tv Bloomberg Markets Balance of Power Bloomberg May 14, 2018 12:00pm-1:00pm EDT
we are watching at this hour. president trump says he wants to --p vte as trade negotiation the united states formally oceans its embassy in jerusalem protests as palestinians are fired on by israeli forces. speaker paul ryan says they need to get a new deal on nafta early this week. we will talk with been cente fox about whether that deadline is realistic and what will work for mexico. >> president trump is toning down his tough trade talk on china for now. in a sunday morning tweet the announced that the commerce department was working with president xi to throw an economic lifeline to chinese
telecom equipment maker zte. bloomberg's international economics and policy correspondent michael mckee is here with the latest. this is a stunning reversal from the president. do we know if the chinese have offered anything in return? michael: we do not all that we know they have started the process of looking at starting to acquire a chinese tech company. that is a small gain for the united states. this is a big deal to china, 75,000 employees and they had almost ceased operations. for china, it is a big win if they get relief. the president said he has instructed wilbur ross and the commerce department to come up with some way to ease the blow. whether just wiping out the
sanctions, and they violate u.s. sanctions and law with impunity. those are tough questions. david: it is important to chosen --hy zte was they were violating sanctions and they lied about it. can the president just say ignore it and let us go on? michael: the president can with trade deals. congress has seated a lot of this -- congress has ceded a lot of this to him. there is a calculus that the u.s. needs china for the north korea summit in june and there are a lot of republicans that are worried about the chinese retaliating. this may be all game to work this out. you notice the hard-liners in the white house have not said anything about this. it is going to be interesting to see where they come down once we finally see what kind of deal this turns out to be. >> they might be waiting for
this meeting in washington. michael: the markets are hoping that china will buy more u.s. stock. that would bearing down the bilateral -- that would bring down the bilateral trade deficit. the chinese want to buy things but they also want to be sold more things. they want more access to high technology and u.s. goods which the u.s. does not want to give them for security reasons. u.s. businesses do not want to sell that to them because they do not want the administration to strike a bilateral deal. they want the administration to go at the structural problems. if you go into china and europe to the chinese. if they make a deal on the trade deficit, it will not address that problem. delegation is the in washington negotiating, they are having hearings. is that just a show trial?
is trade policy just coming out of the oval office? it doesn't matter what commerce is doing? michael: the hearing they are going to have is just part of the process. when the administration used the 301 sanctions on china, they have to publish a list, they have to go through public hearings on that list and allow people to comment. this is just part of that process. may 22 is when the 90 day deadline is up and they would publish theey would final list of what sanctions the president could impose. it is not what happens in that hearing as what we get out of it. >> at the same time we are seeing trade tensions with mexico and canada as the nafta negotiations continue and now we are hearing there could be a deadline with congress because the house and the senate needs times to approve a deal. michael: there are rules about
how this happens. administration needs to notify congress and then they have to publish the agreement. 105 day comment. -- comment period. may 17 isryan said the data get things done, that is based on congress leaving town in early december. they have more wiggle room than they are emitting, but they do need to get something done in the next week or they will run out of time to get it done this year. what happens at the end of the year? if the democrats taken over -- take over the house of representatives, they may oppose this deal. david: even as you've been talking, the wall street journal is saying that u.s. and china are near a deal on zte and agriculture tariffs. i did not connect those things. maybe there is something on soybeans?
michael: it may be that if the administration puts some sort of tariffs on the chinese as the president has wanted to do for intellectual property theft, and the chinese have published a list and said this is what we will retaliate with, they will take soybeans off the risk and impose sanctions on somebody else in exchange for the president backing off on zte. the question is what you do in the future is if you sanction a company and the other country just as we will put sanctions on you. a lot of people are worried about that. >> especially with the rationale behind it with security and espionage, no wonder you have marco rubio saying the problem with zte is international security. said toodonald trump many chinese jobs lost, when did donald trump care about chinese jobs? he has always been about u.s. factory jobs. david: bloombergs michael mckee,
thanks so much for being here. now let's get a check on the markets. julie hyman is here. what you have been talking about is one of the things that has been boosting u.s. stocks. if there is rapprochement on the china trade talks that could be good for u.s. stocks. we have a modest rally. it is not modest when it comes to technology and semiconductors, specifically when you're looking at the supply chain for zte. you are looking at these companies and have analysts recommendations. if you take a look at the bloomberg, one of the potentially positive signs for bulls in the stock market is the advanced decline line for the s&p 500. that is in white. it has been making new highs even as the s&p 500 has been -- has failed to make new highs.
one view -- getting back to some of the semiconductor makers, we are looking at one of the out performers today. according to an analyst at key bank, that company will be designed into microsoft's cloud system and that raises the company's upside. we are also looking at lam research. getting more positive on semiconductor research. , last symantec rallying week it plunged after an internal investigation. it has now scheduled a call for 4:30 today that may give some details.
finally, away from technology and from the united states to some extent, we have a large marijuana deal, the biggest in history. two of the largest players agreeing to the biggest merger we have seen so far. vowed to buy met relief, so the company was -- so the producer will have the cannabis in its nine facilities in canada and denmark. you see other pot stocks also trading highly. coming up, chuck schumer is trying to aid some state democrats ahead of the midterm elections. we will break down his political calculations, next. this is bloomberg. ♪
shery: this is "bloomberg markets: balance of power." rk: as deadly fighting took place along the israeli-palestinian border, president trump's top aides and supporters celebrated the opening of the u.s. embassy in jerusalem. the u.s. ambassador to israel addressed the gathering, which was held on the 70th anniversary of israel's creation. have passed since the transfer of the embassy became the law of the land. today we keep our promise to the american people and we extend to israel the same right we extend to every other nation -- the right to designate its capital city.
mark: in a message during the ceremony, president trump said the u.s. remains fully committed to pursuing a mideast key steel. the move has angered palestinians who claim east jerusalem as their capital. violent crashes continue today on the gaza border. it has been the deadliest day in gaza since 2015. the united nations secretary-general is welcoming an announcement by north korea that it will close its nuclear test site. it is also look -- he said he is also looking forward to the u.s./north korean summit. the weekend, north korea said it would dismantle its nuclear test site in less than two weeks. in iraq, a cleric who much plot the u.s. took a surprise lead an early election results. is said to easily win control of baghdad. he is a former militia member
who now targets iraq's political establishment over corruption. there are complaints in pakistan on the rising cost of food in the buildup to rommel don. aree are -- to -- markets packed with shoppers leading up to the muslim holy month. for 30 days, muslims will fast from some lies to sunset. global news 24 hours a day, on air and on global news 24 hours a day on air and tick tock on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. is walkingk schumer a political tightrope by putting the protection of vulnerable democrats ahead of party unity in congress. senator schumer has stood aside on key broke party ranks votes this year. will his political calculations
pay off? let's ask kevin cirilli who is at the white house. it is a tough year for senate democrats. how many seats are on the line? kevin: a handful. look at heidi heitkamp and joe manchin, two candidates who are in tough reelection fights. spoke with two democratic strategists who told me they are not so sure chuck schumer will be able to carry the upper chamber and make the gains necessary. according to these strategists, the expectations of the type of gains democrats have been talking about in the house of representatives now appear to be a little bit decreased in terms of the gains they are expected to make. fluid,this is very particularly on geopolitical events like north korea. terms of domestic events,
democrats have done a significant effort at framing ae tax deal is something as negative. in terms of controversial votes, especially on things like confirmation votes, we have seen centrist democrats walked back a bit. joe manchin is supporting cia nomineeump's which has been controversial in washington. david: is there some risk for senator schumer? he has a base that is out for blood. if it is perceived that the democrats have gone soft, could he hurt himself in other districts? kevin: that is such a good point. when you look at it on the one hand, you have a situation where progressive activists, people who subscribe to senator
elizabeth warren's version of political ideology are fired up. warrenlast hour, senator sending a letter to at&t looking for new details about michael cohen. you also have the other side of the democratic party saying president trump one because he was able to attract -- president trump won because he was able to enact -- to attract former obama voters in michigan and pennsylvania. that tension will be on play in the 2018 midterms and well beyond into the 2020 democratic primary cycle. shery: what happens then with crucial and key votes where you need democratic support? you have centrist democrats offering support for gina haspel, but you also have republicans playing politics. i have heard from several
sources that the reason you're not having a vote on things like is permanent tax cuts because republicans do not want to hand a gift to some of those centrist democrats like senator heidi heitkamp or joe manchin that are up for reelection. midterm season is in full swaying in terms of the jockeying of votes that is going on. i have my eyes on that dodd-frank regular rate -- on the dodd-frank regulatory reform bill. david: is there any question about that bill being passed? kevin: i think is going to be passed and the house financial head -- his staff has told me that he has not been willing to bring it to a floor vote. that is -- that has been --erpreted that he is what that he has walked it back a bit in terms of trying to get a more conservative version of that
than getting into the details of the localities of this, what changes? >> everything. this is going to be a seismic shift that upends the gaming market. david: where we going to see it first? >> new jersey and delaware. delaware has nfl gambling through its lottery. they will be immediate in the next week or two. then you will see other states, those that already have laws on the books, those will happen quickly. coming out andis pennsylvania will benefit first, rollout will be on a state-by-state basis, we are already seeing the market reaction, casinos jumping. up, prettyhill is the any stock that deals in gaming world, whether in the u.s. or the u.k., they are all
rising. shery: what changes? is it the tax laws, is it the regulations? >> everything is going to happen state-by-state. every state will have its own tax structure, its own rules, it's online companies. patchwork ofo be a laws around the country trying to figure out how these companies operate. david: who loses? there is no such thing as a free lunch. is it illegal bookies, is it state lotteries, the money has to come from somewhere. >> i think you could make an argument for both of those groups lazing. i think major league baseball and the nba, there is concern there and if i'm the ncaa i am concerned about the effect this will have on the integrity of my game. has said wecaa might not hold championship
games in some states. >> that is the rule right now. having 32 states passed laws in the next five years, which is the best case estimate, the ncaa will run out of places to hold their events. the problem the ncaa has is their players are not compensated. that is a much easier person to convince throw this game or throw this match. it is easier to convince someone who is not being compensated millions of dollars like nfl and mlb stars are. for the most part, this will lift boats in the moral ends -- in the sports world. shery: are there any moral concerns? not think the reason it has happened in the u.s. until right now is that socially gambling is not as excepted as it is in the u.k. 2018eason this happened in is because that is changing in
the u.s. there will need to be more social movement toward the acceptance of gambling. make no mistake -- a rule like this, there are structures in place for problem gamblers. you will read about people doing too much, mortgaging their house to pay for the habit, that will also increase. there will be a dark side. david: in the state lottery situation, there are studies showing the middle class and the lower class get hit disproportionately hard. ways, sports gambling will fall into a similar pattern, i assume. shery: how much of the market are we talking about? >> huge. the base estimate i have seen is a hundred $20 million gambled by 2022. with that number you can buy every nfl team and every nhl team. you -- theme ask
walt disney company said they would never gamble at all. will you see more coverage on espn? if in an't shock me couple years you could gamble on espn? it would not shock me at all. shery: thank you so much, bloomberg sports business reporter. king joins us later with how fantasy sports could change. coming up, the u.s. embassy in jerusalem opens today. this is bloomberg. ♪
4/10 of 1%. it's the longest winning streak si since september of last yer. information tech rising today after president trump made a u-turn on blocking telecom equipment makers zte. look at what soybeans are doing because we got a report from "the wall street journal" because they are near a deal on zte and u.s. tariffs on chinese products. david: for bloomberg first word news, we turn now to mark crumpton. along thedeath toll israeli-palestinian border stands at 52. another 1200 palestinians have been wounded by israeli fire. the violence comes as the united states formally opens its new embassy in jerusalem. the un's secretary-general expressed concern about
the escalating violence in gaza. >> the old conflicts never seem to die and i'm worried today with the news about what is happening already with the high number of people killed. largest bombing of muslim majority nations, the 57 member organization of islamic corporation -- cooperation says "it strongly condemns the white house deplorable action to move the embassy to jerusalem from tel aviv." the turkishay, president said the united states has "lost its role as mediator in the middle east peace process." fearedan 40 people are dead after powerful winds and rain storms swept across northern india. severe weather destroyed homes and uprooted trees.
less than two weeks ago, so my storms killed more than 130 people and injured more than 400. extreme weather isn't unusual in india this time of year as monsoon season approaches. the u.s. supreme court has opened the door to nationwide gambling on individual sporting events. justices struck down a federal law that they said unconstitutionally forced states to maintain laws that prohibit gambling. the ruling is likely to lead to a race among states to attract billions in legal wages. global news 24 hours a day on air and on tick-tock on twitter powered by 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. shery: dozens of palestinians were killed with confrontations with israeli troops as thousands converged to the border from march mark by violence. that's over president trump moving the u.s. embassy to
jerusalem. joining us now is bloomberg's government and economic affair us reporter. how bad has the escalation been? >> it has been seven weeks so far these protests. these protests were set up to mark the the day that the palestinians view as a catastrophe. today was basically the worst day as more than 50 people and died. tomorrow is supposed to be the main day of the protests could . because of the embassy move, they made the biggest demonstration today. david: i don't want to add all have a light touch on some 50 plus people dying, but at the same time, are we having any other similar situations of violence around the area? , the westaround here
bank has been relatively quiet. gaza is really where most of the bloodshed has been. there's other conflicts around the middle east connected to the embassy situation, it's mainly in gaza. shery: what about israelis? how are they reacting because this is something they wanted for a long time, but at the same time, if it comes at the risk of more violence, i cannot imagine them being at ease? david w.: you are right. for israelis on the one hand, they are jubilant about this move of the embassy to jerusalem ., there are american and israeli flags everywhere in jerusalem. from almost the entire spectrum of israeli politics are celebrating today. at the same time, they see what is happening in gaza. many of them are concerned about what's going on.
they are worried about israel's security, but they are also concerned about all the bloodshed of the palestinians. hosni for theed situation. they believe hamas was egging the house means to the border to clash with israeli shoulders. david: that is bloomberg's david wehner. for more on the opening of the u.s. embassy in jerusalem, we welcome now the northeastern university professor of international affairs and israel studies. good to have you here. talk about the situation. why is it? are you surprised we have not seen more violence outside of gaza because when this first happened there were predictions that an arab capitals around the area there would be demonstrations? thatm not really surprised the violence has not spread elsewhere in the arab world. i think it is somewhat surprising that the has been almost know no response by palestinians in the west
bank. you think those close to family members there would've at least been protesting out on the streets. the reaction has been very quiet. that might have a lot to do with the actions of the palestinian authority. david: frankly they just took the consulate in jerusalem and moved a few people an in there. the u.s. ambassador to israel said we give israel the right that we give to every other country around the world to decide whether capital is. why is it a big deal? dov: it's not simply recognizing capital, as israel's but it's failing to reckon as the palestinians claim to east jerusalem as their capital. and going about this announcement, there has been not ente any acknowledgment of the palestinians and the palestinian's have long demanded east jerusalem to be their capital.
trump statement that this is taking to resume off the table is making it worse in the eyes of palestinians. shery: president trump said he hoped the move would spur renewed peace negotiations. dov: on the contrary, as we have seen in the violence in gaza today in response of the palestinian president, the prospects for the palestinian authority to renew ties with the trump administration, which they severed after the announcement of this decision, i think is very unlikely. there's a really big risk now between the palestinians and the trump and menstruation and that -- administration and that makes it difficult to promote a successful peace plan. shery: we have seen israeli forces step up their attacks within syria. how does that embolden the israeli administration and change dynamics for the region? dov: it goes to underline how volatile a situation this is. on the one hand, there is
violence escalating between israel and potentially hamas leading to a renewed escalation of hostility there. the situation the west bank is fragile. there's a real prospect for developing potential war between israel and iran and syria today. there's multiple fronts for potential for violence and they are connected in some ways. the forces of the groups that want to generate instability in the region such as iran and hamas obviously have an interest in flaming the situation and really creating a very dangerous dynamic. david: the trump administration's actions go far beyond moving the embassy to jerusalem. the termination of the nuclear agreement with iran was something that also benjamin netanyahu wanted us to do. to what extent has the unites states given him a green light in the region? dov: administration officials would say they have not and that jerusalem can still be negotiated. in the eyes of the net and yahoo! government, they have been given a green light.
as far as they are concerned, they have a white house that has never been as strongly supportive of a right-wing israeli agenda. that has definitely embolden them to take actions which previously they were reluctant to do. david: for years we have been told to be careful of iran because they have hezbollah and terrorist organizations throughout the region no question about it. do we need to be concerned that they could take the leash off as it were really do a lot of damage certainly to israel but other u.s. interests in the region? dov: there is certainly that risk. it's whether they field in there interest to escalate the situation or calm the situation while they are still trying to work with the europeans to keep the iran nuclear agreement alive. if they decide to escalate, that could lead to a complete collapse. it may not be in iran's interest in the short term to inflame the situation. if in the long run they see they have nothing to lose, then
absolutely they can work with hezbollah.-- ha they have potential to play. shery: it's real interesting because of the iran nuclear deal that we are seeing now israel warm-up ties with saudi arabia, who's another player in the region. dov: exactly. it's interesting to see how the saudi's and other gulf states will react to the violence in gaza today. they were really unhappy about the opening of the u.s. embassy in jerusalem. it will be putting them in a very difficult position now to kind of maintain relations with israel while palestinians are dying in such large numbers in the gaza strip. the saudi certainly don't want that. that does put a break on israeli saudi cooperation. shery: what working level ties between the u.s. and israel? what does this say about american jews and their involvement in this and they see the conflict and changes happening in israel? dov: the american jewish
community is more divided than ever over what's happening. although they welcome the opening of the u.s. embassy and recognition of jerusalem as the capital, thery are worried about the repercussions of this. it was very striking that the evangelical pastors that were running the ceremony and orthodox rabbis, that is not ere most american jews go. many feel alienated and they do support a two state solution. they are worried about the impact this will have on the likelihood for peace. shery: thank you so much for your time, professor of political silence international affairs israel affairs at northeastern university. david: mexico is getting its own taste of the antiestablishment candidate. as a presidential contender with less than two months to go. what that can mean for u.s. relations?
david: this is "bloomberg markets: balance of power." i'm david westin. shery: i'm shery ahn. again it is crunch time for nafta negotiations with speaker paul ryan warning negotiators they need a deal this week if they hope to have congress approve it. the parties are saying they are making progress, but this do have a distance to go. fox, thee now vicente president of mexico and author of the book, "let's move on." he saw the difference nafta made for the three countries involved. vicente: it's a pleasure to be here with you and to be in new york. david: give us a sense of how realistic it is that they can get a deal within nafta within the next week.
vicente: i think if everybody would have to deal with that decision, it would go ahead and it would be a great solution. trumprnately wants to please his borders and his audience. he has been very stubborn on nafta and the world and very stubborn but the relationship with mexico. areas forre are there mexico's point of view that would make sense to come from his? people seem to agree that nafta could be modernized. we're are things that mexico would say that could work for both of us? vicente: it would need to be modernized. one issue is living wages and i improves mexico and come out with a professional salary like that. the other one is on the u.s. side.
i think the u.s. automobile corporations are more than willing not only to sustain nafta but improve it because of the only way they can remain competitive. that's what they need to be able to work with canada, the united states, and mexico. everybody will have its part of the deal and everybody will be winning through that. shery: to your point on wages, the u.s. wants half of the cars made within nafta to come from workers who earn at least $16 an hour. does that work for mexico? vicente: something like that. i don't have exact figures, but it would. 60% of the automobile is imported parts from the united states. it is providing jobs and labor to the united states with the same automobile produced in mexico. it's a win-win situation. shery: right now there seems to be a drive to get any deal done, a deal in principle.
is any deal better than no deal at this point? vicente: not for mexico. if mexico does not get a good deal and improve it, mexico will be happy with withdrawing. we are working on plan b, which is meeting with china and looking up to that huge market and also coming down to argentina and brazil to buy our corn that we buy from the united states. that would affect millions of farmers in the united states if we are not buying grain from the united states or are buying it from brazil. mexico is not week in the negotiation. we have leverage and the should be on the scope of the u.s. side, which by the way everybody understands how this can be trump.except senor she is too stubborn. he wants all the marbles for himself and nothing for the rest coul. david: president trump has made it a point in other situations
combining trade with national security issues. in china we are seeing that right today. when it comes to nafta and mexico, i think mexico has been fairly careful not to say the national security goes both ways. we are helping you a lot on the southern border. i've not heard them exquisitely say that could be put on the table. is it possible at some point that if you push mexico hard enough that they will say we will not cooperate with you too much. vicente: one is security and the safety of this nation. we exercise with the army and the marines in the gulf of mexico and the pacific. we work very closely together. that is something that the united states and trump should be very careful about -- security. number 2 -- it's also the case of investment. global u.s. corporations do make a lot of profits in mexico and china everywhere. for the united states, the real business is not trading and exchanging. it is having open markets where they can come in, sell, get
ready o rid of them and get strg profits out of it. finally, the war on drugs. the consumption is in the united states and mexico is just the transit place. mexico could then say, ok, if we don't have a deal, i'm going to just let the drugs go by and get into the united states. there is no work to refrain that because u.s. consumers consume a huge amount of drugs. with that money, arms and ammunition come down to mexico. the killings in mexico are because of that. finally, the real headquarters of cartels are in the united states. it's not mexicans. its u.s. cartels that use mexican cartels to import the drug. were you annly executive at coca-cola and president of mexico and an author, but you are new a wardee. you are an internet star.
vicente: is about the video where i launched my campaign for the president of the united states, which was very successful and funny. super deluxe came out with this video. and that is the award we are getting tonight. david: congratulations. shery: talking about presence elections july 1 coming up, how much is it because of president trump and you expect them to win? vicente: there are two visions and features being discussed for mexico. one is populism and demagoguery and false prophets. the other is keep building the successful mexico that we arty have and can do much better than today. great candidates on that side. one represents the far left and the agreement of real and sao paulo. shery: he is the front runner. vicente: he is front runner today, but that doesn't make him
president yet. david: what is the chance that he is more like lula than he is like chavez? people compare him to shop us but a lot of people appear thought that lula would be leftist and he turned out to be very good for brazil. vicente: it depends on him. he is not shown the attributes that lula showed that is strong leadership looking for the better of the country. it's not for populism and demagoguery. shery: great to have you with us here in new york. thank you very much, the former president of mexico and author of the book, "let's move on." coming up, shares of annex. near a session high. the semi conductor share spiking today as the u.s. and china seek to end trade tensions. this is bloomberg. ♪
shery: i'm shery ahn. time now for our stock of the hour and that is an next piece nxp; actors. shares are on the best pace before qualcomm ever made its formal bid for the company. abigail doolittle joining us with details and something to do with using of -- easing of trade tensions. abigail: there's hope that the deal between qualcomm and nxp will go forward and there is this using of trade the u.s. andeen china. china is starting to look at that deal again and whether or not they would approve it. the ideas that there is hope. the first bid for qualcomm made for nxp was back in october of 2016. it's more than a year and a half out from that. we still don't have a deal. the final date for this deal to go through is july 25. there's lots of hurdles, but the big piece there is china.
nxp receives 30% of their revenue from that country. right now again there is hope. david: who need to the deal more? abigail: it is definitely qualcomm. a stock issued. qualcomm is structural. 40% of their businesses are related to the auto segment and qualcomm wants to get away from that area and to handsets. as we look at the chart of these stocks from the initial acquisition in 2016, we see that qualcomm is basically down since that time, down about 17%. nxp had been hired, but as things have been tough and china backed away from looking at the deal, it has traded lower, now popping higher. it looks like it is much more of a positive for nxp. qualcomm needs the deal to put them into the auto segment. david: it also explains why they
did not take the broadcom deal. abigail: last week china was not our friend and this week they are. lots of moving pieces, but it seems to be game on. david: great to have you here. shery: coming up on bloomberg television on tuesday, exclusive conversation with the turkish president as campaigning gets underway ahead of elections on june 24. that is from midday hong kong 5:00 a.m. london time on tuesday. and of course, if you missed any of our charts, you can access them on the bloomberg terminal. the function is gtb go. live from new york, this is bloomberg. ♪
and what is being described as the deadliest day of violence since a 2014 war. palestinians have been killed and 1200 wounded by fire. hundreds of protesters carried out "concerted coordinate attacks on the border fence in an attempt to infiltrate." borderviolence along the escalated, the american embassy was open today in jerusalem. it is a move that has been condemned by the palestinian authority. at today's opening ceremony, the israeli prime minister benjamin that yahoo! praised the move. -- benjamin netanyahu praised the move. >> it's a great day for israel. it's a great day for america. it's a great day for fantastic partnership, but i believe it's also a great day for peace. mark: palestinian authority president says