Trump Seeks Elusive China Trade Deal; US Terminates Canada Trade Talks

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Good morning, I'm Nathan Hager and I'm Lisa Matteo. Here
are the top stories we're following today.
Lisa, we begin with new developments on two trade fronts. First,
talks between Treasury Secretary Scott Bessant and China's Vice Premier
Holy Fanger scheduled to take place in Malaysia this weekend.
It's a prelude to the closely watched meeting between Presidents
Trump and She Jinping next week. President Trump wants she
to resume American soybean purchases, crackdown on fentanyl, and back
off on restrictions on rare earth exports. He says, if
no deal has reached, big tariffs will resume.
Actually, on November first, the tariffun China goes to one
hundred and fifty seven percent, which is record setting territory.
And we don't want that because it's not sustainable for them.
They can't sustain that.
We don't want.
Them to have to go through that. So a meeting
with President she and I would say the first we
have some big issues like with the farmers and various
other things. But the first question I'm going to be
asking him about is fentat all.
President Trump is scheduled to arrive in Malaysia, his first
stop on his Asian trip, early Sunday morning.
Well meantime, Nathan, President Trump is injecting new uncertainty into
America's closest trading partnership. The President posted on truth Social
that he's terminating trade negotiations with Canada. He's citing this
TV advertisement from the Province of Ontario.
When someone says, let's impose tariffs on foreign imports, it
looks like they're doing the patriotic thing by protecting American
products and jobs. And sometimes for a short while it works,
but only for a short time.
But over the long.
Run, such trade barriers hurt every American worker and consumer.
That commercial features excerpts of them. President Ronald Reagan defending
free trade. We get more from Bloomberg's pens.
This is just a reminder of just how rocky the
relationship with Canada has been ever since Trump returned to
the White House, and even though there has been a
sense of stabilization recently and talks have been happening. Mark
Carney was in the White House a couple of weeks
ago when that meeting seems to have gone well. That
really important to trade relationship, which is worth almost a
trillion dollars a year.
Bloomberg's blash Pens reports President Trump is accusing Canada of
timing the AD to interfere with the Supreme Court case
against his country by country tariffs arguments in that case
set for November fifth.
Well, now, Lisa, let's turn to the latest on the
government shutdown. It is now day twenty four of the
second longest shutdown in American history. On day twenty three,
Senate Democrats blocked a Republican bill that would have paid
members of the military and federal workers who have had
to stay on the job since the funds ran out
October first. Democrats say that bill would have given President
Trump too much leeway to decide which government employees have
to keep working while this standoff continues. House Minoriti leader
hot Kim Jeffrey says all federal workers will receive pay
once the government reopens.
When Donald Trump says anything, and he's the President of
the United States, and there's been a willingness to engage
an unlawful and illegal behavior, sometimes rubberstamped by the Conservative
majority on the US Supreme Court. That's problematic, but the
law is very crystal clear in this particular instance, and
we are going to make sure that every single federal
employee receives the entirety of their pay house.
MINORITI leader Hakim Jeffrey spoke with Bloomberg's David Gura. You
can hear their full conversation on the latest edition of
the Bloomberg Big Take podcast.
And the government shutdown, Nathan, it's also delayed important economic data.
Later this morning, we finally get the consumer price report
for September. Bloomberg's Michael McKee has a preview.
One rose among the thorns. We actually get some inflation
data from the government. The Labor Department has called furloughed
employees back to work to put together this September consumer
Price Index. Social Security uses a third quarter CPI average
to determine next year cost of living increase for beneficiaries,
which by law, must be published this month. The data
had all been collected by the time the government shut
down on October first, so it's simply a matter of
collating it and making the usual seasonal adjustments. And let's
expect we'll see no appreciable slow down from August, with
headline CPI rising four tenths percent during the month and
core three tenths. That would put the annual rate of
inflation at three point one percent for both, another move
in the wrong direction for the FED. Michael McKee, Bloomberg Radio.
All right, Mike, thanks, One question remains who will be
the next FED chairman? Bloomberg's Tom Keane put that question
to Neil Detta, head of economic research at Renaissance macro Well, I, frankly.
Don't think it's any of the people that are being
discussed right now. And the reason is is because if
it was going to be one of those people, they
would have already named them by now, So you know,
I mean, I think the longer it goes on, the
more likely it is, frankly, that Secretary Besson. I mean,
what do we know about Treasury Secretary Best? And we
know that number one, which is the most important, he
has the confidence of the President of the United States,
and number two he has the confidence of the financial markets,
and those are two pretty good. And number three he
probably is interviewing all these people and is thinking to
himself like, I'm better than all these guys.
As for what the FED does on policy. Renaissance Macro's
Neil Detta expects the Central Bank to cut rates next
week and in December.
Well, we now turn to some stocks on the move,
shares of Intel. They're up more than eight percent on
the chip maker return to profitability and gave an upbeat
revenue forecast. The outlook signals that Intel is on the
right track following a turbulent year. Jay Goldberg is a
senior semiconductor analyst with Seaport Research Partners.
It's an encouraging step forward for the company. They've been
through some rough times and I think the driver of
this quarter's results are their new products coming on stream.
I think that's helping a lot, and I'm most encouraged
by sort of the gross margin outlook for next quarter well.
Seaport Research Partners also notes a slew of deals that
has Intel shares up ninety percent so far this year.
In the stretch of a few months, Intel secured an
unconventional investment from the US government and one investments from
Nvidia and SoftBank Group Lisa.
Shares of Forder driving higher as well. This morning, They're
up about two and a half percent. The automaker reported
third quarter profits and sales above Wall Street estimates. CEO
Jim Farley tells Bloomberg that Ford will largely bounce back
next year from a devastating fire that hobbled a key
supplier to its stopped selling f one to fifty pickup.
We're still working to it. It'll be i'd say around
one hundred thousand units, but we still have the opportunity
improve that. This is really a retiming of wholesale. What
we lose this year will gain most of it back
next year. Maybe a billion and a half to two
and a half billion of EBIT this year a little
bit heavier on the cash because of how auto works,
but we'll be gaining at least a billion, if not more,
of that back next year.
And Fords CEO Jim Frowley now expects a billion dollar
financial hit from President Trump's tariffs. That's down from an
earlier estimate of two billion dollars.
And a quick programming note, Nathan, we would like to
invite you this weekend for another episode of The Michelle
Who's Sin Show. Now this week, Michelle sits down with
Reform UK leader Nigel Farage. Among their topics, President Trump.
In terms of keeping promises that he made the electorate. Yes,
there are many other areas in which we might disagree
or might do things.
We tell the areas that you disagree.
There are other airs you might disagree, social policy, etc.
We might see things differently. But the fundamentalism of Trump
is you tell the electorate I'm going to do X
how you actually do it, and that's what he's doing.
Well, you can listen and watch the entire interview with
Michelle Who'sain' on Apple, YouTube, Spotify or anywhere else you listen.
All Right, it's time now for check on the news
around the world. For that, we go to Michael Barr.
Hello Lisa. The head coach of the Portland Trailblazers and
a player for the Miami Heat were arrested along with
more than thirty other people in the takedown of two
gambling operations. Authorities said those involved leaked inside information about
NBA athletes and rigged poker games backed by mafia families.
Portland coach Chauncey Billups was charged with participating in the
conspiracy to rig high stakes card games tied to organized
crime families. US Attorney Joseph Ncella says the defendants would
lure victims into rigged poker games for a chance to
play with sports celebrities. The scheme targeted.
Victims known as quote fish, who were often lord to
participate in these rigged games by the chance to play
alongside former professional athletes who were known as quote face cards.
Heat guard Terry Rozier is accused in a separate scheme
of exploiting private information about player to win bets on games.
Outgoing New York City Mayor Eric Adams, officially through his
support behind former New York Governor Andrew Cuomo in the
mayoral election, self described Democratic socialists around Mamdani leads in
the polls over Cuomo and Republican Curtis Sliwa. If elected,
Mamdani would be New York's first Muslim mayor. Cuomo running
as an independent, and Adams seized on Memdanni's views on
the Israel Hamas Ward to paint him as an extremist.
New York can't be Europe, folks, I don't know what
is wrong with people.
You see what's plan out in other countries because of
Islamic extremism.
Ma'm Donnie called Cuomo and Adams puppets of President Trump.
We have a president of this country who has spoken
publicly of his desire for Eric Adams to drop out
of the race. Eric Adams dropped out spoken of his
desire for candidates to consolidate behind Andrew Cuomo. Today, Eric
Adams is endorsing Andrew Cuomo.
Election day is November fourth. New York Attorney General Letitia
James is set to make her initial appear int in
federal court today. James was indicted in a mortgage fraud case.
In twenty twenty two, James sued Donald Trump and his
company for fraud. Global News twenty four hours a day
and whenever you want it with Bloomberg News Now Michael
barm and this is Bloomberg, Lisa.
Thank you, Michael. Time now for our Bloomberg Sports update,
and for that we bring in Dan Schwartzman.
Thanks Lisa. Game won the World Series tonight in Toronto,
as the Blue Jays are hosting the Los Angeles Dodgers.
LA's looking to repeat as champions, which would make them
the first team to win back to back since two
thousand win the Yankees won their third straight. Toronto hasn't
been in the Series since nineteen ninety three. The Blue
Jay Sen, Rookie Tree, Yes Savage to the Mound versus
the Dodgers Blake Snell. Thursday Night football, the LA Chargers
dominated the Minnesota Vikings thirty seven to ten behind three
touchdown passes from Justin Herbert. There were just two games
in the NBA last night, the Thunder beating the Pacers
in double overtime one forty one to one thirty five
in a rematch of last year's final as Shay Gilgas
Alexander scored fifty five points. In Game two, the Warriors
knocked out the Nuggets one thirty seven to one thirty
one in overtime. That's your Bloomberg Sports Update.
Stay with us more from Bloomberg Daybreak coming up after this.
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Bloomberg Business Appum. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. President Donald Trump may be
looking for a quick win when he meets next week
in South Korea a Chinese president Shi Jin paying earlier
this week, the President said he's got a lot of
leverage heading into this first face to face encounter for
both leaders in years.
I think that China will come to the table and
make a very fair deal, because if they don't, they're
going to be paying US one hundred and fifty seven
percent in tariffs.
That was President Trump at the White House earlier this week.
This morning, we're joined from Beijing by Bloomberg News senior
reporter James Major and James the President puts this in
very simple terms. But the dynamics going into these talks
are really complicated, aren't they. So what are the chances
that we get something like a big deal out of
this one encounter next week?
I would say that the chances of a big deal
resolving a lot of the issues between the US and
China are practically zero. I mean, if you look at
what happened in twenty eighteen, twenty nineteen, it took eighteen months,
almost two years of regular meetings and negotiations to get
anything close to what could be called a big deal.
And we've had you know, we've had a couple of
meetings for a few days in Europe, and we've got
some meanings coming up this week in Malaysia, where Scott
Besant and Vice Premier League fun will be meeting, but
you know, they're really not negotiating on the fundamental differences
between the two countries, and so, you know, I think
we'll get some agreements, you know, if the two leaders
do actually meet, which you know is not I wouldn't
put one hundred percent probability in that. But if they
do actually meet, I think we'll get some announcements out
of that, But I don't think it's going to be
sort of overarching solving of all the different bilateral issues
that the two countries are facing.
Interesting you say that there might not be one hundred
percent chance that the leaders meet on Thursday. What's got
you thinking that there could be some vulnerability there?
I mean after the Madrid, sorry, after the Stockholm meeting,
you know, Scott Present came out and said that there
hasn't there There wasn't a deal until Donald Trump said
there was a deal, and the Chinese came out and
said we have a deal. And then eventually Donald Trump
did come out and say no, no, we did actually
reach a deal, but it was there was a lot
of uncertainty about you know, what normally would have been
a the two sides come out and they announced something.
You know, the negotiators on the ground announced something, but
here it really is until the last minute, until the
President Donald Trump says I'm about to have a meeting
or I've just had a meeting. You know, I just
I don't have that confidence that what we think is
going to happen is actually going to happen. There's been
too many cases where at the last minute, like you
saw with the US and Canada today, Mark Conney was
hoping to do a deal with the US this weekend
before APEC. Suddenly Dawn Trump has come out and said
where all the negotiations are off. So it's that kind
of uncertainty and volatility. I think that just means that
I don't want to put my I don't want to
make a bet that the meeting between him and presidency
is definitely going to happen.
Well, going into this, we've got the President talking about
the threat of one hundred and fifty seven percent tariffs,
and you know China has come out with these rare
earth export restrictions announcement. Given all this, who has the
bigger leverage potentially?
I think if you look at what's happening so far
with trades, you've had I guess since April or March
there's been increasingly higher tariffs US tariffs on Chinese colds
and yet to spittle that when you know, I guess
the current sort of average tariff rate is between forty
and fifty percent. Despite that, China is still selling about
a billion dollars a day worth of goods to America.
And so what that means is that just even with
those higher tariffs, there are no suppliers other than China
for these goods that Chinese companies are selling. There are
there are no other supplies at that price where you know,
some American companies are still willing to buy those products.
So yes, raising tariffs from fifty percent to one hundred
and fifty percent or whatever the latest thread is is
going to be into that quicker. But I think you
know this kind of you know, Chinese dominance of product
like rarests parto factly hear my batteries, where they are
really the only supplier at scale for the whole world.
So it gives them a lot of leverage in these
kind of negotiations where they can say they can they
can clearly wear higher tariffs for a period of time.
And they also have many markets outside the US, where
you know other people are more than happy to buy
those products and it doesn't matter to them what the
US terrorism are those products. So I would say going
to this, you know you're seeing with the railroad tariffs, sorry,
with the railroads export controls. With that strength and exports,
the Chinese seem to have the upper hand.
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