:00:00. > :00:09.This is Business Live from BBC News with Ben Thompson and Sally Bundock.
:00:10. > :00:13.Rising North Korea tensions following the nation's most powerful
:00:14. > :00:15.nuclear test to date and fears Pyongyang may be preparing
:00:16. > :00:37.Live from London, that's our top story on Monday, 4th September 2017.
:00:38. > :00:39.Donald Trump warns he could sever ties with the nation's trading
:00:40. > :00:45.partners in response to the missile threat.
:00:46. > :00:48.We will have all you need to know about that.
:00:49. > :00:53.Counting the cost of Hurricane Harvey.
:00:54. > :00:55.AS the deadly storm dents the US oil industry,
:00:56. > :00:58.we find out what it mean for the world's largest economy?
:00:59. > :01:01.And some nervousness on the markets after that North Korean bomb test,
:01:02. > :01:04.but investors are keeping a closer eye on the international response
:01:05. > :01:09.We'll be getting the inside track on the cost
:01:10. > :01:15.Yep, summer's officially over when children go back to school.
:01:16. > :01:18.We ask the boss of a major uniform maker is schoolwear
:01:19. > :01:29.So today we want to know - congested roads and selfish drivers.
:01:30. > :01:33.Does the school run make your blood boil?
:01:34. > :01:56.Just hours after Pyongyang said it tested a hydrogen bomb,
:01:57. > :01:58.President Trump tweeted that the US could impose trade embargos
:01:59. > :02:02.on all countries that do business with North Korea.
:02:03. > :02:04.That list includes India, Russia, Pakistan and perhaps
:02:05. > :02:11.The latest figures show that trade between the US and China is worth
:02:12. > :02:15.This makes China the United States'
:02:16. > :02:20.Many experts believe that Washington is leaning on Beijing
:02:21. > :02:31.Trade with China is crucial to the fortunes of Pyongyang,
:02:32. > :02:32.with over 80% of all North Korean exports
:02:33. > :02:34.being purchased by their neighbours across the border.
:02:35. > :02:47.Good toads you, Robin. This is a Trump tweet, isn't it? Talking about
:02:48. > :02:52.trade sanctions with any country that do business with North Korea?
:02:53. > :02:57.Yes, China wasn't named, but clearly this is aimed as China responsible
:02:58. > :03:00.for the vast majority of trade with North Korea. Trade that keeps that
:03:01. > :03:06.country going and that is part of the reason why China does it because
:03:07. > :03:09.the prospect of an implosion, an economic implosion in North Korea is
:03:10. > :03:14.something that China does not want to entertain. That could bring with
:03:15. > :03:19.it humanitarian crisis on its border perhaps, even the reunification of
:03:20. > :03:23.the whole of this peninsula and US troops up by the Chinese border.
:03:24. > :03:27.China doesn't want to entertain the prospect of an economic collapse and
:03:28. > :03:31.trade remains important. The idea of suddenly stopping trade with China
:03:32. > :03:35.and that long list as Ben mentioned of other countries that do trade
:03:36. > :03:40.with North Korea, it is almost laughable because the figures are
:03:41. > :03:44.staggering, aren't they? Remember as well there are countless US firms
:03:45. > :03:49.among them the biggest in the world Apple, who have a significant
:03:50. > :03:53.revenue exposure in China. They rely on trade between China and the US.
:03:54. > :03:57.So, they would be damaged as well. In terms of China, what reaction
:03:58. > :04:03.have we had from them if any to this? Well, interesting grid we're
:04:04. > :04:08.waiting to hear from the Ministry of Foreign Affairs who are due to have
:04:09. > :04:15.their usual press conference today. We have heard though some official
:04:16. > :04:20.reaction coming from the summit in the east where President Xi is
:04:21. > :04:25.hosting a handful of world leaders at the bricks summit and they in a
:04:26. > :04:29.statement communique at the end of that two-day meeting condemned as
:04:30. > :04:33.deplorable the actions of the north. I think behind the scenes the
:04:34. > :04:42.Chinese leadership are far more angry at the actions of Kim Jong-un,
:04:43. > :04:46.but China, you know has a different view from the United States on some
:04:47. > :04:52.aspects of this dispute. It does want to see a denuke scholarised
:04:53. > :04:55.peninsula, but it doesn't want to see the collapse of the north and
:04:56. > :05:01.the problems that may bring for it on its border. All right, Robin,
:05:02. > :05:04.thank you very much. Robin Brant. There has been reaction on markets.
:05:05. > :05:08.We will look at this in a few minutes.
:05:09. > :05:10.At least 47 people have died since Hurricane Harvey hit Texas
:05:11. > :05:14.Some residents have been allowed to return to their homes but flood
:05:15. > :05:18.waters are still rising in other areas.
:05:19. > :05:21.President Trump has asked Congress for $7.8 billion as an initial
:05:22. > :05:24.payment to help with recovery efforts following the flooding
:05:25. > :05:28.The White House says about 100,000 homes,
:05:29. > :05:31.not all of which were fully insured, had been affected by
:05:32. > :05:37.the storm and the flooding that accompanied it.
:05:38. > :05:39.Texas Governor, Greg Abbott, said the state could need as much
:05:40. > :05:43.as $180 billion from the federal government to help it recover.
:05:44. > :05:46.The storm at its height knocked up to 24% of US oil
:05:47. > :05:52.It's also believed the nation's largest refinery in Port Arthur may
:05:53. > :05:54.be shut for up to two weeks, sending petrol prices
:05:55. > :06:02.Michelle Fleury reports from Houston.
:06:03. > :06:05.I'm standing by the Upper Houston channel.
:06:06. > :06:07.I'm standing by the Upper Houston Channel.
:06:08. > :06:11.It is about 23 miles long and on each side it is lined
:06:12. > :06:16.This area around Houston is vitally important to the energy industry.
:06:17. > :06:19.Much of the refinery capacity was impacted
:06:20. > :06:24.when Hurricane Harvey made land fall.
:06:25. > :06:28.As they try to restore operations to get in and to get that refining
:06:29. > :06:32.capacity back up and running, one crucial part will be getting
:06:33. > :06:38.the waterways open again so that vessels can come in and out
:06:39. > :06:41.of here carrying crude oil and other vital supplies and it is not
:06:42. > :06:44.that come through here, consumer goods travel on vessels
:06:45. > :06:47.through here making their way to shelves of stores
:06:48. > :06:51.Given its strategic importance, American authorities have made
:06:52. > :06:54.it a priority to get this area reopened.
:06:55. > :06:58.We have been told some estimates that if this port,
:06:59. > :07:02.if this area is closed for a week, it could cost the economy as much
:07:03. > :07:05.as $2.5 billion which is why all efforts are being made to try
:07:06. > :07:10.and clear the debris as fast as possible.
:07:11. > :07:12.Ingrid Hobbs is an insurance specialist and litigation partner
:07:13. > :07:14.at the law firm Mayer Brown International.
:07:15. > :07:25.Michelle looking a the aftermath. It is very difficult, isn't it, to
:07:26. > :07:31.calculate at this point what this will cost and to whom and whether
:07:32. > :07:36.they are insured oar not? It is extremely difficult partly because
:07:37. > :07:39.the water has only stopped pouring down recently and it is difficult
:07:40. > :07:42.for loss adjusters to get in and to see the extent of the devastation.
:07:43. > :07:45.There are huge different losses involved as well. You mentioned
:07:46. > :07:49.earlier the oil industry and the impact on the production levels.
:07:50. > :07:53.I've read in different reports that there is something like a 25% impact
:07:54. > :07:59.on production per day. So that is going to have a significant impact
:08:00. > :08:05.on pricing, but on a personal level for those affected having been
:08:06. > :08:09.displaced losing their homes, maybe looking at long-term re-housing,
:08:10. > :08:15.rebuilding costs, how much of that will actually be insured, flood
:08:16. > :08:18.ex-clueses operating in the domestic insurance policies, ought owe motive
:08:19. > :08:22.industry affected, the amount of cars you can see floating through
:08:23. > :08:25.the water, those will be claims on personal ought owe motive policies
:08:26. > :08:29.and the ex-at any time of the cover available remains to be seen. The
:08:30. > :08:36.Total cost they are saying will be in the order of $100 billion, so
:08:37. > :08:40.even more than Hurricane Katrina. I wanted to ask you about how it
:08:41. > :08:46.compares because there are clearly direct costs and indirect costs and
:08:47. > :08:50.the indirect costs could go on for years of just trying to put things
:08:51. > :08:54.right. Where do we start in that job as a loss adjuster, where do you
:08:55. > :08:57.start to look? There are so many different elements to this? It
:08:58. > :09:02.splits down into different kinds of insurance. The State will be
:09:03. > :09:07.incredibly busy, the national insurance flood programme, will
:09:08. > :09:11.respond immediately, but there will be individual insurers involved on
:09:12. > :09:14.the ground in the United States and then reinsured through the Lloyds
:09:15. > :09:18.community here in London and they will be looking at each individual
:09:19. > :09:24.insurer instructing loss adjusters to go out on their behalf for their
:09:25. > :09:31.policyholder, damage assessments and then also looking at longer term
:09:32. > :09:34.economic losses. In this particular case, unlike Hurricane sandy and
:09:35. > :09:38.Katrina, many businesses and individuals are uninsured for
:09:39. > :09:42.various reasons, aren't they, that makes it much more complicated? We
:09:43. > :09:47.don't know the extent of non insurance, but there is difficulty
:09:48. > :09:51.in obtaining cover for properties that are in the flood plain and
:09:52. > :09:55.Texas and Houston in particular is well-known as a flooding risk. So we
:09:56. > :09:59.need to wait and see the extent of what is covered, but there will be
:10:00. > :10:05.loss of profits claims down the line. Damage claims, personal injury
:10:06. > :10:09.claims and we will have to see what the extent of each of those classes
:10:10. > :10:15.of insurance and loss looks like and whether or not exclusions in the
:10:16. > :10:18.policies bite, flood exclusions, act of god exclusions, we don't have any
:10:19. > :10:23.real handle on the extent of the damage now. Ingrid, thank you for
:10:24. > :10:27.sharing your expertise with us this morning. There is a lot more detail
:10:28. > :10:31.on our website about what is going on there in at moment and how it
:10:32. > :10:32.stands. Yes, something we will be covering for a good while to come
:10:33. > :10:33.yet. Let's take a look at some of
:10:34. > :10:36.the other stories making the news. Fast-food chain McDonald's
:10:37. > :10:39.is facing its first strike in the UK as workers at two sites walk-out
:10:40. > :10:42.in a dispute over zero-hours Workers at Cambridge and Crayford
:10:43. > :10:45.in south-east London The Bakers, Food and
:10:46. > :10:51.Allied Workers Union, said staff want a wage
:10:52. > :10:53.of at least ?10 an hour James Henderson, the chief executive
:10:54. > :10:59.of one of the UK's best known public relations firms,
:11:00. > :11:04.has stood down amid claims it stirred up racial
:11:05. > :11:08.tensions in South Africa. Bell Pottinger has faced criticism
:11:09. > :11:11.from the country's main opposition party after it ran a media campaign
:11:12. > :11:16.for the wealthy Gupta family. South Africa's Democratic Alliance
:11:17. > :11:18.Party said the PR firm emphasised The EU's Brexit negotiator,
:11:19. > :11:22.Michel Barnier, says he plans to "educate" the British people
:11:23. > :11:25.about the price it would pay The European Union suggested that
:11:26. > :11:30.little progress had been made The British Government has hit back,
:11:31. > :11:50.claiming that the EU was not I wonder how they plan to educate
:11:51. > :11:54.people? Maybe it will be a leaflet drop from a plane with facts!
:11:55. > :12:01.We will talk about that with our markets guest in a moment. Pirelli
:12:02. > :12:06.is planning a market listing. The tyre maker is planning to return to
:12:07. > :12:13.the stock market in Milan, Italy, it is the world's fifth biggest tyre
:12:14. > :12:16.maker. It delisted in 2015 after a mandatory offer launched by an
:12:17. > :12:22.investment vehicle. It is coming back to market. Some markets for you
:12:23. > :12:30.before we speak to Richard Hunt ir. He is head of research at Wilson
:12:31. > :12:35.King Investment Management. We would expect there could be a reaction to
:12:36. > :12:39.what happened with North Korea, but the markets are taking it in their
:12:40. > :12:45.stride? The difficulty is how to price it in? Are we talking about a
:12:46. > :12:49.skirmish or something more serious? Clearly, it is not something that
:12:50. > :12:52.investors can runaway and keeping a close eye as you would probably
:12:53. > :12:57.expect overnight in the Asian markets we have had interests in the
:12:58. > :13:05.likes of the yen seeing it is a defensive currency as well as gold
:13:06. > :13:13.and some sovereign bonds. Is it the geopolitical stuff or does it come
:13:14. > :13:18.down to sanctions and trade? I think from a kind of human point of view,
:13:19. > :13:23.the geopolitical part of the equation is much more concerning. I
:13:24. > :13:26.think from practical point of view and something investors will
:13:27. > :13:32.arguably be more interested in is what sort of sanctions may come in,
:13:33. > :13:37.but as we have been hearing earlier, the US, China, relationship is so
:13:38. > :13:43.large that it might be crimped at the edges, but they will be looking
:13:44. > :13:47.to keep that intact. Tell us about your comments on Michel Barnier's
:13:48. > :13:50.advice that perhaps the British are not really across the full
:13:51. > :13:56.consequences of leaving the European Union? There is this danger, as we
:13:57. > :14:01.knew since day one, that there is a possibility that Britain will be
:14:02. > :14:05.used as a scapegoat so as not to encourage other members of the EU
:14:06. > :14:08.even to think about some kind of exit which was obviously one of the
:14:09. > :14:13.concerns from the EU's prospective at the start this could be the thin
:14:14. > :14:17.end of the wedge. There are the complications begin, of course, with
:14:18. > :14:21.I don't think the UK is disputing the fact that there are certain
:14:22. > :14:24.contracts we have already entered into what we will see through. The
:14:25. > :14:27.questions, of course, in terms of some of the money that the EU made
:14:28. > :14:33.whilst the UK has been a member and some of the assets that the UK is
:14:34. > :14:36.entitled to, how that off sets this so-called divorce bill. Sclaerl, at
:14:37. > :14:44.this stage, we are making little progress. There is an irony about
:14:45. > :14:47.the education, given that during the referendum campaign that education
:14:48. > :14:54.was one thing that people talked about, maybe people were told lies
:14:55. > :14:59.and it comes down to information. On the top of that we don't know what
:15:00. > :15:03.could happen. It is so confusing? Michel Barnier is trying to speak
:15:04. > :15:07.with 27 tongues, isn't he? Representing the entirety of the EU.
:15:08. > :15:12.At any given time you have to question how much is the EU bloc and
:15:13. > :15:16.how much is personal? Thank you, Richard. Nice to see you. Shedding
:15:17. > :15:24.come light on that. We'll talk more about it, I'm sure.
:15:25. > :15:29.Back to school for children across the northern hemispheres, we will
:15:30. > :15:45.find out why uniforms are becoming more expense of full. -- more
:15:46. > :15:49.expensive. Before we grapple with ties, blazers, polo shirt, let's
:15:50. > :15:54.talk about Europe's biggest tech show. Samsung, Apple, they have
:15:55. > :16:03.given it a wide berth, the exhibition in Burlington
:16:04. > :16:06.forthcoming. The IFA exhibition. Now, smaller competitors are using
:16:07. > :16:12.the event to make a case for their innovations. Joe Miller is there.
:16:13. > :16:19.This is LG's new V30. No modular design, no side screen, the focus is
:16:20. > :16:24.on taking pictures and shooting video. Two new cameras on the back,
:16:25. > :16:28.a deep and beautiful screen, and a lovely zoom feature, you can pick a
:16:29. > :16:33.particular object or person in the distance and then the camera will
:16:34. > :16:38.very smoothly zoom in towards it. Question for this phone, as with
:16:39. > :16:45.previous LG models, some of which had cutting edge features but have
:16:46. > :16:50.not sold well, can it make inroads into a crowded and competitive
:16:51. > :16:54.smartphone market? I think LG has aways been about choice, it may not
:16:55. > :16:58.be number one in phones, it may not be the thinnest, the cheapest, the
:16:59. > :17:04.brightest, there is a lot of things that we are not but one thing we
:17:05. > :17:11.have always been is giving people an alternative choice. Two ways you can
:17:12. > :17:16.compete with Samsung and Apple, one is with cutting edge features and
:17:17. > :17:23.the other, such as with this 400 dollar Moto X4 is to compete
:17:24. > :17:26.aggressively on price. It targets the disk ruminating consumer,
:17:27. > :17:30.someone who wants a high-quality smartphone experience but is not
:17:31. > :17:34.looking for the flagship prices. We design a phone to provide all the
:17:35. > :17:38.benefits but price it very well accordingly. In just a couple of
:17:39. > :17:43.weeks, a new iPhone is likely to dominate the headlines,
:17:44. > :17:44.manufacturers like those here in Berlin will hope that they too are
:17:45. > :18:12.still able to make a splash. fresh food could be left rotting if
:18:13. > :18:24.strict customs control for EU goods are put in place of the Brexit.
:18:25. > :18:30.If your commute into the office has got a bit busier, probably because
:18:31. > :18:34.the summer break is officially over for many schoolchildren, roads are
:18:35. > :18:35.busy, schoolchildren across the northern hemisphere are back at
:18:36. > :18:48.school. Which means many parents are
:18:49. > :18:50.counting the cost of buying everything they need for the new
:18:51. > :18:53.school year. One of the most expensive things they'll fork out
:18:54. > :18:55.for is a new school uniform. So why are uniforms becoming more
:18:56. > :18:57.expensive? Our next guest will know. He's the boss of Trutex, the UK's
:18:58. > :19:01.number one brand in school uniforms and sportswear. The company was
:19:02. > :19:03.founded over 150 years ago under a different name, and has been
:19:04. > :19:06.operating under the Trutex name since the 1920s. In 2010 when it was
:19:07. > :19:09.teetering on the brink of administration, Trutex was bought
:19:10. > :19:11.out by a private equity firm, and then underwent a management buyout.
:19:12. > :19:13.Success ensued, and now Trutex has expanded into China, where it has
:19:14. > :19:21.ten factories and manufactures over 1.5 million garments a year. Prince
:19:22. > :19:23.George will soon be wearing a Trutex uniform - the company supplies to St
:19:24. > :19:24.Thomas's prep school in Battersea, where the young Prince will begin
:19:25. > :19:33.his education. So, good news for you royal
:19:34. > :19:40.watchers. Matthew Easter is with us,
:19:41. > :19:51.he's managing director at Trutex. Good morning. Good morning. Thank
:19:52. > :19:55.you so much for coming in. I have three boys, I know the cost, you get
:19:56. > :19:59.through the uniform like you would not believe, and also, lose it, week
:20:00. > :20:04.one, they come home without the school jumper, nowhere to be seen,
:20:05. > :20:08.but the name is in it, that is key. Give us a sense of the size and
:20:09. > :20:14.scale of your business. It has ballooned since you moved into
:20:15. > :20:17.China. ?30 million business, we manufacture 4 million garments a
:20:18. > :20:24.year, exporting to 15 countries across the world. Not everywhere has
:20:25. > :20:30.the uniform, so we focus on China in particular. When you had to start
:20:31. > :20:33.working there, you have to get used to the culture, their uniform is...
:20:34. > :20:40.Explain. Traditionally, the uniform is very much in line with the
:20:41. > :20:43.communist state, a pretty horrible set of shell suits, sorry for
:20:44. > :20:48.anybody who wants to wear those, but these days it is far more akin to a
:20:49. > :20:53.European or British style education uniform. The schools are becoming
:20:54. > :20:56.more branded and more focused on brand. Talking about the history of
:20:57. > :21:02.the firm, touching on it briefly there, chequered past, the
:21:03. > :21:06.management buyout, private equity, you were instrumental in that
:21:07. > :21:09.process and talk us through it. 2010, the business had obviously
:21:10. > :21:16.been through a period of decline, over a number of years, and that
:21:17. > :21:20.forced a chain, in 2010. -- change. I came in at that point and along
:21:21. > :21:23.with the team, we were lucky, a number of people were in the
:21:24. > :21:26.business who had experience in the business, we had to bring in new
:21:27. > :21:33.focus. What were they getting wrong, it strikes me, parents have to buy a
:21:34. > :21:39.uniform, how could you get that wrong? In principle you cannot, the
:21:40. > :21:42.product, the brand, it was very well recognised, like every other
:21:43. > :21:46.business, you have to do everything right, manage your customers, your
:21:47. > :21:54.finances, very seasonal business, cash management, and managing stock
:21:55. > :21:58.is hugely important. And requires a lot of focus. Something we have said
:21:59. > :22:03.since you have come in, uniform is getting more expensive, is it
:22:04. > :22:08.getting more expensive? How do you... How do you sell that in the
:22:09. > :22:12.sense that parents are forced to buy it, we have to buy the gear for our
:22:13. > :22:17.kids and it is a huge expense, and for families who cannot afford it,
:22:18. > :22:20.it is a real issue. It is not getting more expensive, overall, the
:22:21. > :22:25.cost of uniforms is cheaper than it was 20 years ago. Clearly, the
:22:26. > :22:29.devaluation of the pound has had an impact on lots of things, post
:22:30. > :22:33.Brexit, and clothing is one of those. Why would argue what we make
:22:34. > :22:36.is good value, there is an upfront cost but it is something you want
:22:37. > :22:41.the kids to wear all year, passed down as well. There is pressure on
:22:42. > :22:44.schools to make it more affordable and have less branded uniform and
:22:45. > :22:50.more stuff you can get from your high street retailer. We try to work
:22:51. > :22:56.with the schools and have a sensible blend of branded and unbranded
:22:57. > :23:00.uniform so it is not too expensive. Schools... That is not good news for
:23:01. > :23:04.the business model. There is plenty of schools we can go and get to, and
:23:05. > :23:08.on that model, we will get more business over time, by doing it
:23:09. > :23:12.right. Very good to see you, thank you for joining us. Matthew Easter,
:23:13. > :23:19.managing director of Trutex. In a moment we will be spinning
:23:20. > :23:20.through the business pages, but first, a quick reminder of how to
:23:21. > :23:27.get in touch with us: we will keep you up-to-date with all
:23:28. > :23:31.the latest details with insight and analysis from the BBC's team of
:23:32. > :23:36.editors right around the world. And we want to hear from you, too, get
:23:37. > :23:42.involved on the business live web page. You can find us on Facebook as
:23:43. > :24:03.well. The Brix Conference, Brazil, Russia,
:24:04. > :24:07.India and China, it is something we were mentioning all of the time in
:24:08. > :24:14.its heyday, when they were all thriving, these economies. -- the
:24:15. > :24:18.Brics. 2001, Goldman Sachs, coined this term for the emerging
:24:19. > :24:20.economies, took on a political life because these countries, as well as
:24:21. > :24:25.being emerging markets, were men to take on some of the world economic
:24:26. > :24:27.leadership away from the US and Europe, they have this annual
:24:28. > :24:32.conference but it has not worked out like that, powers have diverged.
:24:33. > :24:38.China, the driving economy and all of this, is much cleaner now on the
:24:39. > :24:45.economies closer to its home, so it really is forgetting this notion of
:24:46. > :24:50.the Brics and going to a much more to graphically centric. Cynics said,
:24:51. > :24:56.you cannot lump these economies together thanks on -- based on vague
:24:57. > :25:03.similarities, looking at someone of the size, power and scale of China.
:25:04. > :25:06.It suited them at the time, they wanted to be this alternative power
:25:07. > :25:10.source in the world economy, there are such disparities now, and you
:25:11. > :25:14.cannot horse these things together, apart from India and China, Brazil,
:25:15. > :25:19.Russia and South Africa, their economies are not doing well, and so
:25:20. > :25:23.there is also a divergence from the past. Wall Street Journal, Nissan
:25:24. > :25:31.hopes drivers will turn to its new electric car... The Chief Executive
:25:32. > :25:35.of Nissan has pushed this he thought there would be selling 1.5 million
:25:36. > :25:40.electricals at least by now, and they are selling about one third of
:25:41. > :25:42.that, so big hope for the new one, riding on the coat-tails, doing even
:25:43. > :25:47.better than Tesla. They are jealous of Tesla's success. It is a market
:25:48. > :25:50.car, it should do quite well. We will keep an eye on it, we will
:25:51. > :25:56.watch this space. Thank you for your company today. We
:25:57. > :26:04.will both be here tomorrow. We will see you, goodbye.