>> 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 markets.lready wary

the yen gained haven strength. moon heads for north korea. stalledping to revive nuclear talks with washington. shery: let's get started with a quick check of how markets closed in the u.s. monday session. we saw the downside pressure. gainsp 500 reversing 2.6%. weakness,h semiconductor weakness, the nasdaq falling 1.4 percent. amazon, apple, microsoft leading the decline. the markets closed before president trump made the announcement on new tariffs on chinese products. we are anxious to see what they were. we just got the numbers. 10% tariffs on $200 billion worth of chinese imports. implemented, going into effect, september 24. after that, we will see the terror of being raised to 25% -- tariffs being raised to 25%. president trump will implement

these tariffs. of course, may have warned china haveo retaliate -- they warned china not to retaliate. they could consider additional ones could be targeted. all of this will play into the markets. let's see how things are shaping up. sophie kamaruddin is here. sophie: the tariff plan is being interpreted as more severe than anticipated given the step up to 25%, but at the very least, there were no additions to the earlier draft list. werely 300 tariff lines removed including car seats and highchairs. smart watches will not be included, but when you take a look at what we are looking at for the tuesday session, stock losses at the start of the major market opens for tokyo as well as sydney and seoul, tracking u.s. futures lower. the nzx 50 ticky madoff, falling

.4% as of now. japanese markets are set to reopen to the downside after the long weekend. up a prolonged traits that between the u.s. and china and that has implications for a global supply chain, so with that at play, let's check in on currency markets. the dollar looking steady. the yen with a second day of gains. the aussie dollar off by .4%. the offshore yuan is back above .688 against the greenback. we can anticipate looking ahead. more pain for chinese stocks potentially after they sank to an unwelcome milestone on monday. pulling up this chart to show you some of those declines, we have the shanghai composite falling to a four-year low. it may start feeling like deja vu for investors as we are at a level that preceded that boom and bust. haidi. certainly, this is not

good news when it comes to this fragile recovery we have seen when it comes to chinese equities awaiting that open. let's get you the first word news with jessica summers in new york. supreme court nominee brett kavanaugh and the women who accused him of sexual assault when they were teenagers will testify next week before a senate panel. the hearing will be on monday after the judiciary committee to hear pressure evidence. it will delay plans for the senate to vote on kavanaugh's nomination on thursday. of the imf is warning that a new deal brexit would have cleared economic cons -- clear economic consequences. christine lagarde says she remains an optimist that recognizes it is possible that without a new trading relationship in the single market. she added that whatever the deal is, it will not be as good. deal, all likely scenario of any deal, will most

likely lead to a weaker economy. than the economy as it is now. jessica: southern china clearing up after the passage of a typhoon which killed at least two people as it moved into different provinces after battering the philippines, hong kong, and macau. the system has weakened overland. at least 69 people were killed in the philippines and 40 are still missing. elon musk is being sued for defamation by an english paper involved in -- caver. the man a pedophile. the pr stunt had no chance of working, he said.

global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in 120 countries. i am jessica summers. this is bloomberg. haidi: president trump ratcheting up the pressure on china. he is threatening even more if beijing retaliates. joe sobczyk has the latest on this out of washington. the pretty fierce statement. he said he has enormous respect for president xi. trying to keep up pressure on president xi with these new tariffs. they are at 10% now. that is designed to give u.s. businesses some time to adjust supply chains and the like. they are scheduled to kick up to 25% next year as part of the whole process to keep up

pressure on china. they have excluded some items from those tariffs including things like smart watches, bluetooth devices, thatren's car seats, and is designed to at least ease some of the way for u.s. consumers, but nonetheless, those impacts are going to be felt in a broad -- in broad areas of commerce for the u.s. it is now brings about half of all chinese imports under these tariffs and, as i said, they are going to be escalating next year to 25%. if there is no breakthrough on the diplomacy front. haidi: i suppose, if you were an optimist, you could say this is starting off with some exclusions. it does not leave any sort of door ajar for these trade talks we heard were in the making. joe: there have been some formal contacts, but not since last month. secretary mnuchin was trying to

set something up with the chinese government to have some more trade talks. china has indicated so that if a new round of tariffs kim -- though that if a new round of tears came about, they would retaliate with their own tariffs on u.s. imports, things like liquefied petroleum, liquefied natural gas, and aircraft. so there is not a real clear path towards a diplomatic breakthrough. a chancedent will have to see president xi at the end of november in argentina, so that could possibly offer some potential for a breakthrough, but right now, we are sort of at a standstill. shery: we have heard from ubs group saying that even a 10% tariff would slow it enough for the fed to halt its rate hike in december. what are we expecting to the impact on the u.s. economy,

whether it is on consumers or just the economy as a whole when/if these tariffs are implemented? joe: it will affect u.s. consumers for a wide variety of articles. it also could have some political impacts for the president and his party. they will be hitting about the electionsu.s. midterm are taking place, and as consumers are sort of prepping for the holiday season, that could cause a slowdown. much, i will leave to economists to assess what the impact would be, but it is certainly going to take some bite out of u.s. spending by consumers and raise some costs as well. shery: tell us exactly what these new tariffs are on. we have the u.s. has been insisting that section 301 on intellectual part need that china's treatment of

intellectual property has been flawed. the that is one of pressures that the u.s. is trying to put on the chinese. it covers pretty much about half of all chinese imports to the u.s., excluding those items and mentioned earlier. byt was part of an appeal some u.s. manufacturers, particularly apple's ceo, tim cook, who was a consultant with the white house, and had done some lobbying to lessen the impact of tariffs. consumersthings that regularly either want to buy or need to buy, such as infant car seats, things like that, as well as good like an apple watch. so nonetheless, it will have sort of a ripple effect across a wide variety of products that u.s. consumers are spending on. they have become quite accustomed to lower prices on it. shery: joe sobczyk joining us from washington.

diving back into the u.s. markets, jitters over a trade were already caused tech stocks to take a leg lower. su keenan has a wrapup on what we should be looking at now that the new tariffs have been ordered. now, they are out before the markets close. there was an announcement that there would be an announcement. su: typical on wall street. sell on the rumor, buyback on the news. we saw the bulk of the reaction as the market closed. we are now looking at the futures come on which is giving you your secondary reaction. it is negative, as can be expected. there was -- these tariffs have been well telegraphed. what was not completely assured was the recent adjustments that have been made to that original list that came out in july, which does appear significant. let's go to the upper board. you saw during the regular session a very big decline in apple and some of its suppliers. it is very interesting to note

that a lot of the apple products, the airbus, the smart -- sir buds, the smart watch, have been removed. apple ceo, tim cook, bloomberg is reported, met with the first lady and the president for dinner in august, and this clearly has been a concern of theirs. we talked about bicycle helmets, seats, and also important industrial chemicals were moved, so you may actually some ofsitive result in those stocks because there were concerns. take a look at the other big movers in the regular markets. some of them tied to the tariffs, some not. amazon, netflix, show you a continued decline. of then we have got a lot the pot stocks that are continuing to move as it looks like coca-cola, some of the other spirits industry, very in givingested

aligned. let's go to the after-hours real quick. we did have fedex come out with earnings that disappointed. we are going into the bloomberg. gtv is where you can find these charts. this one is called hedging tail risk, which is interesting, and this ties to the tariff announcement. the cost of protecting against large swings has jumped here. and that may very much after do with what was anticipated here. you know, this latest trade war i suppose gives gold or reason to finally rally. su: we definitely saw as it looks like we started the day, this was a big issue and it became a big issue later in the day. gold, which look at has been under 1200. it closed above that very important 1200 mark. we go to oil. the situation there has to do with, again, concern about decline and demand offsetting other issues that it has been

putting oil above the $70 mark in recent matters. remember, the concern is about the iran sanctions from the trump administration but also the drop in demand because of this conflict with the u.s. and china. >> su keenan, thank you so much for that. south korean president moon jae-in heading for pyongyang today with nuclear talks on the agenda. we will be in seoul. >> plus, how the corporate banking sector is dealing with global challenges including this ongoing trade. our exclusive interview with a jpmorgan representative is next. this is bloomberg. ♪ ext. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery on a new york. haidi: i am haidi stroud-watts in sydney. it begins in singapore today. they represent a collective market cap of over three point

five trillion dollars. let's get over to juliette saly, who is with the firm's global head of corporate banking. juliette:- absolutely. we have just been discussing the latest developments in the tit-for-tat trade spat between the u.s. and china. they give so much for joining us. it is kind of exhausting keeping up-to-date with what is happening in the u.s.-china trade relationship, but we have heard the new round of paris will come into effect on september 20 fourth. how do you invest in an unknown environment like this and what do you tell your clients? >> truly heating up, this whole subject, and if it plays out as people fear, it's going to hurt unemployment, the profitability of u.s. companies, but i also think there is a scenario that we are maybe not giving enough credibility to and that is the de-escalation and that there is a reset of the

trade relationship but that they can continue to do well. ignoring the emerging markets for a little bit, the overall world has been growing. we get overwhelmed by all the headlines in the china trade -- china-u.s. trade dispute. >> you're looking five years to 10 years ahead in terms of your investment strategy, so what areas are you looking at? >> our business will continue to grow because the world will keep growing, and international flows will keep growing. planes.and commercial 48 thousand in 20 years, just an indication of how the world will continue to become more global. that's what we are doing and corporate banking, serving companies with financial needs around the world. we will keep investing. the areas we are doing that predominantly in is our payments business and china. juliette: how do you get china right in this environment?

sjoerd: you have to lean forward. it is such a once-in-a-lifetime opportunity that i think we have to lean forward in terms of investing, so it's about people, it's about capabilities, and just sticking with it. notwithstanding some of the ups and downs that the market may have. juliette: you're based in dubai and we recently saw jpmorgan among the banks that lunch $11 billion -- lent $11 billion. we have seen quite a lot of interest coming through from the banks. it is becoming more typical, i guess, to start to see syndicated loans to sovereign wealth funds. is that going to be a trend we see continued? sjoerd: i do not think we have seen it that much, but you are raisedo say the bif has 11 billion dollars. a lot of banks see saudi as a tremendous opportunity. you talk about a country that's probably there is example like it. it will come with a lot of opportunities. there are a lot of banks that want to play. the bif has a lot of investments

internationally. they have a tremendous asset base with domestic assets, $200 billion. it makes perfect sense. juliette: what other areas are you looking at? iserd: i think emerging -- in a growth area for us as well. from russia down to south africa, that is a region that may be not talked as much about as asia, for example, but it does include 2 billion people, 70% of thes, 60% to world's oil reserves, so we see a lot of growth. juliette: how worried are your clients? you sound bullish. you were talking about the global growth. how worried are your clients about the headlines, the day-to-day moves we are seeing not only amongst the china-u.s. trade relationship, but also em as well. sjoerd: in the corporate bank, we talked to cfo's and treasurers, and they have to manage the risks they have

whether it is fx, rates, funding. that is something they have to keep a close eye on. the one that stands out for me is sort of the funding picture and how the capital markets will stay open or not in the various scenarios we may see in this unfolding of the u.s.-china trade dispute. juliette: are you worried about a liquidity crisis? sjoerd: the bond markets broadly have grown tremendously because of quantitative easing. it has gone to 57 trillion. ofis an enormous amount tradable bonds out there. at the same time, the bank community is probably less incentivized and equipped to take risks due to regulations, so you could indeed see a market where people lose faith in there will not be as much of a floor to buy. you see periods where markets strategists,nd for

it's important to make sure that they are thinking one ahead and are prepared for markets. juliette: we have seen quite a bit of retrenchment. try and get some market share amongst some of the woes of some of your competitors? sjoerd: global banking -- being present globally is a difficult game, and i think we will be one of the endgame winners, but there would be fewer than we would have thought five years ago or 10 years ago because -- s,nnecting the global dot only a handful will be able to do. as mentioned, the thing we need to get right is china but also the payments business. but it's really the plumbing of the corporate world. as banks, we need to plan important role in that. juliette: what is your strategy? sjoerd: it's all about innovation. we are pretty much a technology

company. we have 250,000 employees globally. we spent $10 billion per year. that does not necessarily mean you are successful. you need to spend it right way, develop the right tools, working hard on that, seeing what our clients need to become an to stay one of the preeminent -- and to stay one of the preeminent businesses. juliette: we have seen jamie dimon had on president trump a few weeks ago. he walked back those comments. what do you think was going through his mind? sjoerd: i cannot comment on what mind.hrough jamie's he is an amazing boss and he led this company for 16 years. it is a company worth $380 billion. he has been an amazing leader and he has made a series of very good calls on this company. very long-term view. for corporate banks, that's very, very helpful. i don't need to explain to him what we're are doing the next

three months. much for thanks so joining us at the capello hotel on the sidelines. that was sjoerd leenart. shery: juliette saly, thank you so much for that interview, and of course, be sure to tune in all day on bloomberg television for more interviews from the jpmorgan forum in singapore. we will be speaking with the jpmorgan global head of research and the banks asia-pacific ceo. if you want to get a roundup of the stories you need to know to your day going, daybreak is your function. dayb on the bloomberg. the top story today, more u.s. tariffs on chinese imports. of course, you can find the stories on the bloomberg anywhere app. you can customize your settings you get only the stories you care about. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. just giving you a recap of the developments this evening. in new york at eastern time, as is awake up, -- as asia wakes up, president trump firing the next shot in this trade war with china, imposing 10% tariffs on a further $200 billion worth of chinese goods. or crucially saying that if china retaliates against the u.s. industries, including agriculture, they will further retaliate with tariffs on the next $267 billion worth of goods. we know at that point, china essentially runs out of the runway to be able to respond on retaliatory tariffs. we are waiting to hear from beijing the coast, typically, the response has been swift. shery: we will also see how this plays out on geopolitical tensions in the region because

we are seeing president moon jae-in now south korea depart for pyongyang. this will be his second summit with kim jong-un. inwill be eight in seoul -- seoul, next. this is bloomberg. ♪ ♪

to rent a movie? showtime. or buy the hottest shows. even here? we've got you covered. now they are all yours. to take on the go. on any screen. bingo! alright! and watch whatever you buy. wherever you are. head to xfinity.com/stream to start watching. simple to rent, easy to buy, awesome to go. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers.

"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. >> it is 9:30 a.m. in sydney. we are 30 minutes away from asia's first major market opens. to be always going lackluster start to the trading session anyway. we have this next amount of tariffs on chinese goods with the threat of more if beijing retaliates. a past president is anything to fory, -- watching out reaction in the chinese yuan. australia, south korea, taiwan, among them. shery: sorry. ahn in new york.

we saw the reaction on wall street before the announcement was made because president trump said the announcement was coming so the s&p 500 fell the most in a month. it's get the first word news with jessica summers in new york. jessica. jessica: the trump administration is setting up for a long trade war with china. tempora santarus on $200 billion of imports next week and it will more than double the rate in 2019. a chance to look for alternative supply chains. president trump this china has been unwilling to change what he calls it's unfair trade unfair tradeits practices. on the eastern seaboard, torrential rain from hurricane florence forcing dam operators to run generators at full speed and open floodgates that have not been used in more than 20 years. the tennessee began increasing output last week to make room and reservoirs. the energy has been doing

same in north and south carolina. reservoirs were already at seasonal highs. former argentinian president cristina fernandez has been indicted for corruption. the judge calling for her arrest. she is accused of leading a scheme that collected bribes from business figures from 2003 to 2015 in exchange for government contracts. the ruling calls for her to be detained and for the seizure of about $100 million of assets. mastermindingd of the theft of billions from malaysia's state fund has launched a new website to innocence.s he is wanted in malaysia and singapore. u.s. prosecutors say he orchestrated the looting of more than $4 billion from 1mdb. he says he may have done things differently but he does not deserve the allegations made against him. where itstreet is back was before the financial crisis.

the average salary rose 13% last year to its highest since 2008 when lehman brothers collapsed. the new york state comptroller in 2017.rs is rose earnings were up a further 11% in the first half of this year. wall street is on track to add 1700 jobs this year. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. >> we are counting down to some of the major market opens in the asia-pacific. japan coming back online as the u.s. readies a new round of tariffs on china. we are just hearing from the u.s. chamber of commerce, blasting the trump administration on these new tariffs. sophie: when it comes to what could happen for japan today, investors return after the long weekend and the doj is set to kick off its policy meeting, so

it looks like the rising risk to growth from u.s. protectionism will loom large. it will offer motivation for the boj to shift its stance with inflation still far off from the 2% target. japanese investors will have that policy meeting as well as a lineup of data do this week to consider -- due this week to consider. it is expected to quicken core cpi and expected to rise by .9%. on wednesday, trade data is due as well. export growth expected to have risen to 5.2% while the trade deficit is widening for august. shipments to china from japan are likely to have softened. you can see the rundown of events for japanese investors on the eco-function on the terminal. ahead of this lineup, we have nikkei futures pointing lower, showing you what going on with nikkei futures come off by .4%. the yen is set for a second day of gains on the back of that

tariff announcement. also on the agenda, the lbp leadership and mentioned -- leadership election. he focus will not be on if should win, but by how much. >> sticking with politics, moon facing a key political event. he is departing for pyongyang today. this is a make or break summit in terms of getting things back on track between north korea, kim jong-un, and washington. markets feeling about all this? jessica: when it comes to whether -- sophie: when it comes to whether or not markets optimistic, pull up the terminal on the gtv library. it really depends on how you slice it. we have korean construction are rebuilding the rally that we saw that started at the beginning of the year, and that lost some steam after the initial moon-kim summit in april. of these construction stocks rallied 20% -- 28% this year.

is down nearly 7% in light of domestic economic the emd theaters around space as well as that trade tension. the kospi might need more than the summit to really get its mojo back. the sense is that unless something really significant happens like the signing of the pact, itaty or trade could be business as usual and markets may not move to much. kb securities putting out that while the summit itself is good for the kospi, potentially it is the arrest that holds the key to resolving north korean issues. and while the summit is seen as positive for the korean won, a security company said that is already priced in. chief and staff said it is difficult to be optimistic as it is uncertain as to whether there will be progress on denuclearization. haidi: certainly a feel-good event. sophie, thank you so much for that. south korean president moon jae-in is set to depart for

pyongyang for his meeting with kim jong-un. we are looking at my photos of the arab -- live photos of the airbase. we are expecting potentially a meet and greet with kim jong-un on his arrival at pyongyang airport, meeting president moon. thatll get pictures of most likely. essentially a lot on the agenda. they are hoping to revive the talks between washington and pyongyang. our reporter has the latest for us and seoul. int is on the agenda -- us seoul. what is on the agenda? korean jae-in, south president, is expected to board the plane headed to pyongyang in just minutes. he will be getting to pyongyang at around 10:00 a.m. local time. south korean officials are expecting kim jong-un himself to attend the welcoming ceremony in the airport. on theirlso expected schedule is kim jong-un and moon

jae-in will be meeting shortly after their lunch and will likely hold a joint presser tomorrow, later in the morning. that is all we have so far. viewers watching president moon jae-in come out of the building with a delegation of government officials. we know he is taking a member of a 200 member delegation, including not only officials, andalso a billionaire heir other executives from the largest conglomerates. he is about to board his plane, and of course, at haidi was telling us, he is expected to arrive in pyongyang around 10:00 a.m. this would be has third visit our meeting with north korean leader kim jong-il and, and this would be -- kim jong-un, and this would be the first leader to go to north korea and 11 years. about whatittle bit is at stake for president moon? we know that this time around, it is not just a meet and greet. he has already met with tim johnson in the past -- with kim

jong-un in the past. how can he achieve something concrete? jihye: so this pressure, like you said, on moon jae-in, not only comes from the domestic front, but also from the international front, especially for today's summit. moon jae-in is pressed to persuade north korean leader kim tog-il and -- kim jong-un hand over a list of his nuclear facilities. he did invite a whole group of media to witness the dismantling of a nuclear facility, however, analysts were saying that was not enough to prove credibility to his commitment to denuclearization because they need to invite professionals analysts to witness and see how credible his commitment is pure that is what is at stake, especially for the summit. shery: we have just seen president moon jae-in board the plane.

he is accompanied by the first lady who is going to attend pyongyang in the meanings and visit some children's facilities there. thank you so much for that update, jihye lee. coming up next, we will kick off coming up next, we will kick off our coverage of the world economic forum. the hyperloop co-founder joining us now to discuss how the company hopes to change mass movement around the globe. this is bloomberg. ♪ bloomberg. ♪ ♪

>> we are counting down to asia's first major market opens this morning, and what a morning for japan to rejoin trading after the public holiday yesterday. are actuallyres pretty resilient, all things considered. we have a bit of a bounce when it comes to trading in the yen. the safe haven play a bit up for gold as well. a pretty temperate reaction so far. all things considered, it was always going to be a soggy day

when it comes to asian trading anyway. watching out for the chinese reaction, in particular the reaction to trading in equities as well as the yuan, particularly if beijing is seen to respond. this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn. over 2000 delegates attending what is known as the summer davos. , will you be empty talk about anything other than trade this morning? steve: we do want to talk about other things other than trade, but of course, given the action coming out of washington, d.c., on those additional tariffs against china, that is likely going to dominate a one over what they cal -- day one of what they call the summer davos. as welloing to talk about the future of transportation, and that is the hyperloop technologies, and we

have the chairman and cofounder of hyperloop transportation .echnologies thank you for joining us here. >> thank you for having me. steve: i have to start with the overall umbrella issues that are affecting everyone. you are a u.s. based company out of los angeles. how does this dampen the mood for investment as you have signed an agreement with a chinese company to build out some of the hyperlink technologies here -- hyperloop technologies here? bibop: our technology is so advantageous in terms of ability, that we can actually navigate along with the problem is that this is leading us. in reality, we are here at the forum to announce the first important move for commercialization. we were the first company to have an insurance on the hyperloop system, and today, we announced that we defined with our global partners the 11 countries that we actually

signed deals with. the framework for regulation -- right now, we have the days to create regulation on the hyperloop system. steve: you have this partnership an inspection company and also on the insurance side. bibop: exactly. this was very important because these are two of the biggest market leaders in the field, and it demonstrates that all the countries, they are working on it already to actually regulate the hyperloop. they are aware in this meeting there were representatives from the u.s., china, ukraine, europe, uae. so all the stakeholders are finally on the table to discuss regulation. steve: how close are we to having some sort of commercial rollout, in china in particular? you have a most recently a companydeal with

down in the south, which i assume is part of china's belt and road initiative to get transportation links to one of the poor regions of china. bibop: it is one of the most poor regions, but also one of provinces.-growing it is a province that the majority of the chinese tourists in china -- they are very excited because at this moment, we are passing from a theory to actually implementing the first commercial line. we have a complete prototype, infrastructure in france, and we are ready to develop the technology and rollout several accounts. we have 30 commercial lines coming out. steve: what are the biggest challenges? there have been some naysayers, if you will, because of terrorism threats and the cost. how do you overcome these hurdles? bibop: when you look at the technology, actually, the technologies that allow us to overcome this problem, we are already there. we actually integrated technologies that allow it to

resist 9.2 on the richter scale. we are the safest thing designed on the ground, and hyperloop is so very efficient in terms of costs. we can be extremely more efficient and cheap than anything else in the markets. that means that we are cheaper to build, but most importantly, we are cheaper to maintain. we can recoup the investment and eight to 11 years. steve: what will be the criteria for the victor in the space? you have elon musk, which floated this idea about six years ago, so there is others. the canadian company, a number of different companies, trying to make the standard. the first and original company that brought this technology to the market. we also own the brand hyperloop in 57 countries. because we own the system that actually allows us to basically

tosume 1/10 of the energy move our capsule, but the real advantage is our model. the partner locally with the best and the brightest companies in mind locally to actually system.t, maintain our so we are licensing technology to existing partners on the ground, and this gives us a very agile -- steve: how do you license to partners on the ground when the technology is so new that they do not have expertise? bibop: we have the expertise and we put together the partners. we teach them how to build it. steve: how about financing? what stage are you in? i know there was a few years ago, you talked about an ipo, but is that too soon? we realized that actually the moment for the ipo is when we have one system up and running. our crowdsourcing model allowed us to actually raise it

organically. we are finishing the round to build it in abu dhabi. i think after the first one that we build, the five kilometers in all but i'll be for 2020, we will be proceeding with models. steve: so in abu dhabi, it will be the first one, in 2020. will that be mostly for goods? bibop: it will be passenger and goods. steve: you have a test tracking both incidents? -- in france? bibop: a prototype, the first real-skill prototype. it will be showing the first passenger capsule next month. steve: bibop gresta, good luck to you. elon musk said this is the fifth mode of transportation. we will see if this gets off the ground. bibop gresta, chairman of have really -- hyperloop transportation technologies. haidi. haidi: thank you so much for that.

looking forward to more great conversations. stephen engle for our summer davos, as it is popularly known. steve will be sitting down with the likes of the european commission vice president and plenty more conversations coming from the city, so you do not want to miss that, particularly as we get closer and closer to the brexit deadline. let's take a look at some of the stories trending across the bloomberg universe. on the terminal, rapidly climbing, lose on -- news on the trade tariffs. isbloomberg.com, one feature grabbing attention, telling the story of an online lender in north carolina. of cloud to keep working through hurricane florence. out, the stories trending on the bloomberg, online, or on the terminal. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. quick check of the latest business flash headlines. wealthrabia sovereign fund is to invest more than $1 billion in the u.s. electric carmaker, having already taken a stake in tesla. it clinches crucial funding for the company to make its first model in 2020. it is years behind schedule in building a plant in arizona to begin producing the car that is set to start at $60,000. investmenttar authorities said to be in talks with china's biggest online lender. it is discussing buying a minority stake in the insurance unit. up to $1 billion cost. a deal could be announced in the coming weeks. india is considering merging three state-run lenders to strengthen its debt-laden banking system.

the minister recommended combining two of the banks. the merged entity would become india's third-largest lender. than struggle with more $210 billion of distressed debt. shery: spacex is about to reveal the name of the world's first private astronaut to join the trip to the moon. expectedncement is monday evening and california and the only clue it has so far is a tweet about a flat. story.ocencio has this i heard it was an emoji of a flag. ramy: the japanese flag. elon musk did say this to tweet reply, so why else would he put things?g versus other

let's give you a little bit in terms of what we are expecting in terms of the details. at the top of the next hour, 9:00 p.m. new york time, 6:00 p.m. california time, which is where they are, we are expected to hear who that person is, that name there. there are no other flight details, but on spacex's twitter account, they are seeing a couple things at least over the past few days, so they are saying it is an important that towards enabling access for everyday people who dream of traveling to space. something along the lines of the of theeavenly ideas nice, heavenly ideas of a final frontier kind of thing here. what elon also did a little bit of an homage on his own twitter account, saying spacex would not be here without nasa, as we head towards what is really this historic occasion in terms of first. elon musk did say not one but two people are on board, saying that maybe they would do a week long flight to the moon and back, and that they would not actually be on the moon itself

but just loop around it and come back. already paid a significant deposit and they are entering this with their eyes open, knowing of course that because this is a first, that there is also some risk. to about one hour from now, and we will know the name of the first private passenger for that trip around the moon. absolutely extraordinary. it kind of makes our vacations look a bit basic, doesn't it? [laughter] haidi: in the meantime, elon musk getting drunk down to earth with the defamation lawsuit. ramy: the case is alms worth -- is vernon versus musk. theight remember him as english cave diver that must called a pedophile. ins is all headed to court california, filed in a federal court case. he also went further and said, you know, that he thinks there is more in propriety.

-- impropriety. musk's companies did decline any comment, haidi. haidi: certainly on the ugly side of elon musk on twitter that the management on twitter are looking to get past. marketount down to the opened in asia, sophie taking a look at some of the potential movers today. sophie. we will havemy: apple suppliers hot on the radar . this as the watch and airbud products that were spared from the new tariffs. takeda received approval for its acquisition of shire, the biggest do i'll by takeda -- acquire by takeda.

shery: what a time for japan to come back online. that open with south korea, next. this is bloomberg. ♪

haidi: good morning. asia's mate -- major markets have just opened portrayed. shery: good morning. sophie: welcome to "daybreak: asia. ♪ president trump turns up the heat on china. billion of tariffs on goods. asia has threatened to respond in kind. futures's -- they

fell on the news. all this willow play out in asia markets. sophie: not a great day. trump all in on tariffs. the nikkei 225 is off by 2/10 of a percent. softbank dragging on that benchmark. asian stocks tracking u.s. futures lower. the second day of gains, trading around 111. the offshore you want is being -- yuan ist 680 being pushed about 680.

the aussie is looking pretty vulnerable. one group dropped $70.20 over this backdrop. we are seeing some moves in the u.s. 10-year yields. trading about 2.97% so far at the start of trade. president moon is making his way towards pyongyang. >> thank you so much. let's get you the first word news with jessica summers. : president moon is on his way to pyongyang on a mission to revive nuclear talks between the united states and

north korea. it is the first id south korea leader in 11 years. kim is touching for a peace declaration with the united states before taking steps toward dropping the nuclear program. warning af the imf is no deal brexit would have economic consequences for the you take economy. lagarde recognizes it's entirely possible that britain could crash at of the european union next march, and without a trading relationship with the single market. any deal, all likely scenarios of any deal, will most lead to a weaker economy

than the economy as it is now. >> southern china is clearing up after the passage of a typhoon that killed at least two people, after battling the philippines. than the economy as it is now. >>it is still forecast to bring heavy rain and strong winds throughout tuesday. 69 people were killed in the philippines and about 40 are missing. 12 rental brain from hurricane florence is forcing hide -- to rrential rain from hurricane florence is forcing hydroelectric operators to open floodgates not being used in -- that have not been used in 20 year. reservoirs have already hit seasonal highs. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. isthe trump administration

setting the stage for a prolonged trade war with china, with about $200 million worth of chinese goods. raising the rate next year to 25%. joining us now is our senior international editor jodi schneider. let's start with you. the reason for this 25% hike is to give the united states time to adjust. will this be for u.s. and chinese firms to adjust to these new tariffs? company --ons for a in costs go up and down all the time -- input costs go up and down all the time. an option is to pass this to the customer.

what option increasingly discussed is trying to avoid china altogether and uprooting the supply chain. it will become an option for companies lower than the value chain. shifting supply chains will not be easy. i think there is a bit of an approach for china. if we negotiate a deal, we may hold off 25%. retaliate, an additional 267 billion dollars of tariffs on chinese imports. we have heard items have been spared from the terrace? -- tariffs? 300 items were on a

preliminary target list in july have been taken off. a few industrial goods. bluetoothes and devices, and also some children's products, and bicycle helmets. more consumer-oriented, for the most part. some companies said around round of tariffs like this would start to hurt consumer spending, because prices would go up. there are still $200 billion worth of goods on this list. the narrative in washington hiding the news when it comes to china, which is also facing its own slow down.

to play outlikely when it comes to regional growth , in terms of how sensitive the regional supply chains are? across east asia, deeply chain,d, is the supply especially in the tech sector. threat of more than doubling the tariffs. some of those higher value have significant disruption. malaysia and thailand into vietnam could benefit in the near term. remains anyicture shift in the supply chain is probably negative for economic growth and trade. this raises the question as

to what policymakers can do? the inflationary impact of tariffs on the united states the u.s. is planning to stick to the track. we just had a line out from the securities general in china. we'll hand be forced and having to ease further? china has had this domestically engineered slow down. we are facing this pressure on the trade front. the manufacturing sector is still crucial in terms of employment and revenue .eneration

china is making sure banks aren't lending and small into medium-sized businesses are getting money. they make sure that cash is standing by. they want to dig in for this trade dispute. to be parties in a consensus that something needs to be done to fix the unfair trade practices with china. tell us a little bit about the political landscape. is a sense there needs to be something done about the trade gap. there is a lot of pushback against these tariffs. republicans and democrats on capitol hill are delivering it. for the concern

regional economies. soybeans have already been affected by retaliatory measures from china. this could play out politically and have a backlash on the public in canada, something president trump is trying to work against. he wants to help republican candidates in the midterms. some republicans are running scared as a result. on capitol hill, they want to do something, but there is a lot of pushback on the tariffs. trump is listening to the trade talks in the administration and going forward with them. >> thank you very much for joining in on the conversation. we are looking at plenty more analysis on trade, coming up. the latestcuss implications of china's latest

tariffs. talk about short seller research saying one company's shares are worth nothing. this is bloomberg. ♪

"daybreak: asia." asian stocks were flat on tuesday after president trump announced plans to expand tariffs on chinese goods. juliette saly is standing by with some analysis. juliette: i am here with the jpmorgan global head of research. we have been discussing the latest headlines we got in the last hour and a half about new tariffs coming in and the impact of market sentiment.

seeing a bit of market action in asia, but u.s. futures are starting to drop. how worried are you with this continued escalation in china over trade? >> i don't think the trade tensions are going to go away. the u.s. is going forward, even if they just want to get a better trade deal. this will be borne by a emerging market currencies and base metals in particular. we are looking at what trade negotiators apply between the u.s. and china, and nafta. impact to the the u.s. economy, there has been concerns -- has been concern within the red state, like soybeans. but you don't see an impact to u.s. economic growth?

>> not too much right now. we saw 3% in the second half of the year. then trends go back to 2.5% next year. repatriation,rate also share buybacks, a record of over $700 billion in the equity markets. the effects of the u.s. economy are very minimal right now. juliette: do we see a more sanguine president trump come november? joyce: it is very cyclical for it depends on -- what the level of victory is. if democrats come into the house, they are more anti-trade.

i don't think this gets rid of the trade tensions. jpmorgan has a forecast built on technicals. we could see another global recession by 2020. that two of impact is jobs in the u.s. market and currencies? recession mayk of go up 50% or higher by 2020. it is around 17% right now. that is based on the deficit, which goes up to 5.5% of gdp next year, and we may have seen the high point of growth, and we are also at record low unemployment and we have wage growth and profit margin pressures. these will also have an impact. quartersxt couple of --

>> a 20% drop to u.s. equities in your model. a 40% drop in em. where are we going to see that downturn hit hardest? we have already seen this in turkey and asia. there could be a 15% market correction without a recession. i don't think anyone should be too surprised if there is a selloff. you also have momentum traders in the marketplace that make the drawdowns much more volatile. we are considering how much is already priced in. do you begin to see some of these trade tensions hit asia more hard, with questions about the supply chain? impact onore of an nafta? down more are coming

into the mid 60's over the course of the next year, with a 40 year high. what the market is looking for is there is some type of breakthrough between the u.s. and china trade talks. the u.s. is looking at technology transfers. they are looking at a political relationship. the issue is going to be with us for a while. much of an impact does this have on the chinese? chinese have a bit of an impact, but this stabilizes growth around the 6% pace. when you look at the sectors, everything seems to be quite balanced in china right now.

a .5%. growth at around it will stay in that range. juliette: where do you see opportunity at the moment? joyce: we are overweighting u.s. equities right now. there is a very strong outlook with earnings. you will still have u.s. exceptionalism. we are along the funding currency right now. curiousaking a more call in emerging-market equities. the index in turkey is only 1% of it. china, we see value in the health care sectors and education. it is always the glass half-full, isn't it? is joyce chang.

>> always the optimist. juliette saly, thank you. hour, juliette will also be speaking to the jpmorgan asia-pacific chairman and ceo. be sure to catch that conversation. more on president trump's trade war with china. conversation with a former u.s. trade representative. this is bloomberg. ♪ s bloomberg. ♪

is daybreak: asia. president trump is following through on his threats on $200new tariffs billion worth of chinese imports. they are going to be going into it effects next week. i asked an obama era trade

representative what he thinks. >> for those of us that are hopeful, that we can avoid a we will keepwar, thisingers crossed that routine might bring china back to the table. been surprised at the wavy the nafta trade talks have unfolded, with a bilateral agreement on the table? i don't know that i can say im surprised by what this administration does anymore. this is not the only administration that made a commitment to modernizing nafta. a u.s. tradeed commitmentive with a

to modernize nafta and we did so through the tpp. administrations, we have shied away from the blunt instrument of threatening tariffs because they are ultimately taxes on u.s. businesses and consumers. day, whateverthe the administration comes forward, whether it is with nafta or our resolution of grievances with china, we will have to judge them by what we have. 100%gh nafta, we have a tariff free trade in north america, which is the most successful in the world and we have an agreement that cuts that in half? that is not something most farmers, manufacturers, service providers and innovators see as a good deal. wouldn't this be the best

time for the united states to change partners behavior, especially when the library shows you the u.s. economy performing well? we are talking about gdp, payroll, industrial production. when would be the private states 's best time to come to an agreement and push for a change in the trading dynamic? wanted: you could argue it is always a good -- on: you could argue it is always a good time. in 2008, trade was seen as one of the most valuable told to help jumpstart our economy. tonomies did not have budget. right now, our economy is doing well. it is incumbent on the leaders of our country to play the long

game and look down the road to where our economy could be years from now. that, you can ignore that's 95% of the world consumers live somewhere else other than the u.s. and a thoughtful trade policy that gives us to these new markets while protecting our intellectual life blood is a smarter way to cope. we should be focused on the future. we want to make sure we continue economic growth. we also want to share it with american workers and families. kirk speakingn to us before this announcement of the latest round of tariffs. >> we are waiting for more of a market reaction. just taking a look ahead in terms of china, we have the

benchmark for chinese stocks trading at its lowest since 21st -- 2014. we are also looking out for some pressure when it comes to the yen as well, with dollar strength. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

\ we are key really watching for reaction when it comes to investor sentiment. the end of this year are potentially being raised to 25% on $200 billion worth of chinese goods. we are waiting for that response from beijing. sydney.di in shery: we are already seeing u.s. futures react to those headlines, down 3/10 of 1%. let's get the first word news. jessica: the trump

administration is sending up a prolonged trade war with china. it is slapping a 10% tariff on $200 billion worth of imports next week. the delay in tariffs jumping 25%, which will give businesses a chance to look for alternatives. president trump has been willing to change what he calls unfair trading practices. the trump administration is lowering the cap on refugees allowed into america. to a historic low of 30,000 people for the coming fiscal year. is down from the maximum 45,000. likely get support from trump's base, while also attracting criticism. launchedsite has been

of aoclaim the innocence suspect who best rated the looting of millions of dollars from 1 mdb. wall street is back where it was before the financial crisis. the average salary rose 13% last 2008.to its highest since to 420 2000,se $500 in 2017. earnings were up 11% in the first half of this year. wall street is on track to add 1700 jobs this year. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg.

it is time to get a check of the asian markets and see how they are shaping up. sophie? sophie: asian stocks are trading mostly lower. futures are coming through in japan. the nikkei 225 adding 4/10 of a percent. financials and consumer staples are hoping to offset the drag we have seen from telco. the dollar is getting a boost from the tariff plan. u.s. futures are nudging lower. copper is sliding by as much as 1.5%. the aussie dollar is under pressure. markets are pricing in a weaker chinese economy. tariffs are layered on top of existing economic headwinds for china.

finding a pass out of this will be difficult for chinese leadership. the korean yuan has given up gains made over the past week. check in on some stocks we are keeping an eye on. we are keeping an eye on exporters in japan. are up by 2.1%. one tourism stock is fighting for the bestth -- close since july 6. tpg did flag headwinds from the national broadband network rollout. haidi: thank you. staying on the markets, hong kong's sintech has denied allegations in a report by a

saying itompany, contains malicious speculation. is the coo of chong sing. you say you guys are not a bunch of matter -- mavericks and you know how to jam on the brakes when necessary. what do you mean by that? how does this fuel strategy? >> we manage a financial institution. we want to deliver consistent performance adnd manage the risk profile of our positions. that is what we are doing. the board reviews the market environment at the beginning of the year. we decided to scale back on

lending. year on year, payment related services have grown by over 100%. haidi: i will get back to some of the regulatory issues in china. this is not just the short alser report but anonymous -- not just a short seller report, but anonymous research has been coming out with similar issues. explanations have been unsatisfactory, they say. why should investors be assured by your rebuttal? the question being asked is the million-dollar question.

we have been targeting hong kong capital markets to make a profit. we view this as the passage toward becoming better and bigger. there are a number of different , in five different at byictions, looked regularators. -- regulators. the report did not include that the company was included in the msci. july, we have in been included among the top 200 hundred billion dollar revenue companies in asia. the allegations in this case are

baseless. within 24 hours of publication, we've issued a clarification report. we have not even gone into suspension. you have said the proceeds from these loans was not even used to inflate the value of shares. how were these proceeds used? the reports were designed to mislead investors. 48% of weshare back, in 2016. founding shareholders had a limited number of shares. in the normal context, we've given options for founding shareholders to have a put

option back to the company. 2107 was a great -- 2017 was year.t disclosed in the 2016 numbers were the options to place the remaining shares to the company and all of those were in our clarification report. the short-sellers have attempted to try to mislead readers. >> would you say you have enough cash to satisfy your short-term liability? allowed to not disclose insider information. our financial position reflects we should be able to cover our cash needs in the company. haidi: have any of your creditors tried to reach out?

phang: we have spoken to a number of people. we have shared with than the current positions. current positions. shery: can you clarify there are no connections to the counterparties featured in these various transactions? one shareholder came into the company with a vision. he endorsed my leadership in terms of professionalizing the management of the company.

another shareholder owns a chinese state-owned enterprise. both of us -- both of them have given us cash for us to grow. 2018, we havejune over 81 million users. we offer electronic protection. we are valued at over a billion u.s. dollars. mr. zhang is one of the 12 directors on the board. the allegations in the short sell is groundless. disclosedhas properly findings in our reporting since 2013. behind thetand

credibility of the companies affected in some of these transactions? >> of course. every single transaction we enter into, we have a 12 member board. related party need to gos will through the independent followed by an endorsement by the board itself. in 2018, the board reviewed every single transaction. every single public statement we put forward, we have to get the

local counsel to verify them -- council to verify them. endorsed by the board before we can publish. >> we appreciate your time. ceo of chongt, sing holdings. looking at live pictures as the crowd awaits for president moon at the korean summit. he is trying to shore up relations between washington and pyongyang on the nuclear disarmament. president moon and the first lady lady are due to arrive eminently -- imminently. north expecting the korean leader to be meeting him there over three days.

this is bloomberg. ♪ omberg. ♪

haidi: this is "daybreak: asia." shery: let's head back to the world economic forum. correspondent is with the man in charge of the european union's financial stability and capital markets. >> this is day one of the world economic forum. newsflow coming out of washington dc, with a new round of tariffs going to be imposed on chinese exports. what does this do for the global financial system? let's put it to the european commission vice president. thank you for speaking to us. what are your initial thoughts?

we thought this would come down the pipeline. what does this do to risk appetite and financial stability in the world -- euro financial stability in the world? we expect economic growth in the range of 2%, 2.1% this year and the next. these kinds of trade conflicts and raising downsize risks to the economy. i expect this will have negative effects on the economy. >> how do you see this effect and -- affecting e.u.-china relations? are you encouraged by pledges for market access and openness? authorities have

announced for reforms for market openness, including in the financial sector. we are encouraged by those signals. important is implementation. what kind of things were being talked about? aldis: we were concentrating on markets opening, with more sectoral approaches in different sectors. this seems to be going in the right direction. see theseem the -- practical improvements for the european financial sector. we also want to touch up on trade. it's important in this situation we are raising trade attention

to multilateral, rules-based approaches and to be preserved the wto. >> did you get any indication that china could use market access as retaliation against america? dis: this only came this morning. we are worried about the unilateral approach the united states is taking on thrade. that the euroorts must be strengthened and bolstered to become on par with the u.s. dollar as a global currency. what concrete steps to you see being taken in that regard? valdis: we announced the work toward strengthening the international role of the euro. there will be communications on

this by the end of the year. we are working on this and looking at different areas for international trade, what this means for payments and preserve reservees -- currencies. >> brexit is coming hard and fast. there are fears it could lead to the hard brexit. -- reportsbeen some that emergency legislative proposals have been made. in case there is a hard brexit andhat is being put forward being discussed by the e.c.? ondis: we are concentrating reaching agreements on a withdrawal deal with the u.k. hopefully we are able to do so in the next month or so.

we are also creating preparedness notices of also mary and global supply on the e.u.s -- pr side. >> contingency plans are being made for a hard brexit. french officials are telling us talks are extremely difficult. do you see if that way -- it that way? valdis: what still needs to be dealt with is the question of the irish border and how to , andct previous agreements what implication this has for the u.k. in terms of customs? >> what about clearinghouse supervision?

that is another hot button issue right now that has seen a lot of attention from the likes of mr. jehan carlow -- mr. giancarlo. is there anything being proposed that would change your mind and others in the european union, that you don't want to go ahead with a plan to continue oversight of overseas financial institutions? valdis: we have had proposals on supervision already. with the to discuss parliament and european union member states. i met mr. giancarlo a few weeks ago to discuss those issues. we can find a balance to solution.

-- balanced solution. we also need to be able to a dress coming from the ccp -- address risks coming from the ccp. have been a lot of high profile cases of late. how much do these new cases pose to financial stability and new risk. -- new risk? are more cases on the horizon? we look at e.u. rules and money laundering directives. the application of those rules is posing problems. in the -- the last european sommission came with a prop

-- proposal to strengthen the role of european banking authorities. >> the rules have failed us? >> that is why we came with a new legislative proposal. >> thank you for your time. coming up in the next hour, we will be talking with the hong kong financial secretary. you,: stephen, thank joining us from the world economic forum. hash korean president moon just arrived for his third meeting with the north korean leader. we will be discussing everything from denuclearization to inter-korean relations. this is bloomberg. ♪ ♪

shery: you are looking at a live shot of pyongyang airport. we are waiting for president moon's arrival. the plane carrying the president and the first lady as well as a number of business representatives from major korean corporations for this trip. they will be addressing everything from the growing nysiness ties to the thor issue of progressing talks between washington and pyongyang over nuclear disarmament as well as regional strategic issues there. we understand the president moon

and kim jong-un will be meeting a number of times over the course of the next three days. the first lady will participate in some charity activities as well. ofwe await for the deplaning the president. we're looking ahead to some of the cultural as well as strategic aspects over the next few days. you have got to wonder whether expectations need to be managed, despite the good feeling as he goes into this visit. >> a historic visit. the first time by a south korean leader and 11 years headed to north korea. the third summit for president moon. the china open his next. this is bloomberg. ♪

>> it is almost 9 a.m. in hong kong and shanghai. welcome to bloomberg markets china open. rishaad: turning up the heat on china. new tariffs on $200 billion of goods going into effect next week. >> and beijing has threatened to respond in kind. washington warns it will trigger even tougher additional measures. yvonne: the dollar headed higher while the yen saw some haven strength.