10/02/2017 BBC Business Live


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This is Business Live from BBC News with Aaron


Japan's Prime Minister is in Washington to talk trade


with President Trump but who'll come out on top of the leaderboard?


Live from London, that's our top story on Friday


Yes, touchdown - the leader of the world's third biggest


And when he takes to the golf course with President Trump,


he's going to have to defend why Japan sells more to the US


Also in the programme - it's back!


Greece's debt crisis returns to haunt Europe.


Can its lenders agree a new deal, or will we have


And we'll tell you why some solid numbers from China continue


And those Trump promises pushing Wall Street to more record highs.


And as President Trump orders a review of the financial rules


designed to stop another nightmare on Wall Street, we'll be getting


the inside track from our Economics Editor Kamal Ahmed on that


and the rest of the stories he's been covering this week.


As snow hits New York City, how much do you think it costs


to clear an inch of the white stuff off the streets?


One dollar? One hundred Dollars?


We'll give you the answer at the end of the show.


We start in the US where, as you've been hearing,


Japan's Prime Minister Shinzo Abe meets President Trump later.


Remember, one of Mr Trump's first actions as President


was to withdraw from the 12-nation Trans Pacific Partnership trade


deal - signed by Obama - and strongly supported


Mr Trump called it a 'terrible' deal for the US.


He wants a fairer trading relationship with Japan -


Last year Japan sold almost $69 billion of more stuff


to the US than it bought from the US.


That 'trade surplus' as it's called is one of the biggest any


To give you an idea of why - look at this.


In 2015 - the latest figures we have - the US exported a little over


Here's how many Japanese cars were sold


that year in the US - 17.5 million - that's


Here's a vital point though - most of those cars are actually made


Mr Abe is expected to stress that 1.5 million American jobs rely -


either directly or indirectly - on Japanese carmakers.


On top of this - you have the so called


Mr Trump has claimed the Japanese Yen is kept


artificially low against the Dollar to help Japanese exporters.


A weaker yen makes Japanese goods cheaper.


And there's another big figure that is causing tension.


$5.5 billion was the bill to keep US troops in Japan last year.


Japan actually paid for almost half of that -


according to their defence ministry, but Mr Trump says the US


is shouldering too much of the burden of security


So - how best to diffuse all this tension?


Fung Siu, Asia, Regional Manager - Economist Intelligence


Thank you for joining us. Let's start with trade. Aaron has given us


the figures, what looks like a huge trade surplus, but part of that is


caused by the car sales, which are supporting American jobs. So maybe


that headline figure is not as bad as it looks. Completely, most of the


car sales in America are actually manufactured in America by


Americans. Yes, there are exports from Japan, auto exports to America,


that is not the whole picture. You have machinely exports and optical


goods. But America doesn't just have a trade deficit with Japan, it has a


trade deficit with the world and has done for a few decades. President


Trump picking a fight with Japan, he would have too pick a few fights


with the other countries. What do you think Shinzo Abe wants to


achieve from today? He obviously was not pleased that America pulled out


of TPP, in terms of trade agreements, what do you think


they're looking for? I think Shinzo Abe is disappointed that TPP has not


been ratified. Japan had ratified it. But to say that in that front,


Shinzo Abe at the start thought he could persuade Trump to come around


to his idea that TPP is a good thing. I think he has ditched that


idea and I think Shinzo Abe is prepared to enter into by lateral


trade agreements. The US have said Japan is manipulating their currency


you go from there? The weaker yen you go from there? The weaker yen


quantitative easing that Japan quantitative easing that Japan


launched in 2013. One side effect is the weak yen. That is because Japan


is lacking inflation and wants to import inflation. This policy will


go on, but it has ups and downs a and last year the yen appreciated,


so I don't think President Trump has much to say on that front with


regard to that particular year in the yen's performance. Thank you. Do


you know anything about golf? No, #3w I do know that Super Mario is


high on the list and they will play golf. I'm wondering who will win.


They can play golf on the Nintendo. But it is, not quite the same thing.


Some of the other stories making the headlines.


Renault has posted record annual sales -


up 13% with net income rising 16% to 3.5 billion euros.


A series of new product launches boosted Renault last year,


helping it increase its market share in all regions.


Lower-cost models such as the Duster and Kwid also sold well.


Arcelor Mittal, the world's largest steelmaker, has posted its first


annual profit in five years, showing signs of recovery


The Luxembourg-based group reported net income of $1.8 billion in 2016,


even as sales fell just over 10%, but its debt pile shrank.


This is in contrast to the $7.9 billion net loss that ArcelorMittal


made the year before - its worst financial performance


since the mega-merger of Mittal Steel and Europe's Arcelor in 2006.


Now golf, Trump and Shinzo Abe will be playing golf. We could join them


for a four-ball. I think President Trump will have to play more golf


with the Chinese president. We had numbers from China. If President


Trump is not happy with surplus from Japan, he won't be happy with the


surplus from China. Lisha, this is an astonishing number


and it is just one month's worth? Yes since we are all about the


numbers today and deficit, according to US data, the US/China deficit


last year was $347 billion. So they will have to play lot of golf to get


through these tensions. So we have been speaking about that call


between President Trump and president Ping and how that


alleviated tensions over the one China policy. But this issue around


trade will be the real battleground. China's trade surplus is at its


highest in nearly half a year, that is $51 billion and President Trump


has been arguing that China is benefitting at the ex-pension --


expense of America and we saw exports rise in China and we are


going to have to watch and see how the game goes. Watching and waiting


indeed. Have a great weekend. Going to keep the market wrap short,


but yes Asia stocks liking those Chinese trade numbers


as well as the continued record Europe, following suit as investors


keep their eyes on President Trump as he promised to unveil a major tax


announcement to lower OK, let's go and find out what'll be


making the biz headlines in the US. Much of the attention on Friday will


be in washing tovn when President Trump meets with Prime Minister


Shinzo Abe at the White House. There is still some other economic news,


including labour department report showing that import prices rose in


January after a 0.4% increase the previous month. The update to


consumer sentiment index is out and it seems it may have spliped


compared to the previous month and for an economy that relies on


consumer spending, it is important to see how confident people are


feeling and how much that will influence how they spend and finally


earnings still continue, the advertising company Inter Public


shows a slight rise, as the economy showed momentum. Thank you.


Joining us is Sue Noffke, UK Equities Fund Manager at Schroders.


Let's start with the markets, because Aaron mentioned about


President Trump's promise to help with regulation and he has promised


a phenomenal new rules on regulation. But still no detail. No,


but a timeline of two to three weeks. The market had begun to pause


a bit about where was the detail, it was looking more complex in terms of


border adjustment trades and taxation and the deregulation with


industries. And he ignited the airlines with further deregulation


and tearing up lots of red tape around that sector. So that got the


market excited again. Pushing it to further highs. It is highlighting


the markets. You said, we don't have any details, he just said in two or


three weeks I will tell you. Phenomenal. About a tax deal and the


markets react. It would be a big deal. If he can do things with


deregulation and stimulate the economy. The markets will love it.


The attempts to tackle taxation, which is very complex and high in


the United States, it has not been easy for any of the administrations,


because they haven't had consistency between political parties. Now we


have got the Republicans in all the various seats, something could


happen. That would be no doubt a corporation tax, you said taxes are


high, they have one of the highest in the world around 35%. For


individuals it is simplification of the tax code and helping investment.


That tax cuts and the corporate boost to the US economy. That is the


plan. If he can get the tax cuts through that would be the result.


You will be back to do the papers. Still to come: We'll get


the inside track on the big economics stories of the week


from our Economics You're with Business


Live from BBC News. The UK's high street has just


experienced its worst January January's like-for-like


sales declined by 0.1%, marking the first negative growth


in the crucial January discounting period since 2013 and comes hot


on the heels of a dismal December. This according to accountancy


and business advisory firm BDO who's head of retail,


Sophie Michaels joins us now. Great to have you with us, really


poor numbers, what is going on here, are we spending less, is it the


weather, is it Brexit? That's right, so January followed a poor Christmas


sales, which will lead retailers concerned into 2017. But if we break


that down, the first two weeks of January we saw positive sales.


Showing that the consumer is out there looking for bargains. The


third week we saw sales were dented by poor weather. And going to the


end of the month, as retailers transitioned from a sale period into


full price, the consumers backed off in terms of spending, leaving an


over all drop in sales in January. Looking at specific parts of the


sales, were there any bright spots? I believe there was an increase in


the amount of discounted home where we were buying, and the seasonal


increase in online sales. That's right, particularly in that week of


poorer weather. The consumer was taking a more comfortable position,


shopping from the armchair as opposed to in the high street.


Overall, we saw a decline, and homeware saw an increase in sales.


But as we move into a period where there is higher expectation of


inflation, perhaps that is the area, the discretionary spend, where there


is more of a concern that it would be challenged. Thank you for joining


us. Let's take a quick look at the tablet. Thunderbirds... I always


wanted a model of Thunderbird two. You can get them. Make your own from


cardboard. ?10 million worth of grants for the development of


spaceports, but not everybody is a fan.


You're watching Business Live - our top story:


Japan's Prime Minister Abe is in Washington to meet


The leaders of two of the world's three biggest economies will discuss


Tokyo's trade surplus with the US, jobs, investment annd currencies.


Let's like a quick -- let's take a quick look at how the markets are


doing. We're waiting to see if anything interesting comes out of


that meeting with Shinzo Abe and Donald Trump.


Today Greece has to pay back 1.4 billion euros to its creditors.


It's the latest instalment on the country's 320 billion


And it's just one in what will become an avalanche of payments over


We're now joined by our economics editor Kamal Ahmed


Thank you for coming in. Looking at the schedule of payments, it's a


couple of payments over the next six months, but they really need to get


it sorted now before Europe gets distracted by elections. There was a


lot of politics in what is going on. This is the sixth year of the Greek


debt crisis, which started in 2010. There is real tension between the


two main creditors, the IMF and the EU. The IMF is split itself. It is


saying that the economy in Greece is growing reasonably, and it still has


on the table the idea of debt relief, that some of Greece's bets


just will not be paid. The EU, particularly led by Germany, and


with elections coming up, do not want debt relief on the table. They


want to keep the very strict conditions around debt relief on


Greece, that it has to provide this primary surplus of 3.5%, which is


very high, and the two are approaching this at loggerheads. We


had this in 2012, and again in 2015, when Greece nearly came out of the


EU row, nearly defaulted. We have the same pressure now, and with


elections in the Netherlands, Germany and France, as you say,


there is a real concern in the EU that this controversy will play into


those elections. Come the end of the year, the Greeks may not know who


they will be dealing with. I have to move on to the next subject, but


with the elections... There could be different leaders. Who may not have


an appetite at all to give more money. And a different approach. The


paper Germany is that if debt relief Greece comes back onto the table, it


will be controversial and could damage Angela Merkel's chances of


winning the election. We want to talk about China, but I want to ask,


briefly, with Brexit already in play, before Brexit we were talking


about the Greeks leaving the EU. Do you think that the Greek exit could


be easier now? I think it is politically less likely. Germany and


the rest of the European leaders do not believe, and even less than they


did in 2015, that another country leaving after Britain has decided to


leave would be so destructive that I think there will be even more effort


to ensure that Greece remained in. Let's talk about China, we had that


overnight phone call between Donald Trump and see Jean Ping. -- Xie Jin


Ping. There was the controversy over the one China policy. Donald Trump


took a call from the leader of Taiwan, which was considered


politically insensitive, but they have gone back to the status quo of


saying that America believes in the one China policy. Importantly, the


temperature has come down between the two largest economies in the


world. Donald Trump accused China of raping the American economy. It was


described as a cordial phone call, and it eases tension and puts off


the notion that America could impose high tariffs on Chinese goods into


America. That means that the notion of a trade war, which I think was a


possibility, is now less likely. In 30 seconds, the regulations in the


US that Donald Trump wants to rip up. Not quite ripped up, but he


wants to reform them. Some people say reform is sensible. The big


thing is, reform of regulation in America, change of regulation in


Europe because Britain is leaving - as soon as regulatory systems


change, it leads to financial volatility. Yellow might very


succinctly done. You have done that before! -- very succinctly done.


The issue of fake news on social media has grabbed


headlines since the 2016 US presidential election.


But how do fake news sites keep themselves going and make money?


Fascinating, wasn't it? You can find out more about fake news on talking


business this weekend. The times differ depending where


you are and are on your screen now. Sue is back. We are going to look at


the papers. Did you find this story? It was Jonathan. Ryan has been


googling. You said the average cost to clean up snow in New York, per


inch, $1.8 million. I asked what you thought and you said about 5


million. I did. There are a lot of streets in New York, and they have


to do it overnight. 6500 miles of road. And the budget was $88


million. So, if it doesn't snow, do you get to plough that back into


schools? Not exactly, because you still have to have the snowploughs


and had people on stand-by. Let's move on and look at Australia,


Aaron. I saw this today, but I have two sisters in Australia, and one of


them said that in the last month, they have had three blackouts. In


Sydney, it's unheard of. It is because it is so hot, and everyone


wants to cool their homes, their offices, to have cold drinks, and


there's not enough power at peak times. It doesn't bode well. I


thought we were better than that. You know, there is just not enough


supply for the amount of demand. They are asking businesses to shed


some load. It is the Chinese, they have bought all our coal. They have


no coal left. We have one story left, from the Telegraph. Banks want


Labour to tear up -- banks tell France the terror at labour code if


it wants Brexit business. Is it shows how long it takes to work


through a notice period, as whereas high pay rates, high taxes and


possible caps on bonuses. Not a lot of flexibility, which is what banks


really want when they are looking to deploy their operations. Hi and who


knows who will be elected? -- and who knows who will be elected? That


is it from Business Live, there will be more business news throughout the


day. Signs of change next week, but for


the time being, the weather is stuck in a rut, a cold rut. We are drawing


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