India Strikes Pakistan After Kashmir Attack, US and China Announce Trade Talks
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Welcome to the Bloomberg Daybreak Asia podcast. I'm Charlie Pellett. We're tracking two major stories for you this morning. Treasury Secretary Scott Besant and U.S. Trade Representative Jameson Greer will travel to Switzerland later this week for trade talks with China. More on the talks coming up, but we begin with this. India has conducted targeted military strikes against Pakistan.

The move was widely expected after India pledged retaliation for a militant attack last month in Kashmir that killed 26 people. In response, Pakistan said it shot down five Indian warplanes. And for more, we heard from Pakistan's Defense Minister Gawaja Asif, who spoke with Bloomberg's Sherry Ann and Paul Allen.

Minister, great to have you with us and thank you so much for taking the time. We have heard about what Pakistan has done. We are, of course, talking about an escalation here when it comes to the conflict with India. How far could this conflict go?

Well, let me give you the latest count. We have downed five Indian planes. Pakistan Air Force has shot down five Indian planes and multiple UAVs.

and their checkposts on the control line, a couple of checkposts have been destroyed. So this is the latest as for what is happening on the control line or international border between India and Pakistan. As for the attacks of Indian Air Force are concerned,

on seven different locations, two in independent Kashmir, one in Madhavraban, other in Kotli, and five other locations in Pakistan.

uh... giving this impression that uh... these places uh... had uh... terrorist camps well i have uh... uh... you know invited the international media and our local media to uh... visit all these places and see for themselves if there are any terrorist camps or terrorist outfits on these locations

The civilian population has suffered. A lady has been martyred. A child has been martyred. And few other, you know, you know, coyotes have been suffered by Pakistan, civilian coyotes. And two mosques have been destroyed. Minister, of course.

The question right now that's hanging here is how far is Pakistan willing to go here? It all depends upon that. This has been initiated by India. If India is ready to back down,

They have taken the initiative. We have just responded. We have been saying all along, last fortnight, that we'll never initiate anything hostile towards India. But if we are attacked, we'll respond. If India backs down, we will definitely wrap up these things, you know. But as long we are under attack, under fire, we have to respond. We have to defend ourselves.

Minister, is there any contact between yourself and the Indian side at the moment?

I'm not aware of it, you know. I'm not aware of it. There is contact normally during these hostile, you know, activities and tensions. There are backdoor contacts available anywhere in the world, you know. But I'm not aware of any contact between India and Pakistan at the moment, you know.

Are you also concerned that India suspended the Indus River Treaty? Flows from the Chenab River into Pakistan have been restricted. Do you anticipate that continuing, or is there some talk to at least restore river flows to Pakistan?

I think World Bank brokered this treaty way back in 1960, which is now a 65-year-old treaty. And it has worked reasonably well, not excellent, but reasonably well over the years.

We have faced problems, but they still work here. But India now is seriously violating this treaty. For any outflow or any downstream towards Pakistan, because we are a low riparian country,

It has to be under the treaty. We have to be notified that this much water has been released from such and such location, and we should take care of that. And last four or five days or a week, there were releases of water

you know, without any warning. And then there was stoppage of water also without any more warning. So this flip-flop situation is going on for the last about eight, nine days. And the treaty is being violated by India almost on a daily basis. World Bank can intervene. They brokered this treaty. And

We can talk to them, the Indians, as far as IWT is concerned. But under the circumstances... Yes, go ahead, please ask. No, please finish your thought. Under these circumstances...

Under these circumstances, when we are eyeball to eyeball, our forces, both countries are facing each other on the line of control, on international boundary, on working boundary. Under these circumstances...

I think once the peace returns, this treaty can be enforced again. And if there is a need for any negotiation between India and Pakistan, World Bank can play a very significant role in that. That can be done. Under the present circumstances... Yes, yes, please go ahead.

And it sounds to us that you're willing to have contact with India, that you want to talk. Does that mean that you will carry out negotiations before there's another escalation on your side? When you say you already shut down jets, when you already took soldiers, is that the extent of what Pakistan is willing to do before there is a conversation with India?

You must understand that these are not hostile acts. We are just defending our territory, you know, because India's incursions over the last, let's say, five hours or six hours, I think around 11.30 or 12 o'clock or maybe after midnight, it all started. So we are just responding to...

If these hostile acts are stopped or they cease to continue these acts against Pakistan, we will definitely talk to India. And we do not want this situation to escalate. But if we are forced to respond...

if there are hostile acts initiated from Indian side, then we have to respond. We cannot just sit back and take whatever is coming to us. So you've also been speaking to the U.S. What we understand is that you've been speaking to Secretary Rubio. Have you talked to Washington after these attacks from India? And what about Beijing? How does China play into this conflict?

Well, you know, China is definitely, you know, they are the third party to Kashmir. A part of Kashmir is with China also. So this is something I think China is a very, very relevant player in the region, very, very relevant player. They can, you know, use their influence.

I don't know whether it will work with India or not. But beyond China, if, you know, other countries in the region, like in the Arabian Gulf or Russian Federation, or President Trump has spoken just a couple of hours back, and he called this act of Indian aggression a shame.

So President Trump, you know, has been – I mean, last – since he has taken over presidential office in the United States, he has been talking of conciliations and reconciliations.

And, you know, a peaceful world is, you know, talking about. He can also play a very significant role in bringing the two countries to halt the hostilities.

Minister, part of the reason the world is so concerned with this conflict is because your nation and India are both nuclear-armed. How do you prevent this conflict from escalating before either country starts talking about nuclear deterrence?

Well, this is a huge risk, you know, when two nuclear powers are, you know, confronting each other. And we do not have any intention of using a nuclear option. That is just something which guarantees our sovereignty, especially when we have next door a neighbor

who is extremely hostile towards us. Seventy-seven years of our neighbor relationship, neighborhood, you know, is evidence to the fact that India has been hostile, and not only on the eastern border.

the border between india and pakistan they have been proxies working against us from a part of stock uh... both in that province of uh... pocket-sized bush carlson so they have a proxy green then finance by india so we are victims of aggression from uh... both sides of uh... uh... by the indians you know one directly there they they they they they uh...

engage in hostility with us and others through their terrorist proxies. All right. Pakistan's Defense Minister Khawaja Mohammed Asif, thank you so much for joining us today. Bloomberg News is also reaching out to Indian officials for comment as well.

Again, Pakistani Defense Minister Khawaja Asif in conversation with Bloomberg's Sherry Ahn and Paul Allen. Coming up, the latest on U.S.-China trade negotiations. I'm Charlie Pellett, and this is Bloomberg. You know that feeling when you're about to score 30% off, but they want your number?

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Welcome back to the Daybreak Asia podcast. I'm Charlie Pellett in for Doug Krizner this week. Treasury Secretary Scott Besant and U.S. Trade Representative Jameson Greer will be traveling to Switzerland later this week for trade talks with China. The travel was announced in statements from the Chinese and U.S. governments. It'll be the first confirmed trade talks between the countries since President Donald Trump announced sweeping tariffs led by punishing levies on China.

And for the latest, we heard from Bloomberg politics editor Romy Varghese alongside Bloomberg's China correspondent Min Min Liu. They spoke with Bloomberg's Sherry Yan and Paul Allen. Romy, I want to start with you. What are the expectations for these talks? Where do we set the bar? I think the fact that these talks are happening is a huge development.

I must remind everyone, this is the first confirmed trade talks between the two countries. And obviously, what is happening between China and the United States has been concerning investors. I mean, earlier today, stocks in the United States fell based on Trump's comments earlier saying that

The U.S. is losing nothing by not trading with China. So the fact that these talks are happening is a significant development. And indeed, you see stock futures in the United States moving higher on this. And, Min, a significant development that the Chinese side is willing to acknowledge the conversations are happening. So what can we expect to be the bar for China when it comes to these negotiations?

Yeah, I think it's really significant. Two things. One, I think this is one of the few times we have coordinated messaging from US and China, both sides releasing their statement around 6 a.m. local Beijing time, acknowledging that these trade talks are happening. And secondly, you have...

officials at the very top level because China is fielding He Lifeng, which is the vice premier. If you remember, the first trade deal was negotiated by the vice premier at that time, Liu He, who signed the phase one trade deal with President Trump. So this is a very high level official that is going to be overseeing these talks with Scott Besant and Jameson Greer. And the Chinese Commerce Ministry released a statement, a pretty long one, reiterating that China's stance hasn't changed at all. It's

open to dialogue, yes, but if the U.S. wants to fight, it is still going to fight till the end and China is not going to compromise on its principles. It will be defending its legitimate rights and interests. And that statement also came with a warning for other countries looking to negotiate with the U.S., saying that, quote, a

Appeasement cannot be exchanged for peace. Compromise is not respected. Adhering to principled positions and fairness and justice is the right way to safeguard one's own interests. And the statement also saying that China will continue to open up to share its development opportunities with the rest of the world. It's willing to work with other countries to jointly oppose hegemony, protectionism and bullying.

Romy, when it comes to these trade negotiations, we have heard President Trump talk about not wanting that back and forth approach, that he'll be prescribing tariffs to other countries and that they should either accept or not. Do you expect that approach to actually work on Beijing or will he take a two way approach, given that really China has remained defiant so far?

I think this is going to be a tricky situation, and that's why you see Scott Besson and Jameson Greer starting these talks. During his comments today with the new Canadian prime minister, Trump made it clear that he is the final arbiter of all trade deals. And indeed, he said he did not want this back-and-forth negotiation.

But I would also note that Scott Besson earlier today, when he spoke to lawmakers on Capitol Hill, you know, he talked about how things were progressing. He talked about how talks were progressing with other nations. So Trump is aware that—

that markets are watching, but he also wants to stick to his tenet that he is the one who makes the deal, and he needs to see something significant happen with China because he feels that China has treated the United States very unfairly.

Min Min, China's not just going to be talking to the US. We've also got news that President Xi Jinping's going to be heading to Moscow for talks with Russia as well. What's on the table here and to what degree does this offer China some extra leverage when it comes to speaking with the US?

Yeah, so Presidency going to Russia at this time when we have seen this backdrop of the international alliance sort of shifting with President Trump also courting Putin to push for that ceasefire in Ukraine. This is a trip for China to establish that U.S.-China ties remains ironclad despite that

sort of quoting from President Trump so far. And President Xi is there to support Russia to attend the parade marking Soviet Union's win over Nazi Germany during World War II. And this is a mutual sign of support because the Kremlin also said that Putin has agreed to visit Beijing in September to mark China's win over Japan during World War II as well. Both sides are

about to sign bilateral documents as well as release a joint statement that's according to the Kremlin. They will be discussing U.S.-Russia ties as well as the Ukraine war, as well as economic and energy issues, given the threat that Russia is facing from Europe. Now, the prospect of Europe cutting off their energy ties with Russia. And we know Russia has been diverting a lot of its energy supply to China while China

that economic lifeline to Russia. So both sides also, according to the Ministry of Foreign Affairs from China, both sides jointly opposing hegemony and bullying, again coming together to oppose or to create that multipolar world order that they want to see.

And Romy, before we let you go, what's the state of the trade negotiations between President Trump and other countries? We just heard that that negotiation with McCartney, with Canada, went very well, according to the president.

Yes. I would refer to my earlier statement about Scott Besson actually predicting that a trade deal could happen as early as this week with nations other than China. And he even said that 80 to 90 percent of trade deals could happen this year. So Scott Besson is—I

putting an optimistic tone on negotiations, while Donald Trump is insisting that he's not going to do a back and forth on negotiations.

Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the stories shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Krisner, and this is Bloomberg.

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