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Hello and welcome to World Business Report on the BBC World Service.
Will Bain with you today.
Great as always to have your company on the programme.
Today, what would country -by -country tariffs promised by President Trump really look like and what impact would they have on all of us around the world?
We'll be taking an in -depth look at just that in just a moment.
Also on the programme today, we'll hear about a meeting of African leaders to discuss alternative sources of healthcare funding to try and plug some of the shortfall left by the pooled USAID money.
And why big -name investors in the US and India seem willing to pay big bucks for a slice of British cricket.
When you look at Manchester, it is a global sporting hub.
It is one of the top five sporting cities across the world.
Yeah, more on the latest big investment announcement into cricket's 100 competition here in the UK.
before we leave you today on World Business Reporting.
We're going to start where we began the week, talking tariffs once again.
But this latest announcement could, and that's going to be an important word in the next conversation, and every time we talk about potential tariff policy going forward, be the most far -reaching so far.
As Andrew Peach and the team explained on Business Matters, President Trump directed his top trade advisers to come up with new tariffs on a country -by -country basis in retaliation for levies, regulations and subsidies deemed unfair by the Washington administration.
We wanted to take a bit of a step back here on World Business Report and look at how that might work in practice, what that would mean, both to lie about trade and what you need to know about it, a book coming out pretty soon.
It's going to be a pretty timely release, I think, Demetri, also a former international trade negotiator himself, and Shanti Kellerman is also with us, as always, on a Friday, Shanti, the chief investment officer at M &G Wealth here in the UK welcome both Dimitri first of all um can we do a bit of jargon busting
to start with reciprocal tariffs just be really clear about what we mean here well what the words mean we can never be quite clear what the Trump administration means by any particular word but what the word the idea of the word is that if your country has tariffs at a certain level on a certain product
that that hit the US so let's say it has a 10 % tariff on cars that US car exports are affected by the US will then slap the same tariff on your cars heading to the US.
So it's the idea of matching one to one.
Now, they have also now broadened that definition to say that the reciprocity will go beyond just what your tariffs are into the general vibes of how annoying your policy settings are for the US administration and US businesses.
Right. So that could include things like tax breaks, say, to green industry or whatever, things like that.
Or just having a – they have a bee in their bonnet about VAT taxes.
They have a bee in their bonnet about subsidies, levels of regulation on things like plant and animal health.
It could really be just about anything.
Right. And to be clear, at the moment, from the way we understand this, right, this should be product by product.
It wouldn't be, you've got 10%, to use your example, on cars, so we're going to put 20 % on wine.
It would just be on cars, or are we not that clear on that?
So at the moment, the president has directed his officials to come up with a plan to address injustice, I guess.
And we don't know exactly how it will work or what it will target.
it. Certainly, as you said, you could see it as simply be a kind of product matching thing, but that wouldn't necessarily make a lot of sense, because some countries will have high tariffs on US things that they don't export to the US.
So tariffing those wouldn't address the core concern of US business.
And so it's not exactly clear what will happen.
The first draft of it is kind of, as you said, product by product mirroring, but it could really be anything.
And sorry, I was just going to ask you as well to that as well.
Are there things, you know, you give an example of things that people aren't exporting at all to the United States.
What about things where the U .S.
actually has higher tariffs on them?
Industries, a few of those, aren't there?
Sugar is one that we were looking at in our team this morning where there's very high tariffs at the moment on refined kind of sugar products coming into the U .S.
to protect those growers in southern states, in the United States, for example.
Just one example. yeah and light trucks is the obvious one the u .s constantly talks about the auto tariffs which in the u .s are about 2 .5 percent and in europe at 10 but the u .s then has a light commercial vehicles uh tariff of 25 percent so it's these kind of things where exactly as you're saying their
their imbalances don't fully make sense shanti coming at this point as well um in terms of market reaction so far i guess that the most pronounced moves have we seen and can and can we directly link them to this, have been in commodities, things like metal prices, right?
Yeah, I mean, there's a bit of, we saw some of the autos in Europe go up this week.
And I think that was because some of the reciprocity stuff is so vague, and it looks kind of infinitely negotiable and also, you know, not coming till April.
So lots of time. So I think in that sense, it looks, you know, we don't we don't have any bad news yet.
So let's, you know, let's not jump to that.
So I think it's better than feared.
It's probably going to change a lot.
And I think the way we had the, oh, we're having tariffs on Canada, Mexico, and then it came off.
I think you might start to see some less severe reactions, because people will just start to believe it's not going to happen.
Yeah, a don't chase every headline kind of case.
Exactly. Yeah, we'll come to a bit more perhaps of the potential impact if it's taken, as Dimitri says, to its logical conclusion in a moment.
But before we come to that, Why don't we hear from a part of the world that is concerned or could potentially be concerned?
Because we called up one of our Business Matters regulars, Nga Pham, a Vietnamese journalist.
Vietnam, a country that runs a significant trade surplus with the United States.
And so Nga told us a little bit about what she was hearing on the ground back in Vietnam.
So I was in Vietnam just two weeks ago, and everyone was talking about what's going to happen once Trump decided to impose heavier tariffs on Vietnamese imports.
Now, we all know that Vietnam runs a huge trade surplus with the United States, something like $120 billion last year, which is a record number.
And the Vietnamese obviously interested to keep it that way.
I mean, they benefit a lot from the US market, from the globalization and increased trade with not only the United States, but other countries.
You probably know that Vietnam and the United States established the Comprehensive Strategic Partnership last year, and they bang on goodwill and cooperation from the US administration trade with not only the United States, but other countries.
You probably know that Vietnam and the United States established the Comprehensive Strategic Partnership last year, and they bang on goodwill and cooperation from the US administration, from the Biden administration, and they also hope something similar from the Trump administration.
But it doesn't look that way at the moment.
Let's split them up if we can now.
We'll come to what companies perhaps are doing or what they can do in a moment.
But from a policy perspective, what are the government talking about doing?
What can they do? So now it's dawn to Vietnamese producers that the tariff of 25 % is going to be imposed on Vietnam steel and aluminum.
But Vietnam is actually quite well prepared for that tariff.
I think from 2018, Vietnamese steel products already have been under that tariff of 25%.
So that new tariff, it only applies to aluminum.
And I think producers in Vietnam now are quite happy to accept that, thinking that they can survive with a smaller margin of benefits.
But of course, you know, people are talking about now we have to negotiate with the US, we have to discuss with them how to lower tariff on other items.
From when Trump promised a 10 % tariff on Chinese products, Vietnamese producers actually thought that they could benefit from that because manufacturers from China would probably move to Vietnam to avoid that high tax.
But now it seems that the Vietnamese manufacturers also have to bear the tariff.
So I think that the companies are pushing the government to open discussion with the US and other negotiation channels in order to get some kind of favourable conditions for them.
And what about the prospect for some of those companies, in particular, perhaps, American companies that had moved some of their supply chain to Vietnam?
Is there a risk now that companies like Nike, for example, who had moved a lot of work there, now move it on again to somewhere else if there are blanket reciprocal tariffs, as the president is talking about?
There is, of course, danger of them doing that.
But I mean, you've got to remember that to move such a large facility like the Nike factories in Vietnam, for example, But it's not a simple task.
So you've got to prepare the land.
You've got to prepare facilities and human resources.
Working resources is also a problem.
So I don't think it's as simple as they can switch from Vietnam to another country like overnight.
That is a subject to discussion as well with the Vietnamese government.
The Vietnamese government, I think, now have said that they are going to open their market more to American products.
And hopefully with that, you know, that is enough for the US strategists to think of discussion as well with the Vietnamese government.
The Vietnamese government, I think, now have said that they are going to open their market more to American products.
And hopefully with that, you know, that is enough for the US strategists to think twice about higher tariffs on Vietnamese products.
And, yeah, the government seems pretty bullish still, doesn't it?
It had its growth forecast out for GDP growth the other day and still think that's going to grow very healthily.
It seems like the government, at least, are confident they can ride out whatever storm might be coming.
You're right. I mean, they set a very ambitious target of 8 % actually for this year and with the expected inflation rate of something like between 4 .5 to 5%.
Extremely ambitious.
But, you know, I don't really trust their targets very much.
At the beginning of every year, the government set really, really high bar for the whole economy.
But how are they going to carry that?
Nobody knows. I've spoken to quite a few analysts in Vietnam and they all say, you know, 8 % is just imaginable.
It is quite unachievable from their point of view.
Big thanks to Vietnamese journalist Nha Pham there who stayed up late on a Friday night to speak to us a little bit earlier on.
Shanti, interesting couple of thoughts in there, weren't there?
I guess the nimbleness of big corporations, globalized corporations that have learned how to deal with this stuff over the years and much more kind of suppleness in their supply chains perhaps now than maybe 10 years ago.
Yeah, I think you've seen people moving supply chains out of China, but often going through those places like Vietnam.
I think there's also this kind of political element if they want to have, you know, want to have factories in lots of different places so that they've got leverage with governments in those different places to help them with those negotiations.
And you even see that, you know, in the U .S.
locating in states that are politically important.
So they have leverage with the senators.
So I think that's a trend wanting to have those diverse supply chains will continue, but it does increase costs a bit for companies.
And I think that's where you do see a little bit of those worries about inflation and tariffs coming in.
Yeah. And from a government's perspective, Dimitri, similar type of rule, right, is it now for them as well?
Be more nimble than you were and have a plan and have it early and respond quickly, as Nga seem to be suggesting the Vietnamese administration might be already.
yeah absolutely i think the biggest change has basically been that you can't you can't predict what's coming uh and you can't take the status quo for granted and so you need to have a plan firstly for how you're going to engage with the u .s if you find themselves in their firing line and a lot of analysts
and i'd say myself included are looking at the current u .s exercise as drawing up a set of grievances that they can use against anyone.
So rather than a blanket attempt to put tariffs on everyone in a reciprocal way, they will instead have a laundry list of individual grievances with individual countries they can reach into and have a basis for tariffs.
So in that case, you need to have a plan for if you get targeted.
And that plan has to be both how will you engage with the US?
are you able to muster any kind of counterpunch or offer to buy them off and how are you going to support your own firms and tell a positive investment story about your country in the face of global uncertainty and i know we keep using the word having to keep using the word if shanty but if those sort
of plans start to play out in the next six to nine months and that inflation as you talk about then becomes really kind of quite a real thing in the front of mind right around the world, doesn't it?
Let's go to America first and then the rest of the world.
What is the kind of natural conclusion in the short, medium and long term of this policy?
What are the steps of the outcome, I suppose, from the administration's point of view and what you see as what might be the outcomes along the way?
Yeah, so I think it would obviously take a knock a little bit from economic growth because people in the US would be able to buy less because things would be a bit more expensive and people in the rest of the world will be making a bit less because there's a bit less demand for their products.
So that, you know, hurts the economic growth a little.
It boosts inflation a bit.
But longer term, you actually, this would probably be slightly deflationary because people's spending power goes down and inflation is all about that year on year percent change.
So you'd have that initial jump in inflation but then probably a year afterwards, you'd start to see, you know, inflation level out or even fall because people just aren't going to have the opportunity to keep buying.
Yeah. And presumably that lack of consumption then has its own potential economic impacts, right?
It does. And so it means economic growth is a little bit lower, probably impacts company profits a bit.
And that's why you do see equities go down a bit when we start talking about tariffs a lot, because if economic growth is lower, company profits are hit, you know, there's less money to return to shareholders.
And I think it's not, you know, having that kind of extreme scenario where we do have tariffs anywhere and everywhere is not really priced into equity markets at the moment.
And Dimitri, in terms of the rest of us listening everywhere, barred the United States, we've heard it sort of predicted at the end of globalization, new trading order, when all these things kind of happen, COVID or the first Trump administration.
But is this, do you think, likely to drive a fundamental shift in how, I guess, different parts of the world trade with each other, South Asia and Europe, South Asia and Europe, East Asia and Europe, for example?
I don't think we're anywhere near that stage yet.
First, I think markets do tend to have something of an optimism bias in some ways, and they're inclined to look at this and think perhaps this too shall pass.
He will not presumably be president forever, and there may be a return to normalcy.
And secondly, as was said earlier, the costs of this kind of decoupling are absolutely staggering.
We are talking about trillions and not single digit trillions to fundamentally decouple what is a regionally integrated and in a lot of ways, globally integrated economy.
And businesses are going to think many, many, many times before they pull the trigger on that kind of thing.
Imagine he's got a whole chapter in your book, has he, President Trump?
Or did he miss the edit?
the book was written the book was written before his second i think i suffer from an optimism bias too so he's not mentioned all that much well thanks for bringing that to uh the program today great to have your company as always drmitry grzybinski they're the author as i said that our book due to come
out soon why politicians lie about trade and what you need to know about it sure going to be a must read and big thanks too as always to shanti kellerman chief investment officer at mng wealth you're with wild business report on the bbc world service Hi, this is Jenny Garth from I Do Part 2.
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Now African leaders are arriving in Ethiopia for the annual African Union Heads of State Summit and Rwanda's President Paul Kagame is hosting a meeting on Friday to discuss alternative sources of healthcare funding for Africa follows of course another Trump -based story, the freezing of USAID funding
on the continent. Dr Jean Kaseya, Director General at Africa Centers for Disease Control and Prevention spoke to us about those challenges from the conference in Addis Ababa.
This meeting, the initiative was taken in October.
It means before even the decision from the US and other countries.
It was taken after my meeting with President Kagame, who's our champion for domestic resources, to see how to provide more funding system in Africa.
Does it take on increased significance now, though, knowing what we do, the timing seems apt doesn't it yes we can say this is a timely meeting because it came when we saw a number of partners decided to stop funding to a number of programs in africa and today our leaders they decided collectively to
take strong action to increase domestic resources and to reduce dependence to external funds what does that strong action look like What kind of things?
It's a combination of a number of actions from increasing the health budget, second, for putting in place some taxes to create innovative funding, and also for providing some innovation, the innovative approach for Africa CDC and other health organs of the African Union to get funds.
And what about barriers in terms of moving things, moving people, rules, regulations?
I'm guessing those kind of things will be on the table once again as well.
Yes, what our leaders did, it was first to open the door for this kind of topics.
And, you know, it was not common to discuss innovative financing mechanisms.
Now they decided to put in place a committee of AU, Africa CDC, AUDA NEPAD and African Medicine Agency to see together to develop with some experts a concrete plan how we can now start to raise this fund.
You need a bit more than a plan, don't you?
You need action pretty quickly.
I mean, we've heard from agencies already on the programme saying that's it.
you know the money stopped coming in already yes we are not talking about something that will happen in in one year no we are talking for an action that must be taken now let me tell you next week we are meeting we already have planned we have investment case it just to translate this political vision into
concrete action um and it's obviously not an ideal set of circumstances but But in a strange way, Dr.
Kesea, is it what you all needed, kind of a focus to work together better, to really energise that cross -border working, to kind of bring people tighter together, to find African solutions for Africa?
You know, a challenge can be an opportunity.
For us in Africa today, decisions from our partners is a major opportunity.
You might be feeling a bit left alone at the moment.
Let me also tell you that on top of that, the African Union approved what we call the African Epidemic Fund.
The African Epidemic Fund under the leadership of Africa CDC is the vehicle that will start to get funding from our member states and from our partners.
Today, during this meeting, we got some member states and partners pledging money to Africa CDC.
I think we start to become ready for another outbreak with this action we are taking.
That's Dr Jean Kesea there speaking to us from the AU Conference in Addis Ababa, Ethiopia.
Jean Kesea, the Director General of the Africa Centers for Disease Control and Prevention.
Let's shift to the UK and a subject close to my heart and our senior producer today, James Wickham's as well, cricket.
As we mentioned on the programme a couple of weeks ago, English cricket's governing body has been selling off stakes in the city -based franchises that make up its 100 competition.
Hoping to inject some much -needed cash into cricket here in the UK and fight back against the megabucks of India's Premier League, the England and Wales Cricket Board can surely scarcely have believed how well this process has gone so far for a competition that's not always had a smooth run at home
in terms of with the sports purists.
The eight teams have seen investment roll into the tune of more than a billion dollars with big names including India's richest family, the Ambani's, the former NFL superstar, Tom Brady, and the chief executive of one of Silicon Valley's biggest firms, Palo Alto Networks, just some behind some of that investment.
And more announcements today at Manchester's Old Trafford Cricket Ground, just over the road from the home of Manchester United, where Stefan Shelmont, the BBC's chief cricket reporter, has been today.
Stefan, thanks for being with us on the programme.
Hi, how are you doing?
Yeah, really well, thanks.
First of all, give us a little bit about, for listeners who've never watched any cricket before, This competition, the 100, what is it and why does it exist?
And then perhaps take us to what you've been chatting about today.
Yeah, so I guess maybe some people think of cricket played in white clothes with a red ball over a number of days, but the 100 is cricket, but shorter and faster.
Coloured clothing, white cricket ball.
Maybe someone's familiar with the idea of T20 cricket, so a 20 over a side match, while the 100 takes that a stage further, They've played just over 100 deliveries, 100 balls per side with the idea of fitting the whole game into two and a half hours.
In England, we're used to county cricket.
That's who competed our county championship.
But this is not played by county.
It's played by cities.
Eight new teams were created when the 100 began in 2021.
And a unique element about it is the joint nature of it as well.
Men's and women's competitions cricket, so a 20 over a side match.
While the 100 takes that a stage further, play just over 100 deliveries, 100 balls per side, with the idea of fitting the whole game into two and a half hours.
In England, we're used to county cricket.
That's who competed at our county championship.
But this is not played by county, it's played by cities.
Eight new teams were created when the 100 began in 2021.
And a unique element about it is the joint nature of it as well.
Men's and women's competitions running side by side.
So if you were to go to 100 game, you'd see two games in a day, a women's game and a men's game as well.
And you've been chatting to the latest to invest.
This is more Indian investment, and perhaps we'll come to that after we hear about some of their reasons.
But Indian and American investors have been a big part of this, haven't they?
Absolutely. And these investors, they're spending a lot of money.
Eight franchises were owned by the ECB, but they've sold their shares in teams to raise money for the game, hopefully boost the quality and profile of the competition.
Vast, vast sums as well, way more than we imagined.
London Spirit at Lourdes, well, they were valued at £295 million a loan.
In total, £550 million going into the English game, the counties and the grassroots.
And some people are wondering, what are these people buying?
The hundred teams, they exist almost of nothing, a name and access to a few cricketers for a few weeks in the year.
But this is huge business.
We're talking about the CEOs of Google, of Microsoft, the Ambani family linked to the Reliance Group in India.
Serious business people, they expect to return through future TV rights and commercial revenue.
And Shashwat Goenka is the vice chair of the RPSG Group from India, own teams in India and South Africa.
The RPSG Group have paid around £80 million for a 70 % share of the Manchester Originals.
and Shashwat Goenka explained why his company is investing.
For us as an RPSG, our investments in sports are an important part of our growth strategy.
Fundamentally, we believe sports is the single biggest thing that unites every person in the world.
And when you look at it from a cricketing standpoint, it is one of the only sports in the world that has the kind of viewership that it does globally across race, caste, culture, religion, any of that, right?
Sports today is becoming a huge space for investments.
And more importantly, when you look at Manchester, it is a global sporting hub.
It is one of the top five sporting cities across the world.
It is a city which has a huge sporting hub.
And so clearly, Stefan, they want, as you say, returns for that.
That presumably means expansion and expansion of those TV licenses that he was talking about as well.
Those TV viewers.
