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Hello, and welcome to World Business Report from the BBC World Service.
I'm Roger Haring, and on this edition, shares drop heavily on Wall Street as investors worry about the future of the Chairman of the Federal Reserve.
The US Vice President is in India on holiday, but also talking to the Prime Minister there about trade ties.
Plus, how smuggling in West Africa is costing governments billions at a time of increasing concern over global trade.
People are bringing a lot of cosmetics, food, alcohol.
And then increasingly we are also seeing high -value smuggling of gold and other things – cocoa.
And the plight of those forced to work in scam centres as the UN says the phenomenon is growing right across the world.
But first big falls on Wall Street as the week begins.
That's the S &P 500, closed down 2 .3 % after steadying along with other indexes from losses steeper than 3%, in markets a bit thinned by the absence of numerous overseas markets that remain closed for Easter.
The NASDAQ fell 2 .5%, the Dow Jones 2 .4 % and the reason for all this seems to be the Trump Administration's desire to replace the Chairman of the Federal Reserve, Jerome Powell.
The president said of Mr Powell in the post on Truth Social the US economy is headed for a slow down quote, unless mr. Too late a major loser lowers interest rates now And it's being reported that government officials are trying to see if they have the power to remove the head of the US Central Bank Even though his term doesn't end until 2026.
Well joining me now is Peter Jankowskis of Arbour Financial.
Peter Thanks for being with us It's an interesting moment but clearly one which is causing investors to worry because they think that Jay Powell may be in trouble Yes, indeed.
I think that's just adding to all the other things that have been going on I think he is widely respected of course, and it's certainly keeping his eye on inflation Which certainly any move to lower interest rates now, it would simply fuel further inflation Rather than produce economic growth But, is it clear that there is a problem with J.
Powell? Because I think I'm reading it right, that in fact he can't be removed at the moment.
And, in fact, his term goes on until 2026.
Well, and I think he has said that himself, that he plans to fight any efforts to remove him prematurely.
It'll be interesting to see what sort of a rationale that the administration is able to come up with, if in fact, they choose to go that route.
So, what else is going on in terms of investors' minds there.
what was noticeable in all this, Peter, was was how much the Nasdaq dropped and that's tech heavy, and is it the tech area that is really most worried?
Yes, it is. You know, that's really where valuations are most stretched.
The valuations that are most focused on growth and the growth potential of the market, and certainly there's direct impact from all these trade restrictions as well.
These are global companies and they're certainly going to struggle more so than than other companies that are that are more domestically focused.
And there's interesting areas of pressure too from other sectors, I think that the, a lot of people from retail have been meeting the president in the last few hours I think, including Walmart leaders, clearly they're trying to push back on I imagine the tariff issue, because that's going to affect their bottom line in terms of the amounts that they have to charge their customers.
Indeed, you know, they're they're basically gonna have to pass that on it's it's not something that they can afford. Really as big as they are to absorb the the margins in retail are very, very tight.
So they're just no possibility for them to absorb these cost increases.
Now we've got a lot of results and earnings coming up this week, Peter, I mean, I guess people like yourself are getting a fairly good idea of what's gonna come out and how it's going to affect the outlook I mean Tesla and alphabet Google's parent are very prominent amongst them but also got Boeing I mean how are investors seeing this week in terms of what it tells us about the US economy well they're always focused most on the forecast going forward rather than the the actual results from the prior quarter and and that's certainly going to be the case here because that's everybody's wondering
when the other is going to drop and when we're actually going to see an impact on earnings from from all these changes so the they'll be looking very very closely at at the forecast that the companies are putting forth yeah it's gonna be an interesting week stay with us if you will be let me bring in Kristy Pitts who's a tech investor based in San Francisco Kristy thanks for being with us I mean all this I've been talking about with Peter I mean does it make people like you scratch your heads about what you're gonna do because clearly the tech sector And we heard what happened with the NASDAQ,
looks to be the most worried at the moment.
Yes, I would say if there was any word that we could use to describe the environment right now, that word would be uncertainty.
There are many factors that are affecting this, the changes that are happening to some of the prices.
For example, I think you might have mentioned a moment ago, the drop in the NASDAQ today, and in part, that was driven by Tesla, which dropped 6%, and has an earnings report this week.
So it definitely is a time of uncertainty.
There are things that are happening outside of the industry's control, which is affecting the financial results.
Well, things out of your control.
I guess there's quite a long list, but one of them would be tariffs.
Is that primarily what it's about?
Well, tariffs are definitely having a huge impact here.
And it's interesting because if we think about Alphabet, for example, whose earnings report are also later this week on Thursday, Alphabet doesn't have significant tariff exposure in its main businesses.
But you mentioned a few moments ago about how retailers are being affected by tariffs Retailers drive a good more than 20 % of ad purchases and the ad business is one of Alphabet's largest. So I think this points to the fact that, when you think about the U .S. economy, it truly is an ecosystem.
And, when things happen in one part of the economy, it affects other parts of the economy as well.
So, yes, tariffs are definitely adding to this uncertainty.
The fact that the landscape with tariffs changes day by day.
Sometimes it might seem that certain industries or certain products are exempt and maybe then they're not the next day.
And so it makes it very hard for companies to plan and also for investors to anticipate what's coming in the future.
And circling back to what I was mentioning to Peter at the beginning, Christie, what about the head of the Fed looking a bit under siege at the moment?
I mean, if Jay Powell goes or something of that order and all his policies, presumably in regard to interest rates and other things go as well.
Is that the kind of thing that makes investors like you worry as well?
Yes, absolutely. So the federal chairman is supposed to be exempt from being removed from office by the president.
And Powell said himself last week that he understands that he is not removable and that independence has brought support across both political parties in the United States.
If he were to be removed by the current administration, it would lead to even more, even greater uncertainty, likely affect the value of the dollar.
And it would be a cause for concern, especially considering that then the question of economic policy in the US would be, it would be a question, even a greater question than it is today.
So you know, there might be like short term interest rate drops, but they wouldn't, that may not necessarily be a net impact or a net positive for this group.
Yeah, indeed, Christy, well, thanks to you for being with us, Christy Pitts there.
Let come finally back to you Peter with the final question I mean this is only Monday we seem to have decades happening in weeks at the moment what are you expecting from where the shares are going to go in the next five days I mean almost impossible question yeah it is it is very challenging I think we may get a little bit of a breather here depending on how the earnings reports come through as we've you know looked back over the past several quarters typically the market a little bit of a lift. But that can be erased, you know, just with a few words or a few tweets as well.
Who knows? Yeah, uncertainty seems to be the theme that you and Christie obviously are cycling back to, but thanks for being with us, Peter, here on World Business Report.
Well, meanwhile, the world of macrofinance is an interesting position.
The semiannual meetings of the International Monetary Fund and the World Bank can often be — let's not in the world of high finance.
But this week the gathering of finance ministers and leading bankers has got a lot to chew on, as we've been hearing.
Indeed, there are plenty of analysts who say the whole global financial architecture set up after World War Two, which includes the World Bank and the IMF, the so called Bretton Woods institutions, has actually been broken by Donald Trump's tariffs.
Joining me now is our New York Business Correspondent, Michel Fleury.
Michel, thanks for being with us.
What are what are you expecting from the IMF and the World Bank this week in the meeting because a lot of them must be rather shell shocked I imagine by developments.
Yeah I mean this is the time when the kind of men and women who run much of the global economy all descend on Washington for these meetings and obviously there is one topic dominating it all and that is the trade war that has been started by the Trump administration and the impact that it's having on the global economy.
Now one of the things that happens at these meetings is the IMF releases its World Economic Outlook.
It's a report in which it basically issues growth projections for various countries.
That's due out on Tuesday.
I think that's going to be the clearest indication yet of the damage that President Trump's trade war and economic policies are having on the global economy and we sort of got a bit of a preview from the IMF Managing director, Kristalina Georgieva last week who suggested that basically you can expect growth forecasts to have been trimmed in the light of all of this.
But interestingly she didn't look or didn't suggest, I remember when we spoke about it, she didn't say there would be a global recession.
A lot of people thought she might say that.
No, and I think if you look at some of the more pessimistic forecasts from say some of the big banks on Wall Street, you know they have a kind of dimmer view of what might happen or a more worrying projection.
But so far, it does appear that the IMF thinks it will be slower growth, higher inflation that will take longer to deal with rather than recession.
Of course, we're going to find all of this out tomorrow.
But that is the assumption, that is the mood music coming from them.
What's going to be interesting is that typically, Roger, at these meetings, usually there is a sort of unified message or something that comes out.
And I think at this one, although we know what the dominating issue will be, and that's going to be trade, actually, there's going to be a lot of sort of meetings and discussions going on in back rooms between various officials from various countries, all trying to either cut deals with the Trump administration to try and evade these import duties, or trying to do other deals to try and sort of make up where they maybe see opportunities to grow their markets.
So that in some ways may be some of the real action that we see this week.
And also Michel, I've certainly heard it spoken about, as I was saying in my introduction, this is almost an existential moment for them, because the structure, the post -war architecture of finance, really seems to be threatened by all this and that would include, I guess, the Bretton Woods institutions.
I mean, you know, and the US has been a big beneficiary, it is a major shareholder in these institutions and so as a result its voice carries a huge amount of weight and certainly when it partners up with allies like the EU it kind of dominates but what we've seen with the Trump administration is that they've ordered a review of the US's membership of these two institutions essentially considering whether or not to pull out of them and if they do that really would reshape kind of the world order certainly when it comes to trade and and sort of how the economy the global economy has functioned
since post -world war two yes could be big changes Michel thank you so much for being with us here on World Business Report.
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You're with World Business Report from the BBC World Service.
Smuggling in West Africa is by many estimates almost as widespread as the official trade of everyday commodities said to be costing African governments billions in lost revenue at a time when regular exports are now also under threat due to the global tensions and the threat of more trade tariffs.
Ed Butler has been to Ghana where he's been looking at the illicit cross -border trade and hearing exclusive testimony from some of those involved.
A gunfight at a border checkpoint in northern Ghana.
But this isn't a straightforward cops and robbers shoot -out.
This exchange occurred bewilderingly between different factions of Ghana's own security forces.
It is something that really baffled many people, Up to now it's difficult to tell exactly why the military would intervene in a case like this.
That's local investigative reporter Edward Adeti.
The police command received a tip -off that some people were trying to smuggle some bags of cocoa beans.
So after the police stopped the vehicle, the military asked that the police hand over their truck.
Then at that point, gunfire erupted, the police and then the military started firing at each other.
So what do we think was going on?
Luckily, no one was seriously hurt in the incident.
The smugglers were eventually prosecuted and the army officer who created the standoff, He denied any connection with the smugglers, by the way.
He was reassigned to a new post, although the official investigation into the incident has never been published.
While gunfights between different wings of the security forces are thankfully rare, smuggling in this part of West Africa is not.
Smuggling is massive.
All the three frontiers that Ghana has with Burkina Faso, Ivory Coast, and Togo are highly porous.
That's the Ghanaian political and economic commentator, Bright Simons.
It's primarily consumer goods, so people are bringing in a lot of cosmetics, food, canned foods and things like that, alcohol.
And then increasingly we also see high -value smuggling of gold and other thing, cocoa.
I started driving in 2012 between Ghana and Burkina Faso in Togo.
When the vehicle is full, it can be 300 bags, so that's a lot of cocoa.
Everyone has to be afraid, because if they catch you doing this, you will be arrested.
But it's not just us, it's everyone, it's the politicians, the leaders in Ghana, they're all doing it.
Before we leave the depot with the lorry loaded, they have already paid off the customs at the border, so when we get there, often nobody even checks the car.
As we have heard allegations of bribery at customs are widespread and it's not just limited to Ghana but all across West Africa.
Well I have asked the Ghanaian government for a comment in response to these claims, they have yet to reply, but the head of Ghana's official cocoa board did last year estimate that as much as a third of Ghana's cocoa crop, one of its biggest cash exports, is now being smuggled out illegally, costing the country hundreds of millions of dollars.
Ed Butler reporting there.
Now the US Vice President is in India.
Technically, J .D. Vance and his family are on holiday, but they've managed to visit the Central Cottage Industries Emporium, which was set up by the Indian government nearly 80 years ago to preserve traditional Indian crafts, selling dress materials, clothing, rugs and even tea.
The showroom manager Mitu Vazirani told World Business Report's Mark Ashton what it meant to the company.
It means a lot for us.
We are very honoured to have him here.
His aura is so positive, and we really loved the visit.
We were waiting so much for it, and we have never seen such a humble and polite and soft -spoken person at such a big level.
It means a lot to us.
Tell me about the sorts of things you sell there, and what he was interested in, and did he buy anything?
Yeah, of course. He bought tea, he bought a few of herbal products, then wooden items. He has taken pottery, so different artifacts, Indian handicrafts he has taken and he has showed his interests.
Me too, Vazirami. Well, J.
D. Vance also found time to speak to India's prime minister, Mahendra Modi, and to discuss a trade deal.
Mr. Modi's office said they made significant progress on that, and the two men discussing boosting cooperation in energy and defence.
India's hoping to secure a deal to avoid steep US tariffs.
So how important is India's trade relationship with the US, and can it escape harsh tariffs?
Joining me now is Poornima Voria, founder and CEO of national U .S.-India Chamber of Commerce based in Denver Colorado.
She's also former adviser to the US Secretary of Commerce so Poornima thanks so much for being with us.
First of all, just give us a sense of how big is the trade between India and the US.
The trade between US and India is about 200 billion dollars, so it's quite significant but they are talking about doubling this goal of bilateral trade to 500 billion by 2030.
So this is significant amount of trade between the two nations.
And how easy do you think it's going to be to avoid these tariffs?
I mean it's always a hard question to answer but obviously J .D.
Vans speaking to Narendra Modi, suggestions perhaps that this might be going towards a deal of some kind?
I think so. I'm very optimistic about this and have always been.
This is a fair trade.
President Trump, putting the tariffs, 25%, 26 % on India, that is definitely required.
But at the same time, there are a lot of opportunities that are going to arise from this.
Because significant progress has been made in negotiations aimed at strengthening the economic and strategic ties between the two nations, especially with China falling out of the race, so to speak.
This is an opportunity for India.
So India has everything to gain and United States as well, although no formal agreements have been finalized.
But I would still say that J .D.
Vance's trip to India is a very significant one.
Don't take it lightly vice president Vance visit seen as a pivotal step in deepening US India relations, especially in the light of shared strategic interests in the Indo -Pacific region.
Let's talk about the interest in terms of the trade there.
What is it that India could throw in that might tempt the US to do a deal?
What are the kind of concessions that could be made?
I think India has already reduced about 41 .8 billion US imports tariffs on those from 2024 aiming to prevent the implementation of the proposed 26 % U .S. tariff on the Indian goods.
The goal is to double the bilateral trade to 500 billion.
So U .S. has to benefit, of course we'll be buying planes from U .S., military equipment, nuclear technology, you name it, energy collaboration.
There is so many technology sectors that we could look at.
So, India is seeking greater access to US markets for its agriculture, medical equipment sectors, while also proposing a 10 -year framework for defense cooperation.
You know how big India is in defense manufacturing.
They want to make their own planes.
They want to make, even the doors of the Boeing planes are made in one of the smallest place, which is called Belgaum, and I visited the factory, I could have never imagined that the plane doors are made in India.
So, and of course, energy—when we talk about energy investments, clean and reliable nuclear technology to assist India in diversifying its energy sources.
These things could all be thrown into the mix.
Let's see if they are, Purnima.
Thanks so much for being with us.
Purnima, Vauriya there of the National US -India Chamber of Commerce.
Now, as the civil war raged in Myanmar in recent years, light was shone on an area near that country's border with China, where, far from any government surveillance, crime syndicates were running scam centres, making billions of dollars in online fraud.
It was all happening in sprawling compounds, housing tens of thousands of workers, many trafficked and forced to scam victims around the world.
Well now the United Nations says the cyber -scam industry is expanding globally, including to South America and Africa, as raids in southeast Asia fail to contain their activities.
A report released on Monday by the UN Office on Drugs and Crime says a potentially irreversible spillover has taken place, leaving criminal groups free to pick, choose, and move as needed.
Well I spoke about all this to Molly Hodser, the International Justice Mission, which has been campaigning to help the people forced to work at these scam centres.
IJM has been working on this issue for the last four years and we've supported more than 500 survivors of this crime and what people are reporting is that they are being tricked with false job adverts online.
So something like being a data entry analyst, you think that you're applying for a job that's been advertised to you on something like Facebook in Bangkok, and you apply for it, you actually do an interview.
We've had people having to send in typing tests and evidence that they are proficient in English language, and then get the job flown over to Bangkok, met at the airport, suddenly everything kind of changes and you're put in a car, you think you're going to the office in Bangkok, and you get driven seven hours to the border with Myanmar, for example, and trafficked across the border against your will, unable to do anything about it, into massive compounds, which is shockingly large with 10 -foot high walls, barbed wire round the top, armed guards.
You go inside, your passport's taken, your phones, your ability to communicate with the outside world, and then you suddenly find yourself being forced to sign a contract and told you're not here for the job you thought you were here for, but you're actually here to scam people around the world using crypto scams. And you may have heard of like romance scams. So one of the terms that are often used is called pig butchering.
This is where somebody is building a relationship with a fake identity often.
So quite often, we see people's people stealing identities of like influencers or people who have like a large number of followers on social media have lots of photos that can be used.
So they're cloning those accounts, using them to then make friends with people online, building trust with them just chatting about like normal things in life, until they get to the point where they can kind of say, Well, hey, do you know I'm investing in this crypto based scheme, and I'm making a lot of money off this scheme, you should do it too.
And then so somebody will go will invest some money in that scheme, they'll then actually get a return on it and then invest some more money and they basically keep encouraging people to invest more and more money into these schemes until they think they've got to the point where they're not going to be able to invest any more at which point they pull the plug and you as the victim of the scam never hear from them again.
So what sort of people get caught up in and forced to do?
This sounds like a kind of slavery really.
So it is a growing form of human trafficking and modern slavery absolutely that's what is.
And I think what's surprising about this in particular is that it's often not the kinds of people who may have, we might think of as trafficking victims, it's often people who are very well educated, technologically literate, and often able to speak multiple languages.
I was speaking to one lady the other day who was tricked and she can speak six languages, has a degree and run her own business before.
So it's not necessarily the kinds of people that you might think.
And is it surprising to you, this the UN reports saying this is now getting really widespread?
I mean, it started off I think in on the border between Myanmar and China and then and then more widely and now seems to be going all over the world.
Yeah, that's exactly what we're hearing to.
We've heard of this happening in many countries outside of Southeast Asia, everywhere from Dubai, Fiji, Mexico, Namibia, Nigeria, Peru.
Um, to many different places.
And I think what the difficulty is, is that is that this a crime that's quite easy to replicate.
You just need an internet connection and a workforce.
So, yeah, it's a threat that the world really needs to pay attention to.
I mean, Interpol were calling this out as a global threat, and the reason it can come about is it happens in spaces that are essentially not governed, not ruled, don't have the rule of law.
So the enforcement of rule of law is absolutely critical to stopping this crime.
And, yeah, you're completely right that there, where there is often these crimes are happening, and especially economic zones in areas where there is conflict zones, or is you know, like places like Myanmar, where it's difficult for rule of law to, to be laws being forced even where they exist. So this is a really complex crime to solve as well.
Mollie Hodson, the International Justice Mission speaking to be there.
That's it from World Business Report.
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