paul: welcome to daybreak australia. i am paul allen. shery: i am shery ahn. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering, china blames the u.s. for the trade war and says it has not made america great again. morgan stanley sees a recession in a year as the dispute deteriorates. a big day of data for down under with the rba's latest house

prices that could tip the balance on how they cut interest rates. shery: let's see how we are setting up for the asian open with u.s. futures kicking off trading. china blaming the u.s. for the collapse of trade negotiations, we see futures under pressure down .5%. china also said it is investigating fedex and considering blacklisting some firms they say damage the interest of domestic companies. take a look at how u.s. markets closed on friday. it was the worst month of the year for the s&p 500. carmakers down about 4% on tariffs news, the president also threatening tariffs against mexico. we saw the dow falling for a sixth consecutive week, the longest since 2011. yield, 2.1%, treasuries continue the rally for a fourth day over concerns from the economy. trade tensions continue. but see how asia is -- let's see

how asia is setting up. open,pointing towards the abit of a mixed bag, it is finish in the u.s. startedand has not treating yet. you see friday's close. nikkei futures traded out of of 1% ina third australia, futures on the asx pointing south .4%. big day in australia, we have the may house price, pretty closely watched in the context of the reserve bank of australia tomorrow with the rba widely expected to adopt and easing price. kospi futures pointing higher which is curious considering that countries exposure to the trade war. the last few days the korean markets have been up. let's check in on first word news.

chinesetart with the defense minister saying the military will take action to defend the claims over taiwan and the south china sea. speaking at the shrinking low security -- shangri-la concerted -- what he calls limited defense abilities in the contested south china sea. they also issued a warning against external forces. >> china must be and will be unified. we must be unified. be any excuse to do so if anyone dares to split taiwan from doing so the chinese military has no choice but to fight at all costs for national unity. su: in germany the leader of german chancellor angela merkel's coalition partner is stepping down. the social democratic party will resign after removing the

party's backing following a big defeat in the european parliament. the leader played a key role in the coalition and her departure could come -- cause her party's exits. merkel could lead and -- a minority government or face a snap election. in the u.s. sake -- secretary of state mike pompeo says the trump administration is ready to negotiate without conditions but iran's foreign ministry say these don't demonstrate a change in policy and washington needs to be corrected. an iranian military has warned the u.s. forces operating in the gulf work within range of missiles. some indian lawmakers are reporting potential economic crisis after president trump followed through on previous trips to terminate india's designation as a developing nation. this would eliminate the exception that allowed india to

export 2000 products to the u.s. duty-free. organizationade said exporters could lose $260 billion. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. shery: china said it is willing to work with the u.s. but blames the trump administration for the collapse in talks. they say they won't be pressured into concessions even as they ramp up retaliation. tom mackenzie joins us more -- with more. what exactly is china planning to do? tom: there has been a flurry of activity in beijing as china lines up at six months -- its response to the latest tariffs, those sanctions against huawei, most recently sunday.

we got this white paper issued by beijing. we had the vice commerce minister coming in on this, china's officials putting out their position on the back of the failed talks and explaining why they think the talks collapsed, blaming the u.s., reneging on previous commitments, saying an outline of damage they think this is happening -- having on the u.s. corporate and also u.s. consumers. when it comes to the talks, chinese officials saying the u.s., when they were presented with an inch, they took the yard. chinese officials say if you want to get any deal going forward you need to have the u.s. walking back some of its demands again around things like agricultural products, also saying that in terms of future deals it has to be mutually beneficial and benefit both sides and say ultimately tariffs

need to be removed if you want china to sign up. really hunting the ball back it -- punting the ball back into the u.s. court and also outlining damage from the tariffs are they say they are ready to negotiate but the gap --ee decides remains fast remain vast. a willingness to negotiate but in the meantime still the gloves seem to be coming off. how has china retaliated? tom: there is a white paper putting out its position on sunday. they took a number of other measures including of course increasing the tariffs as they had plans to do, retaliatory tariffs into the chinese markets. that happened june 1. the tariffs were raised on 2400 goods from 10% to 25%. the tariffs are now firmly in

place. another interesting move from the chinese side was putting out something called an unreliable entity list which gives chinese broad scope to punish and take action against companies that it sees as opposing national security mix -- risk or discriminating against chinese companies. this was a form of retaliation for the sanctions put in place over huawei. one example was fedex which is being probed in china. this over the delivery of packages from huawei. fedex is facing an investigation and state media saying other u.s. companies could face similar actions again as a result in retaliation for the sanctions and cutting off supplies and components to huawei. a number of steps china has been putting in place and we heard on friday officials have drawn up a plan to cut off exports of rare

earth to the u.s. market if indeed the central government and leadership go down that route i want to take that measure as they are ready to pull the trigger on the plan. -- if they want to take that measure as they are ready to pull the trigger on the plan. paul: the trump administration doubling down on its threat of tariffs on mexican imports. let's get more with amy stillman joining us from mexico on the phone. in washington bloomberg news editor ros krasny is with us. what has been the president's sank in? the news ros: president trump had strong words for mexico over twitter both saturday and today and said the time is now action, not talk. they accuse mexico of taking advantage of the u.s. for decades.

a very interesting intertwining between the goals that are supposed to be on the table for this action which is border security and the migrants across the border with some of the president's other goals including moving factories back to the u.s. and throwing in illegal drug action. he is lumping them off together even though he has made the simple about the border. there are talks coming up this week, not clear how this will go and of course president trump won't be here for them. amy.: let me turn to you, our following president trump -- so far helopez and has done everything by the book not to confront president trump. what was his response to these tariffs? amy: exactly. i am at the airport, the mexican president just left. he was in tabasco to inaugurate

construction work for his seventh refinery of mexico which he says will lead mexico toward the road of energy self-sufficiency, and it was timely given all the remarks out of the white house. of course president lopez over has continually called for dialogue. said thee event, he people of mexico are friends of the united states and the resident wants to continue being a friend to president donald trump, but he did point out above all the friendship was between two people. he said previously international arbitration could be an option and perhaps a less conciliatory tone, he said mexico is not a colony.

we could see how that progresses once we see how talks go this coming season. a conciliatory tone being struck in washington. what is mexico hoping to achieve? mexico is hoping to achieve dialogue. obviously they are working to detain more central american migrants. fact we saw from preliminary statistics the numbers doubled in may. it seems to be the case the government is taking current action to appease donald trump. on the other hand mexico is also in the process of an austerity prostate -- policy where budgets are being plastered across the board and one of those is for

the agency responsible for migrant detention. you could see some movement in that regard, perhaps increase in spending or dialogue but nothing has been spread. -- nothing has been said. what is the u.s. trying to achieve what these negotiations? ros: not a lot of time, this is coming together quickly. acting chief, the of staff, said what the u.s. wants from mexico, has been left deliberately vague in his words but it could be the u.s. wants the fieldoal posts on as a mexico knows what it needs to do to have the tariffs rolled back or stop them from accelerating month by month. making mexicoout a safe place for central american migrants to seek

asylum, if and when they come across the border and for mexico to do more to secure the border. really from president trump's ,oint of view, keeping it vague keeping mexico offkilter might be what the u.s. wants to do. paul: ros krasny and amy stillman, thank you. we have great interviews to dive into the implications of trump tariffs. the president and ceo of the which represents communities involving toyota and honda and on the political side we have -- shery: investors embracing -- bracing for a wild ride on monday. investor portfolio manager, why she sees better times ahead for

equities in the second half of the year. this is bloomberg. ♪ ♪

kicks off onweek wall street and investors are on alert as he what impact escalating trade feuds might have on the global outlook. this week will bring economic data, new broker rules and more earnings. su keenan gives us a plate -- a preview. su: morgan stanley says you can see recession by 2020 if the trade war is not resolved very let's go in to fedex which is in the bullseye of the trade pushback from china, they are saying this is a warning if the u.s. doesn't get its act together, let's go into the bloomberg. this may was the second worst for the s&p, going back to the 1960's, the first down month of

the year so far. setting up for monday's trade the dow was down 355. it was closing near the low. you can see this with the lowest, down 1.6%, the nasdaq 100 and the bond bulls will get yields are with the down to the lowest since 2017. we get big economic data on manufacturing and labor. a good break the bond bulls' story. big movers likely to see action this week, that has to do with earnings. kraft heinz has the look -- been the lowest since the murder and become a black eye for warren buffett's berkshire hathaway as they report on tuesday. growth story for wall street to follow, siena and tiffany's luxury jewelry also reporting this week. let's take a look at oil. -- the bearish bets on

oil have gone up. thanks for that gloomy update. joining us now for more we have tribeca investment portfolio manager -- june, thank you for joining us. outlining the laundry list of things going south. we have a chart that shows us futures slipping below the 200 day moving average. we have the yield curve inversion, morgan stanley warning of recession within nine months, but these are reasons to be optimistic. june: what we are seeing is raising risks of this tariffs issue to have a real impact on the economy. so far we have seen a little bit but it could be more if mexico does get escalated quickly. if you look at the underlying fundamentals so far the earnings of the corporate steel doing

quite well. china is disappointing but don't isget the trade conflict creating other issues. with the stimulus they have done so far this year and more to come we do believe it will underpin a good outlook for the second half of this year. trade is something what you call it tail risk. it is becoming bigger by the day. investors are looking at more capital preservation before stepping into by the rally in the second half. paul: if you want to get defensive, where do you go? jun: previously when we talk about defense, it is tech and growth. we still believe with a huge amount of liquidity supporters by the central banks, these will do well but tech is in the middle of this whole entire trade conflict. tech will be under pressure especially when the market goes

through volatile times and defensive are the traditional ones. you look at the reads, you look at the utilities and some of the staples but avoid the ones with very high gearing. there was some speculation that because president trump was so focused on stock market levels, there was some sort of put in the market, should investors now acknowledge that has gone out of the market? jun: [laughter] at the market is seems to be the i am not ae political commentator. it does seem that his tweets depend on the share price level, market level is. with the elections, he does really need to get the market optimistic, get the economy going, this uncertainty around the tariffs does create a lot of

volatility and uncertainty for business to invest. that will create issue for the economic growth. far we have seen mexico starting to outperform emerging markets index as this chart shows us, but as soon as we heard those trade tariffs threats from the president, the market taking a plunge, should investors be wary of the countries that could get caught in the middle of the trade tensions, whether it is india, their designation as a developing nation has been eliminated or it is japan or europe? jun: it is tough for investors to make a call, because mexico was going to be the beneficiary of the fallout of the -- this really comes out of nowhere, the new tariffs on mexico. right now i do believe investors will have the focus on being defensive, staying in the

market, you see more flight to equality, stay in developed markets and markets where they have self-help. one market coming to my mind is really australian market that have performed very well. it is partly because of the election and more markets, this is a big type of fundamental improvement that drives it. we have the rba looking set to ease, are things really that good? jun: if you look at the forecast they say that rate cuts -- things are not great here but i guess for the investors, the time being it looks a lot more defensive than the potential tariffs impact. our economy has gone through the down drift and much of the domestic sectors have trade on cheap valuations with elections certainty now and rba cuts and more relaxation with the

regulator credit fronts. it could change the outlook to be positive. paul: thank you for joining us. tribeca investment partners portfolio manager. a reminder of our coverage on tuesday and wednesday from morgan stanley, australia summit here in sydney, tomorrow we are joined by the bank's australia ceo and others. stay tuned. this is bloomberg. ♪ ♪

shery: let's get a quick check of business flash headlines. the emirates airlines president said the boeing 737 max is unlikely to be in the skies before the end of this year. he said because of a fallout between the u.s. federal aviation administration and other national regulators. , oneg has told spice jet of the biggest customers, it should be flying again july.

>> i would have said december would be a time -- i don't believe it is going to happen before that because the regulators, global regulators have differences of opinions as to how they will prove it can fly anytime soon. paul: toshiba will transfer its rights to process natural gas to france's total. -- $850l pay 800 50 ms. million to hand over the rights and expect to finalize the deal 2020. for the takeover of the lng business. they set their sights on becoming one of the world's biggest lng layers. shery: facebook is an early-stage conversations with a u.s. derivatives regulator about its plans for a digital currency. the commodity futures chairman said he was interesting but had not received the formal

application for a digital going. they say facebook discussed the project -- project with mark carney. this is bloomberg. ♪

paul: 8:30 monday morning, market open 90 minutes away, futures looking weaker after -- a weaker close to the united states on friday. i am paul allen. shery: i am shery ahn. you are watching daybreak australia and let's get to first word news. su: china is willing to work with the u.s. to end an escalating trade war but won't into concessions. and afford acid official report blames the trump administration for the collapse in talks and says the tariffs will make things worse for all sides. the report also takes a swipe at slogan sayinggn

the trade dispute has not made america great again. bloomberg has been told the u.s. justice department is preparing to open an antitrust investigation into google. it would be the trump administration's first major step to scrutinize anti-competitive conduct by a giant tech firm. the u.s. has been criticized for allowing platforms to dominate the markets while european officials aggressively pursued antitrust cases. china's central banks says the takeover of this bank was an isolated case. they say the seizure was triggered by misappropriation. a pboc statement said have no plans to take over other institutions. china's chief security officer said he is confident the markets are stable and healthy. hong kong property prices reached an all-time high in may,

after previous records in august. they gained for a 16th straight week rebounding on revised sentiment about low interest rates and limited supply. the most extensive property market will remain bullish for another decade and that is thanks in part to the population influx from mainland china. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. ♪ shery: let's take a look at how asia stock markets are looking into the open. we are seeing pressure for japanese futures down .4%, after three sessions of losses already. stock prices are the lowest since february. we get japan's first quarter capital spending later this morning so watch out for that, the yen still holding a six

month high. seeing some pressure for u.s. stocks. futures unchanged, marginally higher after sessions of gains for the kospi market but this coming out a time when we had data of exports falling for a sixth straight month. slowing growth is pressuring exports, not to mention the davenport -- downturn in the semiconductor industry. let's check in on futures in australia. we have sydney futures pointing lower a little of .3%. we had the release of the performance manufacturing index which was weaker at 52.7 and we will have house prices for the month of may later on. the market of new zealand closed .oday for the queen's birthday it is actually april 21. it is weird. shery: we are confused earlier. were confused earlier.

let's continue with the trade front because the president's threat of tariffs on mexico is not sitting well with global automakers. mexico is both largest source of auto parts, and the largest automakers lost $17 billion in onket trading in the u.s. friday. let's bring in this person from the global association of automakers which includes honda, nissan and others. we know these automakers have plans in mexico, nissan has three plants. do we know who would get hurt the most? >> it is a good question. it is nice to be with you. most of the exports from mexico to the united states are from companies like general motors nissan isd ford, but of vehiclesrgest

from mexico to the united states so it affects all companies producing in mexico. the other thing to keep in mind is we receive $60 billion in auto parts from mexico to support u.s. vehicle production and the employment of americans. this could be very significant across the board for all operators in the united states. idea whenyou have an automakers could start passing the cost to consumers? john: that is a good question also. we are seeing the company's passing the cost of steel and aluminum tariffs on to customers and we are also seeing companies pass on the cost of tariffs going back and forth between the u.s. and china on customers. it wouldn't be long after the 5% or 10% tariffs go in to effect

that they would be passed on. another thing i mentioned was in many cases, the cost may not be passed on and it may result in stead in margin pressure. so if the cost is passed on, who will suffer more pain? is it automakers or mexico which is the point of imposing these from the point of president trump? john: these are a tax on american consumers and american companies. that is what they are. punish mexicans. it punishes americans. passing on the costs would be passed on to american consumers if we face margin pressure. they would affect american employees. this is a challenge across the board for american auto workers and consumers. plan? hat is the

are you planning to bring any pressure to bear on the administration? to see howll have things play out over the next week or so. we note the mexican government officials will be here in later this week and we hope that will bear some fruit, that those discussions will. the irony is we have tariffs threatened on an issue that has nothing to do with trade. american consumers and auto workers are effectively being an issue theyn can't resolve themselves. we hope the countries get together and resolve this before the tariffs go into effect. president had delayed auto tariffs from countries around the world agreed when he did that we had strong statements from toyota. this is what they said.

they citizens a message to toyota that our investments are not welcomed and contributions from each of our employees across america are not valued. what is the sentiment you are getting from carmakers who face not only the threats of tariffs on mexican goods but auto tariffs? john: no question about it. what is happening in the auto we are being pounded by the cumulative effect of several different trade policies, the u.s.-china tit-for-tat tariffs impacting efforts -- imports of the high-value manufacturing process. we are facing the inability for major exporters to export vehicles to china. we have steel and aluminum tariffs in effect with money trading partners and domestic steel prices going up. this would come on top of that.

there are a couple of things i am hearing from companies. one is, does the u.s. remain a investments to make in the auto sector or is there too much uncertainty? shery: this is what the president had to say when he came to the rationale behind these tariffs. he set in order not to pay tariffs if they start rising bunnies will leave mexico which has taken 30% of our industry and come home to the usa. president trump, no secret, once the carmakers to come back. can these lead to that? the global in the last auto industry is a long lead time where billions are planned in machinery and equipment to make vehicles around the world. that hard to imagine that type of restructuring of the industry could happen fast

enough to get out of the way of these types of tariffs. the better approach is to continue to work with trading partners. the u.s. trade representative is doing a good job trying to negotiate trade agreements with the u.s. and japan, between the are and the e.u., they getting nafta ratified. that is a better approach than a and shrinking of our business. paul: one thing president trump has a was wanted to do is bring the entire carmaking industry back to the u.s.. is that something your members would consider? john: our members are invested in the u.s. when you look at the last 25 years, car companies in the u.s. million cars more than

they did before nafta. there are 14 car companies building in the united states. what you see is a robust, vibrant u.s. auto industry as a result of foreign direct investment, toyotas investment and honda and kia and hyundai and volkswagen and others. what you want to make sure is the u.s. remains a balanced and effective place to make those investments. you have got to make sure it is a competitive platform and the tariffs i think tilt toward imbalance. we will have to leave it there. president and ceo of the association of global automakers. coming up next we will dig deeper into trump's tariffs on mexico with be hoover institution. this is bloomberg. ♪ ♪

allen in sydney. shery: i'm shery ahn. let's take a look at tariffs on a political angle and what may be driving the president to take these measures. joining us is the hoover for theion director 2012 presidential campaign. always great to have you with us. first question, i don't get, why now? we know the usmca is in the process of being ratified in mexico and canada. >> the president views this three political lens and the immigration issue to him in the u.s. and domestically is his top issue. he feels that is going to be his ticket to winning reelections. he figures i can do anything

now, trade anything, make progress on immigration, trying to stem the flow of illegal and hents into the u.s. says congress isn't working with me anyway so what is the father trying to get them to death bother -- what is the bother trying to get them to collaborate? it is a win-win for him even though the economics aren't great. shery: he is thinking he doesn't have a chance with nancy pelosi so he is like why not? my next question is, why mexico? deal with china first, right? negotiations have broken down. why start another fight when you could be moving in the right direction? don't think there is a linear thought pattern, solve this album and then the next. his idea is tariffs to a certain degree in his mind work. they work to bring the other

side to the table. he believes what he did with china brought them to the table and he is frustrated with the southern border so says let's see if tariffs can work to bring mexicans to the negotiating table. it is not about solving what -- one problem but it is a problem, i will deal with what is in front of me. shery: what is the risk when you make a tariff a political issue? u.s.e: it hurts the concerns -- u.s. economy and growth. that will become real down the road if this activity continues. the president has to be careful because china is already going on and now you add in mexico which will impact of the u.s. economy in a real and sudden manner. it could cause a political problem if the economics turned south. paul: that is a good point. at what point does this cause a problem for trump because the

industry in ohio and michigan supporting him at the last election is unlikely to appreciate the pain the farmers and agricultural experts see. is there a risk of the president alienating his base? to questions of whether independent voters in states like michigan and ohio which got president trump over the top in 2016, whether they have a negative reaction to what the president is doing because of the impacts of the tariffs on those states and economies. is a perfect example, where soybeans are grown. that has been affected by the situation vis-a-vis china and you are seeing public opinion for the tariffs fall off particularly with respect to china. we could see a similar situation in michigan because this cross-border trade between the u.s. and mexico as your guests ined is intracompany trade

the automotive industry. what you see happens here is going to hurt in states like michigan and when it becomes a political challenge, he will back down. is there a possibility of mexico retaliating? it is a huge market for u.s. agricultural products. does mexico hold interesting cards in its hand? lanhee: mexico has a few but the u.s. is the player with more leverage. obrsee how president lopez ador responded to president trump's suggesting he would impose tariffs. he said i think we can do a good deal, let's not get ahead of ourselves, indicating he believes the u.s. has more leverage. if this begins to hit prices and consumers in the pocketbook kind of way in the united states, you could see it having an impact on

the president and what he does politically. howy: i was surprised measured the response was. will congress take action to rein in his tariffs authority? take amendingld the authority he has read most agree that president has a fair amount. it will take republicans to come to the table and say we are uncomfortable with this. a few already have, chuck grassley, brown-forman. the challenge is saying they are uncomfortable with the president, exercising the authority is different from saying we will introduce legislation to restrict his authority in this arena. shery: what will be the measure? lanhee: i don't think it has. people will express frustration but they won't embarrass him with a legislation to restrain his authority. shery: does the president still care about stock levels? lanhee: he cares but he is

willing to trade off gains on immigration and other issues. shery: -- paul: thank you very much. you can watch us live and see past interviews on our interactive tv function, tv go. you can dive into any of the securities and functions we talk about and become part of the conversation by sending us instant messages during our shows. this is for subscribers only. you can check it out at tv . this is bloomberg. ♪ ♪

shery: i am shery ahn in new york. paul: i am paul allen in sydney. let's get a quick check of business flash headlines. lufthansa ceo said the collapse of sun carriers is a positive thing for the industry that has

too many carriers. he said they would be interested in a deal with a great restructured deal with alitalia. cook.ey bid for thomas >> there is an unhealthy element in this industry. others have gone bankrupt [indiscernible] and i think there will be further consternation. with theuthwest ceo struggling state-owned company. he blamed a lack of funding and drop in funding for the carrier plan. executive was brought in to lead a recovery of the airline which has been unprofitable since 2011 and mired in corruption scandals. softbank is tapping a new person -- tapping someone to help with their new fund. they said softbank's bid for a

$150 billion fund is not attracting much margin business. a more diverse investment and brought in this person to find more options. traders are betting the rba is set to end of two .5 year long pause on interest rates as australia's record-setting expansion street comes under threat. -- streak comes under threat. everyone was predicting two, the first tomorrow, so much uncertainty there will be two. >> there is two reasons. new zealand was suggested to cut once and be done but the rba doesn't find -- it goes once or twice generally. that being said, we have been on hold for 2.5 years and there is no record to go on, but the rba leave the game away in its forecast because it said the growth was good market pricing

for rates. they said that clearly. you can't be predicting on rate cuts and not -- that made it clear. shery: we are also expecting house prices in australia to have softened in may. what is the outlook for the rba after tomorrow's meeting? michael: it is an interesting question. looked like things are picking up in the housing market. it was already slowing, butleration in prices, everyone is talking about rate cuts. that is bringing people back into life. as to what happens after the two cuts when we get them, that is a big question. phil evans who has a great record says there will be three by november and j.p. morgan, they say what -- they will be half a percent next year. the worldwide, if you look

around, it is hard to see the two cuts will do with the rba wants for inflation, bring unemployment down to get inflation going. what we will see is a couple of cuts and then go from there. said 1%vernor low getting towards the limit of what monetary policy can achieve. will we see qe down the track? michael: when he said 1% it was a couple years ago when we were at 4.7%. now we have seen negative rates which change the equation. when it comes to returning inflation to target, qe will not be on the agenda. it will be reserved if unemployment sparks or looks like recession. to return inflation we will stick with rates. shery: how much of an incumbent victory helped the may economy? michael: it does. there has been a spirit of confidence where we haven't had

workeports but the housing is a good guide. labor was talking about closing down property, investment brakes which was dampening. place, itt remains in is a boost for sentiment and confidence. in the short-term it is a run-up in a people are not worried about taxes or high government spending or -- labor winning, did throw some doubt on things outside the budget. longer-term australia has structural issues. in confidenceck is great and spending is great and the housing market, it is really only a short-term thing. shery: our australia economy reporting. -- reporter. plenty more ahead including a conversation with this chairman live from the annual meeting in seoul. that is it from daybreak

australia. we will have all the action coming up next and check on the futures as well. this is bloomberg. ♪ bloomberg. ♪

paul: good morning. we are under an hour away from the shery ahn market open. -- the australian market open. shery: welcome to "daybreak: asia." paul: our top story this monday, china blames the rest the trade war and says it definitely has not made america great again. morgan stanley sees a recession within a year if the dispute