>> welcome to "daybreak australia." shery: and i'm shery ahn in new york. >> we are counting down to asia's major market opens. >> the top stories we are covered in the next hour. donald trump promises a new move on china's tariffs. we are waiting. the uncertainty for the readily the markets, already u.s. stocks falling the most in a month and the dollar sliding. and the south korean president

going to north korea for another meeting with kim. he hopes to revive the stalled nuclear talks with washington. >> into quick check of how markets closed on the monday session in new york. shery: we saw u.s. stocks falling, the s&p 500 down 6/10 of 1%. and waiting for the enough my from president trump on the next batch of tariffs on chinese goods, sources saying they could be 10% tariffs on $200 billion worth of goods. investors sought refuge in industrials and energy stocks, but not enough to pull the markets up, with the dow falling and the nasdaq going down 1.4%, led lower by amazon, microsoft and even apple falling despite the fact we got news some of their products might be spared from the next round of tariffs on chinese imports. lets the how things are shaping up in asia. sophie: like in the u.s., trade will take center stage in asia as well as waiting on the

announcement which ups the chances china will bail on the talks with washington. tech will likely be the weaker spot, as from apple suppliers like you pointed out, so we are looking at futures pointing lower, although the nikkei 225 may open to the upside. although japanese markets may be playing catch-up to the declines of late. on the agenda, the south korean president kicking off his three-day trip to pyongyang, where he aims to salvage talks between the u.s. and in the north. and also watching for today in sydney, we are looking ahead to the second corner home price data due out at 9:30 a.m. hong kong time. when it comes the chinese stocks, we did hit an unwelcome milestone yesterday. we will pull the chart on the terminal to show you what happened. we had this falling to a four-year low. so markets feeling like deja vu for the investors, this as we

are back to levels that preceded the $5 trillion boom and bust. haidi: thank you. now to first word news. warning the head of imf that a new deal brexit would have consequences for the u.k. economy. christine lagarde says she remains an optimist, but recognizes that britain could crash out of the market in march and start in the single market. she says, whatever the deal is it will not be as good. >> any deal, any deal, all likely scenarios of any deal all most likely lead to weaker economy than the economy as it is now. jessica: southern china clearing up after the path of a typhoon that killed at least two people as it moved into southern provinces.

this after a bottled the philippines and macau. it has been weakening over land, but still forecast to bring heavy rain throughout tuesday. and sudan people were killed -- 69 people were killed in the philippines and 40 still missing. on the eastern seaboard, rain from hurricane florence forcing hydroelectric dam operators to run generators at full speed and also open floodgates that have not been used in more than 20 years. the tennessee valley authority begin increasing output authority -- output to make room in their reservoirs. reservoirs were already at seasonal highs. forelon musk is being sued defamation by an english caver involved in the rescue of those soccer players in thailand. he called unsworth a pedophile, after the debra said the offer use aer said the offer to

simmering from elon musk was a marketing ploy. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jessica summers. this is bloomberg. >> thank you. haidi: investors awaiting you trade moves by washington, after president trump said he would make an announcement up until the close on wall street. we are waiting to bring you those lines as soon as they become available. at the same time, the administration is exempted some high-tech makers from the next round of tariffs. we will discuss this with joe in washington. worke: this is despite the that has been done behind the scenes by steve mnuchin about getting china back to the negotiations table. what do we know about where things stand? joe: we know whatever the announcement is, whenever it comes out, it will exclude product lines, things like the

apple watch and other similar smart watches and fitness trackers like fitbit. interestingly, those are some products that will be key for u.s. consumers as the holidays approach. the u.s. is going to, or has been consulting with apple's ceo tim cook, and larry kudlow said that the white house does consult with him frequently and takes his views seriously. and apple had been lobbying heavily with the u.s. trade offices to avoid some of these tariffs that could be damaging to consumer goods. not just apple, but others, and raise the cost for u.s. consumers. which is politically one of the big concerns for the administration. >> yet, we are hearing from sources telling us that china will reject trade talks if there are new tariffs, so what does this mean for the prospect of future talks?

joe: it throws all of that into question. china says it plans to retaliate with tariffs on $60 billion of u.s. goods from liquefied natural gas to airplanes. security mnuchin has been trying to restart talks with china. and there is at least some support within the administration, but again the white house is split on how it wants to deal with china. donald trump and other people in the white house want to continue taking a tough line, so whether or not they can proceed ahead with talks, particularly if china is reluctant, i think it is at this point rather doubtful. at some point, they will have to come to some sort of breakthrough or agreement to get these talks underway. >> before we let you go, let me ask about the supreme court nomination, because we have heard president trump again defending judge brett kavanaugh amid a sexual assault allegation. does this mean the confirmation vote will go according to plan? hurdle ins thrown a

front of what was a steamroller for the nomination vote. at this point, the judiciary committee, which is still yet to vote on the nomination, is planning some sort of hearing that will involve brett kavanaugh and his accuser. there was a vote planned for thursday, but it is unclear if they can get that done. democrats still have options to push it further along. and a number of senators on both sides of the aisle are taking a cautious approach until they hear more from brett kavanaugh and the woman, a college professor in california, who accused him of attacking her while they were both in high school. >> thank you. joe joining us from washington. we will continue discussing the escalating trade war with our economics editor, peter. we just heard that some products could be excluded, but at the

same time this $200 billion of tariffs would be mostly affecting consumer products. what would be the impact on consumers? peter: they would be paying more, and whenever a tariff is imposed there is always the question, who bears the cost? is it one by the producers who make the products or those who buy the products? that was depend product byproduct. if it is a product of the u.s. gets only from china, them probably yes, china will have some market power. the u.s. will have to pay up. on the other hand, if you have many choices, products from other places, china will be the one who will bear the brunt of the tariff. >> is there a sense president trump is concerned about the market reaction as opposed to the collateral damage to some u.s. businesses as a result of the tariffs? the timing is relevant, waiting until after the markets closed. .

peter: one way to tell that, as you pointed out, chinese stock market is way off. and i think that donald trump looks at that and thinks that gives them the upper hand, that china will have to cave because if it doesn't the market could go down further. whether that is right or not remains to be seen, but it seems like that is part of his strategy here. just spoke inw new york. take a listen to what he said on the trade war. >> the biggest culprit has been china. but not the only culprit. i will say right here on china, we are ready to negotiate and talk with china anytime that they are ready. >> i remember when larry kudlow also said that president trump would be open to a face-to-face meeting with president xi jinping, could that be one

viable option to get this trade war resolved? peter: i attended the lunch today in new york with larry kudlow, and he also said in a sit-down that he sees people were pressing him on the question of whether the administration knows what it is doing, and he said there was a grand strategy, but he was not clear what that is because it doesn't like we're stumbling toward a more serious trade war. at this point it is not realistic to expect a meeting between donald trump and xi, because the chinese have made it clear they do not want to negotiate with a gun to their heads, which is essentially what these tariffs would constitute in their viewpoint. >> it is interesting with the market reaction, we see the downside with equity session, gold with their first gain in three sessions, so are we starting to look at a market that is pricing in the risk of an escalating trade war? peter: it seems that way. gold goes up when there is greater global risk, but also

when there is inflation, and a trade war would be stagflationary, it would cause higher inflation and a slower economic growth worldwide. and i think that the world is exactly starting to price in the possibility that that despite the best intentions of a lot of people, we seem to be stumbling into the worst of all possible worlds. >> peter, before i get to my next question, we will bring this line that the senate committee will hold a public hearing on monday on the allegations of sexual misconduct from years ago for brett kavanaugh ahead of that confirmation vote. a statement from the white house says, "he is looking forward to clearing his name." we will get you more details on that shortly. tok to the atomic at hand -- the topic at hand. one thesis is that this is few of the bipartisan issues that has garnered support from the administration, and the fact

that there has been a lack of specifics in what they want out of china suggests they are happy for this to drag on. do you see that as a true narrative? peter: i sensed a little bit of that from larry kudlow today, that he does not want a trade war. i think he understands it is bad for the country, but he is also thehere does not seem to be nationalists within the administration, they seem to be dominated the conversation. -- dominating the conversation. that is happening more more, as the people who used to be pressing the case for globalism are leaving the administration one by one. appreciate your time, peter coy. still ahead, president moon heading to the north to salvage the stalled nuclear talks. we are live in seoul later this

hour. >> up next, more on the market and why it is said to be knotty. -- naughty. this is bloomberg. ♪

♪ day and a view of the harbor in sydney, counting down to the open with features futuresed -- unchanged at the moment. i'm shery ahn in new york. haidi: escalating trade tensions seem to be reaching a peak. you are watching daybreak australia. investors grappling with the latest american threat to expand tariffs on chinese goods, but our next guest says it is more than a knee-jerk reaction. we have david ada. is the noise the market reaction

in terms of you think that this will be resilient come even if these additional tariffs are announced, or is it the trade war itself? david: be careful whenever an analyst says something is noise, it often means they do not know what else is going on, said they use it as an excuse. listen, there are some many things that we are focusing in on, for the overnighter, the weekend session today it was these new tariffs and the idea that china may not be participating in talks, but this is death by 1000 cuts. we are treating headlines. i -- trading headlines. i think when you look other things going on, we are talking about chinese stocks and we are talking about emerging markets and about the dollar. and we are talking about the midterm elections, and we are talking about earnings. so there is a lot of things going on. when i describe it as noise, i think there is a degree of

anxiety. the equity markets, which did well last week, and we are getting new information, but i think that this noise is sort of choppy volatility and it will be with us f a few weeksor -- for a few weeks. we will not have resolution on the trade issues. we want to hear if this is going to be a dovish hike from the fed or a hawkish hike. the statement that will come out of it is going to be extremely important. and we are facing the midterm elections here, to say nothing of the geopolitical activity overseas. so there is a lot of things going on and i think that when we look at t market beinghe up a bit today, down a bit tomorrow, we must bear in mind there is a lot of activity and a lot of busyness, but we are not trying to make a directional play. i do not believe to the point of the stock market will prove that much resilient, at least in the next few weeks. i will say that much.

shery: the extraordinary resilience, despite the day-to-day a little bit of a here,there, or dip just looking at the extraordinary break away and divergence of u.s. equities performance versus the rest of the world, and certainly versus the rest of the emerging markets, or asia, or the chinese markets, trade is a little bit of a thorn in the side, or is it a market mispricing the damage across global and asian supply chains, and what happens when china's growth gets dented? is that being understood, the you think? david: i think it is more than a thorn in the side and i think we will have to confront it in a bigger way. but if you take a look at the u.s. stock market this year, we have had a massive amount of

buybacks. in the first quarter, something like $310 billion worth of overseas profit were repatriated, 98% of that was used for buybacks. so we are still finding u.s. corporations are the biggest buyer of the u.s. stock market and i think that that sort of mitigate is not the right word but that sort of, masks the negative repercussions that we are talking about and we will be talking about as the trade policies go through, the tariffs go through. and perhaps early next year, we will also be talking about the tailwinds of tax reform having worn off as well. so i do not think it is something to be neglected, and i do not think people are taking it as merely a thorn in the side, but i think as long as u.s. corporations have all of this cash they are bringing back for buybacks, i think it is giving a deceptive the view of

how confident the u.s. that market is. >> within the u.s., we see the divergence between small caps and large caps, and more domestic stocks against international oriented ones. take a look at the russell 2000 and s&p 500, you can see that compared to the dollar index, the dollar is gaining ground, but because of all the trade noise we are seeing the domestic stocks outperforming come if you are saying we will see no resolution with trade tensions, should this be the safe bet? david: i do not know if it is a safe bet. shery: relatively safe? david: i understand. it is a rotation.the member, we are getting into the end of the year -- and remember, we are getting into the end of the year. as we get into the fourth quarter, the allocations going into the lesser performing sectors makes a good deal of sense. i think that these traded

tensions, perhaps we dismissed it a little bit at the beginning, but it looks now like it is going to go on and last for some time, certainly these headlines on it. it makes sense we would see some sort of rotation, yes, so i would say relatively safe. but i would add to that that when we see for example this two year note, 2.75, the tenure 3%,e 3% -- 10 year above that also represents a relatively better bet than is represented -- it has represented in awhile. 10 at attractive is the 3%? 10 at 3%? david: better than at 2.5%. i think we could see some upward pressure on the 10 year note. we will get quantitative easing coming off more and we look at the same thing out of europe. so i think it is possible to see

it at 3.25% between now and the end of the year, but i think we will have good buying behind a 3%, and i do not think the stock market wants to see the rise like that. >> even to percent tariffs on chinese imports would slow the economy enough to for the fed to not hike in december. what are your thoughts? david: i think the fed wants to go. i think they are leaning more hawkish lee, whether they want to have some ammo when they ease, i think they are looking at the implement rate and they haven't a forays about the fiscal stimulus -- have enough worries about the fiscal some us may have seen. the odds are 75% or so in september and i think they will go, and go a couple more times. the curve is telling us that and the fed is telling us that, they are not backing away from it. -- week or so people who had

and in the last week or so, those people who are doves are sounding more hawkish. i think they will go in december, yes. >> thank you for your thoughts, david ader. if you missed out on the charts we showed you, gtv is your function. you can save them and use them for future reference. >> coming up, big names on bloomberg tv, including the quantum ceo. you do not want to miss that conversation at 10:30 a.m. in hong kong. this is bloomberg. ♪

>> welcome back. quick check of the business flash headlines. apple it others set to escape new tariffs from china. the trump administers and will spare high-tech products, including the apple watch, their pod earphones -- airpod

earphones and other products from fitbit. apple sold 4.7 million watches last year, while fitbit moved 2.7 million trackers. sued for age discrimination, the class action suit on behalf of three former staff who say that -- was based on their ages. it claims the company has a soft thousands older than 40 as it seeks to cut costs after coming late to the cloud party. ibm says these firings are based on cisco, not age. financial,o western at the same time as it raises a billion dollars for secured bond. the deal does not include the baby food and health care operations. over $7starbucks just billion for the right to sell its products.

the deal is the third-largest in nestle's history. coming up, the leaders of the two koreas meeting for the third time this year. we will get a live report from seoul. ♪

a.m. in sydney, features looking pretty tempered. two solid days of gains, but the trade war narrative derailing the recovery rally in asia for another day. about a 10th of a percent lower when it comes to the sydney futures. a pitiful day here. -- a beautiful day here and we are waiting on announcements from president trump on tariffs against china. shery: we are at 6:30 p.m. here in new york and u.s. stocks fell today the most in a month. we are still waiting on the jump in mr. to make comments on

those tariffs on chinese goods. now jessica summers. just got: president trump -- jessica: president trump has defended brett kavanaugh after allegations of sexual assault, but said he would be open to a delay in the vote. he said brett kavanaugh is one of the finest people he knows. that cabinet is accused of sexually assaulting a woman when they were teenagers. the senate will hold a public hearing on monday. slumpedindian rupee after disappointment with the government's latest measures to support the currency. announcement on friday included reduced borrowing restrictions and tax rates on debt sold abroad. they were designed to boost capital -- but traders say they fall short of expectations. and the man accused of masterminding the -- from the state fund has launched a new

website to proclaim his innocence. joe lo is wanted in malaysia and singapore. prosecutors say he orchestrated the looting of more than $4 billion. hindsight he may have done things differently, but does not deserve the allegations made against him. and wall street is back where it was before the financial crisis. the 13% last year to its highest in 2008, when lehman brothers collapsed. t comptroller sayshe annual pay 2017,nuses reached -- in with earnings up 11% in the first half of the year. wall street on track to add 1700 jobs this year. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jessica summers. this is bloomberg. tohie: let's get straight

the market set up this tuesday morning in hong kong. >> we are bracing for a down day this tuesday across asia, trading already starting on a sour note. we are off by 2/10 of a percent and japanese markets will be returning from a long weekend, grasping for direction as the boj kicks off their policy meeting and we're getting closer to the election on thursday, with local posters indicating that the approval rating of shinzo abe is improving a touch. futures going lower before the historic summit between the two koreas. president moon jae-in of south korea set to depart for the north at 7:40 a.m. hong kong time this morning and in light of that meeting i want to bring up a chart to show you what has been going on with the infrastructure stocks in south korea. the so-called peace stocks, which have rallied 20% this year, in contrast to the -- that

has lost 7%, struggling in light of domestic troubles, as well as em antitrade fears. they may need more than the summit to help them move along. and perhaps some of the positivity from the potential summit that have already been priced in. the summit itself could be good for the cost be, it is the u.s. that holds the key for resolving north korean issues. and even president moon's chief of staff said it is difficult to be optimistic, especially as it is uncertain if the summit will yield progress on things like denuclearization. sophie: thank you. diving back into the this markets, where tech stocks dragged benchmarks lower. >> in the late they announcement is something new coming from the white house on tariffs sent stocks tumbling into the close. sue has a wrapup. no supplies that the president

is concerned about how the stock markets a doing prettyre he said -- are doing. he said the announcement are coming after the close. waiting.e are still it is almost the fear of what the announcement is going to be, rather than the actual news that often moves the market. no we will go into the snapshotw. -- go into the snapshot. the semiconductor index and nasdaq 100, the most heavily packed tech index -- take a look, i have feature them because they dropped in a big way. the biggest drop for the nasdaq 100 since june. oil stocks and proctor and gamble consumer stocks among the gainers. and take a look at what the decliners were. we talked about tech stocks, add apple and apple suppliers in the list of those that really felt. . notice -- fell.

notice the semiconductors one of the biggest decliners. so there may not be great demand for the new apple iphone, but these companies and these particular suppliers, particularly those in asia, most exposed to these tariffs that will about to hit. -- that are about to hit. tech was part of the story, but we have expressed scripts moving up as a deal with cigna has been approved and a word cannabis, one of -- aurora cannabis, one of the two weed stocks taht are flying high now as he was companies, particularly coca-cola and is some other spirit companies, start to invest and signal that they are looking at canada as a proxy for how the u.s. may move again. marijuana, legal in some states, but not nationally. it is nationally legal in canada. movers, weours, some

have a $2 billion deal after the close. fedex, next year and reporting estimates that be, the but details on labor costs. really quickly, hedging some tail risk. there is a lot going on in terms of fund managers getting ready to - f- for some kind of drop. shery: think is so much. we have a statement from the president right now. following seven weeks of public notice and hearing, the u.s. trade representative's will proceed with placing additional tariffs on $200 billion with of imports from china. what is important is the tariffs will be implemented on september 24. they will be set at a temper set level until the end of the year. then on january 1, they will rise to 25%. if china takes any retaliatory

action against the u.s. farmers and other industries, the u.s. president, the white house now saying they will immediately pursue phase three, tariffs on approximately $267 billion of additional imports. we had heard from senior officials that the reason that there would be a 10% tariff starting on september 24, then january 1 rising to 25%, would be to give the businesses in the u.s. time to adjust for the new tariffs on chinese imports on $200 billion of chinese goods. so the much-anticipated announcement now coming from the white house. early ins, and very beijing, but no doubt we will get a response from beijing and we will watch for china's reaction. the tit-for-tat, we know, has come pretty quickly. beijing will run out of runway

soon to respond all right allegory tariffs. but also, some of the color around the statement, saying for months they have urged china to change unfair practices and give a fair treatment of american companies, very clear about the changes that needed to be made, but china has been unwilling to change practices. where does this lead with a trade talks? steve mnuchin and i guess the gete dubs trying to everybody back to the table. china saying the next round of tariffs are implemented, which they are said to be, that they would not be coming to the table for more talks. so it looks like we are taking a step back. other concerns going on in terms of this key north korea issue, which do not forget washington very much needs japan and china on board in order to make headway. shery: yes.

of course, we are going to stay with these trade attention mean for the rest of the region -- tensions mean for the rest of the region, especially if china cannot export all of their goods to the u.s. and what if they dump those goods on southeast asia, which could be a concern for that part of the region. but right now, we're hearing that the tariffs, the 10% tariffs on those imports will take effect september 24 under section 301 of the trade act of 1974 on intellectual property. let's discuss all of this with our next guest, jude. thank you so much for being here with us. the tariff level at 10% is something that we had expected. we had heard many reports that it would not be 25% initially, yet 10% tariffs on tillage a

billion dollars, what would it mean for the u.s. economy and for china? jude: it would be a significant flow -- blow, i think more to china than the u.s. the pain can be evenly distributed throughout the markets in the united states, but i think that china is now facing pay significant economic headwinds. so to have a blowout this will, as you just said, where does china send their goods after this? there is uncertainty for china and probably the most aggravating thing for xi and the chinese leaders are they are not sure they are reading from the same script as the trump administration, so finding a path out of this is looking difficult. shery: official saying that the six-month lag between the 10% tariffs and 25% tariffs is to give u.s. businesses some time

to adjust until then. how difficult will it be for u.s. businesses to adjust supply chains that have been in place for years? jude: i think that the possibility of a fundamental restructuring of global supply chains in six months is unrealistic. remember, a lot of purchase contracts are already baked in, so in terms of when the cost will really be felt for u.s. consumers here, we are a ways out from that. but if we are staring down an unfeasible resolution of the trade talks, i would throw out the six-month window. it is important to remember, from the perspective of the trump administration, these are not meant to succeed ever. they are looking for the more fundamental rewriting of supply chains and the timeline for that is longer than the six months. shery: president trump tweeted

earlier that these tariffs would bolster the u.s. bargaining position. this tweet saying, the tariffs have put the u.s. in a strong bargaining position, billions of dollars in jobs flowing into our country, yet cost increases have been thus far unnoticeable. if countries one not make fair deals, they will be tariffed. is this fair when it comes to and thees rising trade war? jude: i do not think in a buddy reading these tweets -- i do not think anybody reading these tweets would expect a nobel prize for donald trump anytime soon. this is about signaling. it is aimed at xi, saying we are not backing down from our strategy, we see this as openly successful and we see softness in the chinese economy, so we have much more leverage than you

do. and so it is, if you are thinking tit-for-tat is going to work, it will not. so i suspect it is as much political positioning as it is a statement of economic wisdom. haidi: a quick chart for those playing along at home in terms of where we are at with tariffs. another $200 billion, which takes us here. donald trump had alluded to 275 -- to two adjacent to $5 billion. billion. they are in a hurry to resolve this, but is this a war of attrition, is this why we see a lack of specifics with the beijing scratching its head, asking, what can we actually do? if you are asking us to change the structure of our economy, that clearly one have them by the end of the year. jude: i think that the

indication is the complexity or non-specificity of the trump ask for china, the kitchen sink ask of demanding china fundamentally rewrite tis political -- its political economic playbook shows they are not serious about resolving the trade tensions anytime soon. donald trump is taking the anti-upping to the maximum amount saying we will put tariffs on everything that they are sending abroad to the united states. so there is a lot of disagreement in d.c. about what the ultimate outcome of this is going to be, but i think if we are trying to see the whole chessboard and we add the efforts by the trump administration in the investment front with reforms, it is pretty clear that this is an all of government attempt to remove china's centrality to the united states, and distributed

elsewhere. because of the concern of essentially enriching a competitor. w are advisinge people dig in and do not watch of the day today on this, because it is much bigger than the $200 billion or $500 billion in tariffs. haidi: a lot of strategists, i think including yourself, see this as bigger than the economy and trade relationships. that is the nature of the fight. so does the u.s. need to do more, not just cut off trade and supply chains with china, but expand into markets across one belt, one road, for example, or to get back in the tpp for this to be effective? jude: i am not advocating any strategy, but i agree. i this was aboutf bring about a more robust position vis-a-vis china, i would be engaging with all of my allies, not picking

trade fight with them, and i would be looking to counter china's moves with my own infrastructure investment plan. and i would be looking to support countries that we can essentially see as alternatives to china in the supply chain, rather than punishing them. so i think that we can expect that we will not see a comprehensive strategy on the u.s.'s part, but that does not mean we are not in for a bumpy ride for the next 12-24 months. interesting, was adding insult to injury, that the statement ends with a note saying he has in on this respect for xi, so how does this pressure in terms of it has been a well-documented summer of discontent and a big part of it has been the handling of the trade war? jude: i think we should draw a line under this question of how vulnerable xi, his political

sicker, is remarkably especially with his -- secure, especially with his control over the military, but that does not mean there are no politics in beijing. he has had to lick someone's this summer -- soeme wounds this summer. a year ago, they thought they had figured donald trump out as a businessman, and now we are looking at the beginning of a protracted investment struggle. so xi is not going anywhere soon, but i do not think we should expect there will be no repercussions for xi in beijing. shery: what about the political positioning within washington dc, because i speak to senators, representatives and analysts in the u.s., and they all tell me that eventually they will have to fix the trade imbalance with china -- does china have any allies left in washington dc?

jude: i think it is safe to say i do not meet many china doves here anymore. i think the defection of the business community, or the business community not sticking its neck up to support china in washington, they lost a valuable ally. no one believes really that the fundamental reform of the economy in china is on the horizon, and that is sustained -- has sustained allies for a long time. but the congress last year and the vocal declaration of the party's role in everything, that means china have to go at it alone. and broadly, china does not have many allies internationally either, so it is looking isolated. and if you are in the white house right now, i think it is feeding into your calculus. more pressure now, because it feels like it is backing china into a corner. xi is a strong leader and i do

not think it will take forever, and we are looking at the polite side of beijing so far, but we should expect in the next two or three months to stay with a nasty side has looked like. >> thank you for your insight, jude. you can get a roundup of the stories you need to know to get your day going on daybreak. tv is the function on your bloomberg. today, the big news is more tariffs on chinese goods by the trump administration. this is bloomberg. ♪

>> welcome back. i am shery ahn in new york. haidi: and you are watching "daybreak australia." the south korean president heads to pyongyang in an attempt to

save the nuclear talks between the u.s. and north korea, his third meeting with kim this year and the first visit by a south korean leader to the north and 11 years. our reporter joins us now. what does the schedule look like today and what do we know about what will take place over the next three days, and expectations for what could eventually happen? so basically what we are expecting from south korea today is moon in a couple minutes will be leaving his presidential palace in the center of the city and taking a helicopter to the airport. then he will take another airplane to you non--- to pyongyang. he will arrive around 10 a clock a.m. korean time and kim will show up at the opening ceremony upon moon's arrival. they will later have lunch, and then a meeting will follow.

then the joint meeting tomorrow, on wednesday in the morning, or later in the afternoon also expected between both leaders. shery: president moon taking a 200 member delegation to the north korean capital, including the head of electronics and others, could we see more economic corporation between the two countries? reporter: the economic cooperation word is the question that bloomberg news asked the chief of staff yesterday at the briefing. they were hesitant to talk about any agenda items outside of the declaration from moon, which does not include economic cooperation between the two koreas yet. they are very aware of the heavy united nations sanctions imposed on north korea. so a lot of south korean officials are hesitant to talk about economic corporation prospects within that term.

haidi: there is a lot at stake for president moon, falling approval ratings, paving the way for the next u.s.-north korea summit, if that takes place, right? >> yes, indeed. he is facing falling approval ratings, below the 50% mark, which is sort of a first in his term after facing skyrocketing approval ratings after the former president left. and moon also facing having to deal with his u.s. counterpart, having to pave the way like you said for the next summit to take place between kim and donald trump. the preconditions for that include having to try to persuade kim jong-un to hand over a list of nuclear facilities that are within north korea, to reach a credible process and commitment for denuclearization from north korea. >> thank you so much.

in seoul, following the inter-korean summit to take place in a few hours. a recap of the latest trade headlines. more u.s. tariffs on chinese goods, the president directing the u.s. trade representative to implement tariffs on $200 billion of chinese goods. and this would be at a level of 10% starting on september 24, until the end of the year. then on january 1, that level will go up to 25%. and the u.s. warning if china takes retaliatory action against the u.s., then the tariffs on $267 billion of additional imports will be implemented. president trump directing the u.s. trade representative to carry out these new tariffs on $200 billion of chinese goods. 300 tariff items have been removed from the original list.

we know the items included car seats, high chairs, the u.s. also confirming that smart watches will not be included in the $200 billion worth of new goods. on chinese this will play out as asia gets going. haidi: the question really is, at 10% is it soft enough to keep the door ajar for potential talks with beijing. we know there was one report saying the chinese said if the tariffs are implemented the talks will be off and we go back to a cold war situation. we are watching out for how the markets react as asia wakes up to the news. and trading in new zealand, we see new zealand and australia vulnerable with being very trade exposed, and expose to a slowdown in china. downside with kiwi stocks, sydni futures lackluster as well. we expect to see the aussie dollar continue to take a

beating as. we also see the dollar-yen making a move, as well as futures for the s&p dropping on these initial trade headlines. will get more analysiswe -- we will get more analysis on these latest developments, coming up next. this is bloomberg. ♪ xfinity mobile is a new wireless network

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>> good morning. i am haidi stroud-watts in sydney. >> i am shery ahn. >> i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this tuesday, shots fired. president trump announces new tariffs on china. they are worth $200 billion and go into effect next week. the news will reverberate through already wary