China’s biggest EV maker BYD speaks out over tariffs
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Price guarantee applies to then current base monthly rate. Additional terms and conditions apply. Let's hear from China's biggest car manufacturer. Good morning. This is the Marketplace Morning Report and we're live from the BBC World Service. I'm Leanna Byrne. Thanks for tuning in.

So BYD is China's biggest carmaker and it's been slashing prices at home to dominate the market. Now it's going global and the big established brands are getting nervous. Stella Lee, the executive vice president behind BYD's global push, has been speaking to the BBC's Theo Leggett. Let's hear from him now. Hi, Theo. Hello. Theo, BYD has grown rapidly in the past couple of years. I mean, what's behind that?

Well, Leanna, BYD is one of the biggest companies most people have probably never heard of. It's a Chinese business and it started in the mid-90s making batteries for mobile phones. But it's diversified heavily. It's been making cars for a number of years, but only relatively recently expanded onto international markets. Last year, it sold more electric cars worldwide than Tesla. And it has existing established manufacturers in Europe and elsewhere.

And that's partly because BYD is able to sell cars relatively cheaply. It has a lower cost base than established manufacturers. And last year, the European Union reacted to this. The US reacted to it, actually. The United States imposed very heavy tariffs on all imports of Chinese vehicles, which basically made it pointless to sell imported Chinese vehicles in the United States.

The European Union was a bit more subtle about what it did. It slapped lower tariffs on Chinese electric vehicles, but they were still pretty substantial. And they argued that the reason they had to do this was because Chinese manufacturers benefited from unfair subsidies from the Chinese government, and therefore it was necessary to create a level playing field.

Well, I met up with Stella Lee, who is the executive vice president of BYD and really its international face. And I asked her whether the company was receiving unfair benefits.

It's an unfair claim because there's no fact base. If any auto manufacturer goes to invest in China, they will receive equally or maybe better subsidy from the Chinese government because you contribute like a job opportunity. So she's saying it's unfair, but the EU is sticking by its tariffs. So what is the latest on that?

Well, Europe has introduced a range of diversified tariffs on different brands. So, you know, the standard tariff for imports coming into the EU is 10%. Well, there have been extra levies imposed on different companies to take them higher than that. But BYD says that part of its strategy in any case is...

is to localize production. So really, all of this hasn't made a lot of difference. For us, our strategy is to make us a global company and also localize us. So even without this tariff challenge, BYD will localize

So as Stella Lee said there, BYD has that site in Hungary which it's setting up. It's also working on Turkey which is

outside the EU but within its customs union. That's all very technical, but it does mean the cars wouldn't attract tariffs when shipped to the EU. So it is working on this localisation strategy that it seems to be very proud of. Interesting. Chinese automakers, though, they've also faced allegations of using forced labour. Did she say anything about that?

Well, it's not actually the carmakers themselves that have been accused of using forced labour. I think we need to be very clear on this. The allegation from human rights groups is that there's forced labour in the production chain, particularly production of aluminium, which comes from the province of Xinjiang. And the allegation is that members of the Uyghur group are...

forced into working in very poor conditions in order to produce the aluminium that the car industry needs. Now, Stella Lee's response to that was very dismissive indeed. She said it was a nonsense claim and she said that BYD is trying to be a top company and in order to be a top company, you need to have a top supply chain with all the checks and balances.

I think we should also say, Liana, that this is not just an issue that's faced Chinese manufacturers. A few years ago, for example, European companies were being accused of buying cobalt that came from illegal mines in the Democratic Republic of Congo. So,

Making sure that your supply chain is clean all the way through, that there are no abuses, is something that is actually quite tricky to do. And some of the existing big players have been caught out because of that as well. OK. The BBC's Theo Leggett, thank you so much for joining us on Marketplace. It's always a pleasure. Now let's do the numbers. ♪

In Canada, President Trump has signed off on a UK-US trade deal, cutting tariffs on British cars. But a 10% levy still applies to most goods, including steel. And 0.7 of a mile, that's the length of a stretch of London's famous Oxford Street that the city's mayor wants to pedestrianise. A consultation showed almost two-thirds of visitors backed the plan, but only one in five businesses.

Now, more on President Trump's tariffs. A 10% blanket tariff on imports has already landed and he's warned it could jump to 20%, even 50% for EU goods. A court ruling may yet derail that plan. In Spain, food is big business. The country exports more than $850 million of Iberian ham a year alone. So there's real concern, as the BBC's Guy Hedgcote reports.

It's lunchtime in a bar in the southern city of Seville, and three legs of jamón ibérico, or Iberian ham, are sitting on a table, ready to be carved and served. This is one of Spain's most emblematic products, made from free-roaming, acorn-eating pigs, and the industry exports nearly three-quarters of a billion euros each year.

But the ham sector, like many others, is concerned about US trade tariffs. President Trump has already introduced a 10% tariff for most EU products exported to his country, and he's threatened to raise it to as much as 50%.

Spain is the largest pork producer in Europe and is the third largest producer in the world. Iberian ham is one of the most iconic gastronomic products from Spain. Jaime Fernandez is international commercial director at Grupo Osborne, which includes the Iberian ham producer 5J.

United States is one of our top priority markets. So the uncertainty is there and complicates our medium and long-term planning, investments and commercial development. It is a lot of uncertainty.

The Spanish economy has been outperforming most of its European neighbours lately with strong growth and unemployment at the 17-year low. But there is an awareness of the potential for outside shocks to the economy. I'm outside Spain's central bank in Madrid, which recently warned of extraordinary uncertainty due to the international panorama.

The Spanish olive industry has already had its fair share of turmoil recently after a 2023 drought slashed that year's harvest. As the world's biggest olive oil producer, Spain is watching the ongoing negotiations between the EU and Washington carefully. Rafael Pico Lapuente is Director General of the National Association of Olive Oil Exporters.

As everybody knows, the negotiations representing the EU's 27 countries are carried out by Brussels. In these negotiations, industrial products have a much bigger influence than food. I wouldn't like it if, in this negotiation, food products like olive oil were used as mere bargaining chips in order to get a better deal for Europe's industrial products. That worries me.

Javier Díaz Jiménez, a professor of economics at the IESE Business School, believes that if US tariffs are not uniform, that will create what he calls trade diversion, sending products along the cheapest route to America. If Spain has a 20% tariff and Morocco and Andorra have a 10% tariff, all the products that can go through either Morocco or Andorra, many of these agricultural products, will do so.

and they will be first exported to Morocco, to Andorra, and from there they will be re-exported to the United States with a 10% tariff. And it's going to be really hard to make sure that these olives originated in Andorra and not from Spain. It's still not clear whether further tariffs will be imposed on the EU, let alone how much they could be worth.

In the meantime, the companies that produce the ham and olive oil that's sold in markets like this one here in Madrid are crossing their fingers. In Spain, I'm the BBC's Guy Hitchcock for Marketplace. And I'm Leanna Byrne with the Marketplace Morning Report from the BBC World Service.

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