hello, this is business live from the bbc. on the offensive, president trump launches a fresh assault in his trade war with china, rattling global markets. we are live, in london, and that's our top story on friday the 2nd of august. us president trump says he will impose more tariffs on another $300 billion of chinese goods in a sharp escalation of the trade war between the two countries. also coming up in the two countries. also coming up in the programme, turbulent times for british airways owner iag, strike

fear is looming and the economy losing altitude. we will see what is happening on the markets, sharply down right across europe and that's after the escalation in the trade war between the us and china. a chill spreading across global stocks. we will getting the inside track on the past week in business including spending on a no—deal brexit and the feds move to cut interest rates, that's all with our economics editor faisal islam. and asa economics editor faisal islam. and as a london pub reveals it is using facial recognition technology to tell staff who is next in the queue, we wa nt tell staff who is next in the queue, we want to know is this a good use of the software? would you be happy for your face of the software? would you be happy for yourface to be of the software? would you be happy for your face to be scanned in order to get served quicker? let us know using the hashtag bbc bizlive. hello and a very warm welcome to business live. good to have you with us.

business live. good to have you with us. we will start with the us and china trade war. president trump has announced a major escalation in us ta riffs announced a major escalation in us tariffs on chinese goods saying that china has broken the promises it made in early negotiations. president trump's announcement has rocked the markets sending stocks and commodities such as oil tumbling. this is what has them so worried. president trump says that from september one the us will impose a 10% tariff on around $300 billion worth of chinese imports that are not already subject to us taxes. this comes on top of the 25% taxes. this comes on top of the 25% taxes that are already imposed on chinese goods worth $250 billion per year. but the new duties will hit consumer year. but the new duties will hit consumer goods. things like electronics, toys, footwear and the like. us business groups have been quick to condemn this latest escalation. the us chamber of commerce, which represents 3 million us firms says it will only inflict

greater pain on american businesses, farmers, workers and consumers and it goes on to say it will undermine an otherwise strong us economy. we can speak to our asia business correspondent who is following developments on this in singapore. we saw a very immediate reaction on the asian markets overnight. yes, and it's to be expected, to be honest. every time we have seen this sort of trumped tariff tweet, if you will, we have seen asian markets react. in the last couple of days we have had the us and china actually having trade negotiations in shanghai. for the most part, the sense from those talks was that they we re sense from those talks was that they were constructive. in fact, that's what the statement had said when the discussions ended, so when we did receive the news, when investors received the news in asia this morning, waking up to that trump tweet, it certainly rattled the nerves of many here. and that's

because of just how nerves of many here. and that's because ofjust how interlinked the asian economy is with china. many companies in asia produce their goodsin companies in asia produce their goods in china and they are being hit by these tariffs too. a lot of a nalysts a re hit by these tariffs too. a lot of analysts are telling me firms are scratching their heads, trying to figure out if they should move out of china altogether so as not to be hit by these further tariffs that are expected to come into place on september one, or do they stick it out and try to find some way to subvert the tariffs. it's a very uncertain and unsettling time for asian businesses and investors as they try to make sense of these trade tariffs. do we have any sense of white president trump has announced this now. just 2a hours ago on the business programmes i was talking about how both sides had said the latest round of trade talks we re said the latest round of trade talks were constructive and they were looking forward to the next round in washington. i think this sense, certainly what we have been able to sense from those negotiations is that there was a difference,

president trump said, in what china promised to do and what it actually did. you will remember at the g20 in june, the last time president trump was with chinese leader xi jinping, there was an agreement and they had a friendly understanding in order to start negotiations going again, and that was that beijing would start to buy large amounts of agricultural products from the united states, and these are very sensitive items for these are very sensitive items for the us and had been targeted in previous rounds of tariffs that beijing had slapped on american agricultural goods in retaliation for other tariffs. it all gets extremely confusing, but simply put, beijing said it would buy more agricultural products and president trump said that hasn't happened to the extent china said it would do, so the extent china said it would do, so he is saying they broke their promises so that is why he is putting on these tariffs. thank you for making sense of that. i'm sure we will be speaking about the us and china trade war in the not—too—distant china trade war in the not—too—dista nt future.

china trade war in the not—too—distant future. some of the other stories making the headlines, japan says it will remove south korea from its list of trusted trade partners, deepening a bitter row between the countries. the decision to strike south korea from its so—called white list puts a fresh trade restrictions on the country. seoul has promised a strong response with the president promising to host a televised cabinet meeting this morning. car manufacturer toyota has posted an 8.7% rise in first—quarter profits. after an improvement in marketing costs and in a small increase in sales. the firm had an operating profit of around $6.9 billion in the year tojune, up from roughly 6.4 billion a year ago. the us senate has approved a two—year federal budget that also includes spending increases and it will set government borrowing limits until the end ofjuly 202i. lawmakers say it will avert a budget crisis in the run—up to the next year's

presidential election. we can talk about airlines now. the owner of british airways and iberia, the international airways group, has reported a fall in profits for the first six months of the year. it did however say that ticket sales have been strongly in the last three months, the beginning of the key summer months, the beginning of the key summer holiday period. iag made around $1.2 billion betweenjanuary and june. that was down 11.7% on the same period last year, but it has forecast that four profits will match last years. higher strikes are looming for british airways and the fallout from the data breach that saw hackers steal personal information from half a million passengers. the outlook is looking uncertain for the whole aviation industry. we can now talk to our

guest, a global aviation expert and senior lecturer at the city university in london. captain tillman, tell us first of all, what are the unique differences between ba and other airlines and to the problems they face because obviously there is something going on in the global aviation industry that is causing this downward trend. the problem we have is that we have a situation here, especially in the uk, with the declining pound. that is caused by this hard brexit, so thatis is caused by this hard brexit, so that is the feeling british airways must consider. the effect of the declining pound will create a lot of higher costs in fuel that is paid for in dollars. on the other hand, there is a big problem in the global world of pilots, there are not enough pilots, and that has caused for example in ryanair, a huge increase in salaries for those pilots. and after a $2 billion

profit year last year for british airways, the pilots want their share of success in british airways. it's interesting, isn't it. anecdotally, i hearfrom interesting, isn't it. anecdotally, i hear from friends and family and colleagues, people generally seem to be flying more, especially short—haul trips, and yet the airlines are facing all this pressure. fundamentally, it is the industry in need of change, perhaps more consolidation? that is happening firstly because of the current issues around the european situation, not only brexit, but other issues around the concentration of the major airlines, luftha nsa concentration of the major airlines, lufthansa air force and british airways aig, concentrating the business in europe. they have their own models of lower cost, short—haul, long haul, with british airways and aig. that's one issue. the other issue is certainly the

pilot shortage, which hits everywhere in europe, and a little bit now the effects of the boeing 737 max which has more than 1000 aircraft now grounded, which continue to be produced by boeing. that is hitting a lot of companies, especially here in norway, like norwegian and a couple of others, with a large number of aircraft ordered. altogether we also have a little bit of an effect, air travel, with this greater issue that's coming under discussion. people may turn away from short holiday trips and may be that is even a welcome situation for airlines because they can cut some of those very costly routes that don't make much money. captain tillman, thank you. let's look at how the markets are doing. no surprising, red across the board with asian shares falling sharply as president trump's decision to slap new tariffs on china ratcheted up

fears among investors over the trade war between the world's two biggest economies. the losses in asia followed a broad base sell—off on wall street where the dow finished more than 1% lower. the european stock markets, again, it's a sea of red. all of them tumbling at the start of business on the friday session, the main markets all lower. oildid session, the main markets all lower. oil did recover some of its losses having fallen around 7% in the previous day of trading, recovering up previous day of trading, recovering up to around two and a half percent the last time i looked. on wall street, the news now. after wednesday's interest rate decision, wall street's attention now turns to the monthly usjobs report. the latest employment data forjuly will be released at 8:30am eastern time. economists are predicting that around 170,000 newjobs were added injuly, a little bit down from 224,000 newjobs which were created injune, but nonetheless a respectable number.

employers have been steadily adding jobs, and the unemployment rate is hovering near historic lows of around 3.7%. so, a strong report would act as a buffer against concerns about rising trade tensions and slowing global growth, but the worry among investors is, how many workers remain to be pulled into the labour force. tom stephenson is investment director at fidelity international. we have seen heavy falls on the markets, so talk us through exactly why investors are so rattled. the two big stories at the market driving the markets. one is what is happening with interest rates, and also the trade tensions and tariffs situation. news from both of those today, but the big surprise was the imposition of new tariffs on essentially the whole of china's exports to the us. interesting to look at where the market falls are heaviest. we saw in europe, the ftse

100 was down 1.5%, but the german market was down more than 2%. i think that is a reflection of the importance of exports to the german economy. that's where we are really feeling the squeeze of this increase in tariffs. what we saw on wall street, retailers really feeling the pressure. the only ones that seem to escape less used were the titans like amazon, where it is considered they can have more clout with suppliers. the reason why i think retailers have been hit by this latest wave of tariffs is because they are capturing the consumer side of the economy. footwear for example, of the economy. footwear for exa m ple, toys of the economy. footwear for example, toys and electronics, these we re example, toys and electronics, these were not captured by the early phases of the tariffs. they now are. that's important because on that side of the economy, with consumption accounting for around 70, 70 5% of the consumption accounting for around 70,70 5% of the us consumption accounting for around 70, 70 5% of the us economy, so this isa 70, 70 5% of the us economy, so this is a big worry for us investors. oil

prices dropped dramatically and then bounced back. what happened there? oil prices are a reflection of global economic activity. the slowdown that is expected following the tariffs will hit the oil price. it fell around 7% yesterday. that's a very significant fall in the oil price, so not surprisingly had a bit ofa price, so not surprisingly had a bit of a bounce back this morning. you will be back to talk through the papers with us later, tom. still to come, we will be speaking about the fallout from a no—deal brexit and also the fed decision to reduce interest rates. we will be speaking to faisal islam about those issues. royal bank of scotland has just announced a £1.7 billion dividend after half—year profits beat a nalysts' forecasts. after half—year profits beat analysts‘ forecasts. but the bank is yet to replace outgoing chief executive ross mcewan and has one of a tough economic environment in the coming months. this is a good set of

results for the bank, and the doubling of operating profit, but more importantly we are starting to see some growth coming through most parts of the business. mortgage lending, 14 billion gross lending in the first six months, sme lending is up, mid—market business lending is up. we are starting to see a bank thatis up. we are starting to see a bank that is doing what it should be doing and serving its customers in the uk and the republic of ireland. the royal bank of scotland, impacted pretty badly by the rbs brand, it‘s around 10—15% of customers. natwest is performing much better, the commercial operation is number one for services, as is our private banking, but there is a lot more work to be done with the royal bank of scotla nd work to be done with the royal bank of scotland group that serves our scottish customers. we are making progress in many ways, but i must admit we have a lot of work to do with that brand. that update on royal bank of scotland. we are talking about the us and china trade

war. a little update to bring you, pa rt war. a little update to bring you, part of the reason markets across europe have fallen further, investors are slightly spooked by reports bloomberg were reporting that president trump is scheduled to make a statement on trade with the european union at 5:45pm gmt today, concern about what may emerge from that. that partly adding to investors‘ jitters, as we saw a short time ago with the ftse, and other european markets including the dax cac, falling sharply at around 2%. more news on the bbc business news website, details on the bank of england, governor mark carney plus my interview on the today programme on radio four and he has said with no—deal brexit, the shock to the economy is instantaneous, instantly you have with supply, notjust disruption, notjust you have with supply, notjust disruption, not just talking you have with supply, notjust disruption, notjust talking about real issues with ports, but

businesses that are no longer economic. he has been talking about the potential impact of a no—deal brexit. what mark carney has to say and plenty more on the website, if you go to the business live website. our top stories on business live, us president donald trump has said he will impose a fresh 10% tariff on another $300 billion of chinese goods. a sharp escalation of the trade war between the two countries and that‘s having an effect on the markets. we can check in on how the main european indices are doing. particularly the export reliant dax in frankfurt, a trade war hitting investors‘ sentiment there, but also the ftse and the cac. and the pound is looking weak, down against the dollar. another busy week of

economic news as global fears trigger an interest rate cut in the us while brexit worries continue to ta ke us while brexit worries continue to take their toll in the uk. economics editor faisal islam is here to talk through it all. yourfirst editor faisal islam is here to talk through it all. your first time editor faisal islam is here to talk through it all. yourfirst time in business live, welcome to the programme. you haven‘t been here before so we will be extra nice to you. actually, we won‘t do that start interest rates, big news this week in the us, and also a general trend globally. you say it has been a busy week, but it‘s been a busy half an hour. all of these issues and shifting sands of the governor of the bank of england interview with the bank of england interview with the bbc, trade tariffs. let‘s go with the interest rates and monetary policy decisions, cuts from the fed for the first time in a decade. i think it‘s interesting that the press co nfe re nce think it‘s interesting that the press conference from jay powell, i have to say, he seemed to be on

quite a sticky wicket, trying to explain exactly why he did it. at one point he suggested they might go up one point he suggested they might go up again, don‘t worry, but he didn‘t quite deliver what the market had hoped for, in terms of serious cuts. making it clear that they were essentially a one off. and then there is all the issue around the pressure from president trump. i think when you look at that extraordinary in context, the phrase is that the idea is normalised that aus is that the idea is normalised that a us president would start instantaneously tweeting, and become an extra member of the fed, essentially, wanting even more rate cuts, but the general picture where we have taken independent central bankers for granted, that seems to be under attack, not just bankers for granted, that seems to be under attack, notjust quite clearly on twitter from the president of the united states and his central banker, some would argue that canny politician rather than an

economist, the ecb president, fits into that mould. we are not at the turkey or latin america stage of things yet. but i wonder how the bank of england and pressure over brexit may fit into that, given mark carney will be replaced imminently. it's carney will be replaced imminently. it‘s interesting how these things have become so normalised in the last few years. the other point with interest rates as they have not even recover to the level they were at pre—financial crisis, and here we are seeing the rates cut, and it raises questions about if there were a sudden financial shock, how much more in the way of levers to the central banks have to pull if they are already starting to bring interest rates down. the remarkable thing about president trump‘s intervention into this sphere is that he sees it as a competition between blocks. he was clear, hang on, we are essentially being undermined by the europeans having negative bond yields, and by what other blocks around the world are doing. he sees it as a sort of

strategic weapon, regional trade weapon, that is problematic. the high theory of central—bank independence is that you leave them independent and then they have the market credibility, and marketsjust know the central bank, if inflation rears its ugly head, they will be on it‘s like a car bonnet, the phrase that the kids use. but actually that message is being muddied right now. i don‘t imagine we will get boris johnson tweeting, that dozy schmuck, whoever it is at the central bank... never say never in this age. but i do offer up the possibility that the picking of the new bank of england governor, officially her majesty‘s roll, but you will get the chancellor chipping in, they will have select committee hearings, what

will they say about no deal, we have heard in the last few moments on the bbc from the current central bank governor, not being critical of no deal but trying to be clear eyed about the economic consequences of what he says, or what is, notjust a demand shock, as we got at 2016 after the vote, but a simultaneous supply shock, affecting the way in which so many businesses trade across the border with europe. faisal islam, lovely to have you on the programme. we hope this is the first of many. don‘t we? definitely. and five youssouf it has simply been the simplest invention ever. according to the common phrase, it‘s the greatest of all time. something you love in the morning or evening, hot or cold,

sweet or savoury. morning or evening, hot or cold, sweet or savoury. and hessel hurst is here with the ultimate million dollar idea, and its toasty. its sliced bread, yeah, the greatest thing since... its sliced bread, isn‘t it. it came to the world in 1928 from this bloke here, otto from iowa. he sold his first brand slicing machine to this bakery in missouri. the owner of that bakery, frank bench, he was on the verge of bankruptcy, but sliced bread increased his sales 20 fold. then this giant new york bakery brought out a sliced bread called wonder, and the fad that swept across america. by 1933, four out of five loaves soul that us bakeries were sliced, and because they were perfectly even, they could sit easily inside another recent

invention, the pop—up toaster. in 1943 the us government actually banned sliced bread as a wartime economy measure to save on the plastic the bread was wrapped in. there was an outcry from angry housewives all across america, and that ban was lifted within two months. nowadays the world munches through $100 billion of sliced loaves every year. wow, that‘s a lot of bread. that close-up shot, do you like yours brown or white? of bread. that close-up shot, do you like yours brown or white ?|j of bread. that close-up shot, do you like yours brown or white? i like a mixed. i think wholemeal tastes better. you are so virtuous! we asked you earlier in the programme about this story of the london pub that announced it would use facial recognition technology to sort out the queueing system. it will recognise your face, when you arrive, and it will serve you next. we asked you to tell us whether it‘s a good idea. susan from london says, there‘s something terribly british about staying in line, i call it a very british innovation. dan feels

scanning customers is both invasive and an expensive solution to a minor problem. i don‘t foresee this being widely adopted. dan says it‘s a minor problem but you haven‘t stood there when you have been passed over time and time again. tom, do you get passed over in bars, or are you worried about the applications? those tweets really sum up the issue. on the face of it, this sounds like a great idea, it solves a problem, but it helps you get served at the bar. but the reality is, do we really need this? it feels like sugar coating to cover up just another incursion into our private lives, more surveillance, and you have to ask yourself, what are they really going to capture. it says in the article that all the information will be wiped at the end of each session, but really? do you believe that? tom, you are a conspiracy theorist, but thank you very much. thank you for watching business live. have a great weekend and happy

friday. hello there. we‘ve seen some torrential downpours in recent days. there are fewer showers in the forecast today, but we still have that severe flood warning in force issued by the environment agency for the river goyt at whaley bridge in derbyshire. and there could still be a heavy shower here through the day today, but there are fewer of them around, and many areas will remain dry with some sunshine. we are in between weather systems. we‘ve got a weak ridge of high pressure which is helping to settle things down a bit, but there are some showers still in the forecast. through the morning we had quite a bit of cloud down the eastern side of the uk. here we saw one or two showers but elsewhere a lot of fine, dry weather. lengthy spells of sunshine, but through this afternoon some of these showers will get going, the west highlands of scotland, the pennines, into the derbyshire peak district. south wales might see the odd shower and down

towards the south—west of england too. the winds are light, though, so in the sunshine it should feel pleasant with highs of around 25 celsius down towards the far south and east. if you‘re heading to the cricket, the ashes at edgbaston, it‘s quite humid. there will be quite a bit of cloud around but some breaks allowing for some sunshine and just the chance of a shower here. and those showers will continue for a while this evening before gradually fading away overnight. we may see the return of some low cloud and mist in some spots. otherwise many places dry with lengthy clear spells, not particularly cold either. temperatures between 11 celsius in the far north down to 15 celsius in the south of the uk. as we head into saturday, we still have a weak ridge of high pressure. but we‘ve got a weather front trying to make inroads from the west, and that will eventually start to turn that sunshine a little bit hazy for northern ireland, where we will see outbreaks of rain before the end of play. otherwise there will be a lot of fine, dry weather around. still one or two showers but they shouldn‘t be as intense as they have been as we head through the day on saturday.

feeling pleasant where we do get to see some sunshine with temperatures ranging between 15 and 25 celsius. as we head into sunday, here our weather front making further inroads into the western half of the uk, bringing some showery outbreaks. through sunday, some of these showers have the potential to be heavy and thundery, particularly through parts of scotland. in the sunshine down towards the far south and east it will feel warmer.

you‘re watching bbc news at nine with me, carole walker. the headlines: the liberal democrats win the brecon and radnorshire by—election, leaving borisjohnson‘s government with a working majority of one. when i arrived in westminster, it will be to find mr borisjohnson, wherever he is hiding, and tell him loud and clear, stop playing with the future of our communities and rule out a no—deal brexit. now. the raf are dropping hundreds of tonnes of sand and gravel onto the damaged reservoir dam in whaley bridge.

i‘m on the outskirts of