emily: i'm emily chang and san francisco and this is bloomberg technology. coming up in the next hour, a trade were underway. president trump imposed 25% tariffs on a $60 billion worth of china made goods and promised to add more. beijing probably retaliated. facebook is teaming up with academics for collaborations and bodies. what this new partnership means on the platform.

a crisis is building in the pacific ocean in the form of a mass of garbage totaling 80,000 metric tons. we will show you the latest technology being deployed to clean it up. but first, to the top stories. the u.s. and china now passed the brink of a trade war. on friday, the trump administration announced 25% tariffs on $50 billion. china wasted no time. they hit back with equal scale, equal intensity and they have 50 billionariffs on dollars of u.s. goods. president trump speaking on fox and friends was resolute in his decision. >> the trade war was started many years ago by them and the united states lost. war, they havede taken us so much. so last year, $375 billion in trade deficit with china. a had over $800 billion over period of years.

it will not happen anymore. emily: the list of goods affected have -- as the trump helpistration was meant to beijing becomes the global leader in technology. amy of principle. and edward alden a senior fellow at the council on foreign relations. thank you for joining us. edward, i will start with you. if these are the first shots iron and an official trade war, what comes next? stepsstill have a couple to go before the tariffs actually get imposed. will july 6, 25% tariffs total about $36 billion will be imposed. round.ill be a second the chinese that they will attract exactly in kind. the president is missing to then

escalate further. i think we could be at the opening of a real escalating trade conflict between the u.s. and china. i hesitate to use the term trade war, but i think we are actually in one right now. would you agree and how rough is the right going to be? >> i would agree. in addition to what is artie been said, the u.s. trade representative talked about the steps placed on china and the united states. their been talk on these restrictions. it will get worse before it gets better, surely. emily: if it gets worse before it gets better, what is next? how does it play out? ward: the trump administration does unexpected things. conflict, trump

announced investigation into auto imports. with china we don't know exactly. this president has said if china response than u.s. will come up with an addition hundred billion dollars worth of products. seen that list yet. there could to be other measures. investment restrictions that are coming. the chinese will have their own ways to respond. warning u.s.n multinational companies invested their that u.s. companies could be hit with a variety of penalties. so there is a lot of uncertainty but more is coming. i want to talk about what this means for technology. emily: you have parts of nuclear reactors. touchscreens. but not consumer products like mobile phones and televisions. what is that signal? amy: i do think the administration was cognizant that they did not want to harm consumers as much as they wanted to harm chinese technology companies and consumers of

technology in china. don't think that strategy will be effective. i think it will impact the american economy as much as it is going to impact the chinese economy in part because of chinese retaliation, not technology specific. issues, u.s. companies by a lot of components from china. we are going to see an impact chineseeven though policies and unfair trade practices and forcing technology transfers and localization of data are harming u.s. technology companies. they have been forced to deal with restrictions for years. to restrictions continue grow rather than frank. so there is a problem for technology companies as china once to indigenous a lot of manufacturing in

china. however, tariffs are not going to help solve the problem. does it mean for china-based companies given what is on their list and our list? we will have to see what the next moves are, but it creates a great deal of uncertainty. for foreign companies invest in china on how exports will be affected and whether they will be hit a retaliation. for chinese owned companies, and a lot of uncertainty heard will they be able to do acquisitions in the united states? will further products be hit by additional tariffs? we have had in this large trade relationship a fair bit of predict ability. a lot of it not working particularly well for certain companies. but the rule is reasonably well known. all of businesses will have to try to come up with what is there plan b if this continues

to add light -- to escalate. andy: let's talk about zte the message that sense to both countries. amy: it is a really interesting case study. i think quite timely for the chinese to use our remedy against their bad behavior. to put thewas going company out of business. president xishe -- talked about why they need to use their own. thereby doubling down on the made in china 2025 plan. the same plan that the u.s. government is quite critical of. it is very focused on minimizing the role of foreign technology

players in the china market. the china market that will become the largest consumer market in the world. tough to beat shut out of. emily: i have a chart here that shows the amount of imports coming from china. the red line is at $50 billion. you can see that there are or implants -- more imports from china. could all of these other goods be at risk? edward: this is interesting. this is president trump's eerie. because we buy so much more from the chinese and they buy from us, they are more vulnerable. let's say they follow the $50 billion with an additional $100 billion. -- chinese retaliates they

wouldn't be able to hit us anymore. we still have hundreds of billions of dollars worth of chinese exports. this is the presidents very as to why trade war's are good and easy to win. out thathink it plays way. i think the chinese will be able to target sex there's. china is the largest soybean market for the united states. real economicome harm. a lot of political pressure. a clash of believe systems. because we buy so much more, we have more leverage. the chinese don't see it that way. normally when you ve these misperceptions the outcome is not good. emily: remind us why the chinese president believes and how this will impact his made in china initiative. amy: i think this will just reinforce his belief that china does have to in digitized technology manufacturing. that theely agree

uncertainty here is overwhelming in part because president xi and the united -- and his government don't understand what the united states wants to achieve here. so they have tried to use some diplomacy to buy their way out of this trade war. promising to increase purchases of american goods and services. president trump today says that is not enough. we want to deal with the underlying issues harming the u.s. economy. that is china's unfair trade practices. the chinese believe these are national security issues. national security issues will not be part of trade negotiations with the united states. once again, this makes me believe that we are in for a tough time. both sides cannot make concessions on these issues. emily: rough ride ahead. amy seleka and edward baldwin.

thank you both. ard motor company looking at new way to tell self driving cars the best route. ford is working with ride os on this endeavor. they also announced $9 million in funding. planning to sell software that gives routes and are a facebook user, you are also a research subject. we take a look at the academic collaborations and live in to how the company chooses products. if you like bloomberg news, listen on the bloomberg radio app. this is a bloomberg. ♪

emily: on thursday, facebook's top policy executive announced he is stepping down. decade of influence. public profile commented in a reckoning. what does this mean for the future of the social network and its ongoing policy issues? kirkpatrick and here in the studio, sarah frier. a single headen roll since this whole cambridge analytic a scandal exploded. mark zuckerberg has said it is my fault. but is this the first one to go as a result? sarah: i think it is clearly not being portrayed as anything like that. they are not even using the word leaving the country -- leaving

the company. they are saying he is stepping down as an advisor. elliott has been through a decade of facebook. they'd, this man has had to deal with. from the ipo to privacy scandal after privacy scandal. era and he is a political guy. he helped facebook become a political company. the heart ofing to their evolution. it is kind of an interesting time for departure especially considering the facebook shareholder who called him out for being sexist last week. he had said the reason facebook wasn't listening to her concerns is that she wasn't nice. and sexist comment.

he later apologized. so that was the latest drama. emily: which is interesting because elliott has already's been perceived as sheryl sandberg's person. you have a slightly different read on this? do you think this is because of all of the trouble over the last few months and perhaps a failure on his part to deal with it? david: whether it is him alone or eight more systemic problem is hard to determine. by the way, something he has worked hard to maintain. i think clearly if you look at his roles, there have been significant failures for the company on both accounts. gettings not just about the ration -- the regulation you want.

bringing the message back into the company and helping it adapt to the world in which it is operating. i don't think that has gone well at all. head of pr is supposed to be the guy who makes the world feel good about company and that is not what has happened. cheryl, mark and looking at the net result of his leadership in those two areas, i would have to say as much of him and he has been effective, it is not working now. one thing i wonder, considering how close he has been to sheryl sandberg is how comfortable she will be with him being gone. maybe that is the reason he is still an advisor. she has been extremely dependent on him in many ways for a lot of her activities. have a new piece out about facebook research and how we are all facebook research subjects. explain. explores theiece

different problems that come with having a company that is so powerful and the world that other people want to study and also having concerns around that. data privacy and being a business and wanting to study things that help the products grow and evolve. facebook is coming to recognize issues like the impact on society and elections and news consumption, these are things they should be looking at for business reasons. have withionship they researchers is very strange. there are some deals where they just hand researchers $25,000 and say look into what everyone. but if you want facebook data, they have more integrated partnerships that give them a right of refusal over whatever you are going to publish. which incentivize of people to not publish the hard things. they are trying to fix this. still going to be very

difficult for the company to get bea place where they can more transparent about tackling these issues. of thedespite all controversies we have covered of the last several months, you wrote about this. it seems like public opinion of facebook is down. and yet facebook says engagement has not been impacted. certainly wall street has not been impacted because the stock has rebounded. how do we square that? line ishe bottom advertisers don't have an alternative place that can give them the result that facebook can give. therefore, they are continuing to advertise. the revenues and profits are continuing to come into wall street is more or less happy. wall street needs to think more long-term about facebook's risk. the issues are the central thing that most disturbing and worried me. i'm coming today from a meeting

at columbia where there is a long discussion of internet governance issues. an issue of facebook and its impact on politics is one of the top issues that academic researchers and a number of other areas are honing and on. concern inrious academia and elsewhere about what is happening to our markers a around the world, not just in the united states. everywhere. that is a serious problem. i think the thing sarah mentioned about your world research is a positive. facebook's willingness to make themselves more open. they are doing unusual things as part of that project to make data available. there was an answer to facebook this week. we will give developers tools. but, we are not going to give them any of the data. talk to us about what this actually means. theh: so it helps sometimes

one learning from the people who come before you. any information to the developers, just bit muji. tmoji.t bi get whenthing they they connect with snap. will it give them any incentive to actually build tools for snap? maybe snap does not care about being an incredibly successful developer platform in terms of the data exchange. they are not even getting data out of it themselves to target into advertising. there david, do you think is any chance that snap can turn this into a way to combat its own plateauing and struggling growth? can snap turned facebook mistakes into its own story? david: from the standpoint of some advertisers they already have. in some ways they are structured

more like traditional television advertising per year during mass messaging to much more broadly defined groups of recipients. data not typically advertising targeted to individual people based on their profiles. you could argue that will not allow them to profit as much. on the other hand, in the world where can earns about data taste ad targeting are growing by the day and growing locally, and will eventually extend to the developing market. well told be positioned profit from that. i do think it is possible, and there are many top leaders who leave on a principle racist and strategic basis that this can be a benefit for them. david could patrick come. thank you both. up, google releases new

statistics on the makeup of its workforce. there is not much improvement, but there is more transparency. we will discuss. this is bloomberg. ♪

emily: if you stories we are watching. broadcom cut 1100 jobs. then they said they may reduce headcount further. they took charges of more than $100 million according to a regulatory filing. nintendo's they just shareholder gave another vote of confidence in the company per capital group increased its stake heard the stock was under pressure under concerns that management has exhausted its lineup of games. i caught up with the president the e3 -- and coo at conference in l.a. where he was championing some of the companies expenses. >> we believe there is a lot

more value for the consumer pair to tell them about content and watch it -- and launch it. 2 milliont has downloads. for us, by surprising the fans and driving this kind of excitement, we are able to move the business forward. emily: alphabet has released a new diversity report disclosing the gender and racial makeup of its workforce. the first diversity report since the controversial memo. which resulted in his firing. google reported women make up just over 30% of the workforce. not much of it improvement. the majority and plays are white. presentation for black and hispanic employees barely increased. moree has included transparency to their report. coming up, apple continues to push into original content and is bringing in the big guns to do the job. with the new partnership with oprah. forchina's zte was fighting

survival. we will look back on how the company came back from the brink and whether it is really in the clear as mobile trade tensions rise. this is bloomberg. ♪ 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.

emily chang. at the heart of the u.s. china trade talks is the te. bloomberg tech managing editor brings us up to speed in this story from tokyo. plaxico zte doesn't usually draw much attention. this year it has landed in the headlines like never before. and not for reasons it would like. they ran into trouble for violating u.s. laws restricting the sale of technology to iran.

they called for the company to pay as much as up-ice -- $1.2 billion. in april the u.s. commerce department said the te had not lived up to the terms of that settlement. bonusesthey paid full to employees and lied about it. for led to a seven-year ban ceased operations weeks later. then, donald trump came to zte's rescue. had china's leader would work to get zte back into business and fast. as thes seen by china two u.s. -- two companies avoiding a trade war. the company's chairs reserved trading wednesday after a two-month freeze.

the clear yet. u.s. congress is working to stop trumps rescue effort even at home. they should not expect beijing to bail them out when they get abroad. emily: applecare licensed music. if you take a look at my terminal you can find this in the apple library. it generates nowhere near as much revenue as the iphone. our next guest argues that it is difficult to see how services could ever replace hardware sales. we are joined now from new york. >> it ever come close? certainly, business has always been an interest.

it is been a major driver of growth in the first part of the year. can services continue to be an engine of growth? services is really an offshoot of the hardware business. one part of that is the applecare business which we believe has been underestimated as part of the total services growth. more entities an offshoot of hardware sales. the warranty is accounted for over 24 months life of the warranty. hardware sales will decline, that affects warranty sales as well. the other point that we made was regarding the rest of the business. media part of the business including things like itunes and the app store. case, it suffers from a large numbers problem.

while it is a small part of apple's business, it is a huge business relative to everything else out there. one of the points we made is even if apple were to build a business that was equal in size to netflix, it would only add about 2% to apple's earnings. that gives you an indication of the numbers problem. first, every conversation i have with tim cook he talks about services and the great potential here. will new devices coming in the fall change the fortune of this business? expecting is that the phones are evolutionary. a new version of iphone x. i don't think that really changes the mix all that much in terms of what people --

in terms of the services i think what he is trying to do is increase the number of dollars per user. are around 750 million ios users out there. meantime, apple announced it is partnering with opera. theon't know a lot about deal but we know it's about original video content. it is a multiyear partnership. apple already has deals with reese witherspoon and others. how big do you think this impact could be? >> we don't know at this time. the ability to bring in someone like opera contributes to perhaps the stickiness of the ios platform. it is another reason to have an iphone instead of an android. hasy: meantime, netflix

signed agreements with celebrities as well. there is a bidding war going on with comcast. what do you think apple's thisty is compete in original programming market? we have seen some of their original forays that have not been successful. >> certainly they can. it is a huge company and may have a tremendous amount of resource. if they choose to get into the media business they absolutely can. the question is, how profitable will it be for the company? again, using the netflix example, a business the size of netflix took netflix a long time to build a business. it could be only 2% of apple's earnings. content,e creating creating content is very

expensive. apple i want to know what -- opera is going to be doing for apple. thank you so much. amazon is facing more questions about the internet last month where in oregon couple had their private conversation recorded on the amazon echo and sent to an acquaintance without their knowledge. the designing about and features of the echo. amazon spokesperson could not it would -- be reached for content. -- theup, the interest rise of the new digital madison avenue. this weekend we bring you our best interviews including our combo with take two. tune in the saturday for the best of bloomberg technology.

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emily: your personal data, your birthday, the city you live in. are knowngs and more by online companies. the ultimate price for that information, advertising dollars. the king are facebook and google. our new guests has written a book about the digital advertising world. welcome to bloomberg technology. the ad business has been completely transformed by google

and facebook and beyond. >> they are both. if you look at the growth of facebook and google that is coming from at agencies and clients and now exceeds the number spent on television ads, in that way they are for enemies -- emily: we don't understand the extent of how much advertisers know about us. what did you find that was the most disturbing? quite when they talk about the future they know the public doesn't like ads on their cell phone. they don't want to be interrupted. they said let's offer a service to people. walking through

san francisco we know that on your gps. and if you bought a sports ago, if you gohs into barney's we will give you 20% off of your new purchase. i wonder if this privacy backlash is just a moment or if it will actually result in long-term us wanting to hold back information from these companies. know how it is in western europe where 20 countries have banded together to impose privacy standards. i think, i was in my hotel yesterday in san francisco, and i was doing and to be on the phone with a reporter.

it spooks you. emily: let's talk about amazon. something that amazon is closing in the next five years a could surpass facebook. if you think about the date of it is that each company has, google has what you are interested in. facebook has what you and your friends are talking about. what facebook has -- what amazon has is what you purchase. if they convert that, if you do a search on a product on amazon today, half of the searches are now done on amazon. they are changing not only the ad business the changing each other. how do you think the

hierarchy will ship? how big of a threat is that. do you think facebook is really under threat? >> i covered the trial in 2000 and microsoft was found guilty of being a monopoly. it change their behavior. they basically pull back they became tentative and they lost a lot of momentum in the next decade. they are only now getting it back. , he is anckerberg engineer. he is a human being. he has a wife and two kids. he is embarrassed. will that alter his behavior and facebook and the threat of regulation from government alter him? emily: let's listen to mark

zuckerberg testifying in front of congress a few months ago. >> we think offering an ad supported service is most aligned with our mission of trying to connect everyone in the world. we want to offer a free service that everyone can afford. there it sounds like this will always be an ad supported service yet the company is exploring its description service. could that ever be a mainstream reality? >> 2.2 billion consumers on facebook. some people, if they don't want ad they pay a little extra. the problem with subs -- push -- in limitings is a pipe dream.

i want to talk about apple which is adding more privacy controls and taking a stand very publicly -- publicly. do you think apple will be on the right side of history here? >> i don't know but they are on the business strategy. they are not in the advertising business near it -- neither is microsoft. positioning as a company. mean that apple is doing fine, they don't need any help and they sell luxury goods. they are at war. andbook amazon google

microsoft, it is a galactic battle going on. author of frienemies. startup is getting serious about cleaning up waste and trash and the pacific ocean. it is getting the attention of executives. this is bloomberg. ♪

the two leaders meet what would've been unimaginable months ago. emily: it seems like an impossible task collecting the trillions of pieces of trash floating in the pacific ocean. the collection system, a black tube as big as a football field is setting sail for the great pacific garbage patch this year.

thank you for joining us. this acrossmbling the bay in alameda. in are setting sail september for the garbage patch. proposed past people to clean this up with nets that would go out and fish for plastic. the thing is, the ocean is so vast that if you were to do this it would take 80,000 years. what we do is develop a passive system. nature can do the hard work for us. we can concentrate the plastic before we take it out, then we see that if we were to deploy 60 of the systems we can clean up half of the garbage patch in five years time. big so this very

area it would take 80,000 years to clean up. you think that you can clean up how much of this? >> we think we can clean up half of it in five years and eventually get to a 90% reduction by 2040. we have done extensive testing over the last four years. we have done hundreds of scale model test prototypes and there is only one way to find out and that is to launch it which we are doing this summer. >> there are some regulatory issues but you have gotten permission from the dutch government to operate in international waters. what other hurdles do you have to clear? >> we signed an agreement with

the dutch government. gavehe first time they permission for an unmanned structure to be deployed in international waters. sure that it doesn't break and that it catches the trash efficiently. >> tell me about yourself. you are 23 years old. talk to me about your past. >> i have always been quite an inventor. when i was 12 or 13 i decided to launch model rockets. useful. very when i was 16 years old i was scuba diving in greece and sought trash and wanted to clean

it up. money to be made here? >> we are a nonprofit entity. of course it is no man's land. no one takes responsibility. the idea is that eventually we will have 60 systems out there or that any individual company can expense their own system. we will be collecting a lot of plastic which we can sell to turn into new products. once they are out there we think they can pay for themselves. obviously begun its patch looks horrifying but what is it matter? >> first of all there are hundreds of species that are in danger of extinction because of this.

tore is an economic threat fishing and tourism. and tiny pieces and up in the food join -- food chain which could eventually be consumed by humans. how much waste is caused by corporations? what is the responsibility of the industries? >> with see a lot of fishing out there for example. debris is dispersed across 7.2 billion people. a lot of plastic. once we have the system working then we can scale this up to 60 systems and rid the ocean of plastic. emily: starting in september we

will keep our eyes on you. >> it will be exciting. >> how long do you think you will be out there? >> the first system will be out there for at least a year. work weit we see it will of course leave it out there for 20 years. you have a team of 70 engineers, researchers working on this. how does technology need to improve to get you past the halfway point? i wasn't sure people actually wanted to clear the ocean. it became clear people do think this is important. that's why we don't focus on developing the tools or technology. emily: we will be watching you.

thank you for joining us. that's all for this edition of bloomberg technology. that is off for now. this is bloomberg. ♪

you get a call from steve jobs, there was a sparkle in his eye that i have never seen in the ceo or. do your friends tell you this was not a good idea? warren buffett still uses a flip phone. exposed your own personal life a bit. >> i thought i am making the wrong call. >> why was the apple watch and not the eye watch? >> people would not recognize me if my tie was fixed. i just leave it this way.