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Hello and welcome to World Business Report from the BBC World Service.
I'm Sam Fennec. Coming up today, the US and the EU have struck a last minute trade deal.
But is it fair? European exports face new tariffs while US goods entering the European area will be tariff free.
We'll hear from a former EU trade commissioner who says Brussels have got the deal wrong.
And as England's lionesses are crowned European football champions for a second time.
We look at the unstoppable rise of women's football around the world.
First, then, the EU and the US have reached a last -minute trade deal, avoiding steep new tariffs.
Instead, they've agreed a 15 % rate, better than the 30 % the US had threatened, but well above last year's average US import tariff of just 2 .5%.
The agreement brings some clarity for European exporters of cars, chemicals and aircrafts, but it falls short of the EU's original push for zero tariffs.
Now, in return, the EU will open its markets to US exports at zero tariffs.
The EU Trade Commissioner Maros Shefcovic said on Monday that this is a good deal.
The world which was there before the 2nd of April is gone.
And we simply need to adjust, we need to address the challenges which are coming from this new approach. And I believe that the strategic cooperation with our strategic partners there is a better outcome than an all -out trade war.
Tarifs more than 30%, huge political tension, lots of SMEs under dramatic pressure and loss of potentially hundreds of thousands if not millions of jobs.
And what would happen after that?
He went on to say that the deal represents the start of a whole new positive relationship between the US and the EU.
It's not only about the trade.
It's about security.
It's about Ukraine.
It's about current geopolitical volatility.
I cannot go into all details, what everything was discussed yesterday, but I can assure you it was not only about the trade.
So therefore, I mean, to have a possibility that the two biggest economies and to close their eyes can openly discuss all sensitive issues and, as I can judge from the discussion yesterday, that are very much aligned on the geopolitical issues of today, I think has additional price.
It has additional worth in having this deal done because I believe that from now we can go only for the better.
Well, earlier I spoke to a former EU trade commissioner, Cecilia Malmström, and I asked her what she thought of the deal.
Is it fair or a worrying sign of what's to come?
Well, I don't think anybody can say it's a good deal.
It's maybe the only possible deal at the moment, but it's not a good deal.
The EU pays a lot for having only 15 % tariffs.
15 % is less than 30%, as was threatened, but it's far more than around 3 % that we had in April.
So it's not a good deal.
And in return, the EU, as far as we know, will open its markets to US exports at zero tariffs.
tariffs yes well i don't know exactly what has been agreed there's a lot of fluffiness in this agreement so far and it concerns non -sensitive products whatever that is i can imagine that if it comes to certain products in agriculture and industry some individual member states might have problems with that and all of them have to agree on this deal so that is a bit unclear so yes but But the EU doesn't get anything in return.
The US doesn't promise to lower their tariffs in a reciprocal manner.
It just lowers from 30 to 15.
But the tariffs on steel and aluminium are still 50%, which is very high.
And we have, like in the UK, I think we have 15 or 16 countries in the EU who produces steel and would be directly or indirectly affected by this.
So it's not a good deal.
And aluminium as well.
That's included within those higher rates as well.
The French have called it a dark day and a submission to US pressure.
Do you agree with them?
Well, I think there's some internal politics in France as well, playing in France has been very active in trying to exempt a lot of their products in the potential retaliation list. But in the end, the Commission had a mandate from 27 countries to negotiate what was possible to do.
Maybe they should have been tougher from the beginning.
I think it was a mistake to withdraw the initial retaliation that was done just after the so -called Liberation Day.
That could have been kept and then you could have kept on talking.
But this is probably what they thought they could agree and they needed to have all the member states on board as well.
And there was a lot of pressure from individual member countries whose industries might be even more affected.
Do you think then it was a necessary compromise to kind of avert any kind of, you know, really nasty trade war?
Well, again, we have avoided a very nasty trade war, but 50 % is still very high and it will affect our businesses, but it will also affect American consumers because they ultimately will have to pay the prices.
it's a tariff, it's a tax, and it's the consumers who pay it.
And also the EU by doing this, but this is what everybody else who has done agreements with the US have agreed to as well.
We are kind of accepting the narrative of the Trump administration that they have been badly treated and that tariffs can be used as a measure of blackmailing or pressure or for all kinds of geopolitical reasons.
And this has severely hurt the global trading system.
You've championed values based on trade.
Can that ideal survive with these kinds of tariffs?
It is harming the EU -US trade.
We trade for 4 billion euros every day.
So it is a tight trading relationship and we will continue to trade.
We are dependent on each other.
There are lots of jobs depending on that trade.
But I think the EU will continue to try to de -risk from the US and try to increase trade with other partners.
with the UK, obviously, but also there are trade agreements now being negotiated with Indonesia, with India, with Malaysia, Thailand, there is a done agreement that is waiting to be ratified with the Mercosur countries in Latin America.
And there's also rapprochement between the EU and the CPTPP agreement that the UK just joined.
And that I think is good, because most countries of the world actually do want to trade in predictable terms with based on rules and norms. And this is shaking it all up.
And it's definitely not good for the trading system.
And it's sort of breaking very important supply chains.
Is there a danger that when you have tariffs going into the US of 15 percent, but no tariffs coming into Europe at all, that actually the European market could get flooded with American products?
Well, there's also a worry that they will get flooded by Chinese products as well, because they can't sell in the US.
So the EU will be very vigilant for this.
But as I said, it has been focusing the last month in trying to deepen agreements or close agreements with other countries in order to diversify the trade to minimise.
But of course, certain sectors, the car industry, the pharmaceutical, maybe some parts of the agriculture and the steel industry will be affected by this on a short term basis at least. And do you think the deal exposes deeper vulnerability within the EU, within its member countries?
Well, every country have their own sensitivities, obviously, and they have been talked upon a lot the last weeks because the Commission has been very eager to have all the member states on board. But I think no country has tried to negotiate on its own.
We have stick together.
So I think it has been a good deal from that point of view that the EU has made it jointly.
jointly. But of course, who knows if it will still be a deal in a week?
I mean, the tariff policy of the Trump administration has been going up and down with new tariffs, with low tariffs, with new deadlines, prolonged deadlines, shortened deadlines.
So who knows? And this is not a legally binding document.
It's a sort of letter of intent or terms of reference.
So it's a vulnerable deal.
But it's a deal. That was Cecilia Mollstrom, former EU Trade Commissioner.
Listening to that That is Peter Jankowski, Vice President of Research and Analysis at Arbor Financial Services, joining us today from Chicago.
Peter, why do you think they made this deal?
Why would the EU agree to zero tariffs on U .S. exports?
Well, it reflects the stronger position that the U .S. had in negotiations.
Exports are, I think, more than 30 % of the EU economy.
And here in the U .S., imports are only 10%.
So a much greater damage to the European Union to a trade war than it would be to the US.
Peter, thank you very much. We'll come and talk to you again about what this deal has done to markets and investor sentiment in just a few moments time.
As we said, US exports into the EU, including things like American whiskey, won't face tariffs under this deal.
And that's been warmly welcomed by the U .S. drinks industry, including Chris Swanger, the president and CEO of the Distilled Spirits Council of the United States.
Chris joins us now.
Chris, for years, distillers have been hit quite hard, haven't they, by EU taxes.
And how have they affected your exports?
Hi. Well, look, on behalf of the Distilled Spirits Council of the United States and the U .S. Distilled Spirits industry, we are thankful that the U .S. and the Trump administration, the EU, has come to a trade deal.
Our industry has thrived as a result of zero -for -zero tariffs between the United States and the European Union.
Our industry is so intertwined together.
But unfortunately, in June 2018, it was the EU that imposed a 25 % tariff on American whiskey.
This was a result in the first Trump administration when the president was leaning in hard on steel and aluminum production in the United States for national security purposes.
And we saw a 20 % decline in American whiskey exports.
And unfortunately, it put the spirits industry in a tit -for -tat tariff posture and really did harm to the European distilled spirits industry, no doubt, and certainly reduced American whiskey exports to the EU for about a three -year period by 20%.
So do you think things will start to pick up or do you worry actually that there might be a bit of a backlash in Europe to US imported drinks?
Well, we certainly hope not because American whiskey and American distilled spirits have become a great favor for European consumers.
Just like in the United States, Americans enjoy great cognac or cordial liqueurs from the EU or Irish whiskey.
And certainly I'm in Scotland at the moment, and Americans love Scotch whiskey as well.
So, you know, from 1997 to June 2018, and unfortunately that was the time when the EU imposed a 25 % tariff on American whiskey, the U .S. and the European Union distilled spirits industry grew by 450 % across the Atlantic for the betterment of both industries that created jobs and economic vitality tied to the agriculture community all the way to the U .S. the great bartenders and then ultimately the consumer so even with those even with those tariffs you're saying that the industry still grew by quite a lot by the sounds of what you were saying well no ma 'am the tariffs uh eu put a 25 tariff on american whiskey
in june 2018 and then and that's when we saw the contract 20 percent decline now thankfully those tariffs have been suspended for quite a while.
And we appreciate that.
And we are anxious and excited about the possibility where in the agreement that was just made between President Trump and the president of the EU, we are hoping that we get a permanent return to zero for zero tariffs.
We haven't been notified yet.
And we're anxious and looking forward to more detail.
Yeah, well, I was just going to ask you that because we heard there from a former commissioner saying this, this might not not be a deal.
We don't know. Given the vulnerability that your sector has had to tariffs, are you pushing for safeguards?
Are you pushing for something written down, guarantees that are written down?
Sole board, our industry, you know, certainly on behalf of the United States, obviously, we appreciate the president's leadership in bringing more jobs and manufacturing to the United States.
But certainly over the last five years, our industry, for the lack of a a better term, has been white knuckle in it.
We've been flying through quite a bit of turbulence and uncertainty.
So the ability to bring this deal together and lock it down will bring certainty to our industry and drive economic vitality, first and foremost, to the American economy.
Chris Swanger, thank you very much from the U .S. Spirit Association for joining us today on World Business Report.
Well, what about businesses in the U .S. which import European European products, Ireland exports more alcohol to the US than anywhere else in the world.
Last year, total exports to the US from Ireland totaled over $900 million.
Anya O 'Brien joins us now.
She is the landlady of Marr O 'Brien.
It's an Irish pub in Chicago.
Anya, thanks for being with us.
So how important then are Irish imports like whiskey, stout or gin to your business?
And what worries do you have now about this new tariff deal?
Hi, Sam, thank you for having me.
I opened a small little Irish bar in the northwest side of Chicago a little over a year and a half ago.
And we really are showing Irish hospitality and bringing a little piece of Ireland to Chicago.
And therefore, it's quite concerning that our Irish products will see these tariff increases.
However, this came about early in the Trump administration.
So we have really thought through our strategy behind how a small little business like this will actually deal with these tariffs.
tariffs exactly exactly strategy well we we're keeping a very close eye on pricing you know across the board and our strategy is that we'll have to increase pricing both on US products as well as Irish products to try and kind of you know make everything an even keel we can't just take on this big price hike on you know we pride ourselves in the perfect pint of Guinness and we can take a massive price hike on Guinness while you know Miller Lite or Budweiser stays the same so So our strategy is that we look at all of our pricing and kind of take in the wave of increase throughout the whole stock
portfolio. You can spread it across.
What changes have you seen in consumer habits?
Do you think that they're willing to pay higher prices?
I think they're willing to pay.
You know, it's quite interesting.
Again, we kind of went through this and we were in panic mode back in March. And, you know, we've seen the pushback and tariffs, pushback and tariffs.
And it seems like we're coming, you know, to the end now and it's become reality.
I haven't seen any major consumer, you know, changes in the last three to four months.
People who want to drink Jameson will drink Jameson.
People who want to drink Tully will drink Tully.
And certainly people who want to drink Guinness and come in for that perfect pint of Guinness want to drink Guinness.
So I don't think it'll change in consumer.
But, you know, there will be, we're in a very small working class neighbourhood.
There will be people who will be looking at pricing and will challenge it, I'm sure, as we move through this.
And just briefly, before you go, Anya, what I suppose has been difficult over the last three months or so is just the not knowing.
At least now you can work with something.
something. Exactly.
I think just not knowing.
It's been quite a challenge, you know, because people are asking, have you put your prices up?
No, not yet. We will put our prices up when we feel like we need to.
We're also very compassionate about us being a working class neighborhood where people work very, very hard for their for their money.
And for their pint of Guinness.
Thank you very much, Anya O 'Brien, landlady there of Mar O 'Brien's Irish pub in Chicago.
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You're listening to World Business Report from the BBC World Service with me, Sam Fenwick.
Now, as I said, we're going to have a look at what U .S. stock futures have been doing and what the dollar has done after the trade deal between the U .S. and the EU was reached.
Investors, it seems, might be relieved.
But what does it mean for markets and the broader economy?
Let's go back to Peter Jankowskis, vice president of research and analysis at Arbor Financial Services, also in Chicago.
So we saw futures jump on the news of the deal.
How much of that is that down to kind of relief of investors?
How much is it optimism about real economic upside?
I'd say it was primarily relief.
As you saw, as the day went on here in the US, those early gains disappeared.
The market was actually down in the afternoon and then rallied back to basically be unchanged.
I think many people were expecting a deal of this sort to come about, certainly after the Japanese deal was struck.
The tariff rate is the same as what was agreed with the Japanese.
And therefore, we did not see a very strong reaction out of the U .S. market.
We saw that the U .S. dollar saw its sharpest one day gain since May.
What's driving that strength?
And could it complicate things for U .S. exporters like people exporting U .S. whiskey?
Well, it certainly will counteract some of the more favorable terms that they have to deal with it, because obviously the price of their goods in foreign currencies will go up.
Overall, today's movement, I think, was just somewhat of a reversal of last week.
Last week, the dollar had weakened somewhat.
Many people pointing to the potential for these tariffs to come into place on August 1st. And now that we see a good piece of that having been taken off the table with this deal with the EU, the dollar has recovered some of those losses from last week.
Well, Peter, I'm going to let you go because you're in Chicago, as we said, the same place as Mark O 'Brien's.
And I can tell you probably after a pint of Guinness, aren't you?
Oh, certainly. Yes, it's a good way to unwind for sure.
Absolutely. Thank you very much for your time today.
Peter Jankowskis there from Arbor Financial Services.
Well, finally today, women's football is enjoying another big moment with England's Lionesses crowned European champions for a second time.
Here are some fans from Newcastle in the north of England.
You should get the same amount of money.
Because, I mean, just because they're women doesn't mean I can't kick a ball about and stuff.
They need a lot more money behind them, don't they, and a lot more support.
It is a different game.
I think when men football and women's football is different, but I hope that they can get up somewhere near to the men's football.
But the spotlight isn't just on Europe from packed stadiums to rising investment.
The women's game is booming globally and its commercialisation is accelerating with brands, broadcasters and investors all taking note.
Andrea Egblad is a women's football consultant specialising in media rights and broadcast strategy.
She's also the former head of broadcast at the Women's Super League in England.
And I spoke to her just as she arrived home from Switzerland.
The plane was packed with England fans, families, men, women, children, all with flags and shirts.
And the smiles on everyone's faces is just something that you want to bottle up and take with you for the rest of your life.
I mean, you talk about wanting to try and bottle that atmosphere, but commercially, the atmosphere will be something that is very lucrative, isn't it?
Oh, absolutely. It's just being on the ground.
You know, the majority of this tournament I happened to follow from England, which was also fantastic to see because really I take a lot of moments to just pause and look back a few years ago and just the extent of the coverage on television, the pre and post match, the halftime analysis, all the dedicated content and podcasts and so forth.
was just not there some years ago.
So there's a lot of development there.
But having been on site in Switzerland, seeing fans on the streets, people paying a lot of money, taking off time from work to go and follow their team, their favorite players, wearing their shirts and providing an absolutely electric atmosphere And then getting the win at the end.
Now, that is something that, you know, you acquire a fan for life and their families.
And, you know, that absolutely translates to commercial success and no doubt that investment, further investments will be pouring in.
And we see this across the globe, don't we?
And especially in the American Women's Soccer League, which are also seeing record attendances.
Yes, correct. So the NWSL and the WSL have been breaking all these records and considered the two top women's leagues in the world.
But what's exciting is that perhaps in different scale, but we've seen over the last few years, attendance records being broken in other European countries as well and other countries.
So there'll be a lot of opportunities.
And what we've seen with the Euros as well is that the competitiveness and nations catching up with each other, the international transfers between countries of these superstars and all of these are showing that women's football is just unstoppable.
Which global markets do you see as the next big growth area in women's football in terms of audience but also potential revenue?
The other leagues and other federations are, for example, we had a big conference.
UAF organised a big conference on Sunday as well where the heads of women's football from everywhere from Mexico to Australia were also present.
And there is a huge amount of collaboration going on as well in the women's football space.
Of course, a lot of investment coming in from the likes of UEFA and FIFA.
There's a lot of lot of investment and commitment going into the women's game.
There's a FIFA programme dedicated.
There is UEFA programme, billion euros investment dedicated until 2030, which was a pledge most recently.
So it's all to make sure that the head doesn't leave the body.
There won't be just some standalone leagues and nations, but that the rest can also catch up.
Andrea Ekblad, the former head of broadcast at the Women's Super League in England.
Peter Jankowskis is still with us.
We heard there from Andrea just how much money is coming into the women's game across the world, but it still needs a lot more investment, doesn't it, if it's going to try and compete with some of these male dominated sports.
Indeed you know I think you will see that investment though simply because the licensing fees for those other leagues have gotten so high and programmers are always looking for additional content and naturally that's going to stimulate some bidding wars for some of these newer leagues that are coming in and women's sports also.
Do you think it looks good for investors to be investing in women's sports?
I think so. I think so.
You know, there's certainly they have a very broad appeal.
They bring in more female fans, I believe.
Yeah. More families.
Yes. And that's very attractive.
Thank you very much, Peter Jankowski, for joining us today on World Business Report.
That's all we have time for.
Thank you to you for listening.
