This BBC podcast is supported by ads outside the UK.
Get more with the My Lowes rewards programs. You can shop member only deals for your home and business every week.
Plus members earn points on eligible purchases.
So what are you waiting for?
Join for free today.
Lowes we hope you save. Loyalty program subject to terms and conditions, details of Lowes .com slash terms, subject to change, free standard shipping not available in Alaskan, Hawaii, exclusions and more terms apply.
And welcome to World Business Report from the BBC World Service.
I'm Roger Heering, and on this edition, the OECD on the impact of Donald Trump's tariffs and a forecast that Mexico's economy will contract.
If everybody decreases effective tariffs by only 1 .5%, this will lead to a significant second increasing growth and and also a decline in inflation.
Also today beef prices in the US reach a record high.
What's going on and what's the impact on burger outlets?
The Peruvian farmer who is suing a German energy giant over the impact of climate change and if you're buying a mattress should you sleep on it first in the store?
That's all coming up on the program but first the business world's been rocked by on and off on and off tariffs coming from the US.
The last weeks have seen a whirlwind of tariffs imposed and suspended.
But where we are now is this.
Donald Trump has imposed 25 % tariffs on all steel and aluminium imports into the US.
He's also imposed 25 % tariffs on other imports from Mexico and Canada, with some exemptions, and a 20 % levy, on Chinese goods.
In response, Canada and the EU have both announced retaliatory tariffs.
So where does this leave the global economy.
Well now the organization for economic cooperation and development has given its estimate.
For two of them, the main nations involved, the picture is pretty bleak.
Canada's economy is predicted to grow by just 0 .7 % this year and in 2026 compared with the previous forecast of 2 % for both years.
Mexico is now forecast to contract by 1 .3 % this year and shrink a further 0 .6 % next year and that contrasts by growing 1 .2 % and 1 .6 % previously expected.
The OECD's chief economist is Alvaro Pereira.
All the tariffs that have been announced and implemented will be implemented, which means including the 25 % tariff on Canada and Mexico, and this will lead to a significant decline of growth in Mexico.
In fact, it will lead to a recession this year.
Alvaro Pereira. So how big a problem is this for Mexico?
Joining me now is Santiago Levy from the Brookings Institution, former Deputy Finance Minister of Mexico.
Santiago, welcome to the program and thanks for being with us.
Do you think that this OECD prognosis is right?
Thank you, Roger. I think it's right in the direction.
I'm not sure yet who are ready to say that the contraction will be as large as the forecasting.
Certainly, they're right in the sense that the situation to Mexico is unfavorable.
And relative to what we expected three months ago certainly is changed in the direction of slowing down substantially.
And perhaps a recession, although the magnitude is hard to tell, depends on what happens in the next two, three months.
I mean, and how much of this can we put down, can you put down to the tariffs is that the sole cause?
No. Mexico was decelerating, it was slowing down towards the end of 2024 even before the American elections and before the inauguration of President Trump, and that was mostly for internal reasons, having to do with large legal reforms that were being pushed, particularly revamping of the judiciary that generated a lot of domestic uncertainty and a slowdown in domestic investment.
To that, we need to add that the budget for 2025 is much more restrictive than it was before, again for internal reasons.
So even if we ignore the tariffs from President Trump, Mexico was slowing down in 2025, and the predictions were for growth anywhere between 0 and 1%.
To that, now we need to add the uncertainty created by the Trump tariffs, and as a result, Well, depending on what happens in the next two or three months, growth might end up being zero or negative.
Whether it's the minus one point three that the OECD is forecasting or something less yet to be seen.
Well, that that is really interesting, Santiago, because it's it's to do with uncertainty almost as much as the tariffs themselves, then because obviously the last few weeks, the last couple of months have been a lot of on off on off, as I was saying earlier.
And is that the problem?
Perhaps more than the tariffs themselves?
Yes, at present, the tariffs are not hurting as much, because President Shambown of Mexico and President Trump reached an agreement a couple of weeks ago, by which they postponed tariffs, except for steel and aluminum, until the early April, and basically all of Mexican exports under the Mexico -U .S.-Canada Free Trade Agreement right now covered by that agreement.
So they're not paying the 25 % tariff right now.
But it's on and off and it's not clear what will happen in the first week of April when this reprieve ends.
So, so far what we've mostly seen is uncertainty, and a lot of firms, a lot of business people postponing investment projects and investment decisions until they have some clarity as to what exactly is going to be the rules of the game going forward. Thank you for talking to me, Santiago Levi there from the Brookings Institution, former Deputy Finance Minister of Mexico.
Now there are lots of cows roaming the prairies of the US, and also I guess in farmers perhaps where they're more controlled, but not enough of them it seems. Beef prices there are very close to a record high, having shot up hugely over the last five years.
Heard stocks are low and possible tariffs on imports threaten further rises, and a shortfall fall in meat on the shelves and in restaurants.
Well, joining me now to talk about this is Bill Bullard, who's CEO of Arcaf USA, which represents the US cattle industry.
Bill, thanks for being with us.
What is behind the rise in prices for beef?
Rise in prices is not a recent event.
This actually occurred after the 2015 price collapse in domestic cattle prices.
And right after 2015, we saw consumer beef prices hitting new highs.
And at the same time cow prices were stair stepping downward. In other words, an inverse relationship between what consumers are paying for beef and what cattle producers are receiving for cattle.
That signifies that we have market failure within our industry.
It means we have a dysfunctional market and that market has remained dysfunctional.
But then we were hit with a widespread drought back in the late, early 2021 period.
it and it shrunk our herd size down to the smallest level in 70 years, and with the supply so extremely tight what was left of the latent forces of competition were able to become unleashed, and we saw cattle prices start to rise.
But we still see a huge spread between what consumers are paying for beef and what cattle producers are receiving for cattle, even though cattle prices are at nominal, high levels right now.
So how to address how to address that bill, because if there is that that weird, as you say mismatch, almost in the market itself, what's the best way to adjust that?
Well, first, we have to enforce our antitrust laws, because we have alleged that the four largest backers have colluded to artificially depressed cattle prices and simultaneously increased beef prices.
Second, we need to we need to include tariffs, as President Trump is doing, we need to level the playing field because we're importing beef from 20 different countries.
A beef is brought into the United States and its undifferentiated from domestic products.
So if the meat packers are buying that beef from South America at a much cheaper level and we can produce it here, they're able to sell it to unsuspecting consumers as if it were a domestic product and there would be no price differentiation.
As a result, the meat packers are profiteering by virtue of current trade policy.
Tariffs will help mitigate that.
But Bill the tariffs will also push up the price for consumers there because if they got a choice between imported beef and US beef then the price is going to come down and that if you what you're saying it through tariffs that won't happen.
More than an economic standpoint we also have to worry about our national food security our ability to have a stable domestic supply chains and what we found in 2020 is that under current conditions we do not.
Consumers did find shortages in the grocery store and that was because of the dysfunctional market.
There is no silver bullet, tariffs are a very important first step.
We also have to address anti -trust laws and in the United States, consumers need to be afforded country -of -origin labeling so they can choose to support the domestic supply chain or a foreign supply chain when they make their purchasing decisions.
Isn't free trade better, though, in this kind of area?
Absolutely not. That's the failed trade policy we've been embarked upon for the last 30 years, three decades.
As a result of that, we've lost over half of all of our beef cattle producers in America.
We've lost 60 % of our sheep producers.
We've lost 60 % of our sheep inventories.
We've reduced our herd by 9 million head.
And consumers are now paying all time record prices while our domestic supply chain is shrinking.
Bill, thank you so much for talking to me, Bill Bullard there of Arkaf USA.
Well around 50 billion hamburgers are reportedly being sold each year in the USA.
So any increase in beef prices which we've been hearing about hits consumer's project, pod pockets.
Andy Vederhorn is chairman and founder of Fat Brands that's the parent company the Fat Burger chain.
He spoke to me earlier and told me how his company had reacted to this trend.
Well prices have been high for beef ever since COVID.
And getting the herd size from an all time low back to normal takes some time.
So we expect over the next two years, the prices will start to come in line, but they've been pretty high, pretty bullish since COVID.
And is that definitely beef rather than other meats you might use?
It is definitely beef.
It's not so much poultry.
There's always some avian flu kind of issues.
But that can affect poultry more than anything.
So honestly we're in a pretty good position from a supply chain standpoint as it relates to what we're optimistic about, beef prices coming down.
Okay, but at the moment they're clearly not doing that.
And how have you reacted to the high prices?
I mean have you been changing your menus?
Well, so we took price in terms of increasing our price to adjust for cost back in the COVID days and in the inflationary days.
So prices are pretty stable today.
We're not seeing further increases in beef, but it's just much higher than it should be So we're looking forward to some relief coming in the next 12 to 18 months Why do you see that relief coming just because of building up a herd. That's right.
That's exactly right I'm what about the potential I suppose for importing beef I mean tariffs, I guess might cause problems for that.
But is that on your agenda?
You know, we don't really import outside of the US for all of our u .s 80 % of our restaurants are in the US of our 2 ,300 restaurants.
And so, we like that corn bed or grass -fed beef depending on the brand that we get locally.
And it seems to work well for us and our customers like it.
We really don't want to see a change in the flavor profile or the texture or any of those things.
So we don't have plans for that.
Terrace are another thing.
They're really rattling the cage and trying to get tariffs in line and equaled between international markets and the US market, is important really for our international franchisees, because we have international franchisees that if they want to bring in an American french fry to their restaurants, there's tariffs that are as much as 100 percent charged to the franchisee.
And if they buy a local fry, or local regional fry like in the Middle East, and they buy a fry from Lebanon, it's a 30 percent tariff.
And so they can't really afford to buy the American fry even though it's a better product.
It's a better potato.
So really hopeful that this tariff thing shakes out and gets everybody to normalize their tariff pricing.
But in the meantime you're dealing with beef prices.
I think they're pretty close to the highest they've ever been.
So do you reflect that on the prices that you're charging customers?
And what are the customers saying?
Yeah, so in terms of inflationary beef prices that really went up four or five years ago, that is reflected in the price today.
customers have adapted to it we've still seen generally over most of the years since this all started positive same store sales trends but you know pricing is in there and it can it can drive you know your trends up or down five to ten percent just depending on if they if they further move right now they've been stable they're higher than they've been so that affects margin and franchisees and corporate stores have had to increase their prices but they they're already there so we're not really seeing further price increases on horizon.
But at this point, I guess people might be saying, Well, you know, there's a limit to what I'm prepared to pay for a burger.
That's right. I mean, you always see when you have inflation, you see people trade down, they go from casual dining to fast casual, or they go from fast casual to fast food.
And so you really have that customer at the lower end, in the QSR fast food category, that really has nowhere else to trade down.
So they come less often, because of increased prices.
And that's really where your worry is.
It's not so much the other categories, because people move around based on price.
Andy, weirdo horn there of fat brands.
You're with World Business Report from the BBC World.
Asking the right questions can greatly impact your future, especially when it comes to your finances.
So if you're looking for a financial advisor you can trust, certified financial planner professionals are committed to acting in your best interest. That's why it's got to be a CFP.
Find your CFP professional at let'smakeaplan .org.
This is Ashley Ecompete from the Ben and Ashley I almost same as podcasts.
If you could lose 10 .4 pounds in one month, would you try?
Well, with FutureHealth you can.
Find out if when weight loss meds are right for you in just three minutes at tryFH .com.
That is tryFH .com. Resaults may vary based on start weight and adherence to diet, exercise and program goals, data based on independent studies sponsored by future health.
FutureHealth is not a health health care services provider, meds are prescribed at provider discretion.
Service. Let's have a look at what's been going on the markets is Peter Jankowski, some viable financial Peter.
Thanks for being with us once again, I was interesting day beginning the new week, a bit of a regain on Wall Street after a month of losses.
Yes, we had some good fall through we actually had a very strong rally on Friday and it was was positive to see the markets up again today, gaining about three quarters of a percent.
What was interesting was that there was kind of a rotation, Friday's rally was led by technology and communication services, you know, the very expensive stocks in the market.
And today it rotated out of those sectors.
They lagged the market and moved into the staples and defensive type stocks.
Yeah, and interesting data around, I mean we talk about the US consumer, a very key figure in the global economy really.
Retail sales rebounding marginally in February not actually as high as people expected.
Yes, the good news was they were positive but we're still wondering where they're gonna go in a few months as we see more and more price increases and disruptions related to tariffs.
Yeah, we'll see how that all plays out and I guess some of that's gonna feed into what the decides to do when it meets on Wednesday?
I mean, we're not expecting any change really in interest rates?
Yes, after the last meeting they telegraphed pretty clearly that they felt the risks were balanced in the economy between growth and decline, and they expressed some concerns about the inflationary impact of tariffs.
So nothing has fundamentally changed on that front other than the fact we've actually seen a good deal of follow -through on the tariffs.
So that That suggests that the Fed is probably gonna remain on the sidelines.
Yeah, interesting. Donald Trump's actually appointed one of his allies to oppose, not that major oppose, on the Fed, trying perhaps to bring it into where he wants it to be, maybe.
I think he will try to exert some pressure there.
Though Chairman Powell has said that he intends to stay through his full term, and, I suspect, he will certainly exercise some strong leadership over the governors that remain there.
Well, casting our eyes away from the US and to Europe and Germany, Audi and Volkswagen, thousands of job losses planned, but over quite a long period, interestingly.
Yes, indeed. It takes considerable agreement with labour unions there.
The labour unions actually have seats on the board. So there's a very involved negotiation process to secure those type of reductions, but overall, the VW group between VW directly, Porsche, and Audi, they're now looking at about 45 ,000 jobs that are going away.
Peter, thank you so much, Peter Jankowksis of Arbol Financial.
Now, farmers around the world have for many years been suffering the extreme weather that scientists are linking to climate change.
It's no secret a number of big companies involved in the energy sector are responsible for the largest portion of carbon emissions into the atmosphere.
Well now, a farmer from Peru has decided to take one of those companies to court.
Saul Luciano Euja has chosen RWE, the German energy giant, and he's just launched a case in a court in the German town of Ham, arguing that the company's greenhouse gas emissions are causing glaciers to melt, putting local people at risk.
Initially, he's demanding the company pay about $20 ,000 towards flood defences to prevent a mountain lake overflowing.
He told reporters why he decided to take RWE to court.
I decided to sue RWE because it is one of the biggest polluters in Europe and, according to a specialized study, it is also one of the contributors to the climate crisis.
I am here to attend the court, PAM court, because of the climate crisis in Juarez, the mountains, the glaciers are melting and that has caused risks, risks to life and I am here to ask for climate justice.
The people of Juarez in my town, in my community there is a lot of concern about the melting of the glaciers.
There is a lot of concern because there are risk issues and there are other consequences like the water issue.
That is his case, well, RWE, which has never operated in Peru argues a single emitter of carbon dioxide cannot be held responsible for global warming.
Well, I heard what had been going on in court from Noah Walker Crawford, a research fellow the London School of Economics and adviser to the non -profit group German Watch, which has been advising Mr Uya.
The court reaffirmed their opinion they've stated before that companies like RWE Major, greenhouse gas emitters, can be held liable under German law.
So in principle, they say companies can be held legally responsible for their contribution to climate change.
And And from the very beginning, the judge was quite adamant in saying that, you know, this doesn't mean that, you know, individuals, individual consumers could be held responsible in some way, but it's really the large companies like RWE that can be held responsible.
And so this stage is now, this case is now in the evidentiary stage.
So the court is looking at whether there's enough evidence to prove this responsibility, to prove this link between RWE in Germany and the plaintiff and the risk to his house in Peru in this specific case.
And so, you know, what the court is looking at at this point is how high is this risk of flooding that's caused by climate change.
So how high is the risk of glacial lake, outbursts flood?
But it's important to say that even if the case is lost at this point, if the court says that the risk isn't quite high enough.
The court will still put their legal opinion into a verdict saying that in principle companies can be held viable.
Yeah, because people coming from the outside would say, well, hang on, Mr. Yuya, he has a problem in Peru.
There are many companies, many individuals right across the world who are producing carbon emissions.
Why pick on RWE? Well, what the court said today is that there's a legal responsibility, a liability, a balance above a certain threshold so that means that individual consumers, they don't make a meaningful enough contribution to climate change that they could be sued in some sense.
What the court said very clearly is that it's companies like RWA and according to studies RWA is responsible for around half a percent of global historic emissions.
So, this is considered a relevant contribution according to the court, which means that this case, can set a very clear basis for other cases against other companies.
Big oil companies, for example, I don't know, BP or Shell, for example, could end up in the courts on the basis of this decision.
Absolutely. And so that's why there might even be a decision in this case in the next few weeks.
And if one of these cases went through, effectively what would happen is the big emitters would have to pay people like Mr. Uya for the for the damage done to his business.
Yes, yes, absolutely.
And of course these companies have been producing greenhouse gas emissions for a long time.
And for many years they've known and we've all known that this is causing damage.
Now, I mean, I suppose people would say that this has kind of happened before.
I think there was a case against Royal Dutch Shell, a little while ago, in the Dutch courts, which didn't end up going through.
So people have tried this before.
So there was this case in the Dutch courts which was forward looking so this was about the company's responsibility and the future to address climate change and so that case was interesting because the court said that, you know, in legal principle they did think, you know, companies do have a responsibility to reduce their ambitions in line with global targets, in line with the Paris agreement.
But some people will still say, how can you say that one company in another country can be held responsible for what happens to a farmer in a very different country.
There are too many moving parts almost between those two things.
But the science is very clear on this.
So the science of climate change is giving us a better and better understanding of, you know, how climate change is causing impacts around the world.
And in places like Peru, we see it with, you know, increasing extreme weather events, we see it with flooding in the UK, for example.
And the science also gives us a very clear picture of who's responsible for this, of, you know, what are the major contributors?
What are the... Who are the major greenhouse gas emissions?
And so research has shown that it's around 100 companies that are responsible for 70 % of historic emissions.
So that's actually a relatively small number of actors who have a very, very big responsibility here.
Noah Walker Crawford there.
Now, what do you think?
What do you think about testing something before you purchase it?
Do you always try on clothes before you buy them?
Do you feel fruit and vegetables before you hand over your cash?" Well, a consumer protection group in Hong Kong has taken all this one stage further.
They've advised people looking for a new mattress to take an in -store nap before buying.
The Consumer Council suggested having a 15 -minute sleep, urging shoppers not to be shy when testing out a major purchase.
Here's the Council chief Executive, Gilly Wong.
We highly recommend you don't be shy, really have to trial different messages to test out how do you feel after you sleep on it.
We recommend at least 10 to 15 minutes.
Frankly speaking, the longer, the better.
Because when you sleep, sometimes you sleep a few, many hours, right.
So, if the shop allows you to sleep longer, I think you can sleep longer as long as you could.
If the shop allows, indeed, is this in fact reasonable consumer behaviour?
Elizabeth Lloyd Parks is a Senior Lecturer in Marketing at the University of South Wales.
Well, I don't think I'd be able to sleep in a store, but I suppose it's down to the individual as to whether they're comfortable with that or not.
The try -before -you -buy scenario though is nothing new.
I'm giving my age away now but I remembered in the 70s that my mother used to come home from dress shops with clothes that she would have, as she called it, on Apro.
And then was able to return the ones that she didn't want.
It's quite a good system in a way I suppose because you get to know what is, what it is that you really want, what fits, what feels good I suppose, but is it good for the shops themselves?
Yes, I think so. I mean, as far as the consumer is concerned, I think they reduce the risk in the purchase and there's informed decision making going on.
There's some convenience if you are able to try these things on in your own home and also a cost efficiency, you're avoiding purchases that are bad purchases, essentially.
But that translates then for the company.
There's differentiation there.
They're doing something that their competitors are not doing which gives them an advantage.
It lowers the barriers for purchase.
If people are able to try things then potentially you're halfway there.
This is why we see displays in department stores and so on where people are encouraged to pick things up and try things on.
It builds brand trust if the consumer is able to try something and reduce the risk of buyer's remorse, for example.
And then that then builds customer loyalty and satisfaction.
I think one of the other benefits for the company is that if this is done in store, they're able to get really good instant product feedback from the customer, which is something they would normally pay dearly for.
Yeah, it's interesting that point you're making there, because one of the other things where they did, in fact, go back on it, I think was Amazon had an idea of, try before you buy and clothes terms and then rolled it back, it clearly wasn't working for them but that obviously wasn't where they were close -up observing people at the time.
Exactly, I think the benefit of doing it in -store is that you do actually get feedback, you know, if things, I mean it would have been unheard of 20, 30 years ago to buy a pair of shoes online without actually trying them on, but now it's something that people do but we also have to recognise that people will buy styles and brands that they are familiar with, which in turn reduces the risk.
And that was Elizabeth Lloyd Parks, the University of South Wales.
Well, whatever you're resting on, I hope you're resting comfortably.
That's World Business Report.
Asking the right questions can greatly impact your future, especially when it comes to your finances.
So if you're looking for a financial advisor you can trust, certified financial planner professionals are committed to acting in your best interest. That's why it's gotta be a CFP!
Find your CFP Professional at letsmakeaplan .org.
