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Chapter 1: What is the main topic discussed in this episode?
The UK stands apart as a place to do business, not because of one advantage, but many working together. Over Ā£10 trillion in capital, four of the world's top universities, a 10-year industrial strategy in action, its stability with dynamism, global reach with local depth. It all adds up to greater growth. Find out more at business.gov.uk slash growth.
News when you want it with Bloomberg News Now. I'm Stephen Carroll. And I'm Caroline Hepker. Donald Trump's new 10% global tariffs are now in effect. The US president signed an executive order last Friday authorising the 10% levy after the Supreme Court struck down his original sweeping duties.
Trump subsequently threatened to raise that rate to 15% but he has not yet officially issued a directive to increase it. Eugene Soroka is executive director of the Port of Los Angeles. He says firms have spent recent days scrambling to understand how the levies will affect them. Many companies were working on their ledgers and trying to calculate what their new effective tariff rates would be.
Now, these tariffs under Section 122 of the Trade Act are a lot more prescriptive, have many more exclusions, and are temporary, which means there will be more debate, more capitulation going down the line, and more uncertainty.
Eugene Soroka was speaking as the White House says that it is working on a formal order to lift the global rate to 15%, although no timeline for that move has been finalised. Meanwhile, an assessment by the European Union has found President Trump's planned increase of 15% means levies on some goods would be above the ceiling agreed in the EU-US trade deal.
On Monday, the European Parliament suspended legislative work on approving the agreement, requesting clarity on Trump's new trade policy. Speaking exclusively to Bloomberg, the EU's Foreign Affairs Chief, Kaya Callas, says the bloc is now trying to make sense of the new tariffs. Nobody understands if this 10% is now on top or how is it really playing out.
Plus, when we agreed to this trade deal, then one of the arguments was that our companies would have stability. Any kind of decision is better than hanging on and not knowing what is coming. So predictability is a value. Now it is again gone. So we are trying to make sense how the US operates.
In other news, Jamie Dimon says that he sees parallels now to the run-up to the 2008 global financial crisis when a rush to make loans ended disastrously. Speaking to investors yesterday, the JP Morgan CEO suggested that some rival banks are doing dumb things to boost income. And according to Dimon, the situation is familiar.
Unfortunately, we did see this in 05, in 06, in 07, almost the same thing. The rising tide was lifting all boats. Everyone was making a lot of money. People were leveraging to the hilt. The sky was the limit. And I think today the rising tide is lifting all boats.
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Chapter 2: What new tariffs has the US implemented and why?
My own view is people are getting a little comfortable that this is real. JP Morgan CEO Jamie Dimon there speaking largely about AI-related investments. The news comes as the financial industry, like many others, has suffered declines in recent weeks due to AI concerns. Dimon added that he expects the credit cycle will eventually sour again, though he's not sure when.
The sell-off sparked by the latest AI scare trade appears to be easing. Stocks fell on Wall Street yesterday after a research report outlined the sweeping potential impact of artificial intelligence on jobs, sectors and economies like the US. Little-known research company Citrini imagined a world where consumers used AI agents to avoid credit card fees and delivery apps.
In response, stocks including American Express, Blackstone and DoorDash fell by at least 6%, something which surprised the report's co-author, Alap Shah. I thought there was going to be a small reaction. It was definitely larger than we expected. But I think it's not that surprising when you take a step back and consider where the markets are in the US.
The AI trade has been going on for three and a half years. It's been more or less a straight line up. Essentially, everyone is max long today, and so there really aren't many incremental buyers left.
On the one hand, it spooks people when you do consider what is negative about this, but I think specifically the market right now is trying to digest this idea that AI has gotten a lot more powerful in the last six months. Speaking to Bloomberg, Shah added he thinks governments should start taxing AI to prepare for the effects of coming mass unemployment.
He expects that AI could cut white-collar employment by 5% over the next 18 months. It's been four years since Russia began its full-scale invasion of Ukraine, and US President Donald Trump's efforts to end the war are stalling. Peace talks have already blown through several deadlines, and even some American officials admit privately that they see no signs that Putin is willing to budge.
Vitaly Klitschko is the mayor of Kiev. This war can stop easily.
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Chapter 3: How are companies reacting to the new tariff rates?
one person who is beginning the war. I'm talking about the president of Russia, Putin. Klitschko added that any peace deal cannot be a capitulation by Ukraine. One concern among Kyiv's allies is that Putin may agree to a ceasefire that would allow Trump to claim success while Russia continues a campaign of sabotage, hybrid warfare and election interference.
British police arrested former British ambassador to the US, Peter Mandelson, on suspicion of misconduct in public office. It comes after US Department of Justice released emails allegedly showing him forwarding government information to Jeffrey Epstein. Mandelson was released on bail early this morning but is still under investigation.
He has not been charged and his lawyer has declined to comment. Bloomberg's James Wilcock has more. Peter Mandelson's arrest deepens the crisis engulfing Prime Minister Keir Starmer. The UK leader picked the Labour Grandee to be his US ambassador, despite Mandelson's known links to Jeffrey Epstein.
In the wake of the fresh revelations stemming from emails released by the Department of Justice, Starmer's Chief of Staff, Communications Chief and Cabinet Secretary all quit their posts. and Conservative leader Kerry Badenock has further criticised the Prime Minister's choice, saying Mandelson's arrest was, quote, the defining moment of Sir Keir's premiership.
In London, James Woolcock, Bloomberg Radio. And those are your top stories on the markets. Some risk appetite returning to markets today, although the stock 600 is still down by two tenths of 1% shortly after the open. The FTSE 100 is a tenth of 1% lower. The CAC Caron in Paris down by three tenths. Technology shares are gaining in Europe today, up by four tenths of 1%.
Wall Street futures pointing higher as well, up a tenth of 1% for S&P. Even as after yesterday's sell-off, the Japanese yen sharply weakening on currency markets, now 1% weaker against the US dollar at 156.14. That's news when you want it with Bloomberg News Now. I'm Caroline Hepker. I'm Stephen Carroll. And this is Bloomberg. As a place to do business, the UK stands apart.
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This sits alongside a clear 10-year industrial strategy, unlocking smarter regulation and making it faster and easier to operate. Stability with dynamism. Global connectivity with local depth. It all adds up to greater growth. Visit business.gov.uk slash growth. The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all.
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Chapter 4: What implications do Trump's tariffs have on the EU trade deal?
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