June 3, 2025 • 21 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US President Donald Trump is eager to land more trade deals, but talks with China and Europe continue to languish amid communications breakdowns and fresh tariff threats.
(2) Treasuries began June on the back foot with 30-year bond yields testing the 5% level as concerns over President Donald Trump’s tariff policies resurfaced at the start of a data-heavy week for assessing the health of the world’s largest economy.
(3) French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni will look to patch up difficult relations during a bilateral meeting in Rome on Tuesday, as Europe grapples with the seismic geopolitical shifts caused by the Trump administration.
(4) Russia and Ukraine wrapped up a second round of talks in Istanbul that failed to bring the two sides closer to ending the war, but laid the groundwork for a new exchange of prisoners.
(5) The UK envisages taking an enhanced role in NATO’s nuclear deterrence amid doubts surrounding the US commitment to the alliance, as Prime Minister Keir Starmer pledges to make Britain “war-ready” to counter Russian aggression in Europe.
(6) Immigration minister Seema Malhotra said it is still too soon to know whether the government’s plans to make it harder for migrants to claim settlement in the UK will apply retroactively to those already in the country, potentially extending the wait for millions who arrived in the country since the pandemic.
Podcast Conversation: Musk’s Chatbot Can Be ‘Non-Woke’ or Truthful, Not Both: Dave Lee
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 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Blooe Big Dabic Curate podcast, available every
morning on Apple, Spotify or wherever you listen. It's Tuesday,
the third of June in London.
Speaker 3 (00:17):
I'm Caroline Hipki.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today, The Art of
No Deal. As the clock ticks down on Donald Trump's
global tariff pause, trade deals with China, the EU and
others remain elusive.
Speaker 2 (00:29):
Investors demand higher yields for thirty year US debt as
uncertainty remains front of mind.
Speaker 1 (00:36):
Plus China's team You and she In want to crack Europe,
but the lure of the US consumer makes it hard
to quit.
Speaker 3 (00:43):
Let's start with a roundup of our top stories.
Speaker 1 (00:46):
The White House says President Donald Trump and China's President
chi Jing PingER likely to speak this week. Beijing hasn't
commented on the prospect of a direct conversation. The leaders
of the world's two largest economies have not spoken since
Trump's inauguration. Mean While says the US has seriously undermined
a recent tariff truce with its decision to impose a
range of new restrictions on the country Bloomberg's chief geenomics analyst,
(01:09):
Jennifer Welch is couraging caution over expectations off an imminent call.
Speaker 4 (01:13):
If a phone call happens this week, I think that
is a good thing for training negotiations that probably will
help restart momentum or at least clear the error in
a way in which these tensions are kind of boiling
on the back burner. But I think a call is unlikely,
And what that means is that tensions could continue to
boil because they're only being addressed really at lower levels,
(01:34):
and it would take a higher level engagement to put
them to rest or at least to put them into
the background to the point where they're not interfering with
talks further.
Speaker 1 (01:42):
Jennifer Wells from Bloomberg Economics was speaking as a private
survey showed China's manufacturing sector had its worst slump since
September twenty twenty two. The kaishin Manufacturing Purchasing Managers Index
fell to forty eight point three in May, as higher
US tariff took a toll on the country's smaller exporters.
Speaker 2 (02:02):
Now, the weaker than expected data from China comes as
President Trump's ninety day pause on his so called reciprocal
tariffs is coming to an end soon, but as the
deadline looms, the White House is struggling to secure trade deals.
The European Union is preparing for another round of talks
with the US tomorrow. The BLOCK is trying to fast
(02:22):
track negotiations before the ninth of July deadline, when President
Trump said that he would hit nearly all of their
imports with a fifty percent tariff. However, the EU has
now warned that it may speed up retaliatory measures if
the President follows through on his repeated threats. Despite promising
that a range of deals are just around the corner.
(02:44):
So far, only the UK has reached an outline trade
agreement with the US on tariffs, and even that deal
is not in place yet.
Speaker 1 (02:52):
Carline investors, meanwhile, are warily watching those trade negotiations as
the US faces broader questions over its fiscal outline. Thirty
year treasury bond yields once again tested five percent on Monday,
and it concerns over President Trump's tariff policies and a
budget bill that could push the deafic at higher. Christian
Lawrence's head of Cross Asset Strategy at Rabobank.
Speaker 5 (03:15):
When it comes to the yields, I do think another
thirty basis points of term premium would make sense. I mean,
if you look at term premium for the last in
a few decades, it's been very low compared to historical standards.
We are in a world where the fiscal stance is
of course getting worse, and that isn't going to change
anytime soon. Everything points in that direction, and there is
just I would say a lot of faith in US
(03:36):
institutions is far too sensationalist.
Speaker 6 (03:39):
But versus a year ago, are.
Speaker 5 (03:40):
There some concerns about how big a role the dollar's
going to play globally?
Speaker 1 (03:44):
I think that's fair, Christian Lawrence speaking there. As a
slate of labor market reports to this week could play
a key role in shaping the next moves and treasury
yields and the Fed's rate path. Traders now anticipate two
quarter point rate cuts and twenty twenty five, down from
expectations of three earlier in May.
Speaker 3 (04:02):
So that's for the US.
Speaker 2 (04:03):
Meanwhile, French President Emmanuel Maco and Italian Prime Minister Georgia
Maloney are to meet in Rome today as Europe grapples
with the seismic geopolitical shifts caused by the Trump administration,
Bloomberg's un Potts has.
Speaker 7 (04:17):
More Now it's being seen as a reset of relations
between two of the EU's key players, ahead of major
NATO and G seven summits scheduled for later this month.
Mccron and maloney's meeting comes amide heightened concerns around trade
and security after President Trump's abrupt moves upended established ties,
and Lisa Official has acknowledged the two leaders divergent positions
(04:38):
on Trump, with the Italian PM being much more ideologically
aligned with the US presidents and as well as geopolitics,
some testy business issues are likely to come up the prize.
If all goes well, the future possibility of a high
level summit between the two countries in London, I'm youw
in pots Splinberg Radio.
Speaker 1 (04:54):
Russia and Ukraine have laid the groundwork for a new
prisoner swap during their latest round of PA talks. The
two countries agreed to prepare for an exchange of heavily
wounded and young soldiers as well as six thousand bodies.
Ukrainian Defense Minister rustam Umurov says it's up to Moscow
to make the next move.
Speaker 8 (05:13):
We propose to Russian side to hold a meeting by
the end of this month. We've been telling Russia for
a very long time this war must end, and the
whole world supports us in that if Russia is serious
about the ending the war, it will move forward on this.
Speaker 1 (05:29):
Ukraine's defense minister speaking there also during discussions, Kiev called
for an unconditional truce, while the Kremlin proposed a two
to three day ceasefire in certain areas. The latest direct
peace talks in Istanbul lasted only about an hour and
came a day after Kiev stage one of its boldest
aerial attacks inside Russia, destroying long range bombers and other aircraft.
Speaker 2 (05:51):
Now to the UK, which wants to take on a
larger role as part of NATO's nuclear deterrent as Europe
doubts America's commitment to the all, Bloomberg has learned that
the government is exploring new capabilities, such as fighter jets
able to find nuclear weapons. UK Prime Minister Kiss Starmer
announced at major new spending plans yesterday to revamp Britain's military, a.
Speaker 6 (06:15):
Blueprint to make Britain safer and stronger. A battleready, armor
clad notion with the strongest alliances and the most advanced capabilities,
equipped for the decades to come.
Speaker 2 (06:28):
Although Starmer's speech was supposed to be a show of
British strength, he failed to explain where the billions of
pounds in extra spending will come from. This leaves the
UK leader facing a major challenge in the future as
his party pushes for more welfare spending and bond markets
fresh over Britain's.
Speaker 3 (06:46):
Debt levels well.
Speaker 1 (06:48):
Meanwhile, the UK Immigration Minister says the government isn't ruling
out making new restrictions on migrants retroactive. Siema Malhatra told
the House of Commons that the Home Office is still
consulting on plans whi would affect millions of people who
come to Britain to work.
Speaker 9 (07:03):
Bloomberg.
Speaker 1 (07:03):
James Wilcock has more.
Speaker 10 (07:05):
Labour doubled how long migrants have to live in Britain
before applying for the right to stay to ten years.
That toughest stance is partly response to the populist reform
UK Party overtaking them in the polls, but it's also
a question of budgets. There are roughly three million people,
many in low paid caring roles who have arrived in
the UK since the pandemic. Bloomberg has learned that the
(07:27):
Home Office is concerned about the strain that many people
would put on the welfare system if they settled in
the UK, and it's now seeking to tighten the rules
retroactively in London. James Orcock Bloomberg Radio, and.
Speaker 2 (07:41):
Those are our top stories for you this morning. Let's
have a look at the markets. So yesterday we saw
the dollar selling off a six cents of one percent lower.
This morning a small rebound for the dollar on the
Bloomberg Dollar Spot Index up two tents of one percent.
The euro rose yesterday almost one percentage point, the euro
retreating somewhat this morning.
Speaker 3 (08:00):
In terms of futures.
Speaker 2 (08:01):
Then for the European markets we are up by about
a tenth of one percent. Trade worries are dampling optimism
about European stocks which have had such a strong run
dominating global stock since the start of the year. And
remember European defense names had a big boost yesterday, particularly
UK defense names also be a systems roles.
Speaker 3 (08:21):
Royce shares were up yesterday.
Speaker 2 (08:23):
You US stock futures are sliding now this morning. Mainland
Chinese indexes are climbing despite the kaishin PMI data being
weak and ten year US treasury yields this morning trade
at four forty three, So down one of our basic points.
Speaker 3 (08:37):
There's the markets in the moment.
Speaker 1 (08:39):
We'll bring you more on the latest in US China
trade relations, plus why Chinese sellers seem reluctant to shift
into European markets despite the American tariff threats. But first,
another story that calls AAI this morning, and how making
an ideological AI might be more difficult than it seems
so our opinion columns. Davely has been writing about grauk
(08:59):
on Lon Musque's X platform, which promised to be a
non woke alternative to chat GPT in its rivals. Dave
writes the problem is when the answers the AA provides
are based on data, the technology can either be non
woke or truthful, but not both. His argument is the
data doesn't care about culture wars, or what's dominating conversations
(09:20):
on cable news networks, or what stance anyone has to
be to be on the right side, in his words,
of the MAGA group on any given week. So he says,
you know, if you take the example of things like,
for example, climate change. If you're ki about climate change,
it's likely to tell you that it is real and
that it's urgent, or it's going to tell you that
vaccines are effective, and that's not because of a woke bias,
(09:40):
it's just what the data essentially provides. And he points
to the example of when you try to manage the
results that an AI chatbot will provide to you, and
that causes problems too. Xai, which created Grock, was criticized
for interventions that it made when it was found to
have directed users away from any news sources that suggested
that Elon Musk or Donald Trump was sources of misinformation,
(10:01):
for example. So you can be causing controversy on both
sides as well. Dave's argument is that you can improve
AI by giving it more data, not steering it away
from certain sources, and artificial selective intelligence, as he describes it,
as of pretty limited practical use.
Speaker 8 (10:17):
Yeah.
Speaker 2 (10:17):
Look, I think Dave does a really fantastic job of
sort of summarizing and analyzing the difficulties of AI. What
you want AI to look like and the sources that
it should look at. But I want to kind of
play devil's advocate because I can. I can see, despite
Dave's points, which I think are absolutely valid, right, that
more data is better to give us a better understanding
(10:39):
of the world. But I can also see sort of
reasonable people on the right of politics which obviously not
agree with the idea that more data will basically prove
that all left leaning ideas are correct and truthful.
Speaker 1 (10:51):
Sometimes are measurable by data, which I think is kind
of what contributes to the problem. I think there are
some very clear cut issues, and Dave sites examples of
them as well, But then there are things that are
going to be m you know, how do you measure happiness?
Speaker 2 (11:01):
Don't have enough research, you know, I mean there were
so many hurries of the world.
Speaker 1 (11:05):
More data, carline, that's the answer, right. We can read
the piece at Bloomberg dot com slash opinion and we'll
put a link to it in our show notes if
you're listening to our podcast. Well, that's bringing more now
in US China trade relations, the White House pushing for
this phone call between Donald Trump and Shi Jingping later
this week. No sign though, of interest in a direct
conversation from Beijing. Let's bring in our eight economic supporter
(11:25):
Katio Dmitrieva for more on this Katia. We reported yesterday
on China saying the US was undermining the tariff truce,
and Washington in return accused Beijing of dragging its feet
in this deal was only agreed a couple of weeks ago.
What's gone wrong between the US and China.
Speaker 11 (11:41):
Well, we're kind of back to a war of words, right,
and we're just a few weeks after Geneva and that
temporary trade truth. I mean that was May twelfth, right,
So it kind of began when Trump last week was
in the Oval Office and he lashed out at China
and said officials weren't up holding they're part of the
trade deal. And the issue really centers on rare earths.
(12:05):
It's the US wanting China to speed up sending the
US these rare earth metals. These are things that go
into critical technologies smartphones, computers, wind turbines, and China produces
seventy percent of these minerals globally, so it's very important
they restart production and export to the US. But China
(12:26):
shot back and said the US engages in discriminatory trade
practices when it comes to semiconductors. And that's likely referring
to sort of a raft of US restrictions on China
and that sphere and unrelated to trade. But of course
we've had this back and forth on education and the
US threatening to in their words, aggressively revoke Chinese student visas.
(12:51):
And about one in four international students in the US
is from China, so it carries these very real implications.
And of course we've heard from China about this issue
as well. Just very tense right now.
Speaker 3 (13:02):
Very tense.
Speaker 2 (13:03):
But then again, the Trump administration advocating direct discussions, a
very kind of mono amano style of negotiation. They want
a conversation between g and Trump. Is that likely? Will
it really help?
Speaker 11 (13:19):
Well, the White House seems to think it's likely, and
it's happening this week. You know, we had comments from
several officials, including US Treasury Secretary saying that a call
is needed to break the deadlock. Kevin Hassett, who's the
White House Economic Advisor, he was also part of Trump's
first administration, saying that he's hopeful for a call this week,
(13:42):
but you know, it's not looking likely when you look
at past experiences with this, and also the fact that
we haven't heard from Chinese officials yet. So we've had
the White House and the US side saying a call
is necessary, a call is good, a call will probably
happen in this week. China has been very quiet on this,
(14:03):
and in the past when this has happened, when the
Trump administration has said a call is necessary, call is happening,
it hasn't happened. And the reason why it's so important
is that it's two different styles of negotiation, right, A
lot hinges on this call. Trump wants it to sort
of get negotiations going, as you said, Mono Amano, get
(14:24):
these two world leaders on a call. But for she
and Chinese officials, it's you know, they don't want to
get on the phone until there's equality and there's a
deal to be done, when there's something on the table
and there's mutual respect, is what we've heard from officials before.
So will it happen A big, big question mark.
Speaker 1 (14:44):
And of course, Katy, this is coming after we've had
the latest kitin Manufacturing survey showing the sector had its
worst slump since September twenty twenty two in terms of
activity in manufacturing. How much pain is the trade war
causing China in the meantime.
Speaker 11 (15:00):
Yeah, it's China in the entire region, right, So we
had manufacturing data from May and from China to Vietnam
to Japan. Productions down really led by weaker outlook, lower exports,
new export orders, i should say, and especially to the US.
And when an economy like China relies on exports so much,
(15:23):
it's of course going to hit growth, not just directly,
but also labor market demand means less investment as companies
wait for more direction, there's less hiring and it's hitting
small and medium sized businesses particularly hard. Large companies can
tend to absorb it better. So we know uncertainty means
(15:43):
weaker investment. But the question is just how much in
the coming months and how much pain frankly will China
be able to withstand because the industrial production numbers, the
manufacturing numbers have really not been good.
Speaker 3 (15:57):
Yeah, Katya, thank you so much for being with us.
Speaker 2 (16:00):
Caratedomtriavia are Asia Economics reporter.
Speaker 8 (16:04):
Well.
Speaker 1 (16:04):
After Donald Trump's tariffs on China, European countries have embracing
for a flood of ultra cheap Chinese goods, but that
might not becoming, at least not yet. Despite a massive
marketing push in Europe, Chinese sellers seem to be sticking
to the American market for now. Our European consumer goods
reporter Sonya Bend joins us from Fankfort for more. Sonya,
good morning. Why are Chinese sellers hesitating over shifting to
(16:27):
Europe even with all of the risks that doing business
with the US seems to hold?
Speaker 9 (16:33):
Yes, well, on the surface, it looks like Timo engine
they're really pushing into Europe with pouring money into advertising spending.
But the sellers, they are more hesitant and more cautious,
and that's because of when they're trying to enter Europe,
they experienced hell mood, as one of the merchants described
it to us. And what they mean that that is
(16:56):
that Europe is more complex than the US. They are
are rules and regulations that differ from country to country.
There are various languages that require user manuals four times
the length of those in the US. More generally, it's
also more complex to understand the consumer dynamics there. And
(17:17):
so when the Chinese merchants initially took a look at
Europe in an attempt to move away from the trade
tensions in the US, they realized it won't be a
quick fix, and it's not as easy as in the
US to scale quickly and make short term and quick returns.
(17:37):
So once the terror for brief happened, it was kind of,
you know, a relief for many Chinese merchants, and they
shifted back to the US at least for now for
those higher short term returns. They can make them way
more easily than in Europe.
Speaker 3 (17:52):
Okay.
Speaker 2 (17:53):
On the other hand, though, Europe is you know, eyeing
up the fact that that Teamy and She and all
of those sellers on those platforms could lead to a
possible surge in cheap imports into Europe.
Speaker 3 (18:06):
So how are they thinking and preparing for that.
Speaker 9 (18:09):
Yes, so Europe is definitely trying to get ahead of it.
And while we are not seeing right now that Europe
is necessarily becoming a dumping ground for the cheap Chinese products,
while there are attentions in the US, there has been
a massive increase in low value parcels over the past years.
It doubled last year compared to the previous one, and
(18:33):
Europe and the European Union are really ramping up efforts
to become more strict here So, for example, the European
Commission is investigating both Timo and Sheen over harmful products,
and we're already seeing more custom checks. So examples that
market authorities mentioned to me were laser pointers that were
(18:53):
so powerful that they could cause blindness and toys that
exceeded the legally allowed threshold of certain chemicals. So they're
definitely cracking down. And part of that effort is also
to scrap the deminumus threshold of one hundred and fifty
euro in the European Union and also the UK is
(19:13):
considering that, and that could really change the dynamics and
could also make Europe a tougher place for e commerce platforms.
Speaker 1 (19:22):
We're talking about this, sonya a point where we're in
the tariff pause. We've forgot about, you know, just over
a month left to go on the ninety day reprieve.
What could happen then when that period ends, if the
tariffs do come into force.
Speaker 3 (19:38):
Yeah, that's the.
Speaker 9 (19:39):
Big question, and it really depends on what exactly will
be agreed upon. One of the people we talked to
mentioned that at a tariff level of fifty four percent,
the US becomes unprofitable for Chinese merchants. So there might
be a point where Chinese sellers are forced to move
into Europe, but what's clear is that they'll be walking
(20:02):
into a more heavily police environment and Temo also seems
to be preparing for that already. So despite hiking advertising spending,
they're also working to increase the share of their local merchants.
So they said that they won't half of their UK
sales to come from local sellers and warehouses by the
(20:22):
end of twenty twenty five, and this is a model
they're trying to expand across Europe, and they're evening for
eighty percent of European sales to come from local sellers
over time. So yeah, we're seeing the dynamics are changing,
and it's clear that even when the Chinese sellers are
forced to move into Europe, it will be a bit
(20:43):
more tricky.
Speaker 1 (20:45):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:51):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:57):
You can also listen live each morning on London DA Radio,
the Bloomberg Business app and Bloomberg dot com.
Speaker 2 (21:03):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 3 (21:11):
I'm Caroline Hepka and.
Speaker 1 (21:12):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Blooe Big Dabic Curate podcast, available every
morning on Apple, Spotify or wherever you listen. It's Tuesday,
the third of June in London.
Speaker 3 (00:17):
I'm Caroline Hipki.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today, The Art of
No Deal. As the clock ticks down on Donald Trump's
global tariff pause, trade deals with China, the EU and
others remain elusive.
Speaker 2 (00:29):
Investors demand higher yields for thirty year US debt as
uncertainty remains front of mind.
Speaker 1 (00:36):
Plus China's team You and she In want to crack Europe,
but the lure of the US consumer makes it hard
to quit.
Speaker 3 (00:43):
Let's start with a roundup of our top stories.
Speaker 1 (00:46):
The White House says President Donald Trump and China's President
chi Jing PingER likely to speak this week. Beijing hasn't
commented on the prospect of a direct conversation. The leaders
of the world's two largest economies have not spoken since
Trump's inauguration. Mean While says the US has seriously undermined
a recent tariff truce with its decision to impose a
range of new restrictions on the country Bloomberg's chief geenomics analyst,
(01:09):
Jennifer Welch is couraging caution over expectations off an imminent call.
Speaker 4 (01:13):
If a phone call happens this week, I think that
is a good thing for training negotiations that probably will
help restart momentum or at least clear the error in
a way in which these tensions are kind of boiling
on the back burner. But I think a call is unlikely,
And what that means is that tensions could continue to
boil because they're only being addressed really at lower levels,
(01:34):
and it would take a higher level engagement to put
them to rest or at least to put them into
the background to the point where they're not interfering with
talks further.
Speaker 1 (01:42):
Jennifer Wells from Bloomberg Economics was speaking as a private
survey showed China's manufacturing sector had its worst slump since
September twenty twenty two. The kaishin Manufacturing Purchasing Managers Index
fell to forty eight point three in May, as higher
US tariff took a toll on the country's smaller exporters.
Speaker 2 (02:02):
Now, the weaker than expected data from China comes as
President Trump's ninety day pause on his so called reciprocal
tariffs is coming to an end soon, but as the
deadline looms, the White House is struggling to secure trade deals.
The European Union is preparing for another round of talks
with the US tomorrow. The BLOCK is trying to fast
(02:22):
track negotiations before the ninth of July deadline, when President
Trump said that he would hit nearly all of their
imports with a fifty percent tariff. However, the EU has
now warned that it may speed up retaliatory measures if
the President follows through on his repeated threats. Despite promising
that a range of deals are just around the corner.
(02:44):
So far, only the UK has reached an outline trade
agreement with the US on tariffs, and even that deal
is not in place yet.
Speaker 1 (02:52):
Carline investors, meanwhile, are warily watching those trade negotiations as
the US faces broader questions over its fiscal outline. Thirty
year treasury bond yields once again tested five percent on Monday,
and it concerns over President Trump's tariff policies and a
budget bill that could push the deafic at higher. Christian
Lawrence's head of Cross Asset Strategy at Rabobank.
Speaker 5 (03:15):
When it comes to the yields, I do think another
thirty basis points of term premium would make sense. I mean,
if you look at term premium for the last in
a few decades, it's been very low compared to historical standards.
We are in a world where the fiscal stance is
of course getting worse, and that isn't going to change
anytime soon. Everything points in that direction, and there is
just I would say a lot of faith in US
(03:36):
institutions is far too sensationalist.
Speaker 6 (03:39):
But versus a year ago, are.
Speaker 5 (03:40):
There some concerns about how big a role the dollar's
going to play globally?
Speaker 1 (03:44):
I think that's fair, Christian Lawrence speaking there. As a
slate of labor market reports to this week could play
a key role in shaping the next moves and treasury
yields and the Fed's rate path. Traders now anticipate two
quarter point rate cuts and twenty twenty five, down from
expectations of three earlier in May.
Speaker 3 (04:02):
So that's for the US.
Speaker 2 (04:03):
Meanwhile, French President Emmanuel Maco and Italian Prime Minister Georgia
Maloney are to meet in Rome today as Europe grapples
with the seismic geopolitical shifts caused by the Trump administration,
Bloomberg's un Potts has.
Speaker 7 (04:17):
More Now it's being seen as a reset of relations
between two of the EU's key players, ahead of major
NATO and G seven summits scheduled for later this month.
Mccron and maloney's meeting comes amide heightened concerns around trade
and security after President Trump's abrupt moves upended established ties,
and Lisa Official has acknowledged the two leaders divergent positions
(04:38):
on Trump, with the Italian PM being much more ideologically
aligned with the US presidents and as well as geopolitics,
some testy business issues are likely to come up the prize.
If all goes well, the future possibility of a high
level summit between the two countries in London, I'm youw
in pots Splinberg Radio.
Speaker 1 (04:54):
Russia and Ukraine have laid the groundwork for a new
prisoner swap during their latest round of PA talks. The
two countries agreed to prepare for an exchange of heavily
wounded and young soldiers as well as six thousand bodies.
Ukrainian Defense Minister rustam Umurov says it's up to Moscow
to make the next move.
Speaker 8 (05:13):
We propose to Russian side to hold a meeting by
the end of this month. We've been telling Russia for
a very long time this war must end, and the
whole world supports us in that if Russia is serious
about the ending the war, it will move forward on this.
Speaker 1 (05:29):
Ukraine's defense minister speaking there also during discussions, Kiev called
for an unconditional truce, while the Kremlin proposed a two
to three day ceasefire in certain areas. The latest direct
peace talks in Istanbul lasted only about an hour and
came a day after Kiev stage one of its boldest
aerial attacks inside Russia, destroying long range bombers and other aircraft.
Speaker 2 (05:51):
Now to the UK, which wants to take on a
larger role as part of NATO's nuclear deterrent as Europe
doubts America's commitment to the all, Bloomberg has learned that
the government is exploring new capabilities, such as fighter jets
able to find nuclear weapons. UK Prime Minister Kiss Starmer
announced at major new spending plans yesterday to revamp Britain's military, a.
Speaker 6 (06:15):
Blueprint to make Britain safer and stronger. A battleready, armor
clad notion with the strongest alliances and the most advanced capabilities,
equipped for the decades to come.
Speaker 2 (06:28):
Although Starmer's speech was supposed to be a show of
British strength, he failed to explain where the billions of
pounds in extra spending will come from. This leaves the
UK leader facing a major challenge in the future as
his party pushes for more welfare spending and bond markets
fresh over Britain's.
Speaker 3 (06:46):
Debt levels well.
Speaker 1 (06:48):
Meanwhile, the UK Immigration Minister says the government isn't ruling
out making new restrictions on migrants retroactive. Siema Malhatra told
the House of Commons that the Home Office is still
consulting on plans whi would affect millions of people who
come to Britain to work.
Speaker 9 (07:03):
Bloomberg.
Speaker 1 (07:03):
James Wilcock has more.
Speaker 10 (07:05):
Labour doubled how long migrants have to live in Britain
before applying for the right to stay to ten years.
That toughest stance is partly response to the populist reform
UK Party overtaking them in the polls, but it's also
a question of budgets. There are roughly three million people,
many in low paid caring roles who have arrived in
the UK since the pandemic. Bloomberg has learned that the
(07:27):
Home Office is concerned about the strain that many people
would put on the welfare system if they settled in
the UK, and it's now seeking to tighten the rules
retroactively in London. James Orcock Bloomberg Radio, and.
Speaker 2 (07:41):
Those are our top stories for you this morning. Let's
have a look at the markets. So yesterday we saw
the dollar selling off a six cents of one percent lower.
This morning a small rebound for the dollar on the
Bloomberg Dollar Spot Index up two tents of one percent.
The euro rose yesterday almost one percentage point, the euro
retreating somewhat this morning.
Speaker 3 (08:00):
In terms of futures.
Speaker 2 (08:01):
Then for the European markets we are up by about
a tenth of one percent. Trade worries are dampling optimism
about European stocks which have had such a strong run
dominating global stock since the start of the year. And
remember European defense names had a big boost yesterday, particularly
UK defense names also be a systems roles.
Speaker 3 (08:21):
Royce shares were up yesterday.
Speaker 2 (08:23):
You US stock futures are sliding now this morning. Mainland
Chinese indexes are climbing despite the kaishin PMI data being
weak and ten year US treasury yields this morning trade
at four forty three, So down one of our basic points.
Speaker 3 (08:37):
There's the markets in the moment.
Speaker 1 (08:39):
We'll bring you more on the latest in US China
trade relations, plus why Chinese sellers seem reluctant to shift
into European markets despite the American tariff threats. But first,
another story that calls AAI this morning, and how making
an ideological AI might be more difficult than it seems
so our opinion columns. Davely has been writing about grauk
(08:59):
on Lon Musque's X platform, which promised to be a
non woke alternative to chat GPT in its rivals. Dave
writes the problem is when the answers the AA provides
are based on data, the technology can either be non
woke or truthful, but not both. His argument is the
data doesn't care about culture wars, or what's dominating conversations
(09:20):
on cable news networks, or what stance anyone has to
be to be on the right side, in his words,
of the MAGA group on any given week. So he says,
you know, if you take the example of things like,
for example, climate change. If you're ki about climate change,
it's likely to tell you that it is real and
that it's urgent, or it's going to tell you that
vaccines are effective, and that's not because of a woke bias,
(09:40):
it's just what the data essentially provides. And he points
to the example of when you try to manage the
results that an AI chatbot will provide to you, and
that causes problems too. Xai, which created Grock, was criticized
for interventions that it made when it was found to
have directed users away from any news sources that suggested
that Elon Musk or Donald Trump was sources of misinformation,
(10:01):
for example. So you can be causing controversy on both
sides as well. Dave's argument is that you can improve
AI by giving it more data, not steering it away
from certain sources, and artificial selective intelligence, as he describes it,
as of pretty limited practical use.
Speaker 8 (10:17):
Yeah.
Speaker 2 (10:17):
Look, I think Dave does a really fantastic job of
sort of summarizing and analyzing the difficulties of AI. What
you want AI to look like and the sources that
it should look at. But I want to kind of
play devil's advocate because I can. I can see, despite
Dave's points, which I think are absolutely valid, right, that
more data is better to give us a better understanding
(10:39):
of the world. But I can also see sort of
reasonable people on the right of politics which obviously not
agree with the idea that more data will basically prove
that all left leaning ideas are correct and truthful.
Speaker 1 (10:51):
Sometimes are measurable by data, which I think is kind
of what contributes to the problem. I think there are
some very clear cut issues, and Dave sites examples of
them as well, But then there are things that are
going to be m you know, how do you measure happiness?
Speaker 2 (11:01):
Don't have enough research, you know, I mean there were
so many hurries of the world.
Speaker 1 (11:05):
More data, carline, that's the answer, right. We can read
the piece at Bloomberg dot com slash opinion and we'll
put a link to it in our show notes if
you're listening to our podcast. Well, that's bringing more now
in US China trade relations, the White House pushing for
this phone call between Donald Trump and Shi Jingping later
this week. No sign though, of interest in a direct
conversation from Beijing. Let's bring in our eight economic supporter
(11:25):
Katio Dmitrieva for more on this Katia. We reported yesterday
on China saying the US was undermining the tariff truce,
and Washington in return accused Beijing of dragging its feet
in this deal was only agreed a couple of weeks ago.
What's gone wrong between the US and China.
Speaker 11 (11:41):
Well, we're kind of back to a war of words, right,
and we're just a few weeks after Geneva and that
temporary trade truth. I mean that was May twelfth, right,
So it kind of began when Trump last week was
in the Oval Office and he lashed out at China
and said officials weren't up holding they're part of the
trade deal. And the issue really centers on rare earths.
(12:05):
It's the US wanting China to speed up sending the
US these rare earth metals. These are things that go
into critical technologies smartphones, computers, wind turbines, and China produces
seventy percent of these minerals globally, so it's very important
they restart production and export to the US. But China
(12:26):
shot back and said the US engages in discriminatory trade
practices when it comes to semiconductors. And that's likely referring
to sort of a raft of US restrictions on China
and that sphere and unrelated to trade. But of course
we've had this back and forth on education and the
US threatening to in their words, aggressively revoke Chinese student visas.
(12:51):
And about one in four international students in the US
is from China, so it carries these very real implications.
And of course we've heard from China about this issue
as well. Just very tense right now.
Speaker 3 (13:02):
Very tense.
Speaker 2 (13:03):
But then again, the Trump administration advocating direct discussions, a
very kind of mono amano style of negotiation. They want
a conversation between g and Trump. Is that likely? Will
it really help?
Speaker 11 (13:19):
Well, the White House seems to think it's likely, and
it's happening this week. You know, we had comments from
several officials, including US Treasury Secretary saying that a call
is needed to break the deadlock. Kevin Hassett, who's the
White House Economic Advisor, he was also part of Trump's
first administration, saying that he's hopeful for a call this week,
(13:42):
but you know, it's not looking likely when you look
at past experiences with this, and also the fact that
we haven't heard from Chinese officials yet. So we've had
the White House and the US side saying a call
is necessary, a call is good, a call will probably
happen in this week. China has been very quiet on this,
(14:03):
and in the past when this has happened, when the
Trump administration has said a call is necessary, call is happening,
it hasn't happened. And the reason why it's so important
is that it's two different styles of negotiation, right, A
lot hinges on this call. Trump wants it to sort
of get negotiations going, as you said, Mono Amano, get
(14:24):
these two world leaders on a call. But for she
and Chinese officials, it's you know, they don't want to
get on the phone until there's equality and there's a
deal to be done, when there's something on the table
and there's mutual respect, is what we've heard from officials before.
So will it happen A big, big question mark.
Speaker 1 (14:44):
And of course, Katy, this is coming after we've had
the latest kitin Manufacturing survey showing the sector had its
worst slump since September twenty twenty two in terms of
activity in manufacturing. How much pain is the trade war
causing China in the meantime.
Speaker 11 (15:00):
Yeah, it's China in the entire region, right, So we
had manufacturing data from May and from China to Vietnam
to Japan. Productions down really led by weaker outlook, lower exports,
new export orders, i should say, and especially to the US.
And when an economy like China relies on exports so much,
(15:23):
it's of course going to hit growth, not just directly,
but also labor market demand means less investment as companies
wait for more direction, there's less hiring and it's hitting
small and medium sized businesses particularly hard. Large companies can
tend to absorb it better. So we know uncertainty means
(15:43):
weaker investment. But the question is just how much in
the coming months and how much pain frankly will China
be able to withstand because the industrial production numbers, the
manufacturing numbers have really not been good.
Speaker 3 (15:57):
Yeah, Katya, thank you so much for being with us.
Speaker 2 (16:00):
Caratedomtriavia are Asia Economics reporter.
Speaker 8 (16:04):
Well.
Speaker 1 (16:04):
After Donald Trump's tariffs on China, European countries have embracing
for a flood of ultra cheap Chinese goods, but that
might not becoming, at least not yet. Despite a massive
marketing push in Europe, Chinese sellers seem to be sticking
to the American market for now. Our European consumer goods
reporter Sonya Bend joins us from Fankfort for more. Sonya,
good morning. Why are Chinese sellers hesitating over shifting to
(16:27):
Europe even with all of the risks that doing business
with the US seems to hold?
Speaker 9 (16:33):
Yes, well, on the surface, it looks like Timo engine
they're really pushing into Europe with pouring money into advertising spending.
But the sellers, they are more hesitant and more cautious,
and that's because of when they're trying to enter Europe,
they experienced hell mood, as one of the merchants described
it to us. And what they mean that that is
(16:56):
that Europe is more complex than the US. They are
are rules and regulations that differ from country to country.
There are various languages that require user manuals four times
the length of those in the US. More generally, it's
also more complex to understand the consumer dynamics there. And
(17:17):
so when the Chinese merchants initially took a look at
Europe in an attempt to move away from the trade
tensions in the US, they realized it won't be a
quick fix, and it's not as easy as in the
US to scale quickly and make short term and quick returns.
(17:37):
So once the terror for brief happened, it was kind of,
you know, a relief for many Chinese merchants, and they
shifted back to the US at least for now for
those higher short term returns. They can make them way
more easily than in Europe.
Speaker 3 (17:52):
Okay.
Speaker 2 (17:53):
On the other hand, though, Europe is you know, eyeing
up the fact that that Teamy and She and all
of those sellers on those platforms could lead to a
possible surge in cheap imports into Europe.
Speaker 3 (18:06):
So how are they thinking and preparing for that.
Speaker 9 (18:09):
Yes, so Europe is definitely trying to get ahead of it.
And while we are not seeing right now that Europe
is necessarily becoming a dumping ground for the cheap Chinese products,
while there are attentions in the US, there has been
a massive increase in low value parcels over the past years.
It doubled last year compared to the previous one, and
(18:33):
Europe and the European Union are really ramping up efforts
to become more strict here So, for example, the European
Commission is investigating both Timo and Sheen over harmful products,
and we're already seeing more custom checks. So examples that
market authorities mentioned to me were laser pointers that were
(18:53):
so powerful that they could cause blindness and toys that
exceeded the legally allowed threshold of certain chemicals. So they're
definitely cracking down. And part of that effort is also
to scrap the deminumus threshold of one hundred and fifty
euro in the European Union and also the UK is
(19:13):
considering that, and that could really change the dynamics and
could also make Europe a tougher place for e commerce platforms.
Speaker 1 (19:22):
We're talking about this, sonya a point where we're in
the tariff pause. We've forgot about, you know, just over
a month left to go on the ninety day reprieve.
What could happen then when that period ends, if the
tariffs do come into force.
Speaker 3 (19:38):
Yeah, that's the.
Speaker 9 (19:39):
Big question, and it really depends on what exactly will
be agreed upon. One of the people we talked to
mentioned that at a tariff level of fifty four percent,
the US becomes unprofitable for Chinese merchants. So there might
be a point where Chinese sellers are forced to move
into Europe, but what's clear is that they'll be walking
(20:02):
into a more heavily police environment and Temo also seems
to be preparing for that already. So despite hiking advertising spending,
they're also working to increase the share of their local merchants.
So they said that they won't half of their UK
sales to come from local sellers and warehouses by the
(20:22):
end of twenty twenty five, and this is a model
they're trying to expand across Europe, and they're evening for
eighty percent of European sales to come from local sellers
over time. So yeah, we're seeing the dynamics are changing,
and it's clear that even when the Chinese sellers are
forced to move into Europe, it will be a bit
(20:43):
more tricky.
Speaker 1 (20:45):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:51):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:57):
You can also listen live each morning on London DA Radio,
the Bloomberg Business app and Bloomberg dot com.
Speaker 2 (21:03):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 3 (21:11):
I'm Caroline Hepka and.
Speaker 1 (21:12):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.