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Hello and welcome to World Business Report here on the BBC World Service.
I'm Rahul Tandon. We're talking tariffs on countries and also for the first time in a while on this programme about companies, mobile phone companies in particular.
And Boeing strikes a deal with the Department of Justice to avoid prosecution for those 737 MAX crashes.
We'll get all the details from our correspondent.
But let us start the program by talking, once again, about the issue of tariffs.
And between particularly two of the world's big trading blocs, the EU and the United States.
Let's remind ourselves of what Donald Trump said when he unveiled those reciprocal tariffs 45 days ago.
You know you think of European Union very friendly.
they rip us off. It's so sad to see.
It's so pathetic. 39%, we're going to charge them 20 % so we're charging them essentially half.
He then reduced that to 10%.
While now President Trump seems to be changing his mind once again, he's recommending the imposition of 50 % tariffs and goods from the EU.
They don't take our cars, they don't take our agriculture, they don't take anything but we take their cars by the millions, and therefore they have the jobs, they get the money, and we get closed plans.
It's not going to happen that way anymore.
Thank you very much. If that was to happen, those terrorists would come in in 45 days' time.
Let's bring you reaction from the EU.
Here's the Polish trade minister Michael Baranowski.
We are negotiating.
And I think anything, I'm sure we'll get a good deal.
I see this us as another step in our in our negotiations that in the end I truly hope will result in a in a good agreement, good that is balanced and and fair for both sides.
The European Trade Commissioner Maros Sefcovic has said the EU stands prepared to defend its interest after President Trump's comments.
We're going to hear from the European business Let's bring in Chris Lowe here, chief economist at FHN Financial.
Chris, we thought there was going to be a pause while these discussions took place of these 90 days to make these trade deals.
Clearly things once again back in terms of tariffs with people not really sure where we're going.
This was quite a surprise this morning and of course the market reaction quite negative here in the US, with both stocks down but also bond yields dropping, which is an indication that traders are worried about recession risk again.
So this really was out of the blue and not a pleasant thing to wake up reading.
A lot more from Chris during the program.
So, what now for European businesses who export to the US?
Ivan Franicievic is the CEO of the promotion business, Rasco, which makes street cleaning machines.
He's been telling me how he just started exporting to the US.
We've started doing business in the US late last year.
We've had our first deliveries in the beginning of this year and we've had our second batch of deliveries of machinery in the past couple of months.
So this is actually the market that strategically for us is extremely important.
And where we expect the most growth coming in the following years.
I was looking at some of your new products, you got that hydrogen, have new street cleaner that's coming out.
If we see 50 % tariffs, or even 20 % tariffs the original reciprocal tariffs that were put in place, what would that mean for you?
Well it would make our products for the end customer in the US more expensive, machinery in, at least in our industry, is simply not capable of consuming this tariffs from the margins that we have. We could do single digit percentages, probably, but double digits, anything 10 % or above, we could not handle.
We would have to transfer this cost to the end buyer in the US, there is no doubt about this.
The question, of course, is what does it mean compared to other US, to our US competition?
that would of course make us less competitive in the US but it would also mean, given that European technology, especially in our segment, is dominant even in the US, this would ultimately probably only mean that the cost for the US buyers would go up.
And in terms of your customers in the US, it's a mix isn't it, of public and private, does that mean that it's different for those two different sectors or they're different problems that they both have, if the tariffs come in.
It is. That's absolutely true.
A private customer has a budget that he wants or she wants to spend on a certain machine and that budget is, of course, governed by the prices that customer can get from its own customers.
And then, you know, when when a machine overnight that you pick that you order becomes 25 or 50 percent more expensive, that's a big problem.
And in public tenders, it's a very big problem for us, because if we submitted a bid to a to a public tender and guaranteed a price.
This price is not changeable.
Regardless of circumstances, we have signed a binding contract to deliver at a certain price, which means that until the situation is resolved, we will most likely not be able to participate in any public tenders that do not have some leniency for the possibility of tariffs.
Do you have time now, when you look at this and you're unsure of what may happen in 45 days, to get more of your product in the US before the end date when Donald Trump said, look, if there are no deals, those reciprocal tariffs will be put in place.
So it'll be higher than the 10 percent that's there now.
No, there's simply no time.
Our products would need to be manufactured.
They're usually manufactured to order, so they're custom built for customer orders.
And we simply would not have time to, even if we had them today in our yard ready for shipping, it's very unlikely that we would be able to get it in the US before the new tariffs hit.
What would you like the EU to do here?
The US Treasury Secretary, Scott Besson said he hope the threat would light a fire under the EU.
Does the EU need to compromise more here?
There's going to be pain and hurt on both sides if tariffs especially if they are unreasonably high as 20 or even 50 per cent.
There needs to be some sort of a compromise obviously here, and I'm sure that there are demands from the US side and there are demands from the EU side.
Now, whether to say who needs to compromise more, I guess this will ultimately depend on who will get hurt more in this in the story, which I think is ultimately going to be difficult to say, it's not sweeping tariffs across everything, because that would hurt some US industries a lot.
On the other hand, it's probably not going to be also sweeping tariffs on the European side, because that would hurt European business a lot.
There needs to be compromise, I would imagine on both sides.
final thought from you.
You're in a very innovative business which, you know, a product that a lot of people across the world may want to buy.
How hard is it at the moment when global trade is going down the path that we haven't seen before?
It's very difficult.
One thing that we as a business, and the businesses in general, don't like is uncertainty.
It makes things very very difficult to plan, especially when it comes to capital goods such as we manufacturer where you have to plan ahead for 6 to 12 months.
Whether your supply chain needs to adjust to to new demands or you need to adjust your products to local market demands.
It's at the moment very very difficult to make any plans and the tactic for a lot of companies including us has been sort of wait and see you how things are going to be developing.
Chris Lowe is still with us.
From what we're hearing from Yvonne there clearly we're back into that uncertainty again.
Companies across the world not really sure what's going to happen?
Well, that's precisely right.
I do think though that this analysis is fundamentally right, that the intent this morning was to light a fire under the European negotiators, to get them moving closer to something, hopefully, hopefully they can work something out.
But I think the negotiation with Europe is already – it had to be trickier than it was with the U .K., where the first deal was done, both because the offer from the U .S. to the U .K. started lower and because in that case you're negotiating with one government.
Here it's multiple governments.
Yeah definitely, stay with us Chris.
Let's bring in another Chris onto the program Chris Swanger is the president and the CEO, the Distilled Spirits Council of the United States, Chris thanks so much for joining us.
When you look at the prospect of 50 % tariffs on EU goods coming into the US, do you rub your hands and say hey a lot of the competition is going to be more expensive, or do you worry about repercussions?
Hope and pray and encourage both governments to negotiate and get these big issues resolved.
Because, as your show was reflecting, many industries on both sides of the Atlantic will be impacted.
For the distilled spirits industry, we're unique, and we're really the model for fair and reciprocal trade.
Between 1997 to June 2018, our industry on both sides of the Atlantic grew by 450%.
and it really prospered the distilled spirits industry, both in the U .S. and in the EU.
And we're an industry of one, so we're actively working on both sides of the Atlantic, encouraging both governments to stay at the table and get these big issues resolved.
About a month or so ago, the EU, when we very much appreciate it, decided to take American whiskey off a target list and that's really really important.
The EU exports plenty of great distilled spirits to the United States and the United States consumers love that love these distilled spirits products and same on the American whiskey side.
When you look at this now you know Donald Trump is a deal maker isn't he?
Do you see this as part of a negotiation you don't really expect those 50 % tariffs to come in place or is that a serious threat But when you live in Washington, D .C.
and with the Trump presidency, you got to appreciate and understand, you know, his perspective, obviously.
And I think the EU needs to do that as well.
And the U .S. is open for business.
But obviously, the president is looking to bring more American manufacturing jobs to the United States.
The trade deficit between the US and the EU was rather high.
But for the distilled spirits industry, we're a line of one.
We have distinct products where you can only make cognac or Irish whiskey in the designated countries, and the same for American whiskey.
And just over the last 15 years, European consumers have grown to appreciate American whiskey, bourbon, and so forth.
So you can only make those products in -country.
And when the EU unfortunately imposed a 25 % tariff on American whiskey related to the steel and aluminum debate, we saw a 20 % decline in American whiskey exports to the EU.
Since those tariffs have been suspended, we've seen a massive rebound.
Why? Because European consumers appreciate American whiskey.
As you said, the same as on the on the on the American side with great European distilled spirits.
As you said that, yeah, both people enjoying each other's products.
Could they become more expensive for both of them?
We'll probably find out in about 45 days.
Chris, thanks so much for joining us on the programme.
President Trump also says he's considering a 25 percent tariff on Apple and Samsung unless they move production to the United States and in the Oval Office a short while ago, he explained why.
I had an understanding with him that he wouldn't be doing this, he said he's to India to build plants, I said that's okay to go to India, but you're not going to sell into here without tariffs.
But we're talking about the iPhone now, and you know the iPhone, if they're going to sell it in America, I want it to be built in the United States.
So how easy is it for companies like Apple to move their production to the US?
Let's speak to somebody who can answer that question.
Alan Young is a former Foxconn executive.
All of us, perhaps even the president himself know that the cost of manufacturing iPhone in United States will be prohibitively high.
So it's unclear. Sometimes his rhetoric does have intent, maybe for negotiation purposes.
But we know from the past that Apple took advantage of the immense and then also this skill level of labor in China and therefore Apple iPhone The iPhone is not really that amenable for mass production.
So bringing it back to the U .S. might not be that economical.
When you say it might not be economical, is there any chance it could be economical?
I think the range that people are looking at is up to potentially 3x the cost, on the high side, and in the low side, you're talking about at least 50%, if not more.
If iPhone costs $1 ,000 or $1 ,200 in the U .S. retail, making it here in the U .S. would probably bring the price to at least $2 ,500 if not more.
You obviously worked at Foxconn, which is one of the big producers of iPhones for Apple.
Will they be looking nervously at what Donald Trump's saying here, he's talking about a 25%.
Tarif, can Foxconn move a lot of production to the U .S.?
Well, I don't speak for Foxconn at all anymore, but I can tell you that Foxconn's position for the longest time in the partnership with Apple has always been whatever that client of Foxconn would like to do.
Foxconn would support that.
So Foxconn, if they were to take on that challenge, certainly would be able to bring the price down, the cost down as much as humanly possible.
But based on my past experience and knowledge, you can't really be easily 20 or 30 % higher than India or China, it will be a lot higher.
You obviously know that supply chain very well, of how Foxconn operates in putting these phones together.
Even moving it from China to India is not easy, is it?
Because they've built up that system of building the iPhone in China, with some of those huge factories and a workforce that is used to doing this.
Some of the challenges have been well documented, but I would just point out a few that is particularly salient.
The ecosystem has been built up, not in Taiwan, not in Vietnam, but in mainland China for at least 10, 15, 20 years.
So if you actually manufacture a sample in India, India, many of the parts and components still come from China and some of the suppliers that Apple in partnership with Foxconn developed and really had excel over the years.
Now, if you take some of that to India, it will take time to develop and localize.
India does have some of the pretty good sizable players to actually take it up, but it will take some time.
But the labor side is another issue.
the labour side has not been the same in India versus China.
China has been able to mobilize it the mass labor supply across provinces and states, whereas India across different states has been pretty much siloed.
You wouldn't see a state kind of support a neighboring state and provide 50 or 100 ,000 employees from my state to a neighboring state to work in that factory.
so for that reason you would not expect to see a mega campus in India where you see 200 or 300 thousand employees that they have in China like in Chengdu or Zhenzhou Alan yang there on the problems that Apple faces in trying to move production away from China in particularly to the US and Chris So what was interesting about the threat of tariffs on the likes of Apple and Samsung?
We've been talking, haven't we, over the past few weeks about tariffs on countries.
Now we're in a whole new domain, tariffs on companies.
Well, yeah, no, that was extraordinary.
And in fact, I'm not even sure it's legal under US law.
There is some question about that that's been sort of popped around.
But even beyond that, bear in mind, too, Apple has been looking at US manufacturing for over a decade.
They've been thinking about it, they even went as far as bidding on a location.
But you know, the engineers have come back saying effectively the same thing that Alan just said, the cost increase would be prohibitive.
Another quick story.
There's a lot happening today.
Donald Trump has announced that Nippon Steel and US Steel will enter into a partnership, And if this has been a controversial merger and even with this decision will still remain one.
It is I think it's probably a good decision, though.
US Steel, the union is very much in favour of this.
The company was questioning whether it would be able to survive on its own.
They obviously were very much in favour of this partnership.
And I think even from the main objection, of course, steel is an absolutely essential to defense, but the manufacturing would still be here, and so you're not losing the physical plant the way you might, if you relied entirely on imported steel.
This deal will make it easier to keep steel production alive in the US.
I think it actually works out pretty well.
More from Chris coming up.
Today, Roam Tomorrow.
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Hey everybody. So, when you get asked, what is Odoo?
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Well, I'll tell ya, Odoo is a bit of everything.
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That's O -D -O -O dot com You're with World Business Report here on the BBC World Service.
Statement just coming in from Nip and Steel.
They have applauded Donald Trump's decision to approve that partnership with US Steel.
Let's talk about Boeing now as it's reached a deal with the Justice Department in the United States to avoid trial over those 737 crashes.
There were two of them, one in Indonesia in 2018.
The other five months later in Ethiopia.
Combined total of deaths, unfortunately, was 346 people.
With more on the deal, Michelle Fleury is here, our North America Business correspondent.
I think perhaps most significant is the fact that this agreement allows Boeing to avoid being branded a convicted felon.
Instead, it will be required to pay and invest over a billion dollars.
Now, this includes $455 million to strengthen what the report says is the company's compliance, safety and quality programs, $445 million will be set aside for the victims of these two crashes that we're talking about.
Remember, this all stemmed from the 737 MAX crashes in Indonesia and in Ethiopia between 2018 and 2019.
There will also be an independent compliance consultant that will have to be involved, and Boeing has to continue to improve the effectiveness of its anti -fraud compliance and ethics program.
So that is what we have so far from a Justice Department spokesman, But obviously the headline here is that Boeing does not have to be branded as a convicted felon.
In other words, it doesn't have to plead guilty.
Have we as yet had any reaction from the families of those crashes that you talked about there?
Yes, so they had been kind of waiting for the Department of Justice to decide what it would do and they had been kind of pushing for the Department of Justice to go forward with charges against Boeing, they were very disappointed with this.
In fact, Javier De Luis, who is an aerospace engineer in Massachusetts who lost his sister in the second crash said, with this filing, the DOJ walks away from any pretense to seek justice for the victims. There was also another response from Nadia Milleren.
Now, her 24 -year -old daughter, Samuel Rostumo, died in the second crash in Ethiopia.
And she said, Pam Bombote, that's the attorney General, is afraid to try a case.
She is reinstituting the coddling corporate criminals policy.
Boeing remains a criminal corporation and Bondi is enabling them.
Now obviously Boeing has not been found guilty and has not immediately responded to any request for comment but it is important for them Rahul because it means that going forward if they had been branded guilty that would have made it more complicated for them to compete for government contracts and that is a huge portion of their business and something certainly that will have been weighing on the mind heavily of CEO Kelly Autberg, who just last week was traveling with Donald Trump on his tour around the Middle East. Michelle with the details there, Chris Lowster with us, chief economist, FHN
Financial. Good news for Boeing here, but still a long road ahead for this company.
Absolutely, and I think one of the things certainly markets will be contemplating is whether this is severe enough to really shake up Boeing and put safety first as a priority ahead of profits.
These are not the first two things to go wrong at Boeing nor are they the last two things to go wrong.
Investors are getting impatient with the safety record. They certainly are.
Chris, thank you very much for that.
It's 10 years since Ireland became the first country in the world to legalise same -sex marriages by popular vote.
A decade later some same -sex couples are contributing significantly to the wedding industry in Ireland at a time when overall marriage numbers are falling.
Leanna Byrne has been to Dublin to speak to couples and vendors about how the wedding industry has changed.
I brought some samples.
When you first get engaged, you're riding high, telling friends, celebrating, showing off your engagement ring.
But inevitably reality hits and you have to start planning the wedding.
That's exactly where Alan Hatton and Darren Lawler find themselves now, at their redbrick home in Dublin's trendy Stony Batter neighbourhood, discussing invitations with designer Anna O 'Byrne.
we have is the colours they were talking about the other day.
The pair got engaged last December between Christmas and New Year on the west coast of Ireland.
Alan and Darren say since they've waited so long to get married they're happy to spend money on the things that matter to them.
It's about very much trying to keep local trying to you know local colleagues local people.
When you're only doing this once, we're only doing this once, these sort of things matter.
Just ten years ago Alan and Darren couldn't have legally planned this wedding in Ireland.
On May 23rd 2015 Ireland became the first country in the world to pass same -sex marriage by popular vote.
Since then almost 6 ,000 same -sex marriages have been registered.
Many campaigners saw this vote about same -sex marriage as a test of equality and acceptance.
Ten years later same -sex couples are contributing significantly to the wedding industry in Ireland, which is estimated to be worth between $800 million to $2 .6 billion to the Irish economy.
According to figures from Ireland's central statistics office, same -sex marriages accounted for 3 .3 per cent of total marriages annually since 2016.
From a business point of view, it's a category that's engrossed.
That's Jessica O 'Sullivan, head of content at One Fab Day, Ireland's biggest wedding planning website.
The opposite -sex marriage category has dipped below 20 ,000 for the first time in a very long time since the height of COVID.
But one category that is actually increasing is same -sex marriage.
She says that the average budget is now around $40 ,000 and many same -sex couples are willing to spend even more.
We definitely see weddings that don't stop at 80 ,000 and many of those are same -sex weddings.
For Dara Doyle, the referendum allowed him to switch careers.
After 20 years working in insurance he set up rainbow weddings .ie in 2017.
He says he has quite a few international LGBTQ couples coming to Ireland for a destination wedding.
The fact that Ireland was the first country in the world to pass same -sex marriage by popular vote, that means a lot of LGBT couples like to come here to marry for that reason.
Ten years on from Ireland's marriage equality referendum, the impact is being felt far beyond the ballot box.
The wedding industry has shifted becoming more inclusive, more diverse and for some businesses, more lucrative too.
And you can hear more of Liana's reporting from Ireland on today's Business Daily.
Wherever you get your podcasts from.
We will be back with business matters at 0 0 0 0 midnight GMT I think is the best better way to pronounce it.
We'll be continuing our discussions about the growing route between the US the economic one and The EU and also looking in more detail about that Boeing settlement Find home wherever you roam at Sinester ES and Simply Suites Stretch out and enjoy home like amenities for however long you need and when you're a Sinester travel pass member Staying at Sinester ES and Simply Suites means earning points toward free nights upgrades and more.
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