April 16, 2025 • 19 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) China’s economy showed surprising strength in early 2025 with a sharp uptick in March, though a trade impasse with Donald Trump has prompted calls for stimulus to offset the tariff shock.
(2) President Donald Trump called on China to reach out to him in order to kick off negotiations aimed at resolving the escalating trade fight between the world’s two largest economies.
(3) President Donald Trump’s administration has barred Nvidia from selling its H20 chip to China, an escalation of Washington’s tech battle with Beijing that will cost the company billions of dollars and hamstring a product line it explicitly designed to comply with previous US curbs.
(4) Import prices for March came in soft – but not soft enough. Bloomberg Economics's calculations of tariff-inclusive import prices indicate that, two months into Trade War 2.0, US importers have borne the brunt of almost all the tariffs so far.
(5) Americans are increasingly looking for jobs in Britain amid President Donald Trump’s funding cuts and a darkening economic outlook.
(6) Donald Trump's push to reshape global trade and security has shocked European markets into life, driving investors to assets from stocks to bonds and the euro, in a way few could have imagined even 6 months ago.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the blom Big Day baq At podcast, available
every morning on Apple, Spotify or wherever you listen. It's Wednesday,
the sixteenth of April in London. I'm Caroline Hepcare.
Speaker 3 (00:18):
And I'm Stephen Carroll coming up today, Growing, Growing, gone.
China's GDP beats estimates, but tariff's signal a looming economic cliff.
Speaker 2 (00:26):
Bloomberg finds US importers are paying almost one hundred percent
of tariffs on overseas imports.
Speaker 3 (00:34):
Plus Donald Trump's push to reshape global trade as driving
investors to Europe as confidence in the America First Trade evaporates.
Speaker 4 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:45):
China's economy grew by a faster than expected five point
four percent in the first three months of the year.
The surprising strength in the world's second largest economy comes
as concerns mount over the potential impact of one hundred
and forty five percent US tariffs on Chinese goods. Bloomberg
understands Beijing as considering stimulus measures to cushion the shock
(01:05):
of the American levies. Our market's Live stratt as Mark
Cranfield says investors are closely watching how China chooses to respond.
Speaker 5 (01:13):
China will have to be seen to be keeping up
the stimulus for quite a long time. That's what investors
will be looking for. They'll be looking for soothing words.
Prison Siegingping is in Malaysia now, he's completing an Asian tour.
He's trying to encourage a lot of support for China
on a trade basis. That are something that investors will
certainly respond to.
Speaker 3 (01:30):
Mark Cranfield speaking there as economists that several international banks,
including UBS, Gulbin, Sachs, City Group, and Socity General, have
all lowered their China growth forecast in recent weeks to
around four percent or lower.
Speaker 2 (01:43):
The latest economic data out of China comes as President
Chump called on Beijing to reach out to him as
triple digit tariffs threatened to effectively eliminate trade between the
two nations. Here is the White House Press Secretary Caroline
Levitt reading what she said was a statement dictated by
President Trump.
Speaker 6 (02:02):
The ball is in China's court. China needs to make
a deal with us. We don't have to make a
deal with them. There's no difference between China and any
other country except they are much larger, and China wants
what we have. What every country wants what we have
the American consumer, or to put another way, they need
our money.
Speaker 2 (02:23):
Trump's comments, delivered there by his Press secretary, come as
China ordered airlines not to take further deliveries of Boeing jets.
Neither side has offered much indication that they want to
be the first to blink in a growing trade will
between the world's two biggest economies. Speaking to Blueberg today,
China's former deputy finance Minister Xuguang Yeo said that the
(02:45):
US had left them with little choice but to respond
with their own tariffs.
Speaker 7 (02:50):
We fully respect the US, We fully follow the instruction
by President CDP. We do everything in the healthy, stable
and the sole relation with the US.
Speaker 4 (03:05):
But it is time we must.
Speaker 7 (03:08):
Picked action retaliate because we don't want the whole world
wepin for the jungle of jungle law.
Speaker 2 (03:15):
That was China's former depthy finance minister speaking there to
Bloomberg as JP Morgan's Jamie Darman once again waded into
the growing trade war. Speaking to the FT Diamond called
on Washington and Beijing to engage with each other, saying
it doesn't have to wait a year, could start tomorrow,
adding also that Trump's trade war is creating uncertainty that
(03:36):
is challenging US credibility.
Speaker 3 (03:39):
The Trump administration is banned in video from selling its
HAGE twenty chip to China and escalation of Washington's tech
battle with Beijing. In video, warned it will write, it
will report a write down of about five point five
billion dollars in the current quarter tied to the H twenty.
Speaker 4 (03:55):
Chips.
Speaker 3 (03:56):
Shares in the videos fell by more than six percent,
and after ours, trade and semiconductor stocks in the US
and Asia have fallen after the news. Here's Bimberg's Anabel Droolers.
Speaker 8 (04:06):
This is important because it's a chip that Nvidia has
created specifically to meet the export controls that are already
in place on advanced technology to China. Now this brings
this new technology into the fray. And so the concern
from the White House and from the Trump administration is
essentially the H twenty is just too advanced. Essentially it
can still be diverted or used to create some sort
(04:28):
of supercomputer in China.
Speaker 4 (04:30):
That's the concern from officials.
Speaker 3 (04:31):
Bloomberg's Anabel Droolers speaking there, and Vidia has said further
tightening of restrictions will only reinforce China's determination to make
itself independent of US technology.
Speaker 2 (04:43):
The Dutch chip equipment maker ASML has reported first quarter
bookings that missed estimates. The company saw bookings of three
point nine four billion euros's versus four point nine billion
that analysts were expecting. ASML's CEO says that the the
US tariff announcements have increased uncertainty for the firm. The
(05:04):
company's guidance is being keenly watched for the impact of
the trade wars. President Trump has threatened to impose tariffs
on the semiconductor supply chain, so ASML, of course the
leading provider of advanced lithography machines used to produce the
smallest chips used in AI and other sensitive applications.
Speaker 3 (05:26):
Donald Trump has launched a probe into the need for
tariffs on critical minerals, citing national security and resilience concerns.
The order signed by the President yesterday calls for the
Commerce Secretary to investigate imports including rare earth elements considered
the building blocks of US defense by the government. If
the Secretary finds impairments to national security, Trump could impose
(05:47):
tariffs on the suppliers, which would replace current so called
reciprocal duties. According to the White House, the US's import
reliant when it comes to at least fifteen critical minerals,
while seventy percent of imports of rare er it's come
from China.
Speaker 2 (06:02):
The European Union expects the majority of US taris will
not be removed. After making little progress during talks in
Washington earlier this week, Bloomberg understands that the EU's trade
chief Maosseevkovich left the meeting with US Commerce Secretary Howard
Lutnik and Trade Representative Jamison Greer with little clarity on
(06:23):
their position. Meanwhile, the US President's most recent comments on
the matter this week from the Oval Office criticized the
trading relationship between the two regions.
Speaker 9 (06:33):
But the European Union has taken terrible advantage. They don't
take our food products. They don't take our cars. We
have millions of their cars BMW, Volkswagen, Mercedes, Benz, many others.
They come in by the minions. They don't take. There
are no Chevrolets in Munich.
Speaker 2 (06:51):
I can tell you that President Trump speaking there while
in those discussions. US officials indicated that the twenty percent
so called reciprocal tariffs, which have been reduced to ten
percent for ninety days, would not be removed outright. The
EU has said previously that its countermeasures on around twenty
one billion euros of US goods will kick in following
(07:15):
the ninety days pause if discussions don't yield satisfactory results.
Speaker 3 (07:20):
Two months into the trade war, US importers have taken
nearly all of the damage. That's the view of Bloomberg Economics,
which has built a tariff inclusive import price index. It
found that import prices had increased by almost the exact
amount of the tariffs, meaning that exporters are not lowering
their costs. Gilbin Sachs, chief US equity stratet as David
(07:42):
Costin says equity investors aren't clear which companies are going
to cope with tariffs.
Speaker 10 (07:47):
I think the bigger issue the investors really are focusing
on is what is the growth prospects for the coming year.
We're looking around three percent earnest growth, So if there
was more confidence that you could have better projectory of
corporate profits, that would be one reason for money to
come into the equan market.
Speaker 3 (08:06):
Cast and ads that dolblin I sees the chance of
a recession this year at forty five percent. The week
O dollar is adding to the higher costs from businesses
importing from the EU, UK and Japan.
Speaker 2 (08:18):
Now, Americans are increasingly looking for jobs here in Britain
as the US second Ike outlook gets gloomier. Job Site
indeed says that interest from US job seekers is bouncing
back faster than any other country. Bloombergs James Walcock has more.
Speaker 11 (08:33):
If you go on to a job site and click
on an ad, they track it and indeed say of
all the people abroad looking at jobs in Britain, nearly
one in ten of those clicks were from the US
in the first three months of this year. That's the
largest share in two years, and it's being driven by
people looking for roles in scientific research. The shift comes
as the US government announces billions of dollars of cuts
(08:55):
to federal science projects in London. James Walcock, Bloomberg Radio.
Speaker 3 (09:00):
Those your top stories on the markets on Wall Street.
Equity markets were mixed and ASTAK finished up two tenths
of one percent. The S and P five hundred two
tenths of one percent lower that we had in Vidia
sinking by six percent and after hours trade on those
new China chip curbs. European stocks had a strong Tuesday close,
with the stock six hundred finishing up by one point
six percent futures, though today pointing sharply lower, down one
(09:23):
percent for eurostocks fifty futures this morning. The US dollar
ending its five day losing street, gaining four tens of
one percent on Tuesday, but reversing that on the Bloomberg
Dollar Spot Index today, Treasuries gaining for a second day
in a row. The ten year yields declined four basis
points today, they're then another one at four point three
to three percent, and we had Goal prices hit another
record high overnight, up one point eight percent on the day,
(09:46):
three thousand, two hundred and eighty eight dollars a triads.
Speaker 4 (09:49):
Those the markets.
Speaker 2 (09:49):
In a moment, we're going to bring you more on
the latest economic data out of China, plus bring you
on latest reporting on how European markets are winning from
investors moving out of view assets.
Speaker 4 (10:01):
But maybe Seef, like me.
Speaker 2 (10:02):
You need some inspiration to do your daily toil to
get out of bed today, Absolutely.
Speaker 4 (10:07):
Love it real, Caroline. Yes, we love being here. I
do love being here.
Speaker 2 (10:11):
But the thing that surprises me every morning is when
I go to bed, I think that I've read all
the news, and then I wake up in the morning
and so much has happened in those a few hours
that I've been asleep.
Speaker 3 (10:20):
One good way to escape the news go on a cruise.
Speaker 4 (10:24):
Yes, exactly.
Speaker 2 (10:25):
And one of our colleagues has been writing about this,
so this is it's not just any old cruising though.
This is cruising for real holiday snove, so we get
the kind of mass market thing, you know, massive.
Speaker 4 (10:36):
Sort of buffet.
Speaker 2 (10:37):
Bloomberg's Fran Golden has been writing about the boom in
ultra luxury cruise ships. These are the ships that have
between one hundred and nine hundred and fifty passengers. She's
got lovely photographs, it's spacious, it's beautiful, pools of endless champagne.
Speaker 4 (10:51):
Just sounds like what I need today.
Speaker 3 (10:52):
And some of the big luxury names getting involved on this.
The Writ's Carleton, for example. Be Arnau's Orient Express brand
also getting in on the act too, and they're even
going as far as trying to rebrand as the people
aren't talking about cruises and a nation from Explorer, one
of the companies involved in this as well, saying that
the word cruise does have a slight mass market connotation,
and she prefers to say she's in the business of
(11:12):
ocean travel.
Speaker 4 (11:14):
Oh, that sounds good anyway.
Speaker 2 (11:16):
It's a piece from Frank Golden that you can read
about in Bloomberg Business Week, and.
Speaker 4 (11:20):
You can look at the prices as well that she
has listed.
Speaker 3 (11:23):
Well, let's go to the Chinese economic data. Now, China's
economy expanding at a faster pace than expected in the
first three months of the year, but the outlook deteriorating
rapidly due to Trump's massive tariffs. Our Asia economic supporter
Katie Demitrieva joins us for more. Katia, let's dig into
the detail. Then, what does the data tell us? It
looks strong on the face of it.
Speaker 12 (11:43):
Yes, it is, and we had sort of a raft
of data coming out this week from China which gave
us a really good look at what's happening. But of
course the problem is that it is kind of in
the rearview mirror already in a bit backward looking. So
what it did show positive stuff. So GDP ticked up
in the first quarter, it was up five point four percent,
(12:06):
and that was led by production and consumption, which is
kind of a rare mix when you're China's usually exports production,
but consumption actually had a really good period. It was
actually the best since December twenty twenty three, and that
was really because of government subsidies. So if you look
through the data home appliances and furniture, those sales were
(12:27):
actually up thirty percent, which is astounding. So unfortunately it
is no longer likely the case because as we know,
tariffs came in the highest tariffs in a century, and
investors seemed to be thinking about that too, because despite
how positive the numbers were, we saw stocks actually extending
(12:47):
losses in Hong Kong and China after it came out.
So in addition to that, there was some not so
great news from data that was not on the GDP
report but kind of came out at the same time,
which is that property investment contracted about ten percent, and
even though the unemployment rate actually looks better it's around
five point two instead of five point four, it's still
(13:07):
a bit too high for some economists liking.
Speaker 2 (13:10):
Indeed, and so if the GDP and the other data
sort backward looking. Let's think about the cliff edge, the
damage that taras could do and are doing now. Really
can try to get to that five percent growth goal?
Speaker 4 (13:22):
That is the question.
Speaker 12 (13:24):
That is a very good question, and there's two camps
that are kind of developing around that. So one says no,
and we've seen that from UBS. Most recently they revise
their growth outlook for three point four, which would be
a pretty big miss from around five percent, which is
what officials Chinese officials have targeted, which is the same
as twenty twenty four. And they've joined Goldman Sachs and
(13:46):
Morgan Stanley and a number of other banks that say
that this five percent growth target is just there's no way,
there's no way with this level of tariffs and with
such a export dependent economy that still hasn't really gotten
the consumer part quite right yet. But then there's also
a camp of experts, and these are folks China watchers
who've been watching this economy for decades for their entire careers,
(14:10):
who say, well, we have to remember that China has
said they want to get around five percent growth, and
in the past they've been able to get it, except
for you know, the pandemic, which no one could really expect,
and so they're going to get it, whether it's through
more government subsidies or trade agreements. You know, she is
currently traveling around Southeast Asia. There's a group of European
(14:31):
officials coming over the summer to China. There's a thought
that no matter what, they're going to have to orchestrate something.
Speaker 3 (14:37):
Katie, what about the hopes for Anny talks over these tis?
We heard Donald Trump say that he's waiting for China
to reach out to start negotiations.
Speaker 12 (14:46):
It's basically a game of chicken right now, and it's
whoever blinks first, right, So we have Trump saying, i
think over a dozen times since he was elected, you know,
she really wants to have these negotiations, and he really
wants to trade deal bad And you know, the Press
secretary just there saying China wants and needs to make
a deal with us. We don't need to make a
(15:07):
deal with China. But you know, China is kind of
saying the exact same thing. And China, for at least
the near term, kind of has the upper hand because
US consumers are going to be feeling the inflationary effects
US businesses that Bloomberg Economics report saying that US importers
are facing the biggest challenges and payment sort of pain
(15:29):
right now. You know they're going to have to at
some point come to the table. They have not spoken yet.
US president, Chinese president have not spoken yet. So until
that happens, you know, that will be the big trade
agreement to watch, but so far doesn't look likely.
Speaker 2 (15:44):
Katyap, thank you so much for being with us today.
Blueberg's Asia Economics reporter Kattia Dmitrieva.
Speaker 3 (15:49):
Donald Trump's push to reshape global trade and security as
shocked European markets into life, driving investors to assets, from
stocks to bonds and the Euro in a way that
few could have imagined just six months ago. Joining us
now from more of Bloomberg's FX and Rates reporter Alice
glad Hill. Alice, good morning, talk us through first of all,
the scale of this move into European assets.
Speaker 1 (16:11):
Good morning, Yeah, I mean it's been a fascinating start
to the year for European assets. So for a long time,
European markets were viewed as this slightly sort of sluggish
backwater where growth was challenged. For such a long time.
We quote an investor in the piece who describes European
markets as this museum, but she said, you know, this year,
you know, this museum suddenly burst into life. So you've
(16:33):
got the strong the euros at the strongest in three
years against the dollar. Last week you saw this huge
sell off in treasuries. German bonds were resilient, and you know,
European shares have been not by the trade war, but
they are. They're doing very well this year. They're moving
far more resilient than American ones. And I think there's
a few things going on here. I think you've got
to push out of US markets, but also a pull
(16:54):
into European markets. So just in terms of the US,
I think, you know, Donald Trump's predictable tariff policy and
fiscal policies have forced investors to start thinking about whether
or not the US treasuries and the dollar are going
to be the haven they've been for decades going forwards.
And then in terms of the pull into Europe, a
month ago we saw Germany announce this huge fiscal package
(17:16):
with package which I think will be a game changer
for the region's growth. So investadors suddenly thinking very differently
about European markets.
Speaker 4 (17:24):
Yeah, it is extraordinary.
Speaker 2 (17:26):
Isn't it that that US exceptionalism is sort of faltering,
that there does seem to be a question mark hanging
over US dollar dominance.
Speaker 1 (17:34):
Yeah, it is extraordinary, But I think there is a
widespread acknowledgement that we are in the middle of a
regime shift for global trade and markets here. Just thinking
back to late last year, it was all about Trump,
and it was all about US exceptionalism and America first.
Speaker 4 (17:50):
And that's not all anyone wants to talk about.
Speaker 1 (17:52):
You know, sort of the hot AI stocks, you know,
the ascendant dollar, King dollar, you know, wave of tax
cuts and doulation. But last week you saw the dollar,
US government bonds, US equities all selling off in tandem.
And that's something that you see more often in an
emerging market, not you know, not the US, but you know,
(18:13):
I think clearly the outlook is tricky for the US here.
There was a Bank of America survey out this week
that found a record number of respondents are going to
cut their exposure to US stocks. Markets have stabilized a
little bit this week, but you know, some of the
price wings in US treasuries have been so severe.
Speaker 4 (18:29):
That markets are unwatchful. Intervention for in the Federal Reserve.
Speaker 1 (18:33):
But in comparison, you've seen European bonds and the euro
really acting like a haven. And let's not forget you know,
Europe is a large liquid market and I think it
does have capacity to absorb a lot of these flows
out of the US. You know, the EU is also
a lot more resilient than in the past, and you've
seen evidence of that in markets in terms of some
of the periphery countries. Their yields have been much more
(18:54):
anchor than you might expect during the recent volatility. So,
you know, Europe does have its challenges, but I think
there's a lot more optimism over the long term.
Speaker 3 (19:04):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:10):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 3 (19:16):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (19:22):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 4 (19:30):
I'm Caroline Hepka and.
Speaker 3 (19:31):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break. Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the blom Big Day baq At podcast, available
every morning on Apple, Spotify or wherever you listen. It's Wednesday,
the sixteenth of April in London. I'm Caroline Hepcare.
Speaker 3 (00:18):
And I'm Stephen Carroll coming up today, Growing, Growing, gone.
China's GDP beats estimates, but tariff's signal a looming economic cliff.
Speaker 2 (00:26):
Bloomberg finds US importers are paying almost one hundred percent
of tariffs on overseas imports.
Speaker 3 (00:34):
Plus Donald Trump's push to reshape global trade as driving
investors to Europe as confidence in the America First Trade evaporates.
Speaker 4 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:45):
China's economy grew by a faster than expected five point
four percent in the first three months of the year.
The surprising strength in the world's second largest economy comes
as concerns mount over the potential impact of one hundred
and forty five percent US tariffs on Chinese goods. Bloomberg
understands Beijing as considering stimulus measures to cushion the shock
(01:05):
of the American levies. Our market's Live stratt as Mark
Cranfield says investors are closely watching how China chooses to respond.
Speaker 5 (01:13):
China will have to be seen to be keeping up
the stimulus for quite a long time. That's what investors
will be looking for. They'll be looking for soothing words.
Prison Siegingping is in Malaysia now, he's completing an Asian tour.
He's trying to encourage a lot of support for China
on a trade basis. That are something that investors will
certainly respond to.
Speaker 3 (01:30):
Mark Cranfield speaking there as economists that several international banks,
including UBS, Gulbin, Sachs, City Group, and Socity General, have
all lowered their China growth forecast in recent weeks to
around four percent or lower.
Speaker 2 (01:43):
The latest economic data out of China comes as President
Chump called on Beijing to reach out to him as
triple digit tariffs threatened to effectively eliminate trade between the
two nations. Here is the White House Press Secretary Caroline
Levitt reading what she said was a statement dictated by
President Trump.
Speaker 6 (02:02):
The ball is in China's court. China needs to make
a deal with us. We don't have to make a
deal with them. There's no difference between China and any
other country except they are much larger, and China wants
what we have. What every country wants what we have
the American consumer, or to put another way, they need
our money.
Speaker 2 (02:23):
Trump's comments, delivered there by his Press secretary, come as
China ordered airlines not to take further deliveries of Boeing jets.
Neither side has offered much indication that they want to
be the first to blink in a growing trade will
between the world's two biggest economies. Speaking to Blueberg today,
China's former deputy finance Minister Xuguang Yeo said that the
(02:45):
US had left them with little choice but to respond
with their own tariffs.
Speaker 7 (02:50):
We fully respect the US, We fully follow the instruction
by President CDP. We do everything in the healthy, stable
and the sole relation with the US.
Speaker 4 (03:05):
But it is time we must.
Speaker 7 (03:08):
Picked action retaliate because we don't want the whole world
wepin for the jungle of jungle law.
Speaker 2 (03:15):
That was China's former depthy finance minister speaking there to
Bloomberg as JP Morgan's Jamie Darman once again waded into
the growing trade war. Speaking to the FT Diamond called
on Washington and Beijing to engage with each other, saying
it doesn't have to wait a year, could start tomorrow,
adding also that Trump's trade war is creating uncertainty that
(03:36):
is challenging US credibility.
Speaker 3 (03:39):
The Trump administration is banned in video from selling its
HAGE twenty chip to China and escalation of Washington's tech
battle with Beijing. In video, warned it will write, it
will report a write down of about five point five
billion dollars in the current quarter tied to the H twenty.
Speaker 4 (03:55):
Chips.
Speaker 3 (03:56):
Shares in the videos fell by more than six percent,
and after ours, trade and semiconductor stocks in the US
and Asia have fallen after the news. Here's Bimberg's Anabel Droolers.
Speaker 8 (04:06):
This is important because it's a chip that Nvidia has
created specifically to meet the export controls that are already
in place on advanced technology to China. Now this brings
this new technology into the fray. And so the concern
from the White House and from the Trump administration is
essentially the H twenty is just too advanced. Essentially it
can still be diverted or used to create some sort
(04:28):
of supercomputer in China.
Speaker 4 (04:30):
That's the concern from officials.
Speaker 3 (04:31):
Bloomberg's Anabel Droolers speaking there, and Vidia has said further
tightening of restrictions will only reinforce China's determination to make
itself independent of US technology.
Speaker 2 (04:43):
The Dutch chip equipment maker ASML has reported first quarter
bookings that missed estimates. The company saw bookings of three
point nine four billion euros's versus four point nine billion
that analysts were expecting. ASML's CEO says that the the
US tariff announcements have increased uncertainty for the firm. The
(05:04):
company's guidance is being keenly watched for the impact of
the trade wars. President Trump has threatened to impose tariffs
on the semiconductor supply chain, so ASML, of course the
leading provider of advanced lithography machines used to produce the
smallest chips used in AI and other sensitive applications.
Speaker 3 (05:26):
Donald Trump has launched a probe into the need for
tariffs on critical minerals, citing national security and resilience concerns.
The order signed by the President yesterday calls for the
Commerce Secretary to investigate imports including rare earth elements considered
the building blocks of US defense by the government. If
the Secretary finds impairments to national security, Trump could impose
(05:47):
tariffs on the suppliers, which would replace current so called
reciprocal duties. According to the White House, the US's import
reliant when it comes to at least fifteen critical minerals,
while seventy percent of imports of rare er it's come
from China.
Speaker 2 (06:02):
The European Union expects the majority of US taris will
not be removed. After making little progress during talks in
Washington earlier this week, Bloomberg understands that the EU's trade
chief Maosseevkovich left the meeting with US Commerce Secretary Howard
Lutnik and Trade Representative Jamison Greer with little clarity on
(06:23):
their position. Meanwhile, the US President's most recent comments on
the matter this week from the Oval Office criticized the
trading relationship between the two regions.
Speaker 9 (06:33):
But the European Union has taken terrible advantage. They don't
take our food products. They don't take our cars. We
have millions of their cars BMW, Volkswagen, Mercedes, Benz, many others.
They come in by the minions. They don't take. There
are no Chevrolets in Munich.
Speaker 2 (06:51):
I can tell you that President Trump speaking there while
in those discussions. US officials indicated that the twenty percent
so called reciprocal tariffs, which have been reduced to ten
percent for ninety days, would not be removed outright. The
EU has said previously that its countermeasures on around twenty
one billion euros of US goods will kick in following
(07:15):
the ninety days pause if discussions don't yield satisfactory results.
Speaker 3 (07:20):
Two months into the trade war, US importers have taken
nearly all of the damage. That's the view of Bloomberg Economics,
which has built a tariff inclusive import price index. It
found that import prices had increased by almost the exact
amount of the tariffs, meaning that exporters are not lowering
their costs. Gilbin Sachs, chief US equity stratet as David
(07:42):
Costin says equity investors aren't clear which companies are going
to cope with tariffs.
Speaker 10 (07:47):
I think the bigger issue the investors really are focusing
on is what is the growth prospects for the coming year.
We're looking around three percent earnest growth, So if there
was more confidence that you could have better projectory of
corporate profits, that would be one reason for money to
come into the equan market.
Speaker 3 (08:06):
Cast and ads that dolblin I sees the chance of
a recession this year at forty five percent. The week
O dollar is adding to the higher costs from businesses
importing from the EU, UK and Japan.
Speaker 2 (08:18):
Now, Americans are increasingly looking for jobs here in Britain
as the US second Ike outlook gets gloomier. Job Site
indeed says that interest from US job seekers is bouncing
back faster than any other country. Bloombergs James Walcock has more.
Speaker 11 (08:33):
If you go on to a job site and click
on an ad, they track it and indeed say of
all the people abroad looking at jobs in Britain, nearly
one in ten of those clicks were from the US
in the first three months of this year. That's the
largest share in two years, and it's being driven by
people looking for roles in scientific research. The shift comes
as the US government announces billions of dollars of cuts
(08:55):
to federal science projects in London. James Walcock, Bloomberg Radio.
Speaker 3 (09:00):
Those your top stories on the markets on Wall Street.
Equity markets were mixed and ASTAK finished up two tenths
of one percent. The S and P five hundred two
tenths of one percent lower that we had in Vidia
sinking by six percent and after hours trade on those
new China chip curbs. European stocks had a strong Tuesday close,
with the stock six hundred finishing up by one point
six percent futures, though today pointing sharply lower, down one
(09:23):
percent for eurostocks fifty futures this morning. The US dollar
ending its five day losing street, gaining four tens of
one percent on Tuesday, but reversing that on the Bloomberg
Dollar Spot Index today, Treasuries gaining for a second day
in a row. The ten year yields declined four basis
points today, they're then another one at four point three
to three percent, and we had Goal prices hit another
record high overnight, up one point eight percent on the day,
(09:46):
three thousand, two hundred and eighty eight dollars a triads.
Speaker 4 (09:49):
Those the markets.
Speaker 2 (09:49):
In a moment, we're going to bring you more on
the latest economic data out of China, plus bring you
on latest reporting on how European markets are winning from
investors moving out of view assets.
Speaker 4 (10:01):
But maybe Seef, like me.
Speaker 2 (10:02):
You need some inspiration to do your daily toil to
get out of bed today, Absolutely.
Speaker 4 (10:07):
Love it real, Caroline. Yes, we love being here. I
do love being here.
Speaker 2 (10:11):
But the thing that surprises me every morning is when
I go to bed, I think that I've read all
the news, and then I wake up in the morning
and so much has happened in those a few hours
that I've been asleep.
Speaker 3 (10:20):
One good way to escape the news go on a cruise.
Speaker 4 (10:24):
Yes, exactly.
Speaker 2 (10:25):
And one of our colleagues has been writing about this,
so this is it's not just any old cruising though.
This is cruising for real holiday snove, so we get
the kind of mass market thing, you know, massive.
Speaker 4 (10:36):
Sort of buffet.
Speaker 2 (10:37):
Bloomberg's Fran Golden has been writing about the boom in
ultra luxury cruise ships. These are the ships that have
between one hundred and nine hundred and fifty passengers. She's
got lovely photographs, it's spacious, it's beautiful, pools of endless champagne.
Speaker 4 (10:51):
Just sounds like what I need today.
Speaker 3 (10:52):
And some of the big luxury names getting involved on this.
The Writ's Carleton, for example. Be Arnau's Orient Express brand
also getting in on the act too, and they're even
going as far as trying to rebrand as the people
aren't talking about cruises and a nation from Explorer, one
of the companies involved in this as well, saying that
the word cruise does have a slight mass market connotation,
and she prefers to say she's in the business of
(11:12):
ocean travel.
Speaker 4 (11:14):
Oh, that sounds good anyway.
Speaker 2 (11:16):
It's a piece from Frank Golden that you can read
about in Bloomberg Business Week, and.
Speaker 4 (11:20):
You can look at the prices as well that she
has listed.
Speaker 3 (11:23):
Well, let's go to the Chinese economic data. Now, China's
economy expanding at a faster pace than expected in the
first three months of the year, but the outlook deteriorating
rapidly due to Trump's massive tariffs. Our Asia economic supporter
Katie Demitrieva joins us for more. Katia, let's dig into
the detail. Then, what does the data tell us? It
looks strong on the face of it.
Speaker 12 (11:43):
Yes, it is, and we had sort of a raft
of data coming out this week from China which gave
us a really good look at what's happening. But of
course the problem is that it is kind of in
the rearview mirror already in a bit backward looking. So
what it did show positive stuff. So GDP ticked up
in the first quarter, it was up five point four percent,
(12:06):
and that was led by production and consumption, which is
kind of a rare mix when you're China's usually exports production,
but consumption actually had a really good period. It was
actually the best since December twenty twenty three, and that
was really because of government subsidies. So if you look
through the data home appliances and furniture, those sales were
(12:27):
actually up thirty percent, which is astounding. So unfortunately it
is no longer likely the case because as we know,
tariffs came in the highest tariffs in a century, and
investors seemed to be thinking about that too, because despite
how positive the numbers were, we saw stocks actually extending
(12:47):
losses in Hong Kong and China after it came out.
So in addition to that, there was some not so
great news from data that was not on the GDP
report but kind of came out at the same time,
which is that property investment contracted about ten percent, and
even though the unemployment rate actually looks better it's around
five point two instead of five point four, it's still
(13:07):
a bit too high for some economists liking.
Speaker 2 (13:10):
Indeed, and so if the GDP and the other data
sort backward looking. Let's think about the cliff edge, the
damage that taras could do and are doing now. Really
can try to get to that five percent growth goal?
Speaker 4 (13:22):
That is the question.
Speaker 12 (13:24):
That is a very good question, and there's two camps
that are kind of developing around that. So one says no,
and we've seen that from UBS. Most recently they revise
their growth outlook for three point four, which would be
a pretty big miss from around five percent, which is
what officials Chinese officials have targeted, which is the same
as twenty twenty four. And they've joined Goldman Sachs and
(13:46):
Morgan Stanley and a number of other banks that say
that this five percent growth target is just there's no way,
there's no way with this level of tariffs and with
such a export dependent economy that still hasn't really gotten
the consumer part quite right yet. But then there's also
a camp of experts, and these are folks China watchers
who've been watching this economy for decades for their entire careers,
(14:10):
who say, well, we have to remember that China has
said they want to get around five percent growth, and
in the past they've been able to get it, except
for you know, the pandemic, which no one could really expect,
and so they're going to get it, whether it's through
more government subsidies or trade agreements. You know, she is
currently traveling around Southeast Asia. There's a group of European
(14:31):
officials coming over the summer to China. There's a thought
that no matter what, they're going to have to orchestrate something.
Speaker 3 (14:37):
Katie, what about the hopes for Anny talks over these tis?
We heard Donald Trump say that he's waiting for China
to reach out to start negotiations.
Speaker 12 (14:46):
It's basically a game of chicken right now, and it's
whoever blinks first, right, So we have Trump saying, i
think over a dozen times since he was elected, you know,
she really wants to have these negotiations, and he really
wants to trade deal bad And you know, the Press
secretary just there saying China wants and needs to make
a deal with us. We don't need to make a
(15:07):
deal with China. But you know, China is kind of
saying the exact same thing. And China, for at least
the near term, kind of has the upper hand because
US consumers are going to be feeling the inflationary effects
US businesses that Bloomberg Economics report saying that US importers
are facing the biggest challenges and payment sort of pain
(15:29):
right now. You know they're going to have to at
some point come to the table. They have not spoken yet.
US president, Chinese president have not spoken yet. So until
that happens, you know, that will be the big trade
agreement to watch, but so far doesn't look likely.
Speaker 2 (15:44):
Katyap, thank you so much for being with us today.
Blueberg's Asia Economics reporter Kattia Dmitrieva.
Speaker 3 (15:49):
Donald Trump's push to reshape global trade and security as
shocked European markets into life, driving investors to assets, from
stocks to bonds and the Euro in a way that
few could have imagined just six months ago. Joining us
now from more of Bloomberg's FX and Rates reporter Alice
glad Hill. Alice, good morning, talk us through first of all,
the scale of this move into European assets.
Speaker 1 (16:11):
Good morning, Yeah, I mean it's been a fascinating start
to the year for European assets. So for a long time,
European markets were viewed as this slightly sort of sluggish
backwater where growth was challenged. For such a long time.
We quote an investor in the piece who describes European
markets as this museum, but she said, you know, this year,
you know, this museum suddenly burst into life. So you've
(16:33):
got the strong the euros at the strongest in three
years against the dollar. Last week you saw this huge
sell off in treasuries. German bonds were resilient, and you know,
European shares have been not by the trade war, but
they are. They're doing very well this year. They're moving
far more resilient than American ones. And I think there's
a few things going on here. I think you've got
to push out of US markets, but also a pull
(16:54):
into European markets. So just in terms of the US,
I think, you know, Donald Trump's predictable tariff policy and
fiscal policies have forced investors to start thinking about whether
or not the US treasuries and the dollar are going
to be the haven they've been for decades going forwards.
And then in terms of the pull into Europe, a
month ago we saw Germany announce this huge fiscal package
(17:16):
with package which I think will be a game changer
for the region's growth. So investadors suddenly thinking very differently
about European markets.
Speaker 4 (17:24):
Yeah, it is extraordinary.
Speaker 2 (17:26):
Isn't it that that US exceptionalism is sort of faltering,
that there does seem to be a question mark hanging
over US dollar dominance.
Speaker 1 (17:34):
Yeah, it is extraordinary, But I think there is a
widespread acknowledgement that we are in the middle of a
regime shift for global trade and markets here. Just thinking
back to late last year, it was all about Trump,
and it was all about US exceptionalism and America first.
Speaker 4 (17:50):
And that's not all anyone wants to talk about.
Speaker 1 (17:52):
You know, sort of the hot AI stocks, you know,
the ascendant dollar, King dollar, you know, wave of tax
cuts and doulation. But last week you saw the dollar,
US government bonds, US equities all selling off in tandem.
And that's something that you see more often in an
emerging market, not you know, not the US, but you know,
(18:13):
I think clearly the outlook is tricky for the US here.
There was a Bank of America survey out this week
that found a record number of respondents are going to
cut their exposure to US stocks. Markets have stabilized a
little bit this week, but you know, some of the
price wings in US treasuries have been so severe.
Speaker 4 (18:29):
That markets are unwatchful. Intervention for in the Federal Reserve.
Speaker 1 (18:33):
But in comparison, you've seen European bonds and the euro
really acting like a haven. And let's not forget you know,
Europe is a large liquid market and I think it
does have capacity to absorb a lot of these flows
out of the US. You know, the EU is also
a lot more resilient than in the past, and you've
seen evidence of that in markets in terms of some
of the periphery countries. Their yields have been much more
(18:54):
anchor than you might expect during the recent volatility. So,
you know, Europe does have its challenges, but I think
there's a lot more optimism over the long term.
Speaker 3 (19:04):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:10):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 3 (19:16):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (19:22):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 4 (19:30):
I'm Caroline Hepka and.
Speaker 3 (19:31):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break. Europe
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