Trump, Musk Trade Threats; US-China Tensions Cool
20:55 Share

This is an iHeart Podcast. 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. Bloomberg Audio Studios. Podcasts. Radio. News.

Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the latest developments in the spat between two of the most powerful people in the world. There are signs this morning the rift between President Donald Trump and billionaire Elon Musk may be easing. Bloomberg's John Tucker begins our team coverage this morning. John, good morning. And good morning, Nathan. Politico is reporting White House aides have scheduled a call with Musk today to try and cool things off.

President Trump with reporters yesterday had this to say as the Musk bromance headed for the rocks. I'm very disappointed in Elon. I've helped Elon a lot. Elon and I had a great relationship.

I don't know if we will anymore. I was surprised because you were here. Everybody in this room practically was here as we had a wonderful send off. He said wonderful things about me. You couldn't have nicer said the best thing. He's worn the hat. Trump was right about everything. The relationship started to rupture when Musk called Trump's signature tax and spending bill a disgusting abomination.

And things really got ugly yesterday. Musk called Trump an ingrate and suggested the president would have never won the election without his help. Trump, in turn, proposed cutting off Musk's lucrative government contracts. Go ahead, make my day, Musk posted on X in response to Trump's threat. Later, he responded yes to a Twitter user's suggestion that the president be impeached.

He then suggested the president was withholding the release of files related to pedophile Jeffrey Epstein because they incriminate the president. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Well, Elon Musk also appears to be walking back a threat that could have put work on the International Space Station at risk. In Bloomberg, Gina Cervetti continues our team coverage.

Elon Musk had threatened to decommission SpaceX's Dragon spacecraft. That's after President Trump posted that the government could save billions of dollars by canceling Musk's federal contracts. Dragon is SpaceX's primary vehicle for sending people and cargo into orbit.

And it's helping NASA maintain a steady presence at the space station until it's retired in 2030. It's unclear how serious Musk was about decommissioning Dragon. It's set to launch another four private astronauts to the ISS with Axiom Space next Tuesday. Gina Cervetti, Bloomberg Radio. All right, Gina, thank you. The feud wiped off $34 billion from Elon Musk's personal net worth in one day. Tesla shares alone fell 14%.

Ross Gerber is president and CEO of Gerber Kawasaki and was one of Tesla's earliest investors. This is a disaster for Musk. I don't know if I can spin it in a positive way because it's just so beyond any intelligent businessman's behavior would be. I can't imagine after putting Trump in there that he would then turn Trump into an enemy of all things.

because he's still the president of the United States. That was Tesla investor Ross Gerber. The sell-off marked the second largest loss ever in an individual's net worth, according to Bloomberg's Billionaires Index. Tesla shares this morning are recovering. They're up more than 5% in pre-market trading.

Nathan, while the public spat with Elon Musk may be cooling off, the Trump administration is not letting up in his fight with Harvard University. But it's taken a legal setback on that front. A federal judge in Boston has given the university a temporary reprieve from the president's ban on international students.

entering the U.S. to study there. Judge Alison Burroughs says Harvard would face immediate and irreparable injury if the ban took effect, and she set a hearing for June 16th. Well, Karen, tensions appear to be easing between the U.S. and China. President Trump and Chinese President Xi Jinping have agreed to resume trade talks after months of stalled negotiations. The leader spoke for 90 minutes yesterday. We get more from Bloomberg News Senior Editor Bill Ferrys. Well,

A lot of, I guess, positive commentary, especially from the U.S. president, saying that they seem to have reached some kind of a deal or agreement on the issue of rare earth mineral products. That seemed to be the issue that was really worrying the U.S. and U.S. companies. We know Ford closed a factory for a week last month, partly based on its access to those supplies of rare earths.

If they can get through that with an understanding, it probably signals that the negotiations between the two sides over those tariffs are back on track. Bloomberg's Bill Ferry says President Trump told reporters he's accepted an invitation to visit China and extended his own invitation to President Xi.

Nathan, there's new developments this morning on two trade fronts. First, the U.S. and Japan have begun the latest round of trade negotiations, with media reports suggesting Tokyo's delegation is trying to win a reprieve from the tariffs by pledging to make more cars in the U.S. and enhancing cooperation on rare earths.

Commerce Secretary Howard Lutnick met with Japan's top trade negotiator in Washington yesterday. Expectations are growing that Japanese Prime Minister Shigeru Ishiba and President Trump, who held two phone meetings recently, may announce a deal when they meet on the sidelines of the summit.

Karen Bloomberg News has learned President Trump and Canadian Prime Minister Mark Carney have been in direct contact trying to reach a trade deal, but still have work to do to find agreement. The president is planning to attend the Group of Seven Leader Summit in Canada that begins June 15th. Some Canadian officials hope to reach a deal to lower or eliminate tariffs before then.

Nathan, President Trump may be backing away from his push for a quick ceasefire between Russia and Ukraine. In comments heard live on Bloomberg Radio, the president said it might be better to let both sides fight it out a little longer. Sometimes you see two young children fighting like crazy. They hate each other and they're fighting in a park.

And you try and pull them apart. They don't want to be pulled. Sometimes you're better off letting them fight for a while. At the same time, President Trump is suggesting he might put sanctions on both countries if he thinks the fighting is going on too long. Overnight, Russia launched a wave of drone and missile strikes on civilian targets in Ukraine. After President Vladimir Putin promised to retaliate for last weekend's drone attack on Russian air bases, the attacks killed at least

three people in Kiev and wounded more than a dozen others. Let's turn back to markets now, Karen. Futures are higher ahead of this morning's key economic report. At 8.30 a.m. Wall Street time, investors get the May reading on jobs, and economists are forecasting a gain of 126,000 non-farm payrolls.

We get a preview from Bloomberg's Michael McKee. Economists see May jobs coming in at the lowest level since last October, a slowdown likely caused by uncertainty over President Trump's fiscal plans. Other labor market indicators are suggesting weakness. The ADP found just 37,000 jobs created last month. The ISM's manufacturing and services employment indexes showed contraction.

For markets and the Fed, however, the key won't be the number of new jobs, but the unemployment rate. A shrinking labor supply may keep the jobless rate unchanged for a while. If that's the case today, we should see little change in investors' belief the Fed is on hold for now. Michael McKee, Bloomberg Radio. All right, Mike, thanks, and stay with Bloomberg Surveillance at 8.30 a.m. Wall Street time. When those numbers hit the tape, we will break them down live with analysis from former Fed economist Claudia Somm.

Nathan, let's check some stocks that are on the move this morning. Shares of Lululemon, they're plunging more than 21%. The athletic wear maker is reducing its earnings per share outlook by about 2.5% for the full year. It also sees sales below analyst estimates. Lululemon is trying to manage supply chains affected by President Trump's trade wars, and its guidance assumes 30%.

30% tariffs on China, and 10% on other countries, which could cause, quote, a significant reduction in profitability. We're also watching shares of Broadcom this morning, Karen. They're down more than 4%. The chip supplier to companies like Alphabet and Apple gave a lackluster revenue forecast for the current quarter. Analysts suggest the artificial intelligence spending frenzy is not as strong as some investors anticipated. Like NVIDIA, Broadcom is seen as a key beneficiary of a surge in AI spending.

Nathan, changes are coming at HSBC. Europe's biggest bank says Chairman Mark Tucker is stepping down to return to insurer AIA as non-executive chairman. Tucker has been with HSBC for eight years and board member Brendan Nelson will step in as interim chair.

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. Michael, good morning. Good morning, Karen. A man accused of yelling free Palestine and throwing Molotov cocktails at demonstrators calling for the release of Israeli hostages in Gaza has been charged with 118 counts, including attempted murder.

Mohamed Soleiman has been jailed since his arrest following Sunday's attack in Colorado. He was advised of the charges during a court hearing in Boulder yesterday. District Attorney Michael Doherty. I am absolutely committed to making sure the defendant is fully prosecuted.

So obviously making sure he remains in the country is a top priority so that he can be fully prosecuted and held fully responsible. D.A. Michael Doherty says the counts also include assault in the first and third degrees, use of explosive or incendiary devices, and animal cruelty.

The judge in the Sean Diddy Combs sex trafficking and racketeering trial issued a warning to the music mogul. Combs is not supposed to react with facial expressions to the testimony, but the judge said he caught Combs nodding vigorously and looking at the jury. The judge calling it unacceptable and says if it happens again, he would consider excluding Combs from the courtroom for the remainder of the trial.

A Massachusetts community is celebrating after a Milford teen was released from ICE custody. Marcelo Gomes de Silva was taken into custody on his way to volleyball practice nearly a week ago. Alongside supporters, family attorney Robin Nice spoke outside the courthouse in Chelmsford. It's unlikely to be arrested by ICE again when you've been released on bond already, so I think he'll have that certain level of security, but...

But it's hard to know, and times are changing. And if it's not him, you know, there's so many people in his situation. Attorney Robin Nice says De Silva was picked up by ICE last Saturday while driving his father's car to volleyball practice. Homeland Security says agents were targeting his dad. But when they found that the teen is in the U.S. illegally, they made the arrest.

President Trump told Senate Republicans he is open to a state and local tax deduction cap lower than the $40,000 in the House passed version of this tax bill. House Speaker Mike Johnson says he's fighting to keep the 40 grand cap as is. Global News, 24 hours a day and whenever you want it. With the Bloomberg News Now, I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

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. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more.

Time now for the Bloomberg Sports Update brought to you by Flushing Bank. Here's John Stashower. John, good morning. Good morning, Karen. The Knicks and their fans, well, they know all about Indiana Pacers comebacks. Late game heroics by Tyrese Halliburton in a series opener. Happened at the Garden in the East Finals and it happened two weeks later in Oklahoma City to begin the NBA Finals. The Thunder were cruising along. Up by 15 with less than 10 minutes to play. Back came Indiana. Pacers at the end trailed by a point.

Okay.

Tyrese Halliburton does it again. On ABC, Indiana won 1-11, 1-10. A Halliburton shot gave them their first lead of the night. He not only hit that shot that tied the game with the Knicks, he hit game winners against Milwaukee in the first round and Cleveland in the second. Game two, Sunday in OKC. Game two of the Stanley Cup Final tonight. Edmonton up 1-0, hosting Florida the night after the Yankees

lost to Cleveland 4-0. They beat the Guardians 4-0. A Cody Bellinger two-run homer fourth inning, a Jazz Chisholm two-run single in the seventh, and another brilliant outing by Max Fried in six innings. He allowed only one hit. First Yankee Red Sox game of the season tonight.

at the stadium in l.a the mets led the dodgers four nothing five three in the eighth inning a brett baity error was costly dodgers won six five game winning hit by the ex-met michael conforto jerry reinsdorf bought the white sox in 1981 for 20 million dollars he's now 89 he's got a deal in place to eventually sell to real estate tycoon justin isbia aaron rodgers waited four months

but finally has agreed to play quarterback for the Steelers. He'll be in Pittsburgh today to sign his one-year contract. He'll be at their minicamp next week. They'll play the men's semifinals today at the French Open.

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. The dust may be starting to settle from the extraordinary public breakup that broke out just less than 24 hours ago between President Donald Trump

and billionaire Elon Musk. But investors may still be worried about the damage done. Ross Gerber is president of Kerber Kawasaki and one of Tesla's earliest investors. Institutions and pension funds have written the board of directors about Elon Musk and reigning in this kind of behavior. And I can't assume that this isn't going to lead to massive shareholder lawsuits against the board of directors and Tesla. Ross Gerber with Gerber Kawasaki there. Now we're joined by Bloomberg News senior editor

Derek Wallbank. And Derek, the questions are still rising here. When you hear things like impeachment and Jeffrey Epstein and cutting off government contracts, where does this relationship stand now? Good morning.

Good morning, Nathan. Look, it was an absolutely explosive period in a relationship that had come to define the second Trump administration, at least its early days, right? Elon Musk was somebody who donated hundreds of millions of dollars of his own money to electing Donald Trump, as well as Republicans up and down the ballot. They were successful. Republicans have unified control of Washington. Musk becomes then the

face of Donald Trump's effort to cut government spending. The two of them scythed their way through the federal bureaucracy and et cetera, et cetera. And now we're sitting here with Musk talking about Jeffrey Epstein and Donald Trump and all manner of other things. It got very personal very quickly, I would say yesterday. And the cost to Musk so far has been staggering. He has...

He saw Tesla off 14%. His own wealth is closely tied to that. More than $30 billion of his own money on paper gone. It is quite a high-cost thing. At the same point, look, Donald Trump wants to pass his one big, beautiful bill that is the centerpiece of his own domestic agenda, and Musk has become the chief antagonist to all of that.

It's really fascinating to think about the brand damage that a lot of analysts think was done to Tesla during Elon Musk's work with the government. Over the 130 days he was the public face of the Doge effort. What kind of brand damage could we be looking at now that it seems as though Elon Musk can't seem to pull himself away from the political fray just yet?

Well, I'll tell you, Nathan, you quite rightly mentioned that Tesla has seen and Musk has seen a fair amount of brand damage among Democrats in the United States, as well as the sort of political left of center abroad. You see in places like California, places like Europe, electric vehicle sales rising and Tesla sales falling, right? So that's a critical context point to start with.

And now you come here to a pretty big break with Trump. Musk had sort of run from one to the other, even as the other wasn't buying Teslas as fast as the former.

does this leave Musk a sort of a person without a home? I think, you know, this is a difficult thing to parse because even as you start sitting there, totting up the damage, trying to figure out, uh, where everything sort of stands there, we get some senses that Musk is open to a cooling off. In fact, um, it is, it,

it was it was a remarkable sort of series of events a aid an account on musk x social media platform with fewer than two hundred followers at the time said quote this is a shameless back and forth you're both better than this cool often take a step back for a couple of days musk response good advice

and then he says he's not going to cancel uh... the dragon space uh... program that nasa uses to ferry astronauts up and down the international space station it's that level of of where are we where are we not with that level of of impact

Yeah. And you've got to think that it's not just Tesla investors who want to see some kind of cooling off here. Republicans on Capitol Hill as well. Right. I mean, they're trying to figure out which way to go on the one big, beautiful bill. And I would I have to think that Republicans are at least hoping to count on some support for from Elon Musk for their midterm election efforts.

Yeah, Republicans are facing a midterm, I think, where most of the focus is on control of the U.S. House. They would very much like to have support from Donald Trump's biggest billionaire backer at their back in that effort. It's a very diverse kind of opportunity.

election uh... the you don't have trump on the ballot you really do want you know to be able to walk into that campaign being able to defend all the seats you need to defend as well as uh... maybe go on offense as well uh... uh...

So you don't want to alienate Musk. At the same point, Musk is sat there on record saying that the cost of this bill, I think CBO's estimate was something like $2.4 trillion added to the deficit over the next 10 years.

if it gets faithfully implemented, that is way more Nathan than all of the money that Doge has, has claimed that it has saved so far, even if it, even in its most optimistic telling and like by orders of magnitude more right. Musk said on in a, in another expo that, you know, all of that came at a personal cost to,

and risk to him and his team. So the idea that all of that would be wiped out, you're hearing Musk talk about this and not just like policy terms, but in deeply personal terms as well. 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.

Learn how at AmazonBusiness.com.

Switch to Verizon Business and get more from your internet without paying more for your internet. Get LTE Business Internet starting at $39 a month when paired with select business mobile plans. That's unlimited data and with it, unlimited possibilities. Start saving today with Verizon Business. Ranked number one in small business internet customer satisfaction by J.D. Power.

Starting price for 25 megabits per second LTE internet plan with smartphone plan savings, plus taxes, fees, and economic adjustment charge. Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. This is an iHeart Podcast.