Report: US, Iran Close to War's End; Trump, China's Xi Prepare for Meeting
Bloomberg Daybreak covers rapidly evolving Middle East developments with the U.S. and Iran reportedly nearing a war-ending memorandum of understanding, President Trump pausing a Strait of Hormuz convoy operation to allow negotiations, and Trump preparing to meet China's Xi Jinping to discuss the conflict. The broadcast also covers domestic stories including Ohio and Indiana primary results, record-high gas prices, and surging stock market futures driven by AMD earnings.
Summary
The broadcast opens with major Middle East news: Axios is reporting that the White House believes it is closing in on a one-page memorandum of understanding with Iran to end the more-than-two-month war. Bloomberg's Patrick Sykes, reporting from Istanbul, explains the memo would set a framework for more detailed nuclear negotiations, with both sides agreeing to lift restrictions on the Strait of Hormuz as an initial step. Key caveats include that the arrangement is contingent on no resumption of hostilities and that Iran's nuclear program remains an unresolved issue to be kicked down the road. The memo would also involve a moratorium on uranium enrichment and U.S. lifting of sanctions — a longstanding Iranian demand. President Trump announced on social media he would pause 'Project Freedom,' an effort to guide stranded ships through the Strait of Hormuz, to allow negotiations to proceed. Secretary of State Marco Rubio separately declared the offensive phase of the war over, stating the U.S. would only respond defensively. Iran framed the pause as a U.S. retreat, claiming firm control of the Strait, while shipping in the region remains insecure with continued targeting of vessels. Gas prices have reached an all-time high for this time of year, with AAA's nationwide average topping $4.50 a gallon for the first time since July 2022. Diplomatically, Iran's top diplomat is in Beijing meeting with China's foreign minister, who is urging Iran to continue negotiations for a lasting truce. President Trump is scheduled to meet China's President Xi Jinping on May 14th and 15th in Beijing, where the war will be a major discussion topic. Trump noted that Xi has been respectful and that China imports approximately 60% of its oil through the Strait of Hormuz. On trade, U.S. Ambassador to the EU Andy Puzder warned that 25% tariffs on European cars and trucks could be implemented 'relatively soon' if the EU does not ratify a trade deal already agreed upon by both sides, with retroactive tariff cuts to August 1st on automobiles. A clash between President Trump and Pope Leo XIV is escalating, with Trump mischaracterizing the Pope's anti-nuclear weapons stance as support for Iran having a nuclear weapon. Secretary of State Rubio, a Catholic, is set to meet the Pope at the Vatican. In domestic politics, Vivek Ramaswamy won the Ohio Republican gubernatorial primary with 82.5% of the vote, backed by Trump, and will face Democrat Amy Acton in November. Former Senator Sherrod Brown won the Ohio Democratic Senate primary with 89.5% and will face Republican John Husted. In Indiana, Trump-endorsed challengers defeated at least five of seven Republican state senators who had opposed a congressional redistricting effort. In Michigan, Democrat Cedric Green won a special election, keeping Democrats in control of the state Senate. On markets, futures surged following AMD's strong earnings report — the stock was up nearly 19% in pre-market trading, driven by data center spending and AI demand, potentially reaching a record high. Disney reported its first earnings under new CEO Josh DeMauro, with consensus estimates calling for $24.87 billion in revenue and $1.51 adjusted EPS, amid challenges including an FCC license review and a collapsed OpenAI deal. Other news included another near-miss incident at JFK Airport involving a Delta regional flight and an uncontrolled small aircraft, details emerging about a shooting on the National Mall involving suspect Michael Marks, and two hikers mauled in a possible grizzly bear attack at Yellowstone National Park.
About this episode
<p>Today's top stories, with context, in just 15 minutes. <br /><br />On today's podcast: <br /><br />1) The US believes it’s close to an agreement with Iran to end the near 10-week war, Axios reported, as China added its voice to global diplomatic pressure to wrap up the conflict. Washington and Tehran are working on a one-page memorandum of understanding that would set a framework for more detailed nuclear negotiations, Axios said Wednesday, citing two US officials and two other sources it didn’t identify. Nothing has been agreed yet, the news agency added, and the US expects Iranian responses on several key points in the next 48 hours. Iran hasn’t commented on any progress toward a deal. <br /><br />2) US President Donald Trump said he would discuss the Iran war with Chinese counterpart Xi Jinping during their summit next week and sought to downplay tensions over the conflict. “That’ll be one subject, but he’s been very nice about this,” Trump told reporters at the White House on Tuesday in response to a question about what he hoped to achieve with Xi on Iran when they meet. “He’s been very respectful. We haven’t been challenged by China,” the president added, even as he acknowledged that Beijing is a significant importer of Iranian oil — supplies of which have been disrupted by the war. “They don’t challenge us. He wouldn’t do that. I don’t think he’d do that because of me, but I think he’s been very respectful.” The leaders are slated to meet in Beijing on May 14-15, a high-stakes summit that comes as the Iran war brings fresh tumult to the relationship between the world’s two largest economies. The war has already delayed the meeting once, sparking anxiety in financial markets. <br /><br />3) US Ambassador to the EU Andrew Puzder said Washington will implement 25% tariffs on cars and trucks from the European Union “relatively soon” if the bloc doesn’t swiftly ratify a long-delayed trade deal. “Unless we see some substantial progress, I think you probably should expect those relatively soon,” Puzder told Bloomberg Television. US President Donald Trump recently vowed to slap 25% tariffs on European vehicles, accusing the bloc taking too long to ratify the agreement, which was initially reached last July. The EU, meanwhile, is frustrated over several Trump moves it argues undermine Washington’s commitments under the pact.</p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>
Key Insights
- Patrick Sykes reported that the proposed U.S.-Iran memorandum of understanding would lift Strait of Hormuz restrictions as an initial step, but critically, it would kick the thorny question of Iran's nuclear program further down the road, making it an incomplete resolution rather than a comprehensive peace deal.
- Iran framed President Trump's pause of 'Project Freedom' — the Strait of Hormuz convoy operation — as a U.S. retreat and proof that Iran is 'firmly in control' of the Strait, complicating the diplomatic narrative the White House is trying to project.
- Trump misrepresented Pope Leo XIV's longstanding opposition to all nuclear weapons as the Pope being 'okay with Iran having a nuclear weapon,' escalating a public clash with the Catholic Church even as his Catholic Secretary of State Rubio prepares to meet the Pope at the Vatican.
- U.S. Ambassador to the EU Andy Puzder argued that a trade deal was already struck between President Trump and EU Commission President von der Leyen in July and put to paper in August, and that the EU's nine months of inaction on ratification is what is driving the threat of imminent 25% auto tariffs.
- AMD's stock surged nearly 19% pre-market on earnings that signaled data center customers are increasingly seeking alternatives to NVIDIA for AI computing infrastructure, with AMD up 66% even before the earnings report was released.
Topics
Transcript
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