Trump's Message to Republican Governors; Hochul Won't Remove Adams
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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 where President Trump continues to push for broader control of the federal government. The president pushed his agenda in a speech last night to the Republican Governors Association. To protect American workers and bring billions of dollars into our treasury, we're in the process of imposing reciprocal tariffs on any nation that tries to cheat us

We're still our jobs. The president told the governors they would do better in upcoming midterm elections if they embrace his agenda. Republicans currently have slim majorities in both the House and Senate. President Trump also threatened to cut funds to Maine if that state allows transgender people to play women's sports. Is anybody here from Maine? Who is that? Is that the governor?

That's, well, I hate to tell you this, but we're not going to give them any federal money. They are still saying we want men to play in women's sports, and I cannot believe that they're doing that. President Trump's comments came after a Republican lawmaker in Maine posted a photo of a female high school athlete who she said was transgender. That picture has been shared widely and picked up by conservative media.

Meanwhile, Nathan, the president continues to make rapid moves to reshape the federal government. According to the Washington Post, the president is planning an executive order this week to fire the board at the U.S. Postal Service and fold the agency into the Commerce Department and Secretary Howard Lutnick. The report says the board is prepared to sue if the president threatens its independence.

Bloomberg News, meanwhile, has learned a staffer with Elon Musk's Department of Government Efficiency, who was fired over racist social media posts, is now back at the Social Security Administration. Marco Ellis had received support from Trump, Musk, and Vice President J.D. Vance. And thousands of IRS employees reported to work yesterday expecting an email telling them they were being placed on leave. But a technical glitch kept many of those emails from arriving immediately.

Those workers are getting paper copies of their termination letters instead. Karen, now we turn to the latest on the war in Ukraine. The U.S. says sanctions on Russia are on the negotiating table in talks to end the war. Treasury Secretary Scott Besson says the White House is prepared to either ramp up or ease penalties on Moscow as negotiations progress. He also continued the administration's criticism of Ukraine's President Volodymyr Zelenskyy.

I think President Zelensky unfortunately escalated and has put some daylight between the- How did he escalate? A lot of his remarks in Munich I thought were inappropriate. President Zelensky, when I met with him, assured me that he'd be signing the minerals deal in Munich. He has not.

Treasury Secretary Besson spoke with Anne-Marie Hordern there on Bloomberg surveillance. America's change in tone on Ukraine has affected talks among the group of seven nations. Countries are struggling to agree on a draft communique marking three years since Russia's invasion. The U.S. is objecting to references to Russia's war of aggression.

Well, in the Middle East, Nathan, Israel's military says Hamas has violated the Gaza ceasefire deal by handing over an anonymous body instead of one of the hostages. The IDF said the remains they were given were not those of Shiri Bibas, who was captured alongside her two sons in the October 7th attacks. Here's Israeli Prime Minister Benjamin Netanyahu speaking through an interpreter.

We will work with determination to bring Shiri home together with all our hostages, both living and dead, and ensure that Hamas pays the full price for this cruel and malicious violation of the agreement. Israeli...

Israeli Prime Minister Benjamin Netanyahu, Hamas is due to free six living hostages tomorrow, accelerating the original plan of a staggered return across two weeks. A return to the U.S., Karen, to get the latest on the political future of New York City Mayor Eric Adams. Governor Kathy Hochul is not removing him from office for now. We get more from Bloomberg's Ed Kolegi in Manhattan.

Governor Hochul made her announcement Thursday afternoon. After careful consideration, I have determined that I will not commence removal proceedings at this time. My strong belief is that the will of the voters and the supremacy and sanctity of democratic elections preclude me from any other action. Calls for Adams to leave office intensified after a top official at President Trump's Justice Department directed federal prosecutors in Manhattan to drop their pending bribery case against the mayor.

Critics say the directive was a quid pro quo in exchange for the mayor's assistance in helping facilitate Trump's crackdown on migrants. Ed Kalecki, Bloomberg Radio. All right, Ed, thank you. Well, we turn to the markets now, and futures are a little changed following yesterday's losses on Wall Street. The Dow dropped 1%. This morning, stocks in Asia are leading gains. Hong Kong's Hang Seng Index jumped 4%.

Stocks in China gained one and a quarter percent on the back of strong earnings from Alibaba. One stock with big gains in Asia this morning, Karen, is Nissan. Those shares are driving higher by nine and a half percent this morning. The Financial Times is reporting a high-level Japanese group has drawn up plans to seek investment from Elon Musk's Tesla. The paper says the group thinks the electric vehicle maker is interested in acquiring Nissan's plants in the U.S.

Well, on Wall Street, Nathan, Citigroup is changing course on its DEI goals. And we get that story with Bloomberg's Charlie Pellett. It cites pressure from the Trump administration. In a memo to staff from CEO Jane Frazier, seen by Bloomberg News, the bank will no longer have, quote, aspirational representation goals, except as required by local law, and it will abandon a policy for diversity in candidates and interview panels.

It will also rename its diversity, equity, and inclusion and talent management team to talent management and engagement. In New York, Charlie Pellett, Bloomberg Radio. All right, Charlie, thank you. Meanwhile, Coca-Cola is warning of potential negative impacts.

from DEI changes. The soft drink giant says policies that could lead to a less diverse global workforce pose a potential risk to its business going forward. Rival PepsiCo, which is also a federal contractor, has joined a number of other companies in dropping DEI programs. That includes cutting staff representation targets and expanding its supplier diversity program.

It'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 John Tucker. John, good morning. And good morning, Karen. New poll numbers are out on the Trump presidency. A Washington Post-Ipsos poll has Trump's approval rating at 45%, with 53% of Americans disapproving. 57% say the president has exceeded his authority since taking office. The Senate has narrowly confirmed Kash Patel to lead the FBI.

The yeas are 51. The nays are 49. The confirmation is confirmed. Senator Susan Collins of Maine and Lisa Murkowski of Alaska were the two Republicans to vote no in a split that otherwise fell along party lines. Votella's vowed to steer the MPI toward its traditional crime-fighting role. Critics are concerned they'll use the role to seek political retribution.

On his 83rd birthday, GOP Senator Mitch McConnell of Kentucky, the former majority leader, confirmed he'll not seek re-election. "Representing our Commonwealth has been the honor of a lifetime." McConnell was the longest serving Senate party leader in American history when he relinquished his leadership post at the start of the year. His traditional brand of conservatism was overtaken by Donald Trump's populism.

Elon Musk recommends taking the International Space Station out of orbit. He wants to do it within two years instead of the current five-year target. Musk argues on social media that the ISS has served its purpose. Dozens of major news organizations, including some conservative outlets, are urging the Trump administration to stop.

blocking the Associated Press from press events. The White House has said it's blocking reporters from the news service because the outlet refers to the Gulf of Mexico in its articles rather than the Gulf of America, as decreed by President Trump. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm John Tucker and this is Bloomberg, Karen. All right, John, 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. This show is sponsored by BetterHelp. BetterHelp has been revolutionary in connecting people to mental health services. Using BetterHelp can be as easy as opening your laptop or your phone and clicking a button, and the session begins.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's Dan Schwartzman. Dan, good morning. Good morning, Karen and Nathan. If you stayed up late, you saw Canada take home the win in overtime, knocking off the U.S. in the final of the Four Nations face-off tournament in Boston as Oilers star Connor McDavid wins it for Canada. Connor McDavid wins it for Canada!

That's courtesy of ESPN. The game was a seesaw battle through the first two periods. Canada taking an early 1-0 lead before the U.S. tied it up late in that first period to send the game into the first intermission tied at 1. The U.S. then taking the lead seven minutes into the second period before Canada scored seven minutes later to tie the game up at 2. After no goals were scored in the third period, McDavid winning it in thrilling fashion. McDavid afterwards talking about the significance of the win. Obviously it means a lot to our group. Um...

You know, I think a lot of people were wondering if, you know, what this tournament would mean to guys. And obviously you can see what it means to everyone on our side. It was really exciting. That's Connor McDavid. After 35 years, Major League Baseball and ESPN are ending their broadcast relationship at the end of the 2025 season. ESPN had scaled down its baseball coverage in the last contract to just 30 games this year, as well as the wildcard round of the playoffs and the All-Star Home Run Derby in 10 preseason games.

The San Antonio Spurs have shut down big man Victor Wemba Nyama for the rest of the season due to deep vein thrombosis in his right shoulder. The team is optimistic that the 21-year-old will make a full recovery in time for next year. Seven-time first-team All-Pro guard Zach Martin of the Dallas Cowboys announcing his retirement from the game. The nine-time Pro Bowler only accumulated seven accepted holding penalties in his entire career. That's your Bloomberg Sports Update. I'm Dan Schwartzman, Karen and 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. Israel is expressing outrage after Hamas returned the bodies of four hostages taken in the October 7th attack. Prime Minister Benjamin Netanyahu is leading the national mourning. Today, every home in Israel bows its head.

We bow our heads over the heavy loss of four of our hostages. We all feel pain mixed with rage. We are all outraged at the Hamas monsters. Prime Minister Netanyahu spoke there through an interpreter. Now Israel is saying one of those victims, Hamas says it returned yesterday, 33-year-old mother Shiri Bibas was

was not actually her, and Netanyahu is calling that a cruel and malicious violation of the ceasefire. Joining us now from Tel Aviv is Bloomberg News Israel Bureau Chief Ethan Bronner. And Ethan, I know that Shiri Bebos and her two little boys have become almost a national symbol in Israel. To find out that the little boys were returned but their mother was not, it is really difficult to imagine what the feeling is in Israel right now. Good morning.

Good morning, Nathan. You're right. There's something else worth insisting on right up front, too. It's not just that the little boys were returned, but that they actually had been murdered in captivity based on forensics. That's what the Israelis have discovered, as did the 83-year-old Oded Lifshitz. So we were in this rather ghoulish ceremony yesterday when they returned the four in coffins with big,

posters insisting that they had all been murdered by Israeli warplanes in an attack, and they were now kindly returning them. It turned out that they're not returning all of them. The mother is not there. And the other three were killed by them in captivity. So it's a very, very angry Israel today. You're absolutely right.

So what does this mean going forward? We're in the later stages of a first phase of a ceasefire. President Trump has talked about letting all hell break out if all the hostages aren't returned soon. It must feel like things are on a real precipice here.

They do. They do. There is, in theory, well, we have, so tomorrow, Saturday, there are due six more living hostages are due out in exchange for several hundred Palestinian prisoners will be released. That seems likely to go forward.

I think the Israelis are going to make an effort to get a few more living hostages out. But I think you're right that the likelihood of there being an actual permanent ceasefire is very low at the moment. In theory, these negotiations are starting next week. In terms of the negotiations, where do they stand right now? And what is the Israeli military doing? Are they preparing to go back into Gaza?

They are. They've moved troops near the border, and they've also started fairly intense activities in the northern part of the West Bank, because there were also bus bombs that went off that didn't kill anyone, but just by luck, south of Tel Aviv in the towns of Bat Yam and Falun. And so there is a general sense, I would say,

in the Israeli government that it's very important that they take a very tough line against all Palestinian militantism. Now, at the same time, we have in the Arab world a desire to try to come up with a plan to rebuild Gaza and preserve the possibility of a Palestinian state. So I think there's very strong...

conflict underway because Israel does not want to see a Palestinian state. And I don't know where the Trump administration will come out on that. But it's a little hard to imagine that the two very distinct goals, Israel's desire to end any Palestinian sovereignty and the rest of the region's desire to preserve it, is going to end well.

It's difficult to imagine there being much support on the U.S. side for the possibility of a Palestinian state when President Trump has talked about the U.S. taking over Gaza and redeveloping it. Is that something that's still under consideration? Where does that factor in when it comes to what's been going on with the hostage exchanges? We've only got about a minute left.

Sure. So, I mean, I don't know. I think there's always a great mystery around what the Trump administration wants to do and the gap between what it says and what it says the next day. So I don't know. It doesn't feel like the Trump administration is particularly interested in the Palestinian state. On the other hand,

The Saudis don't want to move forward with the normalization unless there is a Palestinian state on the horizon. And that normalization does seem important to the Americans. And so that's why there's still some lack of clarity about where we're headed. But I would agree with you if I had to bet.

They probably side with the Israeli government against a Palestinian state. 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.

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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. Some people like A and others like B. At BMW, we prefer X. Like the dynamic X3 meant for ultimate exploration.

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