tv Bloomberg Markets Balance of Power Bloomberg July 26, 2019 12:00pm-1:00pm EDT
from the white house on the administration's u.s. dollar policy. carl riccadonna on u.s. second-quarter gdp numbers, and josh green on elizabeth warren leading from the left. let's start with you, kevin. we heard president trump recommended he take a position on the dollar and he said we will not manipulate the dollar. kevin: fascinating developments on this front. u.s. kudlow saying the government will not intervene to weaken the value of the dollar despite persistent concerns about other countries, i.e. china, and even european counterparts. this is something the administration has been considering for quite some time. it is also something the president has tweeted about and spoken about but as of now they have decided against doing so. we should note that the fact that this is even being senior economic
cabinet level officials talking about this, even openly is white remarkable. -- is quite remarkable. david: something that might be affecting the dollar is the gdp numbers. what is the attitude in the house behind you? it was nice, but it was not the 3% or 5% president trump promised us. kevin: that is right. privately they feel that the president has continued to hammer jay powell on interest rates. as a result of the economic landscape, two developments regarding gdp. robert lighthizer meeting on capitol hill with lawmakers about passing usmca, maybe even in september, and then he will fly around the world next week with steven mnuchin for china trade talks. a lot of economic news on what was otherwise a slow friday in washington. david: never slow at the white house. that is for sure. our thanks to kevin cirilli. now let's get more on those gdp
numbers with carl riccadonna. were they encouraging? carl: the 2.1% would have been 2.7% were it not a big drag from exports. we can see the impact of a strong dollar on these numbers. that being said, i would be more encouraged if we were looking at itersified growth, meeting was contributions from exports and business investment and an array of categories, housing. that was not the case. it was consumers going it alone type of economy, which would be good enough to prop up growth at a pace sustainable too low 2% territory. certainly it would be much more encouraging for the economic outlook if we were seeing a bunch of contributions. david: that is the pattern we are seeing elsewhere. a tale of two economies. there's the consumer that is doing well. carl: exceptionally well. consumer spending on durables up 13%. david: and then business not so
much. carl: business investment taking it on the chin over concerns of escalating trade war. in q2 we thought the trade war would intensify with china, but that it would spread to europe or mexico. that led to a crisis of confidence in the business sector that is impacting animal spirits and leading to a defensive posturing in terms of capital outlays. david: carl riccadonna, thank you for reporting. now let's go to josh green in washington. he is our national correspondent for bloomberg businessweek. you have a cover story about elizabeth warren called "life of the party." -- youto quote one thing say does liberalism jacked up on steroids. that summarizes it. josh: is a deep look at elizabeth warren, who six months ago look like her campaign was dead in the water. she was not raising money. she was low in the national polls. over the last six weeks she has taken the race by storm, lifting
herself not only into the top tier of democrats but shaping the race with these eight robust , her like a wealth tax desire to abolish the filibuster, the electoral college, medicare for all. you name it, if there is an aggressive democratic policy, chances are war and has conceived it or signed on. david: throughout her career she has had a combination of being substantive, and able to sell it in the media. she has that rare combination. at the same time, taking these bold positions, may she be undermining whatever chance you may have in the general if she got the nomination? josh: the central debate in democratic politics is between the incrementalist who say let's not do anything radical, let's just be trump, and democrats led by warren and bernie sanders who say unless we offer big bowl plans to incentivize democratic voters to vote, we will wind up
like 2016 with trump getting reelected. warren is leading the charge and it will be interesting next week at the next number craddock debates to see if she can carry this forward. david: let's come back to 2016 thathe general appearance president trump got the president in wisconsin, michigan, pennsylvania. laid to the bold plans workers in those states as opposed to new york and california? josh: is a good question. if you look at the left-wing populist, bernie sanders arizona -- has shown a strong appeal to working-class. warren seems to appeal to more college-educated white collar workers. those sorts of people. if the two of them confuse, if warren can broaden her appeal, then certainly she could win those rust belt voters, but that is all important for democrats but it is likely the outcome of
the next election is going to depend on states trump won narrowly, but the democrats won back in the midterm elections. i'm talking about michigan, wisconsin, and pennsylvania. david: great reporting. everybody should read this piece . now let's get a check on markets with abigail doolittle. abigail: let's get a check on sprint going up on the expected headline that the justice department would approve the deal with t-mobile. a major hurdle cleared after shares of dish were sold. t-mobile also up 3.5%. that is helping take stocks to session highs. let's take a look at major averages as well as the faang index. the dow is underperforming but has been negative before. the s&p 500 and nasdaq both an all-time highs. you can see the nasdaq
outperforming with tech exposure , and the merrill lynch faang index up 2.4% helping explain the s&p and nasdaq doing better considering the greater weight. the big mover for the faang index is alphabet. we will see a beautiful pop higher on a strong quarter they put up. the stock is trading higher. you can see on pace for the best day since 2015. they beat estimates and revenue growth of 19% better than what had been estimated. alphabet is back on track. not as much for amazon. amazon is the odd stock out. it is down 1.4%. they missed estimates. that has to do with rising costs associated with one-day shipping. twitter up 8.9%, almost 9%. it is a big beat for profits and leading sales. they had 5 million users. investors liking this. starbucks up 7%.
they beat all the metrics. in china, investors awarding the shares. everyone is waiting for the fed decision on wednesday. into the fomc policy decision, we see a lack of movement for the 10 year yield. we have the 10 year yield higher . that tells us haven bonds are trading lower on the week. they have been trading down three out of the last four weeks as yields are creeping higher, suggesting the rate cuts investors and traders are expecting on wednesday could already be priced in. it could have something to do with gdp numbers coming in higher than expected. coming up, gdp numbers show the economy continue to grow but at a slower pace. what does the state of the economy mean for democrats seeking the presidency? we asked her political roundtable, next. this is bloomberg. ♪
david: this is balance of power on bloomberg television. i am david westin. we turn out a mark crumpton for first word news. mark: the trump administration has rejected apples did for tariffs on computer products in manufacturers in china. the administration has said -- larry kudlow echoed the president's remarks. >> they have operations in china ,nd he has encouraged tim cook and we are very friendly with mr. cook. i meet with him a lot and the president meets with them a lot. that is up to mr. cook. there was some talk they would be moving some production facilities to texas. they do that, that is a good thing. that is our preference. mark: after asking the trump
administration to waive terms on key components for their mac pro desk top computer. house democrats are expected to file a lawsuit seeking secret grand jury material underlying robert mueller's report. all grand jury testimony was redacted from the report and has been withheld by the justice department. jerrold nadler says democrats will go to court again next week , hoping to enforce their subpoena compelling former white house counsel don mcgann to testify and turnover documents. libya's coast guard has recovered the bodies of dozens of europe bound migrants who died after their boat capsized in the mediterranean thursday. officials say as many as 350 migrants were on board the boat. a top u.s. official described the ship wreck as the worst mediterranean tragedy this year. in the u k, travelers are facing a second day of disruption after record breaking temperatures gave way to thunderstorms.
network rail, which oversees the majority of britain's railway network, is advising commuters to only travel it actually necessary. the blistering heat left trains and haphazard locations and a fire damage network. at heathrow, many flights were canceled or delayed because of the severe weather. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. is bloomberg. david? president trump named himself a progrowth president and predicted that things like the tax cuts would grow the economy at rates not seen in years. >> the economy has hit 3%. nobody thought we would be anywhere close. i think we go to 4% or maybe even 6% ultimately. david: 6%. not quite there yet. u.s. gdp slowed to 2.1%, a smaller drop than forecast but a
number that makes the trump economy look a lot more like the obama economy. a partner at lowenstein sandberg and president of democrats for educated reform and a partner at k2 and company. she served as communications director for scott walker's 2016 presidential campaign. welcome to both of you. president trump has embraced growth for the country as well as jobs. he has promised a lot, but at the same time it is growing 2.1%. is that good enough for republicans in 2020? >> the president himself thinks that is probably not good enough. he is aiming higher. that is what he has going for him. a lot of people believe the economy is going well for them. even if they are not feeling it , they believe the president is doing everything he can and the sky is the limit for what he is trying to do. 6 million jobs created in his
term, one million new manufacturing jobs, seeking to , unlike a% or 6% gdp lot of presidents who have not tried to get there. the president has a lot going for him in terms of what americans believe he is trying to do, not even to mention what he is trying to do with trade agreements. i was in iowa last week and what you hear a lot around the midwest is this president is fighting for them unlike any president they have had in recent memory. david: you heard part of the case. we have a lot of jobs being created. real wages are going up. wages are going up faster than the rate of inflation. isn't that going to pose a problem for democrats running against president trump? that is a pretty good story. >> there may been short-term increases in terms of real wages but wages have been quite stagnant and its economy is one that does not necessarily work for the middle class and working
families. most of the gains of the trump tax cut go to the wealthiest, and without demonizing them we want to make sure that every day americans have the opportunity to participate fully in this economy. housing ande about health care, about how they will pay for college and retirement dignity. there are a range of questions americans are concerned about and 2% growth is not much to be proud of. as we are seeing the sugar rush of the tax cuts whereof -- wear off. david: let me ask you about business investment. part of the argument for the administration was we would get a lot of investment that will grow the economy faster. i will put a chart up that shows business investment is on its way down. is that a problem with the economy, november of 2020? in terms of stability
of the economy as a whole, the president is trying to tackle big things like the trade deals he has been putting in place. i think ultimately he is trying to get a lot of long-term problems under control that will help business owners like me who look at these things and maybe we are not feeling it right now but we know the long game here that president trump sees and we appreciate that is what he is working toward. david: you mentioned trade a couple times. at the same time, there are studies out indicating the trade disputes may cost fewer jobs, that is job loss. certainly have it in agricultural areas. could that be a problem for the president if he does not get this straight stuff resolved come november 2020? kirsten: again, when you look the unemployment rates at a lot of these states, you cannot get much lower. i know we have other economic things we need to be working on,
and not just the unemployment rate. when you ask about trade in the context of unemployment, what people are thinking is you talk to a farmer in iowa and they say i might be getting hit, and i'm looking for the government to help me right here right now and move past this current crop. they are saying we've been getting the shaft on these things for a long time. ,or my business, for my family i know that what the president is doing is going to be helpful for my long-term growth in the industry's long-term growth. this is a long play and i think a lot of people, especially in the midwest, do appreciate that. david: we spent a long day with robert mueller testifying for congress. there was not as much talk about what we will do to make sure the next election is protected. whatever happened in the last one, how we make sure about that? is that important issue for democrats to run on, but do people care about that?
robert mueller pound the row a lot of attempts to undermine our election. shavar: that is an issue americans broadly should care deeply about. if there was any issue that was unambiguous in terms of robert mueller's testimony, it was that russia sought to influence our election and are continuing to do that. just this week republicans blocked bills that would require candidates to report to the federal authorities whether agents are seeking to influence elections. that is a step back. americans are also concerned with broader access to the franchise. we have seen states in the south attempt to purge voters of color from the rolls. we have seen attempts to purge for people from the balance -- to purge poor people and people color from the ballots. we need to make it easier for americans to vote, not harder. david: what about that? what chance of republicans appealing to people of color.
there seems to be a lot of polarization. it does not seem like president trump is speaking out. kirsten: shavar is right. this is a bipartisan issue. the president has said he is working to reach out to people of color. i know the republican national committee has a lot of grassroots efforts to do that. as a former employee of theirs, i know they have stepped that up. they are out in the community doing those things. security, ielection think that is what we have to look at when we are talking about what is happening in washington, d.c. it feels very partisan. it feels like the democrats are doing this to score political points. i think that is the problem. said, mitch mcconnell, we want to secure our elections across the country. we believe we can come to an agreement, he would probably have a conversation. that is not what is happening. has notitch mcconnell seen much inclination in that
direction. shavar: if anything, we've seen the opposite. this administration has rolled back rights protection. republicans sought to eat this rate section five of the voting rights act, which is the seminal piece of legislation that granted people color access to the ballots. david: which texas to the spring court. many thanks to our panel, sh avar jeffries and kirsten kukowski. coming up, t-mobile and sprint clear up clear hurdle, getting federal approval for their deal. coming up next. this is bloomberg. ♪
build quite an advanced network. david: that was the sprint executive chairman speaking to bloomberg. sprint and t-mobile are the stocks of the hour as the u.s. government approves the t-mobile takeover. abigail doolittle and jen read are both year. how to the stock react? abigial: a huge pop for both stocks. this is highly anticipated. .ot so surprising the department of justice has approved this $26 billion merger between the number three and number for wireless carriers. that executive just talking about 5g. that is one of the reasons the fcc gave it's not for approval. the 5g will help out rural america. president trump is talking about it as a key security concern. there are other hurdles ahead for this deal, including the lawsuit of 13 state attorney general, plus d.c.. it is not done yet. david: how about that?
jen: still a big hurdle in front of the companies. they're going before a magistrate judge august 1 to figure out when the trial may start. the date is now in contention. you have these states, and i think they are dug in, as much as the companies will try to settle. can they consummate the merger without a settlement from the court? there is not an automatic stay. jen: the states will need to ask for an emergency order from the court, unless the judges agree to close in turn for a quicker trier date -- gripper trial date. david: there has been a lot of restructuring in the deal. how strong is the case on merits? jen: it is a strong case, but the remedy is the hurdle. you have two experts that decide the remedy is good enough to convince the harm and now the
states have to convince the judge that the remedy will not ask the harm and prices will still go up. david: in the meantime, they finally have approval from the department of justice. they've been waiting forever. and thanks to jennifer rio abigail doolittle. up next, we will talk with the republican presidential candidate not in the white house. he is former massachusetts governor bill wells. we will talk to him about his quest to take the nomination from president trump and why he thinks he can unseat a sitting president. that is next. live from new york, this is bloomberg. ♪
springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts, experts choose to sleep on it too. try it yourself in any west elm store. or order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and, because everyone needs a place to rest, we donate tens of thousands of mattresses to those in need. experience the leesa hybrid mattress. right now, it's on sale. order today. go to leesa.com. david: this is "balance of power" on bloomberg television. i'm david westin. for bloomberg first word news, we go to mark crumpton. mark: secretary of state mike pompeo says he will travel to
tehran to address the iranian people about u.s. foreign-policy. he spoke with bloomberg. >> i like the chance to go not to do propaganda but speak the truth to the iranian people about what it is their leadership has done and how it has harmed iran. the secretary of state was speaking before cnn reported iran had testfired a medium-range ballistic missile earlier this week. a senior top official says the u.s. is aware of reports of a projectile launched from iran. china, 24 are dead and two others are missing after a lance like this week. the landslide buried 20 homes in southwestern china tuesday night. heavy seasonal rains have caused flooding and landslides across much of the region. andreds of protesters staged sit in at hong kong's main international airport terminal today. the demonstrators dressed in black sat on the ground held up signs and chanted slogans
including free hong kong. protests have been happening for more than a month. demonstrators are calling for , and anic reforms investigation into alleged police ecology. democratic presidential hopeful tulsi gabbard is suing google for $50 million. the hawaii congressman accuses the company of suspending her advertising account hours after last month's presidential debate. she claims the company violated her right to free speech. google has denied any wrongdoing. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. thank you. no sitting president since before the civil war has had the nomination of his party taken away from him, but former massachusetts governor bill weld wants to make history. we welcome from boston, the governor. welcome.
the questions i always like to ask the candidate is why you are running, but i think i have a hint of why you are running. you recently appeared in detroit at the naacp conference. you use pretty strong language. unless the republican party expressly rejects the racism of donald trump, they will become to being universally viewed as the party of racism in america. is that the smartest way to get republicans to vote for you? bill: i am getting anyone who is right minded to vote for me, that's my plan. millennials,clude women, all women voters, not just suburban women, will include independents and democrats where they can vote. 20 states permit crossover voting. you can even reregister if you are a democrat in a closed primary state and be republican for a day, vote in a primary. my message to them is they can vote against donald trump twice.
if you vote for me in the primary, that is coming out of donald trump's pocket. i was there when pat buchanan basically notched george w. bush -- h.w. bush off of his pins. 41 had 91% popularity in december before the february primary. of the vote,37% but he knocked him off of his pins. ross perot came in and the rest is history. in december the your before the election. things can happen fast. david: let's talk about the main things you want changed, besides this powerful accusation of racism. what do you oppose about the policies? bill: i don't think trump is not a real republican at all. i have no problem holding myself up as a republican standardbearer. this guy would not know how to lifece a budget if his
depended on it. his last budget added $9 trillion to the accumulated deficit. aw instead of talking about $20 trillion accumulated deficit, we are talking $30 trillion. the thing that just went through looksis blessing, again, to me like no one in washington is looking out for the taxpayer. appropriation plus 10%, they think it is a cut. ,very governor in the country by constitution, has to balance a budget every year. every taxpaying family in the country has to balance your checkbook every month. why should the federal government alone be exempt from that? they think these other countries who trump loves to dump water that theythey think are going to buy our treasuries indefinitely. no. you cannot run a deficit indefinitely and have people keep on buying your treasury. that is domestically. hasrnationally, mr. trump
ripped up far too many treaties, insulted too many allies, cozied up to too many dictators. abrogating the 2015 in iran deal was a colossal blunder. i would love to see mike pompeo go to tehran. any dialogue there is good. sayinge on the data job let's have direct talks with the u.s. maybe they can crawl their way back into so that iran is not developing nuclear weapons aimed right at our head. iran is 10 times as big and smart as north korea. have 10 years of no nuclear weapons development there under the treaty, which president trump ripped up, while our european allies were still a party to it. he doesn't know what he is doing in the international area. he has this fantasy he can do it all himself. as i listen to you, i am reminded of another former governor who has not yet decided, mark sanford.
bill: great guy. david: he has nice things to say about you, but i asked him, do you think you are going to win, or are you trying to make a point? wouldon't know, i think i be a longshot come in fairness to your point. if you could go -- i don't know if you can -- but if you could actually change the debate in this presidential cycle to include a focus on debt, deficit, government spending, it would be worth some numbers of months in my life. david: talking about a lot of things that you care about. are you try to change the debate or win? bill: i am aiming to win. the first up is winning the new hampshire primary february 11 next year. for somebody to win a primary against an incumbent president, that would knock him right out. that is not supposed to happen when you are an incumbent president running for reelection.
that buchanan got 37%, gene mccarthy got 41%. they knocked the incumbent president out of there. winning is the game. for the reasons i was saying earlier, i feel a heck of a lot more like a republican than that rhino donald trump. he is not for free trade, his first instinct is tariffs and sanctions, is not for a robust foreign policy, which the republican party used to be. he is a complete isolationist. he is scared of the rest of the world, so that is why he is demonizing them, so that nobody in the u.s. will have anything to do with other countries. so he will not have to do as much work. he is woefully unprepared for the job internationally. david: what about on the republican side? are you hearing behind the scenes some republicans encouraging you? if so, what would it take for them to come out in the open and say, i'm willing to support bill weld? bill: i'm absolutely hearing
that. it is too early to say any republican friends in washington, come out. i am here again in new hampshire. it will turn to full time. i can campaign in new hampshire every day of the week and sleep in my own bed in massachusetts, which is an advantage that others don't have. i will do whatever it takes to win the new hampshire primary. i hear that a lot in new hampshire. the republican party is 65% pro-choice on the reproductive rights issue, which i have always been. i was by myself or 20 years on that point. that is sickly 5% of the republican party, not the state. that is a launchpad. shortly after labor day, we will be announcing a steering committee republicans in new hampshire who are willing to come out and say, we have had enough. david: you and i have talked
before about the mueller investigation. now we had a full day of testimony. i believe he had the same job that you did. as you watch that paul thing, if you are asked on the campaign trail, would you in -- support ap before for the president, what would you say? bill: i think it is well past time to launch an inquiry. people don't understand these investigations take months and months. a typical, complicated white-collar investigation in a justice department takes 18 months. the nixon investigation, which i worked on, took 10 months before it even left the house, and that was cut short because the and resign. never even got to the senate. people have this idea that somehow it is all going to be over by september 2020 and he will get a jet -- get out of jail free card because he will only have 55 votes to move him from office. that is not how it works. after the house is finished in
april 2020, they appoint six people to prosecute the case in the senate. that takes another 10 months. this would not be over before the election by any stretch. the republicans in the senate don't get to decide when the vote is taken. that is up to the democrats who prosecuted the case in the senate. they can take as long as they like. david: let's do some criminal procedure here. even as you been talking, jerry the headline crossing, he is citing impeachment prospect in a suit for mueller evidence. do you think they should have to give over the evidence? in particular, grand jury material. that is never given over. bill: i don't agree with giving 6e material over. i am hearing a lot on tv that people are talking about the reductions in the report.
not me. i could tell exactly what that was. grand jurythods, 6e material. i have no problem with that. david: thank you. that is massachusetts governor and presidential candidate bill weld. in the meantime we have a tweet from president trump warning france about the additional tax. it anybody taxes them, it should be the home country. the u.s. will have substantial reciprocal action on macron's foolishness shortly. things escalating over the digital tax issue. ok. live from new york, this is bloomberg. ♪
fired as week tested ballistic missile with a range of 1000 miles, ramping up tensions in the middle east, even as secretary of state pompeo said he would be willing to travel personally to tehran to get negotiations started. >> i would welcome the chance to talk to the reading people. i have talked about this before. he comes to new york, gets to ru drive around the most wonderful city in america, speaks to the public, puts iranian propaganda out onto the american airwaves. i want a chance, not to speak propaganda, but speak to truth about how the leadership has harmed iran. david: we welcome now lori murray. she served as assistant director of u.s. arms control and disarmament agency and has taught national security issues at the u.s. naval academy. welcome. good to have you here. let's start with huron. they have said they will increase their enrichment and
will keep ratcheting up if the sanctions don't come off. how big of a threat is that? lori: what iran is doing is actually setting up a 60-the process where it constantly puts pressure on the other signatories, the remaining signatories to the iran deal, the nuclear deal. that includes britain, germany, france, china, russia, as well as the eu. i actually think that policy is misguided because president trump has shown that u.s. power is primary. u.s. primacy internationally, that he has brought down the iran deal. he has pulled the u.s. out and with his maxim pressure has shown u.s. unilateral sanctions have made the iran deal impossible to implement. businesses in europe are paid to get involved with iran because of the secondary sanctions, the effect it would have with their business in the u.s.
u.s.dent trump has proven primacy, brought down the iran deal, and iran's actions has been to put pressure on the eu. and china and russia to come through. that is a pretty powerful coalition but they have not been powerful enough to beat that the u.s. on this policy. david: the u.s. is proving it can hurt they are ringing economy almost by itself, maybe cripple it. iran getsthe end, breakup capacity, haven't we lost the game? the whole game was to make sure they didn't have nuclear weapons. the president has set up a tremendous amount of leverage, so what is the endgame? a rant it has to be talking to the united states, diplomacy. that is where it ran's current policy is misguided by slowly unraveling the iran deal in itself, trying to put pressure on the europeans when in fact
you need to do with the u.s. on these issues. david: as i understand it, there is an asymmetry in the positions. the united states has said that we will negotiate with preconditions. the president said that. the iranians say we don't want to talk unless you pull back on the sanctions. area for can see some maneuvering here between iran and the u.s.. i think iran should just come to the table, but there is some area of movement. you can see perhaps the president of iran, if you wanted to talk to the u.s., the president lifting sanctions on supreme leader without actually affecting the oil sanctions or secondary sanctions against businesses doing commerce with iran. david: let's turn to another place where we need an endgame, north korea. the president says he wants to have more discussions.
we just had a missile firing by north korea. are we making progress? lori: i actually think we are. we have tried just about everything with north korea over many administrations. the problem really starting with the clinton administration when it hit a peak and president clinton got involved, considered using force, and then ended up with the 1994 agreement with north korea. that problem has continued to grow. i think what we are seeing in north korea is we have tried so many different things. i think the president's policy of dealing directly with kim jong-un, given the structure of the government, with all the power being in kim jong-un's fans, as well as the policy of denuclearization, are actually on point. david: do we have any reason to believe that kim jong-un would give up nuclear weapons? it didn't work so well for
others that had the capability. lori: you could build a scenario -- i believe you can, where kim jong-un would give up nuclear weapons. he has proven that north korea is a nuclear power. he has the capability. globallye recognition that they are nuclear power. when you would be doing is getting rid of the actual capacity. ofremains with the status proving it is a nuclear power, but you get rid of the capacity. in return, he gets the second part of his agenda, which is the into thegrowth back international community, the respect that comes with that. david: what is the role of china in this? for many years we thought china was the way to get leverage over north korea, really the only supplier. are they with us, against us? how do they figure into the national security concerns with
north korea? lori: china is very important with north korea. that remains the case. is it the decider? no. theater percent of north korea's trade is with china, on the chinese border. after the collapse of the soviet union, north korea turned to china as its economic lifeline. .o china is very important what is fascinating is we have brought kim jong-un closer to china and xi jinping with our policies, than they have been during the obama administration. there is a key element that is happening here that has really , onged north korean policy our part, the chinese part, the russian part, and globally. in 2017, one year into the trump administration, the intelligence community assessed kim jong-un have consolidated power. part of the logic of your teaching patients under the obama administration was that
there was a new leader, he was young, unknown, and it was not clear whether he would be able to consolidate power. once he consolidated power, it became clear to the two major , bordern the region neighbors, russia and china, that kim jong-un was here to stay. it became clear to us as well, as well as south korea and japan, and that we need to deal with him. david: now reports that huawei, with which we have concerns with national security, may have provided 3g technology to north korea. a chinese company that we have problems with supplied technology to north korea. lori: huawei is in both of these issues. the cfo, the daughter of the huawei ceo and founder, has been arrested in canada because of violating iran sanctions, now north korean sanctions. be on the front
boilerplate of all these issues, as well as u.s. intelligence concerns. havinghe problems of huawei play such a dominant role in five g technology going forward. david: is this a national security concern or trade concern? lori: both. the reason why is a national security concern is because if it does control the infrastructure and technology, the concern is it will share, under chinese law, data with the government, has a responsibility under chinese law in 2015 and 17, 2 laws were passed on national security and intelligence and espionage, and it will have to possibly provide a backdoor for the chinese in terms of data exchanges. this data will explode, as you know, with 5g technology, beyond
where we are today. david: a question that is not conducive -- what is the biggest nuclear threat around the world today? lori: i think the biggest nuclear threat around the world today is the fact that the nuclear arms control regime is collapsing. ishave the i and a treaty about to come to an end in august as we have not been able to resolve that compliance problem with the russians. these intermediate range systems are no longer going to be constrained. the new treaty ends in a couple of years. we don't have any follow-on to that. you have the arms control treaty collapsing and you have technology exploding. advanced technologies that are not even covered. when you have great power competition coming to the nucleart, which gives weapons much more salience and deterrence. david: much longer conversation
>> the market in china i am so bullish on for the long-term. it is a large and growing addressable market, primarily a tea drinking culture that we are introducing a replica coffee too. we will be able to accelerate and build new stores for a long that washina david: kevin johnson talking to me about china. yield" with the jonathan ferro, discussing the gdp report. this is bloomberg. ♪ ♪ hey! i'm bill slowsky jr.,
i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass.
jonathan: from new york city for our audience worldwide, i am jonathan ferro. bloomberg "real yield " start right now. coming up, u.s. growth delivering an upside surprise ahead of a much anticipated fed decision. present draghi making the investors wait until september. the ecb teaching of extra stimulus, fueling inflows into every major bond sector. from high yield to emerging-market. we begin with the big issue. the u.s. economy is doing very well. >> the u.s.