WEBVTT - Trump Tariffs Take Effect; Vicious Treasury Sell-Off 0:00:02.560 --> 0:00:07.080 Bloomberg Audio Studios, Podcasts, radio news. 0:00:10.039 --> 0:00:13.240 Good morning, I'm Nathan Hager and I'm Karen Moscow. Here 0:00:13.240 --> 0:00:14.960 are the stories we're following today. 0:00:15.160 --> 0:00:18.040 Karen, we begin with the new salvo in President Donald 0:00:18.040 --> 0:00:21.840 Trump's global trade war. So called reciprocal tariffs are now 0:00:21.880 --> 0:00:25.320 in effect for roughly sixty countries, bringing duties around the 0:00:25.320 --> 0:00:28.520 world to levels that haven't been seen in a century. 0:00:29.520 --> 0:00:31.320 They've ripped us off left and right. 0:00:32.240 --> 0:00:35.560 But now it's our turn to do the rippin'. 0:00:36.159 --> 0:00:38.880 That's okay. We're gonna make our. 0:00:38.760 --> 0:00:41.320 Country even stronger, stronger than it ever was. 0:00:41.720 --> 0:00:45.199 Speaking at a Republican fundraising event, President Trump said tariffs 0:00:45.200 --> 0:00:47.879 are already bringing in two billion dollars a day, and 0:00:48.080 --> 0:00:51.040 he said they're leading to negotiations. The President says he 0:00:51.080 --> 0:00:54.200 had a great call yesterday with South Korea's acting president. 0:00:54.480 --> 0:00:57.040 He also spoke with this week to Japan's Prime minister, 0:00:57.080 --> 0:00:59.800 who urged the president to reconsider. 0:01:00.000 --> 0:01:03.360 And Asian nations are bearing the brunt of the new tariffs. 0:01:03.400 --> 0:01:06.679 Cambodia is now under a forty nine percent tariff rate, 0:01:06.840 --> 0:01:10.640 Vietnams is forty six percent, but China is taking the 0:01:10.680 --> 0:01:13.640 hardest hit with duties on top of existing tariffs running 0:01:13.640 --> 0:01:16.800 as high as one hundred four percent. President Trump says 0:01:16.800 --> 0:01:18.600 that'll force Beijing to the table. 0:01:18.880 --> 0:01:21.240 They don't want tariffs on themselves. 0:01:21.520 --> 0:01:23.160 And it's very simple. 0:01:23.319 --> 0:01:27.160 We're making deals and people are paying tariffs. 0:01:27.560 --> 0:01:29.520 Countries are paying tariffs right now. 0:01:29.680 --> 0:01:33.399 China's paying a one hundred and four percent tariff. 0:01:33.720 --> 0:01:35.480 Think of it, one hundred and four percent. 0:01:36.040 --> 0:01:38.920 And President Trump said he won't stop there. He says 0:01:39.040 --> 0:01:42.520 he'll announced tariffs on pharmaceuticals very soon. He's also threatened 0:01:42.560 --> 0:01:45.800 other sectorial tariffs on lumber and semiconductors. 0:01:45.959 --> 0:01:46.119 Well. 0:01:46.120 --> 0:01:49.320 So far, Karen, China has not immediately responded to the 0:01:49.360 --> 0:01:52.400 new tariffs. That's a departure from the last two episodes 0:01:52.440 --> 0:01:55.640 when Beijing hit back within minutes. For more, Let's go 0:01:55.680 --> 0:01:58.400 to Hong Kong check in with Bloomberg's Joe Lisis So, Jill, 0:01:58.480 --> 0:01:59.760 what is the latest. 0:02:00.120 --> 0:02:02.760 Morning, Nathan and Karen. Yes, so far, we have not 0:02:02.880 --> 0:02:06.200 really seen any kind of drastic measures out of China. 0:02:06.240 --> 0:02:10.239 It's really been radio silence. All we've really seen from 0:02:10.280 --> 0:02:13.280 Beijing is they've released a short white paper on trade 0:02:13.280 --> 0:02:16.000 with the United States. But this does stand in pretty 0:02:16.000 --> 0:02:18.760 start contrast to just earlier this year when there were 0:02:18.800 --> 0:02:22.680 earlier levies that Donald Trump implemented on China, we saw 0:02:22.760 --> 0:02:26.560 immediate responses in the form of additional retaliations that came 0:02:27.120 --> 0:02:30.320 with some tariffs on American goods that were sent to China. 0:02:30.360 --> 0:02:33.359 That also came with some other punitive measures, such as 0:02:33.400 --> 0:02:37.799 investigations into various American companies that do some operations in China. 0:02:38.200 --> 0:02:41.960 That doesn't mean, though, that China isn't going to respond. Remember, 0:02:42.000 --> 0:02:44.519 we did see over the weekend when that initial ten 0:02:44.560 --> 0:02:47.840 percent tariff went into effect that China came out with 0:02:47.919 --> 0:02:50.720 its own duties on the United States. That's, of course 0:02:50.760 --> 0:02:53.240 what led to this massive escalation leading to that total 0:02:53.320 --> 0:02:55.239 number of one hundred and four percent that Trump is 0:02:55.280 --> 0:02:58.640 implemented in tariffs on China. So it could be that 0:02:58.720 --> 0:03:01.040 China is kind of biting its time. Maybe it'll come 0:03:01.080 --> 0:03:04.359 back with something else. We've also heard there's been some 0:03:04.400 --> 0:03:08.360 reporting that some within Chinese officials are meeting to talk 0:03:08.400 --> 0:03:11.799 about some economic measures that they could take to sort 0:03:11.840 --> 0:03:14.240 of bolster the economy. Right now, obviously, all of that 0:03:14.280 --> 0:03:17.080 coming against the backdrop of tariffs. We'll have to see 0:03:17.200 --> 0:03:19.760 what continues to come just over the coming hours. If 0:03:19.800 --> 0:03:23.000 not days and weeks in Hong Kong, Jilldy says Bloomberg Radio. 0:03:23.240 --> 0:03:25.120 All right, Jill, thank you. Now it's head to Europe 0:03:25.160 --> 0:03:27.720 where stocks are selling off on the Trump tariffs, and 0:03:27.720 --> 0:03:30.360 bloombergs U and Pots joins us in London with the 0:03:30.480 --> 0:03:31.520 latest Good morning you. 0:03:31.520 --> 0:03:35.280 In Karen Nathan. After yesterday's bumpy session in Europe, which 0:03:35.280 --> 0:03:37.880 saw stocks gain before a late selloff, the direction of 0:03:37.920 --> 0:03:40.640 travel so far this morning is very clear and it 0:03:40.760 --> 0:03:43.960 is down only sixteen of six hundred shares on the 0:03:43.960 --> 0:03:46.600 benchmark stocks ex hundred in the green today within next 0:03:46.680 --> 0:03:50.640 currently down two point seven percent. All twenty industry groups low, 0:03:50.760 --> 0:03:53.840 with healthcare stocks the worst performers, off more than four 0:03:53.880 --> 0:03:57.160 and a half percent. Energy and real estate also under 0:03:57.200 --> 0:04:00.400 performing this morning. Looking across the region, the Swiss market 0:04:00.400 --> 0:04:02.800 at the bottom of the table, it's going down more 0:04:02.800 --> 0:04:06.000 than four percent. Live in London, I'm um Pots, Bloomberg 0:04:06.080 --> 0:04:06.600 radea you. 0:04:06.640 --> 0:04:09.040 And thank you hearing the US futures are mixed down, 0:04:09.120 --> 0:04:13.040 futures lower, Nasdaq futures higher. That puts SMP futures right 0:04:13.160 --> 0:04:16.279 in the middle. That that follows yet another turbulent session 0:04:16.400 --> 0:04:18.840 on Wall Street for four straight sessions we've seen moves 0:04:18.880 --> 0:04:22.080 at least four percent from peak to trough. The S 0:04:22.120 --> 0:04:24.760 and P five hundred is down almost nineteen percent from 0:04:24.800 --> 0:04:27.920 its February record, posting the worst four day run since 0:04:28.000 --> 0:04:29.080 March twenty twenty. 0:04:29.480 --> 0:04:31.800 Well, Nathan, we are seeing major movements in the bond 0:04:31.839 --> 0:04:34.040 market once again this morning, and we bring in Bloomberg 0:04:34.160 --> 0:04:37.040 John Tucker for the very latest, John and Karen. 0:04:37.200 --> 0:04:39.640 Treasuries, which are supposed to be the safest and most 0:04:39.640 --> 0:04:43.200 liquid assets, they're selling off and when the prices go down, 0:04:43.360 --> 0:04:46.200 the yields go up. A Calvin yo Muddy, manager at 0:04:46.200 --> 0:04:48.680 hedge fund blue Edge at Binzer, says this is a 0:04:48.720 --> 0:04:52.080 fire sale of treasuries. He adds, it's like ice sculpting 0:04:52.120 --> 0:04:52.760 in a forest. 0:04:52.800 --> 0:04:53.080 Fire. 0:04:53.480 --> 0:04:56.640 Grace Peters a JP Morgan Chase sees it this way. 0:04:56.960 --> 0:05:00.200 You know what the market is digesting this week is 0:05:00.240 --> 0:05:02.840 that tariffs are not going away. In Volatility is likely 0:05:02.839 --> 0:05:03.440 here to stay. 0:05:03.680 --> 0:05:06.760 US government bonds may be losing their safe haven status 0:05:06.800 --> 0:05:10.599 if it concerns the trade war will trigger stagflation. Hedge 0:05:10.640 --> 0:05:14.000 funds may be unwinding a popular leverage trade, and investors 0:05:14.040 --> 0:05:16.640 maybe just be dumping whatever they can to get cash 0:05:16.760 --> 0:05:19.880 That could signal liquidity concerns, and that's never a good 0:05:19.960 --> 0:05:23.760 sign for markets. Some investors also speculate that global reserve 0:05:23.839 --> 0:05:28.120 managers like China could be re evaluating their positions in 0:05:28.279 --> 0:05:30.840 US government debt. In the US right now, the ten 0:05:30.920 --> 0:05:33.760 year is now ten thirty seconds in price. That is 0:05:33.800 --> 0:05:37.240 pushing the yield up four basis points the four thirty 0:05:37.279 --> 0:05:40.120 three you know, New yorkom John Tucker, Bloomberg Radio. 0:05:40.080 --> 0:05:41.880 All right, John, thank you for hearing a warning this 0:05:41.920 --> 0:05:45.359 morning from former Treasury Secretary Larry Summers. He says the 0:05:45.480 --> 0:05:48.479 US is now likely headed toward a recession thanks to 0:05:48.520 --> 0:05:49.520 the tariff increases. 0:05:49.920 --> 0:05:55.400 We'll see an extra two million people be unemployed. We'll 0:05:55.440 --> 0:06:00.760 see losses in household income that are five thousand dollars 0:06:01.120 --> 0:06:05.839 of family or more. We're very likely, in the context 0:06:05.920 --> 0:06:11.280 of a recession, to see markets reach levels significantly below 0:06:11.880 --> 0:06:13.400 their current levels. 0:06:13.760 --> 0:06:17.560 Former Treasury Secretary Larry Summers also tells Bloomberg's Wall Street 0:06:17.560 --> 0:06:20.719 Week and economic downturn would have various other negative effects, 0:06:20.760 --> 0:06:23.360 including a wider budget deficit. You can get the full 0:06:23.400 --> 0:06:27.359 conversation with Bloomberg's David Weston on the Bloomberg Talks podcast, 0:06:27.520 --> 0:06:31.000 or watch it on the Bloomberg Podcasts page on YouTube. 0:06:30.600 --> 0:06:33.839 Meywell Nathan. Many strategists say Trump's tariff policy should not 0:06:33.960 --> 0:06:36.960 come as a surprise. Limy Countrilla, as Managing director for 0:06:37.000 --> 0:06:39.240 Public Policy at PIMCO, this. 0:06:39.200 --> 0:06:42.679 Is a worldview that President Trump has had for forty years. 0:06:42.720 --> 0:06:45.520 This is what we keep telling our clients, and he 0:06:45.720 --> 0:06:48.680 ran on this. He believes he has a mandate to 0:06:48.839 --> 0:06:52.000 fulfill this. He believes that there's a lot of unfinished 0:06:52.040 --> 0:06:55.520 business from the first administration. And I think that the 0:06:56.320 --> 0:06:59.400 market obviously wants to maybe see through this or hope 0:06:59.400 --> 0:07:02.440 that there is some this will result in a different outcome. 0:07:02.680 --> 0:07:04.960 But our view is tariff rates are going to be 0:07:05.000 --> 0:07:08.239 going up and that will have a headwind on growth 0:07:08.480 --> 0:07:10.560 and likely have implications for inflation. 0:07:10.920 --> 0:07:14.480 Jim Coos Lebby Cantrell says one of the president's primary 0:07:14.520 --> 0:07:17.240 goals is balancing the goods trade deficit, and that he 0:07:17.280 --> 0:07:20.520 plans to use tariffs until that metric is better balanced. 0:07:20.720 --> 0:07:23.000 Karen, this morning, we have a warning as well from 0:07:23.160 --> 0:07:26.440 Ray daly O for investors who may be too fixated 0:07:26.800 --> 0:07:29.960 on tariffs. Let's get the details on that. From Bloomberg's 0:07:30.000 --> 0:07:31.120 li So Mateo. 0:07:31.120 --> 0:07:34.360 In a post on X. The billionaire founder of Bridgewater Associates, 0:07:34.440 --> 0:07:37.880 said investors are not paying attention to underlying conditions the 0:07:37.920 --> 0:07:41.600 breakdown in major monetary, political, and geopolitical orders, and that 0:07:41.680 --> 0:07:44.480 failing to do so may blindside them to the biggest 0:07:44.480 --> 0:07:48.120 disruptions that are still to come. Dalli explained how Trump's 0:07:48.120 --> 0:07:51.400 tariff policies are driven by too much existing debt and 0:07:51.440 --> 0:07:53.720 the rate at which new borrowing is added. He said 0:07:53.720 --> 0:07:57.400 the US is hooked on using debt to finance successive spending, 0:07:57.680 --> 0:08:01.240 while creditor countries like China sell goods to detornations like 0:08:01.240 --> 0:08:03.400 the US, and that will lead to a correction of 0:08:03.400 --> 0:08:06.880 these imbalances and a change in the monetary order. Balio 0:08:07.000 --> 0:08:10.600 also notes that gaps and education, opportunity and values are 0:08:10.640 --> 0:08:13.600 contributing to a breakdown of the democratic system and the 0:08:13.720 --> 0:08:17.080 rise of autocratic leaders, while the US is shifting from 0:08:17.120 --> 0:08:21.040 a multilateral to a unilateral approach in the geopolitical arena. 0:08:21.240 --> 0:08:23.440 Lisa Matteo, Bloomberg Radio, all. 0:08:23.440 --> 0:08:25.880 Right, Lisa, thank you about Bloomberg News has learned the 0:08:25.880 --> 0:08:29.480 White House's top economic team argued over plans to impose 0:08:29.520 --> 0:08:32.920 even bigger tariffs. Trade advisor Peter Navarro was among the 0:08:32.960 --> 0:08:35.840 more hawkish officials who pushed for a flat twenty five 0:08:35.840 --> 0:08:39.040 percent levy on all countries. The revelation comes as Elon 0:08:39.120 --> 0:08:42.240 Musk called Navarro dumber than a sack of bricks. That's 0:08:42.280 --> 0:08:45.840 a quote and truly a moron. On social media, Navarro 0:08:46.000 --> 0:08:49.640 said the Tesla CEO was a quote car assembler who 0:08:49.720 --> 0:08:53.480 used parts from other countries. White House spokesperson Caroline Levitt 0:08:53.480 --> 0:08:54.480 downplay the spat. 0:08:55.000 --> 0:08:58.320 Look, these are obviously two individuals who have very different 0:08:58.400 --> 0:09:02.400 views on trade and on tariff's. Boys will be boys, 0:09:02.559 --> 0:09:05.760 and we will let their public sparring continue. And you 0:09:05.800 --> 0:09:07.400 guys should all be very grateful that we have the 0:09:07.400 --> 0:09:11.000 most transparent administration in history. And I think it also 0:09:11.000 --> 0:09:14.320 speaks to the President's willingness to hear from all sides 0:09:14.360 --> 0:09:17.000 that he has people at the highest levels of this government, 0:09:17.040 --> 0:09:20.080 in this White House who have very diverse opinions on 0:09:20.240 --> 0:09:21.200 very diverse issues. 0:09:21.440 --> 0:09:24.079 Whitehouse spokes version Caroline love it and must defend a 0:09:24.160 --> 0:09:31.359 Tesla as the most vertically integrated auto manufacturer in America. 0:09:31.840 --> 0:09:33.079 It's time now for a look at some of the 0:09:33.120 --> 0:09:35.520 other stories making news in New York and around the world. 0:09:35.600 --> 0:09:37.959 And for that, we're joined by Bloombergy's Michael Baher Machael 0:09:38.000 --> 0:09:38.640 good morning. 0:09:38.520 --> 0:09:41.679 Good morning, Karen. It's another disturbing milestone in the Texas 0:09:41.720 --> 0:09:45.440 measles outbreak. Texas has now confirmed more than five hundred 0:09:45.480 --> 0:09:48.560 measles cases in a little more than two months. The 0:09:48.600 --> 0:09:53.360 outbreak is responsible for two deaths and more than fifty hospitalizations. Meanwhile, 0:09:53.440 --> 0:09:56.840 Health and Human Services Secretary Robert F. Kennedy Jr. Now 0:09:56.920 --> 0:09:59.960 says he is encouraging people to get vaccinated against measles. 0:10:00.400 --> 0:10:02.599 I'm not going to take people's vaccines away from What 0:10:02.720 --> 0:10:04.200 I'm going to do is make sure that we have 0:10:04.280 --> 0:10:07.600 good science so that people can make an informed choice. 0:10:07.679 --> 0:10:11.160 Kennedy spoke on CDs Mornings. A roof collapse at the 0:10:11.360 --> 0:10:14.640 iconic jet Set nightclub and the Dominican Republic has killed 0:10:14.640 --> 0:10:17.079 at least ninety eight people and others may be trapped. 0:10:17.559 --> 0:10:22.400 Emergency Center director Juan Manuel Mendez says Cruz would search 0:10:22.640 --> 0:10:25.200 tirelessly for people at the site of the collapse in 0:10:25.280 --> 0:10:29.800 Santo Domingo. Among the missing is marengue singer Ruby Perez, 0:10:29.840 --> 0:10:33.880 who was among those performing when the roof collapsed. Those 0:10:33.920 --> 0:10:37.800 who died include a saxophonist on stage, local politicians, and 0:10:37.920 --> 0:10:43.320 two former Major League Baseball players, Octavio d'hotel and Tony Blanco. 0:10:44.040 --> 0:10:46.760 The acting chief of the IRS plans to quit after 0:10:46.800 --> 0:10:49.800 a deal to share tax data of undocumented immigrants with 0:10:49.840 --> 0:10:55.200 Homeland Security authorities. Acting Commissioner Melanie Krauss is also said 0:10:55.240 --> 0:10:58.760 to have disagreed with the agency's direction. A federal judge 0:10:58.760 --> 0:11:00.679 in New York will hear argument it's on the Trump 0:11:00.679 --> 0:11:05.679 administration's use of the Alien Enemies Act to deport undocumented migrants. 0:11:06.120 --> 0:11:10.360 Lee Goerlernt is the American Civil Liberties Union attorney leading 0:11:10.360 --> 0:11:13.480 the challenge against that use of the Act. He says 0:11:13.520 --> 0:11:16.000 he believes President Trump has exceeded his authority. 0:11:16.480 --> 0:11:19.079 We are hoping that the judge will issue a temporary 0:11:19.080 --> 0:11:22.880 restraining order to keep things in place while the case 0:11:22.920 --> 0:11:25.680 can proceed further, and then we can provide the court 0:11:25.720 --> 0:11:27.520 with more briefing and more facts. 0:11:27.720 --> 0:11:30.679 On Monday, the Supreme Court lifted a DC judges order 0:11:30.720 --> 0:11:33.480 that prevented the White House from deporting Venezuelan migrants who 0:11:33.640 --> 0:11:37.440 the government alleges our gang members. Global News twenty four 0:11:37.440 --> 0:11:40.120 hours a day and whenever you want it with Bloomberg News. Now, 0:11:40.200 --> 0:11:42.160 I'm Michael Barn. This is Bloomberg Karen. 0:11:42.440 --> 0:11:49.520 All right, Michael Barr, thank you. Time now for the 0:11:49.520 --> 0:11:53.640 Bloomberg Sports update. Here's John stash Hour, John, good morning. 0:11:53.400 --> 0:11:55.320 Good morning. Here the next of the Celtics with a 0:11:55.440 --> 0:11:57.800 hint of what could very well happen when the NBA 0:11:57.800 --> 0:12:00.400 Playoffs get to the second round. Height game with the guard, 0:12:00.480 --> 0:12:03.840 Nick's had a one point lead and the ball. 0:12:03.240 --> 0:12:07.479 Brunsingle try to orchestrate. With the one point lead, Brunsvill 0:12:07.520 --> 0:12:14.520 tried cutting hard Brunson, who sins play hearts and he's 0:12:14.800 --> 0:12:18.280 right on the Celtics. It's Tatum on top, Tatum chip 0:12:18.360 --> 0:12:19.640 stepping three. 0:12:19.640 --> 0:12:20.599 For the time. 0:12:23.320 --> 0:12:25.440 GNT Josh Hart miss the game when he shot out 0:12:25.440 --> 0:12:28.520 the end of regulation and Boston won and overtime one 0:12:28.640 --> 0:12:31.880 nineteen one seventeen. The one time Nick Chris TOMPs Porzingis 0:12:31.920 --> 0:12:35.160 at seven foot three, put on a long distance shooting 0:12:35.240 --> 0:12:37.839 display eight three pointers, a couple of them from the logo. 0:12:37.920 --> 0:12:40.760 He scored thirty four points. Jason Tatum scored thirty two. 0:12:40.880 --> 0:12:43.480 Karl Anthony Towns led the Knicks with thirty four Next 0:12:43.559 --> 0:12:46.600 beat New Orleans won nineteen one fourteen. The Denver Nuggets 0:12:46.640 --> 0:12:49.480 only three games ago in the regular season, fired Michael Malone, 0:12:49.520 --> 0:12:51.880 their coach the past decade. He coached them to the 0:12:51.960 --> 0:12:55.160 NBA Championship only two years ago. Devils lost to the 0:12:55.240 --> 0:12:58.400 Ruins seven to two. The Islanders a wild seven six 0:12:58.559 --> 0:13:02.480 overtime Watson Nashville and talk about while the Vancouver Canucks 0:13:02.960 --> 0:13:05.720 trailed in Dallas five to two with one minute left, 0:13:05.760 --> 0:13:08.520 scored three times in the final minute and one in 0:13:08.720 --> 0:13:10.920 ot make it six wins in a row for the Mets. 0:13:10.920 --> 0:13:12.720 They're five to zero on this first home stand. They 0:13:12.760 --> 0:13:15.920 beat the Marlins ten to five. Francisco Lindora lead off 0:13:16.040 --> 0:13:19.520 home run four RBIs for Pete Alonzo. Those Yankee Torpedo 0:13:19.640 --> 0:13:23.160 bats very quiet in Detroit against Tigers Ace Trek Scubel. 0:13:23.240 --> 0:13:26.200 Yanks had just six singles, got shut out five nothing 0:13:26.280 --> 0:13:28.959 their third strate Laws all three without a home run 0:13:29.080 --> 0:13:31.920 being hit. The Nationals again surprise the Dodgers eight to two. 0:13:32.040 --> 0:13:35.480 James Wood Duomer's five RBIs. Red Sox lost at Toronto 0:13:35.600 --> 0:13:39.119 six to one. John Stasheward Bloomberg Sports, Darin Nathan. 0:13:41.080 --> 0:13:45.120 Coast to Coast on Bloomberg Radio nationwide on Sirius XM, 0:13:45.400 --> 0:13:48.199 and around the world on Bloomberg dot Com and the 0:13:48.240 --> 0:13:51.360 Bloomberg Business app. This is Bloomberg Daybreak. 0:13:51.520 --> 0:13:51.960 Good morning. 0:13:51.960 --> 0:13:54.800 I'm Nathan Hager, and as promised President Donald Trump, so 0:13:54.960 --> 0:13:58.520 called reciprocal tariffs are now in effect, driving duty rates 0:13:58.559 --> 0:14:01.760 for countries around the world to one hundred year highs. 0:14:01.920 --> 0:14:05.040 And even after four straight sessions of market turmoil on 0:14:05.160 --> 0:14:08.520 Wall Street, the President says tariffs are already a win. 0:14:09.080 --> 0:14:11.000 We'll making a fortune with tariffs. 0:14:11.080 --> 0:14:12.400 Two billion dollars a day. 0:14:12.480 --> 0:14:13.040 Do you believe it? 0:14:13.120 --> 0:14:14.600 I was sold two billion. 0:14:14.400 --> 0:14:15.079 Dollars a day. 0:14:15.400 --> 0:14:18.400 And that was the President speaking at a Republican fundraiser 0:14:18.480 --> 0:14:21.800 in Washington last night, hours before these new tariffs kicked in. 0:14:21.960 --> 0:14:24.440 This morning, we were joined by Bloomberg News Global Trade 0:14:24.560 --> 0:14:28.320 editor Brendan Murray. Brendan, can we start there? Where did 0:14:28.480 --> 0:14:31.360 two billion dollars a day number come from? How much money? 0:14:31.440 --> 0:14:34.160 If ed, he is the US taking in from the 0:14:34.280 --> 0:14:35.960 duties that have already been in effect. 0:14:36.000 --> 0:14:36.440 Good morning. 0:14:36.920 --> 0:14:39.720 Well, that's the number he's saying is coming into the 0:14:39.800 --> 0:14:45.160 US treasury, collected by the Customs Agency. For He started 0:14:45.200 --> 0:14:48.360 with ten percent on China, then he went to twenty percent, 0:14:48.720 --> 0:14:50.840 and now we're looking at one hundred and four percent 0:14:52.160 --> 0:14:54.640 it is starting today, So that's the amount of money 0:14:54.960 --> 0:14:58.280 he thinks it's generating. He's going to need a lot 0:14:58.320 --> 0:14:59.880 of money to pay for the tax cuts that he 0:15:00.360 --> 0:15:03.240 trying to push through Congress to extend as well. So 0:15:03.880 --> 0:15:08.760 there's both the effort to rewrite US trading relationships, trade 0:15:08.800 --> 0:15:12.640 deals with countries like China, economies like the European Union, 0:15:13.640 --> 0:15:16.800 and as well as to generary revenue for the Treasury 0:15:17.000 --> 0:15:19.360 to help reduce the national debt. 0:15:19.520 --> 0:15:22.680 Closing sympathis we should talk, Brennan about the scope of 0:15:22.800 --> 0:15:24.920 these tariffs. You mentioned the one hundred and four percent 0:15:25.120 --> 0:15:29.880 duty on China. That alone is eyebrow raising. But we're 0:15:30.080 --> 0:15:33.040 at levels that literally haven't been seen since even before 0:15:33.080 --> 0:15:34.960 the Smooth Holly tariffs in the nineteen thirties. 0:15:35.560 --> 0:15:38.640 Yeah, exactly. So the average US tariff rate has gone 0:15:38.720 --> 0:15:41.720 from something in the mid single digits five seven percent 0:15:42.160 --> 0:15:45.040 to over twenty percent now with the tariffs that were 0:15:45.120 --> 0:15:49.320 enacted today. The European Union was hit with twenty percent, 0:15:49.440 --> 0:15:53.640 the UK ten percent. Countries like in Southeast Asia, like 0:15:53.760 --> 0:15:56.880 Cambodia and Vietnam are looking at rates in the mid 0:15:57.000 --> 0:16:01.080 forty percent too, So those were countries that companies had 0:16:01.120 --> 0:16:05.400 shifted to to get outside of their move their supply 0:16:05.520 --> 0:16:08.560 chains outside of China. So pretty much there's no place 0:16:08.600 --> 0:16:13.920 to hide from these enormous tariff rates that the President 0:16:14.040 --> 0:16:14.840 imposed today. 0:16:15.200 --> 0:16:17.960 And as the President mentioned last night, he's already been 0:16:18.080 --> 0:16:21.800 having discussions with the leaders of South Korea, Japan. We 0:16:21.880 --> 0:16:26.400 saw Israeli Prime Minister natanyahuo in Washington this week. So far, 0:16:26.520 --> 0:16:30.920 though China hasn't immediately retaliated, does that come as a surprise. 0:16:31.800 --> 0:16:35.200 It's a little bit of a surprise. Though China likes 0:16:35.240 --> 0:16:38.680 to wait until rate before the US stock market opens. 0:16:39.120 --> 0:16:42.640 It has done that in the past to maximize the impact, 0:16:42.800 --> 0:16:46.720 the economic impact, the financial impact on the US. So 0:16:47.320 --> 0:16:50.760 China has been quiet for the past several hours. The 0:16:50.840 --> 0:16:54.480 government hasn't said anything publicly, but that can't last, and 0:16:55.600 --> 0:16:57.960 they have said that they will they will fight to 0:16:58.080 --> 0:17:00.840 the end on this in this trade war and not 0:17:01.080 --> 0:17:03.880 cave to pressures. So it's only a matter of time. 0:17:03.960 --> 0:17:07.440 There's only so much imports that China can hit imports 0:17:07.720 --> 0:17:10.159 of American products, so they're going to be looking at 0:17:10.200 --> 0:17:15.400 other other things like export controls, cutting off American access 0:17:15.520 --> 0:17:19.480 to raw materials, things needed to make high tech gear. 0:17:20.480 --> 0:17:24.240 And they've also got big, big US tech companies there 0:17:24.359 --> 0:17:28.239 a big US automakers including Elon, Musk Tesla. So if 0:17:28.240 --> 0:17:31.080 you're an American company in China right now, you know 0:17:31.200 --> 0:17:35.520 you're potentially a target for the government's retaliation. 0:17:37.400 --> 0:17:40.240 Really appreciate this. Brendan again, thanks so again for being 0:17:40.320 --> 0:17:42.920 with us this morning. That is Brendan Murray, Global Trade 0:17:43.080 --> 0:17:45.080 editor for Bloomberg News. 0:17:45.359 --> 0:17:48.800 Karen Nathan, We're just watching the markets this morning as 0:17:48.840 --> 0:17:52.639 treasuries extend their decline. Stocks in Europe or lower, and 0:17:52.800 --> 0:17:56.280 futures this morning are mixed s and P futures they're 0:17:56.359 --> 0:17:58.520 up to tens of a percent of eleven points down. 0:17:58.600 --> 0:18:00.840 Futures are a little change now. Future is up six 0:18:00.920 --> 0:18:03.159 tens of percent, or one hundred and six points. The 0:18:03.320 --> 0:18:05.960 decks in Germany is down two point two percent, so's 0:18:06.000 --> 0:18:08.000 the CAAC in Paris fort C one hundred down two 0:18:08.000 --> 0:18:10.840 point one percent. Then EK two twenty five in Japan 0:18:11.480 --> 0:18:13.800 it was down about four percent. The ten year treasury 0:18:13.880 --> 0:18:16.520 down twelve thirty seconds, seeal four point three four percent, 0:18:16.640 --> 0:18:18.879 yield on the two year three point seven eight percent, 0:18:19.200 --> 0:18:22.600 the thirty year yield four point seven nine percent. NIMEX 0:18:22.600 --> 0:18:25.040 scrude oil is down three percent, down a dollars seventy 0:18:25.119 --> 0:18:27.440 seven at fifty seven dollars eighty five cents of barrel 0:18:27.680 --> 0:18:30.320 comecs Gold up two and a half percent. It's seventy 0:18:30.359 --> 0:18:32.960 three dollars ten cents at thirty sixty three and ounce. 0:18:33.240 --> 0:18:36.480 The Blueberg Dollars Spot index it's lower. It's down half percent, 0:18:36.560 --> 0:18:39.199 with the euro one point one zero three zero against 0:18:39.200 --> 0:18:41.400 the dollar, the n one forty five point three eight 0:18:41.760 --> 0:18:43.679 and Bitcoin up a quarter percent. 0:18:43.840 --> 0:18:46.760 Nathan Okay, Karen, thank you for more on the market impact. 0:18:46.800 --> 0:18:50.200 We are joined now by Sema Shah, chief Global Strategist 0:18:50.600 --> 0:18:53.520 at Principal Asset Management. Seema, it's great to have you 0:18:54.080 --> 0:18:57.840 with us this morning. Where do you see risk assets 0:18:57.880 --> 0:19:01.560 in particular going now that these new tariffs are in 0:19:01.640 --> 0:19:02.600 effect around the world. 0:19:03.960 --> 0:19:07.399 Good morning. Well, look, with the new tariffs, particularly the 0:19:07.840 --> 0:19:12.359 escalation of China's tariffs, we are looking in a slightly 0:19:12.480 --> 0:19:16.000 I mean, I think, a very concerning global economic picture 0:19:16.880 --> 0:19:20.639 and also for the US from our perspective, unless there 0:19:20.800 --> 0:19:25.280 is I guess a release of those tariffs, or you 0:19:25.400 --> 0:19:27.480 have some kind of positive news with regards to tax 0:19:27.600 --> 0:19:30.840 cuts or deregulation, it is quite likely that the US 0:19:30.880 --> 0:19:33.879 would slide into recession. There is still I think a 0:19:33.960 --> 0:19:35.600 lot to be seen over the last next couple of 0:19:35.640 --> 0:19:37.960 months from the administration per Certainly that is the direction 0:19:38.080 --> 0:19:40.960 that things would move without any kind of action to 0:19:41.040 --> 0:19:43.320 reverse some of the things have been playing out over 0:19:43.320 --> 0:19:46.960 the last couple of weeks. So from that perspective, I 0:19:47.040 --> 0:19:49.680 think it seems likely that you're going to have risk 0:19:49.720 --> 0:19:52.720 of sentiment lingering for a little while longer. At least, 0:19:53.400 --> 0:19:56.040 we need to see a rerating of valuations to a 0:19:56.119 --> 0:19:59.080 point where investors are want to get interested, and to 0:19:59.200 --> 0:20:01.920 have that, you're need to see another downward revision of 0:20:01.960 --> 0:20:06.080 the earnings forecasts to slightly more realistic level, one which 0:20:06.160 --> 0:20:08.399 is more reflective of a weaken economic picture. 0:20:08.880 --> 0:20:11.080 Is that what we're seeing in the treasury market right now, 0:20:11.200 --> 0:20:13.920 with the sell off across the curve this morning, a 0:20:14.040 --> 0:20:15.640 repricing four recession. 0:20:17.560 --> 0:20:19.639 I think the seller for in the treasure curve is 0:20:19.680 --> 0:20:23.440 actually quite confusing. It's quite opaque. There's a number of 0:20:23.600 --> 0:20:28.040 different possibilities that could be playing out over here. It 0:20:28.119 --> 0:20:30.760 could be down to inflation concerns, it could be concerns 0:20:30.800 --> 0:20:34.760 around tax revenue, with a weaker economic outlook then starting 0:20:34.840 --> 0:20:38.159 to create additional fears around the budget deficit. And of 0:20:38.280 --> 0:20:42.119 course there's the key risk out there which investors are 0:20:42.160 --> 0:20:45.920 increasingly talking about, which is a loss and interest of 0:20:46.119 --> 0:20:48.600 the US as a safe haven. As I said, it's 0:20:48.720 --> 0:20:51.119 very unclear exactly which one of those is really the 0:20:51.200 --> 0:20:54.639 key driver. Per certainly it does make the economic outlook 0:20:54.720 --> 0:20:57.920 that much more concerning if you have interest rates which 0:20:57.920 --> 0:21:00.600 are spiking at a time when they should ideal be falling. 0:21:01.200 --> 0:21:03.960 If the US is losing its status as a safe haven, 0:21:04.040 --> 0:21:06.400 where is a safe haven at this point? 0:21:07.720 --> 0:21:10.840 Well, it's been interesting today when you look across across 0:21:11.119 --> 0:21:12.879