This BBC podcast is supported by ads outside the UK.
OCI is the blazing fast platform for your infrastructure, database application development and AI needs, where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds.
How is it faster?
OCI's block storage gives you more operations per second.
Cheaper?
OCI costs up to 50% less for computing, 70% less for storage, and 80% less for networking.
Better?
In test after test, OCI customers report lower latency and higher bandwidth versus other clouds.
This is the cloud built for AI and all your biggest workloads right now with zero commitment.
Try OCI for free.
Head to oracle.com slash strategic.
That's oracle.com slash strategic.
Mint is still $15 a month for premium wireless.
And if you haven't made the switch yet, here are 15 reasons why you should.
One, it's $15 a month.
Two, seriously, it's $15 a month.
Three, no big contracts.
Four, I use it.
Five, my mom uses it.
Are you playing me off?
That's what's happening, right?
Okay.
Give it a try at mintmobile.com slash switch.
Upfront payment of $45 per three-month plan.
$15 per month equivalent required.
New customer offer first three months only.
Then full price plan options available.
Taxes and fees extra.
See mintmobile.com.
What links drugs, trucks and upholstered furniture?
By tariffing US manufacturers, you're also making US manufacturers less competitive in the global market.
Since last night I've been getting calls and texts from customers competitors employees, and I really can't answer.
It's World Business Report from the BBC World Service.
This is Andrew Peach on the way.
Uncertainty in sectors facing fresh US tariffs from next week.
We'll get reaction.
Also today, phone scams offering you a job and another opening of another show.
But is Broadway still good business?
First pharmaceuticals, heavy trucks and upholstered furniture three very specific sectors due to face new US import tariffs from next week.
We're going to hear from all three on the programme and to lead us through it.
Claire Jones is the US economics editor at the Financial Times in Washington.
Claire, thank you for being with us.
Just run through what Donald Trump has announced.
Well, so as you said at the top of the show, we're still yet to get quite a lot of details here.
But the basic message is we're going to see new import tariffs on top of what we've already seen earlier this year in quite a few areas.
There's heavy trucks, which will be subject to a New 25 levy, upholstered furniture, where we'll get a 30 levy, kitchen cabinets and bathroom vanities, which is subject to a 50 tariff.
And then the biggie, which is pharma, where you'll see tariffs of up to 100%.
Now, there's plenty of carve-outs and things like that here.
The devil really will be in the detail, but it just compounds the sense where we're seeing higher import costs for a lot of companies based in the US.
And in his social media post, President Trump said the reason for these sectors is that he's identified them as sectors where products are flooding into the US from other countries.
Is that right?
I mean, it's certainly the sense that these are sectors where the US does import a lot of goods.
The question is is it going to be really advantageous to US businesses and US consumers to really reshore that activity back home?
Stay with us, Claire.
I want to look at these sectors one by one.
And we're going to start with the 100 tariff on branded medicines, unless it's a company building a plant in the US.
Hans Trutel is president of Germany's VFA Association of Pharmaceutical Companies, including global names like Bayer and Merck.
And he's been talking to my colleague, Sarah Rogers.
We were in the anticipation that tariffs would be around 15% at the max.
And this is, of course, incomparable with a tariff of 100%.
Apparently there's a difference in interpretation of the agreement of a couple of weeks ago between the European Commission and the EU.
The President of the United States.
And this is the first thing that needs to be cleared.
I know, I'm aware, that tomorrow there will be a meeting with Mr Shevkovich, the Commissioner for Trade in Europe, and Howard Dutnick, as a Trade Minister in the US.
I mean, the US is a huge market for Germany.
A quarter of German pharmaceutical exports go into the US.
So what are you hoping for?
We know with the US president that sometimes he's very drastic in his announcements.
But if parties are able to negotiate and come closer to each other, he's also always there to retreat.
It is one quarter of German exports of pharmaceuticals.
27 billion in 2024, so that's huge.
If you look at Europe, it's also devastating because the biggest surplus in the trade balance with the US is pharmaceuticals.
And if all of these exports are being tariffed by another 100, so that's a doubling of the price, of the cost of the price.
That's Hans Strüttel from the pharma industry in Germany.
And Claire, there's been talk about tariffs on pharmaceuticals this whole year.
We come back to it again and again.
I guess this is one of those areas where Donald Trump really wants manufacturing to be in the US.
Absolutely.
I mean, you really really do get a sense as you say that this is an area that the US administration is particularly interested in bringing back home.
However, your interviewee also has a point in suggesting that the president has a tendency to announce a drastic measure and then row back on it somewhat.
The latest sense we do get from the White House is that it's likely to maintain a maximum tariff on pharmaceuticals coming from the EU and also Japan at 15 percent, as has been set in the trade deals that were announced were agreed earlier this year.
But you can really get the sense, I think in from from the interviewee just of how you know this is an industry that's very, very important for a lot of European economies and how you know they're having to deal with these.
You know very massive and potentially very harmful announcements for their, for their business.
Unlike some of the other areas we'll come on to in a second, these are giant companies.
Does that make it easier or harder for them to do what Trump wants or to withstand the tariffs that are being introduced?
I think that's a very good question.
I mean you would expect, with larger companies, for them to be able to, you know, comply with a reshoring incentive.
We know a lot of these pharmaceutical companies are thinking about.
You know the larger ones opening plants in the US.
So there is a sense in which, you know, I think, with all of these measures it usually does hit the small and medium sized companies harder than it does, you know, the big corporate giants.
And Chris Lowe is chief economist at FHN Financial in New York, also with us live.
How are the pharmaceutical companies reacting on the markets to this, Chris?
Well, that's interesting, Andrew.
And I think it is the point that Claire was making earlier, that that Trump tends to make these threats and then roll them back.
We did not see much movement at all in share prices today.
And I think investors have decided it's best to wait and see what happens.
The other thing analysts are telling people is that many of the bigger companies listed on the exchanges already have manufacturing in the US, and that may also be why they didn't move much.
Right.
OK now.
Another sector that Donald Trump is targeting is furniture, quite specifically, kitchen and bathroom cabinets and upholstered furniture.
I've been talking to Jorge Contreras, who's the president of Sofamaster.
This is a firm that's based in Ciudad Juarez in Mexico, right on the US border.
It's a family run firm, been going for 40 years.
Everything it makes literally everything goes to the US under what's called the USMCA, the free trade agreement between the US, Mexico and Canada.
Currently, we do not pay any tariffs because we meet the USMCA requirements.
And what that means is number one.
There's a major transformation of goods happening here at our factory.
So we get our fabric, foam, wood and cut it and sew it and make the actual goods here.
So we meet that requirement, which is a major transformation.
And then the second requirement is the origin of the raw materials that you're using and where they are coming from, as a percentage of the cost.
And we actually buy our wood and our foam and some of our fabrics are made in the U.S.
So we do meet the USMCA requirements currently.
That's why we can import without any tariffs.
And I guess you must have been keeping a close eye on the imposition of tariffs on different countries and on different sectors in recent months, and then suddenly this week, kind of out of nowhere, there are special tariffs on upholstered furniture.
What was your reaction when you heard your sector mentioned?
Uncertainty.
It's been a roller coaster over the last couple of months because we've had a lot of uncertainty within the furniture industry and especially if you manufacture outside of the US.
Because currently, with the announcement from yesterday, we're not sure if the goods that still meet the USMCN requirements will be exempt or not.
So we have a lot of uncertainty.
And is it clear to you why upholstered furniture, quite a niche sector of the economy, has been singled out and put on a list for extra tariffs?
Not exactly.
My understanding is they want to bring those manufacturing jobs to the United States.
And I'm sure there are certain...
Goods that can be manufactured in the US, but the vast majority.
My thought is that it would be very difficult to move it into the US and be cost efficient.
And you're now in the rather uncertain position of thinking OK, we've been exempt from the tariffs that were in place already.
We're told there are going to be new tariffs, but we don't really know whether there's going to be any possibility of exemption from them or whether we're suddenly being hit with 30.
That is correct.
Do you know when you'll find out?
Not really.
As you can imagine, since last night I've been getting calls and texts from customers competitors employees, and I really can't answer.
And nobody knows, even though this is supposed to come into force next week.
Correct.
So what do you then do in terms of running your business?
Are you just waiting to find that information out, I suppose?
Waiting to find out the official or get the official information.
And in the meantime, you know, looking internally, where we can find efficiencies in case this goes into effect.
How are we going to still be of value for our current customer base?
Because of course, we would have to raise prices for our customers and we make sure that there's still value to be found within our goods.
And it might be too soon to know, but could you keep going this 40-year business if suddenly there's a 30 tariff in the mix?
That wasn't there before.
It's hard to answer.
We might have to switch or focus in different types of goods, but we will definitely continue to move forward as a company.
It might have to be different product or different type of upholstered goods where we can be more competitive.
That is something we're going to have to look into.
And how do you feel about suddenly being caught up in all of this?
Again, I've used the same word several times, uncertainty.
You know, there's a lot of uncertainty.
There's things that we can control here within our company.
This particular thing we cannot control.
So it's uncertainty, really.
And that's Jorge Contreras, who's in Mexico.
Claire Jones, do you have any sense as to whether businesses like Jorge's, who've been exempt from tariffs until now, will still be exempt, subject to the new ones?
Does anyone know?
I do not.
We've heard that these new tariffs are going to come into effect on October the 1st.
So, you know, one would hope that there will be some detail in the coming days.
As to the broader USMCA and the free trade agreement with Mexico and Canada and the US, we do know that the administration has called for comments on that already earlier this month.
And it's expected to review that deal and come out with its thoughts on what the next step should be for that from January.
So there's a sense that there shouldn't be anything dramatic on that until then.
But as to whether or not these new measures take precedence over the USMCA, that's far from clear.
Next to the heavy trucks, Ken Veith is a truck market analyst at ACT Research in Indiana.
He told me he agrees.
There are lots of questions still to be answered.
We've heard that the tariff will be on the whole vehicle, but we also recognize that some of the largest components on the vehicle the engine, the transmission are actually assembled in the United States and tariffs have already been paid on those.
So the question is, are we looking at double tariffs on at least some of the products on the truck?
One additional consideration is that, you know, there is a trade agreement in place with the USMCA.
Under that agreement, we're allowed to import trucks from Mexico into the United States duty free.
Or we are assuming.
At this point, I should say that Section 232 tariffs, will take precedence over a trade agreement.
But, you know, even a question as basic as that is, you know, kind of remains in the air.
Because one thing we're all learning is just how many times different products including trucks, it seems cross the border in and out of the US during the process of manufacture.
In a way, this is what's upsetting Donald Trump, isn't it?
This is what he wants to stop.
There is some you know level of crazy making here for anybody that's looking at this, in that you know, all global trade has been set up under a certain set of rules.
And, you know, we are changing the rules in real time.
But certainly yeah, if you know, you're talking to the folks that are having to deal with this on a daily basis and happily we're not a manufacturer in that regard, as opposed to industry observers.
But it's having to understand where the metal is. in your metal parts are coming from.
And, just you know, trying to get down to very granular levels of understanding.
You know what the supply chain looks like at levels no one has ever had to do before.
Because fundamentally, the reason the supply chain will be as it is is because it's the most efficient way of doing it.
So if you put tariffs on goods, then they become more expensive for US consumers.
And if you cajole the supply chain to say, in this case, be fully within the US border, That's probably a more expensive way of doing it, which would also increase prices for US consumers.
Absolutely.
And to add further to your comment by tariffing US manufacturers, you're also making US manufacturers less competitive in the global market, thereby putting more pressure on them to raise prices on US consumers.
That's Ken Veith in Indiana, Chris Lowe from FHN Financial in New York.
Economists have largely thought that the tariffs were a bad idea.
There are some around Donald Trump I know who are on the same page as he is about this.
How is that playing out?
Well, it's interesting, Andrew.
I think we've all learned something new about tariffs this year.
And the biggest surprise, I think, is that the economic impact was bigger than the inflation impact so far.
The inflation, of course, not fully realized yet.
Prices still accelerating upward in the latest reports, including one we got just today.
But They're accelerating upward slowly.
They're not nearly as high as they were expected to be.
GDP took a big hit in the first part of the year though, and consumer confidence is still quite low.
People are very worried about this.
It's been quite disruptive to employment and hiring as well.
There is one benefit that I don't think people thought about, and that is, according to the Congressional Budget Office, they're now expecting 4 trillion in revenue over 10 years.
That will go a very long way toward reducing the budget deficit.
It puts the deficit on a path toward sustainability, perhaps as soon as two to three years from now, which is something no one thought possible before the tariffs were put in place.
Chris, Claire, thank you very much.
In business, they say you can have better, cheaper, or faster, but you only get to pick two.
What if you could have all three at the same time?
That's exactly what Cohere, Thomson Reuters and Specialized Bikes have, since they upgraded to the next generation of the cloud Oracle Cloud Infrastructure.
OCI is the blazing fast platform for your infrastructure, database application development and AI needs, where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds.
How is it faster?
OCI's block storage gives you more operations per second.
Cheaper?
OCI costs up to 50% less for computing, 70% less for storage, and 80% less for networking.
Better?
In test after test, OCI customers report lower latency and higher bandwidth versus other clouds.
This is the cloud built for AI and all your biggest workloads.
Right now with zero commitment, try OCI for free.
Head to oracle.com slash strategic.
That's oracle.com slash strategic.
Hey, it's Ryan Reynolds here from Mint Mobile.
Now I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for 15 a month is back.
So I thought it would be fun if we made $15 bills.
But it turns out...
That's very illegal.
So there goes my big idea for the commercial.
Give it a try at mintmobile.com slash switch.
A prompt payment of $45 for three-month plan equivalent to $15 per month required.
New customer offer for first three months only.
Speed slow after 35 gigabytes if network's busy.
Taxes and fees extra.
See mintmobile.com.
This is World Business Report with Andrew Peach here on the BBC World Service.
Now, have you had a message on your phone from someone claiming to be offering you a job?
Well, the Federal Trade Commission in the US says scams like this have tripled in recent years.
Today's challenging jobs market making them especially lucrative.
My colleague Kristen Schwab has been looking at how they work.
We've all gotten the texts.
A mysterious recruiter says they have the perfect job for you.
One that you can do from home on a flexible schedule for great pay.
They usually sound something like this message I recently got.
We are hiring remote online evaluator.
I'm not quite sure what that job is, but the pay looks good.
$100 to $600 per hour.
Usually I delete these messages, report them as junk.
But in the name of journalism, I decided to reply and say, yes, I'm interested.
And almost immediately.
Oh, I got a like.
The text claims to be from someone named Shirley.
She's looking for part-time team members at a digital ad company.
Sounds good to me.
Hi, Shirley.
Nice to meet you.
I would love to hear more about the job.
Exclamation point.
Shirley hearts the message, and we text back and forth.
When I decline to move the conversation to WhatsApp, Shirley goes dark.
Of course, whoever is texting me probably isn't Shirley.
It might be a worker at a scam farm, a big operation overseas, or a scammer working on their own.
Or Shirley may be a bot.
Marat Kantar-Jol, a professor of computer science at Virginia Tech, says AI has made it easier for scammers to send convincing messages that use perfect grammar and respond conversationally.
For example, the AI bot can do the first few messages and then it can give it to the human.
The human's job is to close the deal, which usually means steal your money.
Scammers might ask for banking information, so new hires can get paid or a credit card number for work supplies.
PSA, these are not things real jobs ask for, especially not over text.
Kantar-Joel says applicants should always call the recruiter's company and the company that's hiring.
Never trust, always verify.
Maybe you're rolling your eyes right now because, duh, Kristen, these scams are so obvious.
But Eva Velasquez, CEO of the nonprofit Identity Theft Resource Center, says scammers have gotten savvy, like this one text she recently got.
They had spoofed a legitimate business, spoofed the HR hiring manager's name and there was an actual open position on the website for this position.
That was the level of sophistication.
She says job scams are especially common on job boards.
And what's tricky about this is companies are increasingly recruiting online, especially as more people work remote.
And it's really confusing for people to understand what is the real process now, because it's a fundamental shift.
Imagine job hunting after years of being a stay-at-home parent, or following a layoff after a decade at one company.
The job market is ripe for scams because job hunting is usually not something we build routines around.
And when people are looking for work, it can be overwhelming.
The longer they're out of work, the more they may be willing to ignore or just say well, but I really need this.
So that red flag, I'm just going to see what happens.
And it's out of desperation.
What's maybe most confusing of all though, is there are recruiters out there who actually recruit this way over text.
So you truly are a recruiter?
Yes, ma'am.
Absolutely.
This is Joshua Turner, a health care recruiter.
I actually answered his text because I thought he was a scammer.
But he has a well-built out LinkedIn.
He's on the staff page of his company's website.
He says he got my contact info from a medical professional's database.
He invited me to apply for an emergency room job in Maine.
So I'm actually I'm not a doctor.
Oh, how interesting.
Turner says this happens sometimes.
A quick Google shows there is a Kristen Schwab in New York in the medical field.
Turner says though, he hires plenty of doctors via text.
He's well aware that some people think he's a scammer.
I get people saying, wrong number, stop.
Sometimes people are super rude.
You know, I mean, it is what it is.
We work with what we got, the resources we have.
I reached out to Turner's company and verified that he is a recruiter there.
And I believe them.
But I gotta be honest.
After all this, there's a teeny tiny piece of me that doesn't know what's real or not.
Kristen Schwab reporting.
Now, I love musical theatre.
Creatively, it feels in pretty good health.
Lots of new shows, some of them written during the pandemic, attracting young audiences.
But can you still make money from putting on a Broadway show?
Well, none of the 18 new musicals which opened last season has yet made a profit.
Three have already closed.
Even revivals of classics like Cabaret and Gypsy have been struggling.
But why?
Jason Turchin is an attorney producer who founded the Broadway Investors Club and with us on World Business Report.
Jason, thank you for joining us.
How do you invest in a Broadway musical, first of all?
Because I'd love to do this if I had any money.
Such a pleasure.
Thank you for having me.
Broadway is essentially made up of a capitalisation of a show.
It's broken into units.
And if you know producers then you can often invest through the producers and have an investment in the show.
So for many people, I imagine this is a passion project.
People want a slice of showbiz action.
People love the idea of being part of a Broadway show.
Can you actually make a successful business opportunity out of it?
Yeah, I think first and foremost, it's certainly a lifestyle investment.
And a lot of us invest because we just love to support the arts.
But there is a whole business side of it.
It's the entertainment business.
And the short is, yes, if you pick the right shows, you can make a profit.
The ones that are making a profit.
As I understand it, are the real established names, you know Les Miserables, those kind of things.
And also perhaps some of the jukebox musicals.
Like MJ is a relatively new show, jukebox musical with the songs of Michael Jackson.
That's doing well.
But a huge number of shows that people have crafted lovingly and poured their soul into and their money into, just open and fail.
Why is that more prevalent now than in the past?
I think there's a lot of shows that are structurally set up for commercial failure and a lot of times the people involved in the show may not realize it compared with other shows that may be structurally set up for commercial success.
And then it's really a question of how many audience members want to see the show and how much are they willing to pay for a ticket.
But post-pandemic.
I think we've definitely seen a shift in the types of shows that audiences are being drawn to, compared with pre-pandemic.
Right, and just put that shift into words for me.
What's changed?
Yeah, I think we want comfort.
So if you're an out-of-town tourist coming into the city to see a show, if you haven't heard of the other shows and you hear Denzel Washington is in a play, then you may be drawn to that versus an unknown property.
Right.
Now, the costs of putting on shows have really rocketed, but tickets are not cheap.
Are they for these things?
It's almost unbelievable to think that ticket prices are insufficient.
It's a hard balance because the audiences want to pay a reasonable amount for a ticket.
And the productions unfortunately oftentimes can't afford to reduce the prices because the capitalizations are so high and the weekly running costs are so high that if they dropped it down to a level that became, let's say, more reasonable, then the show would be near guaranteed to close.
So there's a discrepancy, I said, between the two sides that aren't really talking to get this to a point where it's sustainable or more sustainable.
Usually you find these days that shows have much smaller casts.
There's much less elaborate staging than might have been the case in the past.
And in some ways that's a trend within the art form, but it's also a way of making the show cheaper to put on right.
Yeah.
I think in part, but some of that comes to the producer and how fiscally responsible they are.
Because we look at Sweeney Todd and it turned profit and it had an orchestra of some 20 some odd members and a tremendous size cast and still found a way to make money.
Whereas some small shows that may have a cast of four people still lose all their money.
Jason, really interesting.
I could talk about this all day, as you can probably tell.
Thank you very much indeed for being with me.
Sir Jason Turchin, who founded the Broadway Investors Club, live with me on World Business Report.
You'll find more on the stories we've been talking about and what else is going on if you go to our website, bbccom slash news.
And from me, Andrew Peach, and the team here, thanks for being with us on the BBC World Service.
America is changing, and so is the world.
But what's happening in America isn't just a cause of global upheaval.
It's also a symptom of disruption that's happening everywhere.
I'm Asma Khalid in Washington, D.C.
I'm Tristan Redman in London, and this is The Global Story.
Every weekday, we'll bring you a story from this intersection, where the world and America meet.
Listen on BBC.com or wherever you get your podcasts.
