>> welcome to "bloomberg markets ," i am scarlet fu. trade concerns take the stage once again after a fairly quiet two weeks. the presidenteatning tariffs on the e.u. and apple. a fourth day of losses in equities although we have come ffof our lows. only utilities are higher. the dollar is weaker againsl the g10 currencies. 's we are seeing bonds get a safe haven bid. te bond market is closing early today for memorial day weekend. gold also getting a boost for haven assets, up 2%.

u.s. treasury secretary scott bessent has been the central figure in trade negotiations. he appeared on bloomberg television. sec. bessent: the president was getting frustrated with the e.u. the problem with the e.u. is they have a collection action problem. 27 countries with different needs. the germans are interested in cars, the french, agriculture. you have brussels negotiating with them. scarlet: for more on all of this let's bring in bloomberg correspondent tyler kendall at the white house. the president went on the tariffs were passed. what has prompted this. tyler: it appears he is setting the tone ahead of trade talks this afternoon between the e.u.'s trade chief and jamieson greer. president trump said no progress

has been made to this point and perhaps this is being used as leverage ahead of those talks. we have seen a proposal from the european union floated earlier this week. the response was to potentially see the e.u. and u.s. reduced tariffs on a reciprocal basis down to zero on certain agricultural products and industrial goods. that does not seem like enough to move the needle for the white house moving forward and that might be my president trump stepped in. the treasury secretary outlined some complicated factors. the european union is -- all 27 member states need to agree and that can complicate things. president trump said in his post today he was pulling out the value added tax. scarlet: also we understand he has been targeting apple and this is a point he has made

before -- really pushing the company to manufacture iphones in the u.s., talking about a 25% tariff. what sparked that and ongoing discussions with japan? tyler: there are a lot of different threads to pull on, including president trump has not been keen on apple's plans to move manufacturing to india. he wants to see it more bolstered in the united states. when there are discussions about how tariffs can affect manufacturing and prices, we have seen president trump go after private sector companies. over the weekend we had him taking aim at walmart, saying they better eat the tariffs in his words. earlier this month, amazon came under fire under reports they would start shilling the terror of costs when consumers went to buy goods. this is part of the white house

ramping up pressure on companies. scarlet: tyler kendall, thank you so much. we will stay with washington because the senate is moving forward with the stablecoin bill called the juniors act. democrats are looking to add an amendment to prevent the president for making money from stablecoins. jeff merkley tweeted passing the genius act without the anticorruption amendment stamps a congressional seal of approval on trump selling access and influence to the highest bidder. scott bessent also spoke about stablecoin policy on bloomberg. sec. bessent: we want to apply the highest u.s. regulatory aml standards to digital assets, especially stablecoins. i have seen estimates that over the short term that stablecoins

could create $2 trillion of demand for u.s. treasury and treasury bills. to put that in context the number is probably about $300 billion. scarlet: scott bessent. our next guest is the biggest player in the table score -- stablecoin place. paolo ardoino. i want to bring in the bloomberg editor with us. thank you so much for coming in. i know you were in washington for the last couple of days as the senate addresses the genius act, which does call for federal oversight of stablecoin issuers by the federal reserve. with the dominant coin be compliant with this? >> thank you for having me. the united states, looking at technology that we created in

2014. it is a very big step for us. we are interested in seeing how the u.s. is looking at regulating stablecoin technology. it is important for us to see how the genius act is distinguishing between foreign issuers and domestic issuers. we believe in the importance of u.s. dt as the most used digital dollar. for a long time, stablecoins are important in united states but it is true the united states have ways to pay each other with paypal, bank accounts, cash, you name it. emerging markets, there are millions of people that need something stable in their lives and that is the u.s. dollar in

the digital form, usdt. for us the main interest will remain outside of the u.s.. creating a domestic issue stablecoin that will be competitive under the u.s. economy. >> i am curious, what are the impediments to compliance that are difficult to make usdt compliant in the u.s. and europe? one of the biggest requirements be the reserves -- what is the impediment to make u.s. dt compliant in the u.s. and europe? paolo: we are looking at it in a way that will allow us to be compliant. we can be compliant still having a strong focus on foreign markets. those are the markets that lead us the most. when it comes to a domestic

stablecoin, different features than a foreign stablecoin. foreign stablecoins are used for savings. 37% of the user base for usdt is using it for savings. in the u.s. you would not use stablecoins for purchases. the issue that we have is the fact it is a lower bar. we are getting comfortable with the genius act. it would force stablecoins to hold 60% of reserves in cash deposits in european banks. that is a bad idea appear the genius act is pushing for 100% cash equivalent with a strong push toward u.s. treasuries, that is a great idea. we have seen how our major competitor two years ago had a huge issue with silicon valley bank having unsure cash deposits

in the u.s. we learn from that lesson. europe is falling behind the regulatory framework the u.s. is pushing. scarlet: you mentioned how you might issue a new stablecoin for domestic use in the u.s. is it still in the conceptual stage? if we were to liken this to a football game, is in the first half? second half? extra time? paolo: i would say closer to the second half. it is the most compliant stablecoin. we work with more than two hundred 55 law enforcement agencies across 50 different countries. when we talk about complying, we work directly with the fbi, u.s. secret service. we have a relationship with the department of justice. being foreign or domestic, it does not matter. we will comply and set the bar

every day higher. in general we think it is important to have a clear regulatory view. michael: stablecoins word invention of the crypto market. they were used as the dollar stand-in in the crypto markets. a lot of the excitement is for non-crypto uses. payment companies, fintechs. in the wall street journal there was a story about big banks considering creating their own stablecoin. it feels like the competition is coming from all around you and a lot seems to be centered on the idea of using it as a method of payment -- quicker, faster, cheaper, money transacting outside of the crypto market. how does tether fit into that use of stablecoins? paolo: in 2020, if you see the tend of growth, in 2020 with the

pandemic, that triggered all the people in developing countries to start holding usdt as their savings account and checking account. if you are living in turkey or argentina, it lost 80% of its value against the u.s. dollar in the last five years. for us in the last five years, usdt has always been an instrument of savings and the payment for hundreds of millions of users. today we have more than 420 million users. we are growing at a pace of 30 million new wallets per quarter. almost like we are a social network. that is making usdt unique. we are not worried about the competitors coming from big banks. they will look at the western world. how they can serve in a better way their existing customer base. our customer base are the 30

billion people unbanked. not generating enough revenue. we feel our market share will remain or keep growing. scarlet: that is your competitive advantage in many ways. i want to talk about the run ins you have had in the past. tether has been forfeited. you have also never been audited. what is the progress with securing an auditor for proof of reserves? paolo: march 3, 2025, a couple months ago we announced our new cfo, a leader when it comes to audits. we do not think our should be considered contentious. an audit of the stablecoin should be fairly easy. we have issued tokens of the size of $152 billion and we have strong reserves that we keep in

the united states. they hold our u.s. treasuries. we have more than $120 billion in u.s. treasuries. we would be the 18th largest nation in the world. we are in discussions with the big four auditors. we are in good progress. there is still a little bit of an adjustment phase on their side. from the previous administration that was aggressive against crypto, the change to the current administration has been dynamic. they are going through a phase of adjustment but a full audit is our priority. scarlet: a full financial audit in addition to the reserves? paolo: the auditors will be looking into all of our processes and all of that. i think it is fair and what people ask. michael: you often make news for non-stablecoin type of investments.

even companies not involved in crypto. i am curious how you think of the long-term strategies for tether? it almost seems potentially to create a berkshire hathaway type of holding company beyond stablecoins. is that a fair model to think about ambitions in the long-term? paolo: in the last three years the company generated around $20 billion in profits. assets have been capped in two parts. one is around $7 million in what we call excess equity. additional equity on top of the 100% reserves. used to do different investments. the biggest landowner in south america. someone could ask the question why you did that. part of our portfolio has to be

capped for stable, long-term investments. the way we look at that company and similar companies is the opportunity of starting to you stablecoins specifically for international commodity trading. we have been in talks with a lot of traders recently in the last year. they are all upset with their banking partners because the banking rails are becoming slower and slower so efficiency is important. stablecoins, usdt is the choice for them for making their portfolio much more efficient. we are making investments to grow our user base and market cap over time. scarlet: tether ceo, we thank you for joining us, paolo ardoino, and bloomberg's michael regan. coming up on "bloomberg markets ," apple could face a 25% tariff

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scarlet: our stock of the hour is apple. the year is starting to an eight month low. the president threatened to impose 25% tariffs on the company directly if iphones are not made in the u.s.. caroline hyde joins us now. we are not clear of the details. it has been made clear by analysts it would be expensive for apple to make the iphone in the u.s. caroline: a fairytale is what dan ives is calling it. ultimately, this is president trump wanting a key pinned up corporate success story to eat

lower margins, do less efficient things to make it in the united states -- and he is serious about this. he has been calling out tim cook. he noted he was not in saudi arabia. now he seems to be completely frustrated it is not coming to the u.s. 25% tariffs, bloomberg intelligence is saying that i could add a 300 basis to base margins. some analysts are putting a $250-$300 increase in price on an iphone. let alone what margin pressure they might experience if they move manufacturing to the u.s. that is a herculean effort. you need to labor, secure set and ecosystem. scarlet: caroline hyde, appreciate you joining us. caroline hyde is the cohost of bloomberg technology. the head of one of the largest

sovereign wealth funds said the clock is ticking for private equity. >> private equity is in trouble because they have gotten away from doing mistakes for the last five or 10 years without paying the price. the time is coming up. a large buyout. the second part is underwriting with no exit optionality. when they underwrite a specific thing, they look at one exit path. what happens if that market is shut? the third part -- we have seen private equity funds go up in size. you see them coming at $10 billion, $15 billion, $20 billion in size. you need to be realizing $40

billion in assets. who is going to buy them? the answer is i don't know. you put them altogether and you have the perfect storm. we have $3 trillion worth of portfolio companies yet to be realized and the worst part is they are approaching the end of the fund lifecycle. there is a limitation for people to ask for their money back. the clock is ticking and buyers on the other side are being paid to wait. that is why you see opportunities come up in special situations. provide solutions to get out of the problem. you are asking where you go with private equity? i would say secondary is a golden opportunity. not because of that happening today but mistakes from five or 10 years ago. scarlet: that was the managing

director of the kuwait investment authority. at the 2025 qatari economic forum. harvard and yale's endowments are selling some of their stakes in the face of reduced government funding. banning harvard from enrolling international students. harvard sued the government and in the last hour a judge ruled the u.s. to not enforce that ba n. brooke sutherland is bloomberg's boston bureau chief. brooke: this is a significant escalation of the trump administration's attack on harvard in higher education. they have not held back from criticizing a number of universities but no one has been harder hit than harvard. appreciating the gravity on what a ban on international student

enrollment would me to harvard. it is a quarter of their enrollment. most international students -- this would have catastrophic effects on harvard's ability to continue operating as it has been. not to mention the massachusetts economy which depends on harvard and other top-tier universities to create a talent pool that attracts businesses to massachusetts. though students create to the local economy, as well. scarlet: this is a big story for you in boston. you talk about harvard and how they are a magnet for talent. it is a huge employer and a huge landlord for other companies in the city. brooke: it is, definitely. it is integrated into the life blood the massachusetts economy.

businesses are attracted to the talent pool that comes out of those universities. though students go on to work it massachusetts hospitals and research institutions, which themselves are facing a financial squeeze from the trump administration. you are seeing a multifaceted attack on that sort of eds and meds that have been the bedrock of the massachusetts economy. politicians here are having harvard's back, speaking out for harvard and advocating for them in the fight against trump but their hands are tied. scarlet: there is a lot of confusion on the ground. you have been reporting about international students. share what you have learned. brooke: confusion is the word. we talked to a few people who were traveling at the time of the news in a foreign country.

getting off the airplane to find out this decision had been handed down by the trump administration. it is really destabilizing if you think about international students returning and trying to figure out if they will be able to do so. harvard's commencement is on thursday. we will see the graduating seniors continue to be able to do so but for the younger students it is a question mark right now. there was an injunction on the move by the trump administration. is that enough are some of these foreign students? today feel confident enough in harvard's ability to prevail in this legal fight or will they try to get ahead of it and look for transfer options? scarlet: i'm sure a lot of them have already signed leases. brooke sutherland, our boston bureau chief, thank you so much. i am scarlet. that does it for "bloomberg markets." from new york, this is bloomberg.

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announcer: from politics to business, this is balance of power. live from washington dc. joe: new threats of tariffs.

the president warns of a 50% tariff on the eu starting next month and 25% specifically apple, unless they move iphone manufacturing to the u.s. no one thinks apple is about to do this. the president is moving markets again. kailey: they may not be technically possible when we consider components and labor. tim cook has tried with this white house personally donating to the inaugural fund. interesting. 50% tariff threatened on the eu starting next sunday.