Trump Delays Canada, Mexico Tariffs; China Blasts Trump, Calls US Tariffs ‘Evil’
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Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the latest on the U.S. trade war with Canada and Mexico. President Trump is giving a one-month reprieve from 25% tariffs to goods covered under the U.S.-Mexico-Canada trade agreement. The president says he made the move after speaking with Mexican President Claudia Sheinbaum about drug and immigrant flows.

We're working much harder lately. Do you notice that on people coming in and drugs? And we've made tremendous progress on both. Still, the president says the break won't last after April 2nd. That is when he has promised reciprocal tariffs on a range of countries. And he says he's not concerned about the market sell off that followed the new tariffs. Basically, you have globalist companies that have been ripping us off that won't be able to rip us off.

Any longer. President Trump's decision means automobiles and parts that meet USMCA requirements will be exempt from tariffs, but about 62% of Canadian imports will still be subject to a 25% duty.

Well, Nathan, Canada is responding to President Trump's tariff pause with one of its own. It's delaying a second phase of retaliatory tariffs on U.S. steel, aluminum and cars until April 2nd. It was supposed to take effect March 25th. Canada has already imposed 25 percent tariffs on about 21 billion dollars in American goods. Those duties will remain in effect. Meanwhile, Karen, China remains under 20 percent tariffs from the U.S. And now the country's top diplomat is blasting President Trump.

saying he's taking a hypocritical approach to bilateral ties. We get more from Bloomberg's Stephen Engel at the National People's Congress in Beijing. Chinese Foreign Minister Wang Yi is known for having a rather sharp tongue, and today, in a one-and-a-half-hour-long press conference in Beijing, he did not disappoint. Attacking the Trump administration on a number of fronts, including trade, of course,

The Trump administration doubled down on its tariff action against China earlier this week, raising it to 20 percent. And China, of course, retaliated. But Wang twice referred to the Trump administration as employing the law of the jungle, veiled reference, of course, to the Trump policies on trade. He called on larger nations, another veiled threat against the United States, to act responsibly and not resort to flexing its large muscles and fists.

He says China opposes double standards, trickery and bullying. Stephen Engel, Bloomberg News, Beijing.

All right, Stephen, thank you. We now turn to the latest developments in the war in Ukraine. Twenty-six European Union leaders have backed a declaration of support for Ukraine at an emergency meeting in Brussels. Hungary's Russia-friendly Prime Minister Viktor Orban was the only one who did not sign on. French President Emmanuel Macron said the EU needs to boost defense spending. "Given the threat and whatever happens in Ukraine,

We need to increase our defense capabilities and we need to build in the next few years autonomous defense capabilities for Europeans. French President Emmanuel Macron spoke through an interpreter as the U.S. pairs back its protective role. President Trump has suggested the U.S. might abandon its NATO commitments if other members don't meet defense spending targets. Well, Karen, uncertainty over tariffs led to a volatile week on Wall Street.

Bloomberg's John Tucker is here with the update. But, John, the week's not over yet. Well, take heart, Nathan. The weekend's almost here. Now, as you just heard, the idea of a Trump put has pretty much evaporated after the president said, quote, I'm not even looking at the market anymore.

Well, the Nasdaq 100 from its peak is down almost 10%. That's the level that would mark a correction. The S&P 500 is on track for its worst week since September. And underscoring this growing risk aversion, stocks failed to stage a rebound even after the president delayed those tariffs on Mexican and Canadian goods. For Steve Chevron at Federated Hermes, the markets are becoming more reasonably priced.

I think that that wall of worry is going to get knocked down or taken down brick by brick as we get in the second half of the year. So more pain to come, but we see a much, much better second half. And it's not just stocks at this point. Oil continues its slump. That's on the idea of slower growth is going to lead to slower demand. The largest digital asset, Bitcoin, that is lower. That's even after President Trump signed an executive order creating a strategic digital token reserve.

The details, however, fell short of industry expectations. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. While Bitcoin may be on the decline, one chip stock is on the rise. Shares of Broadcom, they're up almost 13% this morning. The key chip supplier for Apple and other big tech companies posted earnings that beat analysts' estimates. It also gave an upbeat forecast, reassuring investors that artificial intelligence spending remains healthy.

Lin Duan is a managing editor of technology for Bloomberg News. This is what the chip sector needed, right? It needed a bright spot. NVIDIA disappointed, which wasn't fair. Marvell disappointed, which also wasn't fair. Both of them beat, but not by enough. They wanted it to be overwhelming. Broadcom is delivering, unfortunately.

on a beat and it's a very solid beat. Bloomberg News managing editor Lynn Dewan says Broadcom's AI sales totaled $4.4 billion in the quarter. And Karen, shares of Gap are surging up more than 18% in the pre-market. The retailer exceeded analyst estimates for comparable sales led by better than expected results at the namesake brand as well as Old Navy and Banana Republic.

Well, on the flip side, Nathan, shares of Hewlett Packard Enterprise, they're plunging down more than, well, almost 21% right now. The company gave an annual profit outlook that fell short of investor expectations. It also announced plans to eliminate about 3,000 positions. And we're going to get a lot more on the labor market picture, Karen, when we get the February jobs report and we get a preview now from Bloomberg's Michael McKee.

The chaos of the Trump administration's first weeks is swirling around today's jobs report. Tariff talk has given us conflicting signals about the strength of the labor market from a host of labor indicators. Economists are generally looking through the noise, anticipating about the same number of jobs created in February as in January.

The biggest reason is the timing of data collection, the pay period including the 12th of the month. The big firings didn't really begin until the 14th and so wouldn't be captured. Wall Street, however, is leaning toward a much lower number on fear the economy is slowing, growth threatened by Trump tariffs. That could mean volatility today, even though Fed officials have already signaled they're staying on hold no matter what.

Michael McKee, Bloomberg Radio. All right, Mike, thanks, and stick with Bloomberg. For full Jobs Day coverage on Bloomberg, surveillance starts as soon as the numbers cross the terminal, 8.30 a.m. Wall Street time. Listen on Bloomberg Radio. Watch on the Bloomberg Podcast's YouTube page. Well, Nathan, in addition to the jobs report, investors will be on alert as a number of Fed officials speak, and Bloomberg's Charlie Pellett has the latest.

Jay Powell gives a keynote speech at an event in New York hosted by the University of Chicago Booth School of Business. New York Fed President John Williams and Fed Governor Michelle Bowman will also speak. Investors are listening for any remarks about the path of interest rates, the effects of tariffs, and the outlook for inflation. Here's Federal Reserve Bank of Philadelphia President Patrick Harker. Inflation, wow.

we were moving slowly down to our 2% target. I'm worried that right now that that

Is it risk? Fed officials have signaled they are likely to leave rates unchanged for some time. In New York, Charlie Pellett, Bloomberg Radio. Charlie, thank you. And you can hear Jay Powell's full remarks at 1230 Wall Street time. That's on Bloomberg Radio and the Bloomberg podcast page on YouTube. Well, Karen, Elon Musk's SpaceX has suffered another setback. We get the details on the latest test flight from SpaceX.

Bloomberg's Lisa Mateo didn't go so well, Lisa. No, it didn't, Nathan. This was actually the eighth test flight of its Starship rocket, and things really started out great when it blasted off yesterday from south Texas, and then this happened. And we just saw some engines go out.

it looks like we are losing attitude control of the ship yeah this was just eight minutes into the flight it began spinning wildly out of control the thing is some engines they started to malfunction before they were supposed to cut off and the mishap it caused faa's air traffic control system command center to actually pause takeoffs from some florida airports due to space debris now in a post on x elon musk called it quote a minor setback he also said the next ship is going to be ready in about four to six weeks

Meanwhile, intuitive machine second lander Athena, it also had some issues. And that's when it was trying to land on the moon yesterday after company couldn't confirm its status. Its CEO said it was not likely in the right position on the surface. Again, intuitive machines share as well. They're down more than 34%. Lisa Mateo, Bloomberg Radio.

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 South Korean court has ordered impeached President Yoon Suk-yeol to be released from jail more than a month after he was arrested and indicted over his short-lived imposition of martial law. The decision by the Seoul Central District Court would allow Yoon to stand his criminal trial while not being physically detained.

The court said it accepted Yoon's request to be released from jail because the legal period of his formal arrest expired before he was indicted in late January.

Federal authorities revealed two active duty service members were arrested on accusations they conspired to spy for China. The Justice Department says U.S. Army soldiers conspired to illegally obtain national defense information and send it to individuals in China. The soldiers were stationed at Joint Base Lewis-McChord in Washington state.

Mike Harrington, special agent in charge of the FBI Seattle field office, said there is reason to believe some of the data is top secret.

Information that identifies the United States military's capabilities, plans and intentions, and could really put us at a severe disadvantage if that were to fall in the wrong hands. The FBI's Mike Harrington says a third suspect, a former Army soldier, was also arrested. During a kickoff event in Miami Beach, Florida, Governor Ron DeSantis unveiled plans for increased security in places like Miami Beach for Spring Break 2025. It's a very important day.

very welcoming city, but at the same time, you know, we can't have things just descend into madness and mayhem and chaos. Governor DeSantis says he has deployed 140 state troopers to assist local law enforcement efforts. 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.

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...

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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. Not the way the Knicks wanted to begin their five-game road trip. In L.A. against the Lakers, a blown lead and almost game-winning shot at the end of regulation. But Josh Hart's layup came a tick after the buzzers down. And then with a minute and a half left in overtime, Jalen Brunson rolled his ankle. Lakers went on to win 113-109. They're two superstars. LeBron James and Luka Doncic combined.

for 63 points, 19 rebounds and 20 assists. Brunson scored 39 before he had to be helped off the court. Coach Tom Thibodeau said they're awaiting test results, but Brunson's close friend Hart said it looks like Brunson's going to be out a while. He's the Knick they can least afford to lose. And Brooklyn Warriors top the Nets 121-119. Steph Curry scored 40. And Boston Celtics beat the Sixers 123-105. Jason Tatum at 35. Bruins lost at Carolina 3-2.

NHL trade deadline, 3 o'clock today. The Islanders have traded Brock Nelson to Colorado for two players. The first round pick, Nelson, an Islander for 12 years. He'll be a free agent after the season. So will Riley Smith. That's why the Rangers shipped him to Vegas for Brendan Bisson in the third round. Smith was with Vegas before, helped them win the Stanley Cup a couple of years ago.

Yankee injury news. Luis Hill's lat strain going to prevent him from pitching for at least three months. DJ LeMayu, who's missed time with recent injuries to his toe, foot, and hip, now has a calf strain. Out several weeks, and Yankee general manager Brian Cashman asked about Giant Carlos Stanton's injured elbows. He thought we were in a good place, and I think he was...

feeling like in a good place, but then it reared its ugly head, you know, about three weeks before camp and, uh, is my understanding. And so now we're dealing with it. So, uh, you know, give it the time it needs and, you know,

You know, we'll clearly look forward to getting him back at some point, but obviously in the near term, that won't be the case. Cashman said they treated Stanton with plasma injections. He said surgery is seen only as a last resort. John Stach, Bloomberg Sports, Karen Nathan. All right, John, thank you. This update is brought to you by Audi. Visit your tri-state Audi dealer today and get behind the wheel of the Audi model you've always wanted.

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, and we get our first official look at the labor market from the start of the new Trump administration this morning. The nonfarm payrolls report for the month of February.

comes out ahead of the opening bell. And here to preview it for us in our interactive broker studios this morning, Veronica Clark, U.S. economist at Citi. Great to have you with us in person on a Jobs Friday with the consensus calling for 160,000 new jobs added, the unemployment rate at 4%. You're a bit below consensus at 135. Yes, yeah, exactly. Thank you for having me. Yeah, we do think we'll see some more slowing in the labor market in February.

But 135,000 jobs added, that's still a pretty healthy pace of job growth. Might see the unemployment rate take a bit higher to 4.1%. But I think the issue with this February reading is it's still a bit early. It's not going to get into new government layoffs. The last couple weeks of sentiment really shifting. It's certainly not going to cover a period of two substantial tariffs. We saw some tariffs on China. But the outlook, I think, would look a lot weaker going forward. Yeah.

That is interesting because Bloomberg Economics is going even farther below consensus with 65,000 on the thinking that we could start to see some of that impact of federal government slowdown in hiring impacting other sectors. Could we start to see that even before –

many of these doge layoffs start to feed into the data even more clearly. Yeah, yeah, we certainly could. I think, you know, other labor market data that we do have for February, we got, you know, announcements of job cuts yesterday that were pretty elevated. Probably takes a bit of time for those to show up in actual layoffs. We do know that, you know, initial jobless claims were mostly low through the first half of February. But, yeah, we might start to see some slowing, and I think the issue is,

Yeah. As we're getting into the next couple of months where we're coming into the bigger headwinds. So if the labor market is already slowing in February, that's a worse situation going into even more weakness. Well, let's look ahead over the next couple of months. How much weakness do you think we could see from some of this Doge effort? Yeah.

We're, of course, trying to track the headlines, I think, like everyone else is. Still a lot of uncertainty so far. We're tracking something maybe around 40 to 60K that have already happened or could happen in the next couple weeks. As we're getting into the summer, that seems like when we might see some of the bigger layoffs, maybe something as much as 300,000 layoffs.

Now that's gonna be worth probably a couple tenths of an increase on the unemployment rate. But what worries me more is the spillover into the private sector, you know, private contractors, people who rely on government funds, and just the increased uncertainty in what that could do to hiring.

especially as we're getting into the spring and summer. That's the time of year when hiring is supposed to pick up and maybe it doesn't. Now, we haven't even talked to you about the uncertainty sparked potentially by the tariffs. How could that play into the labor picture as well? Yeah, it is, I think, just a really hard time for some companies to be hiring. Of course, in manufacturing sectors, sectors that rely on those trade relationships.

We have seen some surge in activity potentially before tariffs, front-loading of imports. Maybe consumers are buying goods ahead of possible tariff-induced price increases. But overall, that's going to weigh on spending and weigh on activity, and we might see resulting job losses. Do you see it weighing on wages as well? How does it affect the wage picture? Yeah, it is an interesting question. It could. I think overall, it would probably...

be net negative for wage growth, just in the fact that it is an activity shock first and foremost. Maybe if we're eventually bringing production back to domestic production, that could boost wages, but that's an effect longer down the road, I think. Just 30 seconds left, Veronica, but do you see any sectors that could pick up the slack from some of this uncertainty?

Yeah, I mean, we have seen where we've seen the consistent strength in the economy recently. The last couple of years really has been sectors like health care. And I expect that to continue. But even they're going to be facing uncertainty of medical funding cuts, research cuts, things like that. We did earlier this week see ADP employment and saw a decline in that sector. We'll see if that's repeated.

But overall, softer activity has been a way on the economy as a whole. 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.

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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.