Stocks Soar as US-China Tariffs Slashed, President Trump Visits Middle East
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Good morning, I'm Lisa Mateo. And I'm Nathan Hager. Here are the stories we're following today. Big moves in the markets come as the U.S. and China agree to temporarily lower tariffs on each other's products. The U.S. will reduce levies on most Chinese imports from 145% to 30%, while China will drop its duties on U.S. goods from 125% to 10%. Treasury Secretary Scott Besson spoke about the deal this morning in Geneva. We have reached...

an agreement on a 90-day pause and substantially

move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115 percent. Treasury Secretary Scott Besant added that neither side wants to decouple. U.S. Trade Representative Jameson Greer was also at the news conference and said it's imperative the U.S. reduce its trade deficit.

There was an $850 billion trade deficit at the beginning of the Biden administration. So that is a rapid and expansive increase in the trade deficit. And our view is that this is driven in large part by non-reciprocal trade, among other things. And the result has been offshoring of manufacturing and other negative impacts on the U.S. economy.

That was U.S. Trade Representative Jameson Greer and Treasury Secretary Scott Besson speaking earlier at a news conference heard live on Bloomberg Radio. Well, Nathan, the Chinese delegation was not at the press conference in Switzerland. We get more from Bloomberg's Jill Desis in Hong Kong. We've seen, you know, quite a bit of chaos and sort of how a lot of that has been hammered out. Yet you've got this framing from Besson and Greer kind of saying, look, like, you know, we know what we're doing and like this is all part of the negotiation strategy. So I thought that

That was a really interesting thing to see. But then, yeah, obviously juxtaposing that with the very, very limited amount of information that we've gotten out of the China side. I mean, it's not like there was this big press conference where both of them are coming out together. So I do think that that kind of indicates, you know,

I'm really interested to see what the next 90 days look like and if this is actually something that means, you know, sort of a lasting detente between these two. Bloomberg's Jill Deese is reporting from Hong Kong. Now, according to the Xinhua News Agency this morning, China says it committed to the stable development of relations with U.S. And Lisa, we have an update on trade negotiations with another Asian country, Japan's Prime Minister. Shigeru Ishiba says his country will not accept any initial trade agreement with the U.S. that excludes an accord on U.S.

Japan will continue to seek a reprieve from all U.S. tariff measures and hopes to reach some manner of agreement in June. Well, Nathan, President Trump is vowing to cut prescription drug prices up to 80 percent. Bloomberg's John Tucker joins us with more. John, how does he plan to do all this? Well, Mr. Trump, Lisa says in a social media post, he's going to sign an executive order this morning that will take place at 9 Eastern to institute expectations.

a most favored nation policy. Now, he doesn't go into much detail beyond that. He claims it would drop pharmaceutical prices by 30 to 80% in the U.S.,

Mr. Trump didn't outline potential limits on the policy, such as whether it's going to apply only to government programs like Medicare, Medicaid. Now, Americans do pay the most in the world for medicines, fueling innovation and driving the growth of the pharmaceutical industry. Drug makers have said revamping the system will slash revenue and also stifle the development of

of breakthrough therapies. The pre-market shares of Pfizer, they're down 3%. Merck shares down 1.6%. Eli Lilly is falling down 2.6%. And shares of Johnson & Johnson also down 2.4%.

In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. President Trump is headed to the Middle East today. It's his first official major foreign trip since returning to office. The president will travel to Saudi Arabia, Qatar, and the United Arab Emirates. Bloomberg's Jumana Bersetchi is in Riyadh.

Dozens of deals covering everything from defense and security to artificial intelligence, rare metals and transportation are expected to be signed. But the relationship between Trump and Crown Prince MBS goes further than deals. The recent decision by OPEC+, the oil group led by the Saudis to raise production quickly, will also have gone down well with the U.S. president since it's caused prices to drop.

When it comes to foreign policy, the Saudi crown prince told Trump he's ready to help him achieve his peacemaking ambitions with Ukraine. And U.S. Special Envoy Steve Witkoff has also been pushing for progress on a ceasefire deal in Gaza. Bloomberg's Jamana Bersetchi adds the visit comes as Saudi Arabia faces financial challenges due to oil prices. It's aiming to secure deals to help boost its economy.

And ABC News is reporting President Donald Trump's administration will likely accept a luxury Boeing jumbo jet from Qatar's royal family in what may be the most valuable gift ever received from a foreign government. The network says the super luxury Boeing 747-8 jumbo jet is set to be used as Air Force One. Now, Trump appeared to confirm

some of the reporting in a Truth Social post that criticized Democrats who were quick to fault the potential deal. And as the president heads to the Middle East, Lisa Hamas says it will release the last living American hostage it's holding in Gaza. That's after renewed talks with the U.S. over a truce deal with Israel. The freeing of 21-year-old Israeli soldier Adon Alexander, who is a U.S. citizen, is a step toward reaching a new ceasefire agreement in Gaza.

And President Trump's push to end the war in Ukraine could come to a head this week. The president is urging Ukrainian President Volodymyr Zelensky to meet with Russia's Vladimir Putin in Turkey this Thursday before they've agreed to a ceasefire. Zelensky says he'll be there and he hopes Putin won't look for excuses for why he can't make it. Oksana Markarova is Ukraine's ambassador to the U.S.

Any day potentially could be a great day. And we have heard loud and clear from President Trump that ceasefire should be full and unconditional. And we have heard from other European leaders and we have heard from President Zelensky, who always says, yes, Ukraine is ready. Nobody wants...

peace more than Ukraine. Now, Ukrainian Ambassador Oksana Markova appeared on ABC's This Week, heard Sundays on Bloomberg Radio. And Lisa, tensions appear to be easing between India and Pakistan. Both sides have agreed to a ceasefire. That's after four days of attacks that brought the nuclear armed rivals to the brink of full-blown war. The U.S. says it helped mediate the agreement, but India maintains it was the result of bilateral talks.

India's high commissioner to Singapore, Shopak Ambuli, says his country does not need outside help when it comes to the disputed Kashmir region. For us, Kashmir is a bilateral issue. Diplomacy does happen. We do speak to our counterparts. Our foreign minister and foreign secretary do speak to their counterparts.

But that is to clarify our position and what is our demand of Pakistan. Indian High Commissioner Shopak Ambuli spoke with Bloomberg's Haslinda Amin in Singapore. The latest tensions began April 22nd when gunmen killed 26 civilians in India's Jammu and Kashmir regions. India responded two weeks later with strikes on nine targets inside Pakistan.

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. Transportation Secretary Sean Duffy said that Newark Airport would see several weeks of reduced capacity as officials grapple with continuing delays and safety lapses. Duffy on NBC's Meet the Press. What you see in Newark is going to happen in other places across the country. It has to be fixed. And so what we're having is some telecom issues.

But we're also having some glitches in our software. As the information comes in, it's overloading some of our lines and the system goes down. So I'll just tell you specifically in Newark, we believe we're going to have it up and running in short order. We're going to be able to fix that glitch. Meet the press can be heard Sundays on Bloomberg. Meanwhile, Senate Minority Leader Chuck Schumer says it's something that needs to be addressed by the federal government ASAP. This situation cannot last forever.

We need all hands on deck at the FAA. Make Newark number one. Get it done. Get it done fast. Schumer, speaking in Queens, says we need the FAA to lead. The final stage of jury selection for the racketeering and sex trafficking trial of hip-hop mogul Sean Diddy Combs takes place later this morning. Also today, opening statements begin.

A new song by rapper Kanye West has been removed from streaming platforms for glorifying Adolf Hitler. The rapper has been accused of anti-Semitism for releasing a song last week called Heil Hitler, which includes lyrics that praise the Nazi dictator.

Tens of thousands crowded into Vatican City to hear the first Sunday address of the first American Pope. Leo with a special message for mothers wishing them all, including those in heaven, a happy Mother's Day. Meanwhile, the Archbishop of Chicago, Cardinal Blaise Cupich,

spoke on the importance for Leo to reemphasize a message of peace in one of the first moments of his papacy. It is something for him to be a voice, as he said, for peace at the very beginning of his announcement when he was presented to the people. He cares deeply about that.

Cardinal Cupich spoke on ABC's This Week, heard Sundays on Bloomberg. 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.

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Time now for our Bloomberg Sports Update. For that, we bring in John Stashower. Hey there, John. Hey, Lisa. The Cleveland Cavaliers had that great regular season, 64 wins, most in the East, but the Cavs are in big trouble. Round two of the NBA playoffs. They trail Indiana three games to one. The Pacers have won the game.

After losing game three by 22, won game four by 20. The score at halftime was 80-39, a 41-point halftime lead tied the playoff record. Oklahoma City won at Denver to tie that series at two. Knicks with a 2-1 lead, playing the Celtics. Huge game four tonight at the Garden. So far, home court has meant nothing. The last eight Knicks playoff games have been won by the road team, Celtics on the road.

35-9, including 3-0 at MSG. Also tonight in Chicago, it's the draft lottery. The winner expected to then draft the 18-year-old Duke star, Cooper Flagg. Stanley Cup playoffs, Florida shut out Toronto 2-0, series tied at 2. Dallas a 5-2 win over Winnipeg for a 2-1 series lead. Yankees spent the weekend in Sacramento. The rubber game saw the Yanks leading the A's 6-1, fifth inning. And the 3-1 sent deep down the right field line. It could be gone.

It's a home run. A grand slam for Ben Rice. Bonta the berm in right field here at Sacramento. And the Yankees have blown this baby open. It is now.

10-1 Bombers. That's not worth the call. The Yankees, who blew the lead Saturday, won their game Friday 10-2 and won yesterday 12-2. The Mets also won 2-3 over the weekend at Citi Field. They beat the Cubs 6-2, 8-0 homers by Francisco Lindor and Brandon Nimmo. Red Sox won 3-1 at Kansas City. Nationals lost to St. Louis 6-1. Rare win for Colorado, improving to 7-33. It came after the firing of Bud Black, the Rockies' manager,

The past nine years, Colorado on Saturday lost to San Diego 21 to nothing. John Stashella, 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 with markets back in rally mode this morning as the U.S. and China have agreed to cool off their trade war.

for 90 days. Treasury Secretary Scott Besson says both countries will lower tariffs on each other by 115 percent. He made the announcement after two days of talks in Geneva. The consensus from both delegations this weekend is neither side wants a decoupling.

Treasury Secretary Scott Besson speaking alongside U.S. Trade Representative Jameson Greer in Geneva this morning. Joining us now is Bloomberg News Senior Editor Derek Walbank. And Derek, given the fact that President Trump was talking about 80 percent tariffs on China seeming right before these talks were underway, now with the tariff rate getting lowered to, I guess, 30 percent, seems to be a lot more than the market was expecting. Good morning.

Good morning, Nathan. Yeah, it was a very large upside surprise. Remember, Trump talking about 80% was on the high side. There were also signals coming out of the negotiating world that we were hearing some things about 60% or something like that in conjunction with these talks.

Trump said 80. That's well more than 30. So it is a pretty substantial beat, I guess you would say, on that. It was much better news than I think people were anticipating. You've seen the markets reacting. This was not a number that was priced in in any way. It is a 90-day reprieve. The Chinese side did a similar gesture. They both took down the main...

main tariff lines by about the same amount. So that leaves the U.S. with 30% and China with 10%. The other thing I'd flag here, Nathan, is that there were signals in the press conference on the U.S. side afterwards that there could be more to come. Greer and Besant were asked about the fentanyl tide levies at the 20% that makes up a part of that 30%. And the indication was is that talk's

on that issue, we're progressing as well. So there is a possibility that there could be further reductions if things go well. What a difference we are in right now from where we were just a month ago. So let's get into that. This is a possibility of more movement on fentanyl. 90 days are, I guess, underway now. What more can we expect over the next 90 days to try to bring this to some kind of resolution?

Well, Nathan, there's an awful lot of uncertainty. And one of the things is what is going to be enough to make a deal, a longer lasting deal? Scott Besson said walking into these negotiations that this was about de-escalation and setting things up on a pathway to which you could negotiate an agreement. So certainly that is done reasonably successfully if you're looking for a de-escalation.

What it's not clear yet is what the U.S. got for this. You know, Trump had put on the tariffs. He had said that there are all sorts of things at stake with the U.S. trade deficit. There had been concerns that China had not, uh,

fulfilled all of its obligations under the trade deal made in the first Trump administration. And so we're still going to be waiting to see what the U.S. side gets out of that. Certainly, this is a lot of sound and fury, and you want to see what happens.

what the accomplishments were for that, those details will remain to be seen. But certainly this is positive news toward the idea of de-escalation, which as Besson said ahead of time, is the precursor for talks on a deal.

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

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