drain the global glut. >> and, cycle shifting in china, with a delivery giant nearing a deal. , risk on, riskff off. that is what we are seeing today. it is a pretty not -- pretty mixed picture. investors still mulling over what that list from the u.s. means and whether china will retaliate in a huge way. we will have to wait and see. also tracking the yen, getting close to 107. it is retreating somewhat. we are looking at 105, 108. important levels for both of the economy and manufacturers. yvonne: not just on the trade

front was a dollar-yen. waseard governor kuroda thinking about an exit, but not talking about it yet. at least they are more open about talking about an exit strategy. take a look at the tariff lines. 1300 targets -- products have been targeted by the u.s.. it is certainly runs the gamut. a wide net when it comes to medical imports like painkillers and surgical supplies. that will hit the pharma sector. than 5%.ticals of more industrial tools and materials as well. we are seeing a rise of 2%. usually the one that has been under the most pressure, acc, one of the ones hardest hit. we are seeing that down about 1%. defense also one sector to watch out for. that is rallying today. responsebeen a muted from investors so far. we are waiting for clarity on the china response as well.

tothe meantime let's get first word news with paul allen in sydney. >> thanks, yvonne. get ninesurance will $.7 billion to ensure policy and maintain stable operations. regulator approved the capital injection on march 28. founder prosecuting the and chairman for fraud and embezzlement. market has achieved valuation, $27 billion, after trading on the new york stock exchange for the first time. shares closed 10% below the opening reference price. 1/6 of its almost 10% stake. agencyld's biggest ad

imposing an independent counsel to research personal misconduct against sorrell. wpp says allegations do not involve anything material to the agency. theays he rejects allegations unreservedly. police in california say a woman shot and killed -- injured three people before shooting and killing herself. google says the situation is contained and associated press is investigating it as a domestic dispute. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am paul allen. this is bloomberg. ♪ yvonne: paul, thank you. the u.s. trade representative listed $50 billion in china trade tariffs. stage for a potentially bruising trade war

with beijing confirming it will respond in kind. let's get to jodi schneider, joining us now. it really is an interesting list. you take a look at 1300 products from malaria diagnostic tests to cassette players. tell us more about it. jodi: flamethrowers is the weirdest one. some things we are not sure why they are on their -- there. the u.s. trade representative's office said it is the products they see as having benefited practices, what the ministration is saying our unfair intellectual property practices. they are trying to make this said what they see as intellectual-property crimes, so they are largely targeting technology, but there are a lot of home consumer products. that hasn't some retail industry folks and others worried in the u.s. about the economic impact. representative's

office said it is meant also to spare some industries. yvonne: we were thinking clothes, shoes would be put in there, but they were spared for now. the china response was harsh, they said they would scale the intensity. what would that look like? jodi: in the u.s. we are talking 1300 products, 25% tariffs, equaling $50 billion. i expect we will see the same response from china. when the aluminum tariff came out we saw some kind of response. they have had a measured response, but clearly the statement today from the chinese government, this response would be the same kind of response in kind. leads one to believe we could see blowback. the real question is, how serious does this get? these are trade skirmishes now.

does this become a full-blown trade war with back-and-forth and other countries getting involved? what else happens on the world stage here? haslinda: jodi schneider, thank you for that. full-blown trade war or not, let's bring in michael enright from and write scott and associates. good to have you with us. a full-blown trade war? potential to be? ithink we are seeing -- >> think we are seeing a shot across the belt. the last three decades, we have seen china emerging. what we seeing now is a class of systems. is question in the long run whether we will have a state-dominated system dominate the market economy, or whether a market-dominated economy. haslinda: china has reacted

pretty coolly so far. will it still reacted that way, do you think? michael: i think the first response is likely to be measured in terms of actual tariffs. the rhetoric may be something different. what is interesting, the u.s. tariffs were designed to focus on products where there is evidence china dumped excess capacity on markets, such as aluminum, steel, solar panels. round, chinaecent is trying to limit the position of foreign firms. china initially has targeted sectors that would maximize political fallout in the u.s. it'll be interesting to see how those evolve. haslinda: both sides entered negotiations. think there may be

actions filed in wto. it will be critical. yvonne: michael, it is yvonne in hong kong. how do you see this hitting the made in china 2025 campaign? china has a massive domestic target. they can target that are go elsewhere. is the impact on these latest tariffs going to be minimal? michael: i think clearly the counter what u.s. views as overly aggressive industrial policy, where through the 2025 program, china has set targets over time to limit the position of foreign firms in the china market. remember, because china is the export platform for many of the world's high-tech goods, limiting foreign presence in the

china market also limits it in the world market. we talked about how this deglobalization trend we have seen across the globe, it is not just governments targeting trade, but investments into their countries as well -- do think the u.s. and china can innovate on their own? if you look at a company like which the-- huawei, u.s. has been fearful of, can they build on 5g capabilities by themselves? yes, it has increased enormously over the last several years. you have a number of chinese firms that are at the cutting edge in relevant technologies and china does have a large enough domestic market to support innovative activity. just as the u.s. does. in the medium and longer-term you do not want to restrict yourself to a single market or note market, and you do want to restrict yourself to

ideas generated in the single country. no country, not even china or the u.s., can be at the cutting edge and optimize its economic performance by just relying on the home market or ideas generated in the domestic market. us.ne: michael, stay with if you are a bill -- if you are a bloomberg subscriber, join the conversation. send messages to our team and guest. go to tv . \ this is bloomberg. ♪

♪ unfortunate trade tensions are arising just at this moment where global recovery is supported by trade. for the first time in a long time, trade is growing faster than gdp.

it is recovery around the world. >> it has been the backbone of trade for the u.s. -- if we started trade war with china, agricultural will lose. they are an important market us. as far as i can comment on veryulture, it can be hurtful for u.s. companies and u.s. farmers. >> what we are focused on is, is there substitution? can the u.s. put a trade tariff on an substitute locally? once the administration gets the andback from the public from the manufacturers of the day, they will say, this will impact us domestically, rather than kickstart something in the u.s. economy. tooight now i think it is early to make a major bet on the market, based on this trade war.

i have confidence eventually the u.s. and china will settle things, move forward. i think the market is going to start moving up again, although there is a lot of pressure in the equity markets. you will have a lot of increases in the next few years. a lot of people think this will not escalate. if they did, the market would really selloff. yvonne: some of the comments from our guests this morning on the trade spat between china and the u.s. michael enright is here. we talked a little bit more about the deficit. president trump has voiced how he wants to cut the trade deficit with china by $100 billion. now you see the list of tariffs. how much does that reduce that number right now? michael: not all that much. i believe the industries that 150 been targeted represent billion in exports to the u.s..

that list by itself may cut the deficit, but not by a whole lot. the idea is that this is a is to, and the desire change the nature of the u.s.-china trading relationship to make china significantly more open. i do in a think the goal is setting tariffs. is having morel open trade and less intervention by government on the chinese side. yvonne: what concessions do you think beijing could make? we are talking about some type of negotiation. what could china do without losing face? michael: losing face is important. one of the reasons why xi jinping returned for a new term and term limits have been lifted on the presidency in china is the desire to have a strong leadership that will look out

for china's interests globally. so that clearly is in play. however, there is a wide range that china could act on. china is still one of the most closed economies in the world when it comes to foreign investment. china has much higher tariffs on goods imported from the u.s. on average than the u.s. has on goods imported from china. many people believe china has yet to live up to its wto commitments on issues such as public procurement. there are a number of things china can do without seeming to by simply claiming china is now strong, and therefore willing to open more than china thought appropriate when china was a weaker economy. haslinda: president trump has taken issue with companies investing in a big way in china. has there been miscalculation?

they have managed to maintain their global presence, not necessarily at the expense of u.s. jobs -- isn't that true? the jobs thatof would have gone to china based on u.s. investment in the earlier days would have been relatively simple assembly jobs, which probably already had left the united states. probably that did not have much of an impact. increasingly you see higher and higher tech jobs in china by u.s. economies, other foreign companies, massive investments in electronics and automotive's, in r&d,- automotives, that could have been in the u.s. in the early days it was not an issue in u.s. employment. now, with u.s. and foreign companies but higher and higher tech companies in china, and chinese companies emerging as key competitors, that by itself

may displace jobs in the u.s. our trade tensions inevitable given china once a bigger role in the global economy? michael: they are not butssarily inevitable, because the china system is different than that of the u.s. and western europe, that to me is what drives the trade tensions. on paper, china has a lot more to lose from a trade war than the u.s. does. large, $375ficit is billion in 2017. my own firm, we estimated if you take a look at china's exports through the work ripple effects throughout the supply chains in china's economy, exports to the u.s. are $450nsible for about about 27f china's gdp, million jobs in china.

china, u.s. exports to the impact to the u.s. economy is a strong fraction of that. yvonne: before i let you go, talking more of the china response. you think selling treasury holdings or weakening the currency -- is that a real threat? michael: i do not think selling off holdings is a real threat because of china starts selling off its holdings of u.s. securities in a significant way, it is going to run down the value of its own assets. i do not think that is a major threat. what i think is far more likely is that u.s. companies, their life in china could be made substantially more uncomfortable than it is at present, which because weshame, estimate the operations of u.s. companies in china and the ripple effects through the supply chain add another for

under $50 billion to china's gdp and another 23 million and employment. a trade and investment war, no one wins. can this turn into a series of negotiations that allow the two systems to coexist in a way that each benefits? yvonne: michael enright, appreciate the time and analysis. joining us from singapore. a chinese food delivery giant makes a move from mobile. this is bloomberg. ♪

♪ chinese food delivery giant meituan to acquire mobike.

we are seeing more of these bike wars in china. what does this acquisition mean from meituan? >> that shareholders have approved the acquisition of meituan by mobike. they are valuing the start up at $3.4 billion. they are assuming $700 million of debt. shareholders behind mobike will become shareholders and meituan now. management firm mobike is expected to stay on, the ceo is expected to stay on and operate as an independent entity. yvonne: the timing is quite unusual or timely, when you talk about alibaba getting a state with -- what does this mean for tencent? they back to the companies of meituan and mobike lulu: tencent is now a major shareholder in

groups quite, two different from each other. one is food ordering and delivering and one is bike sharing. even more, they will be using theirs a proxy, in battle. major rival in bike sharing. you see the camps forming and a probability of the battles escalating. haslinda: thank you so much for that. uber having toured retreat from ride hailing market strength potential. it agreed to sell it southeast asian business. uber is facing increased pressure from a smaller rival, lyft. emily chang spoke exclusively to lyft president john zimmer in bloomberg studio 2.0.

>> three and a half, for years, uber raises $3 billion. we had what i believed a lot of money, $100 million in the bank. they have 30 times the capital as us. they are trying to destroy our business using that money. to be blunt, it was scary. someone attacking the business, incentivizing drivers not to but the our platform, team had such drive and such passion, we were smart about that cap -- tactics we used. we had even single digit market share. we raised to the capital we needed, built an incredible team. by coming up as the underdog, but with the vision, the leaders tovision, we have been able build a team not just doing it for a monetary reason, not just

doing it to win, although we intend to win, and that is something that drives us, we are very competitive, but we also have a team that is mission driven. haslinda: that was john zimmer speaking exclusively to emily chang. you can catch the 4 -- full interview 9:30 in -- on wednesday in new york. it will run also on thursday. let's take a look at where stocks are right now. stocks, buyers buying consumer staples and health care companies, with a limited exposure to the u.s. listedmp administration chinese products it proposes hitting with tariffs. investors in china looking inwards. china currently lower by 0.1%. a mixed picture, for asian

indexes, going in various directions. the s&p currently down to 0.2%. this is bloomberg. ♪ retail.

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yvonne: it is 11:29 in hong kong, i am paul allen with the first word headlines. the u.s. trade representative listed chinese products worth $50 billion that could now face new, 25% tariffs. about 1300, including aerospace, i.t., communications, technology, robotics and machinery. it will face public review before final determination. china says it firmly opposes the measures and will retaliate in kind. san francisco fed president john williams is moving to new york. williams has spent most of his

career at the fed and is considered a centrist on policy. he will replace william dudley from june 18. he says he favors three or four rate hikes this year. to remove more than 130 accounts on the network and instagram, controlled by a russia-based internet research agency. target was targeting people in russia itself or neighboring countries. the investigation into pages linked with russia has been going for months. the bank of japan confirmed it is talking about an eventual retreat from massive stimulus, but still too early to offer details. kuroda says he is holding internal discussions. normalization will depend upon conditions at the time. he said inflation a star from the 2% target and he will continue the stimulus until that goal is reached. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries.

i am paul allen. this is bloomberg. ♪ haslinda: paul, thank you so much for that. in the markets, traders still mulling over what this all means and how it will play out. let's get the sophie for more. a lack of clarity so far. >> but it looks like asian stock investors keeping their heads, despite developments from the u.s. list. the kospi leading markets lower. investors piling to companies with a little exposure to the united states. in sydney, shares of sliding for a fourth day. the sydney dollar popping 0.2%. -- 0.3%. taking a look at what is moving the dow in japan. we are seeing some signs of trade concerns as a factory

automation company loses ground. electronic makers outweighing the rise in retailers and autos. sinking in tokyo after nomura downgraded a company on rising competition. chemicals weighing the materials segment down 1.7%. let's take a closer look at chinese pharma stocks, which have become a popular haven for investors wanting to hedge trade risks. looking to boost to generic drug supply and quantity. 2018 working out fine for china pharma stock so far, topping the charts in both hong kong and the mainland. 21%.added over chinese investors are finding shelter from tariffs. escalating trade tensions are weighing on commodities. what is the damage report?

>> take a look and base metals in shanghai, aluminum hits, down 0.25%. analysts are pointing out this is a psychological reaction, with impact on supply and demand fundamentals, can be overrated. the big picture here is that many base metals as well as oil has fallen from their january highs. now, trade tensions on potential for global growth. when it comes to oil, expect more volatility ahead, as traders await news on a possible resumption on iran. u.s. industry data showed a surprise drop in stockpiles, holding at 67.86. yvonne: thank you. lines coming from xinhua.

a little more response from the chinese. ready to deal with trade protectionism and negotiation is the only right way to resolve these trade frictions. onis a commentary on xinhua the u.s. tariff listed they have imposed on 1300 chinese products, up to $50 billion worth. we are hearing more diplomacy from the chinese front. we got this report from robert lighthizer. we will see if there is room for retaliation from china. hassays the opec-led deal improved 85% the problem of oversupply. we will see whether he is worried about a potential trade war. >> i am not that concerned about a trade war getting to the oil market. unique, as youis

know. of, it may affect the cost overall,n, but i think that affect is going to be minor to the oil prices. will this be resilient over the years? i think it is more affected by supply and demand rather than trade wars. >> i understand there have been discussions. i understand that in vienna, there was the five-year average, which i know you were using, and a seven-year average. which one is at the market needs to focus on? >> the basis of what we agreed on, that is talking about the five-year average.

the deal was taste on the five-year average. is that fair or not fair? that is another question to analyze. i would prefer to focus on achieving the mission first, and do you can talk about, like five-year average or something else? confusing that with of the situation we are in today and juggling whether it is this or that does not help. haslinda: uae energy minister suhail al mazrouei speaking to manus cranny. the asia managing director from jpc with me. the minister said he is not concerned about the trade war, but that is not to say volatility will not be there, given geopolitics. >> i think he is right.

the trade war, from a direct impact, is only on the margin. yes, you have problems with drilling, new oil refineries, but it does not directly affect oil price. ofare looking at the health the global economy. a trade war puts pressure on the global economy, which pressures oil demand. demand, it is doing well since oil prices came down. this is one of the headwinds we see, and it is geopolitical in nature. haslinda: looking at prices barrel,$60 and $70 a hedge funds are more optimistic, looking at $80 a barrel. >> hedge funds have to be optimistic. if you look at crude futures, they are overwhelmingly long and at record levels. the question is, how do you make any money? you only make money if you go

about $70 and higher. we have not seen that. the market has tested $70 on three or four occasions. we do not believe the fundamentals justify over $70 because the market is still relatively balanced, we are not short. alsohortness is politically led. haslinda: why do say the market is in balance? balancedthe market is right now, but because opec is limiting supply. not the supply has dropped off in other parts of the world, allowing opec to come out of this arrangement. they have been talking about setting up a new kind of mechanism for managing the market beyond 2018. that will be needed. if they did pull out of this at the end of the year, the market would be oversupplied and we would be back to the 2014 position.

$80 would seem like a pipe dream. opec needs to continue managing in that respect. yvonne: do think this resilience in the oil price, is that justified? if we are talking this is based on geopolitical risks, announcing more of this trade, geopolitical hawks on iran, others levels reasons to be supported? i think there is good fundamentals underpinning the oil price at $60, maybe up to $65. our demand has been very strong. if you look at the latest statistics, supply and demand growth at 2.7 million barrels a day. the demand side is very good. there are strong fundamentals behind it. but yes, there is a premium emerging in the market.

it is centered around the iranian situation. venezuela from time to time is hitting the headlines, allowing some upside. how much are you watching the weakness in industrial metals, which has been weighed down by trade frictions? indicator orht gauge on where oil prices could go? we saw in the past when it goes to aluminum, it is a good indicator where crude goes. richard: the uae minister touched on it well. oil is more resilient because it is more global in nature, and more liquid in nature. i would imagine oil prices would be more resilient than aluminum. in terms of china's consumption, what you see? it is expected to rise 5%, but that is lower than last are.

how will that impact prices? richard: consumption is always one side of the equation, which you also have to take into supply on the other side. we talk a lot about crude oil, but not refined products. what we are finding in the market, the growth in refining capacity is limited right now. regardless of the crude price, the world's refiners are finding it harder and harder to meet end user demand. i think of growth in china will not be a problem for the oil market. maybe oil demand is one of the major drivers of the market. haslinda: i want to talk about china's new crude futures. how much interest has there been, foreign interest? richard: hard data on that is difficult to get right now. we can hear market chatter. there has been considerable foreign interest. a number of traders have been

participating. that is quite interesting. coming up to the launch of the futures, we knew not much about it. it seems to suggest, so far, so good. i have been surprised by how liquid it has been. i would imagine a lot of the market has been surprised. haslinda: having said that, can it be an alternative benchmark? richard: all it takes to be a benchmark is liquidity. if people are willing to trade it, yes, it can be. it is difficult to say why anything should be a benchmark in the oil industry. i do not see why not. if the market believes in it, then yes, it certainly could be. haslinda: we have to leave it there and see if it comes through. richard gorry, thank you for your insights. why india's telecom billionaires

are building up a war chest. this is bloomberg. ♪

♪ yvonne: you are watching bloomberg markets: asia, i am yvonne man. indian markets are just online. >> the mood in mumbai, glimmers of optimism. rising for a third session. on indianping and i banks after they led the rally in mumbai on thursday. this one is down 0.2%. the focus expected to be on earnings, though uncertainty will loom large given the politically have the calendar.

at today's policy meeting expected to be a hold. ground, the 65ng handle. they could flag inflation rates, -- r.b.i.'s job, investment let's pull up the board to check in on stocks to watch. investors will be focusing on reliance industry and airtel, they made nearly 5.6 selling bonds. they may report of -- a sharp inline, due to a drop average revenue per user. india, a country flush with cash.

companies owned by billionaires may raise more than $5 billion selling bonds. chest in what investors hope is an end to the bruising war. what are the details of these issues? they are planning to raise as much as $2.5 billion via bond, while another is planning to raise close to $3.1 billion. to put this fundraising in almost 70% oft is the total outstanding bond for india stocks for telecom companies. bharti airtel has already debuted in the market last month.

months.most after 20 yvonne: we have been talking about this telecom battle going on for years. why are these two companies selling bonds now? bharti mentioned they are raising funds to refinance their mentionedjio has not anything. if you look at the bloomberg has, it shows jio significant repayments coming due in the next few years. titansut the two together, they have close to $5 billion of tech maturity. analysts say they are piling up cash because they plan to roll out the next generation services. 's focus will be on

spending. jio will be spending more for. -- for capex. haslinda: who is ahead in this race? >> we see in the number of users that bharti is holding the top spot. but they have been aggressively adding subscribers, bridging the gap with the top three telecom players. entry has been very disruptive and has forced some to exit. the battle is very fierce. thank you so much for that. a quick check of the latest business flash headlines. planes, aboeing planned order to meet continuing demand and what is the world's fastest-growing major aviation market.

they are valued at almost $10 billion. airlines traditionally enjoyed big discounts. order for thes in next eight, the most popular of boeing's 737 liners. yvonne: committed to winning the race for steel, saying none of the other bidders have as strong a track record. b. bid is its plan a and arcelormittal is to challenge the bid for essar. debt laden air india has yet to stay -- yet to say why. payments have not been made as of tuesday evening. than 21,000s more

full and part-time employees. they say the money will be paid by thursday. coming up, some good news that saying itssla, performance was not as bad as expected. this is bloomberg. ♪

♪ this is bloomberg markets: asia, i am yvonne man. haslinda: i am haslinda amin. one company that has been in the news of late is tesla. tesla did not produce as many expected and that sent the stock tumbling. there has been a change of view. i want to show this chart, it shows the production of their model 3.

yes, they fell behind their goal of 2500. but now, they are saying it is not as bad as initially thought. tesla shares rose 8% on tuesday. it was the biggest intraday jump in two years. a change and up goes the stock. are flaggingay we their credit concerns and now we are talking about, this as not as bad, which is interesting. yes, they did miss that production target, that there is a lot of optimism, they continue to ramp up reduction. gene munster said by the june 2018 quarter they could be producing up to 4000 vehicles per week, but, at what cost? we spoke to eric noble from carl ab. we mentioned the quality problems emerging. take a listen. >> these are very poor quality

units, eastern bloc level stuff they are releasing to the public. it indicates production was not ready for prime time. it means you will have a lot of dissatisfied customers. we all realize early bottles of -- early buyers of model 3 will be fan boys and fan girls, but will the -- will they tolerate quality levels this low? said the quality is preproduction prototypes and will raise questions about the branding issues of tesla here and whether loyalists of tesla will be ok with this quality. we are talking about spotify, enjoying a calm debut on the new york stock exchange, avoiding the traditional ipo process. they close to 10% below that market price, valuing spotify at

almost $27 billion. we have more from alex barinka in san francisco. >> it took three hours first modified's stock to begin trading on the new york stock publice, after they went through an unorthodox means, a directly sting -- direct listing. they had the help of morgan stanley, set evaluation of $29 billion. 90 astock opened at $165. share. fluctuated a bit from there. it did trail off toward the end of the day, finally closing at spotify theing closing market value of about $30 billion. is this direct listing successful? volatility stayed at low, which

is a point for the victory column, but it is well below a typical companies -- company's volume on trading day. does volatility continue? do they want to sell? that will be what spotify investors and other companies considering a direct listing will be thinking about. alex barinka, bloomberg news san francisco. haslinda: that fema volatility remains in the market. still a mixed picture. that volatility will persist. analysts we spoke to said that is the theme for the year. yvonne: it is a new quarter, but same volatility. house saying, this is a time to buy on these bids. perhaps we are seeing investor appetite to buy on these bargains after we saw valuations shave quite a bit.

china's response still quite tame saying, they could retaliate, but they are still hoping for diplomacy and dialogue moving forward. we will go to bloomberg markets middle east next. this is bloomberg. ♪

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