breaking down barriers to trade: rachel reeves is to call for closer eu—uk relations as she heads to brussels for talks. preparing for trump's tariffs — us importers are rushing to protect their businesses from the threat of extra taxes. we hearfrom a handbag designer in philadelphia. also on the program — a tough road ahead for vw — workers at europe's

largest car—maker gear up for a second round of strikes as talks resume over cuts. and... # i don't care about presents underneath the christmas tree. # and the gifts that keep on giving: how a festive hit can help how a festive hit can help artists and songwriters artists and songwriters earn bigger profits than ever. earn bigger profits than ever. have we just given you a have we just given you a christmas earworm today? i christmas earworm today? i apologise. apologise. live from london, this is business today, live from london, this is business today, i'm sally bundock. meeting this afternoon, i'm sally bundock. chancellor rachel reeves chancellor rachel reeves is calling for closer ties is calling for closer ties between the uk and eu, between the uk and eu, saying it will help saying it will help boost economic growth. boost economic growth. she is heading to brussels she is heading to brussels today, where she will be today, where she will be the first chancellor the first chancellor of the exchequer to attend of the exchequer to attend a meeting of eurozone finance a meeting of eurozone finance ministers since britain left ministers since britain left the eu in 2020. the eu in 2020.

speaking at the eurogroup speaking at the eurogroup meeting this afternoon, ms reeves will say resetting relations means "breaking down "barriers to trade" as well as helping "businesses sell in each other�*s markets". uk exports of goods and services to the eu were £356 billion last year. that's almost half of all uk's exports. meanwhile, imports from the eu account for over half of the uk total, worth {a66 billion last year. since brexit, exports have fallen. they are now 11% below their level in 2019 before the uk formally left the eu. now with the threat of us tariffs under donald trump and the increasing competition from china, there is a feeling on both sides that a closer relationship is beneficial. i'm joined by a former negotiator for the european commission,

ignacio garcia bercero, is at the bruegel institute in brussels. good to have you on the programme. rachel reeves is saying she wants a reset as is the uk prime minister. what is brussels saying? i the uk prime minister. what is brussels saying?— brussels saying? i think brussels _ brussels saying? i think brussels from _ brussels saying? i think brussels from my - brussels saying? i think brussels from my point| brussels saying? i think l brussels from my point of brussels saying? i think - brussels from my point of view is quite open inaudible a good opportunity to enforce inaudible the relationship with the european union on trade and security and in order to respond to global challenges. my respond to global challenges. my sense is the chancellor will get a good hearing when she makes her presentation today in the council of finance

makes her presentation today in tithe uncil of finance makes her presentation today in tithe idea of finance makes her presentation today in ti’ the idea inaudible makes her presentation today in ti the idea inaudible change is the idea inaudible change the trade and cooperation agreement. i think they have to be more pragmatic and identify what can be done to improve the trade relationship, to appoint a necessary inaudible trade and that would require both sides to be pragmatic and have a clearly defined agenda about what they will do about it over the next two years and it will be important that the chancellor gives a certain sense of direction but also there is interaction between both sides so by the time there is the summit between keir starmer and inaudible have a common idea about what needs to be covered on trade as part of the reset. d0 be covered on trade as part of the reset-— be covered on trade as part of the reset-_ the reset. do you think the election of _ the reset. do you think the election of donald - the reset. do you think the election of donald trump l the reset. do you think the | election of donald trump in the reset. do you think the - election of donald trump in the us has given both sides impetus to improve the relationship? i think both the uk and eu are

committed to open trade, also committed to open trade, also committed to open trade, also committed to climate protection. from that point of view the fact we will face potentially a difficult relationship across the atlantic inaudible united kingdom and european union to work to be inaudible together and from that point of view i think it is important to get the reset done and with a certain level of ambition. qm. certain level of ambition. 0k, thank you _ certain level of ambition. 0k, thank you for _ certain level of ambition. 0k, thank you forjoining - certain level of ambition. 0k, thank you forjoining us and will be across her trip to brussels and report on how it goes. one of the key reasons why the uk and eu are keen on improving trade ties is the threat of an increasingly protectionist america under donald trump. on sunday, the president—elect gave his first major interview since winning last month's election. speaking to nbc news he reiterated his key campaign pledges, including

the imposition of tariffs on all imports from america's biggest trading partners. iama big i am a big believer in paris. i think they are the most beautiful word. they will make us rich. we are subsidising canada to the tune of over $100 billion a year, subsidising mexico for almost $300 billion. we should not be subsidising... why are we subsidising these countries? if we are going to subsidise them, let them become a state. we are subsidising mexico, canada and many countries over the world and i want a level, fast but fair playing field. donald trump has promised to slap 25% import duties on goods from mexico and canada as soon as he is in office next month and an additional 10% on anything coming from china. many companies are now pushing through orders to avoid

expected cost increases. our north america business correspondent michelle fleury when to meet an importer in philadelphia. so these are some of the bags that we have at the warehouse. is it one of your most popular ones? yes, a backpack. handbag designer sherrill mosee took action immediately after the election, reaching out to her chinese manufacturing partner. she didn't want to risk delays, especially with the chinese new year fast approaching at the end of january. after the election i'm like, 0k, we've got to get these bags in before you go on your vacation. the rush wasn't due to a sudden surge in demand, it was the looming threat of tariffs. i gotta be ready and prepared for it. by shipping her bags ahead of schedule, mosee is working to avoid the tariffs on chinese imports that donald trump has promised to impose on day one of his presidency. the idea behind tariffs is pretty straightforward — make imports more expensive so that products made in america and stored in warehouses like these seem like a better deal. it's all about pushing companies into manufacturing

in the united states, but the big question is — will companies actually move production back here? one american firm with no plans to bring manufacturing back to the us is steve madden, the well—known shoe brand. but it is speeding up its relocation efforts. just two days after the election, the company said it would cut its chinese production in half to avoid trump's tariffs. our goal over the next year is to reduce that percentage of goods we source from china by approximately a0 to 45%. the proposed tariffs are already changing how goods are being handled. warehousing giant prologis is seeing an uptick in interest from businesses looking for space to stock up. these types of requirements have really been on the margin but you are seeing some goods come into the united states, our customers are telling us that they're finding spare places to store goods. i can put my shoes in here,

my workout gear... sherrell mosee doesn't believe she can pass the added costs on to her customers. instead she is now looking for new suppliers in cambodia and india. if you're talking about adding tariffs on everything that comes, people are going to be more concerned about buying their kids clothes and things that they need in their home, not a bag. you can shop on the website now... with the disruption already being felt, the threat of these tariffs are already imposing real—world costs on businesses. michelle fleury, bbc news, philadelphia. and in that interview with nbc, donald trump also said he had no plans to replace jerome powell as chairman of the us central bank. the president—elect has previously criticised the federal reserve chair over interest rate levels. mr powell has said he would refuse to leave the position early if trump tried

to oust him. let's speak now to the independent market analyst craig erlam. hello. i imagine market watchers are happy to hear that from the president—elect, that he will try not to change things at the central bank. absolutely. we have to remember last time he clashed with jerome powell we were in a period of low interest rates. these clashes were seen as not the right thing to do as opposed to something that could be severely disruptive. that is not what we have now. we have had years of high inflation. when trump is talking about tariffs which has already got people concerned about inflation the idea of removing the head of the central bank because he wants interest rates even lower, would cause much more disruption this time than during his last term so i think he has been probably well advised to steer clear of removing someone, causing the disruption a year before his

term is due to expire anyway. give us your take on the week ahead. we have had a tumble to us weekend in syria, of course, and also in south korea where lawmakers narrowly failed to impeach the nation's president over short lived attempt to declare martial law. tumultuous. i am declare martial law. tumultuous. iam noting declare martial law. tumultuous. i am noting the south korean won is at a two—year low compared to the us dollar. all these changes have consequences for markets, don't they? consequences for markets, don't the ? , ., consequences for markets, don't the? they? they do, especially regional— they? they do, especially regional markets - they? they do, especially regional markets as - they? they do, especially regional markets as you l they? they do, especially - regional markets as you alluded to. the more global impact is a focus still on what interest rates are doing and the incoming president and what impact that will have on a much broader scale but certainly for regional currencies and stock markets we are seeing an impact from the events we have seen over the course over the last few weeks and with syria now the potential for some disruption the potentialfor some disruption in crude prices. i

think the benefit from the oil perspective is oil prices are very low because demand is in asia has been quite weak so therefore we are not seeing... had we seen the disruptions when oil was close to $100 a barrel we may have seen a more significant impact but so far we are seeing a muted impact because of that.— because of that. greg, thank ou, because of that. greg, thank you. good — because of that. greg, thank you. good to _ because of that. greg, thank you, good to see _ because of that. greg, thank you, good to see you. - because of that. greg, thank you, good to see you. we i because of that. greg, thank| you, good to see you. we will see you again soon. around the world and across the uk, this is bbc news.

you are with business today. i am the sally bundock. more bad news for the chinese economy. consumer inflation hit a five—month low in november according to the latest figures released a few hours ago. producer price deflation persisted, and this is despite the recent stimulus package aimed at shoring up the world's number two economy. the consumer price index rose 0.2% last month

from a year earlier. that's slightly down from a 0.3% increase in october. let's head to our asia business hub. katie silver is there. this is not the news china wanted, is it?— this is not the news china wanted, is it? that's right and a lot worse — wanted, is it? that's right and a lot worse than _ wanted, is it? that's right and a lot worse than economists l a lot worse than economists forecast, many predicting a 0.5%jump at the forecast, many predicting a 0.5% jump at the good news forecast, many predicting a 0.5%jump at the good news is china's food prices with the main driver, specifically low so temperatures in november with the highest we have seen since the early 1960s, helping with food production as well as transportation, sending food costs down by almost 3%. if you take that impact of food and fuel, what you are left with is core inflation and that was up on the month prior. we also got that reading on the amount of money received by the producers of goods and services, the producer price index, falling by less than the previous month, so still deflation, more

than two years of deflation, but less deflation so a bit of a mixed bag. what this suggests is maybe some of those stimulus measures are working but only in a very limited capacity and no doubt more help will be needed if there is any hope of tackling headwinds coming up. let's talk about headwinds. the main one is president elect donald trump and his intention of tariffs and the impact for china. ~ ., of tariffs and the impact for china. ~ . ., ., china. we have heard from him, -a~ledin china. we have heard from him, pledging 6096 — china. we have heard from him, pledging 6096 tariffs _ china. we have heard from him, pledging 6096 tariffs on - china. we have heard from him, pledging 6096 tariffs on goods i pledging 60% tariffs on goods sold from china. that would have weighed on confidence in november. that coupled with what experts say is overcapacity in the market is dampening confidence going forward. reuters is reporting advisers in china are pushing for more government spending to try and combat those impending tariffs. you have ongoing weakness in the property sector and we've heard from a ratings agency lowering its ratings forecast for 2025 and 2026, the

latest greatest industry —— latest greatest industry —— latest rating industry or bank to do so. ., ~ i. ., it's another critical week for europe's biggest car—maker. in germany a fresh round of talks between volkswagen and the workers' union are due to take place today in a bid to stop ongoing strikes. employees have been striking overjob cuts and factory closures since last week. vw is struggling with weak ev demand, high production costs and steep competition from china. last week, tens of thousands of workers took part in two—hour stoppages, bringing assembly lines to a halt across germany. live now to matthias schmidt, auto market analyst and founder of schmidt automotive research. hello. what are you hearing about these talks that take place today?— about these talks that take place today? about these talks that take lace toda ? ., , ~ , ., place today? how they likely to bear fruit or _ place today? how they likely to bear fruit or not? _ place today? how they likely to bear fruit or not? we _ place today? how they likely to bear fruit or not? we are - bear fruit or not? we are hearing that there should be realism coming to the table. we are seeing two parties calling

for two parallel opposites, one calling for a pay rise, one for a pay cut, one calling for facilities to be cut under extreme pressure from a week european passenger car market which is being multiplied by a weaker chinese market and what weaker chinese market and what we are seeing is calls for realism and both parties to come to the table and discuss the best way to move forward under a poor market environment right now. under a poor market environment riaht now. ~ , right now. where is the middle round right now. where is the middle ground and _ right now. where is the middle ground and which _ right now. where is the middle ground and which party - right now. where is the middle ground and which party is - ground and which party is stronger in your opinion? if you follow volkswagen, it is a bit like a circus. they come to the table with huge demands and the table with huge demands and the same as the unions and it is all about coming out with a compromise, so, for example,

deewr calling for plants to be cut and we are likely to see a compromise. —— inaudible. —— volkswagen. that will possibly appease the government, unhappy to see a huge amount ofjobs, in fact, been cutjust prior to an election that is likely to play out at the end of february. without compromise there is unlikely to be movement going forward. the key word we are looking for is realism, discussions and some form of compromise. in realism, discussions and some form of compromise.— realism, discussions and some form of compromise. in terms of the politics _ form of compromise. in terms of the politics i _ form of compromise. in terms of the politics i know _ form of compromise. in terms of the politics i know olaf _ form of compromise. in terms of the politics i know olaf scholz i the politics i know olaf scholz has made comments about volkswagen's restructuring as well as other politicians. they are happening a snap election in february. it is likely his government has collapsed. it is volkswagen impacted by the

politics or not?— politics or not? definitely. geopolitical _ politics or not? definitely. geopolitical headwinds - politics or not? definitely. | geopolitical headwinds are causing a great storm across the whole of the german economy