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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 bit more optimism from the U .S. Treasury Secretary on trade relations with China and also some optimism from the president himself.
But the IMF warns of less growth as a result of trade tensions.
So are tariffs an economic mistake for the U .S. and...
started a major reprint of a number of games that we make, we can ship those games to other countries.
But if we were to ship them to the US, we would be paying the US Government $14 .50 for every $10 that we spent to make those games.
We hear from board game makers who've been badly hit by the tariff measures.
And also we're going to hear about Australia's efforts to improve the workplace for people with autism.
But let's start in the U .S. The International Monetary Fund's been giving out some revised global growth forecasts because of uncertainty caused by President Trump's tariffs.
The U .S. is predicted to be the hardest hit and we're going to find out all about that in just a moment.
But first, news has been coming in, in the last couple of hours of something that might be grounds for optimism about the progress of the trade war between the U .S. and China.
Now the White House, a spokesperson, said there had been good progress on reaching U .S.-China trade deals, despite Donald Trump's exceptionally large tariffs on Chinese imports and Beijing's hefty retaliation.
And the US Treasury Secretary Scott Besant has been talking in even more positive tones and, as I mentioned earlier, Donald Trump himself has been giving a few hints about what might be happening.
Well, I'm joined to talk about all this by our business reporter Jonathan Joseph.
Jonathan, first of all, well, what have we heard and from who?
We've heard quite a bit, Roger.
In the last few minutes, President Trump himself has been talking to reporters in the White House and he's been striking something of a more conciliatory tone when it comes to China saying that tariffs would not be anywhere near 145%.
It's not clear how and when things might change, but he seems to be rowing back on some of his more outlandish proposals of sort of perhaps opening the door to negotiations, saying that he would be very nice with Beijing that and that tariffs could fall significantly if there was a deal, but they wouldn't fall to zero.
So that is something that US stock markets will be positive about, I expect when they open again tomorrow.
But it also echoes some positive comments from the Treasury Secretary Scott Besin.
I understand that he was speaking at a private event in Washington and he said that no one thinks the current status quo is sustainable and that's the situation where at the moment the US has announced tariffs of 145 % on imports from China and Beijing has retaliated with 125 % tariffs for goods that go the other way round.
Mr. Besin went on to say that he thought that would be in the very near future some kind of de -escalation and that that should give the markets a sigh of relief so it seems that there is a more positive tone yes and you say you know immediately perhaps something might happen but the actual process really I mean Scott Besson was certainly not suggesting was gonna happen any time soon.
No that's right Roger he said that the goal wasn't to decouple relations between the US in China but it seemed that there wasn't any suggestion that there would be a quick fix.
He said it would be a slog and that no one in the administration that is of Donald Trump believes that they have free and fair trade when it comes to China.
So still a lot of complaints about unfair Chinese trade practices as the U .S. perceives them.
Beijing would argue against some of that, but this suggestion is that it would be about that some kind of deal might be about a rebalancing between the consumer economy and manufacturing, because over the last 20 years or so it's been Chinese manufacturing and American consumption that have been two of the key pillars of global economic growth and the US seems to be wanting to rebalance that at the moment China is trying to increase consumption amongst its own citizens and Donald Trump as we keep hearing wants to bring manufacturing back to America so there may be some room there but Mr. Besant
said that it could take two or three years for a deal to emerge which would be similar to what we saw in President Trump's first term.
Indeed a long haul thanks very much for that Jonathan and meanwhile of course in the background we're not really in the background in the foreground the IMF and the World Bank have been having their meetings in Washington they do them twice a year and the finance heads around the world banking heads and others come together to talk there now they've been making predictions the IMF in particular about global growth saying it's going to be held back rather dramatically by what's been going on with tariffs.
Joining me is our North American business correspondent, Michelle Fleury, who's been at the IMF meeting in Washington.
I think she went in the IMF building as we speak, so thanks for being with us Michelle.
What has the IMF been predicting in terms of growth and how much has it been rolled back?
So, the International Monetary Fund warned of dire economic consequences from Donald Trump's trade war.
It comes against a very different background from the last time that the men and women who run the global economy met here back in October.
Back then, there were huge strides that had been made in addressing some of the issues that rose out of Covid.
But now, we are moving backwards instead of forward and a lot of this is driven by tariffs imposed by the Trump administration.
Earlier I was speaking to Pierre Olivier Gorin -Shaw, who is the Fund's Chief Economist, and he spoke to me about sort of the downward projections for many countries including China, India, and of course the United States.
Our assessment is that this is a significant slowdown in growth, about 0 .5 percentage points.
So we're going from, we were projecting 3 .3 and we're now at 2 .8.
That's quite significant.
We've seen downgrades at large before, at the time of COVID, or the time of global financial crises, but it's up there.
It's a significant slowdown in growth.
You're not predicting a recession in the US, but others are.
Why the optimism? So this is an economy that comes from, it's slowing down, but it's slowing down from a position of strength.
What we are seeing, though, is an increase in the risk of recession.
So this is not in our reference forecast, it is not in the different scenarios we're looking at.
But when we think about broader risks that are out there in terms of historical outcomes, then we're seeing the probability of a recession in the US has increased quite noticeably from about 25 % back in October to close to 40 % now.
So it's quite significant.
I wanted to talk to you about China.
Obviously, we've seen sharp tariffs imposed there, and yet you don't see the damage as severe as it is, say, on the US economy.
Why is that? So China, the impact of the tariff, is in fact much bigger than in many other countries.
And the reason is very simple.
China is an exporting powerhouse.
It's manufacturing goods that it's selling all over the world, including to the U .S. It's going to be significantly affected by the tariff.
So why do we land with 0 .6 as the final number?
Well, the answer is there have been some measures that have been implemented by the Chinese authorities, fiscal measures in particular, that are providing some support to Chinese growth and that together is helping Chinese growth come down from 4 .6 to 4 percent this year.
That was the IMF chief economist Pierre Olivier Gorintas speaking to our North American business correspondent Michel Fleury so what is the outcome of tariffs at least in terms of the global growth outlook?
We're getting a sense of what the IMF thinks but of course a lot of people think differently it is the end only a prognostication if you like, a prediction, and much of course can happen.
Let's talk about the tariffs policy and where it has left the global economy.
I've got two people very involved in this, very interested in it with me.
Natasha Sarin is Professor of Law at Yale Law School, formerly Deputy Assistant Secretary for Economic Policy and Councillor to the Treasury Secretary Janet Yellen, when she was in that office.
Also with me, Chris Campbell, US Assistant Treasury Secretary for the Financial Institutions During Donald Trump's first term as president now CEO of in -camera solutions Chris Natasha Thank you so much for being with me Chris let me come to you first and say I mean certainly the verdict of the Bretton Woods institutions the World Bank and the IMF is pretty negative about these tariff policies Not only the things themselves but also the uncertainty that Donald Trump seems to apply to them turning him on and off Is there a positive outlook to what he's doing?
Look, I think that every time that any country is driving toward a different outcome or repositioning or resetting of the table economically, globally, there's going to be dislocation, and it's certainly going to be a challenge to global institutions like the IMF World Bank and others.
But it's a challenge to global growth as well.
That's the point. I mean, everybody suffers, don't they?
Yeah. Like I think, you know, let's take a step back.
The IMF, of course, is doing the best they can, making predictions, as all economists thought, as we all do.
The challenge is that they have not—in the report, they didn't include the 90 -day pause, they don't include, you know, Donald Trump's kind of very, very famous use of tariffs as a negotiating tool.
I think that they, you know, they mistakenly put in their models that the tariffs were gonna be permanent and you know they were not ever gonna be Chris if I'm right just just to sort of but one I think the point was the uncertainty as much as anything the fact of them going on and off you know then they weren't being on permanently that was part of the problem no I just I understand like and then everyone wants certainty and all of course all my clients do as well the chat again I'm just I'm just pointing out that the IMF and their results I believe are flawed because of their because of the the way
that they put together their models.
That being said, we certainly likely will see some dislocation, no question, as the global economy does reposition.
If the Trump administration is successful in bringing manufacturing home, that's going to be a significant change in the United States.
Okay, so dislocation.
Natasha, what's your response?
Is it going to be dislocation, essentially?
So, a point that I think is like really important to emphasize is that what Chris is describing, that the IMF wasn't thinking about the 90 -day pause, but the 90 -day pause really matters, is a bit of obfuscation.
Because the reality is the nature – I have even struggled to call it a 90 -day pause.
Like, in reality, we're talking about tariff rates that presently are the highest that they've been in the last century.
And the result of the pause, so called pause, was actually just a compositional shift that shifted the tariffs more towards China, but didn't change the effect of tariff rates in any meaningful way.
Yeah, but Natasha, the whole point is this is a negotiating tactic, it's going on and off.
But, and that's kind of a little bit the point that you're describing, and I should say like I've run these numbers myself through the Yale budget lab, which I run, and we come to very similar and we've done all of the updating for all of the changes that have happened, sort of on a daily basis.
We come to a very similar conclusion as the IMF.
So we're saying that US GDP growth is going to be about 1 percentage point lower in the short run from the tariffs, and persistently about 0 .6 % smaller.
And the uncertainty piece is like super important as you're raising, because what we've seen markets tell us over the course of the last few weeks is that the Trump trade is really a sell America trade, right?
The stock market is cratering, but also the bond market is cratering.
And normally that doesn't happen.
Normally when the market is down you see investors going into the dollar, you see investors going into bonds, these are the safe assets where the reserve currency of the world, no longer, and I think that reflects this general uncertainty and kind of chaos that makes it a very difficult economic environment.
But Natasha this is a temporary phenomenon and I'm not going to say what Chris has said because he can say it for himself, but that's the point at least that Donald Trump is making that this is not necessarily going to be as it is finally, and in the end if production has brought back to the U .S., that's a win in the long term.
So I actually think it's like a good question.
Like the administration keeps saying, and maybe that's what Chris is saying, this is like short run pain for some longer term objective, but no one seems to really be articulating.
And I think that's, again, why you're seeing the markets react the way they are, exactly what that long term objective is.
Okay. Well, let me bring in...
Yeah, actually I'm just gonna start there.
Yeah, I know. Let me just stop you for a moment, bring Chris in, because we have been sort of saying what he's saying.
But Chris, is that the point that the long term objective is, at least to you, clear and a good one for the U .S.?
Look, the president, I think, has been very clear on this, that he wants to bring back manufacturing in the United States.
You know, if you double -click out, you know, seven years ago, fifty years ago.
So what type of manufacturing is the point?
Give me one second.
So 50 years ago, if you were to ask the average American if they would want to evolve our economy into an economy that 70 percent of them live paycheck to paycheck and there's been a hollowing out of the middle class, I think that most Americans would say no. So the notion of yes, there being a global disruption as we bring back manufacturing, high tech manufacturing, low tech manufacturing, but allow for that middle class to return we're at a place now in our country that more than half of our country believe that best days are behind us, because there is no upward economic mobility.
That's really wrong.
And that's what the global system has put us into.
All right. So that's the challenge that's what the president is trying to solve.
Let me let Natasha have the final word on that.
How do you read? I mean, the return of a middle class that that has a good standard of living and security.
That's important. So I very much believe that that's important.
I think the challenge in why I was asking, Chris, what type of manufacturing.
We've heard various members of the administration say actually the types of manufacturing we want to bring into the U .S. is we should be sort of producing iPhones and screwing in the screws into the iPhone.
I think the reality is that's probably not the direction in a labor market that is very strong.
That we want the American economy to be going.
If we're talking about advanced manufacturing and trying to think about chips in this country super supportive, but I'm not actually clear which direction we're trying to go.
I think with respect to the middle class, like very very important to be focused on policies that are going to advance them, giving them a $4800 tax increase in the form of higher prices as a result of this trade war seems an unlikely way to be able to achieve that outcome.
All right. Natasha and Chris, we're going to have to leave it there before I run out of time.
Thank you so much for being with us.
Natasha, Sara in there, and Chris Campbell.
Well, let's have a reflection, then, on how the markets have been responding to all this, which is, of course, at the core of it, at least as far as a lot of people are concerned.
George Conway of Brighton Securities joins me now.
George, thanks for being with us.
Now, shares, in fact, rebounded today.
I think Donald Trump pointed out, in fact, that things were going back to the way he liked them, and not least – although, it happened, of course – his statement happened after the markets are closed, but he confirmed that he isn't planning to get rid of the head of the Fed, which had markets in a bit of a tizzy.
That's right, Roger.
It looks like that would be great news for tomorrow morning's open.
With the pace of change we've heard of the White House lately, there could be two or three more statements before we open tomorrow morning.
Who knows? That's very true.
Anyway, it is going, it seems in the right direction.
But let's talk about that because one share which, well, certainly has had some interesting times is Tesla.
Now, I will say, George, that I've read announcements saying that Tesla's results today actually beat estimates and they weren't bad, perhaps not in the car sector.
Others saying it's a real indictment of the way Tesla is being run.
Where do you fall? Well, I look at this and I think it's not so much how Tesla is being run as to the market's reception and probably a certain amount of competition coming in from other manufacturers.
Let's not forget Tesla had the market almost to itself for a while but now we're seeing acceptance by consumers of hybrid cars and that's biting into Tesla's market share somewhat so not a big surprise that earnings would be down somewhat.
And indeed the Tesla CEO Elon Musk now says he's continuing to advocate for lower tariffs so he seems to be on an interesting page in terms of the Trump administration but thanks so much for being with us George.
George Conroy there of Brighton Securities.
Well, one sector you may not have thought of suffering badly as a result of the tariffs and trade war is board games.
Now you may have thought board games or tabletop games stuck in the days of Monopoly or Cluedo, when most of the world now plays technologically sophisticated video games, but it is in fact an industry worth over $27 billion in the U .S. with names like Vantage, Scythe and Wingspan.
They're the wholesome game of Wingspan, and it's all without any electronics.
But the board game industry's having a very bad time right now as a result of Taris.
a number of companies have in fact launched a legal case against the Trump administration.
And among them is Stonemaier Games.
Now, I've been talking to Stonemaier's president, Jamie Stegmaier.
How are the tariffs affecting his business?
Well, my industry, the tabletop game industry has been impacted in a huge way by the tariffs because a significant portion of our manufacturing is in China and a significant portion of our sales are in the US.
For the, my company still my our game, 65 % of our sales are in the US and all of our manufacturing is in China.
So what's happening is that the games are being made in China by Chinese factories, and you're trying to import them, but presumably, if they're not going anywhere, they're just sitting in China, are they?
That's right. As it currently stands.
We started a major reprint of a number of games that we make a total of 250 ,000 units, many of which are reprints, a few of them are new games.
We started that back in January and now that print run has recently finished or will soon finish and We can ship those games to other countries, but if we were to ship them to the US we would be paying the US Government $14 .50 for every $10 that we spent to make those games So how much would that be likely be in total then?
Did you be paying them?
My current calculation is that it would be 1 .5 million dollars in tariff taxes paid from my company to the US government That's unsustainable, isn't it?
It is absolutely unsustainable, yes.
Our margins are okay if we sell some of those games directly to consumers, but we support a vast ecosystem of game stores, distributors, and it is completely unsustainable to sell at breakeven or to significantly increase the prices that we charge to those partners.
Are you and the other companies going ahead with production?
Are you pausing production?
What are you doing?
Well, the tough part right now, the puzzle that I'm trying to solve, is that we've already completed production or are about to complete production on games that we started making before the president even came into office.
And so we are now faced with a lack of a grace period for these games that were already in production in relation to the tariffs.
We're faced with a huge investment that we've already made in games that we would very much like to sell to U .S. consumers and U .S. stores, U .S. small businesses around the country that we are unable to do.
And so currently, as you mentioned earlier, we have these games heading to where have houses in China where we will pause and wait and hope that the tariffs go away or get better than 145 percent.
And I guess, I mean I've a few friends who are board game enthusiasts, tabletop enthusiasts.
I mean they're pretty fanatic.
They're gonna notice aren't they?
They're gonna say where are these games that we don't have in the shops anymore.
I think they will very much notice.
Currently companies like mine have inventory around the world and so we can continue to sell that inventory to game stores, but in a months and especially as we reach the holiday season I think we are going to see empty shelves on many of these these stores.
It does seem an extraordinary moment but I suppose someone from the Trump administration might talk to you and say well look, you know this isn't printing things in sort of cardboard or card anyway you could do that in down the road in Colorado or Utah or somewhere couldn't you?
I would love to explore US manufacturing a little bit more I think there are certain types of games that we could make, viably, at scale in the US.
But for us, we're talking about a long -term partner.
We've worked with our partner in China, which is actually a Canadian company called Panda.
We've worked with them for 13 years.
We're pleased with their communication, their quality, how they treat their employees, how they work with the sustainability, the environmental sustainability of the products that they make.
And again, we've already made these products for the current print run.
And I just would love to bring them to the US so we could actually sell them here.
So looking forward, I mean if things don't change what are you gonna do?
That is a great question and that is a puzzle that I am currently trying to solve my hope is that we can continue to Continue with our pursuit of happiness Or our joy is to bring joy to tabletops worldwide and that becomes a lot more difficult When we can't make the types of games that we make in the place that we've made them for the last 13 years Jamie Stegmaier of Stonemaier Games there.
You're with World Business Report from the BBC World Service.
People with autism often suffer economic and social exclusion and now the Australian government has a new seven year plan to improve their lives and job prospects.
It is hoped the strategy will lead to meaningful change for a group that lags behind the rest of the population in many areas of life.
Australians with autism are six times more likely to be unemployed than people without the disability.
The latest Census figures show 1 .1 % of the population has autism.
From Sydney Phil Mercer reports.
I think I fit in very well I feel very happy to be part of the team.
Matt Vaas is autistic and is a valued member of staff at a school in Sydney.
He's worked in the maintenance department for five and a half years.
I like doing my work, gives me sense of purpose.
Makes me feel very happy.
All the teachers and sports teachers and staff and my maintenance friends are very kind to me, very helpful to me and I'm very happy to be here with them.
Asking the right questions can greatly impact your future, especially when it comes to your finances.
So if you're looking for a financial advisor you can trust, certified financial planner professionals are committed to acting in your best interest. That's why it's gotta be a CFP.
Find your CFP professional at letsmakeaplan .org.
Hey everybody, so when you get asked what is Odoo what comes to mind?
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Learn more and sign up now at odoo .com.
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Hi, I'm Janice Anderson.
I'm the principal at Kambala.
This is not an act of charity.
Matt is a really important cog in the wheel.
There are a number of tasks in our school on a day -to -day basis that must be dealt with.
And Matt is a really integral part of our team.
He's completely reliable.
While he epitomises the values of the staff that we look for here, he has a great deal of respect and humanity in the way that he actually engages with people and how he goes about his responsibilities every day, so he is a really key part of our team.
Autistic Australians are six times more likely to be unemployed than people without a disability.
The new government strategy aims to give them more help to find a job.
The plan has broad support, although some charities say there's not enough focus on improving education for autistic children.
The figures suggest about 300 ,000 people have a diagnosis of autism.
Amanda Rishworth was a key part of the ministerial team in Canberra that devised the new blueprint.
We believe, and there is a lot of evidence to back this up, that this is underestimated.
So, it is about laying the foundations for future and broader reform as well.
Our clients don't need to go to job interviews, for example, we do that on their behalf.
Job support is an employment service that helps Australians with intellectual disabilities.
Rachel Taudian is one of its regional managers.
It makes very good economic sense for companies.
And in fact, that's one of the primary drivers.
We're stabilising high turnover positions.
The retention rate is, on average, nine years.
At the Gunners Barracks overlooking Sydney Harbour, Keith Dennett says the opportunity to work at the hospitality venue has been life -changing.
As a person with autism it is always going to be hard because of the barriers to employment.
I'm Kelly Simmons and I'm the venue manager at Gunners Barracks.
Obviously I was a little bit like hesitant of how much and how capable Keith could do, but then the more like, when I realised Keith could come in and realise that he's great and he's just as good as some of my other casual staff, so yeah so it's good.
One of the barriers for me was communication, and now because of this job it has helped me communicate better in the workplace, to talk to people, to ask for help and this job has changed my life for the better, it has.
There is still a lack of understanding of autism in Australian society.
Employers can be hesitant about giving an autistic person a job.
But Keith and many others have shown that given the chance, they will succeed.
And that was Phil Mercer reporting from Sydney on efforts there to try to ensure that people with autism don't suffer economic and social exclusion.
That's it from World Business Report.
Bye bye. Asking the right questions can greatly impact your future, especially when it comes to your finances.
So if you're looking for a financial advisor you can trust, Certified Financial Planner professionals are committed to acting in your best interest. That's why it's gotta be a CFP.
Find your CFP professional at letsmakeaplan .org.
