>> the u.s. proposes duties on french products in response to attacks on american tech giants. president trump slaps steel tariffs on argentina. the deadline for more duties approaches. the britishn capital with questions about the alliance's current direction. ♪ francine: welcome to bloomberg surveillance. these are your markets. as traders00 gaining

across markets trying to figure out what the latest tariffs mean for some of the allies of the u.s.. this after moves against an array of trading partners. let's check in also on crude. opec starts in a couple of days. we also have a great lineup of guests today. later the brazilian environment minister and a 10:00 a.m. u.k. time we have the chief executive officer of --. let's get straight to the bloomberg first word news in new york city. we begin with this, no

impeachable offenses, that is the conclusion of the report of the investigation -- of the republican report of investigation. the democrats are expected to release their findings, that is ahead of the u.s. judiciary committee first public hearing on wednesday. possibly the world's most ambitious policy to combat climate change. european leaders are set to bringing net emissions to zero. eu is also considering -- over the hong kong, the chief executive is planning more relief measures as ongoing unrest continues to impact the economy. she didn't elaborate on what the measures would entail. she only says they would be targeted. she declined to answer questions on whether she considered meeting further protester demands.

christine lagarde testified before the european parliament about restoring price ability. she also stressing strategy review will be wide-ranging. it will be looking into climate change targets. in australia the central bank keeping interest rates unchanged. they look to be injecting new life into the property market raising the prospect of -- of improved household spending. 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. back to you. wine, cheese and handbags just some of the french products i conveys tariffs in the u.s.. washington is setting them in response to paris' tax on tech companies. robert lighthizer says the tech tax unfairly targets american

companies. joining us is the deputy euro cheap -- euro chief. what exact french products would be affected? >> good morning. known is obviously well across the world for its luxury goods companies and for its wine and cheeses and so on. so looking at some of the key companies that could be affected, lvmh, they are france's biggest listed company. they have handbags and a very champagne -- very had -- very famous champagne brand. have the cosmetic giant l'oreal. these sanctions are potentially hitting right to the heart of

the french economy and potentially hitting some of the biggest names in french business. francine: how soon might the u.s. tariff on trade products take effect. >> what they did is kick off a process by which there will be administrative review of the tariffs, it will take 90 days, there will be public hearings and back and forth between french and american officials to try and work out a solution. at the end of this three months, these tariffs may take effect. what it does is it kicks off the process where there will be a very public discussion about it including between the presidents of both countries. francine: brendan, what does this tell us about trump's broader trade agenda. >> people are growing optimistic that the trade war is being de-escalated, that a deal with china's close, but i think what we saw yesterday is president trump, his favorite weapon of

economic leverage is tariffs in the market got a reminder yesterday that he is willing to use them even with allies like france or in the other case, argentina and brazil with these steel tariffs. francine: thank you both. and brendan murray. chief economist that invest big, -- investegg. difficult of, how a model does that have on gdp? >> we've got to know what's actually happening and as we see we think we are getting somewhere on the trade accord and then suddenly a few tweets, global sentiment changes. and weis very difficult

lean heavily on work by supranational organizations such as the imf and both of them have done some work on the impact of tariffs recently, particularly the war between washington and beijing. in a nutshell what they are suggesting is a level remains the same, you will get a continued drag on the global economy and a less impact in 2021. francine: if you look at the flurry of activity from the trump administration yesterday, they were tackling quite a lot of countries in terms of tariffs. will that automatically make a difference to the country? >> it certainly would make a difference to brazil and argentina and the european union countries which have been threatened with tariffs, not just on the french, but also the airbus subsidies as well. impact will be

somewhat less than the u.s. china tariffs but still it's not a helpful direction. already we worry about where we are. globe -- fears of a global recession or sub global 2% gdp growth next year is so much out -- so overdone. what we are seeing in a number of areas is the manufacturing sentiment indices are perhaps bottoming, they are not recovering strongly, but we are perhaps beginning to see manufacturing sector come out of a very difficult year or so. francine: how much is there to lose? some charts saying if you look at the u.s. china trade war, europe and a lot of others are hurt the most. you have the secondary effect as well where if you get a

between, for example tariffs between u.s. and china, that gets a -- that affects the economy. what we hope to see his progress between the u.s. and china, it may be a little bit optimistic to see that happening over december so the u.s. administration would have to push back the deadline of extra tariffs if that deal is not signed in mid-december. we are reasonably hopeful we could see something happen in the first few weeks of 2020. francine: lighthizer also said they were possibly open to investigations into similar digital taxes. significant >>s -- >> such taxes, either digital

capturee trying to business done by technology companies. as this begins to spread, the impact would be greater and we bouts of common sense breaks out. the situation swings to and fro and we wouldn't take too much --ice but we francine: thanks so much. stay with surveillance, plenty coming up including with president macron saying nato is suffering from brain death, will the leaders manage any unity at the summit. plus we will discuss climate change with the environment minister when he joins us. that's at 9:40 u.k. time. this is bloomberg.

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francine: this is bloomberg surveillance. let's get straight to the business flash in new york city. >> unicredit cutting 8000 jobs as part of its for your plan. the losses amounted to more than 9% of its workforce is coming with closure of about 500 princes -- branches. europe's finance chief calling for a new anti-money laundering agency after a wave of scandal across the region banking industry. the current system is vulnerable because it's largely regulated

along national lines. the finance ministers coordinated response opens the door to a revamp of the system. up to $1 billion investment in saudi aramco's ipo. this is the kingdom asks regional allies to bolster record sales. the kuwait investment authority was reluctant but was told by the government it was in the country's strategic interest. this is the nato summit everybody was supposed to want. the organization's 70th birthday but that was before its weekly players begin questioning the very foundation. micron's recent criticism has ruffled feathers within nato. he says the alliance is brain dead and the question is whether he risks pushing other countries too far. he's traded barbs with turkey and the leaders have to choose erdogan and risking more

refugees to europe. maria is at downing street for us. when you look at the alliance and the fact it doesn't feel like an alliance because there's lots of barbed wires. will they get down to work or will it be throwing insults at each other? >> nato is trying hard to present a united front but it's undeniable their major points of friction. donald trump will once again save the u.s. is not going to say he will -- he is also going to focus on technology in five d -- five g. european's don't want to veto china completely but the u.s. is pressuring for that and then you have emmanuel macron with tough language saying nato lacks any strategic vision and

articled he's not your five works, a cornerstone of nato. erdogan is trying to buy russian military equipment, turkish television saying he is already tested it and just trying to play this west indies. this morning, -- west and east. this overshadowed by the trade tensions we are seeing between the u.s. and france. if you are looking for a united front, the answer would be no. who does president trump meet outside at this nato summit? >> does a number of bilateral meetings confirmed for today. -- there's a number of bilateral meetings confirmed for today. saint germany is a country that should be hitting that -- saying germany as a country that should be hitting that market. another meeting is planned with emmanuel macron. the u.s. said they could target

french products with tariffs. we have seen strong language out of france. the big question is whether or not we will see a meeting between boris johnson and donald trump very the u.k. delegation is worried about comments that could shift the campaign either way. francine: thank you so much. up. have the christmas tree we will have plenty more from maria throughout the day. i don't know whether this ornslates into a lack of gdp into geopolitics, but markets have to deal with. ,lliances are formed and broken how difficult is this to quantify? >> impossible to quantify. there are a number of tensions within the nato alliance.

spending to, non-us keep the alliance together. it's difficult to disentangle the geopolitical disagreements within nato from the economics and the tensions we've seen on tariffs between the u.s. and various countries as well. if you getgh to say disagreements at the summit, it will likely spill over into economic issues such as trade. francine: is it a currency war you are worried about? something that the markets tend to ignore. >> you have to take into account downside risk. convincedcessarily the disagreements over defense will result in currency wars. likesw president trump what he sees as he excessively devalues the euro.

i think that's probably a link a bit too far. but certainly if you see continued disturbance on the , --olitical front i know it's difficult to quantify so we are feeling our way around. is it investments it won't happen because they don't spend or will it affect the labor market? >> it's probably that. inre's quite a few reasons different countries why chief executive's aren't spending. in accord inetting the geopolitical level arguably you're less likely able to agree on a trade level as well and that has a direct impact on global gdp. francine: thank you so much. coming up we speak to the chief german --who this is bloomberg. ♪

francine: this is bloomberg surveillance. a lot of focuses on what's going on in london with leaders the world over showing up for the nato summit, the 70th anniversary of nato. president trump speaking in london at breakfast with the chief of nato staying -- saying he is doing a fantastic job. nato and its head were under

intense scrutiny in the past from president trump. executive tohief reward investors with share buybacks and a new four year strategic plan. the bank will cut jobs as it battles slow economic growth and negative interest rates. joining us is our european finance editor. what are the takeaways from unicredit's strategic plan? they are giving investors a reason to stay on board. now,nly a bigger payout but increasing in 2023. they are handing over more money to the shareholders and achieving more cuts, more efficiencies which has been the of the first years and

hopefully convincing them that they want to stick with unicredit. francine: will shareholders be satisfied? reading is this is pretty good. i don't think the market is really bowled over by that. you can see by the shares moving up by just a little bit. the call seems to be that this is achievable. but the combination of what they will cut and what they will pay waywill all add up in some in an environment where the earnings from lending are going to be very low, the growth is almost zero over the next four years. they will not be making a lot more money. francine: let me cut you off because president trump in london just speaking with reporters after meeting with the nato head.

>> we are on. election forortant this great country, but i have no thoughts on it. i have many meetings set up with lots of different countries. turkey responded by saying he was brain-dead which is interesting. nature serves a great purpose, it got to be unfair for the united states because the united states was paying more. i heard president macron said nato is brain-dead, i think that's very insulting to a lot of different forces including america. it has a great purpose especially with the fact nato is

becoming much more electable in terms of -- i was very surprised, i'd like to ask you what did you think. active and we have -- for the first time in our , you can see -- we are extending the fight .gainst terrorism this alliance has proved once again to be able to adapt to change and respond to a changing world. >> it's tough when you make a

statement like that that's a very nasty statement to essentially 28 -- you have a really high unemployment rate in france. it's not doing well economically at all. they are starting to tax other people's products so therefore we are going to tax them which is taking place right now on technology, we are doing their wines and everything else. it's a tough statement to make when you have such difficulty in france. you look at what's happening with the yellow vests or what's going on during certain parts of their season. makingt can't go around statements like that about nato. it's very disrespectful. the department of justice inspectors general report and the attorney general with that conclusion.

it, iaven't seen purposely stay out of it. we have a great attorney general who is a very fair man and a great gentleman. because hes job wanted to serve the country. he is a very successful man, , but he'seat company a very successful man and he is doing a great job. i have not seen the report, perhaps he has read the report. i think he was quoted incorrectly. that, i'm hearing that by reading lots of different things. going to be released on monday or so? i think we have to read on monday or so. we have to read it, we have to see it, but i think there are a lot of devastating things in that report. we will see what happens. we have a few days to

weight. -- a few days to wait. the euro report is something hard,- he has worked very and long hours, i can tell you. we will see. the german report is -- the durham report is a very important report. i read is correct, i read in the newspaper, if what i read is correct, that would be a little disappointing, but it was just one aspect of the report. we will see what happens. it is coming out in a few days. here it is devastating, but we will soon find out. >>[question inaudible]

the. trump: i think secretary-general is doing a good job. -- 4.3% of thenk world by far. the we are paying 4%, 4.3% when at best,s paying 1.2% of a smaller gdp. that is not fair. it is not fair at all. so when you have the european union, these are the same countries but you have the european union treating the united states very unfairly on trade, the deficit for many has beenr decades, astronomical with the united states and europe, in their favor. and i am changing that and i am changing it very rapidly. it is not right to be taking advantage of nato, and then also to be taking an advantage of on

trade. we cannot let that happen. so we are talking to the european union, and we are talking to various countries about nato, but we are talking to the european union about trade. and they have to shape up. otherwise things are going to be very tough. north america and europe meet every day and they discuss and take action together. the different securities and challenges -- we do that more now than we have done for many, many years. we need -- we are also responding to new challenges in space. we have declared space as the new domain for nato. there are differences because we from9 different countries

both sides of the map. different geography, but despite the differences we have always been able to unite in our thoughts to be able to protect one another and because we are stronger and safer together. trump: i would say that nobody needs nato more than friends. you look back over the last long period of time. nobody needs nato more than france. and frankly, the one that is thes really the least united states. we benefit the least. we are helping europe. go against ae common foe that may or may not be a foe. but there are other foes out there as well. but nobody needs it more than france and i think that is why when france makes a statement like they did about nato, it is a dangerous statement for them to make. what would it take you not to

impose those tariffs? pres. trump: look, i am not in love with those companies -- facebook, google, although i will say twitter -- they are american companies. france is going to put a tax on them. it was totally out of the blue. idea,el mack ron had the -- macron had the idea, let's tax those companies. if anybody is going to take advantage of the american companies, it is going to be us, not france. very big tax to put on them come on wines and everything else. on airbus. that will be a good thing for boeing, but we will only do that if it is necessary.

won $7.5 billion in the wto. we never used to win before me, because before me the united states was a sucker with all these different organizations, and now the wto realizes my attitude on them is that if they do not treat us fairly, i will tell you someday what will happen. we have been winning a lot of cases at the wto. very rarely did we ever win a case. they took advantage of the united states. that is where it is. we won $7.5 billion. if france puts attacks on our companies -- again, these are companies that are against -- that are against me, if i read the papers correctly. i don't know why they were against me. they are supposed to be very powerful, and yet i one. maybe they are not so powerful. i don't want france taxing american company's.

if they are going to be taxed, it is going to be the united states that will tax them. why won't you say anything about the british election, sir? pres. trump: because i don't want to complicate it. in the lot of elections last few months. they went up supposedly 17, 18, 19 points. them into a, i got runoff. he picked up 14 points because they thought it was going to lose to a popular governor, john bel edwards. he lost by less than a point. but with the exception of those, it had a huge impact because i raised them up almost to victory and they had no chance, with the exception of those two, i have won virtually every race i have

participated in. but this is a different country, and i say often, in germany they liked obama. the reason they liked obama's because obama gave the ship away. he allowed them to take everything. he give them things that i would not do. germany, i love this country, and a lot of countries, but i am representing the u.s. they may not like me because i am representing us and i represent us strong. president obama did not represent us strong. he gave everything away, and he should not have done that. that is why we are still paying a price for what he did. election.y out of the you know that i was a fan of brexit. i called it the day before. the day before brexit, many of you were there, and i recognized that many of you were there and they asked me if i thought brexit would happen, and i said

yes. they smiled and they laughed, and i said yes, it is my opinion. the next day they had the election and i was right. but istay affidavit -- stay out of it. i think boris is very capable and will do a good job. goode always had a relationship with emmanuel. sometimes he will say things that he shouldn't say, and i disagree with some of his policies with respect to france, but he's got to do what he's got to do. sometimes i think he does things that are counterproductive for his own country. would you ever work with mr. corbyn? pres. trump: i would work with anybody. i am a very easy person to work with you wouldn't believe it. atk at this person that look this gentleman. when i came in i was angry at nato. i have raised $130

billion. you're talking a tremendous amount of money. you're talking a numbers that are astronomical. when theym delinquent are not paid up in full. then i ask the other question -- when they don't pay up in full, what happens to the past year? so let's say germany is at 1% and they stay at 1% -- does that mean it disappears from the last five years? nobody has asked that question. it is not a bad question for you to be asking. it is not like, g, let's start a let'sis not like, gee, start a brand-new year. you have some that are delinquent 25, 30 years. you add all that up, and nato is a very rich system. you know that. they have not chosen to go that way, but when germany is at 1% to 1.2%, and when they don't pay -- and let me tell you, it

2%.ly should be 4%, not it should be for percent. >> with the impeachment hearing back home, congress is preparing to impeach you. the impeachment thing is a hoax. it has turned out to be a hoax. it is done for purely political gain. they want to see whether or not they can do something in 2020 because otherwise they are going to lose. i read something in your paper the other day that it is having a regressive path, which some people thought might happen. i didn't know. but i can tell you in districts where i won and they had an election between mine, and other people got in, democrats got in, those districts are -- i was not in the race in 2018, so it is not really the same thing.

voters say they are not going to vote unless trump is in the race. but it is having a tremendous impact, and a lot of democrats are very upset. they just got back from this trip and i hear they are very upset. the impeachment witchhunt, it is just a continuation of the hoax that has been taking place for the last three years. and i think you know that. >> you are trying to negotiate on -- pres. trump: i will say this. i think it is very patriotic of the democrats to put on a performance like that. impeachment was not supposed to be used that way. all you have to do is read the transcript. we had legal scholars looking at the transcripts the other day, and they said these are absolutely perfect. it.p is right when he uses those calls that we have made, two of them, were absolutely perfect calls. i think it is a very bad thing for our country.

the democrats have done a very great disservice to the country, wasting a lot of time. we are trying to get restriction drugs reduced substantially. we could do it easily. they don't have any time to do anything. i call them they do-nothing democrats. [question inaudible] pres. trump: i may. i don't know if it is on the schedule, but if it isn't, i would. ask the othero countries. i have my own views. a good relationship with turkey, we left there border, we have been on their border long enough. they are doing just fine on their border. we kept the oil. i kept the oil. the only people we have over there now, we have a small group that are fighting the remnants of isis because they have popped up again and we put them down.

we have defeated the isis caliphate and nobody thought we could do that so quickly. i did it very quickly. zero.ked it down to i knocked it down to zero. but it pops up every once in a while. so we have a very small group there. oil,tantly, we kept the and the oil is what fueled isis. that is what fuels them. that is what gave them the economic strength to do what they did. killed baghdadi and we also killed his second. should the national health service be on the table? pres. trump: not at all. i had nothing to do with it. i never even thought about it, honestly. we are going to have a great health care system. we are doing great health care work. we have got things really

running well. if we get elected, if we take the house, keep the senate, keep the white house, we will have phenomenal health care. but right now we have 180 million people on plans that they absolutely love, private plans that they absolutely love. but in this country, they have to work that out for themselves. i don't even know where the rumor started. we have nothing to do with it. we would not want to. if you handed it to us on a silver platter, we want nothing to do with it. you are -- what do you think of being censured versus impeachment? pres. trump: i don't want them to go to censure. i did nothing wrong. , verya great conversation respectful conversation with the president, a good person, by the

way, with the president of ukraine. it was flawless. people have analyzed it from 15 different ways. it was flawless. there were many people on that line, including the secretary of state. one person, two people had a complaint? you take a look at those two people, and then you tell me. i know there were many people on the line. there are always a lot of people. when you speak to a head of state, not only our people, they had people also, many people, probably. to me it is unacceptable. i did nothing wrong. you don't censure somebody when they did nothing wrong. they are in search of a crime. that is what they are. they are what you call an investigation in search of a crime. not even a word that should be used, crime. i had a very good conversation -- by the way, yesterday, he came out again and reaffirmed again that we had a very, very

respectful, good conversation, that president trump did nothing wrong he doesn't even really understand what is going on over here. they look at us like, is this country crazy? the democrats have gone nuts. they are crazy, and it is very bad for our country. >> do you see breaking off from nato? us,. trump: no, not with but i do see france breaking off. he needs protection and i do see him breaking off. bring sanctions against them? pres. trump: say it again? -- a turkey, a dependent dependable neighbor -- a dependable member of nato -- when do you bring sanctions against them? pres. trump: well, it is a

country that i have not had a good relationship with. i read stories two days ago that the deal that trumped it with turkey -- i want to get our soldiers out of there. i don't want to be policing a border that has been fought over for 2000 years. i want to get them out. but i want to keep the oil. and now they are saying that was a great deal that trump made. i think that as far as i am concerned, i like turkey and i get along very well with the president. -- he is ae that very good member of nato or will be. but we will see in the future. >> the only ally on the border between iraq and syria -- turkey is important in our joint efforts to fight isis, but we

have a coalition to defeat isis. -- morehe territories than 8 million people are under isis' control. we have done that with bases in turkey. so turkey has played a key role. many others have expressed a concern about the nato aggression into what is syria. but if falling agreement with , weed states and turkey have seen that turkey has stalled in their operations, and we have seen a reduction in violence. now at the end of that we are trying to find a solution to the crisis. differences, it is nothing new.

on many different things, trade, climate change, all the things. but despite these differences, we have proven again and again able to unite and protect each other. that is exactly what we are doing now. despite some political differences, we are always able as stated together. pres. trump: i will say this. three weeks ago when we got al-baghdadi, turkey was very helpful. we said we are coming, they absolutely were very supportive, actually. we did not tell them what we're doing and where we were going. turkey could not have been nicer, could not have been more supportive. that is important. i wanted to say that in keeping

the oil, isis was trying to regain control of the oil, and we have total control of the oil. and frankly, we had a lot of support from a lot of different people. only soldiers the we have essentially in that area are keeping the oil. so we are keeping the oil and we can do with the oil what we want. does -- pres. trump: they tried to buy ours, and the obama administration said you cannot have it. the obama administration said the patriots and we will not sell them to you. so turkey went out and bought the russian missile. so we will see what happens. we are still talking about it. they wanted to buy the patriots. they tried to buy the patriots, i think you know that, and they were shut off, not allowed to buy them.

the russian system is not being integrated into the nato system, not able to work with the rest of the nato system. between the united states and nato, we the fact that have deployed the turkish air system today. issue and we try to find a way to solve some problems. pres. trump: turkey was one of -35's,rgest owners of f the greatest fighter jet in the world. now all they are going to do is go to russia, china. they don't want to do that, they want to buy the best lane, but

they are making it very way, that'sr, in a the best plane, but they are making it very difficult for, in a way, themselves. they have already put out billions of dollars and given it to lockheed martin. >> [question inaudible] pres. trump: i am not thinking about it. the impeachment is going nowhere. we have tremendous support. in the history of the republican party, we have not been this supportive. 196-0, votes in the congress, and i hear the senate is angry, senators are angry about what is going on because they are hurting our country, the other side, very badly. we have tremendous support, probably the most united that our party has ever been. approvald a 95%

rating, the highest in the history of the republican party. ronald reagan was 87%. he was second. the party has never been this united, the republican party. the impeachment is going nowhere. it is a waste of time. they are wasting their time, and it is a disgrace. what about the republican senators who agree that -- pres. trump: the only people who agree are people who have never read the conversation. you ok back there? what happened? are you getting into a fist fight? oh. thought you were getting into a little fistfight. i think the republican party is right now more organized than

they have ever been. don't just say read the transcript, i also say look at what the president of ukraine said. he said numerous things that were very powerful yesterday. that is it. you have people who heard third hand, fourth hand, secondhand -- we had tremendous support in the republican party. there never has been supported like this. in fact, i would always complain they are lousy politicians with horrible policy. open borders, high taxes. but they have always stuck together. i respect that. and the republicans, i have always said, have better policy. but historically they have not stuck together the same way. there has never been a time where the republican party has been more united. this is a witchhunt by the democrats. it is a continuation. it has been going on now for three years. actually from before the

election it has been going on. you will probably see that after the report is released monday or tuesday. but this is just a witchhunt that is very bad for our country. but i will tell you, it has been very unifying for the republicans. you said you were very great -- you said that you you mentioned a very great country. trump: i would rather have you guess. you are a very good reporter. i would rather have you guess. state igreat state, a won overwhelmingly, if you know. we should not lose that state. you can never find anybody that could do a better job as secretary of state. but i would have to talk to

mike. -- if i thought there was a risk of losing that wouldi would say that i sit down very seriously and talk to mike and find out how he feels about it. he loves what he is doing and is doing a great job, as you know. >> why is china such an important subject for this nato summit? what threat do they pose? done itump: they have largely with united states money because our past presidents allowed them to steal the cookie jar, and that is ok. i don't blame china for that. in our pastinted presidents and leadership. they allowed this to happen there there is no way it should happen. it isant to make it -- not if i want to make it, it is if i want to make it. we will see what happens.

but i am doing very well if i want to make a deal. i don't know if i want to make it, but you will find out pretty soon. we will surprise everybody. the soviet union and russia -- something new that we are addressing, we have to do that because china is now the second largest defense pender in the world, after the united states. the world spender in come after the united states. including weapon systems, intercontinental ballistic missiles that can reach united states, and also -- thatiles that will has been part of that treaty. nato intoabout moving the south china sea, but to

taking into account the fact in theina -- we see them arctic, we see them in africa, we see them investing in european infrastructure, and in cyberspace. there are some opportunities but also some challenges. . think it is a good thing together, we are 50% of the we are stronger than any other potential -- pres. trump: and i think that is important because it is a very different era. since i have joined, since i have come in, we have a very good relationship. this used to be a nato on one country and they did not talk about anything else. really, what now -- now we are looking at different parts of the world. the world has changed a lot. nato't think frankly that

has been changing. nato is changing now. it is a different nato, covering more territory, covering hotspots that were never even contemplated or thought of even five years ago. if you go back five years, they would not even be thinking about the things we are doing now. i have become a bigger fan because they have been so flexible. if they were not flexible, i think i would probably be not so happy. but they are very flexible, and this gentleman is doing a great job. will you come to germany? pres. trump: i will come to germany, sure. love germany. love the people of germany. >> why it isn't the u.s. continuing this program? pres. trump: we will see. we have a good relationship. we will see what happens. likes sending rockets up, doesn't he? that's why i call him rocket

man. >> is that helpful? pres. trump: we will see what happens. in the meantime, it has been a long time. president obama said it is the number one problem. we would be in a war right now if it were not for me. if i were not president, we would be in a war right in asia. that brings in a lot of other countries. he continues to build his nuclear program. pres. trump: number one, you don't know that. inber two, very importantly, the meantime, we have peace. at least speaking for myself, i have a very good personal relationship. i am possibly the only one he has that kind of relationship with in the world. they call it the hermit kingdom. i know a lot about his hermit kingdom, but i have a very good relationship. if you were to listen to

president obama, we would have been in world war iii right now. we will see what happens. we are more powerful militarily than we ever have been, and i will tell you when i took over the united states military, when i became commander in chief, our military was depleted, our military was in trouble. you know that better than and everybody. we had old planes, old ammunition. now we have the most powerful military we have ever had and we are by far the most powerful country in the world, and hopefully we do not have to use it. but if we do, we will use it. if we have to, we will do it. but my relationship with kim jong-un is really good, but that does not mean he will not abide by the agreement. you have to understand, if you go look at the first agreement we signed, it said he will denuclearize. that is what it said. i hope he lives up to the agreement, but we are going to find out. in the meantime, we are working with south korea because it is

burden sharing. we are spending a tremendous amount of money protecting south korea, and we think it is fair that they pay substantially more. last year i asked them to pay more and they agreed. nobody knows this, but they agreed to pay approximately $500 billion a year more -- $500 million a year more. $500 million. they are very good business people. let's see how they do on trade. pay almostreed to $500 million a year more. that got us close to a billion dollars. that is a lot of money. that was a number of phone calls and a meeting. now we are negotiating for them to pay more because the united states is paying a lot of money to protect south korea, and we think it is fair that they pay up and pay more. have a very good relationship, but we think it is fair that they pay more.

you tell us more about it? -- i trump: yeah, i meant met with them 6, 7 months ago, maybe a little longer than that, and i said you are not paying enough. it is not fair. they were paying less than $500 million a year, and it cost us billions. and i said it is not fair. we have 32,000 soldiers there. you have to pay up. good way,aid, in a very fine negotiation, yes. and they were close to being at the end of their budget, and we around $500 million more. that got them up to close to $1 billion from $500 million, less than $500 million, which has been that number for many, many years. decades. i got $500 million more a year there is a lot of money.

still substantially less than it costs. now we are in negotiations. they can do that because they are a very rich country. you did not know about that, did you? i wonder if i will get a good story for that. i hope so. i don't get good stories. >> is it in america's natural interest to -- pres. trump: it could be debated. i think if we are going to do -- it is notld fair for the united states to defend many countries, not only their country but many and they areere we rich countries. there are five other countries i have had the same conversation with. saudi arabia, they have moved more troops there, and they are paying us millions of dollars. you have never heard about that

before, in your whole life. we move troops, people pay nothing. the world took advantage of us. but we have a good relationship with saudi arabia and they needed help. they were attacked and as you saw, we just moved a contingent of troops, and they are paying us billions of dollars. and they are happy to do so. the problem is, nobody ever asked them to do it until i came along. nobody ever asked. obama did not ask, bush did not ask, clinton did not ask. nobody asked. eversaid but nobody has asked us to do it. i said, i know, but i am asking. they have already paid us billions of dollars, and it is already in the bank. they are happy to do it. we never had a president who would ask, and it is not right. and we have many other countries we are doing the same thing. in some cases you have countries

that don't have money. they are poor. trauma,e is tremendous tremendous problems and things going on that should not be going on. that is a different situation. but we have wealthy countries -- be, japan, aer a friend of mine, i said you have to help us out here. you are a wealthy nation and we are paying for your military. you have to help us out. they do a lot. but they were never asked. >> do you have a comment -- >> the china trade deal? trump: i think that is a very important point. this is the first time i have talked about it publicly. almostorea is paying $500 million more, and now we are starting a negotiation for billions of dollars.

we have had that discussion and we have had it three times. you know their position, you know my position. it has been brought up. i also brought up -- and i will bring it up right now, the fact that iran is killing perhaps thousands and thousands of people right now as we speak. that is why they cut off the internet. they cut off the internet so people cannot see what is going on. but thousands of people are being killed in iran right now. know howly, i don't you get in there. i don't know how you do your business, but the press ought to get in there and see what is going on. because the word is that thousands of people are being killed in iran that are protesting. , bigust small numbers numbers, which are really bad, and really big numbers. is there anything more that

you can do? pres. trump: i would rather not say right now. but i think it is a terrible thing and i think the world has to be watching. .any people are being killed many, many people are being killed in iran right now. for protesting. for the mere fact that they are protesting. it is a terrible thing. >> a u.s. diplomat to the u.k. -- will you do that? pres. trump: are you talking about the young man on the motorcycle? >> yes, sir. pres. trump: a woman who works for government who has diplomatic immunity, we are trying to work something out. sir -- do youeal, think you will be able to get anything by the end of the year? is that your goal? the china trade

deal is dependent on one thing. do i want to make it. year by fare worst that they have had. so we will see what happens. it's it is doing very well right now, and i do -- i give the farmers $28 million and had a lot less over -- a lot left over. i gave them $28 million over a two-year period. paidthe tariffs that china , and i had many billions less. i have no deadline. in some ways i think it is better to wait until after the election come if you want to know the truth. i think in some ways it is better to wait until after the election with china. i just think that. in some ways, i like the idea of

waiting until after the election for the china deal. but they want to make a deal now, and we will see whether or not the deal has got to be right. china has been ripping off the united states for many, many years. again, because of leadership or lack of leadership. it is like i told you about the military and the kind of money that we are taking in. every one of these countries -- these are rich countries we are talking to. nobodyuld always say, has asked us to do that, so why should we do it now? i would say well, we have not because they were foolish. but i am, and that is where we are. and that is why with saudi arabia, with south korea, with so many other countries, they are paying a lot of money to the united states that they were not paying. and they will be paying a lot more. story, right? that is a big story to you.

i don't know how you can make that about one, but you will figure a way, right? [question inaudible] pres. trump: i know nothing about him. jeremy corbyn. i know nothing about him. >> [question inaudible] pres. trump: i think he can have a very good relationship with russia. i don't think there is any problem at all with the secretary-general speaking with russia. i think it is an important thing to do. >> the president believes in -- we are trying for a better relationship with russia. -- we havehat based to be strong.

that is exactly what we are doing. and especially when it comes to arms-control. to avoid a cold war. a new arms race is dangerous, expensive. russia violated the imf treaty, which banned long-range missiles. we all agree that russia was in violation. treaty will not work if it is not respected for a long time. and the question is how should we respond. and we will respond in a defensive way but we have to arms-controlt --

is something that the president is very focused on. we have to find ways to include china because in the future china has to be part of the arms-control. junko and i have to say this. rush holt -- pres. trump: and i have to say this. to -- they were not living up to it. but russia wants to make a deal. ago, russia wants to make a deal very much on arms-control and nuclear. and so do we. we think it will be a good thing, and we think it will bring in -- we may bring them in later or we may bring them in now, but russia wants to do something badly and so do we. it will be a great thing to do. >> [question inaudible]

pres. trump: no, i don't know prince andrew, but that is a tough story. i don't know him. anybody else? thank you. thank you. >> thank you. pres. trump: lot of money, a lot of money. >> thank you. francine: president trump in london with nato leaders for the 70th anniversary of the nato alliance. i am francine lacqua in london. tom keene is in new york. we have been listening to that press conference for the last 45 minutes, president trump talking a lot of things, impeachment, france, tariffs. in the last 10 minutes he addressed the china trade deal, saying he does not expect it this year. on the u.k., he said i will stay out of the election, did not

talk that much about jeremy corbyn. tom: very interesting, and you see the drop in the s&p futures off the headlines, "i have no deadlines. no on china deal." for our global audience, this kind of press conference, whether it is outside the white house or what you just saw with mr. stoltenberg, is pretty much on a weekly basis normal for this president. wide-ranging as francine said, and certainly he showed the grievances that are had by his gop he did mention the grand old party and said the republicans are unified as he touched upon impeachment. right now we need to go to rosalind mathieson. there are so many moments to talk about here. we will have you for two hours this morning. what is the distinctive feature you heard in the president's comments? : the president said he

tends to range far and wide in , nato, u.k.,es domestic policy come he talked about. on the nato side, it was interesting to see him sound conciliatory, saying that nato is important. commentshe recent about nato being brain dead were insulting, that it plays an important role. he is set to meet with president erdogan again this week. officials were saying only yesterday that there are no plans at all to sit down with .rdogan after the meeting there was outrage amongst lawmakers last month. on chinang comments and trade, indicating there is no rush to make a deal. he said china wants a deal now, but he said perhaps we can wait until after the u.s. election. well, that is a year away.

that could drag on markets and their economy for a year. we are seeing it impact the u.s. economy, so really the question is, can trump afford to hang on that long to do a deal? at thee: when you look wide-ranging press conference, he would not talk about you take -- about u.k. politics. do, do notatever you get involved in brexit because it will act fire against boris johnson. as we have said before, trump's endorsement of boris johnson may not work that well with boris johnson. so he was told to stay out of it. he did say i could work with him, even though he became leader even though he does not know much about hemp has been credible -- critical of corbyn before. the president is here for several days. he will have a chance to sit

down with boris johnson, said he would not mind meeting with him directly. he said that would provide one-on-one opportunities for photo ops with them together. it will be interesting to see by the time we get to wednesday how that plays out. tom: roslyn matheson, thank you. we have a series of guests mind up. right now on downing street, preparing for a conversation with mr. stoltenberg. maria, an extraordinary press conference by the president. i must ask your take from brussels on how nato should respond. they respond to these grievances, or do they try to wait out this president of the united states? here, what is interesting this press conference was supposed to be about nato, but trump did not really talk about nato. he said he was happy with it, but he was not happy with strands -- with france.

that is what is striking. he referred to emmanuel mack ron, saying he was napping, saying that nato is brain dead and that he is not going to let the french take advantage of u.s. companies, and if anything, he is the one that will tax them. let's take a look. pres. trump: i want to tax those companies. they are not going to be taxed by france. it was totally out of the blue. he just had the idea emmanuel had the idea, let's tax those companies. i am not going to let people take advantage of american companies. because if anyone is going to take advantage of the american companies, it is not going to be us. -- it is going to be us, not france. frankly, the one that benefits really the least is the united states. timing, maria, of the nato summit is pretty delicate with a lot of

differences amongst nato leaders. president trump was pretty critical of nato in the past. with mr.ems to be more stoltenberg. maria: he was very critical of nato. he also took credit for the increased spending, saying the reason why nato members were paying was because i told them to. he said their economy is not doing well. he knows that for emmanuel macron this is a delicate subject. i know macro does not like to talk about it on trips. there was another mention to germany where he said germany should not be paying 2%, they should be paying 4% to nato. this is a rich country. they will not pay to protect a rich country. the language he referred to emmanuel macron, just a couple months ago where he said he liked them, well, not today.

francine: thank you so much. we will bring you a conversation with jens stoltenberg, the nato secretary-general, later today. all angles from trade, everything to do with nato. joining us now, from allianz global investors. andreas, thank you for coming on. you have been listening to the conversation and to the press conference. your key takeaway is that we are none the wiser with a u.s.-china trade war, i guess? theeas: what struck me was lack of urgency the president communicated. he was asked, do you have a deadline for the u.s.-china deal, and replied, no, i don't, which would strike a lot of people as interesting because we do have the december 15 u.s. tariff increase looming just 12 days from now.

that served as sort of a defective deadline -- as a de facto deadline. now the president has just signaled he would much that she would not mind if it drags out over the next year or so. that struck me as an important nuance from the president's epic comment. tom: thank you so much for joining us. there is a single headline from the president of the united states, brendan murray, only saying this matters on china packed as if i wanted -- is if i want it. how does china respond to that headline? brendan: i think it would send some interesting signals to beijing that the deal was basically up to him or not. i believe the chinese officials want say, well, what we from you is to rollback tariffs. as trump has demonstrated over the past 48 hours, he is not afraid to use tariffs, even

against allies like france and brazil and argentina. francine: let's bring in undress -- in andreas. deadline foris no the china deal, but then before he said we could get a deal by the end of the year, and we might surprise everyone. from a market perspective, how do you model having trade with president trump's comments? andreas: what we have here is seemingly a trade deal that is being hammered out many months by large delegations, depending on potentially the whim of the president of the united states. i think that is challenging. you asked me before i came on the show what did i think was the biggest threat, the biggest risk to a potential bear market in 2020, and the answer would have been precisely the risk of a military deal because that is

-- of no deal. because that would have been baked into the market. it suggests that the u.s. economy can withhold it, then. think that would be challenging. i think the markets reflate it partly in expectation of a trade deal. if that does not materialize in the short-term, i think we have a microeconomic and macro economic problem. tom: what are the indications in the last 48 hours where the trade war has moved transpacific -- andrth-south axis of what i will have to pay more for brie cheese? how does the shift -- how does that shift nafta and mr. kudlow 's assistance to mr. president on economics? remindererves as a that president trump is dialing

down trade rhetoric, becoming more dovish and optimistic that there was a china deal that was imminent. people now need to factor that you are turning those tariffs on france. if you take on france, you take on the european union, in theory. in thet move is really european union's court to see how they respond to defend france in effect against the threat the president has just announced. a tradee we are with war, and it is global as well. you have been a gentleman of europe for many decades. can you give us an idea of the dramatic response to what we just witnessed? i don't think anybody in the you that in the e.u. is in the mood to be bullied, and i think that is what is happening. it will be swift and it will be

tough, would be my guess. and it is very unfortunate because the world has enough challenges as it is, and this just adds to it and it might be the tipping point that really challenges markets in the macroeconomic environment. francine: thank you so much. in the meantime, we were s going through what president trump said in his first bilateral of the day. -- don't forget, we will also be speaking to the secretary-general of nato, jens stoltenberg. that conversation a little after 8:00 a.m. in new york, a little after 1:00 p.m. in london. this is bloomberg. ♪ whether you're out here on lte.

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during xfinity mobile beyond black friday. plus, you can save up to $400 a year. click, call or visit a store today. tom: good morning, everyone. it has been an extraordinary moment, a 45 minute press conference with mr. stoltenberg of nato.

clearly, the president had much of the microphone during the conference, a wide set of questions moving the markets as we go to our data check. near the end of the press conference, his comments on china, i would single out the idea of a president in charge of the china negotiations saying, i don't have it in front of me, saying he will decide what is to be done in the trade war with china, and he went on with many comments on europe as well. futures are flat, -12. vix, 12.11 has exploded on the edge of 16 showing the carnage of the market of the last 48 hours. the yen, 108.84. francine: let's focus on climate change and brazil's amazon

region, lost almost 10,000 square kilometers of rain forest, 30% increase in the previous year. fires made forest headlines around the world last presidentd the accused others of interfering in brazil's business. with ministers from around 200 nations in madrid this week for the climate meeting, how can they push forward. brazil's climate minister is one of the key players and he joins us now. thank you for giving us your time. ngo's areent has said burning the amazon. what evidence do you see to back that? >> we have fought against these fires in the amazon since the middle of august, and the numbers we have are the lowest

numbers for the past 21 years. that is to demonstrate we are taking this seriously. in terms of knowing who is policeible, inch -- the will deliver the information with those responsible, in addition to the fact that things happen seasonally in amazon in every year like they do in other countries. francine: what is your plan to combat illegal deforestation? ricardo: we faced this challenge for the past seven years. one of the main reasons we have is this lack of sustainable development. we have more than 20 million brazilians living in the amazon and they need to have an alternative source of income. they need to get involved in the development and have alternative resources to take care of them and their families. if we are not able to do that,

we need investment. we need the private sector to pick dissipate to open this new scenario -- to participate to open this new scenario. we recognize the forces very important, and we have kept the amazon forest well-maintained in brazil by 80%. brazil is an example of a sustainable investment, but we need this investment to bring more than 20 million people to an excellent level of prosperity and development. francine: from what the president said, people say brazil is not taking this seriously enough. what kind of recession are you get at the environmental level? -- reception are you getting? ricardo: we are getting good reception. they know this is not a recent problem but is a problem for at

least the past seven years. thirdmbers we face is one than it used to be in 2000 2005. in 2004, 2005. we need support and we need to open this article six negotiation on the paris agreement to allow investments carbon ande trade of everything allowed in the private sector. francine: one is attracting foreign direct investment. the question people want to hear from brazil is do you have a target number for the deforestation rate, or is it unsolvable? ricardo: it is not unsolvable, but it is a problem. inmust therein mind -- bear -- bear inorestation

mind it is illegal deforestation we must solve. development in a sustainable way to be done. otherwise, people involved in -- we needtivities to give them an opportunity to have an appropriate manner to have a stable development in the amazon. francine: minister, please come back. of environmental minister brazil joining us from madrid. president trump speaking moments ago on china. tom: a lot going on. >> waiting until after the election for the china deal, but they want to make a deal now and we will see whether or not the

deal is right. it has got to be right. if youe: if you are -- are just joining us, it has been an extraordinary morning. mr. stoltenberg with nato, the president took over the press conference and at the end, he moved global markets. from one hour ago, we were flat on futures and now futures -12. curve steepening, dollar week this yesterday. weakness yesterday. near 1.30 near the press conference and i also put in as a litmus paper for the european banking system, deutsche bank cannot get out of its way for the last 10 days or so.

andreas utermann is with us with alianz global investors. i amdoing the same thing, looking at this international relations and politics and it just ain't working. how does europe perceive the president of the united states? or a a one-off moment, more holistically changed united states? andreas: i don't think it is either. i think it is a reality we have to face. there is every possibility president trump will be reelected, so given that, it is the case that europeans understand they are facing a different world order. what happened with the new commission and will have to happen with the new parliament is how does europe restructure and respond when it thinks about

the new world order? it was very different when the u.s. took a world leadership role. europe really has not adjusted. tom: i want to go to a headline the president said, a shocking headline -- i do see france breaking off. i am not sure what that means, but it also has a hint of the degaulle-ism of our youth. do you associate mr. macron with the unilateral french approach that at times we associated with charles de gaulle? andreas: there is no evidence of that. thenuel macron, given strong mandate he received when he was elected, and given his relative youth, is probably more outspoken than his predecessors. i do not detect any sign of france wanting to break off of nato or the european union or

the euro zone. i would turn -- interpret these comments as a wake-up call that nato needs to be reformed and re-infused with a sense of purpose. francine: you could argue in the last 30 to 40 years, the u.k., germany, and france were the glue that held europe together. germany is in the throes of a political crisis and we do not know where the coalition is. france is trying to rebuild europe, and the u.k. is going through brexit. what will be left of europe in five or 10 years? andreas: i think in five or 10 years, europe will be exactly where it is, minus the u.k. probably. breakk europe will not apart, neither will the euro zone. the political will is strong. it is interesting that support for the euro and european union in most european countries is at

a multiyear high. the restructuring of spain, portugal, the successful and 2012ring post 2011 is a sign europe can work. people say they cannot nominally deflate. they have done it, and these countries are well within the touching distance of the market criteria, so i do not detect an overwhelming sense of crisis. there is a significant need, that is understood, to define what europe means on the global stage and for its citizens. francine: we talk about nato having the tools are not to deal with what is coming next. do the central banks have the tools? president trump says he has no deadline for the china deal. how do the central banks react? andreas: it is interesting,

because 10 or 15 years ago we would not have thought that central banks need to be the solution to geopolitical problems because they had a clear mandate, control inflation and control the money supply. central banking is becoming more politicized again and they see themselves as part of the solution. what the comments on the ecb and what they think they might be purchasing in terms of the european green deal. we did not even know there was a mandate for that. this is where it becomes different from the last five or 10 years. it is clear that central banks alone cannot do the necessary job. this is where christine lagarde comes in. paeanll try to co-opt the bullet -- the european political -- to resolve the structural growth problems of europe. tom: where are you positioned on

europe in the equity markets? we are doing international relations and politics, but i have to put institutional money to work. can you go along europe? andreas: i think it is difficult to generalize. european equity assets are relatively speaking, cheap. compound that with a relatively cheap euro, or to put it differently, and expensive dollar. that has all the makings for relative outperformance. it is sector specific and if we go into even more trade tensions , given how export oriented the european market is, there will be some sectors that will face challenging times. tom: thank you so much. he is the diplomat this morning from allianz global investors. an extraordinary press conference from the president of the united states.

bloomberg was in attendance, and we will have much more reporting on that. , goldman sachs chairman of investment bank meant -- banking, you have got to ask about the future of i.b. at goldman. this is bloomberg. good morning. ♪

♪ bloomberg "surveillance," today from london and new york. francine lacqua in a very eventful london, tom keene in new york. p.m. new york time, the goldman sachs chairman of investment banking allison mass will be with us on bloomberg,

after that article yesterday in the ft on the desire to find asset management. he is the perfect person to speak to, andreas utermann. they have a little bit of experience in asset management. --ant to be blacks lack rock blackstone, blackrock, elian's, etc. -- allianz, etc.. asset people want to be managers when you are fighting for your life? andreas: asset management is a client business. clients typically tend to be long term. the investing public, pension things -- funds, central banks are looking for solutions to age-old problems, how do i match my liabilities with an

appropriate mix? asset managers are intending to answer and it is not a surprise advocatedan sachs has a longer-term investment. tom: if mr. solomon has to "get up to scale tom: you are battling that -- "get up to scale,", you are battling that. andreas: goldman sachs asset management is a large asset manager. or $700ver $600 billion billion, so it is a significant business already and yes, it is a crowded field. goldman sachs asset energy a demand is one of the premier if is one of theent premier if not the premier manager. asset management requires a

strong trust in brand and i imagine goldman sachs thinks they can expand that into more business francine:. how much more consolidation will we get into the asset management space? andreas: there has to be more. there will be few global asset managers left in perhaps 10 to 15 years. ae reason we have seen relative slowdown is twofold. asset markets over the past 12 months have been very benign. the tide has helped lift many of the ships. that has led to the second reason, many potential sellers to be much more demanding on valuations and how the future of the indices would be controlled. because the markets have been strong, consolidation activity has slowed.

francine: what does that mean for fees? andreas: fees remain under significant pressure. i don't see that changing. francine: the asset managers that will come out on top, is that also geographical strength? andreas: what do you mean? francine: the ones that will do better than others, is it dependent on where their client base is? andreas: they need to be very diversified, very global, and have incredibly strong client advisory capabilities. those are the business models that went out on the. investment led peace -- pure investment led peace. do you see of the ameritrade-td bank merger? there was a full page ad of the three major discount brokers

basically saying we are going to give it away. what does that say to active management? andreas: i am not sure it necessarily says -- sends a signal to asset management. it sends a signal to the world that technology enabled business models become much easier, much more economical to make it available at a much cheaper price. the fundamental question that gets raised with that, got raised in the u.k., gets raised when people talk abandoned a the trail season, how do people access advice? that question has not been answered. it implies that investors on the retail side, not talking about pension funds or central banks, have to make decisions on their own. are they capable of, given the vast lack of financial literacy of the majority of the public?

francine: we will talk about that. we will have plenty more on your markets, and nato leaders meeting in london today and tomorrow. ♪

♪

"surveillance." tom keene in new york, francine lacqua in london at the center of it. in the next hour, we see the president migrate to run exceptionally busy late morning and afternoon schedule. francine: you have that right. his first bilateral of the day with mr. stoltenberg, a 45 minute conference where president trump says he has no line for the china deal. this is what the markets are focusing on. maria tadeo will be in conversation with the nato secretary-general. this is bloomberg. ♪

♪ this morning, 78 years on for the atlantic charter in an

byempt to "further enjoyment all states, big and small." president trump saying the u.s. is being taken advantage of. europe is disrespectful, mr. erdogan is not, and has kept asia out of a war. the trade war goes closure -- global. futures retreat off the "thedent's comments -- only thing that matters on the china packed as if i want it." from our world headquarters in and in london, what is your single observation on an extraordinary morning? francine: president trump has about 10 bilaterals today and then is having tea with camilla and prince charles.

conversationsing with the president and the nato secretary-general and they touched on everything from u.k. domestic policies to the china deal to what is happening with turkey. the markets are moving on the back of president trump's comments that he has no deadline for the china deal and it may come after the election. tom: the grievances of the president of the old charter, back 78 years, and it is clear to understand this is not just a presidential party grievance in america. there are many in the democratic party that share that, and you see that with the pacific agreement, tpp went down as both candidates did not want to support and asia multilateral agreement. ,iviana: that is where we begin donald trump casting doubt on

the chances of a trade deal with china anytime soon. in london, the president speaking for about 45 minutes and said he had no deadline for potential agreement. he suggested it could be better to wait until after the election. president trump blasting emmanuel macron for his comments on nato, calling it "brain dead." president trump called that insulting. >> nobody needs nato more than france and the one that benefits the least as the united states. viviana: there is more come of the president defending his plan to raise tariffs on u.s. goods. on 2.4. may slap tariffs billion dollars of products to retaliate on a digital attach on -- on a french tax on digital revenues.

to letnt trump vows not people take advantage of u.s. companies. 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 viviana hurtado. this is bloomberg. of: markets on the move off aree headlines, on china churn with curve steepening. a move in the vix near the 16 level, 15.79. sterling, i will leave that to francine. unicredit is in the news in italy as they try to move forward a plan, and deutsche bank having a ten-day struggle. francine: it is clear those president trump comments through doubt into the prospects of an

eminent agreement between the u.s. and china, which is why we are seeing the yuan we can. -- weaken. mood is a risk off move -- globally when it comes to assets. nato, how it folds into that confidence that underpins economics and investment, maria tadeo with the stoltenberg interview in the coming hours. here is the president around the world on china. idea some ways, i like the of waiting until after the election for the china deal, but they want to make a deal now and we will see whether it is right. it has got to be right. tom: joining us now is leslie uri fromurray -- binjam chatham house and troy gayeski

as well. an extraordinary press conference. is europe familiar with what we just observed? leslie: europe is becoming familiar with the united states president. 70 years innt to be celebrating nato's birthday, an extraordinary celebration, and we are seeing a toned down meeting called the leaders meeting, not even a summit, and with most leaders saying the goal is to get through the next couple of days. tom: go ahead. leslie: very interestingly, one thing that london in hosting this meeting, is trying to highlight the very important of the role of the u.k. in transatlantic security, not knowing that we would be in the

run-up to the u.k. elections. the president is staying on message and saying he will not speak about the u.k. elections, probably because he is hoping for a bilateral meeting with boris johnson. at the moment, he is staying on message on this. a tremendously difficult time for nato allies, not least the tension between macron and trump. the question of turkey is looming large, and the meeting will be kept very short. we will see a communique at the end of it. tom: i have about two hours of questions, so let me cut to the chase. to these european leaders wait out this president? leslie: there hasn't been a consensus. initially thely main strategy. as challenging that when

he talks about the brain death of nato and is pushing hard for europe pushing forward. he is separate and distinct from nato. there is no reason those things cannot be mutually reinforcing, but suggesting that the waiting about may not be as successful as it could be. in germany, we hear about strategic patience. francine: what does president trump want from nato allies? , injuresor starters the limelight and is probably enjoys the-- and limelight and is probably here to be in the lead up to the election. a very interesting statement he made earlier, calling out macron's disrespect for the alliance. pushact that macron could

trump into a position of being supportive is extraordinary, but whether president trump has a strategic position with respect to nato, we have not seen that. he is trying to push europe to spend more and commit more on defense spending, but a clear strategic vision is not really there. there is a question in the communique, where you are told there will be a line on china, but how much influence the president as having is not clear. francine: on the back of that on china, how do you read this? in the 45 minute press conference, he said, we may not get a china deal before the election and 15 deals -- 15 minutes before he said we could surprise the market. troy: particularly given how much equities have risen this

year, many factions mean -- factoring in global growth have bottomed. at least a face-saving phase i one trade deal will be done. if that assumption turns out to be false, clearly we are in for not a dramatic risk off like late last year that was driven by fed tightening, but something in the 3%, 5%, 7% range. enthusiasm will get choked out. for you are acclaimed multiple relationships with multiple are tentative managers. -- alternative managers. do they care? is it just a distraction? troy: nato is a distraction. i don't think a lot of sleep is lost over whether trump will have a handshake with macron.

more sleep will be lost over whether we have a phase one deal. policy, not fed only have they cut three times and are expanding their balance sheet, the general consensus would be if we look into next year, we should have a strong january in q1 but after that, arise.n marks start to francine: thank you both, both stay with us. will beday, maria tadeo speaking to yen stoltenberg, the nato secretary -- jens stoltenberg, the nato secretary-general. this is bloomberg. ♪

♪ >> i want to tax those companies. they are going to be taxed by france. it was totally out of the blue, they just had an idea. emmanuel is going to tax the companies. if anybody is going to take advantage of the american companies, it is going to be asked, not france. -- us, not france. francine: president trump talked about the $2.4 billion of tariffs on french products, his relationship with emmanuel macron, and the u.s.-china trade deal, no deadline and suggesting it was up to him to go forward

with a deal or not. you were reminding me china has a pivotal role in how they are dealing with nato. talk to west a relationship between the alliance and china -- talk to us the relationship between the alliance and china. tolie: they would begin think about nato's position on china as china becomes more involved economically. there is the feeling that nato needs to investigate this. for any security concerns that might come from this. we are expecting some sort of statement in the communique that comes out of the summit, but that is an important signal. if nato is going to maintain its relevance it will have to ask questions about what china's engagement in the air up means for transatlantic -- in europe means for transatlantic security. is the relationship

between the u.s. and europe changing? thepe pays the brunt of u.s.-china relationship because they are stuck in the middle of open economies. is there anything they can do? leslie: this is an open question to what extent they are stuck in the middle. a range of things are being discussed and i would not be surprised to see more common ground in the months ahead. that is being discussed very much behind closed doors amongst nato leaders. we will see china become more central to the conversations taking place in nato. tom:

there is a debate about nato, the president, and these leaders, i get it, but what is the image you see at your shop of what the new nato would be? leslie: right now, there is a very strong feeling that on one hand, nato, you might be shocked , but nato is thriving. since 2016, over $100 billion more in investment, commitment to securing the baltic, to poland. there is a lot of cooperation still going on despite the very distracting rhetoric coming out of those leaders who are supposed to be most committed to it. there is a little bit of moderation and in the long term, nato is likely to endure. a lot hinges on the next presidential election in the u.s. and whether or not trump is reelected, what will he do in his commitment to nato? will france try to push forward europe's autonomy?

, to most people thinking european collective defense and its efforts are significant but the solidity of europe's defense hinges on america's commitment. again, put the wall up the famous faces. mr. erdogan very much in the news as the president mentioned him. you mentioned the baltic states. how do they perceive this president of the united states if they are on the frontier with russia? commitment,rly, the the actual commitment on the ground and in dollar terms by the u.s. is very well received and tremendously important. there is a desire to keep america very much in and to keep nato secure, unsurprisingly given their proximity.

concern that internal debuted -- disputes and nato be resolved. turkey raises a significant issue as it sometimes threatens to hold back money that would go toward the baltic, toward that is asking theit alliance to think about the pkk and the kurds. i think the question of turkey and erdogan is front and center, one of the most potentially damaging things for the internal cohesion of the alliance. francine: how should the markets view those? i feel like i am asking an impossible question, but if you look at geopolitics, do you go to gold? troy: let's not get carried away. gold has had a strong run because of the pivot the fed has had, and gold will get a strong bid if we get further easing

from the fed, which we do not expect. in general, most asset managers that are hedged don't over upsets with exaggerated shocks coming from overseas -- over big exogenoushould dax -- shocks from overseas. if erdogan goes on another in , if you areutin, long only, it is another story. main driver will be trade and find policy, but if we get escalation on the geopolitical front, given the recent strength you would expect a more significant pullback. francine: thank you both, troy gayeski and leslie vinjamuri. coming up later today, michael

u.k. defense secretary to talk about security, defense, and the nato alliance. this is bloomberg. ♪ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

♪ this is bloomberg "surveillance," tom and francine from new york and london. we spoke about the nato alliance celebrating its 70th anniversary with the leaders gathering in london. president trump talked about the

u.s.-china relationship and some of the discussions on the leaders. still with us are troy gayeski and leslie vinjamuri. one thing we did not touch on is turkey and russia. leslie: this is a significant point of debate, with some saying it is time to reevaluate turkey's membership in nato. turkey is far too close to russia. the purchase of the air defense system, and pushback from the u.s. kicking out the s 35 system. what is the best strategy for engaging turkey? as i'm turkey in nato, comfortable and difficult as it -- as, is seen uncomfortable and difficult as it is now, is seen in the strategic interest of nato. if you kick turkey out, it

becomes a problem with russia and the eastern border. serious problems in turkey a value that do not reflect the rest of the member states, but the strategic concern is how do you keep turkey in and prevent this relationship with russia from becoming stronger? tom: i am sure when you attend clarence house's afternoon with the president and all, it will be brought up. that is the special relationship across the atlantic. how is the special relationship between turkey and germany? leslie: i would love to go to clarence house but i will not be there. the special relationship between turkey and -- i'm sorry? tom: turkey and germany. leslie: it is very complex because turkey's motivation right now is balancing inside the alliance, but really fostering this connection with

russia, which certainly doesn't sit well for germany, doesn't sit well for any of nato. interventionkey's in northeast syria, which has bolstered russia's role, andnished america's role, threats that potentially stem from isis, it is hard to see that anybody is happy. tom: leslie vinjamuri for chatham house in london. troy gayeski has been more than patient on international relations. we will speak the interesting performance of hedge funds in a bit. this is bloomberg. ♪

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across bloomberg, this on the investment company of london which has been a trade rack, now arched to split up business -- a train wreck, now urged to split up its business. viviana: china is signaling trade talks with the u.s. could again be in jeopardy because of disputes over human rights. chinese state media says the government will compile a list of what it calls unreliable entities that could lead to sanctions. billng is unhappy with the from the u.s. congress. chiefo hong kong, executive carrie lam is promising more economic relief measures. a report saying months of protests leading to a record decline in retail sales. lam says the measures would be

targeted at challenged sectors. she is rolling out making political concessions to protesters. the government unveiling a $5.5 billion -- the economye shrinking more than 5%. violent protests forcing shops thelose, paralyzing workforce. impeachment reports from both sides of the aisle will be sent to the judiciary committee. they will not be there in time for the first public hearings on wednesday. the witnesses at the first hearing will be four law professors. i am viviana hurtado. this is bloomberg. reporting this morning with

swissk winters on gam, a company, and asset manager of various shades, different from what we see in the united states. on gam. a chart capital partners saying, get your house in order. troy gayeski has seen this before and what happens is the money walks out the door. what is it like? you have dealt with them. what is it like when the money walks out the door? troy: it is tough. cyclical buts are you are only as good as your last trade. .

, one of themble biggest keys to make sure you avoid and asset liability mismatch. it is very important to keep morale up, keep performance in the right direction. tom: we are at skybridge. on this phone line, the institutional guys saying he would walk out the door 16 months ago, the stock has gone of athree quarters percent, and you talk about the confidence to have in any alternative investment manager. it evaporates. troy: it depends on the situation. if you have key players leave the firm that have been drivers of success, that is a red flag. assets, thateeding

leads to concerns of whether you can make payroll. it is never good to see flows go .ut the door cantimes a good outflow cleanse a portfolio into cleaner exposures. has seen this chart before. this is a wrought chart. is cyclicality of gam extraordinary, and the move over the last four years from 20 down to two, that says it all, doesn't it? francine: it says it all, and something to keep a close eye on. troy gayeski stays with us. banks have a similar problem, money outflowing. unicredit's chief investor will

reward investors with 2 billion in buybacks and will cut about 8000 jobs as it struggles with low economic growth and low interest rates. joining us as our european finance reporter. the huge surprise is how much she is giving back to shareholders. will they be happy with that? is it enough? ross: the first impression is that it is pretty good, overall positive. analysts are keeping their buys on the stock. i don't think the markets are bowled over by it, but in this environment getting more back and all the way into 2023 getting a bigger return is a positive reason to stick around, and a lot of banks do not have that reason. it is coming over pretty well. francine: if you look at the

number of jobs lost in the finance industry in europe, it tops 89,000 -- 73,000, excuse me. what needs to happen for european banks to get better? the underlying growth, isn't it? what you see at unicredit and a lot of places is happening as much cost savings as you can possibly do, squeezing every efficiency out of it. it is the top line, the money they are making from banking, is just getting weaker and weaker, or barely growing. it will take a turnaround of the whole environment to get that revenue coming in and allowing banks to grow and to add jobs and regions and businesses. francine: thank you so much, our bloomberg finance editor ross larson. if you look at negative rates in

europe, how much of negative rates is an advantage to the u.s. and how much of a killer to european finance? troy: the principal advantage the u.s. has had since the euro zone crisis is that london is no longer a threat to the new york preeminence in capital markets. it is just the growth environment. you have had such anemic growth in europe for so long, it is almost impossible to grow topline. if you look at commerce banks foreign -- forward-looking -- mmerzbank'snk -- con forward-looking growth, you have some name stability -- nim stability. it was not that impressive,

evening with the flattening yield curve. if you look at the underlying credit quality of lending, it has been exceptional in the u.s. for some time. in tier one capital, despite rocksolid balance sheets, in europe they are working through the problems of the euro zone and the financial crisis. big bifurcation between u.s. financial institutions in europe and the hope that at some point that will converge. being long european financials is nobodies favorite trade. trade.dy's favorite tom: coming up, an important discussion made more important by the discussion of goldman sachs that they will move away from a retail banking. mass,ns it, allison chairman of investment banking, the 2:00 hour this afternoon. this is bloomberg. ♪

viviana: you are watching bloomberg "surveillance." in california, investigators say pg&e could have prevented the deadliest fire and they failed to properly inspect and maintain its transition system. blamed for is killing 85 people and destroying tens of thousands of homes and businesses and led to them declaring bankruptcy. amazon needs to shake off a patchy record in live sports. the prime video will start selling -- showing the richest

soccer. they be free of glitches that have happened in the past. that is a bloomberg business flash. tom: can they do it? this is a huge deal in america, can amazon pull this off. everyone will be watching the load on their streaming service. paul sweeney will talk about this morningferro on radio. a data check. futures negative nine, were -12 early. what do you have? francine: i have a similar data check. , bringinges dropped european stocks with them on the president trump trade remarks, throwing into doubt and eminent agreement between the u.s. and agreementmminent

between the u.s. and china. 20, fancywo and the mathematics and jargon like drawdown. relative basis an absolute basis, let's look at a wonderful single best chart off the lehman low, and times on the way where you can go to cash. basically, it has been a vector up. troy gayeski with skybridge capital knows the mathematics of absolute and relative. on an absolute and relative basis, how bad is this year for hedge funds? troy: absolute better than last year, because they have a long beta. 6.8% forl it strategies with a higher beta. relative not nearly as good where you have 27%, 28% upside,

it is impossible to compete. the big picture for the hedge fund industry, the alternative industry was built on the lost decade in equities. toities went nowhere 2000 2010, and hedge funds performed relatively well. since the crisis, it has been a moon up in terms of equities. crisis, hedges in value, but for the most part hedges have been a horror show and it is difficult to keep up. tom: there are good people, lewis bacon stepping aside. many other names. we all agree, these are smart people. troy: for sure. tom: why don't they just buy index? they cannot justify the fee, they have to do something original. troy: the point of alternatives,

whether private or hedge funds, is to generate returns in a different way, do have a correlation benefit their portfolio kit -- portfolio. given the look back, sometimes youas value and other times have higher beta sensitivity to equity. people try to with salt the same problem, how do you -- assault the same problem, how do you make a single digit return that was valuable and in the post crisis period has been a challenge? francine: in the search for yields, do these alternative assets represent too much risk? all the money that goes into older assets because of negative rates goes elsewhere. troy: that is a good question. standpoint,rent that is one of the better areas of growth for alternative assets

in general, as long as equities keep going straight up, the only way to keep up with equities is to be 100% long. if you are allocating to hedge funds, part of the reason you are doing that is because global bond yields are exceptionally low and you will not have as much hedge value from fixed income in the next downturn because rates are starting so low. that is one area hedge funds can compete. they are more sensitive to the economy and not negatively correlated like bonds. there is very little doubt in our mind that on the next several years barring a recession, hedge funds can outperform fixed income globally. we view that more is an opportunity than a risk. tom: troy gayeski with gapper -- skybridge capital, thank you so much. the president of the united

states, an eventful calendar in london. please stay with us. this is bloomberg. ♪

♪ francine: this as bloomberg "surveillance," francine lacqua in london. we heard the news conference between the secretary general of nato speaking at the nato engages event now. earlier, he was speaking beside president trump in a press conference lasting 45 minutes, addressing a number of issues. trade is moving the markets, and other things such as russia, and really going after france. for a roundup of what we heard and what is to come is rosalind mathieson, and just in sync has been traveling with the president. we heard president trump

enjoying the limelight, speaking on a wide range of things. are we expecting anymore press conferences? i don't know if we will get another 45 minutes out of the president, but we expect him to meet with french president which will be interesting. said the comments made about a brain death of nato were insulting, and suggested that france might break off from the rest of nato. between that and the escalating trades -- dispute -- trade dispute over u.s. tariffs and retaliating in exchange for the digital services tax, we can expect that to play out this afternoon. francine: what did we learn and that press conference?

president trump really critical of nato and suddenly he seems to be more onside, and gave us a glimpse of how he sees u.s.-china. rosalind: interesting to say that he will be the champion of nato. it does not mean that the president is a big fan of nato and sees it going well, particularly because of the burden the u.s. is carrying from a cost perspective, but it is a good time to play devils advocate with macron. that sets things up between the two of them, french pushing back on trump's comments, saying it is time to have a public discussion about the future of nato. it does not mean france does not leave in nato, it just feels there are fundamental issues that need to be put on the table. it will bea side,

interesting to see the president's comments possibly pushing the deal out to the election, allowing this uncertainty remain -- to remain in the markets and the economy for an extended period. does it make sense to drag this out? francine: do we have any idea of what the president wants to achieve in london, his goal with his nato allies? is he trying to get something out of anyone? justin: the u.s. is looking for a greater commitment on a number of issues, to orient nato against china with the ratcheting of brescia -- pressure. the other issue is 5g. the u.s. is frustrated they have not been able to get more support to ban huawei and chinese manufacturers from implementing 5g technology. those are modest goals. we also heard the president

asked about the u.k. elections. that is an issue where he is hoping to help boris johnson by staying quiet, which is an unusual track for the president to take, but one he is trying in london. francine: full team coverage, justin sink and rosalind mathieson. falling,ty futures european bonds trimming some gains after president trump said it may take up to a year for a u.s.-china trade deal. we will be speaking to jens stoltenberg, the nato secretary-general. this is bloomberg. ♪

♪ alix: no deadline for china deal.

president trump says there is no urgency, passing doubt that there is a phase i around the corner. president trump delivers harsh criticism of nato, and strikes back at france, saying if anyone taxes u.s. tech companies, it should be the u.s., not france. in markets face weaker u.s. economic data and more trade risk from china, europe, and latin america. welcome to "bloomberg daybreak" on this tuesday, december 30. i'm alix steel. president trump speaking at the nato summit in moving markets. sb futures down by 0.2%, throwing some doubt on a phase one trade agreement. some buying finally coming into the bond market after yesterday's complete carnage, with yields really jumping and crude flat on the day, taking all of this in stride. time for