tv Bloomberg Technology Bloomberg November 20, 2019 5:00pm-6:00pm EST
>> welcome to daybreak australia. live in beijing at the u.s. economy form. -- forum. here at top stories we are covering. the house of representatives prepares to vote on a bill supporting protesters in hong kong. lawmakers are defying angry warnings from china. over a make orms break stage with warnings the
talks could easily collapse. his bank being accused of the biggest breach of financing laws in australian history. >> we are here live at the second annual bloomberg new economy form. we have big names coming up. it's a big moment in time. we are same economic power shifting from the emerging economies. one of the men at this crucial juncture when it comes to u.s. china relations will get you live pictures from austin, texas where president trump is touring the apple factory. imitated or try to copy my conversation, he made up went beforeon, congress, and made up a phony conversation just like he does every time he talks. he is a very dishonest very
corrupt politician. the big upset as you folks know is when i released the transcript. i don't like doing that but you have to keep this very classified and confidential when you are speaking to heads of state. i released it because adam schiff and the whistleblower made of a phony deal. you should be ashamed of yourself. the press should be ashamed. they should end the witchhunt right now. >> [indiscernible] i didn't say that. he has already done the right thing. of president if you look ukraine and his spokesman said foreign minister, they put out there was no pressure whatsoever. you knew that. you knew that very well. with your fake news and you should be ashamed of yourselves. [indiscernible] >> [indiscernible]
the bidens is a different story. when you talk about corruption, when you have a guy who made no and he becomes vice president and he is getting millions and millions of dollars from ukraine, from china from all of these countries you just see two of them. this guy made nothing. he got thrown out of the navy. he couldn't get a job. then his father becomes vice president. press doesn't want to report it. the press is dishonest. i think it is a disgrace. the whole thing with biden is a disgrace. >> [indiscernible] >> where looking at that. you haveem we have is samsung, it's a great company but it is a competitor of apple and it's not fair because we have a trade deal with south korea. we have to treat apple on a somewhat similar basis as we
treat samsung. with all of that being said, we are doing for a nicely with china but i like it the way it is now. we are taking in billions of billions of dollars and we're giving some of that money to farmers and others. we are looking at apple. i said someday we are going to see apple building plants in our country not in china. that's what is happening. all the happening it's american dream. our country has never done better. it is doing better than it has ever done. the lowestt is level. african-americans, hispanic americans, asian americans the unemployment level is the lowest it has ever been. >> [indiscernible] i continue this. -- i can to you this.
china would make it -- rather make a deal. i don't think they are stepping up to the level that i want. >> [indiscernible] here's what i say. what do you know? everyone saysfs you're taking in hundreds of billions of dollars. everybody says that's going to the economy.ad for as you just heard from tim cook, we have the highest -- strongest economy in the world and we are taking in billions and billions of dollars. we will see what happens. we are dealing with china. we have a great relationship with president xi jinping. we are a greater country the china. now, china win right would be a bigger economy in the united states. up $11 i want, we picked trillion in value and china has lost probably wanted $5
trillion. lost $25 trillion. that was president trump speaking at an austin, tex apple plant. we're also watching the house vote happening right now. that they actually want to pass hong kong human rights and democracy act. >> that's another one of these to step forward, one step back scenarios. that is our top story today.
supporting the protesters in hong kong. we have had 2425 weeks of continuing violence and unrest from the democracy protesters. this is all playing into the trade story as well. we're being told that these talks are at the make or break stage going into the phase one trade deal potentially being signed. let's get to our congressional editor. and thisuse is voting is a sign of the sentiment in congress. the senate had passed its version of it. the house had passed a slightly different version. rather than try to work out the differences, the house picked up the senate bill and that's what they are voting on. are poised to pass. there is a great deal of support for this measure.
to the pro-democracy protests in hong kong. it would require the secretary of state to make an annual assessment about whether hong continues to be a beingutonomous and is not too tightly controlled by beijing. it would also allow for -- officials in china and hong kong who are responsible for suppressing dissent. least asure that has at little time and some circuit breakers in there for china and hong kong. it is clearly a statement by the congress that they want to act tough on china and the support the pro-democracy protests and hong kong. we are seeing now the book in progress. now, we are hearing that the house has the votes to pass the
hong kong human rights and democracy act. they just needed a two thirds majority. already last month, they passed a similar bill so it was just a matter of them passing the senate bill. the key question is, what happens next? this bill will not go to president trump. given that the trade negotiations are still going on, will he signed into law? that is the question. at the white house declined to comment even before the house is voting. whether the president would sign it, it seems even the boats -- votes in both chambers of is --ss, it is likely he he would be overwritten. the authors of the senate bill did work with people in the treasury and the administration but it is always donald trump who will have the final say. some of his aides are not entirely sure which way he will go.
been known from the white house that they would oppose or rejected. right now, the betting is that he will in fact sign it. pressure tove some china as they are trying to conclude this first phase trade deal. be slippingem to off into the distance old but already before this is even taking place. we heard typical gamesmanship from president earlier saying that china wants a deal more than he does. that negotiations are ongoing. also, there has been an ongoing relationship with president xi jinping. do we know where we are at when it comes to the trade talks? what's the latest step? oddly simultaneously on the verge of getting done and also teetering on collapse.
there has been progress supported by the negotiators but there are still some issues standing in the way. primarily, china does not want to commit to setting any sort of commit to setting any sort of metric for agricultural purposes. they want to be based on market needs. each of administration is demanding a specific amount of promise for purchases. the chinese also want all terrorists lifted before this can be done. donald trump sees that as a major piece of leverage for him and he wonders that if this does not get signed, he is prepared to put an additional round of tariffs on chinese goods that would hit things like computers and phones and other consumer goods. it would be a little bit more widely felt that the current tariffs. we're still somewhat at loggerheads.
it looking less and less leather there's going to be some major signing ceremony involving the two presidents sometime before the end of the year. that has been the original promise for november. now, it may slip into next year. that was our congressional link -- congressional journalist talking about the hong kong vote in the house. we has in the markets take a hit in the u.s. as there are more doubts about a trade deal between the u.s. and china. david, great to have you with us. we have already seen the market impact from the possibility that we can potentially not see a trait of this year. what will happen if we do not
get that phase one agreement? we have gone from in this trade war to temporary, small, now we are ratcheting up every step of the way. we approach a december 15 deadline and we don't how that's going to go. he just had report on the status and the conclusion is nobody knows. a full trade arrangement with has eluded us. it is gone. businesses are now making decisions about location around the world. they are changing what they are doing. the united states is now collecting a sales tax on americans masquerading as a tariff. is nowunt in the tariffs paying approximately one fourth of the interest bill on american borrowing.
we have a rising deficit. you have the president say we are collecting all this money. we are collecting it, americans are paying it. we see it in changes in prices. orashing machine cost 10% 12% more than it did before the tariffs. this is an unfolding story. adjustingmarkets are to the fact that this is a more permanent state. which means that pricing is different, location of businesses are different, as that unfolds, we go down first, then there is the reallocation elsewhere. we have breaking news. the u.s. house has finally passed the hong kong human rights and democracy act that backs protesters. we have seen a bill already
passed by the senate. is whether orow not president will sign it when it arrives at his desk. >> that is the next thing we are looking at. given there is so much uncertainty about whether this mini deal with the low hanging fruit is going to be completed. how much pressure is on the president now to sit on this bill given that we know it displeases beijing greatly? >> i think you hit it right on ahead. he has to wait but how long does he wait? it's a bipartisan bill. a veto is overridden. the veto -- to veto the bill, it would put him in an unusual and inconsistent position. it's unpredictable is what trump's behavior will be. that this pushes the chinese negotiation and makes it
more difficult. that is the one thing we can depend on. i don't see a trait of coming. i think anything we get is , and a long-term trade relationship between the united states and china has been permanently injured. >> david, you are sticking around for us. back to fundamentals, looking at the takeaways from the last 30 minutes. stay with bloomberg here at the new economy forum. live from beijing, this is bloomberg. ♪
this is exactly the point. we need everybody else to be open. my question to you, what is the critical infrastructure in the digital age? wassed to say telco critical infrastructure. is it a device? how many people have a digital wallets in the world today? more than 2 billion. when you have a digital wallet, you will be part of that arrangement is it just the user? >> online brokerage robin hood is offering stock trading outside the u.s.. the commission free financial trading company is launching in the u.k. in the first quarter of next year. the cofounder and ceo talked about his ambitions for robin hood. >> we are very excited about it.
it's our first live international market outside of the u.s. continueant line as we to democratize our financial system. >> it feels like you're coming home. you are not that well known over here. why the u.k.? why come here first in your international drive? >> a couple of reasons. number one, the market has discerning consumers that are sophisticated and have a long history of having access to financial tools. despite that, we can add a lot of value here. it's a culture more of savings and investing. we could add a lot of value making investing more accessible , making the barriers to entry lower to a younger audience and eight west -- less will be audience. we have done a lot of research
talking to customers on the ground. in the u.k. as well as many other places. we have a sense that there is a ton of demand for the product. that it is somewhat proved out today with our wait list launch. the impression an initial acceptance and excitement has exceeded our expectations. >> a bit of a bombshell through the system when charles schalk -- charles from when c3. >> the way we think about it is our mission is to democratize the financial system. for us to execute on that, it's not enough for us to offer commission free investing or the lowest cost, highest value services to only our customers. adoptimperative that we are pricing and model so that
every customer of any service has the best possible pricing. it is a welcome change, it is great for customers. there is a lot to be done. >> what's next in the democratization of the industry? how do you stay afloat and keep your old customers and gain new customers? >> we look at our mission as expanding our footprint into two dimensions. one is more products to our existing customers. expanding from investing into multiple assets, multiple platforms. then, going into any financial services customers might need in the u.s. for instance, we recently launched our cash management program allowing customers access to high-quality spending tools and paying them interest on their on investing cash. then, expanding into the u.k.
and that being a part of our overall global expansion to make high-quality awesome tools. two available -- available to customers worldwide. >> that was the cofounder and ceo of robin hood. this week, demolition of a building in new york begins. it interview, -- an exclusive interview, they tell -- five gcontent technology will stream content at record speeds. >> there are active discussions about five g in times square. i can't get into the details but one of the most robust places of some of our neighbors are going to be participating in this experience. all of this is going to be
happening at the grandest scale in the world. >> is it going to be ready around 2021? >> yes we will be ready. >> one thing i was reading about five g in new york city is that it's not just the technology and there has been a really robust conversation about the competitiveness in the u.s. , but that it is a real estate problem because you need to sell towers. tell us what that is like. when you get into the zoning aspect of it and the local politics of getting something like that accomplished and don so that five g can be here and allow the effect to be what you envision it to be. without preempting this discussion, i can tell you that the community, the authority, our neighbors all are preparing
for that. this building is essentially an to broadcast and receive information. wi-fi capabilities throughout times square will be unmatched. it is all in the planning and the discussions. neighbors in the times square alliance as well. that was the ceo of elidel holding company. cookg up, trump meets tim in austin, texas with a tour of the olfactory. we will have all the details next. it this is bloomberg. ♪
give me your thoughts on how the meeting went between tim cook and president trump. mark: i just watched it. tim cook was there with trump. ivanka trump was there. flex,l as executives from the facility where the computer is being built. tim cook basically walked trump around the facility, talked about the components that go into the mac pro and how its final assembly is in austin, texas, while the components are built in china, they are imported from texas. the big news moment that happened is when bloomberg asked president trump if this is going to lead to some sort of exemption on overall china tariffs for apple, and trump said that is something that his administration is looking at. you saw aftermarket stock moves of 6%, which is significant for
a company with a market cap of over $1 trillion. if trump would've put in some sort of waiver for apple, that would be extraordinarily significant because december 15, that is when tariffs were going to kick in for the first time on the iphone, with degenerates around 2/3 of apple's revenue. taylor: we know tim cook was meeting with him to talk about keeping mac and iphone off the tariff list. >> the problem you have is you have samsung -- it's a great company, but it is a competitor for apple, and it's not fair because we made a great deal with south korea, but we have to treat apple on a somewhat similar basis as we treat samsung. taylor: we have a trade deal with south korea so we have to treat apple similar to samsung. explain. mark: what the president is
trying to point out is apple produces the majority of its products in china but is an american company. as an american company, they are impacted by those tariffs because the products are built in china and exported to the united states. the difference is south korea is a huge competitor of apple and it is a company not based in america and they produce the majority of their devices outside of china. the point is apple, an american company, is getting taxed a high percentage on its products, whereas samsung, apple's biggest korean companya are not getting taxed. he's pointing out that is not fair. he is saying if there were to be a waiver, that is because of the unfair standpoint. taylor: did any of this meeting today at the factory change the outline for the december tariffs and the impact on apple?
mark: what we have seen is that tim cook has been extraordinarily influential in donald trump's decisions around tariffs. you've seen apple get waivers in the past. by the same token, apple has not gotten waivers on the apple watch and air pods. this was nothing new for apple. this was not their first computer made in austin, texas. this is not a new facility. there's really nothing new going on except apple's pr marketing presentation around it and it's clear this is simply an appeal to the trump administration to work with them in order to avoid tariffs, right? needsok is doing what he to do as a businessman, putting his politics aside to get done what he needs done. trump travel to california to make this happen, could have some influence. it's possible there is a trade deal done even before december 15, so i think one way or another, apple is optimistic this will get done.
taylor: like you said, sort of a press day, win-win for both. tim cook can talk about he is bringing manufacturing back. does it really move the needle when you think about all the apple products and what actually is made in austin, texas, what is made in the u.s.? question. is a good the mac pro is really the only apple device made outside of asia in the united states, but it is actually apple's lowest selling product, right? this is the most expensive device, the highest end device they sell, and they are really not selling a lot of these. you're talking about iphone, tens of millions, hundreds of millions of units per year. this is not a big deal in terms of apple's overall product line. this is more pr than anything.
stored overseas -- trying to u.s. consumers. >> facebook has said or users that they can turn off location tracking. as it turns out, you cannot. even if you say you don't to be tracked by facebook, facebook on your phone continues to scan all of the wi-fi in your area. it continues to use your cellular location, and it continues to transmit that information to facebook, so this is another misrepresentation, frankly, and i would like to know why is it facebook is telling its users they can stop tracking when they cannot. google does the same thing, by the way, and i think it's one more instance of big tech companies not being honest with us about the data they are collecting. >> you think they are purposely misleading users? >> i don't know how to read it any other way. he read the post facebook put up
for all its users saying you can stop facebook from learning your precise occasion, a very lawyerly phrase it turns out. is actually still tracking them, still tracking wi-fi, still using cellular data, the cellular network to pinpoint their location. i think it's very misleading. taylor: what would you like to hear back in response from facebook? senator holly: i would like to :ear the fact -- senator hawley i would like to hear the facts, the difference between what they've told consumers and what they are actually doing. i would like to hear them come clean, be honest. this gets to why we need to pass legislation. congress needs to pass legislation that gives every single american the right to opt out of being tracked, period. no backdoors, no workarounds. every american should say i don't want to be tracked.
taylor: are you also planning to write a letter to apple and , given that it runs on system and google's android system? google testified that customers can turn off location tracking and that is not true. google is constantly searching wi-fi networks even if location tracking is off and it transmits the information to google. as i say, tech companies are all doing the same thing and it is misrepresenting their positions to consumers while they collect this information. they need to stop. taylor: to be fair, we have data privacy.out we have seen a few existing privacy legislation come out. they have not gone anywhere.
why do you think your work has a chance to go somewhere? for one thing, it is bipartisan. it gives consumers the opportunity to say they do not want anyone to scoop up information about them. it would give every american the right to that. it is sponsored by senator feinstein from california, senator warner from virginia. we have broad bipartisan support. it is a common sense measure and something consumers deserve to have. taylor: i want to your concerns about data privacy into big tech and antitrust and the doj has hinted at the fact that those two are a same issue. is this the concern about data privacy or do you have antitrust concerns? wley: one of the reasons data privacy concerns are so present is -- so pressing companies are monopoly
size. there are not really viable competitors to facebook or google, and that is a big problem, so i am concerned about their anticompetitive conduct. i am concerned that is making privacy issues worse. taylor: i think critics, to be fair, would say the competitors are in china and china tech is massive. if we break up u.s. tech, how do we take on china? : i don'tawley understand why getting more competition would hurt our standing vis-a-vis chinese competitors, but i have introduced legislation that would top -- stop chinese companies from entering the market if they are going to abuse data collection. i have a bill that would stop companies like tiktok, a chinese owned company, from collecting data and sharing it with the beijing government. we can address the threat from china and the background threat, which is beijing getting our information, while also asking american companies to actually compete, actually innovate, and actually be honest with
consumers. taylor: i am going to take the bait. ands talk about tiktok apple. we cannot keep apple out of china and cannot really keep tiktok out of the u.s. senator hawley: it's important we stop tiktok from transferring any data to china and to the beijing government. any time a chinese company wants to acquire an american company that is a data company, the state department should sign off on that beforehand. there should be preclearance requirements. when it comes to apple or any similar company, they should not storing data and encryption keys in china. it is too much of a security risk. ktok should be
understood if he is reviewing your opinion? hawley: it already is is my understanding, but it should have been sooner. taylor: what does a realistic tech bill look like that has a chance of getting past? y: i think we can start with do not track. it has broad bipartisan support and addresses privacy issues. it also is pro-competition because they do not track competition goes to the business model of google and facebook and also twitter, for that matter. i would start there. i have said over and over that i do not think the goal of comprehensive privacy legislation, whatever that might look like, i don't think we ought to let that stand in the way of taking steps right now that would be good for consumers. i would start with do not track,
and i would start with protections for children. i think big tex should not be able to direct ads to kids, should not be able to track kids, and every parent ought to have the right to have their children's data deleted. andor: around this issue arguably all legislation on big tech, europe and the european union has been much more strict than the u.s. why have they been able to pass legislation and we have not? ey: i think big tex has been able to purchase a lot of friends here in the capital. give facebook and google credit, they know how to play the game, but the truth is consumers are inpatient. parents are impatient. they are fed up with their kids being exploded online, being tracked online. consumers are fed up with being tracked online and having no way to opt out of it, and i think the american people will demand action by congress, and that's why this body needs to act. taylor: i want to address another bill you have been
talking about called ending support for internet censorship act, which is intended to address claims of anti-conservative bias within big tech. the heritage foundation came out and said if the bill is enacted, it regulates online content, but it does risk eroding a lot of this free speech. how do you respond to the heritage foundation? inator hawley: first of all, would say this is a pro free speech measure. we need less monitoring. my concern is because facebook and google are monopoly-sized companies, when they decide they are going to discriminate on the basis of political views against conservatives, against pro-life voices, against pro-religious freedom voices, that means those folks are effectively shut out of the digital marketplace. that just should not be the case. all these companies say they do not make content moderation decisions on the basis of political viewpoint.
my legislation just holds them to that. it says you should submit yourself to an audit every year to make sure that is accurate, and if it's not, they should not be able to keep their special protections under section 230. taylor: should political ads be fact checked? that tohawley: i leave the particular services, if it's facebook or google, whoever is doing those. we do not typically do that in the context of tv broadcasters, but there is a backstop, which is if an ad is so factually misrepresenting positions so dramatically that it becomes a form of libel, you can sue and that has worked pretty well i think in the broadcast setting. taylor: that was senator josh ley of-- senator josh haw missouri. this is bloomberg.
taylor: kindred ventures is stage.g a new it is launching a new fund to work with founders to work with startups. previous investors come companies like uber, coinbase, and virgin hyperloop one. new biggerabout this fund, how it compares to the earlier version. >> sure. i started the company in 2014 in san francisco. it was really a small seed angel fund with just me and some personal capital. over the years, i have gotten lucky backing some amazing founders solving some really big
problems. even sort of looking at marketplaces like postmates and styleseat.d it has been a really great ride. there is always great seed stage founders looking to bring capital into speed up their journey. there's also another situation where we saw -- and my partner, who was at a prior venture fund before saw this as a seed investor himself -- was that there are a lot of problems out there that are important to solve out in the world and we don't want to wait for startups to exist so that we can back them. we want to use some of our operational and founding background and ask how we can assemble a talented, dedicated team to go after that. taylor: you say you are vertical agnostic, but where are you going to be focusing?
ifwe are theme agnostic, but i could pick themes, the importance of the problems out there rests in the software and data network that runs our daily lives. what is the transportation logistics, food, health and wellness sort of supply chain and network that is happening around the world? that can vary between developing countries and developed countries, and thinking about cities. what is happening in cities? i know that's a broad set of categories, but we like to think about it as where are the problems for people in society today as opposed to looking at specific types of technologies looking for a purpose. taylor: you have mentioned transportation a few times. >> there has been a lot of talk about that type of stuff, and
the company is obviously under a fair amount of scrutiny just because of the rise and the itunt of sort of integration is into everyone's lives. the founders and executives and previous shareholders, early shareholders in any public --pany find diversification they are always selling a certain percentage of their holdings after lockup. at any public company, especially tech companies where there is a large shareholder, set up shareholders ventureeginning for capitalists as well as founders, you will see this often. taylor: you think most of this is an liquidity play, not a deeper issue going on inside of the company and i need to get out sort of play? >> no, i think this is a typical thing for large early shareholders. taylor: you also mention postmates, which is one of your companies. dne of its competitors, door
was said yesterday it laying a private listing. why not just direct list? >> i think private equity markets have made their bets and venture and you are seeing a lot of movement from other asset classes into early stage, mid-stage growth as well as mezzanine pre-ipo financing. i think a lot of these companies have saturated the market at this point, and i think the right thing in the current ipo climate might be to look at if you are profitable or you have enough cash on your balance sheet, why not do a direct listing? i think that in certain cases makes a ton of sense. be direct listing is a better route if you do not need to raise a ton of cash at the actual offering date. taylor: you mentioned profitability. i have to ask -- is that even anything on your radar, or you really don't care given how early in investor you are and you are ok 5, 10 years out?
>> i compare it to being in the deep ocean versus the turbulent surface of the scene. we are investing so early in a company's lifetime that we are really at the cusp of where technology is applied to create an interesting offering for customers and participants. we are not looking at profitability at seed stage. we are looking at can you find product market fit with your particular concept? taylor: give me your thoughts on wework. have a structurally changed this market environment? >> i think if you ask people that live and work for wework or have their company there or work out of a wework facility, they will tell you it is great. from an investor perspective, valuations mean everything in the private market. decides if people think you are a great company or failure. i think the product is still very good. i think there is a fair amount
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