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Subject to change. Hello and welcome to World Business Report on the BBC World Service.
Will Bain with you today.
Great as always to have your company.
Thanks so much for being back with us today.
Two simple questions for us.
Simple in that they're short to ask rather than the complexity of their answers.
What does President Trump mean for the world's biggest economy?
and what impact might his return to the White House have on the global economy?
And we're going to try and answer both here over the next half hour on World Business Report in the company of the BBC's economics editor, Faisal Islam.
Faisal is going to be joining us from one of the biggest annual gatherings of global business leaders, the World Economic Forum, in the Swiss ski resort of Davos.
Faisal, pretty cold in Washington today.
How's it with you and how's the mood there?
it's actually quite bright here quite a sunnier than you might expect but they can feel the chill from if you like trombonomics 2 .0 the perception that what gets announced maybe not today as we'll hear but in the coming weeks will fundamentally upend the global trading system potentially the global
monetary order too and then the real question about not just what america does but how the rest of the world reacts we've seen some very sort of combative preemptive moves from the Canadians for example saying that we will react to any trade war and they're calling it a trade war in advance so some
delicate diplomacy we're entering a new era really and that affects not just America but also the rest of the global economy and the markets we see some volatility on markets today with the dollar, but also in unexpected ways too.
There's a lot to get through.
Yeah, there absolutely is.
And as Faisal rightly sets out, a lot of the focus, of course, obviously on Washington over the next few hours.
But we think this has got its significance wherever you're listening in the world in terms of business, trade, and the economy going forward as well.
Over the next half hour, alongside Faisal, Michelle Flurry, our North America business correspondent, is also going to be with us.
Michelle joining us from New York City.
Michelle, been loads for the markets are closed today in New York where you are, but been loads to kind of digest from a kind of business finance perspective already this morning and just lines coming out before the president's even been sworn back in again.
Yeah, I mean, it's going to be fascinating to see how the markets react when they reopen on Tuesday, because, of course, we know Donald Trump is embarking on a huge agenda that includes mass deportations, steep tariffs that Feisal was just talking about that sort of sent tremors across kind of foreign
trading partners and, of course, slashing the size of the federal government.
We also know that the incoming administration wants to act with a sense of speed and urgency.
And so today we're expecting several executive orders to be signed immediately following his swearing in today.
Yeah, we'll go through those in some more detail, in particular with our next guest, too, because to round out our panel, We're also joined from Washington, D .C.
by Max Cohen, congressional reporter for Punchbowl News.
And if you're not familiar with their work, well, in recent years, Punchbowl really been the place to go for kind of the inside scoop on the real nitty gritty of U .S.
politics. And in particular, Max, you guys were first there with those details of what we might see in those executive orders later.
Great to have you with World Business Report.
Thanks for being with us.
Set the scene for us a bit.
Everybody inside in Washington, I'm watching on the screen.
You can see people funneling into the rotunda in the capital.
How's it different apart from that obvious in terms of other inaugurations, I suppose, other big moments in U .S.
politics? Yeah, it's great to be here.
I really appreciate you having me on the program.
And I think the big difference this year is we're seeing the outgoing administration cooperate with the incoming administration.
Of course, just four years ago, President Donald Trump refused to participate in the transfer of power.
This year, Biden and his vice president Kamala Harris are appearing with J .D.
Vance and appearing with President Trump to usher them in for the inauguration.
So just with that symbolism, it's different.
But as you all mentioned, we're going to have a flurry of executive orders shortly after the inauguration.
And of course, it's inside this year.
The temperatures are frigid here in D .C.
And authorities decided it was better to have a smaller scaled back proceedings indoors to protect first responders and the guests who would be attending.
Yeah, I want to get right to some of that policy in a moment with all of you.
But just whip us through very quickly, Max, if you can, kind of the time frame at the moment.
And I've just seen the two respective first ladies climb into the back of a limo outside the White House and literally walking out of the front doors of the White House as we speak now.
Looks like Amy Klobuchar, the Democratic senator from Minnesota in front of President Biden and President Trump.
What's happening here?
And you be our geographer.
How long is this journey going to take them in the back of this limo to the Capitol?
Yeah, journey won't take very long.
We expect President Trump to be speaking in around an hour, hour and a half.
That will be the highlight of the day for President Trump is his big inauguration address.
But currently in the U .S.
Capitol, we're seeing members of Congress file into their seats.
They're being told to arrive very early for the proceedings.
And Amy Klobuchar, as you mentioned, she is the head of the Committee on Presidential Inaugurations.
That's a big role, a procedural role here.
But again, the symbolism of seeing Trump and Biden together is just massive.
I mean, Biden referred to Trump as a threat to democracy during the campaign.
Of course, Biden did not run.
He was his vice president who lost to President Trump.
But Biden has said it is important to have a peaceful transfer of power to show that the institutions of U .S.
government remain strong, even among someone he considers a threat to the very foundation of the country.
Both men now in the back of that limo, outgoing president, incoming president, the motorcade lined up out the front of the White House, where I'm sure many of you will have seen those TV pictures many times before that sort of roundabout that's almost there in the front.
I can see the monuments of the Capitol in the background there as on the motorcade just pulling off.
So as Max says, you're going to hear the president going to be heading there where lots of people already in their seats in the rotunda to hear the incoming President -elect Trump speak in, well, not too very long at all.
An outside source will be having that with you.
The president was giving a different speech last night, one aimed squarely at supporters.
He was in an ice hockey and basketball stadium, the Washington Capital One Arena, on Sunday night.
And it was pretty raucous.
Our new administration will inherit disasters at home and abroad, an economy plagued by inflation and high interest rates.
But starting tomorrow, I will act with historic speed and strength and fix every single crisis facing our country.
We have to do it. And he went into a little bit more detail about what he was planning to do to try and turn the economy around.
We're going to cut your taxes, end inflation, slash your prices, getting them back down, raise your wages and bring thousands of factories back to the USA right where they belong.
And that'll be done through tariffs and smart policy.
We will build American.
We will buy American and we will hire American.
and as the presidential motorcade moves out onto the frozen streets of washington dc now i'm sure these supporters who the bbc spoke to a little bit earlier on on monday are among those waving at the motorcade as it heads towards the capital and they told the bbc about their hopes for the incoming president
-elect trump is back america's back strength is back in america safety security and prosperity he's going to sign some executive orders tomorrow he said why wait when you can do it tomorrow.
I think that's great.
We need to, you know, we got to get rid of, you know, the immigrant, we've got a huge immigration problem.
So it's time to get to work.
I wouldn't let 10 people I don't know in my house, 10 million.
Come on. I think he's going to bring a surprise to a lot of people.
He's going to bring unity to not only the United States, but to the world.
A better economy. We're small business owners and just, just a better USA making America great again.
Well, there you go.
Some supporters speaking early on Monday to the BBC.
Max, talk us through then.
As I said, Punchbowl, your publication over the weekend seemed to have plenty of detail on what we might see in these executive orders.
Talk us through particularly the key ones, but particularly the ones from a kind of business and economic perspective, if you can.
Yeah, I think top of that agenda is what President Trump refers to as unleashing American energy.
He wants to roll back regulations, which restricts drilling for natural gas and other sorts of fossil fuels on U .S.
soil. And that's key to his economic agenda.
He says so much of the inflation, so much of the price crunch we've been seeing in the United States is because of these climate change regulations.
Trump calls it the Green New Deal.
It was one of Biden's prime legislative accomplishments, the Inflation Reduction Act.
And Trump says, I want to do away with that.
And that's one of his theories for cutting inflation.
Right. Michelle, energy, then one of the areas, I guess, or traditional energy, fossil fuel energy that sees themselves a potential winner from a new Trump administration.
Is that one of the sectors that we'd be looking at?
Yeah. I mean, just picking up what Max was just saying there, Donald Trump on the campaign Trill talked a lot about Drill Baby Drill.
And so two of the executive orders we're expecting to be signed today, one is to unleash production in Alaska.
The other is to declare a national energy emergency.
The idea behind all of this is to try and bring down energy prices and therefore relieve pressure on inflation.
There are also sort of foreign policy objectives.
Alaska is described as geostrategically important and also it has a source of critical minerals.
But if you listen to oil executives, I mean, they keep saying the same thing, which is that production levels are based on market conditions.
And so they may not increase simply on actions from this administration.
But obviously it is something they welcome.
The kind of reduction of sort of any red tape when it comes to getting access to land they want to drill on is seen as a positive for the industry.
Well, here was the president -elect in his own words on that last night.
We're going to reclaim our wealth.
We're going to unlock the liquid gold that's right under our feet.
Liquid gold. Max, just a sense politically, I mean, some of the other things that we're going to come to talk about around migration issues and around tax and things, things that were well talked about on the campaign trail, energy a bit lesser?
Why so early on, do you think, from a political perspective?
Yeah, I mean, I think it's exactly what we're talking about.
One of the top issues of this election was inflation was the high cost of living.
And many Democrats said to Donald Trump after he won, look, everything you're doing isn't actually going to bring down costs for people.
Well, here's Trump's reaction.
He says, if you want to get things cheaper, if you want life to be more agreeable for working class Americans, let's try to cut down on energy costs, cut down on prices at the pump, gas prices.
So this, I think, is a very intentional response to say, yes, I'm going to do stuff, red meat on the border, red meat, government reform, cultural issues.
But this might be an olive branch to people just concerned about the economy who aren't very political, and they can feel these costs go down if these executive orders work out the way Trump thinks they will.
Let's have a little look at a bit of the market reaction.
April LaRouse is also with us.
April's the head of investment specialists at Insight investment.
April, welcome to World Business Report.
Any movement? I mean, obviously, those American -listed, US -listed energy majors, we're not going to know for a couple of days, but any movement in kind of global energy stocks today?
Not so much from energy.
I thought it was interesting listening to the comments about drill, baby drill.
I mean, energy companies will drill more if the price of oil is higher, not if it's lower.
So I think there might be a little bit of not sure the markets are going to respond the way Trump expects.
Faisal, you had a really interesting piece.
People can find it in the live page that's running on the BBC's website as well, talking about where you are, you know, the world's top financiers, big market insiders on tenterhooks.
Is that because of an ability to shift everything from sort of energy stock market, technology stocks, everything?
Is that why the kind of anticipation where you are with the kind of the big players?
Well, I'll give you one very human example of this i mean i've been coming here for 10 15 years and i remember when i first came here in the 2010s one mark zuckerberg was sort of hanging around outside one of the hotels waiting for his press minder and was very much engaged with the with the sort of spread
of as it was then and more than a startup um into europe and its regulation and the likes you know now he is sat in that church up on the rotunda big techs agenda with trump on ai on that cheaper energy piece as well that is required for those ai data centers you know a big transformation and he is now
asking the incoming president to help him deal with the fact that the eu tries to regulate big american tech as a issue of sovereignty as an issue of kind of u .s nationhood So, you know, that's one little change.
The bigger current is, as I was saying, on the change to the trading system, on a change to the sort of monetary system to, you know, project 2025, which Trump sort of disavowed during the election, which was a product of sort of right leaning think tanks in the US.
they have suggested the US pull out of the IMF and pull out of the World Bank.
Indeed, it is strongly suggested here by health executives here at Davos.
They think, they're starting to anticipate, that when Donald Trump addresses this place on Thursday by digital link, they think he might announce pulling out of the World Health Organization.
Now, the truth is, we just don't know.
As we don't really know what he's going to say in his executive orders, I know that Michelle and others have got a hint of that.
On trade, though, just lastly, take this one example.
The perception that there's going to be big tariffs has pushed up the dollar, pushed up 10 -year yields in a way that could impact the whole world, sucking capital from the rest of the world into the US when you have safe treasuries at 10 years yielding 5 or so percent.
The dollar has gone up, but just now, given what Michelle's just said, and your other guests, that the day -one tariffs aren't going to be there, the dollar has fallen back.
Now, I speak to really smart people, connected people here, and they do not know if the Trump trade agenda leads to a strong dollar or the absolute opposite, that the logic leads to a weak dollar.
Because that's the sort of thing Scott Besson, the incoming Treasury Secretary, has suggested is the long term solution to what they call trade unfairness.
So we're expecting now a study of the trade imbalances around the world and the sort of action that might work.
But no action today, which had been in the mix in the markets in the past few weeks.
April, LaRouche, just come back in on that, because not just currency markets going, but stock markets as well.
The European ones that are open, bouncing around all over the place to a lot of activity.
Yeah, they really. They actually opened quite strongly.
And they've had a strong year to date, by the way, comparing and contrasting to the S &P, which is up, but only about 2 percent.
Whereas if we look at sort of the euro stocks, 50, that's up nearly 6 % on the year and about 0 .7 on the day.
So what we're seeing from European equity markets is, frankly, there's been so much negativity around European growth, European prospects, obviously fear of tariffs.
But we are finally getting some hope that maybe things won't be so bad.
So there is a little bit of optimism sneaking in there.
Yeah, perhaps just do a bit of a look ahead for us full stop, because when the days after President Trump won the election, stock market had a pretty serious rally, particularly in the US, obviously, but actually around the world as well on thoughts like deregulation and things like that.
And I'm sure we'll come to throughout the chat that we're going to have.
Is that your looking ahead?
Is that what you see for the next kind of couple of weeks in the kind of early days that there's going to be kind of traders enthusiasm in stock market?
I think there is. And also, it kind of depends on the order in which things happen in terms of either these executive orders or in terms of what his administration decides to tackle first.
Because clearly a focus on deregulation is considered to be very positive.
And, you know, obviously the immigration changes less positive in terms of increasing the cost of labor in the US ultimately.
But we do think that ultimately markets want to see positive In his administration, I think overall growth is going to be better in a Trump administration than under a Biden administration.
April LaRouche, head of investment specialists at Insight Investment, thanks so much for your time.
President Trump and President Biden both entering the capital.
They've just walked through the doors there behind us.
Max Cohen was saying, Amy Klobuchar, they're either side.
They're sorry, they're flanked by members of the United States military.
Literally, I can see Chuck Schumer, senior Democrat, Kamala Harris, the outgoing vice president behind them in that queue as they make their way slowly into the Capitol there as well.
Max Cohen, other big figures, as Faisal mentioned, extraordinary picture in our live page taken from inside the church, the church service this morning for President Trump.
Some of the biggest CEOs in the world.
I can see Tim Cook, the side of Tim Cook's head, the top of Jeff Bezos, the boss of Amazon's head, Mark Zuckerberg to the left of them and behind them, the boss of Google, Sundar Pichai.
Have we ever seen – I mean obviously politics and business have always got crossover right, but have we ever seen it quite so overt as we're seeing in the US right now?
I think it's a big sign of how scared these corporations are about the potential wrath of Trump and his allies.
For the past four years, we've seen the right wing in America rail against corporate DEI practices and threat investigations into these companies.
Now that they've taken power, corporations simply want to be on Trump's good side.
I think it's a huge vibe shift.
Certainly, we were talking about Mark Zuckerberg earlier, someone who, after the election of Donald Trump in 2016, talked about a need to move away from isolationism and nationalism and to become citizens of the world.
And now he's speaking a very right -wing tune, frankly, going on Joe Rogan and trying to get on Trump's good side.
So that's my rail against corporate DEI practices and investigations into these companies.
And now that they've taken power, corporations simply want to be on Trump's good side.
and I think it's a huge vibe shift certainly.
We were talking about Mark Zuckerberg earlier someone who after the election of Donald Trump in 2016 talked about you know a need to move away from isolationism and nationalism and to become citizens of the world and now he's speaking a very right -wing tune frankly going on Joe Rogan and trying to get
on Trump's good side.
So that's my main takeaway is that big business knows that it's Trump's Washington.
Republicans control both houses of congress too and they have to play ball.
Faisal does that extend do you think beyond American based execs too do you think that there is you know you say when when the president's going to virtually speak where you are in Davos later on this week do you think that there is a shift in kind of I guess the approach that non -American chief execs
might take towards the us and president trump 2 .0 well i think first it is definitely worth saying that amongst the american contingent that we see here at davos there is some excitement and encouragement at the deregulation these significant effective tax cuts that are coming down the road as part
of his agenda given they controls congress too and an opportunity to pump even further an american economy that's that's doing pretty well now uh elsewhere i think what's interesting here is we often see this as a sort of transatlantic thing or a g7 thing the world is quite different even from what what it
was under the trump first uh period in in power it has changed and there are lots of other countries doing other things if the trump administration tries to sort of force the world to downgrade the role of china for example in the world trading system uh because you know effective sanctions or tariffs
they work better if other people join in they may find that other countries well do you know what we want to buy these cheap green energy uh goods we want to buy them in our supply chains we're not going to be told by america what to do so the world is just a little bit more complicated and a little
bit more multi -dimensional um for the americans sort of uh decide the tune that everyone else has to follow um but certainly concerns about trade within the g7 and again here's the critical thing there's uncertainty about what trump does and how it plays out within his court or multiple courts as it
were but there's also uncertainty about how the rest of the world friend and foe reacts to this um so um you know that's why i think you're seems to be in volatility.
Yeah, you're listening to a special edition of World Business Report.
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Service. Members of the incoming administration or people we think are going to be in it and also members of the Trump family filing into the Capitol Rotunda now up on a stage facing those guests that we were talking about.
You can see Marco Rubio, been one of those who's been having a hearing about being the incoming Secretary of state as well.
Michelle, let's turn to a bit of world issues here.
What did we learn from some of those executive orders that you were being briefed about policy perhaps looking outward away from the United States?
I mean, so far, most of the stuff we've been hearing about are things like inflation plays a big part.
There was a memorandum on inflation.
But when incoming officials were pressed on what exactly that means, there was a lack of detail and a preference to defer to the President.
I think the energy ones, which we talked about earlier, feed into that.
But in terms of sort of more global looking ones, we know that there is going to be a sort of direction from the President to re -examine trade policies and kind of how federal departments interact with that.
But on the key question of tariffs, they don't seem to be part of the picture, certainly not on day one.
And I think that was a big question mark that people had that obviously potentially had a huge global implication there.
There are other things that are more domestic focused.
We talked about some of them diversity equity and inclusion.
That's going to be one.
Mass deportations. That is something that immigration was one of the other big issues outside of inflation.
Clearly we're getting a lot of executive orders on that.
I think there is concern as to kind of splitting the difference between when it refers to deporting people who perhaps have committed crimes versus what many business executives will tell you are crucial for the economy, specifically in certain sectors, whether that's construction or whether that's
farming. They depend a lot on that sort of labor and so that could have a knock -on effect and that could kind of undermine some of the efforts towards reducing inflation.
So there's a lot of the kind of key issues rather than global stuff today.
The other thing I wanted to very quickly go back to, which you were talking about earlier, and it's that sort of unprecedented site, all those tech billionaires.
The other thing to bear in mind here is that each of those who are going to be appearing at the inauguration have something they need from this administration.
If you look at Apple, he has a lot to lose in terms of the relationship with China and tariffs and the implication of sort of tit for tat there.
If you look at Google, they lost a case in front of the Department of Justice and there are remedies being discussed, including potentially the breakup of Alphabet.
And so Sundar Pichai has a lot to gain potentially from this administration, the Department of Justice.
And then, of course, you've got Meta's boss, Zuckerberg, and who can forget, obviously Elon Musk.
Yes, one of the few people I've not actually seen yet on the TV screens here.
But amazing timing.
You can tell Michelle's a TV pro as well as a radio pro, because as she mentioned, those take bosses probably two, three people away.
Oh, there's Elon Musk live on the screen now, in fact.
The back of that group of Trump supporters stood right next to Sundar Pichai, the Google chief executive, and Jeff Bezos, the Amazon chief executive.
About three people to the right of them, though.
Javier Malay, the prime minister of Argentina and Georgia Maloney, the prime minister of Italy.
So a good sense of that global outlook.
we mentioned China.
We heard from the Chinese government a little earlier on this morning.
Chinese Foreign Ministry Mao Ning said Beijing hoped for more stable ties with the incoming U .S.
government. We have always believed that a stable, healthy and sustainable Sino -U .S.
relationship is in the common interests of the two countries and the expectations of the international community.
China is willing to work with the new U .S.
government on the principles of mutual respect, peaceful coexistence and win -win cooperation and find a correct way for China and the United States to get along in the new era, which will benefit both countries and the world.
Max, we've been looking at a bit of inside America and what the American economy might mean.
That's one of probably the number one issue, is it?
Relations with China in terms of what it might mean for the rest of us looking in from the outside?
Yeah, certainly. I think that the China hawks are omnipresent in the Trump administration.
But there's a fascinating divergence here on the issue of TikTok, which has really risen to the fore this weekend.
Trump's national security advisors, Secretary of State Marco Rubio, have spoken out very strongly that this is a national security risk for America.
But this is pushing up against Donald Trump's love for deal making.
And he says, I want to save TikTok, which many of his own advisors think is a really bad idea.
So I think that's a great entrance into how the Trump administration we saw this when it during his first term yeah it's all of contradictions so many issues so many threads we could have done three hours i think coverage on the world service continues throughout the day special edition of outside source
coming up for many of you shortly while we continue live coverage of president trump's second inauguration where as michelle flurry has been saying some of the biggest names in global business are there as well gonna be so much for us to talk about here on the program big thanks to faisal islam to michelle
flurry and to Max Cohen and of course
