tv Business Briefing BBC News July 4, 2019 5:30am-5:46am BST
this is business briefing. i'm sally bundock. exchange irate! president trump accuses china and europe of playing "a big currency manipulation game" and calls for the us to do the same. plus, rebuilding a reputation — boeing pledges $100 million to help communities affected by the 737 crashes. victims' lawyers reject the move. and on the financial markets in asia mostly are trading higher following a record close on wall street giving investors an independence day boost.
we start in the us, where president trump has raised the prospect of a global currency war — just days after he agreed a truce in the trade battle with china. he's taken to twitter to call for the us to force down the value of the dollar — to better compete with china and europe — a move that could have huge implications for economies around the world. in the tweet he accuses china and europe of playing a "big currency manipulation game and pumping money into their system in order to compete with usa". and he says the us "should match, or continue being the dummies who sit back and politely watch as other countries continue to play their games —as they have for many years!" the comments came as official figures revealed the us trade deficit — the shortfall between what america imports and what it exports — has soared. cutting or eliminating that deficit is of course a key aim for president trump in his trade policies. but in may it hit a five month high — of $55.5 billion — and that was up more than 8% on the same time last year.
it was driven by the biggestjump in imports since 2015. ironically, say analysts, it's a direct result of president trump's policies. the increase in the trade deficit is entirely related to tariffs. what we saw imported in larger numbers were things that would otherwise be subject to tariffs, things like automotive goods, industrial goods, capital goods, machinery, the type of things that might be subject to ta riffs of things that might be subject to tariffs later, so there is an incentive to get that stuff onto us chores now before the tariffs are applied. the downside from an economic standpoint is that the
trade deficit is a reduction of the gross domestic product, so the gross domestic product number is going to ta ke domestic product number is going to take a hit as a result of the higher trade deficit. let us get another view. julian howard from the fund manager gam joins me now. you have been listening to all of that. give us your take on president trump's tweet. i think there is an element of frustration on his part and partly jealousy, i element of frustration on his part and partlyjealousy, ithink, that he doesn't have all of the let us that some of the other economies do, like china, where the authorities control not only fiscal policy but monetary policy. mr trump obviously has some control over fiscal policy but no official control over monetary policy i think there is an element of frustration. everyone is applying stimulus in i want to do the same because they want to keep consumers in the us happy my want to keep voters happy, with a view to the election coming up. as you say, he has not got control of monetary policy. the federal reserve is independent. but he is very vocal
about what he thinks they should do next. and the action of the fed next month injuly next. and the action of the fed next month in july when next. and the action of the fed next month injuly when an interest rate cut is expected will have an impact on the dollar anyway and already probably has had an impact. to a point. i think the market is expecting a cut injuly, as you say, and probably further cuts later in the. all of these meetings are live, ina the. all of these meetings are live, in a sense they could result in a cut. i suppose the question is whether that is going to be enough for whether that is going to be enough foertrump. ithink whether that is going to be enough for mr trump. i think he wants to push for a very, very aggressive easing policy in order to sustain economy going into the electoral cycle. the other issue as well, if the dollar weakens to a degree, other currencies are weakening as well. so the impact for the us, for those exporting doesn't really have that big an impact. the dollar is partly driven by what we call the interest—rate differential, the difference of where it is and ecb is. we know that christine legarde is. we know that christine legarde is perhaps going to become the president of the ecb and she is very
much what we call a dove. in the sense you want to continue the policies of keeping policy very loose. even if the dollar does fall on the back of bowling interest rates, europe is doing the same. so mrtrump rates, europe is doing the same. so mr trump won't get his dollar depreciation, or not the relative depreciation, or not the relative depreciation he is looking for. all right, thank you very much indeed, julian, for giving us the perspective on my president trump had to say. we keep an eye on his 20 feet, as many of you do, i'm sure. and grab —— twitterfeed. let's stay in the us, because boeing says it is giving $100 million to help families affected by the two crashes of the company's 737 max planes in indonesia and ethiopia. the pay—out is not related to lawsuits filed in the wake of the disasters, which together killed 346 people. but lawyers for the victims' families have dismissed the move, as nada tawfik reports from new york. many believe boeing's response to the crashes has been tone—deaf and so they see this as boeing trying to repair a lot of that damage. in this statement, the boeing ceo
says he hopes that this money will give some comfort to the families who lost their loved ones in the crashes. the $100 million, the plan is, will be invested over a number of years. boeing will partner with local governments and also non—profit organisations to invest in things like economic development for communities, and also to pay living expenses and educational expenses for the families. now, already one law firm in chicago, which represents 23 family members who have sued boeing, came out with a statement kind of pouring cold water on this pledge, saying that it was disingenuous when there are still so many facts that are unknown about what happened. they said boeing should take that money instead and help families recover the remains of their loved ones and ensure that the 737 max is safe to fly. nada tawfik with the latest on that story.
let's go to asia now, and a historical row that has flared up in recent days betweenjapan and south korea that could have wide ranging implications for the technology industry. last year south korea's supreme court ordered japanese firm mitsubishi to pay compensation to koreans who were made to work as forced labour during world war ii. it wants a payment of up to $130,000 each. but japan argues it settled the matter in a treaty back in 1965. this week, japan retaliated by tightening export controls on materials vitalfor south korea's semiconductor industry, which supplies almost three quarters of the world's memory chips. let's speak to hyung eun kim in our seoul bureau. just tell us a bit more about how this spat has escalated this week. well, the announcement came earlier
this week from japan that they will impose restrictions on its exports to south korea regarding materials that go into semiconductors and displays. so we're talking about chips that go into smart phones and displays that go into smart phones and ipads and pcs and laptops that we use on a daily basis. and south koreans were ta ken we use on a daily basis. and south koreans were taken aback. it came after the g20 summit in osaka japan, where leaders promised free trade. but relations between south korea andjapan but relations between south korea and japan have been at one of its lowest since last year, when rulings came out that japan should compensate south korean victims of wartime colonial forced labour. what are the implications of this? for example, huge giants such as samsung, will they be affected? they will be. they commented that they
are looking into what this means to their company. however, south korean economy relies heavily on exports. if you are looking to south korean exports, semiconductors alone take up exports, semiconductors alone take up 20% of south korean exports and semiconductors, display items, they rely heavily if not entirely on japanese materials and chemicals, sometimes up to 90%, sometimes 80% range top so it's crucial materials that go into semiconductors and displays. and also the economy is one of the biggest pillars of the south korean economy. south korean economy ways it has not been doing well in the south korean president has been criticised a lot recently for his economic policy. that has a great perspective and context. thank you for that. we will keep an eye on that story. now let's brief you on some other business stories.
britain's national trust says it will sell off the shares it holds in fossil fuel companies — most within a year. at present, 4% of its £1 billion stock market investment is in such firms. the biggest conservation charity in europe plans to invest in green start—ups and portfolios that benefit nature and the environment. netflix has announced it's taking a long—term lease on shepperton film studios near london. its plan is to create a dedicated uk production hub, including 1a sound stages, workshops and office space at the site owned by the pinewood group. a very brief look at markets. 0n wall street they ended on record highs. no action at all in the us today. it is closed for the fourth ofjuly holiday. today. it is closed for the fourth of july holiday. in today. it is closed for the fourth ofjuly holiday. in asia, a mixed picture. i will see you soon.
jane is back in a moment for the news briefing. the laws on assisted dying will be debated in the house of commons today. currently, anyone found guilty of helping someone to end their own life can face a prison sentence, but there are calls for change. tim muffett reports. vicki was 83 and had stage iv bone cancer when she ended her own life last year. she had been in constant pain. her son and daughter, adam and kate, were both investigated by police for a potentially assisting their mother's suicide. he had asked adam to contact the swiss clinic dignitas with a view to potentially ending her own life there. his phone was seized. vicki dating kate's house. kate found her after returning home one day last february. eye then sat with her. didn't go in an ambulance —— i stop
the police took it. mum was a victim andi the police took it. mum was a victim and i was are suspect. it was very, very stressful. after almost a year, the coroner returned a verdict of suicide. kate and adam were cleared of any involvement. in england, wales, northern ireland, being found guilty of assisted suicide can lead toajail guilty of assisted suicide can lead to a jail term of up to 1a years. in scotland, is not a specific crime, but helping someone take their own life can lead to a charge of culpable homicide. all these laws will be scrutinised today in parliament. kidney specialist, doctor david randall, supports cannot killing, an alliance of organisations which oppose a change to the law. it can appear stern, but invariably is interpreted with compassion. there is very clear guidance from the director of public prosecutions, which indicates that family members who act out of compassion to assist the suicide of
a relative should not be prosecuted. the danger, i think, if we change the law here is that we skew the balance. but for adam and kate and many others, legal changes are long overdue. this is the briefing from bbc news. the latest headlines: north korea accuses the us of being ‘hell bent on hostile' actions, just days after a meeting between the countries' leaders. the un security councilfails to reach an agreement on whether to issue a statement condemning the deadly air strike on a migrant centre in libya. a tourist in italy's killed by falling rocks after a volcano on the island of stromboli erupts without warning. now it's time to look at the stories that are making the headlines in the media across the world. we begin with the daily telegraph's business section. and it looks at the potential attempt by the former british chancellor
george osborne to become the chief of the imf. the independent — china's ambassador to the uk says to the uk says that relations have been damaged after the uk foreign secretary threatened ‘serious consquences' over the unrest in hong kong. the guardian reports that us congress is asking facebook to hold —— halt development of its cryptocurrency liber until potential eventualities can be weighed up properly. the times looks at chinese estate media reporting turkey price president is supporting chinese policy towards the uighur minority group in the west of the country. and then the times as well, the unbelievable story of the 15—year—old sensation who knocked venus williams out of wimbledon. she is now through to the third round. we are asking for your opinions on
the new sensation at wimbledon. she is the most talked about player at the moment. so let's begin with the daily telegraph. with me is jane foley, senior fx strategist at rabobank. george osborne apparently interested in becoming the new managing director of the international monetary fund. yes, i was surprised to see this story. but he does have a similar profile to christine lagarde, she was a finance minister for france before she took the job and he was the finance minister for the uk. in those terms it fits, but what this report really was about is whether he would be pitting himself against mark carney. we don't know if he is interested in thejob against mark carney. we don't know if he is interested in the job of head of the imf, but he does leave the bank of england next year and there is speculation about what he does next. this article notes the fa ct does next. this article notes the fact that george osborne appointed mark carney. he had to really sort of woo him