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tv   Business Briefing  BBC News  December 4, 2018 5:30am-5:46am GMT

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this is the business briefing. i'm sally bundock. executives from germany's three big carmakers head to washington for talks. can they throw a spanner in the works, as the white house considers steep tariffs on imported cars? the us—china trade truce mystery — the share market rally grinds to a halt with no word from beijing on car imports or the tariffs ceasefire. let's show you the state of play in asia. us futures indicate wall street will open lower today, however, the price of oil continues to rise ahead of the opec meeting later this week. now while the focus in recent days has been on us—china trade, donald trump's threat to slap
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tariffs on car imports from europe hasn't gone away. so there is intense interest in a meeting later today between top executives from three of germany's biggest carmakers and senior trump administration officials at the white house. so let's bring you some information. european manufacturers sold almost $54 billion worth of cars in the us last year, making the auto industry one of the biggest earning categories. sales in the us accounted for more than 14% of bmw and daimler sales last year, rather less for volkswagen, by some measures the world's biggest carmaker. now president trump is threatening to increase the current 2.5% tariff on eu—built cars to 25%. that compares with a 10% tariff for us—made cars entering the eu. president trump says the tariffs
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are about protecting american workers. the three german firms employ more than 41,000 across the us, and that could rise if bmw goes ahead with reported plans for a second us factory. but on the eve of the talks, germany's chancellor angela merkel reminded the three manufacturers that brussels is in charge of negotiating the bloc‘s trade policy. translation: these trade issues are unanimously decided by the european commission for all member states. at the same time, the german car makers are big employers in the united states, so there is clearly reason to talk to the us administration about issues such as investment and the future of the german car makers as employers in america.
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i'm joined by holger schmieding, chief economist at berenberg. good to see you. you were listening there the angela merkel. what will these executives achieve in the white house today, do you think?“ they are lucky, they can impress upon trump how manyjobs this german car makers create in the us, how much they intend to invest in the us, how often they are using the us asa us, how often they are using the us as a platform to build cars and then export them to china, but of course they cannot negotiate on behalf the european union in any way. that they could maybe lay a foundation for more conciliatory talks in the future but having said that though, when you just look at the bare fa cts , when you just look at the bare facts, the tariffs on us made cars going into europe that much higher at the moment and the other way around. yes, they are that if you look at seb ‘s instance, it is the other way around. if you look at many other products, it is the other way around. the european union has long argued against scrapping all of
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these tariffs and was president trump who came into office arguing to scrap all tariffs and liberalise trade, so trump basically has a problem of his own making. in terms of how the trade discussions are going on between the us and china, obviously there is this mystery at the moment as to whether china is dropping its tariffs on us makers going into china but given how things are playing out with president trump right now, what i think might happen with regards to the eu negotiations? obviously, it would be typical trump if he were to threaten the tariffs, give europe say for instance three months to do something, but then in the end hopefully, in negotiations, he would back down. it is a very loud guy, so loud that sent him are to be expected. if he were to go ahead with his threat of 25% tariffs on ca rs with his threat of 25% tariffs on cars coming from germany, europe, into the states, what impact would
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on this companies, the likes of bmw, daimler eccentric, and the german economy? would have a significant impact on these companies, it would have some impact on the german economy. “ ex- have some impact on the german economy. -- ex- etcher. less so because cars economy. -- ex- etcher. less so because ca rs are economy. -- ex- etcher. less so because cars are so important but because cars are so important but because it would send a signal about the future direction of trade policy, a very broadly protectionist signal and as economies in need foreign trade a lot, germany and much of europe, such as signal would be very bad. having said that, it would also hurt the us and the eu in terms of trading power is as big as the —— as the us and eu would back. and just saying that all of these potential headwinds, potential tariffs, the change in the exchange rate, a strong euro, will weigh on their earnings in 2019, also increased restrictions and
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regulations in terms of how these ca rs are regulations in terms of how these cars are put together in europe. yes, the car companies are facing a lot of headwinds and the trade wars are probably one of the biggest headwinds for them. having said that, if we can avoid genuine trade wa rs that, if we can avoid genuine trade wars next year, they are hoping so because otherwise, the us would also because otherwise, the us would also be hurting head of president trump's potential re— election. the biggest trade headwind is that all in all, demand for quality products, including quality cars around the world, is great. many emerging markets that having a crisis this year are likely to come out of crisis next year, so if we can get over the trade war threat, the output even for cars is not regard. —— outlook. output even for cars is not regard. -- outlook. always, thank you for coming in, it has been great to have you on the programme. —— all right. there's mounting confusion over what was agreed between china and the us over trade at the g20. beijing has refused to confirm or deny claims by president trump that it's to reduce and remove tariffs on us car imports.
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let's try and get our heads around the latest on this. we can cross live to shanghai and our correspondent there, robin brant. what do we know now? amin you and i discussing this yesterday and the silence and china was deafening. yeah, ithink silence and china was deafening. yeah, i think some were heralding the kind of market coming deal agreed across the table in prunus errors. we certainly know that us moves to escalate with the tariff increase in january, moves to escalate with the tariff increase injanuary, that is going to be postponed, there is a 90—day period now for negotiations. —— buenos aires. it is very confusing, we have got president trump tweeting yesterday that china is going to reduce and then remove tariffs and water imports from the us, that is down from 40% to 25%. there has been
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nothing from chinese official sources, government ministries in response to that, not confirming or denying it. yesterday the ministry of foreign affairs just talked about both sides instructing teams to work towards removing tariffs. we have larry kudlow, the president's senior economic adviser, saying overnight it is his understanding that commitment was made at the table. he is pretty clear on that, but we have got another senior adviser who refused to confirm that the issue of reducing auto import tariffs came up. —— ordered harris was confirmed. it certainly came up, he said that he would not confirm whether that agreement had been made by president xijinping or other senior diggers in china. -- xijinping or other senior diggers in china. —— sorry, auto tariffs was confirmed. 90 days starting january the first, it is just not clear. i spoke with some senior figures at
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ford motor company this morning, obviously a very big figure in the global carmaking industry, and i think that captures the sense of confusion over what actually has been agreed. thank you very much indeed for clarity on that. let's brief you on some other business stories. france and germany have reportedly cancelled plans for an eu—wide tax on technology firms. the ft says paris and berlin will instead present a draft plan later today to impose a 3% tax on revenues generated by advertising sales in the digital economy. it says it would be likely to exclude giants amazon and apple. the online retailer amazon briefly became wall street's most valuable company on monday, just days after microsoft dethroned apple. amazon rose 4.7% at one point — putting its market capitalisation at $865 billion. and elon musk‘s firm spacex has launched 64 small satellites into orbit — a record number for the us. the falcon 9 took off
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from california on what has been described as the largest ever ride—sharing mission on a us rocket. the satellites belonged to 34 different companies, government agencies, and universities. let's quickly look at the mental markets. a very different picture to what we saw yesterday. that is the wall street balance off the back of what was thought about the us and china's deal on trade. japan with an over 2% decline that at the moment in tokyo. that is your business briefing. the transport secretary,
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chris grayling, should take some responsibility for the chaos around the introduction of new rail timetables in may, according to a report by mps. thousands of journeys were cancelled or severely delayed as the new schedule went live. the transport select committee says genuine change is now needed to restore trust in the railways, as our correspondent tom burridge reports. the stories we reported back then. the stories we reported back thenlj just read every single morning because i know that the train is probably going to be late. had not been totally resolved. throughout the autumn, services have again been reduced and northern rail but the disruption in may and june and both northern and grohe thameslink was on another scale. today mps and the transport select committee say chris grayling should have done more to
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mitigate the disruption. they acknowledge the timetable change was not fully informed by —— they acknowledge she was not fully informed by transport losses. while we do not hold him responsible for this, we do not think you can absolve himself of any responsibility for what went wrong. —— he can. responsibility for what went wrong. -- he can. the report says disabled passengers were at the time simply unable to travel by train. policies are needed to help them if things go wrong again. many passengers have received compensation but the mps say it quicker system is needed, and they said fares on the part of the network affected should be frozen and not rise in the new year. there is more detail on that story and on the bbc news app, do take a look. including the pressure on the transport secretary chris grayling, who is seen to need to take more
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responsibility for the rail chaos that many had to endure in 2018. coming up at 6am on breakfast, dan walker and naga munchetty will have all the latest. this is the briefing from bbc news. the headlines: british mps are to vote on whether the government is in contempt of parliament by not publishing the legal advice it's received about the prime minister's brexit deal. president trump has paid respect to george hw bush, whose body is lying in state in the us capitol rotunda. the french prime minister has cancelled his trip to the climate summit in poland and is due to meet representatives of the yellow vest anti—government protests. so what is the media making with some of the stories? we begin with le figaro's
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main headline. "under pressure, the executive prepares for a way out of the crisis." it says president macron is still trying to avoid a new "black saturday" and more protests over fuel prices. it calls the political efforts a "damning operation," and has involved talks with politicians and some communication with the leaders of the "yellow vest" protests. in the uk, brexit and the campaign for a second referendum dominates the independent‘s political coverage. picturing the green party's caroline lucas, labour's chuka umunna and conservativejustine greening — the three politicans say they have at least a million signatures calling for another vote. the gulf news anticipates more political fallout from qatar's decision to leave opec. it quotes a tweet by the uae‘s minister for foreign affairs. he claims qatar's move is proof of its declining role and isolation and says he expects more media attacks on opec from qatar. after the g20 meeting and president trump's meeting
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with china's leader, bloomberg reports that trump's advisers are "struggling to explain the deal he says he cut with president xi." it says plans to reduce tariffs on us car exports doesn't exist on paper and hasn't been confirmed in beijing. the new york times looks ahead to the auction of albert einstein's so called "god letter." it explains in one paragraph why he doesn't believe in god or the bible. it's reckoned it could fetch up to $1.5 million. and the times says one fee—paying school has told its parents not to spend more than £50 pound, just under $70, on gifts for its teachers. it came after some teachers were given tables at michelin—rated


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