June 6, 2025 • 25 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Differences between US President Donald Trump and Elon Musk exploded Thursday into an all-out public feud.
(2) Tesla’s shares sank as Elon Musk and President Donald Trump’s simmering feud devolved into a public war of words between two of the world’s most powerful people.
(3) US President Donald Trump and Chinese President Xi Jinping on Thursday agreed to further trade talks aimed at resolving disputes over tariffs and supplies of rare earth minerals at the heart of tensions between the world’s two largest economies.
(4) German Chancellor Friedrich Merz successfully navigated a 40-minute meeting with Donald Trump in the Oval Office without falling victim to the public humiliation the American president has doled out to other leaders — even though both Germany and Europe are two of Trump’s perpetual irritants.
(5) Christine Lagarde just unveiled an outlook that may be as good it gets for the euro zone.
(6) Zia Yusuf resigned as chairman of Reform UK after 11 months in the job, delivering a blow to its leader, Nigel Farage, who has promised to build and professionalize the insurgent party in a quest for power at the next general election.
Podcast Conversation: A Mega Fun Run Becomes a Finance Bro Blood Sport
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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 Day Bak You podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the sixth of June in London. I'm Caroline Hepka.
Speaker 3 (00:18):
And I'm Stephen Carroll. Coming up today. Elon Musk and
Donald Trump trade insults and threats in an extraordinary and
very public war of words.
Speaker 2 (00:27):
More than one hundred and fifty billion dollars is wiped
off Tessa's market value as investors fear retaliation.
Speaker 3 (00:34):
Plus unraveling global trade. The Scottish tweed industry shows the
collateral damage that tariffs are causing around the world.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:45):
US President Donald Trump and Elon Musk have publicly traded
barbs and insults as the two men's formidable political relationship
disintegrated in a matter of hours. The rift has been
widening after Musk on Tuesday called Trump's signature tax and
sp banding bill a disgusting abomination. That was followed by
these comments yesterday from the US President.
Speaker 4 (01:06):
I'm very disappointed in Elon. I've helped Elon a lot.
Elon and I had a great relationship. I don't know
if we will anymore. I was surprised because you were here.
Everybody in this room practically was here. As we had
a wonderful send off, he said wonderful things about me.
You couldn't have nicer, said the fascinate. He's worn the hat.
(01:26):
Trump was right about everything, and I am right about
the great, big, beautiful Bill.
Speaker 3 (01:32):
By mid afternoon, Musk was posting on his X platform
that Trump would never have won back the White House
without his help. Then, as simmering tensions boiled over, the
President called the billionaire crazy and threatened to cancel his
company's federal contracts. Musk shot back, pledging to decommission the
Dragon spacecraft that underpains flights to the International Space Station.
Speaker 2 (01:54):
Now, the acrimonious back and forth between Musk and Trump
represents a remarkable falling out between two men who spent
months working together to reshape the US federal government. This
after the Tesla CEO poured hundreds of millions of dollars
into the President's election campaign. However, there are some signs
of relaxational conciliation of sorts. Elon Musk yesterday evening signaled
(02:17):
on social media that he was open to cooling tensions
with Trump, and Politico is now reporting that White House
aids have scheduled a call with Musk in an effort
to avoid further escalation.
Speaker 3 (02:30):
That bickering wiped thirty four billion dollars from Elon Musk's
personal net worth in one day. Tesla shares fell by
fourteen percent yesterday, wiping roughly one hundred and fifty two
billion dollars off the value of the company. Russ Gerber,
president's and CEO of Gerbert Kowarski, said, one of Tesla's
earliest investors, explains why he was one of those selling
(02:51):
shares in Musk's car company.
Speaker 5 (02:53):
This is a disaster for Mask. I don't know if
I can spin it in a positive way because it's
just so beyond any intelligent businessman's behavior would be. I
can't imagine after putting Trump in there, that he would
then turn Trump into an enemy of all things because
(03:13):
he's still the president of the United States.
Speaker 3 (03:15):
Gerbarada that he expected. SpaceX, one of Musk's private ventures,
had its evaluation cut in half. The massive selloff marks
the second largest loss ever made by one person, the
largest also being Elon Musk in twenty twenty one. Mosque
is still the world's richest person, with a vast three
hundred and thirty four point five billion dollar fortune and
(03:36):
has endured any number of routes before well.
Speaker 2 (03:40):
The fight played out on social media came as persident
Trump and Chinese present Shijingping agreed to further trade talks
on a phone call. Trump acknowledged the relationship had gotten
quote a little off track on that call and said
that it was an honor to have Chinese students. White
House per Secutory Caroline Levitt told Fox News the conversation
focused on trade and rare earth minerals.
Speaker 6 (04:03):
This was a good productive call and he has always
enjoyed a respectful relationship with China's president in China needs
the United States of America and our markets, and we
also have a strategic interest in China's economy in market
as well. And so that's why both leaders decided today
that their trade officials will continue to meet to discuss
(04:26):
this important bilateral relationship.
Speaker 2 (04:29):
Lhite House Press Secretary Caroline Levett, that is, speaking to
folks News. China's Foreign ministry says that the call was
initiated at President Trump's request. It comes just a day
after the US President lamented again on social media that
his counterpart was extremely hard to make a deal with.
Speaker 3 (04:46):
Germany's Chancellor of Frederick Mertz, successfully navigated a forty minute
meeting with Donald Trump and the Oval Office. The two
diverged on the issue of how to end the war
in Ukraine, with Mertz saying the West should look to
stop it very soon.
Speaker 7 (05:00):
I told the President before we came in that he
is the key person in the world who can really
do that now by putting pressure on Russia. And we
will have this debate later on again how we can
proceed jointly between the Europeans and the Americans. And I
think we are all in that we are having the
(05:22):
duty to do something on that now to stop it.
After three and a half years.
Speaker 3 (05:27):
Germany's Chancellor Frederick Mertz risked the trip to Washington, despite
of the world leaders facing public humiliations in the Oval Office.
Yes President meanwhile compared the war in Ukraine to a
fight between two children, saying sometime you let sometimes you
let them fight for a while before they can be
pulled apart.
Speaker 2 (05:45):
Now from that, to the ECB president Christine Legard, has
unveiled an upbeat outlook for the Eurozone. Speaking after the
European Central Bank cut interest rates again under two percent
on Thursday, Leguard offered an optimistic assessment of the bloc's
growth prospects.
Speaker 1 (06:01):
Higher tariffs and a stronger Euro are expected to make
it harder for firms to export. High uncertainty is expected
to weigh on investment, but at the same time, several
factors are keeping the economy resilient and should support the
growth over the medium term.
Speaker 2 (06:20):
Christine Legarde added that she believes the central banks policy
is in a good position to navigate the uncertain conditions,
in her words, that are likely to come from global
trade and a jump in spending in Europe. The ECB
described inflation as currently around its two percent targets.
Speaker 3 (06:37):
Zia Usaf has resigned as chairman of Reform UK, saying
he no longer believed working to get the party elected
was a good use of his time. His departure comes
a day after he criticized the party's newest MP for
asking if the Prime Minister planned to ban Berker's Reforms.
Leader Nija Farash Toldgibini's Usuf was very talented and his
(06:59):
resident nation marks a last for public life.
Speaker 8 (07:03):
He's brilliant when it comes to data, he's brilliant when
it comes to a technical side of things. You know,
he really is in a class of his own. And frankly,
I'm sad that he's going. I'm sad for the pasty
he leaves a gap. I'm sad for him actually.
Speaker 3 (07:23):
Nigel Ferrau speaking there in the latest high profile exit
for a forum, which currently tops opinion polls in Britain.
Former Reform MP Rupert Lowe was asted in March over
allegations that he made verbal threats against Yusef And.
Speaker 2 (07:37):
Those were a few of our top stories and for
you this morning. So in terms of the markets, then
the Nasdaq yesterday closed down by one percent, Tesla's share
price top fourteen point three percent on the feud between
Musk and Trump. S and P five hundred EMII futures
and aws that future this morning are pointing high. European
stock features though are lower European stock so yesterday we're
(07:58):
actually mostly driven by ECB and Christine Lagarde saying that
basically the bank may be nearing the end of the
rate cutting cycle, basically closing up before the real spat
took off in the US. Asian stocks this morning have
been fluctuating. We've got another major data point to think
about today, the US job support non fan pay rolls
(08:18):
expected to see hundred and twenty six thousand jobs added
in the US. This as Japan's long yields continuing to ease.
WHI crude futures pretty quiet this morning. Sixty three dollars
seventeen the bow and gold is up by seven tenths
of one percent. Also the dollar little change. So those
are the markets.
Speaker 3 (08:39):
In a moment. More on the social media blow up
Atunity Eilon Musk and Donald Trump, and the US President's
conversations with the leaders of China and Germany. But in
case our blood pressure wasn't high enough scrolling social media.
In the last twenty four hours, our finance reporter Laura
Noonan's been writing about another high pressure event in Frankfurt.
It's the JP Morgan Corporate Challenge, which she says is
(08:59):
argument be the biggest social mixer in finance. Fifty thousand
people taking part in a three and a half mile
run through the German financial capital. Now, Laura, who's a
keen runner herself, actually right that this could be dismissed
as a low stress amble. Lots of people actually walk
or jog the course, but the global financial community seems
it as a blood sport. In her words, but some
banks rumored to hire athletes to improve their chances. No,
(09:23):
She points to one example. One, Yeah, the Italian Olympic
triathletes hired by JP Morgan in February. Now his bosses
and says he was not hired for this reason, but
he did finish fifth in the race. It's an a
actually the dates back to nineteen seventy seven to a
run in Central Park in New York, which is why
it's three and a half miles, which is bit of
an odd distance as well.
Speaker 2 (09:42):
Even I might be able to manage that, but having
to be amazingly good at your job, and also some
other field may be running or music or whatever it
might be that you can do. I think it's just
amazing because he have to have that second string to
your boat.
Speaker 3 (09:57):
I mean, you're a runner, yeah, but I don't think
I fancy this fifty people. No thanks, anyway, there's some
great stories in there. You can read Lauras full report
and the Business Week daily newsletter. You can sign up
for it at bloomberg dot com Newslatters.
Speaker 2 (10:09):
Well, let's get into the very public escalation of the
row between the President of the United States and the
world's richest man. Is Donald Trump and Elon Musk traded
blows and threats on social media. Our senior US Government
editor Derek Willbank towards this now for more. Good morning, Derek,
bring us up to speed. What has happened between Elon
(10:30):
Musk and Donald Trump.
Speaker 9 (10:32):
Well, there was a major explosion in their relationship, I
don't know any real other way to put it, which
denigrated all the way down to accusations of familiarity with
Jeffrey Epstein and all sorts of other things. It got
very personal, very quickly. Trump meanwhile smashing back that maybe
(10:55):
the best way to cut the deficit would be to
end all of the contracts with Elon Musk's many come
and eese. This is gone from in eleven months, from
Musk endorsing Trump to Musk putting in nearly three hundred
million dollars of his own money to elect Trump and
Republicans up and down the ballot, winning universal control of Washington,
(11:18):
then becoming the face of Trump's efforts to slash the
federal bureaucracy. Both men cything through the federal government together,
and then it just sort of ending, not necessarily in
a way that either probably would have wanted, but certainly
in a way that imperils both of their big flagship
(11:42):
projects right now. Certainly Musk, you mentioned the the damage
to Tesla's shares and thus Musk's net wealth. At the
same time, Musk is the principal opponent of on the
right anyway, of Trump's big Beautiful Bill, which is the
centerpiece of his legislative agenda. So there's a lot at
(12:02):
stake for both of those And indeed we have seen
I'm sitting in Singapore in my day so far, some
efforts to try and I guess, contain this blast, find
ways to de escalate, find some off ramps for both
of these guys so that they can kind of limit
the damage and keep going on.
Speaker 7 (12:21):
There.
Speaker 9 (12:22):
Musk did pull back a little bit from his threat
to cancel the Dragon Shuttle program that NASA uses on
to uses to ferry astronauts to and from the space station.
He did pull back from that threat to cancel there.
We're waiting to hear from the President there and We've
seen a report that White House AIDS are trying to
(12:44):
schedule a call with Musk for tomorrow. So lots to
play here. Lots may still happen, But a pretty remarkable
explosion in American politics yesterday.
Speaker 3 (12:59):
Yeah, it certainly was. It looks like it's not over
by those latest reports. More ensuing perhaps later on in
the coming hours. You talked a bit about the effect
on the businesses as well. We saw that big move
in share prices too. But from a political point of view,
the budget debate still continuing in Washington. Is the tax
and spending bill in danger? In more danger than it
(13:22):
was yesterday?
Speaker 9 (13:23):
Well, it's certainly not in better shape than it was yesterday.
What I would say is that the math on that
remains the same. Senate lawmakers, several of them want to
cut a lot more than they're cutting right now in
the bill. Musk had mentioned on that the deficit impacts
(13:43):
of this legislation, about two point four trillion dollar increase
in US deficits over ten years it's projected to be,
would more than dwarf all of the most optimistic readings
of the savings that Dog had been able to do
at as Musk said great personal cost to him. So
there had been some spending hawks on the right who
(14:07):
were saying, look, we want to have this score better.
It needs to not increase the deficit so much or
even at all. At the same time, House Republicans are
very cognizant of the fact that they barely pass this
legislation in the first place. Right House Speaker Mike Johnson
compared this to his party whip strategy to tightroping across
(14:32):
the Grand Canyon on a piece of dental floss. He
doesn't have much margin, and there are people in his
conference who do not want to cut anymore, as well
as others in his conference who want to cut a
lot more, and you've got to find a balance point there.
So Elon Musk standing on the side firebombing this on
social media is not very helpful, especially when he's speaking
(14:54):
into the lead that Democrats have said, which is that
this thing is going to expl load the deficits. So
if you care about debt, if you care about deficits,
as a lot of Republicans and the bond market seem to,
then this bill is a problem. All of that is
bad for Trump, and all of that is why a
lot of aids to both of these guys are trying
(15:16):
to find ways that they can kind of back up
from the ledge, take the temperature down a little bit,
and have these two very proud billionaires find a way
to get back along again.
Speaker 2 (15:30):
Derek, thank you so much for being with us this morning,
our senior US Government editor, Derek Wallback. I mean, I'll
add to that our chief economists for Bluemberg Economics, Tom Orlick,
saying the fight under scores the potential vulnerabilities that follow
from concentrating industrial and government power in one person, i e.
Elon Musk. So yeah, lots could potentially come from this.
Speaker 3 (15:54):
Well, while those exchanges we're playing out with Elon Musk yesterday,
Donald Trump was also holding high level diplomatic converse. He
spoke to Chinese President Cheatingping for the first time since
it's inauguration, and met Germany's Chancellor at Friedrich Merritz in
the Oval office as well. Our EMEA and news director
Rasalad Mathson is with us for more so ras Trump
finally speaking to Cheatingping, did it produce any turning point
(16:16):
in those relations that have become fraud yet again?
Speaker 10 (16:19):
Well, yeah, because yet yet again, it seems the thing
that has broken the ice with US and China is
a direct conversation between Donald Trump and Cgping, which was
a hallmark also of Donald Trump's first term as president,
is those two get on the phone or they meet
for dinner somewhere around the world, and they managed to
get at least a temporary truce. Often it didn't last,
(16:42):
but at least it did cool things for a bit,
And as we saw with this phone call yesterday, they've
agreed to have further trade talks. They're going to have
high level representatives from either side meet and talk about trade.
They seem to have put a little bit of a
stopper on the tensions over minerals, which was really the
key thing from the US perspective, and it sounds like
(17:04):
they have at least created a pathway for further talks,
which is the biggest thing of all is to have
those conversations going and to get into some of the
detail in these further conversations. So you can see from
the market reaction there was certainly a sense that this
has been a little bit of a breakthrough between the
two countries. Again, very complex issues though to deal with
(17:27):
on the trade side, but also on the security side,
on the tech side, and there's a lot of issues there.
Speaker 5 (17:33):
So will this last.
Speaker 10 (17:34):
It's very hard to know, but the fact that they've
created a pathway for talks is quite significant.
Speaker 2 (17:39):
So we bounce from then China and the US to
the US and Germany. And what was such an enormously
busy day, wasn't it? In terms of the White House.
Friedrich Mertz, for his part, does seem to have gotten
off lightly with his encounter with President Chomp. It didn't
seem to produce any progress on efforts to end the war.
Speaker 10 (18:00):
Though, yes it didn't, although for Merse it was probably
just a matter of trying to survive that meeting, given
that other leaders have really fallen a foul of those
moments in the White House, and that was perhaps the
tactic was to let Donald Trump do most of the talking,
to praise him, and not to say too much and
not to draw his eye in any way. But as
(18:21):
you said, they did disagree a little bit on Ukraine.
Donald Trump really talking about Ukraine in a way like
a sporting match, that he thinks that the two sides
might need to fight it out for a little while longer,
sort of alluding to a hockey game, whereas Fridrick Morse
came in and said, well, very clearly, this is Vadimir
Putin who started this war. But they didn't really talk
(18:43):
about next steps. They didn't talk about where the conversations
might be going between Russia and Ukraine towards the cease fire.
They didn't talk about where the US would stand in
all of that. I mean, Donald Trump has really been
in a way washing his hands of it to some
extent and saying that he thinks that Russia and Ukraine
need to sort it out directly. So there was no
(19:05):
real progress on that front, but neither was there any
blow up. That was probably to some extent a result
for Frederick Morse.
Speaker 3 (19:12):
But on the trade front, actually the segmals seemed relatively
positive compared to what Donald Trump is indicated towards trade
with the EU in the past.
Speaker 10 (19:20):
Well, that's right, and in fact there were some fairly
warm words from Donald Trump on the trade side with
Europe and with Germany. And that comes as the mud
music has been improving a little bit. In general, we've
seen the retric from both European officials and the US
in recent days talking about things going in a better direction,
talking about momentum in a way, despite the fact that
(19:43):
we've got these new US levees on steel and aluminum,
which obviously have not resonated particularly well with the EU.
Speaker 5 (19:51):
So there's a lot of.
Speaker 10 (19:52):
Positive rhetoric going around and meetings that have been happening,
including with the US trade representative Jamison Korea the EU
representative Eskovich. But the question is is that actually leading
to anything tangible? Are we seeing progress on a whole
bunch of complex issues in the relationships and we're not
actually seeing signs of that so far, because the red
(20:15):
lines for either side are pretty clear and they remain.
So we're seeing better rhetoric, but we're not actually seeing
signs of how that's going to lead to a breakthrough
in any kind of progress towards a trade framework. So
at least a better environment again for the conversation, but
we kind of need to see the tangible start to
emerge here.
Speaker 2 (20:34):
Okay, Rolls, thank you so much for being with us
this morning and for your thoughts then on those important
meetings at President Trump with she on the phone and
with the German Charles of Friedrich MRT. So that is
our EMEA News director Roslyn Matheson well.
Speaker 3 (20:49):
To another aspect of the trade story. Now, Donald Trump
is famously fond of Scotland, where his mother was born.
It was ten percent global tar if. It's nonetheless ripping
through the niche business of making Harris tweed, one of
the distinctive fabrics of Scotland. Are UK economy reporter Arena
Angel has been reporting on this with a story that
(21:09):
reaches as far as the far flom Hebrides as well
or in a good morning how are the tariffs affecting
these specialist businesses in Scotland?
Speaker 11 (21:16):
Well, good morning, So specialist is the word. Harris tweett
is sort of the Champagne of woolen fabrics if you want,
because it can only be made on the remote Scottish
Hebridean Islands and it has to be woven at home
by one of the just one hundred and fifty weavers
or so on the Isle of Lewis, which is the
largest of these islands, and many of these weavers have
(21:37):
been doing this four generations. Of course, Trump's mother, Maryann McLoyd,
used to be one of the islanders, so she grew
up on Lewis before emigrating age seventeen to New York
in nineteen thirty. But now her Son's tariffs risk appending
really the livelihoods of islanders and the local economy. So
the tweed industry is a huge source of employment on
(21:59):
this island where there are only nine people per square kilometer.
It helps bring in lots of tourists on cruise ships
who then spend being in restaurants and shops. But it's
also ultimately a way of life that dates back to
the eighteenth century. So and all of that is part
of the collateral damage of Trump's trade war, because you know,
(22:19):
tweed is tiny as exports of the US compared to
the total exports, but it's still subject to the same
ten percent tariffs.
Speaker 2 (22:28):
Yeah, what an interesting business to be getting a grip
on in terms of other markets. Then, for Harris, tweed
can can these islanders look for other markets elsewhere and
try to avoid the tariffs that way, As you say,
it's very few people and yet it's foundational so important
(22:49):
to their way of life.
Speaker 11 (22:50):
Yeah, it's very few people. And you know, Americans are
the top buyers of tweed, and the concern is that
American brands will sort of stop buying tweed or will
buy less of it because of higher costs and just
greater uncertainty. And you know that might mean less work
for weavers and rural communities, so those people might you know,
choose to leave the island to work in oil and
(23:12):
gas or constructions like many others before them. So to
counter this, the mills, especially Harrow Street Hebrides which is
the main mill, is now trying to strengthen links with
places like South Korea which is as fastest growing market,
or Japan, so they will visit the Japan later this
year as part of a trade delegation. However, quickly pivoting
(23:33):
to new markets, it's really not easy for a business
where completing an order can take up the three months.
They also have to put an extra efforts to crack
down on counterfeits and just raise brand awareness in these
newer markets like China, because what is special about the
US is that Harrow Stweet has really has history with
the US. Getting a tailored tweet suit was a rite
(23:55):
of passage for young men in the post war era,
and you know the Kennedys loved it. Ralph Lauren made
it part of his iconic preppy American look and that's
really hard to replicate.
Speaker 3 (24:07):
I mean, it's a fascinating story and that history is
so important as well. But I wonder when you spoke
to people on your trip to the Hebrides for this story,
they were quite critical of Donald Trump.
Speaker 11 (24:19):
Well that's that's very true. So Trump is not liked
at all on these islands. One of the first things
I saw when I visited was this anti Trump banner
saying shame on you, Donald John And then a taxi
driver told me how embarrassed she was when she was
asked to drive a group of Trump supporters, you know,
with Maga T shirts, to Trump's mother's ancestral home and
(24:41):
take a photo of them in front of it. So,
you know, despite boasting about his golf courses and his
Scottish heritage, Trump spent less than three hours on the
island on his last visit in twenty eighteen. I think
it was eight. Sorry, and really the islanders did not
like that. These are very proud people. So you know,
if Trump visits, sure he will be welcome, but he
(25:03):
will have to work extra hard to win them over.
Speaker 3 (25:08):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (25:15):
Look for us on your podcast feed every morning, on Apple, Spotify,
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Speaker 3 (25:21):
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Speaker 2 (25:26):
Our flagship New York station, is also available on your
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Speaker 3 (25:34):
I'm Caroline Hepka and 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 (00:09):
This is the Bloomberg Day Bak You podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the sixth of June in London. I'm Caroline Hepka.
Speaker 3 (00:18):
And I'm Stephen Carroll. Coming up today. Elon Musk and
Donald Trump trade insults and threats in an extraordinary and
very public war of words.
Speaker 2 (00:27):
More than one hundred and fifty billion dollars is wiped
off Tessa's market value as investors fear retaliation.
Speaker 3 (00:34):
Plus unraveling global trade. The Scottish tweed industry shows the
collateral damage that tariffs are causing around the world.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 3 (00:45):
US President Donald Trump and Elon Musk have publicly traded
barbs and insults as the two men's formidable political relationship
disintegrated in a matter of hours. The rift has been
widening after Musk on Tuesday called Trump's signature tax and
sp banding bill a disgusting abomination. That was followed by
these comments yesterday from the US President.
Speaker 4 (01:06):
I'm very disappointed in Elon. I've helped Elon a lot.
Elon and I had a great relationship. I don't know
if we will anymore. I was surprised because you were here.
Everybody in this room practically was here. As we had
a wonderful send off, he said wonderful things about me.
You couldn't have nicer, said the fascinate. He's worn the hat.
(01:26):
Trump was right about everything, and I am right about
the great, big, beautiful Bill.
Speaker 3 (01:32):
By mid afternoon, Musk was posting on his X platform
that Trump would never have won back the White House
without his help. Then, as simmering tensions boiled over, the
President called the billionaire crazy and threatened to cancel his
company's federal contracts. Musk shot back, pledging to decommission the
Dragon spacecraft that underpains flights to the International Space Station.
Speaker 2 (01:54):
Now, the acrimonious back and forth between Musk and Trump
represents a remarkable falling out between two men who spent
months working together to reshape the US federal government. This
after the Tesla CEO poured hundreds of millions of dollars
into the President's election campaign. However, there are some signs
of relaxational conciliation of sorts. Elon Musk yesterday evening signaled
(02:17):
on social media that he was open to cooling tensions
with Trump, and Politico is now reporting that White House
aids have scheduled a call with Musk in an effort
to avoid further escalation.
Speaker 3 (02:30):
That bickering wiped thirty four billion dollars from Elon Musk's
personal net worth in one day. Tesla shares fell by
fourteen percent yesterday, wiping roughly one hundred and fifty two
billion dollars off the value of the company. Russ Gerber,
president's and CEO of Gerbert Kowarski, said, one of Tesla's
earliest investors, explains why he was one of those selling
(02:51):
shares in Musk's car company.
Speaker 5 (02:53):
This is a disaster for Mask. I don't know if
I can spin it in a positive way because it's
just so beyond any intelligent businessman's behavior would be. I
can't imagine after putting Trump in there, that he would
then turn Trump into an enemy of all things because
(03:13):
he's still the president of the United States.
Speaker 3 (03:15):
Gerbarada that he expected. SpaceX, one of Musk's private ventures,
had its evaluation cut in half. The massive selloff marks
the second largest loss ever made by one person, the
largest also being Elon Musk in twenty twenty one. Mosque
is still the world's richest person, with a vast three
hundred and thirty four point five billion dollar fortune and
(03:36):
has endured any number of routes before well.
Speaker 2 (03:40):
The fight played out on social media came as persident
Trump and Chinese present Shijingping agreed to further trade talks
on a phone call. Trump acknowledged the relationship had gotten
quote a little off track on that call and said
that it was an honor to have Chinese students. White
House per Secutory Caroline Levitt told Fox News the conversation
focused on trade and rare earth minerals.
Speaker 6 (04:03):
This was a good productive call and he has always
enjoyed a respectful relationship with China's president in China needs
the United States of America and our markets, and we
also have a strategic interest in China's economy in market
as well. And so that's why both leaders decided today
that their trade officials will continue to meet to discuss
(04:26):
this important bilateral relationship.
Speaker 2 (04:29):
Lhite House Press Secretary Caroline Levett, that is, speaking to
folks News. China's Foreign ministry says that the call was
initiated at President Trump's request. It comes just a day
after the US President lamented again on social media that
his counterpart was extremely hard to make a deal with.
Speaker 3 (04:46):
Germany's Chancellor of Frederick Mertz, successfully navigated a forty minute
meeting with Donald Trump and the Oval Office. The two
diverged on the issue of how to end the war
in Ukraine, with Mertz saying the West should look to
stop it very soon.
Speaker 7 (05:00):
I told the President before we came in that he
is the key person in the world who can really
do that now by putting pressure on Russia. And we
will have this debate later on again how we can
proceed jointly between the Europeans and the Americans. And I
think we are all in that we are having the
(05:22):
duty to do something on that now to stop it.
After three and a half years.
Speaker 3 (05:27):
Germany's Chancellor Frederick Mertz risked the trip to Washington, despite
of the world leaders facing public humiliations in the Oval Office.
Yes President meanwhile compared the war in Ukraine to a
fight between two children, saying sometime you let sometimes you
let them fight for a while before they can be
pulled apart.
Speaker 2 (05:45):
Now from that, to the ECB president Christine Legard, has
unveiled an upbeat outlook for the Eurozone. Speaking after the
European Central Bank cut interest rates again under two percent
on Thursday, Leguard offered an optimistic assessment of the bloc's
growth prospects.
Speaker 1 (06:01):
Higher tariffs and a stronger Euro are expected to make
it harder for firms to export. High uncertainty is expected
to weigh on investment, but at the same time, several
factors are keeping the economy resilient and should support the
growth over the medium term.
Speaker 2 (06:20):
Christine Legarde added that she believes the central banks policy
is in a good position to navigate the uncertain conditions,
in her words, that are likely to come from global
trade and a jump in spending in Europe. The ECB
described inflation as currently around its two percent targets.
Speaker 3 (06:37):
Zia Usaf has resigned as chairman of Reform UK, saying
he no longer believed working to get the party elected
was a good use of his time. His departure comes
a day after he criticized the party's newest MP for
asking if the Prime Minister planned to ban Berker's Reforms.
Leader Nija Farash Toldgibini's Usuf was very talented and his
(06:59):
resident nation marks a last for public life.
Speaker 8 (07:03):
He's brilliant when it comes to data, he's brilliant when
it comes to a technical side of things. You know,
he really is in a class of his own. And frankly,
I'm sad that he's going. I'm sad for the pasty
he leaves a gap. I'm sad for him actually.
Speaker 3 (07:23):
Nigel Ferrau speaking there in the latest high profile exit
for a forum, which currently tops opinion polls in Britain.
Former Reform MP Rupert Lowe was asted in March over
allegations that he made verbal threats against Yusef And.
Speaker 2 (07:37):
Those were a few of our top stories and for
you this morning. So in terms of the markets, then
the Nasdaq yesterday closed down by one percent, Tesla's share
price top fourteen point three percent on the feud between
Musk and Trump. S and P five hundred EMII futures
and aws that future this morning are pointing high. European
stock features though are lower European stock so yesterday we're
(07:58):
actually mostly driven by ECB and Christine Lagarde saying that
basically the bank may be nearing the end of the
rate cutting cycle, basically closing up before the real spat
took off in the US. Asian stocks this morning have
been fluctuating. We've got another major data point to think
about today, the US job support non fan pay rolls
(08:18):
expected to see hundred and twenty six thousand jobs added
in the US. This as Japan's long yields continuing to ease.
WHI crude futures pretty quiet this morning. Sixty three dollars
seventeen the bow and gold is up by seven tenths
of one percent. Also the dollar little change. So those
are the markets.
Speaker 3 (08:39):
In a moment. More on the social media blow up
Atunity Eilon Musk and Donald Trump, and the US President's
conversations with the leaders of China and Germany. But in
case our blood pressure wasn't high enough scrolling social media.
In the last twenty four hours, our finance reporter Laura
Noonan's been writing about another high pressure event in Frankfurt.
It's the JP Morgan Corporate Challenge, which she says is
(08:59):
argument be the biggest social mixer in finance. Fifty thousand
people taking part in a three and a half mile
run through the German financial capital. Now, Laura, who's a
keen runner herself, actually right that this could be dismissed
as a low stress amble. Lots of people actually walk
or jog the course, but the global financial community seems
it as a blood sport. In her words, but some
banks rumored to hire athletes to improve their chances. No,
(09:23):
She points to one example. One, Yeah, the Italian Olympic
triathletes hired by JP Morgan in February. Now his bosses
and says he was not hired for this reason, but
he did finish fifth in the race. It's an a
actually the dates back to nineteen seventy seven to a
run in Central Park in New York, which is why
it's three and a half miles, which is bit of
an odd distance as well.
Speaker 2 (09:42):
Even I might be able to manage that, but having
to be amazingly good at your job, and also some
other field may be running or music or whatever it
might be that you can do. I think it's just
amazing because he have to have that second string to
your boat.
Speaker 3 (09:57):
I mean, you're a runner, yeah, but I don't think
I fancy this fifty people. No thanks, anyway, there's some
great stories in there. You can read Lauras full report
and the Business Week daily newsletter. You can sign up
for it at bloomberg dot com Newslatters.
Speaker 2 (10:09):
Well, let's get into the very public escalation of the
row between the President of the United States and the
world's richest man. Is Donald Trump and Elon Musk traded
blows and threats on social media. Our senior US Government
editor Derek Willbank towards this now for more. Good morning, Derek,
bring us up to speed. What has happened between Elon
(10:30):
Musk and Donald Trump.
Speaker 9 (10:32):
Well, there was a major explosion in their relationship, I
don't know any real other way to put it, which
denigrated all the way down to accusations of familiarity with
Jeffrey Epstein and all sorts of other things. It got
very personal, very quickly. Trump meanwhile smashing back that maybe
(10:55):
the best way to cut the deficit would be to
end all of the contracts with Elon Musk's many come
and eese. This is gone from in eleven months, from
Musk endorsing Trump to Musk putting in nearly three hundred
million dollars of his own money to elect Trump and
Republicans up and down the ballot, winning universal control of Washington,
(11:18):
then becoming the face of Trump's efforts to slash the
federal bureaucracy. Both men cything through the federal government together,
and then it just sort of ending, not necessarily in
a way that either probably would have wanted, but certainly
in a way that imperils both of their big flagship
(11:42):
projects right now. Certainly Musk, you mentioned the the damage
to Tesla's shares and thus Musk's net wealth. At the
same time, Musk is the principal opponent of on the
right anyway, of Trump's big Beautiful Bill, which is the
centerpiece of his legislative agenda. So there's a lot at
(12:02):
stake for both of those And indeed we have seen
I'm sitting in Singapore in my day so far, some
efforts to try and I guess, contain this blast, find
ways to de escalate, find some off ramps for both
of these guys so that they can kind of limit
the damage and keep going on.
Speaker 7 (12:21):
There.
Speaker 9 (12:22):
Musk did pull back a little bit from his threat
to cancel the Dragon Shuttle program that NASA uses on
to uses to ferry astronauts to and from the space station.
He did pull back from that threat to cancel there.
We're waiting to hear from the President there and We've
seen a report that White House AIDS are trying to
(12:44):
schedule a call with Musk for tomorrow. So lots to
play here. Lots may still happen, But a pretty remarkable
explosion in American politics yesterday.
Speaker 3 (12:59):
Yeah, it certainly was. It looks like it's not over
by those latest reports. More ensuing perhaps later on in
the coming hours. You talked a bit about the effect
on the businesses as well. We saw that big move
in share prices too. But from a political point of view,
the budget debate still continuing in Washington. Is the tax
and spending bill in danger? In more danger than it
(13:22):
was yesterday?
Speaker 9 (13:23):
Well, it's certainly not in better shape than it was yesterday.
What I would say is that the math on that
remains the same. Senate lawmakers, several of them want to
cut a lot more than they're cutting right now in
the bill. Musk had mentioned on that the deficit impacts
(13:43):
of this legislation, about two point four trillion dollar increase
in US deficits over ten years it's projected to be,
would more than dwarf all of the most optimistic readings
of the savings that Dog had been able to do
at as Musk said great personal cost to him. So
there had been some spending hawks on the right who
(14:07):
were saying, look, we want to have this score better.
It needs to not increase the deficit so much or
even at all. At the same time, House Republicans are
very cognizant of the fact that they barely pass this
legislation in the first place. Right House Speaker Mike Johnson
compared this to his party whip strategy to tightroping across
(14:32):
the Grand Canyon on a piece of dental floss. He
doesn't have much margin, and there are people in his
conference who do not want to cut anymore, as well
as others in his conference who want to cut a
lot more, and you've got to find a balance point there.
So Elon Musk standing on the side firebombing this on
social media is not very helpful, especially when he's speaking
(14:54):
into the lead that Democrats have said, which is that
this thing is going to expl load the deficits. So
if you care about debt, if you care about deficits,
as a lot of Republicans and the bond market seem to,
then this bill is a problem. All of that is
bad for Trump, and all of that is why a
lot of aids to both of these guys are trying
(15:16):
to find ways that they can kind of back up
from the ledge, take the temperature down a little bit,
and have these two very proud billionaires find a way
to get back along again.
Speaker 2 (15:30):
Derek, thank you so much for being with us this morning,
our senior US Government editor, Derek Wallback. I mean, I'll
add to that our chief economists for Bluemberg Economics, Tom Orlick,
saying the fight under scores the potential vulnerabilities that follow
from concentrating industrial and government power in one person, i e.
Elon Musk. So yeah, lots could potentially come from this.
Speaker 3 (15:54):
Well, while those exchanges we're playing out with Elon Musk yesterday,
Donald Trump was also holding high level diplomatic converse. He
spoke to Chinese President Cheatingping for the first time since
it's inauguration, and met Germany's Chancellor at Friedrich Merritz in
the Oval office as well. Our EMEA and news director
Rasalad Mathson is with us for more so ras Trump
finally speaking to Cheatingping, did it produce any turning point
(16:16):
in those relations that have become fraud yet again?
Speaker 10 (16:19):
Well, yeah, because yet yet again, it seems the thing
that has broken the ice with US and China is
a direct conversation between Donald Trump and Cgping, which was
a hallmark also of Donald Trump's first term as president,
is those two get on the phone or they meet
for dinner somewhere around the world, and they managed to
get at least a temporary truce. Often it didn't last,
(16:42):
but at least it did cool things for a bit,
And as we saw with this phone call yesterday, they've
agreed to have further trade talks. They're going to have
high level representatives from either side meet and talk about trade.
They seem to have put a little bit of a
stopper on the tensions over minerals, which was really the
key thing from the US perspective, and it sounds like
(17:04):
they have at least created a pathway for further talks,
which is the biggest thing of all is to have
those conversations going and to get into some of the
detail in these further conversations. So you can see from
the market reaction there was certainly a sense that this
has been a little bit of a breakthrough between the
two countries. Again, very complex issues though to deal with
(17:27):
on the trade side, but also on the security side,
on the tech side, and there's a lot of issues there.
Speaker 5 (17:33):
So will this last.
Speaker 10 (17:34):
It's very hard to know, but the fact that they've
created a pathway for talks is quite significant.
Speaker 2 (17:39):
So we bounce from then China and the US to
the US and Germany. And what was such an enormously
busy day, wasn't it? In terms of the White House.
Friedrich Mertz, for his part, does seem to have gotten
off lightly with his encounter with President Chomp. It didn't
seem to produce any progress on efforts to end the war.
Speaker 10 (18:00):
Though, yes it didn't, although for Merse it was probably
just a matter of trying to survive that meeting, given
that other leaders have really fallen a foul of those
moments in the White House, and that was perhaps the
tactic was to let Donald Trump do most of the talking,
to praise him, and not to say too much and
not to draw his eye in any way. But as
(18:21):
you said, they did disagree a little bit on Ukraine.
Donald Trump really talking about Ukraine in a way like
a sporting match, that he thinks that the two sides
might need to fight it out for a little while longer,
sort of alluding to a hockey game, whereas Fridrick Morse
came in and said, well, very clearly, this is Vadimir
Putin who started this war. But they didn't really talk
(18:43):
about next steps. They didn't talk about where the conversations
might be going between Russia and Ukraine towards the cease fire.
They didn't talk about where the US would stand in
all of that. I mean, Donald Trump has really been
in a way washing his hands of it to some
extent and saying that he thinks that Russia and Ukraine
need to sort it out directly. So there was no
(19:05):
real progress on that front, but neither was there any
blow up. That was probably to some extent a result
for Frederick Morse.
Speaker 3 (19:12):
But on the trade front, actually the segmals seemed relatively
positive compared to what Donald Trump is indicated towards trade
with the EU in the past.
Speaker 10 (19:20):
Well, that's right, and in fact there were some fairly
warm words from Donald Trump on the trade side with
Europe and with Germany. And that comes as the mud
music has been improving a little bit. In general, we've
seen the retric from both European officials and the US
in recent days talking about things going in a better direction,
talking about momentum in a way, despite the fact that
(19:43):
we've got these new US levees on steel and aluminum,
which obviously have not resonated particularly well with the EU.
Speaker 5 (19:51):
So there's a lot of.
Speaker 10 (19:52):
Positive rhetoric going around and meetings that have been happening,
including with the US trade representative Jamison Korea the EU
representative Eskovich. But the question is is that actually leading
to anything tangible? Are we seeing progress on a whole
bunch of complex issues in the relationships and we're not
actually seeing signs of that so far, because the red
(20:15):
lines for either side are pretty clear and they remain.
So we're seeing better rhetoric, but we're not actually seeing
signs of how that's going to lead to a breakthrough
in any kind of progress towards a trade framework. So
at least a better environment again for the conversation, but
we kind of need to see the tangible start to
emerge here.
Speaker 2 (20:34):
Okay, Rolls, thank you so much for being with us
this morning and for your thoughts then on those important
meetings at President Trump with she on the phone and
with the German Charles of Friedrich MRT. So that is
our EMEA News director Roslyn Matheson well.
Speaker 3 (20:49):
To another aspect of the trade story. Now, Donald Trump
is famously fond of Scotland, where his mother was born.
It was ten percent global tar if. It's nonetheless ripping
through the niche business of making Harris tweed, one of
the distinctive fabrics of Scotland. Are UK economy reporter Arena
Angel has been reporting on this with a story that
(21:09):
reaches as far as the far flom Hebrides as well
or in a good morning how are the tariffs affecting
these specialist businesses in Scotland?
Speaker 11 (21:16):
Well, good morning, So specialist is the word. Harris tweett
is sort of the Champagne of woolen fabrics if you want,
because it can only be made on the remote Scottish
Hebridean Islands and it has to be woven at home
by one of the just one hundred and fifty weavers
or so on the Isle of Lewis, which is the
largest of these islands, and many of these weavers have
(21:37):
been doing this four generations. Of course, Trump's mother, Maryann McLoyd,
used to be one of the islanders, so she grew
up on Lewis before emigrating age seventeen to New York
in nineteen thirty. But now her Son's tariffs risk appending
really the livelihoods of islanders and the local economy. So
the tweed industry is a huge source of employment on
(21:59):
this island where there are only nine people per square kilometer.
It helps bring in lots of tourists on cruise ships
who then spend being in restaurants and shops. But it's
also ultimately a way of life that dates back to
the eighteenth century. So and all of that is part
of the collateral damage of Trump's trade war, because you know,
(22:19):
tweed is tiny as exports of the US compared to
the total exports, but it's still subject to the same
ten percent tariffs.
Speaker 2 (22:28):
Yeah, what an interesting business to be getting a grip
on in terms of other markets. Then, for Harris, tweed
can can these islanders look for other markets elsewhere and
try to avoid the tariffs that way, As you say,
it's very few people and yet it's foundational so important
(22:49):
to their way of life.
Speaker 11 (22:50):
Yeah, it's very few people. And you know, Americans are
the top buyers of tweed, and the concern is that
American brands will sort of stop buying tweed or will
buy less of it because of higher costs and just
greater uncertainty. And you know that might mean less work
for weavers and rural communities, so those people might you know,
choose to leave the island to work in oil and
(23:12):
gas or constructions like many others before them. So to
counter this, the mills, especially Harrow Street Hebrides which is
the main mill, is now trying to strengthen links with
places like South Korea which is as fastest growing market,
or Japan, so they will visit the Japan later this
year as part of a trade delegation. However, quickly pivoting
(23:33):
to new markets, it's really not easy for a business
where completing an order can take up the three months.
They also have to put an extra efforts to crack
down on counterfeits and just raise brand awareness in these
newer markets like China, because what is special about the
US is that Harrow Stweet has really has history with
the US. Getting a tailored tweet suit was a rite
(23:55):
of passage for young men in the post war era,
and you know the Kennedys loved it. Ralph Lauren made
it part of his iconic preppy American look and that's
really hard to replicate.
Speaker 3 (24:07):
I mean, it's a fascinating story and that history is
so important as well. But I wonder when you spoke
to people on your trip to the Hebrides for this story,
they were quite critical of Donald Trump.
Speaker 11 (24:19):
Well that's that's very true. So Trump is not liked
at all on these islands. One of the first things
I saw when I visited was this anti Trump banner
saying shame on you, Donald John And then a taxi
driver told me how embarrassed she was when she was
asked to drive a group of Trump supporters, you know,
with Maga T shirts, to Trump's mother's ancestral home and
(24:41):
take a photo of them in front of it. So,
you know, despite boasting about his golf courses and his
Scottish heritage, Trump spent less than three hours on the
island on his last visit in twenty eighteen. I think
it was eight. Sorry, and really the islanders did not
like that. These are very proud people. So you know,
if Trump visits, sure he will be welcome, but he
(25:03):
will have to work extra hard to win them over.
Speaker 3 (25:08):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (25:15):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (25:21):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (25:26):
Our flagship New York station, is also available on your
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Speaker 3 (25:34):
I'm Caroline Hepka and 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
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