President Trump's Tariff Pivot; Global Markets React | Bloomberg Daybreak: US Edition

0:02 bloomberg Audio Studios podcasts radio news good morning i'm Lisa Mateo and I'm Karen Moscow here are the stories we're following today karen what a difference a day makes while the market moves this morning follows a monumental day on Wall Street us stocks had their best day since 2008 with the S&P 500 rallying 9 and a half% and the Nasdaq 100 soaring 12% now it all happened after President Trump ordered a 90-day pause on non-retaliating countries and is lowering reciprocal tariffs to 10% effective immediately while raising duties on China to 125% i thought that people were uh jumping a little bit out of line they were getting yippy you know

0:48 they were getting a little bit yippy a little bit afraid well the president says countries want to make a tariff deal we don't want to hurt countries that don't need to be hurt and they all want to negotiate the only problem is you know you can only do so many at one time it's like it's uh we want to do it right we want to get it right well that tactic puts Trump on a collision course with Chinese President Xiinping whose government has vowed to fight to the end in any confrontation and looks to shore up ties with trade partners to resist Trump well Lisa the Wall Street rally is spreading overseas our first stop is Asia where stocks in Japan soared let's go to Hong Kong now and get the very latest with the Bloomberg still dies still good morning good morning Karen and Lisa yes we've seen surges pretty much across the board stocks in South

1:35 Korea rallied by the most in five years japan's equities recorded the biggest gain since August we also saw some pretty significant numbers in Taiwan where the TX surged really helped by TSMC the big chip maker there even in China we did see some increases in Hong Kong's Hansen index the Shanghai composite recorded some modest gains earlier today that's despite that 125% tariff that remained part of this really comes down to sentiment that a lot of these tariffs are being delayed maybe there's room for negotiation elsewhere obviously we'll have to ultimately see what happens but certainly the sentiment in Asia is that investors are breathing this sigh of relief we've already started to see some responses from various nations that were impacted by these tariffs particularly in Vietnam

2:20 which was set to receive a 46% tariff from Trump obviously that now called off because of this 90-day reprieve but yes certainly the mood is obviously incredibly euphoric here but again with this 90-day reprieve still on the table and it's still being very unclear as to how any of these tariffs would actually be negotiated there's a lot left over the coming weeks that we'd have to dig into in Hong Kong this Jill D says Bloomberg radio all right thank you Jill in Europe we have stocks surging the most since 2020 let's get the very latest with Bloomberg Zoo and Pots in London good morning Euan Karen and Lisa an update for you on the roller coaster that is markets this week stocks surging as European investors respond to the US president's tariffs row back the stocky 100 currently up 5% just pairing some of

3:05 the gains at the start of the session but still the biggest surge since the beginning of the pandemic banks up nearly 8% and technology stocks up 7% currently the top gainers but a lot of green on screens today with 586 companies higher on the stock 600 today live in London I'm Yan Pot Bloomberg radio all right Ean thanks well it was quite a wild day on Wall Street with President Trump executing one of the biggest economic policy reversals in modern presidential history we get the recap with Bloomberg's John Tucker John good morning and good morning Karen well in the end it was the m wild market swings that forced the president's hand jay Pelosi is with TPW Investment thank goodness for independent financial markets which I believe uh bounded and

3:51 forced the president and his team to reverse themselves and that's a view shared by professor Na Palama at the University of Michigan you can legislate or not even legislate you can dictate tariffs but you can't dictate how markets respond to tariffs on the floor of the New York Stock Exchange murmurss at first turned into a roar as the news of the tariff reversal hit one trader said it was total shock and awe the floor erupted the S&P 500 ended the day up 9 and a half% but Francis Donald at RBC reminds investors tariffs haven't totally gone away to me last week I thought America's cut off both its arms today uh one arm well Trump implemented the three-month pause after a frenetic meeting with economic aids the decision

4:37 came as they were watching the bond market the 10-year Treasury saw the biggest three-day jump since 2001 the president was confronting a worst case scenario voters who had returned him to the White House because of inflation now face both increased prices and higher borrowing costs as the president then said people were getting a little queasy in New York I'm John Tucker Bloomberg Radio thank you John meanwhile Goldman Sachs economists have rescended their forecast for a US recession we have that story from Bloomberg's Charlie Pellet the call came after President Trump announced a 90-day pause on most of his previously announced tariffs a deal is going to be made with China a deal is going to be made with every one of them and they'll be fair deals i just want fair goldman chief economist Yan Hatius said "We are now reverting to our

5:23 previous nonrecession baseline forecast." Goldman economists initially called for a US recession but rescended it after the president announced the pause in New York charlie Pellet Bloomberg radio all right Charlie thank you well in addition to all the tariff talk investors will have a key economic report on the docket this morning we get the CPI report for the month of March and a preview with Bloomberg's Michael McKe consumer prices are forecast to have been relatively tame in March with the annual rates of headline and core inflation falling but investors will be looking hard for signs of impending tariff price increases goods prices which had fallen since the pandemic's end have suddenly reversed course it's possible buying ahead of Trump's import

6:09 taxes pushed up the cost of some of those items electronics toys and furniture are categories to watch as for Fed officials they'll watch too but given the tariff war has just begun they'll wait for further months data before considering any policy change michael McKe Bloomberg Radio thanks Mike and metals rebounding this morning to halt their longest run of daily losses in 25 years copper up 5% aluminum higher by 3% and tin well that's surging more than 6% lisa shares of US Steel they are down 11 12% in early trading the drop comes after President Trump said he does not want to see the steel maker owned by a Japanese company us Steel and Japan's Nip on Steel have been trying to save their 14 billion dollar deal after

6:55 former President Joe Biden blocked it on national security grounds and it's time now for a look at some of the other stories making news in New York and around the world and for that we're joined by Bloomberg's Michael Bar michael good morning good morning Karen house Speaker Mike Johnson says he will try again today to pass the Senate approved Republican budget blueprint the speaker cancelled a Wednesday evening vote after opposition from about a dozen holdouts we're having very productive conversations with a a a good subset of the House Republican Conference uh everybody has the same idea and mission and goal in mind and that is we want to deliver the one big beautiful bill time is running out members are slated to go on recess tomorrow for over two weeks the death toll from Tuesday's nightclub

7:41 roof collapse in the Dominican Republic is now at 184 the search for survivors is over and victim recovery efforts are underway heavy machinery cranes and crews are on top of what used to be the Jetet nightclub across the street hundreds of family members are desperate for word on their loved ones who are still missing there's more support for the Maryland man who was allegedly deported by accident to El Salvador by the Trump administration the family of Kilar Abrego Garcia and the members of the Hispanic caucus called for his release and return to the US on Capitol Hill as the case works its way through the courts his wife Jennifer Vasquez Sura was among the speakers kimar if you can hear

8:28 me I'm still fighting for you your brother your mother our children are still fighting for you maryland Senator Chris Van Holland join Garcia's family we demand that Kilmar be returned home now what has happened here should never happen in the United States of America brio Garcia was taken into custody nearly a month ago it comes as the Department of Homeland Security confirms that the Trump administration will keep deporting alleged gang members to the notorious prison in El Salvador global News 24 hours a day and whenever you want it with the Bloomberg News Now

9:13 i'm Michael Bar and this is Bloomberg Aaron all right Michael Bar thank you time now for the Bloomberg Sports Update here's John Stash Hour john good morning good morning Karen the Masters 89th edition he's off this morning to Augusta National clear skies in the forecast another chance for Rory Mroy to win a major he won four in four years but now none in the last decade despite so many close calls 21 top 10 finishes seven of them at the Masters he's become an expert at trying to overcome coming up short it's something that I'm really proud of you know I Yeah look you you have setbacks and you have disappointments but as long as you can learn from them uh and move forward and and try to put um those learnings into practice I think is very very important

10:00 i feel like I've um I've showed that quite a lot over the the course of my career rory Te's off 112 this afternoon scotty Sheffller 10:15 this morning he's trying to join Jack Nicholas the only golfers to win three Green Jackets in a four-year span mets and Yankees had series ending Matt Nese mets held the two hit suffered their first City Field defeat miami won 5 nothing mets play tomorrow in Sacramento against the A's yankees will be back home for the Giants they salvaged one in Detroit 4 to3 the new Yankee ace Max Freed superb seven scoreless innings the new Yankee closer Devin Williams not so good gave up three in the ninth had to be taken out toronto for the third straight night one in Boston 2-1 11 innings the Dodgers salvaged one in Washington six to five at the Garden Rangers lost to Philadelphia 8 to five there were nine goals scored in the third period the

10:46 Flyers Tyson Forester had a hat-tick in Dallas the return of Luca Donsuch he scored 45 points 31 in the first half the Lakers beat the Mavs john Stasher Bloomberg Sports okay coast to coast on Bloomberg radio nationwide on SiriusXM and around the world on Bloomberg.com and the Bloomberg Business app this is Bloomberg Daybreak all right it's coming up at 5:13 on Wall Street president Trump's dramatic U-turn on tariffs sent equities soaring yesterday the president says he's bringing countries to the table for negotiation while signaling out China as his administration exerts maximum pressure on the world's second largest economy they all want to make a deal somebody had to do what we did and I did

11:31 a 90-day pause for the people that didn't retaliate because I told them "If you retaliate we're going to double it." And that's what I did with China because they did retaliate all right for more on the next steps for President Trump's tariff strategy we want to bring in Bloomberg News trades are Brendan Murray brendan thanks for joining us this morning i want to start with this 90day pause i mean what do you think pushed the president to pivot you had Treasury Secretary Scott Bezon said it was driven by strategy i mean where who is he facing this pressure from it was mainly the financial markets that were uh flashing signs that this was going to go from a a stock market collapse to uh uh and a problem for Wall Street to a problem for Main Street a credit crunch uh the the Treasury market uh you know was throwing off signals uh that things

12:18 were getting a little bit disorderly and that uh you know spells trouble for uh you know all sorts of uh ways that uh you know finance is transmitted through the banking system so the president uh surely listened to some of his advisers who said "Look we might have gotten out out ahead of our skis on this uh bitten off more than we can chew when it comes to um uh doing trade wars with pretty much everybody in the world why don't we scale it back let's focus on the real target here which is China." And uh and that's what they did and they they they rolled back uh all these high tariffs for uh everyone else except for China china's tariff went to 125% which over time will essentially uh decouple the US economy from the Chinese economy if if

13:03 they're if they're allowed to persist so uh there's a lot of pressure on China economically to uh to try to diffuse the situation but China says "Hey look we don't we don't respond to threats uh you want to you want to talk with us you have to come to the table with you know a more as they would say you know respectful attitude." So we're at a real impass here and uh it there's no telling what the next um uh what what the next shots are going to be fired economically between the two uh but it's it portends a a rough uh couple of months if if if neither side is willing to budge so how is this going to weigh on the Chinese economy specifically well it's going to hurt their exporters number one their exporters already operate on very thin margins and that they're going to have to find other customers if if the

13:49 American market is closed off to them with these high tariffs so uh the the China is is already actively you know trying to uh develop better ties with with with with countries in in in Latin America and Africa and Europe and you know they're going to they're going to they're already less dependent on the US market uh than they were say 5 years ago uh during Trump's first term uh but they're going to have to diversify a lot more uh very quickly if they if they want to uh avoid any big economic uh headwind from the tariffs that President Trump has put on them now they haven't stepped up to the negotiating table um yet will they I mean dig more into how much leverage China does have well China can can cut off uh could

14:36 China can cause a lot of pain uh you know separate from tariffs uh they can uh they can limit the amount of of raw materials and machinery and critical minerals that American companies need to uh to to produce what they produce so China would uh that would be one way they could cut things off they could target US companies that operate in China they could make life difficult through regulations and and taxes and other other sort of ways to to to you know to make make life difficult for for American companies in in China and you know generally they can just uh uh they can try to negotiate with other countries to you know to team up with them rather than with the US the US has uh you know whether you support

15:23 President Trump's trade approach or not he's made a lot of friend friends he's made a lot of enemies uh of of former friends in the in the first two 3 months uh when it comes to trade so China would be going around saying hey look we're the we're the reliable partner now you can trust us uh the US is unpredictable and unreliable uh so you know team up with us and that you know that's another way that China can can hit back yeah I want to get more into that so is there this deeper meaning to this isolation i mean is it put putting the pressure on other countries and their relationship with China well I think that's one of the reasons uh among many why the Trump administration did the U-turn that it did yesterday it said "Look we can't uh we can't we need our allies if we're going to stand up to China and if we put these high tariffs on everybody then

16:08 we're going to you know then we're just kind of we're working against ourselves here." So uh as as Treasury Secretary Besson said you look if we can put together some deals with our allies that way we we could stand up much more strongly against China uh than we could if we're going it alone yeah and Besson did say you know we can probably reach a deal with our allies at the end of the day is 90 days enough 90 days is a flash in the pan when it comes to negotiating trade agreements trade agreements take uh I think the uh re renegotiation of NAFTA which was really just a rebranding exercise uh took two years so that was you know that was the trade deal the North American Free Trade Agreement it was renegotiated uh in Trump's first term and that renegotiation took two years in itself trade trade agreements

16:54 take years and years uh some take decades and u before because there's just so much detail that needs to be hammered out they're thousands and thousands of pages of legal ease and so if the president president likes to say that he you know he operates at a uh you know at a at warp speed and so we'll see if if that can be done in any meaningful way uh with trading partners who are first in line those are Japan South Korea uh Vietnam and and India are are keen to keen to keen to sit at the table first all right thank you very much Bloomberg's Brendan Murray let's bring in our next guest this morning to set you up for the trading day we saw a 9 and a half% surge in the S&P 500 after the tariff pause was announced by the president this morning though US futures point to a lower open let's uh join Dan

17:41 Morris now the chief market strategist at BNP Parabah Asset Management dan first off let me just get your reaction what was going through your head yesterday well you know it's it's you want to be able to say you expected it all along though nonetheless our our view initially had been that the terrorists were a negotiating tactic which adjusted at some point uh depending on the response that you had from the US trading partners there would be a response from the administration you just didn't know exactly when or what or how but the fact that we did get one eventually from that point of view wasn't necessarily a surprise uh is the market reaction a reflex or a return to risk appetite well I don't think we're quite that far yet i mean we you guess if you think

18:27 about what's happening in the futures right now for all the reduction in the reciprocal tariffs that we had for most countries of course you still have 10% tariffs which is a non-trivial change that the market still needs to assess uh there's all the uncertainty about how these negotiations go as your previous guests mentioned this is not going to happen overnight and of course there's China which is still uh a significant trading partner for the US even if we know uh the size of the trade isn't commensurate on both sides it still matters and this is going to have an impact on companies in both markets yeah well let's talk about the impact with the first quarter results coming through what are you going to be looking for for the results of companies uh well I think at this point you know it's going to be nice to know how things were in the first quarter but it's not going to tell us too much about the

19:12 future you're going to want to be looking at the guidance uh and in fact already over the last you know couple months guidance uh has been a bit weak though historically that tends to be the case around this time of the year so it's hard to say that it's necessarily any worse than it has been historically uh I think the dilemma is going to be both for investors and for companies is you know no one's really going to feel like they have a clear view on the future so the guidance you know may be a lot of wait and see as opposed to a definitive view on we think profits are going to go up or we think they're going to go down as in so many cases like this in moments of crisis it is the bond vigilantes who kind of ride to the rescue in quotes there is that the case that we saw yesterday

19:57 um I don't know that that's so clear that it was triggered by the bond market i mean even with the you know we've had obviously big moves in Treasury yields but if you look at the absolute level of yields are not all that extreme and we we obviously had fallen quite a bit previously when you were more worried about the growth impact but at the same time you know Treasury yields had gotten up to nearly 5% not so long ago so we're still honestly within that range so I think the the impact of the market on the decision I think is debatable who knows what the actual mental machinations were uh but so far again we're in that range it's trying to assess the impact on growth the impact on inflation policy moves from the Fed but you know compared to where you were prior to the election it's not so different all right c plus G plus I that adds up to growth in GDP uh each of

20:44 those components what do you see well consumption clear you know always for the US is the key one i think it was important that retail sales in February bounce back of course now we're April and February seems like ancient history but we certainly do want to keep an eye on how we see consumer demand holding up what is going to be the impact again even of those 10% tariffs now of course that doesn't mean everyone pays 10% more you're going to have people looking for alternative products and so on but clearly that's going to be crucial um the investment honestly should pick up but I also appreciate that's not immediate and you know we all know building a new auto factor in the US isn't going to happen next month so perhaps more positive for the outlook in the medium term uh you know for second quarter first quarter GDP is not going

21:29 to be uh too meaningful and what is the signal from the markets this morning i mean futures are lower after yesterday's surge well gosh volatility is the name of the game so at any point uh you can see things swing quite a bit uh and I think it's now trying to assess on one hand the the relative improvement in the outlook with the the suspension of the reciprocal tariffs uh but one uh trying to assess not only the impact of the current level of tariffs both from China and the US uh but how long are these going to stay there is there scope for negotiation how is that going to come about and again there's just as much uncertainty today as there was yesterday is 90 days even a realistic time frame but in terms of getting actual deals

22:15 probably not but that I don't think that necessarily is going to be the the the the factor that Trump is going to look at in terms of determining uh how the terrorists progress from here i think he's going to be looking for dialogue uh and if he I would imagine one doesn't want to conjecture but one would I guess at least hope that if there's a dialogue that's going to be sufficient hopefully to to mean the reciprocal tariffs stay off the table and at this point what are you telling clients is this a market you can get into or is it a was it a false dawn yesterday well in our multiasset portfolios we're still a bit cautious uh you know I think we would like a bit more certainty and a bit more sense of how things are going to evolve with China i mean you can't dismiss it and assume that everything is going to be positive now so we're still pretty uh pretty neutral in terms of

23:02 allocations between equities and bonds uh before feeling we have enough certainty to take a a more leverage excuse me a higher risk position in either market is there enough certainty at this point to give us some sort of recession call or nonall um we weren't too I mean there was always possibility of a recession but that was under the assumption that the the previous tariff stayed in place indefinitely and we always thought there was a low probability of that if not zero so given that that's not the case we wouldn't anticipate that they come back um we don't see a meaningful recession risk and as far as year end call for the S&P 500 I know that's unfair but I'm going to put you on the spot nonetheless um if uh we do come to an agreement with China uh I I think you

23:47 would anticipate US growth continue to be positive and that should lead to higher earnings and overtime higher equity prices this is Bloomberg Daybreak your morning podcast on the stories making news from Wall Street to Washington and beyond look for us on your podcast feed by 6:00 a.m eastern each morning on Apple Spotify or anywhere else you listen you can also listen live each morning starting at 5:00 a.m wall Street time on Bloomberg 11:30 in New York Bloomberg 991 in Washington Bloomberg 929 in Boston and nationwide on SiriusXM channel 121 plus listen coast to coast on the Bloomberg business app now with Apple CarPlay and Android Auto interfaces and don't forget to subscribe to Bloomberg News Now it's the latest news whenever you want it in

24:34 5 minutes or less search Bloomberg News Now on your favorite podcast platform to stay informed all day long i'm Karen Moscow and I'm Lisa Mateo join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak