WEBVTT - China's iPhone Ban; Google Moves to Protect US Elections

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Nathan Hager and I'm Garen Moscow. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>We begin with a policy in China that has broad

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<v Speaker 1>implications for the global tech sector. Beijing plans to expand

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<v Speaker 1>its ban on Apple iPhone use in sensitive government departments

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<v Speaker 1>and state owned companies. Sources say several agencies are already

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<v Speaker 1>instructing staff not to bring iPhones to work. The restrictions

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<v Speaker 1>may broad into more firms and organizations. Bloomberg Chief Tech

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<v Speaker 1>correspondent Mark German says, this may just be a starting

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<v Speaker 1>point for the Chinese government.

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<v Speaker 3>Is there something that's going to happen next in terms

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<v Speaker 3>of the Chinese consumer being able to buy the Apple devices?

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<v Speaker 3>Are there going to be limits? There is the Chinese

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<v Speaker 3>government going to begin clamping down on Apple's ability to sell,

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<v Speaker 3>offer services, offer retail stores, offer Apple care and support.

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<v Speaker 3>So there clearly is a potential domino effect that I

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<v Speaker 3>think investors are more afraid of, rather than just lost

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<v Speaker 3>sales to Chinese government workers.

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<v Speaker 1>And Bloomberg's Mark German says the blockade coincides with China's

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<v Speaker 1>effort to reduce its reliance on American software. Apple is

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<v Speaker 1>popular in China. It gets about a fifth of its

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<v Speaker 1>revenue there. Checking Apple shares in the pre market, they

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<v Speaker 1>are down two point six percent.

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<v Speaker 2>Well elsewhere in tank This morning, Nathan Google is making

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<v Speaker 2>a move aimed at protecting elections from artificial intelligence. In

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<v Speaker 2>Bloomberg's Aid Baxter has the story.

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<v Speaker 4>Google is saying it will soon require all election advertisers

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<v Speaker 4>disclosed when their messages have been altered or created by

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<v Speaker 4>AI tools. The policy update, which applies starting mid November,

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<v Speaker 4>requires election advertisers across Google's platforms to alert viewers when

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<v Speaker 4>their ads contain images, video, or audio from generative AI.

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<v Speaker 4>They will have to use prominent language like this audio

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<v Speaker 4>as computer generated or this image does not depict real events.

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<v Speaker 4>Google says it will improve transparency. In San Francisco, I'm

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<v Speaker 4>at Baxter Bloomberg Radio.

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<v Speaker 1>Okay, ed, thank you. President Biden's headed to the G

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<v Speaker 1>twenty summit in India later this afternoon. He's aiming to

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<v Speaker 1>seize on the absence of two key adversaries. Russian President

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<v Speaker 1>Vladimir Putin and Chinese President Shi Jinping both opted to

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<v Speaker 1>skip this year's gathering. President Biden will look to improve

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<v Speaker 1>ties with countries like Brazil, South Africa and India. They've

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<v Speaker 1>sought closer ties with China and declined to take sides

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<v Speaker 1>after Russia's invasion of Ukraine.

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<v Speaker 2>Well back here at home, Nathan, Texas is teetering on

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<v Speaker 2>the edge of blackout. It's the state's power grade operator

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<v Speaker 2>ERKAD issued its first emergency declaration in over two years

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<v Speaker 2>in response to shrinking power supplies. Spot power prices surged

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<v Speaker 2>to more than five thousand dollars a megawatt hour, quadruple

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<v Speaker 2>the cost of the average supply Urkatt had to draw

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<v Speaker 2>on reserves, and officials are urging customers to take conservation efforts.

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<v Speaker 2>Texas is also warning medically fragile residents who need oxygen

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<v Speaker 2>and similar aids to have backup plans in place.

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<v Speaker 1>In the nation's capital, Karen, the Justice Department plans to

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<v Speaker 1>file new charges against President Biden's son, Hunter Bloomberg's Nancy

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<v Speaker 1>Lyons has that story.

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<v Speaker 5>An indictment of Hunter Biden is expected by the end

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<v Speaker 5>of the month. That's according to documents filed in a

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<v Speaker 5>Delaware court by Special counsel David Weiss. The son of

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<v Speaker 5>President Biden had agreed in principle to plead guilty to

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<v Speaker 5>federal tax charges and enter a pre trial diversion agreement

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<v Speaker 5>related to a gun charge, but that plea deal collapse

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<v Speaker 5>back in July. Prosecutors have not specified what charges they

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<v Speaker 5>intend to file against the President's son, Nancy lyons Bloomberg Radio.

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<v Speaker 2>Right, Nancy, thanks for a strike warning from the head

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<v Speaker 2>of the United Auto Workers. Bloombergy. John Tucker joins us

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<v Speaker 2>with the latest. Good Morning, John Karen.

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<v Speaker 6>President Sean fains as the union plans to go on

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<v Speaker 6>strike against any Detroit automaker that hasn't reached a new

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<v Speaker 6>agreement by the time contracts expire next week. The contracts

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<v Speaker 6>with General Motors, Delantis, and Ford will all expire just

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<v Speaker 6>before midnight September fourteenth. All in, the union's proposals would

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<v Speaker 6>cost each of the big three automakers around eighty billion dollars.

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<v Speaker 6>The union will meet today with GM Forward made an

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<v Speaker 6>offer that includes nine percent wage increases plus payments. Those

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<v Speaker 6>talks are farthest along. An agreement with one automaker likely

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<v Speaker 6>would set the template for the others. Live in New York.

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<v Speaker 6>I'm John Tucker, Bloomberg Radio.

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<v Speaker 1>All right, John, Thanks, you got more company news this morning.

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<v Speaker 1>Sources tell Bloomberg the online grocery delivery startup Instacart is

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<v Speaker 1>preparing to set a price range for its initial public offering.

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<v Speaker 1>Bloomberg's Charlie Pellett has that the.

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<v Speaker 7>Sources say the company is considering pricing it's listing September nineteenth,

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<v Speaker 7>and then start trading the following day. They say the

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<v Speaker 7>company's plans are fluid and the timeline could still change

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<v Speaker 7>depending on market conditions. Instacart's listing could further energize an

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<v Speaker 7>IPO market that has been warming and fits and starts.

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<v Speaker 7>Semiconductor designer ARM Holding set a price range for its IPO,

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<v Speaker 7>which is expected to start trading in the biggest listing

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<v Speaker 7>of the year as early as next week in New York.

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<v Speaker 7>Charlie Pellett Bloomberg Radio.

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<v Speaker 2>All right, Charlie, thanks to the Broader Economy Now. The

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<v Speaker 2>ism US Services Index rose to a six month high yesterday,

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<v Speaker 2>but stocks declined amid speculation the strong data will keep

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<v Speaker 2>rates higher for longer. Bloomberg Macros trateg just Mark Hudmore

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<v Speaker 2>says evidence from yesterday's Major Book suggests the Fed's rate

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<v Speaker 2>hike path remains uncertain.

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<v Speaker 8>I thought the most important dedies was actually the Beige

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<v Speaker 8>Book which says backward looking, there's been some good stuff

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<v Speaker 8>from the tourism and leisure sector, but the rest of

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<v Speaker 8>the report was presenting warning signs about the consumer. I

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<v Speaker 8>still believe that US softness is coming in the fourth quarter,

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<v Speaker 8>and I think we're going to have a recession still

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<v Speaker 8>starting around the end of the fourth quarter. Maybe a

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<v Speaker 8>dirty next year, but I still go for the end

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<v Speaker 8>of this year.

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<v Speaker 2>And it's time now for a look at some of

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<v Speaker 2>the other stories making news around the world. For that,

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<v Speaker 2>we're joined by Bloomberg. See Me, Morris, Save Me, Good morning.

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<v Speaker 9>Good morning, Karen. The Senate is going to start moving

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<v Speaker 9>a package of government funding bills next week, as Congress

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<v Speaker 9>is racing to avoid a shutdown at the end of

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<v Speaker 9>this month. Senate Minority Leader Mitch McConnell says he appreciates

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<v Speaker 9>the support that he's seen from President Biden.

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<v Speaker 7>He is supporting the uffard and I intend to continue

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<v Speaker 7>to support it.

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<v Speaker 6>I hope the majority of my colleagues will field the

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<v Speaker 6>same way.

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<v Speaker 9>Now, the President and congressional leaders are focused on a

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<v Speaker 9>passage of a stop gap funding measure to buy a

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<v Speaker 9>little time while lawmakers iron out a full budget. Time

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<v Speaker 9>is running short though the House is scheduled to meet

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<v Speaker 9>for only eleven days before the government's fiscal year ends

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<v Speaker 9>on September thirtieth. It was the first televised hearing in

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<v Speaker 9>former President Trump's election interference case in Georgia. Fulton County

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<v Speaker 9>Judge Scott McAfee laid out how these hearings involving the

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<v Speaker 9>nineteen co defendants are going to move forward.

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<v Speaker 10>The plan would be to try to resolve as many

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<v Speaker 10>of these issues as we can this week and to

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<v Speaker 10>begin entering scheduling orders for the remaining defendants by either

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<v Speaker 10>the end of this week or the early next week.

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<v Speaker 11>Now.

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<v Speaker 9>Judge McAfee denied a motion for one of Trump's co defendants,

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<v Speaker 9>lawyer Kenneth Cheesebro, to sever his case. He said he

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<v Speaker 9>would later decide on whether lawyer Sidney Powell would severhears.

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<v Speaker 9>Prosecutors expect a joint trial to take four months. Former

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<v Speaker 9>President Trump, meanwhile, says he's willing to take the witness

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<v Speaker 9>stand in his own defense if his criminal cases do

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<v Speaker 9>go to trial. He told a radio interview that he

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<v Speaker 9>would absolutely look forward to testifying, but he also said

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<v Speaker 9>he believes the cases are going.

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<v Speaker 12>To be dismissed.

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<v Speaker 9>The former president has pleaded not guilty in four cases

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<v Speaker 9>against him in New York, Georgia, Florida, and Washington, d C.

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<v Speaker 9>The oppressive heat still impacting millions of Americans, and schools

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<v Speaker 9>this week in New England to scramble to get air

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<v Speaker 9>conditioning in classrooms. In Philadelphia, officials announcing schools that don't

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<v Speaker 9>have air conditioning are going to be dismissed early for

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<v Speaker 9>the rest of this week. Englewood Health EMS medical director

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<v Speaker 9>doctor Barbara Streedman says children are among the most at

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<v Speaker 9>risk in the heat. Children have a different physiology than adults,

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<v Speaker 9>and the very young and the very old don't tolerate

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<v Speaker 9>heat as well, especially when the humidity is higher. More

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<v Speaker 9>than fifty million people have been under heat alerts all

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<v Speaker 9>week in the US, from Minnesota to Texas to Massachusetts.

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<v Speaker 9>Global News twenty four hours a day, powered by more

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<v Speaker 9>than twenty seven hundred journalists and analysts in more than

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<v Speaker 9>one hundred twenty countries. I'm Amy Morris. This is Bloomberg.

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<v Speaker 2>Karen, all right, thank you. Now we get a look

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<v Speaker 2>at sports and they Brian John Stashauer. John, good morning, Karen.

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<v Speaker 12>It's opening night of the NFL. Not surprising. The Kansas

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<v Speaker 12>City Chiefs are in the spotlight of the defending Super

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<v Speaker 12>Bowl champions. They've won seven straight AFC West titles. They've

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<v Speaker 12>played the NFC Championship Game each of the last five years.

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<v Speaker 12>It is surprising for the Detroit Lions to be featured,

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<v Speaker 12>usually an NFL doormat, but they finished last season winning

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<v Speaker 12>eight of their last ten games. Chiefs may not have

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<v Speaker 12>their start tight end Travis Kelsey. He's questionable with a

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<v Speaker 12>knee injury. The forty nine ers have gotten their star

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<v Speaker 12>pass rusher Nick Bosa back in camp. He ended his

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<v Speaker 12>forty four day holdout agreed to a massive contract with

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<v Speaker 12>the Niners five years, one hundred and seventy million. Posta

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<v Speaker 12>becomes the highest paid defensive player in NFL history. At

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<v Speaker 12>the US Open Arena, Sablanki another easy victory. She has

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<v Speaker 12>yet to lose a set. She's advanced of the semifinals.

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<v Speaker 12>She's been in the semis of all four Grand Slam

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<v Speaker 12>this year. Coco Goff has her semifinal match in New

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<v Speaker 12>York today and the men's semis will be played tomorrow.

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<v Speaker 12>Danil Medvedev advanced with a straight set win over fellow

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<v Speaker 12>Russian Andre rub Levin. Last night, Carlos Alcarez, the top

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<v Speaker 12>seed independent champ, also won in straight sets. Baseball Red

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<v Speaker 12>Sox lost again at Tampa Bay, three to one. They've

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<v Speaker 12>lost fifteen of sixteen. At Tropiccanafield, the Nationals rally scored

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<v Speaker 12>nineteen ety to beat the Mets three to two. The

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<v Speaker 12>Orioles fifth straight win was ten to three over the Angels.

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<v Speaker 12>The Giants beaten by the Cubs eight to two. Rare

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<v Speaker 12>win for the Eights five to two over Toronto. John

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<v Speaker 12>stashaware of Bloomberg Sports.

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<v Speaker 13>From coast to coast, from New York to San Francisco,

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<v Speaker 13>Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business

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<v Speaker 13>app in Bloomberg dot com. This is Bloomberg Daybreak.

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<v Speaker 7>Good morning.

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<v Speaker 1>I'm Nathan Hagar. Apple's business in China is getting a

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<v Speaker 1>lot more complicated. We've reported this week that the Chinese

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<v Speaker 1>government is barring its workers from using their iPhones while

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<v Speaker 1>they're on the job. Now, sources tell Bloomberg News that

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<v Speaker 1>band could be extended to state owned businesses and other

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<v Speaker 1>government controlled enterprises. It's a move that could erode Apple's

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<v Speaker 1>position in its biggest market outside the US and for

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<v Speaker 1>more on this, we're joined by Alex Webb, who covers

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<v Speaker 1>the tech sector for US here on Bloomberg Radio. Alex,

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<v Speaker 1>good morning. Why this push now to crack down on

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<v Speaker 1>iPhones specifically in China. I mean, it wasn't that long

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<v Speaker 1>ago that the CEO of Apple, Tim Cook, was praising

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<v Speaker 1>his company's relationship with Beijing.

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<v Speaker 11>Yeah, and of course you know Apple employs millions of

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<v Speaker 11>people both directly and indirectly, well Indre Lismos through Fox

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<v Speaker 11>Gone another contract manufacturers in that part of the world,

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<v Speaker 11>So there is a real kind of symbiotic relationship between

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<v Speaker 11>the country and the company. But it sort of looks

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<v Speaker 11>like we don't entirely know the rationale for this. It

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<v Speaker 11>is based on sources reporting. It looks like there could

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<v Speaker 11>be two reasons for it versus the sort of tit

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<v Speaker 11>for tap. We've seen obviously a crackdown on the supply

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<v Speaker 11>of some important components into the Chinese market. We've also

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<v Speaker 11>seen the US ban the use of TikTok in government agencies.

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<v Speaker 11>This is on a state level at the moment, but

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<v Speaker 11>it's been the case in many states where TikTok is

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<v Speaker 11>not allowed to operate on government networks. But at the

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<v Speaker 11>same time you also want to well, maybe they can

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<v Speaker 11>justify it through security reasons that actually in state controlled

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<v Speaker 11>or state agencies, we have started to see a pushback

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<v Speaker 11>on the role of for instance, consultants, and do they

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<v Speaker 11>have an outsized role because of their proximity to foreign groupings.

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<v Speaker 11>There are many reasons why this might be the case.

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<v Speaker 11>That doesn't necessarily mean that it's significant for Apple itself.

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<v Speaker 1>And it is interesting to think about it potentially as

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<v Speaker 1>a national security rationale for China when we've heard US

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<v Speaker 1>government officials use that same rationale to try to limit

0:12:01.240 --> 0:12:05.200
<v Speaker 1>China's access to cutting edge technology, how is China doing

0:12:05.240 --> 0:12:08.760
<v Speaker 1>when it comes to its own development of some of

0:12:08.760 --> 0:12:11.679
<v Speaker 1>that higher end technology despite US sanctions.

0:12:12.400 --> 0:12:16.440
<v Speaker 11>So we did see some really interesting news in the

0:12:16.480 --> 0:12:20.640
<v Speaker 11>past week or so that Huawei, which is the biggest

0:12:20.760 --> 0:12:27.200
<v Speaker 11>Chinese hardware maker technology hardware maker, has released a new

0:12:27.320 --> 0:12:31.120
<v Speaker 11>phone called the Mate sixty Pro, which includes a chip

0:12:31.200 --> 0:12:34.800
<v Speaker 11>that can operate very close to the cutting edge. It's

0:12:34.840 --> 0:12:40.360
<v Speaker 11>built on the advanced seven nanometer, an advanced nanometer processor, which,

0:12:40.559 --> 0:12:44.400
<v Speaker 11>it seems, according to Bloomberg tear Down, has been manufactured

0:12:44.400 --> 0:12:50.160
<v Speaker 11>by China's domestic chip making giant Semiconductor Manufacturing International Corp.

0:12:50.200 --> 0:12:53.000
<v Speaker 11>Which is their equivalent of TSMC, is not quite as big,

0:12:53.320 --> 0:12:55.679
<v Speaker 11>but that's their effort to really on shore and more

0:12:55.720 --> 0:12:58.360
<v Speaker 11>of that. CORTEC themselves and many people didn't think that

0:12:58.480 --> 0:13:01.200
<v Speaker 11>China have these capabilities. The fact that it seems they

0:13:01.240 --> 0:13:03.559
<v Speaker 11>do is a turn up for the books. Now it's

0:13:03.600 --> 0:13:05.360
<v Speaker 11>a caveat to this. We don't know where they're able

0:13:05.400 --> 0:13:07.040
<v Speaker 11>to do it at scale, where they can do it

0:13:07.080 --> 0:13:10.760
<v Speaker 11>with the sort of it's getting to make the economics

0:13:10.760 --> 0:13:13.520
<v Speaker 11>work in the same way that TSMC can, but it

0:13:13.600 --> 0:13:15.880
<v Speaker 11>shows they're a bit closer to the cutting edge than

0:13:16.080 --> 0:13:17.120
<v Speaker 11>many had anticipated.

0:13:17.400 --> 0:13:19.880
<v Speaker 1>Well, if China does continue to get closer to the

0:13:19.920 --> 0:13:22.920
<v Speaker 1>cutting edge and keep up this crackdown on Apple devices,

0:13:22.960 --> 0:13:26.480
<v Speaker 1>what could it mean for Apple's position in the Chinese market.

0:13:27.280 --> 0:13:29.520
<v Speaker 11>Well, I mean, it clearly doesn't help, but you just

0:13:29.559 --> 0:13:32.120
<v Speaker 11>put it in a bit of context. Right, So Apple

0:13:32.200 --> 0:13:35.320
<v Speaker 11>had has trailing twelve month revenue in the order of

0:13:35.320 --> 0:13:39.720
<v Speaker 11>seventy three billion dollars in Greater China, which also includes Taiwan.

0:13:41.040 --> 0:13:45.600
<v Speaker 11>But when we've looked at what has happened with say

0:13:45.600 --> 0:13:47.640
<v Speaker 11>TikTok in the US and the crackdown and using that

0:13:47.679 --> 0:13:50.480
<v Speaker 11>in government agencies doesn't really seem to have had any

0:13:50.520 --> 0:13:58.000
<v Speaker 11>meaningful impact on TikTok's trajectories. So yes, these government controlled companies,

0:13:58.040 --> 0:14:00.920
<v Speaker 11>the likes of Petro China, they do employ millions of people.

0:14:03.120 --> 0:14:04.920
<v Speaker 11>Let's wait and see when we get to earn his

0:14:04.960 --> 0:14:07.920
<v Speaker 11>schools to see if that actually has any meaningful impact.

0:14:08.040 --> 0:14:11.360
<v Speaker 11>If you judge it by the TikTok experience, the implication

0:14:11.400 --> 0:14:13.199
<v Speaker 11>would be it may not be significant.

0:14:13.480 --> 0:14:16.480
<v Speaker 1>Our last minute, we're waiting and seeing for Apple's next

0:14:16.520 --> 0:14:18.840
<v Speaker 1>product launch as well. I think it's coming up next week?

0:14:18.920 --> 0:14:19.080
<v Speaker 13>Right?

0:14:19.160 --> 0:14:22.800
<v Speaker 1>Does that put more pressure on Apple to deliver when

0:14:22.800 --> 0:14:24.680
<v Speaker 1>it comes to what's coming next?

0:14:26.360 --> 0:14:28.920
<v Speaker 11>Look, there's always pressure on Apple in terms of what

0:14:29.080 --> 0:14:31.040
<v Speaker 11>comes next. The thing they have managed to do we

0:14:31.080 --> 0:14:32.800
<v Speaker 11>are going to see you, So they are going to

0:14:33.040 --> 0:14:35.080
<v Speaker 11>We're going to see new iPhones lightly next week and

0:14:35.120 --> 0:14:37.400
<v Speaker 11>probably in new Apple Watch as well. But the big

0:14:37.440 --> 0:14:39.720
<v Speaker 11>story of Apple is how they have managed to diversify

0:14:39.760 --> 0:14:42.440
<v Speaker 11>away from the hardware into services, which not only is

0:14:42.520 --> 0:14:45.520
<v Speaker 11>higher margin, but it also ties people more tightly to

0:14:45.600 --> 0:14:49.560
<v Speaker 11>their hardware, and that is why people still keep buying

0:14:49.600 --> 0:14:51.480
<v Speaker 11>these things even without major upgrades.

0:14:54.000 --> 0:14:57.040
<v Speaker 1>This is Bloomberg Daybreak today. Your morning brief on the

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