Trump Delays Tariffs on Autos; Germany Sends Bonds Spiraling
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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 latest in the U.S. trade war with Canada and Mexico. Automakers are getting a reprieve. President Trump is giving a one-month exemption from 25% tariffs to Ford, General Motors, and Stellantis. But White House Press Secretary Caroline Leavitt says the rest of the world is still on notice.

Reciprocal tariffs will still go into effect on April 2nd, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage. White House spokeswoman Caroline Leavitt and Bloomberg's Kayleigh Lyons reports the automaker CEOs brought their concerns directly to the White House. The

The concern here, of course, is that the auto sector is very vulnerable in a scenario in which tariffs are on our North American trading partners. According to Bloomberg Economics, U.S. automakers in particular for some key parts like seatbelts and airbags, for example, are reliant on the imports of those parts, some 80 percent from Canada and Mexico specifically, which is why you had the likes of Jim Farley saying recently that these kind of tariffs could potentially, quote, blow a hole in the industry.

Bloomberg's Kayleigh Lyons in Washington. And in another sign of tariff relief, Agriculture Secretary Brooke Rollins tells Bloomberg the administration is also considering carve-outs for some farm products from Canada and Mexico, including potash and fertilizer. Well, Nathan, the president is set to meet with another group of business leaders. And we get the details with Bloomberg's Lisa Mateo. Lisa, good morning. Good morning, Karen. And we're talking about those big tech leaders, those behind the companies that are facing the possibility of import tariffs,

STRICTER EXPORT RULES. SOURCES TELLING BLOOMBERG IT INCLUDES THE CEOs OF HP, INTEL, IBM, QUALCOM. HP IS ACTUALLY THE ONLY TECH GIANT WHO CONFIRMED THAT THEY WILL MEET WITH THE ADMINISTRATION ON MONDAY TO TALK ABOUT TRADE POLICY, U.S. MANUFACTURING. NOW, THIS ALL COMES AS PRESIDENT TRUMP HAS CALLED ON CONGRESS TO GET RID OF THE 2022 CHIPS

The administration also looking for some input on its AI action plan, and that's to improve America's global AI dominance. Lisa Mateo, Bloomberg Radio. Lisa, thank you. On Capitol Hill, Republican senators have told Elon Musk he needs congressional approval for government cost cuts.

or they could be overturned in court. We get the latest on that from Bloomberg's Amy Morris in Washington. Senators suggested Elon Musk send a package of cuts to Congress for approval through a process that requires only a simple majority in both chambers. Republican Senator Lindsey Graham. I want to fix it quickly, is what he said. I want to keep the momentum.

But from a political point of view, we need to take the work product of Doge and put it in a rescission package. Now, Musk met with Republican senators and is set to meet with House Republicans. But any effort to formalize the cuts will likely come after a March 14th government funding deadline.

In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. Well, we turn to the markets now, and a global bond sell-off is deepening this morning as traders gauge the impact of geopolitical volatility on growth and inflation. We want to get the very latest with Bloomberg's John Tucker. John, good morning. Yeah, and strap in, Karen, this marks what could be a

paradigm shift in the global market. And the catalyst is what's happening in Germany right now. Berlin, they reached agreement on a package to try and boost the Eurozone's largest economy. So that means they have to sell debt, lots of it. And as Europe has left to defend itself with a shrinking U.S. commitment, they have to spend more and more on their military.

And as a result, they are for now abandoning fiscal constraints. And this goes against the very fabric of the post-war German psyche. The yield on the 10-year German bond, the Bund higher again this morning, up seven basis points as this bond route deepens.

This follows the steepest rise in almost 30 years. Now, the surprise from Germany comes as global bond markets were already grappling with signs of persistent price pressures. It's led Japan's 10-year borrowing costs to hit a 16-year high. Right now in the U.S., the 10-year, the benchmark up two basis points. That is right at 430.

I'm John Tucker, Bloomberg Radio. All right, John, thank you. Well, former Treasury Secretary Larry Summers is warning that volatile policy actions and rhetoric from President Trump are posing the biggest risk to dollar dominance in the world economy in a half century. Summers spoke with Joe Matthew and Kayleigh Lyons on Bloomberg's balance of power. These tariffs are a self-inflicted supply shock wound.

Higher prices, less competitiveness because businesses are having to pay more for all their inputs, and because they have to pay higher prices, less purchasing power for consumers, which means fewer jobs down the road. Former Treasury Secretary Larry Summers also points to the sell-off in U.S. stocks earlier this week as an illustration of investor concern about the direction of U.S. policy.

Well, in Europe, Nathan, EU leaders are holding emergency summit talks in Brussels to beef up their own military defenses and make sure Ukraine will still be protected. French President Emmanuel Macron says he'll discuss using his country's nuclear capabilities to defend the continent.

"Our nuclear deterrent protects us. It is complete, sovereign and French, through and through. Since 1964, it has explicitly played a role in preserving peace and security in Europe. But in response to the historic appeal of the future German Chancellor, I have decided to open the strategic debate on the protection afforded by our deterrent to our allies on the European continent."

French President Emmanuel Macron spoke through an interpreter in a televised address to the nation. And as that summit gets underway in Brussels, Karen, there is word of a new airstrike in Ukraine just hours after the U.S. froze some intelligence sharing with Kiev. Ukraine says a Russian ballistic missile killed four people and wounded dozens more inside a hotel in the central city of Krivyi Rih.

Ukrainian President Volodymyr Zelensky says humanitarian volunteers, including citizens of Ukraine, the U.S. and the U.K., had checked into that hotel before the strike.

Well, now we want to get the latest from the Middle East, Nathan. President Trump is repeating his warning of hell to pay if Hamas does not release all its hostages from Gaza. But while the president is posting on social media, he sent his special hostage envoy at the State Department, Adam Bowler, for direct talks with the militant group in Doha. Bloomberg's Dan Williams reports the U.S. has never had face-to-face contact till now with Hamas, which it's designated, rather, as a terrorist organization.

On the one hand, perhaps he thinks this could work. Perhaps he thinks this is a creative way of getting Hamas to deliver the hostages, of wrapping up this now 17-month-old crisis and war. It could be a sign of running out of options. Indeed, you know, holding talks with a group in a manner that other administrations may not have done would appear on the one hand creative, perhaps on the other hand a sign of vexation, of a lack of ideas. And I think now we'll have to see how Hamas responds.

In Bloomberg's Dan Williams reporting from Jerusalem, the White House says Israel was consulted on the talks.

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. New York City Mayor Eric Adams was grilled by lawmakers on Capitol Hill on sanctuary cities. Adams was joined by fellow Democratic mayors from three other sanctuary cities, Boston's Michelle Wu, Chicago's Brandon Johnson, and Denver's Mike Johnston.

House Oversight Committee Chairman James Comer, a Kentucky Republican, says that the cities only create sanctuaries for criminals. We cannot let pro-criminal, alien policies and obstructionist sanctuary cities continue to endanger American communities. Adams also defended himself following the dropping of his federal charges from the Trump Justice Department.

I think I was extremely clear. No quid pro quo, no agreement. I did nothing wrong but serve the people of New York City. Meanwhile, a new Quinnipiac poll has found Mayor Eric Adams' approval rating has dropped to an all-time low. It shows that only 20% of New York registered voters give Adams a positive rating.

And the same poll shows former New York Governor Andrew Cuomo leading the field of mayoral candidates. Cuomo leads with 31%, while Adams is second with just 11%. There's word there could be a new candidate running for mayor of New York City. According to several reports, New York City Council Speaker Adrienne Adams will announce her candidacy for mayor in the next few days. Dozens of pro-Palestinian protesters at Barnard College in New York City today.

Demonstrators entered the school's library in Upper Manhattan, calling for the reversal of the expulsion of three students for distributing flyers inside a Columbia University lecture. Tensions boiled over as police drove out an encampment of protesters after a bomb threat was called in at the library they occupied. At least nine protesters were arrested. It

It comes as President Trump said he wants to cut the federal funding of colleges that allow what he called illegal protests. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr. 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...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better.

I'm Alpine skier Michaela Schifrin. I've won the most World Cup ski races in history. But what does success mean to me? Success means discipline. It's teamwork. It's the drive and passion inside of us that comes before all recognition. And it's why Stiefel is one of the fastest growing global wealth management firms in the country. If you're looking for success, surround yourself with the people who will get you there.

At Stiefel, we invest everything into our advisors so they can invest everything into their clients. That means direct access to one of the industry's largest equity research franchises and a leading middle market investment bank. And it's why Stiefel has won the J.D. Power Award for Employee Advisor Satisfaction two years in a row.

If you're an advisor or investor, choose Stiefel. Where success meets success. Stiefel Nicholas & Company, Inc., member SIPC and NYSE. For J.D. Power 2024 award information, visit jdpower.com slash awards. Compensation provided for using, not obtaining the award.

Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Rangers and Capitals at the Garden. Chance to see the team with the best record in the East and the guy who's on the verge of becoming the greatest goal scorer in NHL history. And sure enough, midway through the third period with the Rangers ahead 2-1, Alex Ovechkin scored on the power play number 885 as he chases Wayne Gretzky. He's now 9-1.

From tying number 99, the game went to overtime. Entry into the zone. Zabana-Jad. Down! Carlson had Miller tied up. Now it's a two-on-one for Washington. Wilson and Strom. Strom with it. Wait. Wilson scores! Tom!

The overtime winner for Washington. On TNT, the Caps won 3-2 in L.C. If the Rangers make another trade before tomorrow's deadline, the rumor mill has the Islanders looking to deal Brock Nelson and or Kyle Palmieri. For the Devils, the worst fears concerning Jack Hughes' shoulder injury. Realize he's already had season-ending surgery. The 23-year-old Hughes.

His New Jersey's top scorer. Knicks start a five-game road trip tonight against the Lakers and the LeBron James-Luka Doncic combo. Lakers have won 17 of their last 20. Golden State off the win over the Knicks tonight, taking on the Nets in Brooklyn. Last night in Boston, Celtics beat Portland. Peyton Pritchard scored 43 points and Derek White scored 41. First time in Celtics history, two players scored 40 or more. Same game. NFL free agency kicks off next week. Plenty of news ahead of it at the L.A. Chargers game.

have released five-time Pro Bowl edge rusher Joey Bosa. Seattle released wideout Tyler Lockett, who had been with the Seahawks for a decade. Another Seattle wideout, DK Metcalf, wants to be traded. The Raiders released quarterback Gardner Minshew, and Las Vegas gave Max Crosby a huge extension. Crosby is now the highest-paid non-quarterback in NFL history. John Stasch, Bloomberg Sports.

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. President Trump admitted his tariffs could cause a little disturbance during his address to Congress this week. And now he may be offering a little relief. A one-month exemption from auto tariffs for Canada and Mexico.

and a potential carve-out for some agriculture as well. White House Press Secretary Caroline Leavitt, though, says this does not mean the president is losing focus. The president told the truth, and he was realistic, and he level-set with the American people. And I think, frankly, it's very refreshing. Press Secretary Caroline Leavitt speaking from the White House. This morning, we are joined by Terry Haynes, the founder of Pangea Policy and

Terry, are these polo backs that we're starting to see in the tariff a sign that President Trump is feeling a little disturbance now? Good morning.

Good morning, Nathan. You know, I'm feeling refreshed, as the press secretary said. No, I think, you know, I think it's a mistake for markets to think that Trump might blink on tariffs if he adjusts these things. The pattern is going to be, you know, what we've already seen is going to be an imposition of the tariffs and then a fine tuning of them. That is not a

That is not a signal the tariffs are going to happen and that they're going to go away. That's an adjustment. And I know full well markets are discomfited by that because they don't know what's coming next. And that's fair enough. But, you know, that's going to be the policy going forward, I think. Well, are you thinking then, Terry, that there could be adjustment to the reciprocal tariffs that the president has talked about? The Commerce Secretary Howard Lutnick is saying are going to be taking effect April 2nd.

I think some adjustment, yes. The basic principle, I think, stands. Remember that the reciprocal tariffs purpose, I think, broadly speaking, is different than the individual, let's say, the

on Canada and Mexico, those are explicitly about what I call geopolitical matters. In the case of Canada and Mexico, it's about the border, it's about drugs, fentanyl, the like. The reciprocal tariffs are all about the idea that other countries

countries are tariffing us, so therefore we're going to tariff them similarly. And the bid, which I think is unspoken, the bid is to basically have those tariffs go away. The idea is to produce freer trade in the end, which we haven't heard a lot about yet, but I think you will. But that's all based on explicitly on the trade policy of others. And in

Secretary Besant likes to call this the next steps kind of data dependent, dependent on what those tariffs actually are. That's what the administration is studying right now. Well, if this really is about immigration and drug flows over the borders, Terry, why delay these for a month? I mean, can automakers really source more operations in the U.S. within a month?

No. Some of this has been leaked and some of it's been leaked. Some of it's been stated explicitly, particularly by Commerce Secretary Lutnick. The idea is they're going to certainly understand that the automakers need the ability to continue to source the way they're sourcing. So there's that. There's no illusion that the automakers are going to be able to

produce more domestically. But they're providing a reprieve anyway in the hopes that more negotiations on the basic geopolitical issues continue to exist. But beyond that, and the other thing that's been leaked or teased is that USMCA,

the deal between the United States, Canada, and Mexico should pick up a lot of this stuff. So what I anticipate is that you'll probably see an early triggering of a renegotiation more broadly on USMCA basis. Just 30 seconds left, Terry. Do you think we'll see carve-outs for tech when those leaders meet at the White House next week?

Yeah, that wouldn't surprise me at all. The administration right now, I think, is somewhat underpowered when it comes to having boffins around who understand this stuff instinctively. And, you know, that's just largely a problem.

byproduct of being in the beginning of an administration. So the tech folks are going to be able to come in and actually make their case directly and provide a lot of useful insight that the White House, I think, doesn't have right now. 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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