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tv   BBC Business Live  BBC News  January 20, 2017 8:30am-9:01am GMT

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this is business live from bbc news with aaron heslehurst and rachel horne. the inauguration of donald] trump. as the businessman officially becomes president of the united states later today in washington, his plans for the economy come under scrutiny. live from london, that's our top story on friday the 20th of january. slashing taxes, talking tough on trade and ripping up the corporate rule book. america's president—elect promises double the growth and millions of newjobs. but does trumponomics add up? plus his arch rival china confirms its weakest growth since 1990, with fears of even tougher times ahead. and given the inauguration today, one word dominates the markets, that's caution. and we'll be getting the inside
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track on the mining industry. the founder and chairman of one of the world's largest mining companies — vedanta resources — willjoin us. we'll get his thoughts on the trump presidency, and likely drivers for commodity prices this year. and we also want to know your thoughts — are you optimistic or pessimistic about the new leader of the free world's economic plans? will it be a trumpjump or a bump? just use the hashtag bbcbizlive. or 0rdump! or dump! welcome to the programme. lots going on, we've got that friday feeling. later today donald trump will be sworn in as the 45th president of the united states. let's be frank. the billionaire businessman has gone from long—shot candidate to the leader of world's biggest economy in just a year and a half. his supporters will now be hoping that he can shake up the us economy in the same way the he shook up
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the presidential race. let's ta ke let's take a look at some of the details that we know. he has promised to create 25 million jobs over ten years, and to double the annual rate of economic growth to 4%. but how will he do this? he's promised to take a tough line on trade — and on countries he sees as undercutting us workers and taking their jobs. he's threatened to slap a 35% tariff on mexican imports and a 45% tariff on products from china, raising fears he could start a trade war. one thing at the top of the list that we know he has said: he will renegotiate the north american free trade agreement. he also says he'll cut america's
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high corporate taxes — which have pushed big us firms to offshore a lot of their business. from 35% to 15%. critics say this is too expensive, and will help big companies rather than ordinary workers. and he also promises... a lot of promises! he promises to free up business by ripping up red tape — he says 70% of all federal regulations can go. he hopes that will encourage firms to keep morejobs in the us rather than outsourcing. the markets certainly like the approach, and the so—called trump rally saw the benchmark dow jones industrial average rise by close to 9% after the election. laura tyson, professor at haas school of business, university of california berkeley
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and former chair of the us president's council of economic advisers joins me the world economic forum in davos. thank you forjoining us. 25 million jobs in ten years. can he do that? 25 millionjobs over ten jobs in ten years. can he do that? 25 million jobs over ten years is actually an estimate that i think probably keeps up with the demographics of the labour supply, and is not a demographics of the labour supply, and is nota number demographics of the labour supply, and is not a number that is out of range given a 10—year time horizon. there were something like 22 million jobs, i believe, during the clinton administration, i think. jobs, i believe, during the clinton administration, ithink. so jobs, i believe, during the clinton administration, i think. so that number is not the number i would look at. i would look at the growth rate number, which i think is not believable, the 4% growth rate. talking aboutjobs, believable, the 4% growth rate. talking about jobs, we believable, the 4% growth rate. talking aboutjobs, we saw some figures saying the us has lost about 5 millionjobs since
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figures saying the us has lost about 5 million jobs since 2000, but 80% of that is due to automation rather thanjobs being of that is due to automation rather than jobs being outsourced elsewhere. that's right. and i don't think people really understand that point. i do think the voters understand that. i think that any reassuring that occurs in the united states —— re—shoring that occurs. while they might have 20 workers to doa while they might have 20 workers to do a job abroad, they only need five in the united states because of automation. typically after a 2-term president, typically a recession follows after that. i don't think that there is any theory which would suggest that to be the case. in the us economy, we have had a long
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period of economic growth, we have brought ourselves back in many parts of the country to follow employment. we still have the secular problem of employment creation that we talked about in terms of technology. i do think that is going to continue, but the economy is not right now, there are not obvious imbalance is, which would suggest that there would be a recession, so i don't buy the notion that there will be a certain period of years before you go into recession, whether or not there is a period of change in administration. i think you look for in balances in the economy. he has also suggested major tax cuts for corporations, will be enough to bring offshore back to the us? i do think one thing with certainty, thinking about the economy over the next year and several years, we will start with what we know for sure. we know for sure that the republican congress with the president will introduce
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significant tax cuts, personal tax cuts and corporate and business tax cuts, and there will be a need given the tax cuts to make sure that there are not large differentials between various forms of business taxes like pass through taxes for corporations, and corporate tax, so all these rates will come down. the president has proposed a very aggressive cut in corporate tax to 15%. businesses have been looking for rates in the mid—20s, so 15% is a very low rate. one thingi mid—20s, so 15% is a very low rate. one thing i would say about all of this is that there really is a tremendous reduction in the source of revenue for the government, and that then is associated with lots of cuts in various spending programmes, soido cuts in various spending programmes, so i do think that you are going to see for sure significant cuts in
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taxes. a cut in the business tax rate, the corporate tax rate, will almost certainly bring more investment into the united states, more capital investment, so one of the things that has been true about the things that has been true about the economy is weak capital investment. thank you very much your time this morning. it looks cold! good snow. says the lady who just got back from skiing! let's look at some of the other stories making headlines all around the world. president—elect donald trump's choice for treasury secretary, steven mnuchin, has faced strong criticism during a senate confirmation hearing. mr mnuchin is a former goldman sachs banker—turned hedge fund boss and hollywood investor. he faced accusations that his former bank, onewest, ruined lives during the us property crash by foreclosing on 36,000 loans. but he told the senate finance committee "i have been maligned". uber is paying $20m to settle
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allegations that it duped people into working for its ride—hailing service. the us federal trade commission said uber offered false promises about how much drivers would earn and how much they would have to pay to finance a car. the agreement covers statements uber made from late 2013 until 2015 while trying to recruit more drivers to expand its service and remain ahead of its main rival, lyft. you are sitting down, you are doing it! iam you are sitting down, you are doing it! i am doing the tablet. it is all about trump today. we asked you start if you are optimistic or pessimistic about the impact you think trouble have the global economy. already have some! this reader says, i am cautiously optimistic, another one is
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pessimistic. some others also saying that they are very pessimistic. let's wait and see. i'd lots on the ta blet let's wait and see. i'd lots on the tablet from both sides, as well. now let's talk about the second biggest economy in the world. official growth figures out of china. and they confirm that last year china's economy grew at its slowest pace in more than a quarter of a century. the growth rate hit 6.8 per cent in the last three months of 2016 — but that gives an overall rate of 6.7% for the year — the figure is in line with beijing's official growth target of between 6.5% and 7%. robin joins robinjoins us from shanghai. do we trust the numbers, and what i really wa nt trust the numbers, and what i really want to ask you is, if trump sticks to his promise and causes a trade spat with china, that is probably the last thing the chinese economy needs? yes, on that first point, do we trust the numbers? there is
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a lwa ys we trust the numbers? there is always scepticism, but let's set that to one side for now. these numbers are bang on what the chinese government have predicted. the trend of the slowdown continues, it is a managed slowdown in growth that the chinese government want, and that is their overall aim. looking to next year, we can look to see something in the low 6%, perhaps. but the bigger picture here as you say is that china is preparing for a trump administration where it doesn't quite know what he will do. we have had the rhetoric, but there is fear about a trade war and possibly about about a trade war and possibly about a physical, military confrontation in the south china sea. the main concern for the chinese government is domestic, it is about trying to transform the economy here away from being one reliant on government money on exports, we saw a big drop in exports in those figures, and make it instead an economy driven by
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domestic and consumer spending. robin, have a good weekend, we will talk to you soon. let's stay with the markets. caution is the key word on the markets around the world as we all await for the 45th president of the us to be sworn in. europe expected to follow suit. even china's economic growth which beat expectations and federal reserve chairjanet yellen who toned down her earlier hawkish policy stance hasn't been enough to give a real boost. it's all about caution. they are waiting to see what trump and his team put together in terms of economic policies. so on that note — i wonder what'll be making the biz headlines in the us today. here she is — here's michelle. us financial markets have been jubilant ever since donald trump's surprise election win, hitting a series of record highs. now that he
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is about to be sworn in as the 45th president of the united states, will mrtrump president of the united states, will mr trump continue to make markets great again? stocks initially rallied on the hope that the incoming administration would deliver an campaign promises to rollback regulations, cut taxes and spend on infrastructure. lately they have been trading in a narrower range, someone in have been trading in a narrower range, someone in investors have been too focused on the upside, and haven't given enough thought to the potential negatives. at present, wall street doesn't seem to be anticipating problems either with mr trump was my trade policies or in terms of delays by congress. will that view change once he takes office? and on the corporate front, watch out for earnings from the likes of general electric and doctor and gamble. thank you, michelle. joining us is lawrence gosling, editor in chief at investment week. thank you for coming in this morning. the husband a lot of noise around the markets, theresa may outlining brexit, the chinese
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president in davos, trump's inauguration, but underneath all of that, how other markets doing? there is an outbreak of what you call a traditional business cycle but economists look like that starts with a recovery in the us which we have had for the last couple of years, filters over to the uk and moves across the world. the uk is hungry —— the uk economy is healthy, there are signs that europe is beginning to pick up, and a lot of people perhaps confused by china, brexit, an interesting time for the markets. i will take a sharp turn and talk about, we just mentioned that trump and his team will look at the north american free trade agreement, lots of criticism to mexico, but mexico provides united states with about 80% of their avocados, and i can tell you what
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they love, they love guacamole in america! particularly on super bowl day which is coming up! the avocados we re day which is coming up! the avocados were banned a hundred years ago from going from america into the us, nafta brought them back, and the americans have been gobbling them down. we could see and do that, it would be a very small thing and it sounds trivial, but it is a piece of populist protectionism that might make donald trump unpopular. we will see! do come back and take us through the papers. my father in australia had an avocado tree in his backyard. still to come: we'll find out what the head of one of the world's biggest mining companies is expecting from the trump presidency. you're with business live from bbc news. the association of convenience stores is calling upon the government to do more to support
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the uk's 19,000 rural shops. hit by rising costs, a lack of high speed broadband and business rates — they're struggling. more than half of rural shops operate on their own, with no other retailer close by and are therefore essential for many communities. well let's find out more with chris noice, association of convenience stores we heard what the issues are, what do you want the government to do about it? the report is highlighting the concerns we have about the viability of some rural shops, they are absolutely providing an essential service to communities across the uk. we want them to look at rural petrol stations, many of them are fully serviced convenience stores and they are not receiving the same rate relief that there are other rural counterparts are, as well. many rural stores are disadvantaged by slow broadband
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speeds and slow mobile coverage. with many things going online it is important that these stores have a level playing field when making investments. regarding investment, stores that are improving their business, spending money to make businesses better and more appealing, they are actually being dis— incentivised and we want to see that being changed. with brexit, and what that has done with the value of the pound, it makes things more expensive for these shops to bring their goods in, are they telling you that? they don't have the buying power like the huge supermarkets. you are right. the buying power is different, but i think it is more of a secondary impact for the convenience sector a secondary impact for the convenience sector because many stores source their goods locally and we have done research and the impact of brexit is not hitting yet.
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it will be interesting to see how this changes in the next year. we appreciate your time. thanks. there is a story on the tablet. royal mail, cost cuts ahead, tough times could be coming up again, because of a fall in the amount of letters we are sending. send us some letters! there is an 11 month low for the share price. you're watching business live — our top story — later today donald trump will be sworn in as the 45th president of the united states. the billionaire businessman who has gone from long shot candidate to the leader of world's biggest economy — is promising to bring unity and change to the us. a quick look at how markets are faring. the word is cautious today. they are
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waiting to see what donald trump will do when he act she gets into office. —— he. he has promised infrastructure investment and low tax rates, which could appeal to businesses, but they are holding their breath. and now let's get the inside track. trump and china are likely drivers for commodity prices in 2017. meaning the future for natural resource companies is less than certain. but vedanta resources, one of the world's largest mining companies is unafraid of potential protectionist policies. but has he largely ignored the negative possibilities of tit—for—tat trade wars with china and other countries? anil agarwalfounded the group in 1979 and is the executive chairman of vedanta resources. he joins us now from the world economic forum in davos. can we start with this, global
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companies like yours, you need free trade to create jobs and boost growth, what is your message to donald trump? yeah, we have a very good relationship with america and india. ourcompanies, good relationship with america and india. our companies, our company is 196 india. our companies, our company is 1% gdp of the country, we produce oil, zinc, aluminium, and i've been hearing about his speech and to support his country for more jobs. i think brexit is doing the same. india are doing the same. trump is doing the same. everyone has to hold onto their people and create more jobs i think he will look at that. he will look at this as a win—win situation where everybody can win, but as far as our country is concerned, we have a very good
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alignment with america. concerned, we have a very good alignment with americalj concerned, we have a very good alignment with america. i want to ask you this. i will give you a break so you can swallow. responsible leadership has been a big theme at davos and we have got to ask you, your company has come under scrutiny, you have been criticised about your environmental impact. a team of top analysts in your country in india have described the data as being in total contempt of the law. no, this is absolutely incorrect. we are one of the world's best. we ranked one of the best. when you are in the resource industry you have got to be very careful and we use technology today. we area careful and we use technology today. we are a new company and we can't do
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anything which is not right. our environmental norms. india hardly produces anything and india has only done anything, about 10%, compare to the world, 90%, we import most of our oil the world, 90%, we import most of ouroiland the world, 90%, we import most of our oil and this government is com pletely our oil and this government is completely looking to how we reform and make more oil and gas in the country and more copper in the country and more copper in the country and more copper in the country and how to open up the resources sector and country and how to open up the resources sector and how to do the start up. and create a phenomenal jobs, and for the world to come and invest. this is a huge market. it's a huge market. we are going to leave it there. we appreciate your time, as always. stay warm. we are joined again by laurence. we are going to talk about our paper
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stories. we have that tweet, what you think about donald trump? optimistic or press mystic. story here about his treasury nonna —— treasury nominee who contradicted the president. —— optimistic or press mystic here donald trump says he would like a wea ker donald trump says he would like a weaker dollar. but this is a conflicting view. the treasury nominee is saying a stronger dollar is better. well, the treasury nominee is going to get more respect because he has an economics background. the treasury secretary would hopefully understand the direction the country needs to go. the dollar needs to stay strong
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longer term. this is a good thing, they are having a discussion, these are the checks and balances will stop people are worried donald trump will do what he wants, but these are the checks and balances. yes, the nation is not schedule challenging. exactly. sticking with that theme. here goes the tablet. inauguration ball. michael flatley to perform at the inauguration ball. not quite perform, he has rickety knees, but he will lead his dance troop out and perform. he is most like the last man standing who actually wanted to agree to appear at this ball. what a comparison to the obama ball. yes, but i'm sure they will have fun, watching michael flatley. being
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british, we go for marmite. watching michael flatley. being british, we go for marmitem watching michael flatley. being british, we go for marmite. it is wonderful. anyway, that you might is backin wonderful. anyway, that you might is back in the hands of the aussies. they will try to rebrand it, so it is not just for they will try to rebrand it, so it is notjust for breakfast, you can have it all day long. you can have it with cheese in sandwiches, i have that at school, lettuce is very good with vegimite. always a pleasure. that's it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report. goodbye. good morning. it is a big day on the
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other side of the pond in washington and we're expecting to see cloud thickening up and likely to bring some rain. temperatures around six or seven. cold frosty start for the southern half of the uk, and some foggy patches, as well. more cloud in northern ireland and scotland. that is keeping the temperatures up, frost free. they will be some sunshine here through the morning, the cloudy zone, northern ireland, scotla nd the cloudy zone, northern ireland, scotland and northern england, maybe some odd spots of drizzle but most places will be fine and dry. at ten o'clock in the morning, at some place still hovering around freezing, most other places just a degree or so above. at least there is plenty of sunshine and the winds rather light. there will be some extra clout, but elsewhere it is a lovely afternoon with plenty of
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sunshine and the light windscreen macro “— sunshine and the light windscreen macro —— cloud. both places will be dry. six trees in the afternoon. frost will set in in the afternoon ——6 frost will set in in the afternoon —— 6 degrees. but some of the frost will be quite harsh, major towns and cities will be a degree in the side of freezing, rural areas will be a few degrees below. we start saturday ona few degrees below. we start saturday on a decent note with a good deal of dry and the weather, and through the weekend there will be dry weather, some spells of sunshine to be had. one thing you will notice, temperatures will be down and it will be eight few weekend. cold start with a widespread frost ash and it will be a chilly weekend. most and it will be a chilly weekend. m ost pla ces and it will be a chilly weekend. most places will stay dry and bright. it will be about 3—5d, maybe a bit higher in the far north.
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through saturday night, clear skies, and it will turn cold and frosty, the cloud will thicken up to bring some light rain into northern england in particular. sunday, fairly cloudy, light rain and drizzle, but most of people were —— but for most people it will be fine. in just a few hours' time, donald trump will be sworn in as the 45th president of the united states. hello, good morning, i'm joanna gosling — welcome to friday's programme. donald trump has been addressing supporters in washington. we are going to make america great again, and i'll add greater than ever before! thank you, everybody. this is the scene live in washington, where they'll be waking up to the dawn of a new era. throughout the programme we will be
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taking a look at what a trump presidency could be like — we are talking to washington insiders, voters, supporters and critics of the man who so many said would never make it to the top job.
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