tv Talking Business BBC News January 25, 2025 11:30pm-11:59pm GMT
11:30 pm
this is bbc news. we will have the headlines for you at the top of the hour which is straight after this programme. welcome to talking business. here's what's on the programme. crowd cheers he's back. donald trump is once again in charge of the world's biggest economy. but what will that mean for the us and the rest of us? new tariffs against its biggest trading partners, the prospect of tax cuts and drilling for more oil. just some of the ways america is set to change over the next four years. we'll assess what trump 2.0 could mean for the world economy with our panel of experts this week. this week, the head of policy at the us chamber of commerce gives us their assessment of the impact on business and trade. a former head of the american government's energy agency explains what, "drill, baby, drill," really means for energy prices and supplies.
11:31 pm
and this leading expert on government finances crunches the numbers of tax cuts and spending plans and what it could all mean for the value of the dollar. plus all change — the boss of one of the world's biggest law firms tells us how his company is helping others keep up with a changing world, and those policy shifts that president trump has promised. wherever you're watching, welcome to the show. now, donald trump is back in the white house. after months of planning and speculation, he's been sworn in for a second term as president of the united states. it is, of course, the world's biggest and most influential economy. he's got a further four years to reshape it in his vision and that will have an impact both in the united states, but also for millions of people around the world. some of the changes could happen pretty quickly, perhaps even between us recording this show and you watching it.
11:32 pm
but before we delve into the issues, let's just remind ourselves of the state of the us economy that he's inherited from joe biden. well, inflation has been a top concern for millions of americans over the last four years. as you can see, it's fallen a long way from its peak, but prices are still rising faster than the 2% target, hitting 2.9% in december. another thing that's come down under president biden is the unemployment rate. it's now 4.1%, as a strong jobs market reflects companies�* confidence in the economy going forward. as a result, the central bank is cautious about making more cuts to interest rates any time soon. whilst the cost of borrowing has fallen in recent months, it's still much higher than at the end of president trump's first term. he's often measured his success by the value of stock markets and over the last year, the s&p 500 index of america's biggest companies has repeatedly hit record highs, something he wants to see again. so first of all, let's hear a little of what president trump had to say about the economy and trade.
11:33 pm
i will direct all members of my cabinet to marshal the vast powers at their disposal to defeat what was record inflation and rapidly bring down costs and prices. i will immediately begin the overhaul of our trade system to protect american workers and families. instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. let's pick up on that now with the head of policy at the us chamber of commerce. it represents more than 3 million businesses of all shapes and sizes right across the across the united states. neil bradley, welcome to the programme. and i think it's fair to say the american consumer has been a bit of a bright spot in the global economy the last couple of years.
11:34 pm
and i wonder, we've got, you know, a returning resident of the white house — what does he need to do? what does the us need to do to keep those consumers as that global bright spot? yeah, you're exactly right. american consumers have been a big, bright spot. that's largely been supported by growing wages in the us economy that have allowed families to kind of keep up with levels of consumption. the things that the new administration needs to be worried about is a return to inflation. trade is particularly top of that list, but here in the united states, workforce is also incredibly important to making sure that we can maintain the supply and demand balance that we need to support a growing economy. yeah, i want to talk about that inflation issue, though. it's what, 2. 9%? the target of course is 2%. it's still some way off that. and the reason it gets interesting, not only for the us but the rest
11:35 pm
of the world economy, is because of the potential impact that has on things like interest rates. how much is inflation on the minds of business right now, when they make decisions about what they will do next? it's very much on business leaders�* minds. so, you know, we have to recognise that the bout of inflation that we've gone through for the last couple of years really hasn't been experienced by most american business leaders in their professional lifetime. it was kind of a shock to the system. now, we're not going to return to the days of kind of free money, zero interest rates that we've had since most of the period since the great recession in 2008. but a normalisation of inflation right around 2%, doesn't have to be exactly 2%. and interest rates with a normal cost of money is going to be really critical to sustaining long—term growth. and so people, you know, will be forgiven for being a little confused about some of what we've heard from donald trump when it comes to things like tariffs, because the entire point of tariffs
11:36 pm
is to make stuff imported from overseas more expensive. that's all well and good when you can produce all that stuff domestically, but we know that biggest trading partners — canada, mexico, china — all in the crosshairs of the trump administration when it comes to things like tariffs. stuff will cost more and that will push up inflation, won't it? it will. and so, tariffs are a tax. they increase the cost of goods. and so in that way it can be inflationary. of course, they're not done in isolation. what happens on regulatory policy, what happens on tax policy in the united states will also have an impact on the overall kind of cost of goods and services. but listen, we're concerned at the us chamber about the broad application of tariffs and what that would mean for the us economy. they have a role in certain narrow circumstances, but broad applications would be harmful. what are your members telling you about where the opportunities and the risks are in this administration? what are they excited about? at the top of the list of what people are optimistic about, it's the deregulatory nature.
11:37 pm
listen, the last four years, there were $1.8 trillion in regulatory costs imposed on the us economy. that is historic in terms of size and scope. and so that rollback will kind of reanimate the animal spirits of the economy in a very positive way. i think we're also optimistic about where we're going on tax policy in the united states. those combined with what artificial intelligence is going to be able to do, in terms of delivering efficiency, i think means that the outlook for the future is quite bright. president trump promising to make america great at manufacturing again. manufacturing anywhere in the world often relies on imported labour. he's also pledged to crack down on things like immigration. can america be a great manufacturer again without immigration?
11:38 pm
it's a challenge to keep up with but this animated energy they were going to make policy decisions and move forward, actually in some ways is reassuring and so, uncertainty kills business deals. we know that and what we have dealt with for frankly more than than the past four years a number of years is increased levels of uncertainty and so, we can resolve some of these policy questions, make decisions, the businesses can quit worrying about washington and get back to operating the business and growing. president trump promising to make america great at manufacturing again. manufacturing anywhere in the world often relies on imported labour. he's also pledged to crack down on things like immigration. can america be a great manufacturer again without immigration? when the president returned to the oval office for the first time, he was signing a number of executive orders and he was actually asked this question about the workforce. and he replied that he knew
11:39 pm
we needed more workers coming into the united states, legally, of course, to be able to meet his vision for increasing domestic production. so, listen, this is going to have to be a well thought—out series of policies that not only encourage us domestic production, but reform the things that hold it back — excessive regulation, long delayed permitting processes and, yes, a lack of labour. and that's going to be something that is going to have to be addressed. neil bradley, it's been really good to talk to you. thank you. so what do president trump's plans to drill more oil and gas and have more dependence on fossil fuels mean for renewable energy? the inflation crisis was caused by massive overspending and escalating energy prices. and that is why, today, i will also declare a national energy emergency. we will drill, baby, drill.
11:40 pm
cheering so how easy will that be? i've been speaking to a former energy adviser to president 0bama, who also served as the head of the energy information administration. it's the us government's independent agency for analysing the energy industry and its economic impact. adam sieminski, welcome to the programme. and we know that on the campaign trail, donald trump has promised a renewed focus on fossil fuels. he said, "drill, baby, drill." america already produces record amounts of oil and gas. how much more can it produce? well, the president said even during his inaugural speech that he would try to open up federal lands, offshore alaska to more drilling. the industry itself is pretty much working at full capacity right now. so we could keep producing the amount that we're doing now, but it's not going to be really all that easy to produce a lot more. yeah, and that's partly because of
11:41 pm
an infrastructure issue, isn't it? i don't think the us has built a new refinery in, what, something like a0 years. i mean, it's one thing getting it out of the ground. how does it get it in the form that it needs to the people who need it? well, the refining is not going to be a huge problem. i think pipelines to move natural gas around the country, to generate more electricity for the big data centres that are being developed all over the country is going to be very important. so one of the things that the president talked about in his speech was easing up on permitting requirements so that we can build more electric generation facilities. is this also a way that the president can keep down prices for consumers domestically? we know some of his promised trade tariffs could push up prices of imports. and so is he simply trying to offset some of that by making energy — a big component in any business —
11:42 pm
but by making that energy cheaper? well, during the campaign, the president said that he would get grocery prices down and he would cut energy prices in half. that's not going to be very easy. economists always focus on food and energy as one of the key aspects of inflation and dropping energy prices is a really, really difficult task. bob mcnally, who worked for president bush some time ago, said that he looked for the magic wand that would lower energy prices, and it didn't exist. i kind of did the same thing for president 0bama back in 2012 and came to the same conclusion. there is no magic wand to get oil prices down. we know that demand for energy is only going in one direction, um, given especially things like ai that is hoovering up energy at a rate of knots. does america have enough
11:43 pm
energy in the pipeline? i'm thinking particularly of electricity, of course. and if not, are fossil fuels the answer? i think the answer is all of the above. chris wright, trump's pick for energy secretary, said that he would like to focus on things like nuclear, commercial nuclear technology and battery improvements. trying to single out fossil fuels as the only answer to the climate challenges we're facing is really not, uh, not going to work. there are too many people in the world that don't have enough energy. all of this is going to require more energy. so we have to find some way to deal with the emissions associated with those fuels, rather than trying to pick a favourite fuel that really is not going to be capable of doing the job by itself. adam sieminski, so good to talk to you on the programme this week. thank you for being with us.
11:44 pm
pushing more to fossil fuels, that narrows america's ability to diversify its source of energy, doesn't it?— diversify its source of energy, doesn't it? there were a lot of contradictions _ doesn't it? there were a lot of contradictions in _ doesn't it? there were a lot of contradictions in the _ doesn't it? there were a lot of i contradictions in the statements that politicians, including the president made as an example, if you want to— president made as an example, if you want to unleash domestic energy production, that usually means higher— production, that usually means higher prices, not lower prices. and if you _ higher prices, not lower prices. and if you want— higher prices, not lower prices. and if you want to build more power facilities, — if you want to build more power facilities, that might mean higher prices _ facilities, that might mean higher prices for— facilities, that might mean higher prices for electricity and not lower~ — prices for electricity and not lower. so, there are a lot of contradictions here. and ultimately, the system, the government and the united _ the system, the government and the united states is going to try to
11:45 pm
push _ united states is going to try to push a — united states is going to try to push a lot of different solutions and think— push a lot of different solutions and think what they don't want to do is have _ and think what they don't want to do is have massive subsidies for forms of energy — adam sieminski, so good to talk to you on the programme this week. thank you for being with us. 0k, ben, thank you. bye. and after the break, dollars and lawyers will find out 0ne one way to slash the dentist to cut government spending that is something he touched on in his inauguration. imilli something he touched on in his inauguration.— inauguration. will restore competence _ inauguration. will restore competence and - inauguration. will restore - competence and effectiveness to inauguration. will restore _ competence and effectiveness to our federal government and my administration will establish the brand—new department of government efficiency. let's pick up on that
11:46 pm
with the executive director of the bipartisan policy center's economic policy programme. now, that's a washington—based think—tank that tries to work with both democrats and republicans on long—term solutions. shai akabas, welcome to the programme. and let me start with what we know so far. how would you characterise president trump's approach to the economy? because we know he said he wants to cut taxes, so therefore the government will earn less in revenue. but at the same time, he says he'll spend less. so therefore the numbers add up. is it that simple? so, we have had a long—standing . fiscal problem in the united states. this year, the big item - on the agenda is tax policy. that's one of the top - items for president trump as he comes into office, - and republicans in congress, because the 2017 tax cuts - and jobs act, which were passed during the first year _ of president trump's first term, much of that is set to expire. and if it does, tax rates would go up across the board. _ republicans do not want to let that happen. - so they are already starting. the process of figuring out how they are going to extend much or all of those tax cuts. - what's really important here, though, is the i fiscal impact of this.
11:47 pm
if it is extended, unpaid for, for the full decade, - that could be a cost. of $4.5 trillion added to the national debt. let's talk, though, quickly about spending, because we know that president trump wants to spend less as well. where will that cut in spending come? do we know yet? the president has set up a _ department of government efficiency, which is going to look at places - to make the federal government more efficient, which i think. is a great place to start. the problem for many years, though, | has been policymakers on both sides| have been reluctant to touch the real drivers _ of the federal debt. those are the programmes that are growing the fastest, - specifically the entitlement i programmes that primarily go towards america's seniors. so, social security and medicare. and the most recent - president, president biden,
11:48 pm
as well as president trump, i have said that they do not plan to touch those programmes. and without making adjustments to those programmes, _ there's really no way- to wrap our arms around the problem that we have. yeah. and so neatly, that gets us on to that national debt. at $36 trillion, it's a huge number to get your head around. it is growing all the time. and so president trump says, yes, we need to get a handle on this. we need to tackle it. how? that really is the $64,000 i question here, or, you know, close to the $64 trillion question, given the debt that we have - accumulated as a country. for too long, policymakers on both sides have been reluctant- to tackle this challenge, partly because it is - tough politically. people don't like when their benefits are cut l or their taxes are raised. ultimately, that's - what it's going to take. economic growth can help, - but you need to make the tough choices to get there. right now we have a national debt that is stacking up interest - at a remarkable pace. by the end of the decade, l depending on what happens with those tax cuts, _ the interest costs that we're paying on the debt could be eating up. a quarter of all the revenue that we're bringing into the country. that is not sustainable. the other double—edged sword in all of this,
11:49 pm
of course, is the strength of the dollar right now. and president trump hailing that as a sign that america's economy is firing on all cylinders. but of course, we know that makes american exports more expensive. how do you square that circle? how does president trump maintain america's place in the global financial system, whilst also making its businesses more competitive, globally? it's a really tough circle to square and that is what the president - and his team are thinking about as they approach . tariff policy, as they. approach fiscal policy. of course, the fed and monetaryi policy plays a role in this as well. but ultimately, getting our arms around the national debt - and figuring out what we're - going to do to tackle that challenge will have impacts on the strength of the dollar moving forward. - the debt drags down economic growth by pulling investments into less - productive purposes ofjust buying |up us treasuries, instead of beingi deployed in the private sector. and facilitating economic growth. there's also an element. of uncertainty to all of this. the president has come i in with an agenda, but how that agenda will be _ implemented remains unclear. shai akabas, so good to talk to you on the programme this week.
11:50 pm
we know it has huge repercussions and given the sense that interest rates may not be falling as quickly as people had anticipated, it may be stronger for as people had anticipated, it may be strongerfor a bit longer as people had anticipated, it may be stronger for a bit longer and that is all sorts of implications and d feel that the white house is concerned about the implications of you believe the rhetoric, it's america first?— you believe the rhetoric, it's america first? _, , , america first? recognise the impacts and the decisions _ america first? recognise the impacts and the decisions that _ america first? recognise the impacts and the decisions that we _ america first? recognise the impacts and the decisions that we make - america first? recognise the impacts and the decisions that we make in . america first? recognise the impacts and the decisions that we make in a i and the decisions that we make in a strong dollar can have significant impacts on countries that are in us currency and if we are having an impact on the us dollar than it could make the operations much more challenging, those ultimately are things we need to be concerned about because the whole economy is connected and it will impact the prospects are not only americans domestically but our impact on the global stage. shai akabas, so good to talk to you on the programme this week. thank you for being with us. thanks so much for having me. as well as cutting taxes, president trump has said he'll cut
11:51 pm
regulation as part of his efforts to boost growth. details of the new laws are still emerging, but the pace of change was clear. today, i will sign a series of historic executive orders. with these actions, we will begin the complete restoration of america and the revolution of common sense. so what does it mean for firms that are charged with helping firms navigate rules and regulations? here's the boss of one of the world's biggest law firms. that's a&0 shearman, which was created last year by a merger of allen and 0very with the new york—based shearman and sterling. welcome to the programme. it's great to have you with us and talk to me about this week. we've had president trump return to the white house. he's promised to change just about everything, if you believe some of that campaign rhetoric. what does it mean for you and your team, given that a lot of the changes could come in things like laws and rules and regulations? 0n laws and regulations, it's tough to speculate what will happen. look, market sentiment is that trump's plans to reduce
11:52 pm
the regulatory burden that certain industries face, along with, you know, plans to lower taxes, to decrease the overall size of the federal government will have a positive impact on business. the incoming us administration is also set to review things like merger control regulations. so, you know, the anti—trust environment is certainly expected to become more pro—deal, more pro—business. that should be more favourable for activities such as m&a, which is a lot of what we do. so i would certainly expect opportunities for a lot more transactional activity in the us and beyond. how important is it for what you do, for you and the other lawyers you work with, to have a handle on the pace of change, given what we've seen already from president trump? how do you and your team navigate a market, an industry, that is changing so quickly? actually, this is an issue that's faced by our clients, our international clients.
11:53 pm
they see more global opportunity than ever before. but they're also, as you mentioned, navigating an increasingly complex world. there's heightened scrutiny, greater regulatory burden, more investment challenges than ever before, growing geopolitical tensions, the energy transition, technological transformation — i could go on. so businesses that we deal with rightly expect their legal advisers to support them in meeting these challenges, navigating their way through this increasingly complex environment. i'd say that was the thesis for our merger — to be global, to be uniquely global, uniquely integrated and to provide a service that no other law firm has been able to provide to our clients. we know that compliance can be time—consuming. it can be expensive. deregulation, of course, is designed to free up business to just get on with, you know, the matter at hand. but is it an oversimplification to say that deregulation is,
11:54 pm
across the board, good for business? i think deregulation, you know, does create more opportunity for businesses, but it also creates risk. and that is what our clients are sort of facing increasingly. you know, navigating a world that is increasingly complex, increasingly risky. and frankly, the reason why, you know, our clients get lawyers involved, you know, early on isn'tjust to kind of deal with disputes or deal with regulations. it's really to kind of ensure that the problems that they may face are anticipated, they're assessed and they are addressed, whether, you know, in an environment that is overregulated or under—regulated. a consistent theme on this programme is access to skilled labour. that firms tell me theyjust don't have enough people to do the jobs that they have available. have you got enough trained lawyers? yes, absolutely. look, as ever, you know, for us, when it comes to talent, it's about serving our clients. the lawyer talent market at the moment, particularly in the us and the uk,
11:55 pm
is very hot. it's very, very competitive. frankly, it's driving up salaries, particularly, as i say, in the uk and in the us. you know, we embrace that. i know one of the moves that you've made to sort of free up some of those lawyers is to start implementing ai in what you do. how much of a game—changer could it be? it will inevitably turn to the topic of ai. it is pervading all aspects of ai. it is pervading all aspects of our lives and businesses. we embraced ai very early on and we have made that a key component of our strategy. have made that a key component of our strategy-— winds that strong could topple one or two trees,- some - winds that strong could topple one or two trees._e - have made that a key component of our strategy. today, what difference is it making — our strategy. today, what difference is it making in _ winds that strong could topple one or two trees, ., ._ ., , . our strategy. today, what difference is it making — our strategy. today, what difference our strategy. today, what difference is it making in day-to-day _ our strategy. today, what difference is it making in day-to-day life. - our strategy. today, what difference is it making in day-to-day life. by i by late 2025, i expect most firms to be fully embracing ai tools for tasks like legal research, like contract analysis, document review. that drives efficiency, that drives cost savings. and we want to free our lawyers to work on more value add tasks, is it making in _
11:56 pm
such as strategic thinking, problem—solving, decision—making and leave other tasks, more routine work, more processing work, admin work, you know, to ai. khalid garousha of a&0 shearman, really good to have you on the programme this week. thanks for being with us. my pleasure. thanks for having me on. that's all for this week. you can keep up with all the latest on the global economy on the bbc news website and smartphone app. we'll see you for another edition of talking business very soon. bye—bye for now. hello. saturday was a day where the clean—up could begin from that incredibly powerful storm eowyn that battered parts of the uk and the republic of ireland on friday. a much calmer end to the day saturday. or two trees, bringing some we had a fine sunset across southern areas. it was quite cold across northern portions of the uk on saturday, cold enough for some snow
11:57 pm
in the showers across high ground. now, eowyn is continuing to disintegrate just to the west of norway, but this is our next weather system that's coming in off the atlantic. and this is another named storm. it's been named by the spanish authorities as storm herminia, and it's going to be bringing wet and windy weather over the next few days, with rainfall totals building up, particularly across parts of wales, the midlands, and south west england, where we could see some localised flooding concerns as we head into the early part of the new week. now, at the moment we've got a little trough pushing eastwards, bringing rain, a bit of sleet and hill snow, mostly above 200 metres elevation across northern england and scotland, could be a few centimetres actually in scotland and a risk of some icy surfaces wherever we see a frost. so, into sunday morning, actually most of us having a fairly decent start to the day. there will still be some showers and blustery conditions for conditions for northern scotland, and it won't be long before we see the rain and winds pick up across england, wales, and northern ireland. gusts through the irish sea coast reaching around 60
11:58 pm
to 70 miles an hour. winds that strong could topple one of the wind, the worst of the rain should start to push away. temperatures ranging from around seven to ten degrees, so a few degrees above average for the time of year. now, looking later in the new week, it looks like the weather should tend to settle down as the week goes by and into the following weekend, it might be dry for most of us.
12:00 am
amid jubilation over the latest hostage and prisoner release, a precarious moment for the gaza ceasefire deal — as israel accuses hamas of breaching its terms. criticism on capitol hill — after president trump fires more than a dozen independent watchdogs, tasked with investigating government corruption. thirteen soldiers serving with peacekeeping forces in the democratic republic of congo are killed in clashes with m23 rebels. hello, i'm carl nasman. we start with scenes ofjubiliation in israel and the west bank, after four female israeli soldiers held hostage by hamas were released, in exchange for around 200 palestinian prisoners detained by israel. the release of naama levy, liri albag, daniella gilboa and karina ariev is the second
0 Views
IN COLLECTIONS
BBC NewsUploaded by TV Archive on
![](http://athena.archive.org/0.gif?kind=track_js&track_js_case=control&cache_bust=268914190)