07/03/2018 BBC Business Live


07/03/2018

A look at the global business stories.


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Transcript


LineFromTo

on Wednesday 7th March.

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Mr Cohn has been seen

as a moderate voice

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in the White House, so his departure

has dealt a big blow to business

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leaders hoping to prevent

the US President igniting

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a global trade war.

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Also in the programme....

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Harleys, Levi's and Bourbon -

why the European Union is targeting

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classic American goods as it

prepares to retaliate

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against those US tariffs.

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And all that makes

investors nervous.

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In Asia markets dropped sharply

and this is how Europe has opened.

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And we'll be getting

the inside track on the start-up

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siblings who made it big -

You may not have heard

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of the Collison brothers

but their payments technology has

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made them billions -

they are now among the youngest

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self-made billionaires in the world.

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Also tomorrow is

International Women's

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Day and to mark the occasion Mattel

has launched a new set

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of Barbie dolls - this one

behind me is Nicola Adams

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the Olympic boxing champion.

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Nicola says she is honoured.

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So we want to know who would you

nominate for your Barbie role-model?

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Let us know.

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There should be a Sally Bundock

Barbie! You heard it here first.

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We start at the White House,

where top economic advisor Gary Cohn

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has quit after losing a heated

battle President Trump over tariffs.

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He opposed President's proposed

steel and aluminium tariffs

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because of the impact

on the American economy,

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US jobs and the threat

of a global trade war.

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In a moment, we'll hear

from a global trade expert but first

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Kim Gittleson in New York

has more details.

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Gary Cohn has long said he opposed

the tariffs. He is known as somebody

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who supports free trade. He worked

at Goldman Sachs and he is a

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Democrat. He has clashed with

President Trump on a host of issues.

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The thing they seem to agree on was

the tax reform. Beyond that, there

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wasn't that much common ground. When

we saw President Trump come out

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today saying that he once more

believed he wants these tariffs to

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be instituted, it seemed like a done

deal that he would have to resign.

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That is part of our team in New

York.

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Gary Cohn quitting Trump's

team is the latest

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in the transatlantic

tit-for-tat over trade.

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Today, the European Commission

hammers out its plan

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to counter the US President's threat

of import tariffs of 25% on steel

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and 10% on aluminium due this week.

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The Commission says response

will comply with WTO rules.

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It's drawn up a target list of 100

US goods - worth $3.5

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billion.

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Many of them will have

significant political impact.

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Among them the iconic US

motorbike Harley-Davidson -

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made in Wisconsin -

home state to House of

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Representatives Speaker Paul Ryan.

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And Bourbon whiskey -

made in Kentucky, the state

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of Senate majority leader Mitch

McConnell.

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Orange juice is a key export

for Florida - a vital swing

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state in US elections.

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And there's the ultimate example

of classic Americana -

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Levi's jeans, a US firm that relied

on Europe for a 20% jump

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in sales last year.

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The row is already hitting business.

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Electrolux, Europe's

largest appliances maker,

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is freezing a $250 million

investment in a Tennessee factory

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over fears Trump's tariffs

could dent its competitiveness.

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Joining us from Brussels

is Allie Renison

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of the Institute of Directors,

a business lobby group.

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You were listening to all of that,

as we speak, European Commission

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representatives are discussing their

next move, what do you expect to

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come out of Brussels?

Well, I think

that this is something someone like

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Gary Cohn was worried about, the

concerns were the impact to the US

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economy and the scale of

retaliation. This is part of the

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problem. The EU is looking not just

at retaliating in respect of

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products the US and Trump are

putting duty on, they're looking

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wider in scope. It is depressing to

hear somebody like president junker

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say if the US want to do stupid, we

can do stupid too. That is the

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question - how far will it range?

The pressure and the stakes getting

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higher by the hour, when we get to a

position where we are talking about

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tariffs and barriers to trade, there

is no telling where that will stop?

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Yes that is part of it, if you're

looking at how rationale a

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proportionate response might look

like, you might hope markets like

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the EU would be looking at taking

the case and taking the US's

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justification of this under a broad

national security exception to the

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WTO, instead a lot of country and

the EU will be thinking after they

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act, rather than the other way

around.

How damaging would be a

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trade war of this scale be for those

part of your organisation and other

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businesses?

Well, I think one of the

things that people often forget,

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certainly the president, there are a

lot of industries who rely on

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inputs, processing and consuming

industries and for every one job you

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might save with tariffs, you lose

she Sen or eight -- even or eight in

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the supply chain. But that often

doesn't get thought about. That is

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the biggest concern, the revere

bracing through the supply chain.

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Thank you.

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Let's take a look

at some of the other

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stories making the news.

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Australia's economy clocked

up GDP growth of 0.4%

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in the last three months of last

year - lower than expected and

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marking a weak finish to the year.

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A fall in exports in the last

quarter dragged on growth.

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Over the year as a whole,

the economy grew by 2.4%

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compared to a year earlier,

that's down from 2.9%.

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The Royal Bank of Scotland has

agreed a $500 million settlement

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with New York State over

the mis-selling of financial

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products in the run up to the global

financial crisis in 2008.

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RBS is the sixth bank to settle

with the state over similar claims,

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linked to risky mortgages.

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The agreement will see

the bank pay $400 million

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in relief to homeowners, as well as

$100 million to the state.

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Blackberry has filed

a lawsuit in the US accusing

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Facebook of copying features

from Blackberry Messenger

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in a violation of its patent rights.

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Blackberry, which was once a leader

in the smartphone market,

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says Facebook used the features

and technology in its WhatsApp

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and Instagram apps.

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The claims come after Blackberry has

increased efforts to make money

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from its more than 40,000 patents.

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Facebook has said it

would fight the claims.

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Lots of stories on the business live

pages. All the news as it breaking,

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Paddy Power have reported a 20% rise

in operating profits. A strong

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growth in sports betting helped to

boost its figures.

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A new blow for Japanese

steel giant Kobe -

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US consumers have filed a lawsuit

accusing the company of fraud.

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It's the first US consumer

complaint since the Kobe

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quality-control scandal broke -

and it also takes aim at Toyota.

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Leisha Santorelli is in Singapore.

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We talked about this yesterday, and

the boss and all the ongoing chaos

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around the world, this just the

latest installment?

Yes the fallout

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continues this is possibly the first

class action that Kobe steel have to

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face. So in this US court filing,

Kobe is accused of breaking US

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consumer laws by covering up the

fact they used sub standard metal

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used in cars. This includes very

popular models. So Kobe has taken a

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massive reputational hit in America

and they will have to try and limit

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the damage. As we reported

yesterday, their president is

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stepping down, as is the boss of its

aluminium and copper unit. But that

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won't stop the legal risks and won't

limit the hits to their share price,

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they fell by another 7% in Tokyo

today to close at its lowest level

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this year. The fallout will have to

be contained in the months to come.

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Before you go, we are asking people

about inspirational business women

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that could be immortised by Barbie,

anyone in your part of world?

I

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replied to Sally on Twitter, I think

a great idea is to allow people to

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customise their dolls, so if I had a

daughter they should make one in her

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likeness. Or as my mum.

It is

mother's day on Sunday. So good

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timing. Thank you. Here is what is

happening on the markets. Some

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volatility after the news that Mr

Cohn is leaving the White House. He

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is leaving, investors are nervous.

So that is what happened in the US

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and Asia. Now Europe and it doesn't

look like I can show you the numbers

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now, but we are expecting it to look

weaker as a result of that nervous

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frns investors -- nervousness from

investors. Sally has the European

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numbers.

Yes you can see it is flat.

Brent crude down a per cent and our

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regular guest is with us.

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Justin Urquhart Stewart

is with us, of Seven

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Investment Management.

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You were listening to the

conversation about trade. Give us

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your take on this and how it is

being interpreted in the markets.

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The backdrop is the global economy

doing well, but you have got to put

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the issue of trade wars and that is

a very serious issue for the

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markets. Add to that Mr Cohn going.

Without him, who is controlling the

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mad house? The result is markets are

sailing into the wind, the sails are

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flapping, they haven't got a

direction. Behind that you will see

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interest rates rising in the

interest and that will put further

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pressure on the markets.

Among this

uncertainty, people are looking

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elsewhere for places to put their

money. We have talked about bit coin

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and seeing a relationship. You have

been looking at an interesting way

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that people might be investing.

Some

people will know. One lovely thing I

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found, handbags...

You can invest in

handbags.

Not any old handbag. 2010.

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A hand made Himalaya bag and that

has been auctioned for 157,000

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euros.

That is a good return.

It is

portable and in terms of the

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elements to invest in, it is

something physical you can see. It

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is better than the bitcoin.

How can

you use it if it costs 29,000 euros.

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Depends who you are. Maybe we could

have a Barbie doll with the handbag.

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An incredible asset. Thank you. He

will be back. More to discuss,

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including his Barbie doll

recommendation.

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Still to come: The startup siblings

that made their billions from smart

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online payments sytems Stripe -

we talk to one

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of the Collinson brothers

about how they made it big.

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You're with Business

Live from BBC News.

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More debate of the Brexit in the UK.

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Philip Hammond will tell European

leaders it's in the "mutual

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interest" of the UK and the EU

to include financial services

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in a free trade agreement.

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The UK Chancellor is due

to make the argument

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in a speech later today.

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Our economics editor

Kamal Ahmed has details.

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Tell us what he is going to say.

This is the latest stage in that

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Brexit battle. It is over an

important part of the trade

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negotiations that are coming up -

financial services. For Britain,

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they're incredibly important. Not

just for the two million jobs that

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are connected to financial services

across the UK, but because Britain

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has a trade surplus with the EU on

financial services of about £20

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billion a year. So very valuable to

Britain. Philip Hammond is saying it

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is also valuable to the EU - London

is a huge global market, where lots

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of European governments and

businesses raise a lot of money. And

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he is going to say that it is

important for both sides that there

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is a deep and special agreement

between Britain and the EU once we

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have left the single market. Which

at the moment give us privileged

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access to the EU. It seems that his

position has already been rejected

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by the European Commission. Today,

Donald Tusk is going to say any free

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trade deal cannot involve financial

services. But we need to remember

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these are negotiations and you put

out your stall and make your

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argument and both sides probably

admit in the end there will be some

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form of agreement.

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This is one of those perfect

examples where critics will say you

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cannot have your cake and eat it.

Yes but for the EU it is important

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they keep links to London. Frankly

neither Frankfurt, Paris, nor any

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centre in EE you can maintain the

financing operations they have, so

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they will meet London in this

instance. -- nor any centre in the

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European Union.

DHL has reported its

results. Last year profits up 7.2%.

0:16:110:16:21

You're watching Business Live -

our top story -

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the top economic advisor

to the White House, Gary Cohn

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has quit after a battle

President Trump over tariffs.

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He opposed President's proposed

steel and aluminium tariffs

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because of the impact

on the American economy,

0:16:380:16:40

US jobs and the threat

of a global trade war.

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That has left investors pretty

nervous.

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That has left investors pretty

nervous. We can show you what

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trading is doing in the European

markets...

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Some suggesting this can only

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Some suggesting this can only do one

thing, which is harm global trade.

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We often introduce you to

interesting businesses and

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entrepreneurs.

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And today's guest is no exception.

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His name is John Collison

and with the help of his brother

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Patrick he founded "Stripe".

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Stripe enables businesses around

the world to more easily

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accept online payments

and run their websites.

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Set up in San Francisco six years

ago, it now has over

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100,000 customers worldwide

including the likes of Amazon,

0:17:280:17:29

Fitbit and Facebook.

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In 2016 it announced

a new round of funding that valued

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the company at $9.2 billion.

0:17:350:17:38

According to Forbes that means

the brothers are now worth

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upwards of $1.1 billion each.

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And at 27 John is the world's

youngest self-made billionaire.

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Where did we go wrong?

We are just a little bit jealous.

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Yes, we sent somebody else because

we were so jealous.

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Our Business Editor Simon Jack

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went along to meet him

0:18:030:18:04

and began by asking for the secret

of his success?

0:18:040:18:07

It was valuable that myself and

Patrick at the technical background

0:18:070:18:10

to be able to build the first

version of Stripe. Because you can

0:18:100:18:14

build a product, see if it works for

customers, make changes, wash and

0:18:140:18:20

repeat on a two-day cycle. One is

the career track of being a software

0:18:200:18:27

developer. It will continue to be a

good one for decades to come. I

0:18:270:18:30

think that is a good bet to make.

The second thing is, I think in the

0:18:300:18:37

case of Stripe, it was helpful that

it was a gradual process. We came to

0:18:370:18:42

the idea because we had started an

Internet business before. We were

0:18:420:18:46

gobsmacked at how easy it was to

accept money. We started using a

0:18:460:18:50

prototype. We got a user using us.

Then another, and then after a while

0:18:500:18:57

things started to snowball. But that

is the other thing I would encourage

0:18:570:19:02

people, especially if they are in

that starting position, if you pay

0:19:020:19:06

close attention to what the

customers are saying about the

0:19:060:19:09

actual problems you can learn a lot

just through the listening process.

0:19:090:19:13

You have 25 people in London, 700 in

California, now you are betting big

0:19:130:19:17

in Dublin. People think that London

is the thin tech hub in London, you

0:19:170:19:25

are betting on Dublin, wife?

Dublin

has been our European headquarters

0:19:250:19:28

from day one. If a few reasons for

that. It is in the EU. Also, Dublin

0:19:280:19:42

is increasing its phenomenal talent

market. Where you have this melting

0:19:420:19:45

pot effect. It reminds me of what

you get in the valley and what you

0:19:450:19:49

get in London, people coming from

all over Europe to work in Dublin.

0:19:490:19:54

We are using Dublin as a hub for

which to serve Europe, the Middle

0:19:540:19:59

East, and Africa.

What is the threat

to the -- what is the threat Brexit

0:19:590:20:08

has on London as the tech hub?

A big

one. It is twofold. Firstly, in

0:20:080:20:13

actuality, it'll get harder to have

a talent hub here where people from

0:20:130:20:19

across Europe, especially, are

coming to work. We are seeing this

0:20:190:20:25

in the US right now where it has

already proven the case that people

0:20:250:20:29

are less willing to move to the US.

They don't even want to enter the

0:20:290:20:33

Visa process because of what they

perceive to be the political climate

0:20:330:20:38

and how the country is towards

foreigners. I think that is the

0:20:380:20:45

perception and that'll get difficult

for people to go over there.

Are you

0:20:450:20:49

seeing it already here?

We are

seeing it already in the US and we

0:20:490:20:52

are worried about seeing it in the

UK.

If recruitment gets harder, if

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people are less willing to move to

the UK, for example, what the

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penalty, what happens?

The ultimate

risks we are talking about is does

0:21:010:21:08

the UK have a vibrant tech centre

and start-up system. That is putting

0:21:080:21:12

it into stark terms. I think it

will, but how successful it will be,

0:21:120:21:18

I think there are degrees of success

we can talk about there. We might be

0:21:180:21:25

looking at a lower level than

before...

If you had a message to

0:21:250:21:29

the Government, as they are thinking

about this, from your sector, what

0:21:290:21:33

would it be?

It is a bit of a factor

of what is done is done, on the

0:21:330:21:39

Brexit side, but I think what we can

affect is people's perceptions of

0:21:390:21:44

the UK and the UK as an attractive

investment climate. And the

0:21:440:21:50

attractiveness of moving to the UK.

Like I said, in the US, I think that

0:21:500:21:55

is something we are risking, we are

sending the message that people

0:21:550:22:00

should not come to the US, but we

should be sending the opposite

0:22:000:22:06

message. We need to make it clear to

people that the UK is still a great

0:22:060:22:10

place to emigrate to.

Justin has

returned, as promised. We have lots

0:22:100:22:17

to discuss, including your

nominations for the Barbie doll

0:22:170:22:23

idea. First, this story in the

papers. Debenhams to rent flagship

0:22:230:22:30

store space to people who hot desk.

This is a sign of The Times, isn't

0:22:300:22:36

it, with these big department stores

are really struggling.

It isn't good

0:22:360:22:42

news, it is just showing a problem.

Debenhams has all of this space. But

0:22:420:22:47

Debenhams is a shop where people go

and rent spaces. This is just an

0:22:470:22:52

extension of that. A lot of these

businesses, and yet the same with

0:22:520:22:56

House of Fraser, they are all

suffering. All of the news we have

0:22:560:22:59

had is that the bottom has fallen

out of the retail basket. Many of

0:22:590:23:03

these shops are having real

problems.

The bricks and mortar

0:23:030:23:07

basket, is that what we are

thinking?

Exactly. The online ones

0:23:070:23:10

are still there. One prime example

is John Lewis that works

0:23:100:23:15

effectively. But where that hasn't

happened you are in difficulty.

A

0:23:150:23:20

lot of big supermarkets have done

this, as well. They have been

0:23:200:23:23

leasing space to dry cleaners,

cafes, key cutters, this is just an

0:23:230:23:28

extension.

And a logical extension.

This reflects what has happened to

0:23:280:23:32

British business. We are sitting at

record numbers of new businesses,

0:23:320:23:36

600,000 per year. Go back 30 years,

that number would be around 180,000.

0:23:360:23:42

Still a high rate. But we are being

much more entrepreneurial than

0:23:420:23:46

France and Germany. What we must do

is nurture these. Providing sites

0:23:460:23:50

like this is a good way of doing it.

But beyond that you need to be able

0:23:500:23:57

to finance. And access to long-term

finance, not just short-term

0:23:570:23:59

solutions.

Why is Washington so obsessed with

0:23:590:24:07

China's Huawei. It is proving to be

pretty dominant in the market.

0:24:070:24:14

Almost challenging Apple and

Samsung.

Just how close is Huawei to

0:24:140:24:21

the Government? These companies are

intrinsically linked. If you are

0:24:210:24:26

allowing Huawei into high-tech

areas, which can affect national

0:24:260:24:33

communications with some influence,

that level of high-tech, I am

0:24:330:24:38

talking about five G, then you need

to control it, see who is involved.

0:24:380:24:41

We are more accepting of it over

here. Vodafone already has a deal

0:24:410:24:44

with Huawei. More to come on that.

Nominations for new goals. The maker

0:24:440:24:54

of Barbie says it will be

recognising International Women's

0:24:540:24:57

Day tomorrow and will come out with

some new models. There is Nicola

0:24:570:25:01

Adams with a goal with her likeness.

Were talking about this, who would

0:25:010:25:10

you nominate?

Cleopatra.

A

historical figure.

0:25:100:25:15

And she ran the economy.

Absolutely.

Boudicca... And I thought of Mary

0:25:150:25:26

Queen of Scots, you can have an

accessory where you might be able to

0:25:260:25:29

remove the head.

CHUCKLES

0:25:290:25:32

Or Mrs Pankhurst holding a placard

about the suffragettes. You need to

0:25:320:25:37

access rights these things.

CHUCKLES

0:25:370:25:39

Thank you. Just quickly, Amelia

Earhart has already

0:25:390:25:44

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