The Trump Administration is weighing a new weapon in the trade war with china. They are discussing ways to limit portfolio flows into china. A move that could include delisting Major Chinese companies u. S. Exchanges. The move could impact of theions in the markets and nasdaq s p 500 and dow were all in the red following the report. Joining us to discuss is sarah in los angeles who has been covering the trade war. Of u. S. The goal policymakers here . They trying to punish or just protect u. S. Investors . Interesting that with the trade war this is not meant to be provocative or to push china into the corner and remind them of the leverage the u. S. Has. Talks in the these capital restrictions on china are not part of the trade talks and theyre trying to keep them separate. If we look at the marco rubios of the world, whove been trying to push for this kind of thing in the past, it is more of a moral or ethical argument. We really what American Investment funding a nondemocratic government . They alleged human rights issues in china and other things. I think he believed that they do not want to give money to this rising strategic and economic power to the u. S. The newba listed on york stock exchange. Baidu is on the nasdaq. What does this mean for those companies . Is veryu said, this much in the beginning stages and trump is not approved it. Not goingus but its to be put into place tomorrow or anything. The delisting of these Chinese Companies. At some data shows that there are 156 Chinese Companies on the three biggest exchanges in the u. S. This is not small change we are talking about. For some of these companies, it has been a huge win for them to get into the u. S. Market. They have seen a rulesbased approach and ways for these companies to expand themselves. It would be a big move for these companies and it would not be taken lightly. Tell us about Peter Navarro, the white house trade advisor and one of the primary sources behind this thinking. Quite all along in the trade war, the question is who has trumps year . There is always a lot of speculation. With a proposal like this, its clear that advocates like Peter Navarro and outside advisors like steve bannon are behind it. They are some of the key advocates. They are very hawkish on china. As i said earlier, they really see a decoupling of the u. S. And china whether it is a ninja markets or otherwise as a key of punishing china cutting them off. They see china as a bad actor in the world and a very big threat technologically economically to the u. S. Something of this extremely it would not be surprising that Peter Navarro would be an advocate of it. Flex we have heard now for many months that the primary goals of the trade dispute has been to over the markets to allow more access to those markets into Chinese Companies. When move because church that goal . Lets these tariffs are the belief that the u. S. Wants a trade deal and increase transparency three at the same time, to make sure there is a level weighing real for American Companies to compete better. Like theee these proposal and the capital restraints. We see section against Companies Like huawei that total u. S. Suppliers. Urrency manipulation many some of the actions seem could make you believe perhaps that the trump is using some of this leveraged in ways that run against what it says its stated trade policy is which is to make everything better for u. S. Companies. I think it leaves a lot of people in a fit of a confusion goal ofat really is the the Trump Administration. Last question. On one hand, we could have a trade resolution and on the other hand is the prospect of a fallout decoupling from the chinese economy. Its where are we heading right now . That is the milliondollar question. I think we have some talks coming in the next few weeks. At this point, it would be small wins. The two sides cannot of the meeting saying china has agreed to agriculture purchases and the u. S. Maybe to really move forward on granting these huawei licenses as promised for instance i think that would defuse the situation even a little bit. Worse case scenario, with the these capital restraints. There are multiple ways this trade war can go. Thats why its so poor important moment of these trade meetings, we can get a sense of where is this headed now . Whats the latest direction . Thank you for joining us. While the u. S. And china remain far apart when it comes to trade, the u. S. And japan sealed a deal this week. The agreement between tokyo and washington ensures tariff free crossborder data transfers. Videos, video games, ebooks and software. What does that mean to the u. S. Industry . Is a really important agreement because digital trade as a component of the economy is growing much faster than the rest of the economy. It is the growth of jobs which are now digital focus. It is important for the entire digital economy. Whats really important within this agreement, this sets the Gold Standard for what we think these digital trade agreements should really look like. It has the components, the elements that we have been strong proponents four. It is part of a larger agreement that includes reduction of tariffs on farm goods. The u. S. Chamber of commerce says it doesnt go far enough and it raises the specter of u. S. Property to go further. Is this go as far as it needs to . This is absolutely the Gold Standard in digital trade. Let me walk you through a few pieces. The things that the International Community can now look to as they think about how they enter into these kinds of agreements. First, there is free data flow. Theres privacy and security but also free flow of data across all industries. Needsindustry where data to be kept for security reasons, that will get covered but by and large, data across all industries can move freely. Thats very important. Secondly, it doesnt have any data localization mandates. Neither of the two governments are going to force a company or any participants to store their data in a particular place. Thats very unproductive and it doesnt achieve what they are trying to achieve. Thirdly to your question on thislectual property, agreement does two things that make it the Gold Standard. It protects your source code. Neither country will force you to give up your source code. We have never given up our source code and we never would. It also protects the algorithms that you using your software. When you think about the source code and the algorithms, that is of Critical Design elements the next century of the software driven economy. What does that mean to glencore a company like ibm that has a sizable business in japan . It gives us a framework by which we can be very confident as we build our business in these two it that economies are going to operate in a digital way that we think is the right way to do it. More importantly, as we are out talking about digital trade with all of the other places we do business, it is very clear and we can point to the Gold Standard. In the usmcats agreement. We have been very active promoting usmca am a digital trade perspective. Now we have two good examples. Challenge now is we have to get many more countries to adopt these digital trade standards. We are very far from any kind of trade agreement with china. Perhaps we can dream. What would a digital trade agreement with china look like . Input only, i will do them in reverse order because i think there are elements of this that will be important in that discussion. That is all about protecting intellectual property and protecting algorithms. Any regional trade agreement between any countries needs to protect source code and algorithms. There is obviously an element to this that says we cannot make anyone store their data in a particular place erie it data localization mandates should be removed from these. That would be a big component of something we would want to see. Then, the idea that data can flow through float freely. That is the way the world supply chains work. Thats the way the Banking Systems work. Be country that wants to integrated into this Global Supply chains or global Banking Systems needs to recognize those three principles because i think thats how the rest of the world is going to be thinking about digital trade. A quick last question. What does this agreement mean for the u. S. Technology consumer . Ax this is a big help when you think about the digitization of the world, any discussion we have going on with our clients, we are an enterprise focused business that our enterprise clients are serving consumers. This allows our enterprise clients to digitize their processes and offerings in holy ways. We have seen a lot of innovation coming out of technology. And thisvation agreement between the u. S. And japan can continue and now we have to make it much more widespread. That was the Senior Vice President of ibm global markets. Coming up, micron has a very bad day. The rest of the industry follow suit. That is next. This is bloomberg. Micron is having its worst day in the year. Shares tumbled on the heels of micron giving a forecast that was below expectations on thursday. Some analysts say the worst may not be over. In ian king to discuss. I think of them as a bedrock. What was happening was a Common Thread that was going on. That was, they were pressing the red panic buttons fortunate investors. Inventory is absolutely the worst thing you can say in the chip business. You are saying this could be a problem for the Semi Conductor industry and tech overall. Youre absolutely right. The memory chip market is very volatile. Micron is one of those companies that says they can go and buy ,tuff from wherever they want what are you hurting us . Thats the most representative of this conundrum that a lot of Tech Companies are facing. Most people probably havent heard of micron that recently the president of the United States went to the uns General Assembly and talked about micron. Lets listen. A Company Owned by the Chinese State allegedly stole torons designs valued at up 8. 7 billion. Soon, the Chinese Company obtains patents for nearly an identical product. And micron was banned from selling its own goods in china. What is the president talking about . Some of those references im not a hundred percent sure with. There was a case here and its an ongoing case that started an investigation in taiwan. Taiwanese company was allegedly facilitating the theft of microns designs to take them to china which as you know is trying to build its own memory chip business that is an ongoing situation and something the doj thelooked at and lauded taiwanese for trying to do something about. There is an entirely separate tradeoff between south korea and japan. I would imagine that would help microns position because then samsung have limited interest to the japanese market but that doesnt seem to be the case. Yes the idea is that the japanese and koreans are angry with each other and the japanese have threatened to cut off crucial supplies to make memory chips. That would not be good for micron because where else are you going to go in get chips . It turns out the answer is that the chinese are the biggest market for this thing and they have gone ahead and bought a load of this these things in advance to forestall a possible benefit, any switch in market share. That wasnt taken too well when they talked about that. Is there a chance we are going to look at this week and what has happened to micron as the canary in the coal mine for the Semiconductor Industry or tech in general . That is absolutely the concern. When you look at the money that has come into the stock and in chaps in chips in general, what they are saying is its hard to see that right now. We will see what happens. Thank you very much. Coming up, Unprofitable Companies are raising the most cash since the. Com era. Thats next. This is bloomberg. The continuing black eye for the ipo market. Shares of balaton fell for the second day of trading. The startup has fallen by double digits since it went public this week. The poor debut is adding to a year of lackluster ones including uber, lyft, and we work. It has been a banner year for Tech Companies yet it has gotten really ugly lately. Whats happening . Is this one of those imperceptible shifts in market economy . I dont think so. What we are seeing is a moment of recognition. The private markets, the bankers and Public Markets have to come to terms with how the private shares are valued. Overall, it has been great. 50 billion raised so far. Exits are important. Its getting a hit because of wework and the issues right now. Overall, i think the ipo process is alive. The pipeline is robust. Everything is going great. It just needs to we need to tweak the model and the valuation is whats broken at this point. The ipo process is still alive and doing well. When i hear you saying that, the markets have been able to accommodate the valuations set markets, whatte is the role of the investment banks . What should they be doing as they ushered these companies down the runway and recently to ipo offerings . Us i follow this market very closely. Is, i canng to happen understand in the early stages you to the proof of concept, the revenue so the valuations reflect that. I think expectations have to be managed and bankers have to play a big role saying this is and this is what the Public Markets are expecting. Bankers will play a very big role in getting this to work. Its important that if they play a big role in this, ipos are important and the majority of them are doing well. They pull back and thats fine. Ultimately, they grow into the valuation. You have to give them some room. Finally i want to add, how do you value a Transformational Company . Its not easy. Lyft and uber are transformational companies. By definition, they are disruptive and no one knows. Surprise discoveries went to be tough. You need to comes to terms with that. Let them grow and let them be we need them. Wework has shelved its ipo. Startupstill over 100 that have filed to go public that are on the runway including some of yours at manhattan ventures. How do you advise them . Is the ipo door still open right now . It is wide open. The valuations are going to be more rational. Thats the biggest thing. I think everything is going to be more rational. It needs to come down, let it be more rational, let there be a path to profitability even if you arent there, explain it very well. Get there and thats what we do. When we invest in these companies we look for that unless we have that, we tell our investors that you have to be careful. All that is factored in thats the right way to invest. Dont just throw money at an ipo. Look at it look at the Corporate Governance structure then enter the market. Companies went public this year. Lyft and pinterest. There laboring under a dark cloud. What do those Companies Need to do in this market environment to change the perception that they went public at a difficult time . We are very happy with both investments. They are doing very well. Lyft is getting tethered to uber and uber problems. Lyft is a very good investment. When we look at lyft on an a longterm basis. We did not expect it to take off. Ofre is a huge market ondemand transportation. Transportation as a service is going to be huge. Lyft in particular this is why we invested in them is a pure play vocus in north america where the economics are the best. They have a path to profitability. They already said that 2019 is there peak investment year. Optician and pricing is getting more rational. I think these guys the last two quarters were very good. We are very happy with lyft and i think pinterest is also a very good story and it will continue to do well. Thank you for joining us. Coming up, a handful of tech ceos step down. More on a dizzying week in tech. This is bloomberg. Brad this is bloomberg technology. I brad stone in san francisco. A text trend this week was the revolving door. Three notable ceos stepped down in the midst of controversy. And kevinn of we work to jewel all are being discuss, and bringing in andrew challenger, vice president. He is joining us from phoenix, arizona. Thank you for joining. Why is it a volatile time here for ceos of American Companies . Andrew it is really not even just the tech sector where we see this volatility. We recorded 159 ceo departures in august, the highest single month of ceo departures that we have tracked over the first eight months of the year. We have tracked 1009 ceo departures, the largest number we have seen over any eight month period since we started tracking into thousand two. That includes 2008 during the rough session. It is the recession. It is tough to hold the role at the home of a company. Brad that is remarkable. What is going on . Why the turnover . There is no simple answer. Part of it is the predicted economic slowdown around the world. It is getting some people dashboards are a little jumpy, they are making changes. Steppingeing some ceos down by choice at a time when the company is doing well financially, they can go out on their own terms and put into place their succession plans. And then we are also seeing a lot of Tech Companies. An area where we saw the second most number of ceo departures. A lot of that we are in a 10 year bull market run right now. Off companies that started have had founders move up with them for a long period of time. Some of those companies are moving into a more mature phase of their organization. Corporate boards are finding that these younger, often founder