April 3, 2025 • 21 mins
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President Donald Trump imposed the steepest American tariffs in a century as he steps up his campaign to reshape the global economy, sparking threats of retaliation and a selloff in markets around the world.Trump announced Wednesday he will apply at least a 10% tariff on all exporters to the US, with even higher duties on some 60 nations, to counter large trade imbalances with the US. That includes some of the country’s biggest trading partners, such as China — which now faces a tariff of well above 50% on many goods — as well as the European Union, Japan and Vietnam.“For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense,” Trump said during an event in the White House Rose Garden to unveil the so-called reciprocal tariffs. “Now it’s our turn to prosper.”The move marks a dramatic escalation in Trump’s trade war, one that risks triggering retaliation from other countries and upends calculations for businesses and consumers at home. China and the EU, America’s largest trading partner, both said they were preparing to take countermeasures in response.The US president has embraced tariffs as a tool to assert US power, revive manufacturing at home and exact geopolitical concessions — counter to the decades-old consensus that lower trade barriers help to foster ties among nations and prevent conflicts. Economists say the near-term result of his measures will likely be higher US prices and slower growth — or perhaps even a recession.Global financial markets were hit by a sweeping selloff after Trump’s announcement, with US equity futures slumping as much as 4%.Gold hit an all-time high and the traditional haven Japanese yen soared, while China maintained its daily support of the yuan. Ten-year Treasury yields fell toward the closely-watched 4% level, their lowest since October.Read More: Fear Grips Markets as Trump Tariffs Raise Risks to Global GrowthLess than three months after returning to the White House, Trump has already erected trade barriers that are bigger by some measures than those imposed in the notoriously protectionist 1930s. Bloomberg Economics calculates that the effective tax rate the US now charges on more than $3 trillion of imported goods may climb to around 23% — higher than any point in more than a century.A statement published Wednesday by the United States Trade Representative explained the Trump administration calculated its raft of new tariffs primarily based on existing trade balances. Countries running a trade surplus with the US faced a flat 10% rate regardless, as did nations where trade was roughly even.There’s a small difference in the tariff rates first announced by Trump and more than a dozen of those listed in the annex that accompanied the White House executive order. For countries like South Korea, Myanmar, Pakistan and India, the rates in the annex are about 1 percentage point higher than the initial announcement.The 10% baseline charge on everyone takes effect after midnight Saturday. The higher duties on targeted countries — which replace, rather than add on top of the 10% rate — are due to kick in on April 9, the White House said.Read More: List of Reciprocal Tariffs by CountryFor now, the new measures don’t include Canada and Mexico, which are embroiled in a separate on-and-off tariff dispute with the US. They also won’t apply to some products that are sub
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.
Speaker 3 (00:15):
Karen, the Global Sella follows the announcement that Wall Street
and the world had been waiting for four weeks. President
Trump is raising tariffs around the world on a day
he is dubbed Liberation Day for America.
Speaker 4 (00:28):
April second, twenty twenty five will forever be remembered as
today American industry was reborn, the day America's destiny was reclaimed,
and the day that we began to make America wealthy again.
Speaker 3 (00:45):
In remarks from the White House Rose Garden heard here
on Bloomberg, the President announced at least a ten percent
tariff on all exporters to the US. About sixty nations
will see even higher duties. The biggest target of all
is China. The President says, Beijing charges the US an
effective sixty seven percent rate.
Speaker 4 (01:03):
So sixty seven percent, so we're going to be charging
a discounted reciprocal tariff of thirty four percent.
Speaker 1 (01:09):
I think.
Speaker 4 (01:10):
In other words, they charge us we judge m chuge mls.
So how could anybody be upset?
Speaker 3 (01:14):
President Trump is also slapping higher duties on the European Union, Japan, Vietnam,
and more. All together, Bloomberg Economics estimates the effective tax
rate on more than three trillion dollars in imported goods
could rise to about twenty three percent. That is the
highest in more than a century.
Speaker 2 (01:31):
Well iven, President Trump's tariffs have drawn a sharp reaction
on Capitol Hill. House Minority Leader Hankem Jeffries spoke out
even before the president's announcement, this is not liberation Day,
It's recession day.
Speaker 5 (01:46):
In the United States of America.
Speaker 6 (01:48):
That's what the Trump tariffs are going to do, crash
the economy.
Speaker 2 (01:53):
How's Minority Leader Hankem Jeffries. Republicans are mostly standing behind
the president. Ashley Davis is a GEOP. He's strategist and
partner at S three Group.
Speaker 7 (02:02):
He's ran on this for the last four years.
Speaker 2 (02:04):
Really is that he needs to make sure that the
other countries are paying what they deserve Republicans strategist Ashley Davis.
But not every Republican is on board. Kentucky Senator Ran
Paul says tariffs are just another tax on Americans.
Speaker 4 (02:19):
Republicans used to be in Conservatives and particularly used to
be against new taxes. I don't think it's going to
be good for us politically, but it's not good for
the country either.
Speaker 2 (02:27):
Senator Ran Paul and three other Republicans joined with Democrats
on a bill opposing President Trump's tariffs on Canada. The
bill is not likely to pass in the House.
Speaker 3 (02:35):
Well, Karen, President Trump's historic action risks inducing a worldwide
trade war marked by tit for tax strikes. We spoke
with Treasury Secretary Scott Besson, who urged other countries not
to fight back.
Speaker 6 (02:47):
I would advise none of the countries to panic. I
wouldn't try to retaliate because as long as you don't retaliate,
this is the high end of the number, and I
think there could have certainty that this is the number
barring retaliation.
Speaker 3 (03:05):
Treasury Secretary Scott Besson went on to leave the door
open to negotiations, telling Bloomberg quote, We'll see with regard
to further talks. You can hear the full interview with
Scott Besant on the Bloomberg Talks podcast and watch it
on the Bloomberg podcast page on YouTube.
Speaker 2 (03:19):
So, Nathan, let's get the reaction from other countries around
the world. Our first stop brings US to Asia, where
China has been the biggest target of Trump tariffs, and
Bloomberg deal Desis joins US from Hong Kong with more Jill.
Speaker 7 (03:32):
Yes, well, I think it's a lot to really digest
here out of Asia. On the one hand, you do
see those really high tariffs on China. This thirty four
percent increase that Trump is now putting on China. If
you were to take that into tality with all of
the other levees that Trump has put on China that
the US has put on China over the last several
(03:53):
months years, you're looking at somewhere in the neighborhood of
the average US tariff on Chinese goods being at least
sixty five percent according to some economists. Bloomberg Economics estimates
that as a result, that could lead to a one
to two percentage point loss to growth in China. So
certainly a big metric there that you're really looking at.
Of course, we haven't really heard from China yet what
(04:14):
their definitive actions will be to counter these tariffs. The
Ministry of Foreign Affairs has said that there are going
to be measures coming, we're just waiting to see them.
But I would draw your attention, Karen too, elsewhere in
Asia where you're also seeing incredibly high rates and likely
even you know, higher economic shocks. Vietnam, for example, they
were hit with a forty six percent tariff in this
(04:35):
latest round. I mean, this is a country that you
know is incredibly export dependent. They're among the world's most
trade dependent nations. Or exports were equivalent to nearly ninety
percent of economic output. I think that's why you're seeing
such a big market reaction in that particular country today. So,
you know, just a couple of examples there, but obviously
all across Asia, we're seeing a lot of different economic shocks,
(04:56):
just as nations respond to these tariffs that just been announced.
Speaker 3 (05:00):
Jill desis with the reaction from Hong Kong. Jill, thank you.
Now let's head to Europe get the reaction there. Bloomberg Daybreak,
you're a banker. Caroline Hepger is in London with the latest.
Good morning, Caroline, good morning, Nathan and Karen.
Speaker 8 (05:12):
President Trump called the EU pathetic again and that the
block rips off the US, as he imposed twenty percent
tariffs on EU goods exported to America. The EU argues
that America exports plenty of its services to the block
and that it is the biggest single market in the
world now. EU trade ministers are due to meet on
Monday to discuss their response. Meanwhile, in the early hours
(05:35):
this morning, Commissioned President as to Leavondeline warned that US
actions would deal a blow to the global economy, and
she urged further negotiations.
Speaker 9 (05:45):
We have always been ready to negotiate with the United
States to remove the remaining barriers to transatlantic trade. At
the same time, we are prepared to respond. We are
already finalizing the first package of countermeasures in response to
tariff's on steel, and we're now preparing for further countermeasures
(06:05):
to protect our interests and our businesses.
Speaker 8 (06:08):
If negotiations fails, Vonderline speaking there the tariffs could wipe
out the growth forecast by the ECB for this year
and in twenty twenty six. Markets now see another rate
cut in April as likely. Bloomberg Economics sees the tariffs
cutting EU goods exports to the US by half in
the medium term. By comparison, here in the UK, we
(06:30):
were dealt with a bit more leniently, a ten percent tariff.
Some including business lobby see it as a benefit from
Prime Minister Keir Starmer's pragmatic approach to the White House.
The UK Trade Secretary Jonathan Reynolds has told Bloomberg just
this morning that Britain is still confident that tariffs will
come off, and yet the US is inflicting pain on
(06:52):
some of its closest allies. All told, it's more than
just an economic shock.
Speaker 2 (06:57):
All right, Caroline, thank you well early Trump to targets
hitded On in Mexico escaped the new round of tariff announcements.
We spoke with Ontario Premier Doug Ford.
Speaker 1 (07:06):
I would highly recommend to the Prime Minister not the
retaliate and let's carry on a strong relationship. Let's build
the aim can fortress American Canadian fortress around both countries
and be the wealthiestmans, prosperous, safest two countries in the world.
Speaker 2 (07:24):
Ontario Premier Doug Ford, speaking of the Bloomberg's Balance of power.
While no new tariffs were announced to other levies Trump
has already imposed on Canadian and Mexican goods remain intact.
Speaker 3 (07:35):
And Karen Well stocks are selling off around the world.
The US has been the hardest hit so far. Let's
continue our coverage now with Bloomberg's John Tucker.
Speaker 10 (07:43):
John, all right, Nathan, Let's do the biggest losers in
the US. These are the companies most exposed in that
source a lot of their products from Asia, such as
Apple and some of its magnificent seven cohorts of the
new tariffs will reach thirty four percent for China. Apple
still produces the mudjority of its US OL devices in
Chinese factories. India, where Apple's increasingly building iPhones and air pods,
(08:07):
that's getting a twenty six percent TEARFF. And then there's Vietnam,
where the company now makes air pods, iPads, Apple watches,
and max that'll be hit with a forty six percent tax.
Speaker 11 (08:17):
Now.
Speaker 10 (08:17):
Apple shares this morning in the pre market down close
to seven percent. Then there's in Vidia. In Vidia the
most actively traded pre market. It relies on China for
AI Chip sales of those shares right now down three
point three percent. Let's move on to the world's largest
footwear and apparel companies also facing a shock to their
(08:38):
supply chains. Nike makes many of its sneakers in Vietnam,
and Nike shares pre market they are down eight point
four percent. Lululemon Athletico, which makes forty percent of its
products in Vietnam seventeen percent in Cambodia, tumbled almost ten
percent in late trading. Shares of Abercrombie and Fitch, they
get thirty five percent of their merchandise from Vietnam A
(09:01):
fell seven point seven percent. And then Gap, which buys
twenty seven percent of its goods from Vietnamese factories at
nineteen percent from Indonesia. That's slid about eleven percent. You
know you yor income, John Tucker, Bloomberg Radio.
Speaker 2 (09:15):
All right, John, thank you well. Shortly after midnight, US
auto import tariffs went into effect. Meanwhile, one industry was
spared for now, and Bloomberg Lisa Matteo joins us with
the very latest Lisa, Hey there, Karen.
Speaker 12 (09:26):
So let's start with the most recent chain, the twenty
five percent tariff on US auto imports. Now, it's expected
to increase costs and disrupt industry supply chains. But what's
more certain auto parts will also be hit with a
similar level no later than May third. And this morning
you already have Volkswagen already announcing it plans to add
import fees to the sticker prices of its vehicles that
(09:48):
are shipped into the US. Now, Volkswagen shares down about
half a percent. In Germany, you have Ford off about
half a percent, General Motors down one percent, Tesla is
lower by three percent. Chrysler Parents still land. It was
down nearly two percent yesterday. This morning it's up about
three tens of percent before the belt. The only good
news is at imported cards and parts, will they escape
(10:08):
the so called reciprocal tariffs? And speaking of being spared,
you have the pharmaceutical sector and won this reprieve from
sweeping tariffs. But here's the thing, it may not last long.
Sources saying the White House plans to launch an investigation
into the drug industry other sectors, and that includes semiconductors
and potentially critical minerals, and that could lead to tariffs
under the Trade Expansion Act. Now, if we take a
(10:30):
look at chairs A Pfizer, they're down about two tens
of percent. Eli Lilly off about two percent. Lisa Matteo, Bloomberg.
Speaker 3 (10:36):
Radio, Lisa, thank you all. In all, it is an
aggressive suite of tariffs from President Trump, and it will
significantly complicate the federal reserves job as it struggles to
question inflation and avoid an economic downturn. This morning, Morgan
Stanley pushed back. It's called for the next FED rate
cut to next year. The firm's analysts cite inflation risks
arising from tariffs. FED Governor Adriana Kougler says it's appropriate
(10:59):
to keep in restraints unchanged until upside risks to inflation abate.
Speaker 13 (11:04):
I will support maintaining the current policy BRAID for as
long as this upside race to inflation continue, while economic
activity unemployment remain the stay.
Speaker 3 (11:18):
No, it was FED Governor Adriana Kugler. The Fed's next
meeting May seventh.
Speaker 5 (11:24):
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Speaker 2 (11:35):
Good morning. I'm Karen Moscow alongside Nathan Hager, and we
continue our coverage on tariffs with a conversation with US
Treasury Secretary Scott Messant. He spoke with the Bloomberg Televisions
and Marie hor Dern shortly after the tariffs were announced,
urging other economies against taking retaliatory steps against the new
set of America's retaliatory tariffs. Let's listen in.
Speaker 6 (11:58):
What I would say and Marie, I would advise none
of the countries to panic. I wouldn't try to retaliate
because as long as you don't retaliate, this is the
high end of the number, and I think the market
could have certainty that this is the number barring retaliation.
So we've got a ceiling and then we can see
(12:21):
if there's a different floor.
Speaker 14 (12:22):
So you sound like you're ready for a negotiation. A
number of these partners. Has the European Union, has China?
Has India? Have these countries reached out?
Speaker 6 (12:31):
Well, they've all reached out, but it's going to be
up to President Trump to see what he wants to do.
I think the mindset might be to let things settle
for a while. Their terrifts or non tariff barriers have
been on a long time, so we'll see where it
goes from here.
Speaker 14 (12:46):
When it comes to China, they have a much higher
rate on this list. On top of that, there's still
that twenty percent fentanyl tariff rate. Is all of this
coming together to be more than a fifty percent tariff
rate for Beijing?
Speaker 6 (12:59):
Well, yes, I think it is, and I think it's
a combination of things. And you know again that I
think China said today that solving the fentanyl crisis depends
on taking off the fentanyl tariffs, and I'm pretty sure
that's not the way the sequencing is going to work.
They're exporting the precursor chemicals, and every every day, every week,
(13:22):
every month, Americans are dying and it's going to have
to stop.
Speaker 14 (13:24):
When it comes to places like China, the President has
mentioned he's willing to even look at things like TikTok
to potentially do a negotiation with them. When it comes
to tariffs, I'm sure you're looking at things like the
u Wan. What's on the table when it comes to
this trade realignment between Beijing and Washington.
Speaker 6 (13:40):
Well, we have, we haven't started anything yet. We've been
busy with the with the tariffs. I've been busy, as
we talked about it earlier. The tax bills going very well.
So I think that we will move toward the bilateral
relationship with China now that we've done the multilateral tariffs.
Speaker 14 (13:59):
Plan for conversations or a trip to Beijing. Nothing eminent
when it comes to this negotiation. April ninth, these tariffs
come in place, do you plan on having negotiations before
that date?
Speaker 6 (14:14):
Again, I'm not part of the negotiation, so you know,
we'll see. I am sure that there's going to be
a lot of calls. I just don't know if they're
going to be negotiations.
Speaker 2 (14:24):
And that was US Treasury Secretary's god Besson speaking with
the Bloomberg TVs and Marie hord Durn after President Trump's
tariff announcement. You can hear the full interview on the
Bloomberg Talks podcast page and watch it on the Bloomberg
podcast page on YouTube.
Speaker 3 (14:38):
Nathan Karen, we continue our coverage of these tariffs. We
are joined now by Bloomberg News Global Trades are Brendan
Murray and Terry Haynes, the founder of Pangaea Policy, for
a roundtable this morning after the announcement. Great to speak
with both of you, and I'll start with you, Brendan,
because even as Treasury Secretary Scott Bessett is framing this
as a negotiation, this seems like a really huge start
(15:03):
to what could be coming.
Speaker 5 (15:05):
Good morning, Yeah, exactly. He said, you know, let's let
this paraphrasing, he said, let's let this settle in for
a while, so that you know, that doesn't seem like
you know, a window for negotiating over the next four
or five days. So these tariffs are going to take
effect by early next week and countries are going to
be scrambling to figure out do we want to retaliate,
(15:25):
ratchet up the ratchet up the pressure, or do we
want to you know, take a you know, a more
negotiating posture and try to work this out. Either way,
marcuts don't like it, and economists are marking down their
outlook for growth and marking up their outlook for inflation.
And you know the aftermath of it here even though
President Trump said this is simple, reciprocity is about as
(15:49):
simple as it gets, this still creates a lot of confusion.
Speaker 3 (15:52):
Terry, How does the negotiation go when the president is
starting with this onslaught.
Speaker 11 (16:00):
Warning, Nathan, you know, the negotiations in a lot of
ways have already started. My understanding in a lot of
places is that Secretary of Commerce is the Lutnix team
had already been giving wish lists, both tariffs and barriers
to different countries who were already kind of parsing that
(16:20):
and trying to figure out how they might respond to it,
and a lot of countries, I mean major countries, both
allies and non aligned, are going to have to frankly
work through with their own industries there, whether it be
agriculture or machine industries, to figure out exactly what they
want to do and how they want to do it. So,
(16:41):
you know, I think it's it's correct to say this
is not going to magically disappear or be mitigated in
the next few days. But all countries have had an
advanced warning of what the United States might want and
what the kind of the parameters for negotiations will be.
So you know the number one, there's that number two.
(17:02):
You've seen encouraging responses by a lot of countries. It
was encouraged. I mean Canada of course got singled out
for special treatment, but you had Premiere Ford on your
air last night and he was urging Carneie not to
retaliate it all. So you know, you'll have a lot
of those kind of responses.
Speaker 3 (17:21):
Notwithstanding Canada and Mexico being spared at least this round, Brendan,
just about every other country in the world, even some
very very small ones, are being targeted in this long
list that President Trump showed at the Rose Garden last night.
What could the potential impact be for this kind of
country by country tariff announcement.
Speaker 5 (17:43):
Well, one of the hardest hit regions was South Asia.
Countries like Vietnam, Malaysia, Cambodia. These are places where a
lot of the sort of lower skilled manufacturing has migrated
from China over the past several years. And you know
those are places is where you know, close clothes and
shoes are made. And so you know, there are stories
(18:05):
that we're reporting today about how you know, Nike, you know,
you know, Nike tennis shoes and those kinds of things
that are made in South Asia, you know are going
to be more expensive. The other the other issue is
you know electronics, Apple is starting to produce a lot
more of their phones in India. India you know, got
hit with a tariff in the twenty five percent range,
I think, and so you know, if these can't be
(18:30):
resolved by negotiation, you know, anytime soon, then you know,
consumer prices could conceivably go up. Interestingly, Switzerland was singled out,
got a bigger got a bigger tariff level than the
rest of the than than the European Union around it.
So you know, Rolex watches come next week are going
to be about thirty one percent more expensive than they
(18:51):
otherwise would be.
Speaker 3 (18:52):
Terry, we haven't heard much Republican reaction on Capitol Hill
besides the four Republicans who voted with Democrats against Canada tariffs.
What do you think the Republican reaction is going to
be as these tariffs take a fact.
Speaker 11 (19:08):
I think there'll be two things that happened, David, One
above board, one below board. The above board will be
that there will be some concerns from Republicans from based
on the situation in their own states, about making sure
that they push Trump to resolve these issues lower tariffs,
(19:33):
engage in the negotiations, do whatever they can, and frankly,
you know, work with the other the other country as well.
That's number one. Number two. I think another impact here
is that it lights an additional hotfoot under the administration's
broader economic agenda. And you can hear this from a
lot of senators. You can also hear from Secretary Vessant,
(19:54):
who continues to push the idea that the tax cuts
may show up as soon as July or August or
September something like that. Now I've got it at eighty
percent by the end of the calendar year. But there's
an opportunity should everyone wish on the Republican side to
move these things along faster, and Besson will also be
(20:16):
focusing on that. He has said that he's going to
spend a lot of time pushing exactly that that agenda.
Think of Bess and broadly, as in twenty twenty five,
as Gary Cohne was in twenty seventeen, the guy who's
constantly up there goosing things along, trying to make it
go as fast as he can.
Speaker 2 (20:37):
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Speaker 3 (21:22):
I'm Karen Moscow and I'm Nathan Hager. Join us again
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your day, right here on Bloomberg.
Speaker 2 (21:29):
Dabray
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.
Speaker 3 (00:15):
Karen, the Global Sella follows the announcement that Wall Street
and the world had been waiting for four weeks. President
Trump is raising tariffs around the world on a day
he is dubbed Liberation Day for America.
Speaker 4 (00:28):
April second, twenty twenty five will forever be remembered as
today American industry was reborn, the day America's destiny was reclaimed,
and the day that we began to make America wealthy again.
Speaker 3 (00:45):
In remarks from the White House Rose Garden heard here
on Bloomberg, the President announced at least a ten percent
tariff on all exporters to the US. About sixty nations
will see even higher duties. The biggest target of all
is China. The President says, Beijing charges the US an
effective sixty seven percent rate.
Speaker 4 (01:03):
So sixty seven percent, so we're going to be charging
a discounted reciprocal tariff of thirty four percent.
Speaker 1 (01:09):
I think.
Speaker 4 (01:10):
In other words, they charge us we judge m chuge mls.
So how could anybody be upset?
Speaker 3 (01:14):
President Trump is also slapping higher duties on the European Union, Japan, Vietnam,
and more. All together, Bloomberg Economics estimates the effective tax
rate on more than three trillion dollars in imported goods
could rise to about twenty three percent. That is the
highest in more than a century.
Speaker 2 (01:31):
Well iven, President Trump's tariffs have drawn a sharp reaction
on Capitol Hill. House Minority Leader Hankem Jeffries spoke out
even before the president's announcement, this is not liberation Day,
It's recession day.
Speaker 5 (01:46):
In the United States of America.
Speaker 6 (01:48):
That's what the Trump tariffs are going to do, crash
the economy.
Speaker 2 (01:53):
How's Minority Leader Hankem Jeffries. Republicans are mostly standing behind
the president. Ashley Davis is a GEOP. He's strategist and
partner at S three Group.
Speaker 7 (02:02):
He's ran on this for the last four years.
Speaker 2 (02:04):
Really is that he needs to make sure that the
other countries are paying what they deserve Republicans strategist Ashley Davis.
But not every Republican is on board. Kentucky Senator Ran
Paul says tariffs are just another tax on Americans.
Speaker 4 (02:19):
Republicans used to be in Conservatives and particularly used to
be against new taxes. I don't think it's going to
be good for us politically, but it's not good for
the country either.
Speaker 2 (02:27):
Senator Ran Paul and three other Republicans joined with Democrats
on a bill opposing President Trump's tariffs on Canada. The
bill is not likely to pass in the House.
Speaker 3 (02:35):
Well, Karen, President Trump's historic action risks inducing a worldwide
trade war marked by tit for tax strikes. We spoke
with Treasury Secretary Scott Besson, who urged other countries not
to fight back.
Speaker 6 (02:47):
I would advise none of the countries to panic. I
wouldn't try to retaliate because as long as you don't retaliate,
this is the high end of the number, and I
think there could have certainty that this is the number
barring retaliation.
Speaker 3 (03:05):
Treasury Secretary Scott Besson went on to leave the door
open to negotiations, telling Bloomberg quote, We'll see with regard
to further talks. You can hear the full interview with
Scott Besant on the Bloomberg Talks podcast and watch it
on the Bloomberg podcast page on YouTube.
Speaker 2 (03:19):
So, Nathan, let's get the reaction from other countries around
the world. Our first stop brings US to Asia, where
China has been the biggest target of Trump tariffs, and
Bloomberg deal Desis joins US from Hong Kong with more Jill.
Speaker 7 (03:32):
Yes, well, I think it's a lot to really digest
here out of Asia. On the one hand, you do
see those really high tariffs on China. This thirty four
percent increase that Trump is now putting on China. If
you were to take that into tality with all of
the other levees that Trump has put on China that
the US has put on China over the last several
(03:53):
months years, you're looking at somewhere in the neighborhood of
the average US tariff on Chinese goods being at least
sixty five percent according to some economists. Bloomberg Economics estimates
that as a result, that could lead to a one
to two percentage point loss to growth in China. So
certainly a big metric there that you're really looking at.
Of course, we haven't really heard from China yet what
(04:14):
their definitive actions will be to counter these tariffs. The
Ministry of Foreign Affairs has said that there are going
to be measures coming, we're just waiting to see them.
But I would draw your attention, Karen too, elsewhere in
Asia where you're also seeing incredibly high rates and likely
even you know, higher economic shocks. Vietnam, for example, they
were hit with a forty six percent tariff in this
(04:35):
latest round. I mean, this is a country that you
know is incredibly export dependent. They're among the world's most
trade dependent nations. Or exports were equivalent to nearly ninety
percent of economic output. I think that's why you're seeing
such a big market reaction in that particular country today. So,
you know, just a couple of examples there, but obviously
all across Asia, we're seeing a lot of different economic shocks,
(04:56):
just as nations respond to these tariffs that just been announced.
Speaker 3 (05:00):
Jill desis with the reaction from Hong Kong. Jill, thank you.
Now let's head to Europe get the reaction there. Bloomberg Daybreak,
you're a banker. Caroline Hepger is in London with the latest.
Good morning, Caroline, good morning, Nathan and Karen.
Speaker 8 (05:12):
President Trump called the EU pathetic again and that the
block rips off the US, as he imposed twenty percent
tariffs on EU goods exported to America. The EU argues
that America exports plenty of its services to the block
and that it is the biggest single market in the
world now. EU trade ministers are due to meet on
Monday to discuss their response. Meanwhile, in the early hours
(05:35):
this morning, Commissioned President as to Leavondeline warned that US
actions would deal a blow to the global economy, and
she urged further negotiations.
Speaker 9 (05:45):
We have always been ready to negotiate with the United
States to remove the remaining barriers to transatlantic trade. At
the same time, we are prepared to respond. We are
already finalizing the first package of countermeasures in response to
tariff's on steel, and we're now preparing for further countermeasures
(06:05):
to protect our interests and our businesses.
Speaker 8 (06:08):
If negotiations fails, Vonderline speaking there the tariffs could wipe
out the growth forecast by the ECB for this year
and in twenty twenty six. Markets now see another rate
cut in April as likely. Bloomberg Economics sees the tariffs
cutting EU goods exports to the US by half in
the medium term. By comparison, here in the UK, we
(06:30):
were dealt with a bit more leniently, a ten percent tariff.
Some including business lobby see it as a benefit from
Prime Minister Keir Starmer's pragmatic approach to the White House.
The UK Trade Secretary Jonathan Reynolds has told Bloomberg just
this morning that Britain is still confident that tariffs will
come off, and yet the US is inflicting pain on
(06:52):
some of its closest allies. All told, it's more than
just an economic shock.
Speaker 2 (06:57):
All right, Caroline, thank you well early Trump to targets
hitded On in Mexico escaped the new round of tariff announcements.
We spoke with Ontario Premier Doug Ford.
Speaker 1 (07:06):
I would highly recommend to the Prime Minister not the
retaliate and let's carry on a strong relationship. Let's build
the aim can fortress American Canadian fortress around both countries
and be the wealthiestmans, prosperous, safest two countries in the world.
Speaker 2 (07:24):
Ontario Premier Doug Ford, speaking of the Bloomberg's Balance of power.
While no new tariffs were announced to other levies Trump
has already imposed on Canadian and Mexican goods remain intact.
Speaker 3 (07:35):
And Karen Well stocks are selling off around the world.
The US has been the hardest hit so far. Let's
continue our coverage now with Bloomberg's John Tucker.
Speaker 10 (07:43):
John, all right, Nathan, Let's do the biggest losers in
the US. These are the companies most exposed in that
source a lot of their products from Asia, such as
Apple and some of its magnificent seven cohorts of the
new tariffs will reach thirty four percent for China. Apple
still produces the mudjority of its US OL devices in
Chinese factories. India, where Apple's increasingly building iPhones and air pods,
(08:07):
that's getting a twenty six percent TEARFF. And then there's Vietnam,
where the company now makes air pods, iPads, Apple watches,
and max that'll be hit with a forty six percent tax.
Speaker 11 (08:17):
Now.
Speaker 10 (08:17):
Apple shares this morning in the pre market down close
to seven percent. Then there's in Vidia. In Vidia the
most actively traded pre market. It relies on China for
AI Chip sales of those shares right now down three
point three percent. Let's move on to the world's largest
footwear and apparel companies also facing a shock to their
(08:38):
supply chains. Nike makes many of its sneakers in Vietnam,
and Nike shares pre market they are down eight point
four percent. Lululemon Athletico, which makes forty percent of its
products in Vietnam seventeen percent in Cambodia, tumbled almost ten
percent in late trading. Shares of Abercrombie and Fitch, they
get thirty five percent of their merchandise from Vietnam A
(09:01):
fell seven point seven percent. And then Gap, which buys
twenty seven percent of its goods from Vietnamese factories at
nineteen percent from Indonesia. That's slid about eleven percent. You
know you yor income, John Tucker, Bloomberg Radio.
Speaker 2 (09:15):
All right, John, thank you well. Shortly after midnight, US
auto import tariffs went into effect. Meanwhile, one industry was
spared for now, and Bloomberg Lisa Matteo joins us with
the very latest Lisa, Hey there, Karen.
Speaker 12 (09:26):
So let's start with the most recent chain, the twenty
five percent tariff on US auto imports. Now, it's expected
to increase costs and disrupt industry supply chains. But what's
more certain auto parts will also be hit with a
similar level no later than May third. And this morning
you already have Volkswagen already announcing it plans to add
import fees to the sticker prices of its vehicles that
(09:48):
are shipped into the US. Now, Volkswagen shares down about
half a percent. In Germany, you have Ford off about
half a percent, General Motors down one percent, Tesla is
lower by three percent. Chrysler Parents still land. It was
down nearly two percent yesterday. This morning it's up about
three tens of percent before the belt. The only good
news is at imported cards and parts, will they escape
(10:08):
the so called reciprocal tariffs? And speaking of being spared,
you have the pharmaceutical sector and won this reprieve from
sweeping tariffs. But here's the thing, it may not last long.
Sources saying the White House plans to launch an investigation
into the drug industry other sectors, and that includes semiconductors
and potentially critical minerals, and that could lead to tariffs
under the Trade Expansion Act. Now, if we take a
(10:30):
look at chairs A Pfizer, they're down about two tens
of percent. Eli Lilly off about two percent. Lisa Matteo, Bloomberg.
Speaker 3 (10:36):
Radio, Lisa, thank you all. In all, it is an
aggressive suite of tariffs from President Trump, and it will
significantly complicate the federal reserves job as it struggles to
question inflation and avoid an economic downturn. This morning, Morgan
Stanley pushed back. It's called for the next FED rate
cut to next year. The firm's analysts cite inflation risks
arising from tariffs. FED Governor Adriana Kougler says it's appropriate
(10:59):
to keep in restraints unchanged until upside risks to inflation abate.
Speaker 13 (11:04):
I will support maintaining the current policy BRAID for as
long as this upside race to inflation continue, while economic
activity unemployment remain the stay.
Speaker 3 (11:18):
No, it was FED Governor Adriana Kugler. The Fed's next
meeting May seventh.
Speaker 5 (11:24):
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Speaker 2 (11:35):
Good morning. I'm Karen Moscow alongside Nathan Hager, and we
continue our coverage on tariffs with a conversation with US
Treasury Secretary Scott Messant. He spoke with the Bloomberg Televisions
and Marie hor Dern shortly after the tariffs were announced,
urging other economies against taking retaliatory steps against the new
set of America's retaliatory tariffs. Let's listen in.
Speaker 6 (11:58):
What I would say and Marie, I would advise none
of the countries to panic. I wouldn't try to retaliate
because as long as you don't retaliate, this is the
high end of the number, and I think the market
could have certainty that this is the number barring retaliation.
So we've got a ceiling and then we can see
(12:21):
if there's a different floor.
Speaker 14 (12:22):
So you sound like you're ready for a negotiation. A
number of these partners. Has the European Union, has China?
Has India? Have these countries reached out?
Speaker 6 (12:31):
Well, they've all reached out, but it's going to be
up to President Trump to see what he wants to do.
I think the mindset might be to let things settle
for a while. Their terrifts or non tariff barriers have
been on a long time, so we'll see where it
goes from here.
Speaker 14 (12:46):
When it comes to China, they have a much higher
rate on this list. On top of that, there's still
that twenty percent fentanyl tariff rate. Is all of this
coming together to be more than a fifty percent tariff
rate for Beijing?
Speaker 6 (12:59):
Well, yes, I think it is, and I think it's
a combination of things. And you know again that I
think China said today that solving the fentanyl crisis depends
on taking off the fentanyl tariffs, and I'm pretty sure
that's not the way the sequencing is going to work.
They're exporting the precursor chemicals, and every every day, every week,
(13:22):
every month, Americans are dying and it's going to have
to stop.
Speaker 14 (13:24):
When it comes to places like China, the President has
mentioned he's willing to even look at things like TikTok
to potentially do a negotiation with them. When it comes
to tariffs, I'm sure you're looking at things like the
u Wan. What's on the table when it comes to
this trade realignment between Beijing and Washington.
Speaker 6 (13:40):
Well, we have, we haven't started anything yet. We've been
busy with the with the tariffs. I've been busy, as
we talked about it earlier. The tax bills going very well.
So I think that we will move toward the bilateral
relationship with China now that we've done the multilateral tariffs.
Speaker 14 (13:59):
Plan for conversations or a trip to Beijing. Nothing eminent
when it comes to this negotiation. April ninth, these tariffs
come in place, do you plan on having negotiations before
that date?
Speaker 6 (14:14):
Again, I'm not part of the negotiation, so you know,
we'll see. I am sure that there's going to be
a lot of calls. I just don't know if they're
going to be negotiations.
Speaker 2 (14:24):
And that was US Treasury Secretary's god Besson speaking with
the Bloomberg TVs and Marie hord Durn after President Trump's
tariff announcement. You can hear the full interview on the
Bloomberg Talks podcast page and watch it on the Bloomberg
podcast page on YouTube.
Speaker 3 (14:38):
Nathan Karen, we continue our coverage of these tariffs. We
are joined now by Bloomberg News Global Trades are Brendan
Murray and Terry Haynes, the founder of Pangaea Policy, for
a roundtable this morning after the announcement. Great to speak
with both of you, and I'll start with you, Brendan,
because even as Treasury Secretary Scott Bessett is framing this
as a negotiation, this seems like a really huge start
(15:03):
to what could be coming.
Speaker 5 (15:05):
Good morning, Yeah, exactly. He said, you know, let's let
this paraphrasing, he said, let's let this settle in for
a while, so that you know, that doesn't seem like
you know, a window for negotiating over the next four
or five days. So these tariffs are going to take
effect by early next week and countries are going to
be scrambling to figure out do we want to retaliate,
(15:25):
ratchet up the ratchet up the pressure, or do we
want to you know, take a you know, a more
negotiating posture and try to work this out. Either way,
marcuts don't like it, and economists are marking down their
outlook for growth and marking up their outlook for inflation.
And you know the aftermath of it here even though
President Trump said this is simple, reciprocity is about as
(15:49):
simple as it gets, this still creates a lot of confusion.
Speaker 3 (15:52):
Terry, How does the negotiation go when the president is
starting with this onslaught.
Speaker 11 (16:00):
Warning, Nathan, you know, the negotiations in a lot of
ways have already started. My understanding in a lot of
places is that Secretary of Commerce is the Lutnix team
had already been giving wish lists, both tariffs and barriers
to different countries who were already kind of parsing that
(16:20):
and trying to figure out how they might respond to it,
and a lot of countries, I mean major countries, both
allies and non aligned, are going to have to frankly
work through with their own industries there, whether it be
agriculture or machine industries, to figure out exactly what they
want to do and how they want to do it. So,
(16:41):
you know, I think it's it's correct to say this
is not going to magically disappear or be mitigated in
the next few days. But all countries have had an
advanced warning of what the United States might want and
what the kind of the parameters for negotiations will be.
So you know the number one, there's that number two.
(17:02):
You've seen encouraging responses by a lot of countries. It
was encouraged. I mean Canada of course got singled out
for special treatment, but you had Premiere Ford on your
air last night and he was urging Carneie not to
retaliate it all. So you know, you'll have a lot
of those kind of responses.
Speaker 3 (17:21):
Notwithstanding Canada and Mexico being spared at least this round, Brendan,
just about every other country in the world, even some
very very small ones, are being targeted in this long
list that President Trump showed at the Rose Garden last night.
What could the potential impact be for this kind of
country by country tariff announcement.
Speaker 5 (17:43):
Well, one of the hardest hit regions was South Asia.
Countries like Vietnam, Malaysia, Cambodia. These are places where a
lot of the sort of lower skilled manufacturing has migrated
from China over the past several years. And you know
those are places is where you know, close clothes and
shoes are made. And so you know, there are stories
(18:05):
that we're reporting today about how you know, Nike, you know,
you know, Nike tennis shoes and those kinds of things
that are made in South Asia, you know are going
to be more expensive. The other the other issue is
you know electronics, Apple is starting to produce a lot
more of their phones in India. India you know, got
hit with a tariff in the twenty five percent range,
I think, and so you know, if these can't be
(18:30):
resolved by negotiation, you know, anytime soon, then you know,
consumer prices could conceivably go up. Interestingly, Switzerland was singled out,
got a bigger got a bigger tariff level than the
rest of the than than the European Union around it.
So you know, Rolex watches come next week are going
to be about thirty one percent more expensive than they
(18:51):
otherwise would be.
Speaker 3 (18:52):
Terry, we haven't heard much Republican reaction on Capitol Hill
besides the four Republicans who voted with Democrats against Canada tariffs.
What do you think the Republican reaction is going to
be as these tariffs take a fact.
Speaker 11 (19:08):
I think there'll be two things that happened, David, One
above board, one below board. The above board will be
that there will be some concerns from Republicans from based
on the situation in their own states, about making sure
that they push Trump to resolve these issues lower tariffs,
(19:33):
engage in the negotiations, do whatever they can, and frankly,
you know, work with the other the other country as well.
That's number one. Number two. I think another impact here
is that it lights an additional hotfoot under the administration's
broader economic agenda. And you can hear this from a
lot of senators. You can also hear from Secretary Vessant,
(19:54):
who continues to push the idea that the tax cuts
may show up as soon as July or August or
September something like that. Now I've got it at eighty
percent by the end of the calendar year. But there's
an opportunity should everyone wish on the Republican side to
move these things along faster, and Besson will also be
(20:16):
focusing on that. He has said that he's going to
spend a lot of time pushing exactly that that agenda.
Think of Bess and broadly, as in twenty twenty five,
as Gary Cohne was in twenty seventeen, the guy who's
constantly up there goosing things along, trying to make it
go as fast as he can.
Speaker 2 (20:37):
This is Bloomberg day Break, your morning podcast and the
stories making news from Wall Street to Washington and beyond.
Speaker 3 (20:43):
Look for us on your podcast feed by six am
Eastern each morning, on Apple, Spotify, or anywhere else you listen.
Speaker 2 (20:50):
You can also listen live each morning starting at five
am Wall Street time on Bloomberg eleven three to zero
in New York, Bloomberg in ninety nine to one in Washington,
Bloomberg ninety two nine Boston, and nationwide on serious XM
Channel one twenty one.
Speaker 3 (21:04):
Plus listen coast to coast on the Bloomberg Business app.
Now with Apple CarPlay and Android auto interfaces, and.
Speaker 2 (21:10):
Don't forget to subscribe to Bloomberg News Now. It's the
latest news, whenever you want it in five minutes or less.
Search Bloomberg News Now on your favorite podcast platform to
stay informed all day long.
Speaker 3 (21:22):
I'm Karen Moscow and I'm Nathan Hager. Join us again
tomorrow morning for all the news you need to start
your day, right here on Bloomberg.
Speaker 2 (21:29):
Dabray
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