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And this is Andrew Peach with World Business Report.
Good to have you with us today. How the US Republicans move from the free market and a small state to big interventions in the US economy. why Chinese EV makers have got ahead of Tesla, and if you're running a business in Russia, why you can't advertise on social media from next week.
It's very difficult to regulation advertising on this platform right now.
We never can know why it happened. First, the meaning of political terms like conservative and liberal have always evolved, sometimes beyond all recognition.
Back in the 19th century, those on the right moved from paternalism and protectionism to free market economics with a limited role for the state.
Now in the US, things are going the other way.
The Republicans under Donald Trump have turned the US government into a very active player in the country's economy.
Nippon Steel handed the US government a golden share to get permission for its takeover of US steel.
Last week, Intel announced that 10% of its stock would be acquired by the US government.
On Wednesday, the US Treasury Secretary, Scott Besant, told Fox News Donald Trump wants US taxpayers to earn a bigger share of future financial rewards when companies earn money in the US.
President Trump is going to be the only president in modern times who creates assets for the American people rather than debt.
He saw that Intel had been given grants and wanted to know why the American taxpayer wouldn't participate in the upside.
So there's $11 billion of immediate value, and I think there's a very good chance here that it could be much more.
Chips are a strategic necessity for us. One of the things we learned during COVID was that the United States has five to seven strategic vulnerabilities in critical industries.
And President Trump has said about de-risking that.
And while we're de-risking it, there's also substantial upside for the American taxpayer.
Earlier this week, Donald Trump signalled the possibility of buying more companies.
The case of Intel was interesting, but I hope I'm going to have many more cases like it.
I just made $10 billion or $11 billion for the United States of America.
And yeah, there will be other cases. If I have that opportunity again, I would do that.
Well, Sarah Bowley-Dansman is an Associate Professor of International Studies at Indiana University Bloomington, Senior Fellow at the Atlantic Council and with me live on World Business Report.
Sarah, is this the same Republican Party of Ronald Reagan and George W. Bush?
Because I didn't see them buying up US companies or slices of them in this way.
Well, thank you Andrew so much for having me.
This is certainly quite disorienting and we do see a pretty massive change within the Republican Party. in the last 10 or so years.
And I would say that it's important to remember that the Republican Party is not a monolith. but is indeed a collection of factions in the midst of a pretty significant partisan realignment.
And so what we're seeing here is several different factions, some of whom have reasons to be interested in more state intervention in the economy. being led by a president who has a longstanding interest in upending economic orthodoxy and who very much enjoys the extent to which putting in place tariffs and export controls and engaging in other sorts of interventions in the otherwise private market gives him quite a bit of power, not just economic power, but also political and cultural power.
And that's the mix that we're seeing today in the Republican Party.
So it starts with the voters, I suppose.
It's a completely different set of people who've put... the Republicans in power and therefore a completely different set of interests they need to represent.
Absolutely. So we definitely have the growth of the economic populists within the Republican Party.
We might see these voters as previous Democrats who feel left behind and abandoned by a series of trade negotiations that they believe hollowed out and weakened the lower middle class and working class and led to malaise.
I would mention here that for some reason, the trade side of this story is really emphasized instead of technological development automation, the weakening of labor unions and the dismantling of social safety net programs. that also helped to create this particular economic situation for a lot of the country.
But a lot of what's different about the economic populists who are kind of growing base of support for today's Republican Party is there's enough of them in that group who view the reconstruction of a manufacturing sector as as vital to a reemergence of a traditional family structure in which a husband works for a wage that can support support a middle class lifestyle and a wife can stay at home with the kids.
And so we see this kind of confluence of desire to engage more in economic intervention alongside of this more traditionalist kind of conservative value.
And sometimes in these political transitions, you're able to hold together unlikely coalitions of people who think of themselves. as Republicans have always voted Republican, might carry on doing so at least for a while, even after the party has changed a lot.
Yes, and then you also have another group who I might call the security hawks.
They might otherwise be relatively passive. pro-free market, but they're interpreting an expanding segment of the economy such as kind of advanced technology, but also a growing list of critical inputs and supply chains as essential for national security.
We're still only a few years out of a global pandemic that really showed the fragilities of just-in-time supply chains, and they see the offshoring of these industries as a market failure that needs to be corrected.
And it's not just a regular market failure, but it's a market failure with negative security externalities.
So they're willing to have more government intervention in the market than they might otherwise kind of support.
And things like the Nippon Steel deal, where there's a deal between the government and a company over what happens next.
And the US government buying up slices of lucrative US success.
Are we seeing this replicated elsewhere in the world?
Is this part of a bigger shift in right-wing politics and economics, do you think?
I do think that there is some purchase politically in taking a more active role in the economy, particularly because we are going through a major set of challenges as a global economy as well as domestic economies.
We have As I mentioned before, the COVID supply shocks really kind of rejiggered the way that people think about the global economy.
We have some pretty major demographic challenges on the horizon.
And we also have huge technological changes that could reset the way that economies run and wealth is created for quite some time.
And then we also have the example of the Chinese economy that has done very well over the last several decades using a much more state interventionist approach. model.
And so these kinds of interventions are being seen by a larger swath of of people on the right, and in some respects, people on the left, then maybe would... they would have seen in this particular way in years past.
Very interesting, Sarah. Thank you very much indeed, Sarah Bailey-Dansman from Indiana University, Bloomington.
The European Automobile Manufacturers Association says new car sales in Europe rose by nearly 6% in July with a big jump in Germany.
Not all companies... are experiencing this though.
One firm that certainly isn't is the American company Tesla, which lost market share for a seventh consecutive month. despite a rise in overall electric car sales.
Significantly, Tesla is now really trailing behind Chinese competitors like BYD.
Live with me, Ben Nelms, Chief Executive of the New Automotive, which is a London-based independent transport research organisation that wants to see a faster switch from combustion engines to EVs.
Ben, the EV market's doing all right. What's Tesla doing wrong?
Well, yes, indeed. The EV market's doing very well.
It's growing at 33% in Europe. And so Tesla's falling sales are falling sales are bad for any company, but bad in a, especially bad in a growing market.
Tesla's problems, I think, are related to the fact that they haven't really innovated and brought new products to market, and the market is... is developing very rapidly.
There are cheaper and more EV models on the market to choose from than ever before.
And of course, there is also the brand and reputational issues that Tesla is suffering from. which is down to the activities of its chief executive.
And broadly, those two are the cause of these poor sales figures.
The story tends to be told from that perspective and possibly that perspective alone.
You make interesting points about the fact that Tesla's fallen behind with the technology and price point and all of that.
I suppose perhaps the question I should be asking is what are the Chinese companies doing right?
Yeah, well, I think the Chinese companies are clearly doing something very right.
Their sales are growing north of 200% in the case of BYD, which is one of the leading brands.
And what they are doing really is bringing a very wide range of models to market.
They're pricing very aggressively. And they're able to do that because they've pursued a strategy where they have started mastering really the cheap manufacturing of batteries and then developing into vehicles.
They're really trying to go after many more parts of the market than Tesla has ever really gone for.
Tesla is a luxury brand after all, and we might see that they only really have a a limited appeal, a bit like other luxury brands do.
Yeah, I was going to say exactly that. There's only... So far you can go.
There's only so many people who could afford to buy... luxury products and perhaps what the Chinese firms with the backing of the Chinese government have done.
As you said, this needs to be a functional thing that people buy in order to spread it far and wide.
Yeah, I think that's absolutely right. I think the opportunity probably still is there for Tesla to pursue a wider share of the market.
After all, the iPhone was seen as a Apple found a way to get that in almost everybody's pockets.
But Tesla hasn't gone down that line. And I think now they're focused really not on trying to dominate the car market but on trying to pioneer other aspects of the technological development in that market such as autonomous vehicles and the like.
And have the Chinese firms got this sewn up, at least for now?
Are there other firms entering the market from other parts of the world?
Yeah, no, absolutely. There are other brands.
In fact, if you look at the UK, which is quite an interesting example, the UK is kind of a microcosm of some of the global battles that are playing out. because it is a market that's still relatively open and doesn't have tariffs applied very heavily.
Actually, the fastest growing brand of electric cars in the UK is Ford.
So we're seeing the legacy car makers as well and European brands like Volkswagens. stable of brands as well, also seeing very rapid growth in EV sales.
So I don't think the Chinese have got this sewn up just now, but it is an intensely competitive marketplace at the moment.
Ben, thank you. Ben Nelms from New Automotive.
You're listening to World Business Report with Andrew Peach. here on the BBC World Service.
Both consumers and business owners risk getting fined up to 500,000 rubles.
That's over $6,000. To understand more about this, I've been talking to Darina Alexfina, who is from the ad agency Wildjam in Moscow. in the world of advertising live by the principle be prepared for the worst If it happens, you already know what to do.
If not, you're lucky. We assume that such a law could actually appear and form new strategies, for promotion in the influence sphere in advance.
So now we have ready-made solutions to the problem.
Many authors have created spare social networks And in recent years, we have several new networks for different target audiences For example, social networks from marketplaces, social networks for investors And we also have many other social networks in our arsenal.
Instagram was just one of them. We can talk a bit more about the impact in a second, but just to explain to people around the world, what's the reason that you're being given for advertising on social media being stopped?
We can say that the content on this platform was maybe unacceptable for...
Our rules right now, it's very difficult to regulation advertising on this platform right now.
We never can know why it happened. So it sounds like the sort of fundamental problem is that these platforms are in no way in the control of any government.
And, you know, some governments don't like that.
Yeah, we were given time to prepare. It's just happened and we just can accept it.
I can say the advertising budgets are being cut.
They are now... slightly increasing, science bloggers are more expensive on the other social networks.
And brands also understand this. That's interesting.
So one of the impacts, it obviously has a big impact on the advertising market.
And as I understand what you're saying, The overall amount being spent on advertising is reduced and then it disrupts the market and makes some areas of advertising more expensive.
Yeah, it's absolutely true. I think the advertising will be more expensive in the New Year and right now because the influencers on the Instagram were more cheaper than another type of content.
And do you have clients calling your agency asking what to do and asking for your advice?
To be honest, we prepared a large study on the new law where we explained to clients and other I didn't see in simple terms what was happening what the consequences would be and how to quickly and effectively rebuild their promotion strategy.
We passed this study on to all our clients.
And what sort of sectors do you think might be most affected by this?
I mean, I'm thinking about... beauty products and particularly visual things like that would advertise in this way.
But you tell me. We have a wide variety of clients, lines, cinemas, retail, marketplaces, food product, clothing, every brand, lift, in the Instagram but now they want to use another platform Everyone wants to convey their values through bloggers as they understand their life.
Audience loves them, so they can use you too. or telegram or another social networks so a lot of clients can use influence marketing so Yeah, it's also online services, banks, education services and beta cards.
And do you think it's sustainable to have this kind of ban?
To be honest, I want to believe that it's just that period in our social network life. in our country because of course we love this platform a lot of people love this platform I want to say that we need maybe one year to accept it and maybe we can found the solution but it's only my opinion and of course government can have another opinion if you know That's Darina Alexeevna from the ad agency Wild Jam in Moscow.
This is Emma Wall from Hargreaves Landown.
Thank you very much indeed, Emma, for being with us.
We should mention Lisa Cook, who listeners will have heard about in the news in a big dispute over Donald Trump's attempts to get rid of her as the...
Governor of the US Federal Reserve. What do you think?
Well, there's a few different things at play here.
I mean, firstly, it speaks to the continued attack on the Fed and its interest rate policy from the US president, you know, you'll know, no doubt that, you know, he started by attacking the Fed chair, and now he's moving to get rid of Lisa Cook.
One of the interesting things here is he doesn't actually have authority to do that.
And Lisa Cook has actually announced today that she's going to sue Trump over the move and that he's overreaching.
But what's really interesting here is what is it doing to the bond markets because they really do not like this instability in both markets.
On both sides of the pond, actually, we've seen yields spike in the last few days.
Now, let's talk about Nvidia's results from last night.
Still big growth going on there, but is it as big as before?
It's really interesting because what happens is Nvidia's results come out after the market has closed.
So you read what was actually an incredibly robust set of results.
It's actually, it's beat any other results that it's had before.
Then you look at the market reaction and the market reaction, the share price has actually fallen 1.6% at the moment and actually was down further in intraday trading. earlier today and that's because the market has come to expect so much from this poster child of AI innovation, that actually its sort of own reality is being driven by its own hype.
And even though It is delivering on all of its expectations.
The market is putting that bar ever higher.
What's really interesting is off the back of it, analysts actually if you dig into the detail and none of them have moved actually their target for nvidia so although the market has reacted quite negatively to this Tech specialists see this as quite a strong set of results and so therefore have upgraded their price target.
And indeed, our own tech analyst at Harvey's Lansdowne has said, actually, look through the noise.
This is a really positive set of results and thinks that NVIDIA will go on to do even greater things.
Another company we've been talking about already which punches above its weight is Tesla, where European sales continue to slump.
Yeah, I'm afraid this isn't quite so positive a story.
This is a case of actually the data really speaks for itself.
Tesla's main area where it does business is the U.S.
And then the second biggest market for it is China.
So we'll put it in perspective. Europe is smaller in terms of contributing to revenues.
But the numbers are very stark for the fourth time in the last seven months.
It's seen 40 percent year over year fall. in new vehicle registrations across Europe.
And what's really interesting here is that's against a backdrop of actually electric vehicle market that's growing in Europe and actually take up in the region is improving.
So, it's really calling into question the future of Tesla.
It's just not competitive enough in the market.
Now, some people say actually it's very Elon Musk specific and less to do with the product set of Tesla.
We think it's a bit of a mix of both. you know, the having such a prominent and vocal figurehead can be both a blessing and a curse.
You know, he invites the sort of godlike, feeling for some people, but he really sort of turns others off.
There's also the fact that Teslas just do remain much more expensive than some of their competitors.
So, some work there to be done. Emma, thank you.
Emma Wall from Hargreaves Lansdowne. Now, the world's top golfers often rank among the highest earners. earning sports stars.
Golf tournaments are particularly known for having huge prize funds.
At the Masters in Augusta, for example, this year, the total prize fund was $21 million.
The winner, Rory McIlroy, took home over $4 million.
In other parts of the world, though, pro golfers are struggling to make a living at all.
Zawadi Madibo has been meeting African golfers who say they have to take on other jobs because there isn't enough money in the sport.
I am at the Namulonge nine-hole golf course to meet Rodil Gaita, one of the 60 professional golfers in Uganda who's recently just won and retained his title at the Entebbe Professionals Golf Open tournament in central Uganda.
The earnings are not that good. When you've got an event, it's less than 10,000 US dollars.
So on a number of about 60 professionals, it's a scramble.
Once you make a cut or you have a win, you're just winning about 900 US dollars or 700 US dollars.
That only caters for your, call it accommodation, people like me who have got a family now.
You can't live off golf. You need to have some side gigs you do as well to make it.
Otherwise if you try to depend on golf, you might get going back to the village.
I do driving. I do Uber. When I leave golf, I do driving in the evening.
That's the sound of a falcon slasher at Uganda's Namulonge Gulf Coast, where prospects of a facelift are on the horizon.
In Africa, playing golf both as a hobby and professionally is growing, largely due to rising awareness and more people with disposable incomes.
In 2024, the golf equipment market in Africa generated a revenue of US$1.6 billion.
Africa had an estimated 600,000 9 and 18 hole golfers as of 2022.
But behind the growth of the sport lies a stark reality professional golfers in sub-Saharan Africa face.
The challenge of pursuing an underdeveloped sport with few tournaments and sponsorship.
After I turned pro, I really found out how difficult it is.
Because with professional golf, you have to really be settled.
Your mind has to be at ease. And for the next seven, eight years, I was just trying to stay afloat.
You can actually go a year, two years without being paid.
If you don't make a cut, you're not getting paid.
That's the brutal. This is Dane Moore from the small copper belt town of Indola, Zambia.
He moved to South Africa as a teenager to pursue his golf career.
Without the sponsors that I have I don't think I would have come this far or I would have continued playing because financially it's just too much of a stress or I would have had to like other golfers have a side hustle to fund all of this and balance out life, family, all that, you know.
Sometimes you're playing very good golf and you can make a lot of money in a short period of time or you're playing very bad golf and you lose a lot of money in a short period of time.
Most clubhouse tournaments across East, West and Central Africa are for amateur or weekend golfers. painting a grim picture for those looking to earn a living out of the sport.
Here, the sport is largely characterized by narrow opportunities for financial gain where the passes or prize fund is not sufficient to make a living.
Uche Andrew Odo is a Nigerian pro golfer.
I must say for me it's a mixed feeling. Mixed feeling because there are quite a number of events that we have. around Africa, but mainly because of the small price money, you don't want to pay a flight ticket all the way to Uganda for example, or Kenya for example, you want to go and play in a particular tournament and you really can't cover your expenses even if you win it or finish in the top five clearly pro golfers could still make far more than the average wage in sub-saharan africa A prize of $900 for winning a tournament is the equivalent of a month's salary for most people.
But as we have heard, There are no guarantees.
Online at bbc.com slash news, more about the value of NVIDIA and also the latest on the battle. between Donald Trump and US Fed Governor Lisa Cook, who's now suing the President over his attempts to fire her.
BBC.com slash news. From me, Andrew Peach, thanks for being with us for the programme.
