Trump Blasts Xi on Trade Talks; Musk Slams Tax Bill
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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 in Washington, D.C., where President Donald Trump has weighed in on trade negotiations with China in an early morning social media post. The president went on Truth Social just after 2.15 this morning, Washington time, to write, quote, I like President Xi of China, always have, always will, but he is very tough and extremely hard to make a deal with. The

The Post is raising questions about whether the two leaders will have a call in the near future, as the White House has promised. We get more from Bloomberg News executive editor for Asia Markets, Paul Dobson. We've heard all through this week commentary from the U.S. side talking about, don't worry, it'll all be all right, Trump and Xi will get together, and they'll have this meeting, but China has been completely silent on the matter. Now, you can read something into that both ways, right? Either they're silent because they're just leaving the U.S. hanging, or...

maybe there's something coming and they don't want to get ahead of it.

Bloomberg's Paul Dobson reports all this comes as both sides have accused each other of violating terms of their trade agreement in Geneva. The U.S. has imposed new limits on chips and jet engine parts. It is also discussed revoking Chinese student visas, while the U.S. has accused China of slowing exports of rare earth minerals. Meanwhile, Nathan, President Trump has followed through on a promise to raise steel and aluminum tariffs to 50 percent. He announced it to steel workers in Pittsburgh last Friday. At 25 percent,

They can sort of get over that fence. At 50%, they can no longer get over the fence. President Trump's new metal tariffs took effect at a minute after midnight this morning. The new rate does not apply to British steel or aluminum. The U.K. is getting a five-week reprieve to negotiate the details of its framework trade agreement with the U.S. Meanwhile, Karen, there are harsh words this morning about President Trump's tax cut.

bill from Elon Musk. And we get the very latest on that now from Bloomberg's John Tucker. John. And Nate, in a post on X, Musk says Donald Trump's proposed tax bill more than defeats all the cost savings achieved by the Doge team at great personal cost and risk. Earlier, Musk said this massive, outrageous, pork-filled congressional spending bill is a disgusting abomination and shame on those who voted for it. House Speaker Mike Johnson felt compelled to respond yesterday. With

With all due respect, my friend Elon is terribly wrong about the one big beautiful bill. Well, the remarks could stiffen resistance and delay enactment of the tax cuts and debt ceiling increase. One Republican fiscal hawk, Senator Mike Lee of Utah, appeared to endorse Musk's criticism. This all highlights the risk that Musk's public stance will complicate passage. Lee said, in his words, the Senate must make this bill better. In New York, I'm John Tucker, Bloomberg Radio.

All right, John, thank you. Meanwhile, Senate Majority Leader John Thune believes the deal that led to the House to increase the maximum deduction for state and local taxes to $40,000 will have to be changed in his chamber. Republican lawmakers from states like New York and California demanded that the SALT cap be raised well above the $10,000 limit established in Trump's 2017 tax overhaul. House Speaker Mike Johnson eventually agreed to the new $40,000 cap.

Later this month, Karen, President Trump will attend the NATO summit at The Hague as he seeks to rally member nations to step up defense spending. We get more from Bloomberg's Amy Morris in Washington. White House Press Secretary Caroline Levin. I can confirm he will be going to the NATO summit, yes. President Trump has said he wants members of the alliance to spend 5% of GDP on the military. That's a substantial increase for many nations.

The alliance will discuss a target that would see nations commit to spending 3.5% of GDP on core defense and another 1.5% in defense-related outlays on areas including infrastructure, cyber defense, and civilian preparedness. The summit on June 24th and 25th will come shortly after the group of seven leaders are expected to meet in Canada.

The status of the war in Ukraine is likely to be high on the agenda at both meetings. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. We turn to the markets now, and stocks around the world have hit a record high. The MSCI All-Country World Index hit an all-time peak for the first time since February as signs of a resilient U.S. economy overshadowed uncertainty around trade negotiations. The S&P 500 is more than 2 percent below peak set earlier this year.

As for individual stocks this morning, Karen, shares of CrowdStrike are down 6.5%. The cybersecurity firm projected sales for the current quarter below estimates. Jessica Inskip is director of investor research at StockBrokers.com. She says broad adoption of artificial intelligence will be key for CrowdStrike's growth.

From an enterprise level, to bring AI, you need to go to the cloud, which means you need to have data stored there. To have that cloud infrastructure, it requires a lot of security. And so it's really on the enterprise level. But if there is no regulation requirements, it may take a backseat. And that could be a concern.

Stockbroker.com's Jessica Inskip says the results were CrowdStrike's fourth quarterly update since last year's software update that crashed Windows operating systems around the world. Nathan, after more than seven years, Wells Fargo has been released from an asset cap

put in place by the Fed. The unprecedented sanction was imposed in 2018 under then-Fed Chair Janet Yellen after a wave of misconduct scandals. Now the Fed says Wells Fargo has met all requirements, including third-party reviews and internal reforms. Bloomberg's Sally Bakewell says this is a huge deal for Wells Fargo CEO Charlie Scharf.

It ends an era of scandals. It's a huge deal for Charlie Scharf. Can't be understated or underestimated, I think. And I think perhaps the shares not being up so much is because it was expected. We've seen a number of consent orders come off this year. And the bank has, the CEO in particular, has telegraphed that things were going well and that they did expect to have some sort of resolution soon.

Bloomberg's Sally Bakewell says the removal of the cap ends a costly era for Wells Fargo. One estimate projected $39 billion in lost profits, and shares are up about 4% this morning. And shares of Airbus are up more than 3%.

this morning. Karen, Bloomberg News has learned that China is considering placing an order for hundreds of Airbus aircraft. As soon as next month, the deal could involve around 300 planes. The order would be a significant win for Airbus. It has gained an upper hand in the Chinese market due to trade tensions and issues affecting Airbus rival Boeing. Nathan, a top drinks maker is feeling the impact of global tariffs. Cognac maker Remy Cointreau is withdrawing its long-term sales guidance.

It's blaming tariff policies in America and China and a stunted recovery in the U.S. market. Remy and rivals like Pernod Ricard are facing challenges that include the suspension of duty-free sales channels in China and the prospect of escalating trade tariffs in the U.S.

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. The Department of Homeland Security says the wife and five children of the suspect in Sunday's Boulder, Colorado, flamethrower attack are in ICE custody. DHS Secretary Kristi Noem said the family of Mohammed Salman is being investigated. Omar.

Mohammed's despicable actions will be prosecuted to the fullest extent of the law. But we're also investigating to what extent his family knew about this horrific attack, if they had any knowledge of it or if they provided support to it. Secretary Noem says Salomon is an Egyptian national who is in the country illegally after overstaying his tourist visa. At least 12 people were injured in the attack, including an 88-year-old woman who survived the Holocaust.

South Korea's new president, Lee Jae-myung, says he'll pursue dialogue with North Korea while bolstering a trilateral partnership with the U.S. and Japan. Lee won a snap election Tuesday for a five-year term. The Justice Department says two Chinese nationals smuggled a potential agroterrorism weapon into the U.S. It's a fungus that's known to kill crops and be harmful to humans. The two suspects were allegedly receiving Chinese government funding for their research.

Former counterterrorism official John Cohen told ABC, in the wrong hands, the fungus could have disastrous effects on the country. A fungus such as this could be used to damage our agricultural industry, infect our food supply, impact our economy, and harm large numbers of people.

The mayor of Newark, New Jersey is suing his state's top federal prosecutor following his arrest during a protest at an ICE detention center last month. The lawsuit from Raz Baraka accused his acting U.S. attorney Alina Haba and a Homeland Security official of false arrest and malicious prosecution.

Baraka was arrested for trespassing, although Habba's office later dropped the charge. Baraka is running for New Jersey governor in next week's Democratic primary. Wildfire smoke from a series of blazes burning in the Canadian prairie has drifted across New York, contributing to a series of air quality alerts in the area that's threatening breathing problems for children and older adults.

Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

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Time now for the Bloomberg Sports Update brought to you by Flushing Bank. Here's John Stashower. John, good morning. Good morning, Karen. Big reason why so many were surprised with the Knicks decision to fire coach Tom Thibodeau is because of how bad the Knicks were before Thibodeau arrived. 20 years, only one playoff series victory. They had gone through 12 different coaches.

in a 16-year period. Thibodeau in his first season took the Knicks from a win percentage of 32 up to 57. He was NBA coach of the year, and this season his fifth was his best. Only four NBA teams had more regular season wins. Only two went further in the playoffs. Leon Rose runs the Knicks, never talks to the media, did release a statement that said they want to go in another direction. Perhaps it's to Michael Malone, a New York native who just recently got fired

in Denver. Mets in L.A. down 4-1 early. They came back. Juan Soto with a two-run homer. Mets led 5-4 in the ninth inning. Did not use their closer, Edwin Diaz. And Max Muncy with his second homerun of the game tied things up. They went to the 10th inning. Middle going back onto the warning track. And

It is off the wall and a hop and a run from second to walk it off is Tommy Edmund. Freddie Freeman gets it done. Opposite field. Double to walk it off tonight.

DNC the call. Dodgers won 6-5. Yankees at the stadium got back-to-back home runs. Seventh inning from Jazz Chisholm and Anthony Volpe. Chisholm in his first game back from injury. Strong pitching from Carlos Rodon. They beat Cleveland 3-2. Nationals lost to the Cubs 8-3. Red Sox lost to the Angels 4-3. The Sox have dropped eight of their last ten. They'll drop the puck tonight in Edmonton. Game one of the Stanley Cup final. A rematch of last year when Florida blew a 3-0 series lead but won game seven over the Oilers. An All-American championship

Women's quarterfinal match about to start at the French Open. It's Coco Gauff against Madison Keyes, who is 11-0 in Grand Slam matches this year. She just won the Australian Open. The men today have Novak Djokovic against Alex Givera. John Staschauer, Bloomberg Sports, Canada.

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. One early morning social media post is raising a whole host of questions about U.S.-China relations. President Donald Trump wrote on Truth Social overnight that China's Xi Jinping is, quote, very tough and extremely hard to make a deal with, end quote.

Raising a point former acting White House Chief of Staff Mick Mulvaney made to us this week.

Trump doesn't want to go through the back channels. He doesn't want to go through the ordinary course of business. That's never been his style as a leader, being in business or in his first term in office. He wants to talk to the principal. He wants to talk to President Xi himself. That was Acting White House Chief of Staff Mick Mulvaney speaking with Bloomberg from Singapore this week. Joining us this morning is Bloomberg News Global Trade Editor Brendan Murray. And Brendan, we've talked before about whether Presidents Trump and Xi could have a chat anytime soon. Where does this overnight post leave that prospect? Good morning. Good morning.

Well, it seems like the Chinese are really digging in their heels and not giving President Trump that call that he's been consistently asking for and White House officials have been saying could be coming within days. So it looks like it's at least weeks in the future, if it's going to happen at all. In the meantime, we've got a story, Bloomberg's reporting today, that

China's looking at buying a bunch of Airbus airplanes. So, you know, that's not going to be good for Boeing. So it seems that China is sort of playing the Europeans off on the U.S. And, you know, that can only make Trump even more frustrated, given that, you know, he's trying to make this trade relationship and these talks come together. And that doesn't look like it's going to happen as they predict it.

So where does that leave the Geneva agreement that seems now like it was months ago? It was only weeks ago, wasn't it? Yeah, it was three and a half weeks ago. And it was it seemed both sides are pointing fingers at each other, saying, you know, you didn't live up to your end of the bargain. The U.S. is withholding Chinese high tech equipment.

chips that China wants access to, and China's withholding these rare earth magnets that are important for car production and other kinds of high-tech manufacturing. So, you've got both sides basically withholding things that are important in global supply chains from each other and seeing who's going to crack first.

It would appear that, you know, President Trump had a lot of leverage to begin with, but that China has a fair amount of its own leverage. We've had the new U.S. ambassador to China, David Perdue, meeting with the Chinese foreign minister in Beijing. And from what we understand, China used that encounter to tell the U.S. to get the relations back on track. How does that happen, Brandon?

Yeah, exactly. It just fits with the pattern of Beijing saying, we're not going to have any meaningful discussion with you until you stop treating us the way you're treating us. The U.S. had this crackdown on Chinese student visas last week. There was a

There was a lot of things that happened geopolitically that the U.S. doesn't like. Marco Rubio was out talking about the Tiananmen Square victims.

victims today. And so that, you know, all that kind of stuff is just not going to make China very happy. So it would seem the hawks and the doves within the Trump administration aren't really aligned. And that if you want to do a deal with China, you know, you can't be coming out with all these other geopolitical type issues that only anger Beijing. Just 30 seconds left. Does the doubling of steel and aluminum tariffs to 50 percent raise another sore spot for China as well?

Well, it raises a sore spot with a lot of other countries that the U.S. needs to help in their efforts with China. So, if you're going to confront China and its overcapacity and the deflation that it's sending around the global economy, you want the help of your trading partners.

And those are Germany and they're, you know, places like South Korea and Japan. And if you want their help, that's not going to the 50 percent steel tariff is only going to increase tensions with with them at a time when you need them to to to stand together against China. So it's a complicated situation. 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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