Israel-Iran Strike Report, G-7 Mull China Tariff, Elon Musk Exclusive
27:09 Share

This is an iHeart Podcast. When you have bars in the sky, onboard showers, and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations, and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more.

Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Daybreak Europe podcast, available every morning on Apple, Spotify or wherever you listen. It's Wednesday the 21st of May in London. I'm Caroline Hepke. And I'm Stephen Carroll. Coming up today, oil prices jump on a report that Israel may be getting ready to strike Iran's nuclear facilities.

G7 countries discuss tariffs on low-value Chinese packages. Plus, Musk on the charge. The Tesla CEO and the world's richest man talks to Bloomberg's Michelle Hussain about brand damage, doge and a pullback in political spending. Let's start with a roundup of our top stories.

The price of oil has jumped on a report that US intelligence believes Israel is preparing for a potential strike on Iran's nuclear facilities. According to CNN, which cited unnamed American officials, it isn't yet clear that Israeli leaders have made a final decision on whether to carry out the strikes. Stuart Livingston-Wallace leads Bloomberg's Middle East coverage.

I think a few things to be said about it. Number one, we've had similar reports in autumn, we had similar reports in February and now we have similar reports again. It is absolutely true that Israel has been preparing to take out the nuclear facilities for many, many years. It's been a big concern and the Israeli Prime Minister has appeared repeatedly in public saying this is the major threat to the region. So there's no surprise there. What appears to be different this time potentially is that it may or may not be coming fairly soon.

Stuart Livingston-Wallace speaking there. The potential for an attack has raised concerns about the fate of Iran-US nuclear talks and the impact on the global oil market. Brent crude rose above $66 a barrel, while West Texas Intermediate surged by as much as 3.5% before pairing gains. The reports of a possible strike come after Iran's supreme leader said that negotiations with the US over his country's nuclear programme are unlikely to result in a deal.

Speaking yesterday, Ayatollah Khamenei called the Trump administration's latest demands on Iran outrageous. Khamenei's comments were a direct repudiation of the U.S. leader's claim last week that Iran and the U.S. were getting close to maybe doing a deal. The former head of the CIA, retired General David Petraeus, says that he's hopeful for an agreement.

There's a chance that there could be a nuclear deal that doesn't have some of the shortcomings of the previous nuclear deal that could enable the lifting of sanctions progressively and so forth as confidence is built. And that could lead to them being a more constructive player in the region than they certainly have been for many decades.

The view there of General David Petraeus. He is now the chairman of the KKR Global Institute and he was speaking there to our editor-in-chief, John Micklethwaite, at the Qatar Economic Forum in Doha. EU and British officials are stepping up pressure on Israel over its latest offensive in Gaza. Their calls come amidst growing political outcry over the humanitarian crisis caused by the conflict between

The European Union's top diplomat, Kaya Callas, says a huge majority of member states support a review of potential human rights violations by Israel, while Spain's foreign minister recommended possible sanctions. The UK says it plans to pause free trade talks and announced penalties against individuals and entities it says are linked with violence in the West Bank. Foreign Secretary David Lammy heavily criticised Israel's recent conduct.

We must call this what it is. It is extremism. It is dangerous. It is repellent. It is monstrous. And I condemn it in the strongest possible terms.

UK Foreign Secretary David Lamy there. Israel has said it would start allowing aid into Gaza again after blocking it since early March. But European officials have expressed frustration about the pace of food deliveries. In a statement, the Israeli Foreign Ministry said external pressures wouldn't affect its struggle against who it describes as enemies working to destroy the country. Now, Canada's finance minister says that G7 countries are discussing tariffs on

oversupplied Chinese products. Leading democracies have accused Chinese online retail platforms like Timu and Shein of flooding their markets with low-value goods. For Canada's Francois-Philippe Pachopagne, it's something that the G7 can take coordinated action against.

Certainly the low value shipments have created a number of things that we want to discuss amongst ourselves and see how we can progress that discussion because it's not only about the revenues, but it's really about the customs and making sure that we protect our respective jurisdictions.

Canada's finance minister, François-Philippe Champagne, is speaking there at the G7 finance ministers' meeting in Alberta. The US has already started to tax small packages, raising fears that China's producers will switch to other markets in search of profits. From small packages to big trade deals, the UK's Chancellor Rachel Reeves and US Treasury Secretary Scott Besant are hoping to flesh out their trade agreement in talks tomorrow.

at the G7 summit in Canada. The agreement to lower tariffs on limited sectors like steel was a landmark first for Britain. Bloomberg's James Wilcock has more. It was hailed as a full and comprehensive trade deal by US President Donald Trump.

But the UK and the US still haven't set a date for when tariff reductions will come into effect. The two sides are also working through sticky differences on how to regulate big tech and potential taxes on the pharmaceutical industry. Both sides enjoyed the showmanship of announcing a first post-liberation day trade deal. But now the question is, when does the detail arrive? In London, James Woolcock, Bloomberg Radio.

Now to a major interview at Bloomberg. Tesla CEO Elon Musk has said that he is committed to staying on as leader of the company for the next five years and he downplayed the carmaker's challenges. The world's richest man has come under scrutiny since Tesla followed up its first annual sales drop with even steeper declines early this year.

Speaking to Bloomberg's Michelle Hussain at the Qatar Economic Forum, Elon Musk also said that he is paring back his political involvement. I think in terms of political spending, I'm going to do a lot less in the future. And why is that? I think I've done enough.

That was Elon Musk, Tesla's CEO, speaking to Michelle Hussain. Tesla's shares jumped on Musk's comments as investors appeared to take heart from the apparent political step back. Tropical forests are under threat in the face of soaring temperatures and wildfires. That's as global woodland loss hit a record high last year. Bloomberg's Tiwa Adebayo has the story.

6.7 million hectares of tropical primary forest was lost last year, the most on record and double what was lost in 2023. That's according to new figures from Global Forest Watch who say current levels are unprecedented.

The phenomenon comes after the Earth's hottest year on record, as global fires scorched woodland, releasing more than four times the emissions of all air travel in 2023. Cutting deforestation and raising funds to do so are among the top priorities for this year's COP30 gathering, which is scheduled for November.

In London, Tiwa Adebayo, Bloomberg Radio.

It also means that there's a lot of caution in markets. So the Bloomberg Dollar Spot Index has fallen over 1.2% this week. The dollar does continue to weaken today. Swiss franc and Japanese yen are stronger. Gold has risen now to 3,299, so around that $3,300 mark.

You've also got the S&P, which yesterday fell by 0.4%. Looking at the futures then for the European and US markets open. Well, Europe is up just a fraction. S&P 500, even futures down three tenths of 1%.

Let's see what happens, though, in the European session. Actually, Germany's benchmark, the Zetra DAX, managed to reach the 24,000 level for the first time ever yesterday. So, maybe that European outperformance continues to play into markets. I want to watch today. In a moment, we'll bring you more on that report about a potential attack on Iran, plus Bloomberg's interview with Elon Musk at the Qatar Economic Forum. But first…

a word on another story that caught our eye this morning about what CEOs are listening to on their way to work. It's not just us. Oh, Stephen. I know. Although, obviously, and this is actually a recurring theme through this conversation. It's part of the CEO diet series on Bloomberg Business Week that it's a lot of podcast listening. It's a fair amount of live radio listening, which I found interesting as well. But,

But also, and this is the part that I find most interesting, the music, what music people are listening to and how people use music essentially to set their mood for the day. So the CEO of the Beverly Hills Conference of Visitors Bureau, Julie Wagner, says that she uses upbeat music to set a tone for a happy morning. So she mentions Morgan Wallen and Chapel Roan. Good choices. Will Beckett from the Hawksmoor restaurants. He's on a reggae kick at the moment. He's just moved on from punk rock.

So changing genres, you know, shaking things up as well. And actually, Mark Rios from General Motors tests out new models of cars on his commute. So he actually tries to listen to something like live radio in the background while he's also trying to get a feel for the car that he's testing out at the same time. Yeah, absolutely. He listens to news. So, you know, I think he's my favourite person in the world.

Yeah, it's a really lovely piece all about the CEO diet. I mean, they've done series on all sorts of things, what people eat, the fashion that they wear. Anyway, it gets you into the mindset of being a boss first thing in the morning. We'll put a link to that story into our show notes.

Let's bring you more now on our top story this morning, Israel. According to one report, potentially planning an attack on Iran's nuclear facilities, a story that's pushing oil prices higher this morning. Bloomberg's Donna Cray, she leads our Middle East breaking news team, joins us now for more. Donna, good morning. What more can you tell us then about this report and the effect that it's having on markets?

So we saw the report is citing multiple U.S. officials on the latest intelligence and that they say it's not clear that Israel had made a final decision on that. And there was, quote, deep disagreements within the administration about whether or the likelihood that Israel will ultimately go ahead and attack a nuclear facility in Iran. And that, of course, we saw oil prices going up, currency havens as well. This is, of course, very serious, very significant. This option has always been on the table.

for both Israel and the U.S., right? So President Trump last week in Saudi Arabia said he doesn't want the military option, but also said that a lot of people want him to go in that direction. And while, of course, he didn't name them, it's obvious that Israel would want him to go in that direction. Israel thinks Iran's nuclear program in its entirety threatens its existence. And also, of course, we remember Israel wasn't very happy that the U.S. chose negotiations with Iran, wasn't happy that the U.S. is actually directly talking to Hamas. So we

We know Israel would do it, but many have said that if Israel would go ahead with that, it won't do it without U.S. approval. And that's, of course, the big question here. Would the U.S. give the go ahead for that? Yeah, absolutely. Is there would there be a split between Israel and the U.S.? Very significant. But look, in recent days, we've actually seen oil prices drop.

because of the comments from President Trump about talking to Iran about a deal, and then the comments that we had from Iran's supreme leader saying that actually the negotiations are not likely to succeed. So what's the latest actually on those talks between the US and Iran? And I would add to that that the fifth round of talks between the US and Iran has not been scheduled yet. And then we saw Iran remarks yesterday saying that they haven't

chosen a date. So that's still up in the air. And to be frank, President Trump's comments last week that they were close to a deal was not very much supported by Iran or any evidence out there. The talks are still at a technical level, and Iran insists and says that it was

non-negotiable for it to have the right to maintain its peaceful nuclear program. And that's the sticking point, right, and the big question in these negotiations. How much can they allow Iran to enrich uranium? What's that level that they're negotiating at? And we've heard many critics also saying that the U.S. should have a better deal than the one struck with the Obama administration, the so-called JCPOA. So that's still up in the air, and we don't think that there is

any significant progress to say that they are close to a deal here. Dana, what does a report like this

about, you know, something that Israel is considering mean for Israel to emerge at this time when it's already facing so much international pressure over its actions in Gaza? Huge pressure, I would say, and it's only going to mount on Israel. We saw what France has been saying with the UK actually said it took measures because it was criticizing the latest offensive. Even Qatar, the main mediator, was also criticizing the offensive and Israel's plan to take over Gaza.

Two things here, I would say. It has come under pressure in the past from the international community, but it remained on its plans against Hamas. And that's, of course, the risky bit here, that it has come under pressure before and has defended itself and says, no, we will stick to the plan. And they've been sticking to the plan in the past year and a half. But I would also say about the strike is that it's not

The fear here or the big concern is not just Iran's retaliation. This is an attack on a nuclear site. This is environmentally very dangerous. It's a hazard and it's a disaster, especially for countries in close proximity and for U.S. allies. That is Qatar and that is the UAE, especially Dubai. So this is where the extreme risk and danger here. And that's what we have talked about. Would the U.S. actually approve that or give the go-ahead?

So this is very risky for the U.S.'s allies in the region. Absolutely. Dana, thank you so much for being with us this morning. Bloomberg's Dana Kray, she leads our Middle East breaking news team joining us this morning. I'll just add one note, of course, that in amidst this, Israel's air defense system is hugely well known for having protected the country against attack. It's something actually that the U.S. is looking at

Perhaps not copying, but certainly taking an example from as President Donald Trump thinks about this idea, his vision of a golden dome system that would perhaps protect the United States. So when we're thinking about military and defense capabilities and build out, this is something that's on the agenda globally. Yeah, it certainly is.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on Emirates.com. Fly Emirates. Fly better. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast, free shipping to in-depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals.

Let's turn you now to one of our key interviews. Elon Musk speaking to Bloomberg's Michelle Hussain at the Qatar Economic Forum. They discussed his political and business roles and questions of conflicts of interest between them. In a moment, we'll speak to Michelle for her impressions of the conversation. But first, let's listen to some of the edited highlights from the interview.

of that exchange, focusing on Tesla and the carmaker's first drop in annual sales in over a decade. Europe is our weakest market. We're strong everywhere else. So, our sales are doing well at this point. We don't anticipate any meaningful sales shortfall. And obviously, the stock market recognizes that since we're now back over a trillion dollars in market cap. So, clearly, the market is aware of the situation. So, it's already turned around.

But sales still down compared to this time last year? In Europe. In Europe, okay. Yes, but that's true of all manufacturers, no exceptions. Okay.

You would acknowledge, wouldn't you, that what you are facing, OK, let's just take it as Europe. What you are facing is a significant problem. This Tesla is an incredibly aspirational brand. People identified with it. They saw it being at the forefront of the climate crisis. And now people are driving around with stickers in their cars saying, I bought this before we knew Elon was crazy. And there are also people who are buying it because Elon's crazy or however they may view it.

So, yes, we've lost some sales perhaps on the left, but we've gained them on the right. The sales numbers at this point are strong, and we see no problem with demand.

So what do you... I mean, you can just look at the stock price. If you want the best inside information, the stock market analysts have that. And our stock wouldn't be trading near all-time highs if it was not, if things weren't in good shape. They're fine. Don't worry about it. Okay. All right.

I was citing sales figures rather than share price. Well, tell me then how committed you are to Tesla. Do you see yourself and are you committed to still being the chief executive of Tesla in five years' time? Yes. No doubt about that at all? Well, no, I might die.

Does that mean that the value of your pay doesn't have any bearing on your decision? Well, that's not really a subject for discussion in this forum. I think, obviously, there should be compensation for if something incredible is done, the compensation should match that something incredible was done.

I'm confident that whatever some activist posing as a judge in Delaware happens to do will not affect the future compensation. This is the judge who twice struck down the $56 billion pay package that was awarded to you. I think on the basis, on the current value of stock options, yeah. Not a judge, not a judge. The activist who is cosplaying a judge in a Halloween costume

Okay, that's your characterization. I think on the current value of stock options, I think the actual... On the current value of stock options, I think the value of that pay package stands at about $100 billion. Are you saying you are relaxed about the value of your future pay package? Your decision to be committed to Tesla for the next five years, as long as you are still with us on this planet, is completely independent of pay?

No. It's not independent. So pay is a relevant factor then to your commitment to Tesla. A sufficient voting control such that I cannot be ousted by activist investors is what matters to me. And I've said this publicly many times.

But let's not have this whole thing be a discussion of mileage pay. It's not a money thing. It's a reasonable control thing over the future of the company, especially if we're building millions, potentially billions of humanoid robots. I can't be sitting there and wondering to get tossed out by, for political reasons, by activists. That would be unacceptable. That's all that matters. Now let's move on. Okay, well...

One question before we move on to other companies, which is that I wonder if some of what has happened to Tesla in the last few months, did you take it personally? Yes. And did it make you regret or think twice about your political endeavors? I did what needed to be done.

The violent antibody reaction, and I'm not someone who's ever committed violence, and yet massive violence was committed against my companies. Massive violence was threatened against me. Who are these people? Why would they do that? How wrong can they be? They're on the wrong side of history, and that's an evil thing to do, to go and damage some innocent person's car.

to threaten to kill me. What's wrong with these people? I've not harmed anyone. So something needs to be done about them. And a number of them are going to prison and they deserve it. You're referring to the attacks on Tesla showrooms. But I think... Yeah, firing bullets into showrooms and burning down cars is unacceptable. Those people will go to prison. And the people that funded them and organized them will also go to prison. Don't worry. Wouldn't you acknowledge that some of the people who turned against Tesla in Europe were...

upset at your politics and very few of them would have been violent in any way they just objected to to what they saw you say or do politically well it's certainly fine to object to political things but it's not it's not fine to resort uh to violence and hanging someone in effigy and death threats that's obviously not okay that's absurd that is in no way justifiable at all

So that was Elon Musk speaking to Bloomberg's weekend editor-at-large, Michelle Hussain, via video link at the Qatar Economic Forum. And Michelle joins us now from the Economic Forum. You covered a lot of ground with Elon Musk, but we wanted to go back to the comments.

on pulling back on political spending. There was no sense that Elon Musk, though, might be pulling back from his quite divisive politics more broadly. What did you think? I think that's a valuable distinction and absolutely one worth making, the difference between politics and political spending. And actually, even on political spending, he did leave the door open when he said he feels he's done enough.

But essentially, there might be a need in the future. So we don't know what that need might be. We have an idea of things that he would like to see happen that haven't yet happened, which would need a different attitude from the federal government or changes to the law. For example, the moon program becoming a Mars program or some of the rules around self-driving cars. So...

I think even on the political spending, there is a door that's left open there. So it'll be so interesting to see what the midterms bring and indeed the next US presidential election or perhaps even political spending elsewhere in the world.

Yeah, indeed, plenty to watch on that front. On the business side, we just heard some of the conversation there around Tesley shrugged off the sales decline at the electric car maker. Did you get a sense, though, from those comments of what his strategy was for the company from here? Well, I think his strategy is him, essentially. The fact that he is very firmly signalling his commitment in time, in leadership and also leadership.

putting this distance between himself and politics and himself and the administration to some extent. And so I think that's the strategy on the actual reality for Tesla sales. As everyone will have heard, he acknowledged problems in Europe. They are very significant. If you look at a market like Sweden in April, Tesla sales were 80 percent lower than they were

the previous April, but also fewer vehicles have been shipped from Tesla plants in China last month. And that's not a one-off. It has been like that for several months. But again, I think in the market certainly responded to this, him saying that his commitment is the answer and that his commitment is there. That is the strategy that he's banking on.

Yeah, and I thought, again, it was quite interesting that he saw it through a political lens, the Tesla sales in Europe. You know, we lost some sales on the left. We gained some on the right. And yet at the same time, when he was talking about

Starlink in his discussions with you, he was highlighting how the most important thing for alleviating global poverty is to give people access to cheap and accessible Internet in parts of the world where they might not be getting it. So, you know, it is that is why he's such a fascinating and interesting figure, isn't it?

Absolutely, and incredibly consequential in his actions and in the visions that he's pursued and made happen. There's no doubt Starlink offers a really important service in many parts of the world, in low-income areas, in reaching people who wouldn't otherwise have access to the internet. And it's absolutely critical to the Ukrainian front line. It's in every Ukrainian front line position. It's how soldiers communicate with their bases and their hospitals. I

He did get quite exercised on this in relation to South Africa, because I was pointing out that South Africa is one very current example of more deals coming Starlink's way at the same time that countries are trying to get on the right side of the Trump administration. Now, that is not a conflict of interest that Elon Musk recognises, but he certainly feels that any change to Starlink's access to South Africa

is the right thing to do because it would essentially go around black ownership laws, which he sees as racist. Yeah, indeed. And that's in focus ahead of President Cyril Ramaphosa meeting Donald Trump later today as well. It was a very wide ranging discussion. You covered all the business interests, the politics, the overlap between them as well. I wonder what else stood out for you from a conversation that was at times quite combative.

Yes, it was. Look, there were many areas that I wanted to make sure we covered because his reach, his power, his influence does stretch into so many areas of all our lives and of our world. I think, yes, at times it was combative, but I think he was willing for the most part to answer questions. I think the one that he dodged and where he ended up

referring to me as a NPC, like a non-player character for video games, was about Doge and the amount of money that he now expects it to cut from the federal budget, the contrast between the at least $2 trillion he was talking about last autumn and the figure currently on the doge.gov website, which is $170 billion. So...

That was amongst the areas which where I think he didn't like the question. But overall, he engaged. And I think in this interview, we did see the human side of him and very specific answers to questions about his companies and a sense of his future political direction.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bloomberg Business App and Bloomberg.com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepke. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak Europe.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more.

In business, plans change fast and your brand has to keep up. That's why teams rely on 4imprint for promotional products that deliver. 4imprint offers thousands of options including apparel, drinkware, tech, and trade show gear. Many available with 24-hour turnaround, helping you move quickly and never compromise in quality. You'll enjoy free samples, expert support, and every order back by their 360-degree guarantee. So it arrives right and on time. Explore more at 4imprint.com. 4imprint.

This is an iHeart Podcast.