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And when you're a Sinesta Travel Pass member, And this is Andrew Peach with World Business Report.
Good to have you with us.
On the way, time is running out to strike a trade deal with the U .S. in order to avoid Donald Trump's tariffs.
Trying to conclude 90 deals in 90 days has been a bridge too far even for Donald Trump.
Later, why the Thai government has decided against gambling on casinos and a row in India about leather slippers on the Prada runway.
In 90 minutes from now, we're told that the US President Donald Trump will begin sending letters to inform countries of new tariff rates on their goods arriving in the US.
His Treasury Secretary Scott Bessent and Howard Lutnick, the Commerce Secretary, have both indicated the new levels, which haven't yet been disclosed, will kick in from the 1st of August. A 90 -day pause on tariffs is due to expire on Wednesday.
Well, to bring us up to speed with the latest, here's Erin Delmore, our North America business correspondent who's in New York.
Erin, how is this going to unfold then?
Well, we are waiting, thinking that in the next couple of hours we'll start to see these letters going out.
And President Trump has said that it's easier to issue letters to other countries talking about what the trade rate would be, just telling them what the trade rate would be rather than undergo these negotiations.
And we've seen these negotiations unfold over the last 90 days, some of them in fits and starts.
But while the administration promised 90 deals in 90 days, we've seen only two, one with the U .K. and one with Vietnam.
And remember, trade deals take years to negotiate.
Even 90 days is not a long time considering how many tariff and non -tariff barriers need to be discussed and negotiated.
So we're waiting to see how President Trump plans to clear this deadline that he set himself on July 9th and whether and when these letters will go out.
He said that there will be an assortment of countries and an assortment of tariff rates, not really giving any clues there.
So we are waiting to see.
So we know there are no more deals done now.
Is the idea here to create a window between the 9th of July on Wednesday and the 1st of August when these tariffs would kick in to try and get a few more deals signed off?
That's the impression that we get from recent comments from Commerce Secretary Howard Lutnick.
It had been thought that on July 9th, when the deadline for the 90 -day pause was up, then the higher tariff rates would snap back back into effect.
I know this is complicated.
But remember, when President Trump put what he called reciprocal tariffs onto goods from other nations on April 2nd, he then peeled those back and put the 90 -day pause on the higher tariff rates and left only that 10 percent baseline in effect.
So there had been a question on whether countries would just go back to the higher rates from April 2nd or not.
And according to Howard Lutnick, there will be a bit more of a buffer zone here.
It looks like the administration is hungry for deals.
It looks like they're trying trying to create a pathway and a way to create space for conversation.
But again, we're not talking about a lot of time at all.
Erin, stay with me.
Let's listen to Frank Poirier.
Now, Frank runs a company called Tornado Drive, a mechanical manufacturer in Berlin.
They export a fair few products to the U .S., about 25 % of what they make.
I asked Frank earlier whether he's had to raise his prices for U .S. customers.
Yeah, well, at the beginning, we thought it would have a major impact on our business.
because having a significant portion of our business there but our customers actually agree to pay the tariffs.
A one -to -one without questioning is how high it is.
The main reason is that we are making specific products so it belongs to the customers so it's very difficult for them to switch in a short term.
And our competitors are also from Europe so we're all facing the same challenges if you like.
So I suppose I mean I don't want to undermine the amount of effort that you're making to make the products and run the business.
But I suppose that's lucky in a way to be in a sector where there's limited competition from people who are defected by the tariffs and therefore you can just put prices up and people are willing to pay higher prices.
Yeah, in that sense, we are lucky.
Obviously, in the midterms and long terms, we will have to look at it more specifically because if it will go over 12 or 18 months, then our customer could start to look at alternatives that are not EU based or in countries which are affected by less tariffs than the EU.
But that's a long process.
And typically our products need about two to three years to be tested, qualified and implemented for serial production.
So your luck might run out.
I mean, is there any possibility that you might be able to manufacture goods for the US market in the US?
Because in the end, that's one of the objectives that the Trump administration has.
It is. I mean, we are part of a larger group, French group.
And we have several assets in the world, including one in the U .S. So we are working with our sister company out of Pennsylvania.
So it is an option potentially to look at it more in depth, more in detail.
Although we don't manufacture the same products yet, but they also gearbox manufacture.
So they would, if they need it, they would and could potentially build our product there.
The second question will be where the component comes from.
and at the moment most of the components come from Far East. So they are also facing large tariffs, even larger than the EU.
So there is some manufacturing aspect to look into it but also some where we buy the products.
Very hard for you and your competitors to decide how to play this because of course there might be a trade deal, the tariffs might be delayed, they might be taken off on a whim.
Who knows what will happen in three, four years' time when Donald Trump is no longer the president of the US anymore and all these are important factors when you're making such long -term decisions about your business?
Yeah it is I mean somehow we keep our head down thinking that it's just a limited amount of time it's maximum four years or three and a half but we have no other choice as a small manufacturer you know and the way we are lucky to be very small because we feel we fell under the radar if you like but we obviously We keep watching how things are going, and we don't try to base our decision on erratic political leaders' decisions.
We try to have a different agenda and look at long terms and try to convince our customers that on long terms, it will pay off.
Do you want the European Union to do a deal with the US?
Well, they will have to do some kind of a deal, but it has to be fair and also long term.
So I'm not too into politics and how things that work and a lot of things have been discussed that we don't know what it is and what impacts it on our business life or private life.
But I just wish that both parties recognize each other's benefits in doing trade together.
That's Frank Poirier who's in Berlin.
North America business correspondent Erin Delmore is still with me, also joined by Lucinda Guthrie, executive editor of Merger Market.
markets. Erin, what's really interesting about the conversation is it lays bare how complicated this is.
It's not only different for every country, it's different for every sector in every country.
Absolutely. And everyone has different negotiating power, too.
You know, I did a story a while ago talking with toy manufacturers, and their association was coming together to try to lobby Washington to take tariff rates down on toys.
And that was when we saw different sectors having different headway with the administration.
You know, cars got a bit of a carve out.
Steel and aluminium have been treated differently than other products under a different section of the trade law.
So, yes, the complication abounds.
And Lucinda from Merger Market, what sort of reaction has there been knowing that this is supposed to be a big day?
We seem to get all these milestone moments with Donald Trump.
There's one coming up very soon.
Are the markets pre -empting what they think is going to happen yet?
I think today what we're seeing is the major US indices, they have come down a little.
One of the things that is spooking the market slightly is this uncertainty that keeps happening, particularly with this BRICS announcement this week.
There has been a sense that people are becoming a little bit used to uncertainty, they're developing crisis fatigue, which is why you're not seeing huge swings.
But once again, Again, we have this delay and further uncertainty, and that's what's been killing some of the activity in the markets of late.
That said, they are still trading near 52 -week highs.
Stay with me, Lucinda.
You mentioned the BRICS announcement.
This was a social media post by President Trump as the BRICS summit in Rio came to an end, in which he threatened any country embracing what he called the anti -American policies of the BRICS bloc of nations with an additional 10 % tariff.
The BRICS group, Brazil, Russia, India, China, South Africa, although new countries have been welcomed into it in recent years as well.
Let's talk to Sanusha Naidu, Associate Researcher at the Nelson Mandela School of Public Governance at the University of Cape Town, who's been watching all this really carefully.
Is it fair, Sanusha, first of all, for President Trump to look at the discussion at the summit and say, oh, well, it's all anti -American?
Well, I think stranger things have been true for President Trump.
And so I think to a large extent, he is very much linked into this idea that any kind of discussion where countries or a formal structure like the BRICS would be thinking about engaging more with each other and trading more with each other would be seen as a threat to the US.
And therefore, the response that we saw this morning, that any countries that pursue engagements with the BRICS or even try and have a greater engagement with the BRICS will incur a 10 percent tariff, which is seen in the context of trying to push countries into engaging more with the U .S. around the bilateral free trade agreements, etc., as your business report had alluded to now.
It feels a bit like a fit of pique on social media, the idea of, you know, deal with these countries and we'll subject you to an extra tariff.
Is that even workable as an idea?
Well, it's difficult to say, Andrew, because I think to a large extent, you have to think about the fact that the BRICS does not have a formal trade strategy.
There's no straight architecture or structure that defines a strategy or a formalisation of a trade strategy.
So if any countries are going to be working with the BRICS as a group, it will be more bilateral in that context than in terms of doing business with the group as a group, because there's no structure that defines that.
And aside from Donald Trump's reaction, what else of consequence came out of this BRICS meeting, bearing in mind that some of the key players weren't there?
Yeah, I think the optics of not having President Xi Jinping, and of course, President Vladimir Putin, there was really one that became quite important for the for the press and questions were raised.
But leaving that aside, I think questions around the fact that it was India, Brazil, South Africa, which kind of gives you a sense that the IPSA, the India, Brazil, South Africa component of the BRICS was really what was seen in terms of the optics, you know, the three leaders, Prime Minister Modi, from India, President Ramaphosa from South Africa and President Lula from Brazil kind of gave that traction.
Two things kind of caught my attention in terms of the summit discussion.
It was quite a lengthy declaration, almost 126 items on the agenda or in the declaration rather, 26, about 20, between 30 and 31 pages, quite hefty.
But talking about everything from global governance reform of the UN Security Council to the question of peace and security.
What was quite interesting was that that the issue around Iran came up with regard to the issue with Israel.
And, of course, you kind of saw a very broad statement coming out from there supporting the integrity, the sovereignty around Iran and, of course, the question of international law and the attacks that Iran had incurred as a result of Israel.
The other thing was around the peace and security question.
You saw a mutedness over the Russia -Ukraine crisis, but you also saw the question about Ukraine and how that played out.
So there were some kind of interesting kind of hidden gems or hidden ideas in the statement itself.
Sanisha, thank you.
Sanisha Naidoo from the University of Cape Town.
Now, we're having this conversation today because President Trump was elected to the White House promising to revive US manufacturing and address what he sees as the big problem of its trade deficits.
Megan Lawton has been looking at how the landscape of global trade has changed.
If you want your tariff rate to be zero, then you build your product right here in America, because there is no tariff if you build your plant, your product.
It's been a dramatic year for world trade.
Sabina Dewan is an expert on India's trade policy.
She says she's seen the change to global trade first hand since US President Trump was re -elected.
We haven't seen the kinds of actions that are happening now in the global trading landscape, keeper is not something that we've ever witnessed before.
When you have uncertainty, as we do now with the whole tariff debates, it's led to a number of countries feeling like they need to have bilateral relationships.
And, you know, economic trade deals are also very important for geopolitical ties.
Traditionally, talks began because trading partners, countries or blocs wanted to expand their current deal.
For former Canadian trade negotiator Jason Langrish...
It's changed so much. Nowadays, it begins because Donald Trump decides that because the United States has a trade deficit with a country, that therefore they need to be tariffed.
Langrish says Trump's approach has also changed the tone inside negotiation rooms. Traditionally, it's been positive because you're taking something that works and you're upgrading it.
But lately, as we've gone into a sort of more nativist, nationalist phase, these trade deals have become a bit more defensive, accusatory.
What's happening outside the room can also make or break a deal.
Earlier this year, UK Chancellor Rachel Reeves came under fire from human rights groups after revealing she was pursuing a trade deal with Saudi Arabia, UAE and Qatar, countries that have been criticised for their record on human rights.
That's part of the underlying challenge that every government faces when it decides voluntarily whether it wants to go ahead and negotiate a trade agreement with a potential partner.
U .S. trade expert and senior fellow at the Peterson Institute, Chad Bowne.
And increasingly, as the public has become more informed about a lot of these issues, they have said, you know, I don't want to have a special trade agreement with a particular country with whom my values don't align.
This week, President Trump's 90 -day tariff pause ends.
For former US trade negotiator of 27 years, Wendy Cutler, Trump has bitten off more than he can chew.
Trying to conclude 90 deals in 90 days has been a bridge too far, even for Donald Trump.
Trade negotiations are time consuming, resource intensive.
expensive and frankly, I don't think from day one that the US government has had the appropriate bandwidth to deal with all the requests to meet and to negotiate with the whole range of countries.
Trade deals are back on front pages but behind closed doors, the clock is ticking.
This is the BBC World Service World Business Report with Andrew Peake.
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That's odoo .com. ...Lisinda Guthrie is the executive editor of Merger Markets, still with me.
Tell me about this story about Nissan and convertible bonds.
Well, it's incredibly interesting that Nissan is coming to the market for funding.
Obviously, last year had a very tough time facing pressure from electric vehicles from China, as well as a number of other industry pressures.
Now, it obviously had its failed merger.
And what we're looking at now is a new chief executive coming in and trying to convince the market about the need for funding.
This is part of a broader scheme where they're going to issue the bond and also combine it with asset sales.
And part of the success of this, obviously, because it's a convertible, there's an equity component.
So he's saying, let's believe in me and you'll get the equity return at the end of this transaction.
OK. And what will the reaction be to that, do you think?
um well uh it very much depends on your take on nissan um it's it's had an incredibly tough time and uh there's there was such a long period where they were looking for a new ceo i i think that it it will be very much down to how well uh evan espinoza can can sell this to the market lucinda thank you very much indeed for that now to thailand where the government has scrapped a bill that would have allowed casino gambling for the first time in the country.
Proponents of this idea were hoping it would boost tourism, particularly tourism from China.
There's lots of resistance, though, in Thailand to gambling.
It is a majority Buddhist nation.
My colleague Ed Butler has been to Thailand for Business Daily.
I spoke to him a little earlier after the bill was withdrawn.
The government really wanted this bill and we've been talking about it for more than a year.
The way that it works currently in Thailand is that there's only a couple of forms of legal gambling of any kind.
Those are the national lottery and horse racing.
And the move was going to be that they were going to introduce all of these huge entertainment complexes.
They were going to come into the big cities, it was thought.
It wasn't really pinned down, but places like Bangkok and Phuket and other tourist destinations, Chiang Mai in the north maybe.
And those places would take these huge complexes, is they would have all kinds of, you know, other forms of entertainment, cinemas and spas, boutiques, you name it, but they'd also have casinos.
It was controversial.
And the government was very keen because they felt that this was going to boost tourism.
That was the way that they framed it.
It was going to put them on a level with other Southeast Asian countries that had similar things.
But clearly, the parliamentary arithmetic does not add up this time around, at least that seems to be the case.
And I mean, other listeners might be surprised that Thailand is out of kilter with much of the rest of the world when it comes to gambling of this sort.
Clearly, the economic benefits and tourism might benefit from it as well.
What's the other argument?
What's the push against this kind of thing in Thailand?
There has been a long Anti -gambling tradition.
It's part of the ancient tenets of Buddhism, actually, for these people, they say, since the 1930s, I think there have been a view that it's one of the five tenets of Buddhism that one does not indulge in gambling.
I think there's also a feeling across Southeast Asia, and actually you do find it in other Southeast Asian countries and in China, that it does have an extraordinary, perhaps disproportionately corrosive effect on the social fabric.
You get gambling addiction, you get people getting into debt, perhaps because of local culture and ideas and attitudes about perhaps disclosing your own financial problems. People are secretive about it.
And there are all kinds of the problems, I guess, that people identify with gambling in other parts of the world, but they just don't feel like they are well managed in these populations.
So most governments do actually have some degree of prohibition on their own populations gambling.
But in Thailand, they were going to change this.
And in a quite a limited way, at least the government said so, it was going to be a quite a limited lifting of those restrictions.
But it just felt too difficult.
And there was a longstanding protest. I went to visit in the center of Bangkok.
You know, people saying this is terrible for our country and it's terrible for our society.
There was a huge scandal with a monk who was caught embezzling basically the money, or at least it was alleged he was embezzling the money of his own temple worshipers into a gambling scam.
scam. So there was a lot of talk about it.
It just felt a step too far for a government that, as we know, has been under a lot of pressure recently for other reasons.
That was my colleague, Ed Butler.
You can hear more about that story by searching for Business Daily, wherever you get your BBC podcasts from.
Now, a pair of traditional Indian leather slippers appeared on the Prada runway last week.
They were labelled as Leather Footwear that's caused a bit of a row in India where some are calling out the brand for copying their work without giving any credit or compensation Here's Davina Gupta I'm in a cramped, dimly lit workshop in Kolhapur As I walk around to my right there's a stack of freshly made leather sandals wrapped in a plastic sheet In front of me there are artisans who are sitting on the concrete floor There are bits of threads, tools that are scattered around them and they're all working in a rhythmic motion.
It's like a choreography where they are cutting and stitching and shaping large sheets of leather in small sandals.
These sandals are made from buffalo hide, says Sadashiv Sanake as he cuts through a large sheet of brown leather.
he's been working in this workshop for nearly 40 years.
I learned this craft as a child.
Now I make about 50 pairs of the sandals in 10 days.
I earn about $4 to $5 in one day.
Sadashiv is one of nearly 100 ,000 people in India still making these open leather sandals known for their distinctive T -strap and a toe hole.
Many of those in the trade come from marginalized communities and faced low wages, soaring material costs and tough working conditions.
So when luxury brand Prada showcased a strikingly similar design at Milan Fashion Week and called them leather footwear without crediting their Indian origin, the backlash was swift. I really believe that Kolhapuri is a cultural legacy for India and lack of credit or collaboration makes this appropriation.
That's prominent Indian fashion designer Ritu Beri.
The artisan from India remains invisible while the brands profit from it, from the inspiration that they get from here.
So I think it's time the Indians claim our heritage.
In response to the criticism, Prada issued a statement acknowledging Indian influence.
The brand told the BBC it's now in talks with the Maharashtra Chamber of Commerce, a local trade body.
Lalit Gandhi is its president.
Actually, it is a good thing that a brand like Kolhapuri Chappal, greater endorsement from Prada.
Definitely the value has increased many folds.
We want some share of that profit to be shared with the artisans.
Interestingly, Kolhapuri chappals were awarded a Geographical Indication or GI Tag by the Indian government in 2019, a mark of authenticity that protects their name and design within India.
But globally, it offers little protection.
That's why Lalit Gandhi says they're now exploring a patent.
If we patent it and we can do a proper marketing, the artisans can get a good value of their product.
I'm now in Kolhapur's famous Chappalgali or sandal market.
It's a vibrant street lined with shops and Kolhapuri sandals are everywhere in every shade.
They're hanging from storefronts, they're nailed to the walls from top to bottom.
and unlike Prada's luxury price tag, these ones are quite affordable.
I bought this because I saw it on the Prada fashion week.
That's why I really liked it and that's why I got it.
How much have you paid for that?
I paid around $8 for it.
With demand rising, the kolhapuri chappal industry worth nearly $200 million is now looking at the luxury market.
And shopkeepers like Rohit Balakrishnan Gavri hope to benefit.
while keeping prices low to attract more customers.
The design which Prada used was less popular here, but now customers are asking for similar sandals, so we are making more of them.
But back in the workshop, artisans, including Sadashiv, had never heard of Prada.
So I show him a video from the Milan fashion show and tell him sandals like his might be selling for hundreds of dollars in the near future.
Are they made of gold, he says, raising a bigger question about value and fair pay in the world of luxury brands.
Navina Gupta reporting from Kolhapur in India.
So we could be in for a busy few hours watching the US.
This is what we know.
Their deadline for trade deals to be done was the 9th of July.
We understand that Donald Trump is going to start issuing these letters to countries that haven't struck a trade deal.
with the US, and that's most of them, in the next few hours.
The Treasury Secretary, Scott Besant, has said it's going to be a busy couple of days.
He's told CNBC, We've had a lot of countries change their mind in terms of negotiations.
My email inbox is packed with new offers.
So we'll see what happens as far as the letters and the tariffs are concerned.
You can follow that on the live page at bbc .com slash news.
But from me, Andrew Peach, and the team here on World Business Report, thanks for being with us for the programme.
