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I'm Rodney Williams. And I'm Travis Holloway.
Welcome to the Wealth Break Podcast, a real conversation about finance.
Let's be honest, building wealth doesn't look the same for everyone.
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And we're not stopping at success stories.
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Because wealth isn't just about money.
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Hello and welcome to World Business Report from the BBC World Service.
I'm Sam Fennec. Coming up today, President Trump is threatening steep new tariffs on a number of US trading partners, saying that their trade surpluses pose a threat to national security.
We'll have the latest on who's in the firing line, how the markets are reacting, and try to get inside Donald Trump's thinking on why the goalposts on tariffs seem to keep shifting.
Also today, they just decided to paint the city in a different way.
So rather than repaint it themselves, to just call artists from all around the world and create a mural festival.
How art is bringing a southern Italian ghost town back to life.
life. Let's get started.
President Donald Trump says imports from a group of U .S. trading partners will face steep new tariffs starting on August the 1st. Throughout Monday, in a series of posts on his social media platform Truth Social, President Trump shared letters signed address, he shared signed letters addressed to world leaders.
The White House press secretary, Caroline Leavitt, gave details of them in a press conference.
This one is to the President of the Republic of Korea, original signature on that, and these will be mailed.
And then here we also have another letter to the Prime Minister of Japan as well.
Both countries will be receiving a 25 % tariff rate effective on August 1st. Now there are 14 countries targeted and they now have 24 days to negotiate with Washington.
Caroline Levitt says she is confident though that deals can be done.
The president's phone, I can tell you, rings off the hook from world leaders all the time who are begging him to come to a deal.
And this administration is working hard to ensure those deals are in the best interest of the American people.
Donald Trump warned in the letters that persistent trade surpluses with the United States pose a threat to national security.
And he said that the new tariffs are designed to restore what he called fair and reciprocal trade.
Well, let's get a feel for how investors are feeling about these letters being posted on social media.
I think they were unimpressed.
Let's talk first of all today to Peter Jankowskis, Vice President of Research and Analysis at Arbor Financially, joins us today from Chicago.
cargo. So back off a bank holiday weekend, and this was a kind of big day.
It was. It was. The market had a reasonably strong negative reaction.
It was down about eight tenths of a percent overall.
Pretty much across the board, the only sectors that were spared were the traditional defensive stackers, consumer staples, utilities.
Those actually had modestly positive returns on the day.
What about the dollar?
How did that fare? From what I read, the dollar actually strengthened somewhat, which was a little bit surprising to me to see that.
But, you know, maybe they're thinking that these tariffs will take effect and that will reduce trade, which, you know, reducing the trade deficit should support the dollar.
What about some of the countries who have been targeted in this kind of round of tariffs?
How have their currencies coped?
They've been hit fairly hard. I saw the Korean won was down considerably.
And I believe some of the others, the South African rand was down as well.
And those were two of the bigger tariffs that were announced for those two countries.
How do these tariffs compare with those announced on so -called Liberation Day back on April the 2nd, which does seem like a long time ago, doesn't it, Peter?
Yes, it does. It does.
They're actually pretty close to those numbers, slightly lower in a number of cases.
But, you know, if you took them as a percentage of the original tariff that was pronounced, they're roughly 90 to 95 percent of the values that were previously announced.
What do we know about Donald Trump's thinking at the moment, the decision to target these particular countries?
I'll run them, I'll run through the list, because as we said, there are 14 of them.
There's Kazakhstan, Laos, Malaysia, Myanmar, South Africa, Japan, South Korea, you mentioned those, Indonesia, Bangladesh, Serbia, Bosnia, Cambodia, Thailand, and Tunisia in North Africa.
Well, I suspect that he thinks he has a strong position with those particular countries, and he's trying to use these announcements to press them to a deal.
You know, you haven't seen those sorts of statements about China or the EU, and those countries are standing firm.
firm, I think there's a very definite effort here to get some wins against countries that are very strongly dependent on trade with the US.
Peter, stay with us.
We will talk to you again in a little while.
But let's go now to Michelle Fleury, the BBC's North America business correspondent, joining us.
She's been kind of keeping abreast of these social media posts, which the president has been posting.
interesting and what do we know I mean this deadline has now been moved I believe that Donald Trump signed an executive order on the deadline it was supposed to be this week it's now going to be the first of August for any negotiations so there's a couple of things that have happened today broadly speaking those reciprocal tariffs that were announced with Great Fanfare on April the 2nd liberation day as the president called it have been pushed back to to August the 1st. Now that allows potentially for more negotiation of trade deals to take place.
There were also letters sent out to the heads of various foreign countries, in which the president informed them of their new tariff rate.
So for example, South Korea, Japan and Malaysia were told that their new tariff rate would be 25%.
Other countries like South Africa were told their their new rate would be 30%, while Myanmar and Laos, for example, both were told that they now faced a much higher tariff rate of 40 % on goods coming from there.
Perhaps the only case in which we saw a country's tariff rate actually go down was Cambodia, a slight decrease there.
But broadly speaking, the trend was upwards for all of these countries.
And do we know what's prompted those percentages?
So you mentioned Myanmar, 40%.
What's behind that figure?
Look, I mean, I think it's hard to second guess what what exactly Donald Trump's thinking is.
I mean, obviously, public statements, you know, he says this is all about trade deficits.
And, you know, that pause was announced for what he said would be 90 trade deals in 90 days.
You know, it's sort of one has to assume that some of this is countries that are heavily dependent on the United States for trading and don't have much room to kind of retaliate.
What was interesting about those letters that I just mentioned was that they contained a warning saying for any countries that they were thinking of retaliating, that this number could change at any time.
I thought the other thing that was interesting about the letters is it talked about if countries were going to kind of try and bypass, so if they went to another country before they went into the U .S., then they would be hit with higher tariffs.
Well, and that's something that, you know, initially this all started if you go back to Trump's first term with China.
And then what happened was a lot of businesses, a lot of companies figured out, well, OK, maybe we can move some of our production to nearby countries.
And China would still make the bulk of their goods, then maybe kind of send them out to another country, third party country to kind of finish it off.
That would then have sort of made in Vietnam, for example, and then it would be shipped to the US to avoid those tariffs.
This is Donald Trump trying to kind of close some of that loophole.
So if you take Bangladesh, for example, that's big on clothing, maybe some of the items, whether it's cotton or other items, came from China.
That would be a way for that.
That was also why we saw some other countries impact it.
But, you know, this more broadly speaking is part of an effort by Donald Trump to kind of use tariffs to sort of reshape trade relations with other countries outside of America.
Michelle Flory, the BBC's business correspondent, joining us live from New York.
Thank you very much for your time.
Well, in a social media post last week, President Trump described Japan as spoiled, accusing it of refusing to buy more American rice.
So how might this play out in Japan, where voters are about to head to the polls for a general election?
Let's talk now to William Chewy, Deputy Director of the Japan Policy Centre at the Hudson Institute, joining us from Washington.
William, is President Trump here trying to just put a huge amount of pressure on Japan to get a trade deal?
Because actually, we talked about 24 days up to the 1st of August, but actually the window is much tighter for Japan because they're about to go into this election.
Sure. Hi, Sam. Yeah, it's great to be here.
Yeah, for Japan, I think, look, the announcement means that goods from Japan will now have a 25 percent tariff.
But I think this extension of the window to August 1st actually gives Japan a little more freedom of maneuver because of the upper house elections on July 20th, which gives them an 11 -day window to essentially negotiate a trade deal.
Because I think the Japanese government has been very cautious about negotiating any trade deal with the United States before the upper house elections on July 20th.
So I think this announcement actually provides some more flexibility for Japan.
There was some tough talk, though, wasn't there, last week when we were talking about the rice.
And, you know, Japan was saying, Tokyo was saying we will not kind of forego our farmers for the sake of this trade deal.
Sure. Yeah, I think, look, I think that's primarily a case where there's a strong domestic politics sort of coming into the fore in Japan.
Certainly, Japanese rice farmers are a major part of the ruling party's sort of popular support base.
Traditionally, they've supported the government, and so the government is very careful about any danger of angering this powerful constituency.
At the same time, though, given the rice shortages in Japan because of a number of different factors and the new agricultural minister's work to essentially open up the rice supply by using current stockpiled government rice, there's more of a sort of a more consumer -focused approach rather than necessarily a farmer -centric approach. That said, I do think this is definitely a domestic issue that is having implications for the US -Japan trading relationship and trade negotiations right now.
And just to be clear, cars, which you obviously export quite a lot of, they are part of a different trade deal, aren't they?
They're not part of this 25 % trade deal, which needs to be sorted out by the 1st of August. That's correct.
Correct. So the cars and also steel are both what we call sort of Section 232 sectoral tariffs, which really focuses on key industries that the Trump administration really wants to prioritize and also increase American production of.
of. That's not related to this separate 25 % reciprocal trade deal, which will apply to all other Japanese goods.
So say things like electronics or chemicals or machinery.
So it's a little tricky because they're both 25%.
But yeah, they are different categories of tariffs.
William Chu from the Hudson Institute.
We will look with interest as to what happens in Japan over the next few weeks.
Well, what's behind today's announcement?
To some, it might seem inconsistent, even erratic.
To others, it might seem part of a broader negotiating strategy.
Let's try and get into President Trump's thinking now with Matthew Bartlett, a Republican strategist and a former Trump appointee to the State Department during his first term as president.
So, Matthew, where do you stand?
Do you think this is a smart negotiating tactic tactic or do you think that it looks like Mr. Trump keeps bottling it and kind of shifting these deadlines into the never never?
Yeah, Sam. I mean, it looks as if the one big, beautiful bill is now in the rearview mirror and Trump's tariffs are about to hit the windshield.
It is still very unclear what this means for the economy, what this means for the worker, what this means for the consumer.
But I would say, again, if you look at President Trump, he's probably been one of the the most inconsistent politicians in American history, yet has been largely consistent on tariffs since the 80s.
In the first administration, we did some targeted national security, China -related tariffs.
And now he is coming back with much broader tariffs that are aiming to, again, potentially reshape domestic manufacturing and the global trade order.
So it's all still very, very unclear at the moment.
So unclear, but something that he has been clear about since the 80s.
Do you think ultimately these tariffs will come in?
Well, President Trump's head trade mastermind, Peter Navarro, an interesting character, a former Democrat who's, again, been by the president's side, masterminding these tariffs, was just out on the White House lawn or driveway moments ago and was posed that question.
Why, if you mean this, do you keep dragging this out?
His answer was that other countries, you know, continue to drag out their conversations and that they've had it good for a long time and they want to continue this conversation.
But if they really meant it, they would just stop it, stop any negotiation by just slapping the tariffs on, wouldn't they?
And he was posed that question too.
His answer was that they are currently quite happy with the, you know, billions of dollars in tariffs that they are that the U .S., you know, as he said, the U .S. is collecting each month.
So, again, this tends to be a very haphazard way of doing something very consequential for the American worker, for the consumer, for the global world order.
In fact, some of the letters they sent out today to Bosnia, which has a three -person government, was addressed to Her Majesty and then the letter itself said, or rather, Her Excellency, and the letter was addressed to Mr. President.
So it seems as if that there is an intent to do this, yet it remains very unclear how they get to any possible positive outcomes or outcomes that they would view as sufficient.
What do you think about this personally, as a strategist, as a Republican strategist and a former Trump appointee?
When you see these letters appearing on social media, do you put your head in your hands or do you think, yeah, this is a great way of negotiating?
negotiating? Well, you know, all of this trade orthodoxy is very unorthodox to the Republican Party.
It is coming, you know, this is much more coming from the Michael Moore wing.
You know, central planner is going to dictate the economy.
So it's very, very MAGA, if you will, much more so than Republican.
Consequently, you know, this is something that has been popular.
The middle middle class has been forgotten, jobs have been shipped overseas.
This was part of President Trump's original message in 2016 that helped carry the day.
It remains unclear if the rhetoric, though, matches any sort of desired outcomes.
Matthew Bartlett, we will leave it there.
Republican strategist, thank you for joining us today on the programme.
This is World Business Report from the BBC World Service.
I'm Sam Fennec. I'm Rodney Williams, and I'm Travis Holloway.
Welcome to the Wealth Break podcast, a real conversation about finance.
Let's be honest, building wealth doesn't look the same for everyone.
I feel like sometimes being broke is a cycle and that we might have to revisit that.
And we're not stopping at success stories.
What happens when it doesn't go right?
How do you cope with it?
Because wealth isn't just about money.
It's about creating a life where you thrive and This is Jacob Goldstein from What's Your Problem?
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That's odoo .com. Now, a pair of traditional Indian leather slippers appeared on the Prada runway last week.
They were labelled leather footwear, but it sparked a backlash in India where the luxury band is being accused of copying local craftsmanship without credit or compensation.
The BBC's Davina Gupta now reports from Kolhapur city.
I'm in a cramped, dimly lit workshop in Kolhapur.
As I walk around to my right, there's a stack of freshly made leather sandals wrapped in a plastic sheet.
In front of me, there are artisans who are sitting on the concrete floor.
There are bits of threads, tools that are scattered around them, and they're all working in a rhythmic motion.
It's like a choreography where they are cutting and stitching and shaping large sheets of leather in small sandals.
These sandals are made from buffalo hide, says Sadashiv Sanakay, as he cuts through a large sheet of brown leather.
He's been working in this workshop for nearly 40 years.
I learned this craft as a child.
Now I make about 50 pairs of the sandals in 10 days.
I earn about $4 -5 in one day.
Sadashiv is one of nearly 100 ,000 people in India still making these open leather sandals known for their distinctive T -strap and a toe hole.
Many of those in the trade come from marginalized communities and face low wages, soaring material costs and tough working conditions.
So when luxury brand Pradas showcased a strikingly similar design at Milan Fashion Week and called them leather footwear without crediting their Indian origin, the backlash was swift. I really believe that Kolhapuri is a cultural legacy for India and lack of credit or collaboration makes this appropriation.
That's prominent Indian fashion designer Ritu Beri.
The artisan from India remains invisible while the brands profit from it, from the inspiration that they get from here.
So I think it's time the Indians claim our heritage.
In response to the criticism, Prada issued a statement acknowledging Indian influence.
The brand told the BBC it's now in talks with the Maharashtra Chamber of Commerce, a local trade body.
Lalit Gandhi is its president.
Actually it is a good thing that a brand like Kolhapuri Chappal get an endorsement from Prada.
Definitely the value has increased many folds.
We want some share of that profit to be shared with the artisans.
Interestingly, Kolhapuri chapls were awarded a Geographical Indication or GI tag by the Indian government in 2019 a mark of authenticity that protects their name and design within India.
But globally it offers little protection.
That's why Lalit Gandhi says they are now exploring a patent.
If we patent it and we can do a proper marketing the artisans can get a good value of their product.
i'm now in kolhapur's famous chappal gali or sandal market it's a vibrant street lined with shops and kolhapuri sandals are everywhere in every shade they're hanging from store fronts they are nailed to the walls from top to bottom and unlike prada's luxury price tag these ones are quite affordable i bought this because i saw it on the prada million fashion The fashion week, that's why I really liked it and that's why I got it.
How much have you paid for that?
I paid around $8 for it.
With demand rising, the Kolhapuri chapul industry worth nearly $200 million is now looking at the luxury market.
And shopkeepers like Rohit Balakrishnan Gavri hope to benefit while keeping prices low to attract more customers.
The design which Prada used was less popular here, but now customers are asking for similar sandals so we are making more of them.
But back in the workshop artisans including Sadashiv had never heard of Prada.
So I show him a video from the Milan fashion show and tell him sandals like his might be selling for hundreds of dollars in the near future.
Are they made of gold he says raising raising a bigger question about value and fair pay in the world of luxury brands.
Davina Gupta reporting for us there.
Now, a once deserted hamlet in southern Italy is experiencing a stunning revival as thousands flock to it to admire new street art.
The village of Puglia was once suffered, has suffered, because lots of young people have moved to the cities, leaving it virtually empty.
But the new street art has transformed it.
Here's Elisabeth Faggiana.
She's the CEO of Unexpected Italy.
It's a social media feed about Italian tourism.
So a local association, now there are 100 people in it.
It's called Stornara Life, the actual association.
They decided they were all very passionate about art and culture.
There were people from there and people also from around Italy, like one of the organisers, she's from Genoa.
They just decided to paint the city in a different way.
So rather than repaint it themselves, to just call artists from all around the world and create a mural festival.
And it was one of the first ones in Puglia.
This is the seventh year that they're doing it.
And it's had quite an impact, hasn't it?
I mean, it now attracts lots and lots of visitors.
If you think for not even 6 ,000 inhabitants, it's got 151 murals.
so it's basically one mural every 37 inhabitants so everywhere you look there is a mural and with the fact that they repeat it every year everywhere year it increases in the number of mural that there are and there are artists from all over the world they really want to go there and paint there also because they they created a sort of a family they really look after the artists apart from paying for everything but it's they they really feel as they are part of a family and they really want to go there in the past it used to be in august now they moved it to october which is better because the heat in august
it's really really hot but this has attracted yes more tourists it's still not a very touristy area because the in terms of the hotels has got only one hotel and but before there were only let's say 10 beds in terms of guest houses now there are 60 and so So last year, they had around 1 ,500 tourists in between schools and groups.
And if you think that before there was none.
So it is a big increase from nothing to this.
I mean, it's a genius idea.
Do you think the people in the village knew quite the impact it was going to have?
No, I don't think so.
And as it often happens with cultural initiatives, then there is a small group that is very forward thinking and then perhaps there is the rest of the population who doesn't really understand even the cultural impact they could have on themselves as well because what they're trying to do is also go around the schools engage lots of the younger generation to get into not only art but culture, sculpture, food as well so they're really trying to change how young people are living the city and so yeah I think the local community was quite surprised about the impact and as always perhaps there are people
that like it people that think oh it was better before but in general from a cultural point of view he has improved a lot and people that would never have thought of going to Stornara my husband is from near there and he said I never dreamt of going to Stornara but now because of the street art.
He goes and he returns because then you go back to see which are the new murals.
And so it's become quite Instagrammable, hasn't it?
And that's quite useful for younger generation of tourists and visitors.
Yes, yes, exactly. And there are a few new things that have come up, like there is a cocktail bar where every cocktail is named after a mural or a street artist. There is another, there is a street art cafe.
new businesses are starting to grow that have got a link to this that's italian tourist expert elizabeth faggiano speaking to me a little bit earlier we are coming to the end of the program but i just wanted to go back to peter janskowski who's uh with us today from arbor financial services in chicago peter it's been a troubling week uh day on the markets but one particular particular company is struggling tesla their shares are down seven percent today roughly around seven percent yes i think well there are a couple of reasons for that i i'd say the reason for today's downfall of course was uh a flare -up
in the uh true the uh battle between president trump and elon musk with elon musk over his political party yes yeah but overall their sales have been you know on a very bad downturn for quite a while so from that perspective you know a decline certainly is warranted.
They too are having a tricky year.
Thank you very much for joining us Peter Jankowskis today on World Business Report and thank you to you for listening.
