tom: i'm tom mackenzie in london, these are the stories that set your agenda, the eu fights back just an hour after

the u.s. imposes global tariffs on steel and aluminum imports, the eu retaliates with duties on 26 billion euros of american goods. asian stocks gain with futures pointing higher, ahead of u.s. inflation data as president trump downplays the risk of a terror for recession. >> do you think there will be a recession? >> i don't see it at all, i think this country is going to boom. tom: ukraine accepts a u.s. plan for a 30 day cease-fire after eight hours of talks, the white house puts the pressure on russia saying it takes two to tango. so the trade war takes another step and becomes deeper and wider, the eu putting in place

retaliatory measures that will kick in on april 1. they are open for negotiation. european futures looking past the tariff risk after trump of course, about two hours ago put in place those tariffs on aluminum and steel. so far, markets pointing higher, may be latching onto the comments from president trump suggesting the recession risks are overblown, possibly taking some solace from what's happening in terms of geopolitics around ukraine, european futures pointing high in the session by more than one percent. we will see if that hoe -- hold as we lead to the open. ftse 100 in the u.k. looking to add 43 points. we look at the metal space in the minors at the open on higher metals prices on iron ore, copper is a reflection of some of these tariffs. s&p futures stateside looking to gain .3 percent after losses again of 0.8% by the close yesterday, the s&p still closing in on correction territory with losses of about 9% since those record highs. nasdaq 100 futures looking at 76 points up .4 percent.

goldman sachs cutting its forecast for the s&p to 6200, that's still an 11% gain from where things stand now, talking about the magnificent seven, going from the magnificent seven to the maleficent seven. let's look cross asset, money moving into u.s. treasuries. we look ahead to the cpi print later today. whether or not inflation becomes a challenge again in a question mark scenario where the recession risks in the u.s. are being debated. 10 year yields down one basis point. euro-dollar above the 109 level but down .10 percent. aluminum pricing up .4% so far in the session on the tariff story. brent at $69 a barrel up .5%. within the last hour the european commission has launched countermeasures to the new u.s. tariffs on steel and aluminum with plans to impose duties on american goods worth 26 billion euros. for the details let's bring an opening trade anchor kriti gupta.

let's start with a eu response and what are the details? kriti: i think the details are hazy. but you mentioned that there, 26 billion euros when it comes to the goods that are imported from the united states into the eu, basically you are opening higher when it comes to reciprocal terrace. you look into the details in terms of what the biggest trading relationship looks like between the eu and the united states. let me walk you through a good chunk of it because a lot is baked into the energy story for about to eat -- from two years ago. the biggest exports coming from the united states into the eu are things like energy, petroleum oils and lng will be a big one. the second is medicinal and pharmaceutical products, then it's followed by things like engines, aircraft and car parts. you are seeing a lot of the major sectors that we keep an eye out in europe, the car sector in germany, arguably in spain and italy, than things like pharmaceuticals going into, especially in to the medicinal industry here in the u.k. is a big one, and as for the eu, that's want to keep in mind in

terms of ripple effects, the oil story, the energy story, lng coming from the united states into europe really replacing a lot of those from russia, that's where a lot of the trade is baked into. tom: news flow from today on tariffs after a wild slow if after a threat and walking back these tariffs and duties as well, the u.s. president dialing back a threat to double u.s. tariffs on canadian steel and metal imports to 50%, but he reiterated he wanted the country to become the 51st u.s. state. >> i said it before, we give canada $200 billion a year, we subsidize canada, all of the things we give them in trade, we don't have to have cars made in canada, we don't have to have lumber from canada, we have tremendous lumber, we have tremendous trees, all i have to do is unfreeze them from some of the restrictions. and frankly, the way that gets solved is candidate should

honestly become our 51st state. tom: he's not letting go of this aspiration, while as it may seem to some outside of the orbit of president trump. very good lumber it seems from the u.s., talk us through what's happening on the risks and the threats around canada. there's a walk back on tariff with some electricity duties, what is going on, where it is canadian and u.s. trade stand at this point? kriti: in a very precarious situation. our audience will look through what the relationship looks like. he mentioned in those, things like electricity, things like lumber and car parts. i think it's important when you look at the geography of the united states, the northern part of the united states, the rust belt is right on the border of canada, so there are plenty of people and plenty of car parts and car vehicles in the process of that manufacturing process, go back and forth for the border. that's a processes referencing, also not excluding the labor that comes from canada. there are plenty of people

employed within the united states border the end up living in canada and use that ported to go back and forth. same on the southern border. plenty of people that live in mexico and go back and forth to go to work, not unlike things we see in luxembourg, france and germany and on the borders here in the eu. similar dynamic. the argument he is making of that other exports, things like electricity, could be things generated within the united states, and that's where he wants the equilibrium. the risk here, and you could notably see it in his comments where he is noticeably not mentioning is the energy story. if you talk to the big oil names, they will say the biggest concern between the united states and canada's relationship is actually the energy story and how much of canadian oil is not only making it to the united states through some of the key pipelines that come into the country, but are getting refined in other parts of the world because they don't want that u.s. exposure, that's a big risk we have to watch out for. tom: kriti gupta breaking down the complexities of the tariffs for us this morning. thank you, let's cross over to

asia and see how the markets there are adjusting to the news flow. a bit of a mixed picture. let's bring in avril hong standing by in singapore. avril: somehow the region stocks are looking past the tariffs back and forth, the imposition of levies, regions benchmark after three seconds of -- sessions of losses in the green. the recovery today in the region is pretty narrow, it's kind of confined to tech stocks, we are also seen the likes of the australian benchmark nearing correction, so clearly there is a lot of uncertainty out there that's being reflected in the recovery, and we are also keeping a close watch on japanese stocks, part of the rebound today as the yen's rally takes a bit of a breather, and this is despite the boj's governor ueda signaling hawkish old next week saying, there is not much concern when it comes to these higher yields in japan. sounding quite unbothered. foot the board. let's talk about chinese stocks.

u.s.-china trade tensions continue to weigh these tariff talks according to sources that remain at these low levels of frustration for investors, but there seems to be that ai optimism latent from the npc carrying through. there is said to be a conference later where deepseek was founded. alibaba, huawei reportedly going to be in attendance. chinese computing related stocks, some of them surging up. flip the board again. i just want to put things into further perspective when it comes to the hang seng tech because you see these declines today after a really powerful rally since the middle of january. so maybe it was due for a bit of consolidation, and if you look at the trend lines, it's actually well below the 50 day moving average. so a sign of strength, maybe tech can continue fueling that divergence of u.s.-china stocks. tom: that tech story, and of course the focus at the national

people's congress on building out their innovation as you say, continues. avril hong in singapore breaking down the market action in asia. thank you. president trump has downplayed the risk of a tariff lead recession. take a listen. >> do you think there will be a recession? >> i don't see it at all. i think this country is going to boom. as i said, i could do it the easy way or the hard way. the hard way to do it is exactly what i'm doing but the results will be 20 times greater. tom: for more, let's ring in bloomberg's valerie tytel, the market reaction a trump on the recession because, he didn't push back over the weekend. he took a firmer line yesterday, where do we stand on recession risk on the trumpet ministrations views on how that economy is unfolding? valerie: a big swing in the s&p 500 yesterday in late trade, a lot how to do with him pushing back those tariff on canada. saw the s&p rise 2% in just an hour's time. yes, we did in the session

lower, but we close just shy of correction territory, just shy of that down 10% from the peak, we have had a few wall street banks continue to downgrade their outlook for u.s. stocks. the latest one coming from goldman, cutting their year in forecast of 62 hundred from 6500, but that is still implying 11% rise from tuesday's close. that's on trader's minds right now, are we in oversold territory for the s&p 500? if you take a look at my next chart, the rsi, the relative strength index is actually at its most oversold since 2022. if we still get more tariff from trump that continue to be walked back, is this a buying time for the equity market? should we be buying into this dip, that's what many people are asking themselves today. maybe we get to take our eye off the tariff story for just a bit as our focus goes to inflation, dropping at 12:30 pm u.k. time, in our earlier than usual.

eyes will be on that core cpi month on month metric after last month metric came in hot. we are expected to see a retracement to not point three. perhaps some solace on the inflation print. a softer print could turn this equity market around. tom: looking for the inflation story and whether or not the debt buyers get a little bit more appetite when it comes to the selloff on the s&p 500, thank you very much for the market check. let's get back to geopolitics, it could be one of the catalysts in terms of how we are thinking about the positioning around european stocks with futures higher by little over 1% so far in the session. we've had a deal from the u.s. and ukraine around a potential truce, but of course the key player next is president putin and whether or not the russians get on board. we have been hearing from the foreign minister over in russia. he has been in that role for a number of years. he has been speaking to the state run news agency in russia, the task news agencies saying it

would be the illusion that russia turns away from its partners in india and china. his important line, nato troops and ukraine has peacekeepers unacceptable, says the russian foreign minister, also saying that the europeans want to raise the ante in ukraine. that is the response from's sergei speaking to the task news agencies seeming to draw a redline around a proposal that european countries are thinking about in terms of potentially european troops on the ground in ukraine as part's peacekeeping efforts where they say it would be unacceptable. staying with the story, ukraine has accepted a u.s. proposal for a 30 day truce with russia in exchange for lifting a freeze on military aid. the u.s. will take the proposal to vladimir putin to seek his agreement. bloomberg's oliver crook has the details, talk us through what has been outlined in this deal. all of her: listen, i think we

should just begin by saying this is not the outcome that the ukrainians wanted. from the very beginning of any of these discussions with zelensky and his team say they want to negotiate a full piece, a full just and lasting peace and it was over it -- only after that blow up in the oval office and the withdrawal of u.s. aid and support an intelligent support, really an unprecedented act by the united states for an ally that has basically brought ukraine to the negotiating table over eight hours of talks from which they basically agreed to this 30 day cease fire. so what this includes is that it will create conditions to negotiate that lasting peace, this is a 30 day cease fire but it could be extended if it is agreed by both sides, there is exchange of prisoners of war and this. this release of civilian detainees. they want the return of forcibly transferred ukrainian children. both sides now will need to name negotiating teams, the u.s. once the negotiations to begin immediately, but what is critical here is that this has

basically been agreed by ukrainians with basically no direct dialogue with russia, and it's all in putin's court at this point. this is another part, ukrainian delegations as part of the statement reiterates that the european partner shall be involved in the peace process, that is something that notably is only something that is insisted upon by the ukrainians. the europeans are nowhere to be found in any of these discussions so far, which is going to be a major concern for anybody in the capitols across europe. there is the g7 foreign ministers meeting beginning in canada were the other teams will be briefed about what is going on and basically to see what potential could be. at the end of the day, the ball now is in russia's court. tom: it is in russia's court and it is a test of the claim from president trump that putin is ready to talk peace. what are you watching for in the days ahead? oliver: we expect steven witkoff to go, he's been one of the big negotiators in this cease-fire agreement, if it were to come to pass, as well as with israel and

hamas. they already of the cease fire is different from the art of the lasting peace deal. he will go to moscow, he will have discussion with russian officials. as you were just saying, we have lines crossing from the russian foreign minister saying, basically trying to set the conditions for what is going on in terms of the negotiations about the europeans are trying to raise the ante on ukraine, and that nato troops peacekeeping is unacceptable. what is interesting is that we've heard a lot of the constraints that the u.s. is willing to impose on ukraine in order to get them to the table. the question is, if putin rejects this and if the russians were great -- reject, what is the u.s. prepared to do. president trump said they could ramp up banking sanctions, they could do more on fossil fuels. marco rubio was asked this in the press conference yesterday. what he said is that basically, they hope that russia will sign this deal. if they don't, then we know who the impediment to pieces. again, we do not know what the united states is willing to do

to ratchet up the pressure to rush her to drive them to the negotiating table, but i think many of the people who have been critical of trump's approach is not in his pragmatism but -- doing it out in the open, realistically a number will have to be made by ukraine in the hope is that close doors at the negotiating table and not a public ahead of any negotiation. tom: oliver crook on the ground in berlin with the details, coming up, we see on that story to discuss the potential truce with the think tank ukrainian prism. that analysis is coming up next. this is bloomberg. ♪

tom: ukraine has accepted a u.s. proposal for a 30 day truce with russia in exchange for lifting a

freeze on military aid. let's get more with the director of the security studies program at the think tank ukrainian prism who joins us from the desk. thank you for joining us and for your time. what is your take away from the deal that has been agreed between the u.s. and ukraine? >> that is just a proposal that two sides agreed for this cease-fire. the first reaction we felt immediately here. this same as when it was online. russia had the otis support and kill seven sailors. so you understand that now would be really important to see not only the first statements from others, but to understand how the u.s. side reacts on them because previously mr. trump said that he sees the willingness of mr. putin for the cease fire offer the piece.

i cannot name the piece when it is charge of ukraine and this right now, we are in the need of the air raid. that's why i optimistic because that allowed the negotiations in saudi arabia to restore a little bit of relations between ukraine and the u.s. but if you would ask me if i'm optimistic about the final results, the possibility to the real cease fire, unfortunately i much more realistic with the 10 years of bad experience of russia violating the cease fire. tom: on that point, what do you think is the positioning of putin right now? is your expectation that russia will move on any of the lines it has drawn around this conflict? >> no, because their ambitions are increasing, doesn't matter if they are winning or losing on the battlefield because we heard that they would like to control

for regions of ukraine, including the territories that were occupied in the regions. not speaking about all other demands for the sovereignty and they should hold of ukraine, speaking about the language, even the changing of the government of ukraine. so just purely when we speak about the territories where we are -- where they are now. we need to understand that the russian federation thinks they are winning on the battlefield, so they think they are in a more beneficial position compared to the ukraine where the u.s. is not backing. at the same time, it doesn't mean that the russian president will not agree to this certain cease fire or negotiations about the cease fire. they gain about the sanctions that are serious questions for him, and he is in a circle. the second is because he cannot relate the forces, and he is using missiles from north korea that are produced right this week, literally, so that means that he needs -- for them to

attack against the neighbors. tom: what are ukraine's red lines at this point, in which should be willing to give up? hannah: first of all the red zone is red line is definitely our integrity. i would like you to understand that ukraine is not fighting for the territory, we are fighting for the people that are in these occupied territories, which are under serious oppression because ukrainian books are burned proudly by russians. military of the primary school, and you could be arrested just for wearing something yellow. and stepping out the occupied territories. that's why for us, that is one of the main redlines. sanctions, reparations, probably some other stuff can be negotiated. nato membership for ukraine now is also quite a redline. the reason is that unfortunately, we don't have any other security guarantees that

can prevent the next attack from russia. we had to sell them 14, we have the cease fire agreements that didn't work, 2022 happen with a full-fledged aggression against ukraine, so ukraine would like to understand who would help us from the further attacks on the russian federation. tom: is that a security guarantee for ukraine? quakes definitely not, at least from my point of view because if you look at what russia tried to do in the first days of the war, there was a lot of business there, it was heavily destroyed. i can name the other companies that are less well known, but with millions of investments in ukraine, in this case, for the russian federation, the business, they can attack it easily. for the united states, it will be for the enterprise, and that is not the u.s. business of the

territory, that is just where the money will come in part of this money should come to the united states. so, that is not the real damage sure, let's say he loses that and so the losses they have, is the potential of what they can have. that's why i don't believe that that can be what really prevents russia. tom: really appreciate your time and director of the security program out of ukraine. europe's political upheaval continues as portugal's government collapses. we bring you the details next. this is bloomberg. ♪

tom: portugal's parliament has a minority government and a confidence vote likely leading to a third set of early elections in just over three

years. portugal's premier request the confidence vote last week saying he wanted to clarify whether his government had all the conditions to carry out its program. the socialist and far right party both voted against the government. house republicans in the u.s. have passed legislation to keep the government open past hey saturday shutdown deadline. the bill will likely need the support of at least eight democrats in the senate to become law. if the shutdown does go ahead, the white house budget office would decide which federal workers or furloughed in which essential staff must continue without pay. we discussed the impact of trump's tariffs on a rocky few weeks for the markets with portfolio manager from franklin templeton investment solutions. that is coming up next.

tom: good morning, this is bloomberg, daybrhese are the stories it's that your agenda. the eu fights back just an hour after the u.s. imposes global tariffs on steel and aluminum imports, the eu retaliates with duties on 26 billion euros of american goods. asian stocks gained with futures pointing higher ahead of u.s. inflation data. president trump downplays the risk of a tariff led recession. >> do you think there will be a recession? >> i don't see it at all. i think this country is going to boom. tom: ukraine excepts a u.s. plan for a 30 day cease fire after eight hours of talks, the white house puts the pressure on russia saying it takes two to tango. in talking of ukraine, talking of defense, we have lines crossing from the german defense company, rheinmetall, which of

course has seen a huge run-up in its share price, year to date, gains of 87% for this german defense company, it is crossing right now, 2025 operating margin of between 15.5 to 16.1 -- 16.1% in terms of the outlook for 2020 five, operating margin at the top end, estimates, and seeing 15.5% below the estimates of 16.1 percent. in terms of the margin outlook for rheinmetall, that is below the estimates 15 point 5% versus the estimates of 16.1 percent, full-year operating margin came in at 15.2% for the last financial year, the estimates had been for 14.8 percent, for the previous full year, it's a beat on the operating margin, but the outlook for the 2025 operating margin story is slightly below the estimates. sales up 25-30% in 2025, let's

get more reaction analysis by bringing in bloomberg's oliver crook in berlin who knows this company very well and looking at the numbers for the details in the context, walk us through what kind of stands out to you on the margin story, sales, and how we should be thinking about this crucial defense plan. all of her: looking at it, overall in terms of what we said looking backwards there's a miss on a couple of points, whether on sales and operating profit, very light. but as you mentioned, the margin did hit better than anticipated last year, that really is with the key is for analysts looking out the operating margin. looking at 15.2 percent. 14.8% is the estimate. they are guiding it lower on the margin that i think some many had anticipated, so they are looking at 15.5 percent, looking into 2025. looking for something just north of 16%, but that beats what we got from it last year. if you look at the sales volumes looking into 2025, we are talking about sales increases of

25-30 percent. just to give you a little bit of context, the top five performing stocks since 2022, since the beginning of the warrantor ukraine, they are all defense companies, the only one in the four digits means 1002 hundred percent gains as rheinmetall. with eke about the outlook for this company, it's not just going to be the general defense spending, there's a lot of unknowns, there is that german fiscal plan. if you're talking about setting up a defense plan that could be hundreds and hundreds and hundreds of billions of euros. what we know is that originally the defense fund set up by schulz, about 50% of that was already captured by rheinmetall. and what we look at the defense spending that will go across from european allies of nato and basically where they are going to spend that money, there's more and more pressure that they spend that within europe and we are expecting, according to some analysts, that right now rheinmetall gets 3% of european and nato defense spending, that could boost to 7%-9%. this outlook will be somewhat dependent on what the spending

plans will be going forward, but we are looking at the backlog, we have another record backlog of 55 billion euros. that's a line crossing. just to mention closely on the backlog, this is one of the issues we are having for the defense companies. it's great that they have a huge backlog. what's not great is for those waiting to get delivery of all this stuff and this brings us to the conversation of actually getting that capacity ramp up, that will be the challenge for this industry going forward. tom: bloomberg's oliver crook breaking down -- breaking down the rheinmetall numbers. one of the smaller startups later in the show. stay tuned for that interview from the defense story now to what is happening in terms of the retail, fashion retailer inditex coming through with the earnings line. does our own are coming through with a beat in the fourth quarter, earnings before interest and tax coming in at 1.88 billion euros above the estimates of 1.81 billion and for the full-year net income for this company, also coming in essentially in-line net income

coming in line with the earning story of inditex is a beat at 7.5 billion euros. this get to the broader stock market. given the losses we saw yesterday, again on the s&p closing in on correction territory. down over 9% since a record highs dropping zero point 8%. futures picture looking brighter today, watching the tariff story, but the broadening out of trump's tariff and trade war's seemingly at not putting a stop to the upside that's coming through from a futures story so far, may be the focus a bit more on what trump is been saying about recession risks and of course the deal between the u.s. and ukraine, but we will see how long this lasts given the concerns continue around the growth story in the u.s. european futures higher by 1%. ftse 100 looking at 37 points. s&p futures pointing .3%. but again, after the losses of zero point 8% yesterday. nasdaq 100 looking to add 61 points. european stocks looking to snap four days of declines. let's have a look across assets.

euro-dollar, the last time i checked was above the 10 nine level. we continue to focus money moving into u.s. treasuries. yields down two basis points on the 10 year, 425 as we lead up to an inflation data out of the u.s., 12:30 pm u.k. time. euro-dollar of 109. looking at aluminium on the back of the tariffs that kicked in now. 25% on aluminum and steel. that metal is up 2%. print below $70 a barrel. let's get more on the markets now with a vice president and portfolio manager at franklin templeton investment solutions. thank you for taking the time, how do you think about adjusting the portfolio in light of these tariff risks? what is your assessment of today's relatively benign reaction to what we've seen from the trump administration and the eu response? >> good morning, tom, thank you for having me here. first, let's take a step back. what we are seeing now in the

u.s., we see those tariffs will damage not only the u.s., but also the world economy. when tariffs implemented, basically all of that released before. we assess that the tariff will go up from two point 5% to a low double digit number. this is assuming reciprocity, 10% on chinese goods and 25% on critical imports like aluminum and steel. this would be the highest since 1942. so, basically what will happen is it will dampen the international growth and we know that elevated uncertainty will have impact, not only on consumption, but also incorporates.

when delaying investments and hiring. so now we are seeing a slowdown in some economic data in the u.s. measured for example by small business optimism. index under services pmi or consumer confidence. so how do we implement it on the portfolio? we are still relatively upbeat and relatively risk on. we still think that u.s. exceptionalism is not yet over. it is somehow increasing in donald trump has not ruled out some pain on the economy. but i think it is important to look at how u.s. exceptionalism is explained.

and we see the factors. tom: you've touched a lot, i just want to unpack that. on the recession risks around the u.s., what is your expectation around how growth unfolds through the year, why are you pushing back on the concerns from some that we could be hurtling towards negative growth in the u.s.? >> data is still relatively strong in the u.s.. we see a lot of noise, and it's really difficult to look through all of that, but the fundamental data on the economy, even amid some slowdown, they are still good, corporate subjects reported earnings season was good, and we have seen also some broadening to other sectors out of tech. and basically, just u.s. exceptionalism is basically explained by tech, and this

structural trend on artificial intelligence, this has got some scratches, but it is questionable, the whole story on ai in the u.s. economy, u.s. corporate's in that sector, there are questions on the sustainability of the high capital expenditures, and we have seen some profit-taking here, but we still have in place the high fiscal policy -- expansive fiscal policy, so thinking about such programs like the inflation reduction act and consumer is still strong. tom: on europe, his european outperformance continue, does that have furthered a runner as it derailed by tariffs? >> i guess the tariffs on aluminum and steel, they will have a rather smaller impact on

europe, but also, let's take a step back. this outperformance of european stocks that we have seen since the beginning of the year is actually because europe became more attractive, and the u.s. on the other side is more of a concern. so the european stocks basically have very cheap valuations and we also have seen some stabilization of cyclical data like m1 or manufacturing pmi. and as already mentioned before on daybreak, there is really big expectation of big government spending's going forward in germany, but also in european union, and last but not least, there is little exposure to i.t. sector in the european index. so all of that has made european

equities attractive as compared to the u.s. where valuations are high and as mentioned, deepseek has lost some questions and cause some traffic taking. tom: vice president portfolio manager at franklin templeton investment solutions does not see an eminence recession in the u.s. further upside for european stocks, may be down for not having too much tech in the mix. thank you for the market take. coming up, how tech startups can drive your of security push. i will speak with the ceo of the defense tech company aiming to reinvent europe's air defense systems, some of the big experience within the space. that conversation is coming up. this is bloomberg. ♪

>> ukraine accepts this

proposal, we consider it positive. we are ready to take such a step in the united states of america must convince russia to do the same. that is a we agree and if the russians agree, silence will take effect at that very moment. tom: ukraine president volodymyr zelenskyy speaking. european governments planning to spend hundreds of billions of dollars expanding and modernizing their militaries, but they won't only rely on the large defense companies, the prine's that dominate the industry's, but also startups that offer rapid innovation. among them is frankenburg technologies, and estonian-based missile started. the firm's ceo and a former top ranked civil servant in estonia's defense ministry joins me now. thank you very much, you have deep experience in the defense space around estonia given your previous role in the government, and instrumental role. now leading the start up. are you getting the funds that you need to build the technology that europe needs to defend

itself from russia? are lawmakers paying attention, is the funds flowing, are we feeling the urgency right now? >> good morning and thank you for having me here first. i think these months, these weeks are the opening of th window the last seven years. this is where the actual thought that europe needs to start to get their act together is getting home. the actual funding, i think it's not really flooded the market yet, but this is about the government and we as a company need to be ready for that. tom: you are using off-the-shelf technology they use for smart phones. you wouldn't bet that and build missile systems. where are you in getting those missiles into conflict zones, into ukraine, how far away are you from being able to deliver, at quantity, missile systems that estonia and other partners need? >> the whole leadership team has spent a lot of time and national defense and the two problems we

have identified, that whole market has is that the whole defense kit that the current industry manufacturers is just outrageous. that means that is just not available at scale and this needs to change if we really want to confront russia, china and other threats that might confront the free world in the future. so, this is what we are doing. we are bringing air defense missiles that will be 10 times cheaper than the incumbents, and we will manage if you fracture them 100 times more than the current industry has. you're actively developing this, this is where the focus of the company is, and we will be ready very soon. tom: are the main defense contractors, the crimes in -- the prime's partner or an obstacle? >> we are not alone in this market. the system between the governments, academia, startups, if we see growth, that it cannot only come from the primes. it comes from the primes, comes from the incumbents, it comes from the auto civilian companies moving into defense. and i think if we look at the whole system of the market, the

emerging companies are startups. tom: does the procurement process need to change to ensure you get a better bite of the apple that funds are flowing, that you get easier access to some of the contracts? >> always need for change, that's clear. but i think the greatest spark for the change is actually the threat itself. if we see what happened in ukraine, even in europe in 2020 two, a lot of the obstacles were removed on their own. there have been a lot of talks about u.s. aid recently. i worked in the estonian government back then and the things that would otherwise take six months, nine months, essentially happened overnight. the same was in germany, france and our countries. so, i think there are no essential obstacles there right now if the necessity hits. tom: you recently said ukraine possibly has a better week left if there is an incredible plan from europe, where it is that thinking stand right now? >> i think this is a very green

time for you taught -- for ukraine, very green time for european security and essentially it gets down to a bottom line, very simple principles, if russians walk away from this war with no security guarantees for ukraine, u.s. off the ukraine soil and potentially lighter impact in europe, than they have one, there is zero european governments can go back to their people saying that ukraine somehow won the war, and i don't know how the ukrainian leadership -- tom: you have been pushing this for a long time, where are you convinced that rusher poses a broader threat to europe, where they not done with territorial gains in a buffer zone in in ukraine? >> russia has made no secret, they issued paperwork in 2021 for nato and u.s. where they articulated their demands in six or eight papers with 30 different points of what they really want to do, and they all got down to the point that the european security architecture needs to move back where it was

when the cold war collapsed, essentially at the borders of 1997 when nato started to expand themselves, it has the weapons positioning, the restriction for access to the baltic sea. in many other points that will basically dilute their collective defense in europe. this is what they have made public, and this is what they are fighting for in ukraine, and they are making this clear every single day. the real cost for them is not ukraine, but the whole nato expansion. this is what we need to confront. tom: what are the main defense gaps europe has right now versus russia? >> there are no categories where we are not lacking, we need to move at least 10 times faster and at this scale needs to be better in shells, missiles, armored vehicles, communications, everywhere. we are at the brink of, i wouldn't say collapse, but this is the last wake-up call, and

the only solution will be described in euro fears, there's no other way to solve it. tom: is the funding pledge from germany from the eu, is that enough? >> these are very serious numbers, 800 billion from the eu, up to 400, 500 billion from germany, this is almost eight times the annual budget for germany, two and a half times for the whole defense expenditure of europe, they are very serious numbers, the only issues with those numbers is that they are not at the account yet they were at the beginning. but the strategic aim and strategic rocketing is right. tom: really appreciate your time given your experience within the defense ministry of estonia. now leading and ceo of frankenburg technologies. that deep experience in defense based on how the ukraine conflict involves and the huge gap that continues in terms of europe's defense capabilities versus russia, and of course a you on russia's ambitions knowing broadly.

there is a press conference that is being held by the eu on that tariff response. we know they have and will be imposing reciprocal tariffs on april the first in response to the u.s. tariffs on aluminium. they will make a statement on new tariffs at 7:00 a.m. u.k. time in the european parliament. in a little under eight minutes time. we will of course bring you that response as europe looks to target around 26 billion euros in u.s. imports to the euro zone. also making news, greenland's voters have thrown their weight behind a slower approach to independence in the arctic islands and usually closely watched election. the socially liberal democratic party emerged as the surprise winner and a vote overshadowed by donald trump's plans for a takeover of the territory,

despite the global attention, a lawmaker for the party told us many green landers were focus on everyday issues like education and pensions. there's plenty more coming up. this is bloomberg. ♪

>> i think you have to say that there is in the range of, i would still say slightly below a 50% chance of a recession starting this year. tom: former u.s. treasury secretary and bloomberg contributor larry summers speaking with bloomberg's david westin on the odds of a recession. recession part of the mix, but also the selloff in tech and mag seven and central to that has been the pull down when it comes to nvidia. down about 30% this stock from its previous records.

and here is the valuation story in terms of the multiples, trading now at 23 times forward price-to-earnings, this is the context. you are back to levels when it comes to the multiples that we haven't seen since the launch of chatgpt. is that an opening for those that want exposure to nvidia or a warning sign that maybe there's is further downside to this key stock around ai accelerators. let's have a look at the inflation story, ties back to what larry summers said about it recession risk to what extent will inflation be another headwind if we see a tick up? the data crossing at 12: 30 u.k. time. headline is expected to come in at 2.9%. key data point for you today. the opening trade is next. this is bloomberg. ♪

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