Trump Tariffs: Everything You Need to Know
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, the global sell-off follows the announcement that Wall Street and the world had been waiting for four weeks. President Trump is raising tariffs around the world on a day he has dubbed Liberation Day for America. April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed.

and the day that we began to make America wealthy again. In remarks from the White House, Rose Garden heard here on Bloomberg, the president announced at least a 10% tariff on all exporters to the U.S. About 60 nations will see even higher duties. The biggest target of all is China. The president says Beijing charges the U.S. an effective 67% rate.

So 67 percent. So we're going to be charging a discounted reciprocal tariff of 34 percent. I think in other words, they charge us, we charge them, we charge them less. So how can anybody be upset? President Trump is also slapping higher duties on the European Union, Japan, Vietnam and more. Altogether, Bloomberg Economics estimates the effective tax rate on more than three trillion dollars in imported goods could rise to about 23 percent. That is the highest in more than a century.

Well, Nathan, President Trump's tariffs have drawn a sharp reaction on Capitol Hill. House Minority Leader Hakeem Jeffries spoke out even before the president's announcement. This is not Liberation Day. It's Recession Day.

in the United States of America. That's what the Trump tariffs are going to do, crash the economy. House Minority Leader Hakeem Jeffries, Republicans are mostly standing behind the president. Ashley Davis is a GOP strategist and partner at S3 Group. He's ran on this for the last four years, really, is that he needs to make sure that the other countries are paying what they deserve.

Republican strategist Ashley Davis. But not every Republican is on board. Kentucky Senator Rand Paul says tariffs are just another tax on Americans. Republicans used to be, and conservatives in particular, used to be against new taxes. I don't think it's going to be good for us politically, but it's not good for the country either.

Senator Rand Paul and three other Republicans joined with Democrats on a bill opposing President Trump's tariffs on Canada. The bill is not likely to pass in the House. Well, Karen, President Trump's historic action risks inducing a worldwide trade war marked by tit-for-tat strikes. We spoke with Treasury Secretary Scott Besant, who urged other countries not to fight back.

I would advise none of the countries to panic. I wouldn't try to retaliate because as long as you don't retaliate, this is the high end of the number. And I think the market could have certainty that

This is the number barring retaliation. Treasury Secretary Scott Besson went on to leave the door open to negotiations, telling Bloomberg, quote, we'll see with regard to further talks. You can hear the full interview with Scott Besson on the Bloomberg Talks podcast and watch it on the Bloomberg podcast page on YouTube.

So, Nathan, let's get the reaction from other countries around the world. Our first stop brings us to Asia, where China has been the biggest target of Trump tariffs. And Bloomberg's Jill Desis joins us from Hong Kong with more. Jill. Yes. Well, I think it's a lot to really digest here out of Asia. On the one hand, you do see those really high tariffs on China, this 34 percent increase that Trump is now putting on China. If you were to take that in totality without

all of the other levies that Trump has put on China, that the U.S. has put on China over the last several months, years. You're looking at somewhere in the neighborhood of the average U.S. tariff on Chinese goods being at least 65 percent, according to some economists. Bloomberg Economics estimates that as a result, that could lead to a one to two percentage point loss to growth

in China. So certainly a big metric there that you're really looking at. Of course, we haven't really heard from China yet what their definitive actions will be to counter these tariffs. The Ministry of Foreign Affairs has said that there are going to be measures coming. We're just waiting to see them. But I would draw your attention, Karen, to elsewhere in Asia where you're also seeing incredibly high rates and

likely even higher economic shocks. Vietnam, for example, they were hit with a 46% tariff in this latest round. I mean, this is a country that is incredibly export dependent. They're among the world's most trade dependent nations. Their exports are equivalent to nearly 90% of economic output. I think that's why you're seeing such a big market reaction in that particular country today. So it's just a

a couple of examples there, but obviously all across Asia, we're seeing a lot of different economic shocks just as nations respond to these tariffs that have just been announced.

Bloomberg's Jill Desis with the reaction from Hong Kong. Jill, thank you. Now let's head to Europe, get the reaction there. Bloomberg Daybreak Europe anchor Caroline Hepker is in London with the latest. Good morning, Caroline. Good morning, Nathan and Karen. President Trump called the EU pathetic again and that the bloc rips off the US as he imposed 20% tariffs on EU goods exported to America. The EU argues that America exports plenty

of its services to the bloc and that it is the biggest single market in the world. Now, EU trade ministers are due to meet on Monday to discuss their response. Meanwhile, in the early hours this morning, Commission President Ursula von der Leyen warned that US actions would deal a blow to the global economy and she urged further negotiations.

We have always been ready to negotiate with the United States to remove the remaining barriers to transatlantic trade. At the same time, we are prepared to respond. We are already finalizing the first package of countermeasures in response to tariffs on steel. And we're now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.

Ursula von der Leyen speaking there. The tariffs could wipe out the growth forecast by the ECB for this year and in 2026. Markets now see another rate cut in April as likely. Bloomberg Economics sees the tariffs cutting EU goods exports to the US by half in the medium term. By comparison, here in the UK, we were dealt with problems.

A bit more leniently, a 10% tariff. Some, including business lobbies, see it as a benefit from Prime Minister Keir Starmer's pragmatic approach to the White House. The UK Trade Secretary, Jonathan Reynolds, has told Bloomberg just this morning that Britain is still confident that tariffs will come off.

And yet the U.S. is inflicting pain on some of its closest allies, all told it's more than just an economic shock. All right, Caroline, thank you. Well, early Trump targets Canada and Mexico escaped the new round of tariff announcements. We spoke with Ontario Premier Doug Ford. I would highly recommend to the prime minister not to retaliate.

And let's carry on a strong relationship. Let's build the AMCAN fortress, American Canadian fortress, around both countries and be the wealthiest, most prosperous, safest two countries in the world.

Ontario Premier Doug Ford speaking with Bloomberg's balance of power. While no new tariffs were announced, other levies Trump has already imposed on Canadian and Mexican goods remain intact. And Karen, while stocks are selling off around the world, the U.S. has been the hardest hit so far. Let's continue our coverage now with Bloomberg's John Tucker. John. All right, Nathan, let's do the biggest losers in the U.S. These are the companies most exposed and that source a lot of their products from Asia, such as Apple.

and some of its magnificent seven cohorts of the new tariffs will reach 34% for China. Apple still produces the majority of its U.S.-sold devices in Chinese factories. India, where Apple's increasingly building iPhones and AirPods,

That's getting a 26% tariff. And then there's Vietnam, where the company now makes AirPods, iPads, Apple Watches, and Macs. That'll be hit with a 46% tax. Now, Apple shares this morning in the pre-market down close to 7%. Then there's Nvidia. Nvidia, the most actively traded pre-market. It relies on China for AI chip sales. Those shares right now down 3.3%.

Let's move on to the world's largest footwear and apparel companies, also facing a shock to their supply chains. Nike makes many of its sneakers in Vietnam, and Nike shares pre-market. They are down 8.4%. Lululemon Athletica, which makes 40% of its products in Vietnam and 17% in Cambodia, tumbled almost 10% in late trading.

Shares of Abercrombie & Fitch, they get 35% of their merchandise from Vietnam, a fell 7.7%. And then Gap, which buys 27% of its goods from Vietnamese factories and 19% from Indonesia, that slid about 11%. In New York, I'm John Tucker, Bloomberg Radio.

All right, John, thank you. Well, shortly after midnight, U.S. auto import tariffs went into effect. Meanwhile, one industry was spared for now. And Bloomberg's Lisa Mateo joins us with the very latest. Lisa. Hey there, Karen. So let's start with the most recent change, the 25 percent tariff on U.S. auto imports. Now,

It's expected to increase costs and disrupt industry supply chains. But what's more, certain auto parts will also be hit with a similar level no later than May 3rd. And this morning, you already have Volkswagen already announcing it plans to add import fees to the sticker prices of its vehicles that are shipped into the U.S.

Now, Volkswagen shares down about half a percent in Germany. You have Ford off about half a percent. General Motors down 1%. Tesla is lower by 3%. Chrysler parents Stellantis. It was down nearly 2% yesterday. This morning, it's up about three-tenths of a percent before the bell. The only good news is that imported cars and parts, well, they escaped the so-called reciprocal tariffs. And speaking of being spared, you have the pharmaceutical sector. It won this reprieve from sweeping tariffs, but

But here's the thing. It may not last long. Sources saying the White House plans to launch an investigation into the drug industry, other sectors, and that includes semiconductors and potentially critical minerals. And that could lead to tariffs under the Trade Expansion Act. Now, if we take a look at shares of Pfizer, they're down about two-tenths of a percent. Eli Lilly off about two percent.

Lisa Mateo, Bloomberg Radio. Lisa, thank you. All in all, it is an aggressive suite of tariffs from President Trump, and it will significantly complicate the Federal Reserve's job as it struggles to quash inflation and avoid an economic downturn. This morning, Morgan Stanley pushed back its call for the next Fed rate cut.

To next year, the firm's analysts cite inflation risks arising from tariffs. Fed Governor Adriana Kugler says it's appropriate to keep interest rates unchanged until upside risks to inflation abate.

I will support maintaining the current policy rate for as long as this upside race to inflation continues while economic activity and employment remain stable. That was Fed Governor Adriana Kugler. The Fed's next meeting, May 7th. When your company has a position to fill, are you really seeing the best professional candidates?

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Good morning. I'm Karen Moscow alongside Nathan Hager, and we continue our coverage on tariffs with a conversation with U.S. Treasury Secretary Scott Besant. He spoke with Bloomberg Television's Anne-Marie Hordern shortly after the tariffs were announced, urging other economies against taking retaliatory steps against the new set of America's retaliatory tariffs. Let's listen in.

What I would say, Anne-Marie, is I would advise none of the countries to panic. I wouldn't try to retaliate because as long as you don't retaliate, this is the high end of the number. And I think the market could have certainty that this is the number barring retaliation. So we've got a ceiling.

And then we can see if there's a different floor. So you sound like you're ready for negotiation with a number of these partners. Has the European Union, has China, has India, have these countries reached out? Well, they've all reached out, but it's going to be up to President Trump to see what he wants to do. I think the mindset might be to let things settle for a while.

their tariffs or non-tariff barriers have been on a long time. So we'll see where it goes from here. When it comes to China, they have a much higher rate on this list. On top of that, there's still that 20 percent fentanyl tariff rate. Is all of this coming together to be more than a 50 percent tariff rate for Beijing? Well, yes, I think it is. And I think it's a combination of things. And again, that

I think China said today that solving the fentanyl crisis depends on taking off the fentanyl tariffs. And I'm pretty sure that's not the way the sequencing is going to work. They're exporting the precursor chemicals. And every day, every week, every month, Americans are dying and it's going to have to stop. When it comes to places like China, the president has mentioned he's willing to even look at things like TikTok to potentially do a negotiation with them when it comes to

tariffs. I'm sure you're looking at things like the yuan. What's on the table when it comes to this trade realignment between Beijing and Washington? Well, we haven't started anything yet. We've been busy with the tariffs. I've been busy, as we talked about earlier. The tax bill is going very well. So I think that we will

the move toward the bilateral relationship with China now that we've done the multilateral tariffs. Plans for conversations or a trip to Beijing? Nothing imminent.

When it comes to this negotiation, April 9th, these tariffs come in place. Do you plan on having negotiations before that date? Again, I'm not part of the negotiations. So, you know, we'll see. I am sure that there are going to be a lot of calls. I just don't know if they're going to be negotiations.

And that was U.S. Treasury Secretary Scott Besson speaking with Bloomberg TV's Anne-Marie Hordern after President Trump's tariff announcement. You can hear the full interview on the Bloomberg Talks podcast page and watch it on the Bloomberg podcast page on YouTube. Nathan. Karen, we continue our coverage of these tariffs. We are joined now by Bloomberg News Global Trade Czar Brendan Murray.

and Terry Haynes, the founder of Pangea Policy, for a roundtable this morning after the announcement. Great to speak with both of you. And I'll start with you, Brendan, because even as Treasury Secretary Scott Bessett is framing this as a negotiation, this seems like a really huge start to what could be coming. Good morning.

Yeah, exactly. He said, you know, let's let this, paraphrasing, he said, let's let this settle in for a while. So, you know, that doesn't seem like, you know, a window for negotiating over the next four or five days. So these tariffs are going to take effect by early next week. And countries are going to be scrambling to figure out, do we want to retaliate?

ratchet up the pressure? Or do we want to take a more negotiating posture and try to work this out? Either way, markets don't like it, and economists are marking down their outlook for growth and marking up their outlook for inflation. And the aftermath of it here, even though President Trump said this is simple, reciprocity is about as simple as it gets, this still creates a lot of confusion.

Terry, how does a negotiation go when the president is starting with this onslaught? Good morning, Nathan. The negotiations in a lot of ways have already started. My understanding in a lot of places is that Secretary of Commerce's Lutnick's team had already been giving wish lists, both tariffs and barriers to different countries who were already kind of

parsing that and uh... and trying to figure out how they might respond to it uh... and a lot of countries and major countries both allies and not aligned are going to have to work with frankly work through with their own industries there whether it be agriculture or uh... or machine industries

to figure out exactly what they want to do and how they want to do it. So, you know, I think it's correct to say this is not going to magically disappear or be mitigated in the next few days. But all countries have had an advance warning of what the United States might want and what kind of the parameters for negotiations will be. So, you know, number one, there's that.

Number two, you've seen encouraging responses by a lot of countries. I was encouraged. I mean, Canada, of course, got singled out for special treatment. But you had Premier Ford on your air last night, and he was urging Carney not to retaliate at all. So, you know, you'll have a lot of those kind of responses.

Notwithstanding Canada and Mexico being spared at least this round, Brendan, just about every other country in the world, even some very, very small ones, are being targeted in this long list that President Trump showed at the Rose Garden last night. What could the potential impact be for this kind of country-by-country tariff announcement?

Well, one of the hardest hit regions was South Asia, countries like Vietnam, Malaysia, Cambodia. These are places where a lot of the sort of lower skilled manufacturing has migrated from China over the past several years. And, you know, those are places where, you know, clothes stores

clothes and shoes are made. And so, there are stories that we're reporting today about how Nike tennis shoes and those kinds of things that are made in South Asia are going to be more expensive. The other issue is electronics. Apple is starting to produce a lot more of their phones in India. India got hit with a tariff in the 25% range, I think. And so, if these can't

be resolved by negotiation anytime soon, then consumer prices could conceivably go up. Interestingly, Switzerland was singled out, got a bigger tariff level than the European Union around it. So, Rolex watches come next week are going to be about 31% more expensive than they otherwise would be.

Terry, we haven't heard much Republican reaction on Capitol Hill besides the four Republicans who voted with Democrats against Canada tariffs. What do you think the Republican reaction is going to be as these tariffs take effect?

I think there will be two things that happen, David. One above board, one below board. The above board will be that there will be some concerns from Republicans based on the situation in their own states about making sure that they push Trump to...

that resolve these issues lower tariffs uh... you know engage in the negotiations do whatever they can and frankly you know work with the other said the other country as well uh... that's number one number two i think the uh... did another impact here is that it lights

an additional hot foot under the administration's broader economic agenda. And you can hear this from a lot of senators. You can also hear it from Secretary Besson, who continues to push the idea that the tax cuts may show up

as soon as July or August or September, something like that. Now, I've got it at 80 percent by the end of the calendar year. But there's a there's an opportunity, should everyone wish on the Republican side to move these things along faster. And and Besson will also be focusing on that. He has said that he's going to spend a lot of time pushing exactly that

agenda. Think of Besant broadly as in 2025 as Gary Cohn was in 2017. The guy who's constantly up there goosing things along, trying to make it go as fast as he can.

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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