April 14, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) President Donald Trump pledged he will still apply tariffs to phones, computers and popular consumer electronics, downplaying a weekend exemption as a procedural step in his overall push to remake US trade.
(2) Strategists at Goldman Sachs Group cut their targets for key Chinese stock indexes for a second time this month, citing heightened trade tensions with the US.
(3) The dollar fell for a fifth day as traders looked past a reprieve on the imposition of certain electronic tariffs and after President Donald Trump downplayed his exemption for the technology sector.
(4) Treasuries gained after last week’s rout as President Donald Trump paused import duties on a range of consumer electronics. Investors also await speeches from Fed officials Christopher Waller and Patrick Harker.
(5) British companies’ finance chiefs had adopted their most defensive positions since the pandemic even before US President Donald Trump’s tariffs sent global markets into a tailspin.
(6) UK officials are rushing to secure the raw materials needed to keep Britain’s last primary steel manufacturer running, with other businesses offering to provide help.
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Transcript
Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Day ba q At podcast, available
every morning on Apple, Spotify or wherever you listen. It's Monday,
the fourteenth of April in London. I'm Caroline Hepkere and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today. The dollar drops as
Donald Trump downplays his tariff pause on electronics and vow's
new levies on the sector.
Speaker 2 (00:28):
Exports to the US from China surge in March as
firm scrambled to source goods before duties push up costs.
Speaker 3 (00:35):
Plus forging ahead, UK officials race to secure the crucial
materials needed to keep British steals blast furnaces running.
Speaker 2 (00:43):
Let's start with the roundup of our top stories.
Speaker 3 (00:46):
President Donald Trump says a pause on tariffs for certain
electronics is only temporary, insisting in his words that nobody
is getting off the hook. On Friday, the US announced
that popular consumer electronics, including phones and apptops, would be
exempt from the planned one hundred and twenty five percent
tariff on Chinese goods and ten percent global levies, but
(01:08):
over the weekend it became clear that those products would
soon face separate charges. Posting on truth social On Sunday,
Trump said the exempted items were just moving to a
different tariff bucket, and that the administration would now be
focusing on semiconductors and the whole electronics supply chain. Speaking
to reporters on Air Force one, Trump gave further details
(01:28):
of his plan.
Speaker 4 (01:29):
The tariffs will be in place in the non distant future, because,
as you know, like we did with steel, like we
did with automobiles, like we did with aluminum, which are
now fully on, we'll be doing that with semiconductors, with
chips and numerous other things. And that'll take place in
the very near.
Speaker 2 (01:48):
Future, probably the semiconductor tear I'm going to.
Speaker 4 (01:50):
Be announcing it over the next week.
Speaker 3 (01:52):
It's not yet clear what tariff rate Trump plans to
apply to semiconductors and related products, but other sectors such
as stealing off face levees of twenty five percent. This
latest twist comes as countries and global markets continue to
be whipsored by a flurry of walk backs, carve outs,
and concessions from the administration.
Speaker 2 (02:12):
The news that the technology sector is likely to get
only a temporary reprieve from tariffs has helped to drive
the green back to fresh lows. The BlueBag Dollar Spot
index slipped on Monday after tumbling two point four percent
last week amid escalating trade tensions with China and concerns
about US growth slowing down. The move lower comes as
(02:35):
traders pay close attention to the US treasury market following
last week's route. Bob Michael, global head of fixed income
at JP Morgan Asset Management, says the worst of the
sell off has likely now happened.
Speaker 5 (02:47):
I think there's still a bit more of a washout
to go. I think there are still the investors that
are coming in overseas that have seen the downward price
moves and maybe unwinding some position. But I feel pretty
good that we're putting in a low in price and
a high end yield here.
Speaker 2 (03:05):
Well, Michael speaking there. As markets continue to digest the
latest tariff news out of Washington, Equity index futures for
both the US and Europe are pointing high this morning. However,
a rise in the price of gold, which hit a
new record high, suggests investors remain cautious about what lies ahead.
Speaker 3 (03:23):
The latest tariff moves from the US come as new
data shows China's exports surge till last month, exports in
dollar terms far exceeded all forecasts to rise by twelve
point four percent, with a near nine percent rise in
goods being sent to the US. The figure suggests that
many companies were front loading orders in March to get
ahead of looming tariffs. The data also reveals the Chinese
(03:45):
exports to Southeast Asia reached their second highest level on record,
suggesting firms are diverting shipments to countries across the region.
Speaker 2 (03:54):
Here in the UK, corporate finance chiefs have been adopting
defensive positions even before the prospect of a global trade war.
This according to a new study showing British businesses are
playing it safe. Bloomberg's Tea Adebayo has more.
Speaker 6 (04:09):
Just twelve percent of the UK's chief financial officers think
now as a good time to take more risks. That's
half the long term average. The data gathered by consulting
firm Deloitte, was collected in March this year, just before
Donald Trump's global tariff program was unleashed. The last time
risk appetite levels were this low, the country was dealing
(04:30):
with the onset of the COVID pandemic in early twenty twenty.
It will make sobering reading for Prime Minister Keir Starmer,
whose Labour government has pledged to speed up economic growth.
CFOs are also prioritizing cutting costs and predicting a sharp
hiring decline over the next year. In London, to your
Adebayo Bloomberg Radio.
Speaker 3 (04:50):
British officials are raising to find the materials to keep
the last steelmaker in the country going after season control
of the company from its Chinese owners. An emergency session
of Parliament gave the government power to run British Steel
after talks with its parent company Jinye broke down. Business
Secretary Jonathan Reynolds says the Chinese FIRN left them with
no choice.
Speaker 7 (05:09):
In this situation, with the clock being run down, Doing
nothing was not an option. We could not, will not
and never will stand idly by while he'd seeps from
the UK's remaining bus furnaces without any planning, any due process,
or any respect for the consequences.
Speaker 3 (05:28):
Reynolds now faces the challenge of keeping the steel plant open.
The business loses seven hundred thousand pounds a day and
needs raw materials urgently. The saga also raises questions about
the viability of Chinese infrastructure investment in the UK, with
the government saying there is now a high trust bar
going forward.
Speaker 2 (05:46):
And finally, in sports news, will Ree McElroy has completed
a career Grand Slam in golf with his win at
the US Masters Tournament. He becomes only the sixth man
to win all four major golf tournaments. It came down
to a sudden death playoff between the Northern Irishmen and
Justin Rose after McIlroy dragged his paw pot wide. Afterwards,
(06:07):
he reflected on what the victory meant to him and
to his family.
Speaker 1 (06:10):
I want to say hello to my mom and dad.
They're back home in Northern Ireland.
Speaker 7 (06:13):
And I can't wait to see them next week.
Speaker 1 (06:17):
I just count wit to celebrate this with them.
Speaker 2 (06:20):
Rory mcaroy there, speaking after winning the first Master's playoffs
since twenty seventeen. His win follows fourteen years of attempting
to capture the title at Augusta.
Speaker 3 (06:31):
And those are your top stories on the markets today.
The Mscish Pacific Index one point seven percent higher, the
NICKA in Tokyo by almost two percent, and the Hang
Saying is two point four percent high. The Bloomberg Dollar
Spot Index is a tenth of one percent weakers. We've
got the Japanese end three tenths stronger at one forty
three eleven against the dollar, and the euro and the
pound are both slightly stronger against the green back. This morning.
(06:51):
The tenure treasury yield down two basis points to four
point four to seven percent. Goal gold hitting a record
high again today, slightly off the highs, but still three
two hundred and twenty dollars a troy outs as we're
looking at Wall Street futures and eurostocks fifty futures, both higher,
eurostock fifty futures up by two and a half percent.
Speaker 2 (07:10):
Well in the moment, we'll bring you up to speed
on the market reaction to Present Trump's latest tariff moves
over the weekend. Plus we'll dig into the UK government's
take over of British Seal that also happened. Very busy weekend.
But something else caught our rye this morning. This is
a bit lighter. Maybe the craze for cavia. Apparently cavia
(07:30):
as a luxury item I worth shelling out for has
remained pretty resilient over about a century Russian caviat is
under Western sanctions, but today most caviar imported into the
US is actually farmed in China. It's always been kind
of a little bit outrageous, but actually the price of
cavia has been coming.
Speaker 3 (07:48):
Down, yeah, dramatically so because of the increased production out
of China as well. Our colleague Madison Divershire has been
writing about how it's become sort of a staple now
almost of menus in Manhattan certainly US now being asked
about what did Chinese tariffs after production essentially moved to
China mean for this item on the menu that gives
a sense of luxury but has been now almost used everywhere.
(08:11):
I mean, it's quite funny to get some of the
commentary from chefs at this piece as well. One of
them describes it as at the end of the day,
it's salt. If you everyone see an idea of the
downgrading of caviar in people's minds, just salt.
Speaker 2 (08:21):
Now, yeah, absolutely, Well, I suppose the big question is
whether or not maybe some of that cave I will
end up in the EU will be diverted anyway, we
shall see. It's one of those kind of big tariff questions,
isn't it. Well, let's get into that and the impact
on markets next.
Speaker 3 (08:35):
The dollar declining at the start of this week as
investors look past the weekend reprieve on tariffs on popular
consumer electronics and prepare for what could be another wild
week in markets. Our Markets Live executive editor is trapped
in and ready for mark code more. Good morning, good
to talk to you. Let's talk about the tariff tech
pause first, though, Trump promising more levies on this sector.
(08:57):
How significant is this prefer markets.
Speaker 1 (09:00):
I mean, obviously tarifs are the biggest story, and they're
going to remain the biggest story. They're not going away.
I think you got to every kind of question marks them.
We need to look atw different timespans, so on the
longer term time span, taras are going to be imposed
by the US to a level not seen probably in
about one hundred years, Whether some get removed, some get
negotiated away, that they will be imposed because he and
(09:23):
most of the Circle's administration deeply believe in them. Trumpet
particular has long deeply believed in tarifs and always been
very clear about this that he thinks this is what's
needed to kind of restructure US economy. So they're going
to remain in place. What hasn't worked out, is which
ones exactly, and that kind of ebb and flower trading
in the short term. Look, I know that Trump has
kind of gone, hey, we're going to impose some conductor
tariffs again, and that's kind of bad news, and simple
(09:44):
are wondering, hey, why are stocks higher? Well, the fact
is the exemption in the short term, even though it's
a temporary of you know, the electronics goods from China,
that's such a massive amount of the China trade that
you've suddenly kind of taken like a quarter or more
of the risk off of that kind of China US
trade where the most important part. So I think that
is a bigger relief in the short term, even though
(10:05):
people know more taraffs are coming, and they also are
worried that there's going to probably be more positive headlines
than the short term. We have the best at meeting
in Tokyo later this week. People expect there'll be some
kind of deal with Japan trade. There will announce some
kind of headline short term win, and that might provide
some release. So I think longer term, this story is
going to stay with us. It's going to stay extremely negative.
It's extremely negative for US assets. On the short term,
(10:27):
I think we're going to get bounce around. I wouldn't
want to trade that very negative, aggressively negative and narrative
in the very short term.
Speaker 2 (10:33):
Okay, we're talking about negative the dollar dropping to a
new twenty twenty five low. Where next as really the
currency universe has also seen this just massive reset.
Speaker 1 (10:45):
Yeah, unfortunately, it's going to be a similar type answer.
And that's because I think we're all traded in the
same story at the tarffs. But look, the world is
overexposed to the US dollar still. We've talked to a
lot about this in this program over the last kind
of three or four months, and ultimately, the US policies
are very damaging to holding US assets. For the last
fifteen or so years, we traded Tina, there is no
(11:05):
alternative to US megacap tech stocks, and so you know
of the marginal dollar generated around the world ninety five
percent which is pouring into kind of US equities, And
now suddenly people don't want to have exposed US assets
because they don't know how the rules are going to change,
and US businesses have an increased cost of business. Again,
they don't know exactly which cost of business is going
to increase and how much, but they know it's going
to get much more expensive to do business. So we're
(11:26):
eroding the advantage structurally, evrod in the advantage that US
companies have held, and it's a structural advantage that was
so deeply embedded that people thought it would never be removed.
That's the narrative we traded the last fifteen years that
there was no point playing m there's no point playing
a China recovery, Europe was never going to kind of
grow again. All those things have all been shifted. Now
it's suddenly no, wait a sec. We got way too
(11:47):
carried away in the US story, so we have to
get out of the US story. And suddenly people are
getting more excited about the other options again on a
structural basis, and that means that over the next couple
of years, the dollar will continue to decline, but very
short term, I'm pretty wary about how much it's fallen.
In the short term. You know, whether it's higher or
lower in a week, I have no idea. But over
the next couple of years, it's definitely weakening.
Speaker 3 (12:05):
Okay, this isn't a week as well. We're looking ahead
to some Central Bank decisions. But I do wonder Mark,
before we let you go, perhaps are you more excited
by what we saw from Rory McElroy over the weekend?
Speaker 1 (12:14):
Absolutely, the masters is the big news today. Markets are
last quiet compared to the last week or so, I
might actually, Funnily enough, I woke this morning and my
trader What's up charts had all blown up and I
welcome about five am Hong Kong time, and I thought,
oh my god, something's nuclear has happened in FX markets.
It must have gone crazy. And I clicked through every
chart and every single one was just talking about the golf.
Speaker 2 (12:33):
Oh, it was an amazing moment, wasn't it. That walk,
you know, back to getting the cup was amazing? Good self, Mark,
thank you so much for being with us this morning.
I'm sure we'll be speaking to you much more over
the course of this week. Our Market's Live executive editor
Mark Cudmore or.
Speaker 3 (12:47):
The UK government trying an emergency session of Parliament to
take control of British Steel this weekend. The company has
been effectively nationalized after talks with its Chinese owner Jinye
broke down. Our UK politok supporter of James Wilcock is
with us now for more Jesus reminded us of the
background to what got us here.
Speaker 8 (13:03):
Yeah, it's a very good question, Stephen, because here is
quite special. We've been talking about this government and how
it might need to step in on a range of
industries like Thames Water. Instead it's gonnaur size rail. But
to happen over an emergency sitting a Parliament hasn't been
recorded on the Saturday since nineteen eighty two, the Falklands War.
And then to now be in possession of the last
British steel company in the country, it's incredible And so
(13:27):
you know how we got here though? Is Chinese fum
Jinga acquired British steel back in March ninth, twenty twenty,
and being that specific because obviously that is pre COVID
by a matter of days, it pledged to invest one
point two billion into the company to make it new
and green. And a lot has changed since then, the pandemic, inflation, tariffs,
and so last month it announced a consultation on shutting
(13:50):
the steel works and it being cheaper to just import
the steel from China. That is obviously anathema to a
UK government that has made its industrial strategy all about
keeping steel alive. The UK government offered to pay for
the raw materials. We gather they were crisis talks. We
gathered that it was an offers to finish off the
one point two billion investment with a further half a
billion from the government. However, talks broke down, and the
(14:13):
most striking thing to me coming in on this Monday
is the government over the weekend effectively saying that Jingye
weren't serious and.
Speaker 1 (14:21):
That the was.
Speaker 8 (14:22):
They were saying JINGI apparently wanted one billion pounds to
keep this steal what's going and with no guarantee that
the billion pounds would stay for investment in the UK,
which made the government concern the assets would potentially be
leaving the country, and so the government took the step
to say they were going to nationalize it.
Speaker 2 (14:36):
What is Jingye's argument here, Well, if.
Speaker 8 (14:39):
You look at British Ste's accounts, the argument's pretty clear, Caroline.
In twenty twenty two, British Steel made a turnover one
point seven billion, but it made a loss of four
hundred million. It made a lost twenty twenty three of
two hundred and thirty one million pounds pre tax. This
is a company British Steel that loses seven hundred thousand
pounds a day. It is just not viable to keep
it going and the business safety chance and acknowledge that
(15:01):
over the weekend where he said the market value of
this firm is zero. So if you're Jinie, what are
you getting out of owning British Steel?
Speaker 3 (15:09):
What does this say, James about the Labor Government's approach
to its business and industrial strategy.
Speaker 8 (15:14):
All around the world, Stephen, people are asking the question
of is globalization working? What does my country need to
be done here? And the UK government has been extremely
clear about its path to gross it needs private investment.
So what this story is so interesting is it's the
first time we're seeing it all tied together. This is
national security, this is the green debate. Both things need steal.
(15:35):
This is also a world which the UK needs to
be able to function, with some of its sectors being
far less productive and competitive, especially the industrial manufacturing ones
than some of its global rivals. If it had lost
British Steel, the UK would have been the only G
seven country without a capacity to produce version steel. So
the stakes are quite clear. What we can now say
(15:57):
is this is a UK government willing to put the
state funding on the line to back these industries, and
that's through it sees for some of these kind of crises.
The question we don't yet know, though, is what the
physical trade off will be. We know this is a
company that loses two hundred and thirty one million pounds
in a year. Where is that money going to come from?
Speaker 3 (16:18):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Streets and beyond.
Speaker 2 (16:24):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (16:30):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:36):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (16:45):
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 ba q At podcast, available
every morning on Apple, Spotify or wherever you listen. It's Monday,
the fourteenth of April in London. I'm Caroline Hepkere and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today. The dollar drops as
Donald Trump downplays his tariff pause on electronics and vow's
new levies on the sector.
Speaker 2 (00:28):
Exports to the US from China surge in March as
firm scrambled to source goods before duties push up costs.
Speaker 3 (00:35):
Plus forging ahead, UK officials race to secure the crucial
materials needed to keep British steals blast furnaces running.
Speaker 2 (00:43):
Let's start with the roundup of our top stories.
Speaker 3 (00:46):
President Donald Trump says a pause on tariffs for certain
electronics is only temporary, insisting in his words that nobody
is getting off the hook. On Friday, the US announced
that popular consumer electronics, including phones and apptops, would be
exempt from the planned one hundred and twenty five percent
tariff on Chinese goods and ten percent global levies, but
(01:08):
over the weekend it became clear that those products would
soon face separate charges. Posting on truth social On Sunday,
Trump said the exempted items were just moving to a
different tariff bucket, and that the administration would now be
focusing on semiconductors and the whole electronics supply chain. Speaking
to reporters on Air Force one, Trump gave further details
(01:28):
of his plan.
Speaker 4 (01:29):
The tariffs will be in place in the non distant future, because,
as you know, like we did with steel, like we
did with automobiles, like we did with aluminum, which are
now fully on, we'll be doing that with semiconductors, with
chips and numerous other things. And that'll take place in
the very near.
Speaker 2 (01:48):
Future, probably the semiconductor tear I'm going to.
Speaker 4 (01:50):
Be announcing it over the next week.
Speaker 3 (01:52):
It's not yet clear what tariff rate Trump plans to
apply to semiconductors and related products, but other sectors such
as stealing off face levees of twenty five percent. This
latest twist comes as countries and global markets continue to
be whipsored by a flurry of walk backs, carve outs,
and concessions from the administration.
Speaker 2 (02:12):
The news that the technology sector is likely to get
only a temporary reprieve from tariffs has helped to drive
the green back to fresh lows. The BlueBag Dollar Spot
index slipped on Monday after tumbling two point four percent
last week amid escalating trade tensions with China and concerns
about US growth slowing down. The move lower comes as
(02:35):
traders pay close attention to the US treasury market following
last week's route. Bob Michael, global head of fixed income
at JP Morgan Asset Management, says the worst of the
sell off has likely now happened.
Speaker 5 (02:47):
I think there's still a bit more of a washout
to go. I think there are still the investors that
are coming in overseas that have seen the downward price
moves and maybe unwinding some position. But I feel pretty
good that we're putting in a low in price and
a high end yield here.
Speaker 2 (03:05):
Well, Michael speaking there. As markets continue to digest the
latest tariff news out of Washington, Equity index futures for
both the US and Europe are pointing high this morning. However,
a rise in the price of gold, which hit a
new record high, suggests investors remain cautious about what lies ahead.
Speaker 3 (03:23):
The latest tariff moves from the US come as new
data shows China's exports surge till last month, exports in
dollar terms far exceeded all forecasts to rise by twelve
point four percent, with a near nine percent rise in
goods being sent to the US. The figure suggests that
many companies were front loading orders in March to get
ahead of looming tariffs. The data also reveals the Chinese
(03:45):
exports to Southeast Asia reached their second highest level on record,
suggesting firms are diverting shipments to countries across the region.
Speaker 2 (03:54):
Here in the UK, corporate finance chiefs have been adopting
defensive positions even before the prospect of a global trade war.
This according to a new study showing British businesses are
playing it safe. Bloomberg's Tea Adebayo has more.
Speaker 6 (04:09):
Just twelve percent of the UK's chief financial officers think
now as a good time to take more risks. That's
half the long term average. The data gathered by consulting
firm Deloitte, was collected in March this year, just before
Donald Trump's global tariff program was unleashed. The last time
risk appetite levels were this low, the country was dealing
(04:30):
with the onset of the COVID pandemic in early twenty twenty.
It will make sobering reading for Prime Minister Keir Starmer,
whose Labour government has pledged to speed up economic growth.
CFOs are also prioritizing cutting costs and predicting a sharp
hiring decline over the next year. In London, to your
Adebayo Bloomberg Radio.
Speaker 3 (04:50):
British officials are raising to find the materials to keep
the last steelmaker in the country going after season control
of the company from its Chinese owners. An emergency session
of Parliament gave the government power to run British Steel
after talks with its parent company Jinye broke down. Business
Secretary Jonathan Reynolds says the Chinese FIRN left them with
no choice.
Speaker 7 (05:09):
In this situation, with the clock being run down, Doing
nothing was not an option. We could not, will not
and never will stand idly by while he'd seeps from
the UK's remaining bus furnaces without any planning, any due process,
or any respect for the consequences.
Speaker 3 (05:28):
Reynolds now faces the challenge of keeping the steel plant open.
The business loses seven hundred thousand pounds a day and
needs raw materials urgently. The saga also raises questions about
the viability of Chinese infrastructure investment in the UK, with
the government saying there is now a high trust bar
going forward.
Speaker 2 (05:46):
And finally, in sports news, will Ree McElroy has completed
a career Grand Slam in golf with his win at
the US Masters Tournament. He becomes only the sixth man
to win all four major golf tournaments. It came down
to a sudden death playoff between the Northern Irishmen and
Justin Rose after McIlroy dragged his paw pot wide. Afterwards,
(06:07):
he reflected on what the victory meant to him and
to his family.
Speaker 1 (06:10):
I want to say hello to my mom and dad.
They're back home in Northern Ireland.
Speaker 7 (06:13):
And I can't wait to see them next week.
Speaker 1 (06:17):
I just count wit to celebrate this with them.
Speaker 2 (06:20):
Rory mcaroy there, speaking after winning the first Master's playoffs
since twenty seventeen. His win follows fourteen years of attempting
to capture the title at Augusta.
Speaker 3 (06:31):
And those are your top stories on the markets today.
The Mscish Pacific Index one point seven percent higher, the
NICKA in Tokyo by almost two percent, and the Hang
Saying is two point four percent high. The Bloomberg Dollar
Spot Index is a tenth of one percent weakers. We've
got the Japanese end three tenths stronger at one forty
three eleven against the dollar, and the euro and the
pound are both slightly stronger against the green back. This morning.
(06:51):
The tenure treasury yield down two basis points to four
point four to seven percent. Goal gold hitting a record
high again today, slightly off the highs, but still three
two hundred and twenty dollars a troy outs as we're
looking at Wall Street futures and eurostocks fifty futures, both higher,
eurostock fifty futures up by two and a half percent.
Speaker 2 (07:10):
Well in the moment, we'll bring you up to speed
on the market reaction to Present Trump's latest tariff moves
over the weekend. Plus we'll dig into the UK government's
take over of British Seal that also happened. Very busy weekend.
But something else caught our rye this morning. This is
a bit lighter. Maybe the craze for cavia. Apparently cavia
(07:30):
as a luxury item I worth shelling out for has
remained pretty resilient over about a century Russian caviat is
under Western sanctions, but today most caviar imported into the
US is actually farmed in China. It's always been kind
of a little bit outrageous, but actually the price of
cavia has been coming.
Speaker 3 (07:48):
Down, yeah, dramatically so because of the increased production out
of China as well. Our colleague Madison Divershire has been
writing about how it's become sort of a staple now
almost of menus in Manhattan certainly US now being asked
about what did Chinese tariffs after production essentially moved to
China mean for this item on the menu that gives
a sense of luxury but has been now almost used everywhere.
(08:11):
I mean, it's quite funny to get some of the
commentary from chefs at this piece as well. One of
them describes it as at the end of the day,
it's salt. If you everyone see an idea of the
downgrading of caviar in people's minds, just salt.
Speaker 2 (08:21):
Now, yeah, absolutely, Well, I suppose the big question is
whether or not maybe some of that cave I will
end up in the EU will be diverted anyway, we
shall see. It's one of those kind of big tariff questions,
isn't it. Well, let's get into that and the impact
on markets next.
Speaker 3 (08:35):
The dollar declining at the start of this week as
investors look past the weekend reprieve on tariffs on popular
consumer electronics and prepare for what could be another wild
week in markets. Our Markets Live executive editor is trapped
in and ready for mark code more. Good morning, good
to talk to you. Let's talk about the tariff tech
pause first, though, Trump promising more levies on this sector.
(08:57):
How significant is this prefer markets.
Speaker 1 (09:00):
I mean, obviously tarifs are the biggest story, and they're
going to remain the biggest story. They're not going away.
I think you got to every kind of question marks them.
We need to look atw different timespans, so on the
longer term time span, taras are going to be imposed
by the US to a level not seen probably in
about one hundred years, Whether some get removed, some get
negotiated away, that they will be imposed because he and
(09:23):
most of the Circle's administration deeply believe in them. Trumpet
particular has long deeply believed in tarifs and always been
very clear about this that he thinks this is what's
needed to kind of restructure US economy. So they're going
to remain in place. What hasn't worked out, is which
ones exactly, and that kind of ebb and flower trading
in the short term. Look, I know that Trump has
kind of gone, hey, we're going to impose some conductor
tariffs again, and that's kind of bad news, and simple
(09:44):
are wondering, hey, why are stocks higher? Well, the fact
is the exemption in the short term, even though it's
a temporary of you know, the electronics goods from China,
that's such a massive amount of the China trade that
you've suddenly kind of taken like a quarter or more
of the risk off of that kind of China US
trade where the most important part. So I think that
is a bigger relief in the short term, even though
(10:05):
people know more taraffs are coming, and they also are
worried that there's going to probably be more positive headlines
than the short term. We have the best at meeting
in Tokyo later this week. People expect there'll be some
kind of deal with Japan trade. There will announce some
kind of headline short term win, and that might provide
some release. So I think longer term, this story is
going to stay with us. It's going to stay extremely negative.
It's extremely negative for US assets. On the short term,
(10:27):
I think we're going to get bounce around. I wouldn't
want to trade that very negative, aggressively negative and narrative
in the very short term.
Speaker 2 (10:33):
Okay, we're talking about negative the dollar dropping to a
new twenty twenty five low. Where next as really the
currency universe has also seen this just massive reset.
Speaker 1 (10:45):
Yeah, unfortunately, it's going to be a similar type answer.
And that's because I think we're all traded in the
same story at the tarffs. But look, the world is
overexposed to the US dollar still. We've talked to a
lot about this in this program over the last kind
of three or four months, and ultimately, the US policies
are very damaging to holding US assets. For the last
fifteen or so years, we traded Tina, there is no
(11:05):
alternative to US megacap tech stocks, and so you know
of the marginal dollar generated around the world ninety five
percent which is pouring into kind of US equities, And
now suddenly people don't want to have exposed US assets
because they don't know how the rules are going to change,
and US businesses have an increased cost of business. Again,
they don't know exactly which cost of business is going
to increase and how much, but they know it's going
to get much more expensive to do business. So we're
(11:26):
eroding the advantage structurally, evrod in the advantage that US
companies have held, and it's a structural advantage that was
so deeply embedded that people thought it would never be removed.
That's the narrative we traded the last fifteen years that
there was no point playing m there's no point playing
a China recovery, Europe was never going to kind of
grow again. All those things have all been shifted. Now
it's suddenly no, wait a sec. We got way too
(11:47):
carried away in the US story, so we have to
get out of the US story. And suddenly people are
getting more excited about the other options again on a
structural basis, and that means that over the next couple
of years, the dollar will continue to decline, but very
short term, I'm pretty wary about how much it's fallen.
In the short term. You know, whether it's higher or
lower in a week, I have no idea. But over
the next couple of years, it's definitely weakening.
Speaker 3 (12:05):
Okay, this isn't a week as well. We're looking ahead
to some Central Bank decisions. But I do wonder Mark,
before we let you go, perhaps are you more excited
by what we saw from Rory McElroy over the weekend?
Speaker 1 (12:14):
Absolutely, the masters is the big news today. Markets are
last quiet compared to the last week or so, I
might actually, Funnily enough, I woke this morning and my
trader What's up charts had all blown up and I
welcome about five am Hong Kong time, and I thought,
oh my god, something's nuclear has happened in FX markets.
It must have gone crazy. And I clicked through every
chart and every single one was just talking about the golf.
Speaker 2 (12:33):
Oh, it was an amazing moment, wasn't it. That walk,
you know, back to getting the cup was amazing? Good self, Mark,
thank you so much for being with us this morning.
I'm sure we'll be speaking to you much more over
the course of this week. Our Market's Live executive editor
Mark Cudmore or.
Speaker 3 (12:47):
The UK government trying an emergency session of Parliament to
take control of British Steel this weekend. The company has
been effectively nationalized after talks with its Chinese owner Jinye
broke down. Our UK politok supporter of James Wilcock is
with us now for more Jesus reminded us of the
background to what got us here.
Speaker 8 (13:03):
Yeah, it's a very good question, Stephen, because here is
quite special. We've been talking about this government and how
it might need to step in on a range of
industries like Thames Water. Instead it's gonnaur size rail. But
to happen over an emergency sitting a Parliament hasn't been
recorded on the Saturday since nineteen eighty two, the Falklands War.
And then to now be in possession of the last
British steel company in the country, it's incredible And so
(13:27):
you know how we got here though? Is Chinese fum
Jinga acquired British steel back in March ninth, twenty twenty,
and being that specific because obviously that is pre COVID
by a matter of days, it pledged to invest one
point two billion into the company to make it new
and green. And a lot has changed since then, the pandemic, inflation, tariffs,
and so last month it announced a consultation on shutting
(13:50):
the steel works and it being cheaper to just import
the steel from China. That is obviously anathema to a
UK government that has made its industrial strategy all about
keeping steel alive. The UK government offered to pay for
the raw materials. We gather they were crisis talks. We
gathered that it was an offers to finish off the
one point two billion investment with a further half a
billion from the government. However, talks broke down, and the
(14:13):
most striking thing to me coming in on this Monday
is the government over the weekend effectively saying that Jingye
weren't serious and.
Speaker 1 (14:21):
That the was.
Speaker 8 (14:22):
They were saying JINGI apparently wanted one billion pounds to
keep this steal what's going and with no guarantee that
the billion pounds would stay for investment in the UK,
which made the government concern the assets would potentially be
leaving the country, and so the government took the step
to say they were going to nationalize it.
Speaker 2 (14:36):
What is Jingye's argument here, Well, if.
Speaker 8 (14:39):
You look at British Ste's accounts, the argument's pretty clear, Caroline.
In twenty twenty two, British Steel made a turnover one
point seven billion, but it made a loss of four
hundred million. It made a lost twenty twenty three of
two hundred and thirty one million pounds pre tax. This
is a company British Steel that loses seven hundred thousand
pounds a day. It is just not viable to keep
it going and the business safety chance and acknowledge that
(15:01):
over the weekend where he said the market value of
this firm is zero. So if you're Jinie, what are
you getting out of owning British Steel?
Speaker 3 (15:09):
What does this say, James about the Labor Government's approach
to its business and industrial strategy.
Speaker 8 (15:14):
All around the world, Stephen, people are asking the question
of is globalization working? What does my country need to
be done here? And the UK government has been extremely
clear about its path to gross it needs private investment.
So what this story is so interesting is it's the
first time we're seeing it all tied together. This is
national security, this is the green debate. Both things need steal.
(15:35):
This is also a world which the UK needs to
be able to function, with some of its sectors being
far less productive and competitive, especially the industrial manufacturing ones
than some of its global rivals. If it had lost
British Steel, the UK would have been the only G
seven country without a capacity to produce version steel. So
the stakes are quite clear. What we can now say
(15:57):
is this is a UK government willing to put the
state funding on the line to back these industries, and
that's through it sees for some of these kind of crises.
The question we don't yet know, though, is what the
physical trade off will be. We know this is a
company that loses two hundred and thirty one million pounds
in a year. Where is that money going to come from?
Speaker 3 (16:18):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Streets and beyond.
Speaker 2 (16:24):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (16:30):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:36):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (16:45):
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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