Trump-Xi Reach Truce Extension; Iran Defiant at UN

0:02 Bloomberg Audio Studios.

0:04 Podcasts.

0:05 Radio. News.

0:10 Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today.

0:15 Karen, we begin in Washington, where Chinese President Xi Jinping has arrived for his first state visit in more than a decade. The high-stakes summit with President Trump has already delivered at least one result on trade. Treasury Secretary Scott Besant announced it on Fox News.

0:31 We have agreed today that we will extend what we call the Busan Agreement, the economic detente between the two countries that was scheduled to end on November 10th. That is going to be extended until January 10th to give us more time to see what we can do on the economic front.

0:52 Again, that was Treasury Secretary Scott Besant on Fox News. Bloomberg News China reporter Colin Murphy reports that limited extension could be disappointing to both sides.

1:01 Earlier in the week, Jameson Greer was saying that although the two sides were divided on the nature of the truce, you know, the U.S. could sort of support something between three and six months. Meanwhile, the Chinese side were looking for something much, much longer, up to a year, even longer than that.

1:17 Still, Bloomberg's Colin Murphy reports the two-month extension will cover two world leader summits in Shenzhen, China and Miami when both Presidents Trump and Xi could meet again.

1:27 Well, Nathan, this week's meeting kicked off with a rare honor for President Xi, a personal greeting from President Trump. The president and first lady Melania Trump shook hands with Xi and his wife Peng Liyuan as they arrived at the tarmac at Joint Base Andrews. It's the first time a president has greeted any world leader besides the pope at the airport since 1962. President Trump will give the Chinese leader another formal welcome later this morning at the White House.

1:59 And then tonight, Karen, President Trump hosts Xi for a lavish state dinner. The guest list includes a who's who in finance and tech. From NVIDIA CEO Jensen Wang and Apple Executive Chairman Tim Cook to Jamie Dimon of JPMorgan Chase. And that's not all, as we hear from Bloomberg Senior Editor Bill Ferrys in Washington.

2:17 Jane Frazier of Citigroup, Jeff Bezos of Amazon.com. I think in part that reflects, you know, The tech leaders have been there for President Trump since his inauguration, and the fact that AI, the data center issue, is going to be part of the discussions. It may not be part of a major breakthrough, but it's definitely the political context that's taking place right now.

2:39 Bloomberg's Bill Ferrys reports President Xi did not bring his own business delegation, and that's dampening hopes for any major deals to come out of this summit.

2:46 Well, Nathan, the United Nations General Assembly continues in New York, and the gathering has given Iran's President Massoud Pesachian a rare opportunity to criticize the U.S. war against his country on American soil.

2:59 I had prepared a speech to present to you yesterday.

3:08 The United States President described us as terrorists.

3:13 We have been the victims of terrorism.

3:16 And speaking through an interpreter, Iranian President Massoud Pesachian told the U.N. General Assembly his country is ready to resume negotiations with the U.S., but will not respond to threats. Secretary of State Marco Rubio reacted on the U.N.

3:29 Sidelines.

3:31 I don't know what standing Iran has to lecture anyone on human rights or the international system when they.

3:35 Habitually violate it.

3:37 They violate the sovereignty of every one of their neighbors by sponsoring terrorist organizations that reside within the borders of those countries.

3:42 They slaughter their own people.

3:44 Those comments from Secretary of State Rubio came after U.S. envoys held indirect talks with Iranian officials earlier this week. This morning, Iran's semi-official Fars news agency is reporting the war could expand from the Strait of Hormuz and the Red Sea to the Indian Ocean if the U.S. or Israel resume attacks. The report cites an advisor to Iran's supreme leader.

4:05 Well, Karen, artificial intelligence has also been a big subject at the UN Security Council. Both OpenAI CEO Sam Altman and Anthropic CEO Dario Amadei said governments should join the industry in making critical decisions about the technology's future.

4:18 Here's Sam Altman. We have a choice in front of us.

4:22 AI can either be more like a new renaissance of creativity and discovery or more like a new industrial revolution of upheaval and disarray. As AI becomes more capable, people must remain at the center of AI decision-making. Alignment is not an abstract research question. It is the work of ensuring that these systems reliably remain under human control, reflect human values, and help people guide the next stages of development.

4:47 In addition to OpenAI's Sam Altman, Anthropic's Dario Amadei talked about AI's risks.

4:52 The first is misuse of AI models.

4:55 For example, misuse by bioterrorists.

4:57 To create biological weapons. The second risk is loss of control.

5:01 If managed poorly, I even believe that AI could be a risk to humanity as a whole.

5:06 Both Anthropic Stereo Amadei and OpenAI's Sam Altman are planning initial public offerings in coming months that could value each company at nearly $ 1 trillion.

5:16 Nathan, just hours after the heads of the companies urged world leaders to work together to address the perils of AI, word this morning of an AI model attacking a government website. Let me get more with Bloomberg's Neil Camping.

5:28 This was just going through routine tasks and an open AI model hacked into the Australian government website. It's one of the first known cyber attacks by AI on a government database, getting unauthorized access to files. The second part of concern is it took a long time for this newsletter hack to come to light.

5:45 It took place earlier this year.

5:47 Bloomberg's Neil Camping reports Australia Prime Minister Anthony Albanese said there's no evidence that the personal information of Australian citizens was compromised in the hack.

5:56 Back in this country, Karen, a federal judge has ordered the Trump administration to temporarily lift its ban on journalists from CNN, MSNOW and Politico from the White House. Let's get the details from Bloomberg's Alexis Christophorus.

6:08 Alexis. Thanks, Nathan.

6:10 The ruling is an early victory for the three news outlets who argued the ban was a direct assault on their First Amendment rights. The 14-day temporary restraining order requires the Trump administration to immediately reinstate the news organization's White House credentials. In his ruling, a federal judge found Trump's ban was likely unconstitutional. and said CNN, MSNOW, and Politico met the high bar of showing they were likely to succeed in the merits of the case. In a Truth Social post last week, Trump said he was banning the outlets from the White House, warning that other fake news media outlets could follow.

6:44 In New York, Alexis Christophorus, Bloomberg News.

6:47 All right, Alexis, thank you. Let's turn to the markets now, where the U.S. long bond this morning breached the highest level since 2004. Bloomberg's John Tucker joins us with the latest.

6:57 John, good morning.

6:58 Good morning, Karen. There's a confluence of events that add up to bad news for bonds. The latest data suggests the U.S. economy is running too hot. Higher energy prices are putting upward pressure on inflation. A crush of funding demand for data centers, that's competing with treasuries. And then there's the 6% annual deficit. But are these concerns overdone? Well, this morning we put that question to Carl Tenenbaum at Northern Trust.

7:23 Inflation should naturally winnow down, and the amount of restraint that will be required to hit targets should not be nearly as much as the markets are suggesting.

7:31 Well, as Treasury yields surge, traders did ramp up bets on further Fed tightening. That follows last week's first rate increase since 2023. Now, this morning, the long bond up three basis points to 5.43%. The five-year is above 5% for the first time since 2007. In New York, I'm John Tucker, Bloomberg Radio.

7:51 John, thanks.

7:52 You may be paying more for gasoline if the Trump administration bans diesel exports. That's the word from analyst Morgan Stanley. They say it would force U.S. refiners to cut their runs, resulting in lower gasoline output and higher prices. Diesel is vital for trucking, agriculture and construction. Prices for the fuel have soared this year on the combined fallout from the U.S.-Iran war and the Russia-Ukraine conflict.

8:14 And Nathan, get ready to pay more if you stream Disney content. The company is raising prices on several of its streaming subscriptions in the U.S. for the sixth time in as many years. The cost of the flagship Disney Plus streaming service without ads is climbing 13% or $ 2. 50 to $ 21. 49 per month. The increase brings the premium Disney Plus product more in line with a similar plan sold by Netflix, which charges $ 26. 99 a month for an ad-free service.

8:46 Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr.

8:51 Michael, good morning.

8:52 Good morning, Karen. The Northeast is bracing for a nor'easter this weekend. Bloomberg meteorologist Craig Allen has the latest.

8:59 All weather maps indicate an early season nor'easter developing in the Atlantic, and it will track basically north into the weekend. Some bends, some turns, even some loops in the track. All the weather maps have a different solution as to how and when that might happen. So it seems to me the majority of data shows the core of the storm will not have a tremendous impact on the D.C.

9:23 Area.

9:23 However, impacts will become more pronounced eventually. Heading up to New York City and suburbs with gale force winds, rain, and tidal flooding. And as you continue up to Boston, the threat for major impacts on land and sea increases.

9:38 Bloomberg meteorologist Craig Allen. Disgraced movie mogul Harvey Weinstein was sentenced to 15 years in prison for sexually assaulting a TV production assistant. Miriam Haley in 2006. Weinstein, who is 74, pleaded for mercy, citing his age and health issues. He apologized to anyone he has affected with his actions but maintained his innocence.

9:59 Haley spoke after the sentencing.

10:01 For me personally, it's never going to be fair, you know, but it's... As far as what I was expecting to happen today, I was happy with.

10:11 How it went.

10:12 Weinstein's 2020 conviction was overturned by New York's highest court. A second jury found Weinstein guilty again at a retrial last year. Another manhole breach sighting in New York City, but this latest one is causing international concerns. The unauthorized entry was spotted near the hotel where Israeli Prime Minister Benjamin Netanyahu is staying while taking part in the U.N.

10:34 General Assembly this week. Police do not believe these breaches are related to Netanyahu's visit, but are Venezuelan nationals looking for valuables? Global News, 24 hours a day and whenever you want it, with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen.

10:50 Thanks, Michael.

10:51 Time now for our Bloomberg Sports Update. And for that, we bring in John Staschauer.

10:56 Thanks, Darren.

10:56 The Giants confirmed that the knee injury suffered by starting quarterback Jackson Dart is a season-ending injury. He's headed for surgery. Week three begins tonight in Green Bay. It's the Packers and the 0-2 Falcons. President's Cup golf kicks off today at Medina in Illinois. It's the U.S. versus the world, except Europe. This is an event the U.S. has failed to win already. Only once. 12-man roster and 11 of the 12 are ranked in the top 30. Yankees a 9-2 route of Tampa Bay. Two home runs for Ben Rice.

11:24 He's got 41. That's your Bloomberg Sports Update.

11:28 Stay with us. More from Bloomberg Daybreak coming up after this.

11:36 Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak.

11:47 Good morning. I'm Nathan Hager.

11:48 The highly awaited state visit for Chinese President Xi Jinping is underway in the nation's capital with a bit of a breakthrough on trade. Treasury Secretary Scott Besant announced a two-month extension of the truce that both sides agreed to in Switzerland last year.

12:03 I don't know whether a bigger deal can be done.

12:05 I don't know whether we will just roll the current deal. There are some deliverables that have not been perfect on the Chinese side.

12:14 That was Treasury Secretary Scott Besant making that announcement on Fox News. And this morning, we're joined by Lindsay Newman, associate fellow at Chatham House. Great to speak with you this morning, Dr.

12:23 Newman.

12:23 Of course, two months was less than even U.S. Trade Representative Jameson Greer told us here on Bloomberg that the U.S.

12:30 Was hoping for.

12:31 How does this set up things as Presidents Trump and Xi prepare to meet formally later this morning?

12:35 Good morning.

12:36 Good morning.

12:37 Good morning, Nathan. Thanks for having me on. Yes, as you said, the ambition or at least the stated ambition had been on the U.S. side, a three to six month extension of that trade truce. I actually think this plays very much to the U.S.

12:50 Hand.

12:51 You know, the Chinese administration, the way government works is much more longer term planning. So they had hoped for a longer extension to that trade truce. For the U.S., Trump obviously likes to maintain points of leverage and maintain the opportunity for further negotiations and renegotiations. So two months is not three to six months, as initially stated. But what it does do is it allows him to get through the midterm elections, find out how those go, and see also as the new Congress takes office in January 3rd, At that point, then to take stock and say, okay, where are my points of leverage? What do I want to get out of further negotiations here?

13:31 Even so, we just heard from Secretary Bess that he doesn't know whether a bigger deal can be done or if they're just going to roll over the current deal that they currently have. What is the difficulty around some of these issues that we've been hearing about for so many months when it comes to rare earth magnets or even agriculture purchases?

13:50 Yeah, I mean, I think the issue here is that where these two sides have mutual areas of interest, like trade and economic relations, maintaining sort of this idea of strategic stability, which is the key phrase of this next few days, there is room for negotiation and cooperation. somewhat of alignment. But where there are areas that are just in one side's interest or the other, then there are points of leverage that each side is looking to apply in order to sort of pursue gains. So, for example, this area around the Chinese rare earths monopoly, which is something that was very obvious. This was a very impaired political risk that was coming down the pipeline for for the U.S. and for not just the U.S., but Europe

14:34 and other countries, because China has maintained a dominance in the refining space and in the actual access to these rare earths, something that we've been warning our clients about for years now. Last year, when the U.S. administration applied the Liberation Day tariffs and additional tariffs and then went to apply the affiliate rule, which would apply further export controls on China, China said, well, whoa, whoa, whoa, not so fast here. We're actually going to apply our so-called Trump card, which is around the rare earth. And so there are just these points of asymmetries which make it that both sides are looking to preserve and protect their own interests. And they're going to need to give up

15:14 a little bit. And neither side is really that apt to want to do so. So that's why we land on that sort of this exact trace, this exact truce and its extension.

15:23 Yeah.

15:23 I'd be curious as well, Dr. Newman, to get your reaction to the kickoff of this summit. President Trump and the first lady greeting President Xi and his wife on the tarmac.

15:35 It's not something presidents usually do.

15:39 Yeah, absolutely.

15:39 I mean, look, he the U.S. administration has literally rolled out the red carpet here. And Trump wants to get this right. We know there was reporting in the days leading up to the summit that he wants to have good relations with Xi. He wants to see that's a priority for him and his administration. The ambition this week is really to keep everyone, I would say, coloring within the lines here to ensure this idea of strategic stability.

16:04 And the question comes down to what does that mean for both sides? It was something that was agreed upon in May, but they have different interpretations of what strategic stability means. For the U.S., it means transactionalism and deals. For China, it means more around trade. sort of we're going to be near peers and there's going to be a sort of mutual respect in our competition going forward.

16:28 But the optics were very clear. There's going to be more today. There's going to be a further welcoming ceremony at the White House this morning. We know they're going to also take tea tomorrow. So Trump, as I said, he wants to get this right and ensure that he's providing the same level of respect that was provided to him when he was in China a few months ago.

16:50 And the approach for the US remains projecting power, projecting the ability to lead through strength. And the administration thinks that these sorts of treatment does that.

17:00 This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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17:45 I'm Karen Moscow. And I'm Nathan Hager.

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