Transcripts For BLOOMBERG Bloomberg Best 20240713

President trump signaling he is ready for a long political battle. Host hong kong drops its bid for the lse. It is too challenging of a deal to pull off. The brexit outlook remains murky at best. We are nimble. That is not a good thing. Host they discussed the british divorce from europe. If i am right, the u. K. Will come back and rejoin the european union. Host jay powell says the fed is planning to expand its Balance Sheet. And an exclusive conversation with Robert Kaplan shedding more light on Monetary Policy. This cutting we are doing should be limited, restrained, and modest. Host it is all straight ahead on bloomberg best. Host hello and welcome, i am nejra cehic and this is bloomberg best. Your weekly review of the most important Business News, analysis and interviews around the world. Let us start with a day by day look at the top headlines. With the u. S. And china set to talk trade in washington this week, investors were optimistic there would be progress towards a deal. But a bloomberg report threw some cold water on those hopes. Chinese and u. S. Negotiators are preparing to restart long stalled trade talks this week in washington. We are learning china is going into the talks with new reluctance about a broader trade deal. Tochina is apparently going walk into the trade talks this week not going to talk about industrial policy or subsidies. Those of you that have followed all of this for a long time will say to yourself isnt that the core of the u. S. Complaint . You are right. It is. This sort of signals that china is looking for not big deal or no deal but little deal or no deal. The grand ambition on the talks seems to have muted a little bit. Robbert lighthouse or is realistic about what he can achieve in these negotiations. A wholesale remodeling of chinas economy was never on the table. But getting reluctance from the chinese side that anything on subsidies will be discussed or anything that resembles a concession on this will make it hard for him and the president to sell the deal at home. The Trump Administration has blacklisted eight chinese tech companies, accusing them of human rights violations. What has the Trump Administration done to restrict business around these companies . The Trump Administration took a similar move today as it did against a company like huawei, putting it on a blacklist. U. S. Companies are restricted from doing business with the mapnies on theo blacklist. The Trump Administration announced these are chinese surveillance firms, ai firms over human rights violations. The white house exploring restricting Pension Funds from investing in chinese stocks. The white house has taken off one of the more extreme options, the delisting of Chinese Companies here in the United States. They are no longer talking about that but they are talking about a fine pressure on index providers like msci to reduce the weightings of Chinese Companies in the emerging Market Indices and federal government worker Pension Funds to avoid investing in china. The idea being, and this is something pushed by the hawks in the white house, to restrict the flow of American Capital into Chinese Markets and Chinese Companies. The Trump Administration slapped visa bans on chinese officials. State Department Officials say the visa ban is unrelated to the trade talks due to begin on thursday. But the stock market and investors do not seem to believe that. They say this individual action, the visa restrictions, are not linked to the trade talks, what is clear is that u. S. Officials see all of these things as part and parcel of the same thing putting more pressure on china and leading chinese officials know they are very serious and that they will play hardball. They think this gives them leverage and a tougher negotiating position heading into thursday. Chairman powell said the central bank will reserve purchases of treasury securities. It is an effort to avoid the repeat of the turmoil you saw in money markets. The growth of the Balance Sheet should in no way be confused with a largescale Asset Purchase Program that we deployed after the financial crisis. He kept pretty close to his vest any plans to cut rates this month. Trigger a able to steepening in the yield curve, especially the spread between twoyear rates and 10 year rates. It was kind of surprising for markets that we heard from Jerome Powell in such advance of the october 30 rate decision. He came out and said we are doing this, be prepared. The combination of the advance notice plus the term repo operations that continue to come out will inundate the short end and make sure the repo madness we had does not continue on. President trumps counterattack against House Democrats is taking shape. The administration stonewalling the widening impeachment inquiry. A white house lawyer declared it unconstitutional and invalid. What happens now . President trump signaling he is prepared for a long political battle against House Democrats as they continue to try to investigate him for the impeachment inquiry. The behindthescenes notion of that letter suggest that republicans have calculated that politically speaking, they are daring democrats to challenge them in the courts. Democrats for their part say bring it on. Theyre looking at polls that suggest that increasingly the American People are behind speaker pelosis decision to investigate into this impeachment inquiry. The bottom line . Democrats hope to wrap this up by the end of the calendar year. Republicans just said, as illustrated by that letter, say that the longer this goes on, the better. China is open to reaching a partial trade deal with the u. S. Bloomberg has learned that in return, beijing would offer noncore concessions like purchasing more farm products. We are seeing this bloombergs group have influence across the markets. What you have is china coming to washington with the same offer they have had all along for donald trump. We will make some agricultural purchases, some Energy Purchases and we will see how it goes from there, hoping that will buy them sometime. I think the market is taking it as a positive sign. I am not sure it is entirely such a big step forward. The big story of the day trade talks resuming today in washington between the u. S. And china and bloomberg has learned the white house may roll out a previously negotiated currency agreement with beijing as part of a partial deal. The tariff may be suspended. President trump will meet tomorrow. He said china wants a deal. To me, it is surprising that the chinese have come at all. The mood music around these talks is extremely negative. We have had a very good negotiation with china. They will be speaking later but they are basically wrapping it up. We are going to see them tomorrow, right here, and it is going very well. A massive move in cable over the last couple of days. The biggest today pop since december 2008. And potential breakthrough in the United Kingdom after a meeting between the irish Prime Minister and boris johnson. A pathway towards an agreement. The chief negotiator recommended the two sides discuss drafts of an agreement in secret. Negotiations have entered a critical stage and they are the highest level. In secret. We do not actually know the new text and we probably will not know how things are really shaping up until monday. We have to treat this very carefully because the threat of a no is still on the table. The biggest question mark is, if we do get a deal between the United Kingdom and the eu, the u. K. Parliament would have to approve it. Every time it has been put to a vote, it has been rejected. We have a deal, phase one. The u. S. And china have announced an agreement on the outlines of a partial trade accord. President trump says he and the chinese leader could sign it next month in chile. Fx is part of the deal. Agriculture purchases scaled over two years. Ip in the deal. Here is what is not in the deal. Huawei, Chinese Industrial subsidies and chinese tech transfers. We have had a tremendous negotiation. A complex negotiation. Something that will be great for both countries. Let us get real this is not really a deal. It is the agreement of a scope of a deal that has yet to be worked out. What this is going to amount to is not really a deescalation of tensions. Just a nonescalation. It means the existing tariffs and sanctions will not really be rolled back based on what we have heard so far. The new sanctions that have been threatened by the administration will not come into effect. When one thinks of the broader issue that underlie the tensions between the countries, there does not seem to have been that much progress. If you think about the implications for businesses that want to reduce uncertainty, i dont think we have made much progress at all. Nejra still ahead, as we review the week on bloomberg best an exclusive interview with Robert Kaplan. Moving modestly now gives us the best chance to avoid a more severe slowing. Nejra and talks about brexit in london and the ceo spotlight falls on jim svitolina. And up next, more of the top headlines the controversy causes issues between china and the nba. A tweet caused havoc in the last few days. Nejra this is bloomberg. Nejra this is bloomberg best, and i am nejra cehic. Lets return to our global tour of the top business stories. We have an intense geopolitical drama involving turkey, the u. S. , and the conflict in syria. It appears to be a major policy shift for the u. S. Turkish military will be moving into syria and the u. S. Will be stepping aside. Walk us through the significance of this. What can we expect out of turkey . Donald trump just told president erdogan that the west will stand aside as the Turkish Military launches an operation against the u. S. Kurdish allies in syria. On the one hand, the forces have been a close ally of america in its fight against Islamic State in syria. On the other hand, turkey, a major nato ally in washington, considers the Kurdish Group to be a major Security Threat because of its links to groups that turkey has been fighting against for decades, the pkk. The biggest selloff so far. Since march. We can see that around 11 38 was when it took a leg weaker. President trump put out a tweet writing as i have stated strongly before and just reiterated, that if turkey does anything the president seemed to give turkey the green light initially to attack Kurdish Forces in Northern Syria and republicans balked at it including lindsey graham. What is the latest . It has been an unusually high pushback for republican senators. Not the two or three. That led to the tweet which can be read as they walk back of his Statement Last night which was more of a blank check for Turkish Forces to move into Northern Syria. The mood in congress is that the kurds no one will want to be an ally of the United States if we pull up stakes and walk away with short notice like that. Turkey has begun its military offensive into northeast syria days after President Trump said the u. S. Will not stand in the way. President trump released a statement in the last hour saying he was not endorsing the turkish operation. He told president erdogan of turkey that he thought it was a bad idea. But the u. S. Forces are Still Standing down and trying to move out of harms way at this point. Chinas state broadcaster said it would immediately halt broadcast of the nbas games after nba commissioner adam silver said he supports the Houston Rockets general managers freedom of speech after he showed support for the hong kong prodemocracy protesters. This is another example of a Company Caught in the fray of the protesters. The nba arguably has the most at stake here. To put things into perspective, the nba said last year a had 800 Million Viewers in china. That is nearly 2. 5 times the population of the United States and they have been notching doubledigit growth in china since 2008. Whether it is the nba or other brands, they are caught in this new situation where they are at risk of losing fans in one of their biggest markets rbc as kowtowing to the chinese government. More chinese governments are cutting ties with the nba as the fallout continues from a tweet sent by one of its executives. It seems the nba and china at this point are on something of a collision course. You have adam silver expressing regret that it has come to this stage but really sticking by that commitment to freedom of speech. That is what the nba stands for. This looks like an unusual event because it was based on not an error but a single individual, a manager of one of the 30 franchises of the nba. Individuals seven word tweet causing havoc in the last few days. The sensitivities of china are so strong that if you violate them, you will pay the price. The latest fed minutes show policymakers had begun debating how far the rate Cutting Campaign should extend. Even as they agreed to lower rates last month. A few participants are saying they are uncomfortable about the gap between Market Expectations and the feds appropriate path. Do you think the fed is leading the markets around on a leash . In 2018, increasing Interest Rates four times. And then suddenly he switches on january 4, saying he is going to be very dovish because the difference was in the second half of december the market created. The trend the fed is following a policy where the equity market dictates what they will do with little to do with the economy and inflation which are supposed to be their main targets. Now, to germany where a jump in manufacturing fueled surprise improvement. Industrial production after two months of decline. The outlook for europes largest economy remains troubled production down 4 on the year and shrinking factory orders. It is signaling there is no turning point in sight. Factory orders are down for the 15th consecutive months now and Business Confidence in germany is down to a decade low now, which is not surprising given all of the news about the ongoing trade and the uncertainty about the possible half brexit that is around here. Every economist now, almost everyone now thinks that germany has entered a technical recession in the third quarter. The euro area finance ministers agreed on the final key elements of a budget for the currency bloc. What kind of deal are we looking at . Does it make the difference . That is the question and it actually is a small budget. It has been in the making for two years. It has been watered down men a time. There is a deal but the french government, which has put forward this idea many times, will tell you that it can get bigger. We are looking at 20 billion euros that will be used to facilitate investment and promote reforms in the euro area. But the question is can this help the euro economy . The answer is probably no. The positive spin from the french government is the Macron Administration says any agreement is always good news and can get bigger. Two missile struck an Iranian Oil Tanker off saudi arabia has red seacoast. The Tanker Company accused the saudi arabia of the attack but later withdrew that claim. This is the latest as collation in a series of attacks that have happened in the region on shipping and oil installations. What is interesting is the oil market reaction. They are not as important as they used to be an the market seems very focused on the prospect of oversupply next year and less focused for the time being on the geopolitical risks. Nejra this is bloomberg best and i am nejra cehic. Fed watchers had much to consider this week from the fmoc minutes and chairman powells comments. We traveled to texas for an exclusive conversation about Monetary Policy with Robert Kaplan. When you start hearing people like me and others saying i am agnostic about whether we move from here. That would tell you that if nothing changes, we are going to stay where we are. But i think we have so much uncertainty and so much policy uncertainty, i think it would be wise for us not to over telegraph where we are in the cycle. I have said though that i thought that this, this cutting we are doing should be limited, restrained, and modest, and not the start of a fullfledged cutting cycle and i still believe that. The question i am asked all of the time by people on wall street, what does the fed get from cutting rates . We are not suffering from an aggregate demand shortfall. How do you help . I do think when rates are this low, fed fund cuts, the marginal additional affect might be less than if rates were higher or Credit Conditions were tighter but that does not mean cutting the rate does not have an impact. It does. There are still a substantial amount of borrowers that borrow based on the shortterm rate and in addition, i have been concerned about the shape of the yield curve, particularly if the rate is above the 10 year treasury and there is a substantial gap. It has a tendency to make it harder to borrow short and lend long and i think that, if prolonged, would cause a tightening of financial conditions. Sometimes, when youre cutting rates, there is a shortterm positive affect but you have to look over the horizon, particularly as to whether you think there is some distortion in the curve that i think suggests that our policy setting is too tight. Youre not concerned about running out of ammunition when we do face a downturn . Im worried about that argument but i would rather use ammunition when it matters the most. And i have said a number of times that if we wait and withhold our ammunition and wait to see a broader slowing in the economy, we wait for the slowing to reach the consumer, and then we have a more severe slowing, we will have waited too long and all the ammunition we have will not be enough the rest that slowing. Moving modestly now gives us the best chance to avoid a more severe slowing and that is why i want to use the ammunition in now, which means we will have less relator. Coming up on bloomberg best, more of the weeks top news in business and finance. A new chief executive and ge announces a new strategy to them debt. And more exclusive interviews. The new head of the imf says it is critical to have a global conversation about trade. We will be talking about trade peace and not be talking about trade war. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Nejra this is bloomberg best. This week in washington, d. C. , she gave her first major address as the head of the imf focusing on the worldwide effects of a trade war. She then spoke exclusively to tom keene about the risk of a further slow down. We are decelerating. We are not stopping. And it is not that bad and yet, unless we act now, we are risking a potential, more massive slow down. I think you brought up the issue of trust. It is absolutely fundamental for trust to always think not only what is good for me, but what is best for what you face . What is your domestic restraint . What are the challenges for you . And how can we best face decisionmaking that allows the than thebe bigger individual parts . What is your to do list . We are going to go into the meetings and we will show this graph and we will be saying, we will be talking about trade peace and not about trade war. What is so very obvious is that it is the indirect impacts that hurt. The loss of confidence. What we do is to show, as clearly as possible, that everybody is a loser in a trade war. Therefore, everyone would be a winner in a trade peace. Nejra Global Finance leaders gathered here in the bloomberg headquarters in london. Trade was a major topic of discussion. Manny roman said an escalation of the trade war with china could push the u. S. Into recession. There was plenty of conversation about brexit. What are you more scared about brexit or Jeremy Corbyn . [laughter] im not saying you cant get both. We think obviously that a full on Labour Government with a program they have would be bad for risky assets and it somehow reminds me of when i grow up. In 1981, the socialists in france were nationalizing everything in sight. Within a year, they had to do a 180 and decide it was not such a good idea. I came to think that the government is not very good at running things. The government is never very good at running things. Do you see Jeremy Corbyn as another meter . If you look at his program, it is quite extreme. Do you think that is worse than brexit . In terms of the effect. We do. And we like the u. K. And we think even in a brexit scenario, we will be fine. And a hard brexit . That is fine. What you need is resolution at this stage. We are nimble and being nimble is not a good thing. You have a situation where between the politics, the government, the house, the voters it is so fragmented and i dont have to tell you this, that you need a way to get to an outcome. Even if it is a hard brexit is better than having two more years of a situation where nothing is getting decided. We are in europe in the middle and we have a role to play. The u. K. People, the british people think that this may not be the case. We will see what happens in the next three or four years. If i am right, the u. K. Will come back and join the european to 15 years brexit time. Do you think that will happen . I think the british people are pragmatic. The impression was that you did not really have control of the situation. But in todays world, it is difficult to have the control on everything because we are in a global world. So youll have to work with others and cooperate with others. You have to convince others. If you want to decide all by yourself, you decide for 60 million people. In the end, you have much less control. Nejra political divisions in europe are a concern for investors but so are divisions at the ecb after a report this week that mario draghi ignored advice from within the central bank. The bank of finlands governor played down the report in an exclusive interview with francine lacqua. It has some effect on the policy impact. Communication is such an important part of making Monetary Policy these days. But, at the same time, it is natural that there are different views and positions with regards to the Economic Outlook and also the Monetary Policy stance. I, myself, a product of democratic culture and football teams, and so i value team play and communication. If you are divided, you tend to lose games. If you are united, you tend to score and win games. There was a story today suggesting more division with mario draghi not listening to advice from the committee. What does that mean for markets how should markets interpret that . The story itself was greatly exaggerated and actually misunderstood in the sense that the Monetary Policy committee does preparatory work but certain sensitive issues such as resuming qe and purchases is definitely for the governing council to decide. There is nothing extraordinary sequence of events. Nejra one of the worlds most influential Oil Executives bob dudley recently announced he will step down from his post next year. This week, he spoke with Annmarie Hordern in london about leaving the company at a Pivotal Moment for the industry. I think this new environment will create a lot of opportunities for companies that adjust to it. People want an instant solution on everything. Our investors want us to do a lot of different things. Like other companies as well, we will be leaders in this space. We do wind and solar and biofuels. We have thousands of people working on that as part of the transition. Bp has a lot of opportunities. What is your advice for the incoming ceo . He will do a great job. He is a great leader, he has been with the company, he knows it inside and out. He will focus on the fundamentals. Bring your Team Together which he will do and then, and he will do it great, just be really dedicated to the job. Bp has a Great Foundation around the world. Balance sheets are in good shape. It has a good team. I am happy to pass along the baton. No drama. Nejra in the latest edition of bloomberg television, ceo spotlight, Caroline Hyde sat down with james dribbling. He leads the company that spun off from dupont earlier this year. He discusses the political risks and how that impacts of the global environment. During the 1960s, 1970s, dow went through a massive geographic growth expansion. During that time, we built a model, which was to build a core house, kind of a central bank, and that allowed us to look at each of the places we had exposure and how we were going to manage that currency risk. And in some countries we give credit to customers and in some countries we sell in u. S. Dollars. That whole Portfolio Risk is managed on a 24 7 risk on the front end, we manage physical financial hedging and the risks we have their which is a big part of our cost. On the customer end, we manage the currency risk. And from a project standpoint. When you are building billiondollar facilities, what is the currency risk on a 35 your Capital Project and who will manage that . Caroline when you are managing the ebbs and flows of people worrying about certain currencies and politics, how do you see your role in steering the business like that . You have to try to stay in front of it. You have to try to make moves before the market catches you. And you try to take a look at what is happening with your trends on credit risks, watch what is happening with the currencies, make moves to counter it. We trade materials in and out of a country. Sometimes if a country puts on a currency restriction, you can get caught. How will you manage cash and liquidity in the country under a different currency regime . You have this day on top of that. It is a lot about relationships. If you have operations, you have to have people on the ground that are close and talking to the people in power and understand what is happening and be able to move and act on that. Nejra this is bloomberg best. Let us resume our roundup. With news of the cutbacks. Hsbc may cut as many as 10,000 jobs to save costs on top of those announced in august. The ceo john flint abruptly left after 18 months leaving the bank. We are looking at the first restructuring moves. He replaced john flint in august after he was basically deemed to have not done enough on cost cuts. What we are seeing now is his attempt to try to get a handle on the costs of the bank. A lot of these cuts could come from the French Retail Bank is one asset that the bank looks to be probably getting rid of in the near future. We are also expecting cuts around the senior levels of the bank. This is going to be job cuts around the directors and the managing directors of the bank. Credit suisse is considering a return to the u. S. Wealth Management Market after a four year absence. Talks have focused on the ambition to add 15 billion of assets at a new base in miami. It looks like he wants to prove he does not need iqbal khan around to make big moves. This is probably one of the most significant moves they have made in recent years and it is symbolically important. Credit suisse had to pay a fine of more than 2 billion for five years ago and exited the u. S. Private banking market. This would be the first return since then. A fairly bold move. Obviously, they would not necessarily be looking at servicing the u. S. Clients but more catered towards wealthy latin americans. Hong Kong Exchange has dropped its bid for the london stock exchange. It is a rare setback for the ceo of the hong kong business. He says the board will focus a building its role in asia instead. What went wrong here . At the end of the day, they wanted to remain relevant down the road into the future so they had to do something. We have seen lse, they tried to do something that did not work out. They are seeking shareholder approval. And now, for the hong kong stock exchange, the big question is, what is next if we want to be relevant . What will be our strategy . Do we try to grow organically . Do we make more acquisitions . It is just too challenging of a deal to pull off. We are watching General Electric because it is taking steps to cut the worst pension deficit in corporate america. It is freezing benefits for 20,000 employees. It has had a defined benefit plan. It stopped accepting new entrants into its benefit plan in 2011. This is only for employees who started with ge before that and are participating in the pension plan. Theyre going to keep the benefits they have already accrued but they will not accrue anymore under that plan. They will be switched over to defined contribution is. This is not great for the employees. The idea for ge was to put parameters around this mass of tension liabilities. Interest rates have dropped , creating a lot of uncertainty about how big the pension balance may be as Interest Rates remain at alltime lows. General motors apparently losing patience as the onemonth mark approaches. The carmaker boosting its investment offer to 8. 3 billion in a bid to end the strike. 1 billion more than what they proposed a week ago. What is the issue . The big issue according to the union in the letters they sent over the weekend is job security. They have a couple of plants running one shift, 50 capacity. They want to see more vehicles put in there. They do not care if it is a future vehicle that is not on the market yet or if it comes back from mexico. They would love that. They want to see more investment and vehicles in those plants which is how you get job security. The old job security guarantees, that is a thing of the past. They need things to build to stay employed. That is what they want to see more of. Gm has made some commitments but apparently the union does not think that is enough. The leadership struggle at nissan has ended with three top contenders all given senior roles. Tell us more about the new ceo. Why do think he was chosen . He is 53, relatively young for a nissan ceo. He is not a lifer. He joined in 2003 from a Trading Company and he has a lot of background abroad. He has worked with renault. He has won favor with them as well. Nissan has the top three executives. They have come to a starting line where they can start thinking about how the alliance should evolve Going Forward with renault. We may be seeing some structural changes including capital, shareholding arrangements. There could be more personnel changes coming up. On both sides. Samsung has announced thirdquarter earnings that beat the highest estimate but still less than half what the Company Reported a year earlier, when it recorded record profit. The issue we are looking at out of those numbers and it is just a couple of sets that does not show what is going on at the depth of what is going on at samsung. The sell side was more sanguine or cautious i should say compared to what came out. I think you need to look back to a year ago which admittedly was a Strong Quarter a year ago and understand this is still very weak times at samsung. If things are week at samsung, if thingsbly are weak at samsung, they are probably weak elsewhere. The top and bottom line numbers did pass expectations. Things are looking good but you need to understand where the expectations were coming from. I think they are probably a little bit low and that is why things were looking better. I think we need to look at another couple of orders before we can say that recovery is here. Hundreds of thousands of people left in the dark after an unprecedented power shutdown by californias pg e. And shares plunged up by 30 following the ruling. There was a blackout that has taken power out to more than 2 million people. A ruling was handed down by the judge overseeing its bankruptcy case last night basically stripping the utility of its exclusive right to organize a Restructuring Plan and take itself out of bankruptcy. That opens the door to rivals, pitch as to pg e to plan that would all but wiped out the value that current stakeholders have in the company. Itsg e loses its bid and Restructuring Plan fails then elliott and pimco could prevail and we could see every shareholder right now see their stock down to zero. U. S. Court of appeals for the Second Circuit today gave President Trump a potentially significant setback in his crowing battle with congress, ruling 21 that he must hand over documents. His accounts must turn over his financial records to a House Committee investigating violations of the financial clause. How significant potentially is this . I think it is significant particularly after the ruling this past week and new york along similar lines for a different set of reasons. It will be appealed which will slow things down. That is part of his defense strategy. He is 02 in the last seven days in trying to convince a federal judge that these people have no business looking into his tax returns. There is a function on the st, which isled bt basically a back test of an asset class. We put cable into this function and what it does is default to the most profitable trade over the recent time period. If you click on any of the tabs on top, it will isolate what you want and it will show you where the function will go short. And right now, it is actually neutral. Nejra there are about 30,000 functions on the bloomberg and we like to show you our favorite on bloomberg television. Maybe they will become your favorite. A function that is useful right now is brexit go. It will lead you to all the information and analysis you need to understand the latest brexit developments. This week, anna edwards visited the irish border to look at why this crossing continues to be a Sticking Point in negotiations between they u. K. And the eu. The 310 mile border between the republic of ireland and the uks Northern Ireland looks unremarkable right now. On this road from ireland into Northern Ireland, the only clue that youre leaving ireland and heading into the u. K. Is this road sign reminding you that speed limits will now be in miles per hour. But the border has had a famously bloody history. Violence between irish republicans, who favor a connected ireland, and prou. K. Unionists escalated in the 1970s. The troubles eventually claimed more than 3. 5 thousand lives. Checkpoints. They were allowed to gradually fall in to ruin. And the good friday agreement meant that security checks were increasingly unnecessary. Today, people and products flow seamlessly over more than 200 road crossings. 1. 1 billion a week. And thousands of vehicles cross the border every day with no stops and no checks. What would happen if, after brexit, custom checks in some form are restarted . We have no borders. We have no controls. Under this proposal, we will have two corridors. That presents a lot of red tape. And a lot of cost. We are a service provider, if we see manufacturing drop in Northern Ireland, it is less for us to move and that is a threat. Where businesses see trade, communities see friction. The border runs right down the middle of this country lane. This is ireland on one side and the United Kingdom on that side. It is the open nature of this long and historically troubled border that makes taking the u. K. Out of the eu so very difficult. Nejra you can find much more brexit coverage on brexit go on the bloomberg. You can also visit bloomberg. Com for the latest Business News and analysis 24 hours a day. That will be all for bloomberg best. Thank you for watching. I am nejra cehic. This is bloomberg. In society, there is a huge influence of technology in everything we do. But technology is only produced through a highly creative society, a way to approach challenges, through creativity, imagination, and curiosity. This is where art and Technology Comes together