Trump Goes Dovish On China Tariffs, Fed Pressure, Cabinet Confirmations Push
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with two words that start with T, Trump and tariffs. President Trump says he would prefer not to impose tariffs on China. It's a softening compared to his pre-election threat of 60% additional import taxes. Trump spoke with Fox News Channel's Hannity. We have a

one very big power over China, and that's tariffs. And they don't want them, and I'd rather not have to use it. President Trump has floated the idea of 10% tariffs on China from next month, but so far has stopped short of imposing them on Beijing in his first days in office. Well, Nathan, President Trump reiterated his tariff threats in a virtual speech to the World Economic Forum in Davos, and he said he'll demand that Saudi Arabia and OPEC bring down the cost of oil. You got to bring it down.

which frankly I'm surprised they didn't do before the election. That didn't show a lot of love by them not doing it. I was a little surprised by that.

If the price came down, the Russia-Ukraine war would end immediately. Those remarks from President Trump sent oil prices lower, though it's unclear whether OPEC will heed his call. And the president said he would not stop there. With oil prices going down, I'll demand that interest rates drop immediately. And likewise, they should be dropping all over the world. Interest rates should follow us.

And in a surprise broadside, President Trump accused Bank of America CEO Brian Moynihan of limiting business with conservative clients, telling him, quote, I hope you start opening your bank to conservatives because what you're doing is wrong. And on the topic of interest rates, Karen, President Trump said he'll speak with Federal Reserve Chairman Jerome Powell about lowering rates at the, quote, right time. The president spoke to reporters while signing executive orders in the Oval Office.

I think I know interest rates much better than they do. And I think I know it's certainly much better than the one who's primarily in charge of making that decision. But no, I'm guided by them very much. But if I disagree, I will let it be known. President Trump spoke ahead of the first rate decision of 2025 for Jay Powell and the Fed. That's coming up next week. Well, Nathan, senators may be working through the weekend to get President Trump's cabinet appointees confirmed. And we get that story with Bloomberg's Dino Cervetti.

So far, just two of Trump's picks have cleared the Senate. Secretary of State Marco Rubio and CIA Director John Ratcliffe. But defense nominee Pete Hegseth cleared a key procedural hurdle yesterday, despite opposition from two Republicans. He's set for a final confirmation vote tonight.

If the Senate sticks around this weekend, it could vote on Scott Besant for Treasury Secretary and Kristi Noem to lead Homeland Security. Other nominees, including Robert F. Kennedy Jr., Tulsi Gabbard and Kash Patel, have hearings set for next week. Gina Cervetti, Bloomberg Radio. All right, Gina, thank you. President Trump's pledge to keep TikTok operational in the U.S. is being handled differently by different tech giants.

Bloomberg's John Tucker is here with more on that story. So, John, sounds like there's a little bit of confusion out there. To say the least, Nathan. Apple and Google, they removed the app from their respective app stores to comply with the January 19th ban.

And they've held off on relisting TikTok. The app's been unavailable for the past five days, even after Trump's pledged that the government won't enforce the law that raised potential penalties. Oracle, on the other hand, they have kept TikTok operational. Oracle provides cloud services for TikTok and lawmakers and other Washington insiders.

They have raised concerns. Even with a nod from Donald Trump, the critics argue the company could open itself up to lawsuits from current shareholders and massive fines from a future administration that may want to retroactively enforce those penalties. There's also the possibility that Donald Trump could change his mind on enforcement. In New York, I'm John Tucker, Bloomberg Radio.

All right, John, thank you. Well, President Trump is heading to hurricane-battered western North Carolina and wildfire-ravaged Los Angeles. Meanwhile, firefighters across Southern California are making progress battling new blazes that were fanned by gusty winds. The new wildfires come weeks after other blazes killed 28 people, displaced thousands, and destroyed more than 16,000 structures. A forecast of rain this weekend is offering the potential for some relief.

Well, Karen, let's turn to markets now. Futures are modestly lower this morning following a record close for the S&P 500 and several key stocks are on the move. We're watching shares of Boeing. They are down nearly 2% in early trading. The planemaker posted preliminary sales about a billion and a half dollars below estimates.

Overall, Boeing, which was hit by a worker's strike, lost roughly $4 billion in the quarter. Nathan, shares of Texas Instruments are down almost 5%. The chipmaker gave a disappointing earnings forecast for the current period. Analysts say it's a sign it's still contending with still sluggish chip demand and higher costs tied to a factory expansion. In Europe, Karen, shares of Ericsson are down more than 8%. The Swedish telecom missed analyst forecast for earnings in the fourth quarter.

On the flip side, Nathan Shears Burberry higher by 12.5%. A pickup in U.S. demand boosted the trench coat maker's results. Sales in the Americas unexpectedly climbed, while China fell less than estimated. And staying in the Asia Pacific, Karen, the Bank of Japan raised its key policy rate to the highest level in 17 years and took a more bullish view on the strength of inflation. BOJ lifted the overnight call rate by a quarter percentage point to 0.5%.

The decision is fueling expectations for more rate hikes and is supporting the yen. Checking it against the dollar right now, it is stronger at 155.70.

And it's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A federal judge in Washington state has temporarily blocked President Trump's executive order denying U.S. citizenship to the children born from undocumented parents living in the country. The hearing didn't even take a half an hour. Judge John Kuhnauer said in his four decades on the bench, he'd never seen such a clear case.

The Reagan appointee called President Trump's order blatantly unconstitutional and said it boggles his mind that any lawyer would unequivocally assert otherwise. President Trump pledged to fight it. Obviously we'll appeal it. They put it before a certain judge in Seattle, I guess, right? And there's no surprises with that judge. Loyola Law School professor Jessica Levinson.

For a judge at a temporary restraining order to say blatantly unconstitutional, it is worth emphasizing that you don't typically see that type of language at this initial stage. Professor Levinson spoke to CBS. Trump's order aims to block the issuance of passports and social security numbers to children born to undocumented women or on temporary visas unless the father is a U.S. citizen or green card holder.

An ICE raid conducted at a Newark, New Jersey business has the city's mayor outraged. Immigration officials took away three workers who couldn't prove citizenship while working at the Ocean Seafood Depot in Newark. The owner of that business, Luis Genota, believes this was a step too far. I feel that we have to be a country of law, but go off to bed people, not working people. These are people, these are family people. These are people that show up to work every day.

The raid yesterday was part of a nationwide enforcement following President Trump's executive order. One of the people taken into custody was a U.S. veteran. In a statement, Newark Mayor Raz Baraka called it egregious and a violation of the Fourth Amendment. Baraka insists the proper warrant was not presented.

President Trump has ordered the release of thousands of classified governmental records related to the assassination of President John F. Kennedy. The executive order Trump signed yesterday also aims to declassify records relating to the assassinations of Senator Robert F. Kennedy and Martin Luther King Jr. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen.

Uncle Barry, thank you. In 15th century Florence, the great inventor Leonardo da Vinci dreamt of creating a flying machine. But something kept getting in his way. Admin. Piles of it. Luckily, Leo used the smart buying tools on Amazon Business, so he could work more efficiently. With the extra time, he not only invented the flying machine, but actually built it. Magnifico. Incredibile. Splendido. Whoa. Easy there, Leo. Splendido.

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Time now for the Bloomberg Sports Update, brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Novak Djokovic is a 10 for an 11th Australian Open title, a record-breaking 25th Grand Slam. Ended suddenly in Melbourne. He had upset Carlos Alcaraz in the quarterfinals despite taking an injury timeout and getting his left leg taped up in the semis. He took on Alex Zavara. They played a long and tight first set. Zavara won a tiebreaker, and then the match was over.

Jokovic was struggling. He didn't know how badly, Patrick. And the crowd is absolutely stunned. Chanting his name seconds ago as he was very much in that tiebreaker. The second that he missed the volley to lose the set.

He came forward to shake hands, and this is disappointing. The drive for 25 ends right here. On ESPN, Djokovic said later, due to the muscle tear in the leg, he would not have been able to finish even had he won that first set. Zverev in the final will take on the winner of the match going on now. Top seed Yannick Sinner just won a first set tiebreaker. Some of the hard-serving young American Ben Shelton. The Rangers on November 19th were 12-4. Rest of 2024, they went...

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NBA All-Star starters announced some familiar names. LeBron James, Kevin Durant, Steph Curry, and two Knicks were named, Jalen Brunson and Carl Anthony Towns. 39-year-old Liam Cohen is the new coach of the Jacksonville Jaguars. He had been coaching Tampa Bay's offense. The Cowboys said to be moving closer to promoting Brian Schottenheimer, Dallas' current offensive coordinator. The Atlanta Braves have signed free agent outfielder Jerickson Profar just had his best season with San Diego. John Staschauer, Bloomberg Sports.

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. President Trump is calling for lower oil prices, lower interest rates, and higher tariffs.

in a virtual address to the global elites gathered at the World Economic Forum in Davos. My message to every business in the world is very simple. Come make your product in America and we will give you among the lowest taxes of any nation on earth.

We're bringing them down very substantially, even from the original Trump tax cuts. And the president reiterated that message at the Oval Office and in an interview with Fox News Channel. Joining us now is Dr. Lindsay Newman, geopolitical risk analyst and columnist at GZERO Media. Thanks for being with us this morning, Dr. Newman. The president is reiterating these tariff threats at the same time, though, saying in that Fox interview that he would rather not

impose tariffs on China. Where do you see the message from the president when it comes to the potential for trade wars with adversaries and allies at this point?

Thanks, Nathan. Thank you for having me on again. It's a great question around what is the signal and what is the noise here. As you said, he said in his Davos remarks yesterday that he thinks the relationship with China, he expects it to be very good. He wants a fair relationship. He said he doesn't need to be phenomenal, but he does want it to be fair. And as you said, he said he would rather not.

He knows China doesn't want those tariffs imposed, and he himself would rather not impose those tariffs. But he also went on to then say it is a tremendous point of power, a tremendous point of leverage. We're hearing this number right now around 10 percent tariffs to be imposed on China, potentially to be imposed on China on February 1st, a far cry from the 60 to 100 percent

tariffs that he talked about during the campaign trail. But I think we need to be cautious here. And here's my one indicator that I would suggest to watch already, which is that in his executive order for trade, the sweeping America first trade policy executive order, he has instructed his team to not only investigate all and review all potential areas where tariffs could be warranted, but he's also setting up this external reserve services. You don't

Don't set up an organization to collect tariffs if you're not looking to collect tariffs. The president also said he was going to demand that Saudi Arabia and OPEC bring down the cost of oil, couching it as the idea that it could help bring the war in Ukraine to a more rapid end. What did you make of that comment?

It was a really interesting one because most of yesterday's address by Trump at the World Economic Forum was really just a highlight reel of what his very young administration has already done in this first week, including taking responsibility for that ceasefire agreement in Israel. And then, of course, all these executive orders, which he touched on everything from inflation to deregulation efforts, immigration, et cetera. But then

He broke some news, as you're saying here, about this energy point where he's saying he's going to ask the kingdom and Oby to bring down oil pricing. We saw since that discussion, he in fact, since this point that he raised that oil did come down. And as you say, he even connected, very interestingly, the ongoing conflict in Russia and Ukraine with the heightened oil prices, saying he was even a bit...

The sense was that he was a bit miffed that the prices haven't come down, because if they would, he thinks that the war would end immediately. And he's been very clear about how this war needs to end immediately. This relationship is one that we're going to have to watch closely. We should be watching closely between the U.S. and Saudi Arabia, between Donald Trump and MBS.

We know, for example, that the first foreign leaders call was with MBS, where they talked about the kingdom's ambitions over the next four years and how they can collaborate together. I wouldn't be surprised if, yet again, that is Donald Trump's first foreign trip.

And how about the relationship between President Trump and global central banks? We heard the president in the Oval Office yesterday saying that he knows interest rates better than Jay Powell does. And he, at the Davos Forum, called for central banks around the world to follow the U.S. lead in lowering interest rates. Do you see a threat to Fed independence?

This is classic Donald Trump. This is nothing new. We saw it during his first term, where he also had these barbs around interest rates and Powell. Really, I would not expect anything sort of substantive there. We can expect more of that same rhetoric. And it is a point of leverage that he looks to apply to make it clear to both the domestic and global audience that he's going to ask for what he expects and he's going to make clear what he expects.

And he expects to see interest rates come down both further at home and in the global economy. But Powell has been very clear about holding the line and domestic Fed independence. Just 30 seconds left. He's going to ask for what he wants. Do you expect the world to answer?

Well, so far we've seen a ceasefire agreement in Israel that was at a log jam for many, many months on the Biden administration. It's this way in which he will intend to be quite ambitious, sort of flooding the field with his asks.

using both carrot and sticks this time around, in which he will reshape the world, I think so, in his vision. 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.

In 15th century Florence, the great inventor Leonardo da Vinci dreamt of creating a flying machine. But something kept getting in his way. Admin. Piles of it. Luckily, Leo used the smart buying tools on Amazon Business, so he could work more efficiently. With the extra time, he not only invented the flying machine, but actually built it. Magnifico. Incredibile. Splendido. Whoa, easy there, Leo. Splendido.

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