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Hello and welcome to World Business Report here on the BBC World Story Service.
Only one story for us today.
That is the world's largest economy.
Well, they've got a new president and he's already talking about the economy.
Donald Trump says a new era has started.
We will win like never before.
We will not be conquered.
We will not be intimidated.
We will not be broken.
And we will not fail.
From this day on, the United States of America will be a free, sovereign and independent nation.
We will stand bravely, we will live proudly, we will dream boldly and nothing will stand in our way because we are Americans, the future is ours and our golden age has just begun.
Donald Trump currently in Washington addressing his supporters at a big sports centre there.
Any details? We will, of course, bring them to you.
But will it be a golden age for the global economy?
In his inauguration speech, he made his views on trade and tariffs very clear.
I will immediately begin the overhaul of our trade system to protect American workers and families.
Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.
We are, of course, waiting for more details of what some of those policies may be.
We've got the first indication, the White House announcing, that the US will pull out of the Paris Climate Agreement.
So what is going to happen to the global economy?
How much disruption could we see?
A question for Ken Rogoff, professor of economics at Harvard University.
He previously was the chief economist for the International Monetary Fund between 2001 and 2003.
Well, it's significant when there's a big shift in philosophy and power.
The United States economy kind of runs on autopilot a lot of the time.
A lot of the time, the president doesn't matter that much.
it's only when the president really intends to meddle in the economy in a big way.
President Biden did the last U .S.
president that it can really have an effect.
That was part of why we got such high inflation.
And so with Donald Trump and he clearly has very strong views on the U .S.
economy, on the global economy, on issues like tariffs.
So are we going to see a much bigger impact than we normally do with a US president over the next four years?
I think for sure there's going to be a bigger impact.
He really wants to change a lot of fundamentals in the system.
He wants China to stop running such a big trade surplus with the United States.
He wants Europe to pay for its own defence.
He wants Greenland.
He wants Panama. He really wants to be disruptive.
Whether he'll be able to, there's no question he aims to be someone who really changes the landscape.
Whether that's in a good way or not remains to be seen.
You're at the World Economic Forum in Davos at the moment.
What is the mood there, do you think, within business leaders, within finance ministers?
Is it nervousness? Are they excited about disruption to the global economy?
I would say the Europeans are by and large nervous and depressed.
They see their European economy is not doing well.
They don't know what to do about it.
They see Donald Trump wanting them to spend money.
They feel they don't have.
The tariffs are obviously a huge existential threat to big export countries like Germany.
They're very nervous.
Among the business types, they, blindly or not, are pretty enthusiastic.
Not so much about Trump as getting rid of the highly regulatory Biden regime.
Have you ever seen a moment like this where we may see this much change?
It's remarkable. I mean, it really is a very, very big sudden change.
It's not just that.
So we're big on energy and, you know, in the border.
And he spoke to both of those and that fired us up.
We just like a president who's going to back the oil industry, back the energy industry, get us to energy independence.
That's what we wanted to see.
And that's what he said he was going to do.
We think this is a historic inauguration for us in our lifetime and once in a lifetime, opportunity to see Donald Trump back in the office and bringing us back to where we want to be as a nation together.
I feel great. I think our country's going to be in a much better position globally.
And I do think that we will move forward and be a stronger country.
We look very forward to the next four years.
They're looking forward to the next four years let's look ahead to the next four years with chris campbell former u .s treasury assistant secretary during donald trump's first term he is currently founder and ceo of in -camera solutions chris thanks for for joining us did you think you'd see this day
again uh you know i i would i never bet against donald trump let's say it that way he's uh he's you know as your lead -in suggest he's a very big personality with very big dreams he dreams big and plans big and I think hopes to execute big in the second term.
I'm sure that he does want to execute big in the second term and there's a lot of probably unfinished business there when it comes to the economy.
What do you think is going to be the driving theme of the next four years for him?
During the first term, and I believe the second term is going to be the same, much the same, which is he wants to reestablish the United States as a manufacturing base, wants to find a way to level set the trade surplus and deficits that the United States runs with other countries, try to find a way
to appropriately right -size tax burdens across the different cohorts of Americans who earn money, who are earners in the United States, to try to find a way to make that fair.
The great thing about Donald Trump is that he typically tends to do what he says and says what he, what he does.
Um, you know, I think he was very clear in the campaign of what, what his, uh, very ambitious agenda was going to be.
I think it, and candidly, I think, uh, in his inauguration speech this morning, uh, um, you know, he, he reflected very much the same, uh, tone and tenor and, and, uh, ideas that he ran on.
Um, and I think that, you know, those will be reflected in the executive orders that he's, uh, he's signing today and um you know so it's building an economy that's that's that's strong and resilient um that is not dependent upon foreign actors and foreign um either adversaries or or uh allies um and trying
to find a way to uh restore candidly you know like i think his view is uh greatness of american economy which is you know a large manufacturing well can i pick up on that point with you because Because he has talked a lot about that.
And it was one of the crucial reasons why he won the election, wasn't it?
Many people, you know, in those crucial swing states, that's what they want to see.
But is that really practical?
Is it possible to rebuild manufacturing in the U .S., a country with such high wages?
You know, I think with AI and automation, I think it absolutely is.
I think it's becoming more possible every single day.
But I think the rub's going to be many of the voters who gave President Trump the second term are members of labor unions here in the United States.
They're typically blue -collar workers or high -skilled blue -collar workers that earn a great wage, and they work really hard for that wage.
But some of those jobs will likely be displaced by AI or automation in manufacturing.
And so that's going to be a real challenge, I think, in the second term is how you bring back, you know, manufacturing in the United States, but still finding a way to keep those all of those people who supported President Trump in the second term and voted for him, employed, you know, gainfully employed
and, you know, putting food on their table and making sure their kids can go to school and all of those things.
So it's certainly not, you know, it's never easy.
Certainly being the American president, it's not an easy job.
But it's something that he's going to have to grapple with in order to make sure that he maintains the structure and the viability of what he's built.
Chris, stay with us.
We're going to bring in Walter Todd, then our president and chief investment officer of Greenwood Capital.
Walter, the markets.
I know the U .S. markets are shut, but we've already seen quite a lot of reaction in the global markets.
It's going to be an interesting four years, and Donald Trump loves the markets to do well when he's in charge, doesn't he?
Yeah, well, good evening from the U .S.
Yeah, for sure. He definitely uses that as a scorecard.
for himself and his administration.
And we've seen quite a divergence speaking about the US versus the rest of the world since the election of the US doing relatively well compared to the rest of the world outperformed dramatically since the November election.
And given some of the policies that are being espoused, you might expect that to continue.
However, I would just know that divergence is pretty stretched.
You talk about the U .S.
economy versus the rest of the world.
It's about 25 percent of global GDP, but the market cap of the U .S.
markets are about 70 percent of the world market cap in the equity market.
So a little bit over its skis, maybe.
I don't know. Chris, when you were there during the first administration, how much did Donald Trump worry about market reaction?
And could that be the thing that probably checks him more than anything else on his economic policies during Trump 2 .0?
So look, I think he has several different metrics that he likes to measure the economy over, but certainly the market is absolutely one of them.
Inflation is one as well.
He has a laser focus on what the Federal Reserve does and in its role in the economy.
And he also, we talked about earlier, the trade surplus or deficits is also a really thing that drives him.
And so I think in my experience with him, briefing him and working with him in the first administration is he has several different metrics that he looks to for the economy and for, you know, to see how well the U .S.
is doing these other countries.
The market certainly is one, but there are several others that he really cares a lot about as well.
He certainly seems to, doesn't he?
You are with World Business Report from the BBC World World Service.
Tech billionaires, world leaders, and media moguls were among the 600 people watching as Donald Trump took that oath of office.
There was Amazon's founder, Jeff Bezos, Metas, Mark Zuckerberg, and of course, the world's richest man, Elon Musk, one of the president's top campaign donors, and let's be frank, advisers as well.
Later, Elon Musk made a speech at the inauguration parade, which he thanked the gathered Trump supporters.
You know, there are elections that come and go.
Some elections are, you know, important, some are not.
But this one, this one, this one really mattered.
And I just want to say thank you for making it happen.
He also praised Mr.
Trump's plans to send U .S.
missions to Mars. I mean, can you imagine how awesome it will be to have American astronauts plant the flag on another planet for the first time?
Bam! Bam! Yeah! Elon Musk there.
Let us bring in our tech reporter, Lily Jamaly, of course, is based up there in Silicon Valley.
There's been a lot of focus on the prominence that a lot of these tech billionaires have had during the inauguration.
Is it different from normal, Lily?
Do they always turn up or were more of them there this time?
Oh, for sure. This was different.
There is a photo that's been making the rounds on social media of some of the names you just mentioned all in a row on the dais.
So Mark Zuckerberg, Jeff Bezos and his girlfriend, Lauren Sanchez, Sundar Pichai, the CEO of Google and or Alphabet, which owns Google and Elon Musk on the end.
And this is not very common at an inauguration.
Not only that, the people that are usually in that sort of elevated position at an inauguration are family members of the candidate, members of the person's, the forthcoming cabinet members.
And then you had the tech CEOs there.
So this was highly unusual and certainly sent a message.
It's, I suppose, not surprising when you look at Donald Trump's own background.
He is a businessman at heart, isn't he?
So no surprise that he'll have business leaders there.
But why so many from the tech world, do you think?
Yeah, I was thinking about this because recalling some of my own experience covering the 2016 election and the first Trump administration.
Back then, we saw so much commentary and much more elevated roles for members of the finance world.
Big bank CEOs, high up members in the private equity world, people like Stephen Schwartzman and the like who runs Blackstone.
You know, now that has really been supplanted by these tech CEOs.
So you still have the influence of business, of the business world.
But you see how over eight to 10 years, the center of gravity has really shifted from Wall Street and finance to where I am in Silicon Valley and the tech world.
And back then, Trump had a really confrontational relationship with people in tech.
I think back to, you know, the co -founder of Google, one of them, Sergey Brin, protesting at San Francisco International Airport when the Muslim ban was announced.
Jeff Bezos saying, let's send Donald to space.
I very rarely ever hear that ever referenced lately.
He tweeted that on Twitter after Trump criticized his ownership of the Washington Post.
And now you see, I mean, I'm seeing this framed as, you know, these people want to garner favor with him.
They want lower taxes.
They want less regulation, perhaps.
I think that's all true.
But I don't think that they see themselves running the show.
Maybe Elon Musk is the exception to that.
I think of this as being a much more preemptive defensive posturing that they're taking to make sure that they don't end up offside on the wrong side of Donald Trump.
Lily, as always, thank you for joining us.
Chris Campbell, still with us, founder and CEO of In Camera Solutions, served in the first Donald Trump administration as well.
You were there today, were you, Chris?
I was, yes. So we can call you a tech leader, can't we, within Camera Solutions, being CEO of that company.
This is also about regulation, isn't it?
Because that is a big issue for many of these companies.
And Donald Trump is very strong.
One of his ways to get that U .S.
economy moving even quicker is to have less regulation, isn't it?
Yeah, it's a three -legged stool.
So you have regulation, you have effectively reducing the tax burden on companies, as well as trying to find a way to remove additional red tape or give incentives for growth in the country as the economy grows.
And so with those three things, and that's typically the way that the president approaches the economy and tries to find a way to do that.
Presidents of the past would open new markets to U .S.
goods and services, but he wants to grow the American economy so the American consumer can do that themselves.
the uh so yeah so but yeah that's that is certainly the goal and i know that that's the goal of the economic the incoming economic team walter and that is something that the markets will like won't they because those tech companies who want less regulation well they're the ones who are driving forward
the u .s stock exchange aren't they yeah absolutely if you look at the the weighting of tech and you kind of roll in some of the names in other sectors they're not pure tech.
But collectively, it's about 40 percent of the S &P 500.
It's really one of the reasons that the U .S.
has done so much better than the rest of the world is having that tech concentration.
So certainly, these individuals are looking out for their their company's self -interest, their own self -interest and trying to be close and as the previous guest said, not be on the wrong side of Donald Trump when it comes to regulation or otherwise.
This program is called World Business Report, so we like to speak to businesses on it um and let's talk about a business area that's already been impacted by president trump because over the weekend it looked like the clock had stopped in the us for one of the world's most popular social media apps
tiktok then donald trump said this they said we need to save tiktok because we're talking about a tremendous who in this audience goes with tiktok Many are very popular.
And frankly, we have no choice.
We have to save it a lot of jobs.
We don't want to give our business to China.
We don't want to give our business to other people.
And then, of course, the clock started ticking again for TikTok.
It's back up and money running again.
Good news for Montana farmer Caroline Nelson, who runs Little Creek Lamb and Beef and uses TikTok to market her business.
It must have been an interesting weekend for you.
Yes, it was. I think so many small business owners like myself, we rode the roller coaster with it.
You did. And what I mean, how much difference would it have made to you if TikTok had not been functioning for quite a period of time?
You know, it's hard to quantify.
And I think of myself as diversified with our marketing.
So we would have been OK.
However, when TikTok hits, it really hits.
For example, we recently had some content go viral, a million or two million views.
You know, we had a huge number of orders come in from that.
And just the brand awareness piece has been really huge for us.
We have a brick and mortar.
I would say 25 % of our foot traffic comes in from social media.
So it would have been a hit for us, for sure.
Stay with us, Caroline.
Just want to bring in Chris Campbell here.
Chris, were you surprised that Donald Trump moved so quickly on TikTok?
Because, you know, on one hand, he's so strong against China.
This seems a little bit contradictory, doesn't it?
Yeah, this is actually a very easy question if you know the president.
The president loves to, just in its core in his DNA, negotiate and drive toward a deal.
I know that he feels very confident that there is a deal to be had here that would let Texark survive in the United States, but do so in a way that does not give American privacy rights and private data to the Chinese government.
And so I know he feels confident that that's that's the approach he's going to take.
I feel I feel very confident he's going to give the time necessary for him and his administration to work with appropriate suitors here in the United States to buy TikTok.
What's unknown is what will the Chinese government and will the Chinese, you know, will the folks who buy dance and others be willing to sell TikTok to the U .S.
to the U .S. Well and I'm sure that some of those tech billionaires who were there today could well be interested in in buying it.
Caroline, Donald Trump believes the U .S.
is about to enter a new golden era.
He's talking about the economy there.
Do you share those sentiments?
Do you have that confidence?
Oh my gosh I am just a rancher.
I'm a small business owner.
I have no idea. I would say that i started my business six seven years ago i'm a millennial i'm 34 and practically since 2019 when we started it's been you know threat of war pandemic i feel that at this point i'm kind of i don't know what's going to happen a year from now let alone four um but i try
to always stay optimistic that's just how i'm built i guess listen thank you very much for joining us here on the program want to bring in another business owner now that's heime chamberlain President of the Chamberlain Distributing Inc.
in Arizona. He thinks that, well, what do you think about Donald Trump and tariffs?
Because just tell us a little bit about your business.
I mean, you're in the food importing business, aren't you?
Do you bring in quite a few products from Mexico?
So do you worry about tariffs?
Let's be clear, we've had no announcements as yet about them, but could it impact you?
Yes, thank you for inviting me.
We appreciate the invitation.
I'm from Nogales, Arizona, and I am an importer of Mexican fruits and vegetables to the North American chain stores, food service companies, and wholesalers all over North America, Asia, and we also market into Europe as well.
So the use of tariffs has been around for a long time as a negotiation tool, and that's what I think the president is going to be using, you know, the threat of tariffs for, is to negotiate for a better trade deal.
We're very fortunate in the United States.
Sorry to interrupt you, but if it's not just a threat, if it's not just a negotiating tool, but he does go through with tariffs, and he's talked about 25 % on Mexico, that can't be good for you, can it?
Well, I don't think we're going to go across the board on all sectors first.
I think there's sectors that might take precedence.
For example, the manufacturing sector and the steel sectors, which are much more important to U .S.
companies first. I think the ag sector is a sector that will be on the table, but I don't think it's going to be one of the first sectors to be affected first.
And if he does put in tariffs, I don't think it will be for a very long period of time.
I think a short period of time, 30 to 60 days, will probably be enough time for both countries and to realize how much we need each other.
We are part of the fabric of the supply chain for all of our manufactured goods and all for our agricultural goods as well.
So we work in partnership with domestic farmers and Canadian farmers during which we have our importation of our products and our seasons.
We take over lots of contracts with big box stores and with chain stores all over North America.
So we're a very important part of that distribution.
Stay with us for a second.
Chris Campbell is still with us, who obviously was in that first Trump administration.
He will worry, won't he, Chris?
You've worked with him closely about the impact of tariffs on inflation in the US.
Yeah, but you'll notice that when the president talks about tariffs, he also speaks about reducing the tax burden on Americans at a point where you would have, effectively, a break -even.
And so one of the very first things that Congress has to tackle is the expiration of what people know as the Trump tax cuts of 2017.
And I feel confident that because Republicans now control all of Washington and that we'll pass that bill in a way that requires only Republican support, We will likely see an extension of a permanency to those Trump tax cuts of 2017.
OK. It's going to reduce the burden.
But there's no question that we – as the previous speaker suggested, that there will be an imposition of new tariffs.
I don't believe they'll be across the board.
And the president loves to find ways of negotiating and using every tool in his arsenal.
To do that. Yeah. Yeah, yeah.
I just want to quickly get final thoughts from Walter Todd here.
Walter, the markets won't like it, though, if there's inflation, will they?
No. To put it simply, I think the market is concerned about the inflationary impact of tariffs, as was alluded to.
But, you know, listen, if they pull the tax bill forward and get that done early in the year, that would be a huge win for the administration.
I think the market would like that very much.
But I think there's just the uncertainty of how he's going to go about doing this.
I think we'll keep us, everyone on their toes as we start this new administration.
Walter, thanks for joining us.
Jaime, final thoughts from you, 20 seconds, I'm afraid.
It's all here, Haby.
Are you confident a new golden era for your business?
I think so. I think it's part of our responsibility of any economic development group or any business group at all to educate our new governments, whether it's in Mexico or whether it's in Washington, D .C.
we have to tell them of the importance of of a good trade agreement and the we need to build on what we've already built over the last couple of centuries and we i think we're we have some great opportunities in front of us and chris uh yes or no from you could you be in the set next administration we
will leave that question to be answered later that is it for world business report
