May 7, 2025 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) India conducted targeted military strikes against Pakistan, which said it retaliated in expected tit-for-tat blows after a militant attack last month in Kashmir that killed 26 people.
(2) India and the UK agreed to a landmark trade deal slashing tariffs on cosmetics, vehicles, alcoholic beverages and other goods, as both sides look for wins to offset the disruption of President Donald Trump’s protectionist policies.
(3) The UK and US are in intensive discussions about an economic agreement that would reduce the impact of some tariffs, with a team of British officials in Washington to negotiate terms this week, people familiar with the matter said.
(4) China reduced its policy rate and lowered the amount of cash lenders must keep in reserve, as Beijing ramps up efforts to help an economy caught in a second trade war with the US.
(5) Friedrich Merz sought to move past an embarrassing stumble as he took power in Germany, vowing to reboot the economy and revive the country’s military.
Podcast conversation: Macron Wants a Netflix in Paris, Not Just Emily: Lionel Laurent
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. They say it's the
Bloomberg Daybreak. Youurate podcast available every morning on Apple, Spotify
or wherever you listen. It's Wednesday, the seventh of May
in London. I'm Stephen Carroll coming up today. India and
Pakistan exchanged military strikes as fears of further escalation grow.
(00:26):
The US and UK are locked in intensive trade negotiations,
with hopes for a deal soon. Plus second time Lucky
Fredrich Mertz takes power in Germany as he aims to
move past a chaotic start to his premiership. Let's start
with the undup of our top stories. India has conducted
what it says are targeted military strikes against Pakistan, hitting
(00:49):
seven locations. Pakistan has called the strikes an act of
war and claims to have shot down five Indian jets
in response. The escalation between the nuclear armed neighbors comes
after gunman killed twenty six people and Indian administered Kashmir
last month. Pakistan's Defense Minister Kauwaji Muhammad Asif has been
speaking to Bloomberg.
Speaker 2 (01:08):
We'll never initiated anything hostile towards India, but if we
had attacked we'll respond. If India backs down, we will
definitely wrap up these things, you know. But as long
we are under a tag under fire, we have to respond.
We have to defend ourselves.
Speaker 1 (01:25):
As Pakistan's defense minister, speaking to Bloomberg As, India said
it only targeted known terror camps and hit no Pakistani civilian, economic,
or military targets. The news came just hours after India
announced a landmark new trade deal with the UK. The
world's fifth and sixth largest economies, cut tariffs on each
other's cosmetics, vehicles, alcohol, and other goods. For British Prime
(01:49):
minister career Starmer, it's a major achievement.
Speaker 3 (01:52):
This is the biggest trade deal that we the UK
have done since we left the EU, and it's the
most ambitious trade deal that India has ever done. This
will be measured in billions of pounds into our economy
and jobs across the whole of the United Kingdom.
Speaker 1 (02:09):
Starmer's deal ends more than three years of trade negotiations.
The UK expects the deal to add more than twenty
five billion pounds a year to the economy in the
long run. Meanwhile, the UK and US are in intensive
talks about a trade deal with a British team in
Washington negotiating terms. According to Bloomberg sources, it's still too
(02:32):
early to say if any agreement may come this week.
James Wilcock has more.
Speaker 4 (02:37):
Britain has been talking up the prospects of a trade
deal with America since Brexit, but the looming trade war
seems to have sharpened minds on both sides of the Atlantic.
The Ft reports the deal will include steal and car exemptions,
with pharmaceutical goods still being argued over, but officials tell
Bloomberg although there's optimism a deal can be struck, it's
unlikely to happen this week. In London, James Worcock, the radio.
Speaker 1 (03:01):
US Treasury Secretaries Got Bessant, and Trade Representative jameson Greer
will hold trade talks with China's Vice Premier Holifeng this weekend.
The three representatives are due to meet in Switzerland on
Saturday and Sunday as both sides seek to de escalate
the ongoing trade standoff. These will be the first confirmed
talks between the two countries since President Donald Trump announced
(03:23):
tariffs up to one hundred and forty five percent on
Chinese imports and Beijing retaliated with its own levees on
US goods of up to one hundred and twenty five percent.
Here is the Treasury secretaries got beston speaking on Fox News.
Speaker 5 (03:38):
We have shared interest that this isn't sustainable, as I've
said before, especially on the Chinese side. And you know,
one hundred and forty five percent, one hundred and twenty
five percent is the equivalent of an embargo. We don't
want to decouple. What we want is fair trade.
Speaker 1 (03:55):
Scott beson't speaking on Fox News. President Trump has said
in recent days that he's open to lowering tariffs on
China at some point, though he also says the US
is losing nothing by not trading with Beijing. China has
reduced its policy rate and lowered the amount of cash
lenders must keep in reserve. The move aims to guide
borrowing costs lower and release about one trillion y one
(04:18):
in long term liquidity. These stimulus measures reflect Beijing's intensified
efforts to support an economy grappling with the escalating US
trade war. Survey data released yesterday showed that China's services
activity has fallen to its lowest level in seven months. Meanwhile,
analysts pulled by Bloomberg expect GDP growth to slow to
four point two percent this year. And in Germany, Fredrick
(04:41):
Smertz has secured parliamentary backing as Germany's new chancellor on
his second attempt. The Conservative leader has vowed to reboot
the economy and revive the country's military, but Bloomberg's Oliver
Crooks says his initial loss casts a shadow over the
strength of his coalition.
Speaker 6 (04:57):
Frederick Mrse really wanted to cast himself as that strong
leader of Germany and potentially within Europe, and he comes
into the office now with great doubts about how strong
this coalition is and how effective they're going to be
a governing particularly with the deployment of that one trillion
euros worth of debt finance assets to build out infrastructure
and to build out the defense industry. How certain are
(05:18):
they that they're going to have the agreements in order
to effectively deploy that capital. In a day that was
supposed to bring political stability into Germany really has brought
a lot of sort of chaos and a lot of
sort of doubt about the future of this coalition government.
Speaker 1 (05:31):
Mertz's confirmation as Chancellor comes as the European Union prepares
to hit about one hundred billion euros worth of US
goods with additional tariffs in the event that ongoing trade
talks with the Trump administration fail. Bloomberg understands the proposed
retaliatory measures will be shared with member states as early
as today, and consultations will last for a month before
(05:54):
the list is finalized. Those are your top stories on
the markets. Dollar. The dollar and equities have gotten a
boost from those planned US China trade talk set to
begin on Saturday in Geneva. We've got SMP Mini features
up by six tenths of one percent this morning. Nastok
features are six tens high. The Bloomberg Dollar Spot Index
(06:15):
is up by three tenths of one percent. European stock
features looking pretty flat ahead of the trading session today.
Asian equity is also getting a boost by the moves
by the Chinese Center Bank we were just telling you about.
The CSI three hundred is up by four tenths. The
Shanghai Composite six tenths higher this morning as well, and
we've seen the main Pakistani stock market index, the ks
E one hundred, falls some six percent on the open.
(06:38):
On those escalating trenches with India. India's Nifty indexes trading
marginally lower, and the rupee is weakened slightly versus the dollar.
Well in a moment, we will bring you the latest
on what's happening between India and Pakistan, plus trade news
out of the UK doing a deal with India and
hoping for an agreement to lower US tariffs on as well.
(07:01):
But before that, another interesting read this morning from Bloomberg
opinion columnist Lionel laurent As. We're looking ahead to Germany's
new chanceller taking a trip to Paris to meet Emmanuel
Macron after passing that parliamentary hurdly yesterday. Will they be
talking about Emily in Paris? Perhaps? Leanel's been looking at
the media landscape in Europe and perhaps how Mertz is
reviving a proposal for a European media platform to rival
(07:23):
the lights of Netflix. You remember Emmanuel Macron a couple
of months ago bemoaning Emily in Paris potentially moving to Rome.
Newlyanel has been cataloging some of the efforts that were
made at a national level in Europe and France and
Italy that haven't worked to try and rival some of
those American giants in the sector. The big production still
mostly been made by the likes of Netflix and Disney
(07:44):
Plus and so on. But now that Donald Trump is
threatening tariffs on foreign made films, will that help to
create a so called air bus of streaming in Europe?
One option that Lenel looks at is potentially boosting the
Franco German broadcaster ATTE. But he says that we shouldn't
underestimate as significant national interests can come to be when
it comes to the media landscape. But perhaps the consequences
(08:07):
of not doing anything will be even bigger this time.
This might be the shock that prompts a revival of
some of those European proposals for a greater European giant
in media. You can read more in Leonel's piece at
bloomberg dot com for its last opinion, and we'll put
a link to the article in our podcasts show notes. Well,
let's turn to the latest now and those rising tensions
(08:28):
between India and Pakistan. After India conducted military strikes against
its neighbor and Pakistan says that it's shot down five
Indian jets and response, Bloomberg's Swati Pandi joins me. Now
from more, It'swati great to have you with us. What
is the latest that we're hearing from both sides, so.
Speaker 7 (08:43):
To understand what's going on. I would just like our listeners.
I would just like to take our listeners to April
the twenty second, when a terrorist attack in Indian Kashmir
had targeted civilians, specially tourists, and twenty six people had died,
mostly Hindu men. India had blamed Pakistan for that attack
and had said it would retaliate, and then today was
(09:08):
the day when it decided to act and hit military
camps in Pakistan. India said its response was focused measured
in non escalatory in nature, and then Pakistan said it
has retaliated as well to India's military strikes. Pakistan said
it has shot down five Indian planes. India has not
(09:30):
confirmed those losses. Pakistan had earlier said it had taken
five Indian soldiers as prisoner, but later clarified that no
Indian soldiers were taken. So this is also a reminder
to our listeners, especially those who might be living through
their first South Asian crisis. There will be a tremendous
amount of misinformation and fake news, and it will take
(09:51):
a while to sort through what actually happened in twenty
nineteen when the last time India and Pakistan had a
major conflict, they took handless about three to four days
after the strikes to get a clear sense of what
actually happened.
Speaker 1 (10:05):
And with that in mind, then Swati, what does those
previous incidents tell us about where things could go from here?
Speaker 7 (10:15):
So the last time, like I said, was twenty nineteen.
At that time, suicide bomber had killed forty members of
India security forces. India had again blamed Pakistan for that
and responded with the first air strikes on Pakistani soil
since nineteen seventy one, and then Pakistan retaliated by shooting
(10:39):
down an Indian jet and arresting an Indian pilot who
was later released. And after that tensions had died down.
So people who are watching this conflict are wondering whether
the same pattern would repeat. There have been repeated conflicts
over the past three decades since both countries went nuclear
(11:01):
in nineteen ninety eight, and both sides have shown restraint,
So whether it happens again this time is yet to
be seen.
Speaker 1 (11:11):
This is something that of course will be watched the
world over as well. Because of the scale of the
two countries involved. I mean, what about a path to
de escalation from here.
Speaker 7 (11:23):
Look, this is a difficult one because the relation is
pretty acrimonious. As we speak. India has already suspended a
long standing Indus waters treaty. Pakistan has said that India
has almost entirely stopped the flow of water across the
border through the Chainab River, which is crucial for farm irrigation.
(11:45):
There are also skirmishes in the border. So Pakistan's Defense
minister was on Bloomberg TV earlier and he said China
is a third party to Kashmir and called China a
very relevant player who can use it influence. Beijing is
also a major backer and financial investor in Pakistan and
(12:06):
has we to rated its support for Islamabad. So you know,
it is a difficult situation. There are diplomatic efforts that
are ongoing to de escalate tensions. Pakistan has said it
is willing to talk to India as long as India
does not resort to hostile acts quote unquote, So we
have to wait and see what either party decides to do.
Speaker 1 (12:29):
Bloomberg's Swati Pandi thank you very much for bringing us
up to date on that story. Well, then, he's coming
out of India and Pakistan, somewhat over shadowing announcement that
had come just hours earlier that the UK and India
had finally concluded a trade deal that had been under
negotiation for many years. This is British and American officials
are in intensive discussions about a separate deal that could
(12:50):
reduce the impact of some US tariffs. Our UK correspondent
Lizzie Burton is with me for more. Lizzie, firstly on
the UK India trade deal. How significant is this for
the economy?
Speaker 8 (13:00):
So this will cut tariffs on cosmetics, vehicles, alcohol and
various other goods. And the point of course is to
offset the disruption of Trump's tariffs. And at the same time,
the UK and India are looking for trade deals of
their own with the US. So it's all about reducing
the impact of the trade war. It's a diplomatic feat.
(13:21):
The talks for an India trade deal started in twenty
twenty one and the aim had been to conclude them
by Devali twenty twenty two, but it was notoriously hard.
You hear experts saying when India looks to reach a
trade deal, it ends up researching itself and that takes
a long time. Then you had elections on both sides
(13:41):
getting in the way. So in a way, Donald Trump's
done a favor to both the UK and India by
accelerating the process here and for context, this is the
UK's biggest trade deal since Brexit, it's India's first with
the European economy. But our economists saying it's only going
to add zero point one percent to economic growth long run,
so really it's a drop in the ocean compared to
(14:02):
Brexit or Trump's trade war.
Speaker 1 (14:04):
Has it been received politically then in the UK.
Speaker 8 (14:06):
Well, there's one particular detail that's explosive, an exemption from
national insurance payments for Indian workers who are staying here
less than three years, so it makes them much more
attractive hires for employers than other nationalities, including British citizens.
And remember it's just a month after the implementation of
that controversial hike on employers national insurance here in the UK,
(14:28):
which is a cost of business the government's still trying
to live down. So that is a win for the opposition,
particularly Reform, which of course had a victory lap last
week in Westminster after those bumper election results. Local election
results just hands them another attack line.
Speaker 1 (14:47):
This Lizzie, as we've been also looking at the latest
reporting on hopes for a deal between the UK and
the US.
Speaker 8 (14:52):
Well source of tell us that they're in intensive discussions.
Now You've got a team of British officials in Washington
to negotiate terms this week, so there is that a
deal can be struck. But a senior UK official told us,
and this repeats the Chancellor Rachel Reads's line from the
IMF meetings, Britain's not going to be bounced into a
deal that isn't in its interests just because the Trump
(15:12):
administration's keen to announced deals to soften the impact of
its tariffs. But still this would be another boon for
Keir Starmer as he's trying to protect British industry from
the impact of US tariffs, especially those twenty five percent
levees on steel and car imports.
Speaker 1 (15:27):
This is Bloomberg Daybreak Europe. You're morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 9 (15:34):
Look for us on your podcast feed every morning, on Apples,
Spotify and anywhere else you get your podcasts.
Speaker 1 (15:40):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 9 (15:45):
Our flagship New York station, is also available on your
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I'm Caroline Hepka.
Speaker 1 (15:54):
And 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.
Speaker 2 (16:04):
Mm hmm
Bloomberg Audio Studios, podcasts, radio news. They say it's the
Bloomberg Daybreak. Youurate podcast available every morning on Apple, Spotify
or wherever you listen. It's Wednesday, the seventh of May
in London. I'm Stephen Carroll coming up today. India and
Pakistan exchanged military strikes as fears of further escalation grow.
(00:26):
The US and UK are locked in intensive trade negotiations,
with hopes for a deal soon. Plus second time Lucky
Fredrich Mertz takes power in Germany as he aims to
move past a chaotic start to his premiership. Let's start
with the undup of our top stories. India has conducted
what it says are targeted military strikes against Pakistan, hitting
(00:49):
seven locations. Pakistan has called the strikes an act of
war and claims to have shot down five Indian jets
in response. The escalation between the nuclear armed neighbors comes
after gunman killed twenty six people and Indian administered Kashmir
last month. Pakistan's Defense Minister Kauwaji Muhammad Asif has been
speaking to Bloomberg.
Speaker 2 (01:08):
We'll never initiated anything hostile towards India, but if we
had attacked we'll respond. If India backs down, we will
definitely wrap up these things, you know. But as long
we are under a tag under fire, we have to respond.
We have to defend ourselves.
Speaker 1 (01:25):
As Pakistan's defense minister, speaking to Bloomberg As, India said
it only targeted known terror camps and hit no Pakistani civilian, economic,
or military targets. The news came just hours after India
announced a landmark new trade deal with the UK. The
world's fifth and sixth largest economies, cut tariffs on each
other's cosmetics, vehicles, alcohol, and other goods. For British Prime
(01:49):
minister career Starmer, it's a major achievement.
Speaker 3 (01:52):
This is the biggest trade deal that we the UK
have done since we left the EU, and it's the
most ambitious trade deal that India has ever done. This
will be measured in billions of pounds into our economy
and jobs across the whole of the United Kingdom.
Speaker 1 (02:09):
Starmer's deal ends more than three years of trade negotiations.
The UK expects the deal to add more than twenty
five billion pounds a year to the economy in the
long run. Meanwhile, the UK and US are in intensive
talks about a trade deal with a British team in
Washington negotiating terms. According to Bloomberg sources, it's still too
(02:32):
early to say if any agreement may come this week.
James Wilcock has more.
Speaker 4 (02:37):
Britain has been talking up the prospects of a trade
deal with America since Brexit, but the looming trade war
seems to have sharpened minds on both sides of the Atlantic.
The Ft reports the deal will include steal and car exemptions,
with pharmaceutical goods still being argued over, but officials tell
Bloomberg although there's optimism a deal can be struck, it's
unlikely to happen this week. In London, James Worcock, the radio.
Speaker 1 (03:01):
US Treasury Secretaries Got Bessant, and Trade Representative jameson Greer
will hold trade talks with China's Vice Premier Holifeng this weekend.
The three representatives are due to meet in Switzerland on
Saturday and Sunday as both sides seek to de escalate
the ongoing trade standoff. These will be the first confirmed
talks between the two countries since President Donald Trump announced
(03:23):
tariffs up to one hundred and forty five percent on
Chinese imports and Beijing retaliated with its own levees on
US goods of up to one hundred and twenty five percent.
Here is the Treasury secretaries got beston speaking on Fox News.
Speaker 5 (03:38):
We have shared interest that this isn't sustainable, as I've
said before, especially on the Chinese side. And you know,
one hundred and forty five percent, one hundred and twenty
five percent is the equivalent of an embargo. We don't
want to decouple. What we want is fair trade.
Speaker 1 (03:55):
Scott beson't speaking on Fox News. President Trump has said
in recent days that he's open to lowering tariffs on
China at some point, though he also says the US
is losing nothing by not trading with Beijing. China has
reduced its policy rate and lowered the amount of cash
lenders must keep in reserve. The move aims to guide
borrowing costs lower and release about one trillion y one
(04:18):
in long term liquidity. These stimulus measures reflect Beijing's intensified
efforts to support an economy grappling with the escalating US
trade war. Survey data released yesterday showed that China's services
activity has fallen to its lowest level in seven months. Meanwhile,
analysts pulled by Bloomberg expect GDP growth to slow to
four point two percent this year. And in Germany, Fredrick
(04:41):
Smertz has secured parliamentary backing as Germany's new chancellor on
his second attempt. The Conservative leader has vowed to reboot
the economy and revive the country's military, but Bloomberg's Oliver
Crooks says his initial loss casts a shadow over the
strength of his coalition.
Speaker 6 (04:57):
Frederick Mrse really wanted to cast himself as that strong
leader of Germany and potentially within Europe, and he comes
into the office now with great doubts about how strong
this coalition is and how effective they're going to be
a governing particularly with the deployment of that one trillion
euros worth of debt finance assets to build out infrastructure
and to build out the defense industry. How certain are
(05:18):
they that they're going to have the agreements in order
to effectively deploy that capital. In a day that was
supposed to bring political stability into Germany really has brought
a lot of sort of chaos and a lot of
sort of doubt about the future of this coalition government.
Speaker 1 (05:31):
Mertz's confirmation as Chancellor comes as the European Union prepares
to hit about one hundred billion euros worth of US
goods with additional tariffs in the event that ongoing trade
talks with the Trump administration fail. Bloomberg understands the proposed
retaliatory measures will be shared with member states as early
as today, and consultations will last for a month before
(05:54):
the list is finalized. Those are your top stories on
the markets. Dollar. The dollar and equities have gotten a
boost from those planned US China trade talk set to
begin on Saturday in Geneva. We've got SMP Mini features
up by six tenths of one percent this morning. Nastok
features are six tens high. The Bloomberg Dollar Spot Index
(06:15):
is up by three tenths of one percent. European stock
features looking pretty flat ahead of the trading session today.
Asian equity is also getting a boost by the moves
by the Chinese Center Bank we were just telling you about.
The CSI three hundred is up by four tenths. The
Shanghai Composite six tenths higher this morning as well, and
we've seen the main Pakistani stock market index, the ks
E one hundred, falls some six percent on the open.
(06:38):
On those escalating trenches with India. India's Nifty indexes trading
marginally lower, and the rupee is weakened slightly versus the dollar.
Well in a moment, we will bring you the latest
on what's happening between India and Pakistan, plus trade news
out of the UK doing a deal with India and
hoping for an agreement to lower US tariffs on as well.
(07:01):
But before that, another interesting read this morning from Bloomberg
opinion columnist Lionel laurent As. We're looking ahead to Germany's
new chanceller taking a trip to Paris to meet Emmanuel
Macron after passing that parliamentary hurdly yesterday. Will they be
talking about Emily in Paris? Perhaps? Leanel's been looking at
the media landscape in Europe and perhaps how Mertz is
reviving a proposal for a European media platform to rival
(07:23):
the lights of Netflix. You remember Emmanuel Macron a couple
of months ago bemoaning Emily in Paris potentially moving to Rome.
Newlyanel has been cataloging some of the efforts that were
made at a national level in Europe and France and
Italy that haven't worked to try and rival some of
those American giants in the sector. The big production still
mostly been made by the likes of Netflix and Disney
(07:44):
Plus and so on. But now that Donald Trump is
threatening tariffs on foreign made films, will that help to
create a so called air bus of streaming in Europe?
One option that Lenel looks at is potentially boosting the
Franco German broadcaster ATTE. But he says that we shouldn't
underestimate as significant national interests can come to be when
it comes to the media landscape. But perhaps the consequences
(08:07):
of not doing anything will be even bigger this time.
This might be the shock that prompts a revival of
some of those European proposals for a greater European giant
in media. You can read more in Leonel's piece at
bloomberg dot com for its last opinion, and we'll put
a link to the article in our podcasts show notes. Well,
let's turn to the latest now and those rising tensions
(08:28):
between India and Pakistan. After India conducted military strikes against
its neighbor and Pakistan says that it's shot down five
Indian jets and response, Bloomberg's Swati Pandi joins me. Now
from more, It'swati great to have you with us. What
is the latest that we're hearing from both sides, so.
Speaker 7 (08:43):
To understand what's going on. I would just like our listeners.
I would just like to take our listeners to April
the twenty second, when a terrorist attack in Indian Kashmir
had targeted civilians, specially tourists, and twenty six people had died,
mostly Hindu men. India had blamed Pakistan for that attack
and had said it would retaliate, and then today was
(09:08):
the day when it decided to act and hit military
camps in Pakistan. India said its response was focused measured
in non escalatory in nature, and then Pakistan said it
has retaliated as well to India's military strikes. Pakistan said
it has shot down five Indian planes. India has not
(09:30):
confirmed those losses. Pakistan had earlier said it had taken
five Indian soldiers as prisoner, but later clarified that no
Indian soldiers were taken. So this is also a reminder
to our listeners, especially those who might be living through
their first South Asian crisis. There will be a tremendous
amount of misinformation and fake news, and it will take
(09:51):
a while to sort through what actually happened in twenty
nineteen when the last time India and Pakistan had a
major conflict, they took handless about three to four days
after the strikes to get a clear sense of what
actually happened.
Speaker 1 (10:05):
And with that in mind, then Swati, what does those
previous incidents tell us about where things could go from here?
Speaker 7 (10:15):
So the last time, like I said, was twenty nineteen.
At that time, suicide bomber had killed forty members of
India security forces. India had again blamed Pakistan for that
and responded with the first air strikes on Pakistani soil
since nineteen seventy one, and then Pakistan retaliated by shooting
(10:39):
down an Indian jet and arresting an Indian pilot who
was later released. And after that tensions had died down.
So people who are watching this conflict are wondering whether
the same pattern would repeat. There have been repeated conflicts
over the past three decades since both countries went nuclear
(11:01):
in nineteen ninety eight, and both sides have shown restraint,
So whether it happens again this time is yet to
be seen.
Speaker 1 (11:11):
This is something that of course will be watched the
world over as well. Because of the scale of the
two countries involved. I mean, what about a path to
de escalation from here.
Speaker 7 (11:23):
Look, this is a difficult one because the relation is
pretty acrimonious. As we speak. India has already suspended a
long standing Indus waters treaty. Pakistan has said that India
has almost entirely stopped the flow of water across the
border through the Chainab River, which is crucial for farm irrigation.
(11:45):
There are also skirmishes in the border. So Pakistan's Defense
minister was on Bloomberg TV earlier and he said China
is a third party to Kashmir and called China a
very relevant player who can use it influence. Beijing is
also a major backer and financial investor in Pakistan and
(12:06):
has we to rated its support for Islamabad. So you know,
it is a difficult situation. There are diplomatic efforts that
are ongoing to de escalate tensions. Pakistan has said it
is willing to talk to India as long as India
does not resort to hostile acts quote unquote, So we
have to wait and see what either party decides to do.
Speaker 1 (12:29):
Bloomberg's Swati Pandi thank you very much for bringing us
up to date on that story. Well, then, he's coming
out of India and Pakistan, somewhat over shadowing announcement that
had come just hours earlier that the UK and India
had finally concluded a trade deal that had been under
negotiation for many years. This is British and American officials
are in intensive discussions about a separate deal that could
(12:50):
reduce the impact of some US tariffs. Our UK correspondent
Lizzie Burton is with me for more. Lizzie, firstly on
the UK India trade deal. How significant is this for
the economy?
Speaker 8 (13:00):
So this will cut tariffs on cosmetics, vehicles, alcohol and
various other goods. And the point of course is to
offset the disruption of Trump's tariffs. And at the same time,
the UK and India are looking for trade deals of
their own with the US. So it's all about reducing
the impact of the trade war. It's a diplomatic feat.
(13:21):
The talks for an India trade deal started in twenty
twenty one and the aim had been to conclude them
by Devali twenty twenty two, but it was notoriously hard.
You hear experts saying when India looks to reach a
trade deal, it ends up researching itself and that takes
a long time. Then you had elections on both sides
(13:41):
getting in the way. So in a way, Donald Trump's
done a favor to both the UK and India by
accelerating the process here and for context, this is the
UK's biggest trade deal since Brexit, it's India's first with
the European economy. But our economists saying it's only going
to add zero point one percent to economic growth long run,
so really it's a drop in the ocean compared to
(14:02):
Brexit or Trump's trade war.
Speaker 1 (14:04):
Has it been received politically then in the UK.
Speaker 8 (14:06):
Well, there's one particular detail that's explosive, an exemption from
national insurance payments for Indian workers who are staying here
less than three years, so it makes them much more
attractive hires for employers than other nationalities, including British citizens.
And remember it's just a month after the implementation of
that controversial hike on employers national insurance here in the UK,
(14:28):
which is a cost of business the government's still trying
to live down. So that is a win for the opposition,
particularly Reform, which of course had a victory lap last
week in Westminster after those bumper election results. Local election
results just hands them another attack line.
Speaker 1 (14:47):
This Lizzie, as we've been also looking at the latest
reporting on hopes for a deal between the UK and
the US.
Speaker 8 (14:52):
Well source of tell us that they're in intensive discussions.
Now You've got a team of British officials in Washington
to negotiate terms this week, so there is that a
deal can be struck. But a senior UK official told us,
and this repeats the Chancellor Rachel Reads's line from the
IMF meetings, Britain's not going to be bounced into a
deal that isn't in its interests just because the Trump
(15:12):
administration's keen to announced deals to soften the impact of
its tariffs. But still this would be another boon for
Keir Starmer as he's trying to protect British industry from
the impact of US tariffs, especially those twenty five percent
levees on steel and car imports.
Speaker 1 (15:27):
This is Bloomberg Daybreak Europe. You're morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 9 (15:34):
Look for us on your podcast feed every morning, on Apples,
Spotify and anywhere else you get your podcasts.
Speaker 1 (15:40):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 9 (15:45):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 1 (15:54):
And 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.
Speaker 2 (16:04):
Mm hmm
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