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The world is trying to deal with more tariff chaos.
The ground continues to shift for those partners who have essentially struck trade deals with the United States.
On the Indian economy, I think it's a bit too soon for me to comment.
It's World Business Report from the BBC World Service.
I'm Rahul Tandon.
The EU looks like it's putting its trade deal with the US on hold.
There's confusion around Trump's tariff policies.
We're going to try and make sense of it all.
Yep, that is where we're going to start the program.
We are talking about tariffs once again.
Now let's be honest it's pretty hard to keep up with what is going on after that decision by the Supreme Court on Friday to strike down many of Donald Trump's tariffs.
So in these situations, we like to turn, to put us at ease, to our North of America business correspondent, Michelle Flurry.
Over the weekend, Donald Trump said that he was going to increase a global tariff, tax or duty, whatever you want to call it from 10 to 15 on countries around the world.
The ground continues to shift for those partners who have essentially struck trade deals with the United States.
So allies like the UK, the EU Japan, South Korea now face higher global duties than they did before, while countries like Brazil and China potentially, are better off.
There we go.
The calming words there of Michelle Fleury.
Let's bring in a couple of other voices into the program.
Greta Paes is a former general counsel at the Office of the United States Trade Representative, now a partner at Wiley Rand.
Thank you so much for joining us, Greta.
Before we get into where exactly we are, what have you made of the last few days?
Well, it has been a bit of a roller coaster, that's for sure, right?
Just a lot of confusion out there in the business community about what it all means for the Supreme Court ruling to come down, whether tariffs will be available, what their imports today tomorrow, next week are going to face coming across the border.
It's been quite chaotic, and it will probably take some time to answer all those questions.
Okay, well, we're going to put some of those questions to you in a few minutes time.
But we've also got Peter Jankowskis, Vice President of Research and Analysis at Arbol Financial Services in chicago.
Already we've had the word confusion and i've been speaking to quite a few people today.
Have used the same word.
What about the markets?
Are they making sense of all of this, peter?
Let us go back to greta.
I think confusion there with peter jankowski.
Peter, can you hear us now?
Yes, i can.
The markets what have they made of it all?
Well, I think they have reacted as you want.
I certainly expected.
With all of the increase in uncertainty, defensive sectors consumer staples and health care notably were up fairly strongly, more than 1 percent.
And then more economically sensitive areas like financials consumer, discretionary industrials.
They were the ones leading the market down today.
And overall, the market was down about 1 percent.
Yes, it was.
It has been a sort of topsy-turvy time for the markets, hasn't it, Peter?
Greta, you talk there about this confusion for businesses.
If I'm a business in the US today, we're going to hear from a US business who imports cheese in about six or seven minutes' time.
What tariffs am I paying today?
Am I still paying those tariffs?
Do I know when they're going to end?
Well, as of late last night, we do have more clarity on that.
So the tariffs that were in place before, those tariffs based on this AIPA authority that differentiated between countries, those still apply until midnight tonight.
Starting tomorrow after midnight, then the new tariff, this new authority that was used on Friday will come into effect tomorrow.
Currently, actually still at that 10% level.
Although the president announced the intention to increase to 15%, that hasn't happened yet.
There hasn't been a legal instrument to make that happen.
So it's 10% as of right now, starting tomorrow.
Well done.
I'm glad that you clarified that for us.
And what about trade deals?
The European Parliament has put on hold a trade deal agreed last year with President Trump.
Greta, do you think we'll see other countries following suit?
Many countries are waiting to see.
The administration officials over the weekend said those trade deals are still good.
Our partners should still implement them, indicated that they intended to uphold them.
Again there's uncertainty given this announcement of going up to 15 percent because, as you said, that will exceed some of these agreements.
But for others, it's lower.
And so you know if you're in India or many other Asian countries, it still looks like a pretty good deal.
And you're going to want to keep your side of the bargain to keep the US trade relationship steady.
Okay, stay with us, Greta.
Peter, have a listen to this.
This is India's Finance Minister, Nilmala Sitaraman.
On the Indian economy, I think it's a bit too soon for me to comment.
On the trade, particularly aside from the Indian economy in general.
The Commerce Ministry is reviewing the situation.
The delegation will have to take a call on when they're going to go for further negotiations.
So it's a bit too early for me to comment.
And Peter, this is the problem for the markets, isn't it?
And for all of us.
If you have India's finance minister saying, hey, we don't know what's going on.
We're still trying to work it out at the moment.
How is anyone supposed to make sense of this?
It basically has upped the level of confusion from what was existing beforehand.
But that confusion has been ongoing since certainly the president has been very willing to change and undo deals at a moment's notice.
As it is,
But this has made it across the entire world, not just individual countries that are experiencing that uncertainty.
Okay.
Let's have a listen now and go back to one of the world's biggest trading blocks, the EU, which has now delayed ratifying its trade deal with the US Greta.
And that shows, I think, a problem that may lie ahead for Donald Trump and the US.
Here is some countries saying we know the parts of the EU didn't like this deal.
They may now think, hey, can we get a better deal?
Let's hold on a moment for clarity here, Greta.
I mean, I think one thing that you need to remember from the US perspective is every other country, every other economy has their own politics too.
And you're right.
The deal in the EU was controversial in how to deal with the United States in this climate.
And so the action that would appear to take the US out of compliance with the agreement.
It's really going to make it difficult for the EU to push something forward that was already controversial.
That was already a difficult step for them to make to follow through with tariff reductions and other measures at the US demand, when tariffs have gone up on the EU from the US.
Let us pick up on some of the points that Greta was making there, because I've been speaking to somebody very influential here in Europe, Ulrike Malmendier.
She is a member of the German Council of Economic Experts that advises the German government on its economic policies.
The EU and the EU Commission has also said that they're very interested in continuing the conversation, converging towards a path of more stability and possibility for businesses to anticipate what's going on.
So I hope it won't last forever.
But yeah, they are confused and you can't blame them.
I think confused is the word of the programme this evening.
If we go back to when this deal was struck, though, the German Chancellor was not very keen on it.
So do you think some countries in the EU might think, let's renegotiate now?
Yeah, I mean, nobody, I think, in the EU was excited about it.
We come from a world where tariffs were much lower before Liberation Day, before April 2nd.
They were around 6% if you take a bundle of goods exported from the EU to the US.
And so then they've averaged around, you know, if I include the exceptions, around 12%.
So that's still a world nobody could envision living in.
So nobody excited about how big the tariffs are, but everybody was aiming to get some more stability into it, right?
Uncertainty, policy uncertainty is really poison for economic growth for businesses.
By the way, not just in the EU.
Very much the same for the US, which is, you know why, several US businesses have been the ones bringing forward the lawsuit.
So where do we go next, do you think?
Or are we going to be in more uncertainty now?
When you speak to businesses in Germany, how are they making sense of this?
Let's be honest, we're struggling too at the moment.
You were saying Chancellor Merz wasn't maybe necessarily keen on the result.
That's true.
However, at the same time, the politicians were saying OK, that gives us some basis to calculate, move forward.
Think about the costs and benefits of different investment decisions, supply chain and trade chains, and so on.
And to be honest, already at the time, many people, including me, thought, not quite.
It's a little breather, I would say a little moment, to maybe have some certainty for some months going forward.
But the tariff topic will come up again.
We saw it come up again in the whole debate around Greenland.
And so I very much hope that both the businesses and business leaders here in the US and the business leaders in Europe not too much thrown off their path now.
I hope everybody was ready for uncertainty being there.
And that's now just the realizations.
And it doesn't shock us all too much.
Too much.
President Trump has announced, you know, some other legal path he wants to use.
Those are more complicated than AIPA, the one he has been using so far.
Some of them last only for a limited number of days, like 150 days.
Others have to go through Congress.
At least at this point in time, nobody knows exactly what the path forward is, nor do I, I'm afraid.
Do you want to have a guess?
I mean, if you were to look in a crystal ball, which I'm sure is quite murky, everybody's at the moment.
In a few months time, will we still be talking about confusion?
Do you think?
I mean, is this the world we're going to live in for the next few years?
Do you think?
You know there were several motivations for the tariffs, as we have discussed, as you've discussed on your program, right.
There was the aspect of the trade imbalance.
There was the aspect of generating income.
There was also the aspect of this being a tool in global politics.
And not all of them were always consistently going in the same directions in terms of also now, what would you do as a next step?
My understanding is that not everybody in Trump's party among the Republicans was entirely happy about the tariff situation.
In light of the midterms.
I think there was a brief moment after the Supreme Court decision where some of them, loudly were sighing in relief.
So the question is, if we economists always say the outcomes of elections are determined by the, it's the economy stupid, or maybe it's the inflation stupid?
Maybe the realization that this is quite powerful, that this will have a big impact, that the rising prices, which are accelerated by the tariffs, will have an impact, might maybe make the administration consider using other tools, which they do have at their disposal, to influence global decision making.
So my murky glass whatever look into the future is saying maybe we are moving a bit away from it, but I don't even want to answer really.
There we go.
Greta, somebody else like you who is finding it difficult to make sense of all of this.
Are we going to see it settle down?
We have to at some point, don't we?
You think that we would.
And we may have actually been on the path to have it settled down before it was upended by the Supreme Court's ruling.
But now, with having to put a temporary measure in place that only lasts 150 days and then backfill that with other authorities that may be country specific or sector specific, you know, unfortunately we may be pushing off that that settling down of the tariff policy that we all hope will happen further into the future.
Okay, let's bring in a US business here.
John March, we've had him on the program before, is the owner of St.
Killian's Cheese Shop in Colorado.
John, thanks so much for joining us once again.
You've had tariffs on cheese that you bring in and sell.
Tell us what level of tariffs have been in place?
What sort of cost increases have you had to pass on to customers?
I'd say that, across the board, most of the increases are somewhere in the 20 range that we've had to pass on to customers.
You're a business owner, so you're trying to plan for the future.
I'm sure you've been following the news fairly closely.
Do you know now what sort of tariffs are going to be on the products that are coming in? for you.
Could you see those prices going down if we're talking about 10 or 15% now?
No.
Everything's, I think, even more uncertain than it was a week ago, to be honest.
It's very confusing.
A lot of customers are asking and stuff because they think oh, there's been this change and they've struck those down.
But, As you all have been discussing, there seem to be trying to find ways to implement those.
If it stands right now where the bulk of our cheese comes from in the EU, the tariff that they're putting back in place is about the same as what was being charged on the type of products we're selling.
And also, we're a buyer here.
We purchase from other people.
We don't directly import cheeses into the United States.
We're purchasing from distributors.
So even if they refund those amounts from previous tariffs that are backdated, that money is going to go to importers and it probably won't reach down to our level at retail, much less consumers'.
Let's bring Greta back in here, because you have that legal brain for us and you've worked in a department that looks at this
On that point that John talks about there of when this money might come back to importers, do we have any idea of what we're looking at there?
Are we talking months, years, do you think?
Unfortunately, you know, I think the best guess is it will take some time.
You know, I think one point is who gets the refunds, right?
It's the actual importer.
Whoever brought the product in, made the filing, paid the tariff, they're the one with the right to the refund, which may or may not be you know the business that sells it to the consumer right.
There may be a middleman in there at some point as well.
But even when you answer that question, your question of timing, you know, we just don't know.
We don't know whether importers will need to actually sue the government in order to get their refunds or whether there'll be some other process set up for them to access.
But even under the best case scenario, in order to handle this volume of claims, it's really going to take some time to unwind.
It certainly is.
Peter Jankowskis also, of course, is with us.
Peter, some of those bigger American companies that have been importing a lot of products in.
If they get money back, it could be good news for them, couldn't it?
Because they passed on those prices often to the consumer as well.
So they could win twice here.
They could except many of them, as they invoiced, their customers had placed tariff surcharges on them, and their customers may want their money back too.
So it's not entirely clear whether it will be a windfall or not.
John, you are trying to operate a business. through all of this, is that annoying, frustrating?
Have you just got used to it?
Describe your emotion.
Yeah, it's really frustrating.
I mean, I think, when I've talked to other people about the tariff thing, I think that the uncertainty is even more trouble for trying to plan and run a business than the actual.
You know if, if a year ago there had been a straight 15 tariff on everything imported, it would have been much, uh clear.
At least we'd have that ability to plan.
Um, but with, with all of this change and, and uncertainty, it makes it nearly impossible to plan.
I mean, even since the tariffs have happened, there's been multiple changes in the amounts.
Um, It's really difficult for us because we work through a lot of different distributors and importers and things like that, even for a small specialty shop like mine.
And all of them have had different times at which they're adjusting their pricing and different methods for adjusting pricing.
So it makes it really hard to plan on items that were, you know, much more kind of stable across time.
And now it's just constantly changing in in pricing and structure.
Well listen, good luck with it all.
Thank you so much for for joining us here on the program greta.
Final thoughts uh, from you.
Are you glad now that you no longer form a general counsel in that trade office?
Because, because it's, it's a tough job, isn't it?
It is a tough job, especially in this environment, with uh many authorities being used, uh Court cases coming down, more litigation to follow.
They're certainly keeping themselves busy.
They certainly are.
A real pleasure having you on the programme.
We look forward to speaking to you once again.
Confusion, order of the day, hopefully.
After that, you're all a little bit better informed and know where you are now.
Your With World Business report here from the BBC World Service.
Let us have a listen to this now.
We begin another season.
I should like great gossip.
The social season might look a little different.
No, no, no.
You must begin the proper way.
Dearest gentle reader.
If you're wondering what that is, that is from Bridgerton, the hit series on Netflix, and the boss of Netflix, Ted Sarandos, has told the BBC that its bid for Warner is better than the rival one from Paramount, despite concerns about its impact on the entertainment industry.
I would say the reason why you would do a Netflix deal versus this Paramount deal, our deal is growth.
We've been growing and growing and growing this business since we started.
And the other model in the Paramount model, it's the classic horizontal media mergers that are always bad for consumers, always bad for creators, because basically what they're just taking is two studios and collapsing them to one.
There's five major studios left in Hollywood.
If the Paramount deal were to go through, it would be four.
Now, we have some breaking news on this, Peter Jankowski.
Paramount has now submitted a higher offer for Warner Brothers than the one it had in previously, which was higher than Netflix's.
Anyway, so still some time for this story to run.
There's a deadline, isn't there?
I think for midnight Eastern time.
So about six or seven hours for Paramount here.
So lots of twists and turns still in this story.
Yes, indeed.
You know, the big one, of course, was last week when Warner's board decided that they were actually going to start talking to Paramount and try to work through that.
And, of course, we've had some other shots taken at Netflix as well, in terms of the US government starting to look at them for some restraint of competition claims.
And, of course, President Trump calling out one of their directors that he wanted to see one of their directors removed.
So So again, a lot of things in play with this particular action.
Yeah, that story continuing to develop.
Let's see how Netflix will respond to that higher offer.
Now, if you've been listening to the BBC World Service today, there's a lot of chat about Mexico.
And we're going to look at the impact of the killing of Nemesio Almencio.
Cervantes, who was head of the Jalisco New Generation cartel.
He was Mexico's most wanted man, head of its largest drug cartel, which ran a number of businesses.
Here's Aaron Grillo, a Mexican journalist specializing in drug cartels.
So El Mencho was one of the most powerful drug lords in Mexican history.
He was the head of the Jalisco New Generation Cartel, which was a very powerful criminal organization, one of the most powerful in the world which trafficked large amounts of fentanyl and crystal meth and cocaine to the United States, but was also involved in a whole plethora of rackets, from stealing oil to running mines to doing extortion, and was involved in many countries, from Europe to across South America and around the world.
Because of the violence, people are being warned to stay inside as fires burn across the country.
Wesley Yor is an actor, TV writer and producer from Palm Springs in America, who spends much of the year in Puerto Vallarta, in one of the worst affected areas.
But the major pharmacies.
Pharmacia Guadalajara, which is one of the big chains here, is a huge store a couple blocks away.
It's been set on fire.
And the Oxos, which are like 7-Elevens, and the convenience stores.
There's several in the neighborhood that have been burned.
And it's not just in Puerto Vallarta, but Guadalajara and all of Jalisco, which is the state.
Yeah, we have seen that violence across Mexico.
I'm delighted to say that Wesley is with us now.
He gave those comments in an interview to the BBC earlier this morning.
Wesley, tell us exactly where you are at the moment, what you can see around you.
I'm in the romantic zone here in Puerto Vallarta, right by the beach.
This is right smack dab where the tourists are.
And it's kind of an eerie calm.
I mean, it's Puerto Vallarta.
It's a beautiful, sunny beach day.
And The streets are just so quiet.
And I've been walking around.
I probably got out of my house.
And I went and saw there's a bus right around the corner that's burned out.
That caused a building to catch partially on fire.
I went and looked at Pharmacia Guadalajara, which is the biggest pharmacy that's been burned out.
And there was just literally a few steps from my front door.
It was an OXO, again, one convenience store.
And that has been all burned out.
This was right on the beach, on the Malecon, which is basically the boardwalk.
But everybody is hopeful.
I don't think it's been officially all cleared.
But the roads are clear.
Over 98 were cleared last night by the government.
All the burned-out vehicles and there were so many of them
But they towed them away.
I saw a bus come through.
So there's a few buses coming through.
There's no taxi, which is so creepy here.
Not seeing a taxi.
Uber, of course, is not working.
Well, the fact that you're out and about gives us a sense that it was safer than when the World Service spoke to you earlier in the day.
But you've described a lot of damage to businesses there.
So it's taken a big economic hit, hasn't it?
And it's a tourism area.
And after those pictures have gone around the world, do you fear that people may not come for some time?
Absolutely.
Listen, we live in a bubble here.
And I've been coming for 10 years for six months each year.
And we felt very safe because, let's face it, terrorism is an economic driving force in Mexico.
And it's been a protected area.
Nobody wanted the tourists to leave.
And suddenly our little fantasy bubble seems to have been pricked a little bit.
And I know that the Mexican people here, we're there, you know, we've been here long enough.
They're family and friends of ours. are resilient and it will come back.
But of course there's going to be fear.
And I know that for some friends that own a hotel that I'm getting a lot of cancellations.
I'm actually standing at a hotel right now.
They've been gracious enough to allow me in because I have no wifi, and they've been dealing with with, you know, cancellation after cancellation after cancellation today.
And it's, it's weird and it's strange.
And all my friends that own property here, we've been talking and, Yeah, everybody's nervous.
Everybody's like you know.
We know it's going to come back, but it may take a while and we don't know what's going to happen with the aftermath of the biggest leader gone and what's going to happen with all the other factions here in Mexico.
Wesley, thank you for talking to us.
I know it is a difficult time in many parts of Mexico, like Puerto Vallarta and there.
Wesley from the US.
We know that many Mexicans which we've heard from Wesley have had their businesses affected.
We did try to speak to some of them.
It's not easy at the moment, but we are going to continue to try with that here on the BBC World Service.
Thank you to Peter Jankowskis as well.
We'll be back tomorrow.
And with world-class service in the Emirates Lounge and exceptional comfort on board, it's just a better way to do business.
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