Daybreak Weekend: U.S Retail, ECB Meeting, TSMC Earnings
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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. Straight ahead on the program, a look at some key economic data in the U.S. amid an escalating tariff war between the U.S. and China. I'm Tom Busby in New York. I'm Stephen Carroll in London, where we're taking stock of the ECB's options in the face of trade tariff uncertainty. I'm Doug Krisner with a preview of next week's earnings from Taiwan Semiconductor.

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, and we begin today's program with a look at March retail sales data in the U.S. out this week.

but it comes against the backdrop of a chaotic and escalating global tariff war. What will it tell us about the health of the U.S. consumer and the economy as we navigate a very uncertain future? And for more, we're joined by Stuart Paul, U.S. economist with Bloomberg Economics. Now, Stuart, looking backwards, the month of March, things were looking good. Inflation, wholesale and consumer inflation was better than expected. We have this consensus outlook for retail sales. May surprise to the upside.

Is this all good news? It is mostly good news for the month of March. As you mentioned, inflation was relatively muted. More importantly, inflation, particularly in the items that would be affected by tariffs, were muted. And from a consumer perspective, the behavior that we saw was a front-loading of purchases

that consumers expect to be tariffed. Not only were consumers pulling forward their purchases of autos, auto sales surged during the month, and that should boost retail sales, they were also pulling forward their purchases of big, durable goods as purchased from major retailers that sell things like washing machines, coffee makers, and so on.

So, we're going to get major tailwinds supporting retail sales, at least temporarily in advance of these tariffs. So, we expect the March data to show about 1.3% monthly growth in nominal retail sales. Now, the thing is,

Retail sales started the year really poorly. January was terrible. When we think about what Q1 GDP growth is going to look like, real consumer spending growth for the first quarter is just going to run at an annualized pace of about 0.6% to 0.8%. That's compared to 4% in Q4 of last year. As good as March looked as the tariff threat became real,

uncertainty is really the name of the game here, and it's going to show up in the Q1 data, but probably not the March data specifically. Okay. And again, that was then, because now we have a very different reality. Before those tariffs went into effect, and now, and we know things could change, and they do. Boy, do they change day to day, hour to hour, it seems.

This tariff war really threatening consumer spending, isn't it? And frankly, threatening the economy. That's right. Again, the uncertainty element is creating a huge overhang, not just for consumers, but also for businesses that are trying to invest and want some certainty around what policy is going to look like, who their trading partners are going to be, and what their financing costs are going to look like, as we saw the bond market getting roiled in the last week.

So, you're totally right, quick moving policy landscape is really having a major effect. A few rules of thumb that I typically like to apply when we think about, let's say, recession risk. An increase in the average effective tariff rate of

1% creates about 15 basis points of drag on cumulative real GDP growth. So, the entire move that we saw in the average effective tariff rate should shave off about 3% from real GDP growth. And, from the inflation perspective,

An increase in the average effective tariff rate, like we saw, moving up to about 25%, should add about 2.5% to cumulative core inflation.

So, not good, especially for the Fed that's trying to balance its dual mandate of having maximum employment and price stability. These tariff threats de-anchor, or they un-anchor, inflation and inflation expectations, and they also should be creating additional slack in the economy. It's a problem for the Fed. Where do we think that that's going to shake out for the Fed, though?

The Fed, at least outwardly, is saying that they are very much so focused on reining in inflation. While the numbers were good in March, that's backward-looking, they are worried about inflation pressures mounting, especially in the year, year and a half ahead.

And those inflation pressures are really going to hit the auto industry. Let's talk about that because it is a big, big industry here. People say U.S. doesn't make anything. We make a lot of cars. Of course, we import a lot of cars. But that 25 percent tariff on imports is still in effect.

What do you see in the auto market coming up? You said there was front-loading of buying of autos. What happens now? There should be a cooling in auto sales and auto purchases from consumers. It's a little bit peculiar that we've seen auto prices fading just a touch. So far, you would think that auto dealers would be very slow to cut prices, given, as you say, the expectation that there should be

given the expectation that there should be higher input costs, higher prices as it meets the consumer. We do expect to see auto sales fading to an annualized pace of about 15.5 to 16 million units a year. That's even probably a touch high.

By comparison, in March, we saw over 17.7 million annualized units sold during the month. It's a pretty significant fading, and risk is skewed to the downside as prices are likely going to jump. It's hard to say what consumers are thinking. Do you think the U.S. manufacturers will see a benefit from this? Or is that just really wishful thinking?

It's the sort of thing that, if these tariffs are maintained for a long enough amount of time, it's possible that they can see some improvement if capacity is built out, if we don't see major retaliation from our trading partners. But, in the interim, there are definitely going to be some growing pains, and auto producers are really struggling with how to source the inputs that they need.

Wow. Well, there's a lot of uncertainty ahead. We know that U.S. retail sales for March are out this Wednesday ahead of Wall Street's opening bell. Our thanks to Stuart Paul, U.S. economist with Bloomberg Economics. We turn now to the new earnings season, which kicked off on Friday with some of Wall Street's biggest banks. What we will focus on earnings at Netflix. This earnings report will be far different from past postings. And for more, we're joined by Geetha Ranganathan, Bloomberg intelligence analyst on U.S. media.

Well, Geetha, thanks for joining us. So what will make this report from Netflix different from past reports? This time around is going to be really, really different because Netflix is going to stop reporting subscriber metrics. Now, we all know that Netflix really is a subscriber story. I mean, quarter in and quarter out, we all obsess over the number of new subscribers that they are going to post.

But they did guide last year to the fact that they are going to stop reporting the subscriber metrics, anything connected with subscriber metrics. So both the number of actual subscriber gains as well as what they call average revenue per member, they're going to stop reporting both of those starting this quarter. So it's going to be a very, I think, a very different tone around this time.

And this comes after they hit a record number of subscribers last quarter, right? I mean, wouldn't you want to talk about if you have growth? Exactly. This is so ironic, Tom. I mean, they just are coming off the best year ever in the history of the company. 41 million new subscribers added in 2024. That is even better than it was during COVID-19.

And so subscriber momentum is absolutely going to continue. I mean, this is by far the biggest streaming service in the world. It has over 300 million subscribers.

And we actually think that they are well on their way to gain about 25 million again this year, especially with all of their new initiatives. And I'm talking here about the crackdown on password sharing, which they call paid sharing, as well as this new ad supported tier, which is priced very, very competitively at about $7.99 in the U.S.

Now, since they won't be reporting on that growth, though, let's face it, it's all about operating revenue and especially advertising revenue then. Absolutely. So the biggest metric now, and this is a metric that they have been kind of trying to promote over many, many quarters now, kind of shifting away from this focus on subscribers to top line growth. So revenue growth is the big metric. They are projecting about 11% revenue increase today.

in the first quarter. And you're right, they are, you know, expecting advertising to become a bigger and bigger portion of the business. So remember, advertising is something that they are very, very new at. This is primarily a subscription driven business.

So advertising last year, for instance, was less than 3% of revenue. Now granted, that is going to increase pretty substantially as they kind of open up more and more ad inventory as they kind of add more programming that is tailor made for advertising. But it still will be a very, very small portion of the total revenue by until maybe 2026 2027.

Well, we've seen some of those. It was the boxing match with Jake Paul and Mike Tyson. That was back in November. Christmas Day, two NFL teams, two NFL games playing. So big advertising opportunities there. Let's talk about, though, this past quarter. I believe they started WWE Wrestling. We had the Screen Actors Guild. What were maybe the big revenue earners there for advertising and what's in the pipeline there?

So they really had a huge content slate. You're absolutely right in pointing out that WWE started this January, and it continues to be one of their most watched pieces of content week in and week out. So we know that it is doing really, really well for them and obviously kind of contributing to the subscriber growth.

And I think over time, what we're going to see Tom is we're going to see them go more aggressively after different sports rights. I mean, we have many different properties coming on the market over the next few months. Formula One is a great example. And this is something that, you know, Netflix has already had a lot of series with Drive to Survive. So we think that the Formula One rights actually makes a ton of sense for Netflix.

You have UFC again that kind of complements the whole, you know, WWE so we think eventually they are going to go into sports rights much more aggressively, which again builds their life programming slate and again works really well for that advertising, you know revenue base. Now in terms of content. I mean, of course they had a really strong content lineup in the first quarter of 2025.

But the whole year actually is just going to be one blockbuster title after the other. So just to give you an example, you have Squid Game, the season finale, the final season coming up. You have Stranger Things, the final season coming up this year. You have Wednesday, the next season coming up there. So they have constantly referred to 2025 really the content state as being an embarrassment of riches.

So it is going to be a lot of good content and a lot of titles to choose from.

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where money means more. 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, a look ahead to first quarter earnings from the chipmaker TSMC. But first...

European central bank officials under pressure to respond as U.S. President Donald Trump's tariffs wreak havoc with global markets. But just how should policymakers react in the face of such uncertainty? For more, let's go to London and bring in Bloomberg Daybreak Europe anchor Stephen Carroll.

Tom, European central bank policymakers have lowered the deposit rate six times since last June. At its current level of 2.5%, it's approaching territory that some think no longer constrains demand. But economic realities have shifted.

With Trump's tariffs and the threat of an escalating trade war between the US and China hammering financial markets and raising the spectre of a global recession, analysts and traders have become increasingly convinced that the only direction for euro area interest rates is down. And some key rate setters are backing another cut this time around. France's François-Villerault de Gallo says the ECB should lower interest rates soon as the post-tariff market fallout favours such a move.

He went on to argue that the trade war will have a non-negligible direct impact on the economy that will take about a quarter percentage point off growth this year. Now, Fyfraal de Gallo joins others, including Finland's Olli Renn, who are convinced that the current backdrop makes the case for cutting rates stronger based on an assessment of inflation and growth.

Now calls for an April cut aside, other policymakers have restrained from saying where rates may settle given the elevated uncertainty. Austrian central bank chief Robert Holtzman maintains there's no reason for an immediate cut. He believes the central bank should allow the current trade-related uncertainty to dissipate before considering lowering rates. Further arguing that tariffs and threats of countermeasures make it next to impossible to predict if inflation in the 20-nation eurozone will continue to approach the ECB's

2% target as planned. Now, Holtzman's hawkish point of view will likely clash with many of those colleagues when the Governing Council gathers in the coming days. So how much breathing room do European policymakers really have? It's something we've been discussing with Catherine Nice, Chief European Economist at PGM Fixed Income. If we look at the euro area, you know, I'm not saying it's easy for them to make these changes. I'm just saying relative to the US, they have way more scope to...

to ease policy to support. I mean, if we look at, for example, the tariff impact, the kinds of goods that the euro area tends to import from the U.S. are not really final goods. They don't go straight into the consumption basket. So the inflationary shock will be less. You also have to factor in the, you know, that global growth will be slower

The euro area is a much more open economic region. There's a risk that China is going to dump a lot of that excess capacity. So there's all these deflationary pressures and there isn't that big inflationary push. And the starting point for the ECB is much cleaner than it is for the U.S. because inflation already is basically at target. So I think that does other things equal make it easier. We can then talk about the fiscal. Well, let's talk about that and maybe discuss

pause on the fiscal and talk about the bond moves here because the yield kind of moves that you saw in the German yield prior to all the tariff announcements was pricing in fiscal spend over the next 10 years. How believable is that fiscal spend? How believable are yields at where they are right now? Well, I think

who knows what they're going to announce and how quickly. You know, I do hold out some degree of optimism that, you know, with Germany having taken this bold step forward, you know, breaking, you know, smashing through a couple of political red lines to get through significantly higher defense and infrastructure spending, that they're sort of leading from the front and we see more initiatives like this. I think we could see perhaps

Perhaps we're seeing some leaks in the press around EU bond issuance, something that looks a bit more grant-like, but perhaps just a fraction of the size of the kind of package we saw during the pandemic. We could see a coalition of the willing also forging together, so a European, not an EU coalition.

vehicle, financing vehicle to support defence. You know, we've already seen the EU water down and ease and change some of its fiscal spending rules to give member states more discretion. So all of this, I think, is still to play for. That was Catherine Nice, Chief European Economist at PGM Fixed Income, speaking to Bloomberg's critic group to Guy Johnson and Anna Edwards.

So Trump has laid his gauntlet. How should the ECB respond? It's a question I put to ECB reporter Jana Randau. Words is the first line of defence. I mean, ECB President Christine Lagarde is not known for being tight-lipped when it comes to criticising tariffs or Trump.

But also, of course, in order for that to be effective, that needs somebody to listen. And I'm not so sure, you know, she has the right counterpart there. But, of course, we need to say that uncertainty itself is bad for the economy, for confidence.

it's not something the ECB will react to. So inflation is still the guiding star for everything the ECB does. And of course, it's much too soon to tell what kind of implications the events of the past days, weeks, months have on inflation in the Eurozone. Growth for sure is probably going to be weaker as a result of what we've seen.

on inflation, the verdict is very much unclear and that I think will very much complicate the debate at the upcoming meeting and also the decision. Yeah, indeed, because this challenge of balancing the inflationary risks because, you know, higher tariffs could in theory boost inflation, but also hurt growth, which makes it a difficult balance for policymakers to try to work out.

Absolutely, absolutely. I mean, it really seems that growth is going to be lower because of uncertainty, because tariffs essentially close off export markets. You will find optimists who say, well, but you can explore new export markets, you can form close trade alliances elsewhere, but that's more of a medium to long-term thing. In the short term, it will hit growth. On inflation, it very much depends on...

The kind of tariffs, which kind of goods, it very much depends on the countermeasures. It depends on the duration. So, yeah, your guess is as good as mine.

Well, a little bit less guesswork coming from markets when it comes to this upcoming decision from the ECB. They're pricing in a rate cut. But how much divergence is there amongst policymakers? What have we heard in terms of the views about how the ECB should act now, given all of the uncertainty that you just mentioned? Yeah, I mean, everyone will probably tell you and has told us that agility is needed, vigilance is needed, caution is needed.

No pre-commitment, which makes, of course, figuring out what will happen very difficult. I would say that while it was, you know, you could say 50-50 on whether there was going to be a cut or not at the upcoming meeting right after the last one. Now, I would say the consensus has shifted more increasingly.

toward favoring a move, favoring a cut, even though there are still skeptics. And I spoke to one of them just before the quiet period kicked in. That's Austria's Robert Holtzman, who says there's absolutely no reason why the ECB should cut at this point in time. Inflation is nearly at the target interest rate. So low uncertainty is incredibly high. And we should really wait until the fog has cleared. And

That makes sense in my ear, of course. But at the same time, I believe people who say, well, you know, if uncertainty is this high, that damps investment, that, you know, puts in place processes that aren't easily fixed. And also with inflation moving toward the target, we're not going to be able to do that.

we have room to move into a more neutral policy setting. So there's arguments for both sides. And overall, it won't be an easy meeting. There will be disagreements and differences of opinion. But I think a cut is what needs to be expected. Well, just you mentioned the two

trajectory that inflation had been going in as well just remind us of where we are in that process because we are down dramatically from the spike that we saw during the energy crisis a couple of years ago. Yeah, so we moved from a

peak of just over 10%, so double-digit inflation, to just over 2%. And so we are at this point where inflation just over 2%, so target within sight. We've seen quite some progress also on the core rate, and even services have come down, which has long been, and in fairness is still a

you know, a point where people worry because it is still running at very elevated levels. But there has been movement in recent months so that services inflation is coming down, of course. And what the ECB is really happy about is that wages are finally on track. Wage growth has slowed. It's behaving exactly as policymakers expected. So they're taking a lot of confidence from the fact that

Essentially, the domestic part of inflation, which can be very dangerous because that's the forceful kind of inflation that's very difficult to control and that hinges on people being convinced that the ECB can do its job of guaranteeing press stability, that this is now finally possible.

all moving in the right direction. So that's partly what or mostly what has driven the interest rate cuts of the past months. Yeah, indeed, of course, so much could change in the path ahead. But it's good to remind ourselves of where we are now going into this meeting. In terms of the debate over the terminal rate, this has been a long running conversation. But has that now also been thrown up in the air with the uncertainty over tariffs?

I mean, there was no consensus before where the terminal rate was going to be. So there's probably even less consensus now. I would still say that 2% is a pretty good guess, which would mean two more quarter point cuts, which also happens to be what a lot of economists are expecting. But, you know, we have to be honest, you know,

It could be that, it could be more, it could be less. What I would be willing to bet money on is the ECB is not yet done, but how much further it has to go, whether it's another two cuts, three cuts, who knows.

Jana, you've seen the ECB handle a fair number of crises in your time covering the European Central Bank. And I wonder what we should have learned from those past experiences that perhaps might inform what is going to be a very challenging time for the European economy, given the trade uncertainty.

Yeah, absolutely. And I think we've seen, as you said, we've seen many crises and we don't even need to look back very much. And I think the confidence I have is that the ECB has proven that if push comes to shove, it is very, very quick in coming up with solutions and devising tools that you wouldn't necessarily have expected.

and figuring out and helping where help is needed. My thanks to Bloomberg's Jana Randow. We'll have full coverage of the upcoming ECB rate decision and its implications here on Bloomberg. I'm Stephen Carroll in London. You can catch us every weekday morning here for Bloomberg Daybreak Europe, beginning at 6am in London and 1am on Wall Street. Tom? Thank you, Stephen. And coming up on Bloomberg Daybreak Weekend, a look ahead to first quarter earnings from the world's biggest computer chipmaker. I'm Tom Busby and this is Bloomberg.

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? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

where money means more. 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.

It's the biggest chip manufacturer in the world. And this week, it'll report first quarter earnings. For more, let's get to the host of the Daybreak Asia podcast, Doug Krisner. Tom, Taiwan Semiconductor is trying to navigate a shifting landscape when it comes to U.S. trade policy. Back in March, TSMC announced plans to invest an additional $100 billion in U.S. chip factories.

Now, by producing chips in the States, TSMC would avoid U.S. tariffs, and President Trump has repeatedly made that point. They have to come back because the tariffs are forcing them to come back. And remember, there are no tariffs if you build here.

And that's a big factor. Recently, there were also reports of a potential joint venture between TSMC and Intel. This JV would operate Intel chip foundries in the United States. So there is a lot to consider as we look ahead to the earnings in the week ahead from TSMC. So let's bring in Jane Lanhee Lee, North Asia tech reporter for Bloomberg News. Jane joins us from our bureau in Taipei. Thank you for making time to chat with me.

Until very recently, I think it's fair to say the conversation until this market instability had been focused very much on AI. Of course, there was the deep seek moment in China. We know that was an accelerant. And when you think of AI and AI chips, you think of NVIDIA. You think of NVIDIA. You obviously think of TSMC. Are we expecting blowout earnings this week from Taiwan Semi?

Well, earnings-wise, yeah, analysts are estimating 55% net income growth for the first quarter. Wow. But I think people are not going to be focused just on these numbers.

what everyone will be looking to hear is what is going on with the tariffs, what is going on with pressure potentially from the Trump administration on TSMC to help Intel, which has been struggling. So these are going to be the things that people are looking out for. Also, they'll want to see with the latest troubles in AI with DeepSeek,

You know, we saw a big route in NVIDIA prices and other AI chip related companies because concern that maybe we don't need to invest tens of billions of dollars, even hundreds of billions of dollars to build out these data centers. Maybe the AI models can be a lot smaller. In that case, would we be buying a lot cheaper?

less chips. And so there has been that concern. Now, on top of that, tariffs are bringing concerns that, you know, we've all read about how our iPhone prices in the U.S. could be going up, you know, something like 20 percent with the tariffs. And in that case, would consumers be buying fewer iPhones? Will they be buying fewer laptops? Are they going to be waiting to buy those smart TVs for a while? In which case, that will again hit

companies like TSMC or others that are making chips that go into all these devices. And so one of the things that have come up, in fact, just this past week, is whether or not TSMC will be revising down its revenue growth outlook for 2025. In January, it had said that it expected sort of mid-20% growth in sales for this year,

So that's going to be some of the points that investors are going to be looking out for. I would imagine another key data point is going to be CapEx spending. Now, President Trump in the last week was speaking at a dinner event organized by the Republican National Congressional Committee. A couple of things emerged here. One,

A lot of criticism of the CHIPS Act. He made the point that semiconductor companies are basically loaded. They don't need billions of dollars in what amounts to some sort of subsidy to ramp up production. So how is TSMC positioned to build out more capacity? They absolutely do. But it's about, you know, who's going to say no to free money? And

Depending on how much subsidies you get, whether it's a straight out grant from the CHIPS Act or whether it's something that's even more important, that is the tax credit for these investments.

It's going to really make a difference to your profitability, which it sounds so obvious. So will they be building more? Will the investors be as interested when gross margins aren't as high? Those are sort of questions that will come. And who pays for more expensive chips?

when those subsidies or tax credits go missing. So it's an important component. Can they do it without it? Of course they can. They've got gobs of money. So what about the factory that TSMC was constructing in Phoenix? I think there were some initial delays. Do we know the status? Are they producing chips there? Oh, yeah. They've been mass producing those chips since late last year. And the initial outcome of that...

What we talk about in chip manufacturing are yields. If I'm making 100 chips, how many of those are good chips that I can use versus things that if I used, my gadget wouldn't work? And that yield rate has been on par with their manufacturing in Taiwan. So that's been some good news after a lot of news about delays and labor tensions and things like that.

For what we have now in Arizona, things seem to be doing well. And some people who I've spoken to in Arizona are optimistic that this is just the start. And, you know, they made a lot of mistakes with the first FAB.

But they've learned, and so that learning curve will help them, will benefit them. And when it comes to talent recruitment, one person who was out there doing some recruitment in the colleges in Arizona said, you know, when I first started doing this, nobody heard of TSMC. That makes it harder to recruit. By the time he's now left the company, but by the time he left,

You know, which has been a couple months now. Everybody knows TSMC. And of course, you know, these announcements at the White House of $100 billion additional investment made between Trump and the CEO, C.C. Way, that really helps bring the profile of the company up. That'll help.

have college students realize that, you know, this is an important company. Let's talk a little bit about the market in China, where obviously those export controls from the Biden administration really curtailed access to some of those more sophisticated AI chips. We mentioned a moment ago that deep seek moment.

Clearly, tech in China was not constrained by those controls. DeepSeek was obviously, or so it would appear, able to develop a pretty sophisticated chatbot in spite of those controls. So is TSMC going to ask anything of the Trump administration when it comes to China? Yeah, I don't know if there's going to be a specific ask for that. I think right now the big news with TSMC is that there was a report by Reuters that

possibly the Trump administration could fine it for a billion dollars because TSMC allegedly sold chips to one company that then passed it on to Huawei, which makes AI servers. And somehow that chip ended up in one of those AI servers. And so

It's been in a bit of hot water with China and with making sure chips it makes for one customer don't end up with another. And so a lot of focus right now is watching whether or not the Trump administration could use these fines. And this would be unprecedented in a sense that, you know, a former BIS official explained that you don't really have...

finds this big when companies come clean and work together with the U.S. government. But Trump could use it as a bargaining chip to push for more concessions from TSMC. So that is

is what people here are watching about when it comes to China. Yeah, that's very interesting that you made that point. It's not unlike what we have seen play out in these tariff negotiations. And apparently Trump told the same Republican congressional event that I referred to earlier, that he was prepared to slap a 100% tax on TSMC if the company doesn't make its chips in

in the U.S. So the objective here seems to be a reshoring of chip manufacturing and TSMC would be a partner in that process. Yeah. And initially when that $100 billion announcement came, I think the first few days there was some skepticism. Yeah, they're just paying lip service. They're not going to do it. By the time those investments come around, Trump will be gone.

But what I'm hearing from the ground here from suppliers of TSMC are, no, they're serious. This is their biggest market. About three in four chips that are sold by TSMC are sold to the U.S. 75% of their sales is in the U.S. This is their biggest market.

And so it seems it is a genuine move towards the U.S. And the suppliers are now saying that they are getting ready to follow as well. Jane, thank you so much for taking the time to chat with us. That is Jane Lanhee Lee, Bloomberg Tech reporter in Taipei. For another perspective on tech in Asia, I spoke with Stephanie Leung, chief investment officer at Stashaway.

I was reading a piece in the Wall Street Journal on Apple planning to send more iPhones to the US from India rather than from China as a way of offsetting the high cost of the tariffs. And I'm wondering whether or not you expect other companies to follow suit that Apple clearly will not be alone in this. Yeah, I think, of course, in the short term, it's hard for companies to just kind of move the whole supply chain overnight.

But of course, I think it makes sense for Apple to come out and sort of make these statements and for other companies to make these statements as well, because I think what's the I guess the the the kind of implication I guess.

from the whole kind of trade war. I mean, even if it ends, let's say in the next few weeks, is that companies need to rethink again about the whole supply chain, right? How dependent they are on China. And also, I think the, I guess the Trump administration is also trying to get companies to invest back in the US again by giving tax breaks

and trying deregulation. So I think that also prompts companies to rethink whether or not they need kind of a more diversified supply chain rather than just rely on China itself. Now, I also spoke to, I guess, some of the businesses in Hong Kong, Hong Kong business owners,

have a lot of investment in China, for example, in terms of garments, exports into U.S., supplying to names like Nike or Lululemon, et cetera. And, I mean, they said, I mean, yes, indeed, there has been some kind of movements out of China into Vietnam in the past few years. But, I mean, that has been very, very slow. And you can't just change that supply chain overnight. So, yeah.

still will be impact but i think over time yes i think the supply chain will will be more kind of uh diversified than previously that was stephanie leung chief investment officer at stash away i'm doug chrisner 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 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.

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