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Hello and welcome to World Business Report from the BBC World Service.
I'm Roger Hearing, and on this edition, a bumpy prelude to talks between Donald Trump and the South Korean president.
But the US president now says we have a deal done.
So what are the trade implications? Also today, the tariff problems for the postal systems dealing with the US.
The perils for young South Africans being recruited on social media for jobs in Russian drone factories. and those dealing with the harm caused by fast fashion in Africa.
But first, it wasn't the most auspicious start to the visit of the South Korean president to Washington.
Donald Trump posted on social media, what's going on in South Korea?
Seems like a purge or revolution. We can't have that and do business there.
When the South Korean president, Lee Jae-myung, arrived at the White House a few hours later...
It was all warm words, and there's a lot of hanging on these talks.
There's already a tariffs deal. but Sol would like to improve it, and everything from microprocessors to shipbuilding He's up for discussion with Washington's sixth largest trading partner.
Donald Trump certainly sounded positive.
It's an honour to be with... President Lee of South Korea We've known each other and gotten along very well.
We have some... Additional trade because I hear they want to renegotiate the deal, but that's okay.
I don't mind that. That doesn't mean they're going to get anything, but I don't mind.
But we're going to have some very serious discussions about different things, including Trade?
Well, we do a lot of trade with South Korea, as you know. thinking about contracting some ships. them very well in South Korea.
They're also thinking about coming to our country with some shipyards to start us on the process of building ships.
Donald Trump speaking in the White House on his earlier comments. seem to be referring to last year's political upheavals in South Korea.
Supporters of the former President Yoon... and hoped Donald Trump would intercede in what they say is communist persecution of the impeached ex-president.
But the trade issue seems to be more important to both sides.
After the talks, Mr Trump said, I think we have a deal done.
Had some problems with it, but we stuck to our guns.
They're going to make the deal. that they agreed to make.
Well, let's talk about all this with Zhou Yun'an, who is Professor of Government at...
William and Mary, and director of Asia Policy Lab there, that university.
She joins us now. Joe, thanks so much for being with us.
Can I first of all ask you what you think really, is the relationship between...
South Korea and the US at the moment in any kind of danger, because that was certainly the implication. of what Donald Trump put on social media earlier.
Hi, thank you for having me. Yes, the meeting came some tension, as you have seen.
Trump criticized President Lee Jae-myung publicly. just hours before the visit.
But thankfully the tone shifted when they met at the White House And Lee Jae-myung avoided a quote-unquote Zelensky moment that many South Koreans feared might happen.
Yoo Jae-myung began his remarks by showering Trump with praise and even joked about building a Trump Tower in North Korea. all of which seem to very much please Trump.
Yeah, it's clearly a very important relationship, isn't it?
It's the sixth largest US trading partner, as I mentioned.
And there is a lot in the process. In fact, Reuters has been suggesting earlier this evening that Korean Air might announce an order for about 100 Boeing airplanes.
So that's clearly an important thing as well.
Not confirmed as yet. But in terms of trade, it's a very close relationship.
Yes, trade relations between South Korea and the US is very strong. especially in things like chips, cars, phones.
The U.S. is also one of South Korea's top trading partners with about 25% of South Korean exports heading there.
As you mentioned, the U.S. also exports a wide range of goods to South Korea, things like aircraft, agricultural products and energy. defense systems are also a major area.
And shipbuilding as well, because that certainly seemed to be coming up.
What is the nature of this? Are they trying to get ships... from Korea?
Are they trying to get Korean companies to build shipbuilders in the US?
Right, the specific contours of the investment strategy is yet to come.
When it comes to shipbuilding, South Korea currently plays a smaller role in US trade because of various domestic shipping laws and defense concerns.
But of course, all of that could change very soon.
Um, it's a strategic and symbolic win for both Trump and perhaps also for Lee Jae-myung.
For Trump, it's about jobs, manufacturing, strengthening US industry.
For South Korea, partnering with the U.S. in a critical way like shipbuilding is a smart move because it gives them a deeper access. to this market and helps also counter China's growing influence in global shipbuilding.
As to what it will specifically look like, we're talking about joint investments and partnerships. worth up to $150 billion.
My understanding is that Korean firms will bring the expertise, technology and capital, We've already seen some of the investments happening in US facilities like acquiring the Philadelphia shipyards.
So it's not just selling ships to the United States.
It's about building them together, creating the supply chains and also boosting competitiveness against other competitors like China.
Clearly important areas that they really, both sides, want cooperation on.
Thanks so much for being with us. That's Joe Yun.
Professor of Government at William and Mary University and Director of the Asia Policy Lab there.
Well, there is a problem right now in the post.
Several countries have suspended postal services. to the United States as Washington ends a longstanding exemption. that allowed packages worth $800 or less to enter tariff-free.
From this Friday, August 29th, even low-value parcels are going to face new duties.
So what sort of effect? Is this having?
What effect is it going to have? Joining me now is Kate Muth, who's the executive director of the International Mailers Advisory Group.
She's joining us from Virginia. Kate, thank you for being with us here on.
World Business Report. We've already heard quite a lot of parts of Europe, for example, postal services saying, we're just not going to touch this anymore.
What's the reaction from businesses in the U.S.?
? Yeah, I mean, it's a pretty big deal. postal operators around the world saying that they aren't going to send packages.
Some of them have already suspended it as of today.
And so it really is, especially for small businesses that rely on the postal network and for citizens, of course, you know, If you're looking for a package from your relative that's in another country,
Those won't be coming, at least temporarily, until the postal operators around the world can figure out how to meet the mandate of the executive order that has and to the de minimis exemption for all countries.
And the postal channel has some, challenges because of the way their duties will be collected and remitted to Customs and Border Protection.
Yeah, because a lot of it, I guess, isn't simply economically worthwhile because of the small size and the amount of markup that there will be. be.
Exactly. I mean, the whole rationale behind the de minimis exemption was because you don't want to be a you know, enforcement costs being higher than the duties you collect.
Now, $800 is quite high by sort of the rest of the world's standards.
I think most of us expected that at some point there would be some reform of the de minimis exemption, but eliminating it entirely with one month's notice.
It's just the posts were just not ready to do that.
And so consumers and small businesses around the world are going to kind of suffer from that.
Yeah, I mean, you think e-commerce is an obvious area because... that subsists on really quite small amounts moving left, right and centre.
Things like eBay, I suppose. couldn't work, could it?
Options, of course, to get goods into the US.
You can do it through the commercial channels whole informal entry process.
You're still going to pay all the duties because it starts at, you the de minimis exemption goes away no matter what channel you use, but you're right.
The smaller sellers, the Etsys, the Ebays, Anyone that's a small business that's looking to go global, an easy entree to that if you're if you're an online retailer, is the postal channel because it is sort of Their sweet spot is these are for these low value lightweight goods that the posts are just very good at moving and delivering.
So what's going to happen? How is this going to work out?
We've seen a number of postal services just saying, right, we're going to hold it right there.
Are they going to come back with a new system or are they just going to say, well, we can't do it? new system taking shape.
So the way it is going to be done is either the carrier, the air carrier, or an approved third party will collect from the postal operator and remit to, uh, to Customs and Border Protection.
And there are a couple of approved third parties.
It's just going to take a little bit of time to get them plugged in implement and integrate the systems with the foreign postal operators.
We're hearing that Royal Mail is very close.
I hear that Canada Post is quite close to having the systems in place.
But there's going to be this temporary suspension until... everybody's comfortable with that system.
I just want to add one other thing about that. is that if the airlines aren't comfortable taking on any of the responsibility or the liability um and we have heard that some airlines are suspending lift to the u.s of packages you know until they're comfortable it doesn't matter if a postal operator is ready if an airline is reluctant to take packages to the U.S. through Customs and Border Protection,
Because if they are going to be held responsible or liable for a misdeclaration or something like that, Airlines don't even have the item level data of the packages.
They just have it at the receptacle level.
So kind of get that all straightened out, and that's not going to happen by Friday of this week.
I think there will be a little bit of a blip.
Well, very briefly at the end. How long is it going to take?
A little time? Weeks? Months? Yeah. Well, you know, ideally it would be great to have six months or so, if we could even get 30 days, I think that would be huge because I think a lot of these third party providers They're ready to go.
It's just a matter, again, of integrating and getting everybody fully comfortable.
Very frustrating all around, Kate. Thank you for taking us through that, Kate Muth, Executive Director of the International Mailers Advisory Group. group.
Now, if you were living in South Africa and you badly needed work... and this video popped up on your social media, what would you think?
Every six months brings a promotion, a salary increase and new professional skills.
But the most important growth isn't just in the job itself.
Participants also learn how to communicate, solve problems Well, you can imagine it's quite an appealing thought, isn't it?
Particularly if you need... work. And this was posted by the South African social media influencers. advertising jobs for young women in Russia.
Well, now the South African government's issued a warning to people not to. to fall for recruitment drives on social media, which promote seemingly lucrative job opportunities abroad because... they come with a catch.
Our correspondent in Johannesburg, Mayeni Jones, has been telling me why this job ad is not as straightforward as it seems.
Some videos have been floating around showing young South African influencers in Russia. in one of the Russian republics, Tatarstan.
And they kind of are showcasing employment opportunities for other young South African women. telling them that this is an opportunity to take part in a two-year program. working in Russia, learning the Russian language, living with people from all over the world. and getting professional skills.
Now what's interesting about these videos is the kind of skills that they would be getting, they don't give much details around.
We're not sure what jobs they would be doing, what exactly they would be learning. but it's very much presented to young women online as this golden opportunity.
And we've seen similar recruitment drives happening in other African countries, including Cameroon, Nigeria. where young African women, particularly aged 18 to 22, are targeted to work in in this alabuga special economic zone. know that the alabuga special economic zone amongst their uh their actions they make military drone.
So is the suspicion that that's what these young ladies would be doing?
Absolutely. The zone itself is actually under sanctions currently from the European Union.
And it's believed to be kind of a center for producing weapons for Russia.
So there are concerns that this is what these women would be entering into.
The UN has actually highlighted some of the... recruitment drives and said that they kind of bear the marks of human trafficking because they're deceptive. they don't fully tell you what you'll be doing.
And in South Africa, we haven't had any examples of this yet, but in other African countries... there have been reports of young women who've gone to the zone to work and come back describing terrible working conditions, dealing with harmful chemicals, working long hours, not having breaks.
So there's a worrying precedent around this area.
And also, I guess, if they are working in drone factories, the risk they might... be injured or even killed in the Ukrainian airstrikes.
Absolutely. The Alabuga zone has been targeted a couple of times in the last two years by Ukrainian drives. one was in April of this year, there were no casualties, but then there was another one. in April of last year where Twelve workers were injured and the drone strike hit a dormitory that had reportedly had some African workers. workers there.
So it's incredibly dangerous work, not just being in the factory and handling these incredibly powerful weapons, but also there's the risk that you might be hit by a Ukrainian strike working them.
So, what is the South African authorities, what are they saying about all this?
So they took to social media over the weekend warning young people to be careful. or videos they saw on social media to always make sure that they checked the website of the Foreign Office here in South Africa if they are unsure whether a video promoting a job is legitimate or not. or they contact the embassy of South Africa in that country.
But they haven't specifically mentioned...
Russia or what they intend to do with regards to this.
The Justice and Security Department did say they would investigate one video. by a young influencer called Tian Buzhi.
They said they'd look into it to find out if it was legitimate.
But the main message seems to be. Beware of any videos offering you jobs.
If it's too good to be true, it probably is.
But I suppose they're pushing at a very difficult door to close because almost half of young South Africans, I believe, are actually unemployed. so I mean people need the work exactly unemployment is huge in South Africa but it's especially a big problem amongst young South Africans, almost half of them, as you see. are without a job so many of them are looking for work opportunities but Lots of people on social media also saying, as much as we need work, we're also worried about what this might mean.
Some people are concerned that they might be human trafficked, that this might have to do with sexual... human trafficking.
So there's a lot of kind of concerns on social media.
The young influencer that the authority said they'd be investigating. if you go on her page lots of people commenting they're saying you know you You should be careful the kind of things that you endorse.
She's even taking the videos down. But I think he really highlights the problem that a lot of African countries, including South Africa, have. with regards to youth unemployment and the fact that foreign nations can take advantage of that to try and entice these young people. would come and work for them.
My Annie Jones in Johannesburg. Mint is still $15 a month for premium wireless.
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You're with World Business Report from the BBC World Service. happening on Wall Street with Peter Jankowski, Chief Investment Officer at Arbor Financial Services.
Peter, thanks for being with us again. It's been some interesting moves, not least, I suppose, in reaction to what we saw last week, which was the gathering of... central bankers, Jerome Powell giving indications, I suppose. about whether or not he's going to make another interest rate cut.
Are the markets generally feeling optimistic?
Do you think about that? They certainly reacted that way on Friday, though.
I think having some time to think about it over the weekend, they stepped back. and maybe seen it in the light of perhaps the cuts won't be as large as expected. etc.
So today's market was actually down a little bit. about four-tenths of a percent on the day for the Standard & Poor's 500.
Well, let's talk about a few specific companies.
Now, Kerrig Dr Pepper... of course, home is for its carbonated drink that it makes, is going to buy a Dutch coffee company.
For 15.7 billion euros, it's 18.3 billion dollars.
Why are they doing that? Well, they appear to be trying to engineer a restructuring of the company.
Keurig, of course, has its roots in making the coffee makers, etc.
They also own some smaller coffee chains.
And it looks like they want to split the company in two to be one focused on soft drinks and the other one focused on coffee.
Overall, the market doesn't seem too enthusiastic about the plan.
Courage stock was down more than 11% today.
And another interesting eye-catching moment, which is Elon Musk's artificial intelligence startup, ARXAI. is suing Apple and chat GPT.
It's all to do with I suppose what they think is illegally conspiring to thwart competition for artificial intelligence.
What is going on? What does it mean? Well, I think it is kind of an extension of the feud between Elon Musk and the makers of ChatGTT. been kind of talking about this, threatening this for a month or more.
And he finally stepped forward and filed a suit.
Overall, I don't think the market expects too much to come of this.
Apple stock was down, but only very modestly today.
It was only down about a quarter of a percent.
Do you get the sense, Peter, that AI has had a very... good run as it were in terms of being the thing everyone wants the thing everyone thinks will revolutionize things and then A little bit of a sense, perhaps, that this is being slightly oversold and the market's still as enthusiastic.
Well, we'll get a good test of that. Nvidia is going to be announcing their earnings, I believe, later this week. and it'll be interesting to see how the market reacts to that.
But you're right, there have been a number of articles lately kind of questioning the immediate benefits that companies have not been seeing any sort of great gains in productivity or anything else from their AI investments thus far.
And you and I are old enough to remember the dot-com bubble. early 2000s when a lot of initial enthusiasm for things to do with the internet was well, disappeared rather quickly and then, of course, came back very strongly.
Is that the kind of sense of perhaps where this is going?
Well, I think there definitely are some similarities with valuations getting stretched.
I think the big difference this time around is there really are some physical products that have been changing hands.
Nvidia, obviously. with all the chips that it's produced has generated real revenue.
I think the dot-com era was one there was so much hype that all people had to do was put .com at the end of their name. and stocks would have huge gains from that.
We're a little bit better off in the standpoint that we have real physical products here. that are changing hands.
And is chat GPT still... leading the field.
We know about the Chinese version, Deep Seek.
We also know, of course, about Elon Musk's approach, and there are several others.
But is it really chat GPT still out there?
Well, the reaction to their latest product has been somewhat mixed. that some people haven't seen it as a real big breakthrough in the field. that it's really more of a routing system to smaller AI models.
So, yes, they're definitely still at the lead, but I think others are getting very close.
All right. Thanks so much, Peter, for being with us.
Peter Jankowski is there. Now throughout August, World Business Report's been looking into the economic issues affecting Africa.
Today we're in Ghana. It's the world's largest importer of used clothing.
Around 15 million garments arriving every week. donated from countries like the UK and the US.
Now, many end up with vendors, but about 40% are too damaged to resell.
We'll be right back. to Accra to see the true cost of fast fashion and how people there are trying to change it.
It's just after 7am and you can hear the waves crashing down on Usher Fort Beach in Accra.
All around me there are piles of waste. colorful pieces of fabric.
There's a stripey sock over there, someone's hat. bits of t-shirt fabric, even children's clothes.
About 150 people in high-vis jackets, rubber gloves and wellies are here for a clean-up.
They pull tangles of fabric out of the sea, cutting out waistbands, tags and labels so they can name and shame fashion brands.
The rest is bagged up to be taken to a rubbish dump further away.
Here on the beach with me is Joseph Ayesu, who is from the Orr Foundation.
It's an environmental charity that tries to solve the problems caused by the fast fashion industry in Ghana.
Jo, tell me about some of the things that you have found today on the beach.
There are a lot of stuff that we find at the beach, but mostly dominated by textile waste.
How they get into the beach, it's kind of crazy.
We have a dam site closer to the lagoon called the Koli Lagoon.
And this is where most of these tests always go.
It's like a mountain, a heap of garments.
And so when it rains, Most of these garments are washed into the lagoon and with the currents they draw into the ocean. and pile up at the beach as we see.
Does that affect the marine life and your fish supply for example?
Yeah, it affects them greatly. I grew up on the coast and so We wake up most of the time to see turtles at the beaches, laying eggs and stuff.
Lately, you don't see them coming. I think they can't find ways to dig and lay eggs. for fishing and instead of catching fish, they catch most of this waste.
It's destroyed their nets. We've just got to the offices of the Orr Foundation, and I'm here with Sami Oteng, who is head of fashion development.
And hi, Sami. Hi, nice to meet you. Why is it that Ghana has so much of this textile waste that comes from the global north countries like the UK, The issue is something like we like to call waste colonialism.
And it's when a more richer, more dominant, a more wealthier company colonizes another country, usually from the global south, with waste.
They ship it elsewhere for someone else. to deal with and that's the issue that we are having here in Ghana.
So what is it that you guys are doing to try to stop the waste from getting to the beaches and the rubbish dumps in the first place.
We are working on a textile transformation technology where we shred some of the garments and then turn them into fiber boards.
We turn some of the materials into cushion fillings like the ones we're sitting on right now.
We use some of them for mops. So these are all ways that we are trying to divert these garments into another income stream which can benefit the community as well.
Locals call Ghana's second-hand clothing obroniwabu, which means dead white people's clothes.
It's a phrase from colonial times that once meant high-quality cotton or silk donated after someone's death.
Now it's mostly polyester and nylon, sent by people who are very much alive.
It's also an important source of income.
Cantamanto, just up the road. is the world's largest market for second-hand clothes.
Thousands of vendors and upcyclers buy bales of clothing and sell it on or repurpose it. but many of the items they get as part of the bundle are unusable.
Ruth is an upcycler who makes boxer shorts out of secondhand cotton pillowcases And she's unhappy about the low-quality garments they're buying.
Look at this. This election, it faded very light.
It has been won several. but yet so they will add it to the bill and then they will bring it here We are angry.
Most of it is waste. Then if you invest your money in it, at the end of the day, you lose.
They just bring the waste to us, for us to suffer the consequences.
We don't want the waste anymore. Back on the beach, I ask Joseph if there's anything that can be done to break the cycle.
I think yes. So that is why it starts from the brands. if they can use ecological friendly materials in producing. and also focus more on doing quality rather than competition and doing quantity. then there wouldn't be more waste coming.
People buy stuff and they wear it once and they don't wear it again.
Ever. Joseph Aiezu ending that report by Hannah Gelbart.
Now you can listen. to a longer version of that story on the What In The World podcast.
It's called Dead White People's Clothes. how Ghana is dealing with its textile waste crisis.
And you can find it there on YouTube. I'm just looking at it now.
So you can get all the details that you didn't get in that report just now.
But that's it from this edition of World Business Report.
From me and from the rest of the team, bye-bye and thanks for listening.
