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But once again, we are talking about tariffs and Donald Trump, because he has threatened Russia, well, with tariffs now.
We've spent $350 billion approximately on this war with Russia and Ukraine.
And we want to see it end.
And I'm disappointed in President Putin, because I thought we would have had a deal two months ago, but it doesn't seem to get there.
So based on that, we're going to be doing secondary tariff so we don't have a deal in 50 days it's very simple.
Okay we've talked a lot about tariffs haven't we on the program so now we come to a different sort of tariff secondary tariffs so what exactly are they?
A question for our North of America business correspondent Michelle Fleury.
I mean they're pretty unusual although we have heard Donald Trump refer to them before in the context of Russia.
What is new today is that he has issued a deadline with it that of sort of of around September.
And if he doesn't see what he wants, then he's going to impose 100 % secondary tariffs.
And what it means, in essence, is that nations that are doing business with Russia could face steep penalties when they're exporting goods to the United States.
So for example, if a country like India is buying oil or gas from Russia, then they could face these 100 % tariffs selling goods to US companies.
And the idea is to act as a deterrent and to try and sort of cut off funds that are making their way into Kremlin's coffers, but also to try and sort of curtail the sale and export of oil and gas from Russia, which has been a major source of revenue for the country and has helped it sort of fund the war in Ukraine.
And he would use secondary tariffs in Russia's case because there isn't really that much trade between the US and Russia anymore.
And if he wants to hit energy, he has to look at other countries.
Well, and if you look at also how effective these are, there's sort of a bit of a question, Mark, about that too.
As you say, sanctions are in place against Russia, and so because of that, trade has sort of essentially fallen to virtually nothing.
But you still have this huge source, as I say, of oil and gas exports.
But Russia has a shadow fleet.
Essentially, if you think of it as tankers whose origins are fairly murky, And that's how they've been trying to avoid and evade sanctions.
And they could use that in the case of secondary tariffs to help countries try and evade notice.
So there are still question marks about whether or not it would work.
And an important announcement and definitely a sort of shift in policy.
But 50 Days is a long time in the world of Donald Trump.
It's a long time in the world of Donald Trump, but it's also a long time on the front line.
And I think if you look at how the Russian market has reacted, it actually rose after Donald Trump's announcement, in part because they were expecting something potentially harsher.
Obviously, Congress here is still considering more sanctions, so that could potentially still happen.
But there was a bit of relief on the Russian markets because of this.
That gives Russia time for a sort of summer offensive.
And obviously, things could change a lot during this time frame.
Michel Fleury there.
We wanted to take you to a country that does a lot of trade with Russia because how could they be affected?
Yerik Bati -Khanov is an independent policy expert based in one such country, Kazakhstan.
At this point, it's difficult to say whatever these threats will become real measures, but the fact that 100 % and even 500 % terrorists are being discussed shows that the U .S. is using strong political signals.
For Kazakhstan, it's moment to pay attention because the rhetoric is clearly shifting toward pressure on Russia's partners as well.
Kazakhstan is not the direct target of these measures, but we are economically and logistically connected to Russia.
And if secondary sections on tariffs are introduced, they might affect some of our exports, and it may rise concerns among international investors.
It's something that we need to monitor closely.
Let's look at the areas where Kazakhstan does trade with Russia, and there is a lot of trade, isn't there, between both countries.
Which sectors will be affected?
Are we talking about oil, gas, those sorts of areas?
The energy sector is most obvious, especially oil transit infrastructure, also any joint projects involving Russia and Kazakhstan.
Financial institutions might also take a more cautious approach due to, like, complaints risk.
If we look at some of the infrastructure that's in place, it's going to be difficult to disentangle that, isn't it?
Because if we look at the Caspian Pipeline Consortium, which exports 79 % of Kazakhstan crude oil, that has a very strong Russian influence, doesn't it?
Yeah, of course. Russia is our strategic partner and our big trade partner, especially in terms of transit, infrastructure, energy cooperation and imports.
But over the past decade, Kazakhstan has been actively diversifying, so building stronger ties with China, the European Union, central Asia.
So our connection with Russia is real, but the country is not fully dependent.
So we have options.
OK, but you say you have options.
It is very difficult to replace your major trading partner.
How could Kazakhstan do that?
In this stage, there are no public decisions, but I believe that the government will take pragmatically.
So possible steps could include strengthening dialogue with the US, reviewing trade exposure and adjusting transit routes we need.
Kazakhstan has experience in managing external reefs and usually prefers quiet diplomacy over loud directions.
That is true. But we have an American president who's very clear that he sees people who are not with him as against him.
So if he does put this in place, it is going to cause a lot of problems for Kazakhstan, isn't it?
Because we're only talking about 50 days, it's very difficult to move your economic ties in that short period of time.
I know that and I hope that Kazakhstan and the U .S. relation will not harm.
And Kazakhstan and the United States have long -standing partnership, especially in energy, nuclear safety and regional security.
So we have important areas of mutual interest. So I believe that both sides will want to maintain a stable relationship in there.
Kazakhstan should stay calm and stick and it's a principle of multi -vector diplomacy.
It's important to keep dialogue with both US and Russia to explain our neutral concentric position clearly.
At the same time, we must prepare options to protect our interests if needed.
We are not a part of the conflict, but we should understand that Russia is our neighbor and trade partner.
We may feel, of course, feel the secondary effects.
It's interesting to hear a voice from Kazakhstan, which has very strong trade links with Russia.
Let's bring in Peter Jankowskis, vice president of research and analysis at Arbol Financial Services in Chicago.
Peter, always a pleasure having you on the program and a sign there that Donald Trump probably wants to punish Russia.
And that hasn't been easy because Russia has managed to still sell a lot of its oil to countries like India and China.
Yeah, it certainly has.
And they've taken some steps previously, at least on the EU's part, which led to the creation of the Shadow Fleet when they basically said that they wouldn't insure Russian energy shipments.
And in some ways, I think the action that was taken almost is the opposite.
It's not really showing a great deal of resolve on the part of the Trump administration.
It's given the timeframe of 50 days.
It seems fairly lax.
The proposal lacks specifics.
And you can see also that the energy market took it in stride.
Oil prices were actually down today.
So that to me suggests that they don't expect that these tariffs are going to have any teeth.
Let us talk about tariffs in another form now, that is the European Union, because they have pledged countermeasures against the United States.
If the administration of US President Donald Trump introduces 30 % tariffs on imports from the bloc next month, Mr. Sefcovic said he had to protect the European workforce.
Force. It was also very clear today, and I have to say that comparing to the previous discussions we had with the ministers, now it came very clear across the table.
So if this is a situation, we have to protect the jobs, we have to protect the businesses, we have to protect EU economy, and we need to go for this rebalancing measures.
The message was strongest I've witnessed since we started the discussion with the US.
There was a meeting of EU trade ministers there, that was the trade commissioner himself.
Well, for more reaction, I've been speaking to Karen Cosper, vice chair of the EU's Committee on International Trade.
It's time to put action behind our words.
We had a meeting with the International Trade Committee here in the European Parliament today, and I feel that that is the common approach from the members, but we also feel that the European citizens have high expectations.
It's time to act. And And let's say pull the trigger.
We have a big toolbox and it's time to use it.
It's not easy, though, because with 27 countries inside the EU, there are lots of differing views, aren't there?
And there are some countries like France who want a hardline approach, but others who want to take a softer approach. So there's always going to have to be a compromise.
Yes, and that's the thing with the EU, that we have to stay united.
But we are stronger together and that makes us so strong.
When we have a decision, which is always based on the compromise, we stand very, very strong.
And we have seen different attempts from President Trump to divide and to split the member states.
But the European Union stays very strong and trade policy is a common policy area.
So I think he realizes that this is not the way forward. You will be aware of what's taking place behind the scenes.
How close to a trade deal are we?
Because it looks like the EU is getting close to a trade deal with the US, but then Donald Trump changes things.
Yes, I think it's actually very difficult to answer.
I have heard also behind the scenes here in Brussels today that we are close, we are very close.
But on the other hand, President Trump himself, his mood swings all the time.
And what I learned from my visit in Washington some weeks ago is that he runs this very much like a personal project.
So you don't know what the next step actually can be.
So before we have a deal on the table, there is no deal.
And I really want to underline how important it is for the EU to have the best trade relations with the United States.
But it's very, it's tricky when we have to work with a person who runs his country like a one -man show in this case.
But you do have to deal with him, don't you?
There is no other option.
Exactly. That's how it is.
But the European Union stands strong and united.
The European Union works as a big compromise, as we know, and we have to move forward. And we also want to stay strong and united in this case, because this is not only about different levels of tariffs.
It's also a way to defend the international rules -based trade, which is also under attack from the White House.
President Trump wished to have a more power -based system than a rules -based system.
And that's also something we defend by negotiating with the United States right now.
You say that it's time for a firmer approach. What did you make of the European Commission President Ursula von der Leyen delaying those tariffs that were due to come in place today?
I suppose she had good reasons for that.
But on the other hand, we have the toolbox.
It's time to put action behind our words and move forward. I mean, this is about days.
But were you disappointed with that decision not to put those retaliatory measures in place over the previous US tariffs on steel and aluminium?
I wouldn't say that I'm disappointed towards the commission at all.
I know they are working so hard day and night.
But I think that the leadership of the commission really understand that we have high expectations.
it's time to pull the trigger very, very soon and speak the language that President Trump understands.
And it has to be super clear.
One big problem in this case is the unpredictability with President Trump.
That's why we have to communicate so direct, so strong and very clear.
So that was also something we discussed in the trade committee today, that we have to be very clear in our communication.
The thoughts there of the Vice Chair of the EU's Committee on International Trade, Karen Carlsbrough.
So how will Donald Trump react to the EU's stronger tone?
Here is Michelle Flurry once again.
We know that Donald Trump doesn't like threats.
Both sides are trying to talk tough and that's partly what this letter from the US to the EU is.
But we are getting closer to potentially an all -out trade war if these two can't reach some kind of deal.
Now we thought a deal might be coming as soon as this weekend or last week.
That hasn't happened and obviously the temperature has ratcheted up now.
I was speaking to someone today who said this is definitely one step closer.
And unlike other countries, the EU is a major trading partner with the United States, and it has more tools at its disposal.
It is, you know, not like dealing with a smaller country like Vietnam or others.
This is a country that could do economic damage to the US.
us. Michelle Fleury there.
Peter Jankowski is still with us.
Peter, this really is one of the only trading blocs along with China that seems to have the ability to stand up to the US.
So it will be interesting to see how Donald Trump does respond to this tougher tone coming out of Brussels and the EU now.
Yes, it certainly does suggest that perhaps we're headed towards something like what occurred with China.
A lot of talking, posturing back and forth, and then basically, you know, coming to a deal that, for the most part, maintains the status quo.
I think that's the most likely outcome.
It's interesting you say that, because with hindsight now, when we go back to what happened between China and the US, who do you think had the upper hand there in the end?
Well, certainly the rare earths prove to be a very powerful item in China's favor.
And I think ultimately that's what led to the U .S. or President Trump somewhat backing down from some of those tariffs and moving back.
Because, you know, basically there's nothing we can do.
There's nowhere else we can get those materials for now.
And it would take some time to develop them.
I want your thoughts on this story that's come through in the last hour or so, Peter.
The founder of Meta, Mark Zuckerberg, a name we often talk about on this program, says that it will spend hundreds of billions of dollars on building huge AI data centers.
And we're often talking about what areas are we going to see growth in.
This is the area, isn't it?
Well, certainly it is right now that everyone is working toward that.
Um, I think, uh, you know, people should be a little cautious in terms of, uh, you know, the resources that are being dedicated to it, that people find more efficient ways to achieve the same goals.
You know, we went through that with the deep seek, uh, episode earlier in the year.
Um, that's one thing to think about.
And, you know, frankly, a lot of these models are very buggy.
Um, you know, you read stories every day about, uh, you know, them producing results that are not desirable.
comparable, that's certainly going to be a concern going forward as well.
How significant, though, is this announcement that, you know, one of the big companies that we talk about is committing such a huge amount of money?
Well, it certainly does suggest that it's very important to them.
The questions I have, though, are, you know, he's not really making a strong business case for it.
From the articles I've read, he talks about the fact that we can afford to do it um that doesn't seem to be the right justification for spending that type of money to me well let's see what happens there you're with world business report from the bbc world in business they say you can have better cheaper or faster but you only get to pick two what if you could have all three at the same time that's exactly what cohere thompson reuters and specialized bikes have since they upgraded to the next generation of the cloud, Oracle Cloud Infrastructure.
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Let us head now to Argentina, whose president, Javier Millet, wrote a wave of economic dissatisfaction to become president in 2023 and famously used a chain store as a prop to symbolize all the spending cuts his government would make to rein in inflation.
So we like to keep an eye on the data that's coming out there to see how successful he's been.
The latest data that came out on Monday showed that prices rose by 1 .6 % in June.
Joining us live is Luis Agüero, an economics professor at the Belgrano University in Buenos Aires.
Those look like pretty good figures, don't they, Luis?
I mean, the president's going to be happy with that.
Are Argentinians happy with the inflation they're dealing with?
I guess so, that the president is going to be happy with this number.
us. I think it shows a clear diminish of the inflation rate in Argentina.
We have two months in a row with inflation below the 2 % threshold.
So I think probably this year, inflation is going to be around below the 30 % line.
So for a normal country, this would be tragic.
But for Argentina, And considering its instability in the last years, it would be an achievement.
So how has President Millet managed to make this achievement?
Well, basically by achieving a fiscal surplus.
Argentina has had many, many years of fiscal deficit.
That deficit was paid by getting debt, issuing bonds or by printing money, basically.
And that money that was printed later led to inflation.
So we had in 2023 an inflation of over 200%.
Last year in 2024, it was over 100%.
So getting to the 30 % line would be really a success.
When you talk to Argentinians, what do they make of this lower level of inflation that they are now dealing with?
Is that changing their behavior?
Do they feel under less pressure to buy things now because prices aren't going up as quickly as they used to?
Well, this reduction in inflation doesn't come without a cost, right?
As you said, the change of policy led to the cut of public works, to many public employees seeing a reduction in their salaries or being laid off.
and uh but i believe that most of the argentinians feel that this is an improvement because now we have some kind of price reference right before with such a high inflation we didn't have any reference of the basic products that we buy every day it's difficult it was difficult to compare from one place to the other because there was a constant change in prices now with this level of of inflation.
People get used to the price of the things they buy.
They can compare. They can decide on what's the best, what is the best place to buy.
So I believe that people are feeling the improvement of this.
But obviously, this came with a high cost for many people.
This system created its winners and its losers.
It certainly did. Look, it's been a real pleasure pleasure speaking to Luis Aguero there.
We are going to keep in touch with him and follow those inflation figures in Argentina.
Peter Jankowski is still with us.
As Luis Aguero pointed out there, for many countries, you know, 30, 40 percent inflation would be horrific.
In the Argentinian context, quite an achievement.
Indeed. It's tremendous that he's been able to bring it down that quickly.
And hopefully he'll be able to sustain that and perhaps even bring it down even further.
Yep, let us see if he manages to do that.
Right, we talk a lot on this program about Chinese car companies and how they have accelerated their global expansion in recent years, particularly in the EV sector.
It's something our international business correspondent Theo Leggett has been closely looking at.
Hi everyone, ciao tutti.
When BYD's executive vice president Stella Lee took to a stage in Rome last month, she took the covers off a machine whose appearance is likely to send shivers down the spines of industry executives across Europe.
Are you ready for the green wave?
Let's say hi to the Dolphin Surf.
The Dolphin Surf is a small sharply styled city car.
In China it's called the Seagull and there's certainly something gull -like about its swooping lines and mischievous eye -like headlamps.
But what makes it stand out is its price tag.
In its home market, it sells for under $8 ,000.
In Europe, because of import costs, tariffs and the need to meet stringent safety standards, the price is nearly three times as high.
Even so, for an electric car in Europe, $23 ,000 is still very cheap.
And the company behind it, BYD, is nothing if not ambitious.
Everybody wants to be number one.
So this always can be the motivation for everybody working hard. Stella Li is one of BYD's most senior executives.
We want to be one of the main players in each country.
Do you think established Western brands should be scared of you?
I don't know, but I think this race is about technology.
But BYD is far from alone.
A whole host of Chinese brands have been emerging from their super competitive domestic market onto the international stage.
We were at the Shanghai Auto Show very recently and we were just shocked at the quality and variety of different EVs on display there.
It really was amazing.
Dan Caesar runs an online channel devoted to electric vehicles called The Fully Charged Show.
Germany certainly has set the benchmark for high -quality cars and I think the reality is some people expected that Chinese cars would be inferior but the general average standard is very, very high indeed.
Politicians in the United States and the European Union are convinced subsidies have given manufacturers based in China an unfair advantage.
Last year, the US imposed a 100 % tariff on imports of Chinese -built EVs, effectively making it pointless to sell them there.
The move was condemned by Beijing as naked protectionism.
The European Union, meanwhile, placed extra tariffs of up to 35 % on Chinese EV imports, with the actual amount varying depending on how much of an unfair advantage it thought each manufacturer actually had.
The response from Chinese firms themselves has been, in public at least, something of a resigned shrug.
Here's what Xpeng's president Brian Gu had to say when I met him at last year's Paris Motor Show.
I think the reason we are competitive is because we have fought tooth and nail through the most competitive market in the world, which is the Chinese EV market.
We competed with Tesla, we competed with all the Chinese brands, as well as global EMs. BYD, the best -selling brand in China, is often singled out as a major beneficiary of Chinese government funding and has been a key target for critics who say it has unfair cost advantages as a result.
But Executive Vice President Stella Lee insists that's nonsense.
It's an unfair claim because there's no fact base.
If any auto manufacturer goes to invest in China, they will receive equally or maybe better subsidy from Chinese government because you contribute like a job opportunity.
Theo, with that report, they're looking at China's growing success in the EV market.
You can hear more by searching for Business Daily, wherever you get those BBC podcasts.
Final thoughts on the programme from Peter Jankowskis.
China really moving forward in the EV markets, but are we seeing a slowdown in EV growth, do you think, in the US in particular?
Oh, certainly in the US.
We definitely have seen them slowing down.
The sales actually are truly declining at the moment, largely because the EVs are proving to be very expensive compared to gasoline powered alternatives or fossil fuels, I should say.
Certainly diesel is still there as well.
But certainly something that would come in at a lower price point I think could be successful.
Yep, let us see whether those Chinese cars though manage to get into the US.
We will be picking up and looking at these issues in more depth on Business Matters in a couple of hours time.
But for this edition of World Business Report, we say that is the end.
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