economy. leaving every competitor, threat and challenge outmaneuvered. differentsures from comcast business outmaneuver. geographies right now on traditional contract manufacturing, where the margins are in single digits and going lower, what it means is a real impetus for innovation. kong, liven hong i think 40% of our respondent companies said the future of the from the asian headquarters. taiwan economy is about innovation and products and welcome to daybreak: asia. the top story, the war in the services. there is a big theme around digital transformation and iot white house, president trump says he has no choice but to transformation. impose tariffs. rather than risks, i think the sent, it is not opportunities are around these products and services and digital transformations. want to trade war but is supportive of the president's plan. companies find the raw i'm betty, it is just after 6 ingredients here to support that kind of innovation. p.m. on this tuesday evening. the news will send the shockwave through the market. the ip protection, the labor easing, autos are force, manufacturing expertise, these are the ingredients you falling after hours. need to support this the party is over, the fcc transformation. joiningalbert chang,

onsident tightens their grip us. a quick check of your markets in the asia-pacific. continue to see downside when it all aspects in china. comes to equities. look at this risk off today for the japanese yen, strengthening from 0.5%, 105.66 at the moment. betty: this news of gary cohn's nikkei 225, shares down 0.8%. australia taking this more resignation hitting the markets. just as asia is opening. today, down 0.9% in australia. gary cohen, the chief economic with political tensions advisor is to be leaving the white house. one of the most high-profile potentially easing, we are departures. seeing downside on the kospi. the won strengthening this closelysachs worked morning. betty: let's take a look at with gary cohn and one person markets set to open. said he deserves credit for expert-oriented singapore, after serving his country. i join many others disappointed these headlines coming out that are really showing the to see him leave. ratcheting up of trade tensions. related to this or not, we are futures coming up 1.5%. watching these tariffs, coming tariffs, the u.s. has said to taiex futures lower by about 1%. yvonne: take a look at the china

incur broad tariffs on chinese open. we are going to see day three. imports and takeover. good into thisng we are getting reaction to some of these lines, said to be imports ofcurbing asian session when he came to geopolitical aspects. it has seemed this has shocked china. we are seeing downside for china markets. the system and asia session. hang seng, pretty much flat. this is bloomberg. we also learned that the ♪ retail. president is going to be canceling that's meeting with some of the top-level executives, which are still consumers, which gary cohn was supposed to host. absolutely not. things are going to get a little not just between u.s. and others, but also in the markets. but crossover to washington. but set over to joe, who has more details. yes it is.r is thinning out this is a shock, but not particularly a surprise. gary cohn was one of the

strongest voices for what might be termed as the conventional economic outlook globalist perspective, if you will. that was left in the white house. he has been clashing with trump on a number of issues. he was set to prepare his resignation last summer after the trump comments of clashes between protesters and white ander -- white supremacists virginia. then they talked about him leaving after the tax break was finished. trade tariffs were a major battle within the white house with cohen on one side and commerce secretary on another side. two principles in this. some of the other cabinet members such as the defense secretary, james mattis, and rex tillerson, or behind cohen on this and he is on the frontline of this fight. does indicateure that be protectionist, those in

favor of the tariffs and a stronger restrictions on trade have won the fight. >> it absolutely does seeing that she seem that way, joe. you are seeing in the markets as under pressure like never before. they open the u.s., and we saw and it's connected technology 304th --all by over that's moving companies forward fast. e-commerce. real time inventory. points and s&p is down over 1%. virtual changing rooms. that's why retailers rely on comcast business that is the knee-jerk reaction here, joe. ,ven if these tariffs go ahead to deliver consistent network speed across multiple locations. we don't have the details right every corporate office, warehouse and store yet on what that might look like. right, congressional near or far covered. leaving every competitor, threat and challenge outmaneuvered. republican leaders are pressuring trump to make what comcast business outmaneuver. they say is more surgical and more limited. they are still waiting that the fight in congress, there were a lot of statements from mitch >> the war in the white house. mcconnell, paul ryan, other members of leadership in the republicans, pleading with trump as advisor gary cohn quits to make them a little more restrictive. president trump says he has no choice but to impose tariffs.

conference, trump seemed undeterred. he was talking very toughly all of this sending shockwaves through markets which thought about the european union and tariffs were perhaps going away. their trade, particularly. rishaad.ong, i am and about china, and he was going to go forward with the tariffs. no indications of backing off, yet. as we say, we don't know the haidi: in sydney, i am haidi lun. details, whether the exclusions for the industries or particular this is bloomberg markets: asia. countries, but the republicans are trying to convince him. the whole controversy around the tariffs were that they were blanketed in hurting u.s. allies, not particularly when it comes to china. aboutou see the headlines chinese imports and takeovers, is this perhaps a more targeted standpoint when it comes to trade on china? yes, it is. it shows they are turning attention to that where the

tariffs were rather broad and affecting u.s. allies. that does not mean they are backing away from the steel and aluminum tariffs. the president had harsh words for the eu and their trading relationship with the u.s.. as well as with canada. it has been a threat over canada, particularly the biggest supplier of steel to the u.s., and he is using that as a negotiating tactic and nafta. they are turning to china, and this could extend to more than just a few, one industry of steel and aluminum to other things as well. >> joe, i want to turn to another piece of news that we thought was going to lend support to the markets, but it was overws. there could be a breakthrough with the russian relations?

describe what we are hearing from the white house. joe: trump was optimistic. but then, during the press conference he said he thought the north koreans were sincere and that was a result of these sanctions and pressure he has been putting on them. it should be put out that his director of intelligence was testifying before senate today. he expressed deep skepticism about whether or not the north koreans were willing to follow through, and said that these talks, it isd of more rhetoric than action. toy are going to be waiting get a briefing from the south korean delegation that went up to talks into the north to see where it goes here. the white house, at least from trump's standpoint, he is

declaring a bit of victory here. his tough stance on north korea has brought them to the table. whether or not we have seen this before with north korea, that there are promises of and talks, and negotiations that have fallen through in the past. right now, as i said, the intelligence agencies are fairly skeptical about what their intentions are. >> all right, joe, thank you so much. joe in washington, a lot to cover with you, our bloomberg congress editor. but get a quick check on the currency markets and how they are reacting to this. we saw the dollar taking, the yen is stabilized around this level you have seen. the euro is continuing to gain of its, given the dollar weakness. the loonie is also gaining traction as well as the peso.

skews meis on the -- the loonie is on a weakening front given this is likely going to affect dramatically these nafta negotiations. trade, you vine, at the top of the agenda for the markets. yvonne: still a bit question of whether trump will have any exclusions when it comes to canada as well as mexico. certainly gives them more uncertainty in the market, particularly around asia. this could be the big focus around the dollar-yen trade. it is really waking up here this morning. you mentioned the yen, we could be seeing a retreat of the more than 300 point on this chart. we saw a stronger one at 1.8% trading in australia. we are seeing things turning quite quickly -- things turned down quite quickly. yields are ticking lower your.

we see of its more from the government bonds in australia. we expect the fourth quarter gdp numbers coming through in the next hour, as well. that could be another event risk. new zealand is underway, we see stocks down as well. >> let's bring down remain bostick for more on how these headlines will affect trade tomorrow as well. >> there was a lot of doubt that trump would follow through with these tariffs. these of the markets closed. but now as we see gary cohen exiting, and the cancellation of the meeting on friday -- thursday, not a good sign. the dow feature is down over a percent. s&p is down over a percent, and the nasdaq is down. this in the main etf, that s&p, the spider fbf

that you see on your screen. down about 1.5%. as we go into the asian trading day, and the next u.s. trading day, keep an eye on these industrial stocks, technology stocks, basically anything that could be affected by what the u.s. exports or any companies that rely heavy on steel and aluminum that could be affected by the tariffs. we could see movement in the stoxx as we move into the trading day. we were asking last week about the reports seeing these tariffs on steel and aluminum, what is the markets going to be? focused on? the input prices for some of these still consumers are going to be ticking higher? --ert margins are ticking shrinking, or could we see inflationary pressures in the u.s. leading the fed to hike aggressively this year? >> the one thing a lot of people are frightened over is the retaliation coming about him a

not only when trump imposes this, but keep in mind you have a lot of countries saying they are ready to go. the european commission has already said they will target american bluejeans, bourbon whiskey, cars and other agricultural goods. we are talking about a scenario, not with an put prices for companies and carmakers here, but for a lot of technology companies, car companies that export goods overseas, and we could see demand hit there. i could have a much bigger impact on some of the corporate profit and economic picture in the u.s.. what is this going to do for the dollar then, overall? we talked about how trade tariffs could be a headwind when it comes to the dollar weakness we have seen. >> it is interesting. you would expect to see some of this give a lift to the dollar but it is getting hit today. we see it is weakening against of the yen, being down for quite

a bit now. i'm not so sure now that this announcement will do any favors to the dollar heading into the trading day. >> remain, thank you. our bloomberg editor breaking down some of the market moves we are seeing. jessica summers in new york. the/ina is reinforcing asian century for the economy. forecasting $13.2 trillion in 2018, that would be the total of the 19 countries using the common currency. china by lessed than 200 billion dollars and china pushed past the combined economies of north and south america in 2016. is being, the u.k. urged to stay as close to european union laws and regulations after brexit to prevent job losses. the one in comes with a split a year away and ahead of the summit earlier this month which will kickstart talks to decide

future relations. you officials are in london for talks at of the summit. they are urging the summit to pick up the pace. putinchoice would be that is still part of the market, part of the union. then most problems would be solved. that is not the wish of the u.k. governor. indy's biggest banks are being summoned for the fraud of a national. 31 lenders are two meet federal investigators later wednesday. the $2 billion fraud was disclosed and alleged to celebrity jewelers colluded with bank officials to give loan guarantees that are used overseas and indian lenders. the struggle to buy this company they are pulling out after a looks of the books

raised by ability of the studio. them if she might buy it becomes available in bankruptcy. the company has been brought down by sexual harassment claims against the cofounder. global news, 24 hours a day, 2700ed by more than analysts and journalists in more than 100 and 20 countries. >> we spin the conversation on tariffs in just a moment on global market reactions on a trade war between the world's biggest economies. >> later, we talked to a tech investor of more than 40 years of experience and talk about why he is keen on payment providers. this is bloomberg.

>> let's take a look at how the futures are trading. they opened 15 minutes ago. you can see they are resuming that slide here. it's slipping, and the dow is slipping 1.4%, down over 300 points. as if he lower by 1.2%. as well.q future expect a pretty ugly day in the markets. why is that? the news out of about the gary cohn and him resigning. peter coy.ring in this is by far one of the biggest departures i would say in the white house. it is checks and balances her since trump took office was by far the strongest, the leader of the globalists gone, s come.

you have these indications where wilbur ross rosen profile on the terrorist front. replacingy could be cohn in this chair? >> trump does not want to put someone like him in their. he is tired of having someone stole him at every front. you can even imagine peter tomorrow hitting the job -- peter navarro getting the job. out on the nationalist front but crazier things have happened in the white house. >> he is kind of running out of people. [laughter] >> people want to walk into a situation like that. >> what are the implications, not just for tariffs year, which looks like are going ahead, but other economic policies from the white house? have not just tariffs, but there is a very important move

coming up in the next few weeks, section 301 which is a against china. answer my eta has a story on bloomberg news -- andrew my eta -- we have a story on bloomberg news and that will be the next story to drop. >> thank you, peter. we will talk about this top story and the next guest, joining us now for more is michael mccarthy. he joins us from their office in sydney. mikey, gary cohn is leaving and out of the white house. how does the market read to that headline? michael" it reacts poorly. markets are very concerned about the impact. you see the huge impact on dollar already and we are seeing

industrial metals in the pressure. , wasel: the market here indicating up six points at the new york close earlier today. it dropped by more than 40. it's clear the moment that the markets are likely to price the worst case and ariel on tariffs. >> would you think will be the big concern for the markets? and thee of retaliation likes of europe, possibly china as well or the fact that we could be seeing inflationary pressures and force the fed to be more aggressive in hikes? >> i think both of those are a real concern. it is clear the aluminum early -- make up global trade in the u.s.. they themselves, are not significant. reading from europe is very clear and targeted retaliation measures. it spoke directly to the politics of this and i think that is what the european message to the white house was. all that is the case, and a

number of other countries have theeaster done this, to let u.s. note that this will not go without you -- retaliation. it is the global impact, and higher interest rates could be off the table if this escalates. yvonne: how do you assess risk at the moment? we are still expected to get further volatility to come. absolutely right. that is one of the key things that the white house could do. get the formula out into the public as soon as possible. it is the lack of knowledge around this that could be concerning. if we see the -- these sort of tariffs that were introduced by george w. bush that had a lot of exceptions and company by company exceptions, a lot of people outside of the u.s. might consider this is a political gesture. that detail could mike, i thin.

it is easy to forget, but we have been here before with protectionist policies in the 1990's. there were politics -- tariffs take -- place on japanese products. could the markets be overreacting to this? michael: it is not impossible. global trade will survive, but it comes at a time of very fragile global growth. that is a concern, the 90's, we emerged from recession and it was seen as one of the measures slowing the recovery. given of agility and risk of the markets at the moment, the impact could be magnified by the current situation. yvonne: where do see, for instance, the yen going if we see this continue? could we see the yen strength and above 100? what are we talking about here? michael: we can't rule that out.

there are a number of strategists calling for a move back to those lows back toward etienne. ¥80.ll take -- the potential for lower dollar israel. i don't think we could count the dollar out. policy,back to monetary if we see this further, what kind of implications will that have for the fed in other central banks looking to tighten? the most probable scenario is not a full-blown trade war, but if that were to eventuate, the impact on global growth and u.s. growth could be very significant. under that scenario, despite the physical gains made in the u.s. with the tax reform, all that good work good be undone and more. the fed it might be stayed by a direct hit to the u.s. growth prospects. yvonne: i have a chart here

showing the growing of global growth across the region. g #btv 3864. receipt negative as global growth moves. even earnings growth has reached the top, some are saying. is that a good guess on that front too? michael: it is tempting to say it is a multi-decade high for earnings expected this year. for when we get to that elevator level, it is much more likely, or the risk become more real for disappointment rather than earning. some states we need a bit of correction and i suspect this is a move that could bring it about. yvonne: we have been talking about how some of the correlations have turned positive, if you look at stock bonds, it is hard to create a diversified portfolio. how do you create one right now, right -- mike?

michael: and the action we saw overnight with the previous announcement, it was u.s. dollar correlated. copper and gold is making similar gains, that tells us it is currency driving it. the big problem for markets is the weakening u.s. dollar. if it continues, we get all sorts of impacts the markets. we need to see strength they, and without the turnaround, it is hard to make a call. the key is the volatility markets and they have settled down at higher levels but it gives the opportunity for investors to maintain exposures to growth while covering off on risks using extreme options. yvonne: mike, thank you. joining us live from sydney this hour. let's do a check at the business our this hour. professional governors did not went to answer questions about the conglomerates, his deputy said tackling the restructuring

should be fine based on aspect quality. hna is targeting $6 billion in sales in the first half of this year. there's a possible pursuit of qualcomm might see a hurdle because washington they think opposed a risk to national security. the takeover could damage qualcomm's leadership and reduce its competitiveness in r&d. officials also say lowering their advantage would allow china to expand its influence in world's technology. the steel president has confirmed his resignation as the company said it's doing an independent investigation and found more misconduct. he is going to quit on the start of the new fiscal year and his successor will be named in the coming days. the vice president who is head of the aluminum and copper division will also sit down.

we're live in beijing. much more ahead. at leicester covered in the market. this is bloomberg. . mom you called?

oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around.

>> 7:30 a.m. wednesday in hong kong. temperatures are dipping down a bit here now. --hought it was some starting summer and a spring, but we get back to cold temperatures. is 6:30 p.m.ht, it tuesday here in new york. i had of snowmageddon. snowmageddon in the futures market right now in a way. features, doubt many -- dowell futures are dropping like a stone. yvonne:ching daybreak asia.

let's get to first word news with jessica summers. >> starting off with recent breaking news here. president trump's top adviser gary cohen is it -- quitting over the tariffs. it was part of a campaign to stop the idea and invite is that invited steel and aluminum users to the president. john says he has "no choice but to go ahead." saying it has for trading deals around the world. steve mnuchin is tried to calm fears of a trade war but he supports brought tariffs on steel and aluminum. he spoke before congressional committees a senior republicans at the idea of abandoned. mitch mcconnell says there is growing concern on capitol hill. trump is once again signaling is open with talks with north korea. that is after the south said and

done room is ready to give up nuclear weapons. is ready to suspend weapons tests and talk to the u.s. if the safety of his regime is guaranteed. finally, the japanese volcano that is featured in the james bond film as a rep did in spectacular fashion. it sent smoke -- thousands of meters into the sky forcing cancellations of dozens of flights at the nearby airport. it is the most horrible irruption since 2011. scientists say molten lava is rising inside the crater. global news, 24 hours a day, powered by more than 2700 analysts and journalists in more than 120 countries. i'm jessica summers, this is bloomberg. >> jessica, thank you. we go over to sophie, and we are

trying to digest all of this news with his resignation. this is a big wake-up call for asia today. yeah, that is wrapping up speculations that trump will push through with the tariffs. that raises the risk of retaliation. we also learned the white house is considering curbs on chinese imports and a takeover. traders are flocking to pull up the board and see how the currency is stirring. it is back down and we are seeing weakness in the canadian loonie as well as the mexican peso. today toee closely gauge how ugly the session could be today. at 2647.n is low check out what is going on in sydney, stocks are trading near the session low. you have materials a slightly lower down 2/10 of 1%.

ofn you look at the damage the mining space, you have alumina miners sliding nearly 2%. .luescope steel is among them a bluescope ceo said they would benefit from these tariffs. today they're sliding with the rest of these sectors. they are tracking gains which is trading near a one-week high. also, on the watch today, betty, we cannot discount data in asia. key among that is the data out today. betty: certainly can't. on the radar, trump is signaling is open to talks. >> with that development, that has been on the move. check out g #btv 643. that is set to strengthen the 50 day losing average and maybe a

three-year high. that is after north korea said they are willing to give up their nuclear weapons. we have seen this playbook before. we really have to wonder whether trump will play ball when it comes to this. he is optimistic, that is what he said so far, and north korea seems quite eager to engage in talks. it looks like optimism, that is caring that toward the three or hike. betty? betty: thank you so much. president trump is open to talks with north korea. this is a potential breakthrough after months of threats from both leaders. we want to bring a north korea expert, robert kelly. how serious do we take these possible breakthroughs here? we should certainly try and see what the president can

get from the north koreans, what they have to offer, if anything meaningful. i think the community, as your reporter said in the previous segment, is produced -- is pretty skeptical. i would be very surprised if the north koreans were genuinely willing to give them up if they get30 years or them to them. maybe we can get something real, though? betty: anything to suggest things could be different this time around? of thisi wonder if some is maybe because of the threats that the president has made. if the north koreans genuinely thought the north koreans were on the verge of striking them. they might be willing to make a deal. on the other hand, they might be playing this out for time. and this all fails, all falls apart, he will come in with crushing criticism for years that will allow the north koreans to spin it for six

months or a year while they work on their programs. the real test is whether the north koreans make a genuine irreversible concession that shows they are willing to step in our direction. so far, we have not seen anything like that, that is why i am skeptical. betty: what are going to be the potential concessions on the u.s. side? if we do see some breaking down of this nuclear program. is the u.s. willing to drop the sanctions on north korea, too? korea i think the north ns would what the tariffs most. they always say this is a rehearsal for envisioned and they wanted them stopped for years. they will probably push for that, and there is the question that, those would be really big gives by us so we need to demand something substantial. that does not mean it getting a committee, i

mean something substantial a new. we should try. it may be moved can bring it home. maybe the south korean president can do it. betty: professor, i want to bring up a treat -- tweet from trump on what he calls progress being made on talks with north korea. a serious effort is being made by all parties concerned. the u.s. is ready to go hard in either direction. in either direction, what is he implying? robert: almost certainly strikes. the trump people have been talking about this for a while. 's makes that's six months ago they wanted to strike north korea. generally, the president's impact on the north korean debate is that he moved the talk toward airstrikes. out -- in a major print

outlet that he wanted to do strikes. if we do get anything meaningful theythe north koreans, might genuinely believe an american strike is running quarter. we have to get something real from them to a missile freeze is not enough. those are minor, many concessions designed to get the south koreans to make a bigger concession. we need something real before you make a big step. betty: china, what role do they fight? robert: to the extent that they are enforcing sanctions that help in north korea down. as long as the chinese are looking the other way and not enforcing them, which has been the case for the last 15 years ago, it was easy for north korea to build off the programs and ignore the sanctions because they could run study legally through china and the banks there. i wonder how much the chinese have lost their patients with the north korean nuclear program . nobody wants them to have nuclear weapons.

they began to enforce the sanctions. that would cut off north korea. oneink -- i think that is thing where they could really feel the bite. betty: we've been talking about these headlines and we talk about will see, we'll see, but thank you very much. moving to china, the chinese president is planned to extend a sweeping government overhaul that would give them a greater control from entertainment to financial services. thatve someone covering and he joins us live from beijing. -- whathat a rehearing are we hearing? >> i want to set the stage here in the media center. we are ahead of a press conference with the finance ministry.

and of course, this latest story , potentially the trump administration could impose restrictions are clamped down on chinese investment into the united states and also impose tariffs intocrease the united states in retaliation to their alleged -- allegations that the chinese have been doing intellectual property violations. we are likely to get, or we will pose questions to the finance .inistry here to get the response also, this morning, we hear from the agricultural minister in china, and they have opened an investigation into allegations of their own against dumping sorghum into the chinese market. there could also be retaliation on the soybean front against the united states. there's a lot of potential, tit-for-tat talks that could tom does come after this story.

we heard from the vice minister saying these cap's -- saying these tariffs would not be welcome but china would have to defend its own interests. document, you mentioned that chinese president was solidifying control over the government, that is what is going to be put before delegates in the next couple of weeks to vote on to give more disciplined of the state my the party. that could involve the merging of a number of different agencies. has said he wants more discipline and that means more are to control over the state, a.k.a. the government. one of the proposals put forward is changes to the constitution -- rather get rid of term limits including for the chinese president.

i pu q delegates and here's what they had to say. what he has done in terms of economics, education, poverty, toing corruption, i think the country and people of china, it is a blessing. >> the key to whether it is limited term is whether there is any check and balance. there is there in the future on this particular basis, i do not see how somebody can continue to be an a powerful position without having the support of the people in doing a good job. and if the people continue to support someone, i don't see why we don't have a system that can allow able people to continue. if you look at the american system, is that good?

>> again, about two thirds of the nearly 3000 delegates will vote on the proposed changes to the constitution at the end of the national people's congress at the end of the week. >> steve, thank you so much. in a moment, we look at investing. the markets are volatile today, but what about investing in technology? a focus on cryptocurrency, global payments, the trend at the moment. alan patrick off is because next . this is bloomberg.

>> this is daybreak: asia. i'm yvonne hong kong. betty: i'm that he in new york. stone are dropping like a and after-hours trade following news that gary will be resigning. could technology be a possible channel for investment?

channel for investment as we see these industrials slipped on the back of these tariffs threats. joining us now in an exclusive .nterview, is alan patricof politicalown in circles here in new york city and washington. tell me, first your reaction on the resignation. alan: we say when we have young entrepreneurs running something, --need a grown-up in the rue room. i remember that vividly. i think we need a grown-up in the room in the white house. that is the problem and it gets worse every day. betty: does it make you more concerned about where the economy is headed? alan patricof when trump got elected i was on the program and said the market does not like uncertainty and surprises.

all we have gotten for the last 15 months is surprises. the market went up. some point, the market has to be spooked by they don't know what is going to happen tomorrow. betty: might this be the moment? alan patricof i tweeted so many times saying this is it. betty: and the markets defy that prediction. then, -- alan patricof the market defies me and we get another one. gary cohen has been the grown up in the white house. i don't know where they will find a replacement. so he said maybe wilbur ross. commerce has been an easier thing, a place to fill in with people but penny did a pretty good job with that. betty: it seems like wilbur ross's profile has been elevated with this.

it has been interesting, allen, seeing how technology and stocks have continued to rise. it has certainly been a bumpy road in some aspects, but they continue to rise in tandem with the markets but shrugging off any of this outside news. do you think technology will continue to benefit and ignore what is going on here? alan patricof no one will completely ignore it -- alan: i focused primarily in the world and they are relatively immune as far as taxes, interest rates, and politics. you don't ever hear that discussed. the companies that are growing 20%, 30%, 40% a year, what happens, unfortunately, they don't pay enough attention to it and i think that is changing a bit. allen, yuan in hong

kong, some of us argue devaluations at some of the early stage levels that they are still too high. you see corrections this year? alan patricof public companies or private? yvonne: privates. alan: i'm concerned because there is a lot of money around. findave to find a place to money to work -- put money to work. saidears, i have always that pre-ipo rounds to not to be very long engagements before the wedding takes place. . think that we may see that we have seen a couple companies get through the minefield. some of them better, some of have done worse. we have seen a definitive ipo trend yet. there are lots of -- dropbox will be the next ipo and that will bring more enthusiasm and

interest in the ipo market. some of the investments you are making, you're invested in private markets, i'm curious, what are you focused on these days? payments? you think payments is the next big growth? alan: we have a company in china, actually, which we invested in a couple of years ago. it is run by the person who founded tempe. the square of china in effect is growing like crazy because we accept payment from various things. as a mode london, and i have been particularly involved in a company in africa that uses bitcoin for effecting

differentfrom currencies to other ones. >> do you think the mobile payments markets which has grown like a gang buster in china, do think that will be the next big area for growth, globally? alan: one company that does not get enough credit, is a company in kenya. the global started wallets, the mobile wallets, and virtually everything in kenya get a that way. from that, all the payment companies have a halt. we started been well, that became braintree, which became paypal. that is a very exciting area. we have participated across the board in the payment area.

we are in the middle of it. it is very exciting. it will only get bigger. i'm worried that we might not be able to use cash, credit cards. >> wire you worried about that? alan: it will be a new world. >> allen, great to see you. . betty: the cofounder and managing director there. subscribers will indeed be gone, and the terminal is available in the bloomberg app and you can customize your settings so that you only get news on the assets and industries you care about. this is bloomberg.

yvonne: this is daybreak asia. on the bond and -- i'm yvonne in hong kong. betty: global energy executives

-- policymakers, the dynamic the secretary-general says the two are comparing notes for now but for few signs of fondness. .emy has more what is the take away from today? ramy: it seems the people who are attending our tiptoeing through the tensions between the two. the folks behind me here are some of the biggest names. one is the current opec president on a rotating basis and he says, there is no need to panic as we try to get to the final rebalance. he said there is room to grow. bullish demandis and everyone. jack stark is pushing a little guys, weg, guess what have a couple decades of inventory and we will pump more oil out.

as for the norwegian oil minister, he says the $60 oil market good for him. 2%way does only account for of the world oil they are happy with the number. i show you g #btv 1989 and this is what is happening with u.s. shale. , and now as we stand here upd into 2019, we might be near 11 million barrels. the reason i pointed this out, says u.s. the ceo shale will not go away and we can see that based on the estimates here. iea saying the u.s. will dominate global oil markets over the next three years with global growth demand being met over that time. in addition, this is g #btv 6321, and we are looking at volatility falling.

themore default, the better price becomes. yvonne back to you. yvonne: in the next hour, reaction to gary cohn's resignation and other stories. the market is open and this is bloomberg.

♪ yvonne: 8:00 a.m. here in hong kong, live from bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." the white house, gary cohn quits as president trump said he had no choice but to impose tariffs. washington turning up the heat on china. plans for imports and investments. in newi am betty liu york, where it is after 7:00 p.m. tuesday. today's news sent a shock through the market. traders fear tit-for-tat measures. it overshadows positive measures from north korea. kim jong-un reported to be

willing to talk, if the nation's safety is guaranteed. ♪ yvonne: despite some breakthrough potentially on the south korea-north korea front, fears of a trade war shattering optimism we have seen the past couple days in markets. heh gary cohn's resignation, was seen as a steady hand in an otherwise unpredictable administration. it makes you wonder who are the adults in the room now? betty: joe sobczyk said it well. it is a shock, but not a surprise. we have been given lots of hints this was coming down the line. gary cohn, if you have been watching the news, seems to fall into the background as others like peter navarro and wilbur ross come to the fore as those

closest with of the ear of the president. yvonne: what does this mean? navarro has a more elevated role in the white house. take a look at the market open with sophie kamaruddin. we are seeing pain. >> storm clouds back this wednesday. doldrums, the nikkei 225 losing 0.6%. we have seen the kospi opened fairly flat. second consumer stocks avoiding the kospi. this is policy uncertainty and instability in the white house, stoking a broadly negative reaction in stocks. u.s. futures, a lower open of about 1%. this is markets trying to figure out trump's priorities. is it to keep stocks flying high as evening outs

an uneven playing field when it comes to trade? some say, keep an eye on the topix, below 16.87. we have not been below that in five months. currency markets not waiting to see if these tariffs are going to lead to a full-blown trade war. check out what is happening for the yen. dollar-yen awakened as the greenback looks more vulnerable to rising u.s. protectionism. the dollar-yen approaching a 16 month low. the mexican -- the canadian loonie and mexican peso sinking. trump has canceled a meeting with steel and aluminum chiefs. the aussie dollar on the back foot, reinforcing the rba's trade war fears, given australia's exposure to trade, which caused philip lowe to say the tariffs are regrettable and bad policy. we are keeping a close eye on the korean won. said to retest a three-year high, close to the -- north

korea open to denuclearization. getting closer to that 1067 handle. story which has dominated the past couple hours, gary cohn resigning as president trump's top economic advisor. bloomberg editor jodi schneider here with more on this news. probably the most high profile departure, as we have been describing it. what will it be, the impact, how serious will it be? jodi: clearly this is a very serious departure. kerry cohen was fundamental in passing the tax bill at the end hn wast year -- gary co fundamental in passing the tax bill at the end of last year. he pushed very hard against these tariffs, clearly. there will be some uncertainty.

and this is another departure at the white house. this is a theme, a lot of seats being empty. how chaotic are things at the white house. the president says he can easily fill this position. he said to reporters earlier he could find 10 good people for every position he has to fill. but this will be a tough position for him to fill. gary cohn was respected and financial markets and by the business community. betty: he absolutely was. lloyd blankfein saying very nice words about gary cohn. look, thesealysis, a steel and aluminum tariffs are going to happen. jodi: yes, it looks like that. the meeting gary cohn try to set up with is this executives -- set up with business executives.

does not give indication he has concerns of the tariffs. he says if there have to be a trade war, there will be a trade war. he almost seems to welcome it. news from europe, they could impose their own tariffs of up to 25%. the president says, if that is the case, that is the case. looks like he is going to for -- to go forward. does not look like he will allow industries are countries -- he did say earlier if canada and mexico would agree to the terms in new -- in renegotiating nafta , he would consider renegotiating them. but there is no indication they will do that. yvonne: the president says when you are behind in every country, trump trade wars are not so bad. but we are talking about the divide in the white house with ross, navarro versus gary cohn

and steve mnuchin. now we don't have gary cohn in the picture, what can mnuchin do to assuage congress? the: even if we impose tariffs, that this will not necessarily be an overnight war. we won't necessarily see economic effects overnight, that we are protecting our industries. that will be the theme. the question is, how far will that go in markets? and there is political follow, as well. paul ryan has been publicly campaigning against this, in a break with the president. he is worried about followed in the midterm election year, when both of the house and senate are in play. yvonne: jodi, we continue to follow these developments. a busy white house this morning. president trump also signaled he is open to talks with north korea after kim jong-un

indicated he is willing to give up his nuclear weapons. let's get to our editor who was watching this now. we need good news this morning. value we put on these headlines? it is very typical north korean diplomacy at the moment. >> it is another step toward talks, which is a good thing. this has been flagged. north korea says it wants to have talks and they cannot get anywhere unless they get south korea on board. and they cannot get anywhere unless they have the trump administration on board, as well. is this just the south singh the north told them everything trump wanted to hear? sayinghis just the south the north told them everything trump wanted to hear? betty: the president seems to be taking credit in this progress.

he is saying he is willing to push hard in every direction. what does he mean by that? daniel: we saw that when vice pence -- vice president pence was in the region for the olympics. they say, maximum pressure and engagement. they say they can do both at the same time. we are not going to ease up on sanctions, which is kim's game. he is buying time to ease of sanctions, make his country seem a normal, responsible nuclear power and all that. trump is saying, hold on, we don't want moon to give the farm away in these talks. needser happens, complete, verifiable denuclearization. koreans areouth headed to washington and the seem more than willing to take face value.at

what does president moon want at this point? daniel: moon wants trump to get on board with these sanctions. he does not want a war on the korean peninsula. that is still his main goal. the u.s. has given some signals it is willing to tolerate a war in northeast asia, if cam -- if kim does not give up his weapons. we saw moon say he would guarantee there would be no war. the u.s. holds all the military cards on that decision. part of his efforts to ease get on the same track with trump. the hard part is yet to come. along come a long way to go long, long and -- a way to go between now and then.

betty: let's get the first word news with jessica summers. jessica: thanks, betty. lael brainerdwas gradual rate h. although economic tailwinds quicken the pace. she says it is supporting growth, although wage gains fall short of precrisis levels. overall risks are moderate. reinforcing the idea of the asian century to surpass the eurozone. surpass $3.2 to trillion. the combined total of the 19 countries. the eurozone led china by less than $2 billion. china pushed half the combined economies of north and south america in 2016.

meanwhile, the u.k. urged to stay as close as possible to you -- european union laws and regulations after brexit to prevent job losses. the split, just a year away. the summit will kickstart three months of talks. e.u. officials in london this week ahead of the summit. they are urging the u.k. to pick up the pace. >> my potential choice would be [indiscernible] it is still part of the customs union. most problems would be solved. that is not the wish of the u.k. government. biggest banks summoned for questioning over the fraud at punjab national. 31 lenders are to meet federal investigators. the $2 billion fraud was disclosed when two celebrity jewelers colluded to gain loans

overseas. finally, a deal to buy the struggling weinstein company has collapsed. the group is pulling out. a look at the books raised questions about the viability of the tv studio. however, she says that they might by weinstein. it has been brought down by sexual harassment claims against co-founder, harvey weinstein. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ still ahead this hour, we will talk trade and tariffs. the angle from taiwan. have they been caught in the crosshairs of a potential china-u.s. trade war? we get the latest in about half an hours time. betty: more market reaction to gary cohn's white house departure.

this is bloomberg. ♪

♪ betty: this is "daybreak asia." i am betty liu in new york. yvonne: and i am yvonne man. we have gone quickly from a on it to risk off, given we are digesting the news of gary cohn's resignation. moderatorn as the when it comes to america first policies. 225re seeing the nikkei leading most of the losses, 0.6%. and big exporters taking it hard today, down 0.7%. the dollar-yen getting a bid at 105.63. seems like we are having

a harder line stance on trade. we are also looking at futures. s&p futures down 1.3%. the dow almost down 400 points. the nasdaq also losing ground. pretty much risk off trading right now. as asian markets are opening lower with the news of gary cohn's resignation from china, there are fresh trade threats against china, and north korea's apparent willingness to give up nuclear weapons at the safety of kim jong-un's regime is guaranteed, if you can believe that latter part. johane with us cio jooste. your reaction to cohn's departure? how risk off is this going to be, the reaction to cohn's

departure? johan: i think the markets are reflecting the fact, no one can win a trade war. there are losers and bigger losers. chance of as of a reasoned response out of the white house that signals their potential move, or a stance that could be viewed as hard line. the markets do not like that. betty: no, the markets do not like uncertainty, obviously. he had been in the background for quite some time. his departure really going to make that big of a difference in terms of economic policy, going forward? johan: that is one question. i think the answer is, no, we will not know. , theour point of view important next thing is, how do other countries reacts to this?

if the response is fairly brutal, fairly strong, you would imagine the white house reacting in kind. and then we get into the kind of the thing, the markets will outcome for stocks. it is interesting in terms of the behavior we have seen in the markets, so quicken so easy, this recovery. we quickly bounced back and now are getting back to this pain trade right now. more real a little this time, or will we see the same thing again, volatility pickup and they will start buying these again? mind, the market is less settled of this year compared to last. there is a bit more volatility. bad news spreads a little faster. the positive response after the initial knee-jerk was, wait a

minute, maybe cooler heads prevail. if europe and china do the math, maybe it is good news. and if it forces other people, the outcome he comes slightly less likely. i think the market will wait and see how the trade partners react to this. if it stays calm, no one else loses nerve, it might go away. in the meantime, people will be look at what sectors are more likely to be losers and winners. yvonne: what sectors do you look at? in the face of this volatility, you would look at more value. but we also have the weaker dollar to contend with, which could help these exporters. where do you hide? johan: there are still points about the trade war. there are losers and bigger losers. a weaker dollar is likely to be the same for the year.

we thought that was going to be the case anyway. the general tone is one of nervousness and caution, until we know what the trade allies, how they will respond. if in fact we see these trade tensions escalate, which it looks like they are going to, what do you think this means for central banks, and in particular, the fed, which looks like it is on a path after the powell testimony, for four rate hikes this year? johan: four rate hikes with the absence of a trade war, we thought was entirely digestible. that was in the context of normalizing inflation, solid growth. this need not have been a stretch. if you have potential impetus upwards in prices due to tariffs, that is a different

story. it remains to see if that is the case. you could have higher import costs, but a drag on growth. i think the fed will be on the more about we know the landscape and our retaliation and where it will be focused. there is a myriad of sectors that europe and china can focus on, if they wanted to retaliate. we have no way of predicting precisely where that is. betty: if we see this uncertainty, i know what is a lot of guessing, could we see or do the chances rise that the fed the light -- said -- fed delays a rate hike? johan: that is one outcome. if the effect of increased tariffs are bigger, more of a drag on growth, and less of a contributor to higher prices, it makes sense for them to sit back and not do the four. at this point it is guesswork.

but it is a option. it depends on where the tariffs fall and how quickly the feedback hits the real economy. yvonne: we talked about global growth, you mentioned showing signs of losing momentum. theaw the shadow pmi's, chinese export numbers, have not been to encouraging. it may be more than a seasonal distortions. is that more of a worry for investors than a possible trade war? johan: i would say at the moment, not yet. i think some of these numbers have been cooling down compared to really hot pace. it is normal to see it normalize just a bit back again, off strong levels. still moving along at what i would call a healthy pace. no worries yet. but it will be difficult to disentangle one effect from the other. without the trade war, we would

have thought growth was fairly solid and the earlier outlook in most areas, still looking quite encouraging. the u.s. specifically. numbers,at european still pretty robust levels. jooste, joining us from the lion city. don't forget our interactive tv function, tv . dive into securities or bloomberg functions we talk about on a busy day like this. this is for bloomberg subscribers only. check it out. this is bloomberg. ♪

♪ betty: a quick check of the latest business flash headlines. hawaiian air handed a victory to boeing, suggest -- selecting 10

airliners. the deal is valued at $2.8 billion. hawaiian will use the planes on flights to asia and mainland america. the first delivery is expected in 2021, and they have an option for another 10 dreamliner's -- dreamliners. and offering will delete -- dilute the holding based on the ceo's five-year turnaround plan. hasard ea -- bombardier debt after investing heavily in debt programs. they won't intervene in hna group and will respect market rules. they did not want to answer questions. the deputy says it is tackling restructuring and should be fine. hna said to be targeting $16 billion in asset sales the first

half of this year. china's president moves to widen his powers with a sweeping government overall to give his communist party greater control. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations.

every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. awaiting these numbers, just breaking now out of australia. fourth quarter gdp numbers, expanding 0.4%, quarter on corner -- quarter. slightly under what economists had estimated four arise or expansion of 0.5% in australia for the fourth quarter. the household savings ratio was at 2.7% in the fourth quarter. household spending up 1%. the big headline, fourth-quarter -- 2.7%.ding 0.4%,

notinuing to confirm, rba sure they will hit that 3% gdp target in australia. yvonne: that is below what they were thinking when it came to their own forecasts of 2.4%. it tells the case of what philip lowe was talking about this morning. talking about, no strong case and it comes to interest rate hikes at the moment. he said at this point, the economy moving in the right direction. but they are saying a bit of headwinds. the gdp is reflecting that right now. we did see a different language. a bit above 3% the next couple years. the language we heard yesterday was more water down saying, the economy looks better than what we saw from 2017. the market seems to be right on this front, that we might not see a rate hike. declinese extending

this morning. along with trade concerns we have seen. number coming gdp in slightly softer. that might get lost in the fray, given concerns over cohn's resignation. that released a wave of a risk off moves. asian stocks sliding across the region. the aussie benchmark sliding 0.9%, moving further away from the 6000 point level. shares in tokyo led lower by resource players. steel, amongn kobe the casualties, as the president resigned. the steelmaker said more cases of misconduct were found. falling withtors, most auto stocks. nomura calculating the yen may profitomakers' operating by 2%. returning to big moves in the markets, bonds are higher. treasuries climbing across the

curve, setting the yield lower to the 2.84 level. that is a drag. goldman sachs delivering a scathing critique of the tariffs, saying the risk of damaging the american economy, affecting the u.s., canada and mexico the most. b wilderness allies a speak of retaliation. the mexican peso sliding 0.7%. the canadian loonie also under pressure, having a hard time sticking with the 130 handle. we have gdp numbers weighing on the currency. won making the move toward the 1061 level. we are seeing it hedge around the 1069 level. the korean won very much in focus. you so much, sophie

kamaruddin, with the state of the markets. let's get to first word news. news, president trump's top economic adviser gary cohn is quitting over the administration's threatened tariffs. cohn always opposed the plan and was part of the campaign to stop the deal. he invited steel and aluminum producers to the white house. trump said he had no choice but to go ahead, claiming the u.s. has a poor trading deal with partners around the world. moments after gary cohn confirmed his resignation, the administration is considering broad curbs against chinese imports and investment in the for, to publish beijing alleged theft of intellectual property after an investigation by the trade representative's office. the president said he would welcome a trade war. has once again

signaled he is open to talks with south korea, after the south said kim jong-un is willing to give up nuclear weapons. a delegation spent more than on monday.with kim he is willing to suspend weapons tests if the safety of his regime is guaranteed. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ♪ the trump administration is considering turning up the heat on china, clamping down on investments in the u.s. and imposing tariffs on the broad range of him or to punish beijing for alleged theft of intellectual property. let's get the stephen engle, covering the national people's congress in beijing. how is this going to go down with the leadership? probably won't go down too well.

we are awaiting, the -- we are waiting. the finance minister should be here at the top of the hour, the annual briefing from the finance minister. also later we will get the agricultural minister. could china retaliate some of these threats coming from donald trump on steel and aluminum? could they retaliate with soybeans? there is also the investigation into chinese allegations the u.s. has been dumping are adding unfair subsidies to sorghum that china buys. there is a lot on the table. we did hear from the vice foreign minister on sunday saying, the prospect of a trade war is not welcome to china, but china must protect its interests . an interesting new story from bloomberg. two sources close to this development that potentially the white house would not only add weiffs the chinese imports,

don't know which imports, they could also clamped down on chinese investment or takeovers in the united states. it brings to mind a number of deals which have more recently fallen through because of quite strident reviews. that being ant financial, alibaba's financial services arm. that deal to buy moneygram fell through in january. last year, a chinese fund tried to buy lattice semiconductor. the u.s. blocked that because of foreign interests. and broadcom's hostile pursuit of qualcomm is being investigated by the u.s. it is concerned that there purchase could weaken qualcomm and given manages to chinese semiconductor competitors. there are a lot of different factors to be taken into account. the vice foreign minister on sunday said they invited foreign trade officials to china to discuss potential trade

differences and tariffs that will potentially bring -- be proposed in coming days or weeks. betty: a lot will be happening in the coming weeks. to unveil aent xi sweeping government overhaul, to give everything from financial services to entertainment, give that communist party greater control over these industries. what do we know? stephen: that is right. we are learning from another couple of sources close to this a proposal that will likely hit the delegates at some time to possibly vote on by march 17, toward the end of the national people's congress. that is to unwind reforms we saw in the 1980's, that really fueled out of this 30 year investment and economic boom in china, that really separated church and state, if you want to call it that. it drew a clear line between the communist party and the

government. ist xi jinping wants to do rein in the excesses and corruptions, add more discipline. this document as sweeping changes to the structure that would but the communist party more in control of state agencies and government agencies, blurring the line between church and state. or in this party, a party and government. it would be interesting to see. also what will be put forward to sweepingelegates are constitutional changes, which would allow xi jinping to stay beyond the two term limits. i spoke to delegates. here is what they had to say about the proposal. chairmanxi -- chairman foras done for the country,

the country and the people of china, is a blessing. >> the key to whether it is a limited term, is whether there is checks and balance. if the election in the future is on this particular basis, i don't see how somebody can continue to be in that powerful a position without having the support of the people. and if the people continue to support someone, i don't see why we don't have the system that can allow people to continue. if you look at the american system, is that good? a lot of people wanted clinton or obama to continue. the nearly 3000 delegates at the end of the national people's congress need a 2/3 majority to pass that proposal. i wanted to add something we heard on sunday, that the communist party's central

committee on sunday said that primary task of these dramatic changes is to strengthen the communist party of china's leadership in every sector. back to you, betty. betty: thank you so much for that thorough report. our chief in north asian correspondent. a top story never far from a topic in china, north korea. president trump signaling he is open to talks after kim jong-un indicated he might give up his nuclear weapons if his regime's safety is guaranteed. out, sayingeadlines the u.s. is adding further north korean sanctions over the poising and killing of the half-brother of kim jong-un, several months ago in malaysia. while we are talking about overtures, at the same time, the u.s. ratcheting up sanctions against north korea.

let's discuss this with a university professor. let's first take these overtures, these comments from president trump saying he believes the north koreans are about a breakthrough, about talks. you think anything has changed? >> i really don't. if you look at what was agreed upon on march 5, very little of it is new. the north koreans a bully said they would be prepared to denuclearize, if the americans were to give them a complete security guarantee and abandon their hostile policy. the problem is what they consider to be hostile policies. sanctions,t not just but the very presence of american troops on the peninsula. the north koreans do not seriously believe the americans will put down their weapons and abandon all that stuff in the hopes of north

korea denuclearize and -- denu clearizing down the road. i was surprised by kim jong-un's willingness to hold a summit. that tells me he is desperate to get something going with the south korean administration. that is what he is more interested in mending ties with you rightly point out, cavernous,huge gap, hard to see any bridging here. does that necessarily rule out -- we know how the president loves theatrics -- rule out direct talks between president trump and kim jong-un? it does not-- >> rule it out. but why has north korea not communicated its readiness to denuclearize directly to the united states? has to speakgyang

to the government in seoul to the united states is preposterous. the american people have to start wondering why they are exposing their own cities to a nuclear attack from north korea, on the half of a south korean ally, that sees itself only as a mate -- intermediary between pyongyang and washington. these are things probably making the government -- american government nervous behind the scenes. even though it is professing there is no daylight between seoul and washington. there is an awful lot of daylight between seoul and washington. there have never been as many people with pro-north korean anti-american activity in the south korean a chill on -- eche lon as there is right now. yvonne: it is interesting though. people were saying after the

olympics, the optimism, things will go back to normal. that was the concern with north korea, these military exercises, if they were to take lace, we could see escalating tensions. but we are not seeing that. why do we see the change in tone from kim jong-un? are these sanctions taking hold in pyongyang? or is he developing more of his nuclear arsenal? >> i think it is all of those things. he wants to use the popularity that moon jae-in enjoys. we have seen in the south korean president command more sympathetic to north korea than any president in south korea's history. but he is on a shaky ground politically. he has high approvals for the moment. but any downward turn in the south korean economy could put a change to that. his past is under fire in the movement, the me too

which has claimed some of its members. if he wants to strike a spectacular deal with north korea, perhaps ushering in a north-south confederation, of the type kim jong-un says he wants, they have to move quickly. it is not the time to be launching missiles and causing provocation. takee: who do think should credit for this potential breakthrough? is it still the concern moon jae-in will give too much? or is president trump right saying he should take credit? >> this is the danger, president trump is so eager to gain credit for what he sees to be his the denuclearization front, he might jump the gun and make too much of it. as i say, north korea has not said anything it has not been saying for a long time. you so much for talking about this developing news.

myers, joining us to talk more about. as trade tensions strengthened between u.s. and china, the possible fallout for asia. this is bloomberg. ♪

♪ betty: this is "daybreak asia." i am betty liu in new york. yvonne: i am yvonne man. u.s. companies operating in taiwan are generally optimistic. but business leaders have concerns about energy, regulation and trade, just as the u.s. threatens new tariffs. joining us now from taipei, albert chang. thank you for joining us. i want to pull up a quick chart,

what is at stake for taiwan, if we do see a trade war. we talk about how china's dependence on the u.s. is quite tiny. but taiwan taking a big piece here it it makes up more than 20%. how concerned are you and u.s. businesses of a potential trade war between the u.s. and china? good morning, yvonne. thank you for the question. there is a lot of concern, just like there is a lot of concern in different economies. taiwan will feel a direct impact. taiwan's economy is unique in terms of interconnectedness with global supply chains. if you look at semiconductors, this is a highly interdependent and interdependent economy, globally. a union trade war will affect taiwan and companies operating here. issues, is like many topic, whicholving

will end up better on day 100 than it is on day one. yvonne: with the gary cohn's resignation, now that he has decided to step down, are you less confident cooler heads will prevail? i think with a different situations happening, it is very new. we will see how these things will play out. we launched a business climate survey surveying the 1000 plus members amcham for taipei. that showed us this general u.s.-china trade relationship, there are concerns. said thespondents decision to withdraw from tpp puts american companies at a disadvantage in the asia-pacific. there are a lot of concerns. not just with the broader resignation. it is about the trade dialogue

and relationships. the political front, taiwan is a true democratic nation in asia. how important is that when it comes to u.s. businesses operating in asia? what we found from the business climate survey is, there are many strengths from the taiwan economy that u.s. businesses are taking advantage of, to see their revenues grow. if you look at manufacturing expertise, there is one of the most highly educated and trustworthy, hard-working workforces globally. patentlook at ip, linkage connection, many things about the taiwan economy help the u.s. prosper. 80% of companies expect their revenues to grow here over the next three years. almost half expect to increase their investment over the next 12 months.

this is a confidence-positive environment for businesses and taiwan. betty: i am curious about taxes. u.s., corporations are getting a significant tax cut. did any of your members talk about how that affects their own competitiveness and owner relations with u.s. business? i think the tax reform in the u.s., the developments, have been viewed favorably. in the survey you see positive remarks about tax reform on u.s. business operations globally. i think that is a plus. what you see more specifically, there are pockets of investment opportunities around things like green energy, biomedicine, smart energy, iot. if you think of additional investment globally and back to the u.s., given the interconnectedness of the economy, that is what the survey

has been telling us. did anyone in the survey or talking to your member saying,s, are they given the political climate, given what we are seeing women -- given what we are seeing with the impact of tariffs, they are less certain about tariffs in asia? albert: if you are a business here or anywhere in asia, what you value is the same. you value predictability, stability and consistency. this talk of trade tariffs, trade war, goes against those themes. that undertone was in the survey. forsee a lot of uncertainty u.s. positioning on trade and we hope this evolves in a better position. tpp is something amcham supported strongly. we were sad to see the withdrawal.

we hope something else takes its place. yvonne: which sectors are most vulnerable? take a look at the semiconductor business in taiwan. they are being squeezed by the likes of china with low-end products. and south korea, when it comes to the higher-end. albert: look, i think it is a great question. it is a complex question. they are in a motive tra transiw