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I'm Roger Hearing, and on this edition Tariffs back in the news.
This time Donald Trump's threatening secondary tariffs on countries that buy oil from Venezuela.
Also, 23andMe, the DNA ancestry and health firm, sues for bankruptcy protection.
How bad is the impact of the suspension of USAID on communities that relied on its support?
And better than Tesla, the Chinese electric vehicle maker BYD outpace Elon Musk's company revenue for the first time.
But let's start with the White House from which there have been more confusing signals on tariffs on President Trump.
He told reporters on Monday not all the new tariffs he'd previously threatened would be announced on April the 2nd and he said he may give a lot of countries breaks on tariffs but he provided no details at the same time he says there will be now secondary tariffs 25 percent on any country that buys oil or gas from Venezuela that's 25 percent on top of any other charges on anything that country then tries to sell to the US and he signed the order for that in the last few minutes.
according to the White House.
The measure comes into effect on April 2nd and in a post on his Truth Social site, Mr Trump said the secondary tariff was being introduced because Venezuela had, as he put it, purposefully and deceitfully, sent tens of thousands of violent people to the United States.
Let's talk then to Dr. Francisco Monaldi, who's director of the Latin America Energy Program at the Center for Energy Studies at Rice University, who joins us now.
Dr. Monaldi, thanks for being with us.
these secondary tariffs, how do they actually work?
Would it be beyond anything that the US then imports from them after they bought oil?
Well, apparently so.
This is a new concept.
I never heard before the idea of secondary tariffs as a part of economic warfare, but that seems to be the case.
And it seems that the main country to which they will be targeted is to China, because that's where most of Venezuela's exports exports go to the black market.
But it's, of course, not clear when those because, you know, oil exports are ongoing, so what does it mean for the exports to be generating this type of retaliation?
Well, yes, I was going to ask about where the oil actually ends up.
Now, you say it's on a kind of black market at the moment.
But is it in a place they're exporting to China?
I believe they're also exporting to India and some other smaller countries.
Just give Give us a sense of how much oil and where does it go.
Venezuela is exporting between 800 ,000 and 900 ,000 barrels per day.
The largest market, about half or a little bit more, is to China's black market.
This is not reported by the Chinese as coming from Venezuela, but typically from Malaysia.
But then, the other half goes to licensed countries, countries that the US has authorized, like the US itself where about 250 thousand barrels of oil per day are exported by turban and then Spain and India are the other leading markets.
Dr. Manali, let me let me introduce you for a second, are you saying Venezuelan oil goes to the US?
Is that right? Yes, under the turban license that the US just announced a few days ago that it was going to be revoked and but today was extended for 60 days, under that license about 250 ,000 barrels of oil from Venezuela go to the U .S. It seems to be something turning in on itself then almost, if the U .S. is penalizing countries that import oil from Venezuela when it does that itself, and it will be these tariffs as a measure of punishment?
Yeah, so that we need to understand the whole policy framework, because right now, the U .S. could receive Venezuelan oil until May 27th because they just extended the chevron license, but at the same time, this new provision is saying that Venezuela could not export anywhere else.
So taken together, you could argue that it basically the U .S. is telling everybody else, do not buy the oil that we used to buy from Venezuela, but it's unclear exactly what the the big picture.
So what would be the impact of this on Venezuela?
Because if, for example, China doesn't buy Venezuelan oil, that presumably would be a very harmful thing for the Venezuelan economy, which, as we know, is already in a big mess.
Yeah. I mean, this will be the maximum pressure ever exerted over Venezuela by the US in an economic way, because so far when Venezuela was not able to export to the US or Europe, basically they exported to the black market in China at a significant discount but still got a significant amount of revenue.
With this sort of the only country presumably that will be willing to buy Venezuelan oil will be Cuba unless the Chinese do not abide by this and continue to buy Venezuelan oil.
Now you mentioned Cuba there, and Cuba is already in a massive problem because it can't actually get enough oil from Venezuela but I suppose that could be an outlet that would exist and of course Cuba doesn't need to worry about it importing things to the US because it doesn't happen.
Exactly. So, Venezuela is exporting a little bit less oil than it used to Cuba because they have these other outlets like the US, but if they are not allowed to export anywhere else they would probably export more to Cuba.
The problem, of course, is Cuba doesn't have the money to pay but for Cuba it's not a problem with the threat of additional Now, one of the other interesting things about this, Dr. Manadees, is the involvement of U .S. companies.
I mean, Chevron, massive company, oil company, very much involved, of course, in getting oil from Venezuela, has been told it has to leave, I think by May the 27th.
I mean, that kind of move will make a big difference, won't it?
Yeah. At this point, Chevron produces 25 % of Venezuela's oil, and it's the only company that is significantly investing in the country under the license provided by the Biden administration.
But this will change if in May 27th nothing else is approved.
And so yeah, that will be a big impact on Venezuela.
Well we'll see how it all plays out.
Dr. Manaldi thank you so much for being with us.
Francisco Manaldi there of Rice University.
Well let's pick up some of those lines with Peter Jankauskas who is joining us from Arbor Financial Services.
Peter, we can talk about the markets more generally later, but what was the impact on oil prices of all this coming out about Venezuela?
Well, in the US energy markets today crude oil was up about 1 % and gasoline futures were up about a half a dollar.
So very little effect then actually.
Yeah, and the broad scheme of things pretty small.
I think some of that reflects the fact that obviously oil is a commodity that at the moment is at a fairly low price and there likely will be other producers that step up and fill the gap, even if Venezuela's ability to access the markets is cut back.
And we'll come on to a bit more on this in a moment.
But perhaps a bit of skepticism, do you think, in the markets about whether any of these things will actually happen?
I think that's also playing into it as well.
The plans on tariffs seem to change from day to day.
and very small changes in actions on the part of Venezuela could cause it to entirely go away.
Peter, thanks for that, stay with us.
We'll come back to you in a little bit.
But while we're talking about tariffs, one thing, one area that's been affected a lot, of course by tariffs and not just US tariffs are electric vehicles.
And the interesting aspects of electric vehicles markets are showing themselves more every day.
One figure that's come out today is extremely interesting.
The Chinese electric car maker BYD says its revenue went over $100 billion for the first time last year and that means that it's overtaken Elon Musk's Tesla in that regard. Now the firm has emerged in recent years as the clear leader in China's highly competitive EV market which is in fact the largest in the world.
Joining me to talk about this is Tu Li, founder of the Beijing based advisory group Sino Auto Insights and co -host of the China EVs and More podcast. Tulli, thanks for being with us here on World Business Report.
BYD is clearly doing extremely well, but is it only in China that it's really making its money?
So far, but 10 % of their total sales of 4 .27 million were exports.
And, the pie is going to get bigger for BYD in 2025, I think they're forecasted to well over five million units, and, again, trying to grow that export number within that five million units.
But as you know, there are some challenges with tariffs in Europe and the United States.
But according to their earnings report, they're firing on all cylinders.
OK. Well, I mean, let's pick up on that, because they are blocked pretty much into the US and they're being blocked effectively into Europe.
So where are they going to sell?
Where are they going to find these export markets?
I think it's easier to ask where aren't they going to sell?
They're in over a hundred countries currently many emerging markets whether it's Southeast Asia Middle East You know certain parts of Europe, but I also feel that because the EU tariffs did not increase the tariffs on PHEVs which BYD 60 % of their Sales from last year were plug -in hybrids So I think there's still a huge opportunity for them in the EU to grow into that market substantially this year Okay, and be widely the argument from Europe as you know And indeed from the US is that this is a company that gets very big subsidies from the Chinese government So in a sense that figure we're talking
about that revenue is almost a false figure.
How true is that? Well, I think they have gotten a substantial a boost from the Shenzhen government and the central government.
But I would argue that most EV makers have gotten substantial subsidies.
Tesla has bought a factory in California for $40 million.
So, if that's not substantial, so and Tesla historically, if you look, they've not sold many vehicles without some form of subsidy on top of the sale price.
So I think we should look and make sure that we're trying to judge objectively when we're passing judgment on the electric vehicle makers.
And I suppose the other big question is how far can the electric vehicle market go in China?
We know again from Europe and to some extent from the US that perhaps the appetite for electric vehicles isn't what it was.
But in China, people still won them?
They do. The base is much larger now, so the growth rate is going to slow down obviously in 2025, but I still see a lot of demand coming out of the Chinese consumer.
The central government is still incentivizing the purchase, and there's a price war that's three years old that Tesla actually started in January of 2022.
So I think we should still see growth in the China a market in 2025, but we should also look at other markets, the EU, because if they're able to still sell these vehicles affordably, I think there's going to be some demand for them.
And apart from BYD, are there other companies in China that are really making inroads in this sort of area, in the EV area?
So, Xpeng is probably one of the others, as well as Ziker.
So, Xpung is looking at entering 40 markets and they've aggressively priced their newest mid -sized crossover and large crossover, the G6 and the G9.
I think Zeeker who has European roots but is Gileone is also looking aggressively to move into the European market with European design and a lot of features that should attract the European consumer.
Tully, thanks so much for being with us there looking at what's going on with BYD and let me come back to Peter Jankowski who is waiting here with me.
Peter, is the EV market then really expanding?
We know that in the U .S. it's been faltering because of the rules being changed with the new Trump administration not pushing towards it, but is there a sense that overall the EV market is still one it's worth getting invested in?
Well, I think certainly the news from BYD did stimulate some of that thought here.
Tesla was up 12 percent on that news, which, if you look at it as a stagnant market, certainly BYD's growth would be a negative, so I think people are interpreting those strong BYD results as a sign that the market is bigger than expected.
I still think that the market here in the US is somewhat limited at the moment.
There remain a lot of concerns about range and other factors, as well as cost and resale value that have been holding EVs back.
Okay, Peter. Thanks very much. Stay with us again.
We'll be coming back in just a moment.
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Terms apply. You're with World Business Report from the BBC World Service.
Now the U .S. government's main overseas aid agency USAID is one of the largest owners in the world or at least it was.
On his first day in office President Trump signed an executive order stopping USAID projects worldwide saying he wanted overseas spending decisions to align with his election policy to put America first. Sam Fenwick's been exploring what the abrupt halt of funding means for lives and livelihoods around the globe.
So we're gonna sign executive orders first. I'll revoke nearly 80 destructive and radical executive order.
Barely moments after the ink dried on President Trump's executive order, emails like these, seen by this programme, began flooding the inboxes of aid organisations, charity groups and government offices across the globe.
Dear U .S. aid implementing partners, in accordance with President Trump's executive order, the contracting slash agreement officer hereby issues an order for the contractor or recipient to immediately stop or suspend work under this contract.
USAID has been instrumental in supporting Africa's largest slum, the Kibera community in Kenya.
Yeah, initiatives are focused on improving health care, education, and creating jobs to boost economic opportunities, but the recent funding cuts have left residents facing an uncertain future.
My name is Sharron Akoth.
I was a mentor, a facilitator, group therapy for girls.
It was on 27 January and I found that I emailed her with top operations.
I was so disturbed.
I I was so stressful because I was imagining how I was going to cope with my life, because my mom is relying on me, I have a rent to pay, I have a Nailing Father who is relying on me, I was wondering how I was going to cope with that situation.
My name's Lik Tito Vilemoa.
I'm a community worker, mostly implementing the HIV prevention programs. To find a job, it's not easy because the rate of unemployment in our country is a bit high.
The only job you can find outside is casual jobs.
In 2023, the United States provided Kenya with $850 million in aid.
It's young girls in particular who are most affected, says Ali Elieveld, who leads the Safe Water and AIDS Project in western Kenya.
It's really heartbreaking, because HIV -positive girls who were under scholarship, they've now just been told it's not going to happen, so their future is scattered really.
One recurring criticism is that the funding can sometimes create dependency among local agencies, leaving them struggling to sustain programs when support is scaled back.
I contacted key US government figures for their perspective on this issue.
Some were unavailable, others didn't respond to my request for comment.
Even aid organisations that haven't directly received USAID funding are feeling the ripple effects of these cuts.
This highlights a broader challenge, balancing the push for independence with the reality of reduced resources.
Dr Sheila Davis, CEO of Partners in Health, highlights the struggle.
Her organisation currently operates 11 programmes across 10 countries, including Haiti, Peru, Liberia and Malawi.
It received no more than 15 percent of its funding from USAID, but Dr Davis says they're still feeling the impact of cuts.
In Lesotho, a place where we've worked for many years, I think there are about 1200 direct frontline healthcare workers that lost their jobs, so nurses, lab techs, pharmacy techs, people who were doing the direct care, but there's not the staff there, or there's one nurse rather than four.
When you look at the collapse of the system, does it perhaps suggest that organizations and countries and governments were just too reliant on USAID?
And we've set up this model and fed this model.
The structures that have been set up for years, there was no other way that the aid was actually getting there.
This was the only thing that was there.
And so I also think we need to take responsibility for how this has emerged.
But the way that this has been done it's been too much of a shock.
Yeah, I think the way it was done is immoral.
Amidst the legal battles and policy debate surrounding USAID, one thing is clear.
The ripple effects of these funding cuts affecting nearly all of their projects are being felt far and wide.
Sam Fenwick reporting.
Now let's have a look at what was going on on the share markets more generally.
We have already spoken to Peter a couple of times.
Peter Jankowskis of Arbore Financial Services is still with us.
So Peter that sense which I kind of mentioned at the beginning of the program, that perhaps the markets aren't as convinced now that what Donald Trump says in terms of tariffs will actually happen?
Yes, they certainly, if you look back to mid -March, there were very strong statements being made that there'll be no waivers, there'll be no exceptions.
And late last week it emerged that, well, in fact, there will be some.
And the big announcement that was talked about for April 2nd, which was supposedly going to include implementation of tariffs now has been walk back to basically, there'll be some sort of an announcement.
So I think we've gone from that very strong, tough talk to more of a more reasoned approach, which is welcome in the market for a number of reasons.
One primarily is these things should be thought out and implemented over time.
And, and other is that whatever is announced, we need time to adapt to it.
So from that perspective, I think some of the market rally we saw today with the US S &P 500 up one and three -quarter percent is justified.
And is there a sense then, Pete, I mean, I've spoken about this before, that potentially this uncertainty could lead to trouble in the economy more generally, perhaps higher inflation, perhaps a recession even.
Is there a sense that those kind of issues may be not as prominent as they were?
We certainly heard from the Fed last week that, no, but they're kind of keeping their power to dry anyway?
way? Yes, certainly stories had begun to emerge about business leaders holding back on investment plans because of uncertainty and those sorts of things if they're allowed to continue, can build a negative momentum that's difficult to overcome and drag the economy down.
So changing course quickly is welcome that hopefully will cause some of that talk to diminish and and people start looking more optimistically toward the future.
So what are the kinds of data points that people like yourself are looking for now?
Is it the labor market?
Is it perhaps indications of further issues to do with costs and inflation?
Both of those are very important right now.
Consumer confidence surveys have ticked down.
Measures of manufacturing orders have ticked down.
We'd like to see some improvement in those since those are really leading indicators as to where the economy is going.
Peter thank you so much for being with us.
Peter Jankowski's there of Arbore Financial Services.
Now, have you heard of 23andme?
Well, the name is drawn from the 23 pairs of chromosomes that we all have and what they can tell us about who we are and where we come from.
The company launched almost 20 years ago and had great success using DNA to provide reports about customers ancestry and genetic predispositions to health issues.
Great success, but it has never actually made a profit.
And now it's filed for bankruptcy protection in the United States and its Chief Executive has resigned.
Well, in a minute, we'll hear from our North America Business Correspondent, Lily Jamali, about what's going on.
But first she's been talking to California's Attorney General, Rob Bonter.
Some people read all of the fine print, many don't.
I think many folks were really interested in the core service that 23andMe provided the ability to understand with a greater level of accuracy than what's been handed down through family members over the years.
Their ancestry and their ethnic heritage, I think that was a source of inspiration and empowerment to have that knowledge, to have that information also to connect for those who wished to with others in their ancestral tree.
I think many folks were probably focused on that.
And as they do, there are laws that continue to protect those individuals, their privacy, and rightfully so.
These are values that California has as voted on by both our legislature and directly by the people through a proposition to have these really strong privacy protections.
And it's exactly a moment like this when a reminder of the rights and the protections that you have is appropriate, so you can determine how and if you want to exercise those rights.
So I think that folks don't always think about their privacy, but moments like this, they might want to.
And putting myself in the shoes of other Californians as, you know, I am the attorney general of California, I'm also a consumer myself.
I care about my own privacy, my family's privacy.
And I believe that individuals who have their sensitive data with 23andme We would care about their privacy, too.
Wanna know about what this moment means for their private data, and be reminded of their rights so that they can exercise them if they wish.
California's Attorney General there, Rob Bonter, speaking to our own Lili Jamali, who joins us now.
Lili, thanks for being with us.
What Rob Bonter was talking about there is, I suppose, one of the key issues at the heart of all this, which is all that data, all our DNA, we carefully sent through to 23andMe and I was one of them.
We don't know where it's all gonna end up, do we?
No, we don't. And I think that's pretty troublesome to a lot of customers.
As you heard him say, he's a consumer, he is also a customer of 23andMe just to put a pin on that.
And so he is in the process of deleting his data.
And that is what he is advising consumers to do, that you can go in there and delete your data from the 23andMe database.
That's a right that Californians have through our privacy law, the CCPA, a number of U .S. states have similar protections that allow them to do that.
And in the UK, you all have the GDPR.
That is still in force.
And the ICO in the UK made that clear today, saying that they have been in touch with the company, they are monitoring the situation closely, and it sounds like they've made very clear to the officials there that they're still under the obligation to protect the personal information of its customers, even though they're in bankruptcy protection.
And even though at the end of that process it's entirely possible that this massive trove of data that they've built up over the last two decades could end up in another company's hands.
Natalie, let's go back a bit on this.
I mean, what was the problem with 23andMe?
Why did it end up in this mess?
Because it was hugely popular, wasn't it?
It was hugely popular, popular with consumers, popular with investors who at one point, you know, helped this company, The value of this company rise to as much as $6 billion.
Of course. It's just a fraction of that today just 50 billion, 50 million.
Rather. You know, as you mentioned, this company has never been profitable despite all its promise.
And part of that is just a systemic issue with the business model.
If you do the test once, you don't really need to do it again And they've tried multiple avenues to create a more sustainable business model, they've tried a subscription service which didn't really catch on One more promising avenue that they pursued was the idea of drug development.
They actually got pretty far with that.
They had a team of about 150 people.
They had a couple of these therapeutics go to human trials.
But that is an extremely cash intensive business.
They often say developing a new drug can take a decade and a billion dollars.
So that helps explain why they were burning through so much cash and why they ended up the situation that they are, plus had a massive data breach in 2023 affecting millions of customers.
I think that also shook the confidence of their customers as well.
It was a difficult time.
Lily, thank you so much for being with us.
Lily Jamali there on the downfall of 23andMe.
Will it continue to exist in some other form?
I'd like to because I'm quite interested in the data it produces.
But there we are. That's World Business Report.
That's it from me and rest of the team.
Thanks for listening, and bye -bye.
This is Jenny Garth from I Do Part 2.
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