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Daybreak Weekend: US Jobs, ECB Decision, Vietnam Eco

2025/5/30
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Bloomberg Daybreak: US Edition

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Caroline Hepker
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David Powell
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Doug Krisner
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Karen Ward
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Katya Dmitrieva
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Stuart Paul
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Tom Busby:特朗普政府的关税政策、企业盈利下降等因素是否导致美国劳动力市场出现裂缝? Stuart Paul: 我认为我们才刚刚开始看到实质性的裂缝,并且我们开始看到那些微小的裂缝开始扩大。下周我们将获得的第一个劳动力市场数据是4月份的职位空缺数量,我认为职位空缺数量有所下降,尽管幅度不大,仅下降了约6万个。职位空缺数量的下降,将导致失业工人数量首次超过疫情以来的职位空缺数量,这对美联储来说是一个重要的信号,表明劳动力市场存在实际的松弛。我们预计5月份新增就业岗位仅为9万个,这是一个非常显著的放缓,而且这个速度无法跟上劳动力或人口的增长,因此我们预计失业率会上升。休闲和酒店业新增就业人数相对较少,部分原因是由于来自国外的旅行减少,这与西翼的政策有关,可能是由于贸易伙伴的报复以及旅客取消春季和初夏的旅行计划。更重要的是持续申请失业救济金人数的稳步上升,因为正在寻找新工作的工人发现更难获得工作机会,部分原因是企业在经济政策不确定时期对增加员工人数仍然持谨慎态度。如果企业盈利减少,它们就不会雇佣更多的人,盈利减少会导致扩张计划放缓,从而导致劳动力市场裂缝扩大。关键在于裁员是通过大规模裁员还是通过自然减员来实现,后者对增长的冲击较小。如果我们最终看到迅速的裁员,这可能足以让美联储恢复降息。 Tom Busby:长期失业问题是否严重? Stuart Paul: 长期失业确实是一个大问题,我们确实看到首次申请失业救济金的人数迅速增加。关键在于裁员是通过大规模裁员还是通过自然减员来实现,后者对增长的冲击较小。如果我们最终看到迅速的裁员,这可能足以让美联储恢复降息。目前,鉴于通胀前景,我们认为美联储将维持利率不变至第四季度,但由于劳动力市场降温,我们预计美联储将恢复降息。

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This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our daybreak anchors all around the world. And straight ahead on the program, the upcoming May jobs report in the U.S., how that could impact Fed policy moving forward. I'm Tom Busby in New York. I'm Caroline Hipka in London, where we're asking if the ECB can help Europe seize its golden opportunity. I'm Doug Krisner looking ahead to trade data this week from Vietnam.

That's all straight ahead on Bloomberg Daybreak Weekend. On Bloomberg 1130 New York, Bloomberg 99.1 Washington, D.C., Bloomberg 92.9 Boston, DAB Digital Radio London, Sirius XM 121, and around the world on BloombergRadio.com and the Bloomberg Business App.

Good day to you. I'm Tom Busby, and we begin today's program with a look ahead to the May jobs report. Non-farm payroll numbers for May out on Friday, 8.30 a.m. Wall Street time. Now, for more on how those numbers may impact the Fed policy moving forward and the state of the U.S. labor market and the economy, we're joined by Stuart Paul, U.S. economist with Bloomberg Economics. Stuart, thank you for being here again. Now, I'm sure you've all been

When you look at the impact of the Trump tariffs, the doge cuts, lower corporate profits, a shrinking U.S. economy, are we starting to see cracks in the labor market? It was robust for years.

I think we're just starting to see material cracks, and we're starting to see the cracks that have been just minuscule starting to widen. I think that the first labor market data print that we're going to get next week, or in the coming week, is going to be the number of job openings available in April.

And I think that the number of job openings declined, albeit modestly, just by about 60,000. But that's going to be enough for the number of workers available, the number of unemployed workers, to exceed the number of job openings for the first time since the pandemic. So that's the first sign, I think, that will really matter for the Fed,

that there is material slack in the labor market. And then as we get to the jobs report on Friday, I think we're going to see a materially slower pace of hiring. We're estimating just 90,000 jobs were added in May. That's a pretty dramatic slowdown from the 177,000 jobs added in April. And it's

such a slow pace that it does not keep up with labor force or population growth. So we're expecting to see an uptick in the unemployment rate. It's still going to be low at 4.3%, but moving in the wrong direction for the Fed. That is a big change. Under 100,000 ads is...

a lot fewer than we saw even a week ago, economists were predicting. What has changed in that time? The thing that we're seeing in the data when we look at high frequency data is that there were relatively few people added in the leisure and hospitality industry. And going back to your initial point, some of this is downstream from policy that's coming out of the West Wing. One of the reasons we think that there were fewer people

added in leisure and hospitality, food service and accommodation, for example, is because there's less travel from abroad. And part of that is retaliation from some of our trading partners and potential travelers who are canceling their trips in the spring and early summer travel season. Yeah. And not just Canadians, Europeans, South Americans, we're seeing it from all over. Big, big decrease in travel.

Alright, so now the latest data that we saw also on jobless claims. Are you seeing a pattern there? It held pretty steady for most of the president's second term, but I think now we're starting to see things creep up. And also long-term unemployed, that's a biggie. That's exactly right. For a long time, it was one of the easiest data prints to forecast, initial jobless claims, 220,000 a month, no big deal.

You wouldn't even have to look, wouldn't have to think very hard about what to expect. But we did see a pretty swift jump to 240,000.

in the previous week. I think the thing that's more important, however, is the steady rise in continuing claims as workers who are looking for new employment find it more difficult to get job offers. And I think that a part of that is that businesses remain pretty tentative about increasing headcount in a period of economic policy uncertainty. And one of the data points we got last week was corporate profits in this first quarter.

And if they're not making as much money, they're simply just not going to hire more people, are they? That's right. With less profits, you're going to see slower expansion plans. Slower expansion plans mean less hiring. And to your point, that's going to result in widening cracks in the labor market. And we've seen a couple of big layoffs announced. Microsoft, 6,500 workers, 3% of its workforce.

Match.com, I mean, these are very different kinds of companies. 13% of its staff, Intel, that's a biggie. 20% they're planning. Not all at once. It's going to be gradual. A lot of this is attrition. But you add it up, that's a lot of people who won't be getting paychecks.

That's right. I think that the name of the game, though, is whether this is going to be en masse layoffs or headcount reduction through attrition. The latter is, of course, going to be less shocking, less significant. It's going to result in a less material disruption to growth.

if we end up seeing swift layoffs, that could be enough for the Fed to resume rate cuts. Right now, given the outlook for inflation, we think that the Fed's going to remain on hold until the fourth quarter, but we do expect the Fed to resume cuts because of that cooling labor market. The May jobs report out this Friday ahead of Wall Street's opening bell. Our thanks to Stuart Paul, U.S. economist with Bloomberg Economics. We turn now to Apple, the $3 trillion tech giant that's facing some

unprecedented challenges, including being way behind rivals in AI, pressure from the White House about where it makes the iPhone, and seeing OpenAI team up with its legendary former design guru on a family of devices with AI at their core. How is Apple responding? What does this mean for Tim Cook? Well, for more, we're joined by Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech.

Mark, that was a blockbuster announcement, that move by ChatGPT, a maker, OpenAI, acquiring the AI device maker co-founded by Johnny Ive, the man who designed the iPhone, the iPad, the iPod, and other devices before.

What does Johnny Ive mean, him and his company, and what does this mean for Apple? It's pretty remarkable, isn't it? This is open AI betting that chat GPT and artificial intelligence and voice interaction are, again, the future of computing, and that now is the time to productize it.

An app is quite good, right? An online service, you know, that's meaningful. But having your own hardware, your own product that people could buy to leverage this technology is critical in order to take the next step. You know, I look at the current state of generative AI as pretty much similar to the touchscreen 20 years ago. If you really think about it, the iPhone, the iPad, smartphones and tablets from other manufacturers,

Those are basically productizations of a touchscreen, right? Now what OpenAI is working on with Johnny Ive is the productization of generative AI. My belief is that they're eventually going to roll out a necklace, right? A necklace with microphones, speakers, cameras, and other technology so you can go about your day and interact with chat GPT and other AI features. And so they think that's going to be the future. Voice activated.

Voice activated, always on AI companion that you wear around your neck or other parts of your body to interact with and use throughout your day. Now, they see it as secondary to a phone, right? You're still going to use a phone to watch video, still going to use a phone to play games, maybe still use a phone to make, well, phone calls, right?

But for getting a lot of other stuff done, whether that's asking questions, whether that's sending messages, whether that's booking a movie or doing a restaurant reservation or looking up

something throughout your day, you're going to do that with that pendant around your neck. And I think they see that as the future and the phone eventually transitioning into that type of product. And now they have taught, and by they, I mean, Sam Altman of OpenAI and Johnny Ive, a reference, a family of devices. So not just a necklace. Could they put out their own phone as well? I think they're going to start with the necklace.

And then at some point you're going to have a home companion device. So something that you would put on your desk.

to use alongside your iPad or your laptop or what have you, right? Something more ambient than that's just around your neck. Something that as you walk throughout your home, you would have access to. And eventually maybe there will be a pocketable device. Maybe there will be a product with a screen, but I think that's further off. And I doubt they've done any conceptualization on that to this point. So it's a game changer. It's not glasses. It's not a phone. This is a whole new category.

It's a whole new category, a whole new type of product. And this is their bet. I mean, that's what Johnny Ive is known for, right? New major product categories and having the right people, having the right design sensibilities for it. And so he's the perfect person. Well, he's probably the only person who could successfully, you know, other people have tried it, but they haven't been successful. But if you're betting on someone who could do this successfully, it is Ive. And what kind of timeline do you see for this device?

What they're telling me is they're going to introduce the product some point next year. I wouldn't anticipate given the economics of manufacturing, given the time it takes to produce these things, given the fit and finish that IVE is known for, given

basically where we're at with chad gpt and the quality you probably want another year in the oven to make sure it's up to snuff for a hardware product that people are going to pay you know hard cash for i wouldn't anticipate a release before 27 okay all right so we have we have some time until then let's talk about some of the other challenges facing apple like the 25 tariff threats from president trump on iphones sold in the u.s but made overseas i mean

If Trump is able to follow through, what does that mean for iPhone buyers and for Apple? Well, it's a big if that if this ends up happening, right? We've already seen the news of global organizations deeming the tariffs illegal. We

We know that Trump, Tim Cook and other CEOs of smartphone manufacturers are going to have conversations. We know that Trump in the past has shown a willingness or even a strong willingness to make concessions for certain executives and for certain companies. So let's assume that this does happen, because I'm not sure it will, but let's assume this does happen.

25% is a small price to pay for Apple when they were looking at north of 100% tariffs on the original setup related to the Chinese tariffs. But I don't think that threatening a 25% tariff is going to accomplish much for Trump. His goal is to force them via the threat of a tariff to move production to the US. First of all, the time it would take to move production to the US is a decade long. So it's not going to happen even in 2020.

the course of the rest of Trump's three years in office. Right? Right. So that's one. Two, 25% tariff, that cost increase, that's less than the cost increase or the

operational resources necessary that would be incurred for a move to the US. So the 25% doesn't accomplish what Trump wants. It's basically just a penalty on Apple for not being able to move to the US. And if he wants to do a penalty on Apple for not being able to move to the US,

That's up to him. That's his prerogative, right? Apple probably won't love it. The consumers are going to have to pay more, aren't going to love it. But he's going to do whatever he wants. But it's simply not going to accomplish the goal he has in place. Our thanks to Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech. Coming up on Bloomberg Daybreak Weekend, we'll look at whether the ECB can help Europe seize its golden opportunity. I'm Tom Busby, and this is Bloomberg. ♪

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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This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Up later in our program, we look ahead to trade data this week from Vietnam. But first, policymakers in Frankfurt choosing whether to cut, hike or maintain interest rates as the European Central Bank undergoes its quarterly economic review this week.

How will the Governing Council respond to the moving targets of inflation and macroeconomic circumstances? Well, for more, let's get to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepker. Tom, it's not really shaping up to be a relaxing European summer for Christine Lagarde and her colleagues at the European Central Bank. If a widely expected eighth successive 25 basis point rate cut is passed in the coming days, it will mean that the depreciation

deposit rate will have been cut in half over the past year to 2%. That's as factions of the ECB's governing council disagree on how low is too low when it comes to borrowing costs. And with growing pressure on EU-US trade negotiations to consider and uncertainty about US tariffs, ECB officials have a lot to consider. If they play their cards right, Europe could be well placed to take advantage of an opportunity

presented by the current geopolitical context. That's according to Karen Ward, who is EMEA Chief Market Strategist at JPMorgan Asset Management. The US has had the world's capital flowing to it for the last 15 years in abundance. It's been a huge part of why they've been able to grow, why their companies have been able to grow, why governments have been spending a lot more in the US than we have here in Europe. So they're

are big upsides to having that abundance of capital. A lot will depend on the US-EU tariff negotiations, which we'll talk about in a second. But is now the moment to be invested in European markets, or are there too many question marks?

I've been saying since we came into the year, we had a situation where the U.S. was believed to be exceptional and Donald Trump was going to further exacerbate that exceptionalism. Expectations on the U.S. were too high. Expectations on Europe were too low.

That was J.P. Morgan Asset Management's Karen Ward speaking to Bloomberg's Francine Lacroix. So how can Europe's central bankers prime the region to grasp hold of what could be a fleeting chance to access more of the world's capital? And how important a role will interest rates play in the equation? It's something I've been discussing with Bloomberg Economics' senior euro area economist,

David Powell. Well, if we look at what most of the members of the governing council have said recently, they all think that the impact of the US tariffs on the euro area is going to be disinflationary. So it's going to lower inflation pressures as cheaper goods come in from China and weaker demand weighs on the economy. So as a whole, they're pretty much all in favour of a cut. We don't have complete

agreement on that. We never knew. We've already heard from the ECB's most hawkish member, the governor of the Central Bank of Austria, that he's not in favour of a cut this month. But he's really an outlier. The majority of the people will go ahead and vote for that cut. And so we're also due to receive some Eurozone economic data in the next few days. How do you think that is going to affect decision making?

Well, really what the ECB is doing right now is it's kind of looking forward to what the impact of these tariffs will be. When we look at the latest economic data coming out of the euro area, in particular to the survey components that...

relate to exports, they're all holding up pretty well. And basically, what I think most people think is happening is that American businesses and consumers are front-running this 90-day pause. So, they're wanting to bring all these exports into America before that 90-day pause ends in July, and they potentially face higher tariffs. So, things look good now. The data is generally holding up. But the ECB is going to be more forward-looking and be thinking about, well, what happens

when this resilience comes to an end. That's going to be the focus of the discussion. I mean, there's even more uncertainty about the US tariffs than ever before now, given the recent US court decision.

But there remains that question for the central bank about whether it will end up having to step in at some point. Let's say if talks fall through or if at some point the tariffs from the US actually do hit Europe even more severely, about whether the central bank will then have a bigger role and have to step in.

Even if you put US tariffs aside, the central bank is in an environment where it can reduce borrowing costs. When you look at the latest data on cost pressure, it's all coming down in the euro area. In particular, the ECB's official time series on negotiated wages slowed very sharply in the first quarter. They also have an experimental wage tracker which shows

Wages remaining more subdued later in the year. So the inflation problem that the euro is facing over the past couple of years is really no longer a problem. So even the tariff issue aside, that's not a huge problem right now. They can cut. And then looking beyond that is the impact of the tariffs.

and that could determine more easing later in the year. But in all likelihood, they're going to want to see, given all the uncertainty, what actually happens. So they're probably not going to rush cut meeting after meeting. They'd probably do something more like moving at a quarterly pace to wait and see what actually comes out of the US, given all that uncertainty that you mentioned.

In terms of other things that may affect the Eurozone, again, as a kind of consequence of the tariffs, China and, you know, there's been a worry about perhaps more disinflation being exported from China into the EU. Is that in amongst the considerations at the moment? Definitely will be. There are basically three big ways in which this tariff issue is going to impact Euro area inflation areas.

to the downside. That is one. Cheaper goods, which are no longer going to America, likely to come to the Euro area and wider EU from China.

We have estimated that could take about 0.4 percentage point off inflation each year. On top of that, oil prices are down. That's also another disinflationary force. And also just demand will be weaker. So as exports in all likelihood slow in the second half of the year, there won't be as much demand for labor or for products from the euro area anymore.

from abroad. How close do you think we are then? How close do economists think we are to the neutral rate in Europe? Well, we're pretty close to that. Most people say it's about 2%. And that's where we're going to be after this cut in June. However, we already know that the ECB is focusing much less on this concept of the neutral rate than they previously were. At the last press conference in April, the ECB removed from its statement, this long standing state of if

had been focused on about how restrictive monetary policy is. And Lagarde elaborated on that in the press conference saying the neutral policy rate is a concept for a world without shocks and is certainly not the world we are living in. The thing is, the ECB president, Christine Lagarde, sees an opportunity in those shocks in the sense that

an opportunity for the euro maybe to become a stronger reserve currency versus the dollar is there scope maybe for policy makers also to be thinking about the euro obviously it's not in their mandate but do you think that they'll be thinking about this what do you make of the ecb president christina guard's comments the euro has been around for nearly 30 years now and almost that entire time policy makers

in Europe, whether they be heads of state or people at the European Union or people at the European Central Bank, have been playing up that the euro could be a secondary reserve currency, displacing some demand for the US dollar as a reserve currency. However,

It's never really taken on that role because it has been plagued by a number of problems throughout the years. Obviously, there was the Euro crisis, which scared a lot of international investors away. And some of those problems that arose at that time, the lack of a banking union, the lack of a fiscal union, they persist. And if there were some big problem again, as there inevitably will be, because we know from history that financial crises pop up from time to time, I think questions still remain about why.

How exactly the euro would perform in that environment, although the architecture of the monetary union was strengthened significantly after the last big crisis in 2012. But it goes to the question also of the power, the strength of Europe as an economic bloc, doesn't it? And about...

economic growth, you know, the strength of the euro would be based on the strength of Europe sort of economically, wouldn't it? That's always a relative game, obviously. But how do you think growth is going now for Europe? We've got this kind of more disinflationary environment, a lot of money being rolled out in different countries.

for more spending on defence and infrastructure. How do you think the ECB is thinking about economic growth in the bloc? Well, when you take a step back and look at growth in the euro area, since the global financial crisis relative to the US, the euro area has lagged considerably.

particularly in the last few years after the ECB began tightening, the euro area has hardly grown and the US economy has really kind of been moving forward at full speed. So the euro has fallen behind considerably over the last decade. There's a lot of ground to make up and that's going to come through higher levels of productivity. We had Mario Draghi release a report earlier this year on his recommendations for how the euro area could achieve

None of those things are very easy to implement. I mean, increasing the rate of growth is a difficult game. And there's a lot of work to be done before we see the kind of results that we've seen in America. But on the flip side, does that mean no recession then for Europe in what is this kind of very volatile trading world right now, very volatile geopolitical world today?

How do you see Europe currently? Our own forecasts, as well as those of the ECB, are that the economy will, economic growth will slow as a result of this trade war. And it will be a shock, but it's unlikely to be large enough to push the euro area into recession at this stage. Okay. So then how does the ECB's situation stack up versus other central banks?

Again, we're watching the Federal Reserve closely given the trade picture in the US. Markets have really paused and slowed down the pace at which they think the Fed's going to cut. How does that influence the ECB? I think you could generally put central banks around the world in two categories. And one only has the Federal Reserve. They're having to worry about the ECB.

the impact on GDP of the tariffs, as well as on inflation, because this will directly increase prices in the United States. And just about every other central bank in the world is more focused on the impact on the economy, less so on inflation. Of course, there could be some inflationary pressures if they were retaliatory measures put

in place but they're really focused on the damage to the economy that is particularly for countries with large trade surpluses that depend upon foreign demand and particularly the US demand to keep their economies going through the external sector through those exports to America. Is there anything that we should be thinking about anything unusual that you think is going to pop up? I have to ask this question now because I think so many things are moving so rapidly

currently. Is there something that we should think about in the days ahead when it comes to the ECB meeting maybe that our audiences doesn't have on their radar? I think what I'll be looking for, I'm not really expecting this but this is something that I'll be looking for is, is the ECB looking to take out insurance by being extra dovish? Meaning that do they want to kind of prepare the market for further easing later in the year just in case things get much worse? We know already that

you know, will essentially, as I mentioned before, that will kind of be at neutral after this. But how much are they going to look forward to further cuts? My thanks to Bloomberg's David Powell for speaking to me. And of course, we'll have full coverage of the ECB rate decision from Frankfurt here on Bloomberg Radio. I'm Caroline Hepka in London, and you can catch us every weekday morning for Bloomberg Daybreak Europe, beginning at 6am in London. That's 1am on Wall Street. Tom.

Thank you, Caroline. And coming up on Bloomberg Daybreak Weekend, a look into how Vietnam's economy has been impacted by tariffs. I'm Tom Busby and this is Bloomberg.

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. How can you free your team from time-consuming office tasks? Amazon Business empowers leaders to not only streamline purchasing, but better support their teams.

Smart business buying tools enable buyers to find and purchase items fast so they can focus on strategy and growth. It's time to free up your teams and focus on your future. Learn more about the technology, insights, and support available at AmazonBusiness.com.

This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Vietnam is under the threat of aggressive tariffs from the Trump administration. The levy's on hold for now, pending trade talks, but Vietnam's economy is still being affected. For a closer look, let's get to Bloomberg's Doug Krisner, host of the Bloomberg Asia podcast.

Tom, there is no greater risk for economies in Asia than U.S. trade policy. Now, the Trump administration has been using the leverage of tariffs in attempting to negotiate new trade agreements as a way of helping to reduce America's many trade deficits. Now, to be fair, there is a big question mark now over the legality of these levies. In the last week, the U.S. Court of International Trade deemed the tariffs illegal, and it blocked them.

Now, the Trump administration is appealing this decision, and the case may ultimately be decided by the U.S. Supreme Court. But before this development, U.S. trading partners were lining up, and many were in the midst of trade negotiations with the administration as a way of getting tariff relief. And among the countries at the table, Vietnam. In the coming week, we will get trade data for this country, so we thought it would be a good time to look at Vietnam's overall economy, the impact the tariffs are having, and

as well as the trade relationship between Hanoi and Washington. I'm joined now by Bloomberg's Katya Dmitrieva. Katya is Asia economy reporter. She joins us from Hong Kong. Good of you to make time to chat with me about this. Recently, I know that Vietnam and the U.S. concluded a second round of trade negotiations. Do we have a sense of

how well the conversation is progressing? Well, about the same sense that we have with any of the trade talks at this point. We know that Vietnam has made... In fact, it was one of the first countries to make concessions and offers to the U.S. So...

Even before trade negotiations started, they were talking about buying more Boeing airplanes or trying to find a way to sort of narrow the trade gap, which, of course, is the biggest focus for the Trump administration. Is that is that trade deficit that they have with with Vietnam and Vietnam has its biggest trade surplus with the US?

So there was already this sense that Vietnam was able to sort of bend over backwards to secure a good bilateral deal with the U.S. because the economy depends so much on the state's

The most recent negotiations were a bit tricky because, of course, going into them as they began, Vietnamese officials were talking about how Trump's tariffs were seen as unreasonable. And for a kind of relatively small economy like Vietnam, a 46 percent tariff would be absolutely punishing and seem to catch leadership off guard.

So there hasn't been a deal yet, like the UK, like China. There has not been anything announced even temporarily with Vietnam. And of course, we'll have to wait and see how those negotiations continue. Vietnam has been one of Asia's fastest growing economies. It was only a few years ago.

that many on the equity side that put money to work in Asia refer to Vietnam as still being a frontier economy. And I think that the U.S. recognizes Vietnam as a non-market economy. Does that necessarily put Vietnam at a disadvantage in these trade negotiations? It's definitely coming to the trade negotiations from a position that's quite different from the EU or China, for example. It is a smaller economy. It has less ability to

to push back on Trump in the way you've seen, for example, China pushing back on the U.S. in these talks and sort of making, marking out concessions and getting tariffs moved down substantially, at least temporarily.

So it's a smaller economy. It has fewer levers. And frankly, it depends a lot on the U.S. So about 30 percent of its total GDP is just U.S. exports or exports to the U.S. So it's one of the most among Southeast Asian economies, but also globally. And so if you're in that position as a nation, you're

And you want to do everything in your power to try to fix that as soon as possible, even if it means potentially buying more goods, kind of asking companies to extend themselves in that way or buying things maybe that the country doesn't necessarily need or making concessions.

when it comes to their own trade protectionism. Many supply chains, as you well know, were reconfigured during the first Trump administration as a way of trying to reduce exposure to China. That seemed to accelerate during the pandemic.

Vietnam, I think it's fair to say, was a big beneficiary during that period. And from what I've read, the country has been under a bit of scrutiny here to prove that its exports are not actually made in China, or at least that part of the supply chain is not strongly linked in a way that kind of masks the fact that these products essentially...

are originating in China. Is that fair? Yeah. And this is why the trade data next week will be so interesting. Vietnam has become a hub for companies, but I think fair to say for Chinese companies in particular,

During the 2018-2019 trade war, you had factories all along the supply chain casting around looking for places to start producing goods that were not in China, that were not going to be targeted so heavily and explicitly by the US, which is the biggest customer. So they went to a number of places, but Vietnam ended up being the

a big hub. And so the ties between the two countries, between China and Vietnam, are quite close with exchange of goods and materials and people as well, workers. So there was a growing sense in the US that this kind of relationship would

or could start to bypass those US rules. And in some cases they did. So there was an example of linoleum flooring that there was an investigation into in the US and they found that a lot of the components were actually coming from China because, you know, these items have to undergo what's called

substantial transformation in this country, in a second country before being shipped out. You can't just legally, at least in the trade realm, you can't just ship an item to a second location, stick a label on it, ship it to the US and say it's from Vietnam and not China. So there's sort of a debate about how much

of trade is is that is that kind of illegal uh rerouting or transshipment I've seen estimates anywhere from 5 to 20 percent um which is a lot when you think about the flow of trade but it's a very difficult to prove um

B, there are limited ways to sort of target it, even from an administration level. So that will form an interesting part of the negotiations, because one thing I've been wondering is how are they going to address that? Will there be sort of more of an imperative for Vietnam and Vietnamese companies to start investigating this stuff at the

factory level to supply some sort of documentation or heavier documentation. That's definitely one question in these talks that might be a bit different from other countries. And I think the trade data next week, and in fact, a lot of the figures we're getting next week, as you said, will provide a look at what's happening in global commerce, because

We had the liberation day tariffs. We had the lifting of the liberation day tariffs. We had rerouting across and front loading across Asia. We had last month, double digit trade growth from Vietnam, as well as other Southeast Asian economies. So if that's continuing to roll through, it's positive for Vietnam's economy, which is aiming for 8% growth this year, which is a pretty high target, even though it's one of the fastest growing economies in the world.

But can they still do that with this 46 percent tariff threat hanging over them? And can they do that when increasing trade and this over-reliance on trade is just going to exacerbate this issue of the trade deficit from Trump's view? So recently, Vietnam and France agreed to boost cooperation in a couple of areas. I think defense, security among them.

It kind of goes to the area of technology and cybersecurity, which you don't necessarily think of when you think of Vietnam. First, can we look at how Hanoi is going about finding new trade relationships, given the tension that exists with the Trump administration?

Yeah, it's interesting. So Vietnam's leader, Tho Lam, recently went on a tour of Central Asia and Russia. And part of this, I think, was aimed at sort of shoring up support, diversifying. We had the ASEAN summit recently in the region. And the big takeaway from that was

countries across the region from Cambodia to Vietnam, Malaysia, Indonesia, they need to diversify their sources. And again, Vietnam is kind of a prime example of this. It's

had such an incredible growth and development story. It's still a developing economy, but the household incomes and wealth has increased. The poverty rate has fallen, really mirroring, I think, what happened in China during this manufacturing revolution. The question is, now, can the government...

pivot from that model of growth to something more a consumer led, but also more innovative. And that's where the technology and the AI comes in. And the question will be, can they do that in an economy that's still quite controlled, and is not necessarily one that's, you know, when you look at the US, for example, and the export of services, a lot of that is in the tech sector, it's software, it's development, it's ingenuity and development. And the question is, can

can Vietnam do that under its own government system, which is still quite closed and still quite controlled top down? Katya, before I let you go, I have to ask about the golf resort that President Trump's real estate company is intending to build in Vietnam. Can you help me understand where things sit at the moment? This is such an interesting part of this entire story because

The Trump Organization is building a $1.5 billion golf resort in the country. It's just outside of Hanoi. And it's happening at the same time as these trade negotiations. And the country is desperate to get a deal with the U.S. So it's a very interesting timing. And critics have actually pointed out that this process has been fast-tracked.

in the country. So usually there's a process in Vietnam for environmental standards, for getting community approval. And a lot of legal experts have pointed to that being bypassed or sped through. And this is pretty important for people who live there because it's a lot of farmland, people

you know, individuals own this land. The fact that the government could be, uh, doing a process or making this process in a, in a, in a way that they normally wouldn't is definitely raising some eyebrows. Um, there's also, of course, in Ho Chi Minh, um,

There's a skyscraper also part of the Trump organization that they're trying to build. So there's sort of this real estate part to this as well. And of course, Trump's connection to all of us. It's going to be very interesting to watch. Katya, thank you so much for helping us understand more about what's happening these days in Vietnam. As we look ahead to next week's trade data, Bloomberg's Katya Dimitrieva. Katya is Asia economy reporter joining from Hong Kong.

And I'm Doug Krisner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast. Tom? Thanks, Doug. And that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at 5 a.m. Wall Street time for the latest on markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now.

Thank you.

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