May 9, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) The Trump administration is considering a significant tariff reduction in talks with China to ease economic pain and de-escalate tensions. The US aims to reduce tariffs below 60% as a first step, which China may be prepared to match, with progress possible as soon as next week.
(2) The new trade deal between the US and UK includes a carve-out for autos, which could reduce the tariff levy from 27.5% to 10%, making a 0.1% difference to UK GDP. The deal's impact is limited because almost half of UK value-add that ends up in the US is exported via other countries, and global uncertainty remains a major drag on the UK economy.
(3) US President Donald Trump’s trade policy is upending long-held alliances, threatening global growth and causing mayhem for business. For UK homeowners, though, it is working out quite well. In the last few weeks, several major high street lenders have cut mortgage deals below 4% for the first time in months.
(4) Mayor of London Sadiq Khan will “actively explore” building on the city’s green belt in what would amount to the biggest change to housing policy in the UK capital since the 1960s. The mayor will announce a consultation on releasing parts of London’s green belt in a speech Friday, saying that some building in the protected zone around the city is necessary to meet the capital’s targets and to end a housing crisis.
(5) Cardinal Robert Francis Prevost was elected as Roman Catholic pontiff, the first ever pope from the US and a possible bridge between the moderate and hardline sides of a divided Church. Prevost, 69, chose the name of Leo XIV for his pontificate and was greeted by thousands of cheering faithful as he stepped out onto a balcony overlooking St. Peter’s Square to be presented to the world.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the blue Berg Day BAQ podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the ninth of May in London. I'm Caroline Hipki and.
Speaker 1 (00:18):
I'm Stephen Carroll.
Speaker 3 (00:19):
Coming up today, the US may dramatically cut its China
tariffs to less than sixty percent if talks go well
with Beijing this weekend.
Speaker 2 (00:28):
The UK agreement is a political win for Kiss Starmer,
but the economic benefits appear less certain.
Speaker 3 (00:35):
Plus once known just as Bob, a baseball fan from
the South side of Chicago, Cardinal Prevost of Francis Protege
becomes the first American pope.
Speaker 2 (00:44):
Let's start with a roundup of our top stories.
Speaker 3 (00:46):
The Trump administration is considering a significant reduction in tariff's
on Chinese goods as part of talks this weekend between
the world's two largest economies, sources tell Bloomberg. The White
House is weighing a cut in levies to be low
sixty percent, with hopes that Beijing will agree to a
reciprocal move. US Treasury Secretary Scott Bessant and Chinese Vice
(01:07):
Premier Hulifeng are meeting in Switzerland tomorrow for the first
high level talks since they imposed triple digit tariffs last month.
Speaking yesterday, President Trump hinted at the prospect of lower levees.
Speaker 1 (01:20):
I mean, we're going to see right now, you can't
get any higher. It's one hundred and forty five. So
we know what's coming down. I think we're going to
have a very good relationship.
Speaker 3 (01:29):
Trump's lators comments come as new data shows that China's
exports grew by a greater than expected eight point one
percent in April. However, shipments to the US slumped by
twenty one percent and imports from America fell by almost
fourteen percent after the imposition of duty's. Meanwhile, exports to
the European Union and Southeast Asian countries rose eight and
twenty one percent, respectively, in a sign that China may
(01:52):
be finding other markets for its goods.
Speaker 2 (01:54):
The UK became the first country to sign a trade
deal with President Trump since the start of his global
trade The US hailed the agreement as an historic step
towards reshaping its global trade relationships. US Commerce Secretary Howard
Lottnik told Bloomberg the deal could serve as a model
for future agreements, outlining the kind of concessions that President
(02:15):
Trump is seeking in return for tariff relief.
Speaker 4 (02:19):
As the President said, many of those will be higher.
Of course, you can bring them down by opening your government,
opening your economy to US exports and then the sectoral tariffs.
That's where you can be super smart if you're opening
your market to US, and that's what the UK did.
Speaker 2 (02:37):
Howard Latanek also conceded that targeted deals with the likes
of South Korea and Japan may take much longer to finalize.
The Anglo American agreement grants the US better market access
and faster customs clearance for exports to the UK. In return,
the UK gets limited tariff relief on auto's, steel and aluminium,
(02:58):
with many details though still to be nig agociated.
Speaker 3 (03:01):
The britain success in becoming the first country to secure
a trade deal with President Donald Trump since his global
tariff offensive is being hailed as a political win for
the Prime Minister cair Starmer. Levies on cars are being
reduced from twenty seven point five percent down to ten
percent on a quota of one hundred thousand vehicles annually. Meanwhile,
(03:21):
tariff's on steel and aluminium will drop from twenty five
percent to zero. In a call with President Trump, Starmer
described the deal as a significant moment.
Speaker 5 (03:31):
With this president, this Prime Minister, We've managed to achieve
what many people have tried to achieve for many years.
It feels completely historic. Donald, Thank you so much. It's
really good to have got this deal over the line.
Predue to both teams, Predude to our countries, and prebute
to your leadership.
Speaker 3 (03:47):
Starmer's allies are especially pleased with the White House commitment
to provide the UK with preferential treatment in any future
sector specific tariffs.
Speaker 1 (03:55):
However, Bloomberg Economics.
Speaker 3 (03:56):
Estimates the deal will only boost a UK GDP by
zero into one percent, with ongoing global tariffs and uncertainty
still expected to drag growth down by zero point two percent.
Speaker 2 (04:08):
Bloomberg understands that British Airways parent IAG is poised to
order roughly thirty Boeing seven eighty seven Dreamliner aircraft. US
Commerce Secretary Howard lot nick Tea's the order yesterday telew
reporters an unnamed British airline would buy ten billion dollars
worth of Boeing planes. He then said that engines from
(04:29):
rolls Royce and other UK aircraft suppliers won't be subject
to US tariffs. Boeing is the largest US exporter of
manufactured goods and has been a target for countries retaliating
against the White House's trade policies.
Speaker 3 (04:44):
As US trade policy continues to dominate the market narrative,
the uncertainty is having a surprising upside for the UK
housing market.
Speaker 1 (04:52):
Bloomberg's Uwen Pots has more.
Speaker 6 (04:53):
President Trump's trade policy is upending alliances, threatening global growth
and causing mayhem for business for UK homeowners is working
out quite well. In the last few weeks, several major
high street lenders of cup mortgage deals below four percent
for the first time in months, bringing the average down
from about four and a half percent at the start
of the year. Trump's trade war has seen boring costs
(05:15):
fall on the guilt markets, which is fed through to mortgages,
and the Bank of England made clear yesterday that tariffs
were a key factor in their base rate cuts In London.
Speaker 1 (05:24):
I'm Uwinge Pots Bloomberg.
Speaker 3 (05:25):
Radio Building on the protected land earmarks to prevent urban
sprawl would mark the biggest change in London housing policy
since the nineteen sixties, and a reversal of mercediq Can's
previous opposition to the idea. The changes are set to
be announced in a speech today setting out why the
move is necessary to meet the capital's house building targets.
(05:47):
A consultation on the plan will be open until late June,
with the draft to be published in twenty twenty six
and formal adoption expected in twenty twenty eight.
Speaker 2 (05:58):
And lastly, former Cardinal Robert p Els has been elected Pope,
the first North American in history to take up the role.
It took the church's one hundred and thirty three electors
just two days to identify Pope France's successor, who has
chosen the name Leo the fourteenth. Speaking to crowds at
the Vatican, the new Catholic leader outlined his hopes for
(06:20):
the future.
Speaker 7 (06:22):
Together, we must try to find out how to be
a mission church, a church that the ills bridges establishes dialogue.
Speaker 5 (06:31):
That's always focused on.
Speaker 1 (06:34):
This cancer with open arms.
Speaker 2 (06:37):
Pope Leo the fourteenth, speaking there through a translator. He
also spoke Spanish during the address, in a tribute to
the people of Peru, where he served as an archbishop,
eventually gaining citizenship. Those are our top stories this morning.
Speaker 3 (06:51):
On the markets, we are looking at the dollar holding
steady after yesterday's gains. The tenure Treasury yield is down
a basis points this morning at four point three to
seven percent. The Mscirish Pacific Index half a percent hire old.
There's some weakness on Chinese share markets ahead of this
weekend's trade talks. The CSI three hundred in DECKX down
by a quarter of one percent. European stock futures pointing higher,
(07:13):
up by a quarter. The S and P five hundred
yesterday finished six tents higher, and futures are pointing a
tenth of one percent higher this morning.
Speaker 2 (07:19):
Now in a moment, we'll being you the latest on
what to expect from this weekend's US China trade talks. Plus,
did Kiss Darma get an economic win as well as
a political one with yesterday's US trade agreement? We can
discuss that. But there is another story that has support
our eye that we've been reading today, the inside story
of this year's Bordeaux wine tasting seasons. Does this appeal
(07:42):
to you.
Speaker 1 (07:42):
Out, Caroline?
Speaker 3 (07:43):
Why would you assume that on a Friday morning, I'd
be excited to be reading about wine This is the
on premire, which is when wine buyers and critics get
a first taste of the latest vintage while it's still
aging in the barrel. So it's not it's not why
necessary that you'd want to be drinking, but it does
give those in the know a sort of sneak previous
to how this particular vintage, which won't be bottled for
(08:04):
another eighteen months or so at least, is like. There
has been a lot of concern about this particular vintage
because last year, both the spring and the harvest was
cold and rainy, so fears about the quality of what
you were going to get out of it. Ian McCoy
were writing in Bloomberg's Top Shelf Drinks newsletter. It says
that the results weren't bad, but there's a lot of
concern about prices, not only because it's not necessarily the
(08:27):
best year that these Bordeaux wine producers have had, but
of course also tariffs, because essentially the buying and selling
happens now, but those bottles won't be delivered for years
down the line, and that's when if there are tariffs
in place, they could actually drive up the prices. So
the pressure on the shadows to bring down prices. US
buyers are pulling back in particular because they're worried about
(08:47):
how much they're going to cost down the line as well.
So really interesting time for the Bordeau wine producing region.
Speaker 2 (08:52):
Yeah, it does feel like one of those stories that
we've been wide about concerned about not just climate change
but also you know, trade for so long, and yet
this perhaps is one of those pivotal years. The good
news though, is that Ellen McCoy has also got a
list of the most interesting lines for this season.
Speaker 1 (09:08):
She says, don't pay too much. That's the most important thing.
Speaker 3 (09:10):
Okay, Bloomberg dot Com for is last news letters if
you want to sign up for a top shelf.
Speaker 2 (09:15):
Now let's bring you more on what to expect from
this weekend's trade negotiations then between the US and Chinese delegation.
The US Treasury Secretary and the Chinese Vice Premiere will
be with their delegations in Switzerland for these talks, and
our Hong Kong News Desk editor Jill Desis joins us
now for more on this. Good morning, Jill, So, what
(09:35):
have we learned then about the American strategy going into
these talks?
Speaker 1 (09:40):
Well, from what.
Speaker 8 (09:40):
We know from talking with people familiar with preparations for
these talks is that at least on the US side,
they've ultimately set a target of reducing tariffs and China
below sixty percent is sort of a first step. The
thinking is that this is something that they feel that
China may be prepared to match. I mean, you know, obviously,
when you've got tariffs and access undred twenty five forty
(10:01):
five percent, that's a pretty significant reduction in terms of
what these two economies have really been throwing each other
on so far. But I wouldn't go so far as
to expect anything sort of big and concrete out of
this weekend at least, you know, obviously when it comes
to Trump do you never totally know, But what these
talks at least seem like going into this weekend are
(10:23):
likely to be more exploratory, more toward geared toward airing
grievances rather than hammering out long term solutions. I mean,
you know, we know a couple of months ago, Bessett
was speaking behind closed door saying it could take a
couple of years first to reach you know, total sort
of negotiations on trade. But at least in the short term,
it does seem like, you know, the US maybe coming
(10:44):
in with sort of an opening figure. There will have
to see whether that actually results in anything remotely concrete
coming out of this weekend.
Speaker 3 (10:51):
So that's what we're hearing from the US side. Do
we have any indications in the Chinese side about what
they're hoping to achieve or perhaps where there could be
avenues for negotiation from them.
Speaker 8 (11:00):
Well, I think on the Chinese side that's certainly a
lot more guarded. I mean, at least what China has
said openly is that they've actually made a lot of
this about wanting to reduce the tariffs entirely, which you know,
I think fair to say that's probably out of the question.
But you know, China has really framed this is, you know,
something where they're looking for more respect from the US.
In terms of what we could actually see on the
(11:24):
table for discussion, I mean, you know, you can just
look at some of the major pain points between the
US and China recently, China's sort of stopping exports of
rare earth materials, certainly critical for a lot of infrastructure
and technology. That's maybe something that could be discussed obviously
on the US side, the fentanyl trade is something that's
really close to Trump. Maybe that's something that comes up
(11:44):
for discussion. And then I think, you know, there's sort
of numerous other avenues that they could really be talking
about here. You know, maybe advanced technologies trade is kind
of off the table, but you know, maybe there's something
more in terms of the aviation sector, maybe some other
things that they could really kind of come to the
table discuss. But again, I think really kind of difficult
to get a lot of insight from that Chinese side
(12:05):
right now.
Speaker 2 (12:07):
Okay, interesting, and yet we do get an insight into
what's at state for the Chinese economy the hard data
out for last month when it comes to inputs and
exports from China.
Speaker 8 (12:17):
Yeah, I mean I think that you know, it's no
surprise obviously that when you're effectively, you know, implementing these
really really really incredibly high tariffs on the world's second
largest economy and sort of vice versa. I mean, when
you're hampering trade between these two countries, you know, that
really really sort of takes a hit. I mean, right now,
I think China earlier this year set a GDP growth
(12:40):
target of about five percent.
Speaker 1 (12:41):
For this year.
Speaker 8 (12:42):
That's something that they've been you know, sort of targeting
over the past couple of years, particularly as this really
massive economy growth starts to slow a little bit. I mean,
our consensus economic forecast right now on the terminal is
four point two percent growth, so obviously quite a ways
off from that GDB target. So we're talking about tariffs
that really really really impact economic growth in China. I
(13:03):
think you're really seeing that right now, you know, with
with factories in China, and you know, when the economy,
when when the government is trying to push more domestic
consumers within China to spend more to sort of make
up for this, I think that that's a that's a
pretty happy task. So certainly I think it Behoo's you know,
bought the US and China to kind of come to
the table and try to figure out a way to
reduce the pain from at least the highest of these
(13:25):
highest tariffs right now.
Speaker 1 (13:26):
Okay, Jill Lisa so Our Hong Kong News Desk editor,
thank you. Now.
Speaker 2 (13:29):
Those talks with China came after Donald Trump announced his
first post tariffs trade.
Speaker 1 (13:34):
Deal with the UK.
Speaker 2 (13:35):
The agreement is a framework which gives the US increased
market access to the UK, whilst British exporters will see
limited relief on cars, on steal and on other export tariffs.
Our UK Politics reported, James Wilcock joins is now for
more on this. Good to have you with us, James.
So the announcement came with much fan fait. You had
(13:56):
President charm sitting in the Oval Office just surrounded by
you know, his top team and Kirstarma dialing in. What
are the details now that we have them, and what
can we say in terms of how much good they'll
do for the British economy.
Speaker 7 (14:10):
I think we can objectively say it's better than if
there were no deal at all. Now you mentioned cars
and steel. The tariffs and cars will go to ten
percent from twenty seven point five up to a quota
of one hundred thousand cars which is roughly what the
UK exports anyway, and steel goes from twenty five percent
to zero. And then in exchange, the UK will offer
(14:31):
US farmers improved market access, but also without altering its
food standards.
Speaker 1 (14:35):
That's the key point.
Speaker 7 (14:37):
And also it will remove its tariff on one point
four billion liters of US ethanol that theoretically could be
exported to the UK on top of that, there is
a ten billion dollar deal for Boeing with a US
UK plane maker.
Speaker 1 (14:51):
Now we are reporting this.
Speaker 7 (14:52):
Morning that UK planemaker is AIG and so that is
another sort of key part of this, and broadly in
terms of how we analyze this, I'm going to cit
Bloomberg Economics and our chief UK economist, Dan Hanson. He
was saying pre the deal that where there was effectively
going to be an increased tariff rate on all UK
exports of just above ten percentage points. Of that, five
(15:14):
point seven percentage points were the whole shebang sor reciprocal
tarers to ten percent on all goods, three point seven
percent percentage points were in the auto sector, and zero
point eight per cent points were on metals. So we
are seeing a major reduction in some of the most
affected sectors here, and in that it's better than it was. However,
there are still going to be ten percent tarts on
(15:35):
all UK goods, and they say that in that there
will still be a hit to UK GDP of n
zero point two percent from this trade raw down from
the zero point three percent they had forecast. But their
conclusion is it's a modest gain.
Speaker 3 (15:46):
Yeah, we'll watch to see how that ID announcement plays
out as well. What about the unresolved issues in this
agreement one of the key things to watch from here, James.
Speaker 7 (15:55):
Well, I mean you have to start by saying, Stephen,
it's not a full fat sort of free trade agreement.
What it does is it takes the most affected sectors
in both the UK economy steal cars and the most
affected sectors in the US agriculture, and it ameliorates the
kind of damage done from this global trade all to
those So it's both leaders trying to kind of make
(16:17):
a better deal to improve their domestic kind of audience.
And so as this goes on, we are going to
see these negotiations on digital sectors, on various other kind
of areas of both the UK economy and the US
economy keep going. At the very least, it's going to
be many many many months, if not years, before anything
(16:38):
more solid comes out. But yet you've got to give
Kirstarmer the sort of agreement that he's the first to
get any kind of framework over the line.
Speaker 1 (16:45):
Here, this is Bloomberg Daybreak Europe.
Speaker 3 (16:49):
You're a morning brief on the stories making news from
London to Wall streets.
Speaker 1 (16:53):
And beyond.
Speaker 2 (16:54):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (17:00):
You can also listen live each morning on London Dab Radio,
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Speaker 2 (17:05):
Our flagship New York station is also available on your
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Speaker 1 (17:13):
I'm Caroline Hepka and I'm Stephen Carol.
Speaker 3 (17:15):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the blue Berg Day BAQ podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the ninth of May in London. I'm Caroline Hipki and.
Speaker 1 (00:18):
I'm Stephen Carroll.
Speaker 3 (00:19):
Coming up today, the US may dramatically cut its China
tariffs to less than sixty percent if talks go well
with Beijing this weekend.
Speaker 2 (00:28):
The UK agreement is a political win for Kiss Starmer,
but the economic benefits appear less certain.
Speaker 3 (00:35):
Plus once known just as Bob, a baseball fan from
the South side of Chicago, Cardinal Prevost of Francis Protege
becomes the first American pope.
Speaker 2 (00:44):
Let's start with a roundup of our top stories.
Speaker 3 (00:46):
The Trump administration is considering a significant reduction in tariff's
on Chinese goods as part of talks this weekend between
the world's two largest economies, sources tell Bloomberg. The White
House is weighing a cut in levies to be low
sixty percent, with hopes that Beijing will agree to a
reciprocal move. US Treasury Secretary Scott Bessant and Chinese Vice
(01:07):
Premier Hulifeng are meeting in Switzerland tomorrow for the first
high level talks since they imposed triple digit tariffs last month.
Speaking yesterday, President Trump hinted at the prospect of lower levees.
Speaker 1 (01:20):
I mean, we're going to see right now, you can't
get any higher. It's one hundred and forty five. So
we know what's coming down. I think we're going to
have a very good relationship.
Speaker 3 (01:29):
Trump's lators comments come as new data shows that China's
exports grew by a greater than expected eight point one
percent in April. However, shipments to the US slumped by
twenty one percent and imports from America fell by almost
fourteen percent after the imposition of duty's. Meanwhile, exports to
the European Union and Southeast Asian countries rose eight and
twenty one percent, respectively, in a sign that China may
(01:52):
be finding other markets for its goods.
Speaker 2 (01:54):
The UK became the first country to sign a trade
deal with President Trump since the start of his global
trade The US hailed the agreement as an historic step
towards reshaping its global trade relationships. US Commerce Secretary Howard
Lottnik told Bloomberg the deal could serve as a model
for future agreements, outlining the kind of concessions that President
(02:15):
Trump is seeking in return for tariff relief.
Speaker 4 (02:19):
As the President said, many of those will be higher.
Of course, you can bring them down by opening your government,
opening your economy to US exports and then the sectoral tariffs.
That's where you can be super smart if you're opening
your market to US, and that's what the UK did.
Speaker 2 (02:37):
Howard Latanek also conceded that targeted deals with the likes
of South Korea and Japan may take much longer to finalize.
The Anglo American agreement grants the US better market access
and faster customs clearance for exports to the UK. In return,
the UK gets limited tariff relief on auto's, steel and aluminium,
(02:58):
with many details though still to be nig agociated.
Speaker 3 (03:01):
The britain success in becoming the first country to secure
a trade deal with President Donald Trump since his global
tariff offensive is being hailed as a political win for
the Prime Minister cair Starmer. Levies on cars are being
reduced from twenty seven point five percent down to ten
percent on a quota of one hundred thousand vehicles annually. Meanwhile,
(03:21):
tariff's on steel and aluminium will drop from twenty five
percent to zero. In a call with President Trump, Starmer
described the deal as a significant moment.
Speaker 5 (03:31):
With this president, this Prime Minister, We've managed to achieve
what many people have tried to achieve for many years.
It feels completely historic. Donald, Thank you so much. It's
really good to have got this deal over the line.
Predue to both teams, Predude to our countries, and prebute
to your leadership.
Speaker 3 (03:47):
Starmer's allies are especially pleased with the White House commitment
to provide the UK with preferential treatment in any future
sector specific tariffs.
Speaker 1 (03:55):
However, Bloomberg Economics.
Speaker 3 (03:56):
Estimates the deal will only boost a UK GDP by
zero into one percent, with ongoing global tariffs and uncertainty
still expected to drag growth down by zero point two percent.
Speaker 2 (04:08):
Bloomberg understands that British Airways parent IAG is poised to
order roughly thirty Boeing seven eighty seven Dreamliner aircraft. US
Commerce Secretary Howard lot nick Tea's the order yesterday telew
reporters an unnamed British airline would buy ten billion dollars
worth of Boeing planes. He then said that engines from
(04:29):
rolls Royce and other UK aircraft suppliers won't be subject
to US tariffs. Boeing is the largest US exporter of
manufactured goods and has been a target for countries retaliating
against the White House's trade policies.
Speaker 3 (04:44):
As US trade policy continues to dominate the market narrative,
the uncertainty is having a surprising upside for the UK
housing market.
Speaker 1 (04:52):
Bloomberg's Uwen Pots has more.
Speaker 6 (04:53):
President Trump's trade policy is upending alliances, threatening global growth
and causing mayhem for business for UK homeowners is working
out quite well. In the last few weeks, several major
high street lenders of cup mortgage deals below four percent
for the first time in months, bringing the average down
from about four and a half percent at the start
of the year. Trump's trade war has seen boring costs
(05:15):
fall on the guilt markets, which is fed through to mortgages,
and the Bank of England made clear yesterday that tariffs
were a key factor in their base rate cuts In London.
Speaker 1 (05:24):
I'm Uwinge Pots Bloomberg.
Speaker 3 (05:25):
Radio Building on the protected land earmarks to prevent urban
sprawl would mark the biggest change in London housing policy
since the nineteen sixties, and a reversal of mercediq Can's
previous opposition to the idea. The changes are set to
be announced in a speech today setting out why the
move is necessary to meet the capital's house building targets.
(05:47):
A consultation on the plan will be open until late June,
with the draft to be published in twenty twenty six
and formal adoption expected in twenty twenty eight.
Speaker 2 (05:58):
And lastly, former Cardinal Robert p Els has been elected Pope,
the first North American in history to take up the role.
It took the church's one hundred and thirty three electors
just two days to identify Pope France's successor, who has
chosen the name Leo the fourteenth. Speaking to crowds at
the Vatican, the new Catholic leader outlined his hopes for
(06:20):
the future.
Speaker 7 (06:22):
Together, we must try to find out how to be
a mission church, a church that the ills bridges establishes dialogue.
Speaker 5 (06:31):
That's always focused on.
Speaker 1 (06:34):
This cancer with open arms.
Speaker 2 (06:37):
Pope Leo the fourteenth, speaking there through a translator. He
also spoke Spanish during the address, in a tribute to
the people of Peru, where he served as an archbishop,
eventually gaining citizenship. Those are our top stories this morning.
Speaker 3 (06:51):
On the markets, we are looking at the dollar holding
steady after yesterday's gains. The tenure Treasury yield is down
a basis points this morning at four point three to
seven percent. The Mscirish Pacific Index half a percent hire old.
There's some weakness on Chinese share markets ahead of this
weekend's trade talks. The CSI three hundred in DECKX down
by a quarter of one percent. European stock futures pointing higher,
(07:13):
up by a quarter. The S and P five hundred
yesterday finished six tents higher, and futures are pointing a
tenth of one percent higher this morning.
Speaker 2 (07:19):
Now in a moment, we'll being you the latest on
what to expect from this weekend's US China trade talks. Plus,
did Kiss Darma get an economic win as well as
a political one with yesterday's US trade agreement? We can
discuss that. But there is another story that has support
our eye that we've been reading today, the inside story
of this year's Bordeaux wine tasting seasons. Does this appeal
(07:42):
to you.
Speaker 1 (07:42):
Out, Caroline?
Speaker 3 (07:43):
Why would you assume that on a Friday morning, I'd
be excited to be reading about wine This is the
on premire, which is when wine buyers and critics get
a first taste of the latest vintage while it's still
aging in the barrel. So it's not it's not why
necessary that you'd want to be drinking, but it does
give those in the know a sort of sneak previous
to how this particular vintage, which won't be bottled for
(08:04):
another eighteen months or so at least, is like. There
has been a lot of concern about this particular vintage
because last year, both the spring and the harvest was
cold and rainy, so fears about the quality of what
you were going to get out of it. Ian McCoy
were writing in Bloomberg's Top Shelf Drinks newsletter. It says
that the results weren't bad, but there's a lot of
concern about prices, not only because it's not necessarily the
(08:27):
best year that these Bordeaux wine producers have had, but
of course also tariffs, because essentially the buying and selling
happens now, but those bottles won't be delivered for years
down the line, and that's when if there are tariffs
in place, they could actually drive up the prices. So
the pressure on the shadows to bring down prices. US
buyers are pulling back in particular because they're worried about
(08:47):
how much they're going to cost down the line as well.
So really interesting time for the Bordeau wine producing region.
Speaker 2 (08:52):
Yeah, it does feel like one of those stories that
we've been wide about concerned about not just climate change
but also you know, trade for so long, and yet
this perhaps is one of those pivotal years. The good
news though, is that Ellen McCoy has also got a
list of the most interesting lines for this season.
Speaker 1 (09:08):
She says, don't pay too much. That's the most important thing.
Speaker 3 (09:10):
Okay, Bloomberg dot Com for is last news letters if
you want to sign up for a top shelf.
Speaker 2 (09:15):
Now let's bring you more on what to expect from
this weekend's trade negotiations then between the US and Chinese delegation.
The US Treasury Secretary and the Chinese Vice Premiere will
be with their delegations in Switzerland for these talks, and
our Hong Kong News Desk editor Jill Desis joins us
now for more on this. Good morning, Jill, So, what
(09:35):
have we learned then about the American strategy going into
these talks?
Speaker 1 (09:40):
Well, from what.
Speaker 8 (09:40):
We know from talking with people familiar with preparations for
these talks is that at least on the US side,
they've ultimately set a target of reducing tariffs and China
below sixty percent is sort of a first step. The
thinking is that this is something that they feel that
China may be prepared to match. I mean, you know, obviously,
when you've got tariffs and access undred twenty five forty
(10:01):
five percent, that's a pretty significant reduction in terms of
what these two economies have really been throwing each other
on so far. But I wouldn't go so far as
to expect anything sort of big and concrete out of
this weekend at least, you know, obviously when it comes
to Trump do you never totally know, But what these
talks at least seem like going into this weekend are
(10:23):
likely to be more exploratory, more toward geared toward airing
grievances rather than hammering out long term solutions. I mean,
you know, we know a couple of months ago, Bessett
was speaking behind closed door saying it could take a
couple of years first to reach you know, total sort
of negotiations on trade. But at least in the short term,
it does seem like, you know, the US maybe coming
(10:44):
in with sort of an opening figure. There will have
to see whether that actually results in anything remotely concrete
coming out of this weekend.
Speaker 3 (10:51):
So that's what we're hearing from the US side. Do
we have any indications in the Chinese side about what
they're hoping to achieve or perhaps where there could be
avenues for negotiation from them.
Speaker 8 (11:00):
Well, I think on the Chinese side that's certainly a
lot more guarded. I mean, at least what China has
said openly is that they've actually made a lot of
this about wanting to reduce the tariffs entirely, which you know,
I think fair to say that's probably out of the question.
But you know, China has really framed this is, you know,
something where they're looking for more respect from the US.
In terms of what we could actually see on the
(11:24):
table for discussion, I mean, you know, you can just
look at some of the major pain points between the
US and China recently, China's sort of stopping exports of
rare earth materials, certainly critical for a lot of infrastructure
and technology. That's maybe something that could be discussed obviously
on the US side, the fentanyl trade is something that's
really close to Trump. Maybe that's something that comes up
(11:44):
for discussion. And then I think, you know, there's sort
of numerous other avenues that they could really be talking
about here. You know, maybe advanced technologies trade is kind
of off the table, but you know, maybe there's something
more in terms of the aviation sector, maybe some other
things that they could really kind of come to the
table discuss. But again, I think really kind of difficult
to get a lot of insight from that Chinese side
(12:05):
right now.
Speaker 2 (12:07):
Okay, interesting, and yet we do get an insight into
what's at state for the Chinese economy the hard data
out for last month when it comes to inputs and
exports from China.
Speaker 8 (12:17):
Yeah, I mean I think that you know, it's no
surprise obviously that when you're effectively, you know, implementing these
really really really incredibly high tariffs on the world's second
largest economy and sort of vice versa. I mean, when
you're hampering trade between these two countries, you know, that
really really sort of takes a hit. I mean, right now,
I think China earlier this year set a GDP growth
(12:40):
target of about five percent.
Speaker 1 (12:41):
For this year.
Speaker 8 (12:42):
That's something that they've been you know, sort of targeting
over the past couple of years, particularly as this really
massive economy growth starts to slow a little bit. I mean,
our consensus economic forecast right now on the terminal is
four point two percent growth, so obviously quite a ways
off from that GDB target. So we're talking about tariffs
that really really really impact economic growth in China. I
(13:03):
think you're really seeing that right now, you know, with
with factories in China, and you know, when the economy,
when when the government is trying to push more domestic
consumers within China to spend more to sort of make
up for this, I think that that's a that's a
pretty happy task. So certainly I think it Behoo's you know,
bought the US and China to kind of come to
the table and try to figure out a way to
reduce the pain from at least the highest of these
(13:25):
highest tariffs right now.
Speaker 1 (13:26):
Okay, Jill Lisa so Our Hong Kong News Desk editor,
thank you. Now.
Speaker 2 (13:29):
Those talks with China came after Donald Trump announced his
first post tariffs trade.
Speaker 1 (13:34):
Deal with the UK.
Speaker 2 (13:35):
The agreement is a framework which gives the US increased
market access to the UK, whilst British exporters will see
limited relief on cars, on steal and on other export tariffs.
Our UK Politics reported, James Wilcock joins is now for
more on this. Good to have you with us, James.
So the announcement came with much fan fait. You had
(13:56):
President charm sitting in the Oval Office just surrounded by
you know, his top team and Kirstarma dialing in. What
are the details now that we have them, and what
can we say in terms of how much good they'll
do for the British economy.
Speaker 7 (14:10):
I think we can objectively say it's better than if
there were no deal at all. Now you mentioned cars
and steel. The tariffs and cars will go to ten
percent from twenty seven point five up to a quota
of one hundred thousand cars which is roughly what the
UK exports anyway, and steel goes from twenty five percent
to zero. And then in exchange, the UK will offer
(14:31):
US farmers improved market access, but also without altering its
food standards.
Speaker 1 (14:35):
That's the key point.
Speaker 7 (14:37):
And also it will remove its tariff on one point
four billion liters of US ethanol that theoretically could be
exported to the UK on top of that, there is
a ten billion dollar deal for Boeing with a US
UK plane maker.
Speaker 1 (14:51):
Now we are reporting this.
Speaker 7 (14:52):
Morning that UK planemaker is AIG and so that is
another sort of key part of this, and broadly in
terms of how we analyze this, I'm going to cit
Bloomberg Economics and our chief UK economist, Dan Hanson. He
was saying pre the deal that where there was effectively
going to be an increased tariff rate on all UK
exports of just above ten percentage points. Of that, five
(15:14):
point seven percentage points were the whole shebang sor reciprocal
tarers to ten percent on all goods, three point seven
percent percentage points were in the auto sector, and zero
point eight per cent points were on metals. So we
are seeing a major reduction in some of the most
affected sectors here, and in that it's better than it was. However,
there are still going to be ten percent tarts on
(15:35):
all UK goods, and they say that in that there
will still be a hit to UK GDP of n
zero point two percent from this trade raw down from
the zero point three percent they had forecast. But their
conclusion is it's a modest gain.
Speaker 3 (15:46):
Yeah, we'll watch to see how that ID announcement plays
out as well. What about the unresolved issues in this
agreement one of the key things to watch from here, James.
Speaker 7 (15:55):
Well, I mean you have to start by saying, Stephen,
it's not a full fat sort of free trade agreement.
What it does is it takes the most affected sectors
in both the UK economy steal cars and the most
affected sectors in the US agriculture, and it ameliorates the
kind of damage done from this global trade all to
those So it's both leaders trying to kind of make
(16:17):
a better deal to improve their domestic kind of audience.
And so as this goes on, we are going to
see these negotiations on digital sectors, on various other kind
of areas of both the UK economy and the US
economy keep going. At the very least, it's going to
be many many many months, if not years, before anything
(16:38):
more solid comes out. But yet you've got to give
Kirstarmer the sort of agreement that he's the first to
get any kind of framework over the line.
Speaker 1 (16:45):
Here, this is Bloomberg Daybreak Europe.
Speaker 3 (16:49):
You're a morning brief on the stories making news from
London to Wall streets.
Speaker 1 (16:53):
And beyond.
Speaker 2 (16:54):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (17:00):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (17:05):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
Speaker 1 (17:13):
I'm Caroline Hepka and I'm Stephen Carol.
Speaker 3 (17:15):
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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