:00:00. > :00:16.Now it's time for World Business Report.
:00:17. > :00:20.A taxing task for Trump, as he pushes plans to ease
:00:21. > :00:23.the burden on business and the middle classes.
:00:24. > :00:26.But can he sell it to a sceptical Congress?
:00:27. > :00:29.Plus, crude warning - the boss of Shell says the price
:00:30. > :00:32.of oil could soon be heading higher as lack
:00:33. > :00:44.Also coming up, unexpected good news as China's factories move up
:00:45. > :00:56.where President Trump has begun a speaking tour to try and build
:00:57. > :01:02.He described the US tax code - which hasn't been reformed for three
:01:03. > :01:07.And he called for a more competitive system to boost jobs and wages,
:01:08. > :01:10.repeating his ambition to cut America's corporate tax rate
:01:11. > :01:15.On paper the US corporation tax rate is one of the world's
:01:16. > :01:22.Taking into account various tax breaks, top US firms pay a bit less
:01:23. > :01:26.That still compares unfavourably with the 25% rate in China,
:01:27. > :01:29.19% in the UK, and just 12.5% in Ireland -
:01:30. > :01:31.where many top US firms have their overseas headquarters.
:01:32. > :01:35.Which has led of course to this - $2.5 trillion worth of profits
:01:36. > :01:37.channelled overseas by top US companies as they look
:01:38. > :01:55.The US national debt is spiralling towards $20 trillion.
:01:56. > :01:59.So would cutting taxes boost the economy, and tempt US firms
:02:00. > :02:13.Or would it just do more damage to the government's finances?
:02:14. > :02:16.That's an argument the President will have to take to Congress,
:02:17. > :02:25.as Michelle Fleury reports from New York.
:02:26. > :02:35.These stock market is art. The unemployment rate is at an all-time
:02:36. > :02:39.low. If you listened to Donald Trump on Wednesday, you heard him say the
:02:40. > :02:42.system is rigged. In a speech to introduce tax reform, the US
:02:43. > :02:47.President told the crowd, the country's tax system was broken. His
:02:48. > :02:52.sales pitch, which was light on details, focused on how it would
:02:53. > :02:55.then that the middle class. Our self-destructive tax code costs
:02:56. > :03:00.Americans millions and millions of job, trillions of dollars, and
:03:01. > :03:05.billions of hours spent on compliance and paperwork. One
:03:06. > :03:11.proposal he has been pushing is cutting the nation's 35% corporate
:03:12. > :03:14.tax rate to 15%. Those in favour say it would encourage companies to stay
:03:15. > :03:19.in the United States and create jobs, but not so fast. Budget
:03:20. > :03:23.experts say the plan could cost the government $2 trillion, and critics
:03:24. > :03:28.argue there is no evidence that companies saving more on taxes will
:03:29. > :03:31.expand their workforces. Plus, the tax code is so full of loopholes
:03:32. > :03:37.that most firms already pay less. There is bipartisan support to
:03:38. > :03:40.simpler by America's tax code. But given potential impact on workers,
:03:41. > :03:41.businesses and the country's deficit, modernising the rules would
:03:42. > :03:43.get for water. Professor Alan Auerbach is Professor
:03:44. > :03:54.of Economics at the University Good to see you again, Professor.
:03:55. > :03:59.Can you give us your take on President Trump's challenge? Will he
:04:00. > :04:06.pull it off and get a 15% corporation tax rate in the US? I
:04:07. > :04:11.think he is still talking about 15%, but others in his administration
:04:12. > :04:16.have begun talking about 20% or 25%. So maybe he is still talking about
:04:17. > :04:20.that in speeches, but I think it is extremely unlikely we are going to
:04:21. > :04:25.see a 15% tax rate. So we will see some kind of political fudge at the
:04:26. > :04:30.end of it? Well... Will it either desired effect of American companies
:04:31. > :04:35.bringing profits home? -- will it see the desired effect. I think it
:04:36. > :04:39.depends on the details, and as you said, that has been very light so
:04:40. > :04:43.far. If we just have a cut in the corporate tax rate, that in itself
:04:44. > :04:46.would encourage companies to bring profits home and perhaps to locate
:04:47. > :04:50.more production in the United States. The big question is how he
:04:51. > :04:55.will pay for it. Simply issuing more debt in order to do that would
:04:56. > :05:02.equate counter-productive. All in all, that would not be a good policy
:05:03. > :05:05.to follow. They are taking a path of least resistance right now and
:05:06. > :05:08.promising benefits without really indicating how they are going to
:05:09. > :05:13.balance the package. And of course that is where the difficulty comes
:05:14. > :05:17.in. Partick million trying to hold their fragile Republican coalition
:05:18. > :05:24.together, especially in the senate. -- particularly in trying to hold.
:05:25. > :05:28.From your perspective, how are the public finances? We have given the
:05:29. > :05:34.barebones facts, with public debit heading towards $20 trillion. That
:05:35. > :05:37.is such an enormous sum. But the US economy, we had a revision of the
:05:38. > :05:43.latest GDP numbers upwards, I mean, the economy is healthy. The economy
:05:44. > :05:46.is very healthy. We are experiencing a very low unemployment rate. We
:05:47. > :05:51.just had a revision upward of our recent growth. The US economy is
:05:52. > :05:56.doing well, which is not to say that we couldn't do better, with a more
:05:57. > :06:03.sensible tax system. But I would say that taking harsh or extreme
:06:04. > :06:10.measures right now in the name of rhetoric thing and economy, I think
:06:11. > :06:13.that would be inappropriate. A cheerful, well-designed tax reform
:06:14. > :06:20.would be a benefit for the US economy. -- careful, well-designed.
:06:21. > :06:23.But simply passing a tax cut to declare victory, that something has
:06:24. > :06:26.been accomplished, that would be a big mistake. We will watch this
:06:27. > :06:31.space closely. Thank you for your time.
:06:32. > :06:41.Let's go to Asia and talk about the economy. China moved up in August in
:06:42. > :06:43.terms of their factory sector, better than most economists were
:06:44. > :06:51.predicting. That will ease concerns about the help of the Chinese
:06:52. > :06:55.economy. Sharanjit Leyl joins us. The numbers are looking good for
:06:56. > :07:00.China, following hot on the heels of the US revision upwards as well?
:07:01. > :07:04.Absolutely. You said it. Most markets in the region are going up
:07:05. > :07:07.as a result, because of all this good news. China, as you said,
:07:08. > :07:14.posted stronger than expect the factory sector growth in August. The
:07:15. > :07:18.purchasing managers index, that is the official one, it is a gauge of
:07:19. > :07:21.the help of the manufacturing sector, and it came in at 51.7,
:07:22. > :07:25.crucially above the 50 point mark that separates growth from
:07:26. > :07:30.contraction. Analysts had expected it to actually be fairly little
:07:31. > :07:34.change from July. So China's resilience is giving something of an
:07:35. > :07:38.extra boost to the global recovery, especially, like you said, at a time
:07:39. > :07:41.in the US economy also seems to be bouncing back. You just said US
:07:42. > :07:45.growth would be revised up to register growth, the fastest pace in
:07:46. > :07:49.more than two years. China has had to manage its economy much more
:07:50. > :07:53.carefully, because it has cracked down on riskier lending, it has put
:07:54. > :07:56.in place tough curbs to get its housing market under control, and we
:07:57. > :08:02.saw a growing by a better-than-expected 6.9% in the
:08:03. > :08:06.first half. -- saw it growing. So we have seen this better data, but the
:08:07. > :08:08.services sector has not shown as much growth. Thank you, Sharanjit
:08:09. > :08:10.Leyl. The industry has got
:08:11. > :08:14.used to lower prices, but the boss of Shell,
:08:15. > :08:17.Ben van Beurden, has told the BBC that prices could start rising soon,
:08:18. > :08:20.as underinvestment reduces Good news for oil companies,
:08:21. > :08:23.you might think. But not necessarily,
:08:24. > :08:35.as he told our business editor If you look at it in the slightly
:08:36. > :08:39.longer term, I think the fundamentals are such that supply is
:08:40. > :08:46.going to be a little bit tight. Not necessarily next quarter, not
:08:47. > :08:50.necessarily very predictably. There might be seasonal effects, there
:08:51. > :08:56.might be other effects. But I think the market is actually in balance,
:08:57. > :08:59.and it will tighten a bit more. So there is probably more propensity
:09:00. > :09:04.for the oil price to drift higher than lower. But you have to bear in
:09:05. > :09:08.mind come in the short term, it is driven by sentiment, so it can go in
:09:09. > :09:11.any direction. That is interesting. You are saying that underinvestment
:09:12. > :09:16.in bigger projects over the last couple of years, because of the low
:09:17. > :09:19.oil price, is so -- is selling PCs for a potential oil price spike
:09:20. > :09:28.knowing forward? -- selling in the seeds. -- sowing. I think that is a
:09:29. > :09:33.risk, and nobody would benefit from that. You would. I don't think so.
:09:34. > :09:37.It is a popular belief, that this is good for oil companies, but I can
:09:38. > :09:41.tell you that it isn't. What is important to us as a relatively
:09:42. > :09:44.predictable market, a relatively predictable outlook for supply and
:09:45. > :09:50.demand, prices, et cetera. Because look at what happens, if oil prices
:09:51. > :09:58.drop down from over 100 to less than 30, you know, there in mind every
:09:59. > :10:05.$10 in the oil price is like $5 billion of cash per year for me. --
:10:06. > :10:09.bear in mind. So the amount of impact on our operations is massive.
:10:10. > :10:13.We cannot, as an industry, have a predictable and efficient way of
:10:14. > :10:16.running our business, when you have so much disruption and so much
:10:17. > :10:21.cycling. Of course, we can take costs out of a weak and simple by
:10:22. > :10:24.projects, but also you have to put people out of business because you
:10:25. > :10:28.can't afford it any more, or you are not going to build as much as you
:10:29. > :10:32.would like to build. And next time around, you know, it all reverses
:10:33. > :10:35.again. That is a very inefficient way of actually running the
:10:36. > :10:37.industry, and nobody benefits from that. Least of all customers, but
:10:38. > :10:47.definitely also not us. That was the boss of Shell, speaking
:10:48. > :10:51.to Simon Jack. Looking at markets now, the price of oil has declined,
:10:52. > :10:55.but gasoline is going up and up. This has to do with Hurricane Harvey
:10:56. > :11:00.pounding the energy rich Gulf of Mexico coastline. Mixed markets,
:11:01. > :11:03.slightly down for Hong Kong. Overall, sentiment is positive,
:11:04. > :11:07.thanks to the news from China and also the GDP figures from the US the
:11:08. > :11:13.night before. I will see you again shortly.
:11:14. > :11:16.From tomorrow, working parents across England will be able to get
:11:17. > :11:21.30 hours of free childcare a week, and the deadline to apply is today.