16/01/2017 World Business Report


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Taking aim at BMW, the President-elect threatens


the German carmaker with huge tariffs, as he reveals more


about his plans for the world's biggest economy.


And we take you to Silicon Valley, to find out what the world's biggest


players in technology are doing to get ready


We will also have more on that story just mentioned, an arrest warrant


issued for the de facto boss of Samsung.


The US President-elect, Donald Trump, says he will offer


Britain what he calls a quick and fair trade deal within weeks


His comments come just days before a speech by the UK Prime Minister,


Theresa May, where she is expected to reveal further details


of the country's strategy as it prepares to leave


Speaking to the Times newspaper, Mr Trump said his team would work


very hard to get it done quickly and properly,


Mr Trump went on to say the UK had made the right decision in leaving


the European Union, and that further countries were likely to follow


Meanwhile, in a separate interview with the German newspaper Bild,


the US President-elect threatened BMW with a 35% border tax for cars


Last week the German carmaker said it was committed to its plans


to open up its new factory in San Luis Potosi,


despite Mr Trump's persistent warnings.


Dr Brian Klaas is a fellow in comparative politics


Good morning. Good morning. There is so much to talk about. He had a lot


to say in that interview. Let's start with the tariffs on BMW, to


begin with. What do you think BMW is thinking about that, and is it


likely to happen? There are two backsides to the story. One is


whether it will happen. I think Senate Republicans will put up


barriers, when many of them believe in free trade. The second aspect to


the story is how this will play for US manufacturers. America is a


global player in the economy as well so is there going to be a


retaliation from other countries if Trump tries to pursue this policy of


punishing individual car makers for their decisions to allocate their


resources as they best see fit. It is interesting, because we saw Ford


and Fiat-Chrysler say they would perhaps put on the backburner their


plans to move to Mexico. It is interesting how businesses worldwide


are having to react to this President-elect. His tweets, his


comments, his interview last night. It is, in the words of the president


really matter and send clear signals but one thing that is troubling is


that Trump and signalling very clearly that he will choose winners


and losers in the economy. That is not good for the economy because you


have uncertainty, rather than waiting for that last tweet to


determine where to invest. Interesting to see what he had to


say about Brexit, about the US, UK trade relationship and Michael Gove


being part of the interviewed him, as it were. Which is interesting.


Give us your take on that. He seems to say that it will happen quickly


and smoothly but in reality that is often not the case. I think the US


UK trade deal would certainly be good for Britain but we have to put


it in context. First up, written and the US are not the largest trading


partners. Written has most of its trade going to Europe and 10% or 15%


going to the United States so this will not be a huge game changer for


the United States. But it is still good news. However, how quickly can


get done? Most trade deals in the past have taken between four and


eight years to actually ratify and put effect. Nafta took four years,


the DPP took eight years. The idea that there would be some quick


policy change is unlikely -- TPP. Theresa May doing a speech on Brexit


this week, and the markets reacting. But on China, Trump called it not


free trade but there are or smart trade. Give us your take on these


comments. I think Trump and signalling he wants to drastically


shift trade policy but Trump doesn't get to do this alone. So Trump is to


find common ground with establishment figures both in the


Republican and Democratic Party but particularly the Republican Party


and many of them are the most hawkish on free trade, particularly


in the Senate. So the idea that Trump will come in and change trade


policy alone is not true. I think the US presidency often gets blamed


too much for the economy and gets too much credit for the economy. It


doesn't exist out of Trump's hands and it is something where he will


have an influence on it, but he is not going to dictate it. Thank you


for your time, lots more on that story on our website.


Staying with the US and Donald Trump, and we assess how


the vast US technology industry is preparing for the new president.


It forms a huge part of the US economy, accounting for just over 7%


of the value of goods and services produced there in 2016.


Our technology correspondent Rory Cellan-Jones has been


to San Francisco to find out what the tech sector thinks


San Francisco, in effect the capital of Silicon Valley and the epicentre


of the technology industry. Looming over everything right now is the


prospect of a president the majority of Californians did not vote for.


One tech firm, the memory of his election still hurts. It felt like


someone died in the family. It felt like 9/ 11. Everyone was in shock.


We are kind of in a bubble in the tech industry. We thought Hillary


was for sure going to win and the next day Trump wins, and you have to


wonder, what is the rest of America like? This company's owner, Michael


Birch, arrived here from the UK but is now an American citizen and


trying to be positive. One thing that Silicon Valley certainly is is


very innovative, so in the face of what is happening with Trump, I


think we will innovate around it and find a way to go forward. During his


campaign, Donald Trump was exactly friendly to the tech business. What


I think you want to do is boycott Apple. And his positions on


immigration and trade caused concern in this globalised industry. But


there is an upside. Like a number of tech giants, Apple has one good


reason to be optimistic about Donald Trump. He could offer them a deal to


bring billions of dollars of cash held overseas home at a favourable


tax rate. But the price of that could be increasing pressure to


build the iPhone in the United States rather than China. If he can


maintain the cost for the consumer, sure. But I don't think that's


possible. I think it will be great. The more the merrier, for being in


America, being made in America, yes. Whatever their reservations about


him, the bosses of Apple and cluster of other tech giants had profitable


meeting with him. America's most dominant technology journalist says


they should be far more robust. I think they have to be outspoken in


ways they have not been comfortable being outspoken before, on issues of


privacy, immigration, encryption. All kinds of things that have been


very important to their employees. These are the most powerful people


on the planet, and the richest as well. So they have nothing to fear


by expressing themselves. At the tech industry's big hope is that the


new president will come to see that it is going to underpin America's


future prosperity, and let it get on with the job.


Shares of Japanese airbag maker Takata are tumbling,


after they announced a deal with the US government.


The company pay $1 billion and plead guilty to criminal wrongdoing over


the airbags, which have been linked to multiple deaths.


Shanijit Leyl is in Singapore for us.


Nice to see you. What is the detail? Well, the details are that those


shares are down over 10%, and that is, bear in mind, after soaring more


than 16% on Friday ahead of that announcement you just mentioned. The


fact that US officials saying on Friday Takata had essentially agreed


to the settlement over the defect involving its exploding airbags,


which were behind as many as 16 deaths and led to the recall of more


than 100 million airbags worldwide. The US also indicted three former


Takata employees, bringing the first criminal charges in the scandal. It


has caused the auto industry's biggest safety recall. Analysts are


essentially saying that this agreement may be one step forward


for Takata, but there are still lots of concerns over the fact that the


company hasn't shown when and how it would restructure its company, or


pay off its many liabilities. There has been some speculation that they


could go bankrupt. Takata has been in talks with potential buyers who


are evaluating all its many potential liabilities as well. We


are watching that stock, currently down over 10%. On the other big


story coming out of Asia today is the special prosecutor in South


Korea seeking an arrest warrant for the head of the Samsung group, for


his role in a corruption and influenced peddling scandal. HY Lee


is accused of bribery in connection with the National pension service,


supporting the merger of two Samsung affiliates. It is said he paid


bribes totalling 40 billion yuan, that is to a friend of President


Park, at the centre of an escalating corruption scandal. The pound


sterling on the way down against the dollar, 1.6% versus the dollar since


it was reported in the Sunday Times about what the Prime Minister will


have to say in her speech this week about Brexit, it would seem a hard


Brexit is what is expected. Asian shares falling across the board with


a much weaker dollar against currencies such as the Japanese yen.


I will see you soon. Northern Ireland's devolved


Government is set to collapse today, after Sinn Fein insisted again


they would not replace Martin McGuinness as Stormont


deputy First Minister. Our Ireland correspondent


Chris Page reports.


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