♪ >> coming up on "bloomberg best," the stories that shaped the week in business around the world. tensions take another leg up. >> this will take chinese policymakers by surprise. >> china could make life more difficult. >> theresa may wins a brexit battle with parliament. >> she faced them down and they caved they backed off. , >> opec tries to hammer out a compromise on oil supplies. print actually played a huge role in the meeting. the victory goes to the saudis. >> a chinese tech giant prepares to go public. the bidding sweetens as disney and comcast vie for fox. >> this was a very aggressive

move on the part of disney. >> plus, insight from leaders in business, finance, and politics. >> if we go tit for tat, they run out of things to apply a tariff to end we don't. desk and we don't. >> for the first time, we are hearing about decisions to postpone investment, postpone hiring, and postpone decisions. >> we are living with a brittle economy. >> it is hard to make an omelette if you do not break some eggs. >> it is all straight ahead on "bloomberg best." hello and welcome. i am abigail doolittle. best," youromberg weekly review of the most important analysis and interviews from bloomberg television around the world. the week began with crude prices on the rise in advance of a major meeting between oil-producing nations. >> opec's summit this week's shaping up to be one of its

toughest in years. members are discussing a compromise that would see an oil production increase between 300,000 and 600,000 barrels a day in the next months. >> russia and saudi arabia on the one side for different reasons. a significantly desk significant increase in production. on the other side, you have what we call the have-nots. they don't have spare capacity. it is the likes of iran and venezuela and so on who would like higher prices. the situation right now is you have countries like saudi arabia and its allies saying we can't just let the market run by itself. we got to almost $80 a barrel. this is the best they can come up with but it is a long way to go. >> president trump has widened the tariff war, adding $240 billion of chinese goods in the firing line and he is

threatening to double that. it seems the u.s. is not blinking yet in the fight. >> this will take the chinese policymakers by surprise. we were looking to the july 6 date when the u.s. said it would impose the first round of tariffs announced on friday or early saturday, and of course the chinese were going to follow , suit with their own list of tariffs, targeting the u.s.ultural sector in the and commodity producers. this $200 billion trump has threatened with an additional potential for 400 billion dollars, combine that with the and you have close to $450 $50 billion billion in tariffs. david china responded : forcefully, saying if the u.s. loses its senses and publishes such a list, china would have to take quantitative and qualitative measures. what are the options available to china? we will put up a chart that actually shows they don't have enough imports to put that kind of tariff on.

manus: china could make life more difficult for the u.s. operating in china. we have seen how they dealt with south korean companies and japanese companies during times of political intentions -- tensions. they heighten bureaucracy, increase inspections and customs duties and other levies. even leaving aside tariffs they , have plenty of options when it comes to nontariff barriers that could make things difficult for american companies in china. mark: 21st century fox accepting a $20 billion bid from disney. a blow to comcast's efforts to acquire fox's entertainment assets. the share price, $10 a share higher than what disney offered in december. three dollars above comcast's bid last week. i guess bob iger wanted this one. >> i think he really did. this was an aggressive move from disney.

not only did they raise their price about $10 a share, but included a cash option. now shareholders of fox will have the option to take cash or stock up to a 50/50 split. that is a really important aspect because it allows the murdochs to take cash or stock but presumably, they will keep the stock and not pay tax. mark: what is ryan roberts thinking right now? >> the ball is in tir court. >> one interesting thing is that fox delayed its shareholder vote to vote on the disney bid for the 10th of july. they said they want to give their investors more time to digest a new bid from disney, but other events to date. i wonder if fox is also expecting comcast to come back. >> the no's have it. mark victory for theresa may. : the commons narrowly rejecting the amendment to the brexit will that would have allowed parliament to amend the motion

on the final deal. how did she get through it? >> it looks like she won this one pretty handily. she faced them down and they caved, they backstop -- backed off, accepting her view that by giving parliament too much in the end would undermine the government's negotiating strategy. the important thing to note is aif the action is taking place in westminster with the may government trying to get their act together, continuing to lose time vis-a-vis the negotiating with the e.u. >> president trump, signing an order a few minutes ago to end the immediate separation of immigrant families at the u.s.-mexico border, which has sparked outrage in the united states and abroad. >> i read some of the text of the order. what it does is require the attorney general to file a motion in court that would clarify the settlement from 1997 in a way that would allow the administration to detain

children with their parents in criminal detention facilities. the trump administration is going this route and we should expect a legal challenge from the immigration lawyers who say this is still not the way to go. the advocates who say we don't need to take away the rights of kids. they will not be happy with this. francine daimler is the first : major corporation to blame tariffs for lower profit outlook. meanwhile, india has raised tariffs on imports to the u.s.. has hiked tariffs on items like chickpeas, walnuts, apples, boric acid among others clearly in retaliation to the , increased duties on aluminum and steel that india believes hurts domestic industry and more importantly, it believes it violates global trading roles. wastinger is --hoisting the white flag even

before the trade war is caps off. are they using this as an excuse? it could be this is the business just not performing as it should be in china and they preemptively come out with this today. if we see other carmakers following suit, maybe the skepticism will subside. at the time, it is unclear what is behind this. great british pound, popping after more than two weeks. that is after the boe's chief economist unexpectedly supported a rate hike, boosting prospects for the next couple of months. >> the bank hypothesized slowing growth in the u.k. economy was temporary. and now what it is seeing and thinks is it is right. it thinks it is temporary. he thinks he has seen enough and we need higher rates right now. you have still got six members of the committee who are not convinced, but over the coming weeks, the august meeting we think they will be convinced. there is more data to come and it will come out relatively strongly and prove growth is likely to rebound in the second quarter. we do think the bank, at the

moment at least, is on track to lift rates in august. francine donald trump : -- vonnie donald trump : threatening the european union with an new ultimatum on trade. he says on twitter he plans to impose a 25% tariff on all cars imported from the bloc unless it removes tariffs and barriers to other u.s. goods. justng a new front or poking the bear? >> it is odd he is tweeting this now. there were reports the german ambassador was in washington to bring some kind of offer that would maybe lead to the tariffs being zeroed out eventually. that is one of the puzzle pieces. the commerce secretary initiated an investigation into the national security threat of cars and car parts. that is not done yet and so trump put a little doubt into the credibility of this investigation with this tweet. if he is saying they will lead

to 20% tariffs on e.u. cars. >> roll out the barrels. opec has reached a compromise on crude, agreeing to boost all production by one million barrels a day. the salary energy management -- saudi energy manager calling it "a nominal increase." supplies have increased, but the market rally's because it was not as much as anticipated. >> it was an interesting afternoon because the initial deal, and prices really started to rally when it became clear the official communique mentioned no production numbers at all and then ministers emerged from the meeting, one saying one thing, another saying another thing. it was a fudge everyone seems to be interpreting in a different way the market doesn't know how , real these barrels are. >> you had the iranian oil minister meet with his saudi counterpart. the prince played a huge role in the meeting. the fact that they were able to come together does show this unity, but the victory goes to the saudis.

this is what the americans wanted. they asked for one million barrels of oil and this is what they are getting. abigail still ahead as we review : the week on "bloomberg best," conversations with lloyd blankfein and david solomon. plus, central bankers share their views on the rising trade tensions. next, more top business headlines. as if ge needed more bad news, now it is kicked out of the dow. >> it is symbolic of the dramatic fall from grace. it is not the company it once was. >> this is bloomberg. ♪

♪ abigail: this is "bloomberg best." i am abigail doolittle. let's continue our global to her of the week's top business headlines, with a startling

arrest tied to one of the longest running corporate scandals. mark the diesel cheating scandal : at vw has reached the executive level. the chief executive of its audi unit has been taken into custody

game of chicken. >> it is not my style, but if -- what you want to show is if you want to give someone incentive to see the world from your point of view, it does not help to remind them of your negotiating position. the fact is we go tit-for-tat. by the time you get to 100, they run out of things to apply a tariff to, and we do not. that is what you would do if you were crazy and really wanted to end free trade. that is what you would do if it was a negotiating position, you want to remind your negotiating counterparty of just how much firepower you had to bring to the negotiation. which one is it? john: do you think donald trump

is a protectionist? he dislikes nafta. "rosenkrantzmember and i don't know what i would do in not sure, and i'm certainly not sure what he would do in his place, but if you ask me, can i give a narrative about how this is a useful thing to do , i can't say as a lot of people do with respect almost everything he does, this makes no sense at all. it does not make no sense to me at all. abigail: coming up, more perspective from goldman sachs president and coo who speaks exclusively about trade tensions and the bank business in china. commerce secretary wilbur ross explains why the white house believes the benefits of its

trade policy outweigh the cost. >> it is not about trying to make money out of tariffs. that is not the end game at all. abigail: this is bloomberg. ♪

♪ abigail: this is "bloomberg best." the ecb held its annual form and bloomberg was there to into video. our exclusive conversation with former u.s. treasury secretary larry summers, but first highlighted that highlights by stephanie flanders featuring leaders of the world's fourth-largest banks. what the effect on business investment, what is the effect on experts? what is the effect on consumers confidence?

lessink there have been from the past, and they are all very negative. >> those concerns seem to the rising and for the first time we are hearing about decisions to post on investment and hiring and making decisions. thats a new thing. >> on trade, i think what's happening is credibly disturbing. cannot even think of a country that boosted productivity growth by building walls? i do not. >> i hoped this escalation could normal so thatd trading relationship between the u.s. and china would prevail. >> inflation is converging towards our objective, and we draw this confidence by the ever by the labor market,

higher capacity transition rates, and frankly by the continuing ample monetary accommodation. also by the disappearance of what we call the tail risk of deflation. >> with unemployment low and expected to decline further, inflation close our objective in the risks are balanced, the case for continual gradual increase is strong. >> with technology progressing so quickly, particularly for the leading firms many firms are , having trouble picking up, having trouble adopting the new technology. to remain competitive, they focus on what they can control, and that is their costs. >> some people think, well, the economies are growing, that shows that the speculators stagnation theory was wrong. -- secular stagnation theory was wrong. i have exactly the opposite view. it required enormous fiscal stimulus to get the economies to grow, even reasonably

adequately, and that demonstrates the validity of the secular stagnation thesis. relative to what happened in 2013, when i first talked about secular stagnation, take the united states, you have far more fiscal expansion and we had then. you have far lower long-term interest rates than we had then. you have asset prices that have increased in an unsustainable rate. it's not that the economy has somehow healed itself. it's that the set of developments predicted by secular stagnation theory have happened, yet many make the mistake of condemning those developments as somehow inappropriate, because they represent abnormal monetary policies or exceptionally expansionary fiscal policies. >> many would say, well, we are looking at wage growth. it is taking time, but we are starting to see some signs of deceleration in wages.

we are still very loose on monetary policy. give it some time. you are overstating the problem. >> well, those who put it the way you just did neglect an enormous fiscal expansion and an enormous perspective fiscal expansion. they neglect that asset prices have risen, creating a wealth effect at a pace that asset will surely not continue to rise. 15%, 20% every year increases in the stock market. so yes, it may be that if policy stays on guard with relatively expansionary monetary policies, with fiscal policies that are traditionally regarded as in prudent then we may keep this , going for a while. but we're living with a very brittle economy. downturns happen, the odds of the economy moving into a downturn are 20% each year. when they happen, the normal playbook is to cut interest rates by 500 interest rate -- by

500 basis points and there will , not be that kind of room going forward. >> market reaction to trade pressures ran the gamut this week, some days risk off, some days shrugged off, but as the effect of tariffs spread, investors are watching closely. bloomberg's stephen engle spoke exclusively with david solomon in beijing this week, and asked what the bank is hearing from its chinese clients. >> everybody's talking about it, and the implication that this escalated to an all-out trade war there would be implications of market activity, implications on investment, implications both here in china and for u.s. clients. people are watching, people are interested in seeing how this unfolds and everyone is hopeful because this relationship is so important. >> we heard from lloyd blankfein yesterday saying that this is , more negotiating tactics, and that either both sides are not going to be conducting mutual

suicides here. >> it's certainly in the interest of both parties to find a constructive solution. lloyd is referring to the fact that we should get a solution of -- over some period. >> how concerned are you that this could spill over into areas like financial services? we know about the big bank reforms allowing banks to have full ownership of their joint ventures. and you a 33% stake would like i'd assume, to get up to 51% now and eventually up to 100%. do you think there's a potential? >> we are encouraged by the messages that the leadership has conveyed rather than continuing to open up markets moving forward. that is something we will accomplish over time. so we continue to work and invest in our business. we see the opportunities for us here in china to be quite significant. we announced today a significant

partner hire in china. we continue to invest in the business, to grow our business. we have been here for a while and we will be here for a long time. if you put things in a broader perspective, we are confident that this will move forward appropriately. abigail finally, here's commerce : secretary wilbur ross defending u.s. trade policy in an interview with david westin. david what happens when there is : a tension between growth and jobs, which is what the president's first order of business was, and getting fairness and reciprocity? if you have to choose between the two, which you rather have less trade and less growth and have it be fairer and more reciprocal? >> well, we want it to be fair and more reciprocal. reciprocity is an important keynote our trade policy. the question is, how do you get there? the only way we are going to get

foreign countries to lower their inordinate barriers is when they can get more painful for them to continue those processes than to get rid of them. that's what this is all about. this is about an endgame that really is free, fair, and reciprocal. it's not about trying to make money out of tariffs. that's not really the end game here at all. but we need something to induce changes in their behavior. david the question is, how much : pain are we willing to suffer to get that done? the pain goes both ways. for example deutsche bank was , out with estimates that a trade war could take .3% off gdp growth. if you knew today that was the price you have to pay, would you be willing to pay it in order to get to reciprocal trade? >> well, it's very hard to make an omelet if you don't break some eggs. we really have no choice but to change the way these countries

are using unfair trade practices against us. we have to do it. it's unfortunate that it wasn't done at an earlier point in time. it would have been a lot simpler, a lot easier, and a lot less painful. but it's really important that we do it, because we are talking about our future. ♪

♪ abigail: this is "bloomberg best," i'm abigail doolittle. let's resume our roundup of the top business stories, starting with the result of a presidential vote in south america. >> colombia has elected a new president, conservative former senator, who was a former

guerrilla fighter and mayor of bogota. he's supposed to be market friendly. he supposed to be open. however, at the same time, he was against the peace treaty that was brokered. anywe expecting to see progress on the peace dividend? >> he is opposed to portions of the deal. it's not that he's against peace, but he said the deal was a bit too lenient, in some portions especially, he doesn't want to see people who he says have blood on their hands sitting in colombian congress. we can expect interview portions of the agreement. >> the federal reserve is publishing the first results of its annual stress test. all banks reviewed cleared the 35 first hurdle of the fed stress test. all banks found to have sufficient capital and those fed exams. goldman sachs is the closest to the minimum level here on the supplementary leverage ratio. state street, meanwhile, the closest to the minimum on the equity tier one capital.

goldman sachs is the closest to the minimum on the supplementary leverage ratio. what does that mean? it doesn't sound good. >> and it's not the first time. goldman and morgan stanley come very close on the leverage numbers in the first stage, which tells us that when they are asking for their capital planning for the next four to eight quarters they have less , wiggle room to ask for huge increases. actually, according to the analyst estimates i included in my outlook this week, goldman is probably going to decrease the amount of capital it's distributing in the next two years. so that is why when you are that close, you cannot really ask for too much of an increase, and in goldman's case, they will probably decrease. morgan stanley which is also close, might not ask for too much. >> the philippine central bank has raised its benchmark for the second straight week.

should it be necessary the , governor says the bank is ready to take further actions. what prompted the second in quick succession rate hike? >> we have really seen a deterioration in inflation outlook in the philippines, and that has been the main concern of the central bank. the bsp yesterday marginally reduced its inflation forecast for this year down to 4.5% from 4.6%, but that's still way above the inflation target, which is 2% to 4%. we have seeing inflation pick up quite strongly this year and that has been exacerbated by the currency slumped. down moreen the peso than 6% against the dollar this year. inflation dynamics are the main reason for the central bank raising its interest rates again yesterday. >> having a look at the msci, because it is giving argentina

and saudi arabia -- granted, the two countries are in emerging market status they will , be added to indices in about a year, joining countries like china, india, turkey, and brazil. tracking stocks, how does this change the outlook for emerging markets as a whole? >> there hasn't been anything particular to long run concerns about trade tensions and what the fed is doing, but there's nothing front and center on that. then to have two major markets like these recognized as being emerging instead of frontier, that's a bit of a plus. in particular, it means that both decisions have been anticipated, in particular the saudi one. if there was any delay, you would have seen some disruption, just because people have loaded up on saudi assets in particular. that's the last thing we want at the moment, dumping a fresh set of emerging-market assets to add to all the others already being dumped.

>> shifting to solar power, and it could be a boon for the industry. that's according to a new report by bloomberg new energy finance. wind will account for 50% of global energy generation by 2050. where are we now and what facilitates that shift? >> the reason is none other than cost. wind batteries are getting extremely cheap. we think that over the next 30 years, global power sector will attract about $11.5 trillion, trillion will be invested in solar and wind. and one reason is solar and wind is getting cheaper and the other is batteries. this is the first time we see how the decline in cost of batteries will affect solar and

wind penetration. this battery will help solar and wind meet demand, even when it is not windy and not sunny. this means they will eat from a market that has traditionally been dominated by coal and gas. >> the supreme court came out with a decision today that was widely awaited. it ruled that states that it can require internet tax collecting. it was a 5-4 decision break, not entirely unexpected, given the makeup of the supreme court these days. >> yeah. it was unexpected because of the argument. when the court agreed to hear this case, there was a broad expectation that it was ready to take this step, that it would say this old, physical presence role is outdated and should be overturned. but the argument made it seem like the court was hesitant to take the step and wanted to leave it to congress. instead, by a narrow majority, 5-4, they said, we are throwing

out the physical presence role. -- rule. now states have broad authority to require internet sellers to collect sales tax. >> euro area finance ministers struck a landmark deal for greece. it would ease repayment terms for some loans and clear the way for an end of the bailout, at least for now. the terms are a little bit better than anticipated. 10 rather than seven years. did greece get a good deal here? >> i think so, and i think that the euro area in general is happy to be close to closing the door on this long saga. greece still have a mountain of debt, and it is going to need to finance that going forward. it is very important for greece and the eurozone in general to have this be sustainable. i think that is what the eurozone feels like they have in place now. they extended the maturities for 10 years of almost 100 billion euros of debt, and they gave a grace period of 10 years for the

interest. i think they are preparing for the end of the bailout program, and that will happen in august, and they are hoping things will go smoothly as we get to that. >> sometimes, the most successful businesses are forged -- born from adversity. take a well-known bakery chain, baked by melissa. its founder was 25 years old and suddenly unemployed when she decided to follow her passion and become a cupcake entrepreneur. melissa tells the story in this week's edition of "small to big." >> we started baked by melissa in 2008, when i was fired from my job in advertising. i picked up the phone in my cubicle, called my big brother. i went straight to his office from being fired, and to cheer me up he said make some cupcakes and will start a business. we always wanted to go into business together. the night i was fired i baked 250 cupcakes.

four batches. i sent them in to work with my best friend's little sister. she was interning at a pr agent. the owner of the pr firm loved the cupcakes and put me in touch with her caterer. the rest is history. ♪ >> we never really had a business plan. we had opportunity. after doing events as a caterer, i would go on tastings and people would place large orders. we knew we had a product that everybody wanted and loved, so we decided to open in the union square holiday market. we had a boost that was granted, and people lined up. we sold out every single day. that is when we saw the opportunity to open up our very first retail location. cafe barry, where i was doing my baking had a pickup window that they didn't always use, and that is what we turned into the very first baked by melissa location. i was fired from my job in july,

2008. we opened our first storefront in march, 2009. we also heard from people all of the country that they wanted to get baked by melissa. so in april of 2010, shortly after we opened our second store location, we developed packaging and started shipping our product nationwide. we did market research. we ordered other baked goods to receive and see how that came. we learned, we researched, and then we developed, and we tested. it definitely did not happen overnight. but you have to start somewhere. ♪ today, we have 14 retail locations. and we ship products nationwide. three of the 14 stores are not in long island -- in manhattan.

there's one in long island, one in new jersey, and one in jfk airport. today we know that every time we open a new store, it contributes to our e-commerce. there are plans to opera baked -- open baked by melissa locations in new market. since we started baked by melissa, we sold over 100 million cupcakes, and we know we celebrate over 50,000 birthdays a year. i love working hard, and i love cupcakes. cupcakes are my favorite thing in the world. i could never live the life of could have, would have, should have. i have to do i love every day, to make baked by melissa a reality. ♪

♪ >> if you missed out on any of the --rts, gt the -- gt

gtv is the function on the bloomberg library. you can see them and use them in future reference. abigail there are about 30,000 : functions on the bloomberg, and we always enjoy showing you our favorite on bloomberg television. maybe they will become your favorite. here's another function you will find useful. quic . it will take you to our quick takes, where you can get important context and fastens right into timely topics. here's a quick take from this week. ♪ >> you may have seen a few of these pop up on your phone or in your email. google, facebook, twitter, amazon, square, go daddy, tesco, sainsbury's, and many more are updating their policies to give consumers more control over their personal data. those updates and changes are thanks to a new laws governing data privacy called the general data protection regulation or gdpr. it only applies to people who live in the european union, but its adoption is largely expected to have americans asking, why don't we have that? here is how data collection currently works. with you sign up for, let's say facebook, you have to click the

box agreeing to the company's terms. those terms give facebook the right to track your online activity, even if you are not actively browsing facebook. facebook can let certain parties access it the sale ads and services. >> they will have the right to ask for copies of anything. >> that's nate lanxon. >> up to entire archives of all the content they have generated on the service. >> on may 25, companies with more than 250 employees will have to get unambiguous consent from users to collect their data, instead of burying the ok inside the fine print. it will also make it easier to revoke consent users had previously given. for consumers that often, they have a right to know what is being done with their data instead of being charged to contain it. >> companies like google and facebook have been making data available for download and deletion upon request for quite some time. >> consumers also have the right to be forgotten, which lets citizens request that organizations delete their data. data portability gives consumers the right to retrieve their data and sell it to other companies.

for example, you may be able to trade something like a gift certificate from zara in exchange for your shopping history from j.crew. if they firm has a data breach, companies must notify the authorities within 72 hours, and any failure to comply with the new law will be costly. penalty fines can be as high as 4% of the company's global annual revenue. europe expects companies to act in the spirit of the law, and not just follow it to the letter. this means there will be disputes and legal precedents to be set over the coming years. >> so while the u.s. is still reeling over facebook and cambridge analytica, e.u. is moving ahead with tough new rules. many will ask if the u.s. should be next. abigail: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm abigail doolittle. this is bloomberg. ♪

jason: welcome to bloomberg businessweek. i am jason kelly at bloomberg headquarters in new york. a big show for you this week. we start in london where we explore that city's future as a financial hub given the backdrop of brexit. we go to south carolina where we talk to the although ceo about the new plant there. what it means for that state's economy and for volvo's chinese owner.