctions policy as well. In this

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Speaker 1: act also previously has been used by none other than

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Speaker 1: Joe Biden to impose things like sanctions on China, on Russia,

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Speaker 1: on Iran, etc. So that's kind of the context and

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Speaker 1: the legal framework that's being used.

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Speaker 2: But the create thing is, do we know if persons,

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Speaker 2: let Trump has signed off on it, would sign off

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Speaker 2: on it.

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Speaker 7: We don't know.

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Speaker 1: And this is the tricky bit because it introduces a

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Speaker 1: completely different strategy than what Donald Trump has been suggesting.

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Speaker 1: It's one that protects American consumers. It's one that's done gradually.

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Speaker 1: But the flip side of this argument, where it can

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Speaker 1: have a two or five percent increase month by month

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Speaker 1: and be gradual, also inhibits the kind of shock factor

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Speaker 1: on a lot of the countries that the tariffs are

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Speaker 1: put on, and that shock factor is almost a leveraging

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Speaker 1: power that one would argue that Donald Trump has. So

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Speaker 1: it's not necessarily clear if this is even something that

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Speaker 1: Donald Trump would would agree to. But I think the

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Speaker 1: logic behind it is that inflation and affordability are key

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Speaker 1: voting issues and have been key voting issues in the

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Speaker 1: United States, especially in this last election. One would argue

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Speaker 1: it's one of the reasons why the Democrats lost. It's

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Speaker 1: also one that could alienate the base. So if you

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Speaker 1: see inflation increase under Donald Trump's psidency as a result

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Speaker 1: of the tariffs, it could potentially lose some of the

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Speaker 1: ground that the party has gained.

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Speaker 3: Because of course, that's the implication here, is that if

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Speaker 3: this were to transpire, and that were to be this

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Speaker 3: gradual ramping up as well, the hope is that that

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Speaker 3: would limit the inflationary impact of these tariffs absolutely.

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Speaker 1: And I think that's probably why, of all people, Scott

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Speaker 1: Besten is at the helm of this, the Treasury Secretary

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Speaker 1: kind of towing the same way the Jenny Yellen is

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Speaker 1: almost protecting the American people looking inward rather than outward.

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Speaker 1: But again, in limiting that impact domestically, we're also limiting

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Speaker 1: the impact internationally. And that's where the unknown is whether

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Speaker 1: or not Donald Trump would support that.

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Speaker 2: Yeah, indeed, and just remember Trump floating the idea of

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Speaker 2: ten to twenty percent tariffs on all the imports during

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Speaker 2: the presidential campaign. Sixty percent or high of the shipments

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Speaker 2: from China, but even month by month, that's that's a

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Speaker 2: pretty speedy ratcheting up of taris Christie, thank you for

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Speaker 2: being with us, pretty big, Tvanka Kritty Gupta.

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Speaker 3: This story has been moving markets, the dollars weekend and

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Speaker 3: currencies like the Chinese yuan and Australian dollar have been

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Speaker 3: strengthening after this reporting. Let's get the details now from

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Speaker 3: our market's report of Valerie Titel. Varie talk us through

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Speaker 3: what we're seeing in terms of market reaction, perhaps starting

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Speaker 3: with the US side of the equation, but when it.

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Speaker 7: Comes to US markets, it seems like.

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Speaker 10: They welcome this leak on gradual terrorists for seeing stocks

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Speaker 10: in the green after having a very I guess last

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Speaker 10: few sessions of strugg and the dollar is softening, so

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Speaker 10: in some way maybe they are welcoming this report on

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Speaker 10: gradual tariffs. But you know, I want to echo Gupta

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Speaker 10: was just talking that does really pose a few more questions,

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Speaker 10: you know, rather than answers. I want to point out

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Speaker 10: the effect that we're seeing in Asia markets. We're seeing

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Speaker 10: Chinese equities really jumping this morning, and that could be

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Speaker 10: perhaps because if you view this article or this scoop

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Speaker 10: from Bloomberg in relation to China, could be seen as

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Speaker 10: quite duvish on the tariffront. You know, this article is

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Speaker 10: talking about a two to five percent increase on tariffs.

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Speaker 10: You know, we were promised a multiple of twenty percent

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Speaker 10: from the Trump administration and the run up to the

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Speaker 10: election when it comes to tariffs on China, So perhaps

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Speaker 10: it's dubbish on China but hawkish on the rest of

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Speaker 10: the world.

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Speaker 7: Maybe that's one conclusion.

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Speaker 10: Another conclusion the market could could start talking about is frankly,

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Speaker 10: discussions are still ongoing.

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Speaker 7: We're, you know, less than a week away from inauguration day.

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Speaker 7: There clearly is no plan.

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Speaker 10: Maybe that is, you know, dubvish overall, that there isn't

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Speaker 10: hard and fast out of the gate tariffs looking to

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Speaker 10: be proposed on day one. And lastly, maybe we just

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Speaker 10: totally discount this because it has not been put to Trump.

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Speaker 7: Trump, you know, hasn't seen it. Does he support it,

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Speaker 7: We don't know.

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Speaker 10: So a lot of questions again on the back of

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Speaker 10: this bloomberg scoop that they're looking at gradually implementing tariffs

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Speaker 10: a month by month, But it seems like broadly the.

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Speaker 7: Market's welcoming it this morning. If you look at what's

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Speaker 7: going on in S and P futures, yeah, of course.

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Speaker 2: And there's been such a great deal of concern around

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Speaker 2: tariff increases, including for the lights of the IMFs, christ

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Speaker 2: Didine and Gelgevia talking about the tariff threat driving up

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Speaker 2: long term borrowing costs and obviously already being a concern

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Speaker 2: for markets because it's such an unknown look. A week

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Speaker 2: a dollar is also an issue from the UK perspective.

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Speaker 2: The UK has been at the center of, you know,

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Speaker 2: the bond market difficulties. Certainly a week a dollar would

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Speaker 2: ease some of the pressure for the UK. The chart

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Speaker 2: is going to be speaking to MPs today, how much

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Speaker 2: what hope do we have for the guilt auction today?

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Speaker 2: How easy or difficult is going to be?

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Speaker 10: Well, we could talk about let's talk about the UK's

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Speaker 10: situation in guys of the US dollar. We have had

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Speaker 10: lots of data and lots of analysis talking about these

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Speaker 10: overly stretched longs in dollar positioning. If we get closer

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Speaker 10: to inauguration day and it seems like that the tariff.

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Speaker 7: Situation isn't going to be as bad as.

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Speaker 10: Feared, we could see a big reversal in dollar strength,

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Speaker 10: which would very much help the situation.

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Speaker 7: Calm the situation here in the UK. You know, for

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Speaker 7: some time.

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Speaker 10: If you look at how much the dollar has moved

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Speaker 10: since the Trump trade began back in September, it strengthened

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Speaker 10: over eight percent, you know, just in a quarter, which

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Speaker 10: is you know, that's a that's a fundamental you know,

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Speaker 10: market shift, market narrative shift here.

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Speaker 7: That we're that we're witnessing.

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Speaker 10: If we do, you see most of that reverse when

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Speaker 10: it turns out maybe there isn't a full plan on

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Speaker 10: how to go about tariffs. That would definitely give some

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Speaker 10: room for the guilt market to find some calm for

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Speaker 10: the cable cross with US Sterling to also find some calm.

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Speaker 7: Maybe give the UK government here some breathing room.

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