Trump Sparks a Global Trade War: Here's the Latest from Bloomberg
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. President Trump has made good on a promise of sweeping levies on China and North American allies. As of midnight, most goods from Canada and Mexico now face a 25% charge, while the tariff on Chinese goods has been doubled to 20%.

In comments heard live on Bloomberg Radio, President Trump said the tariffs will help bring manufacturing back to the U.S. I would just say this to people in Canada or Mexico, if they're going to build car plants, the people that are doing them are much better off building here because we have the market, we're the market where they sell the most. President Trump says there was no room left to reach a deal with Canada and Mexico as he hopes to force them to address fentanyl flows into the U.S.

And President Trump added the tariffs will be exciting for U.S. automakers.

The administration has delayed the removal of a so-called de minimis exemption for now. That means Canada and Mexico can continue shipping low-cost goods over the border without a tariff.

Well, Nathan Trump's move has prompted a swift retaliation from Canada and China. Canada has imposed phased levels on $107 billion worth of U.S. goods, while China imposed tariffs as high as 15 percent, mainly on agricultural shipments. Meanwhile, Mexican President Claudia Sheinbaum said her government would await for the tariffs to go into effect before reacting, but they are ready to respond. Canadian Foreign Minister Melanie Jolie spoke before the tariffs were put into place.

We know that this is an existential threat to us. And there are thousands of jobs in Canada at stake now.

We've done the work. We are ready should the U.S. decide to launch their trade war. Canadian Foreign Minister Melanie Jolie said her government was ready to go ahead with retaliatory duties. Karen, President Trump also announced he's imposing tariffs on external agricultural products on April 2nd. He didn't provide detail on which products would be affected or if there'd be any exemptions.

The U.S. agriculture trade deficit is projected to hit a record $49 billion this year. Well, Nathan, all this has sparked a bearish mood across markets. Asian shares sold off and the S&P 500 suffered its worst drop of the year. Joe Livornia was chief economist at the White House National Economic Council during President Trump's first term. He told Bloomberg's balance of power the markets might have not priced in Trump's move.

The markets also, I think, were not believing the president was serious with these tariffs. So today might just reflect the fact that for much I think of this year, there was thoughts that they would actually never be implemented or be watered down. So I think today was really a reality check for many investors.

Former Trump official Joe Livornia notes that Wall Street's so-called fear gauge, the VIX, hit its highest level since December. And tonight, Karen, many are going to be watching as President Trump addresses Congress for the first time in his second term. Bloomberg's Amy Morris is in Washington with a preview.

Since his reelection, President Trump has blazed across the federal government, dismantling norms and traditions and parts of the government itself, firing thousands of federal workers, closing agencies, and positioning the U.S. closer to Russia, all issues that may overshadow his address to Congress. The White House says President Trump will also discuss his economic agenda.

In Washington, Amy Morris, Bloomberg Radio. Amy, thank you. And for full coverage of the president's address to a joint session of Congress, stay with Bloomberg for a special edition of Balance of Power with Joe Matthew and Kayleigh Lyons. It starts at 8 p.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcasts page on YouTube.

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 trade war is on. President Donald Trump has made good on threats to impose 25% tariffs on most imports from Canada and Mexico and to double the levy on all Chinese goods.

to 20%. The president says it's about stopping illegal immigration and drug flows and boosting U.S. manufacturing. They can't come in and steal our money and steal our jobs and take our factories and take our businesses and expect...

Not to be punished. And they're being punished by tariffs. President Trump spoke there at a White House news conference heard live on Bloomberg Radio. This morning, we are joined by Bloomberg News global trade editor Brendan Murray. And Brendan, could we see trade flows upended dramatically following this first major salvo in what looks like a new trade war? Good morning.

morning yeah it could uh it could happen fairly quickly now we haven't heard uh the retaliation yet from mexico that will be something to watch today and tomorrow mexico is of course a big uh you know supplier of food products and

and consumer electronics and automobiles. And so we'll see how a lot of the food products are perishable too. So you can't really stick those in a warehouse for very long. So we'll see how the trade flows

play out here. But it seems that all three sides are kind of talking a big talk right now about how tough they're going to be on their retaliation. There's even a Canadian politician who's saying, we're going to cut off your electricity supply from our province into the U.S.,

So we'll see how you like that. So it's getting it's getting it's I wouldn't call it, you know, that the tone isn't, you know, very, very sharp just yet. But both sides are kind of sharpening up their sharpening up the rhetoric. And, you know, we'll see how if this is a short run situation or something that turns into a more prolonged trade war that starts to hit the economy.

Well, as we start to see these rhetorical knives get sharpened here, Brendan, we've heard Canada announce phased-in tariffs on $107 billion in U.S. goods, China with 15% tariffs mainly on U.S. agriculture. What kind of impact could that have on the U.S. economy? So China's...

China's retaliation that they announced just a few hours ago was fairly reserved. It was on a tiny fraction of the goods that China imports from the US, but more symbolic than anything, they targeted agricultural products.

U.S. farmers and U.S. farmers for years have tried to develop markets in China and to and to and to increase the soybeans and all the wheat and crops that they that they that they ship overseas. China has been the big market for those at the at the moment.

Guess who's having a bumper harvest? Brazil. So if China says, look, we're going to slap tariffs on American agricultural products, the message is we've got somewhere else to buy from. So American farmers would be getting nervous about this. And I think that's one of the reasons why you saw Trump post on social media yesterday something about

farmers are going to do great because we're going to put, we're going to put tariffs on all food, food imports. And so American farmers are going to do great. So a bit of preemptive reassurance there, I think maybe the president Trump anticipating that China would come back and retaliate against, you know, the heartland of America. Only about 30 seconds left, Brandon, what does this mean for the existing U S trade deal with Canada and Mexico? And is the door still open to a trade deal with China? Well,

Well, there's an interesting role that that trade deal, the USMCA, previously NAFTA, plays into this. That's supposed to be renegotiated in 2026. This was the deal that Trump renegotiated in his first term. It's up for renegotiation in 2026. And so perhaps what the strategy here is to put Mexico and Canada on the back feet, hit them with these tariffs,

drive them to an early renegotiation in more favorable terms to the U.S. That's one way some folks are speculating this could play out, that this is really just kind of a flurry of things that the U.S. could do to sort of enter those negotiations in the strongest position possible.

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.

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