31/01/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne and Sally Bundock.


As many big US businesses rally against President Trump's travel


ban, will he be able to get them back onside with lower taxes


Live from London, that's our top story on Tuesday 31st January.


With $2.5 trillion stashed overseas, can America's biggest companies be


convinced to bring it back and boost their own economy?


Also in the programme, jitters in Japan.


Profits fall at Canon and Sony sees a big write-down on the big screen.


The FTSE 100 up slightly, the Dax is flat.


And, how a wine industry is trying to put Lebanon's vineyards back at


the top table. And, bad maths skills


could be costing us as much Let us know, have your maths


skills ever resulted US President Donald Trump has only


been in office for 12 days but he's already turned every Presidential


convention on its head. Temporarily banning immigration


from seven countries may have emboldened the President's


supporters but it has been Leading experts now say those


international relationships could be further tested and even result


in a trade war if Mr Trump follows through on his


radical plan for tax cuts. There are around $2.5 trillion worth


of US profits currently overseas held by some of the biggest US


companies like Google, Microsoft and Apple that would get


hit by some of the highest tax rates in the world at 35%


if they were repatriated now. Donald Trump has "proposed" three


areas of tax reform. A "one-time tax rate of 10%"


for companies bringing money earned in other countries back


into the United States, he's also talked about a cut to 15%


in US tax rates to improve competitiveness, and potential


border taxes on firms that outsource With me is our Business


Editor Simon Jack. You were talking to some of those in


the know about this recently. Businesses have been very


enthusiastic about the proposed tax reforms? Yes, the less tax a company


pays, the more of its own profits it gets to keep, and the more valuable


the company is, and you have seen share prices rise since the


election. But crucially, trillions of dollars are held overseas, and


getting those back, there is a massive disincentive. The Chief


Executive of the Boston consulting group sits on Donald Trump's policy


Forum, he explained what is keeping the money overseas.


That creates a discouragement to bring it back, you leave it


overseas, you show higher earnings, because you have not pay taxes on


it, but the money cannot be put to work in the US, so it creates


challenges the companies. Most of the rest of the world does not


operate that way, and there has been pressure for years. It is by both


parties, the system is antiquated, but the gridlock has prevented any


action from being taken. Trillions coming back into the


country would be good for the economy? It depends on what you have


it. If it came back into the country and you put it to work on building


would be one thing, but some people would be one thing, but some people


fear if they buy back shares and the financial engineering with it...


Depends. You would see the dollar shirt as well. If you move to put $5


trillion in a short order, something will happen, there will be some sort


of disturbance. Christopher Smart is a former adviser to Barack Obama, he


explained what the problems could be.


The potential is for a great deal of instability, both on the financial


market side and on the political side. For the financial markets the


issue is a large amount of money destabilising things, but the


political issue has to do with the potential for retaliation, and areas


that we have been removing start going up again, it could lead to a


trade skirmish. This is the problem. People cannot


figure out whether Donald Trump is good or bad for American business.


We have this story about Washington State following through with legal


action against the travel ban that was signed off last week. Companies


are unsure what it will mean for them. There is no such thing as a


tax free lunch. Anybody that has you reform is simple is crazy, occurs


lots of administrations have tried to address the issue, without


success. Businesses are cheering less regulation and lower taxes.


Putting boulders up, that is the one thing that could throw sand in the


engine of the global economy. And the travel ban. You have seen some


of the big tech companies come out strongly against this, Google,


people walking off campus. We knew that tech was anti-this in the first


place. What is more interesting, some of the big banks are getting


involved, sending a text to the Goldman Sachs employees, saying,


diversity is at the heart of what we do. Business was excited about tax


and regulation reform, but these barriers being erected, they think


it might be a barrier to trade, and that is what might go the wrong way


for them. A lot more from Simon on our


website. Royal Dutch Shell says it will sell


some of its UK North Sea assets to the oil company Chrysaor for up


to $3.8 billion. Around 400 staff are expected


to transfer to Chrysaor once the deal, which is subject


to regulatory approval, Deutsche Bank has been fined


$630 million by US and UK regulators for failing to detect and stop


a Russian money-laundering plan. Under the scheme $10 billion


was moved illegally out Deutsche Bank says it is cooperating


with regulators and has put aside money to cover the cost


of the settlement. Japan's central bank has


finished its first meeting of the year by leaving interest


rates unchanged, but upgraded its forecasts for the world's


third-biggest economy. The Bank of Japan cited rising


exports, easy lending conditions and stronger government spending


ahead of the 2020 Olympics The strong yen is causing


difficulties for some It is causing problems. Some of the


biggest names in corporate Japan are posting results, and it is a less


than stellar report card. We heard from Canon, their profit tumbled in


the last three months of last year, hurt by the strength of the yen


after the Brexit decision. Its operating profit fell 25%, following


the UK's vote to leave the EU. We have heard from Sony, it is more


than just the Sony, it includes movies. Their movies


excite cinemagoers at the global box excite cinemagoers at the global box


office, so they are having to take a hefty write-down on the value of


their movie business. It is due out with its results this Thursday. I


did see Angry Birds, but I was not their target audience!


US stocks saw their biggest selloff yesterday since


The markets looking unnerved by President Donald Trump's


The dollar was down and the Japanese currency the yen and gold gained


A rise in the yen often pulls down the Nikkei,


and you can see its biggest daily decline since November.


In Europe, figures out this morning showed an unexpected fall of almost


1% in retail sales in Germany for the month of December.


However, this indicator is often revised.


But let's find out what's ahead on Wall Street Today.


The Federal Reserve, America's Central Bank,


starts its two-day policy meeting on Tuesday.


The Fed has forecast three rate hikes this year,


but it is expected to leave rates unchanged at this meeting.


This is the first since Donald Trump became President.


The Fed lifted interest rates in December by 25 basis points.


Apple will be reporting earnings on Tuesday.


It seems the revamped iPhone 7 will give the tech company a boost.


Apple is predicting record-level revenues for this quarter.


Analysts will be looking out for comments on the smartphone


industry and expectations for the next iPhone.


Finally, ExxonMobil, the world's largest publicly


traded oil producer, will be benefiting from rising crude


prices and it should be reflected when it reports fourth quarter


Joining us is James Quinn, Group Business Editor


A busy time in the US, it seems to be orientated and around the US,


especially with Asian markets closed. Markets yesterday were


focused on the travel ban, imposed late on Friday, eight. Have a chance


to react Friday. The Dow Jones having its worst day since the


president was elected in November. The bump was surpassed last week,


but now investors are questioning whether or not the momentum can to


-- continue. It is only a little bit down. Not terrible, it is all about


momentum. A slew of results coming out today from corporate America and


over the next week, so we will get a test of how the big culprits and the


economy are doing, as opposed to whether the president will be good


for the economy, the hopes and dreams. What impact are we expecting


the president to have? There is the question of whether Janet Yellen can


remain as Federal Reserve chairman, that is up to the president and


Congress. The Fed will take a balanced view and hold rates. A rate


hold is expected from the Bank of England as well. Central-bank week.


It is also tech week. We have Snapchat's parent company's IPO. If


you are a central bank watcher and a tech watcher, this is your week. We


will see you again soon. He got away with me asking about his maths


skills, we will tell you why later! We'll get the inside track why wine


is making a comeback in Lebanon. You're with Business


Live from BBC News. Britain's commercial aerospace


industry is celebrating its sixth successive year of growth,


that's according to figures More than 1,400 planes


were completed in 2016, and it raised ?27 billion


for the UK economy. Paul Everitt is the CEO


of the trade body ADS. What could happen once Brexit kicks


in? We do not tend to produce whole planes in the UK, we are integrated


in a European system. Brexit will be a big challenge for us. We have a


long cycle industry and we have record order books are fed of us,


something equivalent to seven or eight years of work at current


rates. It is not an immediate problem, but we need to use the next


two years to get the conditions right for a successful Brexit, both


for the UK and our European industrial partners, because we are


an integrated industry, with complex supply chains, so for us the Brexit


negotiations are important, but we believe they can deliver a


successful outcome for our industry. Can you be specific about what a


successful outcome is? Is that being out of the customs union or being


firmly in the single market? There are key priorities. The number one


is remaining part of the European Aviation Safety Agency, the


regulatory regime for Aerospace in Europe, because that, in addition to


providing our route to market, it is the organisation that negotiates


technical equivalence with major partners in the US, China and other


parts of the world. The regulatory regime is important, and achieving


this frictionless trade is also important. We are not impacted by


tariffs in the way the car industry is. The cost and administration of


multiple border crossings, because our supply chains are integrated,


our products are developed and produced in many sites across Europe


before being brought together either here and then exported out


elsewhere... Thank you very much for your time


this morning. So good news for the British aerospace industry.


You're watching Business Live. Our top story:


As many big US businesses rally


against President Trump's travel ban, one of his


top economic advisors tells us that they should repatriate


billions in overseas profits so they can put that money to work.


A quick look at how markets are faring.


They have been open for 45 minutes and you can see actually they are


all in the green. We mentioned some retail sales figures out in Germany


which were disappointing for December, but it doesn't seem to


have had that much of an impact on investors.


Now, think of the global wine industry and places like France,


California and South Africa will probably spring to mind,


but one of the oldest wine industries in the world is to be


The country's civil war caused a lot of disruption for the sector.


Well, now there is a revival of interest and our next


He's the boss and head wine-maker of Domaine des Tourelles.


The company was founded way back in 1868 by a French engineer,


making it the oldest winery in the country.


It's thriving, producing 300,000 bottles of wine a day and 350,00


bottles of the local alcoholic drink, Arak.


But just think about this - the Syrian war is raging


Faouzi Issa is managing director and head wine maker at Domaine des


There is two families that run this company now. Yes. And you are from


one of those families? Yes, we are two families running the winery. We


are a committee of four younger team all from the 30s, so we are the


youngest team running the oldest winery. I bet you'd love to be


making 300,000 bottles a day. I would be the leader worldwide! It is


an interesting story. It goes back many, many years with the French


influence at the beginning, but now it is purely a Lebanon wine grown by


two Lebanese families, isn't it? Domaine des Tourelles is a wine that


was the first winery to launch a ready bottle to the market because


at that time it was producing wines for the monks. Today, we are putting


Lebanon back on the map by producing high quality wines and most of the


people everywhere in the world, they don't know that Lebanon has wine.


Well, that's what I was going to ask you. Being in Lebanon, it is not a


traditional wine making region. What specific challenges do you face


being based in Lebanon? It's a fabulous work because you are really


taking something exciting, something sexy to the world. Tell them,


listen, you know, all the negative things maybe about this region, but


come on, taste some good wines. Taste some great potential we


produce in Lebanon. This is what we're really trying to make and


we're succeeding. We're in 17 countries today. Your vineyards,


where you are, is eight kilometres away from an enormous refugee camp


full of Syrian refugees. You are keenly aware of the 1.5 million


refugees in Lebanon. Your population is over four million. What impact


does that have, if any, on what you do? The security impact, but


globally, I mean, that's fine. I mean we are the closest country to


Syria so we are the number one responsible country to solve their


problems. If they want shelter, we're ready to cope with this. There


is no direct impact on our business exactly, but of course, on in the


long run it might be catastrophic. You can't employee any of the


refugees, can you, because they haven't been processed and they're


not in that position? No. Syria is one of your main markets, you export


to Syria? We export a lot to Iraq as well. Now days a Syria, big quality


industries are down. They stop producing so they are importing lots


of niche products from Lebanon. Tell me about your Arak, how many bottles


of Arak do you produce and tell me about the aniseed? We produce


300,000 bottles of Arak a year. We are the leaders in the market, in


the niche category. We use Anna seeds. It is a cocktail, isn't it?


It is a spiritment we use it for cocktails as well, the Lebanese


spirit, the Lebanese national spirit is the Arak. And you have had to


start growing your own aniseed? Because of the problems in Syria, I


launched my new plantation and last year we had the first produce and it


was amazing, amazing and I think we will divert to Lebanese aniseeds


very soon and I hope that we will play this, we will play a role of


diverting aniseeds plantation from Syria to Lebanon. Well, we shall


keep an eye on what you're up to. Thank you for coming in. It is


fascinating and I know your wife is watching you in Lebanon. Just say


hi. Hi Ruba. The whole family is tuning in. It has been good to have


you. In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. The Business Live page


is where you can stay ahead with all the day's


breaking business news. We'll keep you up-to-date


with all the latest details with insight and analysis


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to hear from you too. Get involved on the BBC


Business Live web page. On Twitter we're at BBC business


and you can find us on Facebook. Business Live, on TV and online,


whenever you need to know. No excuses. The story about our


maths skills. Not many of you have been in touch.


It is a revelation? Those of us who have to use maths in our work, the


bits that we have to use, calculations that we use all the


time, they are fine, but the bits that you learnt in school, thaw


don't have to put into practise with your work, they fall away and I find


it with my kids, if you're talking about maths, actually I can't


remember that! It is cobwebs. Citizen maths is launching this new


online course that will allow you to go and refresh your maths skills and


get up to speed. Very, very useful. A good idea. I'm on it. I'm going to


do that. Will says mental arithmetic isn't needed since we have


calculators on our phones. I don't agree. You still need to know how it


works. How about when your phone isn't working? Wall Street Journal,


we've got Mark Zuckerberg trying to reach China. I love the line that he


even took a smog jog in Beijing? To woo over the Communist Party.


Facebook has been blocked since 2009. A lot of people won't


remember, Facebook was blocked along with Twitter in 2009 and they have


tried everything to get back in. Not only because it is a big market, but


because of the way that the Chinese use their social media. There are


some big players here who are really, they use them in a different


way, they use them as banking systems and payment systems all done


through social media and Facebook is worried they are losing a


competitive march here. Well, losing, they have not got in here.


They are worried the Chinese having developed all the fantastic extra


services on their social media sites will export them to the West and


Facebook will be unable to survive. Do you think that's a worry that's


going to become a reality? I don't think that people are loyal to any


service. They will go to the one with the best services. Facebook


itself is vulnerable to a nimble agile competitor and the chin he is


are developing them. Let's talk about Cathay Pacific. They are


looking to fly on rubbish. They are switching to biofuels? They have


been working on these for years and years, but they are saying they are


going to fly 80% flights just on biofuels. One of the hold-ups is


safety. If you're a safety regulator, you don't want to certify


that fuels are OK. I wonder if you could get a cheap flight and say,


"I'm going to donate all my rubbish for six months. Can I have a ticket


to Shanghai?" There have been a lot of questions about the real green


credentials of bio fuels, if they are diverting fuel that was meant


for crops, are you really saving that much CO2? Cathay Pacific are


doing the best they can. Thanks, Dominic. What's it called Citizen


Maths? That's it. I will test my skills later. Thanks for your


company. I will see you soon. The weather is looking pretty


unsettled for the rest of this week. Some rain in the forecast and things


turn windy for Thursday and Friday. Today though, it


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