Reporter it was a dave twists and turns in the relationship between the president of the United States and the president of mexico. We learned they both had an hourlong phone call to discuss whats happened over the last couple days. Heres how President Trump described that phone call in his News Conference 28 the u. K. Prime minister. We have a really, i think, a very good relationship, the president and i. And we had a talk that lasted for about an hour this morning. And we are going to be working on a fair relationship and a new relationship. But the United States cannot ten to lose vast amounts of business, vast amounts of companies, and millions and millions of people losing their jobs. That wont happen with me. We will no longer be the country that doesnt know what its doing. However, even though President Trump says they have a great relationship, he then went on to criticize mexico. Mexico with the United States has outnegotiated us and beat us to a pulp through our past leaders. They have made us look foolish. We have a trade deficit of 60 billion with mexico. On top of that, the border is soft and weak, drugs are pouring in, and im not going to let that happen. Both the white house and the Mexican Government put out a joint statement later in the day echoing the relationship is important. One difference between two statements . The statement from the Mexican Government was much more explicit in staying two president s had agreed not to speak publicly about who was going to pay for the wall. For nightly business report. At the white house. And as michelle just said, getting mexico to pay for a border wall remains a source of serious friction between washington and mexicos president nieto. One idea is a 20 border tax on mexican president s entering the u. S. As you might expect, the former mexican president vicente fox thinks that a bad idea. You dont play around with mexico. If you want to tax 20 , you are really taxing corporation importing cars from mexico. Thats what you say that youre getting the money to pay the wall. Youre getting it from the pockets of u. S. Citizens, pockets of u. S. Workers, from the pockets of u. S. Taxpayers. So what are the economics of a border tax some the Global Economics professor at the university of pennsylvania here to shed some light. Welcome. Good to have you with us. Is mr. Fox right . How is mexico paying for a wall via a border tax if that stax paid by u. S. Importers and ultimately passed on to u. S. Consumers . Well, yes. The former president fox was correct in that the first this effect here is that ultimately the u. S. Consumer will be paying for it. But there will be some substitution. Some u. S. Consumers who will say, well, we had a 20 increase and im no longer going to buy this car or this tv set from mexico. Im going to buy from somewhere else. There is no guarantee that that somewhere else will be an american producer. It could be a Chinese Company or a korean firm. The effects of this would be so complicated and i dont think anybody right now is in a position to say exactly where they would be. Professor, there are other companies who have a similar. At a tax. Do we have any idea how that has played out in those other companies and ultimately whether consumers paid the price for it . Well, the Immediate Impact is to create a lot of confusion, a lot of uncertainty. Remember a lot of american firms have created jobs, both in the United States and mexico, assuming free trade between two countries. So in the short return, it would be confusion and uncertainty and disruption. Over the long run you can imagine some american firms and some American Workers would benefit from it. But that tax could be a great benefit for some but a big harm to most. People here in the United States. And by the way, protection encourages, people in the United States, they wont work as hard, they wont be its a productive, they wont be as innovative. So i think we here in the United States by focusing on an eern emerging market like mexico, we are shooting ourselves in the foot. You can say that american automobiles have had to compete. That competing has made them better than they were. Lets take it away from the context of the u. S. Putting a 20 tax, a tariff, a border adjustment on mexico and talk more broadbly the idea that the floating around of a global border adjustment tax. It would not merely target mexico but everyone. A lot of countries have this. I was speaking earlier today to professor navarro on the white house staff and he talked about germany. When a u. S. Car is brought into germany, they put a 20 good on the that we dont have a 20 vat on an incoming audi or merced mercedesbe mercedesbenz. The vat is a value add tax. Every state with a few exceptions charges a sales tax. So there is a tax that gets charged on both u. S. Made cars and imported vehicles, right . But the problem here once again is that is one moving part. The other is currency. So one thing from the Trump Administration has achieved over the last few days is to prop up the value of the dollar, right . The american peso has lost value. But you see it has lost 16 or 18 of its value since trump was elected. That means everything made by mexico has become so much more attractive to the u. S. Consumer. This is one of the ironies. Even imposing a 20 tax would only serve to level the playing field. There are so many moving parts here. We are always simplifying things. With no provocation on the mexican side whatsoever, i think it is not conducive to the supporting or promoting the best interests of the United States. Thank you so much for enlightening us tonight. . Gross domestic product expanded at 1. 9 first port last three months of 2016. That was below expectations and well off the 3. 5 growth rate in the third quarter. A sharp decline in exports and slower Consumer Spending contributed to the lackluster growth. Over all, 2016 was the weakest year for growth since 2011. Consumer confidence rose to its highest level. The potential impact on growth. According to those who come File University of michigan index, consumers feel more confident about their own financial situations. On wall street the disappointing gdp number put a damper on things. All in all the stocks ended, the dow fell. The nasdaq rose 5. And the s p 500 was off just about 2. For the week, all threeindexs were up. Disappointing quarterly results. The company swung to a profit thanks to rising commodity prices. It still fell way short of expectations. Revenue below what analysts were expecting. The ceo said the companys well positioned to improve earnings. Shares dropped more than 2 . A better than expected quarterly profit. The Defense Company said it expects sales growth to accelerate toward the end of the decade. Also, a lead contractor on the navys new 125 billion Nuclear Missile submarine program. Yesterday, the president said that the country needs more submarines but he wants to buy them at a lower cost. The defense secretary james mattis ordered reviews of both lockheed martins f35 program and another project. They may not be the only changes ahead for the industry during the Trump Administrations first 100 days. Morgan brennan has the report. Reporter the Trump Administration will certainly shake up the Defense Industry bringing bigger opportunities and bigger risk. The opportunities President Trump promises to rebuild the american military. Scram the budget caps and develop a quote, stateoftheart Missile Defense system. The risk . A tweet from the president saying your weapons system is too expensive. Analysts say it will come down to the budget and the budget is far from deciding. I think the interesting question would be, how much of a push will be, will it be from the administration to see what they can get out of each and every dollar spent. The strenld one that says higher spending probably benefits most if not all the military counts. Expected incoming weeks, the 2017 appropriations bill which will reflect how much lawmakers are willing to spend this year and the 2018 proposal expected in springful will experts do anticipate more defense dollars, how theyre spent will be scrutinized. As defense talks square off, including nick mulvany. That has already affected lockheed martin. Trumps criticism of the join Strike Fighter program is front and center on a call with investors today. The they stressed the falling sxris the Job Opportunities the programs create. The meetings have been very productive, very good dialogue. He asks excellent questions and he is really focused on making sure that the cost comes down on the program. It is not not about slashing it. It is how to get the aircraft down and in the future. That will be key, especially since it depended on launch reviews to find ways to save money on the program and seeing if a competing plane could with improvement be used as an improvement. All of it amid a busy week for defense earnings. There are some open questions in terms of how large it will be, Program Costs and reforms. I think it is too early to answer those questions so were expecting earnings to have a quiet and calm feel. By no means do we have that will persist by the remainder of the year. And if President Trumps first week in office is any indicator, it could be a very busy year. For nightly business report. Coming up, this weeks market monitor has a couple big name for your portfolio and he says it is ball the Balance Sheet. Miamidade has become the first metropolitan area to comply with President Trumps call for an end to sanctuary cities. Miamidade mayor Carlos Jimenez ordered county jails to fully cooperate with federal officials. That came after President Trump signed an executive order that could result in the elimination of federal funding for local government thats done comply. The sanctuary city designation is an informal one. Governments are generally considered sanctuaries if local officials refuse to hold on to suspected undocumented immigrants while federal agents figure out their status. Los angeles is considered a sanctuary city, the mayor has sharply criticized President Trump in the past but now he says there may be some areas where the two can find common ground. Julia boorstin spoke to mayor eric garcetti. Reporter he is working to expand the economy and to keep part of that is the commitment to immigrants. Saying 61 of the businesses are started by immigrants and he knows first hand how immigration policies are key to helping a city grow. Here in los angeles, if it was so bad, we would be so affected, we would be the first to say keep them out. On the contrary, weve seen a huge economic boom linked to those activities. Reporter garcetti said he was hopeful after a conversation with the president. He was very open minded. He wants to fix a system that is broken so theres room for common ground. Reporter the question now, what happens if President Trump follows through on his throat wi, on his threat. Mayor garcetti said he wont use city officials to enforce a federal crackdown. Mayor garcetti said he is confident in his position of defending immigrants and he is willing to take action. I think were on very secure ground. The United States constitution says you cant put a federal financial gun to the head of states and tell them what to do in and change for funding. That was established by Justice Roberts last year on the Affordable Care act. Reporter garcetti said he is watching President Trumps attack on mexican goods, saying it would absolutely have an impact on the port. One out of nine jobs is in the port of los angeles. We can report one out of every 200 jobs in this nation come from the port of last. We want to make sure that is a great gateway. Now well see if President Trump comes to agree garcetti that immigrants and free trade bring to the economy. For nightly business report, im julia boforstin. The it matched wall street estimates but net income plunged because of a 3 billion tax benefit the company booked last year. America did report better than expected sales as well as higher unit revenue and said that it expects the key metric will remain positive through the year. But labor costs did spike. Shares fell 5 , friction. 95. Honeywell said weakness in its Aerospace Business caused earnings to fall. They reaffirmed the guide yamasa the for the year. Sale fell more than analysts expected while the lower profits came in in line with estimates. Shares were off. After the bell, the Home Improvement retailer lowes authorized a new buyback program. The new amount would be tacked on to the previous programs existing balance. Shares rose after the news finished the regular session up 2 cents at 73. 25. The Industrial Gases company said strength in its asia market and higher volumes helped lift sales. Air products also raised the Quarterly Dividend by more than 10 to 95. Since the share nevertheless, shares fell nearly 5 to 142. 01. And shares of wynn resorts tenned to rise after the operator said late yesterday that strong results in its new macao property led to the new results. It raised the price target to 19 up from 79. A market monitor likes health care and energy stocks. Two sectors he says have underperformed in the last two to three years but thats about to challenge. This is his first time joining us on the program. Lets welcome the senior portfolio manager. Michael, nice to have you with us. Welcome. Good evening. It is great to be here. Thank you for the opportunity to join you on your show. Excellent. Youve given us some very interesting picks. Lets get right to it. The first is Zimmer Biomet holdings. What in particular does this company do and why do you like it . Sure. Zimmer is a manufacturer of artificial hip and knee implant. And the company has high returns on capital. We think theyre sustainable. They keep out competitors. The Company Bought biomet the june of 2015 and we think they have a great opportunity to take costs out of the system and take already high returns on capital modestly higher from here. The priority is to pay on the debt to net action by session. You have a company with high returns on capital. We think theyre sustainable and a very good achieved valuation so we think it is a good pick. This couldnt be any farther from artificial hips and knees as you can get. So this is relative to other energyrelated companies. It is less cyclical and it has a good mix of good stream and up stream businesses. Between 2010 and 2014 the Company Invested in a major cycle in oil and gas properties. As those assets continue to come on stream, we think they can buy in the next few years. So their cash flow can accelerate. Simpson they hit their peak, it it can fall significantly from here. So it is gaccelerating. If you combine that with a very good Balance Sheet able to under the dividends, we think it is a get risk reward. And finally pfizer. It has high returns on capital and we think theyre saveable and sustainable. The company has a very good pipeli pipeline. And they have a cash flow allows them to increase dividends, stock buybacks and edge gasing in a good position. And it allows them to engage in strategic acquisitions. So heres a company with high returns on capital. Trading at a digital yield just north of 4 . We think thats a good reward for our clients. On that note, i want to note that you and your team were recently monitored for the 2016 stock fund manager of the year award. Thanks for joining us. What can jump start . Heres a look at what to watch for next week. Exxonmobil, pfizer, apple and visa. A few of the dow components scheduled to report their earnings. Several policy makers meet to discuss Interest Rates and the Labor Department will release the Monthly Employment report for january. Union membership has fallen to its lowest level on record. According to the Labor Department, the share of American Workers in unions fell for both private and public sector. Part of the decline is too to the decrease in manufacturing jobses. A major focus in the white house is to fix the infrastructure. To do that, President Trump has proposed spending 1 trillion. The question is, how will that get paid for . Anywells is in long beach, california with one possible idea. This half billion Dollar Civic Center being built for the city of long beach is not being funded by a big bond. It is not taking a decade to decide, permit and build. It is being done in three years and not risking anything. There is always some risk but the value outweighs it. It is through a private company is building the facility and essentially leasing it back for the next city hall. And the company is getting the Old City Hall as part of the deal which it will tear town and redevelop. These are popular outside the United States. Now some companies are coming up against bond limits and President Trump wants to provide more tax incentives. They have an uneven record. This it is having success with dozens of projects around the world like rebuilding hundreds of bridges in pennsylvania, and the long beach project. Some of the projects that were delivered earlier in this format are what you might think of as aspirational. That some city leaders or government leaders thought if you built something, that it might generate growth. It doesnt always work out. But he says long beach will always need a city hall and they are attracting attention. Pwp said then projects closed last year. If the president come through with tax incentives, he said it could be the capital. That will do it for nightly business report. Thank you for joining us. Have a great weekend, everybody. This is bbc world news america. Funding of this presentation is made possible by the freeman foundation. Newmans own foundation, giving all profits from newmans own to charity and pursuing the common good. Kovler foundation, pursuing solutions for americas neglected needs. And aruba tourism authority. Planning a vacation escape that is relaxing, inviting and exciting is a lot easier than you think. You can find it here in aruba. Families, couples and friends can all find their escape on the island with warm, sunny days,