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• 00:00TOM: GOOD MORNING, THIS IS BLOOMBERG “DAYBREAK: EUROPE.” THESE ARE THE STORIES THAT SET YOUR AGENDA. PRES. TRUMP: THE BIGGEST MARKET IN THE WORLD, RIGHT NOW THE BIGGEST MARKET IN THE WORLD. TOM: TRUMP, TARIFFS, EVERYONE, THE PRESIDENT IMPOSING THE STEEPEST U.S. IMPORT LEVIES IN A CENTURY CHINA FACING A TARIFF OF MORE THAN 50%. STOCKS PLUNGE IN HAVEN ASSETS RALLY ON FEARS OF AN ESCALATING TRADE WAR. BOWING RETALIATION, BEIJING CONDEMNS THE TARIFFS, PLEDGING TO HIT BACK, WHILE THE E.U. SAYS IT’S PREPARING FURTHER COUNTERMEASURES TO TAKE EFFECT NEXT WEEK. PLUS AS EUROPEAN INVESTORS ASSESS THE FALLOUT, WE WILL SPEAK TO THE PRESIDENT OF THE GERMAN AUTOS ASSOCIATION AND THE MINISTER OF STATE AT THE FOREIGN AFFAIRS DEPARTMENT. ♪ TOM: GOOD MORNING. IF HE FELT THE MARKET FOR PRICE FOR THIS EVENT, TAKE A LOOK AT THE SCREEN, TAKE A LOOK AT THE MARKETS AND THE DATA AND ACTION WERE SEEN. THEY HAVE NOT FULLY PRICE THE ACTION IN THE DECISION COMING THROUGH. THE TRUMP TARIFF BAZOOKA IS NOW GLOBAL TRADE WAR. EVERY SINGLE NATION HIT BY TARIFFS TO SOME DEGREE. CHINA RACING TARIFFS CUMULATIVE NOW OF MORE THAN 50%. EUROPEAN FUTURES POINTING TO DEEP LOSSES ON THE BACK OF THIS NEWS, LOWER BY 1.8%. HERE IN THE U.K., THE U.K. HIT WITH A 10% TERROR. S & P FUTURES STATESIDE DOWN BY 2.7%. THAT HAS BEEN FLAGGED IN THE SESSION. THE NASDAQ 100 IS UNDER PRESSURE YOUR TODAY, CURRENTLY POINTING LOWER BY 3.2% WITH TECH THE FOCUS, GIVEN THE SUPPLY CHAIN RUPTURES WERE EXPECTING TO SEE AS A RESULT OF THESE BROAD-BASED TARIFFS ANNOUNCED BY PRESIDENT TRUMP. THIS IS WHERE YOU SEE THE SAFE HAVEN MOVES AROUND THE BENCHMARK U.S. TENURE. THE BENCHMARK 10 YEAR YIELDS DOWN SEVEN BASIS POINTS, MINUTE — MONEY CONTINUING TO MOVE INTO TREASURIES, AS RECESSION RISKS NOW LOOM FOR THE U.S. ECONOMY. THE BLOOMBERG DOLLAR INDEX IS DOWN .6%. MONEY MOVING INTO THE YEN, OIL BEING CRUSHED IN THE SESSION, GOLD ANOTHER SAFE HAVEN. GAINS OF MORE THAN 18% YEAR TO DATE, APPOINT TO IN THE SESSION SO FAR. APPLE AND FOCUS GIVEN THE SUPPLY CHAIN IMPACT IN THE TARIFFS. THE BURDEN ON CHINA, GIVEN PRODUCTION FACILITIES APPLE HAS THEIR BUT ALSO NATIONS LIKE INDIA AND VIETNAM AND MEXICO, WHAT IS IT MEAN FOR A COMPANY LIKE APPLE WITH ALL THAT EXPOSURE. THE STOCK IS DOWN MORE THAN 7% IN AFTER-HOURS. NVIDIA AS WELL, GIVEN EXPOSURE NOT JUST TO CHINA BUT THAT YOU, THE SUPPLY CHAIN PICTURE AND WHAT THAT WILL MEAN IS THOSE GET TORN UP. CURRENTLY THE PRODUCER OF THOSE AI ACCELERATORS AND NIKE WITH THE U.S. CONSUMER IN FOCUS HAVING TO ABSORB THAT ADDITIONAL LEVY CURRENTLY POINTING LOWER BY MORE THAN 7%. SO MUCH OF THE PRODUCT PRODUCED AND MANUFACTURED IN NATIONS LIKE INDIA, CHINA, AND VIETNAM. LET’S CROSS OVER TO ASIA WHERE AVRIL HONG IS STANDING BY FOR A CHECK ON HOW THINGS ARE ADJUSTING IN THE ASIA SECTOR. AVRIL: WHAT A MASSIVE REPOSITIONING WE ARE SEEING IN ASIA’S MARKETS. CLEARLY INVESTORS WERE NOT EXPECTING THESE TARIFF LEVELS, MUCH WORSE THAN ANTICIPATED. SO WE’RE SEEING THE VIET — VIETNAM STOCK CAME 46%. THE STOCK PLUNGING BY THE MOST SINCE 2021. JAPANESE STOCKS ARE ALSO UNDERPERFORMING TODAY AND THE LENDERS. REMEMBER THESE CONCERNS ABOUT THE GLOBAL GROWTH TRAJECTORY ARE AFFECTING THE BOJ’S RATE HIKE PATH, THERE WAS CHATTER ABOUT SEEING SOMETHING IN THE FIRST HALF. NOW EVEN SEPTEMBER IS NOT A CERTAINTY. THE RATE HIKES WOULD’VE HELPED BANKS PROFITABILITY. SO UNSURPRISING THAT THE GAUGE OF JAPANESE BANKS IS DROPPING BY THE MOST SINCE THE IN CARRY TRADE IN AUGUST. FLIP THE BOARD AND TAKE A LOOK AT CHINA. THESE LEVIES ARE WORSE THAN EXPECTED FOR THEM AS WELL BUT IT’S REALLY INTERESTING HOW WE ARE SEEING THE GAUGES MANAGING TO PAIR EARLIER LOSSES. MAINLY THAT’S HAPPENING IN THE MAINLAND STOCKS, WHICH TELLS US THAT MAYBE A LOT OF THE BAD NEWS WAS ALREADY BEING PRICED IN, BUT PERHAPS MORE IMPORTANTLY, INVESTORS NOW EXPECT AUTHORITIES TO FRONTLOAD STIMULUS GIVEN THE TERROR OF HEADWINDS. NOW FLIP THE BOARD, AND THE EFFECT SPACE THE RENMINBI ONSHORE TODAY SLID TO THE LOWEST LEVEL IN SEVEN WEEKS. OFFSHORE LOOKING STILL PRETTY STABLE AND IT’S INTERESTING TO PASS THE SIGNALS WE’RE GETTING FROM THE CENTRAL BANK OF CHINA BECAUSE IT IS STRONGER, VERSUS TRADERS ESTIMATES. SIGNALING THEY STILL WANT TO SUPPORT THE CURRENCY BUT IS THE WEAKEST SINCE JANUARY. THE TAKE AWAY IS THAT YES, THESE TARIFF HEADWINDS MAY BE THE PBOC WILL LET THE YOU WANT WE CAN LITTLE BUT THEY DON’T WANT TO SEE RAPID DEPRECIATION IN THE RENMINBI. AMID ALL THIS, WHAT IS REALLY BEEN SHINING THROUGH TODAY, THE SAFE HAVEN QUALITIES OF THE JAPANESE YEN, NOT JUST MOVING TOWARD THE ON 47 HANDLE THIS OUTPERFORMANCE IN THE ASIA-PACIFIC, KEEP IN MIND IT’S ALSO NOT FAR FROM THE LOWS OF THIS YEAR. AMID THE GLOBAL GROWTH CONCERNS. TOM: REMARKABLE MOVES IN THE JAPANESE YEN. GOLDMAN SACHS AVENUE AND CALL THAT A SAFE HAVEN, THAT CURRENCY OF MORE THAN 1%. THANKS FOR THE CHECK ON THE ASIAN MARKETS AND HOW INVESTORS THERE ARE ADJUSTING TO WHAT IS LOOKING LIKE A RUPTURING OF GLOBAL TRADE LINES FROM THE STAIRS. I TOP STORY, THE U.S. TREASURY SECRETARY WARNING TRADING PARTNERS NOT TO FIGHT BACK. > > I WOULD ADVISE NONE 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. THE MARKET COULD HAVE CERTAINTY THAT THIS IS THE NUMBER, BARRING RETALIATION. TOM: WE KNOW THAT YOU IS PREPARING TO RETALIATE, CHINA SAYS IT WILL TOO. TALK US THROUGH THE ECONOMIC IMPACT OF THE TARIFFS THAT HAVE BEEN OUTLINED BY THIS TRUMP ADMINISTRATION. > > SOME INTERESTING ANALYSIS RIGHT OUT OF THE GATE FROM BLOOMBERG ECONOMICS ABOUT THE POTENTIAL GDP IMPACT OF THE TARIFFS ANNOUNCED YESTERDAY. THE EUROPEAN UNION COULD SEE A GDP IMPACT OF 1.1% AND THE DOES NOT TAKE INTO ACCOUNT ANY COUNTERMEASURES COMING WHICH COULD MAKE GDP IMPACT EVEN MORE COMMON. TAKE A LOOK AT THE GDP IMPACTS ON CHINA, BLOOMBERG ECONOMICS SEES NEARLY A 2.8% GDP IMPACT OF THE CHINESE ECONOMY. MOVING ONTO THE EXPORT IMPACT, ANOTHER ANALYSIS FROM BLOOMBERG ECONOMICS, THE SEE A DROP OF CHINESE EXPORTS TO THE U.S. UP TO 80%. THAT IS A WHOPPING NUMBER THAT IS REWIRING GLOBAL TRADE. THE COULD SEE EXPORTS DROPPED TO THE U.S. OF UP TO 50%. THE U.K. WITH A 20% DROP IN EXPORTS TO THE U.S.. S & P FUTURES IN THE ASIA SESSION HIT A FRESH YEAR TO DATE LOW, OFF SLIGHTLY FROM THE LOWS BUT STILL 2.7% MOVED TO THE DOWNSIDE AS WE SEE A RALLYING INTO SAFE HAVENS. THE TREASURY CURVE IN FOCUS AS WELL. IT’S LED BY THE FIVE-YEAR SECTOR. THERE IS NO PRICING FOR IMMEDIATE CUTS FROM THE FEDERAL SERVE. PRICING FOR THE MAY MEETING HAS STAYED STABLE. WE’RE SEEING THE MOVE MORE PRONOUNCED FARTHER OUT IN THE CURVE AS THE 10-YEAR YIELD GETS VERY CLOSE TO 4%. TOM: THANK YOU VERY MUCH INDEED, IN TERMS OF THE ECONOMIC IMPACT AND HOW MARKETS CONTINUE TO ADJUST. LET’S GET MORE DETAILS IN TERMS OF WHAT PRESIDENT TRUMP ACTUALLY ANNOUNCED. U.S. TO APPLY A MINIMUM 10% TARIFF ON ALL TRADING PARTNERS AND ADDITIONAL DUTIES ON AROUND 60 NATIONS. PRES. TRUMP: IN A FEW MOMENTS I WILL SIGN A HISTORIC EXECUTIVE ORDER INSTITUTING RECIPROCAL TARIFFS ON COUNTRIES THROUGHOUT THE WORLD. SUCH HORRENDOUS IMBALANCES HAVE DEVASTATED OUR INDUSTRIAL BASE AND PUT OUR NATIONAL SECURITY AT RISK. THAT’S WHY EFFECTIVE AT MIDNIGHT WHO WILL IMPOSE A 25% TARIFF ON ALL FOREIGN-MADE AUTOMOBILES. NEARLY A CENTURY LATER IN THE FACE OF UNRELENTING ECONOMIC WARFARE THE U.S. CAN NO LONGER CONTINUE WITH THE POLICY OF UNILATERAL ECONOMIC SURRENDER. WE CANNOT PAY THE DEFICITS OF CANADA, MEXICO, AND SO MANY OTHER COUNTRIES. TODAY WE ARE STANDING UP FOR THE AMERICAN WORKER AND WE ARE FINALLY PUTTING AMERICA FIRST. FOR THESE REASONS, STARTING TOMORROW, THE UNITED STATES WILL IMPLEMENT RECIPROCAL TARIFFS ON OTHER NATIONS. TOM: WHAT ARE THE DETAILS OF THE TARIFFS ANNOUNCED BY TRUMP? > > AS YOU SAID, IT’S GOING TO HIT EVERYONE. THERE IS A 10% TARIFF ON EVERY SINGLE COUNTRY THAT SENDS GOODS INTO THE U.S.. THERE’S GOING TO BE TARIFFS AS HIGH AS 60% ON OTHER ECONOMIES AND IT’S IMPORTANT TO NOTE THAT THESE ARE SOME OF THE U.S.’S BIGGEST TRADING PARTNERS. YOU CAN THINK OF JAPAN, SOUTH KOREA, THE EUROPEAN UNION, ALL OF THESE COUNTRIES ARE GOING TO BE SEEING THEIR GOODS INTO THE U.S. GOING UP IN PRICE. THIS IS SOMETHING THAT COMPANIES HAVE IMMEDIATELY REACTED TO, STOCKS ARE DOWN ACROSS THE BOARD OF COURSE, AS WE JUST HEARD. WE HAVEN’T EVEN HEARD RETALIATION YET. BUT COULD EXACERBATE THIS IS IF THESE ECONOMIES THAT COME BACK, WE’VE HEARD FROM THE E.U. AND CHINESE OFFICIALS WHO SAY THEY ARE GOING TO RETALIATE AGAINST THIS. THE DETAILS OF THAT WILL SHAPE HOW FAR THIS GOES AND HOW MUCH HIGHER THOSE RATES COULD POTENTIALLY GO. TOM: IN CHINA IS OF COURSE A NATION YOU KNOW VERY WELL INDEED. ARE WE LOOKING POTENTIALLY AT THE END, IF NOT THIS YEAR, THEN IN A DECADE, OF MOST U.S.-CHINA TRADE. GIVE US THE SCALE AND SCOPE OF WHAT HAS BEEN IMPOSED ON CHINA. > > WELL, IT IS DEFINITELY A POSSIBILITY. BLOOMBERG ECONOMICS RAN SOME NUMBERS RECENTLY FINDING THAT A 60% TARIFF RATE WHICH HAS BEEN FLOATED BY PRESIDENT TRUMP WOULD ACTUALLY DECIMATE MOST OF TRADE BETWEEN CHINA AND THE U.S.. WE ARE NOT AT THAT LEVEL, EVEN IF YOU ADD IN THE 45% AND THE 20% THAT WAS ALREADY IMPOSE. BUT OVERALL I THINK THAT WAS THE CONCLUSION, THAT TRADE WOULD ESSENTIALLY CEASE TO EXIST. FOR OTHER COUNTRIES, THEY MIGHT BE ABLE TO FIND EXEMPTIONS, THEY MIGHT BE ABLE TO NEGOTIATE SOMETHING. GIVEN CHINA HAS BEEN SUCH A FOCUS FOR THE U.S. ADMINISTRATION AS WELL AS SOME COUNTRIES LIKE VIETNAM WHERE THEY ARE ALLEGING THOSE SHIPS ARE HAPPENING, IT’S NOT LIKE THAT THEY WILL BE ABLE TO REACH THAT AGREEMENT. TOM: THANK YOU FOR THE DETAILS ON THE TARIFF ANNOUNCEMENTS AND THE IMPACT ON CHINA. HOW CHINA RESPONSE WILL BE CRUCIAL IN TERMS OF THIS DYNAMIC. THE PRIME MINISTER SAYING HE AND THE TEAM WILL ASSESS THE TARIFF IMPACT ON DOMESTIC INDUSTRIES. THE PRIME MINISTER SAYING HE IS DEEPLY CONCERNED OVER THE CONSISTENCY IN THE FIRM — SAYING HE WILL NOT HESITATE TO DO IT DIRECTLY WITH TRUMP IF NECESSARY. TO THE E.U., VOWING TO RETALIATE AFTER JAPAN HAS NOT DONE THAT YET. THAT COUNTERMEASURE AND THOSE ROUTE — RETALIATORY STEPS AFTER PRESIDENT TRUMP IMPOSED A 20% TARIFF ON THINK FOR — IMPORTS FROM AMERICA’S LARGEST TRADING PARTNER. > > 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 TARIFFS ON STEEL. WE ARE NOW PREPARING FOR FURTHER COUNTERMEASURES TO PROTECT OUR INTERESTS AND OUR BUSINESSES IF NEGOTIATIONS FAIL. TOM: OLIVER CROOK IS OUTSIDE THE EUROPEAN COMMISSION HEADQUARTERS IN BRUSSELS. WALK US THROUGH WHAT WE’VE BEEN HEARING AND WHAT HAS EUROPE GOT BENEATH ITS — THE NEW DOES NOT WANT TO TAKE ON THE UNITED STATES AND GET IN A TRADE FIGHT OR TARIFF WAR. THEY WOULD LIKE TO SEE NEGOTIATED RESOLUTION TO THIS ISSUE WITHIN THE UNITED STATES. THEY WERE ANTICIPATING SOMEWHERE IN THE BALL CAME OF 10%-20 5%. VERY, VERY ELEVATED. IN TRYING TO RESOLVE THE ISSUE WITH THE TRUMP ADMINISTRATION, THERE ARE NOT 20% WORTH OF TRADE BARRIERS IN THE FORM OF TARIFFS BETWEEN THE E.U. AND THE UNITED STATES. NOW THEY NEED TO LOOK AT THE NONMONETARY TRADE BARRIERS THAT EXIST BETWEEN THE E.U. AND THE UNITED STATES. THIS IS ALL HAPPENING IN A VERY IMPORTANT CONTEXT BECAUSE IN THE NEXT COUPLE OF HOURS WE WILL HAVE MARCO RUBIO TO TALK TO FOREIGN MINISTERS OF NATO. EUROPEAN POLICYMAKERS NEED TO CUP — KEEP THEM INVOLVED. ALL OF THESE NAMES BEGIN TO BLEED INTO ONE ANOTHER WHEN THESE NEGOTIATIONS TAKE PLACE. EUROPEANS WILL TAKE SOME TIME TO ASSESS WHAT THE SITUATION IS REALLY, THEY WILL HAVE TRADE MANAGERS MEETING BEGINNING NEXT WEEK BEFORE WE GET ANY STRONG RESPONSE FROM THE E.U.. THE WAY IN WHICH THIS COULD IMPACT THE E.U. THE MOST IS NOT NECESSARILY — IT IS THE OUTFLOW, THE EXTRA DEMAND, THE EXTRA SUPPLY COMING FROM CHINA, POTENTIALLY POURING INTO THE E.U. MARKET. THAT WILL BE FRONT AND CENTER FOR THESE POLICYMAKERS TO DEAL WITH. TOM: THAT’S A CRUCIAL DYNAMIC TO WATCH. WE WILL OF COURSE BE CONTINUING THE CONVERSATION ON TARIFFS THROUGHOUT THE SHOW. OUR GUESS INCLUDE THE PRESIDENT OF THE GERMAN AUTO ASSOCIATION, THOSE 25% TARIFFS ARE NOW IN PLACE. CRUCIAL CONVERSATIONS COMING UP. STAY WITH US. TOM: LET’S BRING IN THE COHEAD OF PUBLIC MARKETS, GOOD MORNING, THANKS FOR JOINING US. WHAT IS THE MEDIUM TO LONG-TERM MARKET IMPACT OF THESE GLOBAL TRUMP TARIFFS? > > THIS WAS A PROFOUND ANNOUNCEMENT YESTERDAY, THAT’S FOR SURE. THAT IS REALLY AN ANNOUNCEMENT THAT IS ASKING FOR A RESPONSE AND I THINK THIS IS WHERE THE MARKET IS, THIS IS ONLY THE OPENING SALVO. WE’VE GOT — EUROPEAN COUNTERMEASURES WILL BE MORE FOCUSED ON PROTECTING EUROPE FROM POTENTIAL LETTINGS OF EXCESS GOODS THAT COULD COME TO THE MARKETS. SO I THINK IT WILL BE VERY LARGE OR SHOULD BE VERY MUCH FOCUSED ON THOSE COUNTERMEASURES. WITH REGARDS TO APPEASING THE U.S. ON AGRICULTURAL GOODS, THINK IT’S VERY DIFFICULT, THE OUTCRY ACROSS EUROPE IF IT COMES TO MARKET, GIVEN THE GROWTH HORMONES AND ALL THOSE THINGS THAT EUROPE DOESN’T ALLOW. IT IS DIFFICULT TO APPEASE, TRUMP TALKED ABOUT POETRY IN PARTICULAR. IT’S DIFFICULT TO LOWER SOME OF THOSE NONTARIFF BARRIERS. WITH REGARDS TO THE RESOLVE ANY INDUSTRIAL POLICY WE HAVE SAID THAT FOR THE LAST FEW WEEKS THERE’S A SHIFT INDUSTRIAL POLICY BY THE U.S. AND YOU CAN SEE THAT, HOW THE EQUITY MARKET HAS RESPONDED IN THE U.S. BECAUSE CLEARLY LOTS OF U.S. COMPANIES ARE AFFECTED BY THOSE TARIFFS AS THERE IMPORTING FROM ABROAD. THEY SHOULD NOT BE IMPORTING, THIS SHOULD BRING GRAIN PRODUCTION BACK HOME. SO THERE WILL BE A NEAR-TERM IMPACT ON THAT. SO THAT’S A FIRST RESPONSE. AT THE SAME TIME, IT’S ALREADY BEEN ANNOUNCED, PLANNED TAX CUTS AND ALL THOSE THINGS. THE EUROPEAN RESPONSE, THE CHINESE RESPONSE WITH REGARDS TO CONSUMER STIMULUS, EUROPEAN RESPONSE ON STRUCTURAL REFORM AND REALLY COMING TOGETHER AS A UNIT. ALL THOSE THINGS ARE POSITIVE FOR THE INDIVIDUAL REGIONS. IN THAT REGARD WE ACTUALLY THINK THE RESPONSE HAS BEEN QUITE MUTED. IS THIS GOING TO BE ALL OF IT? WE’LL HAVE TO SEE WHAT THE RESPONSE AND COUNTER RESPONSE IS. TOM: DOES THE BOND BULL MARKET THEN HAVE FURTHER TO RUN AND IF SO, WHERE DO YOU WANT TO BE POSITIONED? > > WE HAVE BEEN POSITIONING FOR THE LAST FEW DAYS, REDUCING OUR CREDIT EXPOSURE, SO WE THINK THERE COULD BE FURTHER SPREAD WIDENING, THERE’S BEEN SOME SPREAD WIDENING BUT REALLY VERY MARGINAL. SO DEPENDING ON HOW THIS SHAKES UP, CLEARLY THERE WILL BE A SLOWDOWN IN GROWTH, SO THAT MEANS WE’VE REDUCED OUR CREDIT RISK AND WE PREFER ALL IN U.S. RATES. SO WE THINK THEY WILL BE THE SAFE HAVEN WITH REGARDS TO FIXED INCOME SO WE’VE BEEN EXPANDING IN THE U.S.. WE’RE MORE CAUTIOUS ON EUROPEAN RATES AND THAT’S BECAUSE OF THE GROWTH STIMULUS WERE EXPECTING OUT OF EUROPE, WHICH WILL PROBABLY BE MORE QUICKLY ANNOUNCED THAN WHAT WE HEAR FROM POTENTIAL TAX CUTS IN THE U.S. TOM: DO CENTRAL BANKS RIDE TO THE RESCUE? > > WE EXPECT THE ECB TO CUT IN EVERLY AGAIN, THEN WE WILL HAVE TO SEE WHAT POWELL SAYS ON FRIDAY. IS THE GROWTH IMPACT OVER RIDING AND CLEARLY THE FED RESPONSE TO THAT, OR IS THE INFLATION OH — IMPACTING OVERRIDING? I THINK WE WILL HAVE TO DO WHATEVER THE FED IS SAYING AND WE WILL GET A BIG IDEA IN THE NEXT FEW DAYS. TOM: THANK YOU. WITH REDUCING EXPOSURE TO CREDIT AND U.S. TREASURY STILL THE SAFE HAVEN PLAY. THE INSIGHTS IN THE MARKET REACTION, WHAT A MOMENTOUS DAY FOR GLOBAL TRADE. COMING UP, REST PRESIDENT TRUMP’S WHEN HE 5% TARIFF ON U.S. ARTIFACTS TOOK EFFECT SHORTLY AFTER MIDNIGHT IN WASHINGTON, WE GET REACTION FROM THE PRESIDENT OF THE GERMAN ASSOCIATION OF THE AUTO INDUSTRY. THAT CONVERSATION COMING UP. TOM: THE U.K. HAS REFRAINED FROM A TALLY ASIAN AND SAYS IT WILL MAINTAIN HIS PUSH FOR U.S. TRADE DEAL AFTER PRESIDENT TRUMP SLEPT TARIFFS OF 10% ON ALL IMPORTS FROM BRITAIN AS PART OF A WIDER GLOBAL PACKAGE. CAPITAL ECONOMICS HAS ESTIMATED THE U.S. POSITION OF 10% TARIFFS ON U.K. GOODS SHAY BETWEEN 0.01% AND 0.06% OF BRITAIN’S GROSS THOMISTIC PRODUCT. THAT OF COURSE DOESN’T INCLUDE THE BROADER IMPACTS OF THE SQUEEZE ON GLOBAL TRADE AND THE IMPACTS ON THE U.K. ECONOMY. WE WILL SPEAK WITH JONATHAN REYNOLDS, THE U.K. SECRETARY OF STATE FOR BUSINESS AND TRADE, TO GET HIS REACTION TO PRESIDENT TRUMP’S TARIFFS. THESE BEEN LEADING THOSE U.K. NEGOTIATIONS WITH HIS U.S. COUNTERPARTS. SAYING THE U.S. MILITARY SHOULD STEP UP AS THE U.S. TILTS AWAY FROM THE REGION TO FOCUS ON THREATS FROM ASIA. ASKING ABOUT POTENTIAL YEARS WERE PLAYING WITH CHINA, HE KNOWLEDGE U.S. PIVOT TOWARD THE INDO PACIFIC REGION EVEN AS HE REITERATED THAT WASHINGTON HAS NO PLANS TO WITHDRAW FROM EUROPE. > > IT IS UNDERSTANDABLE ALSO FOR THE U.S. THAT OVER TIME THEY WANT TO FOCUS MORE AND MORE ALSO ON THAT PART OF THE WORLD. IT’S ONLY LOGICAL FOR EUROPEANS TO STEP UP EVEN MORE. TOM: LET’S CHECK BACK ON THE MARKET REACTION AND A PRICING IN TERMS OF THE FUTURE STORY, IT TELLS ONE OF EXPECTATIONS THAT THE U.S. IS GOING TO BE WORSE HIT THAN MANY OTHER SPOTS, MAYBE NOT INCLUDING JAPAN. THE NIKKEI’S DOWN HEAVILY IN THE SESSION, DOWN 3.3 PERCENT. THE AUTO SECTOR WITH TARIFFS KICKING INTO PLACE, THEY ARE NOW IN FORCE, 25%. EUROPEAN FUTURES POINTING LOWER BY MORE THAN 2%. NASDAQ 100% LOOKING TO DROP 3.4% AFTER ALREADY FALLING SUBSTANTIALLY YEAR TO DATE. THE MOVES IN TERMS OF THE SWISS SEEN, THE BIGGEST JUMP SINCE NOVEMBER ON THAT SAFE HAVEN. A SIMILAR STORY FOR THE JAPANESE YEN AND FOR GOLD AS WELL. COMING UP, WE LOOK AT THE AUTO INDUSTRY AND THE TARIFF IMPACTS. TOM: GOOD MORNING, I’M TOM MACKENZIE IN LONDON. THESE ARE THE STORIES THAT SET YOUR AGENDA. PRES. TRUMP: FOREIGN NATIONS WILL FINALLY BE ASKED TO PAY FOR THE PRIVILEGE OF ACCESS TO OUR MARKET, THE BIGGEST MARKET IN THE WORLD. RIGHT NOW THE BIGGEST MARKET IN THE WORLD. TOM: TRUMP TARIFFS EVERYONE, THE PRESIDENT IMPOSING THE STEEPEST U.S. IMPORT LEVIES IN A CENTURY WITH CHINA FACING A TARIFF OF WELL OVER 50%. STOCKS PLUNGE AND HAVEN ASSETS RALLY ON FEARS OF AN ESCALATING TRADE WAR. BOWING RETALIATION, BEIJING CONDEMNS THE TARIFFS, PLEDGING TO HIT THAT WHILE THE E.U. SAYS IT’S PREPARING FOR THE TO TAKE EFFECT NEXT WEEK. PLUS AS EUROPEAN INVESTORS ASSESS THE FALLOUT, WILL SPEAK TO THE PRESIDENT OF THE GERMAN AUTO ASSOCIATION AND IRELAND’S MINISTER OF STATE AT THE FOREIGN AFFAIRS DEPARTMENT. CHECKING IN ON YOUR MARKETS, THE ROUTE IS THERE FOR THE EQUITY STORY. SIGNIFICANT SELLING PRESSURE OVER IN JAPAN COME OVER AND SOUTH KOREA. THE 25% AUTO TARIFFS HAVE BEEN IMPLEMENTED, AN ADDITIONAL 10% GLOBALLY, TRUMP HAS PULLED THE TRIGGER ON THIS GLOBAL TARIFF BAZOOKA, RUPTURING GLOBAL TRADE IF THOSE COME INTO PLAY IS EXPECTED NEXT WEEK. EUROPEAN FUTURES DROPPING 2%, WAITING FOR COUNTERMEASURES FROM THE E.U. LIKELY NEXT WEEK. S & P FUTURES STATESIDE PLUMMETING LIKE A STONE, DOWN 3%. FURTHER LOSSES POINTING LOWER BY 3.5%. LET’S LOOK AT THE SAFE HAVEN MOVES, TREASURES RALLYING, GOLD IS GETTING MORE UPSIDE. FRESH RECORDS FOR THE YELLOW METAL, CURRENTLY THE U.S. BENCHMARK CLOSING IN ON THE 4% LEVEL. CURRENTLY A MOVE OF EIGHT BASIS POINTS LOWER IN YIELDS. YOU’RE SEEING A BID FOR TREASURIES. THE BLOOMBERG DOLLAR INDEX DROPPING .8%. UPSIDE TO THE POUND, THE EURO ONION. BRENT DOWN 2.5 PERCENT, OIL PRICES PLUMMETING TRADE AND RECESSION RISK. GOLD DOWN .2%, GIVEN THE 18% YEAR-TO-DATE RALLY. EVERYONE FROM CAMBODIA TO MADAGASCAR COULD — TO THE YOU TO CHINA BEING HIT BY TERRORISTS. WE PUT THE LEVEES UNDER THE MICROSCOPE. CHARLIE, HOW ARE THESE ADDITIONAL TAXES LIKELY TO IMPACT CORPORATE? WHO IS IN FOCUS FOR YOU? > > HOW MUCH DO YOU MAKE IN THE UNITED STATES AND WHERE DID THOSE INGREDIENTS COME FROM? INTERESTINGLY, EUROPEAN ALCOHOL COMPANY SHOWING REALLY INTERESTING SPLITS RIGHT HERE. 30% OF AMERICAN SALES, COMPARE THAT WITH A EUROPEAN COMPANY USED TO HAVING EUROPEAN SALES OF ABOUT 25%. IS NOT JUST ABOUT THOSE SALES, IT’S ABOUT THOSE INGREDIENTS. IT PARTIALLY EXPLAINS WHY A SUBSIDIARY OF ANHEUSER BUSCH CEO SPOKE RECENTLY ABOUT HOW 99% OF THEIR BEER IS BREWED IN AMERICA, 99% OF THOSE INGREDIENTS ARE AMERICAN BUT IT’S NOT JUST GEOGRAPHY, AND RETAIL TELLS AN INTERESTING DORY. IT’S ALSO THE BUSINESS MODEL. IF YOU COMPARE AND CONTRAST THE LIKES OF DISCOUNT OR TARGET IN THE U.S., THEY HAVE A LOT OF CHINA EXPOSURE. COMPARE TWO DIFFERENT BUSINESS MODEL, SAME SECTOR, T.J. MAXX HAS HAD TO RESELL OVERSTOCK. THAT PUTS HIM IN A BONE POSITION RIGHT NOW WHERE THEY CAN POTENTIALLY RESELL OVERSTOCK. THE COMPANY SEVEN PILING UP SINCE NEWS OF THESE TARIFFS AND I HAVE TO END ON AUTOS BECAUSE THERE’S BEEN SO MUCH IN FOCUS. YOU CAN CALL HIM SOMETHING OF A WINNER TODAY IF YOU WANT TO USE THAT WORD BECAUSE THEY’RE NOT SUBJECT TO ADDITIONAL TARIFFS BUT THE 25% TARIFFS CAME INTO EFFECT JUST AFTER MIDNIGHT I WERE SEEING REALLY MAKES PICTURE HERE. TOM: A FANTASTIC BREAKDOWN OF THE CORPORATE STORY AND HOW IT’S DIVIDING UP. CHARLIE WELLS, THANK YOU FOR THAT ANALYSIS. WE WILL GET MORE DETAILS NOW, THEY ARE NOW IN EFFECT. THERE EXPECTED TO DRAMATICALLY UP IN INDUSTRY SUPPLY CHAINS. LET’S GET REACTION FROM THE PRESIDENT OF THE GERMAN ASSOCIATION OF AUTOMOTIVE INDUSTRY. THANK YOU FOR TAKING THE TIME. WHAT IS THE IMPACT LIKELY TO BE ON YOUR MEMBERS AS A RESULT OF THESE 25% TARIFFS NOW IN FORCE. > > GOOD MORNING. THIS KIND OF PROTECTIONISM WILL ONLY PRODUCE LOSERS. IN THE U.S. WE HAVE 2000 COMPANIES FROM THE GERMAN AUTOMAKERS WITH ABOUT 140,000 EMPLOYEES, PRODUCING 840,000 CARS IN THE U.S.. IT’S A GREAT COMMITMENT AND WERE ABLE TO PRODUCE CARS FOR THE CONSUMERS WITH PRICES THAT ARE AVAILABLE FOR THEM. THIS KIND OF TARIFFS ONLY LEADS TO A SPIRAL OF PROTECTIONISM. THE HIGHER INFLATION RATE AFFECTS HOW THE CONSUMERS IN THE U.S.. TOM: PRESIDENT TRUMP WANT YOUR MEMBERS TO BUILD MORE EXPOSURE IN THE U.S.. ARE THEY PREPARED TO DO THAT AND WILL THEY BE DOING THAT? > > WE ARE INVESTED IN THE U.S., WE HAVE A GREAT COMMITMENT TO THE U.S., BUT IT’S ABSOLUTELY OPEN TO INVEST MORE AT THE MOMENT. TOM: WILL WAIT WE BE SEEING FURTHER FACTORY CLOSURES AND JOB LOSSES IN GERMANY AS A RESULT OF? ? THESE TARIFFS > > KNOW, I DON’T THINK THAT, BUT AT THE END OF THE DAY, THE U.S. COMPANIES OREGON SEES TARIFFS BECAUSE PRODUCTS FROM U.S. COMPANIES WILL BE MORE EXPENSIVE BECAUSE OF THE SUPPLY CHAIN. THE RESULTS ALL OVER THE WORLD ARE AT THIS POINT OPEN. TOM: TO WHAT EXTENT CAN THESE TARIFFS BE ABSORBED BY YOUR MEMBERS? HOW MUCH WILL BE PASSED ON TO THE CONSUMER? > > I’M SORRY, I CAN’T TALK ABOUT CONCRETE PRICE, BUT 25%, THEY’RE NOT ABLE TO PUT IN THE SUPPLY CHAIN. THEY HAD TO GIVE IT TO THE CONSUMERS IN THAT MEANTIME PRICES AT THE DAY. HOW MUCH I CAN’T BRING THAT TO YOU. TOM: BUT HIGHER PRICES ARE COMING FOR THE CONSUMER. MERCEDES IS LOOKING TO PULL ONE OF ITS LOWER AND MODELS FROM THE U.S. MARKET. DO EXPECT OTHER MODELS TO BE PULLED FROM THE U.S. MARKET FROM OTHER AUTOMAKERS? > > I THINK IT WILL BRING THE AUTOMOTIVE INDUSTRY IN THE U.S., WE HAVE 2000 PLANTS IN THE U.S., WE HAVE 140 THOUSAND EMPLOYEES, IT’S A GREAT COMMITMENT. WE ALSO WANT TO SHOW THE SUPPLY CHAIN, SO ARE — WE’RE IN AN ONGOING DISCUSSION. AT THE MOMENT THE WHOLE INTERNATIONAL SUPPLY CHAIN, I’M SURE THE EUROPEAN UNION, JAPAN, CANADA, KOREA AND ALL THE OTHERS WILL REACT TOGETHER. TOM: SHOULD THE E.U. RETALIATE DOES YOUR INDUSTRY NEED A SUPPORT PACKAGE FROM THE GERMAN GOVERNMENT? > > THEY HAVE TO REACT, AT THE END OF THE DAY IT LEADS TO A SPIRAL OF PROTECTIONISM BUT WE TRY TO AVOID SO WE NEED NEGOTIATIONS TO SHOW, MAYBE THEY HAVE SOME OTHER OPPORTUNITIES. IN 2018 WE ALSO HAD A SITUATION LIKE THIS AND AT THE END OF THE DAY WE FIND A SOLUTION. SO WE JUST TRY TO HAVE TALKS TOGETHER TO AVOID THE SITUATION. TOM: AS THESE 25% TARIFFS ON THE AUTO SECTOR ARE NOW IN FORCE, THANK YOU. FOR YOUR REACTION TO THAT PARENT COMING UP, WE WILL SPEAK TO ARMAND’S MINISTER OF STATE AND THE FOREIGN AFFAIRS DEPARTMENT ON HOW THE TRUMP TARIFFS WILL HIT THE IRISH ECONOMY AND THE EE RESPONSE. THAT EXCLUSIVE CONVERSATION IS NEXT. THIS IS BLOOMBERG. TOM: TRUMP TEAM TARIFFS ALSO HITTING CORPORATE AMERICA. WE WILL WRITE DOWN SOME OF THE BIG MOVES. > > LET’S START WITH THE RETAILERS, ESPECIALLY THOSE WITH PARTICULAR EXPOSURE FROM VIETNAM , SANK AFTER HOURS AFTER THIS ANNOUNCEMENT FROM THE TRUMP ADMINISTRATION. NIKE DOWN 7%, GAPPED DOWN NINE, LULULEMON DOWN 11. ALL RETAILERS WITH EXPOSURE TO VIETNAM. MOVING ON TO RETAILERS WITH EXPOSURE TO CHINA, ESPECIALLY THOSE THAT SOURCED GOODS FROM CHINA. WALMART DOWN 7%, AMAZON DOWN 6%. WE HAVE TO IAN ON APPLE. CHINA’S APPLE SUPPLY CHAIN IS HEAVILY EXPOSED TO THOSE THAT GOT A WHOPPING TARIFF NUMBER YESTERDAY. CHINA, INDIA, VIETNAM, ALL TARIFF NUMBERS ABOVE 30%. APPLE IS HIGHLY EXPOSED TO THOSE SHARES, LEADING LOSSES FOR THE MAG SEVEN IN EXTENDED TRADE. TOM: THANK YOU VERY MUCH INDEED. ARLEN WITH THE 3.5% HIT TO ITS GDP ACCORDING TO A PAPER FROM THE COUNTRIES FINANCE MINISTRY. A PLACE TO HAVE AN SUSU CONVERSATION WITH THE IRISH MINISTER OF STATE, THANK YOU FOR TAKING THE TIME. I WANT TO GET YOUR VIEWS ON THE E.U. RESPONSE BUT LET’S START WITH THE IMPACT ON ARLEN. WHAT IS YOUR EXPECTED TAKE IN TERMS OF THE BROAD-BASED IMPACT OF 20% TARIFFS ON YOUR IRISH ECONOMY? > > IT’S GOING TO TAKE A COUPLE MORE DAYS TO WORK OUT THE FULL IMPACT. ONE NOTABLE POINT IN THE FINAL PAPER LAST NIGHT WAS THAT TARIFFS ON THE PHARMACEUTICAL SECTOR, A PARTICULAR SECTOR THAT IS EXTREMELY EXPOSED. OVERALL LET’S NOT BEAT AROUND THE BUSH, IT’S BAD NEWS FOR IRELAND, EUROPE, THE U.K. AND THE UNITED STATES. YOU REFERENCE A PAPER FROM OUR DEPARTMENT OF FINANCE PASSED ON LAST FRIDAY. THE IMPACT IN THE MEDIUM-TERM, IN TERMS OF CREATION AS WELL AS A HIT TO OUR CONTINUING ECONOMIC GROWTH. TOM: SO THE PHARMACEUTICAL SECTOR, WHICH SECTORS FACE THE MOST PAIN AS A RESULT OF 20%? TARIFFS IN ARE IN RIGHT NOW? WHICH SECTORS ARE YOU MOST CONCERNED ABOUT? > > CERTAINLY PHARMACEUTICALS IS ONE WERE KEEPING CLEAR IN OUR MINDSET. HIGH-END BEEF AND INDEED WHISKEY AS WELL AS SO MANY PRODUCTS OF THE U.S., ALSO THE TECHNOLOGY SECTOR IN THE MANUFACTURING SIDE OF THINGS. IT’S GOING TO HAVE AN IMPACT IN EVERY SECTOR, AND EVERY FACET OF THE IRISH SOCIETY. BUT NONE OF THIS IS A SURPRISE, WE’VE BEEN PREPARING SINCE LONG BEFORE NOVEMBER, AND WE WILL GET THROUGH IT AS BAD AS IT IS. TOM: WHAT RETALIATION MEASURES HAVE YOU RECOMMENDED TO THAT YOU? > > WE’VE BEEN IN CONSTANT DISCUSSION WITH OUR EUROPEAN PARTNERS. THE E.U. DOESN’T NEED TO REACT INSTANTANEOUSLY. FIRST OF ALL, LET’S WAIT. THERE’S A TIMELINE WHEN THESE TARIFFS ACTUALLY COME INTO PLACE. THERE’S QUITE A BIT OF WORK NEEDED IN TERMS OF DIGGING THROUGH THE DETAIL AND LOOKING FOR FURTHER ANNOUNCEMENTS AND EVERYTHING ELSE. SO WE VERY MUCH HAVE BEEN ADVISING THE YOU TO TAKE OUR TIME, IT’S VIA,, REASONED VOICE IN THIS DISCUSSION. WE EXPECT THERE WILL BE COUNTERMEASURES, THERE HAS TO BE COUNTERMEASURES AND THIS IS CRUCIAL, THIS HAS TO LEAD TO A NEGOTIATED OUTCOME. TOM: IT IS A NEGOTIATION, SO WHAT ARE YOU PREPARED TO GIVE UP IN THAT NEGOTIATION? > > I DON’T THINK IT’S ABOUT GIVING UP ANYTHING AT THIS STAGE. IT’S ABOUT WHAT MEASURES THE U.K. NEWS TO MAKE SURE WE NEGOTIATE FROM A POSITION OF STRENGTH. THIS NOT FORGET THE E.U. IS THE WORLD’S LARGEST ECONOMIC LOCK WITH A POPULATION OF 450 MILLION DOLLARS. THAT’S WHY IRELAND NEGOTIATES AS A PART OF THE E.U.. OTHERWISE WE WOULD BE VERY SMALL FRY IN THIS DISCUSSION. OUR PRIME MINISTER AND DEPUTY PRIME MINISTER WILL STAY IN TOUCH WITH EUROPEAN COMMISSIONERS THROUGHOUT THE WEEKEND. THIS WILL LEAD TO A MEETING OF OUR TRADE MINISTERS ON MONDAY AND LUXEMBOURG. TOM: FOREIGN DIRECT INVESTMENT TO REALLY A CRUCIAL PART OF ER IS ECONOMIC MODEL. WHAT CHANGES ARE YOU SEEING THEIR AS PROTECTIONISM IS ON THE RISE? > > CERTAINLY THIS IS SOMETHING WE WILL START TO SEE IN THE COMING WEEKS AND MONTHS, MANY OF OUR WONDERFUL EMPLOYERS WILL — 10 OF THE WORLD’S LARGEST PHARMACEUTICAL COMPANIES HAVE MAJOR OPERATIONS IN IRELAND, 14 — 15 OF THE WORLD’S LARGEST TECH COMPANIES HAVE OPERATIONS HERE. IT’S REALLY GOOD FOR THE ECONOMY. THEY’RE GOOD EMPLOYERS AT PLAY A HUGE AMOUNT OF TAX. WE HAVE NOT BEEN SPENDING, THAT IS NOW BEEN PUT INTO EFFECT FOR THE SOVEREIGN WEALTH FUNDS THAT IF WE NEED TO REACH THEM IN THE COMING YEARS AND MONTHS WE WILL AS WELL AS WORKING WITH EUROPEAN PARTNERS. WE’VE SEEN A MARKED SLOWDOWN BUT WE ARE STILL SEEING GROWTH. NASA TIME HAVE TO LOOK AT THE DIVERSIFICATION OF OUR TRADING ARRANGEMENTS, BRINGING FORWARD FINALIZATION AS WELL AS MAXIMIZING E.U. TRADE DEALS WITH SOUTH EAST ASIA AND OTHER COUNTRIES. THERE WILL BE A TRADING RELATIONSHIP WITH THE U.S. GOING FORWARD, IT WILL JUST BE VERY, VERY DIFFERENT. TOM: YOU TALK ABOUT THE SUCCESS IN HOSTING THOSE U.S. TECH COMPANIES. HAVE YOU HAD REASSERTS — REASSURANCES THAT PART OF THE COUNTERMEASURES IN RETALIATION WILL NOT GO AFTER U.S. TECH? > > AS I SAID, ALL OPTIONS ARE ON THE TABLE AND THEY HAVE TO BE ON THE TABLE. NOW IS WHEN EUROPEAN COMMISSION, THIS IS NOT SOME FOREIGN ENTITY MAKING A DECISION FOR US. WE WILL LOOK AT WHAT MEASURES CAN DELIVER THE BEST RESULTS FOR EUROPEAN CITIZENS. MAKING SURE THAT IF YOU’RE GOING TO BRING IN COUNTERMEASURES THAT THEY ARE TARGETED. ULTIMATELY TARIFFS ARE IN NOBODY’S INTEREST. WE DID NOT START THIS TRADE DISPUTE, BUT WE CERTAINLY WANT TO FINISH IT AS QUICKLY AS POSSIBLE, PROTECTING AS MANY IRISH AND EUROPEAN WORKERS AS POSSIBLE. IN PARTICULAR I HAVE MICROSOFT IN MY OWN CONSTITUENCY, 3750 EMPLOYEES. TOM: YOU THINK THE LONG-TERM COMMITMENT, IT IS THE GOOSE THAT LAYS THE GOLDEN EGG FOR IRELAND. DO YOU THINK THAT COMMITMENT SURVIVES POTENTIAL COUNTERMEASURES? YOU MUST BE CONCERNED THAT BRUSSELS GOES AFTER U.S. TECH AND DAMAGES YOUR PROSPECTS. > > IS IMPORTANT WHEN YOU TALK ABOUT THE FBI SECTOR, THEY ARE NOT IN ARLEN FOR THE WEATHER OR JUST FOR TARIFF RELATIONS. WE HAVE AN EXTREMELY EDUCATED WORKFORCE, THE MOST EDUCATED WORKFORCE IN THE, FULL ACCESS TO THE E.U. MARKET AS WELL AND SPECIAL ACCESS TO THE UNITED KINGDOM. THERE’S A LOT GOING FOR THE IRISH ECONOMY. WE ABSOLUTELY FACE AN EXISTENTIAL THREAT AND WE WILL WORK WITH EUROPEAN PARTNERS TO MAKE SURE ANY COUNTERMEASURES ARE DESIGNED TO BE DELIVERED AN EFFECTIVE. AND ULTIMATELY WILL LEAD TO A RESOLUTION OF THIS AWFUL SITUATION THAT PRESIDENT TRUMP HAS CREATED. TOM: MINISTER, PRESUMABLY YOU AGREE WITH THE CANADIAN PRIME MINISTER WHEN HE SAYS THE U.S. IS NOW AN UNRELIABLE PARTNER. > > I THINK YOU HAVE TO SEPARATE THE U.S. FROM THE CURRENT U.S. ADMINISTRATION. AMERICA HAS BEEN A REALLY GOOD PARTNER OF ARLEN, PARTICULARLY THE E.U.. THE TRAINING RELATION BETWEEN E.U. AND THE URIS IS WORTH 1.4 TRILLION EURO. YOU CAN’T DISMISS THAT DESPITE THESE GENERATIONAL TARIFF ANNOUNCEMENTS, FROM AN HOUR’S POINT OF VIEW THE RELATIONSHIP HAS TO ENDURE. IT’S IMPORTANT NOT JUST TO OUR ECONOMY BUT TO OUR SOCIETY. ONE FOURTH OF AMERICANS HAVE IRISH HERITAGE. THIS WILL CHANGE ULTIMATELY IN THE SHORT-TERM BUT NOW WE ENTER INTO A PHASE OF DISCUSSION AND NEGOTIATION TO MAKE SURE WE CONTINUE TO WORK WITH THE AMERICANS IN SOME GUYS. THE RELATIONSHIP HAS CHANGE, IT WILL BE A LITTLE BIT DIFFERENT, BUT IT IS STILL ONE OR WORKING ON. TOM: NEIL RICHMOND, DEPARTMENT OF FOREIGN AFFAIRS WITH ARLEN’S REACTION TO THESE TARIFFS. 20% ON THE E.U. WHICH OF COURSE INCLUDES IRELAND. THERE IS PLENTY MORE COMING UP. WE STAY ON THE TARIFF IMPACTS. STAY WITH US. THIS IS BLOOMBERG. TOM: — IT’S A PERFECT ENTREE TO LET’S MAKE A DEAL. > > HE’S RAN ON THIS FOR THE LAST FOUR YEARS, HE NEEDS TO MAKE SURE THE OTHER COUNTRIES ARE PAYING WHAT THEY DESERVE. > > THERE WAS NOTHING TRULY CONSISTENT ABOUT THIS ROLLOUT IT WOULD EACH COUNTRY TRULY IS AFFECTED DIFFERENTLY. AND TO A HIGHER DEGREE THAN WHAT I THINK MANY WERE FACTORING IN. > > I WOULD ADVISE NONE THE COUNTRY STEPANEK. I WOULDN’T TRY TO RETALIATE BECAUSE AS LONG AS YOU DON’T RETALIATE, THIS IS THE HIGH END OF THE NUMBER. > > IT COULD BE VERY BUMPY ROAD AND WE MAY WELL LOOK BACK ON THIS AS THE KNIFE EDGE OF THE ECONOMIC PROSPERITY IN THE UNITED STATES FOR SOME TIME TO CALM. TOM: SOME OF OUR GUEST SPEAKING AND REACTING AFTER PRESIDENTS TRUMP’S TERRIBLE ANNOUNCEMENT AND THAT TIDAL WAVE HAVING A GLOBAL IMPACT. THE EMERGING-MARKET SPACE WILL BE CRUSHED IN TERMS OF THE TRADE FLOWS INTO THE U.S. AND SOME OF THESE PROPOSED TARIFFS. REACHING UP TO 50% IN SOME CASES, WHEN YOU THINK ABOUT CAMBODIA AND VIETNAM, CHINA, THE SECOND-LARGEST ECONOMY GLOBALLY, 54% TOTAL TARIFFS. THAT’S NOT INCLUDING THE 13% IMPOSED DURING TRUMP’S FIRST ADMINISTRATION. YOU ADD THAT TOGETHER IN THAT GET YOU TO 65% TARIFFS ON CHINESE GOODS INTO THE U.S. MARKET. THINK ABOUT THE IMPACT ON COMPANIES LIKE WALMART AND COSTCO. LET’S LOOK AT THE MARKET REACTION TO THIS. THIS IS HOW THE MARKET REACTED YESTERDAY. VOLATILITY ON THE FIRST REACTION TO THAT 10% ANNOUNCEMENT GLOBALLY, THEN THE DETAILS CAME OUT IN THE NUANCES CAME THROUGH IN THE MARKET REACTION OF COURSE HAS TURNED DEEPLY NEGATIVE WITH THE PRESSURE COMING THROUGH IN TERMS OF THE U.S. FUTURE PICTURE. EUROPE OF COURSE SET FOR A BRUTAL DAY OF TRADING AS WELL. THE NIKKEI IN JAPAN GIVEN THE IMPACT OF MORE THAN 20% TARIFFS, 24% ON JAPAN, FRONT AND CENTER. LET’S FLIP THE BOARD AND HAVE A LOOK AT HOW THE CURRENCY STORY IS ADJUSTING. STRENGTH FOR THE CURRENCY ON U.S. RECESSION RISKS SEEMS PRETTY PERTINENT EVEN WHAT WERE SEEING IN TERMS OF THE FLOWS TODAY. THE JAPANESE YEN UP 1.5%, BLOOMBERG DOLLAR INDEX SLUMPING, AND THE STRONGEST LEVEL WE’VE SEEN SINCE NOVEMBER FOR THE SWISS CURRENCY. IN TERMS OF THE 10 YEAR, MONEY IS MOVING INTO U.S. TREASURIES. THIS IS SEEN ACROSS THE CURVE, DO WE GET BELOW 4%? THE S & P LOOKING TO DROP 3% AND THE NASDAQ MORE THAN THAT. BRENT OIL PRICES PLUMMETING 2.5%. WE WILL SPEAK TO THE U.S. COMMERCE SECRETARY. STAY WITH US.