US Eyes China Tariff Cut; Trump's Plan to Tax Millionaires
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Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Lisa Mateo. Lisa, we begin with the latest on trade. We are just a day away from a key meeting between the U.S. and China. The talks will take place in Geneva, led by Treasury Secretary Scott Besant and Chinese Vice Premier He Li-Fang. We get more from Bloomberg News Senior Editor Derek Walbank.

I think the magic word is de-escalation. That's what Scott Bettson said that the US negotiators are going to try and come away with was a de-escalation that could potentially set the frame for future trade talks. And so that's really where I'm sort of watching right now. I'm not looking for this to come out of Switzerland on the high side scenario with a full comprehensive deal or the outlines of what could be one. But what you're looking for is a possibility of seeing concrete steps

to kind of take down the temperature and the relationship. Bloomberg's Derek Walbank says one of those steps the Trump administration is considering is a significant tariff reduction to ease economic pain and de-escalate tensions. We're told the U.S. aims to reduce tariffs below 60 percent as a first step.

And Nathan, that China talk's come after President Trump announced the first framework of a deal in his global trade war with the UK. The final details are being written up in the coming weeks. We'll have it all very conclusive. But the actual deal is a very conclusive one. We think...

Just about everything's been approved. President Trump's agreement gives the U.S. increased market access, while the U.K. will see limited relief on auto steel and aluminum tariffs. A baseline 10 percent tariff rate will stay in effect. John Alte is a former director general for trade policy at the U.K. Department for International Trade. He says the deal falls short of a full and comprehensive trade agreement. It's quite limited in its scope, and obviously both sides are saying that it should be the

start of a wider negotiation. So we look forward to seeing that. John Alte now a senior advisor at Pagefield says full trade negotiations typically take years to complete. Well, Lisa, one U.S. company may be starting to see the benefits of the U.S.-U.K. trade framework. Bloomberg's John Tucker joins us with that. Which company, John? Boeing has an order from IAG. This is the parent of British Airways, Nathan, for 32 Boeing 787-10 aircraft.

And there's also an option to top up the deal with as many as 10 additional Boeing 787s. So this provides a much needed shot of confidence to the embattled plane maker. IAG is Boeing's largest customer in the UK. Now, Boeing is the largest US exporter of manufactured goods. It has been a target for countries stung by the wide ranging tariffs rolled out by the Trump administration. China, one of the world's largest aircraft makers, that has stopped taking deliveries

And the European Union has proposed tariffs on American-made jets if its own talks with the U.S. sputter. A share is a Boeing gut and over 3% boost in Thursday's trading. In New York, I'm John Tucker, Bloomberg Radio. Thank you, John. It was a historic moment at the Vatican.

For the first time, an American is the leader of the world's 1.4 billion Roman Catholics. This morning, the former Cardinal Robert Francis Provost is celebrating his first Mass as Pope Leo XIV. He set the tone in his first words to the faithful at St. Peter's Square. We have to be a church that

that works together to build bridges and to keep our arms open, like this very piazza welcoming. Pope Leo speaking there through an interpreter. We get more from Bloomberg Italy bureau chief Chiara Albanese. He has shown to already say and speak his mind very loudly in the past. He said publicly that Vice President Vance was wrong.

about his assessment of the Catholic love. So we should expect that bridges will be built on some issues, but also bridges will be tested on some others. And that was Bloomberg's Chiara Albanese reporting from Rome. Lisa, tensions continue to escalate between India and Pakistan. Soldiers exchanged heavy volleys of shelling and gunfire across their frontier in Kashmir overnight, killing at least five civilians.

The nuclear-armed rivals have seen tensions soar since an attack on a popular tourist site in Indian-controlled Kashmir left 26 civilians dead last month. New Delhi has blamed Pakistan for backing the attack, an accusation Islamabad rejects.

And Nathan, back here in the U.S., President Trump is looking for a tax hike on millionaires. Bloomberg's Amy Morris has more from Washington. President Trump is pushing lawmakers to increase tax rates on some of the wealthiest Americans. Sources tell Bloomberg the president's proposal calls for creating a 39.6% tax bracket

for anyone earning at least $2.5 million or couples making $5 million. Commerce Secretary Howard Lutnick tells Balance of Power this will help pay for the president's proposed tax cut. Remember, he cut it from 39.6 to 37. So if he just goes back to what he did last time...

You know, I'm in favor of that. I think it's smart as long as it's a redistribution. Lawmakers are expected to take up the tax package next week. In Washington, Amy Morris, Bloomberg Radio. Amy, thanks. Let's turn to corporate news now. Bloomberg News has learned that UBS is telling bankers to stop flying business class on short trips to China. The move comes as dealmaking and capital markets activity in China has slowed significantly amid escalating U.S. trade tensions. And we're starting to see a lot of

See the impact tariffs are having on global travel. Expedia posted weaker than expected gross bookings for the first three months of the year. The travel company's CEO cited weaker than expected demand to and from the U.S. The stock is down more than 9% in early trading. And Lisa, the city that never sleeps is...

Looking a bit sleepier, at least when it comes to international tourism. Bloomberg's Tom Busby has more. New York City officials slashing their forecast for the number of visitors coming to the Big Apple from outside the U.S. by 17 percent in 2025. And they're blaming President Trump's tariffs.

and hardline policies on immigration. City officials predict 12.1 million foreign travelers will visit this year. That's down from a forecast for 14.6 million just six months ago. The biggest hit will likely come from our neighbors to the north. United Airlines has visits to New York City from Canada by air. We're down 7% in just the first four months of this year compared to a year ago. Tom Busby, Bloomberg Radio.

And it's time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. The Trump administration announced a plan to overhaul the air traffic control system after deadly plane crashes and technical failures at airports, including at Newark. Transportation Secretary Sean Duffy says it's time to fix the system. This is going to allow us to better manage the airspace, to allow the airlines to better manage their flights. So when you take off...

You actually fly and you land. You don't circle airports. President Trump joined Duffy on the phone for the announcement. The ancient infrastructure is buckling under the weight of more than a billion flying passengers a year and supporting hundreds of billions of dollars. How much it will all cost wasn't immediately revealed. Congress must sign off on the upgrades.

President Trump called for a 30-day ceasefire between Russia and Ukraine to pave the way for talks on a lasting peace agreement and threatened to impose further sanctions if a truce is violated. President Trump's comments contradicted his vice president, J.D. Vance, who said the U.S. has to focus on a long-term settlement.

A former model has testified that Harvey Weinstein sexually assaulted her when she was 16 years old, calling it the most horrifying thing I ever experienced to that point.

Kaya Sokola told jurors at Weinstein's retrial graphic details about her encounter with the one-time movie mogul at a Manhattan apartment in 2002. Weinstein is not charged with any crime in connection with the alleged assault. Sokola is testifying because Weinstein is charged with forcing oral sex on her at a Manhattan hotel four years later. Weinstein has pleaded not guilty to all of the charges and denies sexually assaulting anyone.

Former First Lady Barbara Bush is now on a postage stamp. It was unveiled at the White House Thursday. Daughter Doro Bush Cook called it a fitting tribute. Our family is immeasurably blessed to call Barbara Bush our mom.

Her legacy lives on, not only in history books, but in the hearts of everyone she touched. The first day of issue for the Barbara Bush postage stamp will be June 10th. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Lisa. Thank you, Michael.

It's time now for a Bloomberg Sports Update. For that, we bring in John Stashower. Hey, John. Thanks, Lisa. The Washington Capitals' top seeds in the NHL Eastern Conference look sluggish at a Game 1 overtime loss at home to Carolina better in Game 2. Caps beat the Canes 3-1, series tied at 1. Another comeback by Edmonton. The Oilers lost their first two playoff games. They've won six in a row since, have trailed in all six, though they then led at Vegas 4-2. Third period of the game went to overtime. Here

Here's McDavid. Working past Eichel. McDavid. Oh, dry sidle. McDavid and dry sidle come by Edmonton. Wins it in overtime.

On ESPN, the two stars hook up. Oilers beating the Golden Knights 5-4 lead the series 2-0. NBA playoffs, Minnesota beat Golden State 117-93. That's series 1-1. Indiana is up 2-0. Home tonight for Cleveland, who is apparently getting its three injured players back for a must-win game three. Darius Garland, Eric Mobley, and DeAndre Hunter all missed game two. The Knicks, shockingly up 2-0. They have game three with the Celtics tomorrow afternoon at the Garden, where the Knicks have lost their last two, but on the road.

Five and 0. Five wins by a total of only 10 points. Tom Thibodeau's team keeps pulling games out. Always have the belief, I think, in each other. You know, I think you get to the playoffs. It's about really your mental toughness, your defense, and your teamwork. And always having the belief that

You can do something better and you can find a way to win. Celtics star Jason Tatum admitted yesterday he needs to play better. Yankees tonight in a place they've never been before. Sacramento to play the A's. Much improved. Second place in the AL West. NL division leaders meet at Citi Field. Mets take on the Cubs.

Pirates are 12-26. They fired manager Derek Shelton. Chet Lemon, who played center field for 16 seasons, has died at 70. A three-time All-Star, a part of the 1984 championship team in Detroit. John Staschauer, Bloomberg Sports, Lisa 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. After announcing a framework trade deal with the United Kingdom, President Trump says he's looking for more. We have many...

Meetings planned today and tomorrow, and every country wants to be making deals. Perhaps the biggest meetings of all begin tomorrow when Treasury Secretary Scott Besant and the U.S. Trade Representative sit down with officials from China for the first trade talk since both countries slapped triple-digit tariffs on each other. For more, ahead of the talks in Geneva, we're joined by Bloomberg News Senior Editor Bill Ferrys. Bill, this really is the big one, isn't it? Good morning.

Good morning, Nathan. Thanks for having me. It really is. We were wondering for weeks when either side might show a little bit of flexibility here. The U.S. with its 145% tariffs on China and China with its 125% tariffs on the U.S.,

Both sides have made some exceptions to those, but the reality is a lot of bilateral trade has been slowing down or stopping completely. And both sides are feeling the pain economically. So there's going to be a lot of interest in how these talks progress, what really might come out of them. I think the most important thing is that they're happening.

I don't think there's a lot of expectations of a big breakthrough trade deal, but there is talk on the U.S. side. We've done some reporting on this that the Trump administration would love to see find an agreement where they could come out with tariffs cut a little bit more than in half. So down in the perhaps under 60 percent range.

which would be a breakthrough if China follows through with it. So that's, I think, what the markets will be trying to look for, as well as signs that the talks will continue after this weekend's meetings in Switzerland. A breakthrough like that would be pretty significant, given the fact that we've heard from President Trump telling reporters that he wouldn't lower tariff rates to jumpstart talks. Does our reporting contradict that or something else?

Well, the president's, you know, the comments have been kind of all over the place. He has said that he's not willing to back down. Our reporting shows that there are at least officials on the Trump administration side looking to try to get tariffs potentially below 60 percent as a first step.

that China would presumably try to follow up on and match. So the Chinese side as well has basically said that they want to see the U.S. rescind what it considers to be these unwarranted tariffs before it takes any steps at all. But I think the reality is both sides are going to be trying to show perhaps a little bit of flexibility coming out of these talks.

Does the announcement of the framework deal with the UK yesterday, Bill, provide a springboard for the U.S. heading into these talks? How could what we saw from the UK yesterday play into what comes this weekend in Geneva?

Well, I think what it does do is show that despite, I think, a lot of marketing by the White House, these are really framework deals. They are not full, complete trade agreements in any sort of normal sense. What we see with the U.K. is that there was some agreement on market access for a few goods from the U.S., including some agricultural goods. There was a reduction in tariffs for imports.

US imports of British automobiles. But a lot of the big questions were left hanging. Those are going to take months, if not longer, to deal with. That includes the digital services tax from the UK. That includes food regulations that the US has wanted the UK to ease up on. The really tough details are yet to be worked out. I would expect the same from anything that comes out of these talks in China. There might be some sort of broad agreement,

But they're not going to get into the nitty gritty that might take potentially years. Does that hint at more nitty gritty to come for some of the other trade negotiations that we're hearing are happening from the likes of South Korea and Japan? Got about a minute left. Yeah.

Yeah, absolutely. I mean, we heard Commerce Secretary Howard Lutnick saying that they're very far away from announcing a big deal with countries like Japan or India. Those are countries that had been much higher on the list earlier. The reality is, you know, the president put a 90-day reprieve on those reciprocal tariffs that he announced on April 2nd. We are almost halfway through that 90-day period. This U.K. framework agreement is the first

sign of light in the tunnel that we've seen. But if you're talking about striking deals with dozens or more countries, it's going to take quite a while. 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 Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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