Trump Threatens Higher Canada Tariffs; Stocks & Bitcoin at All-Time Highs

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1:30Let Cincinnati insurance make your bad day better. Find an independent agent at CINFIN.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 on global trade. President Trump is threatening a 35 percent tariff on some Canadian goods. That's an increase from the current 25 percent rate and would take effect August 1st. But as Bloomberg's Bill Ferries reports, the increase would not affect goods that are shipped under the terms of the current U.S.-Mexico-Canada agreement.

2:12That might be a little misleading as a headline number. I mean, our understanding of this is that it would not apply to products or goods and services that are already covered under this U.S. MCA trade agreement with Mexico, Canada and the U.S. So that's the majority of goods traded between the U.S. and Canada right there. So things like energy as well are subject to a lower 10 percent tariff. In terms of the 35 percent, I think we're going to need a lot more details from the White House before that goes into place about which products. But it doesn't look like that kind of broad swath of tariffs across everything that comes south from Canada.

2:50And Bloomberg's Bill Ferries reports President Trump's announcement on Canada came as he told NBC News he's also eyeing blanket tariffs of 15 to 20 percent on most trading partners. Well, Nathan, Vietnam is seeking to lower its tariff rate by the U.S. Sources say the country's leadership was caught off guard by President Trump's announcement last week of a 20 percent tariff. Vietnam is pushing for a tariff in the 10 to 15 percent range. And Karen, Brazilian President Luiz Anasio Lula da Silva says his country can survive without trade with the U.S. and will look to other partners to replace America.

3:24In a broadcast interview, Lula said Brazil's trade with the U.S. represents 1.7 percent of its GDP. And quoting here, it's not like we can't survive without the U.S. Earlier this week, President Trump threatened 50 percent tariffs against Brazilian imports. Meanwhile, Nathan, tariffs on China remain in the spotlight this morning. Secretary of State Marco Rubio met his Chinese counterpart Wang Yi in Malaysia. It's the first in-person session between the two and a possible prelude to a presidential summit. The U.S. and China agreed in May to temporarily slash their high tariffs imposed on each other.

4:00Now, when it comes to the impact tariffs will have on inflation, Karen, Federal Reserve Bank of St. Louis President Alberto Musalem says it's too soon to tell. He spoke at an event in St. Louis yesterday. The outlook for inflation that I have, and it's in accordance with what many private forecasters have, is for inflation to increase going forward, mostly owing to tariffs, which may settle somewhere between the low teens or the low 20s, depending on trade policy. St. Louis Fed President Alberto Musalim says the tariff impact on inflation has been mild so far, but he expects it to show up more in data starting in June, July, August, or September.

4:45Nathan, President Trump says he plans to make a major statement on Russia on Monday. In an interview with NBC News, the president repeated his criticisms of Russian President Vladimir Putin over his continued attacks in Ukraine. He says he expects the Senate to pass a tougher sanctions bill sponsored by Republican Lindsey Graham, Though his option on whether to use it, it's his option, though, on whether to use it. And he says he's reached an agreement with NATO for allies to buy U.S. weapons that would then be sent to Ukraine. Now to the latest, Karen, on the flood disaster in Texas. President Trump plans to visit Hill Country today, where at least 120 people were killed in last weekend's flash floods, and more than 170 are still missing.

5:27Fredericksburg, Texas Fire Marshal Reagan-Rabke says more than 2 ,000 local, state, and federal workers are still searching for victims in Kerr County. And we have heavy equipment working, and we're having to dig through it by hand as well. Just because the machines can go through it, we have to be very methodical about what we're doing. That's Fredericksburg Fire Marshal Reagan-Rabke. President Trump's expected to get an aerial tour of some of the hard-hit areas and meet with first responders and relatives of flood victims. Texas's two Republican senators are expected to join the president aboard Air Force One.

5:58Let's turn to the markets now, Nathan, where futures are lower as we close out the trading week. Yesterday, the S &P 500 closed at a record as it nears the 6 ,300 level. Veronica Willis is global investment strategist at Wells Fargo Bank. The market's seen a really impressive rally from those lows earlier this year. Maybe it's gotten a little bit ahead of itself. There are still some uncertainties related to trade. We've got, you know, earnings season coming up, which could start to see some of those impacts around that uncertainty around prices and uncertainty around tariffs. Wells Fargo Banks' Veronica Willis, the S &P 500 is up almost 7 % so far this year.

6:39And while stocks have been reaching new heights, Karen, so has Bitcoin. It's trading at another all-time high this morning at about$118 ,000 per token. Analysts say the rally's triggered a major unwinding of short positions with more than a billion dollars worth of bets against Bitcoin being liquidated. Investors have also poured a net$1.2 billion into Bitcoin ETFs. Nathan, in Europe, the U.K. economy shrank for a second straight month as companies and consumers struggled to bounce back from the blow dealt by U.S. tariffs and a raft of tax increases. Gross domestic product declined one-tenth percent in May after contracting three-tenths percent the previous month.

7:16And staying in Europe, Karen, shares of BP are up 2.5%. The oil giant says it expects to report rising production and a strong result from its oil trading business for the second quarter.

7:30Time 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 New Hampshire has blocked President Trump to move forward with his ban on birthright citizenship. The Supreme Court determined federal judges could not issue sweeping nationwide injunctions against many of President Trump's policies. But the plaintiffs worked around that ruling by filing a class action lawsuit on behalf of all children born in the U.S. after February 20th. Cody Wafse is the deputy director of the ACLU's Immigrants Rights Project and the lead attorney on the class action lawsuit.

8:09So no matter how much the Trump administration may dislike it, they cannot break it, they cannot ignore it. It is the right of every child born in this country. Palestinian activist Mahmoud Khalil's role in Columbia campus protests against Israel led to his detention for over three months in immigration jail. Now he's seeking$20 million in damages from the Trump administration. His lawyers filed a claim alleging false imprisonment and malicious prosecution after his march arrest by federal agents. Khalil, a legal U.S. resident, said he suffered severe anguish in jail. The government has accused Khalil of leading protests aligned with Hamas but has not provided any evidence of a link.

8:55New York City Mayor Eric Adams' campaign says he has raised more than a million dollars for his re-election effort in a single night at a fundraiser in Manhattan. According to a person familiar with the matter, Wednesday's fundraiser was attended by several hundred people and more than 800 donated. Adams said the passion against Zoran Mamdani will ultimately propel him to win a second term. Heard on Bloomberg yesterday, Adams once again said that former New York Governor Andrew Cuomo, who is also running as an independent, should drop out of the race. We both interacted and I said you should step aside for the good of this city.

9:34We both agree the city will move in the wrong direction under the primary winner and I think he should do the right thing. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg Aaron. All right, Michael Barr, thank you. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise, proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

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12:03Time now for the Bloomberg Sports Update. Here's John Stashauer. John, good morning. Good morning, Karen. Late in the Yankees game of Seattle at the stadium, the question was not Would the Yankees win? It was. Would they get a hit? They did not have one through seven innings against the Mariners. Brian Woo. Jazz Chisholm broke up the no-hitter, and then he scored on a sack flight to end the shutout, and it got interesting when Giancarlo Stanton added a pinch hit two-run homer, and even more so with an Austin Wells two-out, two-run game-time single bottom of the ninth inning. They went to the tenth.

12:34The 1-1. High-fly ball. Center field tagging Volpe. The catch is made. Here comes Volpe. Here's the throw. Here's the play. He's safe. Yankees win. A sack fly by Judge. Yankees win 6-5 from no hit to no way. Yes, now worth the call. Series sweep. Yanks two games behind Toronto as they begin their final series before the All-Star break tonight at home against the Cubs. The Mets are in Kansas City. Kodai Singa tonight comes off the injured list. The Mets just got swept to the doubleheader in Baltimore. 3-1 and 7-3. They now trail the Phillies by a game and a half. The Red Sox, with their seventh straight win on only four hits, would beat Tampa Bay 4-3.

13:17National is lost in St. Louis 8-1. The Wimbledon semifinals for the men. American Taylor Fritz trying to upset the two-time defending champion Carlos Alcaraz. And then it's the top seed Yannick Sinner against Novak Djokovic, who will be playing his 52nd career Grand Slam semifinal match. Lee Elia, who managed the Cubs and Phillies, has died at 87. It was in 1983, after fans got on his struggling Cubs team, that Elia delivered the greatest expletive-filled rant in history, 23 F-bombs. The Cubs only played day games then, and Elia noted, among many other things, that 85 % of the population works, and the other 15 go to Cubs games.

13:57I'm Stash Edward, Bloomberg Sports, Karen 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 on a morning of trade threats rippling through the market. Once again, President Trump says he could slap 35 % tariffs on some Canadian goods, 15 to 20 for everyone else. And now Vietnam is saying it was caught off guard with the 20 % announcement that President Trump made last week and is still working to get that tariff rate down. Here to work us through all the latest trade headlines this morning, Bloomberg News senior editor Bill Ferries.

14:39Bill, where to start? I guess with the Canada announcement on social media last night. How to take a 35 percent tariff given that we are under a USMCA agreement still? Good morning. Good morning, Nathan. Yeah, the 35 percent number from President Trump, that's a big headline number. But we still aren't sure what the reality of that means. I mean, it does seem like from our reporting that a lot of the products or the products that are covered under that U.S. MCA trade agreement are not going to face that 35 percent tariff. And frankly, that's the that's the majority of goods that Canada is exporting to the U.S.

15:17There's also just the big ticket items like energy, for instance, is facing a 10 percent tariff. That's likely to not change under this regime. So there's a big question about exactly how many products will really face that 35 percent. But it is, you know, it's not good news for Canada at all. And it's not good news for all these other countries out there that are still waiting to get letters or still, you know, hurriedly trying to negotiate deals. Yeah, you have to wonder now what those negotiations are going to look like when we've heard the report from NBC News that the president's thinking about a 15 to 20 percent blanket tariff anyway.

15:58Yeah, and 15 to 20 percent, you know, in comparison to some of the numbers we saw on April 2nd, Liberation Day, that might seem like relatively low numbers. But when you keep in mind that, you know, the average U.S. tariff for years up till January was about 2 percent, you know, 15 to 20 percent is a significant increase and would have a big impact on trading partners and the U.S. economy. So it remains to be seen if that's really what's going to happen. But we have seen the president rolling out these, sometimes more than a dozen at a time, these letters just going out, naming a tariff rate. Now they have till August 1st to perhaps try to work that down.

16:41But that's a lot of work that would have to get done in just less than three weeks. And along with the letters, we've seen the rollout so far of just two framework agreements with the U.K. and Vietnam. And now it seems like there are questions about whether the Vietnam framework was really agreed to by both sides the way they thought it was. Yeah, this is an exclusive from Bloomberg. But, you know, people who are familiar with how the negotiations were going say Vietnamese officials were were surprised by Trump's public announcement about the deal and the 20 percent tariff. They had been looking for something lower than that.

17:19And it was interesting to note after Trump came out and said 20 percent for Vietnam, the Vietnamese government really never confirmed that agreement at all. And they basically deflected a lot of the questions that got raised about it. So now it turns that maybe they they thought they were getting something else or were still in talks for a better deal. So it'll be interesting to see how that plays out after August 1st as well. Well, but what does this tell you about all the negotiations that have been going on, not just with Vietnam, but with Canada as well? They've been working for literally months now to try to cut to some kind of middle between the U.S.

17:57and Canada. And now we've got this 35 percent announcement. Yeah, I mean, at one point we were promised 90 deals in 90 days, and we're so far off the mark when it comes to that at this point. As you mentioned, just two framework deals. It does seem that the president doesn't have a lot of patience for maybe the complexity of these trade agreements. Even Treasury Secretary Scott Bessent was actually asked at a forum this week how he would compare his two big bosses in his life, George Soros and Donald Trump. And he said, well, they're both very impatient when it comes to a high stakes deal. I think we're seeing how that plays out with the White House now.

18:37This 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.

19:17Search 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.

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