EU Retaliates as Trump Trade War Heats Up; Ukraine Ceasefire Proposal Puts Onus on Putin
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the global trade war heating up. The European Union is responding. Just hours after President Donald Trump's 25% tariffs on steel and aluminum imports came into force,

The EU launched countermeasures with its own duties on more than $28 billion worth of American goods. We get more from Bloomberg's Rosalind Matheson in London. Obviously they're going to target U.S. steel and aluminum products, but they're also going to look at textiles, agricultural products and home appliances. And they're going to look back at some of the products that got hit.

in previous trade tensions with Donald Trump. And that's some of the kind of big name US products, including bourbon and motorbikes. I mean, the EU describes this in the statement as strong but proportionate, but certainly coming out of the gate pretty hard this morning.

Bloomberg's Roz Matheson reports the EU will immediately begin consultations with member states. Adoption of the tariffs is expected in the middle of next month. Well, Nathan, before these new tariffs took effect, President Trump had threatened to double duties on Canadian steel and aluminum to 50 percent. The president walked that back after the province of Ontario backed down from plans for a surcharge on energy it sends to the U.S. At the White House, Trump was asked if he's worried about tariffs leading to a recession.

I think this country is going to boom. But as I said, I can do it the easy way or the hard way. The hard way to do it is exactly what I'm doing, but the results are going to be 20 times greater. And later, in remarks heard here on Bloomberg, President Trump told executives at the business roundtable more tariffs are coming, but they'll pay off if they bring more operations into the U.S. Well, Karen, billionaire Ray Dalio is comparing the trade war to Germany in the 1930s.

Speaking at a CNBC conference in Singapore, the Bridgewater co-founder warned that tariffs could lead to fighting between countries, which will have consequences. He emphasized the importance of understanding the mechanics of the situation. Meanwhile, in an exclusive interview on Bloomberg Radio, Queens College Cambridge president and Bloomberg opinion columnist Mohamed Alarian said U.S. exceptionalism is under threat from uncertainties around President Trump's political and economic policies. Alarian also talked about concerns over a recession.

Companies are just waiting to see what's happening before they commit to major expenditure. The problem is if they wait and see, and if consumers start feeling income insecure, then we could easily book ourselves or wait ourselves into a recession. Bloomberg opinion columnist Muhammad Al-Aryan says predictability and the rule of law give the U.S. its edge. Without them, he says America could lose ground with the rest of the world.

Well, Nathan, more fallout this morning from the global trade war. A major Wall Street firm is cutting its forecast for the S&P 500, and we get the very latest from Bloomberg's John Tucker. John, good morning. Good morning, Karen. Goldman Sachs cutting its year-end target for the most widely watched stock index to 6,200 from 6,500. The firm cites the sharp recent decline in the Magnificent Seven stocks,

The downward revision also reflects the recently reduced GDP growth forecast of Goldman's economics team, a higher assumed tariff rate and a higher level of uncertainty. Meantime, at Charles Schwab, Lizanne Saunders says the fuller story of what's going on is under the surface of the index. At the average member level, the maximum drawdown this year is 14 percent. It's more than 30 percent for the Nasdaq.

Well, the S&P 500 yesterday did slip another three quarters of a percent. It continues to flirt with correction. The Nasdaq 100 firmly in correction. That's down close to 13% from its peak. And then the VIX gauge of stock volatility is near its highest since August. In New York, I'm John Tucker, Bloomberg Radio. Thank you, John. Well, tariffs aren't the only thing on investors' minds this morning. We get a key reading on inflation before the opening bell. Bloomberg's Michael McKee has more on the February Consumer Price Index.

With tariffs on their way, inflation may take a backseat today. But it will be important to the Fed and in the longer run to the economy. As forecast, February CPI would represent only modest progress toward the Fed's 2% target. But it would be progress. That's what the central bank wants to see as it contemplates how it may have to react to price increases stemming from taxes on imports.

If inflation is contained, policymakers can leave rates unchanged this month. The central bankers will be watching categories including airfares, auto insurance, and as always, housing.

Michael McKee, Bloomberg Radio. All right, Michael, thank you. Well, one stock on the move this morning is Intel. It's up 8%. Reuters is reporting that TSMC has pitched NVIDIA, Advanced Micro Devices, and Broadcom about taking stakes in a joint venture that would operate Intel's factories. Karen, we have new developments this morning in efforts to end the war in Ukraine. The U.S. and Ukraine have agreed to a 30-day ceasefire in the war with Russia. The deal now awaits approval.

from Russian President Vladimir Putin. Here's Ukraine's President Volodymyr Zelensky speaking through an interpreter. Ukraine accepts this proposal. We consider it positive. We are ready to take such a step and the United States of America must convince Russia to do the same.

That is, we agree, and if the Russians agree, silence will take effect at that very moment. And in return for Ukraine's acceptance of the U.S. proposal, the Trump administration agreed to lift its freeze on military and intelligence aid to Kiev.

Well, back in Washington, Nathan, the House has approved a stopgap spending bill to keep the government open past a shutdown deadline on Saturday. Just one Democrat joined with Republicans in favor of the bill. One Republican voted against it. The bill now heads to the Senate, where Majority Leader John Thune will need at least eight Democrats to pass it.

At this point, there's really one solution on the table. It keeps the government funded. It addresses the core issues I think a lot of Democrats care about in terms of programs that they want to have funded through the end of the year. And we think it represents the best solution at the moment. And the bill increases security and immigration spending and cuts the IRS. It also contains no new limits on DOJ or agency heads to fire federal workers or cancel grants and contracts.

Pennsylvania Democrat John Fetterman has said he'll support the bill. Other moderate Senate Democrats have not said which way they'll go. Well, Karen, major cuts are coming to the U.S. Department of Education. It is pushing to terminate half of its more than 4,000 employees. It is the Trump administration's first major step to dismantle an agency that it has targeted to shutter completely.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A federal judge in New York will hold a hearing today to determine whether the Trump administration can deport a green card holder.

Mahmoud Khalil, a Columbia University graduate, was arrested by ICE over the weekend after organizing pro-Palestinian demonstrations there last year. White House spokeswoman Caroline Leavitt says that Secretary of State Marco Rubio has the authority to detain those who engage in behavior that goes against American interests. Secretary Rubio reserves the right to revoke the visa of Mahmoud Khalil.

New York Mayor Eric Adams weighing in on the ICE arrest. But we don't know the full scope of this investigation. And as a former law enforcement person, I know that there are parts of an investigation that's beyond our understanding. Let the process take its course. That's why the federal government is in charge of deportation. And they should be in charge of deportation. I believe that. Former federal prosecutor and Loyola law professor Lori Levinson.

The judge's decision today is on what we call a petition for writ of habeas corpus, that the lawyers representing Khalil have gone to federal court and said that he's being held unconstitutionally. He's being punished for exercising his First Amendment rights. And even though Khalil is...

only a green card holder, even non-citizens, have First Amendment rights in the United States. Professor Levinson, there are signs a ruling could come soon from the judge weighing the Justice Department's request to dismiss corruption charges against New York Mayor Eric Adams. You?

U.S. District Judge Dale Ho canceled a hearing scheduled for Friday, saying he does not believe that an oral argument is necessary at this time. In a written order, Judge Ho said he has reviewed filings from the parties involved, all of whom favor dismissal.

Health and Human Services Secretary Robert F. Kennedy Jr. says therapeutic drugs should be intensively tested on U.S. poultry flocks infected with bird flu. Kennedy on Fox News argued that the medications could help identify treatments for human cases. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen. Michael Barr, thank you.

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.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Another Tiger Woods injury. He ruptured his Achilles while training at home. This comes after several back surgeries and the serious leg injury suffered in the car accident in 2021. NBA and Cleveland make it 15 wins in a row for the Cavs, who also won their first 15. They came from 18 down in the second half, beat the Nets 109-104. Rangers lost in Winnipeg 2-1.

Islanders fell to the Kings 4-1. The Devils a three goal first period of 5-3 win over Columbus. Bruins with three in the third atop Florida 3-2 and the Capitals a 7-4 win at Anaheim. Alex Ovechkin settling for three assists no goals to move closer to the all-time record. Four more schools won a conference tournament. Gonzaga, North Carolina, Wilmington, Robert Morris,

and St. Francis of Pennsylvania. In Tampa, Clark Schmidt, first outing of the spring, he'd had back issues. He gave up a three-run homer to Baltimore's Ryan Mountcastle. The Yanks will need Schmidt with Luis Hill injured. Of course, Gary Cole out for the season. Yankee general manager Brian Cashman was asked if he thought the Cole injury was coming since he also hurt his elbow a year ago.

You start to forget a little bit about, you know, the longer you go, the less of a no complaints and good performance. You start forgetting about, you know, things that have happened in the past. It's always in the back of your mind, regardless for any pitcher, because, as I said, you're one pitch away from having your whole landscape changed and

And that obviously occurred here on his last outing. Cashman was on the S Network. He said he doubts he'll be adding a big-name pitcher at least anytime soon. NFL free agent signings. Quarterback Jacoby Brissett headed to Arizona. Wide out DeAndre Hopkins to Baltimore. Pass rusher Joey Bosa got released by the Chargers. He's going to play for Buffalo. The Giants have added six free agents. Five of them play on the defensive side. John Stasch, Howard Bloomberg Sports. Captain Nathan.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. The trade war is intensifying this morning. President Donald Trump has followed through on his promised 25% tariffs on global steel and aluminum. Now the European Union is retaliating with duties of its own on $28 billion in U.S. goods.

But European Commission President Ursula von der Leyen says it doesn't have to be this way. In a world fraught with geoeconomic and political uncertainties, it is not in our common interest.

to burden our economies with such tariffs. ECB President Ursula von der Leyen spoke this morning in Strasbourg. We are joined now by Bloomberg's news director for Europe, the Middle East and Africa, Rosalind Matheson. Roz, good morning. What does retaliation look like from the EU?

Well, as you're saying, the EU has come out pretty quickly on the back of this and they're announcing plans to impose their own duties all up at about 26 billion euros, 28 billion US dollars worth of American goods. This will come in a phased approach that does still allow room for negotiation. So there were existing tariffs that had been suspended on the US. Those are due to snap back, as they say, at the end of March. And it sounds like they'll just let them

And it's interesting to see that they're very much targeting certain products that are produced in certain states, politically sensitive states, should we say, in Republican-led countries.

So that includes soybeans from Louisiana, for example, bourbon, aluminium and steel, obviously, but also products like boats and motorbikes. And some of these are produced very much in Republican led states like Nebraska and Kansas. So it seems to be.

very deliberate, very targeted. We know that they're looking at additional tariffs by mid-April. That's after the reciprocal tariffs from Donald Trump are set to potentially come into force. So we are seeing the EU come out

Swinging today, I mean, they call it a calibrated response, but a proportional one. But certainly it's interesting to see that the EU has decided to announce retaliation when other countries today are seemingly holding fire. Yeah, interesting as well to hear the EU coming out saying they are targeting Republican-led states in particular. It almost sounds like it mirrors the first trade war when they made a similar move like that in terms of political targeting.

Very much so. You can look at the list of what was targeted by the EU during Donald Trump's first administration. Number one was bourbon and whiskey, but also iron, steel, aluminum, agricultural products. So again, soy, motorcycles, you know, boats and even, but very much...

Some of them are kind of, you know, almost mythical names in the US, Levi Strauss jeans, Harley Davidson motorbikes. And again, so very much associated with brand America and also in these Republican states. And the message the EU is sending there in allowing these tariffs to snap back on and to potentially have additional tariffs on top is that they know that the impact of tariffs is really felt

in the US in a way on the US consumer and the impact potentially on US growth, on US inflation. And obviously, if you have Americans who say they're feeling squeezed by this, companies are changing their behaviour, people are saying that they're feeling the impact of inflation. Does that

put the pressure back on Donald Trump domestically to rethink some of these actions, because obviously for him, a number one thing is going to be any impact on the U.S. economy and whether the pressure on him grows internally over that. So very much sending a message today from the EU. So all this, Roz, of course, is coming ahead of the reciprocal tariffs that President Trump has promised are going to be coming on April 2nd. In our last 30 seconds, what kind of consultations or negotiations are

Should we expect or should we expect to try to cool things down here? Well, certainly even in doing this, the EU is signaling that there's a phased approach and they're very much wanting to negotiate. I mean, the EU trade chief was in Washington last month offering various things, didn't seem to get a lot of traction. And the question and really the challenge for Europe is who's able to engage Europe.

with Donald Trump's administration on it, who can get his ear? It doesn't seem as though Ursula von der Leyen, the EU chief, necessarily has that direct link. So do you see other European leaders start to reach out directly to try and get some traction there?

But certainly the message in all this still is that the EU is very much ready to negotiate and to adopt this stuff in stages in order to do so. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg

99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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