tv Bloomberg Markets Balance of Power Bloomberg July 13, 2018 12:00pm-1:00pm EDT
getting underway. arrivingstein will be in a few minutes. it will be an announcement on the law enforcement. that is all we know that we will monitor that closely. on the other side of your screen, some cars are pulling up. the queen waiting for president donald trump. sir andrew ford, the controller. with other infantryman. all of the pomp and circumstance with the queen's guard singing "god save the queen." rover ismp's range approaching the queen, queen elizabeth ii feared -- queen elizabeth ii.
he is about to disembark. a major moment for him. where he came from a few years ago to this moment, meeting the queen of england. >> it is not even a state visit. it is a working trip technically. they schedule this meeting with the queen. article, he said the queen is an incredible woman and he has fondness for her, his mother, born in europe, always wanted to watch the queen when she was speaking. he grew up saying you watched -- he watched her and his wife always looks up to her and thinks she is incredible. this is more personal for him considering how much the last few days he has been talking about his parents being from europe, his father born in scotland. what do we have any idea matters will be discussed
between the queen and president trump and his wife? >> i do not think so. we will know -- we know what he is going to talk to may about about the queen would not want that discussed feared -- discussed. vonnie: you can hear the u.s. national anthem being played by the guard of honor. giving a royal salute to the queen who came out earlier. they will have tea. we have a breaking news headline feared -- a breaking news headline. 12 russian intelligence officials have been indicted by the u.s. government. an announcement made by rob rosenstein,-- rod indicted by the u.s. government. we will get more details.
this is a much greater number that has been invited -- announced so far -- indicted so to thekely related 'sining of access to dnc networks in july of 2015. let's get to the white house. on the one hand, the president sitting down to meet with the queen and 12 russian intelligence officials indicted by the u.s. government. do we have any more information? >> an amazing split screen, a press conference with president trump saying the russian investigation is a witchhunt. -- expected to hear more about indictments of russian officials were interfering during the election. something president trump has thrown confusion around, talking about maybe russia was not involved in the election,
denials by vladimir putin that russia was not involved. now getting ready to hear more on the justice department about the indictments. how russian intelligence agents involved in the hacking during 2016 election. a broadside against president trump who has called this a rigged which shot at who -- witchhunt and said this hacking is an excuse by the democrats for losing the election. this will rain on president trump's parade as he meets with the queen, a series investigation and these indictments are piling up with these new indictments, we will be about 30 indictments that have been already handed down as part of the special counsel probe in just over one year. a massive amount targeting the russian influence operation that started in 2016 and impacted the election. vonnie: very aware of the
timing. golf in helsinki to speak with vladimir putin. background, bob mueller has secured indictments of former campaign chairman paul manafort and guilty pleas and cooperation agreements from several others, including national security adviser michael flynn. will it be those types of indictments and corporation agreement and guilty pleas which led to this? >> there is a chance that is a case but we have not put the sides together. robert mueller putdown indictments against people on the trump camp, they issued indictments about russia involving. we have not seen the merging of those two groups. we have not seen whether robert
mueller as the evidence that people within the trump campaign were involved with hackers on the russian side, coordinating or colluding. that is what the investigation is looking into but we are still waiting that level of evidence. it is clear this is a methodical investigation that is moving along. these new indictments against russian officials will cast russiany doubt that the government was involved in the hacking operation that happened in between 16 campaign. -- in the 26 in cap thing. -- indie the 16 campaign. campaign.6 whether or not this will lead to the information that would show there was collusion during the campaign. we will just have to wait and see if that is the case. i may, a i ask you about president trump's
interview with the sun newspaper. it caused such a stir this morning. enough to move the pound against the dollar. how was that interview received in washington among the establishment, given the time of palaceease he was in a having a black-tie dinner? some may suggest it was quite an affront of the president to say such things while he was being received by the prime minister at the birthplace of churchill? >> this was an explosive interview and received that way in washington. a lot of head scratching against the foreign-policy establishment in washington wondering why the president would say these things and what the broader strategy is , if there is a broader strategy against attacking an ally while sitting down over a nice meal. why saying negative things about theresa may.
concerns president trump is going in as a wrecking ball, first in nato and then to the u.k. to cause confusion and chaos among me western alliance before he goes to helsinki where he will meet with president clinton -- puting. a concern president trump does not have a broader strategy and leaving weekend european leaders in his wake and meeting with vladimir putin where he may give away more than he gets. we are hearing from the foreign-policy establishment in washington, concern president trump is causing more chaos and not doing it with a strategy. his press conference earlier today gave the impression he was trying to walk back some of the statements and he spoke in glowing terms about theresa may. some of that may have stopped the tension but concerns president trump may not have a strategy. vonnie: dollar ruble dropped before the dollar gained ground again.
trading now at 62.26 on the headline at 12 russian intelligence officials are being indicted by the u.s. government. the number now at more than 30. rod rosenstein will come out on your screen to give that announcement. he will be making a law enforcement announcement in a moment. the first lady and the queen of england and the president will sit down for tea following a beautiful ceremony by the queen's guard. let's get to kevin cirilli who has more about this 12 russian intelligence officials being indicted by u.s. government. kevin: these officials that the government is saying hacked into the democratic national committee ahead of the 2016 presidential election is the latest concrete evidence from the intelligence community they believe that vladimir putin has orchestrated and led russian
meddling in the last election. the president is now meeting with the queen of england. as we await the press conference from deputy attorney general rod rosenstein, i would note that within the past 10 days, the deputy attorney general has been a fixture at the white house. he attended a private gathering of the white house lawn for the fourth of july with other senior demonstration officials and their families. he was at the white house during the announcement of justice kavanagh to be appointed to the supreme court. he has been very much ever present in washington and within this administration. i spoke with several sources connected to those who are involved in this investigation within the last half hour. none of them were aware of the indictments that were coming down. i should also note that this just a few days
when the president will meet with vladimir putin. he is goingt saying to discuss a host of issues, including disarmament, pressure-ukraine, and -- pressure-ukraine, and the prime ministers saying -- and he says he is unified europe despite political theatrics. vonnie: this is a phenomenal geopolitical event happening right before our eyes. windsor castle on the left and the president taking tea with queen elizabeth. on the right, rod rosenstein will come out and say the 12 russians accused of stealing usernames and passwords. they will be indicted by the u.s. government. i want to ask you about this intelligence -- actually let's listen into rod rosenstein. >> the grand jury of the
district of columbia has an indictment. it charges 12 russian military officers by name to conspire to interfere with the 2016 presidential election. 11 defendants are charged with conspiring to hack into computers, steal documents, and release those documents with the intent to interfere in the election. one of those defendants and 12 russian military officers are charged with conspiring to infiltrate computers of organizations involved in administering elections, quitting state boards of elections, secretaries of state, and companies that supply software used to it minister elections. -- used to administer elections. unitsfendant work for two of the main intelligence director of the russian general staff, known as the gru. the units engaged in active cyber operations to interfere in
the 2016 presidential election. engageds one unit that and active cyber operations by stealing information. a different unit that was responsible for disseminating the stolen information. the defendants used to techniques to steal information. they used the schemes known as spearfishing, which involve sending misleading email messages and tricking the user's into disclosing their passwords and security information. and the defendants hacked into computer networks and install malicious software that allow them to spy on users and capture keystrokes, take screenshots, an excellent trait or remove data -- excellent trait or moved -- or remove data from the computers.
this included the dnc campaign chairman starting in 2016 at hacked into the computer networks of a congressional campaign committee and a .ational political committee the defendants covertly monitored the computers and implanted hundreds of files containing malicious computer code, installed emailsemls and r documents. they created fictitious all my andona's including dc lease they used those personas to get information including thousands of stolen emails and other documents beginning in june of 2016. the defendants falsely claimed that dc leaks was a group of american hackers and that another group was a loan romanian attacker. both were created and controlled by the russian gru.
in addition to releasing documents directly to the public , the defendants transfer stolen documents to another organization that is not identified by name in the indictment. they used that organization as a pass through to release the documents. they discussed the timing of the release and an attempt to enhance the impact of the election. in an effort to conceal their connections to russia, the defendants used a network of computers around the world and paid for using cryptocurrencies. -- theyt -- corresponded with several americans during the conspiracy through the internet. no allegation in this indictment that the americans knew they were corresponding with russian intelligence officers. in a second related conspiracy, russian officers hacked the website of a state election board and stole information about 500,000 voters. they hacked into computers of a
company that supplied software used to verify voter registration information. they targeted state and local officials responsible for administering elections and sent spearfishing emails two people involved in administering elections, including attaching malicious software. the indictment includes 11 criminal allegations. defendantsharges 11 with conspiring to access computers without authorization. and to damage those computers in connection with efforts to interfere with the presidential election. counts 2-9 rc 11 defendants with aggravated identity theft by employing usernames and passwords of victims in order to commit computer fraud. the 110 charges defendants with money laundering to transfer cryptocurrencies to a web of transactions in order
to purchase computer servers, registered domains, and make other payments in furtherance of their hacking activities while trying to conceal their connections to russia. defendantsarges to for separate conspiracy to access computers without authorization and to damage those computers in connection with efforts to infiltrate computers used to administer elections. the indictment seeks the forfeiture of property involved in the criminal activity. there is no allegation in this indictment that any american citizen committed a crime. conspiracyon of which change the vote count or reflected any election result -- affected any election result. the special counsel's investigation is ongoing and no comments by the special counsel. the assistant attorney general is here today and because we
will transition responsibility for this indictment to the justice department national security division while we await the apprehension of the defendants, principal associate deputy is with me who has been assisting in managing the special counsel investigation. i want to caution you, the people who speculate about federal investigations usually do not know all of the relevant facts. we do not try cases on television or in congressional hearings. not anonymous leaks are from government officials who are conducting these investigations. we follow the rule of law. which means we follow procedures and we reserve judgment. we complete our investigations and we evaluate all of the relevant evidence before we reach in the conclusion. that is how the american people
respect their department of justice and how our department is going to operate. system, everyone who is charged with a crime is presumed innocent. unless and until proven guilty. it should go without saying that the people who are not charged with a crime also are presumed innocent. the indictment was returned today because prosecutors determined that the evidence is sufficient to present these allegations to a federal grand jury. our analysis is based solely on the facts, law, and department of justice policy. i briefed president trump about these allegations earlier this week. the president is fully aware of the department's actions today. in my remarks, i have not identify the victims.
we can find foreign interference in american elections, it is important to avoid thinking politically as republicans or democrats. instead, thinking patriotically as americans. not -- does not depend on which side was victimized. the internet allows for an adversary's to attack america in new and unexpected ways. free and fair elections are always hard-fought and contagious. there will always be adversaries that seek to exacerbate our divisions. and try to confuse and divide and conquer us. so long as we are united in our commitment to the values enshrined in the constitution, they will not succeed. byartisan warfare fueled modern technology does not fairly reflect the grace,
dignity, and unity of the american people. the blame for election interference belongs to the criminals who committed election interference. we need to work together to hold the perpetrators accountable and we need to keep moving forward to preserve our values, protect against future interference, and defend america. i have time for a few questions. today on the eve of the presidents meeting with vladimir putin. talk about that. the president described the robert mueller investigation as a witchhunt. the evidence in the law was sufficient for an indictment. i briefed the president. with regard to the nature of the investigation, i only comment on the evidence. the evidence is reflected in the
indictments and in the charges, it represents a determination by prosecutors and agents without regard to politics that we believe the politics -- we believe the evidence is right for the charges. >> you have talked about the fact that in your view the evidence does not show any votes were changed as a result. a companyd say that coordinated with defendants enhance the timing of the release and the impact of the election, can you tell us about what the evidence you have shows in that respect? mr. rosenstein: what i talked about is in the indictment. conspirators was to impact the election. what impact they had or their motivation independently of what is required to prove this is a matter of speculation and it is not our responsibility. no allegation in the indictment
about it. that is not our charge here >> in terms of the state, information collected on 500,000 voters, any information on what they did with that and any information of other states being successfully penetrated by the russians? mr. rosenstein: i told you what was included in the indictment. fbi and other intelligence agencies are working constantly to defend against cyberattacks in the united states. this case is just about one particular effort that was made during the 2016 election. the efforts of our department and the department of homeland security and other agencies with the state election board throughout the country are ongoing. those efforts receded this -- preceded this indictment and we continue to share relevant intelligence with all of our partners. it will take a longer time to talk about this but there is an organized effort by the federal
government to make sure we do deter and prevent any cyber attack on elections and we harden our election systems to prevent against intrusions. >> last question. >> you mentioned you briefed president trump. did he indicate any support for this action? mr. rosenstein: i will let the president speak for himself. it was important for him to know because he estimates important decisions for the country and he needs to know the evidence we have of foreign interference in elections. thank you very much. generaleputy attorney rod general rod rosenstein announcing the and dykeman of 12 russian spies for the hacking in the 2016 -- announcing indictments of 12 russian spies for the hacking of -- in the 2016 election.
12 russian spies will be charged in connection. he said there were no actual vote counts affected by the incidence in the charges. he said no allegation that any american citizen this. -- knew of this. the president right now meeting at windsor castle in the u.k. with the queen of england along with the first lady. to the two days prior president landing in helsinki to meet one-on-one with the russian president vladimir putin. thank you for being with us. up whereou make now this investigation -- of where this investigation is going and what it means for the president ahead of his meeting with president to -- president putin? >> for all of the speculation
and debate about the robert mueller investigation, the investigation has been pretty good about not tipping its hand about where it is going next. asse indictments has come surprises and they have been careful about not disclosing more information than necessary for each and i meant. not sure -- each indictment. we can't say the debate about the investigation -- we hear it being a witchhunt aimed at the president but it seems like a furious inquiry aimed at russian interference in american elections. people on the left to hope it will lead to the president somehow taken down. people on the right think that is that the intention but seems like a more methodical investigation. ,evin: debbie wasserman schultz the former head of the dnc, saying she is pleased that the justice department is following the facts this bike you
president's dangerous distortions. david, my question to you, what is going to happen if the president -- the president earlier with a press conference with theresa may said he will meet and talk about disarmament, talk about syria and the ukraine with president putin. does this cast a shadow over the donald trump-vladimir putin summit in helsinki? >> something people will be talking about over the next couple of days. a related question is -- why did the special counsel bring this indictment today? is he sending a message? prosecutors have immense control over when they file charges, which charges they bring. it is fair to ask whether robert mueller wants to send a message. the special counsel has been
exemplary and not being politically throughout the course of this year on the investigation. you have to wonder why now. bigy: they made such a point about not trying cases on television or in congressional hearings as they reserve judgment. why right now? and given they made a point in emphasizing that americans were not involved, they did not know they were helping the russians, what does this mean going forward? >> unless a defendant appears in court, is extradited, not going to happen, this case will largely stall. you will not see filings, court actions. it will just be out there. -- whatd question is clues do we find in what rod rosenstein said?
he talked about the russians using gustifer 2.0. which americans were talking and were they being duped? what are those individuals telling the special counsel? any number of questions we will now cease and out of control -- out of this. shery: we have 30 indictments, people linked to president trump , to his campaign, but also russians. we have not seen evidence linking the two, that there was some form of collusion. in if this drags on, what happens to the investigation which has been dubbed a witchhunt? >> there is not yet any evidence of criminal collusion. but the investigation is still ongoing.
what we will see now is continued speculation, continued back-and-forth politically over this and continued back-and-forth politically over president trump keeps insisting told him that there was no russian government interference in the election. these indictments are pretty inclusively showing that is false. >> he said there is no collusion but i talked to lawmakers on capitol hill in the republican party who rolled her eyes on that. the largest delegation of mostly republicans just got back from russia and raids the issue of meddling with their russian counterparts. how is then becomes u.s. best protecting its financial institutions as well as its political democratic institutions ahead of them in terms? that legislation which bolstered security was bipartisan.
but, room mesh, is that enough? wise question. a the other question is what is the value of a summit with a leader who we know life to president trump? kevin: beyond the politics of this, my question to you, does this weekend at all president putin in terms of his leverage with the united states come and do these charges do that, as he is getting ready to face and emboldened nato alliance with additional funding, as well as questions about europe's relationships with the energy markets in russia? ramesh: i think the indictments do her russian leverage but they have a back of tricks that are available to them, as we are seeing. kevin: i want to thank ramesh glovin, teamavid leader for bloomberg's legal team on the east coast. shery, i will let you pick it up.
shery: one of the biggest mandates of its kind in europe. lloyd's may split the mandate among firms. black rock and schroeder's are set to leave lloyd's. .hey will be deciding right now we are hearing black rock and schroeder's are set to leave on that mandate. black rock trading up .2%. live from new york and washington, this is bloomberg. ♪
kevin: this is bloomberg markets, balance of power. shery: i'm shery ahn. the breaking news, a major twist ahead of the trump-putin summit. 12 russian intelligence officials have been indicted by the u.s. government. that was rod rosenstein coming intelligencehese officials meddled in the u.s. elections in 2016, that one group stole the information and others spread. to give us more insight is retired brigadier general mark kimmitt. he served as assistant secretary of state for political military affairs under george w. bush. thank you for joining us. what a time to have you on. we heard from deputy attorney general rod rosenstein talking
about the extent russian meddling in the u.s. elections, that americans were not aware this was going on, but this comes at crucial timing when president trump is set to meet with russian president. what are the risks that this summit poses, if president trump does not deliver? i think he will deliver up. there are a number of other issues. nato is not the only issue and collusion is not the only issue. there are a number of other issues that president trump needs to speak to president clinton about and hopefully we see success come out of the summit. shery: at the same time he is heading to the helsinki summit while causing chaos in the u k and brussels, saying things that could have been seen as undermining the alliance with u.s. allies. will these cracks in the western alliance given up her hand to vladimir putin? >> i don't think so.
first of all, there is no danger in the crack of the transatlantic allies or nato. i served with nato officers in five different operations. that alliance is strong, essential, and while president trump may have gone into disrupt it a bit and reminded of its responsibilities, i don't think there is any danger the allies will be breaking up anytime soon. kevin: president trump said he made a charter of $34 billion of additional funding. is he right? >> i think he renewed the commitments of the countries who come in 2002, demanded 2% out of their economies, and have not provided that. so he put them on record, on notice that he expects them to pay their dues. kevin: we talk about president trump and what he has to do with russian president vladimir putin. let's talk about president clinton. now you have pretty much the dominating headline that he had orchestrated 12 spies to hack into a major political party
here. it comes at a time when there are questions about europe's involvement with russia and their ties regarding energy policy. what does this mean for president putin? >> this is a country with horrible demographics, and economy no bigger than italy. we have to be concerned because they have nuclear weapons but frankly, if he wants to stay in power, improve the situation in russia, he cannot do it as a dictator, cannot do it as a bully. he needs us more than we need him. in brussels, president trump appeared to suggest that the u.s. could recognize the annexation of crimea. he called the question interesting. what would this mean for the future of the alliance and relations with russia? well, i think it is a serious concern about the alliance has but i think if we take a hard look at russia they have always had very grave concerns when the
borders have been encroached upon. they see this as a downside of nato expansion. i don't think the president is going to actually acknowledge or recognize that taking either or the encroachment into the baltics. it doesn't serve our purposes or his purposes either. shery: do you believe nato should increase spending as president trump has reportedly said, from 2% of gdp to 4%? is such an increase necessary at this point? >> i think it is necessary to make up for the years and years of what nato has not done. it has not increased its personnel, procurement has been horrible. operational capability is near zero. if they want to make up for the years of underspending, and you to spend about 4%. kevin: final question for you regarding ukraine in syria.
-- and syria. what does the message that president trump have to convey on that issue? the u.s. delegation that was there, many would argue that they been more aggressive arguing with president putin then the rhetoric from president trump himself. >> we cannot lose our leverage inside ukraine, nor can we lose our leverage inside syria, if the president decides it's in the best interest of the u.s. to pull out. that is a victory for the russians, and frankly, it is also in the case of syria, a victory for the iranians. fascinating time to have you on. we appreciate your time. earlier today, i spoke with congressman scott taylor, republican from virginia, about what he hopes president trump will convey to president putin ahead of the summit. the president is headed to meet with vladimir putin in just two days in helsinki. what are you hoping the
president says to president putin? >> i'm pretty sure he will discuss a few topics. you have nuclear proliferation, arms race, syria conflicting with russia in syria. we have to contain iran. he has to deal with that. election meddling. he should discuss that. ukraine, crimea. there are a few topics that he could speak to. although i'm not sure there will be something groundbreaking coming out of this meeting. i don't have expectations that there will be. 34 billion dollars in additional funding the president says he has been able to secure with nato. you have been watching the president through these meetings. what do you make of how the president is representing the u.s. on his overseas trip? >> a lot of americans and president obama and president bush at the same thing of this president, our allies have to pay more for their own defense.
president obama said that they were free riders. i think that is a little strong language, too. reality is it is an comfortable truth and you have to have these kinds of conversations with your family and ends and allies. the president is doing that. americans largely believe that europe should spend more on their defense. that is a good thing, will make all the stronger. gave apresident trump press conference with u.k. prime minister theresa may, talked about the special relationship. although the president did have some critical words for the u.k. prime minister. what do you make of how the president is heading into monday's meeting with president putin? is he coming at this with a position of strength or is there this unification amongst traditional allies? >> i think it is a separate thing. i know there is reporting out there that says the president is having top conversations with europe, that therefore he would
not be strong in a meeting with putin. i disagree with that. i just do. i don't agree with the president stylistically, for sure, but i agree that europe should spend more in defense. just like president obama and president bush. i do agree the president should take a tough stance with vladimir putin on things like election meddling, as well as ukraine, syria. i think he should. i am hopeful that he will. i wish him success, as should every american. his success is our success. kevin: with regard to energy policy, what did you make of the president commenting, pushing back on not just prime minister may but chancellor merkel with their energy relationship with russia? >> energy is everything. 70 years ago when nato first formed, the threat was physically russia moving west and taking over territory.
that threat is no longer there. whether it is cyberwar energy policy, you can hold countries hostage by those things. i don't agree with the president stylistically but i think he is correct that it undermines europe, the alliance, if germany becomes more and more relied on energy from russia. therefore filling their coffers with money. also being beholden to them. you have seen in the past where russia turned the gas of through ukraine. the president has a valid point, although i may not agree on the delivery. kevin: quickly on turkey, a lot as to howsurfacing this administration is purchasing weapons, military defense systems from russia. what do you make of that in the context of what we are talking about now? >> it's a problem. turkey is an ally of ours. they have to choose. , the bestt the f-35
airplanes, with us, or planes from russia? i am concerned with turkey, we should have an alliance with them, but i'm concerned about a breath of issues with elections, journalists, jailing opponents on trumped up charges. i'm concerned about them purchasing jet fighters from russia. it would not be long before information from the f-35 could get to russia, so they could tweak those to compete. i have a problem with it. turkey needs to choose. kevin: switching continents, asia. the president's trade negotiations with china, seemingly suggesting bipartisan unification with intellectual property but there doesn't seem isbe as much with how negotiating other aspects of the trade deal. any concerns with how the president is negotiating with china? have a war,ou physical or trade war, there are
concerns, potential for unintended consequences. trade, some will be helped, some will be hurt. at the same time, this is an uncrackable truth. china has been stealing intellectual property. they have gone and harmed the u.s. in terms of trade, and other countries around the world. americans largely want someone to step up and say enough is enough, we are going to deal with china. .hat is uncomfortable listen, he may fail in some respects, but i think we have to give this president space to do what americans will put him in office for, and to stand up to a china that has a crazy trade balance with us, stealing intellectual property, trying to rise and become a power in the world. i would rather america stay as the power in the world. i want to give the president space to do what is in the best interest of the u.s. kevin: that was scott taylor from virginia. up next, trump
kevin: this is "bloomberg markets." i'm kevin cirelli. shery: i'm shery ahn. president trump and british prime minister theresa may have reaffirmed their commitment to finding a trade deal. the show of unity comes after an explosive interview with "the trump took aim at the brexit plan, saying it would likely kill any such deal with the u.s. henrietta now is treyz. great to have you. the president now saying he is now looking forward to a trade deal post-brexit. how challenging would it be for both countries to come up with a deal that works for both of
them? >> very challenging. what we have seen so far with this administration is he cannot get to yes on much of anything yet. there is either continue negotiations we have seen with nafta, challenging negotiations with china. i imagine it would take some time to get to an agreement with london or any other nation. shery: they first have to deal with brexit itself. right now we are getting headlines on the terminal saying the commerce department has now lifted a ban on the chinese company zte after a $1 billion penalty, and that they will monitor zte to ensure compliance. we know that the company violated u.s. sanctions. to important is it forzte continue business not only for china but also for the u.s. economy, given how much they supply to china? >> it's very important for a
couple of reasons, the most important being it was a precondition for china and president xi specifically to ensure that zte remained operational. the administration have to spend a lot of political capital with her republican -- the republican caucus. it was obviously very important to china and important for president trump to enter into a bilateral negotiation. this is a major priority so they can move the on the threats of tariffs which will continue, to a place where they can have a dialogue, which is occurring. shery: when you talk about dialogue, do we know who is leading the conversations on the u.s. side, whether with china or mexico? very focusedico, on what heiser. the president is important to be involved at her principal level, which will happen in a couple of weeks.
late junior could be a conversation. when it comes to china, the efforts of beijing are to prop .p secretary mnuchin they feel like he is their best bet to have a conversation about entering into a peaceful dialogue about trade, as opposed to launching these tariffs. mnuchinsomething that would like to see but that has dwindled in the last couple of weeks. i was struck when president trump earlier today spoke to prime minister may, talking about essentially point blank, that he believes the talk of nato is directly linked to trade talks. my question to you, as you try to price this, looking at their much doeslios, how the global volatility on issues not related to traditional economic issues impact things like these trade talks? >> the trade talks are occurring
outside any economic conversation. when i talk to investors, they see the market will send a message, the president will stop all of this. that is not the metric they are using. they are using gdp growth, unemployment. until those shipped, you will not see any effort from the republican caucus in any earnest way to ring this in. kevin: it is fascinating, if we have the front pages of what london woke up to today in the sun, the mirror, the daily mail, the president giving this interview to potentially rupert tabloid, that has the potential to move markets come is what you're saying. >> everyone needs to take this seriously. so far what we have seen from the markets as they are not. i'm curious as to when that will happen. we have a number of data points coming up. the auto tariffs are not baked in. the investor
community is taking seriously the threat of $200 billion worth of tariffs. when you talk to republican lawmakers and say when will you exert any sort of congressional authority to ring this in, you see there is no appetite. they were present the farmers, manufacturing districts. when i tell you that they are not willing to rein in this administration and are very comfortable, hearing good thing from their constituents, particularly from china, i'm serious. shery: how big of a risk with be, also nowriffs that we have higher gas prices and more expensive cars? >> i believe that we are going to see these auto tariffs. about 75 percent range. speaking with the auto dealers association, they are extraordinarily concerned. the groups that need to be super worry to me are the dealerships, who have cars that are manufactured exclusively abroad.
those dealerships, like lexus, jaguar, are out of luck if these tariffs go into effect. shery: henrietta treyz, thank you for your time. let's take a look at our stock of the hour. netflix on the decline, down 3% ahead of the company's second-quarter earnings report on monday. a cautious note from deutsche bank. kailey leinz is here with more. i actually subscribed easily. kaylee: i do every weekend. is theair, netflix second-best performer in the s&p 500 this year, up more than 100% year to date. expectations are as high as they can get. the key number here, netflix reports monday night. everyone will be watching subscriber growth closely. the company is expected to add 1.20 2 million domestic, 1.5 million internationally.
the company's own forecast is a little bit below that. deutsche bank saying there could be some downside risk, the company may not meet their numbers in the u.s., coming in below estimates. because subscriber growth is such a crucial number, the company spends so much, $9.5 billion last year, if that are progrowth is not up to snuff, that could really affect the shares. shery: i can imagine, although we subscribe. we are not the problem. thank you, kailey leinz. monday, an exclusive interview with blackrock chairman larry fink. that is in the 6:00 eastern hour. live from new york and washington, this is bloomberg. ♪
>> from new york city, i am lisa abramowicz. 30 minute dedicated to fixed income. this is bloomberg real yield. coming up, the trade war heats up. the question now becomes is it time to buy bonds? the leverage loan market is getting hotter but for how much longer? china's junk market starting to crack. we start with a big issue, the rising global trade tensions. >>