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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
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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