20/01/2017 BBC Business Live


20/01/2017

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Live from London, that's our top story on Friday the 20th of January.

:00:00.:00:20.

Slashing taxes, talking tough on trade and ripping up

:00:21.:00:22.

America's President-elect promises double the growth

:00:23.:00:27.

Plus his arch rival China confirms its weakest growth since 1990,

:00:28.:00:40.

with fears of even tougher times ahead.

:00:41.:00:44.

And given the inauguration today, one word dominates the markets,

:00:45.:00:47.

that's caution. And we'll be getting the inside

:00:48.:00:50.

track on the mining industry. The founder and chairman

:00:51.:00:53.

of one of the world's largest mining companies -

:00:54.:00:55.

Vedanta Resources - will join us. We'll get his thoughts

:00:56.:01:00.

on the Trump presidency, and likely drivers for

:01:01.:01:03.

commodity prices this year. And we also want to

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know your thoughts - Are you optimistic or pessimistic

:01:06.:01:07.

about the new leader of the free Or dump! Welcome to the programme.

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Lots going on, we've got that Friday feeling.

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Later today Donald Trump will be sworn in as the 45th President

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The billionaire businessman has gone from long-shot candidate

:01:37.:01:43.

to the leader of world's biggest economy in just a year and a half.

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His supporters will now be hoping that he can shake up the US economy

:01:48.:01:50.

in the same way the he shook up the presidential race.

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Let's take a look at some of the details that we know.

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He has promised to create 25 million jobs over ten years,

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and to double the annual rate of economic growth to 4%.

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He's promised to take a tough line on trade -

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and on countries he sees as undercutting US workers

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He's threatened to slap a 35% tariff on Mexican imports and a 45%

:02:13.:02:24.

tariff on products from China, raising fears he could

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One thing at the top of the list that we know he has said:

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the North American Free Trade Agreement.

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He also says he'll cut America's high corporate taxes -

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which have pushed big US firms to offshore a lot

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Critics say this is too expensive, and will help big companies rather

:02:55.:02:59.

And he also promises... A lot of promises!

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He promises to free up business by ripping up red tape -

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he says 70% of all federal regulations can go.

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He hopes that will encourage firms to keep more jobs in the US

:03:20.:03:22.

The markets certainly like the approach, and the so-called

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Trump Rally saw the benchmark Dow Jones industrial average rise

:03:32.:03:36.

Laura Tyson, Professor at Haas School of Business,

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University of California Berkeley and former Chair of the US

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President's Council of Economic Advisers joins me

:03:54.:03:55.

Thank you for joining us. 25 million jobs in ten years. Can he do that?

:03:56.:04:10.

25 million jobs over ten years is actually an estimate that I think

:04:11.:04:14.

probably keeps up with the demographics of the labour supply,

:04:15.:04:19.

and is not a number that is out of range given a 10-year time horizon.

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There were something like 22 million jobs, I believe, during the Clinton

:04:27.:04:34.

Administration, I think. So that number is not the number I would

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look at. I would look at the growth rate number, which I think is not

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believable, the 4% growth rate. Talking about jobs, we saw some

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figures saying the US has lost about 5 million jobs since 2000, but 80%

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of that is due to automation rather than jobs being outsourced

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elsewhere. That's right. And I don't think people really understand that

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point. I do think the voters understand that. I think that any

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reassuring that occurs in the United States -- re-shoring that occurs.

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While they might have 20 workers to do a job abroad, they only need five

:05:29.:05:32.

in the United States because of automation. Typically after a 2-term

:05:33.:05:38.

president, typically a recession follows after that. I don't think

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that there is any theory which would suggest that to be the case. In the

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US economy, we have had a long period of economic growth, we have

:05:53.:05:56.

brought ourselves back in many parts of the country to follow employment.

:05:57.:06:00.

We still have the secular problem of employment creation that we talked

:06:01.:06:05.

about in terms of technology. I do think that is going to continue, but

:06:06.:06:11.

the economy is not right now, there are not obvious imbalance is, which

:06:12.:06:15.

would suggest that there would be a recession, so I don't buy the notion

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that there will be a certain period of years before you go into

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recession, whether or not there is a period of change in administration.

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I think you look for in balances in the economy. He has also suggested

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major tax cuts for corporations, will be enough to bring offshore

:06:34.:06:39.

back to the US? I do think one thing with certainty, thinking about the

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economy over the next year and several years, we will start with

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what we know for sure. We know for sure that the Republican Congress

:06:48.:06:50.

with the president will introduce significant tax cuts, personal tax

:06:51.:06:56.

cuts and corporate and business tax cuts, and there will be a need given

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the tax cuts to make sure that there are not large differentials between

:07:03.:07:06.

various forms of business taxes like pass through taxes for corporations,

:07:07.:07:13.

and corporate tax, so all these rates will come down. The president

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has proposed a very aggressive cut in corporate tax to 15%. Businesses

:07:23.:07:28.

have been looking for rates in the mid-20s, so 15% is a very low rate.

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One thing I would say about all of this is that there really is a

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tremendous reduction in the source of revenue for the Government, and

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that then is associated with lots of cuts in various spending programmes,

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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

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almost certainly bring more investment into the United States,

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more capital investment, so one of the things that has been true about

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the economy is weak capital investment. Thank you very much your

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time this morning. It looks cold! Good snow. Says the lady who just

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got back from skiing! Let's look at some of the other stories making

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headlines all around the world. President-elect Donald Trump's

:08:21.:08:25.

choice for Treasury Secretary, Steven Mnuchin, has faced strong

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criticism during a Senate Mr Mnuchin is a former Goldman Sachs

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banker-turned hedge fund boss He faced accusations

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that his former bank, OneWest, ruined lives during the US property

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crash by foreclosing But he told the Senate Finance

:08:40.:08:41.

Committee "I have been maligned". Uber is paying $20m to settle

:08:42.:08:52.

allegations that it duped people into working

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for its ride-hailing service. The US Federal Trade Commission said

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Uber offered false promises about how much drivers would earn

:08:59.:09:01.

and how much they would have The agreement covers statements Uber

:09:02.:09:04.

made from late 2013 until 2015 while trying to recruit more drivers

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to expand its service and remain You are sitting down, you are doing

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it! I am doing the tablet. It is all about Trump today. We asked you

:09:27.:09:34.

start if you are optimistic or pessimistic about the impact you

:09:35.:09:38.

think trouble have the global economy. Already have some! This

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reader says, I am cautiously optimistic, another one is

:09:48.:09:50.

pessimistic. Some others also saying that they are very pessimistic.

:09:51.:09:55.

Let's wait and see. I'd lots on the tablet from both sides, as well. Now

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let's talk about the second biggest economy in the world. Official

:10:02.:10:03.

growth figures out of China. And they confirm that last year

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China's economy grew at its slowest pace in more

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than a quarter of a century. The growth rate hit 6.8 per cent

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in the last three months of 2016 - but that gives an overall rate

:10:17.:10:20.

of 6.7% for the year - The figure is in line with Beijing's

:10:21.:10:23.

official growth target Robin joins us from Shanghai. Do we

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trust the numbers, and what I really want to ask you is, if Trump sticks

:10:34.:10:39.

to his promise and causes a trade spat with China, that is probably

:10:40.:10:42.

the last thing the Chinese economy needs? Yes, on that first point, do

:10:43.:10:49.

we trust the numbers? There is always scepticism, but let's set

:10:50.:10:53.

that to one side for now. These numbers are bang on what the Chinese

:10:54.:11:04.

government have predicted. The trend of the slowdown continues, it is a

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managed slowdown in growth that the Chinese government want, and that is

:11:08.:11:12.

their overall aim. Looking to next year, we can look to see something

:11:13.:11:16.

in the low 6%, perhaps. But the bigger picture here as you say is

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that China is preparing for a Trump administration where it doesn't

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quite know what he will do. We have had the rhetoric, but there is fear

:11:25.:11:27.

about a trade war and possibly about a physical, military confrontation

:11:28.:11:34.

in the South China Sea. The main concern for the Chinese government

:11:35.:11:37.

is domestic, it is about trying to transform the economy here away from

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being one reliant on government money on exports, we saw a big drop

:11:43.:11:46.

in exports in those figures, and make it instead an economy driven by

:11:47.:11:51.

domestic and consumer spending. Robin, have a good weekend, we will

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talk to you soon. Let's stay with the markets.

:11:56.:11:59.

Caution is the key word on the markets around the world

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as we all await for the 45th president of the US to be sworn in.

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Even China's economic growth which beat expectations and Federal

:12:07.:12:13.

Reserve Chair Janet Yellen who toned down her earlier hawkish policy

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stance hasn't been enough to give a real boost.

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They are waiting to see what Trump and his team put together in terms

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of economic policies. So on that note - I wonder

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what'll be making the biz US financial markets have been

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jubilant ever since Donald Trump's surprise election win, hitting a

:12:45.:12:50.

series of record highs. Now that he is about to be sworn in as the 45th

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President of the United States, will Mr Trump continue to make markets

:12:56.:12:59.

great again? Stocks initially rallied on the hope that the

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incoming administration would deliver an campaign promises to

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rollback regulations, cut taxes and spend on infrastructure. Lately they

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have been trading in a narrower range, someone in investors have

:13:13.:13:15.

been too focused on the upside, and haven't given enough thought to the

:13:16.:13:20.

potential negatives. At present, Wall Street doesn't seem to be

:13:21.:13:24.

anticipating problems either with Mr Trump was my trade policies or in

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terms of delays by Congress. Will that view change once he takes

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office? And on the corporate front, watch out for earnings from the

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likes of General Electric and doctor and Gamble.

:13:36.:13:35.

Thank you, Michelle. Joining us is Lawrence Gosling,

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editor in chief at Investment Week. Thank you for coming in this

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morning. The husband a lot of noise around the markets, Theresa May

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outlining Brexit, the Chinese president in Davos, Trump's

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inauguration, but underneath all of that, how other markets doing? There

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is an outbreak of what you call a traditional business cycle but

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economists look like that starts with a recovery in the US which we

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have had for the last couple of years, filters over to the UK and

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moves across the world. The UK is hungry -- the UK economy is healthy,

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there are signs that Europe is beginning to pick up, and a lot of

:14:17.:14:27.

people perhaps confused by China, Brexit, an interesting time for the

:14:28.:14:32.

markets. I will take a sharp turn and talk about, we just mentioned

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that Trump and his team will look at the North American Free Trade

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Agreement, lots of criticism to Mexico, but Mexico provides United

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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

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day which is coming up! The avocados were banned a hundred years ago from

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going from America into the US, Nafta brought them back, and the

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Americans have been gobbling them down. We could see and do that, it

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would be a very small thing and it sounds trivial, but it is a piece of

:15:16.:15:19.

populist protectionism that might make Donald Trump unpopular. We will

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see! Do come back and take us through the papers. My father in

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Australia had an avocado tree in his backyard.

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Still to come: We'll find out what the head of one of the world's

:15:35.:15:37.

biggest mining companies is expecting from

:15:38.:15:39.

You're with Business Live from BBC News.

:15:40.:15:48.

The Association of Convenience Stores is calling upon

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the government to do more to support the UK's 19,000 rural shops.

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Hit by rising costs, a lack of high speed broadband

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and business rates - they're struggling.

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More than half of rural shops operate on their own,

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with no other retailer close by and are therefore essential

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Well let's find out more with Chris Noice,

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We heard what the issues are, what do you want the government to do

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about it? The report is highlighting the concerns we have about the

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viability of some rural shops, they are absolutely providing an

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essential service to communities across the UK. We want them to look

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at rural petrol stations, many of them are fully serviced convenience

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stores and they are not receiving the same rate relief that there are

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other rural counterparts are, as well. Many rural stores are

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disadvantaged by slow broadband speeds and slow mobile coverage.

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With many things going online it is important that these stores have a

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level playing field when making investments. Regarding investment,

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stores that are improving their business, spending money to make

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businesses better and more appealing, they are actually being

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dis- incentivised and we want to see that being changed. With Brexit, and

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what that has done with the value of the pound, it makes things more

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expensive for these shops to bring their goods in, are they telling you

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that? They don't have the buying power like the huge supermarkets.

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You are right. The buying power is different, but I think it is more of

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a secondary impact for the convenience sector because many

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stores source their goods locally and we have done research and the

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impact of Brexit is not hitting yet. It will be interesting to see how

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this changes in the next year. We appreciate your time. Thanks.

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There is a story on the tablet. Royal Mail, cost cuts ahead, tough

:17:59.:18:05.

times could be coming up again, because of a fall in the amount of

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letters we are sending. Send us some letters! There is an 11 month low

:18:14.:18:18.

for the share price. You're watching Business Live -

:18:19.:18:25.

our top story - later today Donald Trump will be sworn

:18:26.:18:28.

in as the 45th President The billionaire businessman who has

:18:29.:18:30.

gone from long shot candidate to the leader of world's biggest

:18:31.:18:34.

economy - is promising to bring A quick look at how

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markets are faring. The word is cautious today. They are

:18:38.:18:54.

waiting to see what Donald Trump will do when he act she gets into

:18:55.:19:02.

office. -- he. He has promised infrastructure investment and low

:19:03.:19:07.

tax rates, which could appeal to businesses, but they are holding

:19:08.:19:08.

their breath. Trump and China are likely

:19:09.:19:12.

drivers for commodity Meaning the future for

:19:13.:19:16.

natural resource companies But Vedanta Resources,

:19:17.:19:19.

one of the world's largest mining companies is unafraid

:19:20.:19:22.

of potential protectionist policies. But has he largely

:19:23.:19:26.

ignored the negative possibilities of tit-for-tat trade

:19:27.:19:31.

wars with China and other countries? Anil Agarwal founded the Group in

:19:32.:19:37.

1979 and is the Executive Chairman He joins us now from

:19:38.:19:40.

the World Economic Forum in Davos. Can we start with this, global

:19:41.:19:55.

companies like yours, you need free trade to create jobs and boost

:19:56.:19:59.

growth, what is your message to Donald Trump? Yeah, we have a very

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good relationship with America and India. Our companies, our company is

:20:07.:20:14.

1% GDP of the country, we produce oil, zinc, aluminium, and I've been

:20:15.:20:24.

hearing about his speech and to support his country for more jobs. I

:20:25.:20:29.

think Brexit is doing the same. India are doing the same. Trump is

:20:30.:20:35.

doing the same. Everyone has to hold onto their people and create more

:20:36.:20:41.

jobs I think he will look at that. He will look at this as a win-win

:20:42.:20:45.

situation where everybody can win, but as far as our country is

:20:46.:20:49.

concerned, we have a very good alignment with America. I want to

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ask you this. I will give you a break so you can swallow.

:20:58.:21:02.

Responsible leadership has been a big theme at Davos and we have got

:21:03.:21:08.

to ask you, your company has come under scrutiny, you have been

:21:09.:21:12.

criticised about your environmental impact. A team of top analysts in

:21:13.:21:23.

your country in India have described the data as being in total contempt

:21:24.:21:27.

of the law. No, this is absolutely incorrect. We are one of the world's

:21:28.:21:37.

best. We ranked one of the best. When you are in the resource

:21:38.:21:43.

industry you have got to be very careful and we use technology today.

:21:44.:21:49.

We are a new company and we can't do anything which is not right. Our

:21:50.:21:55.

environmental norms. India hardly produces anything and India has only

:21:56.:22:05.

done anything, about 10%, compare to the world, 90%, we import most of

:22:06.:22:08.

our oil and this government is completely looking to how we reform

:22:09.:22:11.

and make more oil and gas in the country and more copper in the

:22:12.:22:16.

country and how to open up the resources sector and how to do the

:22:17.:22:25.

start up. And create a phenomenal jobs, and for the world to come and

:22:26.:22:31.

invest. This is a huge market. It's a huge market. We are going to leave

:22:32.:22:37.

it there. We appreciate your time, as always. Stay warm. We are joined

:22:38.:22:45.

again by Laurence. We are going to talk about our paper

:22:46.:22:54.

stories. We have that tweet, what you think about Donald Trump?

:22:55.:22:58.

Optimistic or press mystic. Story here about his Treasury Nonna --

:22:59.:23:09.

treasury nominee who contradicted the president. -- optimistic or

:23:10.:23:14.

press mystic Donald Trump says he would like a

:23:15.:23:29.

weaker dollar. But this is a conflicting view. The treasury

:23:30.:23:34.

nominee is saying a stronger dollar is better. Well, the treasury

:23:35.:23:41.

nominee is going to get more respect because he has an economics

:23:42.:23:45.

background. The Treasury Secretary would hopefully understand the

:23:46.:23:48.

direction the country needs to go. The dollar needs to stay strong

:23:49.:23:54.

longer term. This is a good thing, they are having a discussion, these

:23:55.:23:58.

are the checks and balances will stop people are worried Donald Trump

:23:59.:24:01.

will do what he wants, but these are the checks and balances. Yes, the

:24:02.:24:06.

nation is not schedule challenging. Exactly. Sticking with that theme.

:24:07.:24:15.

Here goes the tablet. Inauguration ball. Michael Flatley to perform at

:24:16.:24:26.

the inauguration ball. Not quite perform, he has rickety knees, but

:24:27.:24:31.

he will lead his dance troop out and perform. He is most like the last

:24:32.:24:36.

man standing who actually wanted to agree to appear at this ball. What a

:24:37.:24:44.

comparison to the Obama ball. Yes, but I'm sure they will have fun,

:24:45.:24:52.

watching Michael Flatley. Being British, we go for Marmite. It is

:24:53.:25:00.

wonderful. Anyway, that you might is back in the hands of the Aussies.

:25:01.:25:05.

They will try to rebrand it, so it is not just for breakfast, you can

:25:06.:25:10.

have it all day long. You can have it with cheese in sandwiches, I have

:25:11.:25:19.

that at school, lettuce is very good with vegimite. Always a pleasure.

:25:20.:25:30.

There will be more business news throughout the day on the BBC Live

:25:31.:25:34.

webpage and on World Business Report.

:25:35.:25:36.

Good morning. It is a big day on the other side of the pond in Washington

:25:37.:25:55.

and we're expecting to see cloud thickening up and likely to bring

:25:56.:25:56.

some

:25:57.:25:58.

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