US & Iran Strike Each Other, Trump's New Tariffs Blocked

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1:59Alexa's tensions are building once again between the U.S. and Iran as the world waits for Iran's response to a U.S. peace offer. Overnight, the U.S. attacked missile and drone launch sites inside Iran that it says were used to attack three U.S. warships in the Strait of Hormuz. That's after Iran accused the U.S. of targeting two of its oil tankers in striking civilian areas along its southern coast and Kashim Island. But President Trump says the ceasefire is still intact. They trifled with us today. We blew them away. They trifled. I call that a trifle. I'll let you know when there's no season.

2:33You won't have to know. President Trump's threatening to hit Iran even harder if it doesn't reach a deal. We get more from Bloomberg's Jumana Bersechi in Dubai. There is a strong push from the U.S. side to get a deal across the line. But we are still in this period where we're waiting to hear back from the Iranians officially about the 14.1-page proposal that the U.S. has put forward. As you were reporting earlier in the week, some of the demands that the U.S. have put on that paper are deemed to be quite maximalist from Iran's standpoint. So it is unclear at this point whether there can be some form of a compromise and indeed whether you can get to a compromise over a 30-day period.

3:11Bloomberg's Jumana Bersetje reports Iran is still expected to respond to the U.S. offer through Pakistani mediators in the next two days. President Trump is moving ahead with plans to hold a summit with his Chinese counterpart, Xi Jinping, next week in Beijing. And he's bringing some big name guests along with him. Bloomberg's Tom Busby reports from New York. The president bringing a who's who of American business leaders for next week's summit in China, despite there being no resolution to the U.S. war against Iran. Now, among those planning to attend, Blackstone CEO Steve Schwartzman, Citigroup CEO Jane Frazier, with Semaphore reporting that the administration also plans to invite Kelly Ortberg of Boeing, Jensen Wang of NVIDIA, and others.

3:51Trump and Xi slated for a sit-down meeting May 14th and 15th. That summit has already been postponed once due to the war. Tom Busby, Bloomberg Radio. Tom, thanks. Let's turn to politics in the U.K. now. Now, the Labour government is taking heavy losses as the first wave of local election results comes in. For more, let's go to London and get the latest with Bloomberg's James Woolcock. Good morning, James. Nathan, Alexis, Prime Minister Keir Starmer says the results are very tough. There's no sugarcoating it and that he takes responsibility for the losses. We're still waiting on the majority of results, but the early signs are it is a disastrous election for the governing Labour Party.

4:30the right-wing populist reform UK party are set to pick up hundreds of seats already. They've taken control of two councils in elections in England. And as we wait for the rest of the day, we are still waiting on Wales and Scotland elections too, where Labour are also set to perform very poorly. The question now for markets and people in the UK is does the Labour Party decide that Keir Starmer needs to be a change in leader as well as someone who is an election loser? In London, James Walcock. Bloomberg Radio. Thanks, James. And President Trump says he's giving the European Union until July 4th to ratify its trade agreement with the U.S.

5:08Bloomberg's Juan Potts reports from London. Having previously threatened to hike tariffs on auto imports as soon as this week, Donald Trump has extended his deadline for the EU to ratify its trade deal. The move comes after Trump spoke to European Commission President Ursula von der Leyen. Negotiators from the European Parliament and member states discussed potential amendments to the deal earlier this week, but we're told didn't reach any conclusive decisions. In London, I'm Ewan Potts, Bloomberg Radio. Ewan, thanks. A major piece of President Trump's effort to rebuild his tariff wall has just been declared unlawful.

5:41Federal trade courts invalidated the president's 10 percent global tariffs under Section 122 of the 1974 Trade Act. That law had never been invoked before to impose tariffs, but the president used it back in February after the Supreme Court struck down his sweeping emergency tariffs. The court says the ruling against Section 122 only applies to the group of small businesses that challenged it, along with Washington state. It's unclear what the ruling will mean for other importers that have been paying those duties. And turning to the markets now, futures are higher ahead of today's key jobs report.

6:14Economists are expecting a slowdown in hiring in April. The median forecast is for a gain of 65 ,000 jobs and the unemployment rate to hold steady at 4.3 percent. Bloomberg's Michael McKee reports. It's a one-number increase as far as economists and investors are concerned. With immigration near zero, the labor force isn't growing much, which means headline job growth is going to be a lot smaller. That's why the Fed will pay attention to the unemployment rate. If it's not rising, it's not signaling problems for the employment side of their mandate. And near record low jobless claims suggest unemployment is stable.

6:49There will be some focus on average hourly earnings, which are forecast to rise. policymakers are looking for any signs labor shortages or rising costs of things like gasoline are pushing up on inflation. Michael McKee, Bloomberg Radio. San Francisco Fed President Mary Daly says there is no indication the surge in energy prices is driving inflation expectations higher. Daly spoke with Bloomberg's Mike McKee. If the conflict ends and oil prices come back down and that doesn't get passed into the broader economy, then I expect the underlying dynamics that we were facing prior to the conflict to return, which is policy is slightly restrictive, continues to put downward pressure on inflation.

7:29The labor market is stable right now, but it's not creating any inflationary pressures. San Francisco Fed President Mary Daly. And stay with Bloomberg to hear more Fed voices. At 2 p.m. Wall Street time today, Mike McKee sits down with Chicago Fed President Austin Goolsbee. You can catch that conversation live on Bloomberg Radio, Bloomberg Television and the Bloomberg Business App. And Nathan, now to two Bloomberg exclusives. First, SoftBank. It's downsizing plans for a$10 billion margin loan backed by its stake in OpenAI. Some creditors are expressing concerns about the difficulty of reaching a valuation for an unlisted company like OpenAI.

8:07SoftBank is now said to be targeting a margin loan of about $6 billion. The developer of chat GPT has faced challenges this year in meeting sales targets and some internal goals. That's his rival, Anthropic, gains ground in the coding and enterprise markets. And sources say a key company behind Thailand's national artificial intelligence effort is suspected of helping to smuggle servers containing advanced NVIDIA chips to China. Bloomberg News has learned U.S. prosecutors have outlined a scheme in which Supermicro's co-founder allegedly worked with OBON and third-party brokers to divert AI semiconductors in violation of U.S.

8:44trade rules. The alleged involvement of OBON in this smuggling arrangement could raise questions about NVIDIA's due diligence on high-volume sales of its hardware. 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. Good morning, Michael. Good morning, Alexis. Spanish authorities are preparing to receive passengers and crew members on a hantavirus-stricken cruise ship headed for the Canary Islands. At least three passengers have died and several others are sick, but the World Health Organization says the risk to the wider public from the outbreak is low.

9:21Dr. Stephanie Widmer is the director of the medical toxicology program at St. John's Riverside Hospital in New York. At this point, health officials are assuming person-to-person transmission is possible because this appears to involve the Andes strain of Hantavirus, which is one strain known to occasionally spread between humans. Dr. Stephanie Whitmer, authorities across four continents are tracing contacts of passengers who left the ship, and the CDC has ranked the Hantavirus a Level 3 response that is the lowest level of emergency activation and typical for this stage. Secretary of State Marco Rubio spent several hours at the Vatican Thursday.

10:01His visit included a meeting with Pope Leo. During an exchange of gifts, Rubio gave the Pope a small crystal football with a State Department seal. Leo gifting Rubio a pen apparently made of olive wood. Olive being, of course, a plant of peace. This is the coat of arms here. Today, Secretary Rubio is set to meet with Italy's prime minister. After widespread backlash, soccer fans are getting a bit of a break. New Jersey Transit will reduce its World Cup ticket price from$150 to$105. Governor Mikey Sherrill has directed the agency to find private sponsorships and other sources to reduce the cost, noting that FIFA should contribute to transport of its fans to World Cup games.

10:47The original round-trip price from New York's Penn Station to MetLife Stadium was raised to cover the additional costs of carrying fans to each game. By the way, a typical ride on a regular day costs about$13. Global News, 24 hours a day and whatever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg Alexis. Thanks, Michael. Time now for our Bloomberg Sports Update, and for that, we bring in John Stashauer. Home teams won in the NBA playoffs. That includes the Detroit Pistons, and now five straight playoff victories beat Cleveland 107-97. The Cavs in the playoffs are 0-5 on the road.

11:22Oklahoma City 6-0 in the playoffs, with every win by at least nine points, the second straight 18-point win over the Lakers. Carolina Hurricanes 7-0 in the Stanley Cup playoffs. They've only allowed eight goals in seven games, a 4-1 win at Philadelphia. Aaron Rodgers to meet today with the Pittsburgh Steelers moving closer to making a return. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Is passive investing costing you more than you think? Active ETFs aim to beat the benchmark, while passive ETFs just settle for them. Embrace an active strategy that helps you build stronger portfolios.

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12:55Coast 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. Coming up on 10 full weeks of war in the Middle East, the U.S. and Iran are trading fire once again around the Strait of Hormuz. But President Trump says the ceasefire is still on as he waits for Iran's response to his latest peace offer. If there's no ceasefire, you're not going to have to know. You're just going to have to look at one big glow coming out of Iran. That was President Trump speaking near the Lincoln Memorial Reflecting Pool in Washington.

13:29Joining us from Dubai this morning is Bloomberg Middle East correspondent Jumana Bersechi, the anchor of Bloomberg Horizons. Jumana, catch us up on what's been happening over the last 24 hours. Is the ceasefire holding? Good morning. Yeah, well, that's what Trump is saying. And so far, from the Iranian side as well, they seem to be respecting the ceasefire apart from that scuffle overnight around the straits. Certainly there was an escalation. and CENTCOM saying that three U.S. warships came under attack by Iran while they were crossing the straits. So the attack involved missiles, drones, and small boats.

14:03So the U.S. responded to that. They struck back around the Iranian coast and also hit some key launch sites and command and control locations. But that was that. It was almost a tit for tat. And later, President Trump was asked about it, whether that did constitute a violation of the ceasefire from his perspective. And he said no. However, he did threaten once again and said, just like we knocked them out today, we'll knock them out a lot harder, a lot more violently in the future if they don't get their deal signed fast. So once again, really putting the pressure on the Iranian side to come forward and offer their response to the memorandum of understanding that the U.S.

14:43put forward to them earlier this week. Well, do we have any sense that that pressure is being felt on the Iranian side? Are we still expecting some kind of response in the next day or so? We are. We are. We know that they are reviewing it. And this is according to sources that we've spoken to at Bloomberg and indeed what the Iranian foreign ministry spokesperson has said in the last 24 hours. They are reviewing the document, but they've also characterized the document as being very maximalist in terms of what the U.S. is looking for. And so the question here is how Iran is going to come back, whether they're going to completely cut off the process or whether they will extend the process of negotiations once again, and whether we can actually move towards this phased plan that both the U.S.

15:29and Iran actually have been positing the last couple of weeks, which would entail a gradual lifting of the mutual blockades around the straits, as at the same time they talk about some of those bigger issues around the nuclear file and ballistic missiles and the lifting of sanctions. The other issues obviously at the core of the issue and why the war was started in the first place. The strait is the one that President Trump seems to care about the most right now because it's having the most notable economic impact. We'd heard some reports that the effort to reopen the strait on the U.S. side was delayed in part because Saudi Arabia wasn't allowing access to its bases.

16:08Now there are reports that that's kind of been reversed. What could that mean for the potential of the U.S. trying to reopen the Strait of Hormuz again? And how could Iran respond to that? We've got about a minute left. Yeah, I just want to say that the official Ministry of Foreign Affairs diplomatic senior advisor from Saudi Arabia put up a tweet this morning saying, The Kingdom of Saudi Arabia maintains its position supporting de-escalation and negotiation efforts. Beware of media reports attributed to unnamed sources, some of whom claim to be Saudi, suggesting otherwise. It is strange to see such a post put up, but I think Saudi Arabia just wants to reiterate that they are keen on a diplomatic solution here.

16:53That's probably not the case for the likes of the UAE, and we can speak about that. And their posture towards Iran has been a lot more aggressive. Saudi Arabia is still pushing the diplomatic angle, despite all of the media reports that have emerged. 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.

17:34Plus, 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 Alexis Christophorus. 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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