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

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Speaker 2: This is the Blueberg daybreakur podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Friday, the thirtieth of May.

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Speaker 2: Here in London. I'm Caroline Hepka. Coming up today. Markets

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Speaker 2: drop as Trump wins a temporary tariff reprieve in an

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Speaker 2: appeals court ruling, and the Treasury Secretary, Scott Bessen concedes

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Speaker 2: that trade talks with China have stalled the Bank of

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Speaker 2: England's Andrew Bailey wades into UK politics and calls for

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Speaker 2: closer EU ties to reverse the damage of Brexit. Plus,

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Speaker 2: Hidden in Plane Sight, we discuss the obscure tax item

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Speaker 2: buried deep in the President's massive tax and spending bill

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Speaker 2: that is giving wall Streets sleepless nights. Let's start with

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Speaker 2: a roundup of our top stories. President Trump's global tariffs

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Speaker 2: will remain in place for now. That's after an appeals

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Speaker 2: court temporarily paused a ruling on Wednesday that had blocked them.

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Speaker 2: JOm has hailed the ruling in a social media post

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Speaker 2: on Thursday night, while calling the original decision quote so

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Speaker 2: wrong and so political. Derek Wallbang is our senior editor

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Speaker 2: for US economics and government.

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Speaker 3: This is going to work through the US legal process.

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Speaker 3: In the meantime, though, it has kind of complicated the

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Speaker 3: idea that the Trump administration in this ninety day pause

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Speaker 3: window was going and trying to do deals with individual countries.

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Speaker 3: We really haven't seen a ton of deals come through

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Speaker 3: with that. We've had the UK, a lot of others

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Speaker 3: are said to be maybe close or nearer, but haven't

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Speaker 3: gotten over the line.

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Speaker 2: Darry Wallbank says that despite the temporary reprieve, the possibility

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Speaker 2: remains that the appeals court could ultimately back the original

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Speaker 2: ruling and block President Trump's tariff policy that would reduce

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Speaker 2: the effective US tariff rate to below six percent from

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Speaker 2: a high of almost twenty seven percent last month. However,

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Speaker 2: White House official stress that Trump has options to pursue

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Speaker 2: similar tariffs through other authorities if appeals ultimately fall short. Now,

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Speaker 2: US Treasury Secretary Scott Bestent says that trade talks with

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Speaker 2: China are currently at a bit of a standstill. Bestent

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Speaker 2: told Fox News a call may be required between President

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Speaker 2: Trump and Chinese President Shijinping in order to reach a deal.

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Speaker 4: I would say that they are a bit stalled. I

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Speaker 4: believe that We will be having more talks with them

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Speaker 4: in the next few weeks, and I believe we may

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Speaker 4: at some point have a call between the President and

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Speaker 4: party chair.

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Speaker 5: She.

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Speaker 2: That was Treasuy Sectary Scott Bessent speaking on Fox News.

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Speaker 2: The last time Trump and She spoke was in January,

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Speaker 2: days ahead of President Trump's inauguration. The US President said

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Speaker 2: that he would speak to the Chinese leader in the

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Speaker 2: days after trade talks in mid May, though the call

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Speaker 2: never materialized, and in their first in person meeting since

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Speaker 2: the inauguration, President Trump pushed the FED Chair, Jerome Powell

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Speaker 2: to lower interest rates. The US President has publicly and

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Speaker 2: repeatedly lashed out at the policymaker, calling him a quote loser.

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Speaker 2: White House Press Secretory Caroline Levitt says that Trump urged

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Speaker 2: Powell to cut rates.

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Speaker 6: The President did say that he believes the FED chair

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Speaker 6: is making a mistake by not lowering interest rates, which

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Speaker 6: is putting US at an economic disadvantage to China in

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Speaker 6: other countries, and the President's been very vocal about that

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Speaker 6: both publicly and now I can reveal privately as well.

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Speaker 2: The White House Press Secretary there the FED officials have

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Speaker 2: held interest rates steady this year, arguing that a patient

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Speaker 2: approach to policy is appropriate amid economic uncertainty caused by tariffs.

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Speaker 2: The Central Bank says that Chair Pow quote stress the

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Speaker 2: path of policy will depend entirely on incoming economic information

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Speaker 2: and what that means for the outlook. While moving on

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Speaker 2: to some corporate news, the CEO of City Group says

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Speaker 2: that the economic outlook for the US does remain stronger

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Speaker 2: than Europe despite sweeping policy uncertainty from trade and tariffs.

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Speaker 7: Bloomberg's un Potts has more.

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Speaker 8: There's nothing like being in Europe to make you feel

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Speaker 8: a bit better about the US. City Groups Shane Fraser

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Speaker 8: not mincing her words. She was speaking in a wide

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Speaker 8: ranging interview at a financial conference, where she also expressed

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Speaker 8: skepticism that the EU will pursue its long delayed plan

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Speaker 8: for capital markets union and drive economic growth. On the

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Speaker 8: prospects for the US economy, Fraser said her eye is

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Speaker 8: on the unemployment figures, but Addie, the consumer spending so

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Speaker 8: far appears to be showing signs of resilience in London.

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Speaker 7: I'm you in pots Blimberg Radio.

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Speaker 2: Bank of England Governor Andrew Bailey has urged the British

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Speaker 2: government to strike a deeper EU trade deal. The Central

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Speaker 2: bank head warned that quote something has gone wrong with

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Speaker 2: the global trading system.

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Speaker 9: If you believe that tariff action is needed to create

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Speaker 9: the shock and or to get these issues onto the

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Speaker 9: table and dealt with, I'm afraid that means something's gone

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Speaker 9: wrong with the multilateral system. Yeah, these things ought to

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Speaker 9: be dealt with without having to get to this point.

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Speaker 9: And we need to deal with that something. And it

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Speaker 9: matters to central bankers and economic policymakers because our jobs

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Speaker 9: are much harder, much harder if we face more inflexible

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Speaker 9: and uncertain supply conditions in our economies, as we appear

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Speaker 9: to do today.

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Speaker 2: The Bank of England Governor Andrew Bailey he sees rebuilding

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Speaker 2: ties with the EU as the best way to drive

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Speaker 2: sorely needed UK growth. Since the recent trade deal with Europe,

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Speaker 2: UK business confidence has jumped to a nine month high

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Speaker 2: in a sharp rebound. And lastly, a fifty three year

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Speaker 2: old man is due in court later today accused of

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Speaker 2: driving a car into crowds of people at Liverpool's trophy parade.

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Speaker 2: Paul Doyle, who is from the West Derby area of

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Speaker 2: the city, is charged with seven offenses including dangerous driving,

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Speaker 2: malicious wounding and intent to cause grievous bodily harm. Jenny

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Speaker 2: Simms is the Assistant Chief Constable of Merseyside Police.

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Speaker 7: This continues to be.

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Speaker 10: A large and complex investigation and detectives are reviewing a

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Speaker 10: huge volume of CCTV and mobile phone footage submitted by

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Speaker 10: the public and businesses.

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Speaker 2: Jenny Simms speaking there. Seventy nine people were injured in

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Speaker 2: Monday's incident in Liverpool, with seven people still in hospital.

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Speaker 2: Those are our top stories this morning. Let me take

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Speaker 2: you through the markets now. So the legal battle over

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Speaker 2: President Trump's tariffs and the uncertainty injected by a fresh

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Speaker 2: court decision has weighed on markets. The masci Asia Pacific

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Speaker 2: indegs down half of one percent, the Hank Saying dropping

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Speaker 2: one and a half percent this morning. We also had

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Speaker 2: data out yesterday showing the US economy shrank at the

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Speaker 2: start of this year, weaker consumer spending and even bigger

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Speaker 2: impact from trade than had been initially thought. Stock futures

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Speaker 2: for the US and for Europe are in the red

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Speaker 2: this morning. We're down two tenths for the S and

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Speaker 2: P five hundred e Many futures you've also got in

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Speaker 2: terms of the BlueBag dollar Spot index. A stronger dollar,

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Speaker 2: a weeker euro, weeker pound a Japanese yen, though, is

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Speaker 2: gaining two tenths of one percent. I've read an interesting

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Speaker 2: report that global investors have become net buyers of cash

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Speaker 2: Japanese equities for the last eight weeks in a row.

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Speaker 2: So this goes to that theme of investors looking elsewhere

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Speaker 2: and away from just the kind of US exceptional trade

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Speaker 2: in stocks. Looking at the bond markets this morning, little

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Speaker 2: movement actually in tenny US treasure yields forty two is

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Speaker 2: where we stand. So those are the markets in a moment.

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Speaker 2: I'm going to bring you more in the latest when

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Speaker 2: it comes to the Trump administration winning a temporary tariff

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Speaker 2: reprieve in the appeals Cord. Plus also why Wall Street

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Speaker 2: is alarmed by a tax measure that's buried in the

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Speaker 2: big beautiful bill that's currently working its way through Congress.

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Speaker 2: So we'll get to those stories. But somebody else caught

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Speaker 2: my eye this morning. Summer is rolling around, and so

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Speaker 2: soon the corridors of your firm, I imagine, and mine

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Speaker 2: and maybe many others will be filled with interns, which

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Speaker 2: got me to thinking, why I'm in the world of Ahi,

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Speaker 2: do we still have interns? I was staggered to learn though,

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Speaker 2: how intense the competition for internships is now. Three hundred

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Speaker 2: and fifteen thousand people applied for an internship at Goldman

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Speaker 2: Sachs for two seven hundred places that they offer. JP

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Speaker 2: Morgan was even more staggering, almost half a million applications

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Speaker 2: for four thousand positions at JP Morgan for like a

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Speaker 2: ten week internship. Much harder to get an internship than

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Speaker 2: it is to get into Harvard. Mark Rubinstein, who writes

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Speaker 2: Bloomberg's Net Interest newsletter, dug out this story for us

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Speaker 2: and has written all about it. He explains that there's

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Speaker 2: been a huge surge in applications because of online platforms

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Speaker 2: making it easier to find out about internships and apply

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Speaker 2: for those opportunities.

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Speaker 7: The salary doesn't hurt.

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Speaker 2: One hundred and twenty five thousand dollars is the annual

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Speaker 2: salary the equivalent of that, But mainly it's that internships

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Speaker 2: are the prime route to get a graduate job, and

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Speaker 2: the prime route now into the top ranks of banking

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Speaker 2: and finance. So there you go. Some thoughts for you.

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Speaker 2: It's a real kind of audition for leadership potential from people.

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Speaker 2: So now you can have to on that as you

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Speaker 2: think about interns arriving perhaps in your office this summer. Now,

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Speaker 2: a reprieve for President Trump on taris from a federal

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Speaker 2: appeals court, but a legal fight that threatens to inject

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Speaker 2: even more uncertainty into the global economy. Joining me now

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Speaker 2: is Bloomberg reporter cat Demitrieva Katty.

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Speaker 7: Good morning.

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Speaker 2: Just tell me what did the court actually decide. It

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Speaker 2: seems to extend the timeline now for this legal fight

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Speaker 2: over Trump's tariffs.

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Speaker 7: Yeah, it certainly does.

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Speaker 5: And we're still, frankly trying to unpack exactly what this

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Speaker 5: all means, because there are still a lot of questions

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Speaker 5: about where we go from here. But essentially with the

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Speaker 5: US Court of International Trade, they're in Manhattan. What they ruled,

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Speaker 5: these three judges is that the Trump administration was wrong.

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Speaker 5: They wrongfully invoked this emergency law to justify their reciprocal levee.

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Speaker 5: So for that, we'd have to go back to April.

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Speaker 7: Second.

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Speaker 5: That was when they announced, you know, on Liberation Day,

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Speaker 5: these reciprocal tariffs against or what they called reciprocal tariffs

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Speaker 5: against a number of countries, and there was about a

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Speaker 5: sixty countries that they had targeted, and so the court

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Speaker 5: found that that was not actually legal, that was not allowed,

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Speaker 5: so they blocked effectively the tariffs. Now, the administration very

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Speaker 5: quickly and as expected, filed an appeal. That appeal was

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Speaker 5: granted very recently, and so that effectively stays that initial order.

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Speaker 5: But basically, what this means is a protracted legal fight

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Speaker 5: between the US administration and the courts. It will likely

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Speaker 5: go all the way up to the Supreme Court, and

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Speaker 5: as we know, this takes a lot of time.

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Speaker 7: Yeah, what workarounds? Then? Does the Trump administration have?

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Speaker 2: What is it looking at in order to deliver on

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Speaker 2: its tariff's aims, because that's what the administration has said

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Speaker 2: it would do given this legal battle.

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Speaker 5: Now, Yeah, and I think that markets are assuming, I

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Speaker 5: mean everyone is assuming at this point that there's no

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Speaker 5: way around tariffs. You know, initially when the ruling came down,

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Speaker 5: there was some optimism, but very quickly soured because of

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Speaker 5: the stay, but also because the Trump administration has a

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Speaker 5: very clear trade strategy. They want to impose, they want

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Speaker 5: to add tariffs, and there are other ways to do that, right,

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Speaker 5: So the emergency law was kind of the biggest broadest

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Speaker 5: way to do it and the quickest way to do it.

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Speaker 5: There are other methods that take time. So there's for example,

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Speaker 5: the two three two tariffs, and that would apply sort

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Speaker 5: of pharmaceutical there's semiconductors. It also doesn't impact tariffs that

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Speaker 5: were imposed under Section three oh one, which is to

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Speaker 5: do with unfair trade practices. And the administration can also

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Speaker 5: do a lot of They could just do investigations. You know,

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Speaker 5: this is the power of the US government to launch

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Speaker 5: investigations against specific products, against specific countries. And so we

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Speaker 5: do know that there are a lot of these other

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Speaker 5: tools that would use national security powers to be able

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Speaker 5: to add levy so that they're not necessarily going away.

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Speaker 2: Okay, Katy, thank you so much for being with us

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Speaker 2: this morning. Right, so we are awaiting then quite a

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Speaker 2: protracted battle when it comes to imposing twists, Bloomberg reported,

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Speaker 2: Katya Demitrievia, thank you. Now. Another aspect of what's happening

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Speaker 2: with the Trump administration, very deep in more than a

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Speaker 2: thousand pages of tax and spending information in the bill

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Speaker 2: that President Trump is pushing through Congress is an obscure

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Speaker 2: tax measure that is setting off alarm bells on Wall

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Speaker 2: Street and beyond our opening trade Ancha Critti Gupti is

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Speaker 2: here to explain why this matters. Pretty good morning. Just

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Speaker 2: tell me about this measure. It's known as Section eight

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Speaker 2: ninety nine.

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Speaker 7: It is, it is.

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Speaker 11: It's called the Enforcement of Remedies against Unfair Foreign Taxes,

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Speaker 11: aptly named for exactly what it does, which is simply

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Speaker 11: this idea that when you're looking or comparing this to

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Speaker 11: other countries that have as would be deemed by the

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Speaker 11: Trump administration as tax policies that are discriminatory, which again

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Speaker 11: is a fairly vague term, so we don't actually know

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Speaker 11: which countries that applies to, but we know it's something

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Speaker 11: that Donald Trump has talked about in his previous iterations

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Speaker 11: in terms of tax barriers when it comes to the

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Speaker 11: likes of the European Union, for example. This is a

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Speaker 11: measure that would include raising tax rates on passive income

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Speaker 11: as you suggest, but interests and dividends as well. And

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Speaker 11: the reason this is so important is because when you

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Speaker 11: are talking about international investors and how they are positioned

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Speaker 11: and exposed to the United States, a lot of them

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Speaker 11: aren't necessarily trading stocks day in day out, trading the

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Speaker 11: headline risk you've seen a little bit of a jump

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Speaker 11: in that at the moment, but a lot of them

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Speaker 11: are talking about saying having the majority of their exposure

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Speaker 11: to the US and sitting in those assets, so to

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Speaker 11: be taxed on that passive income or those dividends actually

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Speaker 11: threatens trillions of dollars that would incentivize a foreigner to

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Speaker 11: enter the States in the first place.

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Speaker 2: Yeah, I mean that could be absolutely huge if signed

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Speaker 2: into law. The sense is that it would therefore drive

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Speaker 2: away foreign investors.

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Speaker 11: It's interesting because there's a couple of ways that this

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Speaker 11: would show up, because it also measure talks about not

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Speaker 11: only the interest, but dividends as well. We know that

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Speaker 11: right now in this current market environment, something that a

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Speaker 11: lot of stocks are saying companies are issuing is not

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Speaker 11: only share buybacks, which is a big one, but in

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Speaker 11: times of recession, they will pull back on those share

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Speaker 11: buybacks and issue dividends instead to their shareholders.

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Speaker 7: So to be now taxed on that basically.

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Speaker 11: Return for shareholders returns of capital is a concerning way

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Speaker 11: for a lot of companies actually want to keep their

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Speaker 11: investors interested and not see a sharper decline in their

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Speaker 11: share price.

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Speaker 7: So why has it been put into the bill then.

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Speaker 11: Two as a negotiating tactic, it seems. And again this

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Speaker 11: really falls in line with some of the rhetoric you've

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Speaker 11: heard from Donald Trump. I think the most easiest one,

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Speaker 11: although it's not specifically MEAs mentioned in this bill, is

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Speaker 11: the vat tax. He calls that an unfair, discriminatory tax,

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Speaker 11: something that he thinks the European Union can pull down

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Speaker 11: very easily.

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Speaker 7: Us sitting on the side.

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Speaker 11: Of the Atlantic note that is a very tricky thing

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Speaker 11: to do just from an internal European perspective, but from

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Speaker 11: the outside that is how he's viewing it.

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Speaker 7: But it's not just him. You've had these other.

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Speaker 11: Tax barriers in other places as well, not just in

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Speaker 11: the European Union, but India, Switzerland, some others. Globally speaking,

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Speaker 11: the US has one of the lowest tax rates in

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Speaker 11: the world, and that has been a beneficiary for both

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Speaker 11: corporates and for passive investors.

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