juliette: wrapped up in washington. they will continue friday. optimism in markets, heavily beaten down over the course of this week. the msci pacific index on track for a weekly loss of more than 3%. certainly on the front foot, the csi 300 up almost 2%, into the nikkei, as we see the yen halting the advance, losing ground for the first time, off by attempt of 1%. also a big surge -- a 10th of 1%. wti crude up 7/10 of 1% of 62.17. as we have been mentioning all week, it has been a -- week for markets.

toeign investors not willing wait to see what the latest outcome the twin u.s. and china trade talks will be. they have taken $346 million off the table per day for mainland shares, the biggest since the open in late 2016. bloomberg markets will be giving you special coverage with the increased tariffs and all the market and political reaction. that's coming up in just under an hour. midday, hong kong and beijing time. founder frank. and i will be joined by a member of the financial research. subscribers can catch this on tv on the terminal or bloomberg.com. let's move things along and have a look at first word news as we

join the fallout. force tested a second unarmed -- the u.s. air force tested and on armed -- and unarmed launch. the rocket flew almost 7000 kilometers over the pacific to an et al. in the islands -- attoll in the islands to test a robust nuclear deterrent. u.s. authorities have seized a north korean cargo ship it says was involved in sanctions violations. it was detained in indonesia and will be moved to america. the doj said it was used to transport coal to china and other countries to generate badly needed revenue for pyongyang. the true ownership was disguised to avoid suspicion. uber raised $8 billion in ipo. it sold 180 million shares of

$45 a piece based on the stock outstanding after the offer. it gives uber a market valuation of $75.5 billion, below its last private valuation of $76 billion, and far short of the hundred billion dollars touted earlier. asia's richest man sealed another deal and stepped up the fight against amazon and walmart in india. they are buying the 200 and 59 euro british toy store hamley's for an undisclosed sum. it gives them 167 stores across 18 countries. it will catapult reliance to be a dominant player in toys. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg.

the clock is ticking as they try to hammer out a deal in washington. president trump says there is a chance beijing says it is ready to hit back. >> i did get a very good letter from president xi. but they renegotiated the deal. whether it's intellectual property theft, they took many parts of that deal and renegotiated. you can't do that. fictioncalate the trade -- friction does not serve us. china deeply regrets this and will be forced to make necessary countermeasures if the u.s. puts these tariffs into effect. china is repaired. china correspondent tom

mackenzie is watching these developments. what are we looking at? how are things expected to play out? nobody is expecting deals if these continue tomorrow. tom: that is not the expectation. we're watching the clock until 12: 01, which is when we are expecting them to double. the big question really is how china will respond. they said they would retaliate. exactly what steps they take will be in focus. they could raise the level of tariffs they impose on $110 billion worth of goods, or they can take other measures. so far, no sign of that. fixed income came in stronger-than-expected. another area is pulling back on pledges they made to buy 7 million tons of u.s. soybeans., others discussed a muted

possibility of whether or not china looks at treasury holdings. the largest holder of u.s. treasuries. many see that as unlikely. another possibility for china is they reimpose tariffs on u.s. autos suspended after the detente and buenos aires. they could raise those and at toy 5% on all those -- 25% on autos. we've heard that talks will continue friday. trump said the china will paint tariffs into -- many economists say that's laughable. that's not the case. we heard the vice president of the business council saying it would be u.s. consumers paying the price. take a listen. >> 10% tariff increase would largely offset by chinese r&b depreciation, also much of the cost is passed on to suppliers and a hit on company's margins.

consumers didn't feel much of the impact. that will change when it goes up to 25%. those costs will have to be passed on to the consumer. effectively, president trump will be taxing the american consumer. tom: there is a bit of relief in markets, maybe on the back of these trump comments on this beautiful letter he received from xi jinping. might be having a phone call with the president. potentially, you have a two or three week window because the tariffs are likely to be applied to goods shipped today rather than on group to the u.s. -- en route to the u.s. juliette: how are these going to affect exporters? tom: it's going to be very significant. economists are told it will be the most significant round of tariffs the u.s. imposed on

chinese exporters. they were able to manage those, particularly with a weaker bremen be. bloomberg economics says over just 300 have, profit margins over 10%. but they were able to whether that storm. 25%, it becomes much more difficult. just 60 have margins over 25%. what additional policy measures chinese officials might be looking to be put in place to support these tariffs, which will come under severe pressure. juliette: tom mackenzie, thanks, joining us from beijing. joining us in singapore is the global exchange had of risk advisory. great to have you with us. how have you been reading the latest? you have the trump tweets and positive rhetoric. daniel: just when we thought we

were comfortable, we had a pretty decent earnings season, historically low volatility markets. and then we just get a tweet that shakes things up. what this does is changes the

you are thinking about what happens in markets if we have a trade resolution? what happens if we have a projected non-resolution? this changes the thought process. introduces a host of second order decisions, the implications. we need to think about what this means because what does this mean for prices down the road for consumers? what does it mean for the federal reserve and how they might react with central-bank policy in the future, as well? if this continues, it changes our decision from continuing to be pro-late cycle cyclical growth story into it is more of a defensive case. juliette: it also raises the question of the likelihood china will retaliate as hard as it can. it doesn't have the same firepower but a lot of people are saying this will hit some of the american companies in china. tom mentioned of the scenarios. what is your thinking? daniel: what this does is, when we think about how the reaction is down the road, how much leeway does the president have to continue along that path and continue a resolution? as we get closer to the election to keep that ability that front up i think starts to erode. the president has tied pretty closely the growth outlook for gdp in the u.s. with of the market, and the administration's

prowess. if we start to see that the affective with chinese companies in the u.s. and chinese market, that is going to put some pressure on the u.s. side of negotiations, i think. rishaad: a trade deal everybody says is imperative and the trade wars don't have any winner. that's generally the narrative. is it actually the case? i keep banging on about this. it's not knowing whether these tariffs are going to be imposed is worse than knowing they are going to be imposed. daniel: absolutely. the uncertainty makes any decision-making difficult. because we have those second-order decisions, if there are tariffs imposed, meaning does that actually raise prices quicker? does it affect the economy in the market quicker, causing central bank decision-making

different than expected? or if this gets resolved quickly, we're back to the story before, our base case. we're not backing away from it. we do think this can be resolved. story and theowth u.s. slowdown, not as bad as expected. it didn't depend on a suspended -- successful resolution right away on trade tensions. what it does depend on is not an escalation. that is something different. juliette: we'll get you to stay with us. daniel does stay with us. still ahead, commodities markets. we'll assess the markets most likely caught in the crosshairs. rishaad: plus, how the trade war is affecting thailand's most wonderful companies.

our exclusive interview later this hour. this is bloomberg. ♪

rishaad: your with bloomberg markets, counting with the trade war deadline. some breaking news concerning the world's biggest brew here. this is anheuser-busch. they are announcing it will be selling shares of its asia-pacific unit here in hong kong, an ipo taking place. something to do with selling minority stake. it looks like it could be a deal that could value the business at $70 billion. and shares with list on the hong kong exchange.

a lot of debt. the maker of budweiser coming under pressure to reduce that leverage, which it compiled onto its balance sheet. i think it paid more than $100 billion for that. what are we at the moment? 45 minutes away from president trump's promised tariff increase even though compromise could mean high tensions. we look at assets for the best chance of sustainable gains. that is the mliv question of the day. which asset amid trade tensions? daniel is still with us. whether he has any opinion on that question. daniel: i think this is a tough one. it goes back to your early question. how do we think about this in a decision-making framework where we're not sure what's happening

with these tariffs and there are very different outcomes, resolution versus protracted escalation. in our base case, we think china has legs. the u.s. equity markets are strong. and some of the best opportunities are in equity markets. reflation of the equity story was based on expectations have gotten too low. expectations for a slowdown were too great. data has come in better and we had an improvement of evaluations. what's left? most of the participation in the reflation story has come from the retail side and domestic side. institutional investors weren't large participants in the first quarter story. there is still a shift in institutional investors and a shift to offshore investors

coming into the market. rishaad: i just got to get this line through because it's not a huge surprise. the notice states are saying it will go ahead with the tariff increases one minute past midnight d.c. time, past noon here in hong kong and singapore. the thing here, this is probably a question you're asked all the time. how do you hedge against this? daniel: so, i think that, perversely, the ust does well, in this case, whether we have tariffs or not tariffs. the u.s. becomes that safe haven start to see'll u.s. dollar strength, especially effectse of the other

coming into play, like china weakening control. i think you will see some weakening still and u.s. dollar strength. i think this means we're going to see, at least temporarily, more strength in the treasury market and strength in the jpy. juliette: but weakness still in terms of the japanese equity markets. tell me why underway there. daniel: we had faith at the beginning of the year that we would start to see improvement in japanese equities. japanese equities has been one of the worst regional performers. not terrible. we're notpened is seeing the wage growth. the better earnings is not translating the way we expected to. japan and korea are the largest exporters to japan. currency dynamics are not favoring exports.

we're seeing them worse than expected in japanese markets. it's looking more like a value not seeing that improved earnings story and people are not buying into the value. it's really a capitulation on suspected improvement more than anything. juliette: always great to get your insights. you can also turn to your bloomberg for more on the latest developments. go to tliv to get commentary and announcements. this is bloomberg. ♪

rishaad: we are back and this is bloomberg markets. that's how much time we've got left before the u.s. trade war tariff deadline kicks in. at businessto look

flash with anadarko saying as it finalizes the agreement to be bought by occidental. said occidental is tapping to a 10 year low on investor concern over the deal. chevron rose the most over three months, saying they will use the theack fee to increase -- breakup fee to increase buybacks 25%. fatal dam collapse in brazil in january. $4.5 billion for the d isaster and posted a loss. rishaad: thailand's largest and most vulnerable companies seeing the heat from the u.s. china trade war, more than 20% of its revenue from global infrastructure projects. despite theng

tariffs, is confident about the outlook for his country. >> i think the expectation is that the growth will continue. last year, for example, similar demand growth in thailand is 2-3 %. that's something mainly driven by the infrastructure projects. because the infrastructure projects, most of the project we monitor have started. a lot of projects have signed w ith contractors, so on. for the next few years, that trend should continue. >> we could see the new governments emerging as early as june. how likely is it we're going to see the policies in infrastructure projects? >> i think, from what we understand, is that the majority

of the infrastructure projects have forced government agencies. at the same time, a lot of foundations have been done by the current and past government. so, the expectation is that continuity will remain. be a good that should starting point for the government coming in. >> what's the growth forecast for the company for revenue profits this year? i would sayy, between 5-10%. but because half of our business is chemicals, a lot will depend on how the chemical product prices do for the rest of the year. so far, it looks like it will not be easy to get to that

5-10%. because the product price very much linked to the global price of the chemicals. it's down slightly from the previous year. with uncertainties in terms of the oil price and chemical product price, it still remains to be seen for the remaining eight to nine months of the year on how that price will do. >> what's been the impact on the u.s.-china trade war? >> quite a bit. you know? business is very much the global markets. chemicals the global market. one china is slowing down, that impacts a lot in terms of demand of our products. juliette: that was the ceo of

siam speaking to bloomberg. let's get a quick check on markets. it is a solid session. 1.5%suicide 300 up over after this week's selloff. this is bloomberg. ♪

>> i call him rationally crazy. >> it's not just tense. it's almost existential between the united states and china. >> i would say to president trump, you're going to get a good deal. >> patient, patient, patient, positive, persistent. >> it may take more time, but he should do the proper deal. i would rather not do a deal then do a bad deal. juliette: 30 minutes until the extra tariffs come in. we are seeing pretty strong relief coming in. it's been a terrible week were

investors sold out in the chinese market. we see the msci pacific index over 3%, one of the worst weekly losses of the year. some relief coming through, some suggesting the nationals buying chinese stocks. solid by in hong kong. that is on the lunch break. half an hour until its lunch break. risk on across the board, people taking out of the japanese yen, on this solid run, off by a 10th of 1%. a risk on session ahead of the imposition of these new tariffs. minutes as the u.s. gets to raise tariffs on $200 billion worth of chinese goods. you've got market and political reactions. midday hong kong time.

let's get to paul allen with the first word news. paul: the u.s. air force tested a second unarmed icbm but denies the launch has anything to do with renewed missile firings by north korea. the minuteman rocket flew almost 7000 kilometers over the pacific to an attoll in the islands to test and accuracy in the system and demonstrate what authorities call a robust nuclear deterrent. u.s. authorities have seized a north korean cargo ship it says was involved in sanctions violations. the ship was detained in indonesia in april last year and will be moved to america. the doj said it was used to transport north korean coal to china and other countries to generate badly needed revenue for pyongyang. the true ownership was disguised to avoid suspicion. uber has raised just over $8 billion in ipo.

we're told it sold 180 million shares of $45 a piece based on the stock outstanding after the offer. it gives uber a market valuation of $75.5 billion, below its last private market valuation of $76 billion, and far short of the $100 billion that had been touted earlier. private sectors space race is heating up with the world's richest man, saying it's time to go back to the moon. he told a presentation in washington it's been too long since an astronaut walked on our nearest neighbor. he will carry a small rover on a mission scheduled for 2024. >> my generation's job is to build the infrastructure so you'll be able to. we're going to build a road to space. and then amazing things will happen. then you'll have space

entrepreneurs in their dorm room. that can't happen today. paul: global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. rishaad: investors bracing for new tariffs on china. this is after a trade standoff that has dominated headlines and economic agendas. the fx have been far-reaching and certainly consequences. president trump went on a warpath in a campaign to push china into reducing a $560 billion trade deficit. trump slept duties on goods worth $250 billion, ranging from steel to furniture and food. there were a few winners.

as steel tariffs came into force, prices climbed 36% and some producers reopened sites. apple suppliers started immigration out of china. southeast asia set to gain from china's pain. battling a slow economy, china struck back on duties on almost all u.s. imports. that ramped up the damage. u.s. soybean farmers needing government bailouts, and great markets hit a 42 year low. harley davidson saw a 58% rough it miss in the fourth quarter -- profit miss in the fourth quarter. the imf cut world growth outlook for the third time in six months to 3.3%. a bloomberg economic survey sees more tariffs shaving off 1.5 percentage points off china's growth. progress on a deal is too slow and duties are set to more than double, threatening further economic pain around the world.

juliette: our next guest advises companies and governments on the trade tensions. alex is visiting a business school and doesn't expect a deal to be announced this week. great to have you with us. you're saying if these tariffs come into effect, which is likely the u.s. said it will, all bets are off. what happens then? alex: we have to look at the bigger picture, which is the china-u.s. relationship that spills over into all areas. if we look at trade as a subset of broader context, it's really a matter of thinking more long-term, looking at how the relationship will involve and impact global value chains, ecosystems built around supplier networks, and the rise of the nontariff barriers around technology. so, regardless of what they

agree to in this round, i think for me, i would be happy to know they will be continuing talking and working. issuese substantive plaguing the trade relationship, industrial policy, the ip issues, technology transfer, i don't see china changing that or backing off. juliette: the minutia not going away. talks are continuing friday. what guests can turn an about-face in this relationship? alex: as long as there's good faith efforts to continue, just chipping away at these issues, what's interesting, and you've been talking to many in the business community, even though there's apprehension about collateral damage we might see to supply chains in supplier networks with raised tariffs, there's also this silent approval, particularly the american business community and europe in the west, that trump

is standing up to china and they've been misbehaving for far too long. juliette: certainly appealing to his base. way in the news -- while way just huawei in the news -- huawei in the news. alex: long-term tech relationships will become more sensitive. i expect more export controls. i expect sanctions on individuals and companies based on national security issues. even though the u.s. and china are engaged in trading, there's a lot of business taking place. at the same time, you have all kinds of competition going on, some of it fierce. some of it ruthless. that's going to impact how companies decide who they partner with. i would expect to see the chinese looking to cut reliance

on u.s. tech as much as possible. in that regard, they're going to be looking to europe, to separate firms and america from allies in europe to cut the u.s. out and bring as much stuff onshore in the technology area. rishaad: alex, rish from hong kong. the thing is, there is also growing feeling by the europeans they're not getting a fair deal either. is there a chance the u.s. and the eu getting together and acting as one against beijing with regard to this? the: yeah, i think despite often abrasive nature of communication and relationship with the trump administration and european allies, i think ultimately we are getting to that. comesain, i think when it to sensitive technologies, we've seen this manifest in the huawei

5g confrontation. i think that narrative has been oversimplified, but nonetheless, i do see essentially european and u.s. interests are lining, -- aligning, as well as japanese, australian, the fair trade block. the block that has a different set of framework of rules around trade and business. so yeah, i do see that alignment happening despite the disagreements we're seeing between the trump administration and europe, in particular. automobiles, etc. ishaad: the common refrain that trade wars are no good for anybody. but surely there is a winner. who is a going to be? is it really the u.s., ultimately? alex: well, i would generally

agree so-called trade wars, where you have ratcheting up tariffs create all kinds of collateral damage, so i would essentially agree with that. at the same time, for trade and business to be perpetuated, you need to have adherents to particular rules. there has to be semblance of good governments build into business practices and trade relationships. that's where the work needs to get done in the future. the other trends that we're seeing is localization, regionalization has been accelerating, and not just because of tariffs. because of technology, what can be done with manufacturing. all these laws around data privacy and localization. there are all kinds of overlapping complexities.

who wins and who loses? that's a very complicated question. some win, some lose. overall, trade war, not good. juliette: no one wins. how would you be changing your system? alex: great question. i'm looking at scenario mapping around scenarios that involve decoupling in business sectors. traditional supply chains with chinese firms and chinese networks and southeast asian networks. i'm looking at moving some of that production out of china, which we're seeing. we're seeing production networks being moved. if i'm worried about sanctions. if i'm worried about technology blockages, i'm thinking about maybe changing my partners. where am i doing my r&d? who is going to be my critical suppliers of this, and that part of the component? rishaad: you mentioned

decoupling and supply chains, which would then be used to get around these sanctions. that leads to my last question. does that also press to something much worse than this? do we look to a new cold war? if we don't get a deal, go their separate ways? alex: i think to use the term cold war, that's an outdated term. i would call it a hybrid it -- hybrid competition. it would be a strategic library that spills over into many andetitive aspects increasingly in the tech sector. so, that clearly is happening. clearly, markets and firms have to factor that into their long-term planning. they absolutely have to. they also have to recognize all

of this trade activity, that is just a small part of a much, much bigger landscape. that's going to continue. that is long-term. juliette: a landscape changing by the minute. alex, good to have you with us. coming up, we're just minutes away from high u.s. tariffs on chinese goods. we'll assess how any retaliation from china can royal commodities. this is bloomberg. ♪

juliette: india's markets have just opened. let's get to mumbai. take us through what to expect. we've seen seven straight days of losses. looks like we could have relief. what do you think? we'll be hoping for

that relief to come through. technical traders are pointing at the possibility of covering short positions, considering it is the end of the week. for now, we are looking at benchmark industries -- indices, but no more than 25% -- .25%. thinking index holding up as much as .5%. it's important to understand markets have seen very little reaction in the early part of the session. it is the second part of the session that looks at sharp cuts. traders will hope that doesn't happen today, but it is coming up and that is a positive, considering it is not as high as what we have been used to the previous days. the last of the large indian i.t. firms, announcing earnings. what were they like and how is

the stock faring? >> well, the earnings were largely in line with consensus expectations and no real surprises to the positive or negative. before now, we were looking at global cues, which is why we are seeing a 3% drop. that could be some concerns with operating margins. despite that, not too much to speak for on the whole. again, in line with what the index is doing. rishaad: thank you. having a look at what commodities are doing, under a bit of pressure, under more pressure if the u.s. and china fail to resolve trade differences. should beijing retaliate, there is a range of rumors on the firing line. soybeans and corn facing the biggest threat and indeed,

facing the biggest threat and perhaps donald trump's heartland. >> exactly. have become the poster child for this trump trade war. currently, there are 25% retaliatory tariffs in place by china. there is no ceiling. we could see these numbers increase. also, there's nontariff barriers and other tariff barriers on basically all-american farm products. this is really hurting the trump voters. and the silos have been piling up. you have seen hurling's -- earnings depress. on the foot side, there's going to be impact in china, as well. tightening supplies lead to higher prices and have led to higher prices. china isgative side, facing a deficit in corn supply.

a lot of corn planters are moving to soybeans to fill that gap. now there's a gap in corn supply -- corn supply and there will be a struggle to import any of these if they keep raising tariffs. aside from agriculture, there's also energy. placeriffs currently in on american lng. this could increase to 25%, as threatened before. and crude oil, left off the list last year, was added and then scrapped, that can be added back on. the big question will be whether the u.s. buyers, whether the u.s. sellers are going to be able to increase their market share for the commodities act to levels they were before the trade war. a lot of chinese buyers are very scared on whether they can strike any kind of long-term deal with the u.s. again with these uncertainties in place. juliette: thanks so much.

anna in tokyo. howng up, we find out chinese media is responding to the escalating trade war and ask if exporters can weather tariffs of 25%. this is bloomberg. ♪

>> 10% tariff increases would largely offset chinese depreciation. also, much of the cost was passed on to suppliers and a hit on our company's margins, so consumers didn't feel much of the 10% tariff impact. that's going to change when they ratchet up to 25%. those will have to be passed on to the consumer. effectively, president trump will be taxing the consumer. >> everybody slows down. we've seen a small negative

impact on the u.s. economy, a significant impact on china. if they go up to 25%, you're looking at like 8% off u.s. gdp and maybe close to 2% off chinese gdp. even in the u.s., they will start to notice. >> even if they were market leaders, they are starting to pull away from china. it's really having an impact. it's good negotiations are focusing on this. you've seen that change in the u.s. it used to be driven by politicians. it's now driven by the corporate side. they may not always like the tariff approach, but they do like pressing on areas like ip and enterprises and so on. just some of the plethora of use we've seen on the trunk tariffs from guests today desktop tariffs from guests -- trump tariffs from guests today. in a universe of a thousand

companies, only 300 have profit margins of more than 10%. these companies should be resilient to tariffs. of exporters would be able to withstand the bump in duties or indeed be able to bake them in. jewels? juliette: let's look at how the trade dispute is being viewed in chinese media as we count down to the new tariffs. joining us is our china's economic editor, james. what is standing out in the coverage, both online and in print? james: everything that stands out is everything we've been noticing. the coverage is muted in china. basically for all of monday and much of tuesday, there was no reporting at all about the tweets, turning to raise tariffs on china.

there are more newspapers that have had stories, but it's been very controlled and very muted. all the papers have a brief mention of yesterday's press conference, which was china's main statement on what they are looking for, but no one, except for the belligerent tablets, is stepping out of that. daily, the people's flagship of the chinese communist party. they have an editorial saying the tariffs are going to cause pain for american consumers. but there is no expression of outrage or what china should do or can do. the china daily, the main endlessly which newspaper, it's got a story about xi jinping addressing a complex -- conference, smaller about the trade talks. just comparing to what was said at the press conference with the communist ministry. there's very little discussion.

one of them is very controlled. any stand out from that is the global times, which is a very belligerent, hard-hitting tabloid which often has more leeway to say things other state media doesn't have. they had an editorial which said if the u.s. refuses to do a deal and goes into the election, it's going to take an economic hit. the u.s. will be the biggest joke if it doesn't do a deal with china. a much more aggressive tone. across the rest of the state media and the main business papers, you seem to be seeing a repeat of what was said yesterday and nothing else. rishaad: how bombastic is the tone of these tablets? if people want to find out, are there anonymous blogs they can go to? james: it's a very bombastic

newspaper. ought to tell how much this represents the real feeling and china and how this represents the editor in chief. it already has a lovely way to say stuff others don't. you assume the government is okaying that. it's very bombastic, but it's hard to tell. there are other places to go. it has more information. but as i said, it's very controlled and censored here. rishaad: thank you very much indeed for that. james joining us from the chinese capital. do watch our special coverage. live analysis and political reaction. we'll be speaking with a lead u.s. trade negotiator, frank lavin. we'll also be joined by the national institute of financial institute. juliette: and we are watching

markets. we have seen a reprieve coming through in asian equity markets. china up 1.9% after a torrid week for chinese investors. this is bloomberg. ♪

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