August 7, 2025 • 19 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US President Donald Trump doubled tariffs on Indian goods to 50% as a penalty for its purchases of Russian oil, escalating a fight with a key Asian partner and sparking outrage in New Delhi.
(2) Donald Trump declared plans for a 100% tariff on semiconductor imports while promising to exempt companies such as Apple Inc. that move production back to the US, triggering a scramble among trading partners and companies worldwide to make sense of the threat.
(3) Switzerland’s president left Washington without announcing any success in lowering the 39% tariff that US President Donald Trump has put on her country.
(4) Three Federal Reserve policymakers voiced concerns about the US labor market Wednesday with remarks that pointed to a potential interest-rate cut in September.
(5) The Bank of England is set to cut interest rates to the lowest level in over two years, as its policymakers contend with a slowing economy and a jobs market rattled by higher taxes.
Podcast Conversation: A Private Island Fort Off the Coast of Wales Hits the Market
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg dayba Qut podcast. Good morning, It's Thursday,
the seventh of August. I'm Caroline Hepcat in London.
Speaker 1 (00:15):
And I'm Stephen Carroll. Coming up today. US President Donald
Trump's new tariffs come into effect, pushing US import duties
to their highest since World War II.
Speaker 2 (00:24):
The White House warns of a one hundred percent tariff
on semiconducted chips, with carve outs for companies who manufacture
in the US.
Speaker 1 (00:32):
Plus Dreaming of your Own off the Grid Island, a
tech entrepreneur's converted for it off the Welsh Coast goes
on the market for three million pounds.
Speaker 3 (00:41):
Let's start with the roundup of our top stories.
Speaker 1 (00:44):
The next phase of US President's global trade tariffs have
come into effect, pushing American taxes on imports to their
highest level since World War II. The European Union, Japan,
and South Korea negotiated a rate of fifteen percent on
their exports to the United States. Other countries simply assigned
rates which range from the UK's ten percent to much higher.
(01:05):
More levies are yet to come, with President Trump saying
he would double tariffs on Indian goods to fifty percent
as a penalty for buying Russian oil. Boombergs Jail Lisa
says these so called secondary tariffs are less about trade
and more about geopolitics.
Speaker 4 (01:19):
It does seem like India has become kind of collateral
damage in this ongoing pressure campaign that Trump's trying to
launch against Russian President Vladimir Putin. Part of that big,
you know idea of applying these secondary sinctions or tariffs
on you know, nations that purchase Russian oil to try
to get Putin to end the Russia's warn.
Speaker 1 (01:38):
Ukraine Jesus out of the president. Trump said he might
also punish China with additional tariffs over its purchases of
Russian oil. Trade negotiations with China are still ongoing, along
with the US's other two largest trading partners, Mexico and Canada.
Speaker 2 (01:54):
Now, the US president declared plans for a new one
hundred percent tariff on semikin doctor imports. Standing next to
Apple CEO Tim Cook in the Oval Office, Donald Trump
says that he is bringing manufacturing back to the US.
Speaker 5 (02:09):
We'll be putting a terraform of approximately one hundred percent
on chips and semiconductors. But if you're building in the
United States of America, there's no charge, even though you're
building and you're not producing yet in terms of the
big numbers of jobs and all of the things that
you're building. If you're building, there will be no charge.
Speaker 3 (02:32):
Now.
Speaker 2 (02:32):
Trump's surprise declaration further upends the global electronics supply chain.
Tech companies including Apple, TSMC, and Nvidia have pledged to
spend more than a trillion dollars collectively in the US
since Trump returned to power, but the levees may still
have major implications for the price of consumer electronics in
the US.
Speaker 1 (02:53):
I Meanwhile, America's allies are still grappling with the shock
caused by the levees. Switzerland's President Karen Keller Sotter left
Washington after a two day emergency trip, having failed to
secure better terms. The European leader did not meet President Trump,
instead only talking to Secretary of State Marco Rubio. Swiss
goods face the highest American tariff of any developed nation
(03:15):
at thirty nine percent. Bloomberg Economics estimates that if the
rate comes into effect, including on pharmaceuticals, at risks, cutting
up to one percent of Swiss economic output in the
medium term. The Swiss government is holding an emergency meeting
later today. Meanwhile, despite agreeing a trade deal with President Trump,
Japan is also trying to get clarity on car tariffs.
(03:38):
Tokyo says Japanese cars were exempted from the levy, but
that detail was not on the executive order.
Speaker 2 (03:45):
Now, three FED officials have voiced fresh concerns over the
US labor market, pointing to a rate cut in September.
According to the San Francisco FED president Mary Daily, the
data shows policymakers will need to alter borrowing costs soon.
Speaker 6 (04:00):
Labor market has softened, and you can see this everywhere
in the US economy and here as well. And I
would see additional slowing in the labor market as an
unwelcome sign. So all this means, as you put it together,
that I think will likely need to adjust the policy
rate sometime in the coming.
Speaker 2 (04:18):
Months, the Fed's Mary Daily speaking there speaking to CNBC. Meanwhile,
the Minneapolis FED president Near Kashkari also express worry over
the slowdown showing up in multiple data points, adding that
he expects two FED rate cuts before the end of
the year. The news also comes off to fellow Governor
Lisa Cook said that downward revisions to the jobs data
(04:41):
for the last three months were typical of turning points
in the economy.
Speaker 1 (04:46):
In her words, markets are expecting an interest rate cut
from the Bank of England later today. The news comes
as members of the Monetary Policy Committee contend with a
slowing economy and a jobs market rattled by higher taxes.
Bloombergoks tea Adebayo has more.
Speaker 7 (05:02):
Markets and economists are expecting the UK Central Bank to
cut interest rates to four percent this afternoon, a two
year low. The twenty five bases point drop would be
in line with the boees current once a quarter pace
of easing, but policymakers have remained cautious amid a fresh
inflation spike. Concerns over the economy are also rising after
(05:23):
it faced back to back contractions and a hiring slowdown
over spring. The decision will likely expose divisions amongst the
nine member committee panel, with experts predicting a three way
split in London. Twa Adebayo, Bloomberg.
Speaker 2 (05:38):
Radio president Donald Chom says there is a very good
chance that he will meet Russia's Vlasimir Putin and Ukraine's
Vladimir Zelinski soon in another bid to broke a piece
between the two countries. Chomps spoke to reporters in the
Oval Office hours after talks between Putin and US Special
Envoice Steve Whitkoff in Moscow.
Speaker 5 (06:00):
Very good talks with President Putin today, and there's a
very good chance that we could be ending the ending
the round, ending the end of that road. Road was
long and continues to be long, but there's a good
chance that there will be a meaning very soon.
Speaker 2 (06:18):
Excuse me, do you think you are some kind.
Speaker 5 (06:20):
Of pot Well, look, I don't want to say.
Speaker 2 (06:22):
Been disappointed before President Trump speaking thereafter, he informed allies
in a phone call on Wednesday that he is positive
about the possibility of a ce SPA in Ukraine in.
Speaker 3 (06:34):
Terms of sources.
Speaker 2 (06:37):
Speaking to Bloomberg, he also suggested that Putin would be
open to peace talks in exchange for discussing land swaps.
Speaker 1 (06:45):
With Those are your top stories on the markets this morning.
The Mscirish Pacific Index nine tenths higher this morning after
those latest tariff announcement, particularly to do with chick makers,
have been giving the markets some optimism. TSMC shares in
Taiwan are up by four point nine nine percent. Looking
ahead to the European trading session, eurostocks fifty futures are
up by a quarter of one percent. Wall Street futures
(07:06):
are two tents higher for SMP emonies as well. The
ten your Treasury eel this morning just up a basis
point at four point twenty four percent. The Blueberg Dollar
Spot index is a tenth of one percent weaker.
Speaker 2 (07:17):
Now in a moment, we'll bring you more on the
latest US tariffs coming into effect. Plus we'll dig into
the market reaction, particularly to the announcement around chips. But first,
something we've been laughing about and thinking about all morning,
really a bit of an escape from all the tariff news.
Sarah Rappaport School always gets the best assignments, doesn't she.
Speaker 1 (07:40):
Well, she's been writing about a private island for sale
off the Welsh coast. It's home to a Victorian era
ford that's been renovated into a five bedroom home. It's
got things like a roof top bar. It's also fully
self sufficient with generators, solar panels and heat pumps. Now
the island is currently owned by the tech On Brenner
(08:00):
and Mike Connor, who bought it in twenty seventeen brought
it back from dereliction. He's had some great parties on
the island over the years. He describes it as a
really expensive train set.
Speaker 2 (08:12):
Yes, I think that's got a helipad on it as well.
Speaker 3 (08:15):
You'll have to add that in there.
Speaker 1 (08:16):
I think there's been quite a lot of a work
that's essentially had to be done to try and get
this island back to I suppose the state that it's
in now, but it is on sale. Four an island,
and it's at the current price is three million pounds.
Speaker 2 (08:32):
I thought that was quite a snip. Actually, I must
say that I've been doing research asland.
Speaker 7 (08:37):
Well.
Speaker 2 (08:38):
No, I just had seen the island when it was
for sale.
Speaker 3 (08:42):
I think everybody in the country.
Speaker 2 (08:43):
Saw it because it was the most popular or the
most viewed for sale property in the UK, and the
year that it was up for sale I think it
was twenty seventeen or twenty eighty, So I actually thought
three million pounds after all the investment that must have
been needed just.
Speaker 1 (08:58):
Made me think of the famous five To be honest,
the idea of there being an island, you know, with
a four workshist.
Speaker 2 (09:03):
It's so beautiful a view of that coast must be amazing.
Speaker 1 (09:07):
Yeah, we'll put a link to there rapp And for
its story in our podcast show notes. But let's bring
you more down our top stories. The late US round
of Donald Trump's trade tariffs have come into effect, raising
the rates faced by dozens of countries around the world.
Switzerland's president left Washington without any change to the thirty
nine percent rate that their imports will now face in
the US. Donald Trump's already threatening further moves on chips
(09:28):
and higher tariffs on India as well. Let's speak to
Bloomberg's Ramsey Arabaki for more on all of this. Ramsey,
good to talk to you. First of all, just to
put us where we are with these new tariff rates
coming into force today. How big a moment is this
in Donald Trump's trade offensive.
Speaker 8 (09:46):
Well, you know, he's been in one sense, it's at
least some certainty for the world. He's been talking about
these things since he got into office. He had this
big announcement in April, delayed till July, delayed again. Finally
at midnight in the US New York they have gone
into effect, So we kind of know where everything lies.
(10:07):
But as you guys have been talking about he's still
full of surprises. There's the issue with India and oil.
There's this random announcement in the White House about one
hundred percent or sorry, one hundred percent tariffs on chips
unless they're produced in the United States or at least
a company promises to produce the United States. There's the
shaker on Switzerland. They still haven't settled China and Mexico
(10:30):
and Canada, which are the biggest trade partners. So in
one sense things feel quietly settled. But there's still some
very big questions out there. And as I said, he's
full of surprises. So everyone's still on their toes.
Speaker 2 (10:43):
Yeah, okay, so let's focus in on one of those.
Then one hundred percent havef on chips with some very
key exemptions. Is it good or badness for chip makers?
Speaker 8 (10:54):
Well, you know, you even look at the story that
Bloomberg and others writer. Right now, we even have people trying,
they say, they're scrambling to make sense of what this
threat is. It seems good news for a lot of
the names you would know off the top of your head,
a company like Apple, Taiwan's TSMC, Samsung in Korea, all
of those governments. Those companies said, look, we were making
(11:16):
investments in the United States or we're going to So
by the reading of what he said, it's like, well,
they should be exempted. So it's not entirely clear just
yet how big of a hit it could have to
some of the biggest suppliers. What he's demanded was sort
of already in train even before he came into office.
If you remember, under the Biden administration, there was a
(11:37):
chips AC that was encouraging chip makers to build in
the United States, and a lot of them had already
made commitments to that point. But again, it probably has
just as much to do with Trump's interest in being
splashy and having a big number out there and really
hammering home his point that he wants he wants companies
to build in America for American consumers and American jobs.
Speaker 1 (11:57):
So this could potentially, as you say, have some good
news for those chip makers that are carved out from
the that Twerff threat. But the other threat that we
had from Donald Trump is to increase the tariff right
on India from twenty five to fifty percent later this month.
This is linked to its purchases of Russian oil. Is
there any hope for negotiation? Do we think we've another
(12:18):
twenty one days before that higher rate would come into force.
Speaker 8 (12:21):
Gosh, that's another wildcard that we're trying to get our
head around, you know, if you just we go back
a little bit after the invasion of Ukraine, that's when
the US and the EU really tried to crack down
on Russian energy, and they had this policy of trying
to cap the price on Russian oil but still trying
to keep it onto the market, which means there's a
(12:42):
lot of oil, so gasoline prices don't go up, but
Moscow and Vladimir Putin get less money. A big buyer
during all this was India. The US knew it. They
sort of just let it slide. India saying we need
the cheap oil, we have a growing economy, the US thinking, well,
we need a counterweight to China, so we'll all get
along here.
Speaker 5 (12:59):
Now.
Speaker 8 (13:00):
Trump thought he could end this war in Russia very quickly.
It's going much more difficult than he thought. Vladimir Putin
is a lot more stubborn than he was expecting. So
he's been ramping up his pressure on Putin, and I
think that's where he probably saw an opportunity to make
it seem like he was serious, and he's kind of
using India as as the outlet for that. What sort
(13:20):
of upside he's going to get is unclear. Vladimir Putin
and Russia have been very, very resistant and sort of
they've adapted well to the economic isolation the West has
tried to put them in. And this is obviously very
much angered India, so much so that even you know,
the Modi's opponents are piling in and backing him in
(13:41):
a sense saying this is just straight up bullying. But
you're right, there's time to sort this out. And as
we've seen, Trump can change his mind very quickly, very dramatically.
And it could be as simple as one phone call.
We saw the Swiss apparently didn't get it, got a
really terrible deal because of a bad phone call. It
could be that a nice phone call with Modi sorts
it out, or a nice phone call with Putin. But
(14:01):
it puts the oil market a tricky situation. It puts
Indian a very tricky situation. And as I'm sure as
you might have heard as well in the questioning yesterday
in the White House, Trump even said he might do
the same thing for China, which again it just is
throwing another huge wrench in the works in that trade relationship.
And as I'm sure you know, China is another massive
buyer of oil globally and from Russia.
Speaker 2 (14:24):
Yeah, person Trump's saying that that may happen, but of
course it also sounded fairly tensitive about China. Let's see
what happens on that point. Ramsey, thank you so much
for being with us, that is Blomberg's Ramsey Alviccarby that
are joining us taking us through the latest round of
trade tariffs.
Speaker 1 (14:40):
Well, let's think about how markets are reacting to that
trade and use now the exemptions that Donald Trump announce
him his plans. Chip tarris has boosted shares in Asia
and our market support of Valerie Title is with us.
Speaker 3 (14:50):
Now for more.
Speaker 1 (14:51):
It just talk us through what we are seeing in
terms of reaction to this latest set of announcements.
Speaker 9 (14:55):
Well, huge relief when it comes to the semiconductor Yes,
it was a big, flashy number one hundred percent, but
it exempts anybody who is pledging investment in the US,
is pledging to move their supply chain more to the US.
So we're seeing the likes of TSMC. Those shares are
up five percent in Taiwan trade. Even the likes of
Navidia traded higher in postmarket, and the likes of Apple
(15:16):
as well. Tim Cook obviously being in the Oval Office
with Trump when he made this announcement, Apple is going
to get that carve out that exemption too. So Apple
shares traded nearly three percent higher in post market trades.
This is just another tariff now, Stephen, that we don't
have to worry about. The tariff thread on semiconductors seems
in the rear view mirror the exemptions. The list of
(15:40):
both foundries and chip designers who have pledged investment in
the US is really quite extensive. TSMC, applied materials, Apple
has talked about moving some of their supply chains to
the US. Navidia as well. There's this big Phoenix plant
that TSMC is building in Arizona, and many chip designers
voice support of using that production line as well. So
(16:04):
the carve ounts are quite enormous on this one, and
I think that surprised the market in quite a positive way.
With TSMC up some five percent and trade in Taiwan in.
Speaker 2 (16:12):
Terms of the USS of taffs O buying Russian oil.
Speaker 3 (16:17):
Targeting India and China. How's that affecting oil prices?
Speaker 9 (16:21):
This is a really hard one to put your finger
on because secondary sanctions are very much known to be
very hard to enforce, and honestly, the oil price yesterday
was way more affected by reports that Trump wants to
meet with Putin and Zelenski. So we actually saw oil
fall at the end of the session yesterday. So it
does seem like to be there's two things pulling the
oil market. It has rallied this week on worries of
(16:44):
these secondary sanctions, but then yesterday was really much on
a back foot on hopes of a ceasefire when it
comes to the Russia Ukraine. Or we did have WTI
falling over percent by the end of the close in
yesterday session.
Speaker 1 (16:58):
And just in terms of markets are thinking about the
tireffs more broadly in the effect on the US economy.
Interesting of comments from Federal Reserve policymakers Mary Daily and
Yakashkari among them about interest.
Speaker 9 (17:08):
Rights exactly a dove its shift from some of these
FED members voicing some fresh concerns on the labor market.
Mary Daily Basically, this is now her second time around
that she's mentioned that the labor market is cooling, because
Kari mentioned that as well, saying cutting sooner rather than
later might be better than waiting because of this cooling
in the labor market. We also heard from Lisa Cook,
(17:30):
who is a Fed governor a current voter as well,
saying that it is concerning the latest jobs market. Jobs
data is concerning and those big revisions can be somewhat
typical of turning points in the US economy. So this
dubvish language from the Federal Reserve members, it has kept
the dollar soft. It's been weakening for five straight days.
It's now down a percent and a half since Friday's
(17:52):
payroll report. But when it comes to what's priced in
the front end, I think it's fairly justified. We're pricing
still around a ninety percent ninety ninety to ninety five
percent chance of a September cut, So at least no
one for now is talking about a big jumbo cut
when it comes to September. That would be something that
would really shift the market. But Stephen, remember we still
have another CPI print and another payroll print before we
(18:14):
get to that September meeting, so that might keep FED
members from sounding any alarm on a jumbo cut until
we get more data.
Speaker 1 (18:22):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (18:28):
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Speaker 1 (18:34):
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Speaker 2 (18:40):
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Speaker 1 (18:47):
I'm Caroline Hepka and I'm Stephen Carol. Join us again
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your day right here on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg dayba Qut podcast. Good morning, It's Thursday,
the seventh of August. I'm Caroline Hepcat in London.
Speaker 1 (00:15):
And I'm Stephen Carroll. Coming up today. US President Donald
Trump's new tariffs come into effect, pushing US import duties
to their highest since World War II.
Speaker 2 (00:24):
The White House warns of a one hundred percent tariff
on semiconducted chips, with carve outs for companies who manufacture
in the US.
Speaker 1 (00:32):
Plus Dreaming of your Own off the Grid Island, a
tech entrepreneur's converted for it off the Welsh Coast goes
on the market for three million pounds.
Speaker 3 (00:41):
Let's start with the roundup of our top stories.
Speaker 1 (00:44):
The next phase of US President's global trade tariffs have
come into effect, pushing American taxes on imports to their
highest level since World War II. The European Union, Japan,
and South Korea negotiated a rate of fifteen percent on
their exports to the United States. Other countries simply assigned
rates which range from the UK's ten percent to much higher.
(01:05):
More levies are yet to come, with President Trump saying
he would double tariffs on Indian goods to fifty percent
as a penalty for buying Russian oil. Boombergs Jail Lisa
says these so called secondary tariffs are less about trade
and more about geopolitics.
Speaker 4 (01:19):
It does seem like India has become kind of collateral
damage in this ongoing pressure campaign that Trump's trying to
launch against Russian President Vladimir Putin. Part of that big,
you know idea of applying these secondary sinctions or tariffs
on you know, nations that purchase Russian oil to try
to get Putin to end the Russia's warn.
Speaker 1 (01:38):
Ukraine Jesus out of the president. Trump said he might
also punish China with additional tariffs over its purchases of
Russian oil. Trade negotiations with China are still ongoing, along
with the US's other two largest trading partners, Mexico and Canada.
Speaker 2 (01:54):
Now, the US president declared plans for a new one
hundred percent tariff on semikin doctor imports. Standing next to
Apple CEO Tim Cook in the Oval Office, Donald Trump
says that he is bringing manufacturing back to the US.
Speaker 5 (02:09):
We'll be putting a terraform of approximately one hundred percent
on chips and semiconductors. But if you're building in the
United States of America, there's no charge, even though you're
building and you're not producing yet in terms of the
big numbers of jobs and all of the things that
you're building. If you're building, there will be no charge.
Speaker 3 (02:32):
Now.
Speaker 2 (02:32):
Trump's surprise declaration further upends the global electronics supply chain.
Tech companies including Apple, TSMC, and Nvidia have pledged to
spend more than a trillion dollars collectively in the US
since Trump returned to power, but the levees may still
have major implications for the price of consumer electronics in
the US.
Speaker 1 (02:53):
I Meanwhile, America's allies are still grappling with the shock
caused by the levees. Switzerland's President Karen Keller Sotter left
Washington after a two day emergency trip, having failed to
secure better terms. The European leader did not meet President Trump,
instead only talking to Secretary of State Marco Rubio. Swiss
goods face the highest American tariff of any developed nation
(03:15):
at thirty nine percent. Bloomberg Economics estimates that if the
rate comes into effect, including on pharmaceuticals, at risks, cutting
up to one percent of Swiss economic output in the
medium term. The Swiss government is holding an emergency meeting
later today. Meanwhile, despite agreeing a trade deal with President Trump,
Japan is also trying to get clarity on car tariffs.
(03:38):
Tokyo says Japanese cars were exempted from the levy, but
that detail was not on the executive order.
Speaker 2 (03:45):
Now, three FED officials have voiced fresh concerns over the
US labor market, pointing to a rate cut in September.
According to the San Francisco FED president Mary Daily, the
data shows policymakers will need to alter borrowing costs soon.
Speaker 6 (04:00):
Labor market has softened, and you can see this everywhere
in the US economy and here as well. And I
would see additional slowing in the labor market as an
unwelcome sign. So all this means, as you put it together,
that I think will likely need to adjust the policy
rate sometime in the coming.
Speaker 2 (04:18):
Months, the Fed's Mary Daily speaking there speaking to CNBC. Meanwhile,
the Minneapolis FED president Near Kashkari also express worry over
the slowdown showing up in multiple data points, adding that
he expects two FED rate cuts before the end of
the year. The news also comes off to fellow Governor
Lisa Cook said that downward revisions to the jobs data
(04:41):
for the last three months were typical of turning points
in the economy.
Speaker 1 (04:46):
In her words, markets are expecting an interest rate cut
from the Bank of England later today. The news comes
as members of the Monetary Policy Committee contend with a
slowing economy and a jobs market rattled by higher taxes.
Bloombergoks tea Adebayo has more.
Speaker 7 (05:02):
Markets and economists are expecting the UK Central Bank to
cut interest rates to four percent this afternoon, a two
year low. The twenty five bases point drop would be
in line with the boees current once a quarter pace
of easing, but policymakers have remained cautious amid a fresh
inflation spike. Concerns over the economy are also rising after
(05:23):
it faced back to back contractions and a hiring slowdown
over spring. The decision will likely expose divisions amongst the
nine member committee panel, with experts predicting a three way
split in London. Twa Adebayo, Bloomberg.
Speaker 2 (05:38):
Radio president Donald Chom says there is a very good
chance that he will meet Russia's Vlasimir Putin and Ukraine's
Vladimir Zelinski soon in another bid to broke a piece
between the two countries. Chomps spoke to reporters in the
Oval Office hours after talks between Putin and US Special
Envoice Steve Whitkoff in Moscow.
Speaker 5 (06:00):
Very good talks with President Putin today, and there's a
very good chance that we could be ending the ending
the round, ending the end of that road. Road was
long and continues to be long, but there's a good
chance that there will be a meaning very soon.
Speaker 2 (06:18):
Excuse me, do you think you are some kind.
Speaker 5 (06:20):
Of pot Well, look, I don't want to say.
Speaker 2 (06:22):
Been disappointed before President Trump speaking thereafter, he informed allies
in a phone call on Wednesday that he is positive
about the possibility of a ce SPA in Ukraine in.
Speaker 3 (06:34):
Terms of sources.
Speaker 2 (06:37):
Speaking to Bloomberg, he also suggested that Putin would be
open to peace talks in exchange for discussing land swaps.
Speaker 1 (06:45):
With Those are your top stories on the markets this morning.
The Mscirish Pacific Index nine tenths higher this morning after
those latest tariff announcement, particularly to do with chick makers,
have been giving the markets some optimism. TSMC shares in
Taiwan are up by four point nine nine percent. Looking
ahead to the European trading session, eurostocks fifty futures are
up by a quarter of one percent. Wall Street futures
(07:06):
are two tents higher for SMP emonies as well. The
ten your Treasury eel this morning just up a basis
point at four point twenty four percent. The Blueberg Dollar
Spot index is a tenth of one percent weaker.
Speaker 2 (07:17):
Now in a moment, we'll bring you more on the
latest US tariffs coming into effect. Plus we'll dig into
the market reaction, particularly to the announcement around chips. But first,
something we've been laughing about and thinking about all morning,
really a bit of an escape from all the tariff news.
Sarah Rappaport School always gets the best assignments, doesn't she.
Speaker 1 (07:40):
Well, she's been writing about a private island for sale
off the Welsh coast. It's home to a Victorian era
ford that's been renovated into a five bedroom home. It's
got things like a roof top bar. It's also fully
self sufficient with generators, solar panels and heat pumps. Now
the island is currently owned by the tech On Brenner
(08:00):
and Mike Connor, who bought it in twenty seventeen brought
it back from dereliction. He's had some great parties on
the island over the years. He describes it as a
really expensive train set.
Speaker 2 (08:12):
Yes, I think that's got a helipad on it as well.
Speaker 3 (08:15):
You'll have to add that in there.
Speaker 1 (08:16):
I think there's been quite a lot of a work
that's essentially had to be done to try and get
this island back to I suppose the state that it's
in now, but it is on sale. Four an island,
and it's at the current price is three million pounds.
Speaker 2 (08:32):
I thought that was quite a snip. Actually, I must
say that I've been doing research asland.
Speaker 7 (08:37):
Well.
Speaker 2 (08:38):
No, I just had seen the island when it was
for sale.
Speaker 3 (08:42):
I think everybody in the country.
Speaker 2 (08:43):
Saw it because it was the most popular or the
most viewed for sale property in the UK, and the
year that it was up for sale I think it
was twenty seventeen or twenty eighty, So I actually thought
three million pounds after all the investment that must have
been needed just.
Speaker 1 (08:58):
Made me think of the famous five To be honest,
the idea of there being an island, you know, with
a four workshist.
Speaker 2 (09:03):
It's so beautiful a view of that coast must be amazing.
Speaker 1 (09:07):
Yeah, we'll put a link to there rapp And for
its story in our podcast show notes. But let's bring
you more down our top stories. The late US round
of Donald Trump's trade tariffs have come into effect, raising
the rates faced by dozens of countries around the world.
Switzerland's president left Washington without any change to the thirty
nine percent rate that their imports will now face in
the US. Donald Trump's already threatening further moves on chips
(09:28):
and higher tariffs on India as well. Let's speak to
Bloomberg's Ramsey Arabaki for more on all of this. Ramsey,
good to talk to you. First of all, just to
put us where we are with these new tariff rates
coming into force today. How big a moment is this
in Donald Trump's trade offensive.
Speaker 8 (09:46):
Well, you know, he's been in one sense, it's at
least some certainty for the world. He's been talking about
these things since he got into office. He had this
big announcement in April, delayed till July, delayed again. Finally
at midnight in the US New York they have gone
into effect, So we kind of know where everything lies.
(10:07):
But as you guys have been talking about he's still
full of surprises. There's the issue with India and oil.
There's this random announcement in the White House about one
hundred percent or sorry, one hundred percent tariffs on chips
unless they're produced in the United States or at least
a company promises to produce the United States. There's the
shaker on Switzerland. They still haven't settled China and Mexico
(10:30):
and Canada, which are the biggest trade partners. So in
one sense things feel quietly settled. But there's still some
very big questions out there. And as I said, he's
full of surprises. So everyone's still on their toes.
Speaker 2 (10:43):
Yeah, okay, so let's focus in on one of those.
Then one hundred percent havef on chips with some very
key exemptions. Is it good or badness for chip makers?
Speaker 8 (10:54):
Well, you know, you even look at the story that
Bloomberg and others writer. Right now, we even have people trying,
they say, they're scrambling to make sense of what this
threat is. It seems good news for a lot of
the names you would know off the top of your head,
a company like Apple, Taiwan's TSMC, Samsung in Korea, all
of those governments. Those companies said, look, we were making
(11:16):
investments in the United States or we're going to So
by the reading of what he said, it's like, well,
they should be exempted. So it's not entirely clear just
yet how big of a hit it could have to
some of the biggest suppliers. What he's demanded was sort
of already in train even before he came into office.
If you remember, under the Biden administration, there was a
(11:37):
chips AC that was encouraging chip makers to build in
the United States, and a lot of them had already
made commitments to that point. But again, it probably has
just as much to do with Trump's interest in being
splashy and having a big number out there and really
hammering home his point that he wants he wants companies
to build in America for American consumers and American jobs.
Speaker 1 (11:57):
So this could potentially, as you say, have some good
news for those chip makers that are carved out from
the that Twerff threat. But the other threat that we
had from Donald Trump is to increase the tariff right
on India from twenty five to fifty percent later this month.
This is linked to its purchases of Russian oil. Is
there any hope for negotiation? Do we think we've another
(12:18):
twenty one days before that higher rate would come into force.
Speaker 8 (12:21):
Gosh, that's another wildcard that we're trying to get our
head around, you know, if you just we go back
a little bit after the invasion of Ukraine, that's when
the US and the EU really tried to crack down
on Russian energy, and they had this policy of trying
to cap the price on Russian oil but still trying
to keep it onto the market, which means there's a
(12:42):
lot of oil, so gasoline prices don't go up, but
Moscow and Vladimir Putin get less money. A big buyer
during all this was India. The US knew it. They
sort of just let it slide. India saying we need
the cheap oil, we have a growing economy, the US thinking, well,
we need a counterweight to China, so we'll all get
along here.
Speaker 5 (12:59):
Now.
Speaker 8 (13:00):
Trump thought he could end this war in Russia very quickly.
It's going much more difficult than he thought. Vladimir Putin
is a lot more stubborn than he was expecting. So
he's been ramping up his pressure on Putin, and I
think that's where he probably saw an opportunity to make
it seem like he was serious, and he's kind of
using India as as the outlet for that. What sort
(13:20):
of upside he's going to get is unclear. Vladimir Putin
and Russia have been very, very resistant and sort of
they've adapted well to the economic isolation the West has
tried to put them in. And this is obviously very
much angered India, so much so that even you know,
the Modi's opponents are piling in and backing him in
(13:41):
a sense saying this is just straight up bullying. But
you're right, there's time to sort this out. And as
we've seen, Trump can change his mind very quickly, very dramatically.
And it could be as simple as one phone call.
We saw the Swiss apparently didn't get it, got a
really terrible deal because of a bad phone call. It
could be that a nice phone call with Modi sorts
it out, or a nice phone call with Putin. But
(14:01):
it puts the oil market a tricky situation. It puts
Indian a very tricky situation. And as I'm sure as
you might have heard as well in the questioning yesterday
in the White House, Trump even said he might do
the same thing for China, which again it just is
throwing another huge wrench in the works in that trade relationship.
And as I'm sure you know, China is another massive
buyer of oil globally and from Russia.
Speaker 2 (14:24):
Yeah, person Trump's saying that that may happen, but of
course it also sounded fairly tensitive about China. Let's see
what happens on that point. Ramsey, thank you so much
for being with us, that is Blomberg's Ramsey Alviccarby that
are joining us taking us through the latest round of
trade tariffs.
Speaker 1 (14:40):
Well, let's think about how markets are reacting to that
trade and use now the exemptions that Donald Trump announce
him his plans. Chip tarris has boosted shares in Asia
and our market support of Valerie Title is with us.
Speaker 3 (14:50):
Now for more.
Speaker 1 (14:51):
It just talk us through what we are seeing in
terms of reaction to this latest set of announcements.
Speaker 9 (14:55):
Well, huge relief when it comes to the semiconductor Yes,
it was a big, flashy number one hundred percent, but
it exempts anybody who is pledging investment in the US,
is pledging to move their supply chain more to the US.
So we're seeing the likes of TSMC. Those shares are
up five percent in Taiwan trade. Even the likes of
Navidia traded higher in postmarket, and the likes of Apple
(15:16):
as well. Tim Cook obviously being in the Oval Office
with Trump when he made this announcement, Apple is going
to get that carve out that exemption too. So Apple
shares traded nearly three percent higher in post market trades.
This is just another tariff now, Stephen, that we don't
have to worry about. The tariff thread on semiconductors seems
in the rear view mirror the exemptions. The list of
(15:40):
both foundries and chip designers who have pledged investment in
the US is really quite extensive. TSMC, applied materials, Apple
has talked about moving some of their supply chains to
the US. Navidia as well. There's this big Phoenix plant
that TSMC is building in Arizona, and many chip designers
voice support of using that production line as well. So
(16:04):
the carve ounts are quite enormous on this one, and
I think that surprised the market in quite a positive way.
With TSMC up some five percent and trade in Taiwan in.
Speaker 2 (16:12):
Terms of the USS of taffs O buying Russian oil.
Speaker 3 (16:17):
Targeting India and China. How's that affecting oil prices?
Speaker 9 (16:21):
This is a really hard one to put your finger
on because secondary sanctions are very much known to be
very hard to enforce, and honestly, the oil price yesterday
was way more affected by reports that Trump wants to
meet with Putin and Zelenski. So we actually saw oil
fall at the end of the session yesterday. So it
does seem like to be there's two things pulling the
oil market. It has rallied this week on worries of
(16:44):
these secondary sanctions, but then yesterday was really much on
a back foot on hopes of a ceasefire when it
comes to the Russia Ukraine. Or we did have WTI
falling over percent by the end of the close in
yesterday session.
Speaker 1 (16:58):
And just in terms of markets are thinking about the
tireffs more broadly in the effect on the US economy.
Interesting of comments from Federal Reserve policymakers Mary Daily and
Yakashkari among them about interest.
Speaker 9 (17:08):
Rights exactly a dove its shift from some of these
FED members voicing some fresh concerns on the labor market.
Mary Daily Basically, this is now her second time around
that she's mentioned that the labor market is cooling, because
Kari mentioned that as well, saying cutting sooner rather than
later might be better than waiting because of this cooling
in the labor market. We also heard from Lisa Cook,
(17:30):
who is a Fed governor a current voter as well,
saying that it is concerning the latest jobs market. Jobs
data is concerning and those big revisions can be somewhat
typical of turning points in the US economy. So this
dubvish language from the Federal Reserve members, it has kept
the dollar soft. It's been weakening for five straight days.
It's now down a percent and a half since Friday's
(17:52):
payroll report. But when it comes to what's priced in
the front end, I think it's fairly justified. We're pricing
still around a ninety percent ninety ninety to ninety five
percent chance of a September cut, So at least no
one for now is talking about a big jumbo cut
when it comes to September. That would be something that
would really shift the market. But Stephen, remember we still
have another CPI print and another payroll print before we
(18:14):
get to that September meeting, so that might keep FED
members from sounding any alarm on a jumbo cut until
we get more data.
Speaker 1 (18:22):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (18:28):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (18:34):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (18:40):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 1 (18:47):
I'm Caroline Hepka and I'm Stephen Carol. 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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