tv Bloomberg Markets Americas Bloomberg January 27, 2017 12:00pm-1:01pm EST
we begin with breaking news. the prime minister of the united kingdom theresa may arriving for a meeting with donald trump at the white house. she was at arlington national cemetery earlier in the day. the leaders will hold a joint news conference at 1:00 eaern time, 6:00 london time. or the latest details, let's go to the white house where kevin cirilli and guy johnson are standing by. in the studio is michael mckee. say, the first question will probably be about mexico. the prime minister wanted it to be about them, but this news is looming large.
about thislked yesterday, wide trunk would get the mexicans to cancel the meeting. it is very confusing. we don't know why he decided to put mexico front and center. questions about mexico and a 20% border tax is what everyone is talking about, and today again he doubled down, insulting mexico and talking about the need for the wall. johnson, what will theresa may learn from this exchange about how to negotiate with donald trump? she will not be responding on twitter. guy: she has to try to make this a calm affair from the british point of view. she is here to do a number of things. some of it is domestic politics, and that is maybe where we will talk about trade. some of it as well is to come here and convince the white
house, donald trump that he needs to engage with the international community, that he needs to establish a relationship with a traditional architecture for security, and that is really what the british prime minister is here for. it will help with brexit, but i think they may be trying to take a step back and say, what we need here is a solid relationship with the white house. kevin, a margin is underway, the march for life. antiabortion activists. the president giving his s for . he tweeted out about mexico this morning. he has not said much about the u.s.-u.k. relationship. how important is this to the white house? kevin: very important, not only with a part trade perspective but also because it comes a day after where there was a political hick up with regards to next weeks now canceled
meeting with the mexican president. in regards to march for life, vice president pence will be there as well as kellyanne conway. we hear that president trump will somehow deliver some kind of remarks, not attending, but maybe through a telephone call or something. with regard to trade at the white house, senior advisers i speak with our all signaling that this is about trade, about not only project to the u.k. but also to global world leaders that this is a president who wants to personally negotiate in terms of those bilateral trade agreements. vonnie: we should mention, this is a march that happens traditionally and presidents in the past have called in. tomorrow, we know from sean spicer the president will be speaking with vladimir putin,
angela merkel, and france wall hollande.cois kevin: it is interesting that once again donald trump is putting vladimir putin and angela merkel on the same page. that will not go down well with the germans and french. the fact that theresa may is here, there is a telephone conversation with the leaders howrrow, shows you a lot of the u.k. is positioned right now. that is what they want to build on in terms of the relationship that can be established here. trump has described in nato as obsolete. the british are coming here to make sure that that is not the case. of brexitic politics are very important to theresa may and there will be a lot of questions from the british side here, but nevertheless, she is here to talk about the international architecture, security, vladimir putin, talk about why nato is important. john mccain saying, i
hope that they end the speculation on russia. kellyanne conway said that this was something they were considering, lifting the sanctions against russia whole scale. it brings to mind the role of saidkers, what they has about the remarks from sean spicer about this 20% tariff. do you think we will see lawmakers play a bigger role as the day goes on? they will have to reassert themselves. right now, he is dominating the headlines. it is up to them to pass the legislation he wants. is part ofde tariff a larger effort to lower corporate taxes that was put together by the house republican caucus. congress is really driving some of this. as we have seen from donald trump in the past, he puts himself into the whole next.
the interesting thing about what is going on is that he can have a conversation with theresa may that is not a negotiation because they are not edit stage where the u.k. can negotiate. but if he brought in the mexicans, he met have to get down to brass taxes. he does not have his commerce secretary, trade representative, they have not been confirmed. none of the undersecretary or assistant secretaries have been appointed. so maybe he doesn't want to get into a negotiation right now. it doesn't serve his purposes or the u.s. vonnie: kevin, who among the two meeting today, theresa may and donald trump, has the leverage? it would seem that it is all on donald trump's side, true? i think the administration feels they have more leverage in this meeting, at least before the cancellation
of mexico's meeting, but there is pressure on the administration and president trump himself to make sure that today goes off without a hitch, to say the least. david: on the subject of opposites attracting, a comment from theresa may on her plane over, she said sometimes opposites attract, referencing her relationship with donald trump. how important is the personal relationship, how much work will be done to make sure there is a legendship between the leaders? anythinghe brits take away it will be an establishment between the chemistry between these leaders. if you can establish that early on, that will set the relationship up. will it become reagan and thatcher, i don't know. we will see. that is certain what the white house has been talking about. whether it turns out to be the case, we will see. but chemistry will be absolutely critical. vonnie: why wouldn't it become reagan and thatcher, michael?
they don't have a history, first of all. second of all, donald trump went to mexico and met with the president, left saying what a great guy he was. until this month, talking about looking forward to wking with him, he had made a lot of constructive suggestions, and now all of a sudden they don't like each other. i don't know it cherries and they will be able to trust the relationship one she leaves. it is interesting to see if they can get anywhere. more difficult to do than they think. this is not about tariffs. the two countries right now trade without a lot because they are in the eu trade block. thingshe non--tariff they have to agree on like banking regulations. we have dodd-frank. we have to harmonize banking regulation to work together. that will be more difficult to do than something. david: great insights from all of you, thank you.
we will be checking in with you over the next few hours as we await that live press conference with president trump and theresa may scheduled to start at 1:00 in washington. vonnie: we are halfway into the trading day here in the u.s. julie hyman has the latest. julie: we are not seeing much action in the major averages, in part, because there is a lot of reaction to earnings. on the winning side, we have wynn resorts leading the gains, as it's newest property in macau listed their results in contrast with las vegas sands. kla, the chip equipment maker, new orders topping $1 billion for the first time. that is the good. on the negative side of the ledger we have the staffing
company, earnings missing estimates. they say month to date placements are down 19%. afterproducts shares down second-quarter guidance came below estimates. also american airlines matched estimates. they say pricing power will come back but also say fuel sts will rise $1.4 billion in 2017. moving away from these individual companies, because we are talking so much about britain today, i wanted to look at the pound. the dollar overall has been falling overall against a basket of currencies, set for its fifth straight weekly loss. but the pound is lower against by half a, off percent. you can see that is a continuation. last year was rough for the pound. this is looking at the average annual performance. 2016 saw the lowest annual average over the course of the year, going back to 1983.
we did not see a recovery in the vote to exit the eu. vonnie: thank you. we will be back with you in a bit. now let's get a look at the first word news. expectedonald trump is to make good on another campaign pledge. he will sign an executive directive halting the flow of refugees into the u.s. and topping entries from majority muslim nations. the ap citing a draft order says it includes an indefinite on accepting syrian refugees and causes a pause in refugees for over 120 days. president troublemaker's first visit to the pentagon as commander-in-chief today. within ask for a plan month to more aggressively strike iamic state. imf managing director christine lagarde said president trump's plan to overhaul the tax system and increase infrastructure
spending to excellent growth in the u.s. economy over the next two years. she says it is too early to predict how his other policies may impact the economy. could berorists planning to undermine elections in france and germany. the warning came from the european union. pen inlist marine le the running and angela merkel flooding anti-establishment forces as she faces reelection in germany. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. vonnie: president trump bloats the idea of a 20% tax on imports from mexico, but who will end up paying? we are live in mexico city. this is bloomberg. ♪
david: this is "bloomberg markets." i'm david gura. vonnie: i'm vonnie quinn. relations between the u.s. and mexico are continuing to break down and the countries are getting closer to a trade war. president trump tweeted today that mexico has taken advantage of the u.s. for long enough. necently, the administratio floated an idea of a 20% tax for all imports from mexico but that could carry serious consequences. join the charlie rose it talk about the implications of a mexico tariff. >> under nafta and our obligations under the wto's, we cannot oppose that 20% and not
leave the door open to other countries to retaliate. if we do that, we are in violation of our international obligations. that means x ago could raise tariffs on our exports. we export hundreds of billions of dollars of goods to mexico every year, supporting u.s. jobs. vonnie: with the latest is nacha cattan from mexico city. what has been the public pronouncement from mexican officials? responses from the mexican president on twitter, but what is being told to the public? nacha: there is a sense that the border tax pronouncement is the last straw, there has been pena nietos between
and trump, and then he canceled his trip after donald trump said don't come if you have not decided to pay for the wall. but this border tax pronouncement seems to be a serious step. people have the sense that trump is after mexico's economy. david: we are getting word from the ap that president pena nieto and president trump had an hour-long phone call this morning. is there a sense that this relationship can be salvaged hearing that news? the foreign minister yesterday said that talks will continue. there is obviously a push from the government in mexico to continue the talks and salvage them, but there are also, within pena nieto's party, other politicians who have a very bleak look on the future of negotiations and are wondering what will happen to nafta after
this showdown between the countries. david: what has the political response been in mexico thus far, what have politicians been saying in congress about what is happening? all of the opposition parties were saying pena nieto should have canceled the trip even before trump's tweet. afterwards, there is a bit of solidarity with pena nieto among politicians, and among the public. not a very popular president, has the worst ratings in the past two decades, but people are rallying behind him, and there is a nationalist strain that we are seeing in mexico to confront trump and all of his rhetoric. david: i want to bring up a chart on the bloomberg showing nafta trade reliance. the top chart showing exports to canada in white, to mexico in
blue. almost 14% of u.s. exports are to mexico. is there talk in mexico about retaliation for this? we were talking about the prospect of retaliation. has there been talk in mexico about doing that? mexico has a couple of choices, they could slap retaliatory tariffs on the u.s. if this goes into effect, they can go to the wto. at this point, there is just talk among some politicians but it has not gone to a level where this is the plan. there is still hope that things will turn around. even the peso today is doing well, as there is hope that things can finally come together , so that mexico and the u.s. can further their relations. vonnie: reports of an hour-long call today between trump and pena nieto.
investors in mexico are not all that worried. we have seen the index erase some gains but it has not cratered. butpeso has been volatile, in a range since the election. nacha: exactly. we have seen the pace over the past 12 months do terribly. then there is a pickup this week, a sense from traders, buy the rumor, sell the fact. things have come to fruition as people expected. they are not surprised. the peso is now strengthening. cattan, in mexico city, thank you. we will bring in a press conference between donald trump and theresa may. david: it will start at 1:00, we have pictures here of donald
trump meeting the u.k. prime minister. moments ago. she was in philadelphia yesterday meeting republican lawmakers. here she is in the oval office. we expect that press conference to begin at 1:00 eastern time. still ahead, verizon eyeing a charter deal. how corporate america could be facing the most favorable political and regulatory climate in years. this is bloomberg. ♪
let me ask you how this may resonate in washington today, how in the regulatory halls this will be perceived, if it becomes a deal. right now it is early stages. of analysts are skeptical that ts deal will come together, but that said, this could fall into a really favorable climate. if the parties, verizon and charter, are able to catch it in terms of job creation and infrastructure investment, those are issues that would resonate well with the white house and congress. that this is one in a list of deals that are pending. this has not been made formal, but what about the other deals that are waiting for final approval? depending on what the combination is, they may benefit from some of the same factors. this is a little
bit different than if we looked at the at&t-time warner deal. that involves more content. this seems to be focused more on infrastructure, to address the coming wave of wireless technology, 5g, other plays that the company may want to look into. those may be perceived differently by the president, by congress. david: put this into broader context, in the telecom space we have seen other deals. with them, sometimes criticism or support from capitol hill. where are the allies right now for a deal like this, how would this deal compared to others we have seen in recent memory? good question. potentially, both companies could draw on powerful allies in congress and elsewhere in washington. charter has a large presence in three of the home states of three powerful lawmakers in the house. latta from ohio, a republican chairman of the
digital commerce and consumer protection subcommittee. you have marsha blackburn from tennessee, who is now chairman of the committee occasions and technology subcommittee. finally, from wisconsin, house speaker paul ryan. that is just in congress. at the fccyou also potentially has a favorable regulator, shown himself to be very willing to look favorable on industry consolidation. of course, we have the x factor in the white house, president trump has been quite happy to weigh in on business deals. perhaps if he looks on a deal favorably, he would weigh in with the department of justice. david: thank you. this is bloomberg. ♪ with the xfinity tv app,
with the first word news. taylor riggs is in the newsroom. donald trump is meeting theresa may. may's meeting is being held by the government that the transatlantic special relationship is valued by the new administration. the visit comes after mexican called offena nieto his own trip to washington amid wrangling about who will pay for the wall along the border. will holdrump and may a joint news conference. we will bring that to you. the white house and kremlin confirmed latimer bruton will speak by phone with president donald trump tomorrow. putin congratulated trump on his victory shortly after the election. the kremlin says they have not spoken since then. the kremlin has applauded their efforts to amend ties with moscow. sean spicer says investigations into what president trump says
was widespread voter fraud in the election will be focused on understanding where the problem exists and how deep it goes. he has singled out california and new york. s the president will sign an executive order to launch the action today. belgium has sealed an agreement with france and the netherlands to draw a passenger list and introduce passport checks on international real services. the move will tighten security on high-speed trains and help track criminals who may be using them. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. vonnie: thank you. let's take a look at some of the securities moving today, including the u.s. dollar. the bloomberg dollar index is up slight today but on pace for a fiftweekly decline. it looks like it will be five weks of a decline.
morgan stanley saying it is a powerful rebound in the relationship of risk assets and bond yields. you can see the 10-year is still back at 2.05%. the ruble is stronger today. it may have been unwise for the central bank to signal that it would start purchasing rubles. it will be a volatile time for that. is alsocan peso stronger by about 1% today. perhaps following reports of a telephone call between donald trump and pena nieto. it could also be for other reasons. at the world look with abigail doolittle. abigail: major averages are unchanged, small gains and losses, but to them your earnings winners are trying to
help these indexes, microsoft and intel. point boost for the dow, s&p 500, and nasdaq. microsoft is up more than 2%, beating earning estimates by 7%, $.83 per share. there was strength across the board. legacy server and pcs trotted -- products were strong. analysts intelligence say that the results may suggest that i.t. spending is strong. as for intel, they beat a nice quarter, solid. an upgrade from morgan stanley to outperform despite the fact that the guidance could be somewhat disappointing. as for the big percentage performer on earnings, wynn resorts. we see a nice pop higher, up about 7% on the day. according to bloomberg
ielligence, analysts say what investors like is the fact that revenues and ebitda did beat estimates from the new wynn palace in macau. the key going forward is strength continuing in that wynn palace. in the bloomberg, let's take a look at some charts. this shows there could be strength ahead for wynn resorts, but this is pretty tentative. back in 2012, when the 50-day moving average crosses up to the 200-day moving average. it speaks to a lot of interest. last april, we saw one of those. up nicely, but they consolidated in this range of uncertainty where new the bulls are bears are winning. resorts put in a reversal of that, but it looks like today there could be another golden cross, suggesting
maybe that range will produce a move to the upside. this may be a bullish stock to take a look at in the future. vonnie: we will keep an eye out, thank you. david: ubs shares are trading down today after clients pulled $15 billion out in the fourth quarter even as the bank beat profit estimates. the ceo painted a positive picture to investors today. he spoke to manus cranny earlier today. >> 16 was much more challenging. the good news is the benefits of our diversified business makes geographically and activities as graduated once again to managed this environment. the investor confidence is there. we are talking regularly to clients and investors about it. planning readiness and
for investments in not only potentially financial markets but also underlying businesses. but it is quite clear that investors are looking for concrete actions by the new u.s. administration, in order to then go into investment mode. changedthey physically and moved to transaction mode since the election, showed you the money? >> not really in a meaningful way. you see, particularly in the u.s., better momentum. although i have to say the fourth quarter was in the u.s. a .ositive one postelection if you look at in general outside of the u.s., the situation has not changed a lot. , for fundamental reasons, looking at europe in general, particularly on the political side, also in asia, there is still room for improvement. lot management america, net
new money. are we seeing the end of these regularization for the clients, the end of those cross-border outflows? thisow, what we saw in q4 year was an acceleration of a process of regularization that we will be going through as the automatic exchange of information is applied globally. what we see is clearly now a phase where emerging markets, markets,rly some asian this is not executed. we do expect similar outflows that we saw in 16 for this year. we see a little bit of tapering in 18. >> talk about the investment bank. you went fixed income like.
i look at the numbers, a significant beat on one market had for you. talk me through what the success was in an equity heavy investment bank. indeed, iness is, equity, that is the investments we have been making for the last couple of years to rebalance our business mix a little bit more toward the u.s. if you look at our u.s. businesses in general, particularly in equities, we have had a strong performance. when you look at also a little bit more activity on the other side, that has helped to sustain this business. >> everybody is looking at america. your chairman hinted there could be deals for ubs, that you may look at m&a. will you scale up in the u.s. on wealth management and on the ib? when would you be convinced to
shift gears on what you do in the usa? >> i think we are already convinced of what we do in the usa. our wealth management business, in 2010, we were losing 350 million pretax. 1.20 5st year we posted billion pretax across the u.s. the momentum from inorganic standpoint is still good. we are very focused on growing organically, but of course, as i mentioned in the past, the time of consolidation in our industry is clearly starting. it is almost inevitable to and,ss both overcapacity in some cases, profitability issues. >> when you sit with the board, do you say you want to be one of the players in that consolidation? >> consolidation is one option, not the option. whatways have to look at fits into our strategy. we have a clear strategy.
we don't want to really dilute our strategy just or the sake of consolidating. there has to be a merit, strategic and financial merit. we are open to exploit any option that makes sense and the crews out before our shareholders. vonnie: that was the ubs ceo sergio ermotti. trump andsident theresa may will be holding a joint press conference in a few moments. we will take you there live. this is bloomberg. ♪
in client withdrawals last quarter. the bank's chief executive tells bloomberg he is optimistic about the future. german prosecutors doubling the number of people they are investigating in a diesel emissions cheating scandal. among those under investigation, former ceo of volkswagen martin winterkorn. mark: a closer look at donald trump's campaign promise to rewrite trade policies. will it help or hurt the u.s. economy? ubs says clients pull more than $15 billion in the last quarter and profitability in what management businesses declined for a third quarter. still, sergio ermotti was optimistic. the most important thing for me is to see that our clients are optimistic. there is some positive momentum, particularly with u.s. investors and clients.
i think this could be a turning point, but it's very important to see the new administration plansuts in action their and to give our investors even more confidence. prosecutors in germany are extending a criminal probe into volkswagen diesel emissions cheating scandal to include the former chief executive martin winterkorn. he is one of 37 people being investigated for fraud and competition violation. he had already been targeted in a separate investigation of market manipulations tied to the scandal. he resigned in september 2015 tesco is making an acquisition. the u.k. supermarket leader has agreed to buy the number one u.k. food wholesaler booker group. the price tag, $4.6 billion. the deal will enable tesco to gain access to the fastest-growing market to supply restaurants and hotels. the bank of japan moves to purchase bonds in five and
10-years after benchmarks climbed. the level serves as the upper limit of its target range. the central bank also made clear it has less interest in containing yields on so-called super long bonds which have risen this month to the highest levels in a year. time now for our bloomberg quick take where we , provide context and background on issues of interest. of two centuries, the virtue free trade when almost unchallenged, but now it's the target of a populist backlash that is helped to propel donald trump to victory. fulfilling his campaign pledge to rewrite trade policy, president trump on january 23 sign in order to withdraw the u.s. from the transpacific partnership. the sweeping 12-ish impact that is known as tdp.
mexico's president enrique pena nieto said that his country would not pay for a border wall with the united states. callednt trump's actions to question the future of both agreements but especially tpp, which trump is abandoning before the congress votes on it. he also promises to hit china with punitive tariffs. aides say the new president is open to negotiating two-way trade deals, including one with the united kingdom. here is the background. after world war ii, trade agreements removed barriers, impeding the flow of goods across borders. a wave of protectionism that kranz economic growth led to the 1947 formation of the general agreement of trade and terrace. that is the precursor to the wto. most members are now a member of the body, with china joining in 2001. there is the argument. trade has raised living
standards and has allowed many poor countries to close the gap on rich ones. consumers have a broader range of goods and in multi-nations, cheap imports road down the cost of basic items. even so, the benefits can be harder to see and opponents it undermines social and economic impacts of free trade. retrain displaced workers does that make up for lost earnings, they say. making opposition to free trade a rallying cry for champions of the middle class. you can read more about trade on the bloomberg. that is your global business report. david: james madison orders a review of the f-35 program in the air horse. that is according to our colleague who covers the defense department.
ordering a review of the f-35 and air force one programs. continuing coverage of that through the afternn as the presidentwi be going to the pentagon after his press conference. he will be going in for a ceremonial wearing in. here you can see the stock of lockheed martin falling about half a percent on that news. coming up, that press conference between president trump and u.k. prime minister theresa may is supposed to start in about 12 minutes. we will take you there when it begins. you can watch on your bloomberg. this is bloomberg. ♪
news conference between president donald trump and british prime minister theresa may. let's go to the white house where kevin cirilli and guy johnson are standing by. with us in studio is michael mckee. , let me start with you. the first press opportunity to see donald trump meeting with a leader, but theresa may has been in power for a while and has met with other foreign leaders. what will be different about this meeting? we want to know whether or not it will get hijacked by a completely separate issue. the british, i would suspect, are actually nervous about what is about to happen. has faced certain criticism about this trip, how quickly she has embraced donald trump, how quickly she has come here, the first foreign leader to visit the new president. it needs to go well. to be honest, this is different in terms of the other press
conferences she has faced. i would say the risk is a little bit higher judging by the last 48 hours. david: we have used the term trade war over the last week. what are we looking at, what could happen here with mexico? basically talking about one country imposing trade sanctions on another and then the second country retaliating. that could happen in donald trump imposed some sort of tariff on the mexicans. one would assume that they would fight back. that is what happened in parts of nafta, the u.s. not letting long-haul trucks into the u.s. the problem was eventually resolved. we hope we are a long way from that now. when a spicer was floating the balloon of using the adjustment tax as a way to have claimed that they funded the wall, that will not be passed by congress until sometime later this year, if at all. it would not take effect for quite some time.
this is down the road. the interesting thing is, the tweet that donald trump sent out about mexico this morning, did that come before or after this reported phone call with pena nieto? vonnie: this is something new and interesting. there was a one-our conversation between the two today. what are you hearing from your sources? kevin: they say the call took place i spoke to somebody confirming that. this is also good news heading into the press conference, particularly when the trump white house is looking to alleviate concerns, not only in congress and washington, but around the world, that they are able to interact with global world leaders on a world stage. in terms of leverage, i spoke with kellyanne conway this morning, who told me perhaps one of the conversation topics that will be addressed in the working lunch that theresa may and
president trump and vice president pence will have after this press conference, is ways in which president trump and the administration can work with the prime minister in order to help them publicly pressure others to help them meet that march 31 deadline. in terms of hearing washington, big deal to have the leverage, particularly in negotiating a bilateral trade agreement. they hope that will set the stage for other trade agreements, maybe even like mexico's. david: we had a big speech from theresa may a week ago. davos of theing in world economic forum, yesterday in philadelphia. streamlined, how clear is her message on brexit now after all of that? guy: very clear, brexit is going to happen. the date that kevin talked about will come to pass, we will trigger article 50. the u.k. is embarking on a much
more positive phase in its economic history opening itself up to global trade. the irony of the meeting, in some ways, is that donald trump is seeking to protect u.s. workers in a time when prime minister may is looking to expose british workers to the full forces of the global economy. in some ways, not exactly seeing eye to eye on what trade will look like. the trade story is important for theresa may. i don't think you will see much achieved here. the mechanics of this are difficult to actually make it happen. it would be a surprise, even by the midterms in the which has been suggested by the administration. are looking for an executive order today as well about the flow of refugees. we got the news this morning. do you think that is something theresa may will address, given it is such a high profile issue in britain as well, she would credit that with her win, too.
to say that she would talk about it. the refugee situation in europe has been a factor in politics, but it is not quite the same situation. comingople in europe directly from syria into the european countries. because of the rules, they can go straight into the u.k., whereas syrian refugees in the u.s. are already extremely vetted. it may not be the same thing. as anay talk about syria issue but may not drill down to threfugees. cirilli, guy johnson, and here in new york, michael mckee. we will bring you that news conference as soon as it starts. this is bloomberg. ♪
we expect a joint news conference any minute from them. the prime minister is expected to pitch a free trade deal as the u.s. president puts together his vision for a more assertive bilateral approach to trading relationships. we will be going to that news conference live, but before we go to that, let's check in with kevin cirilli, guy johnson, standing by at the white house. here in the studio is michael mckee. guy johnson, let me start with you. theresa may cannot get into any weeds on the trade deals, nor would she want to this first meeting, but she is actually not allowed until article 50 is triggered. -- guy: theoretically, yes, the u.k. should not be negotiating any kind of a trade deal. in practice, you can have lots