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Welcome to Donald Trump's America, or what soon will be anyway. I'm | :00:19. | :00:26. | |
Samira Hussain and on this special edition of World Business Report, | :00:27. | :00:30. | |
we're taking a look at the President-elect's plans for America, | :00:31. | :00:33. | |
in particular what he wants to do with the US economy. | :00:34. | :00:38. | |
Here on Wall Street, Donald Trump's selection triumph was met with high | :00:39. | :00:47. | |
spirits. US markets have soared. Now with his inauguration approaching, | :00:48. | :00:50. | |
people are asking, what will Mr Trump do for US growth? In his | :00:51. | :00:55. | |
campaign he promised big in Best man's in America's infrastructure. | :00:56. | :01:00. | |
Michelle Fleury took a look at how that might work. Investment. | :01:01. | :01:04. | |
Mid-morning in Allentown, Pennsylvania. Traffic is flowing | :01:05. | :01:09. | |
smoothly over this bridge built in the 1920s but underneath it's not | :01:10. | :01:15. | |
ageing gracefully. This bridge was built in 1929, almost 90 years old, | :01:16. | :01:19. | |
this is an open arch the ridge. Engineers tasked with checking the | :01:20. | :01:24. | |
strength are worried. This is the worst case, the joint area. That's | :01:25. | :01:30. | |
where the most erosion happens. This bridge, like many of America's | :01:31. | :01:35. | |
roads, ports and airports are starved of funds. Lack of funding is | :01:36. | :01:40. | |
a problem in the sense that there is so much money so you have to decide | :01:41. | :01:44. | |
which bridges go first. Money isn't the only problem when it comes to | :01:45. | :01:48. | |
building the country's roads, bridges and pipes even. Under Barack | :01:49. | :01:54. | |
Obama, the Republican-controlled Congress was opposed to spending on | :01:55. | :02:00. | |
infrastructure projects. When they will they change that position now | :02:01. | :02:04. | |
they hold the White House? -- will they. Their man made a point of | :02:05. | :02:09. | |
mentioning infrastructure in his election night victory speech. We're | :02:10. | :02:13. | |
going to rebuild our infrastructure, which will become, by the way, | :02:14. | :02:20. | |
second to none, and we will put millions of our people to work as we | :02:21. | :02:27. | |
rebuild it. Mr Trump's pitch is to spend $1 trillion. Not just using | :02:28. | :02:34. | |
government money. He's also hoping to get the private sector to fund | :02:35. | :02:39. | |
these projects with tax credits. In 1976, Mr Trump successfully used | :02:40. | :02:44. | |
this model to rebuild this ice rink in New York's Central Park. Doing | :02:45. | :02:49. | |
the job cheaper, faster and better than the public sector. And | :02:50. | :02:54. | |
experience he hasn't forgotten. So is the private public partnership | :02:55. | :02:58. | |
always the right tool? That depends -- an experienced. It's not the best | :02:59. | :03:03. | |
for every project, it is best suited to large, complicated projects and | :03:04. | :03:07. | |
the reason for that is those other projects that give you an | :03:08. | :03:10. | |
opportunity to really drive innovation so the net result is more | :03:11. | :03:17. | |
bang for the taxpayer but. In Pennsylvania, the need for repairs | :03:18. | :03:21. | |
is urgent. Americans want to update their nation, but as Donald Trump | :03:22. | :03:24. | |
will find, the overwhelming sticking point is likely to be how to pay for | :03:25. | :03:29. | |
it. Aside from infrastructure, one of | :03:30. | :03:33. | |
Donald Trump's signature policies is a rejection of America's | :03:34. | :03:38. | |
International Trade agreements. He blames trade deals for encouraging | :03:39. | :03:42. | |
US companies to move jobs abroad. Here's Michelle Donald Trump's move | :03:43. | :03:45. | |
away from free trade. Donald Trump turned up in person at | :03:46. | :03:51. | |
Carrier Corporation to claim victory that he kept manufacturing jobs in | :03:52. | :03:56. | |
America, a campaign trail promised cheered by the working class who | :03:57. | :03:59. | |
helped elect him. He said he would help us and he actually did. If he's | :04:00. | :04:09. | |
done this for us here in Indiana before even been elected, my gosh, I | :04:10. | :04:13. | |
can't wait till he gets in office to see what he'll do for the country. | :04:14. | :04:17. | |
But how good was the deal? Carrier will collect millions of dollars in | :04:18. | :04:20. | |
tax breaks for keeping 100 jobs in the heartland and Donald Trump got | :04:21. | :04:25. | |
to use Carrier ain't part of his crusade. Companies are not going to | :04:26. | :04:29. | |
leave the United States any more without consequences -- in part of. | :04:30. | :04:35. | |
It's not going to happen. Donald Trump frequently bashes free trade, | :04:36. | :04:39. | |
but how far is he prepared to go? This man was an adviser to Mitt | :04:40. | :04:43. | |
Romney when he ran for the presidency in 2012. Just going from | :04:44. | :04:49. | |
let's expand free trade to let stop expanding free trade is already a | :04:50. | :04:54. | |
huge shift. How much further he goes beyond that to constrain free trade | :04:55. | :04:58. | |
is what people aren't sure about -- let's stop. Donald Trump's antitrade | :04:59. | :05:03. | |
rhetoric captured what many in the nation felt, that free trade hasn't | :05:04. | :05:09. | |
been good for all workers. The fear now among companies who rely on | :05:10. | :05:13. | |
global trade is that Donald Trump's new approach could be bad for | :05:14. | :05:17. | |
business. One firm that might suffer if | :05:18. | :05:22. | |
tariffs were introduced on goods imported to the US is this cargo | :05:23. | :05:27. | |
company. Immediately it would be a ghost town. When you have an | :05:28. | :05:31. | |
antitrade policy, you're going to make it that much harder for | :05:32. | :05:35. | |
companies to do International Trade, which means your goods are not going | :05:36. | :05:40. | |
to be as cost-effective overseas and you're going to out price yourself | :05:41. | :05:44. | |
because of duties and they will look elsewhere. It's not clear if Mr | :05:45. | :05:48. | |
Trump will follow through on some of his antitrade rhetoric, but he has | :05:49. | :05:53. | |
put corporate America on notice. Browbeating US firms into keeping | :05:54. | :05:57. | |
jobs at home. Michelle Fleury. Mr Trump's approach | :05:58. | :06:02. | |
to free trade has caused alarm among some economists, but there's no | :06:03. | :06:07. | |
doubt that some of his plans can be seen as progrowth. I sat down with | :06:08. | :06:12. | |
the chief US economist at Deutsche Bank and asked him what impact | :06:13. | :06:16. | |
Donald Trump's infrastructure plans will have. >> | :06:17. | :06:21. | |
Improving infrastructure for transportation, for electronic | :06:22. | :06:26. | |
communication, this is certainly an area that we need more of in the US. | :06:27. | :06:32. | |
I think it will help productivity, I think it will help get jobs going as | :06:33. | :06:37. | |
well. The incoming Trump administration seems to be reversing | :06:38. | :06:40. | |
a lot of Barack Obama's policies with regard to trade. I'm wondering | :06:41. | :06:46. | |
what kind of an impact that will have on the US economy. A lot was | :06:47. | :06:51. | |
said during the campaign. If we followed through with that it would | :06:52. | :06:55. | |
be a significant concern, no question. My sense is that the new | :06:56. | :07:02. | |
administration is going to have its primary objective to be to raise | :07:03. | :07:05. | |
growth in the economy from what's been a very sluggish 1.5%/ 2% into | :07:06. | :07:12. | |
the 3% plus range, which will be very important I think for raising | :07:13. | :07:16. | |
productivity and standard of living down the road. If we go down the | :07:17. | :07:22. | |
road seriously of some of the protectionist elements talked about, | :07:23. | :07:27. | |
that could be counter-productive. We've seen our first and pretty much | :07:28. | :07:31. | |
only interest rate rise for this year in 2016. I'm wondering what you | :07:32. | :07:36. | |
think the Federal Reserve will do under a Trump administration. So far | :07:37. | :07:44. | |
our house call is for two more rate increases in 2017. Even though the | :07:45. | :07:54. | |
F1 see how is increased their guesses to about three. The labour | :07:55. | :07:59. | |
market is already beginning to tighten in the US. We are at very | :08:00. | :08:04. | |
close to full employment. It's going to take a while for increases in | :08:05. | :08:09. | |
business spending to raise productivity, to raise the growth of | :08:10. | :08:13. | |
the supply side of the economy, so for a while we're going to see a | :08:14. | :08:17. | |
further tightening of the labour market. We're already beginning to | :08:18. | :08:22. | |
see some pressure on wages and we expect to see inflation move up | :08:23. | :08:27. | |
further. There is room, and this is a desirable development up to a | :08:28. | :08:31. | |
point but it also means the Fed is going to get back to a more normal | :08:32. | :08:34. | |
level of interest rates somewhat faster than previously. While our | :08:35. | :08:40. | |
official forecast is two, I think the risks are going towards three or | :08:41. | :08:46. | |
even four in the year ahead. Peter Hooper of Deutsche Bank. Donald | :08:47. | :08:50. | |
Trump's shock election victory reset many assumptions about US politics. | :08:51. | :08:56. | |
We were about to find out if a Trump presidency can remake the US | :08:57. | :08:57. | |
economy. For the first time in nearly 30 | :08:58. | :09:10. | |
years, Queen Elizabeth has missed the Christmas Day church service at | :09:11. | :09:15. | |
Sandringham. Buckingham Palace says she is still | :09:16. | :09:16. |