US & Iran Strike Each Other, Trump's New Tariffs Blocked
Bloomberg Daybreak covers escalating U.S.-Iran military exchanges near the Strait of Hormuz amid ongoing ceasefire negotiations, Trump's planned China summit with top business leaders, UK Labour's devastating local election losses to Reform UK, and a federal court ruling invalidating Trump's 10% global tariffs under Section 122.
Summary
The broadcast opens with coverage of renewed U.S.-Iran military exchanges near the Strait of Hormuz. CENTCOM reported that three U.S. warships were attacked by Iran using missiles, drones, and small boats while crossing the strait, prompting U.S. retaliatory strikes on Iranian missile and drone launch sites, command and control locations, and areas along Iran's southern coast. Despite this exchange, President Trump maintained the ceasefire remains intact, while threatening significantly harsher retaliation if Iran fails to sign a deal quickly. Iran is expected to respond through Pakistani mediators within two days to a 14.1-page U.S. peace proposal, which Iranian officials have characterized as 'maximalist' in its demands. Bloomberg's Jumana Bersetchi noted Saudi Arabia publicly reaffirmed its commitment to de-escalation and diplomacy, pushing back against media reports suggesting otherwise.
President Trump is proceeding with a summit with Chinese President Xi Jinping scheduled for May 14-15 in Beijing, bringing a prominent delegation of American business leaders including Blackstone's Steve Schwarzman, Citigroup's Jane Fraser, Boeing's Kelly Ortberg, and NVIDIA's Jensen Huang. The summit had previously been postponed once due to the ongoing war.
In UK politics, Prime Minister Keir Starmer's Labour Party suffered what Bloomberg described as 'disastrous' results in local elections, with the right-wing populist Reform UK party picking up hundreds of seats and taking control of two councils. Starmer acknowledged the results as 'very tough' and accepted personal responsibility. Questions are now being raised about his future as party leader.
A federal trade court declared Trump's 10% global tariffs under Section 122 of the 1974 Trade Act unlawful. The law had never previously been invoked to impose tariffs, and was used in February after the Supreme Court struck down his emergency tariffs. The ruling currently applies only to the small businesses that challenged it and Washington state.
On the economic front, markets were anticipating the April jobs report, with economists forecasting a gain of 65,000 jobs and unemployment holding at 4.3%. San Francisco Fed President Mary Daly indicated that if oil price increases from the conflict don't pass into the broader economy, pre-conflict disinflationary dynamics are expected to resume. Bloomberg also reported that SoftBank is downsizing its planned margin loan backed by its OpenAI stake from $10 billion to approximately $6 billion amid valuation concerns for the unlisted company.
Key Insights
- President Trump characterized the U.S.-Iran military exchange near the Strait of Hormuz as a 'trifle' and insisted the ceasefire remains intact, while simultaneously threatening Iran with a response described as 'one big glow coming out of Iran' if no deal is reached.
- Bloomberg's Jumana Bersetchi reported that Iran views the U.S.'s 14.1-page peace proposal as 'maximalist,' raising doubts about whether a compromise is achievable within the proposed 30-day negotiation window.
- San Francisco Fed President Mary Daly argued that if rising energy prices from the Iran conflict do not pass through to the broader economy, the pre-conflict conditions of slightly restrictive monetary policy and a stable, non-inflationary labor market are expected to return.
- A federal trade court ruled that Trump's 10% global tariffs imposed under Section 122 of the 1974 Trade Act — a statute never previously used to impose tariffs — are unlawful, though the ruling currently applies only to the challenging small businesses and Washington state.
- U.S. prosecutors have outlined an alleged scheme in which Supermicro's co-founder worked with Thailand's AI company OBON and third-party brokers to divert advanced NVIDIA chips to China in violation of U.S. trade rules, potentially raising questions about NVIDIA's due diligence on high-volume hardware sales.
Topics
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