Daybreak Weekend: Jobs Preview, France Conference, China-Iran Relations
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This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our daybreak anchors all around the world. And straight ahead on the program, a look ahead to the June jobs report, what it means for the Fed moving forward. I'm Tom Busby in New York. I'm Stephen Carroll in London. We're asking what's next for France as it navigates a new economic and political reality. I'm Doug Krisner looking at the state of Chinese-Iranian relations as tensions simmer in the Middle East.

That's all straight ahead on Bloomberg Daybreak Weekend. On Bloomberg 1130 New York, Bloomberg 99.1 Washington, D.C., Bloomberg 92.9 Boston, DAB Digital Radio London, Sirius XM 121, and around the world on BloombergRadio.com and the Bloomberg Business App. ♪

Good day to you. I'm Tom Busby. We begin today's program with the June jobs report. Nonfarm payroll numbers out on Thursday, 8:30 a.m. Wall Street time, just ahead of the July 4th holiday on Friday. For more on those numbers and some key inflation and spending data out this past week, how it may impact the Fed's moves going forward, we're joined by Stuart Paul, U.S. economist with Bloomberg Economics. Well, Stuart, let's start with this, what we saw on Friday.

A real surprise, huh? That's right. On Friday, we got the May personal income and outlays report, which really just had a very stagflationary contour to the whole thing. Personal spending declined 0.1%. Personal income growth really surprised, the downside declining 0.4%. And we saw a bit more core inflation decline.

than we anticipated. Core prices rose 0.2% in the month of May. By our estimates, it was about four basis points more than we were estimating. But what we're really seeing is tariff pass-through, especially into non-durable goods. What's that doing? That's causing consumers to retrench. They're pulling back their spending, especially in discretionary services categories, things like travel, things like food services. They're seeing higher prices. They're pulling back their spending where they can.

And on the income side, while there is still reasonably strong labor income for now, transfer payments materially declined in the month of May. And we think that that did play a role in forcing spending lower. Consumers are feeling the pinch of...

Lower income in the month of May. And so they pulled back in the discretionary categories. They're really just trying to satisfy their needs right now and meet their demand for staples. They're really just trying to spend on necessities. Lower income, slightly higher prices. And we have not even seen near the full effect of these Trump tariffs.

We may have seen, though, some impact of China tariffs, correct? Last week. Yeah. So in the month of May, consumer spending really pulled back in part because consumers are feeling the pinch of higher prices, in part because of tariffs on China. Higher prices rippled through, especially to the non-durable goods that...

come from China, but the tariff effect is not just a consequence of what we're seeing on China. There was a real pull forward of spending on autos earlier this year in anticipation of tariffs. And now we're seeing the payback. Spending on autos declined

really swiftly in the month of May. And a lot of that is just because of the policy uncertainty that we've seen, the uncertainty around tariffs throughout this year so far. A 6% drop in auto purchases. That's right. What else did we see? Airfares, hotels, anything like that that we saw prices go down? Airfare is soft, hotels soft. We saw most of those...

most of those data points in the CPI report earlier in the month. And a big part of what's driving that is canceled travel plans, a lot of travel from abroad that's been pulled back. Again, this is downstream of the trade war and folks not wanting to travel necessarily into the United States and they're canceling some of their summer travel plans. Now, this consumer spending down by the most since the start of the year, do you see moving forward for consumer spending at

It's not looking good. It's not looking great. So much of it hinges on the labor market right now. As I mentioned, incomes declined, so consumer spending retrenched quite a bit.

But where we do see one tiny little bright spot is in labor income. Labor income increased 0.4% in the month of May. That's because wages accelerated and hiring continue to pace during that month. Looking ahead, we do expect to see a more material cooling of the labor market. And as it cools, so should consumer spending. We already see consumers trying to build up precautionary savings by rotating toward inflation.

focusing on necessities and away from discretionary spending, we think that if the cracks in the labor market widen further, that spending is going to pull back even further. And we're going to get a good look at that this Thursday's June jobs report. What are you expecting to see? Headline numbers, we're expecting 120,000 jobs added. But I will admit, risk is skewed to the downside. We can see a situation in which there are just

tens of thousands of jobs added, not over 100,000. So, Whisper is below 100K? Whisper right now is fluttering around 100,000. We haven't seen a Whisper number -- that's the expectation for market participants beyond just forecasters -- fall below 100,000 since early 2021.

So, right now folks are feeling this tendency to lower their expectations for the pace of hiring, but there's a little bit of a mental block.

in getting below 100,000. We think it could fall below 100,000 and it will by the end of the year, certainly. But for the month of June, we estimate 120,000 jobs added. But that is not enough hiring to keep pace with the increase in the labor force. And so the unemployment rate is likely to rise to 4.3%.

And we're getting closer to the 4.5% unemployment that the median FOMC member and the median monetary policymaker is expecting to see at year end.

Boy, an important readout. The June jobs report this Thursday, 830 a.m. Wall Street time. Our thanks to Stuart Paul, U.S. economist with Bloomberg Economics. We move next to oil. Prices tumbled early last week amid hostilities between Israel and Iran before stopping that slide in prices after a tentative ceasefire was called and the Strait of Hormuz remained open. The question now,

Where are crude prices headed and why? And for more, we're joined by Javier Blas, Bloomberg opinion columnist covering energy and commodities.

Well, Javier, thank you so much for joining us. Where are crude prices now? And with all the recent turmoil in the Middle East, do you think prices are where they should be? I think that prices are about right right now. WTI around $65 a barrel. Brent just a bit higher than that. So the price of oil right now is somewhere between $65 and $70 a barrel. The market is discounting that the turmoil in the Middle East is on the rear end.

mirror that Iranian oil production is going to continue, that there is no risk of the Strait of Hormuz, which is that choke point for about 20% of the world's oil. It's not going to be close. And I think that the market is also expecting that the OPEC oil cartel is going to continue increasing production through the summer.

And if we were having this conversation towards the end of the summer period, kind of September, early October, I would not be surprised if we see prices a lot lower. Are you saying there's a glut of oil?

There is a glut of oil and certainly that glut is going to increase as OPEC is putting more barrels into the market. And also the high prices that we had recently at the height of the conflict between Israel and Iran, where we saw prices around $15 higher than they are

that also has a low u.s shale producers to lock in those high prices to hedge so that means that probably we're going to see american oil production a bit higher than we expected and that's going to add to that kind of uh um glut on oil that that we we are seeing and the way i have put it is that we have

enough oil, probably too much oil right now. And by the end of the summer, the global economy is going to be swimming in oil. Well,

Well, let's talk about Iranian oil right now, because Israeli American missiles, fighter jets, they did not target Iranian energy assets at all. No, there was a small, a couple of targets by Israel very early in the conflict. I think that it was a message to the Iranians, careful, we can't go after your energy sector if we want. But I also believe that

quietly the White House intervened and told both sides oil should not be attacked in this conflict. So ironically, what we have seen is that the Iranian oil production probably is higher today than it was in May. And despite all this talk about maximum pressure and oil sanctions from the United States on Iran, the truth is that Tehran is producing the most oil in seven years right now. And that must be a big benefit for China, right? That is its main customer.

And of course, President Trump was encouraging Tehran to keep selling to Beijing. Yes, President Trump on one hand has been talking about maximum pressure and the sanctions are still there. But at best,

I think that one can argue that either Beijing has found a way to bypass all the sanctions or Washington is turning a blind eye and is not enforcing the sanctions. I think it's a combination of both, but I don't think that the White House wants to do anything with Iranian oil exports. I believe that the talk about maximum pressure is that talk, but very little action. And to cut off that oil,

or the oil production would devastate that economy. Is the tactic maybe to keep that economy moving along in Iran as best President Trump can? Yes, it will be bad for Iran if the exports were to go again towards zero as they went during the first administration of President Trump. But I do believe that this is nothing to do with trying to get the Iranians into the negotiation table or anything like that.

China was able to continue buying Iranian production at the beginning of the second administration of President Trump. And the administration has done very little to really stop the Chinese buying that oil. It looks like the framework of a trade deal between the U.S. and China just this past week. So I guess this is all part of that, keeping the peace with China.

Now, I want to talk to you about West Texas Intermediate, the U.S. pumping out more oil than ever before. It's the start of the summer driving season. Traditionally, demand skyrocketing. Gas prices, though, are down, down 23 cents on average from a year ago. What does that tell you about domestic production here in the U.S.?

Well, domestic production continues to be very, very strong. The last monthly data that we have comes from March. So it's a bit dated, but that was an all-time high, just under 21 million barrels a day. That compares 20 years ago, the United States was producing about 7.5 million barrels of crude and oil.

other liquids, when you put all the petroleum that gets out of the ground in the United States. Today it's close to 21 million barrels a day. That's what the shale revolution has done to American oil production. And when I was thinking about what were the

capitals of the most recent conflict involved in the fighting. You obviously have Tehran, you have Jerusalem, Tel Aviv, and you have Washington. But I thought that it was a four capital or a four important town in this conflict because you

cannot really understand geopolitically what happened in recent weeks if you don't include Midland in West Texas, that town of about 150,000 inhabitants, which is the capital of the Shale Revolution. And a lot of what happened in the Middle East

has been shaped by American entrepreneurs in Midland, which discover the riches of shale. Our thanks to Javier Blas, Bloomberg opinion columnist covering energy and commodities. And coming up on Bloomberg Daybreak Weekend, we'll look at whether financial services can deliver for the UK and what the city of London needs to thrive. I'm Tom Busby, and this is Bloomberg. ♪

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Join us in Atlanta or via live stream on August 12th for Bloomberg's Business Value of AI event and networking reception. This event will gather business and technology executives to share their experiences and provide insight into how to best use data to optimize the customer experience.

You'll also learn how companies have successfully implemented AI agents that have led to improved productivity and profitability. This program is proudly sponsored by IBM. Register at BloombergLive.com slash AI slash Atlanta. This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York.

Up later in our program, we'll look at the state of China's relations with Iran amid the simmering tensions in the Middle East. But first, in the coming days, top economists and political and business leaders will descend on the southern French city of Aix for its annual Summer Economic Conference. It comes as France marks one year since the snap parliamentary elections that plunged the country into political and economic turmoil. For more, let's go to London and bring in Bloomberg Daybreak Europe anchor Stephen Carroll. Tom...

It's been quite a year in France. Last July, President Emmanuel Macron's party suffered a crushing defeat in early elections that fractured the National Assembly and left it without any group holding a majority. That triggered months of political chaos.

Now, the Prime Minister, François Bayrou, is holding together a fragile minority government. He faces an uphill battle to pass a budget later this year. As the one-year mark passes since the last elections, Emmanuel Macron could choose to dissolve the Parliament again, a step he hasn't ruled out. At the same time, Marine Le Pen's far-right National Rally Party has continued its ascendance, despite her conviction for embezzlement, which may rule her out of standing in the next presidential race in 2027.

While all that is happening, France is facing a slew of economic challenges, from increasing defence spending to trade tariffs from US President Donald Trump. The CEO of French cosmetics giant L'Oréal, Nicolas Erronemus, told Bloomberg recently how his firm is preparing. If I look at my US business, right now I manufacture in the US around 50% of the units I sell in the US.

And by the way, we are a net exporter from the US because what some people sometimes forget is that we have like 18 US brands and the brand like Kiehl's is manufactured in the US and exported to China and the rest of Europe. So we're a net exporter from the US, but overall half of our units are manufactured there. You add around 15%, which are,

Canada and Mexico. So all in all, we have like 30% that comes from Europe. It's mainly fragrances or luxury products, which we have indeed built a little bit of inventory on prior to the tariff increases, which

In the end, we don't really know what they're going to end up being. That's L'Oreal CEO Nicolas Erronimus there speaking to Bloomberg's Francine Lacqua. Now, many of these issues are going to be discussed at a key economic conference that's happening in the coming days. It's the Rencontre Economique, or Economic Encounters, I think I'd best translate it as that, in Aix-en-Provence. For more on this, let's go to Paris. We can speak to our Bureau Chief, Alan Katz, and Jean d'Albert from Bloomberg Economics is with us as well. Alan, first of all, can we just...

put in context this event that's coming up. It's a big set of economic conversations, lots of policymakers, lots of politicians there as well, happening in Aix-en-Provence. It is a date in the calendar for French economists and politicians and a pretty spectacular location that it happens as well.

It is, but the main thing that's actually going to happen at X or the main person that the people in X are trying to deal with or understand is someone that you didn't mention in your introduction, which is Donald Trump.

I was really struck, I have to say, this year that the title of the rencontre économique avec son prince is "affronter le choc des réalités," which best translates probably as "confronting the clash of realities." So they don't mention him by name, but they're really referring to Donald Trump. When you look at the opening session, it's the urgent need for a rational debate on Thursday, this session.

If you look at the closing session on the first day, the title is the fiction of a Western block. I mean, really, like there's there's a bit of panic that.

that has this not about France and not about France's problems that you've mentioned, but really is about sort of this broader view that Trump is upending the global order. And in France, the people who are at this meeting, it's mostly French, not all French people, but mostly French, have to deal with this again as well. And they have to understand really what's going on and what's changing if they're going to try to figure out a way to make it work for France in the future.

Yeah, and some pretty big names involved as well. Mario Draghi, former ECB president, is going to be there, former Italian prime minister, of course, as well. And not the current prime minister, but the previous prime minister of the three that we've had in the past year in France, Michel Barnier, is also going to be attending. Yeah, I'm not quite sure if he's the best place to sort of

chart a path out for France since he wasn't able to last more than a few months in the prime ministership. But there's also the current foreign minister, the current labor minister will be there. She's also Elizabeth Bell, and she's also a former prime minister. This event always has heavy hitters, whether it's government or central bank or CEOs. There are a bunch of CEO board members who are going to be there, a bunch of ECB board members who are going to be there.

as well as CEOs like Thomas Boubain, who is the CEO of AXA, or Patrick Pouyanné, the CEO of Total, the big energy company. So from that perspective, you do get sort of the great and mighty of France coming together. But as I said, it's usually a pretty relaxed environment, and it's mostly chit-chat. And as you've said, it's a spectacular location, and people are sort of

you get that sort of summer vibe from this thing. And this year, I really do feel like there's a little, it's a little more tense and people are really trying to figure out what are they going to do down there. Now, maybe you're right. Maybe Bonnier can provide a, with, with the experience of that he went through in the fall can provide a way to sort of reconcile France with this changing order that's being brought about by Trump's that's been brought about by Trump's election. But, but we'll have to see on that. Yeah.

Yeah, I mean, the heat in Aix-en-Provence, not just literal this time, but also perhaps metaphorical as well. Let's bring in Jean Delbar from Bloomberg Economics, who joins us as well. Jean, when we're trying to think about where France's economy is going into this set of discussions in Aix-en-Provence, which you know well, talk us through where the French economy is now with all of the challenges that are laid out before it.

Sure. Hi, good morning. So yes, indeed, France is currently facing a pretty sluggish growth momentum. We have pointed out the 0.5% GDP growth this year, which falls down from 0.9% in 2024. And this is below the European average of 1.1% for 2025. So a pretty sluggish momentum. And basically, all its growth drivers are contributing to that. We are observing a

pretty weak investment dynamic despite and currently easing in financing conditions. And this is probably related to the increase in uncertainty that we do face in France. Consumption is going poorly as well. Gains in disposable income are limited this year and the saving rate remains pretty high currently. And finally, and pretty obviously, the contribution from net trade will be negative this year.

All of that contributes to a pretty sluggish growth momentum in France, which again contrasts with other European countries at the moment.

And if we look ahead, France will face a lot of challenges. First and foremost, the political uncertainty, which remains pretty high and has even increased these days, given the collapse of the pensions reform stocks. So that's the main challenge, I would say.

The second one is obviously the current trade uncertainty that we are facing, although France is less exposed than its European peers. And finally, the fiscal topic is really important and some tough negotiations will have to take place in autumn to pass the new budget.

Yeah, a very tricky couple of months ahead. On that point, Jean, we've just had the NATO summit where leaders agreed to increase spending on defence. How is France placed to be able to cope with that fiscally? It's also a tricky situation for France. I mean, the defence spending in terms of GDP have already increased a bit in France. They are now like above the 2% NATO mark. So it's pretty positive. And they are already expected to increase again, to increase further to 2.5% of GDP in

in 2030. So yesterday we had President Macron saying that 5% is a target or I mean can be a target. We think it is unlikely, we think it will be a huge challenge exactly because of the fiscal constraint we mentioned before. So it would be very costly for France to reach that 5% mark.

And we've made some estimates that it will add a 15 percentage point of debt on the debt to GDP ratio over 2030. So it would be a lot and we think it will not be possible. And we have penciled like one 3.5% mark, which will be tricky, but still manageable and feasible in the coming years.

Okay, Alan, I want to go back to you as well, because I mentioned that we're coming up on this point where Emmanuel Macron could call another election for the National Assembly. He hasn't ruled it out, but give us a sense of how stable the political situation is in France at the moment. It's a little bit of a tricky question. I guess it's stable probably in the short term and unstable in the longer term, I guess would probably be the best way to put it. As you point out, Emmanuel,

Emmanuel Macron could dissolve parliament and call new elections as soon as next month in July. He said that he doesn't plan to do that, doesn't expect to do it. As you point out, he hasn't ruled that out entirely. But it seems unlikely because if you look at opinion polls,

if you called new elections now, you'd end up with roughly the same sort of breakdown among political parties in parliament. So there's no real reason to do it. The other reason why it's unlikely to happen in the very near term is that Jean mentioned that these pension talks have broken down, which they did, though Prime Minister Bayrou has pledged to come up with something, some sort of

something to try to present to Parliament. It's really unclear as yet what that will be. But in any event,

the far-right national rally has said that it will not participate in a no-confidence vote until budget time, and that won't be until the fall. So while the socialists have filed a no-confidence motion against Bajou, there's no chance of a passing without the far-right. Because again, mentioning Bernier before, what actually pushed him out back in December was when he had the far-left, sort of the center-left influence,

and then the far right all joining together, that got you up to a majority of parliamentarians who could push around. And that's not the case, at least for the next couple of months. So I would say short-term stability, but it doesn't mean that creates any sort of longer-term stability for the government or allows the government to really do much. Because again, like,

In this case, it's a fight over pensions. But as soon as we get to the fall, it will be a fight over the budget. It's going to be a major fight. I mean, as Jean was mentioning, you know, the government's pledged to reduce the, or

or pledged to have about 40 billion euros in what they call savings. So that's a combination of potential, you know, revenue increases and spending cuts. It's unclear what those are going to be or where they're going to come from, but that's a lot of money. So how they're going to get there without, you know, there being a major blow up and the government being forced out is how they're going to get there without a major blow up is very hard to see whether or not that ends up pushing out the government is another question because it depends on, again, on opinion polls and whether parties see it in their interest to sort of make the

by who take on whatever budget cuts are going to come. And, you know, that's what the unpopularity that goes with that and leave that all in the current government and save their sort of their fire for later when they get to either municipal elections 2026 or, as you mentioned, the presidential election in 2027. So it's again, as I said, just to boil it all down, I would say short term stable for the next couple of months, longer term, all bets are off.

Yeah, keeping us very interested and our eyes closely focused on what's happening in France over this summer as well as some of those conversations are taking place. For now, Alan Katz, our Paris Bureau Chief and Jean d'Albart from Bloomberg Economics, thank you very much for joining us. We'll be bringing you some of the key conversations from the Exxon Provence Economic Conference across Bloomberg platforms in the coming days.

I'm Stephen Carroll in London. You can catch us every weekday morning here for Bloomberg Daybreak Europe, beginning at 6 a.m. in London and 1 a.m. on Wall Street. Tom? Well, thank you, Stephen. And coming up on Bloomberg Daybreak Weekend, a look at the state of Sino-Iranian relations as Iran's defense minister visits China. I'm Tom Busby, and this is Bloomberg. ♪

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Join us in Atlanta or via live stream on August 12th for Bloomberg's Business Value of AI event and networking reception. This event will gather business and technology executives to share their experiences and provide insight into how to best use data to optimize the customer experience.

You'll also learn how companies have successfully implemented AI agents that have led to improved productivity and profitability. This program is proudly sponsored by IBM. Register at BloombergLive.com slash AI slash Atlanta.

This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Iran's defense minister arrived in China last week for his first known overseas trip since that country's war with Israel began. The visit highlighting just how critical Beijing has become to Tehran's strategic calculations. For more, let's get to the host of the Daybreak Asia podcast, Doug Krisner.

Tom, Israel and Iran have spent the better part of the past two weeks exchanging strikes, and in the process, the U.S. was drawn into this conflict. The situation highlights the role of another power player, though, China. Joining me now is Jenny Marsh. Jenny is Greater China EcoGov team leader for Bloomberg News, and she joins us from our studios in Hong Kong.

It's always a pleasure to benefit from your perspective. And as long as we're talking about geopolitics, let's talk about what's going on between the US, Israel and Iran.

Now, after the strikes, the recent strikes by the U.S. government on Iranian nuclear facilities, Beijing issued a strong condemnation and basically called it a violation of the U.N. Charter and of international law. I'm wondering whether or not China may have played a role in this. Do you have a sense of that? My sense is that China very much here will be remembered for sitting on the sidelines.

You know, like they issued this very strong statement condemning the U.S. and they talked about how America was sort of blowing up, you know, the international system for sort of maintaining order, i.e. the U.S.-led, you know, U.N. framework for resolving conflicts.

And before the US strikes, you know, Xi and Putin had got on the phone and sort of worked out this four-point plan for peace. But really for China, they kind of left it at diplomacy. And I don't think, you know, they were particularly effective in what they were messaging. We know that Wang Yi spoke to both the Israeli and the Iranian foreign ministers. So there was some sort of attempt at sort of back-channeling. But essentially, you know,

So China is one of Tehran's sort of strongest partners. And when it came to its darkest hour, China really didn't do much apart from call for peace. Is it pretty much a selfish move that boils down to crude oil? Is that really what this is about, this relationship? I think this relationship is about the U.S.,

And I think one of the reasons I say that is, yes, China is one of the places that will buy sanctioned Iranian oil. It's a very, very slim percentage of China's oil supplies, about 10%. And they can easily source this oil from other places. And I think, you know, there's a couple of practical reasons why these sort of, it's mainly sort of these teapot refineries in northern China that take this oil. It's much cheaper now.

But also I think the Chinese government tolerates it because they are vehemently opposed to the U.S. sanctions regime. And so they let this go as a way of sort of defying the U.S. sanctions regime, which is something they and Russia and Iran are all united in opposing. But I think the broader relationship with Iran has been about sort of finding partners that will join hands with Beijing and challenge the U.S. sub-world order. And I think you can see that through China.

You know, she has ushered Iran into the BRICS group of emerging markets, which is this block that it's expanding with India and South Africa and Brazil as sort of a kind of a rival framework to the G20. It also welcomed Iran in the last couple of years into the Shanghai Cooperation Organization, which is another sort of grouping that it's expanding, which has more of a security flavor. But when it comes to sort of trade with Iran, I mean, the trade is very, very...

isn't significant. It doesn't sell much to Iran. Actually, trade with Iran actually fell off in the first four months of this year. It was down about 20%. And the broader Middle Eastern region, from a Belt and Road perspective, is more important to Beijing. So I think really this was sort of a partnership of convenience. And for China, it was always about finding partners that will join hands with it to stand against the U.S.,

So to that point, maybe China is not solely reliant on Iranian crude oil. I get the fact that they're only going to import, let's say, 10%. But the Strait of Hormuz, I would imagine, is perhaps more critical. And

if there were a way for Beijing to become influential in dialing down a lot of this tension just so that the conflict didn't extend into the Strait. Is that part of the thinking here as well? Yeah. So I think the Strait of Hormuz is definitely a different story and a much sort of more alarming concern for China. About 45% of its oil shipments come through that Strait.

And China is the country that is most dependent on the oil coming through that waterway globally.

So, yeah, massive exposure there. That being said, China has been stockpiling on oil. So if there was a crisis that closed the strait for a short period of time, it wouldn't feel the immediate impact. But in the long term, absolutely doesn't want this conflict to spiral. And I think that was the message from the four point plan that she put forward. He talked about like not wanting this to expand.

And when they were condemning the US, they were saying, you know, the US is fanning the flames of war and would be to blame, essentially, if this did become a broader conflict. I think the problem for China is like,

how can it affect, how can it, or what is it willing to do to stop it from becoming a broader conflict? And the answer is not very much. You know, China doesn't like to get its hands dirty in foreign conflicts. It definitely doesn't go anywhere near the U.S. playbook of these sort of faraway wars and military operations. And even with Russia, which it has a much stronger trade relationship and sort of interdependency with, and Russia has now overtaken Saudi as the top supplier of crude oil to China.

Even when Putin went to war in Ukraine, she was very careful not to do anything that would invite U.S. sanctions. So, yes, he stepped up economic support and diplomatic support. And then there was some controversy about sort of, you know, the dual use items that have been shipped, but never any direct, you know, military support that would cross these red lines that America and Europe laid out very clearly. You know, and I think China is a country, you have to remember, that has no formal allies whatsoever.

by design, you know, and its self-interest will always be its sort of north star of what it does when these kind of conflicts break out. What is the degree of anti-American feeling right now in China? Not just because of what we're describing here in terms of Israel, Iran, but I'm thinking of

Whether it's Taiwan, whether it's the US-China trade war, give me a sense of the degree to which people in China are feeling very anti-American. I think that is a really interesting question, and it hasn't been as prominent as you might have thought.

Sort of broadly towards American people and the Minecraft movie came out in China and did pretty well And we've seen other sort of examples of sort of American soft power being powerful Even though the US and China are locked in this trade war I almost wonder if the Chinese people sort of are able to separate Trump and you know the aberration or you know that is Trump from the average American people

There were people talking about, you know, how foolish Iran had been to sort of trust the U.S., saying, you know, the U.S. came in to negotiate, then its ally hit Iran, and then the U.S. hit Iran. You know, the Iranians were fools forever trusting America. So there was a lot of that kind of sentiment. But I think actually the Chinese people sort of

It is not this sort of like rise in nationalism. And I think that is partly because the Chinese government has learned from the first time around, the first trade war, you had this wolf warrior policy that really stoked up a lot of bad feeling. Then you had sort of people like Hu Xijin, the former editor-in-chief of the Global Times, who were allowed to sort of really run wild on social media. You know, when Nancy Pelosi was flying into Taiwan, he was posting things about, you know, perhaps China

shooting down the jet as she came in, which obviously just was a step too far. And I think this time, the nationalist voices on social media and state media have been tampered down because the government doesn't want it to get out of control to a point where they are not the ones managing the narrative. Jenny, thank you so much. It's always a pleasure. Jenny Marsh there, Greater China EcoGov team leader for Bloomberg News.

We move next to global trade. Flows have been surprisingly resilient in spite of those U.S. tariffs and the uncertainties that they have brought. That's the take from Aditi Rashkina, the CEO of DHL Global Forwarding in Greater China. She spoke recently with Bloomberg's Stephen Engel at the World Economic Forum Summit in Tianjin, China. Obviously,

There's been some turmoil in the world. There's obviously an uncertainty around the tariffs and the global reciprocal tariffs from the United States. There's rising conflict in the Middle East. How is that directly impacting what you're seeing as far as package deliveries and essentially demand? So let's just start off by saying that global trade has been pretty resilient.

If we look at China's export growth in the first five months, it's grown about 7%. So whilst having said that, with the tensions and tariff scenarios,

organizations are deploying different strategies. Some are front-loading and looking at taking inventory forward so they have it when demand peaks. Others are looking at alternative sourcing and manufacturing networks where they can in the short run. And yet others have a wait-and-see approach, so let's wait it out and see what happens with the tariffs and the rest of the situation. On that front-loading, do you have

see a tangible increase while we're in a 90-day pause, which is running out already. But our shipment's definitely spiking because we don't have the certainty following mid-August. That's right. So it was the spike in order to hit that 90-day window. So we're not sure what's going to happen after that period of time, but we do believe at some stage was to meet that window.

What are you seeing on the de minimis exemption that the Trump administration has essentially done away with that $800 shipment exemption? Have you seen a complete drop off? Yes, e-commerce has actually would have been the one that has had a little bit more of uncertainty of not knowing how to deal with the technology on the other side when it gets to the customs. So it's been on both sides.

for the customs regulation to figure out how they're going to handle it once the shipment arrives, but also for the organizations moving to figure, to know how to deal with the situation. So everyone's working on solutions right now to address the demand. How much of a sales drop are we looking at between China and the United States? Honestly, it really depends on the sector that it is. E-commerce has had the biggest hit, but if you look at the tech,

like Apple's, Dell's, HP's, organizations like that, they're still flowing in the same form as they've gotten exceptions from tariffs. You mentioned about diversification. How are you seeing corporates, individuals or mostly corporates, I would say, probably diversify from their shipping to or from the United States away from the more heavily tariffed China?

So, you know, it depends again on the sector or industry that organizations are in. So those impacted by tariffs look for alternative sourcing locations. And you see a bit of shift into Southeast Asia. You see a bit moving to Middle East, Africa, Latin America. So it has been a varied process.

amount of setups, there are those that still believe that China is the most cost-effective model that works for them. And usually, the shifts of a production into Southeast Asia is to move to the U.S., and for the rest of the world, in intra-Asia and within China, consumption generally stays in China. That's Aditi Rashkina, the CEO of DHL Global Forwarding in Greater China, speaking with Bloomberg's Stephen Engel. And I'm Doug Krisner. You can catch us weekdays for the Daybreak Asia podcast.

It's available wherever you get your podcast. Tom? Thank you, Doug. And that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at 5 a.m. Wall Street time for the latest on the markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now. This is an iHeart Podcast.