May 29, 2025 • 19 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) The vast majority of President Donald Trump’s global tariffs were deemed illegal and blocked by the US trade court, dealing a major blow to a pillar of his economic agenda.
(2) US assets got a boost Thursday after a vast majority of President Donald Trump’s global tariffs were deemed illegal and blocked by the US trade court. Upbeat earnings from Nvidia Corp. also lifted investor sentiment.
(3) Billionaire Elon Musk said Wednesday that his time as formal adviser to President Donald Trump is coming to a close, raising questions about the future of the Department of Government Efficiency effort he spearheaded.
(4) Nvidia hief Executive Officer Jensen Huang soothed investor fears about a China slowdown by delivering a solid sales forecast, saying that the AI computing market is still poised for “exponential growth.”
(5) Federal Reserve officials broadly agreed heightened economic uncertainty justified their patient approach to interest-rate adjustments, minutes from their latest policy meeting showed Wednesday.
(6) The UK said it plans to require the country’s pension funds to invest in private markets and the domestic economy, a move widely opposed by the City of London’s investment managers.
Podcast Conversation: Trump Bristles at ‘TACO Trade’ That Bets on Him Backing Down
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Transcript
Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg daybreakurate podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the twenty ninth
of May in London. I'm Caroline Hepcot. Coming up today.
Trump's tariffs blocked. A US trade court rules that most
of the US presidents sweeping global levies are illegal. Markets
gain as traders digest the latest twist in the trade story,
(00:32):
as well as upbeat Nvidia earnings. Plus the UK government
says that it is prepared to use legislation to force
pension funds to invest in private markets and the domestic economy.
Let's start with a roundup of our top stories. A
US trade court has blocked most of President Donald Trump's
global tariffs. A panel of three judges at the US
(00:54):
Court of International Trade in Manhattan issued a unanimous ruling
that they were illegally in posed under an emergency law.
The judges rejected the government's argument that President Trump had
authority to unilaterally issue tariffs under a law intended to
address financial transactions during national emergencies. The court has ordered
(01:16):
the tariffs to be stopped within ten calendar days. We
got reaction from the former IMF Chief economist Olivier Blanchard.
Speaker 3 (01:24):
A not a legal scholar, but it was clear that
the so called reciprocity tariffs, which was ten percent of
cost of ward, doesn't have a national security justification, which
is when he has used to actually put tariffs.
Speaker 2 (01:37):
So I think this one is.
Speaker 3 (01:38):
Probably in trouble and there's going to be legal steps, right,
but I suspect that he will have to think this
one off. You're replaced by something he will basically, I
think tried to get tariffs against particular countries. We'll see
how it goes. It's just one more level of uncertainty.
Speaker 2 (01:58):
Olivier Blanchard, now of the Peas Institute, speaking there to
Bloomberg as President Trump's Justice Department said that it will
appeal the ruling. A White House spokesperson added that it
is not for unelected judges to decide how to properly
address a national emergency. The order covers President Trump's global
ten percent flat tariff increased rates on China and other countries,
(02:21):
as well as fentanyl related levees on China, Canada, and Mexico.
Other tariffs imposed under different powers by President Trump, including
on steel, aluminium, and vehicles remain in place now. The
court's ruling has led to a surge in stock markets,
the S and P five hundred and Nasdaka futures gaining
(02:43):
one point six percent and two percent, respectively, while shares
in Asia are rising zero point six percent on the news. Meanwhile,
the dollar strengthened on the decision, but it remains significantly
down from its February high. Timothy Murray is Chief Asia
Pacific equitiesash is at Goldman Sachs. He's urging caution on
the possible upside for markets.
Speaker 4 (03:05):
With the SMP and other global market serving rallied well
over twenty percent from the lows in early April. April seventh,
the SMP aple night for the mscaa Asia Pacific Extrapan Index,
a lot of optimism has already been priced in, so
I think it's we have to say this is a
fundamentally constructive development from the standpoint of lowering tariff risk,
but not all the risk is off the table and
(03:26):
markets have well priced there.
Speaker 2 (03:28):
Timothy Murray as that while this might be considered a
body blow, it's not the final rendering. Now. The comments
come after President Trump's century high tariffs and his plan
to cut taxes in the US, which has spooked investors
who caught onto a Cell America trade and mid concerns
that the trade will would hurt global growth. Now, in
(03:51):
other news this morning, billionaire Elon Musk has announced that
he's stepping down from President Trump's administration. The Tesla CEO
shared on x yesterday that his time i'm as a
formal advisor in the White House is over. By law,
Musk's status as a temporary government worker was set to
expire as soon as tomorrow, the exact date determined by
the number of days worked. This was raised questions about
(04:13):
the Department of Government efficiency effort that he spearheaded, which
fell short of its own high expectations for cost savings.
His departure comes shortly after Musk criticized the Presiden's flagship
tax bill in a recent interview, and after he told
Tesla investors in April that he would devote more time
to the firm. In earnings news, n Vidia CEO Jensen
(04:36):
Wong says that Chinese AI rivals are taking on US
firms as their technology develops. Speaking to Blueberg, he warned
the companies like Huawei and others are filling the void
left by the American departure from the Chinese market.
Speaker 4 (04:53):
Without American technology, the availability of Chinese technology will fill
the market.
Speaker 2 (05:00):
And so you know, whatever we offer has.
Speaker 4 (05:02):
To at least at least be competitive and has to
add value to the market.
Speaker 2 (05:07):
That was Nvidia's Jensen Wong speaking their too Bloomberg. He
went on to highlight the shrinking gap between US products
and their Chinese alternatives, pointing to similarities between Huilawei's latest
AI chip and Nvidia's own Age twenty product. US restrictions
on experts to China have effectively locked Nvidia out of
(05:27):
the country, and this is the largest market for chips
in the world, causing expected losses of eight billion dollars
in sales for Nvidia this quarter alone. Bed officials back
to patient stance on interest rates, blaming the rising risk
from tariffs to both inflation and unemployment in the US.
The minutes from the Central Bank's May meeting pointed to
(05:49):
an increase in economic uncertainty since April. Federal Reserve reporter
Amara mcquai says that the document underlines that wait and
see approach from many policy made and.
Speaker 5 (06:01):
The minutes underscore once again just how much tariffs are
complicating the economic outlook and how focused FED officials are
on ensuring that teriffs do not lead to persistent inflation
or inflation expectations becoming unchecked.
Speaker 2 (06:14):
FED reporter Amara Omaqui speaking there, even with the latest
tariff reprieve, duties on imports do remain historically elevated, and
many businesses have put hiring and investment decisions on hold
in the US. So that's on those FED minutes, as
I say here. In the UK though, very interesting story.
So the government says that it is planning to require
(06:37):
pension funds to invest in private markets and the domestic economy.
It's a move that's widely opposed by the City of
London's investment managers Bloombergs, James Orcock has more now.
Speaker 6 (06:49):
Two weeks ago, Chancellor Rachel Reeves gathered with Britain's major
pension funds to agree to put five percent of their
assets into UK private markets. Bloomberg aster at the time
if she would ever force them into it.
Speaker 7 (07:02):
We don't need to mandate them if people are willing
to sign a voluntary accord, and today we've shown that
that is possible. With seventeen businesses representing ninety percent of
active savers signing up voluntarily to this.
Speaker 6 (07:15):
Now the Chancellor plans to legislate to give herself the
power to set legally binding targets anyway, just in case
some of the CEOs who signed up to the pact
are worried they fit acting in the best interests of
their savers will clash with investing in the government's priorities.
In London, James Wilcock, Bloomberg Radio.
Speaker 2 (07:35):
So those are a few of our top stories for
you this morning. Let's think about the markets then, as
we do see this another tariff bombshell. Mascias specific INDATEX
up by six cents of one percent. You've got the
cost beat up by one point seven percent. Japanese stocks
hired this morning, and the stock futures are flying right now.
Nasdaq futures up almost two percent. S and P five
(07:56):
hundred evenly features up one point six percent. European stop
which is also up by one point three percent this
morning on this ruling by the court in Manhattan. As
for ten yere treasury yields, they trade currently at four
point five percent by a couple of basis points this morning,
and the dollar is also stronger by a quarter of
one percent on the Bloomberg Dollar Spot Index this morning.
(08:20):
There is still, though, you have to lay into the
enthusiasm in markets for the reversal of tariffs, the fact
that it could also set up a major clash effectively
between the US judiciary and the executive branch. So maybe
there's more uncertainty for tariffs to come. Anyway. We're going
to talk a bit more in a moment with all
the analysis about that US Trade Court decision blocking President
(08:42):
Trump's global tariffs, and we'll also get you the market
reaction to it. It's hugely important story. But before we
get to that, there's something else that has caught my
eye this morning. Traders do always love a pithy term
for a big idea, don't they, Tina, there's no alternative
fomo fear of missing out and now Taco Trump always
(09:03):
chickens out. Have you heard this phrase? It has been
adopted by traders investors basically seizing on market declines right
after the president makes tariff threats because they expect him
ultimately to relent. For example, when he did that last
week with Europe and the thread of fifty percent tarifs
and he delayed it. Well, he was asked about this
(09:24):
very issue. A reporter asked President Trump about this, and
he sounded pretty annoyed about this idea, and he went
on to explain why he was doing this and the
idea about negotiation. Have listened to what he said.
Speaker 8 (09:40):
It's called negotiation. You set a number, and if you
go down. You know, if I set a number at
a ridiculous high number and I go down a little bit,
you know a little bit, they want me to hold
that number. One hundred and forty five percent tariff even.
I said, man, that really got up. You know how
it got because of fent and all and many other things,
and you hit it it up. I said, where are
(10:02):
we now? We're one hundred and forty five percent. I said, whoa,
that's high.
Speaker 2 (10:06):
President Trump there, Well, he bristled. Really the idea that
traders sort of see his draconian trade threats as blustered
by any big sell off related to Trump tariff threats.
But of course that was before the tariffs were blocked
by a panel of three judges in the United States.
So one story that really caught my eye today. But
speaking of that, court decision. Let's get more details on it.
(10:30):
Because those judges blocking most of President Trump's global tariffs,
deeming them illegal something that Trump administration is appealing. So
what does the ruling mean? Joining us now our Hong
Kong News Desk editor Jill Desis, Good morning, Jill. Which
tariffs is the court blocking and which remain? Can you
sort through them?
Speaker 9 (10:52):
Yes, Good morning, Caroline. So, as you just said, this
is a pretty significant ruling because it actually does affect
most of the Trump tariffs. This is specifically targeting the
ones that he invoked through executive order. The idea behind
it was that he was declaring the use of some
emergency powers in order to affect these tariffs that the
(11:12):
court is saying was illegal. And so this is mostly
the global flat rate tariff that Trump you know, orchestrated,
also all of those elevated rates on China, some others,
the fentanyl related tariffs on China, Canada and Mexico. So
what it doesn't include are tariffs imposed under different powers.
So there's you know, levees that are unaffected. That included
(11:34):
tariffs on steel, aluminum, and automobiles. But aside from that,
I mean, when we're talking about that big blanket global
tariff rollout that Trump was talking about. That really being
the target of this in what's now in question in
the courts is I think very significant.
Speaker 2 (11:48):
Yeah. Absolutely. This is the IEPA law that President Trump
cited as a justification for the tariffs, so law dating
back to nineteen seventy seven. Look, the court has given
the administration ten calendar days to act, but then the
government's also appealing the ruling. So what does that mean?
Speaker 9 (12:07):
Well, so this is where it gets very murky. So
what that court order says is that the administration has
ten days to you know, basically follow this effectuate they said,
you know, to effectuate the order. But the order also
didn't provide any specific directions of steps that the Trump
administration must take to unwind the tariffs. I mean, you know,
(12:28):
it's it's, you know, sort of this idea of okay, well,
if you've got ten days, that just mean in ten
days time, are all the border agents going to stop
collecting duties on anything crossing over. I mean it's kind
of you know, difficult to imagine how exactly the Trump
administration would enforce that, or you know, whether it wants
to enforce that. I guess for one thing. The other
thing that's really in question here is obviously, because the
(12:49):
Trump administration is appealing this, so the Trade Court in
New York that we've been talking about, that's part of
the US federal court system. So you can imagine a
scenario where, you know, the Trump administration, which is now
doing this, it's appealing this to a federal appeals court.
It could it's something that could end up in front
of the Supreme Court of the United States. And so
really the question there is whether you know, an appellate
(13:10):
court or if it does end up before the Supreme Court,
whether they you know, institute a motion to stay any
lower court decisions so that you know, we can you know,
kind of continue to see how all of this is
going to play up. But again, I think that's just
a long rambling way of saying it's still very murky
on how exactly you know this this all plays out
right now?
Speaker 2 (13:28):
Yeah, okay, So then any response about tariff relief from China,
of course a major issue between the US and China.
Speaker 9 (13:36):
Yeah, I mean, obviously we're still you know, waiting for
a response there. I mean, you know, we're we've obviously
reached out to those relevant channels. But you know, I imagine,
you know, there's got to be something coming down the
pipeline here. I think at this point, Caroline like just
you know, obviously this isn't the end of the tariff story,
and you know, any chance that you know that you know,
(13:56):
a higher court does ultimately say that Trump can go
ahead with these tariffs, but I do think that it's
just worth highlighting that you know, this this still remains
a blow in the sense that, you know, it adds
to that additional uncertainty over whether Trump can enforce you know,
what was really kind of the signature piece of his
tariff agenda. And when you consider the fact that I think,
you know, really two things to mention here. I mean,
(14:17):
first of all, there's still a lot of trade deals
with countries around the world that have not yet been completed,
so a big question as to how this actually enters
the negotiations there. And then also, I mean, you know,
the tariffs were kind of held up. Is this idea
of providing revenue to offset you know, the impact from
tariffs from Trump's you know, big beautiful tax bill. So
I think that there's still a lot to kind of
(14:38):
juggle here, and I think it's going to be really
really interesting to see whether this goes forward and you know,
whether these tariffs actually end up taking effect.
Speaker 2 (14:45):
Yeah, absolutely, and what the reaction film businesses might be
also whether they could be front loading of impults again
for example, I mean the Federal Reserve minutes yesterday. Also
they cut down on the growth expectations for the US
twenty twenty six. But that all of that now looks
again a bit out of date, doesn't it.
Speaker 10 (15:06):
Yeah.
Speaker 9 (15:06):
I mean, you know, it reminds me of back when
you know, originally you were seeing some of these tariffs
go into a factor. You had you know, Trump announcing
you know, just higher tariffs or lower tariffs are changing
his mind on different things. And you know how many
different you know really started investment banks were just revising
their global growth forecasts, you know, left, right and center.
I mean, it does I think just add to this,
(15:27):
you know, continued story of a lot of uncertainty, as
you mentioned, particularly for a lot of those exporters that
have to worry about whether they should continue front loading
things or whether they should change from their strategies. And
I think yeah, just really really adds to that that
overall volatility picture.
Speaker 2 (15:40):
It certainly does. Yeah, indeed, and the Fed minutes also
showed that policymakers were boosting their inflation expectations too. But
as you say, it pointed policymakers pointed to uncertainty, you'll
point into uncertainty. Jill, thank you so much for being
with me this morning, our Hong Kong News Desk editor
Jill de sis Well. Investors, of course, are scrambling to
understand the consequences of the court ruling. Stop futures are
(16:01):
celebrating the dollar's caught a bid, But does it mean
more uncertainty in markets in the days ahead? Our Markets
Live shash is Mary Nicola joins me. Now, Mary, good morning.
How are markets reacting? How do you see what's going
on with investors?
Speaker 1 (16:17):
Oh, as you pointed out, they're celebrating this. It's just
been such a good day for stocks. It's been good
day for resentiments, with equity futures rising. You've seen across
the board green even in Asia. So it has been
a really strong day in terms of the Essentially, the
Trump administration has been dealt a big blow on tariffs,
(16:38):
and the market is realizing that this is great news,
especially for growth not only for growth in the US
but growth globally, So there could be an unwine of
just what expectations are for growth, and that's what's really
fueling sentiment.
Speaker 2 (16:55):
Yeah, does it change things though structurally when it comes
to the US dollar, which has been on this big
leg lower this morning, we're up a little bit. Does
it change the structural set up? So?
Speaker 1 (17:06):
I don't think so, because I think there's still a
lot of uncertainty out there in terms of how this
all plays out. Does of course, now we're in an
environment where the Trump administration is going to appeal with
the courts. Then we're going to see what if it
gets to the Supreme Court, So it's going to be
a long drawn out battle and how it ends ends
(17:28):
will be difficult to gauge as of now. So there's
still and then of course you have an added concern
over you know, does does the Trump administration even abide
by the rules of the court and the and the
court order as we've seen in the in some cases
recently where they haven't. So it's and that would really
(17:49):
bring up concerns about the US's rule of law, the
and and just bring back that Cell America concern the
Sell America trade and concern over policies and how they
are unfolding in the US.
Speaker 2 (18:04):
Yeah, so that's what's happening in the US. But of course,
closer to where you are, the response in China and Asia,
what would you pick out?
Speaker 1 (18:13):
Yeah, I think what has been the clearest thing because
especially in Asia, we've had both the combination of Nvidia
results and then of course this this terriff reprieve. But
I think what's interesting is just how currencies have reacted
because obviously dollar downside was a big, big, big trade
and then of course we had comments from the Bank
(18:35):
of Korea governor who said that FX was discussed. So
there is still a lot of appreciation pressure on these currencies,
especially to fix these the imbalances that they have with
the US, and that Yes, sure today we're seeing the
dollar as a rising star, but it still doesn't take
(18:55):
away the appreciation pressures on the currencies in the region,
and that's not going to go away.
Speaker 10 (19:03):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:09):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 10 (19:15):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (19:21):
Our flagship New York station, is also available on your
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I'm Caroline Hepka and.
Speaker 10 (19:30):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg daybreakurate podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the twenty ninth
of May in London. I'm Caroline Hepcot. Coming up today.
Trump's tariffs blocked. A US trade court rules that most
of the US presidents sweeping global levies are illegal. Markets
gain as traders digest the latest twist in the trade story,
(00:32):
as well as upbeat Nvidia earnings. Plus the UK government
says that it is prepared to use legislation to force
pension funds to invest in private markets and the domestic economy.
Let's start with a roundup of our top stories. A
US trade court has blocked most of President Donald Trump's
global tariffs. A panel of three judges at the US
(00:54):
Court of International Trade in Manhattan issued a unanimous ruling
that they were illegally in posed under an emergency law.
The judges rejected the government's argument that President Trump had
authority to unilaterally issue tariffs under a law intended to
address financial transactions during national emergencies. The court has ordered
(01:16):
the tariffs to be stopped within ten calendar days. We
got reaction from the former IMF Chief economist Olivier Blanchard.
Speaker 3 (01:24):
A not a legal scholar, but it was clear that
the so called reciprocity tariffs, which was ten percent of
cost of ward, doesn't have a national security justification, which
is when he has used to actually put tariffs.
Speaker 2 (01:37):
So I think this one is.
Speaker 3 (01:38):
Probably in trouble and there's going to be legal steps, right,
but I suspect that he will have to think this
one off. You're replaced by something he will basically, I
think tried to get tariffs against particular countries. We'll see
how it goes. It's just one more level of uncertainty.
Speaker 2 (01:58):
Olivier Blanchard, now of the Peas Institute, speaking there to
Bloomberg as President Trump's Justice Department said that it will
appeal the ruling. A White House spokesperson added that it
is not for unelected judges to decide how to properly
address a national emergency. The order covers President Trump's global
ten percent flat tariff increased rates on China and other countries,
(02:21):
as well as fentanyl related levees on China, Canada, and Mexico.
Other tariffs imposed under different powers by President Trump, including
on steel, aluminium, and vehicles remain in place now. The
court's ruling has led to a surge in stock markets,
the S and P five hundred and Nasdaka futures gaining
(02:43):
one point six percent and two percent, respectively, while shares
in Asia are rising zero point six percent on the news. Meanwhile,
the dollar strengthened on the decision, but it remains significantly
down from its February high. Timothy Murray is Chief Asia
Pacific equitiesash is at Goldman Sachs. He's urging caution on
the possible upside for markets.
Speaker 4 (03:05):
With the SMP and other global market serving rallied well
over twenty percent from the lows in early April. April seventh,
the SMP aple night for the mscaa Asia Pacific Extrapan Index,
a lot of optimism has already been priced in, so
I think it's we have to say this is a
fundamentally constructive development from the standpoint of lowering tariff risk,
but not all the risk is off the table and
(03:26):
markets have well priced there.
Speaker 2 (03:28):
Timothy Murray as that while this might be considered a
body blow, it's not the final rendering. Now. The comments
come after President Trump's century high tariffs and his plan
to cut taxes in the US, which has spooked investors
who caught onto a Cell America trade and mid concerns
that the trade will would hurt global growth. Now, in
(03:51):
other news this morning, billionaire Elon Musk has announced that
he's stepping down from President Trump's administration. The Tesla CEO
shared on x yesterday that his time i'm as a
formal advisor in the White House is over. By law,
Musk's status as a temporary government worker was set to
expire as soon as tomorrow, the exact date determined by
the number of days worked. This was raised questions about
(04:13):
the Department of Government efficiency effort that he spearheaded, which
fell short of its own high expectations for cost savings.
His departure comes shortly after Musk criticized the Presiden's flagship
tax bill in a recent interview, and after he told
Tesla investors in April that he would devote more time
to the firm. In earnings news, n Vidia CEO Jensen
(04:36):
Wong says that Chinese AI rivals are taking on US
firms as their technology develops. Speaking to Blueberg, he warned
the companies like Huawei and others are filling the void
left by the American departure from the Chinese market.
Speaker 4 (04:53):
Without American technology, the availability of Chinese technology will fill
the market.
Speaker 2 (05:00):
And so you know, whatever we offer has.
Speaker 4 (05:02):
To at least at least be competitive and has to
add value to the market.
Speaker 2 (05:07):
That was Nvidia's Jensen Wong speaking their too Bloomberg. He
went on to highlight the shrinking gap between US products
and their Chinese alternatives, pointing to similarities between Huilawei's latest
AI chip and Nvidia's own Age twenty product. US restrictions
on experts to China have effectively locked Nvidia out of
(05:27):
the country, and this is the largest market for chips
in the world, causing expected losses of eight billion dollars
in sales for Nvidia this quarter alone. Bed officials back
to patient stance on interest rates, blaming the rising risk
from tariffs to both inflation and unemployment in the US.
The minutes from the Central Bank's May meeting pointed to
(05:49):
an increase in economic uncertainty since April. Federal Reserve reporter
Amara mcquai says that the document underlines that wait and
see approach from many policy made and.
Speaker 5 (06:01):
The minutes underscore once again just how much tariffs are
complicating the economic outlook and how focused FED officials are
on ensuring that teriffs do not lead to persistent inflation
or inflation expectations becoming unchecked.
Speaker 2 (06:14):
FED reporter Amara Omaqui speaking there, even with the latest
tariff reprieve, duties on imports do remain historically elevated, and
many businesses have put hiring and investment decisions on hold
in the US. So that's on those FED minutes, as
I say here. In the UK though, very interesting story.
So the government says that it is planning to require
(06:37):
pension funds to invest in private markets and the domestic economy.
It's a move that's widely opposed by the City of
London's investment managers Bloombergs, James Orcock has more now.
Speaker 6 (06:49):
Two weeks ago, Chancellor Rachel Reeves gathered with Britain's major
pension funds to agree to put five percent of their
assets into UK private markets. Bloomberg aster at the time
if she would ever force them into it.
Speaker 7 (07:02):
We don't need to mandate them if people are willing
to sign a voluntary accord, and today we've shown that
that is possible. With seventeen businesses representing ninety percent of
active savers signing up voluntarily to this.
Speaker 6 (07:15):
Now the Chancellor plans to legislate to give herself the
power to set legally binding targets anyway, just in case
some of the CEOs who signed up to the pact
are worried they fit acting in the best interests of
their savers will clash with investing in the government's priorities.
In London, James Wilcock, Bloomberg Radio.
Speaker 2 (07:35):
So those are a few of our top stories for
you this morning. Let's think about the markets then, as
we do see this another tariff bombshell. Mascias specific INDATEX
up by six cents of one percent. You've got the
cost beat up by one point seven percent. Japanese stocks
hired this morning, and the stock futures are flying right now.
Nasdaq futures up almost two percent. S and P five
(07:56):
hundred evenly features up one point six percent. European stop
which is also up by one point three percent this
morning on this ruling by the court in Manhattan. As
for ten yere treasury yields, they trade currently at four
point five percent by a couple of basis points this morning,
and the dollar is also stronger by a quarter of
one percent on the Bloomberg Dollar Spot Index this morning.
(08:20):
There is still, though, you have to lay into the
enthusiasm in markets for the reversal of tariffs, the fact
that it could also set up a major clash effectively
between the US judiciary and the executive branch. So maybe
there's more uncertainty for tariffs to come. Anyway. We're going
to talk a bit more in a moment with all
the analysis about that US Trade Court decision blocking President
(08:42):
Trump's global tariffs, and we'll also get you the market
reaction to it. It's hugely important story. But before we
get to that, there's something else that has caught my
eye this morning. Traders do always love a pithy term
for a big idea, don't they, Tina, there's no alternative
fomo fear of missing out and now Taco Trump always
(09:03):
chickens out. Have you heard this phrase? It has been
adopted by traders investors basically seizing on market declines right
after the president makes tariff threats because they expect him
ultimately to relent. For example, when he did that last
week with Europe and the thread of fifty percent tarifs
and he delayed it. Well, he was asked about this
(09:24):
very issue. A reporter asked President Trump about this, and
he sounded pretty annoyed about this idea, and he went
on to explain why he was doing this and the
idea about negotiation. Have listened to what he said.
Speaker 8 (09:40):
It's called negotiation. You set a number, and if you
go down. You know, if I set a number at
a ridiculous high number and I go down a little bit,
you know a little bit, they want me to hold
that number. One hundred and forty five percent tariff even.
I said, man, that really got up. You know how
it got because of fent and all and many other things,
and you hit it it up. I said, where are
(10:02):
we now? We're one hundred and forty five percent. I said, whoa,
that's high.
Speaker 2 (10:06):
President Trump there, Well, he bristled. Really the idea that
traders sort of see his draconian trade threats as blustered
by any big sell off related to Trump tariff threats.
But of course that was before the tariffs were blocked
by a panel of three judges in the United States.
So one story that really caught my eye today. But
speaking of that, court decision. Let's get more details on it.
(10:30):
Because those judges blocking most of President Trump's global tariffs,
deeming them illegal something that Trump administration is appealing. So
what does the ruling mean? Joining us now our Hong
Kong News Desk editor Jill Desis, Good morning, Jill. Which
tariffs is the court blocking and which remain? Can you
sort through them?
Speaker 9 (10:52):
Yes, Good morning, Caroline. So, as you just said, this
is a pretty significant ruling because it actually does affect
most of the Trump tariffs. This is specifically targeting the
ones that he invoked through executive order. The idea behind
it was that he was declaring the use of some
emergency powers in order to affect these tariffs that the
(11:12):
court is saying was illegal. And so this is mostly
the global flat rate tariff that Trump you know, orchestrated,
also all of those elevated rates on China, some others,
the fentanyl related tariffs on China, Canada and Mexico. So
what it doesn't include are tariffs imposed under different powers.
So there's you know, levees that are unaffected. That included
(11:34):
tariffs on steel, aluminum, and automobiles. But aside from that,
I mean, when we're talking about that big blanket global
tariff rollout that Trump was talking about. That really being
the target of this in what's now in question in
the courts is I think very significant.
Speaker 2 (11:48):
Yeah. Absolutely. This is the IEPA law that President Trump
cited as a justification for the tariffs, so law dating
back to nineteen seventy seven. Look, the court has given
the administration ten calendar days to act, but then the
government's also appealing the ruling. So what does that mean?
Speaker 9 (12:07):
Well, so this is where it gets very murky. So
what that court order says is that the administration has
ten days to you know, basically follow this effectuate they said,
you know, to effectuate the order. But the order also
didn't provide any specific directions of steps that the Trump
administration must take to unwind the tariffs. I mean, you know,
(12:28):
it's it's, you know, sort of this idea of okay, well,
if you've got ten days, that just mean in ten
days time, are all the border agents going to stop
collecting duties on anything crossing over. I mean it's kind
of you know, difficult to imagine how exactly the Trump
administration would enforce that, or you know, whether it wants
to enforce that. I guess for one thing. The other
thing that's really in question here is obviously, because the
(12:49):
Trump administration is appealing this, so the Trade Court in
New York that we've been talking about, that's part of
the US federal court system. So you can imagine a
scenario where, you know, the Trump administration, which is now
doing this, it's appealing this to a federal appeals court.
It could it's something that could end up in front
of the Supreme Court of the United States. And so
really the question there is whether you know, an appellate
(13:10):
court or if it does end up before the Supreme Court,
whether they you know, institute a motion to stay any
lower court decisions so that you know, we can you know,
kind of continue to see how all of this is
going to play up. But again, I think that's just
a long rambling way of saying it's still very murky
on how exactly you know this this all plays out
right now?
Speaker 2 (13:28):
Yeah, okay, So then any response about tariff relief from China,
of course a major issue between the US and China.
Speaker 9 (13:36):
Yeah, I mean, obviously we're still you know, waiting for
a response there. I mean, you know, we're we've obviously
reached out to those relevant channels. But you know, I imagine,
you know, there's got to be something coming down the
pipeline here. I think at this point, Caroline like just
you know, obviously this isn't the end of the tariff story,
and you know, any chance that you know that you know,
(13:56):
a higher court does ultimately say that Trump can go
ahead with these tariffs, but I do think that it's
just worth highlighting that you know, this this still remains
a blow in the sense that, you know, it adds
to that additional uncertainty over whether Trump can enforce you know,
what was really kind of the signature piece of his
tariff agenda. And when you consider the fact that I think,
you know, really two things to mention here. I mean,
(14:17):
first of all, there's still a lot of trade deals
with countries around the world that have not yet been completed,
so a big question as to how this actually enters
the negotiations there. And then also, I mean, you know,
the tariffs were kind of held up. Is this idea
of providing revenue to offset you know, the impact from
tariffs from Trump's you know, big beautiful tax bill. So
I think that there's still a lot to kind of
(14:38):
juggle here, and I think it's going to be really
really interesting to see whether this goes forward and you know,
whether these tariffs actually end up taking effect.
Speaker 2 (14:45):
Yeah, absolutely, and what the reaction film businesses might be
also whether they could be front loading of impults again
for example, I mean the Federal Reserve minutes yesterday. Also
they cut down on the growth expectations for the US
twenty twenty six. But that all of that now looks
again a bit out of date, doesn't it.
Speaker 10 (15:06):
Yeah.
Speaker 9 (15:06):
I mean, you know, it reminds me of back when
you know, originally you were seeing some of these tariffs
go into a factor. You had you know, Trump announcing
you know, just higher tariffs or lower tariffs are changing
his mind on different things. And you know how many
different you know really started investment banks were just revising
their global growth forecasts, you know, left, right and center.
I mean, it does I think just add to this,
(15:27):
you know, continued story of a lot of uncertainty, as
you mentioned, particularly for a lot of those exporters that
have to worry about whether they should continue front loading
things or whether they should change from their strategies. And
I think yeah, just really really adds to that that
overall volatility picture.
Speaker 2 (15:40):
It certainly does. Yeah, indeed, and the Fed minutes also
showed that policymakers were boosting their inflation expectations too. But
as you say, it pointed policymakers pointed to uncertainty, you'll
point into uncertainty. Jill, thank you so much for being
with me this morning, our Hong Kong News Desk editor
Jill de sis Well. Investors, of course, are scrambling to
understand the consequences of the court ruling. Stop futures are
(16:01):
celebrating the dollar's caught a bid, But does it mean
more uncertainty in markets in the days ahead? Our Markets
Live shash is Mary Nicola joins me. Now, Mary, good morning.
How are markets reacting? How do you see what's going
on with investors?
Speaker 1 (16:17):
Oh, as you pointed out, they're celebrating this. It's just
been such a good day for stocks. It's been good
day for resentiments, with equity futures rising. You've seen across
the board green even in Asia. So it has been
a really strong day in terms of the Essentially, the
Trump administration has been dealt a big blow on tariffs,
(16:38):
and the market is realizing that this is great news,
especially for growth not only for growth in the US
but growth globally, So there could be an unwine of
just what expectations are for growth, and that's what's really
fueling sentiment.
Speaker 2 (16:55):
Yeah, does it change things though structurally when it comes
to the US dollar, which has been on this big
leg lower this morning, we're up a little bit. Does
it change the structural set up? So?
Speaker 1 (17:06):
I don't think so, because I think there's still a
lot of uncertainty out there in terms of how this
all plays out. Does of course, now we're in an
environment where the Trump administration is going to appeal with
the courts. Then we're going to see what if it
gets to the Supreme Court, So it's going to be
a long drawn out battle and how it ends ends
(17:28):
will be difficult to gauge as of now. So there's
still and then of course you have an added concern
over you know, does does the Trump administration even abide
by the rules of the court and the and the
court order as we've seen in the in some cases
recently where they haven't. So it's and that would really
(17:49):
bring up concerns about the US's rule of law, the
and and just bring back that Cell America concern the
Sell America trade and concern over policies and how they
are unfolding in the US.
Speaker 2 (18:04):
Yeah, so that's what's happening in the US. But of course,
closer to where you are, the response in China and Asia,
what would you pick out?
Speaker 1 (18:13):
Yeah, I think what has been the clearest thing because
especially in Asia, we've had both the combination of Nvidia
results and then of course this this terriff reprieve. But
I think what's interesting is just how currencies have reacted
because obviously dollar downside was a big, big, big trade
and then of course we had comments from the Bank
(18:35):
of Korea governor who said that FX was discussed. So
there is still a lot of appreciation pressure on these currencies,
especially to fix these the imbalances that they have with
the US, and that Yes, sure today we're seeing the
dollar as a rising star, but it still doesn't take
(18:55):
away the appreciation pressures on the currencies in the region,
and that's not going to go away.
Speaker 10 (19:03):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:09):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 10 (19:15):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (19:21):
Our flagship New York station, is also available on your
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I'm Caroline Hepka and.
Speaker 10 (19:30):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
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