US to Narrow Metals Tariffs; DHS Shutdown Looms as Senate Fails to Cut Deal

0:01Bloomberg Audio Studios Podcast Radio News. good morning i'm nathan hager and i'm john tucker here are the stories we're following today john we begin with new developments this morning on global tariffs bloomberg news has learned the trump administration is working to narrow its broad duties on steel and aluminum products we get more from bloomberg global trades are brendan murray well what we know is the trump administration has acknowledged that the the steel and aluminum tariffs that they rolled out in waves last year are overly complicated for a lot of companies and have really created a lot of unintended victims that have to pay these tariffs.

0:46They rolled out the first 25 percent tariff in March of 2025. Then they raised it to 50 percent in June. And then in August, they extended the scope of the tariffs to include a whole host of maybe hundreds of goods that contain steel and aluminum. Bloomberg's Brendan Murray says ending or curtailing the derivative tariffs would be a positive step for the U.S.-European Union trade accord. And meanwhile, Nathan, the Environmental Protection Agency has revoked a key scientific finding that supported U.S. regulations on greenhouse gas emissions. Let's get that story from Washington and Bloomberg's Amy Morris.

1:26The move rescinds a 2009 declaration that carbon dioxide and other gases endanger public health. EPA Administrator Lee Zeldin calls this a major deregulatory action. President Trump says ultimately it saves money. This action will eliminate over$1.3 trillion of regulatory costs and help bring car prices tumbling down dramatically. The so-called endangerment finding serves as the legal foundation for a lot of environmental rules, including federal standards for vehicle emissions. Trump says he'll also repeal those. Amy Morris, Bloomberg Radio. All right, Amy, thank you. On Capitol Hill, it's gone quiet.

2:05The Senate has headed out for a week-long recess. The federal government is headed for its second partial shutdown in as many months, and the third since President Trump returned to office. This one will affect only the Department of Homeland Security. The Senate failed to begin debate on a year-long bill for the agency that included no changes to immigration enforcement. Senate Minority Leader Chuck Schumer says that would have been unacceptable. This vote today asked a simple question. Will you rein in ISIS abuses or will you vote to extend the chaos? Republicans chose chaos and the Democrats, we refused.

2:41Minority Leader Chuck Schumer says Democrats want immigration agents to wear body cameras and obtain warrants, take off masks and have limited immunity from lawsuits. Majority Leader John Thune says the White House presented a good faith counteroffer, but he says it looks like the Democrats aren't serious. Under a shutdown, most DHS employees will be expected to work without pay. That includes the Transportation Security Administration, which could mean a strain at the airports. And more fallout this morning from the Jeffrey Epstein scandal. Goldman Sachs' top lawyer, Kathy Rembler, leaving the firm.

3:13This follows a cache of Department of Justice documents showing her links to the sex offender. Rembler, who's going to leave on June 30th, was well known for a time as a White House counsel in Barack Obama's administration. She was hired by Goldman Sachs in 2020 and later became its legal chief. All right, John, let's get you an update now on the search for Savannah Guthrie's mother, Nancy. Tomorrow will be two weeks since the Today Show host's mother was last seen at her home near Tucson. The FBI has doubled the reward for information leading to her captors to$100 ,000. And investigators are asking neighbors to share surveillance camera footage of suspicious cars or people they may have seen in the month before she disappeared.

3:53This neighbor just hopes they find Nancy Guthrie. She was the kindest, warmest, the most giving person I've ever met. And was passed on to her daughter, Savannah, as well, because that's how Savannah is. The FBI has also released more information about the masked man seen in surveillance video on Nancy Guthrie's front porch. They now say he is a suspect. He's 5 '9 or 5 '10 with an average build wearing a black 25-liter Ozark Trail hiker pack backpack. And Venezuela is planning to grant more oil production land to Chevron. and Spain's Repsol as the Trump administration pushes for private companies to rebuild that nation's energy sector.

4:31Sources are telling Bloomberg that officials in Caracas are poised to award the exploration and production blocks. As soon as this week, Energy Secretary Chris Wright spoke to Bloomberg's Anne-Marie Hordern about rebuilding the country's oil sector. I think in the first year, we'll see pretty significant 30, 40 percent growth in Venezuelan oil production. And this year, you can continue production growth rate at a pretty good clip. Venezuela does have the largest proved oil reserves, which is a technical concept, much larger than the U.S. Energy Secretary Chris Wright speaking to Bloomberg's Anne-Marie Hordern in Caracas.

5:07The Trump administration is expected to issue a general license to allow international oil companies to explore and produce in Venezuela without violating U.S. sanctions. Let's turn to the markets now, John. following another tech-fueled sell-off on Wall Street, which saw the Nasdaq fall 2 % yesterday. This morning, futures are mixed, but shares of applied materials are surging. They're up 12 % now in the pre-market. The largest U.S. supplier of chip-making gear delivered an upbeat sales forecast, signaling demand for artificial intelligence and memory semiconductors is fueling equipment purchases.

5:43Federal Reserve Governor Stephen Myron is once again calling for lower interest rates. He says the biggest risk to the economy right now is policymakers underestimating how much rates are restraining growth. It's still slack in the economy, increased potential output that can be accommodated by looser monetary policy. And so the combination of these things leads me to think that monetary policy is tighter than it needs to be and that we can afford to have lower interest rates. Fed Governor Stephen Myron spoke at an event in Dallas. He says underlying inflation is very close to the Fed's 2 % target.

6:19And another big payday for a banking boss. Citigroup has boosted the pay of Chief Executive Officer Jane Fraser to$42 million. The 22 % increase follows a year in which Citigroup's stock rose 66%. That's more than any other Wall Street bank. The pay bump puts Fraser's total package for the year of 2025 just a million dollars behind that of J.P. Morgan. and Shea's CEO, Jamie Dimon. And John, we're watching the skies this morning with NASA set to launch four astronauts to the International Space Station, replacing a crew that had to be evacuated early due to a medical issue. This is Crew-12's mission aboard a SpaceX Falcon 9 rocket.

7:00The pre-dawn launch was delayed by two days due to adverse weather conditions across the East Coast. These astronauts are expected to arrive at the orbiting ISS by tomorrow afternoon.

7:16And that brings us to 509 on Wall Street. Time 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, John. It's a victory for the Gateway Tunnel Project under the Hudson River in New York. The Trump administration is expected to restore federal funding for the tunnel construction after a deadline passed for an appeals court to block a judge's order to release the money. New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport said the administration must immediately release funding for the project as the order is now in effect.

7:55The federal government could still ask the Supreme Court to put the judge's order on hold. A federal judge agreed to block the Pentagon from punishing Senator Mark Kelly for taking part in a video telling troops to resist unlawful orders. It comes days after a federal grand jury refused to bring charges against the group of Democratic lawmakers for the same video. Defense Secretary Pete Hegzeth moved to demote Kelly from his rank of captain. However, U.S. District Judge Richard Leon ruled that Pentagon officials not only violated Kelly's First Amendment free speech rights, but they also threatened the constitutional liberties of millions of military retirees.

8:35Kelly spoke after the judge's ruling. So again, this isn't about me. This is about an administration that is out of control on so many different levels. Some Republicans support for Heggs's move, but others like GOP Senator Murkowski accused the administration of trying to make criminals out of lawmakers. Senator Kelly says he's fighting because retired service members have told him they change what they say and do because of how President Trump is acting. The pride flag is flying once again at the historic Stonewall Inn in Greenwich Village.

9:18New York City elected officials raised the flag once again. Earlier this week, the National Park Service removed the rainbow flag at the federal monument dedicated to LGBTQ rights, saying it was in line with administration guidelines. Global news, 24 hours a day, and whenever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg. Thanks, Michael. Time now for a Bloomberg Sports Update. For that, we bring in John Stashauer. Last game before the NBA All-Star break, the Lakers won by 20 over Dallas, and LeBron James at age 41 scored or assisted on each of the Lakers' first 23 points.

9:53He had never done that before in an NBA game, and he had a triple-double, the oldest to ever do that. At the Olympics today, the U.S. will play Italy in the women's hockey quarterfinals. The U.S. team is 4-0 by a combined score of 20-1, and in men's figure skating, the American Elia Malin goes for the gold. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots.

10:29Visit Bloomberg.com slash podcast offer to learn more.

10:36Coast 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 White House may be ready to do some tinkering with a piece of President Trump's tariff regime that has proven complicated. Bloomberg News has learned the administration's working to narrow its broad duties on steel and aluminum. For more, we're joined by Bloomberg News global trade czar Brendan Murray. Brendan, good morning. What are we hearing about the Trump administration's plans here? So if you recall, the president put a 25 percent tariff on steel and aluminum in March of last year.

11:13Then he raised it to 50 percent in June of last year. And then he added about 400 products that have steel and aluminum in them in August. So that captured a lot of imports and created some collateral damage from companies that use steel and aluminum. You can imagine how hard it is to figure out how much of the contents of a product you import contains steel and aluminum. And those companies have complained to the White House, and the White House has acknowledged that the complexity has gotten too much for these companies to handle. So it sounds like our reporting says that the administration is going to come at this with a more tailored approach rather than the sort of shotgun approach they had last year.

12:00So what would a tailored approach necessarily look like? Well, they could pull back the derivative product tariffs that they rolled out in August. That really annoyed the Europeans because the Europeans just a few weeks earlier had negotiated a trade deal with the U.S. And when they hit these other hundreds of products, the Europeans were like, you know, I thought we had a deal here, but you just hit us with a whole lot more. So they could pull those back. they could create some exclusions for tariffs that companies are having trouble paying. And so ultimately, these were designed to protect the steel industry.

12:41But what they've done is they've hit the users of steel, the domestic users of steel. All you have to look at is Ford and General Motors this week said that they paid$5 billion combined last year in U.S. tariffs. And that's because automakers use a lot of steel and aluminum. So is this the kind of thing that could smooth over the U.S.-EU trade deal? I mean, there's been a lot of back and forth in terms of getting this thing ratified. Yeah, the derivative product issue has been a big hang-up for the Europeans. And if it can be dealt with and narrowed, then that will go a long way toward resolving some of Brussels' issues with the tariffs as they see them now.

13:24The implementation of that deal still hasn't been fully carried through on the European side, and so that could help bring that deal over the line. Of course, Brendan, as you know, this is coming at a time where a lot of Americans are concerned about the cost of living and whether tariffs are feeding into that. Is that part of the calculus here from what you're hearing from the White House as far as these steel and aluminum tariffs go, that this could be a means to address some of those concerns? Absolutely. We've heard from both the Federal Reserve and the Congressional Budget Office this week that American consumers and businesses are paying the lion's share of the tariff bill.

14:05And we're going to get some consumer price numbers this morning, so we'll see how inflation looks as it stood in January. So absolutely, the White House is trying to moderate its approach, given the pressures that are coming from Congress and from consumers on the cost of living and the affordability issue. And given the potential impact here on the auto industry, what could this mean for the ongoing negotiations around the U.S.-Mexico-Canada agreement? We've been reporting that President Trump is at least privately talking about, why don't I just walk away from it? Yeah, exactly. So President Trump has really been picking on the Canadians recently, And Mexico and Canada would be interwoven into the auto supply chain with the U.S.

14:54And Mexico and Canada also have a lot of steel and aluminum imports. So it all factors into the broader negotiations that are going to take place this year for that North American Free Trade Agreement. 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 at Sirius XM channel 121.

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16:05Thank you.