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This is Andrew Peach with World Business Report.
Today, despite the doubts of some of his own supporters.
President Trump is signing his package of tax and spending cuts into law on the 4th of July.
Meanwhile, time is running out in short for some of the US trading partners to strike a trade deal before tariffs kick in.
We'll be focusing on Japan and the EU.
There are rumours of a skeleton deal which keeps the 10 % baseline tariff.
There's rumours of a 17 % US tariff on EU food that may or or may not be on top of the 10 % or the 20 % baseline tariff.
Later, a battle over the size of cabin bags on airlines.
The cheaper the ticket you buy, the more concerned they are about your personal belongings because, basically, they want to upsell.
And? The latest band making waves on Spotify But are they real?
It is American Independence Day, and amid the celebrations at the White House happening right now, President Trump is signing his flagship package of tax and spending cuts into law.
This bill makes permanent tax cuts introduced in his first term that largely benefit wealthier Americans while slashing support for those who are less well -off.
Here is President Trump speaking a few moments ago.
Ladies and gentlemen, the President of the United States and First Lady Melania Trump.
Well, thank you very much. And that is some sight, especially after what happened just a week ago, when you look at that big, beautiful plane and the other ones were something.
It was an incredible mission.
I just left NATO, where we had a tremendous experience.
They've agreed to put up over a trillion dollars a year.
They went from less than 2 percent to 5 percent, and nobody thought that was possible.
And they told me very strongly, the leaders of a big part of the world, very respected people all, they told me that, you know, one year ago your country was dead and now you have the hottest country anywhere in the world.
So that's the way it is and that's the way we like it.
And it's only going to get hotter.
I promise you that.
The United States military and God bless the USA.
God bless the USA. And to all Americans, I want to wish you a very happy Independence Day.
Happy 4th of July. This is going to be something special.
There's spirit in this country.
We haven't seen anything like it in many, many years and decades.
Now we're still listening to President Trump's speech at the White House for you.
Meanwhile, the US's trading partners around around the world are running out of time to strike those trade deals.
Lydia DePillis is economics reporter for The New York Times and with us live.
Just give us your reaction to what's happening in the White House right now, first of all, Lydia, as this bill finally becomes law.
Well, it's a moment of triumph for the president because it was not an inevitability that it would get done.
It did require a lot of arm twisting, a lot of deal making.
And, you know, I will note that it's something that the president is celebrating, but there are a lot of reservations about what this tax and spending bill is going to mean for the country.
It involves a huge run -up in debt and the deprivation by a lot of people of their healthcare and their food benefits, so it's risky politically for the Republicans as well.
Meanwhile, there's an approaching deadline with tariffs, which has been on the back burner in terms of the news agenda for a little while now, and a lot of countries now scrambling to see if they can beat the deadline and strike some kind of deal with the US.
Yeah, I think there's a lot of feeling of, wow, it's July already.
It's been three months since that cataclysmic reversal in early April that saw stock markets dive and then recover again on the news that Trump had backed off his really steep tariffs on almost the entire world.
So what's been happening for the last three months is the White House has been entertaining obtaining delegations from countries all over the world to try to come to agreements on trade negotiations that the U .S. thinks are more favorable to America.
And it's only had a little bit of success, right?
There was an initial deal with the United Kingdom that allowed for a lowering of duties, but also a promise of higher imports by the U .K. Just recently, there was an agreement with Vietnam, which arrived at actually 20 % tariffs, which are, again, pretty markedly higher than earlier, plus higher tariffs for anything that has Chinese inputs or is simply trans -shipped through Vietnam from China.
And, you know, that, and then there was a de -escalation with China.
But other than that, these negotiations have fallen far far short of what has been promised, despite many rumors along the way.
OK. I'll tell you what, Lydia, just stay with us for a sec.
We'll come back to you in a moment or two.
Let's focus on the EU for a minute or two.
No deal there yet. Tonight reports that the EU Commission is being threatened with a 17 percent tariff on food exports.
This is the EU Commission President Ursula von der Leyen speaking earlier, saying that the EU is ready for an agreement, but a detailed one is impossible at this stage we are aiming at the 9th of july um it's a huge task because we have the largest trade volume globally between the european union and the united states 1 .5 trillion euros very complex and a huge quantity um and uh indeed what we are aiming at is an agreement in principle.
Because I'm in such a volume in 90 days, an agreement in detail, impossible.
David Hedig is a trade export and UK director at the European Centre for International Political Economy.
I asked David what he made of the speculation about this 17 % tariff on agriculture and food exports from the EU to the US.
There are rumours of a skeleton deal which keeps the 10 % baseline tariff but doesn't really do much else.
There's rumors of a 17 % U .S. tariff on EU food that may or may not be on top of the 10 % or the 20 % baseline tariff.
What we learned really from the U .K.-U .S. talks was not necessarily to believe any of the gossip in the run -up to it because the final deal didn't actually include many of those items that had been discussed.
So, I think the same applies with With the US and the EU, it's not really clear either side quite knows what they're dealing with.
So there may well be more rumours to come.
And that's true even if the rumours are really informed and from credible sources because they can be being used as part of the negotiation, right?
Rumours are normally a part of trade negotiations as it happens.
There are folk who are briefing other folk in the hope that that will in some way help them to get what they want.
Ultimately, though, there's only one decision maker on the US side, which is President Trump.
There's no reason to believe he's made his decision yet with regard to the EU.
Therefore, this is more likely to be people under President Trump or just anybody on the EU side speculating rather than having a very firm idea of what will happen.
I mean, there's every incentive for both sides, certainly every incentive for the EU to want a deal.
So what's getting in the way?
The EU and the US, that is the world's largest trade relationship.
one and a half trillion dollars.
So this is big money at play.
Really important that they get a deal.
Otherwise, trade is going to be affected.
What's getting in the way is mostly on the U .S. side, because only Trump can really speak for Trump.
Even his cabinet are restricted in what they're actually pursuing.
When we saw the deal between the U .K. and the U .S., it was entirely dictated by Trump, as far as we can tell, at least the headlines of it.
So that's predominantly what's in the way.
But equally, the EU is struggling to find a position to deal with Trump this time round.
It prefers an orthodox negotiation, traditional free trade agreements, and that's not what Trump wants.
Unfortunately, it's not clear what he does want, but he doesn't like the EU.
So, taking all of that together, there's a problem for the EU and a problem for this trade agreement negotiation that, so far, the main players have been unable to overcome.
Is the problem the starting point in this relationship, which is Donald Trump saying the EU's been ripping the US off for years and that needs to change?
I think the starting points are very difficult because Trump doesn't like the EU.
you the EU has a surplus in trading goods with the US which Trump doesn't like there appears to be absolutely no personal chemistry between President Trump and Ursula von der Leyen they have maybe met a couple of times on the margins of other events whereas Trump likes to do things one -to -one that's a lot to overcome in this particular instance that's David Hennig from the European Centre for International Political Economy still with me Linda De Pilles from the the New York Times.
Give us a sense of the importance of this trading relationship between the US and the EU, Lydia.
Yeah, it is quite large.
And in certain industries in particular, so the biggest import category from the EU to the US is actually pharmaceuticals, and then cars, and then steel, right?
And all of those are sectors that have separate goods specific tariffs on them, aside from these quote, unquote, reciprocal tariffs that are the subject of this July 9th deadline.
So that's part of the difficulty here, is that the White House is trying to preserve its ability to impose those goods -specific worldwide tariffs, and so countries are not sure if this immediate negotiation will protect them from those kinds of tariffs being imposed later on.
Let's turn to the US -Japan relationship now.
Talks there seem to have stalled.
Donald Trump has been complaining about the lack of US -made cars in Japan.
He's also upset about rice.
The president's suggesting that negotiations with Japan are effectively over and there'll just be a letter setting out what tariffs Japan will have to pay.
Hosok Lee Makiyama is a senior fellow at the London School of Economics and previously advised the European Commission on trade negotiations with his native Japan.
I got his take on why the talks between the U .S. and Japan seem to have soured.
I've heard, actually, U .S. officials say informally that Japan is one of the worst in class, which is actually quite surprising, considering how smoothly and well they are usually negotiating, and especially on commercial issues.
But this is where we are at the moment, I'm afraid.
And do we know what the sticking points are?
There are several elements.
So first and foremost, perhaps we should mention that Prime Minister Ishiba is facing a very, very difficult upper house election on the 20th this month, which puts quite severe limitations on what he can offer.
And he has also pledged that Japan will never concede under his leadership to US pressure.
So all politics is domestic.
And this is very much such a case.
One of the persistent rumors, is that actually that there was a deal, at least from what Japan understood, that Japan pledged to invest more into the U .S. economy, create new jobs.
And indeed, the Japanese auto industry, not least, is one of the biggest employers in the United States.
And also, we should remember that Nippon Steel had made a friendly offer for U .S. Steel and was was very much deemed as the only one who could actually save the US deal, and a deal that has been held off.
So there seemed to be an understanding, at least on the Japanese side, that there would be no tariffs imposed on Japan, considering these must be for a direct investment that was being planned.
And that was clearly from the US side, not a commitment.
The other thing there was a lot of talk about at that meeting in Washington was about energy and about LNG, liquefied natural gas particularly.
Is that something that's still part of all of this?
Well, there are many ways that you can try to offset a trade deficit between the United States and another country.
And indeed, Europe and other countries have also pledged to buy LNG from the United States, as the United States is currently a net energy exporter.
And this is something of a win -win, I would say.
But in the end, that is not enough to close the gap.
And also, one of the things that the United States is insistent on is market access.
And one of the major sensitive issues is about autos.
One thing that's really united the US and Japan is mutual interests on defence.
Where are we with that?
Japan and the United States have one of the very few ironclad security pacts on this planet.
it. And it is indeed true that defense spending has been put on the table, not least by the Europeans who have promised to increase the defense spending to 3 .5 % of GDP.
That's something that's very difficult for Japan to do because if you actually measure by central government spending, Japan already spends almost close to 9 -10 % of its annual budget on defense, which is very difficult to even boost and Japan already has a debt ratio that is higher than most countries it's over 200 percent of GDP at the moment and it just just so happens that because of how the Japanese economy is structured that it just comes out a very low GDP to defense number so that's the problem.
Personal chemistry always seems key to relationships with Donald Trump Trump himself, and therefore possibly to negotiations with the US.
There's also something in Donald Trump that likes a winner and might smell weakness around Prime Minister Ishiba, who's under such pressure at home.
I'm not so sure if that's how President Trump is reading the map.
And also, I would like to insist as someone who has dealt with commercial negotiation appreciation much of his professional career, that personal report is very often overrated.
And in the end, personal report on its own will never close a trade deal.
That's Hosok Lee Makayama from the London School of Economics.
Just to update you on the picnic at the White House on the 4th of July, President Trump has just signed his tax and spending bill.
He's holding it up for the assembled crowd and the cameras right now.
We're getting reaction, not only to that, but also to the impending deadline about trade negotiations with Lydia DePillis from The New York Times.
Do you think this impasse between the US and Japan is likely to be unblocked in the coming days?
It's really hard to see, especially given those pending elections, like who has a negotiating position when, you know, you're not your party potentially may not be in power in the following month.
Also, I had the important thing hanging over a lot of of this is that there's still a court decision pending on whether the White House has the authority to impose these emergency tariffs that have been imposed on a national security basis.
So if you're another country, a negotiating partner, you really want to wonder, should I make a commitment that maybe requires concessions if the US isn't going to be able to upend its part of the deal?
Lydia, thank you so much for being with us.
Now, as we heard earlier, One country that has got a deal is Vietnam.
Let's get a sense of how important that is for businesses in the country.
We've been talking to Hao Le, who runs the Vietnamese company SHDC Electronics.
They sell $2 million worth of phone and computer accessories to the U .S. every month.
Trump's new tariff plan on Vietnam matters a lot to my company.
To be honest, it's about survival.
If the tax is 20%, we can still manage even though it's not what we are hoping for.
Right now we are waiting to see the exact number of electronics.
I heard it may be from 10 % to 15%.
We are also watching how the US deal with another companies like India, India, Thailand, Malaysia, and Philippines.
If the tax rates are the same or higher than us, we expect to get more orders from the US.
For our company, over 90 % sell revenue from the US.
We love to expand to another place, but not easy.
At the end of the day, we just want to make good products and play fair.
More twists and turns in these trade negotiations and potential tariffs imposed by the US to come.
Stay with us on World Business.
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That's odoo .com. It's Andrew Peach, keeping you company on the BBC World Service.
Next to the airline Ryanair, which says it's bringing in new rules on how much cabin baggage passengers are allowed this after european lawmakers decided to regulate how much hand luggage should attract no extra cost simon calder is travel correspondent for the independent newspaper in the uk and tell me more ever since 2006 when budget airlines started charging people for checking in baggage there'd There have been kind of cabin baggage wars going on, basically with the airlines progressively shrinking the amount that people take on board and charging them if they want to take any more.
Now, the European Parliament says this is very anti -consumer.
They have been demanding that the airlines are obliged to take people with two pieces of cabin baggage, one a kind of backpack size and then one a small trolley bag, one of those wheel along bags.
They say it's, according to some of the proponents, it's a basic human right to be able to do that.
And therefore they are progressing with legislation, which is at the moment being the trilogue stage, which is a part in the very long European process.
The airlines very much hope that they are going to be able to head this off because they say, if you allow everybody to take two bags on board we will take a financial hit of course but more to the point the poor old consumer is going to find that their planes are late because everybody's fussing about trying to get their bags on and also people will be paying for stuff they do not need but the current system is also penalizing the the poor old consumer because it it means that airlines can advertise these very cheap flight tickets and it turns out but you've you've got to pay extra for this,
that and the other, including taking your stuff.
Well, yes. And I think the airlines, to some extent, have brought this upon themselves by, exactly as you say, I can buy a cheap flight from the UK to somewhere in Europe for, say, $20 and it's going to cost me another $20 if I have the temerity to want to take something bigger than a small personal backpack.
Now, over the years, I've got quite accustomed to doing a a week just with the minimum baggage and doing laundry along the way but that doesn't suit many people um although easyjet which is the uk's biggest budget airline says that two out of five passengers are perfectly happy just with their small personal item and that it would be an outrage to make them pay for more and what about ryanair because it does have changes planned in line with what the EU is talking about well the airlines and there's a big trade group called airlines for Europe they are determined to see off this European legislation and the way
they intend to go about it is by I was going to say pretending to be nice by being more kind towards their passengers so what they've come up with is a new set of baggage dimensions which they say are a kind of minimum maximum if you've got a bag measuring 40 by 30 by 15 centimeters you're guaranteed to be able to bring it on board and put it under the seat in front of you whichever airline you are on now as it turns out all the airlines have different bigger sizes than those except for Ryanair and it's actually had to increase one dimension of its bag size by five centimetres, two inches, so it's
a bit of a bonus. And how does this all compare with other parts of the world?
Well, in the US, almost all the so -called legacy airlines make it perfectly possible for people to take a roll -along case and a personal backpack, and that is the norm.
Elsewhere around the world, it's just all over the place.
Australia, I've been caught out at the gate and fine $75 for having the temerity to have just a little bit too much baggage and it really depends generally the cheaper the ticket you buy the more concerned they are about your personal belongings because basically they want to upsell they want you to spend more money on baggage to get them to be able to make a profit from taking you along Simon Calder travel correspondent for The Independent Let's talk about Velvet Sundown, the latest AI -powered band making waves on Spotify.
850 ,000 monthly listeners, despite having no known members, having done no live performances, made no public appearances.
The mystery sparked debate about the future of music and the age of artificial intelligence.
Ariana Odell is a music and tech journalist in New York with us live on World Business Report.
so i suppose the fundamental question here is are velvet sundown real ariana and that is the true question but as someone who has listened to and created ai generated music this is simply a hoax that is taking the internet by storm and there's likely two musicians sitting in their basement laughing at everybody who is so concerned about if this is real or if it's not when it's it's clearly AI generated.
Okay, so how has that been possible, then not so much to create the music that we heard a bit earlier in world business report, but to give it so much traction online?
Definitely, I would say anyone with a marketing sales technology background can very easily game the music industry.
Myself as a songwriter, I've been also able to generate millions of streams just based on being able to target ads, being able to game the algorithms with different pieces of content.
so I would say this is somebody who has an expertise in technology and they know exactly what they're doing and they're likely sitting at home laughing let's just take a quick listen to what we're talking about so artists and critics are obviously worried that if you can create the content and promote the content without any humans involved could be very profitable but also So it spells the end of creativity or is going to really limit musical creativity.
I don't believe that's true.
If you look at people using chat GPT today, many people can easily identify what is being AI generated and real thoughts, real text is rising to the top while the AI generated text is falling to the bottom.
And I believe that is what we're going to see more of with music in the near future.
AI is going to become a tool where we can create different sonic experiences, but it's It's not necessarily going to destroy creativity.
I believe people who think that actually need to get a little more competitive edge to be able to stay relevant in an industry that is constantly changing.
AI isn't something that's new.
This has been around for 10 plus years.
It's only slowly starting to infiltrate consumer circles.
So whether it's your banking or whether it's how your mobile phone app works, AI has been around for a long time.
It's just a hot topic right now that everybody doesn't know how to navigate unless they have done in -depth research on it.
Right. But so there is music that, you know, perhaps it's in the background, in the lift or in a shop or somewhere where the AI stuff would work.
And at the moment, people have made money from creating that sort of thing.
Yes, so you can make money with AI generated content as well.
I personally believe that the artist should be credited.
The artist should be able to gain some of that cash flow.
So legislation is going to need to be developed.
developed you've already seen the artists like Elton John, Dua Lipa who have been trying to push forward legislation around AI so artists aren't getting taken advantage of but in the meantime I think this is a new gold rush where people are quickly capitalizing on it you've seen with quite a few bands.
Arianna thank you very much indeed for that.
Now while we've been on air President Trump has signed his big beautiful bill of tax and spending cuts into law at the White House this is what he had to say about the US economy.
Trillions of dollars are pouring into the United United States for investment purposes.
Almost $15 trillion has never been anything like it.
There's never been anything even close.
The stock market's at an all -time high.
Jobs are at an all -time high.
Everything's at an all -time high, and we're going to keep it that way.
We have the greatest country in the world, and we're back.
American independence celebrations at the White House.
And from me, Andrew Peach, and the team on World Business Report, thanks for listening.
