16/03/2018 BBC Business Live

This is Business Live

from BBC News with Jamie

Robertson and David Eades.

Trading threats - raising tensions.

Fears of a global trade war set

to dominate as G20 finance chiefs

gather this weekend.

Live from London,

that's our top story

on Friday the 16th of March.

With jobs and trade

on the line, the United States

is demanding more from its biggest

partners so will they hit back

with action of their own?

Also in the programme...

Singapore-based chipmaker Broadcom

hints it will look to buy smaller

rivals after President Trump blocked

its $140 billion deal for Qualcomm.

The market is starting down but not

a huge amount of change. Less than a

10% movement on the European markets

as they open today.

And we'll be getting

the inside track on the business

impact of those growing tensions

between Russia and the UK and all

the other big stories of the week

with our Business Editor Simon Jack.

And we begin our Future Of Work

series with a look at commuting

so we want to know what unusual

journeys to work you have.

Just use the hashtag BBCBizLive.

Hello and welcome to Business Live.

Tensions are growing

over global trade.

As President Trump continues

to protect US industry there have

been threats of retaliation

from around the world -

raising fears of a trade war that

could seriously damage

the global economy.

People putting up tariffs to protect

their own industries against others

around the world.

The issue will top the agenda

when finance chiefs from the world's

biggest economies meet

in the Argentine capital

Buenos Aires this weekend.

This week the Trump

administration raised

the temperature with China again -

demanding a $100 billion

cut in Beijing's

trade surplus with the US.

It also turned its

attention to India,

complaining to the World Trade

Organisation about export subsidies

to Indian exporters worth

an estimated $7 billion a year.

That's what he reckons, anyway.

And there's just a week to go

until US tariffs of 25%

on imported steel and 10%

on imported aluminium

come into force.

Many countries are seeking

exemptions to stop any

damage to their economies.

Since they were first announced

at the beginning of the month,

global stock markets have been

confused as investors try to assess

the potential damage

as the European Union and others

threaten to retaliate

against those US tariffs.

Chris Watling is the Chief

Executive of the global

consultancy Longview Economics.

Thanks for joining us. Just to get

the short for you first. We have a

raft of demands from Donald Trump,

but it's all coming to a head.

What's going to happen, two days to

sort it out.

It's classic trumpet,

go in hard and aggressive, make a

lot of noise and shake things up and

see how things fall, and hopefully

go from there and end up with

something fairly sensible. We have

seen this several times in his

presidency in the last year or so,

whether it was Tpp on many of these

deals. He goes in hard and then

pulls back and see what happens.

With China, would you expect some

movement from them? This sort of

technique has some effect.

It does

have some effect. We saw some

movement from Japan when he raised

it with Japan several months ago.

Whether or not we'll get movement

with China who knows, only the

Chinese leadership will know. The

problem I think is misdiagnosed by

the administration. It's not simply

a case of, we have a $100 billion

deficit, you are clearly doing

better than we are. It's a

reflection of overconsumption in the

US and under saving, essentially.

When the shouting stops and it dies

down, will he get anything out of

it? What are his targets? Is there

anything specific, there is more to

him than just making a noise.

There

is more, his place in the political

constituency, old economy, a lot of

it in the midwest. There is

something in this. There are unfair

trade practices in the world and the

WTO does not have a much bite as one

would hope. China has all sorts of

industries, there is too much steel

capacity in the world and part of

that is because China keeps

businesses that are basically

loss-making going through the

government stimulus and back door

credit programmes. There is

something to what he says, but I

think it misses the main point about

the trade deficits and

overconsumption.

When it all dies

down, whatever happens here, if

there is give and take, it has a

ripple effect. It's not just

necessarily a one-off, we are done

and move on.

It's a risky business.

You are clearly upsetting the global

consensus. Growing global trade is a

good thing, falling tariffs is a

good thing. All that stuff is very

powerful. We saw in the 1930s,

rising tariffs was a dangerous

approach to global growth. It's not

a great way to go about things, but

it is Donald Trump and hopefully it

will follow the usual pattern and

calm down.

We will see, Chris, thank

you very much.

Let's take a look

at some of the other

stories making the news...

A committee of British MPs say

they have been unable to find

a technical solution anywhere

in the world that would be capable

of avoiding a hard border

between Northern Ireland

and the Irish Republic after Brexit.

The Northern Ireland Affairs

Committee has called

on the government to set out more

details on how it will manage

the movement of people

and goods across the border.

The Swedish music streaming

giant Spotify says it

will start selling its shares

on the New York Stock

Exchange on April 3rd.

In a pitch to investors

the company's boss Daniel Ek said

he would put growth over profits

to try and fend off competition

from the likes of Amazon and Apple.

More than half of Spotify customers

use the free services and the firm

has yet to make a profit.

Deutsche Bank says it does not

expect to cut costs by $1.1 billion

in 2018 as previously announced.

However, Germany's biggest

lender is forecasting

an increase in revenues,

with banker bonuses returning

to levels not seen since 2015.

Profits are up at

Singapore-based computer chip

maker Broadcom which has been

outlining it's plan for the future.

This week it formally

abandoned a $142 billion

attempt to buy its US rival

Qualcomm after President Trump

blocked the deal.

Mariko Oi is in Singapore

with more details.

Interestingly, in the conference

call with investors,

the company's chief executive didn't

really comment about that block

deal by President Trump,

who cited national security concerns

to which the company said

there shouldn't be any concerns.

But he also said that the company

continues to look at the US

as a potential market,

prompting speculation that broad,

as a potential market,

prompting speculation that Broadcom

might be looking at smaller,

probably lower profile targets

in the market as well.

In terms of the earnings number,

they came in stronger

than analysts expected,

but the company warned

that they are seeing a slowing

demand from its US customer,

which many analysts believe

is Apple, but growing

demand from South Korea.

Again, analysts are speculating

that's probably Samsung,

which is ramping up its production

of the latest Galaxy smartphones.

We can look at the Asian markets.

Trade and the G20 meeting this

weekend in South America. What will

happen in terms of protectionism and

the amount of tariffs that will be

put on over steel and aluminium. A

slightly confused message there but

we have the Dow Jones up about 0.5%.

Asia is a little bit worried, it's

down. Europe, pretty inconclusive,

up a tiny fraction.

And Kim Gittleson has the details

about what's ahead

on Wall Street Today.

On Friday, investors will be eyeing

a raft of economic data to better

gauge what the US Federal Reserve

will do when it meets next week.

Housing data released

by the Census Bureau is expected

to show that new construction slowed

in February, partially

as a result of poor

weather here in the north-east.

Two key measures of US manufacturing

activity will also be released.

A miss in any of these figures could

worry America's central bankers,

especially after retail sales

and inflation data came in lower

than expected this week.

The expectation is that the Fed

will continue to slowly

raise US interest rates.

But in order to do that,

it will need the American economy

to be growing at a healthy pace.

Joining us is Simon Derrick,

Chief Markets Strategist,

Bank of New York Mellon.

In terms of occurrences, we have

this trade war, a great euphemism,

for general chaos in the trade

sphere. What effect is it having on

currencies generally? I'm thinking

about the three main ones.

I think

the one that is really starting to

emerge as being a beneficiary for

this has been the Japanese yen.

Maybe because a little bit it is a

safe haven, but it's worth noting

over the last 40 years, one of the

trade policy has come up as an issue

in the US, more often than not it

has also focused on people

manipulating the currencies and

Japan has come up time and time

again, more often than not, the

pressure has been upward on the yen

because that is the easiest way of

fending off concerns from the US.

The stronger currency makes the

trade situation better.

Down on the

dollar.

That's the main story. In

fairness, playing out against the

Asian currencies. Stirling and

Europe are pretty much sidelined the

moment.

We talked about the

Australian dollar and its impact

potentially on smaller currencies.

That's the one currency that really

has been under pressure over the

last few weeks. Most obviously

because Canada is the largest

exporter of steel to the United

States, so if you are looking to

currencies heading in different

directions at the same time, the yen

and Canadian dollar are eight right

now.

Something many people don't

follow, unless they are in the

market and following day today is

the weakness of the dollar and how

it has weakened over the last year.

It's getting on 15% or something.

Will that continue?

I think it will.

What's interesting is that it has

broken the relationship with yield

because relatively speaking interest

rates are going up in the United

States, which is normally good for a

currency. Instead people are focused

on two things, first of all, the

administration seems to be less

supportive about the dollar in the

rhetoric.

He doesn't talk about

stronger dollar any more.

And people

are talking about increased spending

plans and where the money comes

from. One of the main areas it comes

from in the past is the far East,

people like China. Maybe if China is

allowing its currency to move more

freely, there is less money coming

in to be recycled to the US is about

looking ahead to next week, the Fed

has a decision to make. Interest

rates up? Definitely next week. What

will matter will be the rhetoric and

how concerned they are about

inflation and what happens with

trade.

Still to come...

We'll have all the implications of

the UK and Russia trade and more

from Simon Jack, business editor.

You're with Business

Live from BBC News.

JD Wetherspoon has reported pre-tax

profits of £54m for the six months

to 28th January -

up 36% on the same period

in the previous year.

Joining us now from

London Stock Exchange

is Tim Martin, the founder

and chairman of JD Wetherspoon.

Thanks for joining us. These are not

easy times for the casual dining

market. Give us your secret.

It's

hard to know, really. It's a

thousand components of a BMW, you

work on different components all the

time and you eventually come up with

a good car. We have been going a

long time, we sell a lot of things

that have been unfashionable over

the years, like real ale, which is

doing very well for us. We are now

selling quite a bit of draught beer,

which is at the trendy end of the

market. Over the years we have moved

into breakfast and coffee which do

very well. Coffee is particularly

going great guns at the moment.

What

about your costs, the weak pound,

food costs going up, and business

rates going up next month. You have

the national living wage, which is

putting upward pressure on wages.

Will you be able to keep costs under

control to the point where you can

still increase profit?

Can we keep

them under control when it comes to

the things that you mention, the

answer is no. What we can try and do

is make sure we are running the

business well, everyone else has got

the same costs. If we can get all

the different components running

better, we will be able to sell

people a pint at a reasonable price

with a good atmosphere. It's

difficult enough. The main sword of

Damocles for the pub industry is

that it pays much higher taxes per

pint or per meal than supermarkets.

That disparity has increased over

the years. Eventually, when things

settle down and people have a chance

to look at it, we have to say, do we

want pubs and restaurants,

particularly in small towns and

unfashionable suburbs. If the answer

is yes, then you have to equalise

tax.

Tim Martin, we wanted to talk

about Brexit, but we are running out

of time. I'm sure you would have

lots to say about that, but we will

save it for another day. I'm sure he

might be relieved, or maybe not!

A quick look at how

markets are faring.

There is not much happening on this

Friday morning but coming off the

back of an unsettled week with Asian

markets waiting to see what's going

to emerge from these trade tensions

as they mount, courtesy in large

part to President Trump of course.

We will talk more about lead the

second because we have Simon Jack

here and a round-up of all the

stories.

Russia says its expelling British

diplomats following the poisoning

of a spy on British soil but there's

less impact on trade

ties and global trade

tensions on the rise.

Let's talk to Simon. Let's talk

first about global trade, is there

going to be a trade war? People

increasing tariffs and the rest of

it?

There's been widespread

condemnation of the steel tariffs

and we will see how other countries

respond to that so that is the big

worry. Much more so than the Russian

tensions. At the moment we have the

US which pulled out of the TTP, and

many voices in the US are saying

that as we withdraw and put up

barriers we are losing influence in

areas where we had a lot of it, for

example in the Pacific area, we used

to have a big military presence,

that tilts away, meanwhile China is

expanding into those areas. So you

have got the most developed economy

in the world turning away from

global trade at a time when everyone

else is trying to get together. That

could reduce long-term US influence

and allow China to get a march on

that. You have the rest of the world

coming together, promoting trade,

globalisation, the world economy is

doing well, the fly in the ointment

is the approach of the US.

An

interesting angle on that, we were

saying on this programme a week ago

that it is not that surprising China

is the champion of free trade at the

moment because the dominant economy

in the world is always in favour of

free trade. You go back historically

into the 19th century, Britain

getting rid of the Corn Laws. Then

is America became dominant it

promoted free trade, now China is

coming up and it too will promote

free trade.

That is not quite the

dominant economy, but it is coming

soon.

This is one of the symptoms of

it.

One other thing you are seeing,

this is being looked at through the

lens of Brexit, with the UK going

its own way. The Government are

saying we are not leaving Europe,

just the European Union but you have

these tensions there.

Let's move on,

we have the tensions between Russia

and the UK and we have heard Sergey

Lavrov the Foreign Minister saying

for sure our response is coming so

we are waiting for that but there is

still this reticence about

economically biting...

I thought the

economically biting...

I thought the

Prime Minister got a lot of plaudits

for the way she dealt with this this

week, the expulsion of huge amount

of diplomats, we are expecting tit

for tat. But the word business

didn't come into her speech at all

and in fact there were words of

comfort for the Russians who have

come and made their home in the UK.

You think about Roman Abramovich who

owns Chelsea, and of course the big

one, BP, aren't they already have...

Have we been dancing with the Devil?

Bob Dudley sits on a board chaired

by close Putin friend Igor Sechin

and at some point he has to walk out

of the room in case there is

anything pertaining to him

personally! I don't think there was

anything in the list of sanctions we

saw that apply additional pressure

to the business relationships. They

said we don't want your spies or

assassins but we want to keep doing

business with you.

And the Royal --

the rollback for banks?

Yes, in

doing this you are swept up in the

bid to make the to big banks safer,

you've also swept up lots of

community banks and made it hard for

them to do their job which is to

lend to communities. There is a bill

passed in the Senate to roll back

some of these regulations, it has

got to go through the house and is

deeply dividing the Democrats. We

are sowing the seeds of another

financial crisis, some are saying,

but others are saying we have

constrained the banking system

unnecessarily at a local and smaller

level and this is a good thing for

the US economy.

Simon, thanks so

much.

Now it's time for the first in our

series about the Future of Work.

For many of us, the daily commute

can be a combination of unreliable

trains and overcrowded buses.

But advances in technology,

automation and artificial

intelligence are set to change

the way we travel to work

as Rico Hizon has been

finding out in Singapore.

People have long dreams of taking a

jet pack or flying car to work and

that reality is closer than most of

you think. One man passenger drones

are being tested but widespread use

is yet to come. For now

battery-powered electric vehicles

are moving people in new ways. For

many commuters, this is the last

mile solution. When their office is

there and the train only takes them

here so how does it work?

It is a

battery operated Scooter, where you

can actually use an app to activate

it. We see the huge popular demand

in other places we have launched,

especially places where they need

connection to their offices or

schools from the station.

Jet packs

were only used by the likes of James

Bond, but a number of companies are

turning science fiction into science

fact.

We can get into really

exploring the dream and the idea,

the concept and the science behind

true human flight and achieve a lot

of those things that people have

been dreaming about for a long time.

Jet packs may not be for commuting

just yet but the way we get to work

is constantly changing and will be

vastly different in the future.

Simon Derrick is back with us, and

you like the hover board. It's all

right when you get one person doing

it, it is when you get thousands

going down Oxford Street! But have a

look at the papers. This is the rush

investigation and they are going

after the Trump organisation now

closer and closer...

Obviously we

don't know how this plays out so we

cannot comment too much about how it

goes but I think what matters is how

markets react to these kind of

stories. People forget what matters

over time. People seem to think

politics is a big issue but it's

never proved a market mover in

Germany. In the US absolutely it has

been a market mover. Think back to

Watergate in 1973, a cause of major

market volatility so this story,

talking about concerns within the

White House, that could potentially

be an issue.

Would you expect flight

away from US assets if political

things get hot in the states?

If we

go back and look at the past three

events, they were dollar negative.

But not necessarily globally?

Noakes.

Shall we go for your

favourite story of the day, the

scientists who planted a noble card

in his hand to make it easier to use

the Sydney underground -- an Opal

card.

He puts the card under his

skin.

The big he got done for was

mutilating his card, which is the

best bit of all of it! He calls

himself a body hacking scientist.

There are lots of them around, I'm

told.

If I put my travel card for

London inside my glove, is that

low-level body hacking? Most

important, the gentleman changed his

name... Does he signed it on all his

checks?

He wouldn't have a I doubt.

I wonder if we have this, body

hacking. Click has it all over the

weekend! Simon,