Hello and welcome to World Business Report from the BBC World Service.
I'm Roger Hearing and on this edition, President Trump confirms big tariffs are being imposed on the goods coming into the US from Mexico, Canada and China.
We'll hear from businesses in Canada and Mexico on their response.
Also, we'll hear the story of one family's return to their home following the LA wildfires.
Oh, it's hard to look at.
What's that? The postbox.
Oh, the mail inside it burned up.
Oh, it's all just asses.
Who knows what it was?
Plus what to expect in the upcoming budget in India.
Personal income tax can see some reject to give the middle -income class earners some kind of reprieve to give a boost to their disposable income, which ultimately translates into higher consumption.
And what it's like having a book by you published when AI has actually written every word.
But let's start in the US.
In just a few hours, Donald Trump says he will go through with his threat to impose tariffs of 25 % on imports from Mexico and Canada and 10 % on imports from China.
And asked if he would soon be imposing tariffs on the European Union as well, he confirmed he would.
President Trump said the tariffs were in response to big trade deficits and the flow of the illegal drug fentanyl, which he claimed these countries were allowing to be distributed into the United States.
We have big deficits with, as you know, with all three of them.
And in one case, they're sending massive amounts of fentanyl, killing hundreds of thousands of people a year with the fentanyl.
And in the other two cases, they're making it possible for this poison to get in, number one.
And number two, we have big deficits.
And it's something we're doing and we'll possibly very substantially increase it.
We're not. We'll see how it is.
Donald Trump. Well, let's hear now from our North America business correspondent, Ratika Gupta, who is joining us on the line.
Ratika, OK, what is going to happen and when is it going to happen?
Well, Roger, there's still a lot of uncertainties surrounding this.
Now, Trump has said he'll be levelling 25 % tariffs on Canada and Mexico alongside a 10 % duty on China to begin tomorrow.
But the uncertainty is about how these tariffs are implemented.
Many saying that this is Trump, the negotiator.
I mean, Trump, Trump very well.
President Trump said the tariffs were in response to big trade deficits and the flow of the illegal drug fentanyl, which he claimed these countries were allowing to be distributed into the United States.
We have big deficits with, as you know, with all three of them.
And in one case, they're sending massive amounts of fentanyl, killing hundreds of thousands of people a year with the fentanyl.
And in the other two cases, they're making it possible for this poison to get in, number one.
And number two, we have big deficits and it's something we're doing and we'll possibly very substantially increase it.
We're not. We'll see how it is.
Donald Trump. Well, let's hear now from our North America business correspondent, Ritika Gupta, who is joining us on the line.
Ritika, OK, what is going to happen and when is it going to happen?
Well, Roger, there's still a lot of uncertainties surrounding this.
Now, Trump has said he'll be levelling 25 % tariffs on Canada and Mexico alongside a 10 % duty on China to begin tomorrow.
But the uncertainty is about how these tariffs are implemented.
Many saying that this is Trump, the negotiator.
I mean, Trump very well could put 25 % tariffs on all those imports coming in from Canada and Mexico, but he could also phase in higher duties on a monthly basis.
And even if the announcement is tomorrow, these tariffs will take time to implement.
So it does give the partners time to respond, possibly to also maybe avert the tariffs as well.
Donald Trump has said he would impose tariffs on a wide range of imports in the coming months.
They include steel, aluminium, oil and gas, pharmaceuticals, as well as semiconductors as well.
So he's really ramped up the threats to these trading partners.
And Rutika, he's acknowledged that this is not going to be easy.
I think in some of the comments he said, yes, it could be disruptive.
And actually, a lot of the costs might be passed on to consumers.
Yes. I mean, there is also questions about whether he will end up giving reprieves to specific industries.
discoveries. He did say that he indicated that he would look to lower the rate on oil in the tariffs planned for Saturday.
So maybe investors might interpret the softening on some of the harsher warnings.
In terms of the prices for consumers, I mean, that's something that economists have been warning for some time, that these tariffs may actually hit the US consumer.
Trump did insist, though, that tariffs don't cause inflation.
But if you look at a lot of the industries that it could hit i mean the auto industry uh wolf research showed that it could lift the price price of a typical car by some three thousand dollars so that could devastate the car industry disrupt supply chains then there's the issue of gasoline prices canada is the biggest
source of foreign oil in the u .s they import some four million barrels a day and food prices i mean the u .s imports everything from beer to avocados and tomatoes from Mexico.
So that really could hit the US consumer.
And potentially, some of these tariffs may also be going now on to the EU.
He kind of said that, didn't he?
He said he was definitely going ahead with that.
Yes, he said that he would be doing something very substantial with tariffs targeting the European Union.
But it's still very much a wild card.
We don't have more details on that.
And again, there's the question of this is Trump.
Is this Trump the negotiator coming out?
how much you know negotiations will be possible and how much time it will take to implement tariff so you know there's still a lot of unknowns and I think that's also what we've seen if we look at the markets has been a lot of nervousness around it a lot of uncertainty still remains clearly there is as
you say an awful lot of questions still despite what we do now seem to know about what's going ahead but thanks so much for being with us Ratika Gupta there our North America business correspondent well that's the view or what's coming out of Washington but how will Mexico and Canada respond to this.
The outgoing Prime Minister of Canada, Justin Trudeau, says his country is ready for any tariffs.
If the President does choose to implement any tariffs against Canada, we're ready with a response, a purposeful, forceful, but reasonable, immediate response.
It's not what we want, but if he moves forward, we will also act.
Meanwhile, Doug Ford, who's the Premier of Ontario, which is Canada's most populous province, Says his country would match dollar for dollar any tariffs imposed by President Trump.
He said we want to make sure we match dollar for dollar, tariff for tariff, and they need to feel the pain like all Canadians will feel the pain.
And he added these tariffs will hurt Canadian jobs and it will hurt American jobs.
There hasn't been an official response so far from Mexico, but businesses are talking.
I spoke to Sophie Avernian, who's director at De Grandes Viñedos de Francia.
That's a wine producer in Mexico City.
He thinks he puts a tariff on Mexico and it only affects Mexico.
It affects globally.
He doesn't understand it's going to have an effect everywhere.
Modelo Group, the Mexican beer, is Belgium -owned.
Many tequila brands are owned by Americans.
So it's ridiculous.
There will be retaliations, most definitely.
And I think, well, Americans are going to pay more for what they are going to buy.
They're going to consume less.
Consumption is going to decrease and the economy is going to slow down.
That's what I think is going to happen.
Sophie Avernine there.
Well, let's talk to Dan Kelly, President and CEO of the Canadian Federation of Independent Business.
Dan, thanks for being with us.
What are your members thinking about this?
What do they want the Canadian government to do in response?
Gosh, it's hard to know what to think, given that the news seems to shift by the hour from the U .S.
president. But there is great concern.
This is not just a big business issue.
When people think about exports, they think about giant companies selling goods to the U .S., but tons of small companies, both exports to the United States from Canada and, of course, import from the U .S.
And so we're worried about both the tariffs that Donald Trump might impose on Canadian goods coming into the U .S., but even more concerned about the Canadian reciprocal action where we might add tariffs of our own to U .S.
goods, both of which deeply harm small businesses across the country.
So you wouldn't be in favor of the Canadian government actually responding in kind then?
Look, we get that the government's got to respond in some fashion to run a democracy.
You've got to be able to respond against these kinds of tactics.
At the same time, we urge the government to use caution in applying these tariffs.
I mean, I'm not the first to say this, but tariffs on imports are like chemotherapy.
It poisons your own people in order to try to fight the disease.
And sadly, that's exactly what would happen if Canada slaps on anywhere close to dollar -for -dollar tariffs, as has been suggested by some.
So Dan, just take me through this.
What is it that mostly crosses the border in terms of imports and exports?
I mean, what is it that you guys send to America?
Well, the big categories for Canadians to send to the U .S.
are timber. We send a massive amount of oil.
That is the number one export from Canada to the U .S., but also a lot of finished goods too.
We sell, you know, Canada produces a ton of cars, and the automakers are very integrated in Detroit and in Ontario with car parts and full cars going in both directions, sometimes several times before sold to the ultimate consumer.
Those are the big ones.
But then for small businesses, it's a lot of packaged goods, consumer goods.
Food is another big category.
So these are the areas that would be first hit if Trump attaches oil and food, especially from California and Florida in the winter.
These are some of the categories that would be deeply worrisome if a new Canadian tariff were attached as a retaliatory measure against the United States.
And we're talking about real damage here.
I mean, some of your members could go out of business, I guess, with these sort of pressures.
I've talked to some small businesses that sell 90 % of their products to customers in the United States.
And if your products now are going to be significantly more expensive than the alternative from a U .S.-based firm or from another country that isn't tariffed at this point, you could very quickly find yourself out of business.
Yes, yes. So this is an existential threat.
Canada is a country of exporters and it's going to be big.
But then the tariffs on coming the other way on goods coming in from the United States, that probably would hit even more small businesses because so many of them selling furniture or other goods would be affected.
It's going to be a difficult time, I guess.
Dan, thanks so much for being with us.
Dan Kelly there, President, CEO of the Canadian Federation of Independent Business.
business. Well, the impact of this has been felt already, at least on share markets, certainly in the US.
Let's talk now to Chris Lowe, chief economist, FHN Financial, based in New York.
Chris, thanks for being with us once again on World Business Report.
I mean, obviously, we don't absolutely know what's going to happen, but it's pretty clear something's coming.
How has Wall Street responded?
Well, thank you, Roger.
We started the day on a weak footing anyway, with tech stocks retreating again from extraordinarily high valuations.
But the selling intensified in the afternoon.
And, you know, we're looking at losses in the Dow Jones, which is the industrial index of three quarters of a percent.
So a significantly bigger hit than the technology -heavy NASDAQ down a quarter of a percent.
So this is a different look than we've seen in the last couple of weeks, where volatility was mostly in those high flyers.
And that's, of course, because the industrials are more sensitive to trade issues.
But I mean, from what Donald Trump says, this is intended to help the U .S.
economy. It's intended to boost it.
So why would Wall Street, why would investors not look on all this as positive?
Well, look, I think one of the big things that's missing from the conversation, and I really appreciate Dan touching on the impact on small business.
I've talked to small technology heavy NASDAQ down a quarter of a percent.
So this is a different look than we've seen in the last couple of weeks where volatility was mostly in those high flyers.
And that's of course because the industrials are more sensitive to trade issues but i mean from what donald trump says this is intended to help the u .s economy it's intended to to boost it so why would would wall street why would investors not look on all this as positive well i look i think one of the big
things that's missing from the conversation and i really appreciate dan touching on the impact on small business.
I've talked to small US manufacturers who import a lot of their materials and parts from Mexico, from China.
And, you know, they compete, they sell their products internationally.
So even if their goods are not hit with tariffs, their inputs are going to be more expensive.
And, you know, in the case of some of these firms, they're making essentially identical products that now are going to have a much higher cost basis, they can't compete internationally.
They will lose business.
And I think that even translates up into some of the bigger companies which will be hit with retaliatory tariffs by other countries.
Now, Chris, one of the things that President Trump's been concerned about and touched on in some of the remarks about this is oil.
I mean, oil potentially from Canada will be hit by, of course, these tariffs, but we've also had some interesting results, some earnings from big oil, Exxon and Chevron, both reporting and there's a sense that, well, it's not a good week for big oil executives, essentially.
It has been. The thing about Canadian oil, they produce a lot more than they need and most of it is exported down into the US where it's processed, and then a whole lot of it gets re -exported from here.
So it's not only contributing to the Canadian economy, it's contributing to the U .S.
economy. But yes, all of the traditional energy sources are doing well, because, of course, one of Trump's other battles is to pare back on green energy, or as he calls it, so -called green energy.
Yes, indeed. But the refining sector certainly, Chris, isn't good, is it?
I mean, there's certainly problems.
It's very weak, really.
refining has always been so it's not only contributing to the canadian economy it's contributing to the u .s economy but yes all of the traditional energy sources are doing well because of course one of trump's other battles is to pare back on green energy or as he calls it so -called green energy yes
indeed but the refining sector certainly christ isn't isn't good is it i I mean, there's certainly problems.
It's very weak, really.
Refining has always been extraordinarily difficult here.
It's a highly regulated industry.
It's hard to build new refineries.
The old ones are really showing their age.
And we have a capacity shortage, a refinery capacity shortage in the U .S.
It's not going anywhere anytime soon.
Thanks very much for filling us in on all that, Chris.
Chris Lowe there, joining us live on the line from New York.
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We are with World Business Report from the BBC World Service.
Now, the California firestorms earlier this month destroyed at least 16 ,000 buildings and more than 9 ,000 of them, mostly homes, were lost in and around the town of Altadena.
That's about half an hour northeast of downtown LA.
One of those houses belonged to David Brancaccio and his wife Mary.
David is a journalist with our US partner Marketplace They bought the house just a few months ago and David's been documenting the experience of losing it Until this moment, we'd only seen photos Oh, it's hard to look at The footprint of what was an 1 ,100 square foot two bedroom cottage is now a pond
of fluffy ash, marshmallow sized lumps of black char and a chimney.
What's that? The post box.
Oh, the mail inside it burned up.
Oh, it's all just ashes.
Who knows what it was?
The deed to the house?
Yeah. The house on the left, the house on the right.
Also, it's going to easily change.
To get a long view from a wildfire survivor, I turned to Jeff Chemnick, who runs a nursery and private garden in Santa Barbara.
You know the aloe plant?
His place is called Aloes in Wonderland.
His house was one of 220 lost in a fire 16 years ago.
And he rebuilt something more fire hardy in what's seen as record time.
Two years almost to the day.
That stopped me. Two years is fast.
Jeff is a botanist who'd been a contractor, which helped him network for a builder.
Again, the goal is good contractor.
Sadly, several of our friends sort of fell for the smoke and mirrors of contractors from out of town that promised new building techniques, cheaper prices.
And price is certainly a consideration, but it should not be your primary driver.
Did they end up with a house in the end, a deficient house, or did they really get scammed and didn't end up with a house?
Well, one of them, the contractor that he engaged is in prison.
Meanwhile, back at the property, we need power in so many ways.
I look around and now all I see is all the hard work it's going to take to bring it back.
And I'm wondering if I still have it in me to do it, if I'm still young enough to do it.
Who do you blame? The infernal wind?
Climate change? Some neighbors are suing the electric company that kept its transmission lines energized near the apparent origin of the fire.
Oh, and that copper vessel with the sacred water to bless the house at Thanksgiving.
I spot it, covered in carbon, empty but recognisable.
I don't see the top, but I see the rest of it here.
David Brancaccio there on the LA fire aftermath.
Now let's turn to India, where the finance minister will be presenting the country's annual budget on Saturday, outlining the government's spending plans for the coming year.
The BBC's Arunade Mukherjee reports now on the key priority areas for the government and the concerns threatening India's claim to be one of the fastest -growing economies in the world.
A long line of people wait to enter this year's auto show being held in India's capital, Delhi.
A crowd of enthusiasts jostle as they walk along new gleaming cars on display, soaking in the sights of the vehicles expected to hit the Indian market.
But the number of people doesn't necessarily mean number of sales, a reality car makers have been struggling with.
The apparent origin of the fire.
Oh, and that copper vessel with the sacred water to bless the house at Thanksgiving.
I spot it covered in carbon, empty but recognizable.
I don't see the top, but I see the rest of it here.
David Brancaccio there on the LA fire aftermath.
Now let's turn to India, where the Finance Minister will be presenting the country's annual budget on Saturday, outlining the government's spending plans for the coming year.
The BBC's Arunuddin Mukherjee reports now on the key priority areas for the government and the concerns threatening India's claim to be one of the fastest growing economies in the world.
A symbol of strength and ingenuity...
A long line of people wait to enter this year's auto show being held in India's capital, Delhi.
A crowd of enthusiasts jostle as they walk along new, gleaming cars on display, soaking in the sights of the vehicles expected to hit the Indian market.
But the number of people doesn't necessarily mean number of sales, a reality car makers have been struggling with.
Sales growth slowing to a four -year low and even smaller affordable cars saw a drop in sales by over 14%.
Ladies and gentlemen, a big round of applause for Eve Vitara.
Maruti Suzuki, India's largest selling car maker, is also feeling the pinch.
Partho Banerjee, the sales and The marketing head of the company is optimistic, but also realistic about industry challenges.
The bottom of the pyramid, the people who are there, their affordability part of it, vis -à -vis the increase in the car price has been a challenge.
How we can try to bridge the gap of the affordability is something collectively we all have to work together.
Walking through supermarkets and looking at revised price tags of essential items is a reminder that from vegetables to fast -moving consumer goods, costs have significantly gone up.
And because incomes have not increased at the same pace, people are much more cautious about spending.
Consumption makes up 60 % of the Indian GDP, so the lack of spending has a direct impact on the country's growth.
Which is why economist with QuantEco research, Yuvika Singhal, says putting money in the hands of Indians is essential.
Urban consumption does require a handholding, which can come to some extent from some kind of a tax.
But despite the headwinds, this nation of 1 .4 billion people is still bustling with economic opportunities.
The buzz on the streets, backed by the World Bank and the International Monetary Fund, who say, comparatively, India will still remain one of the fastest growing big economies in the world.
But this year's budget could hold the key to whether India manages to maintain that economic trajectory.
Arunuday Mukherjee reporting there.
And finally, some exciting news, or is it?
Our technology editor Zoe Kleinman has written a new book.
Only she hasn't. And the fact that she hasn't, and yet the book is out there, has a lot of significance for all artists and creators.
So what's going on?
Zoe's been explaining to Justin Webb.
You know, I wrote a book many years ago, and it took me a year, And this book, I think, took under a minute.
It's entirely generated by AI, but it has my name on it.
And it has my photo on the cover.
And it has references to my family and my life inside it.
It's called Texplaining for Dummies, which is a title I might steal if I ever do decide to write another book.
But what's really interesting about it, Justin, is that I've had nothing to do with it.
It is entirely crafted by artificial intelligence.
A friend of mine gave it to me for Christmas.
She fed a few prompts into a company that sells these books.
It says it's sold 150 ,000 worldwide.
And it's such a good illustration of the argument that is going on, isn't it?
And it's very much going on about the extent to which governments ought to be intervening and stopping the big tech companies from doing this.
So the UK government is currently mulling copyright law and it says it really wants to find a solution in which AI tools have the data that they need to train because we know that if they don't have good data, they won't be any good and they won't be useful.
But on the other hand, how to protect our creative industry, people who write people who sing people who generate stuff for a living because that is also being used by AI to create work that's very much like them and can be done as we see here a lot cheaper and a lot quicker there is a lot of debate
going on and there is an argument which says you know AI can do so many useful things look at the benefits of in healthcare and artificial intelligence can carry on doing that but it doesn't have to be able to also write songs in the style of Taylor Swift does it is there a scenario in which we stick
with the more useful bits, and we leave the creative work to people, to humans who make a living doing that.
On the other hand, the genie's out of the bottle.
It's already happening, isn't it?
Zoe Kleinman there and her book, or not her book, depending on which point of view you take.
Anyway, this has been World Business Report, and my name is on it.
It is from me. I'm not AI.
I'm real. But thanks to all of you for listening.
Bye -bye.
