The court has ruled a new deal brexit. A spokesperson for johnson says the u. K. And European Union have made progress in brexit talks but a deal is a long way off. In hong kong, police are banning a national day protest march. Police say they have based their decision on the last two months of protest. Officials say the march and rally were planned in an area close to what they call high risk buildings that could be subject to violence. Protest organizers say they will go ahead anyway. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im ritika gupta. This is bloomberg. Live from bloomberg World Headquarters in new york, im vonnie quinn. Amanda im amanda lang in toronto. Welcome to bloomberg markets. Top stories we are following from around the world. Trade escalation. The white house ways limiting u. S. Investors portfolio flows into china, sending alibaba and jd. Com listing spiraling. Wall street is slammed by the potential escalation. Stocks turned lower, treasuries surge on the report. Anyways . Is vaping the lack of research has left even nobel winning chemist the same question. Lets get a quick check on the major averages. You alluded to the fact that we had a downdraft. The s p 500 down to 2957. The dow down a 30 . , 1. 3 ,daq down the most on some chip stock movement. I want to point to another chart that im looking at. You see the market cap of Chinese Companies trading on u. S. Stock exchanges. Alibaba, far and away the Largest Company market cap wise. It is these companies that will see outflows when it comes to u. S. Investment, if with the Trump Administration is talking about goes ahead, and that is impacting the market today. Amanda we were already watching another stock that was feeling the effects of trade even before todays announcement, micron. Take a look at this chipmaker. We know it was already implicated in the concerns around huawei. Micron reporting its numbers. Disappointing, saying sales will be lower, in fact, the fourth consecutive quarter where sales will fall 20 , specifically noting the trade wars continue to weigh on its outlook. It is a tough one, 10 moved to the downside. For more on the possible limits them may be placed on portfolio flows to china, we have shawn donnan in washington. Onnie notes the market is ok, but the intraday fell off a cliff on this news. We understand there are active discussions happening inside the white house about how to essentially broaden out the trade war against china to areas of capital. The shorthand for this is the white house is looking to turn the trade wars into the capital wars, in some ways. The discussions we should stress are ongoing. They have not agreed on a set of actions yet. I was told by one source this morning they are about halfway through the timeline, although they would not say how long that timeline is. We should expect these discussions to go on for months. The National Economic council doing some work now on exactly what the economic report repercussions would be of various scenarios. This is a whole new front. This is something that will get a lot of people on wall street concerned, and will also get a lot of people in beijing concern. China has been working hard in recent months to open up its morecial markets and lure foreign capital in. This is the Trump Administration signaling it wants to see the opposite. Vonnie how much is this a ploy on the part of the Trump Administration to turn the screws in the trade negotiations . Austin simply, two different tracks, but you could see how one may have an impact on the other. Shawn people inside the administration stress these are two separate tracks. They are trying hard to keep these scotians separate from the trade negotiations. They are being led by different people inside the administration, Bob Lighthizer is leading the trade negotiations. Larry kudlow is leading these discussions. But there is no doubt these things are related. There is a broader economic war, if you will, that is being waged here by the Trump Administration. We have seen everything from technology to immigration to chinesevisas to investment in u. S. Companies being targeted by the Trump Administration, or considered as potential targets. This is more of that same gam e. Amanda i dont know if you agree, but the difference to me between a tariff and a limit on capital is a norm us. Justify, notould all economists would back you up, but in terms of trade and protecting your industries. This feels like a sanction, something that you would do to some of you were trying to punish, not negotiate with. Shawn at the imf, they would call this a capital control. These are things that the u. S. Has actively lobbied in the past. U. S. Has been lobbying china to open up its Financial Markets. Shawn donnan, thank you. Wonderful reporting. We appreciate your contributions in washington. For more on this, the Economic Impact of what may happen if this were to go into place, and the Economic Data out of the u. S. , lets bring in michelle girard, economist at natwest markets. She joins us from stamford, connecticut. If there was to be outflows out of china mandated by the Trump Administration and it is still speculation what would that look like in the treasury and equity markets . Michelle clearly, you can see the markets will react negatively in a shortterm basis to any impediment to capital. Lows in the treasury market, there would certainly be risk of some kind of reciprocity where perhaps we would see china buying less or selling treasury securities. Those kinds of concerns certainly would be front and center. Back, what allg of this reminds is, the trade war and the conflict with china is not going to go away. There is a lot of optimism about negotiations between the u. S. And china in coming weeks, a lot of speculation that we will see some kind of trade truce, and that the president is highly motivated ahead of the elections to come up with a deal. What this is a reminder of, this is a far bigger conflict, as you just said. , andfrom trade and tariffs what may or may not be agreed to on that rock, agriculture purchases, the bottom line is, the headlines around the conflict between the u. S. And china will continue, and the uncertainty associated with that which is impacting business, i think, will linger. One of the things that makes this so interesting, there has been some analysis that in a trade war, the u. S. Could manage better for longer, still suffer, still consequences for American Consumers and businesses, but they would be hurt more in china. Cutting off your nose despite the face. You are taking steps to hurt attraction of american capital. What do you think could be the damage to the American Economy . What the u. S. Is trying to do here, i think, as the administration will say, is to think more like china, play the long game. In particular, you have a lot of bipartisan support when it comes to intellectual property rights, what they feel has been perhaps threats on china, to curb some of that. Now, evenough stand if there are some shortterm economic or Financial Market concert ensues. It is not about the stock market over the next month. Is, if you will, about world order. This is about kind of the relationship between china and the u. S. Over the next decades. I think we need to sort of keep all of this in perspective. Again,s of the economy, what im most concerned about is the impact of uncertainty. It is more than just a tariff on a particular good or sector. Uncertaintylevel of around the unpredictability of trade policy will keep business cautious. Ultimately, if we see less hiring, that could come back to the consumer and undermine their that is confidence and a slowdown in the u. S. And im concerned about. Vonnie what do you make of the data on the consumer . Its been a mixed bag. This morning, we got very optimistic university of michigan data. Spending was soft. Measure of confidence we had was disappointing earlier this month. So how is the consumer here . Michelle on the whole, the consumer is holding up well. You have seen a lot of resilience. We did have some softer numbers in july and august, but coming off an awful lot of strength in the second quarter. Consumer spending was the best we had seen since 2014. And flow, ifof ebb you will, but when you look at the consumer, which is benefiting from the labor market which up until the last couple of months has been a bright spot those are the sectors or areas that you point to as showing strength, feeling good about where the u. S. Is, particularly with respect to the rest of the world. The question is, will there be theks developing against consumer, if we start to see businesses pullback . We have seen this slowing in employment growth. One of the reasons the Conference Board confidence number was hit was because consumers were less optimistic about the job prospects, employment situation. Is that the first sign that some of the Business Uncertainty or pullback is seeping into the Consumer Sector . This is what im watchful of. The strength we are seeing now in the consumer will not be sustained. Amanda great to have your thoughts on this, michelle girard. Coming up, even nobel winning chemist dont seem to know what is in your weed vape. How a federal ban hinders academics from studying products. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Amanda im amanda lang in toronto. A Vaping Health crisis is sweeping the u. S. And is highlighting how little scientists and Health Officials know about the marijuana in weed vapes. Meanwhile, a federal ban prohibits people from studying marijuana. Greg, this is your story come it caught my eye. Where it isda, federally legal, there has been little done by the way of testing, research, scientific study. Describe how hard it is to go down that road interstates. Interesting situation in the united states. 33 state where there is access to medical marijuana, another 10 states were an adult can walk in and buy it. But because it is federally banned, it is schedule one, on a list of the most restrictive stop senses. Researchers cannot study it. U. S. Esearcher at ucla cannot walk across the street to a popstar and buy a bit cartridge and do a study on it. It is a strange situation when you have millions that have access to these products on a daily basis. At what point is it ok for anybody to turn up and make a complaint . Anybody that gets a disease that makes a complaint, it must be from my vape. Health crisis, it seems officials dont really know exactly what is causing this. Some of the people that have gotten is our vaping nicotine products, some are they think thc. It seems to be mostly black market products causing the illnesses. They have not been able to get their arms around exactly what is causing this. Meanwhile, the federal government is on the sidelines of the Legal Marijuana market, and leaving it to the states to regulate, do testing and things like that. Things seem to be slipping through the cracks. Amanda meanwhile, we have decisions like the ones by walmart to pull ecigarettes. Realworld implications for companies. Juul very much in focus, austria took a hit. Hit. Tria took a for a long time, this was a space to be avoided because there was so much illegality around it. Is this an area to avoid not because we dont know about the health risks . It is interesting. Evenanadian companies, u. S. Companies listed in canada, have not done well this year. In canada, they are looking forward to the new rules that would come into effect that would regulate vaping and edible products. You sort of have to wonder if Health Canada is looking at this. Regardless of what is causing these illnesses, you have consumers looking at this saying, vaping is dangerous now. Whether or not that is totally true or a new want to view, that is the perception in the public. That is a problem because these parts have been very popular for the Legal Marijuana companies. Vonnie it has already scuttled a deal between altria and philip morris. Ria owns 30 of juul, and it appears i got in the way of the merger. Tobacco companies arent interesting spot. Thatp morris has a product some say would benefit from the news. You also have this generation that will be hooked on nicotine from vaping. If they cannot get their hands on vaping products, maybe they go back to traditional cigarettes. A and philipn altri morris stocks going up on this news because they think people will be by more cigarettes. Amanda can you see where rules at least around federal testing are loosened, so we can get this done . This has been a longstanding thing, that marijuana does not along on schedule one. Again, legal for use in 33 states, but the federal government says it has no value. The scheduling it is something that people have been pushing for for a long time. It seemed like a simple thing that the government could do to open it up, but it is not clear that there is an impetus to do that. Fromea has not bunched their stance about keeping this on schedule one. Vonnie great reporting from chicago, thank you. Coming up, a trade war does not involve the u. S. And china. We speak to south koreas Foreign Affairs minister about the ongoing dispute between her country and japan. This is bloomberg. Amanda this is bloomberg markets. Im amanda lang in toronto. Vonnie im vonnie quinn in new york. A warning from s p global ratings, an escalation of the trade were between japan and south korea will have a greater ripple affect that is priced in markets. Shery ahn sat down with kang kyungwha, the Foreign Affairs minister of south korea, and asked whether the alliance with the u. S. Has seen any impact from the country exiting the intelligence sharing pact with japan. Kyungwha the u. S. As expected has expressed its disappointment with our decision but we have explained the compelling nature of our decision, which was triggered in fact by japans very unexpected and unilateral trade measures. We respect the u. S. Position on this, but our position, you decision we have made, and you are talking about, the military intelligence sharing agreement, this requires trust betweenf the parties. If japan has latest trade restrictions on trust between the parties. Us based upon the rationale of breached trust and security concerns, then it doesnt make sense for us to maintain this agreement, which requires a higher level of trust. Shery in the past, washington has play the role of mediator us based upon the rationalebetween japan and , many times. What role is washington playing now . Think,ha washington, i is of course urging the two sides to talk in the first instance. But also using opportunities visavis us, japan, to make the point that the trilateral cooperation is very necessary theimportant as we do with north Korean Nuclear issue, and other security issues. We respect that, we understand that, we are very much a part of it. It may not be playing a role visibly, but it certainly is keep thet it can to Trilateral Security Alliance strong. You have just met your new counterpart in japan, the foreign minister. What have you talked about when it comes to measures to ease tensions, anything concrete . Kyungwha he is new. As the first meetings go, it went well. Cordial, it was forthcoming. Newness oress of oldness, the personalities, the issues are there. We have big disagreements on the issues at hand. Basically, the trade restriction , and also the disagreement over our Supreme Court judgment of the forced labor issue. They are there. We need to work through that. But we are both committed, as i have shared with his predecessor, of the two ministries, talking at every opportunity that presents itself to us, to try to better understand each other and narrow the gap so that we may be able so that we may be able to find a way forward on the issue of the forced labor. But also on a trade restriction measure. Shery quickly, the weakness and challenges in your ties with japan, will it benefit china . Kyungwha i think there is lots of analysis, a minus on the side, plus on that. I dont think global diplomacy and coordination cooperation is a zerosum game, so that a loss here is a benefit there. We also have to see the shared strategic goal in this region, completenorth koreas denuclearization, and lasting peace on the peninsula. Amanda that was before and Affairs Minister of south korea. Users can interact with all the charts that we have seen on bloomberg with the function gtv. This is bloomberg. Let the first word. After washington released a rough transcript of a phone call between President Trump and ukraines president , russia is worried. A kremlin spokesperson says russia would like to help. When asked if moscow was worried the white house would publish transcripts, he added relations between the countries are already troubled. China is planning to cap the nicotine content allowed in ecigarettes. China would join a growing list of nations escalating regulations. Last week, india banned ecigarettes. A British Oil Tanker has left the orang import. Iranian state media states it has entered international waters. It began transmitting its location for the first time in weeks. Saider this week, iran Legal Proceedings have finished and it was free to leave. Germanys first known human case of west nile virus is being reported. The developmt