US and EU Reach Tariff Deal; US and China Hold Trade Talks On today's podcast:

0:00Bloomberg Daybreak U.S. edition is brought to you by OTC Markets Group. OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Learn more at otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer, and is available only through participating broker-dealers. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

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2:07And I'm Karen Moscow. Here are the stories we're following today. Karen, the jump in futures comes as the U.S. and the European Union have agreed to a deal that will see 15 percent tariffs on most EU imports into the U.S. The deal staves off an escalation and hostilities in the world's biggest trading relationship, but many details still need to be ironed out. President Trump announced the deal alongside European Commission President Ursula von der Leyen during his trip to Scotland. We've reached a deal. It's a good deal for everybody, I believe. And I think you were saying this is probably the biggest deal ever reached in any capacity, trade or beyond trade.

2:47It is. It's a giant deal with lots of countries. And Bloomberg's Lizzie Burden is covering the president's trip. She has more from Turnberry, Scotland. We await the details, but what we know is that 15 percent is all inclusive. So Trump can't be stacking extra levies on specific industries like drugs and chips and cars. And without a deal, Bloomberg Economics had estimated that the U.S. average effective tariff rate in the EU would have been 18 percent from Friday, from the August the 1st deadline. Now that's about 16 percent. And von der Leyen admits that this is the best she could get. Now, how did they get it over the line?

3:26Well, as a sweetener, a bit like Japan had to offer, there was an agreement to buy 750 billion dollars of American energy products, to invest 600 billion dollars in the U.S. on top of existing expenditures, and to buy vast amounts of military equipment. And that's Bloomberg's Lizzie Burden reporting from Scotland, where President Trump will meet with U.K. Prime Minister Keir Starmer later today. The British leader will be looking to finalize his trade deal with the U.S. and push for a lasting ceasefire in Gaza. On top of all that, Karen, U.S. and Chinese officials are meeting in Sweden today to extend their trade truce beyond its August 12th deadline.

4:07It'll be the third meeting in less than three months for Treasury Secretary Scott Besant and Chinese Vice Premier He Li Fang. Bloomberg's Oliver Crook is in Stockholm covering that meeting. The expectations will be somewhat more muted than what we got in Scotland with the EU, which was, you know, amounted to the beginning of a framework of a comprehensive deal between the EU and the United States. This is really just an ability and an endeavor to kick the can a little bit further down the road, because if just to remind everybody where we are on the U.S.-China tariffs, they were at 125 percent.

4:37They were then reduced now to the level that they rest at, which is 30 percent. But that trade truce was basically set to run out on August the 12th, which is, as we know, you know, just about a week and a half away from there. This is an opportunity for them to begin to discuss some of the main sort of issues to get a full deal, but really also to extend that truce for another likely 90 days. Bloomberg's Olly Crook says any breakthrough today could help set the stage for President Trump to meet with his Chinese counterpart Xi Jinping later this year. Nathan, questions about the Jeffrey Epstein case or following President Trump on his trip, the president was asked whether he rushed to deal with the EU to draw attention away from the matter.

5:14Oh, you got to be kidding with that. No, had nothing to do with it. Only you would think that. But back in Washington, a pair of lawmakers have come together on a bill that would force the House to vote on releasing more documents about the pedophile financier, Republican Thomas Massey. It would force a full release of the files. It has the force of law. It's not a subpoena. It's not a pretty please. Would you release the files? It's the force of law. And it's got protections to redact victims' names and to prevent release of child pornography. And Democrat Ro Khanna. Pam Bondi says there's a client list.

5:51Then she says, no, it's just the file. She's going to release them. I didn't criticize them at all those first few months. But when they refused to release the files. When they said there's nothing more to see, that's when we said transparency demands the full release of the files. Congress members Ro Khanna and Thomas Massey appeared on ABC's This Week, which can be heard every Sunday on Bloomberg Radio. Turning to the economy now, Karen, we have two key events awaiting investors this week. On Wednesday, the Fed makes a rate decision. That'll be followed two days later by the July Jobs Report.

6:21We get a preview from Bloomberg's Michael McKean. It's a little like having dessert first. The Fed meets on interest rates Wednesday, not expected to change anything. Inflation is rising a little, but Trump's import tax increases haven't really hit the economy yet. Investors are hoping the central bank will hint at a move in September. That will depend on the data, of course. If job growth weakens further or unemployment rises further, that could prompt a rate cut. Economists are forecasting both happened during July, but July's jobs report isn't due until Friday after the Fed meets. Michael McKee, Bloomberg Radio.

6:57All right, Mike, thank you. It's also a busy week on the earnings front. Four tech giants will lead the way, and we get a preview with Bloomberg's Charlie Pellin. Apple, Amazon, Microsoft, and meta platforms will be among this week's most closely watched, with AI and tariffs a major focus. John Stoltzfus is chief investment strategist at Oppenheimer. So, you know, we think this is, so far, so good. That's the remarkable thing, and we like our call where it is in terms of being bullish, but at the same time recognizing that there's still some risk within this tariff regime and where it arrives at.

7:31Also this week, UnitedHealth, Boeing, Visa, along with eBay, Cloudflare, Starbucks, UPS, ExxonMobil, and Chevron. In New York, Charlie Pellett, Bloomberg Radio. All right, Charlie, thank you. And in more company news, Samsung will produce semiconductors for Tesla. It's a$16.5 billion deal lasting until 2023, I should say. The contract is a win for South Korea's largest company. It's steadily been losing ground in chip manufacturing. Bloomberg Intelligence says the agreement could boost Samsung's foundry sales by up to 10 percent a year. In a social media post, Tesla CEO Elon Musk said the strategic importance of the deal was hard to overstate.

8:15Time 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. It is another hot and humid day in the Northeast. Bloomberg meteorologist Craig Allen has the latest. Over two dozen states with heat alerts in effect for today, right on through the mid-portion of the week. Over 100 million people with some kind of an alert. There will be about 20 million people across the Southeast and East Central states in an extreme heat risk right on through Thursday. Bloomberg meteorologist Craig Allen, temperatures are expected to reach close to the mid-90s for the next several days.

8:55Israel's military has begun a limited pause in fighting in three populated areas of Gaza for 10 hours a day as part of humanitarian measures, including airdrops for food and medical supplies as concerns grow over hunger. Meanwhile, Israeli Prime Minister Benjamin Netanyahu blamed Hamas for stealing aid and called on the United Nations to distribute it more effectively. Stop lying. Stop finding excuses. Do what you have to do and stop accusing Israel deliberately of this egregious falsehood. Several international organizations and doctors volunteering at hospitals in Gaza report starvation deaths among Palestinians there.

9:39Dr. Nick Maynard, a surgeon based in the United Kingdom, volunteers in Gaza. Every time it's much worse than I expected. And the conditions that I witnessed with my own eyes over the four weeks I was there until just a few days ago, the humanitarian conditions are unfathomable. Dr. Maynard said other doctors have brought in baby formula only to have it confiscated by IDF soldiers. Prosecutors say they plan to file terrorism and assault with intent to murder charges against the suspect in a weekend knife attack at a Walmart store in Michigan. Eleven people were stabbed over the weekend at the store in Traverse City.

10:21All are expected to survive. Authorities say 42-year-old Bradford Gilley is in custody. Police say a group of bystanders intervened and detained the suspect in the parking lot. Global News, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr, and this is Bloomberg. Karen. All right, Michael, thank you. Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space but unsure where to start? Designed to meet the needs of a growing international investor base, OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S.

11:01dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Extend your trading day and trade global securities in U.S. dollars through a FINRA-licensed broker-dealer. In the first half of 2026, over$28.1 billion U.S. dollars traded on Moon ATS. Learn more about Moon ATS. Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. 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.

11:47Not 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. Let's create smarter business. IBM. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated for patients and providers.

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13:02Time now for the Bloomberg Sports Update, brought to you by Flushing Bank. Here's Dan Schwartzman. Dan, good morning. Good morning, Karen and Nathan. Five new members are welcomed into the National Baseball Hall of Fame. Ichiro Suzuki becoming the first Japanese-born player enshrined. Ichiro joined by CeCe Sabathia, Billy Wagner, and both Dick Allen and Dave Parker posthumously. One of the best potential trade candidates leading up to baseball's trade deadline this Thursday will be off the market as last season's AL Cy Young Award runner-up Seth Lugo and the Royals are finalizing a two-year$46 million contract.

13:34The Yankees snapping their three-game losing streak with a 4-3 win of the Phillies in the Bronx. Ground it. Fair ball. Down the right field line. That'll go into the corner. Stanton scores. Chisholm scores. Dominguez will stop at third. It's a two-run double for McMahon, and the Yankees have tied the score. That's courtesy of the Yes Network. Ryan McMahon going two for three while driving in two runs. Mets winners a seven trade after sweeping the Giants in San Francisco 5-3. Mets getting homers from both Juan Soto and Ronnie Mauricio. Elsewhere, Red Sox outlasting the Dodgers 4-3. Orioles knocking off the Rockies 5-1, while the Nationals beat the Twins 7-2.

14:13Meanwhile, baseball's home run leader Cal Raleigh hitting his 41st of the season in a Mariners loss to the Angels while Mike Trout reaches a milestone. To center field. Rodriguez watching, and this is way back there. Wow. That's courtesy of Roku Sports Channel. Trout driving in his 1 ,000th runner with a home run in the win. Bubba Wallace becoming the first black driver to win a major race on Indianapolis Motor Speedway, winning the Brickyard 400, holding off defending champion Kyle Larson for the win. That's your Bloomberg Sports Update. I'm Dan Schwartzman, Karen and Nathan.

15:16It's a very powerful deal. It's a very big deal. It's the biggest of all the deals. It will be the biggest of all the deals. It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic. Presidents von der Leyen and Trump announced the agreement at President Trump's golf course in Turnberry, Scotland. Joining us with the details is Bloomberg News Global Trade Editor Brendan Murray. And of course, Brendan, the devil always is in the details. So what's the devil we know? Good morning. Morning. Yes. So the as one former trade negotiator told us, the EU played a bad hand about as well as it could have.

15:54No country likes to see its tariff from another country go up to even 15 percent. But still, that was half of what the EU was facing from President Trump. So there's a sense that they got about as good as a deal as any other country could have gotten their auto tariffs. The European cars now face a 15 % tariff, where before it was 27.5. So they can point to a bit of relief there. But the European auto industry says this is still going to put some strains on them and their ability to sell cars into the U.S. So there was a little bit of concessions on both sides. Both leaders walked away saying this is a win for both of us.

16:38But as you said, the devil is in the details, and there are a lot of details to sort out here just exactly how the breakdown of the European purchases is going to show us. President Trump said this was going to lead to$750 billion worth of energy exports from the U.S. to Europe and$600 billion worth of investments that they weren't already going to make. So we need to know what the timetable is on those and the breakdown of energy products and what kinds of investments we're talking about. So it sounds like a lot of similar questions to what's being asked about the$550 billion investment agreement that we heard about with Japan as well.

17:23So walk us through what we are looking for from these details. Well, the two sides, I mean, the main thing that they did was that things are not going to escalate on August 1st. And so that means that the tariff of 30 percent is not going to take effect. They will spend the coming weeks going through the fine print and carrying out the sort of broad outlines of this preliminary deal that they've announced. So, obviously, things can change and people can misunderstand what their intentions are. But if they keep working at the negotiating table, they can iron out this deal that President Trump says is the biggest of all of them.

18:06But once you add it all up, we'll want to take a look under the microscope at what exactly the fine print says. And I guess there's still a question as well, isn't there, about some of the other sectoral tariffs besides automobiles, particularly around pharmaceuticals and steel and aluminum? Yeah, exactly. So the pharmaceuticals, steel and aluminum, cars, semiconductors, those are all being dealt with under a separate authority the president has to impose tariffs. So they've dealt with the cars at 15 percent. There's also a pledge in yesterday's agreement to keep pharmaceuticals at 15 percent.

18:46But the other question is now what happens with semiconductors? There's a large Dutch semiconductor maker that would have a lot at stake in what that tariff rate would be. There's also copper tariffs coming. And we don't know how broad those are going to be, but Europe is a big supplier of machinery and chemicals and industrial supplies to the U.S. So copper tariffs are also going to be factored in here in the overall tariff burden that European exports are going to face trying to get into the U.S. market. In our last minute, Brendan, we're waiting for a third round of talks between the U.S. and China.

19:27What should we be expecting there? Yeah, those are getting up and underway in a few hours. We wouldn't extend, and they last through tomorrow. This is basically the first in what the U.S. hopes will be a regular conversation with their counterparts in China to make sure that the relationship, the rivalry stays stable and that neither side starts escalating things or limiting the exports of certain things that the other party needs. And so, we would expect this to be a dialogue that produces an extension of the truce that they already have. So, we're looking at maybe another 90 days into what would be November of both sides saying we're not going to raise tariffs on each other.

20:17And that will provide some stability as the two largest economies try to sort their problems out. 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.

20:57And 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 care in 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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