US-China Tariff Cuts, UK Trade Deal, First American Pope | Bloomberg Daybreak: Europe

US-China Trade Talks and Tariff Reductions

• 🇺🇸 The US is considering a significant reduction in tariffs on Chinese goods, potentially below 60%, as a first step in upcoming talks.
• 🇨🇳 China may reciprocate these tariff cuts, with progress possible as soon as next week.
• 📈 Recent data shows China's exports grew 8.1% in April, but shipments to the US fell 21% due to imposed duties.
• 🗣️ President Trump hinted at lower levies, stating current tariffs are at 145% and are expected to come down.
• 🤝 Talks between US Treasury Secretary Scott Bessant and Chinese Vice Premier Julie Fang are scheduled for tomorrow in Switzerland.

US-UK Trade Agreement Details

• 🇬🇧 The UK has signed the first trade deal with the US since the start of the global trade war, hailed as a political win for Prime Minister Kier Starmer.
• 🚗 Tariffs on cars will be reduced from 27.5% to 10% on a quota of 100,000 vehicles annually.
• 🏗️ Tariffs on steel and aluminum will drop from 25% to zero.
• ✈️ British Airways parent IAG is reportedly poised to order approximately 30 Boeing 787 Dreamliner aircraft, valued at $10 billion.
• 📉 Bloomberg Economics estimates the deal will boost UK GDP by only 0.1%, with global uncertainty still expected to drag growth down by 0.2%.

Impact on UK Housing Market

• 🏡 Uncertainty from US trade policy is having a surprising upside for the UK housing market.
• 📉 Several major lenders have cut mortgage deals below 4% for the first time in months, with the average falling from 4.5% at the start of the year.
• 🏦 The Bank of England cited tariffs as a key factor in their recent base rate cut.

London Housing Policy Shift

• 🏙️ Mayor of London Sadiq Khan will explore building on the city's green belt, a significant change to housing policy since the 1960s.
• 🏘️ A consultation on releasing parts of the green belt will be necessary to meet housing targets and address the housing crisis.
• 🗓️ A draft plan is expected in 2026, with formal adoption anticipated in 2028.

Election of the First American Pope

• 🇻🇦 Cardinal Robert Francis Prevost has been elected pope, becoming the first North American to hold the position.
• ✝️ He chose the papal name Leo XIV and was presented to the world in St. Peter's Square.
• 💬 The new pontiff expressed hopes for a missionary church that builds bridges and establishes dialogue.

Bordeaux Wine Season and Tariffs

• 🍇 The Bordeaux wine tasting season, known as 'en primeur', offers a preview of the latest vintage.
• 🌧️ Concerns about the vintage's quality arose due to cold and rainy spring and harvest conditions last year.
• 💰 Prices are a significant concern, exacerbated by potential future tariffs which could increase costs for buyers, particularly US buyers who are pulling back.