tv Bloomberg Markets Balance of Power Bloomberg April 13, 2018 12:00pm-1:00pm EDT
>> tpp confusion as president trump clarifies reports saying the u.s. would only rejoin the transpacific partnership if the deal is substantially better than the one previously negotiated. the summit of the americas moves in -- who is in and who is out, why vice president pence will attend but robert lighthizer will sit it out with an agreement on nafta remaining out of reach seemingly. likens donald to a mob boss in his new book. the present call the former fbi director a slimeball. ♪ david: president trump has been storm, up by the tweet from trade, border, robert
mueller, syria, it did not overlook russia. he said our relationship with russia is worse now than it has ever been and that includes the cold war. no reason for this, russian needs us to help with their economy, something very easy to do and we need all nations to work together, stop the arms race? he also warned that russia should not be harboring with what he calls a gas killing animal, referring apparently to president bashar al-assad. dana rohrabacher serves in the house foreign affairs commission and chairs the subcommittee responsible for russia. he is with us now from washington. , do you question is agree with the president that our relations with russia are at the worst have ever been including during the cold war? >> that is correct and i think we have to take steps that will help correct that situation. and put us back on the road to cooperation. , theissue in syria
president has talked about using military force in syria. ronald reagan used military force and build up our armed forces while offered a compromise to mikael gorbachev, which helped finish the cold war. a deal and trying to make things better. it the he is going about same way ronald reagan and hopefully he will be successful. david: there is plenty the united states can do but does not russia need to move towards us? crimea, ukraine, poisoning in the u.k., and now the syrians , don't with the russians we need to have them move toward us? >> it is a mutual situation where we need to understand, corporation between russia and the united states is a benefit to both. example, we need to demonstrate we are willing to use force.
that is what the president is doing and that using gas to kill people is not acceptable. ,t the same time, we should be as ronald reagan did, opening up channels to reach a peaceful solution. there will not be a peaceful solution in syria without a compromise, without us finding a plan, rather than military force , we tried it with saddam hussein. the same message, poison gas was used and we invaded saddam hussein, fought a military solution, and it unleashed chaos. i think this president is smarter and if he uses force, will also have a plan to work out an agreement, a corporative agreement to bring all these sites together. -- all the sides together. shery: the russian foreign minister reiterated the chemical attack was staged by foreign agents, seeming to be a under
mental gap in understanding what is going on on the ground and how do you compromise on something as simple as that? >> any type of use of gas is wrong. let's face the facts, not only gas kills people but civilians ivy tens of thousands being get -- by the tens of thousands killed because of the conflict in syria. we need to work with the russians and other people, including the anti-bush are a solid sod -- anti-bashar al-assad and bashar al-assad, the dictatorial nation of him, is using an excuse for just military action does not work. them knowing we are capable of military action and doing this, we can make sure that they know we can reach a compromise that will bring peace, rather than trying to win the war. shery: isn't it a bit too late to bring russia to the table,
two men this ties with russia, russiaend ties with considering their involvement in our election? going against popular opinion. are you concerned your constituents will judge you for it in november? constituentsric -- would provide a strategy to have peace in syria, rather than think we will bring war and more military power to bear in that area, thinking we will win the day militarily. my constituents think one operation is better than trying to -- think corporation is trying -- is better than trying to win the day militarily. things were worse during the cold war. i was in gauged and we were engaged and military action against soviet troops in afghanistan.
-- i was engaged and we were engaged in military action against soviet troops in afghanistan. ronald reagan knew the cold war was hot, the conflict in afghanistan in nicaragua, ronald reagan reached out to find the compromises necessary to end the cold war. we should not go back to the cold war. and send us back in the right direction with cooperation, rather than confrontation. david: thank you for your time. dana rohrabacher of california. shery: major averages paring back some earlier losses. there is taylor riggs with the latest. >> you stole my thunder, paring back losses, we were sharply red and coming back a little bit and this week has been characterized by the same volatility, losses, gains, losses, gains, losses again. the nasdaq down as much as 6/10 of 1% and trying to crawl back. terminal, we have a cool
earnings chart. or 20he past 20 quarters earnings seasons i should say, the s&p posted gains, this until february when we had the big equity volatility moment that happened. the real question is -- today, we talk about the bank earnings and kicking off earnings season, does that continue? trying to get back to games today but i like this chart as we look at earnings season at what it does to the s&p 500. i want to talk about the michigan survey, consumer sentiment survey we saw. we see consumer stocks a little bit weaker because of that. the survey showed it fell more than forecast in april. 8% drop and people expecting higher income. this led to a drop in helpful finances. a little bit of pressure here. wrapping it up, looking at individual members today. alaska airlines is when i'm
looking at, air traffic in march up 6.5%. shares higher 6.7%. broadcom. 5%,they are up more than the management is trying to focus on plugging holes in the technology cloud. recently, it is all about the cloud. analysts are positive on that. shery: taylor riggs, thank you. coming up, a better deal, president trump teases he would rejoin transpacific partnership on better terms but why the other 11 countries may not be budging on renegotiation. this is bloomberg. ♪
♪ shery: this is bloomberg markets, knowledge of power. -- balance of power. david: let's get to mark crumpton with the first four news. callingdent trump is james comey and untruthful slimeball in response to james comey's new book in which he compares the president to a mall boss. james comey's book says the president was fixated on trying to prove that food allegations against him in an intelligence dossier were false. nationsed secretary-general says the middle east is in such peril that his become a threat to international peace and security. he told an emergency meeting of the security council today that the highly volatile situation could have found regional and global ramifications. >> the cold war is back.
with a vengeance. the mechanisms manage the risks of escalation that existed in the past no longer seem to be present. >> he cited the palestinian and israeli divide, the sunni-shiite divide and other factors and said syria is the most serious and there is no military solution to the conflict. more world leaders joining president trump choosing to skip the summit of the americas, the regional gathering on western hemisphere leaders is set to kick off today in peru, without the presence of at least four other presidents besides donald trump. the cuban president has not confirmed their attendance. leaders from el salvador, guatemala, paraguay announced they are sending alternates as they deal with domestic matters. the u.k. and european union will formally discuss their post-brexit relationship for the first time next week.
eu officials do not expect serious talks about trade to begin until june. the main sticking point is how to avoid a hard border on the island of ireland when it becomes the u.k. border with the eu. officials involved with the process say the european side wants that settled before talks on trade get underway here in -- underway. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than than 120 countries. i am mark crumpton. this is bloomberg. deal, one ofr no the first things president trump it was cancel his predecessors transpacific partnership deal but yesterday said he was having second thoughts. overnight he said that he would only join it if the deal were substantially better than the deal offered to president obama. we already have bilateral deals and six of the nations in tpp and working to make a deal with the biggest of those nations, japan, who has hit us hard in trade over the years.
we welcome the vice president of the council of america's. we will put up highlights of tpp. it has been one year since we talked about it. a huge financial deal, the largest in history involving 40% of world gdp. the president now says maybe we will go back in. our other nations interested in having us in? >> huge deal from a economic and strategic perspective. when he came in, president trump cancel that and may be rethinking it. do the countries who have gone ahead and consummated the deal, are they willing to have the united states come back in on the same terms the united states left? david: they negotiated a final deal and agreed to it. they made changes after we left. they have to rethink that. >> not just that the united
states can reclaim the position plan we left, now negotiating accession to a pre-existing agreement, not a -- this is a fundamental difference, the ability to get the terms meet -- we may want will be difficult. coveringwas in japan the tpp when negotiations went forward and i remember the pains it took shinzo abe to get japan on board. they are not too happy. not sure how they will respond. and renewed tpp interest in it from u.s. policymakers distract them from what is happening with the renegotiations over nafta? >> possibly but we are not sure how the administration -- series the administration is regarding tpp -- serious the administration is regarding tpp? leaders took political cost domestically to agree to tpp and
there will be political cost to bring in the united states again. it will change the dynamic with reference to nafta? ofinteresting question, all the nafta parties are part of the tpp, and you could argue that this may build momentum to conclude the renegotiations of nafta. we just do not know how it will play out. its own having renegotiation track and hopefully it will be concluded in the near timeframe. shery: tpp, dictated to asia, trying to -- the pivot to asia, chinese presence is so big in latin america is countries, the largest trading partner for many of these countries, brazil, chile, peru, china, the largest trading partner. president trump not wanting to lose influence. having said that, given he is not attending the summit of the americas, what message does it
send to the latin american countries? entrancehas made an into the western hemisphere, particularly in the commodities sector. and south -- in south america. as the united states and china trade becomes more complicated, it is possible that china will retaliate against the united states by raising tariffs on agricultural products. who is the winner? south america, because they produce the product china consumes. soy and beef. that is an ironic twist. in peru, there is not much of an economic agenda at the summit of the americas, not the trade agenda we have are used to. -- we are used to. hopefully they will find their way back to the table to talk about trade in the hemisphere context. lighthizer is not going to the summit and will not meet with his counterparts in canada and mexico. they have technical negotiations involving things like rules of origin.
will we know whether nafta will work in a week or so? >> not in that timeframe specifically, something under negotiations since august and they were trying to concluded by the end of the calendar year and then by the end of march, etc.. they will have to decide at some point. not sure the timeline. i would say that there were political concerns, mexico has a presidential election on july 1, clearly the intent and the desire to conclude an agreement in principle prior to that, an important signal of the viability of nafta, no matter who is elected president of mexico. chairman will ask the of the mexican business council who we have in a minute on the program. great to have you in new york with us. vice president of the council of the america. coming up, the white house braces for another tell-all, james comey's them more hits bookshelves next week, how the gop is sitting back and tried to discredit the former fbi
♪ shery: this is bloomberg markets: balance of power. shery: james comey -- david: james comey's book hit shelves on tuesday but we are hearing what is in it with people getting advance copies and reading -- writing reviews. this triggered by a twitter response to the president who said, james comey is a proven l eaker and liar, everyone in washington said he should be fired before he was fired, leak acid -- classified information which he should be prosecuted for and is a week and untruthful slimeball. there was, as time is proven, a terrible director of the fbi and his handling of the crooked hillary clinton case and the events surrounding it will go
down as one of the worst botched jobs of history, it was my great honor to fire james comey. one of the most longest presidential tweets. we welcome our white house editor coming to us from washington. we know that the president is trying attention. -- paying attention and he will help james comey sell books. the other reaction? >> they are trying to discredit james comey. the book is a list next week. we have a copy ourselves. there is not a lot new in the book. i said it is a letdown, news wise. the biggest reservation -- resolute -- resolution is he wanted the fbi to disprove about his supposed cavorting with prostitutes in moscow and james comey did a lengthy interview on abc about that.
that is the sexiest part of the book. david: is this business or personal? could something in here affect the president's ability to do his job or just feelings getting hurt? >> depends on whether there is something in the book that me, not being a lawyer, i overlooked that would be notable to the special counsel. we believe the fire and fury book published earlier this year that quoted steve bannon extensively, remarking on the administration and saying things that got him in trouble with the president, we believe that provided some new avenues of investigation for the special counsel. steve bannon wasn't be by the special counsel after the book came out. interviewed by the special counsel after the book amount. -- book came out. it seems to be mainly personal, these guys do not like each other. shery: president trump has responded and we have seen
republicans launching a counteroffensive. >> rnc has organized a extraordinary campaign to discredit and ridicule james comey, a former fbi director, not something you have seen the republican party do, i think, before donald trump. it used to be the party that unquestioningly would back law enforcement and here they are attacking the former fbi director. shery: are democrats saying anything because james comey is defending his handling of the clinton email investigation? >> they are quiet as they do not see any profit in getting involved. part of the republican campaign against james comey is to resurface old democratic complaints about james comey. that they had during the clinton investigation. nancy pelosi said mean things about him and bernie sanders criticize them and chuck schumer
criticize cam. -- criticized him. they said they lacked confidence in james comey as leader of the fbi during the clinton investigation and they are quiet now. david: we do not know if this will affect the robert mueller investigation and reports the president is having trouble adding his legal team together and difficult putting people on board? >> somebody showed up in court identify herself as a lawyer for donald trump that we had never heard of. michael cohen is in new york trying to block the fbi from using the stuff is found in the search of his office and home earlier this week. in the courtroom, a lawyer pop that up identifying herself as representing the president. he found somebody to represent him in that case. yes, a lot of reports he is having trouble getting your typical white shoe firm to represent him in washington.
a lot of local law firms, big ones, already have clients involved in the robert mueller investigation and have a conflict of interest in taking on the president. shery: congress trying to attack robert mueller. >> i do not see that going very far. the bill has advanced a little bit in the senate judiciary committee as a message to the president to not mess with the special counsel. i would not expect the bill to become law. shery: thank you, i were bloomberg white house -- our bloomberg white house editor from washington. the president said he is willing to renegotiate forever on nafta. details next. this is bloomberg. ♪ retail.
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we cap are earnings season this week. -- have our earnings season this week. the s&p 500 is flat at the moment. results could change after a settlement with regulators. the nasdaq is down 2/10 of 1%. the treasury is looking a little bit mixed. the 10-year gilts is falling -- yield is falling. david: let's turn to mark crumpton. mark: the turkish president says he is urging the united states and russia to remain calm over the suspected chemical attack in syria. speaking to reporters in istanbul, he spoke to the leaders of both countries in separate calls, he said. he called for peace and an end to the tragedy going on.
u.k.mposter to the question britain's refusal to allow the former -- the daughter of a former russian double agent to meet with representatives for kremlin. >> did anyone see her pictures after the poisoning? voice?one hear the in more than a month? what is happening in this country? are they isolated? ambassadorussian added that russia is getting the wants ton britain destroy potential evidence with regard to the poisoning. international chemical weapons watchdog has confirmed britain's point -- finding there were poisoned with a nerve agent. russia continues to deny any involvement.
politicians have already been pounding the pavement. candidates have been shaking hands and using social media to reach potential voters, promising them a better future. may 12 is the fourth alimentary election in iraq since the 2003 election that removed saddam hussein. lawmakers passed a bill that would make the federal reserve the sole regulator in charge of the volker rule. with a single regulator because they believe it will make complying with the lot easier. -- with the law easier. global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. president trump is talks.ning endless nafta
at the same time, he may be suffocating -- a his signature demand for changes. robert lighthizer scrap a trip to the summit of the americas, he was due to meet with his canadian and mexican counterparts. here to talk about what kind of impact nafta negotiations are ising on mexico's businesses afael moises. you talk all the time with leaders, beck's can policymakers. -- mexican policymakers. where are we on the nafta talks? : we see goodwill from the u.s. administration. mexico has been very proactive. this has to be the right deal. u.s. demands the key
holding back nafta negotiations right now? moises: there have been five or six demands for mexico and the mexican private sector. those demands have a sudden death to it. those are things the mexican private sector is not willing to accept. those demands are still on the table. they are what are holding these negotiations. david: we hear from the side of the united states that there is optimism. how theynegotiators, opened the door at all to any degree of compromise on what you would call talks is demands? -- toxic demands?
moises: we had some hope that some advance could be taken. there is not going to be the sign of that. while that is happening, we have advancing -- have been advancing really fast on other chapters of this agreement. that is something to be gained from this negotiation. that is a pretty to go. we have a lot of work on the positive side. there are so-called technical sessions going on in washington as we speak. they are focusing on rules of origin. 70 technical negotiations make progress without someone coming in and saying, we have an overall compromise? moises: this is a very technical conversation.
they need the technical side. they come to check at least on the mexican side. we have the mexican industry. that is happening all the time, as we speak. we happen to seen a proposal that is achievable, up to now -- en't seen a proposal that is achievable up to now. uighur. the u.s. stocks were open to gripping car parts in five categories, which would be a bit of a lower -- grouping car parts in five categories. a bit of a lower requirement. would that be acceptable to the mexican side? moises: the proposal is on the table. we are analyzing it. there is a lot of technical work to be done. this waters down the content of each country.
it is very sophisticated. we are analyzing that to make sure we have a real read on the numbers. works.s on the shery: the cce president talked about the mistake that it was for mexican businesses to sign this deal in the 1990's. are you guys hedging for the future, even if a nafta deal is renegotiated? it wasn't a mistake to sign it. that we have is not done our work to mixer that nafta is promoted in the united states the right way. sure that nafta is promoted in the united states the right way. jobave to do a better communicating the benefits of nafta.
that is what we have done the last year. mexico has to look several ways. there is a modernization coming from the european fda. fdas with 50 different countries. i think we are doing our push forward on free trade. mexico has always been a champion in that platform. david: you have an election coming up this summer for your president. how does this negotiation on nafta read against that? does it affect the presidential election one way or the other? does it help or hurt somebody? decision has to be made on markets, on the business end. it has to be made on looking into the future, 25 or 30 years. we don't see this as having a political drive.
this has to be more based on free trade, on the real principles. that is what's mexican businesses want. -- what's mexican businesses want. whatever happens in those important elections, the private sector will call in the same position. shery: yet the private sector has not been very happy with the frontrunner. are you hearing any plans to delay or g4 projects until after the election? efer projects until after the election? moises: some candidates tend to go to the left more than others. the mexican private sector is going to be institutional. we are going to work our way through this. we want to see free trade in respect for the rule of law.
concern with amazon. they use our postal service as their delivery boy. they're pulling many thousands of retailers out of business. that was from last month. bloomberg white house reporter is touring us. -- joining us. the white house is denying this is a way of getting at amazon? >> yes. the president is not directly using this task force to go after it was on, they said. they said that was not the impetus behind why the president decided to do this. together,o and two really taking on amazon directly, saying the postal service needs to charge amazon more, followed by this executive order calling for the postal service to look at its pricing practices. it is not too hard to make the connection between this the animusrder and
toward amazon. avid: the postal service has been losing money for quite some time. when amazon go to fedex if we clamp down on the postal service? toluse: they have talked about this very publicly. they say amazon helps their bottom line. the millions of packages amazon ships every year on behalf of amazon actually helps to bring money into their coffers, helps them to increase their revenue, despite what the president is saying about amazon charging the postal service below market rates and costing the taxpayer dollars. the postal service themselves tos amazon is helping, reduce its amount of business for the postal service would hurt the profitability of the postal service and potentially
lead to more taxpayer dollars going to building up the service itself. shery: it has been a busy year for the treasury. aren't they also looking into china and russia? what is the text desk task force expected to do? force expected to do? toluse: they will be investigating issues related to the postal service. they are looking at a number of issues that have already been discussed and studies. -- and stuided. -- and studied. putting the treasury department at the top of the task force signals that president trump is a serious, but it raises the question about whether or not this is a redundant effort, using the taxpayer funds within the treasury department to look at things the taxpayer has already paid for, with various other bodies, government bodies that are already looked at.
and recommendations have been made to congress. shery: most changes would have to do with legislation anyway. is this more of a messaging tool? toluse: that is one way you can look at it. the president said he wants to look at the administrative changes he can do on his own, as well as legislative changes. the president has had trouble getting legislation through congress on very mundane issues. changes thisative task force may come up with to give the president power to make changes about the postal service. most of the changes he would want to make he would need congress to pass a law. shery: interesting. thank you so much. it is time for our stock of the hour. tamps.com.
shares are sharply lower and on pace for the worst day of the year. abigail: president trump is ordering the task force to evaluate the united states postal service. it is unclear exactly what the motives are, but probably amazon. ,he real fallout is stamps.com on pace for the worst day of the year. the unitedvendor of states postal, they create software that allows people to print out stance at home and at a discount. the usps told bloomberg earlier had year that stamps.com generated almost $7 billion in revenue back in 2016 for the u.s. postal service. the company helped them double the package shipment over the last five years. it is unclear what is ahead. david: what is the rationale?
will be by lessor use less stamps? : i don't think there is any true fallout for stamps.com. you have one of these tweets from president trump, this executive order, could there be some sort of fallout? there was that positive influence. this is a real business valuation. it is pretty attractive. if we happen to be bloomberg -- into be bloomberg, this is a long-term chart of the company. stock, with anm stock, withdot-com an ipo back in 1999, a value of $200. it has reclaimed that. david: i did not know there were any dot-coms left.
abigail: it is a real business and their future is bright. it is unclear whether this task force will affect their business. but the perception right now is negative. shery: thank you. president trump's tax overhaul is taking a bite out of wall street's wine and dine affirms. -- wine and dine firms. why some mainstay practices could be changed. this is bloomberg. ♪
shery: president trump's new tax law is making enemies on wall street. for more, we are joined by bloomberg national group -- political reporter sahil kapur. sahil: bankers will not be happy. firms investment firms that like to take potential clients out for things like expensive meals and golf outings to try to them over. that is a common thing that you were able to deduct up to 50% of mrs. -- expenses for things like that. it looks like the new law will not allow that anymore. there has been no specific but the exactly which in the bot is that entertainment, amusement, and recreation are no longer deductible. geeking out clients for a --
taking a client for inexpensive steak dinner. -- an expensive steak dinner. the many parts of the law that is ambiguous. the treasury and the irs may end up settling the dispute. 100%. it used to be when they cut it to 50%, everyone thought it was the end of the world. law firms are going to have a tough time. somehow, we survived. what this be likely to happen e likely ton't this b e happen again? sahil: i don't know that not
being able to deduct 50% of the does it expenses is pulling them out of business. avid: earned their lobbyists in washington trying to get some favorable interpretation of the regulations? usel: they would try and every leverage to maximize their ability, their tax situation. i think restaurants do benefit a lot from wealthy businesses that splurge on expensive meals to try and impress possible clients. we will be hearing more about that from these lobbyists. lawyershat our tax telling these banks to do in the meantime -- are tax lawyers telling these things to do in the meantime? sahil: to be cautious. businesses want to be able to take clients out for expensive meals. they are being advised to recognize they may not be
those.ely able to deduct we don't know precisely what the role is going to be. is going to be, but do you really want to take that risk and sacrifice your balance sheet at the end of the day? you have been covering this legislation from the beginning. what else is out there? is there anything we don't quite know about? i am looking at my taxes in new york state with the property and estate laws, i will pay more taxes, not less. sahil: one big controversial -- there are various glitches in the law, there are very levels of demand -- varying
levels of demand. thisrominent one was tendency for so-called co-ops to ditch agribusiness. we are hearing about businesses that would be armed in farm states like kansas and nebraska. i'm states are able to get a fix to that aid -- attached to the are -- -- farm starts states are able to get a fix to that attached to the omnibus bill. how treasuries are reacting to geopolitical and trade tensions next. this is bloomberg. ♪
jonathan: from new york city for our viewers worldwide, i am jonathan ferro. yield.""bloomberg real ♪ up, trade warng fares to geopolitical concerns. one thing washington can guarantee is more debt. the u.s. needs a foreign investors to step up. we begin with a big issue. geopolitical risk, the new market concern.