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Hello, and welcome to World Business Report here on the BBC World Service.
I'm Rahul Tandon, plenty coming up on this edition.
More and more consumers are boycotting products from countries for political reasons.
But does that actually work?
Boycotting a whole country is hard. Boycotting a specific product when there are easy alternatives is much, much easier.
And should the US invest more in its rail network?
But we're going to start the programme by talking about this company.
Type 2 diabetes? Discover the Osenpic TriZone.
Oh, oh, oh, Osenpic.
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The weight loss drug Osenpic has turned the Danish pharmaceutical company Novo Nordisk into one of the most profitable firms in Europe.
briefly in 2024. It was actually Europe's most valuable company.
And the sales of weight loss drugs have had a huge impact on the Danish economy.
Here's the mayor of Canamborg, the town where its manufacturing hub is based.
Ten years ago we had quite high unemployment rate.
Now we have one of the lowest in the island of Sealand.
All the people working there, they have a good salary and they can pay taxes.
When Canamborg is dispensing so much, we have a greater share of a bigger cake.
We have a lower the taxes for people six times in 10 years.
And then, we can afford to make some investment in the municipality too.
We can see that going around in the city.
Much of that success has come under the leadership of the company's CEO, Lars Jorgensen.
But now, he's lost his job as the company share price has fallen by more than 50 percent in the past 12 months.
Adrienne Murray is our correspondent in Denmark.
And she'd been telling me more about the company's spectacular rise over the past few years.
Never noticed because it's a giant and is interesting because it's a company that's been well known in Denmark.
It's been around for 100 years.
But it's been principally known as a manufacturer of insulin to treat diabetes.
But over the last few years when these seemingly wonder drugs, these weight loss drugs, Wegovy and the other diabetes drug, Azempic hit the market.
There's been a huge transformation of the company, enormous sales in the United States.
And that's really catapulted Nevin Nodisk to become an enormous firm.
It became the largest company in Europe in 2023.
And of course, for a country like Denmark, that means that there's been this huge inflow of income.
There's a lot of people in Denmark, there's shareholders who have had a huge influence here.
But also, it's been one of the biggest employers in the country.
So it's hard to overstate really, just how significant it is.
And you've been to the area where the company is based.
So we've heard you describing on our programs, that area has also significantly changed, hasn't it?
The company has made enormous profits, record profits for the last couple of years.
But it's also been investing £8 billion just in the last couple of years in one town in Denmark, in the northwest of Zealand.
It's a very small town, less than 20 ,000 people and that's where it has its principal manufacturing and this huge investment to boost production as it's really raced to meet this insatiable demand.
And so that's been an enormous amount of money pumped into such a small place as they've expanded the factory.
There's a lot of building work going on if you go there, there's a new motorway that's being built, and so a small town really is just in quite a transformation.
It has, and a lot of that transformation has come under the chief executive Lars Jorgensen.
So were you surprised, when it was announced that he was going, he seemed surprised himself.
Well here in Denmark it's been described as a bomb cell, he's really overseen a huge growth of the company and the transformation of what its main product is.
So this abrupt ousting has really caught a lot of people off guard. Shares in Nevinordis fell following the announcement.
But the companies said that this is a decision that's been made over the last few weeks.
And they decided it was time to replace him and find a successor.
But Jonsson himself said it wasn't something he was expecting right now at this moment.
And one of the reasons why that share price has declined has been they have faced intense competition, haven't they?
Particularly from the likes of the big US pharmaceutical company, Eli Lilly?
That's right. I mean, there's been a race, it's been a two -headed race to produce these weight loss drugs and particularly for the US market.
Also, they've started to enter other countries around the world.
The two firms, they have successfully produced these GLP -1 type medications.
It's a sort of enzyme that mimics the feeling of being full.
It's worked very successfully to help people limit their calorie intake, to feel fuller.
It's been successful at weight loss now.
They have very, very similar products both for weight loss and for diabetes.
It's Novo Nordisk were the first to bring their products to the United States and to other markets, but Eli Lilly has really been chasing them, and their latest drugs have actually, in some clinical trials, had a slightly higher weight loss result.
So that has had an impact on the market and on Novo Nordisk.
And both companies have been racing to produce the next drug that they're going to bring to markets.
That's made investors a little bit nervous about what the future might hold.
So in 12 months it's wiped off about 50 % of the value.
So having rocketed up to become Europe's most valuable company in 2023, it lost that top spot, and it's hemorrhaged about 300 billion in value in just one year.
Chris Lowe, Chief Economist at FHN Financial based in New York, he's with us.
We heard from Adrian there, and it's a tough world, isn't it?
They're losing that race with Eli Lilly at the moment.
So bye -bye CEO. Yeah, it really is.
I think in this case though I have to agree it is a bit of a shock particularly because he built the company up so well and after all Eli Lilly really winning the race because they developed this new pill form and it tested well.
Chris we've got some news that's been coming in in the last hour or so maybe another surprise as well here.
Moody the credit agency, company stripping the US of its top notch Triple -A credit rating, surprising and how significant?
It is surprising. First off, the reason.
It's because there's been a really significant increase in US debt, and they're starting to get nervous about it.
Congress, of course, in the middle of the budget process, and not focused on any kind of fiscal responsibility.
I think too, as an analyst who's watched this process over the last 40 years and watched the fish downgrade a couple of decades ago, it's absolutely typical the way it's playing out as well.
We had five years where Congress increased debt with abandon and the rating agencies didn't care.
This time, I think the reason they are focused is because the budget's getting so much attention because the process has devolved into chaos, they can't seem to pass a bill.
More from Chris coming up throughout the programme.
One of the things we like to do on World Business Report is to track global trade and the impact that tariffs have through shipping.
Earlier this week, we saw a pause, didn't we, in the tariff war between China and the US.
So what impact is that having?
Here's Mario Cadavera.
He's the CEO of the US's busiest port, Long Beach, and he's been telling me what the past few weeks have been like.
Well certainly the last few weeks have been a period of turmoil in the shipping industry.
While the good news is that the two main parties, China and the USA have agreed and are having discussions, however we still remain in a period of uncertainty because again all that's been announced is a pause.
I've always been optimistic that there'd be a meeting of the mines.
Again, good news that we have 145 % tariff that's gone down to 30%.
But nevertheless, again, that's a pause.
So I think what the industry is looking to is some clarity so that they can do their business planning going forward. When you talk about uncertainty, let's put some numbers on that.
What sort of fall in volume have you seen at the Port of Long Beach over the past few weeks?
Well, we definitely saw a fall volume in the short term of 10 % to 15%.
And prior to Monday, our forecast that we were going to reduce volume in the second half of 2025 by 20%.
However, given the discussions and the announcement that we heard Monday, I will say that in the next two weeks, we have expectations that 18 vessels will arrive.
To put that in perspective, in good times, we have about 20 a week.
So it gives us a signal that perhaps some of this cargo that has been delayed is now coming to the West coast, given that these shippers have a little bit more comfort, that they're not gonna be exposed to 145 % tax, but you know, 30 % is again, not the ideal scenario.
So we were as low as 14 vessels a couple of weeks ago.
One day we had one vessel at our two major terminals or six terminals in Long Beach, as opposed to six.
Do you sense that we're gonna see quite a lot of front loading taking place in this period until we get to July really.
I do believe that we're going to see a slight surge because July is the beginning of peak season.
So this cargo has to come to get ready for the back to school and holiday inventory.
So again, on August 1st, we'll have a better idea how much of this expected surge may occur.
Because a lot of your cargo does come in from China, doesn't it?
And we have to be clear here whilst we're talking about a pause in those very high tariffs.
As you said there, for many businesses, 30 % tariffs are probably going to be too much, aren't they?
You've already seen the CEO of Walmart, just in the last 48 hours, announce that prices at Walmart are going to go up.
That gives you an indication that at the end of the day, the consumer is looking to higher prices.
Still, we're in an uncertain period.
Now, aside from the 90 -day pause on the China -USA tariff, let's keep in mind the July 8th date.
That's the pause that will end on reciprocal tariffs.
So that's another date that has a much interest for us in the shipping industry and concerns that hopefully the pause on the reciprocal tariff is eliminated and we have some permanency that again, some of our other trade partners are not looking to significant tariff application.
You did get replaced by trade from anywhere else.
Countries that have slightly lower tariffs at the moment of 10%.
Well that's a great question because it does get replaced from areas like in Southeast Asia more specifically Vietnam and that's why I believe July 8th is a very important date because the 90 -day pause on reciprocal tariffs ends.
So at that point there's 46 percent tariff on cargo coming from Vietnam.
Now I do have some optimism that on July 8th the administration is going to step back from that 46 percent tariff.
So if that's the case then of course there is that option and we'll have some comfort that we will have cargo coming from Southeast Asia.
CEO of Long Beach Port there Chris and once again emphasising that word uncertainty And that is the big problem for businesses at the moment.
It is absolutely. From a macroeconomist's point of view, the current tax rate in the US is on average about 11 .5%, which I think we can easily withstand.
It won't dent the economy too badly.
But if we revert back to the tariff levels announced in early April, particularly that extraordinarily high tariff rate.
The US and China were charging on each other's goods.
That's a whole different story.
So we are watching this with bated breath.
We need a lasting trade deal.
If we don't get it, I think global recession is still probable.
Let's see what happens over the next two months.
Donald Trump, busy week out there in the Middle East, made some big deals.
Chris, let's remind ourselves of that deal he made for planes in Yeah.
This is huge. It was Qatar's biggest ever order of civilian aircraft. It comes at a time when Boeing is really in need of business.
Boeing, of course, getting that order.
And also, the engines will come from GE, another big U .S. company that's been hurt by Boeing's troubles in recent years.
Now what we need to see is that company Boeing getting attack together and Producing aircraft that people feel comfortable flying.
Yep. Let's see what happens then Bob Quinn here for suck -up manufacturing as you're planting this season's crop You can't help but think about marketing this crop as well and that could mean storing that grain on farm to take advantage of future Market opportunities now is the time to think suck -up the lead time is ideal for all suck -up products You can get your bin, dryer or material handling in time for fall by ordering now.
Great lead times mean great pricing.
Find your local Sukup dealer at sukup .com.
You're with World Business Report here on the BBC World Service.
We are seeing more and more consumers boycotting products from different countries, often for political reasons.
at the moment. Many Indians are cancelling holidays to Turkey as they provide arms to India's neighbor Pakistan.
India's also boycotting Indians are boycotting Azerbaijan as well.
Farhan Khan is director of sales at DMC Wale destinations management company based in New Delhi.
Around 90 to 95 % booking has been already cancelled.
It is the decision by the customer.
Those are mentally, emotionally attached with the nation.
So we Indians, also take the decision as for the sentiment of our nations.
So whatever we felt that the country who is not standing with us in our tough time.
So we should also bicot them, whatever way we have in our hand.
And we've heard lots of voices from Canada in the past few weeks, like this one, who boycotting American products because of Donald Trump's comments that Canada is the U .S.'s 51st state.
I just was this morning shopping at my local grocery where there's Ontario strawberries and there's California strawberries.
The California strawberries are now priced down to three dollars for a carton, the Ontario strawberries are six dollars for a carton.
Nobody was buying the cheaper California strawberries.
They are rotting on the shelves.
And the expensive Canadian strawberries are almost gone.
That's what's happened here.
So to get more on these consumer boycotts and effectiveness, I've been speaking to Maurice Switzer, a professor at the Wharton School at the University of Pennsylvania.
There's been an increase in tensions.
People often try to vote with their wallets.
So Canadians avoiding the United States for vacations, or in this case, Indians avoiding Turkey for a vacation.
We're seeing this across the globe where people people are expressing a preference by choosing a different economic decision.
And how much impact can those economic decisions have?
It really depends on how persistent those decisions are going to be.
In most cases, people, their tension gets absorbed by something else.
A new issue comes along.
For a boycott to really work, it needs to be persistent because people have to choose something that's either less convenient, less pleasant, less economical, and boycotts will only work if people are highly motivated over a long period of time.
And I suppose it also depends on the scale of trade, if we're talking about countries here.
Canadians have a lot of U .S. products, so it's easier to boycott those products.
Indians, some of them go to Turkey, but a tiny percentage of the population.
That's right. So if it's a very small portion of the population, Turkey is probably unlikely to feel a big economic hit.
It's also, you know, for the Canadians, they do get a lot of US products.
But because of where they're situated, they don't have as many competitors that is much more expensive for them to get products from other countries, to start, say, buying European products or products from Asia instead, it's going to be less convenient, less economical.
So it's got to be something they're very motivated about as well.
I suppose we're talking about the economic impact, but for individuals, the other side of this is when they do it, it makes them feel better, I suppose.
It may. And I'd also flag a social component that is, it could be part of a group identity.
and here in the United States, there was a boycott of Bud Light because they had hired or given products to a person who was transitioning.
In the trans world, it's Bud Light marketing was trying to expand their reach. There were people that got upset about Bud Light, started boycotting Bud Light.
That had a real impact in part because people consumed beer socially together, and so as As a group, people see what you're consuming and you're forming a sense of identity with your group and sometimes social consumption can make boycotts more effective.
On that point there, is it easier to boycott a company because you just have to go to another product than it is to boycott a whole country?
I mean, we've seen a lot of companies, McDonald's was one who suffered, haven't they?
because people have associated them with policies and Israel when it comes to Gaza.
Broadly you're right.
That is boycotting a whole country is hard, boycotting a specific product when they're easy alternatives is much easier.
So like in the Bud Light example going to Coors Light or Miller Light is very easy here in the United States.
There's just a very salient alternative that makes transition costs pretty easy.
For people to boycott a whole country it could be a long list of products and it could be very inconvenient and over time people lose motivation.
We are seeing more of this, though, aren't we?
So is that giving us a sense that consumers are using what they think is their economic power a little bit more than they have than in the past?
Yeah, it could be, rather than economic power, it could be just expressing a preference, that is.
But in part because it's happening with increased frequency, and the number of boycotts has gone up, it does also mean that new boycotts keep coming up in a way that keeps pulling attention, as intense as you might feel today about something, you might feel very differently a week, a month, six months from now.
Morris Schweitzer there, Chris Lowe from FHN Financial is still with us.
What sort of impact do you think that Canadian boycott of American products is having?
Honestly, it's fairly small.
Just given the fact that the US economy is 33 trillion in size and the Canadian economy 2 trillion.
Nevertheless, it's an important market, particularly for the states on the border.
I think the companies who've been caught up in it would be very happy indeed if we could reach some kind of peace with our northern neighbours.
Let us see what happens there.
Let's see, I mean are companies taking more of a stance on this issue?
Ben Cohen is the co -founder of the Ben & Jerry's ice cream company, billion -dollar business, he was arrested during a protest in the over a military aid budget to Israel and humanitarian conditions in Gaza.
I'm speaking to you now as an individual and the action I took was as an individual.
It was not on behalf of Ben and Jerry's, but I can tell you that for Ben and Jerry's, it has a social mission and it has a set of values that determine what actions the company takes and what stands the company takes.
Those stands are generally about justice and human life.
So we take those stands and some people agree with them, some people don't, it's okay.
We keep on selling more ice cream.
Ben Cohen there, but Chris they're an unusual company, aren't they, most companies don't take stances like that.
No, that's exactly right.
In fact, the usual message to CEOs from the gurus who advise them is, for whatever you do, avoid taking a political stand.
Ben & Jerry's is the exception, they've been quite political since their founding, and Ben is precisely right.
They keep selling more ice cream.
People are willing to put up with it, it's part of the brand.
It is part of the brand.
And there is a bit of confusion in the US right now about the government's views on building new rail lines, federal funding for lines in California and Texas has been pulled.
But at the same time, there's been praise for a plan new privately funded service.
So what is going on Henry Ep from marketplace has been finding out.
So you want to build a high speed passenger rail line in the US the bad news truly high speed rail has never really been done here before.
The good news, it could work well in theory, there is a clear target market where high speed rail outperforms either air transport or driving.
Andy Getz is a professor at the University of Denver.
The sweet spot, he says, is connecting big cities about 200 to 600 miles apart.
That's San Francisco to L .A., L .A.
to Las Vegas, Houston to Dallas.
Within that range, he says, a train going up to 200 miles an hour can be a great mode of travel in terms of the speed of service, in terms of the costs associated with it.
And Americans may be ready for it.
Amtrak, which is controlled by the federal government, saw a record number of riders last year, a nearly 15 percent increase over the previous year.
And the private company Brightline has had success with a train line in Florida running between Miami and Orlando.
The problem is actually building a high speed train line costs tons of money up front and will likely take years to complete.
Sean Jean scale heads government affairs and policy at the Rail Passengers Association.
They are really large allocations of capital with very long term return on investment which is why both public and private groups aiming to build high speed rail in the U .S. Have leaned on the federal gov for a successful high spe we're gonna have to have from year to year, but al to administration.
The op right now. The biden admin billion into the rail sy Amtrak and several high s trump administration is l that money back.
Back in Speaking over booing protesters at L .A.'s Union Station, Secretary of Transportation Sean Duffy derided California's state -run high -speed project that's supposed to eventually link L .A.
and San Francisco. It's years past its original deadline, and completing the full project could cost more than triple its original price tag.
But Duffy had kind words for Brightline's effort to build a fast train between L .A.
and Las Vegas. It appears to be on budget, on time.
Those are the projects that I think taxpayers are willing to invest in.
But projects like this?
This doesn't make any sense.
The Department of Transportation did not respond to requests for comment.
Brightline declined an interview request as well.
It's reportedly on track to complete its line by 2028.
And at least for now, it's still in line to receive a federal grant of three billion dollars.
Another private high -speed rail venture has not been so lucky.
In April, the Department of Transportation pulled a $63 million planning grant from a project that aims to connect Houston and Dallas.
Add all that up and Robert Puentes at the Brookings Institution says the administration doesn't have a clear strategy around passenger rail.
I don't think the Trump administration cares at all about passenger rail one way or another.
Companies and governments trying to build new rail service might be helped by a looser regulatory environment under Trump, he says...
But... The model of the federal government providing grant money to get passenger rail started is not going to happen during this administration.
Which could make it difficult to start any new high -speed rail projects over the next four years.
I'm Henry Act for Marketplace.
Henry Act with that report there.
Chris Lowe still with us.
You know the US, it has a pretty poor, doesn't it, rail network system.
Can you see private companies really stepping in?
there enough money in this?
There is, but it's precisely what he said.
It's very market -specific.
Brightline has a successful rail line in south Florida.
In fact, it's so successful that it's almost too expensive to commute because it's so crowded with tourists, and they're willing to pay a lot for the tickets.
Great way to avoid traffic.
Great way to avoid, Chris.
Go and get some rest I know it's an interesting time on the markets as you follow all those developments.
To get some rest you'll be back at your desk on Monday, trying to make sense of it all once again.
We'll try to make some sense of what's going on, and has been going on this week on Business Matters where we will be once again looking at what has been going on at Novo Nordisk.
Bob Quinn here for Sukup Manufacturing.
As you're planting this season's crop, you can't help it think about marketing this crop as well, and that could mean storing that grain on farm to take advantage of future market opportunities.
Now is the time to think Sukup.
The lead time is ideal for all Sukup products.
You can get your bin, dryer, or material handling in time for Fall by ordering now.
Great lead times mean great pricing.
Find your local Sukup dealer at sukup .com.
