Tariffs on Hold Until US-China Summit; AI Existential Risks

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Nathan Hager (0:09)

Good morning, I'm Nathan Hager.

Karen Moskow (0:11)

And I'm Karen Moskow. Here are the stories we're following today.

Nathan Hager (0:15)

Karen, we begin with China, and a look ahead to next week's summit with President Trump and his Chinese counterpart, Xi Jinping in Washington. Ahead of the meeting, we're learning the US is expected to delay the announcement of certain new tariffs. Bloomberg's Amy Morris has the latest from the nation's capital.

Amy Morris (0:32)

Sources tell Bloomberg the capacity tariffs, which are over trading partners' excess manufacturing capacity, will be held off until after the summit, at least. Bloomberg earlier reported the administration intended to release a trade report on excess capacity before the leaders meeting, and that the report would recommend a 7.5 percent tariff on Chinese goods. The reason for the delay is unclear, and it's not clear if the final tariff rate will change. In Washington, Amy Morris, Bloomberg Radio.

Karen Moskow (1:02)

All right, Amy, thank you. President Xi heads to the White House for the high-stakes summit, with not just trade, but tech and AI are also set to dominate the agenda. Sources tell Bloomberg that leaders of Apple, OpenAI and Qualcomm are set to attend the White House state dinner for Trump and Xi. The executives are reportedly expected to join other business leaders, including Nvidia's Jensen Wong. Bloomberg's Tom MacKenzie says one area of focus will be China's critical response to Anthropic CEO Dario Amadei's essay about slowing the pace of AI development.

Tom MacKenzie (1:35)

My reading of that was this is a China that's very annoyed with Anthropic, because Anthropic has been very critical of China, and they were making the case, Dario, in that essay, that there should be greater restrictions on chips into China. I think that's where the criticism was, rather than pacing itself.

Karen Moskow (1:51)

And Bloomberg's Tom MacKenzie says the summit comes with geopolitical tensions simmering over the AI race, international trade and the Middle East. Trump and Xi are scheduled to hold the bilateral summit at the White House next Thursday, September 24th, following their previous meeting in Beijing in May.

Nathan Hager (2:08)

And ahead of that, Karen, President Trump is telling Axios he is approaching a big decision, in his words, on whether to re-escalate attacks on Iran.

Persian Gulf nations are set to meet in New York next week on the sidelines of United Nations General Assembly. Ahead of that, Reuters is reporting that China has privately asked Iran to help rein in Houthi militants after an appeal by Saudi Arabia. The Tehran-backed militant group has made advances in Yemen toward the Bab al-Mandeb Strait in recent days, while also attacking facilities in the kingdom.

Karen Moskow (2:41)

Meanwhile, in Iran this morning, Nathan, hundreds of thousands of Iranians have gathered for a government-organized rally. It's the biggest show of defiance since the US and Israel first attacked in late February. Many of the demonstrators marched through downtown Tehran in combat uniform, pledging to take up arms and receive limited military training in an effort known as, quote, ones who sacrificed their lives for Iran.

Nathan Hager (3:04)

With all that in the background, Karen, oil is falling for a third straight day. Brent is trading around $102 a barrel as supply concerns ease. But analysts to JP Morgan say it is increasingly impossible to predict how the Iran war might end. Markets are pricing an additional 4 million barrels a day of oil disruption on top of the 10 million now.

Bloomberg executive editor for the Middle East and North Africa, Stuart Livingston Wallace, says President Trump currently seems to be looking at diplomacy.

Stuart Livingston Wallace (3:32)

There is the issue of domestic fuel prices, the cost of this war, the optics of this war. Those will all constrain him. And I think certainly from the GCC side, that is the Gulf Arab states, one would presume they're going to be pushing for a more diplomatic solution because of the experience earlier on in this year. And what a return to full scale hostilities might potentially mean for their economies in particular.

Nathan Hager (3:55)

It's Bloomberg's Stuart Livingston Wallace. Meanwhile, the nationwide average price for gasoline rose to nearly $4.47 a gallon today, according to AAA. Regular has risen by nearly 10% over the last month.

Karen Moskow (4:07)

Well, turning to Europe here, Nathan. German Chancellor Friedrich Merz is commenting on US-German relations. He says the era of, quote, unconditional transatlantic friendship between Europe and the US is over for the foreseeable future. Merz made the comments in a speech to party members in Berlin ahead of Sunday's state election. His Christian Democrats are under pressure from the far-right AFD. After its shock victory in Saxony and Halt earlier this month, President Trump praised the AFD following that result.