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Hello and welcome to World Business Report here on the BBC World Service.
I'm Rahul Tanden. Thanks so much for joining us.
We are, of course, going to talk about tariffs, but we're also going to find out why Denmark is going to stop delivering letters.
It's gone really, really downhill.
Since the year 2000, the number of letters has fallen with 90%.
And we'll hear from the online influencers who are discovering that small is beautiful.
I still don't want to be a very big influencer.
Yes, I want to grow my following, but not past 30 ,000 followers.
But let us start by talking about tariffs because another day and there's been another change in the US's tariff policies.
Donald Trump's administration has backtracked further from its threat to impose sweeping 25 % tariffs on Mexico and Canada in what some say is a major climb down.
Confused? Here to make sense of it all is our North America business correspondent Aaron Delmore.
He has indeed put into effect a reprieve on some goods coming from Mexico and Canada.
They would be exempt from the 25 % import taxes that he announced earlier this week.
And in addition to the car industry exemption that he made clear yesterday.
Now, if you're feeling a little bit of this back and forth, that's how American businesses and especially American manufacturers have also been responding to this news.
And we're seeing it reflected in the stock market.
Questions about which industries are affected, from which countries at which tariff rate.
And starting when has stocks dipping down this morning on the uncertainty?
Let's pick up on that point from Erin Delmore.
Bring in Kerry Lee.
He's going to be with us throughout the program.
Economist at Columbia University.
The markets, their reaction to this.
We're going to hear why Donald Trump himself says he's changed some of these policies.
But do you think, does the market think this is the reason why we're seeing such a flip -flop?
I think that that's what the market is seeing is they're thinking that the fact that it's being done so haphazardly and ineffectually and creating not only it's bad enough we're going to have to deal with tariffs but to deal with tariffs of an uncertain nature the amount of time it's going to waste of businesses to figure out if they're if they're going to be subject to those tariffs and if they can can they squeeze the way out of it is this going to create additional paralysis even if tariffs don't increase very much stay with us because we're going to get further thoughts from you Kerry but let's
hear what Donald Trump was saying he said he came to the decision out of respect for the Mexican president, Claudia Sheinbaum.
He said the two countries have been working harder on border controls and stopping the fentanyl crisis.
That, of course, is why he says these tariffs were imposed on Canada and Mexico.
Ms Sheinbaum herself, well, she held it as a good result for both countries.
Many thanks to President Donald Trump.
We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results while respecting our national sovereignies.
We will continue to work together, particularly on migration and security issues, which include reducing the illegal crossing of fentanyl into the United States as well as weapons into Mexico.
However, on the US side, there were less than kind words for the Canadian Prime Minister Justin Trudeau.
U .S. Treasury Secretary Scott Besson was speaking at the economic club of New York as President Trump has said many times tariff is his favorite word I would say the reciprocal is probably his second favorite one and I think we have to be open to the idea if you want to be a numbskull like Justin Trudeau and say oh we're going to do this then tariffs are going to go up but if you want to sit back have a discussion with the commerce department they all have my phone number too.
I am happy to have a discussion with our foreign counterparts.
We wanted to bring you some reaction from Mexico, from somebody who's been involved in the decision making process.
They are, of course, the US's largest trading partner.
So here's Jorge Castañeda, former Mexican foreign minister.
Quite honestly, all of this is a bit difficult to follow and to understand.
I'm glad, of course, that he delayed the tariffs for another month, but it doesn't make a whole lot of sense.
If he was going to delay them, then why place them to begin with?
Why generate so much nervousness in the markets among businessmen thinking of investing in Mexico?
All of this is just very difficult to follow and to fathom.
You raise the question there yourself.
Try and answer it. Why do you think he's done this?
I think there's simply a lot of confusion in his team between him, he who makes the final calls, Commerce Secretary Ludnik, who seems to be a fellow who was not terribly inclined to go for the tariffs.
Peter Navarro, who's a very pro -tariff fanatic even.
Then also there are the people who may have gotten worried that if they pushed President Sheinbaum too far, she might stop cooperating on migration, which for them is more important than trade.
Mexico is the US's largest trading partner.
When you're talking to people in the Mexican financial world.
What are they saying to you?
How nervous are they about this relationship moving forward?
They're very nervous because of the downsides.
In other words, if the tariffs had been applied and had lasted several weeks or several months, that would have done enormous damage to the Mexican economy.
But they're not necessarily happy because this is like a sword of them at least hanging over Mexico.
But secondly, and most importantly, this introduces a huge degree of uncertainty into any business decision.
Nobody is going to invest a cent here with these constant comings and goings every day.
The automobile manufacturers can't plan long -term investments.
Beer manufacturers, tequila manufacturers, the electronics manufacturers cannot really plan on anything in the long term or even the medium term because they don't know what in the world is going to happen next week.
Even though we've had some of the tariffs suspended, those are only for goods that are covered under the United States, Mexico, Canada agreement.
And that's about 50 % of goods that go from Mexico to the US.
So there's still uncertainty about a lot of trade between the two countries.
That's one of the enigmas.
In the case of the automobile industry, about 80%, I think, of the cars that go to the US go under USMCA rules, that is 75 % North American content at about 20 % pay a 2 .5 % tariff.
It's not clear, for example, if the 25 % tariff will be applied to those cars that are currently paying a 2 .5 % tariff.
And it's not really that clear what other sectors of Mexican exports to the US are not covered by USMCA, but we don't know.
According to the Mexican press this morning, there were 200 ,000 trucks.
Sounds crazy, but 200 ,000 trucks backed up along the border yesterday because they didn't know how to cross into the US with the stuff they were carrying.
Donald Trump has been very clear, hasn't he, on issues like fentanyl and also on the issue of migration.
But do you think there's also a wider issue at play here?
Mexico's relationship with China?
Is that something do you think Donald Trump would like to see Mexico walking away from a little bit?
Well, there is not a whole lot to walk away from in the sense that we export very little to China.
We import a lot from China.
We are importing about 11 times more than we are exporting.
So there's somewhat of a relationship there to maybe walk away from.
But there's no geopolitical relationship, there's very little Chinese investment in Mexico.
But certainly China is an issue and trade is an issue.
When President Trump says he's doing this because of fentanyl, he's right.
When he says he's doing this because of migration, he's right.
When he says he's doing this because he needs more money for his budget deficit, he's right.
And when he says he's doing this to reduce the U .S.
trade deficit with Mexico, he's also right.
But nobody knows which of these factors is the most important one at any given time he changes hour by hour practically if you were foreign secretary now how would you deal with his policies that seem to be changing on a daily basis to wait things out to take it easy to not necessarily respond to every single announcement that comes out of the white house on the one hand on the other hand to try and sit down with him at some point somewhere and figure out what he wants.
Sit down with him and try and figure out what he really wants.
You can't do that on a phone call.
Kerry, fascinating to hear from the former Mexican foreign minister.
And the confusion is seen by we've got a car company like VW saying its exports to the US from Mexico do comply with the USMCA, that trade treaty, but BMW says it doesn't.
It's There's still so much confusion around.
Well, that's right.
As some of our listeners may know, to get a car into the United States from within the trade area, it may cross a national border, I think, about seven times.
So it's extraordinary complex to figure out if a car has been made in America or made in Mexico or assembled in Mexico or assembled in the US or Canada.
And so the amount of hair pulling and time wasted and efforts will be taken to figure out what you have to pay, if you have to pay anything at all.
Is this going to be extraordinarily bad?
The uncertainty is just going to be an effort's going to be mind numbing for the typical businessman in that area.
It's not working quite how Donald Trump wanted it to these tariff policies, are they?
Because he wanted to put them in place to reduce the US's trade deficit.
We got figures out saying it's increasing because everyone's trying to get things in quickly before tariffs to put in place?
That's exactly right.
The latest trade figures showed a huge buying -advanced psychology among importers, which I think most analysts were looking for.
I'm surprised they didn't pencil it in on their own forecast.
But yes, you're trying to get ahead of the wave, ahead of the curve, and so a lot of imported stuff was pulled in from later months this year into January to get it done fast.
Yeah, we're going to hopefully hear from one of the U .S.'s biggest ports on.
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Syrian banking and investment expert was responsible for trying to create the Syrian private banking system, former World Bank official.
Thanks so much for joining us on World Business Report again.
How significant a moment is this?
Thank you very much.
I mean, it is significant.
This is kind of the first step because with the UK lifting sanctions, hopefully others will.
However, this cannot be seen in isolation.
The UK lifting sanctions on the central bank in and of itself is not going to be enough.
to ensure that transactions within the financial system are flow again, that we will need the U .S.
to also lift sanctions for that to happen.
Yeah. And, you know, who knows what will happen there?
We know the EU is discussing lifting sanctions.
But whilst they're in place at the moment on the central bank, how does that hamper the Syrian economy?
What obstacles does it put in place?
So think of it this way.
I mean, the central bank is the absolute nerve of the financial system.
And imagine yourself in a country where the central bank cannot serve this function.
So it becomes almost like a local institution that basically deals with the government.
And that's basically what has happened, more or less.
What needs to happen is for the central bank to take on its role as an independent financial body within the country, within the economy, and begin to deal with other central banks and with the global financial system.
So this is a good step moving forward.
Without it, I think it would be impossible to have a reconstruction program and, as importantly, to create jobs for the people of Syria, who 90 % of them are now under the poverty line.
Are Syrians getting frustrated that the EU and the US are taking so long to follow what the UK has done today?
I think so. I think it's early days, though.
I mean, you know, the context of Syria is quite different than what other people expect.
So the GDP has declined by 86 percent during the war.
Most cities have one or two hours of electricity every day.
Water is not readily available.
You know, we have seen that food products have returned to the markets and definitely people are able to move around freely and security has largely improved.
But other things are needed.
So definitely they would like the U .S.
and the West in general to help them in this process and to be able to reclaim their independence, finally.
Bersal, stay with us from a minute, Kerry.
One of the problems is when, you know, you hear Syrians quite rightly saying they want the U .S.
to lift sanctions. When you look at where Donald Trump's agenda is at the moment when it comes to the global economy, it's not there, is it?
No, not at all. I mean, he's focused on the Middle East to some extent, but it's not particularly worrying about Syria.
It's more closer to the situation in Gaza with Israel and the like.
And Basel, where will money come into Syria to help it reconstruct its economy?
Some of it will come from Syrians abroad, but where's the rest of it going to come from?
So a lot will come from the Gulf, right?
I mean, even in the case of Gaza, we're going to see that, you know, the Gulf states are going to commit to help the region in a profound way.
and one of the reasons for this is that it's I think absolutely imperative that we get Syria right we must get Syria right because for so many reasons Syria can be a source of stability for the region and we must get it right through the help of the Gulf countries the West as well as Syrian expats abroad.
Well listen we'll continue to talk to you about how the economy tries to rebuild in Syria.
Thanks so much for joining us once again on World Business Report.
Right, I want you to think about your own life now.
How often do you send a letter?
Why are we asking you that question?
It's because the Danish postal service has said it will deliver its last letters at the end of this year.
PostNord said it would cut 1 ,500 jobs in Denmark and remove 1 ,500 red postboxes, ending four centuries of the company's mail service.
That has not gone down well with everyone.
Marlene Rieshoy -Cordes is from an organisation that advocates for the elderly called Alde Sagen.
Many of the elderly are very sad because one of their communication lines in the past has always been writing greetings.
Sending mail has been also a way of fighting loneliness, which is also a very big problem in Denmark.
And if you live in the rural area and you have difficulties getting out of your house, then it's even more difficult to communicate with others because it's primarily now digitalized.
It will be a loss for these people.
Let's get some more on this story from Lona Thiels, who is a journalist and writer based in Denmark.
It's gone really, really downhill since the year 2000.
The number of letters has fallen with 90%.
Normally, as we all know, Christmas is the most busy time of the year for the postal services last year, December, numbers of postcards and letters were down with 47%.
So it's not any longer a viable business for the post office, at least that's what they say.
And because it's not a viable business, I presume that this announcement will also see a number of job losses as well.
They've already announced that about 1 ,500 people will be laid off.
Some of them will be sort of offered a new job in the postal package section.
You know it's one of those stories that gets you thinking about your own life a little bit when it comes to letter writing.
I have to say I haven't written a letter for a long time.
What about yourself?
No it's the same and also it's gone so expensive that most people don't send letters anymore and I think also part of the story is that Denmark is extremely far with the digitalisation so we have, you know, all communication from public services that's already sort of on email.
Do some people blame privatisation for this because it's not just the elderly who write letters.
Denmark, I can imagine, there are some pretty remote areas where people may have to write letters to communicate from there.
Are some people saying, look, the privatization of this industry may be one of the reasons why we're seeing this now?
I think everybody agrees that that is the major reason.
It has to be a business now and of course, you know, when you distribute mail in remote areas such as small islands, of which we have a few in Denmark, it's not a viable business.
But if you have the overall business and you have a monopoly on delivering lettuce, you can sort of make some kind of economic sense of it.
But Since the privatisation, that's been hard.
So that's one of the criticisms that's actually been invented today from a lot of politicians is how do we ensure that the remote areas, the islands, still have a reliable source of postal service.
I was in India when the world's last telegram was sent from Kolkata and I on that day sent a telegram.
Now that you know this letter service is going to stop by the end of the year, are you going to write a few more letters now?
Maybe I will. I think particularly, you know, what about love letters?
You know, it's not the same with an email, is it?
You know what, it's so long since I wrote one, I'm not sure I can answer that question for you.
Well, I mean, I think, you know, it's part of growing up, you know, when you have your birthday, you've got a birthday card from your grandparents and you've got Christmas letters and Christmas postcards from people.
You know, I know that, you know, it's part of decoration for Christmas.
That's basically stopped now.
So we're going to have to figure out something else.
Not good for business letters anymore in Denmark.
What about you, Kerry?
I'm not going to ask you when you last wrote or received a love letter, but do you get many in your mailbox?
No, and other than writing Christmas card greetings, there's hardly any of that, but I keep telling my students that they want to make an impact on someone and trying to find a job.
Send them a letter because they never see one in business.
they'll probably open it up immediately and you certainly will get their attention.
Are there similar discussions in the U .S.
maybe about mail? I mean, do you need so many constant deliveries or is it all private out there?
Well, it's not a big deal now.
We had our Sturm and Drang creating the U .S.
Postal Service and having to go private.
So I don't think that's really a big issue now.
They just are trying to find ways.
And there's still a lot of activity in terms of shipping boxes and the like.
They're keeping they and FedEx and UPS going pretty good.
Yeah, get writing some letters, Kerry.
You can write one to me whenever you want to.
Let's have a look at what happened on the markets and the tech sell -off.
It's continuing, isn't it?
I mean, and the numbers are quite large, but the drop in valuations is huge, isn't it?
It's extraordinary.
I mean, we did have this talk for two or three months of American exceptionalism, and that trade has sort of peaked now that Europe's doing well And while companies are still generating a lot of revenues, even a company like NVIDIA, which is sort of like the poster child for all this, is reporting some cut in profitability.
So I think that's what's really bothering the market.
And finally, nobody wants to get in front of a freight train, which may be captured by payroll employment tomorrow morning.
Yeah, let's see what those figures come out.
And so Crypto Summit at the White House tomorrow.
I mean, crypto has been pretty volatile, generally can be, but even more so under the Trump administration.
Oh, absolutely. I mean, if you're going to invest in crypto, as I've said more than once, this has to be money you can afford to lose because it's so volatile, you may lose everything.
So it's in some sense a little bit like going to the track.
If you take it like that, it may not be such a bad deal, but you have to be prepared to lose quite a bit, to make quite a bit.
Let us see what comes out of that meeting at the White House there of some of those leading people in the world of crypto.
We've all heard, haven't we, of social media influencers, people with millions of followers on Instagram or YouTube who can earn big money by endorsing certain products.
But what about micro and nano influencers?
They've discovered that small can mean mighty in the world of influencing.
The BBC's Izzy Greenfield has been investigating.
When you're scrolling through social media, do you ever come across content like this?
You can enjoy a whopping 50 % off on their iced coffee range.
And does it make you more likely to purchase a product or follow a brand?
Companies have been using influencers to market goods for years, but the industry has become more and more saturated.
As brands seek genuine connections and targeted reach, there's one type of influencer that's emerging as a key player in this market.
Introducing the new influencer powerhouse, the micro -influencer.
In a world where it wants paid to have a huge social media profile, why are businesses investing more in those with fewer followers?
With just over £70 ,000, Jerilyn is currently a micro -influencer and they're very much on trend with businesses.
My name is Jerilyn De Silva and I am based out of Pune, which is in India.
I started the whole thing as a food blogger and now I think I call it a lifestyle blog or page.
So tell me about the kind of payments that you would get for a post.
It typically starts from £25 ,000 and it goes up to, I think, in lakhs, depending on the followership that you have.
That's 25 ,000 rupees, just under US $300.
$300 a post is a typical payment for a micro -influencer, whilst a nano -influencer might be looking at around $10 -100, maybe a bit more.
It's different for macro -influencers, though.
They receive an average of $5 -10 ,000 a post, and the mega -influencers can earn $25 ,000 to millions of dollars.
We really, really want our brand to grow.
We want it to be stocked in physical shops.
We want it everywhere.
Kenzie and Donna are based in the northwest of England and run Crystal Becraft.
They make hand -drawn tarot cards, greeting cards and other collections.
They launched on Instagram earlier this year.
We'd love to work with influencers.
We'd favour micro -influencers because they seem to be more trustworthy and they have loyal followers.
And we need this help because we are so niche.
The engagement rate for micro -creators, that's a metric that measures how much an audience interacts with content, is at around 8 % compared to 4 .5 % for macro -influencers.
But there's more money in macro -influencing, so which do creators choose?
Big reach or financial reward?
It's a tough balance because at the end of the day, every content creator wants to have big following.
Kadide Franci is a lifestyle influencer in Kenya.
She's got just over 8 ,000 followers on her Instagram account.
Yes, you can be a nano -influencer and have so many brands who you're working with, but again you can be a premium influencer and have this one brand that is paying you millions of shillings.
I still don't want to be a very big influencer.
Yes, I want to grow my following, but not past 30 ,000 followers.
So in East Africa and around the world, smaller influencers like Kadide are helping businesses to share their brand in a more effective way.
No matter the niche, it's likely there's someone who can communicate the message.
Whether it's a business, an influencer, or the person putting the two together, if you crack the code on collaboration, you're likely to reap the rewards.
Izzy with that report, and you can listen to the full programme if you go to wherever you download your podcast and put in the words business daily, have a listen, definitely worth doing that.
When you're teaching your economic students, Kerry, I suppose how the world of advertising is changing now, Influencers, I presume, are becoming a bigger part of that, macro or micro.
Absolutely. The numbers you were quoting for the macro and even the micro influencers is extremely impressive.
You can go back for almost 100 years, it seems like, when you had René Lacoste getting people like John Wayne to wear his shirts and that recreated the polo shirt.
This has been going on for a long time, but now it's truly being monetized.
Yeah, and that trend away from, if we call it, the traditional world of advertising, that is probably likely going to increase isn't it i don't see why it wouldn't if business is happy with the targeting they're getting through this it has to be a very efficient system because you're eliminating the middleman which effectively that's what uh madison avenue was all about and so you've gotten rid of that you're getting you know your rubber on the road much more closely so i i think that's going to just get bigger and bigger carrie if uh you know you decide to hang up being economists and teaching
the kids maybe the world of micro influencing is one that you could also join thank you so much as always for joining us on the program we started it didn't we by talking about tariffs we're going to continue that conversation on business matters at 0100 GMT we're going to hear from somebody who's running a business in Mexico what's it like trying to do that as those policies are flip -flopping on a daily basis Canada has now said that it's going to delay its second wave of retaliatory tariffs in response to the story that stopped that we started the program with Donald Trump removing some of those
tariffs on Mexico and Canada.
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