26/12/2016 World Business Report


26/12/2016

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Welcome to Donald Trump's America, or what soon will be anyway. I'm

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Samira Hussain and on this special edition of World Business Report,

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we're taking a look at the President-elect's plans for America,

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in particular what he wants to do with the US economy.

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Here on Wall Street, Donald Trump's selection triumph was met with high

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spirits. US markets have soared. Now with his inauguration approaching,

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people are asking, what will Mr Trump do for US growth? In his

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campaign he promised big in Best man's in America's infrastructure.

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Michelle Fleury took a look at how that might work. Investment.

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Mid-morning in Allentown, Pennsylvania. Traffic is flowing

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smoothly over this bridge built in the 1920s but underneath it's not

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ageing gracefully. This bridge was built in 1929, almost 90 years old,

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this is an open arch the ridge. Engineers tasked with checking the

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strength are worried. This is the worst case, the joint area. That's

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where the most erosion happens. This bridge, like many of America's

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roads, ports and airports are starved of funds. Lack of funding is

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a problem in the sense that there is so much money so you have to decide

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which bridges go first. Money isn't the only problem when it comes to

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building the country's roads, bridges and pipes even. Under Barack

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Obama, the Republican-controlled Congress was opposed to spending on

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infrastructure projects. When they will they change that position now

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they hold the White House? -- will they. Their man made a point of

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mentioning infrastructure in his election night victory speech. We're

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going to rebuild our infrastructure, which will become, by the way,

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second to none, and we will put millions of our people to work as we

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rebuild it. Mr Trump's pitch is to spend $1 trillion. Not just using

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government money. He's also hoping to get the private sector to fund

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these projects with tax credits. In 1976, Mr Trump successfully used

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this model to rebuild this ice rink in New York's Central Park. Doing

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the job cheaper, faster and better than the public sector. And

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experience he hasn't forgotten. So is the private public partnership

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always the right tool? That depends -- an experienced. It's not the best

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for every project, it is best suited to large, complicated projects and

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the reason for that is those other projects that give you an

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opportunity to really drive innovation so the net result is more

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bang for the taxpayer but. In Pennsylvania, the need for repairs

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is urgent. Americans want to update their nation, but as Donald Trump

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will find, the overwhelming sticking point is likely to be how to pay for

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it. Aside from infrastructure, one of

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Donald Trump's signature policies is a rejection of America's

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International Trade agreements. He blames trade deals for encouraging

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US companies to move jobs abroad. Here's Michelle Donald Trump's move

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away from free trade. Donald Trump turned up in person at

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Carrier Corporation to claim victory that he kept manufacturing jobs in

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America, a campaign trail promised cheered by the working class who

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helped elect him. He said he would help us and he actually did. If he's

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done this for us here in Indiana before even been elected, my gosh, I

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can't wait till he gets in office to see what he'll do for the country.

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But how good was the deal? Carrier will collect millions of dollars in

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tax breaks for keeping 100 jobs in the heartland and Donald Trump got

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to use Carrier ain't part of his crusade. Companies are not going to

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leave the United States any more without consequences -- in part of.

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It's not going to happen. Donald Trump frequently bashes free trade,

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but how far is he prepared to go? This man was an adviser to Mitt

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Romney when he ran for the presidency in 2012. Just going from

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let's expand free trade to let stop expanding free trade is already a

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huge shift. How much further he goes beyond that to constrain free trade

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is what people aren't sure about -- let's stop. Donald Trump's antitrade

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rhetoric captured what many in the nation felt, that free trade hasn't

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been good for all workers. The fear now among companies who rely on

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global trade is that Donald Trump's new approach could be bad for

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business. One firm that might suffer if

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tariffs were introduced on goods imported to the US is this cargo

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company. Immediately it would be a ghost town. When you have an

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antitrade policy, you're going to make it that much harder for

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companies to do International Trade, which means your goods are not going

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to be as cost-effective overseas and you're going to out price yourself

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because of duties and they will look elsewhere. It's not clear if Mr

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Trump will follow through on some of his antitrade rhetoric, but he has

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put corporate America on notice. Browbeating US firms into keeping

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jobs at home. Michelle Fleury. Mr Trump's approach

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to free trade has caused alarm among some economists, but there's no

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doubt that some of his plans can be seen as progrowth. I sat down with

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the chief US economist at Deutsche Bank and asked him what impact

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Donald Trump's infrastructure plans will have. >>

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Improving infrastructure for transportation, for electronic

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communication, this is certainly an area that we need more of in the US.

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I think it will help productivity, I think it will help get jobs going as

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well. The incoming Trump administration seems to be reversing

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a lot of Barack Obama's policies with regard to trade. I'm wondering

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what kind of an impact that will have on the US economy. A lot was

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said during the campaign. If we followed through with that it would

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be a significant concern, no question. My sense is that the new

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administration is going to have its primary objective to be to raise

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growth in the economy from what's been a very sluggish 1.5%/ 2% into

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the 3% plus range, which will be very important I think for raising

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productivity and standard of living down the road. If we go down the

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road seriously of some of the protectionist elements talked about,

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that could be counter-productive. We've seen our first and pretty much

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only interest rate rise for this year in 2016. I'm wondering what you

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think the Federal Reserve will do under a Trump administration. So far

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our house call is for two more rate increases in 2017. Even though the

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F1 see how is increased their guesses to about three. The labour

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market is already beginning to tighten in the US. We are at very

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close to full employment. It's going to take a while for increases in

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business spending to raise productivity, to raise the growth of

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the supply side of the economy, so for a while we're going to see a

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further tightening of the labour market. We're already beginning to

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see some pressure on wages and we expect to see inflation move up

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further. There is room, and this is a desirable development up to a

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point but it also means the Fed is going to get back to a more normal

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level of interest rates somewhat faster than previously. While our

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official forecast is two, I think the risks are going towards three or

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even four in the year ahead. Peter Hooper of Deutsche Bank. Donald

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Trump's shock election victory reset many assumptions about US politics.

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We were about to find out if a Trump presidency can remake the US

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economy. For the first time in nearly 30

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years, Queen Elizabeth has missed the Christmas Day church service at

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Sandringham. Buckingham Palace says she is still

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