As big as apple and starbucks and shut down a major form of personal communication between the u. S. And china. Doubtsre increasing about an agreement on another round of stimulus. The president now expected to bypass congress with more executive orders. Microsoft leading some of the declines today. Scarlet fu has been following the market action. Talk to us about the trading moves on the back of all this tension rising between the u. S. And china. Scarlet fridays in august are not usually known to be heavy news days, but we had a jobs report today and we had President Trump stepping up his campaign against chinese Tech Companies. The stock market closed mixed with the s p and dow little changed. Between a huge contrast small caps and the nasdaq. Focus really on gold. The relentless rally in gold prices and the selloff in the dollar, the better than expected jobs report reverse that trade. Gold still finishing the week up. The dollar finished up 0. 5 . There is concern that that jobs report remove some of the urgency for democrats and republicans to agree on stimulus. In july. Ion jobs added unemployment falling to 10. 3 . Talks are at a stalemate and Steve Mnuchin says he is recommending President Trump move ahead with executive action. Emily we are still trying to figure out what that means. Also trying to figure out what this executive order on tiktok and we chat means for Companies Like apple. Would apple have to remove these apps from the app store . What are investors saying about these chinese tensions and the uncertainty around these tensions Going Forward . Scarlet we saw some of the impact this morning. Chinese adrs got hit hard. You look at some of the emerging tencent as the secondbiggest holding, that got hit pretty hard as well. Mention specifically by this executive order, but it is the biggest chinese publicly traded company. You mentioned earlier about this move to sanction chinese officials, including carrie lam, the chief executive of hong kong, handpicked by beijing. Hong kong stocks off by more than 1 . , digesting allfu of the news today, thanks so much. Monday will be an interesting day. I want to get back to the president s move to ban americans from doing business with tencent and we chat. A huge and potentially farreaching move. The internet giant losing 35 billion in market value. The Company Invests in spotify, order comingcutive after a similar move against tiktok and its parent company. Sam,ng us to discuss, cybersecurity policy fellow. We are trying to figure out what this means. But if you cut off tencent, how does that ripple through the Global Economy . Sam theres a lot more uncertainty here. When im looking at the executive order, i have three questions. What is the potential extraterritorial reach of this . We talk about u. S. Residents, but could it require app stores to remove we chat or tiktok globally . What would that mean for consumers of the iphone in china . Why would they buy iphones . The second question is, all of investments,iness does this affect those . And third, we have a massive market of chips and server centers. A lot could happen beyond just one app. Chat for soe use we many things. There really isnt even a good comparison. Starbuckst to pay for in china. I saw one quote today that if they cant use we chat, nobody is drinking starbucks in china. Talk to us about how massive this could be. Is a fallacy to think of we chat as just a messaging app. It is how businesses connect with consumers, how people shop and do payments. It is a news portal. It bundles so Many Services to the point that if people dont have we chat, basic transactions and daily life will be cut off. Which is why i think it would have serious implications for apples Global Business in china. Seen and it remains to be how these major u. S. Tech companies will respond to this. Could you see apple and google actually taking we chat and tiktok out of the app store . Sam the first thing im looking at is, lets think about what happened when huawei was placed on the entity list. There were a lot of workarounds and it was a full year after the initial entity was designated. But i think the Trump Administration figured out how to close those loopholes. Semiconductor companies were continuing to sell to huawei. You might see a similar trend there. Is this something those companies are going to comply with . This is also a First Amendment issue. Will there be a legal challenge . A lot to watch here. Emily theres the ongoing situation with tiktok. Microsoft still in talks to buy tiktok operations. Reports about buying global operations. How do you see that situation playing out . Sam 45 days, that is the window of time under this executive order. That is a short amount of time to complete an acquisition by microsoft of tiktok. To get this through, they have to push it through hard. Sale ate becomes a fire this point. The word is that had microsoft not stepped in, strong action in the form of an executive order, this was coming. Microsoft was kind of the last effort for tiktok to really survive in the u. S. Another deadline is also approaching, the president ial election. We are less than three months away. Certainly there are political motivations for the Trump Administration taking this stance. Of the entire Global Economy is shaken up just three months before the election and then trump loses, what happens . Sam. S like weve lost sam talking about the implications of this executive order on we chat, on tiktok. Huge far ranging consequences. We will talk about it later in the show with dan ives. Meantime, i want to talk about uber. Less travel and more food delivery. We are going to break down the disappointing results and what is next. This is bloomberg. For the first time ever, uber made more money delivering food than it did transporting people, but that failed to offset a huge decline in the Second Quarter. Sales falling, ending a decade of growth. To discuss, we are joined by tom white. How bad is this . Look, thanks for having me. I dont think it was really all that bad. There were no real surprises, i would say, in the Second Quarter numbers. Either positive or negative. Maybe it is that lack of positive upside surprise heading into the print, i think that is why you saw the shares give back today. I think investors were focused on profitability trends. We had a pretty good sense of the topline trends heading in. They announced the postmates deal. Everyone was looking for either upbeat in the Second Quarter or a sign that the timetable for them achieving consolidated profitability might be moved up. We got basically in line for the Second Quarter, but nothing suggesting the timetable or profitability is speeding up. Investors might be disappointed by that. Emily what is your outlook on ridesharing given the uncertainty, given that we are not out of the pandemic in any way . This could be going on another year and a half at least according to bill gates. What does that mean for getting into a car with a stranger . Hard to handicap completely, but i think my view is that it will be sort of the longlasting impact of the pandemic will be sort of neutral to slightly net positive to the rideshare growth curve, for the adoption curve, if you will. Think positive side, i there are a lot of people who shy away from public transportation, getting on crowded subways and buses, even after the pandemic or the worst of it has subsided. That would provide a bit of a tailwind eventually. On the flipside, there is some data that suggests consumers who live outside of congested cities might embrace the idea of personal car ownership. Obviously that would erode ofewhat the longterm vision what these Rideshare Companies are trying to achieve. But on the other hand, the core markets for the rideshare densely are kind of populated urban areas. Net, we think it is probably neutral to slight positive. Lyft shares fell even further. Lyft doesnt have a food Delivery Business. How does their rideshare how is their business faring compared to uber . Is it doing even worse . Tom i think theres a couple things to think about here. Lyft is aviously single product, as you mentioned. Weve heard now from uber. Weve also heard from a lot of the Online Travel companies. Rideshare is not exactly travel but it is transportation. It sounds like u. S. Trends for rideshare and for travel kind of took a step back. Weve seen kind of steady recovery over the course of the Second Quarter, but then starting in july, we had this flareup of cases. It sounds like the pace of the recovery has slowed or even reversed a little bit. That would be worse because this is their only market, so that is one thing. I think the other thing investors are trying to wrestle with is, what does it mean that uber has been able to maintain some steady engagement with consumers and drivers because of the food Delivery Business . The food Delivery Business is taking off. Uber has touch points with consumers and drivers. Some of the Rideshare Companies havent been able to do that. About thethat mean rideshare guys, their ability to grow on the flip side of the pandemic . I think those are two of the things weighing on investors minds. Soly tom white, thank you much for joining us to weigh in. Lyft results out next week. Coming up, it is no secret that retailers have been among the hardest hit in the pandemic. We are talking to a legendary , the ceo levi strauss will be with us. Youve heard people are wearing more pajamas in the pandemic, but what about bluejeans . This is bloomberg. Emily welcome back to bloomberg technology. Retailers have been hardhit but the crisis is also leading to new innovations. I spoke with the ceo of levi howuss, chip bergh, about his company is making a business out of masks and what the outlook is for the Holiday Season. Chip i would like to say we saw this coming because it first started impacting our business in china, where we had to close down at the end of january. We had a strong first quarter, minimal impact of the pandemic. The Second Quarter, revenues our stores2 because were closed. We do expect a relatively slow recovery. We kind of said that on our Second Quarter call. Our ecommerces business has accelerated through this. We made money in the Second Quarter over a year ahead of schedule. Weve seen our ecommerce business grow month over month and it has held into the third quarter. Consumer behavior is changing as a result of the pandemic and i think a lot of this is going to stick. Emily it is no secret that apparel has been hit hard. A lot of buying has moved online, but not necessarily enough to make up for the loss. What are people buying . What are they not buying . Chip one of the soundbites out there is, everybody is doing their resume calls wearing pajamas or tights. If you read the headlines, you would believe that at leisure is taking over the world. That is false based on the data. Bigger onim is still a global basis. The entire apparel industry has shrunk during the pandemic, but denims share of apparel has not changed. Today, denim is bigger than athleisure. Emily one thing we do have to keep buying is masks. You have some trendy options on your site. How big could this be . Chip i read an Industry Report in the business of fashion that says that the mask category could be a billiondollar business this year. We are seeing it. We kind of got into this initially for our own employees, knowing that we were going to have to reopen stores and those employees would need masks. Theres ae discovered real commercial opportunity here. Our masks right now are the number one selling mask on amazon. We sell them on our website as well. We are in short supply. We are scrambling to get back into stock. While,ere to stay for a for sure. The more the science becomes clearer that Wearing Masks can beat this thing down, we are seeing more people Wearing Masks. It is not going to go away for a while. Emily as you look out to the fall, black friday, baby day, holiday shopping, what are you expecting . We reported that the pandemic has wiped a billion dollars off your sales expectations. Is that still the case and how will the holidays be different . Chip just in the Second Quarter alone, we lost about a billion dollars off of our top line. We came into the year expecting to be about a 6 billion business. Below 5ing to be well billion. It should get progressively better unless theres a huge second wave. For the first time in 40 years, i dont have a forecast that i have a ton of confidence in. We are running the business against three scenarios. We are controlling what is within our control. We are managing our inventory going into the second half of this year very tightly. I would rather lose a sale right now than have way too much inventory at the end of the season. When you have to much inventory, you have to get rid of it, mark it down dramatically. Onwe are very focused maintaining our inventory. My expectations are that the Holiday Season is going to be muted, very different. It is going to be a very different Holiday Season. But im very optimistic about our business. We are going to emerge from this building share. We are going to take more share. We have competitors already that have gone out of business. The brand is really strong. But it is going to continue to be a challenging environment. Consumers are lining up to get into our store. Like when going to be it is zero degrees outside . Levi strauss ceo chip bergh. More on that conversation later in the show including his thoughts on tiktok. All right. Coming up, talking more about the executive order on tiktok. President trump now going after we chat as well, what banning it in the u. S. Means for businesses like apple and walmart. A prayer granting programming note. Do not miss david westins conversation with Larry Summers and jillian ted on how the pandemic aid in the United States is having a skewed impact. Wall street week, this evening. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Emily welcome back to bloomberg technology. More now on President Trumps moves to potentially ban tiktok and tencents wechat, the worlds most used messaging app. Used for sony things beyond messaging. It has the potential to up in International Business from apple to walmart, and shut down business between china. I want to bring it dan ives. Wechat is the key reason people buy phones in china. If it is not an apples app store or googles play store, what does that mean . Dan this is a slippery slope. I think it is unprecedented, choppy waters. Right now it comes down to wechat and bytedance it is a gut punch to those companies when you look at the Global Expansion plans. This is something i think over the coming weeks and months, theres going to be more chapters to this book. About so, talk to us chapter one. President e, where the in the last week and a half or so has taken aim at this company. Said it is going to be banned unless it is bought by a u. S. Company. Microsoft and negotiations to buy part of tiktok, maybe all. What is the tak your take of a likelihood being done . Dan 75 to 80 . For microsoft, it fell on their lap. Christmas morning came early in terms of this asset. They are the only ones in town that can buy. The faang names, they are up to their eyeballs and regulatory swirls. This would be a major turn in terms of social media. I think it is worth 200 billion three years from now. Theres a high likelihood of this getting done for bytedance, backs against the wall. If it is not microsoft, ultimately that is a dark chapter to go down. Emily 75 to 80 is a pretty high likelihood in a very controversial environment. The president set a deadline that seems to be done in the next 45 days. Do you really think they could do a deal that quickly . Dan i think the Technology Issues and Security Issues in terms of the lines of code, crosspollination between u. S. And china, that is going to take some time to actually get worked out. Think deal perspective, i 35 billion, 40 billion for u. S. Assets along with canada, new zealand and australia. They want to get this deal done. For facebook and zuckerberg, it is a nightmare scenario when microsoft gets the tiktok asset. A game bytedance, it is of highstakes poker. September 15 comes and that is a code red situation. Emily what does it mean for other Companies Like apple, like google, that have huge businesses in china and have actually for years been working on building those bridges with china . In termscially apple, of iphone, production. I continue in terms of retaliation. I dont see that. I think what you are seeing in terms of investors, the need to contain risk for apple, for other tech players. That will be a risk Going Forward but it does come down right now. I think that is something investors need to contain risk for this company, especially apple going to iphone 12. They are one of the biggest employers in china when you think about iphone. Howy now, realistically, do you expect this to play out . We dont really understand how much teeth the president s urgings will have here. There is this executive order, but does he really have the power to do this . Will the Companies Really respond . We are now less than three months away from an election. How does this actually unfold . Dan in my opinion, i think before labor day we could potentially get a deal. Microsoft and tiktok. I think behind the scenes, they are obviously working closely with the white house. His relationship with trump does not hurt things. I think they have to give everything the green light. When you go down that path, i think a deal in principle is reached before september 15. Scenario, it is for them a bit of a nightmare. You would rather get 40 billion or, if they pull the plug september 15, valuations go to 10 billion or 15 billion and that is the key. Emily do you anticipate tim cook would just roll over and do this, after all of the time he has invested in building that China Business . China, terms of cook and that continues to be where they set their core competency in terms of iphone. I dont see that changing. That will be throughout the trade war over the last year and isalf so many times, apple the poster child of the u. S. China tech war. That is an opportunity. I view this as something apple where iinue to have dont see retaliation against apple. You go back a year and a half ago, they are burning iphones in the streets. Instead, they are going into apple stores and buying iphones. I think this a little bit of misse misperception but there is a wide range of ramifications across the tech space. Emily dan ives, you always have such a way with words, thank you so much for joining us on this friday afternoon. With the controversy surrounding tiktok and antitrust around big Tech Companies, are companies thinking twice about where to put their ad spend . I put that question to levi strauss ceo chip bergh which has been using tiktok to reach gen z consumers. I asked him how concerned he is about the controversy. Take a listen. Chip from our standpoint, a tiny part of our total strategy of reaching gen z, i hope that the whole thing would get sorted out on the one hand. Fatherother hand as a with a daughter thats on it incessantly, Something Else will come along, im sure. Our strategy digitally is very holistic and we are very confident we can continue to reach those consumers, whether tiktok survives this political and economic battle or not. Emily you did pause advertising on facebook during the facebook ad boycott. Have you restarted there and have your concerns about hate on the platform direct or is that ongoing . Chip initially, i would say i was not very optimistic we would make progress because they continue to make promises but did not back the promises up with concrete evidence and concrete timelines. I think they got enough pressure and heard from enough advertisers that they have really started to make meaningful progress. So, we are now starting back up. In a measured way. We are going to continue to watch it. I would not hesitate to pull out if they dont live up to the commitments they made to us. We managed to survive and did quite well the month we were off of facebook. It cost a little bit more because facebook is very efficient, but if they dont follow through on the commitments they have made to us, we will pull back up without a heartbeat. We have been pleased with the progress they have made and the commitments they have made. As a result of that, we have started to advertise again, effective beginning of august. Emily you do have a massive store in wuhan, china which closed and then reopened. This is the epicenter of covid19. What are some Lessons Learned there that maybe could apply to other reopenings around the world . For first of all, good t you to know that. Our largest or in china. It opened ironically in early october. I was there in midoctober right after the store opened. It is a beautiful store. Its a miniflagship, if you will, in wuhan. Our business, we reopened the store. Traffic is coming back. Traffic across all of china is still down fairly significantly. Our business is down. We are behind what our plan was. The team has been really innovative. We developed a new ways of reaching consumers. The team in the store is contacting the friends on wechat to get them to come into the store. It is where we first started piloting buy online, pick up curbside. We started building new capabilities in china. It has kind of been our lead market, not just the wuhan store, but all of china has been our lead market for how we emerge from the pandemic. We just opened. We are opening this weekend, a new store in shanghai. Another beacon store, if you will. Very optimistic about that. So, the pandemic, the crisis really does create opportunities, great Real Estate Opportunities for us. And we are going to capitalize on all the opportunities to come along and not miss the opportunities that a crisis gives us. Emily last question, you and i have talked about technology, the technology that goes into designing, manufacturing, distributing jeans. What is the cutting edge of Denim Technology right now . What should we be watching for . Chip one of the things we are very focused on, this is an industry that has been around for centuries, right . The way this industry conducts business is still very, very analyzed. One of our Top Priorities is to digitize everything inside of levis. Ive hired a head of Artificial Intelligence and machine learning. 167 years of data. We have applied ai to every aspect of our business. We developed digital design tools. Our designers today are designing on tablet. Those tablets, those designs can be directly uploaded from lasers and we can finish a pair of jeans on a laser on the other side of the world, without any human interference. It goes directly to a black box on the laser. Those lasers give us the flex ability to finish a pair of jeans much closer to market. We have laser sitting in our Distribution Center in nevada. And can be much closer to market and finishing our product. So, theres a huge opportunity to disrupt inside this business. I have said before, three years from now or five years from now, we will look like a technology company. Bergh, the ceo of levi strauss. Menng up, i mostly white world of silicon doing and not doing to address its diversity problem. That story next. This is bloomberg. Emily the black lives Matter Movement has touched nearly every industry with so Many Companies pledging to do more to hire and promote underrepresented minorities. The tech sector is no exception, but for an industry that is largely touted and sells itself as innovative and ahead of the curve, it is perhaps more surprising how on diverse it is. With more on this is bloombergs shelley banjo who has a big piece on Bloomberg Businessweek about silicon valleys progress or lack thereof on this issue. I am with you, it is not much of a surprise that the Tech Industry has not made strides. What is significant about the strides they have not made . Shelly i was curious about their story was trying to figure out why. They had certainly been upfront talking about it. One of the big issues that people continue to bring up was that there were these two misconceptions in the Tech Industry. A, it was this meritocracy that anyone could get ahead. And b, it was like a pipeline problem. It was only about hiring. It turns out it is not just about hiring, it is also about creating a place where people want to work and feel happy coming into work every day. Emily what examples are you finding across some of the bigger names like google, microsoft, facebook . We recently spoke to facebooks head of diversity, Maxine Williams, and while they have made progress on women, they have not won it comes the black employees, and especially black engineers. Shelly facebook is an interesting case study in this. We also spoke with the chief diversity officer Maxine Williams for the story. What is interesting for the story is that they were able to make progress on closing the gender gap and increasing the proportion of women from 15 in 2014 to 24 in 2020. For black employees, they could even increase the share of black employees by that time by a single percentage point. Points toe it almost the fact you might not be able to move everybody at the same time. That it might take a real focus on certain groups of people to really move the needle. Facebook had almost the most promise. You look at a company like microsoft that has been around much longer, started in the 1970s, it is much harder to add. Facebook, it started not that long ago in the scheme of things. By 2016, they still only had a couple of hundred black employees. It points to this message that you have to start when you are really small as a company. You cannot wait until you are a big company to start focusing on diversity. Emily now, one of the interesting things that i pulled out of my interview with Maxine Williams is people always talk about diversity issues as a leadership problem. She said i have never felt more supported by the leadership of Mark Zuckerberg and Sheryl Sandberg who both wrote a book about women. If it is not leadership, what is it . Or is it . Shelly i think you could have leaders intent by your who put those big goals out there, but there are multiple layers of things that happen between when a leader says something, the ceo of a set company says something to the very bottom of the workforce. What maxine, one thing she was talking about was trying to create a more systemic change in the company. You dont really leave it up to the chair on whether or not you have a good manager. She said that is probably where it is today. Emily you spoke to some really important people pushing for change in the industry, including tracy cho who worked at pinterest. And actually was sort of the catalyst of convincing Tech Companies to start releasing the numbers as they do now year after year. What are the people in these jobs, the people who actually have these jobs now telling you . Shelly the interesting thing from tracy was that there was this big push on numbers. And tracy started it. If we didnt put those numbers out there and make people aware, maybe it will change freedom it is not just about making people aware. What this unveiled over the last five years is that it is going to take a lot more systemic change. It is not just about am i a racist or not racist . No, is the system racist or is the system stacked against you . What can you do to really change that . That is the kind of theme kept being hit over and over again. A lot of these chief diversity officers and people who work in hr talked about this change. Ymily all right, shelley banjo, check out her piece in Bloomberg Businessweek. Thank you for joining us. Still ahead, we will hear more of our exclusive interview with the worlds biggest maker of electric car batteries and a major supplier to tesla. The ceo of lg chem is next. This is bloomberg. The companys of that supplies batteries for tesla surging today after saying it expects battery revenue to double by 2025. David ingles spoke exclusively to the ceo of lg chem and talk about how the pandemic is impacting the company. Take a listen. Obviously, we saw some impact especially in the first half, especially in march, april timeframe. For example, the United States and china. From was demand coming europe. Many have slowed down in european demand. We have some more production to boost in the second half of the year. We have not had a complete tally yet in terms of total your production is concerned. But i think it is very close to our projection originally that we have had. If theres any impact, it will be relatively small. David any of the things you are hearing, that you are probably seeing recently making you rethink your targets for Production Capacity for the battery business . I believe the initial one was 160 gigawatt hours, this year it is up to 120 by 2021. Do you need to look at that or maybe increase that were does that make sense to you . Hakcheol pretty much, we stick to our plan to continue to invest in our capacity as you mentioned. We have about 100 gigawatt capacity by the end of the year. About2, we should have 220 gigawatt capacity. I think the penetration rates of evs is relatively low. 2. 6 last year. This year, 3 . Even with the Market Growth of about 40 over the next five or six years. We need to continue to invest in our capacity to secure over 220 gigawatts by 2022. An order of we have close to 125 billion. That is a lot of batteries to be made. David your capex plans . Is it still 5 trillion for this year . Do you have a figure of what you plan to spend next year and the year after that . Hakcheol i think in battery alone, we will be spending about 3 trillion this year. Fromps a slight increase what we had in the plan. Continue in will years to come. David the market has taken a look at your stock and your stock has gone up substantially. I think you entered either top five or top six Largest Company on the South Korean Exchange at some point. A lot of that has to do with speculation that the partnership with tesla and the battery business is linked quite well. Can you tell us more about how this engagement is going now, what you are looking forward to and how you plan to fend off competition . Hakcheol we should be able to secure Production Capacity of roughly 25 gigawatts, which is the equivalent of about 400,000 evs by the end of this year. So, i think we are very well poised to meet the demands of various customers, including the customers you just mentioned. David ok, fair enough. Assumption on how quickly you think the battery business overall will grow every year and as a company your sales will exceed that growth . Hakcheol i think we expect about 13 trillion from our battery business. 30ill grow to about trillion by 2025. Robust arra very Market Driven by Commission Regulation and government policy. Business, weattery will at least grow at the speed of the market. Our goal is to either maintain or set our market position for many years to come. We hope to grow faster than the market. Emily lg chem ceo speaking exclusively with bloomberg. That does it for this edition of bloomberg technology. Wall street week is next. Do not miss it. That is all for now. Im emily chang. Have a wonderful weekend, everyone. This is bloomberg. David not what we had hoped for. A slow and syphilis economic recovery, and recovery in stocks in a fight with china over tech. This is bloomberg wall street week. Im david westin. This week, contributors Larry Summers of harvard and gillian tett of the financial times. Dr. Anthony found of the National Institutes of health. Dr. Fauci i think theres a misperception that unless we either lock down or open up, theres nothing in between. David senator rick scott of florida. Sen. Scott i think the market is telling us to watch out, weve got a lot of debt. Be careful how you spend your money. Here, nobody cares