Elon Musk’s White House farewell
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Promotions may vary. Restrictions apply. Visit Jewelosco.com for more details. Hello and welcome to World Business Report from the BBC World Service. Namaste, I'm Divina Gupta. And on the show, we are taking a close look at two major economies. In the US, all eyes were on a particular high-profile White House exit or

All details on that in a moment. And from the other side of the globe, we are unpacking fresh economic data from India that is raising new questions if the country's high growth momentum is starting to slow down. Plus, a new US tax proposal that's making global investors uneasy.

But first, let's go to the White House, where at a news conference earlier, President Trump began by saying thank you and goodbye. I just want to thank Elon and all of his people. Most of those people are staying. Almost all of them are staying and they're going to be with us. And you're going to see the results coming long into the future. Even a year and two years later, you're going to see a lot of the results.

Well, that's goodbye to his one of the biggest political donors and advisor, Elon Musk. Let's get in on North America technology correspondent Lily Jamali. Lily, a much awaited farewell. President Trump gave a golden key in a box to Elon Musk, who was dressed in all black.

With a cap, just remind us about this kind of unprecedented role that Musk got in the Trump administration where it all began 129 days ago.

Yeah, absolutely. It began with Doge, the Department of Government Efficiency, not a real U.S. agency, one that was sort of created on an ad hoc basis by Musk, who was actually joined originally by Vivek Ramaswamy. And you might remember he was summarily dismissed. It is now running for the governorship of Ohio. But the promise had been trillions of dollars in promised contracts.

cuts and far less of that, far less than that has actually been delivered. Today in the Oval Office, Elon Musk talked about a trillion dollars in savings being the goal. Then he quickly edited himself to say in waste and fraud reduction and basically

Right now, he really only has $160 billion in his own telling to show for it in terms of those cuts. And our own colleagues at BBC Verify have poked holes in even that claim. Well, that's interesting. All the analysis that's also being done by the BBC that it's actually he's not been able to meet that threshold that he had promised of $2 trillion initially. And I remember he was holding that chainsaw and brandished it when he said, I'm going to make these payments.

savings for the U.S. citizens. But let's also get in Chris Lowe, chief economist at FHN Financial based in New York, who's joining us. Chris, 129 days and Lily's been talking about those pending promises. A lot of them have not been met, have been met. But having said that, have things actually changed in terms of the way business is done at D.C. because of Elon Musk's approach?

Not – certainly not as much as he and I think the people around him had hoped in the beginning. None of the Doge recommendations or at least very few of them were considered in the congressional budget negotiations. They're not really material in the House budget that was just passed.

And on top of that, a tremendous amount of pushback from members of both parties in Congress against the idea of the administration making cuts that were not initially authorized by Congress.

So Doge here again is short for the cost-cutting Department of Government Efficiency that we've been talking about. But Lily, this departure also comes at a time when Musk has said he must go back to his businesses. And how much have they been impacted, particularly his electric car, Tesla?

Yeah, I mean, there's a couple of different ways to answer that question, depending on the company you're talking about. So let's start with Tesla, because there you have a publicly traded company. So you can see some of the market sentiment through the stock price, which actually did quite well after the election. We all remember how Donald Trump got a lot of funding, almost a quarter of a billion dollars or perhaps more than that from Elon Musk going into the election.

And after the inauguration, Tesla shares tanked because there was this huge backlash to Doge and his activities in this government.

So there's that. But I think other parts of the Musk empire look at SpaceX and Starlink, which is a subsidiary of SpaceX. They do the satellite internet. Those have done quite well. X, the social media platform, has really changed under Elon Musk, but is, you know, they're not selling a lot of ads, but

In terms of being a right-wing propaganda machine, I think it has actually thrived in that respect, which is what Elon Musk has really turned it into.

This tenure at Doge has been great for Elon Musk because he's seen a host of regulatory rollbacks for companies that affect his company's new government contracts. And, of course, access to troves of American citizens data, hundreds of millions of people's data. And we all know that he's also developing XAI, a competitor to OpenAI.

And it seems that access will continue because Donald Trump and Elon Musk have insisted that now they'll stay friends. And Elon's really not leaving. He's going to be back and forth, I think. I have a feeling it's his baby and I think he's going to be doing a lot of things.

Chris, looking at it's not a complete breakup, it perhaps a pause right now. But even Elon Musk said that he'll continue to advise the president, he'll continue to access White House. How are investors seeing this, particularly those who are concerned about how much time he'll be able to devote between his businesses and his political passion?

I think, look, at the moment, shareholders would love it if 100 percent of his attention was on his companies. They would also probably like it if he was a bit less of a political lightning rod because that has alienated some customers. But at the same time, this is not an unusual arrangement. Warren Buffett, of course, spent quite a bit of time in the Obama White House and was instrumental in

advising Obama on tax policy, regulatory policy, and other things, some of which, of course, benefited his business. So it's unfortunately, maybe one of those business and government do seem to be intertwined in this country. It's hard to completely divorce them.

Lily, but looking at the picture of the day, perhaps would be that handshake where Elon Musk is standing, Trump is sitting in the Oval House, and that's the handshake which says, OK, fine, goodbye. But at the same time, this would be a very tricky slope, isn't it? Because the cracks between the relationship between the two countries,

between Elon Musk and Donald Trump showed over a spending bill, the big, beautiful bill, which Trump was quite keen to pass. And Musk said, well, I'm not really happy that neither it's big nor it's beautiful. Well, yeah, it was interesting. We got some, frankly, contradictory messages from the White House today. We saw the goodbye. And then we heard Donald Trump say he's not really going anywhere. He's not really leaving, I think is what he said. He'll be back and forth again.

And he also said Elon's service to America has been without comparison in history. So I think there's actually still a quite friendly relationship, despite Elon Musk's comments about the so-called big, beautiful bill, the budget bill that's making its way through Congress right now. I'm not sure. I'm not a political reporter, but I don't get the sense that Donald Trump particularly cares what Musk thinks about that bill.

And looking at the share price right now, it seems for Tesla, Chris, it was 3% down on the U.S. stock exchange. So it's not exactly been the dose of confidence for shareholders as well as we were talking about. But what's your analysis here? Well, I mean, remember, the stock's up 50% from its lows. So it is, in fact, down.

in far better shape than it was. I think what happened today to Tesla is what happened to the broad market, which is, you know, we've got tremendous new uncertainty on tariff and trade policy. And Tesla, of course, has enormous exposure in China, that market very important to the company.

Absolutely. And it comes at a time where Donald Trump has said that China is not sticking to the deal that both sides had agreed when they paused their trade tensions. He's not given out details, but that was quite evident, as Chris was saying, in the markets today, which ended flat. But

Lily Jamali, thank you so much for joining us on the show with all that analysis. Our North America technology correspondent there, Chris, be with us because we also want to talk about that big, beautiful bill that Lily mentioned earlier, the bone of contention between Elon Musk and Donald Trump, it seems to be in the past few days.

One section in particular, which has been pointed out recently by investors is Section 899. Now, just for our global listeners, this is a spending bill which has passed through the U.S. House of Representatives last week. It's a big push by Donald Trump. And this Section 899 is critical.

Quite interesting because a lot of people are calling it a form of tax revenge on foreign companies operating in the US. So to help us unpack what's in the bill and what it could mean for global businesses, we are joined by Jonathan Samford, President and CEO of the Global Business Alliance, which represents international companies in Washington. Jonathan, first of all, can you just demystify this for us? What exactly is Section 899 briefly?

Yes, absolutely. Great to be with you. This is a provision that deals with the international tax framework. And Republicans, if you go back to 2017, were first movers in this space, creating a whole new structure, things like GILTI and FITI and BEAT. It very quickly devolves into acronyms. But what this section does is tries to play a direct role in retaliation against Republicans

how other nations tax U.S. multinationals in their jurisdictions. And it would fundamentally reshape how U.S. subsidiaries are taxed as a response to that. There is real concern on Capitol Hill with things like the digital services tax and some of the particulars around the Pillar 2 framework, the global minimum tax.

So this tit-for-tat sort of tax policy, how is it being viewed by international companies? What kind of risks are they weighing right now for doing business in the U.S.? Well, the one big beautiful bill certainly contains a big concern for international companies specific to this provision. There are a lot of things in this bill that would help propel U.S. competitiveness and maintain America's innovation advantage. But I have to say that Section 899 says

is really going to have a negative impact on investment into the United States if it becomes law. Just so your listeners have a sense for the impact it will have, 8.4 million Americans today are employed by international companies. And these companies are offering those workers a job that offers them about 7% higher compensation than the economy-wide average.

More to the point and to the president's point, an emphasis on manufacturing and American manufacturing, these American workers at international companies, about 2.9 million of them are in the manufacturing sector. That's about one in every four manufacturing workers in the United States.

But it's interesting because the Congressional Budget Office has said, according to their calculation, it could raise over $100 billion in taxes over 10 years. And that is, again, a much needed revenue right now for the economy there. You know what's interesting about that analysis you reference, and I appreciate you raising it. It's actually a revenue loser in the long run.

The Joint Committee on Taxation does expect this to raise $116 billion. But when you look at what that actually entails, it's a lot of revenue in the first three years. And then in the next seven over that 10-year window that they analyze, it actually loses money each year to the point in the last two years, it actually costs the Treasury revenue.

And that's a realization that international companies in the United States, companies who made a deliberate decision to invest and create jobs here in the United States, will not be able to operate in an environment where their effective tax rate is north of 50 percent or exceeds 50 percent. And so they'll actually have to shutter operations here in the United States. That's reflected in those numbers.

That's what I was about to say, that you see foreign companies wind down their U.S. operations. And like you said, yes. What does it say then about America as a place of doing business for these companies in the future? Well, that is exactly the analysis of the Joint Committee on Taxation, a bipartisan committee that looks at what the impacts of individual proposals in this bill will have.

And their conclusion is that companies will not be able to operate if this becomes law and over time will have to shutter their U.S. operations.

You know, it's interesting. As we speak, the president is in the Commonwealth of Pennsylvania touting investment, the Nippon Steel deal with U.S. Steel, a partnership. Earlier today, the White House sent out a press release entitled Made in America, President Trump's Vision for Revitalizing American Industry. And they highlighted a number of companies that have made investments since his inauguration in January. Right.

There's an entire website or page devoted on the website to those investments. And when you look closely, you'll notice one thing. About half of those are actually international companies who made a deliberate decision to invest and reinvest into the United States. And those are the exact companies that this tax provision, this punitive and discriminatory provision are taking aim at.

Jonathan Samford, thank you so much for joining us. With that, President and CEO of the Global Business Alliance. Now, shifting gears, crossing continents, let's go to India, where I am at the moment, and some fresh growth numbers were reported here as well. The economy grew by a strong 7.4% between January and March, beating expectations and picking up speed from 6.2% the quarter before.

But zoom out a bit and it's more of a mixed picture. For the full financial year, the growth is pegged at 6.5% and that's slowest in four years. So while things are still moving fast by global standards, the pace here is clearly cooling. For a full analysis, I spoke with economist Mitali Nikore from Nikore Associates in eastern Indian city of Bhubaneswar.

I am still looking at this as a glass half full. There have been two or three very key ingredients. I think the first one is around the push on infrastructure investments. You know, we've managed to create growth centers not only in tier one cities, but in tier two, tier three, tier four cities. So, you know, there are these big

very new centres of growth that are coming in. And that's all because of the infrastructure investment that, you know, has been pushed for the last decade. But then there is also rural India, where most of the population is dependent on the agriculture and monsoons. And that then translates into the kind of demand one sees from rural India for different goods and services in the country. Where is that at the moment?

You know, one of the major sectors that has done well in this round of data, and it's coming out very clearly, is the agriculture sector, where the growth has increased from 2.7% in FY24 to 4.6% in FY25. And I think that now there is a huge demand amongst the larger farmers, amongst the larger landowners, amongst the more corporatized, you know, and cooperatives that are coming up

across the rural landscape for more and more market-based agriculture to come in. And for a long time, the agriculture sector, of course, has been very protected and there's been a, you know, subsidy regime that has been in place, which is, of course, in place even in countries like the U.S., right? The corn farmers in the U.S. enjoy massive subsidies even today. However...

You know, there is more of a market-based economy that is coming up with food processing as a major sector. And I think even exports of food products is something that a lot of, you know, farm-based enterprises are looking at. So I do feel that the future of farming in India is very bright. It just needs a little bit of a policy push and it needs a little more infrastructure investment. But then there is also manufacturing, which has seen a decline.

Manufacturing growth stood at 4.5% year on year compared with 12.3% in the previous year, if you look at these numbers. And that's not a good sign. No, definitely that's not a good sign. And see, some of it, I agree, can be explained through the fact that the production linked incentive scheme was launched in 2023.

it provides incentives for foreign investors and domestic investors to start setting up new manufacturing facilities, all of which should provide a certain number of jobs and then they can access government incentives. That kind of a scheme coming in in 15 sectors all at once is, of course, expected to generate a flurry of investment activity, which obviously then came in in FY24. And plus,

when you combine it with the global outlook at this point in time and the Trump tariffs and the uncertainty around exports, again, it becomes quite a dampener for any economy in that sense to say, do we really want to invest in setting up a new factory right now? Is this now the end of high growths? I would not read it as the end of high growth. I would read it as a sort of cyclical effect of

and a compounded effect of global factors as well as domestic factors. I would say that India will see another round of high growth, especially when we start to see more and more investment going in from the government, not only from the private sector, into newer and newer cities, into building more and more cities, because the country is just so vast, Devina, we know this.

And we're discovering so many new sectors. Religious tourism, for example, is taking off like no one's ever seen before. So, you know, there are these completely novel sectors that are being discovered in this round of growth. And I feel like it will take another decade of high growth for India to reach its real potential. And we would get there after this cycle of global uncertainty is over. I actually feel quite hopeful.

Economist Mitali Nikori in India.

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You're with World Business Report from the BBC World Service. Now, earlier on the show, we spoke about Donald Trump's big, beautiful bill. So now let's go to a billion dollar beauty deal that happened in the U.S.,

RODE, the beauty brand owned and founded by the model Hailey Bieber, has been acquired by Elf Beauty for $1 billion. It's not bad for a company that started out as a direct-to-consumer brand, and just three years ago, it started out and only had 10 products. So earlier, my colleague David Harper spoke with Tarang Amin, chair and CEO of Elf Beauty.

What we see in Rode is another like-minded disruptor. Elf Beauty was founded 21 years ago, selling cosmetics over the internet for $1. Everyone thought we're crazy. You couldn't sell cosmetics over the internet pre-iPhone, and it certainly couldn't make money at $1.

But we proved them wrong. And that spirit of disruption has been with us ever since. We're a very strong company. We just reported our 25th consecutive quarter of net sales and market share gains. We're the top selling cosmetics brand in the U.S., rapidly growing internationally. And what we saw and wrote was an incredible disruptor in Hailey Bieber. She took her brand for basically zero to two hundred and twelve million dollars worldwide.

in less than three years, direct-to-consumer only with just 10 products. And so it's in a phenomenal business that we see and plenty of runway for growth. In fact, Sephora, the world's largest global retailer, is going to be expanding the brand in all US and Canadian doors.

this fall, followed by the UK by the end of the year. Would there have been so much value in the company without Hayley Bieber's very public involvement? Well, Hayley Bieber, this is her baby. She's highly involved in the brand. And what I tell you, it's well beyond her celebrity status. She's one of the most thoughtful founders I've ever met, has incredible instincts, a beautiful aesthetic.

And it's one of the reasons why the brand really resonates with consumers. You know, Elf Beauty is the number one brand amongst Gen Z, I think three and a half times higher than the next highest brand. We're also the most purchased by Gen Alpha and Millennials. So always on the lookout for brands that particularly resonate with consumers. And that resonance with Rode is so deep. In fact, when Rode, their latest pop-up event in Los Angeles, announced

they had consumers camping out overnight, waiting in line 14 hours, not just for product, but to buy into the entire lifestyle of the brand. And that's something that really appeals to us. You don't find brands that break through that way. Let me just ask you, because I have to be honest, I'm not the world's biggest expert on cosmetics. What is it?

that makes a company like Elf and indeed Rode so popular with that generation? Well, I think first and foremost, it's our value proposition. We make the best of beauty accessible to every eye, lip and face.

Second is in our category, in particular, powerhouse innovation, this unique ability of taking prestige quality and introducing it at prices that are accessible for consumers. But probably most important is our disruptive marketing engine. For both brands, our unique ability to engage and entertain consumers wherever they want to be and how they want to engage with the brand. And that is really what's top of mind from it. How do you do that, though? How do you engage with them?

Well, we engage with them with where they live. Elf was one of the first beauty brands on TikTok. We noticed there are a lot of teens on TikTok. They live there. They, you know, they had a lot of music, a lot of dance. We commissioned our own song, did our first engagement. I think it had 2 billion views. Our latest hashtag challenge on TikTok had 15 billion views. We're living with where they're living and we're engaging with the way they want to be engaged and we're entertaining them.

Tarang Amin, Chair and CEO of Elf Beauty, speaking to World Business Report's David Harper there. But Chris, here's another analysis that Elf actually reportedly gets a disproportionate amount of its products from China and has been impacted with the trade tensions between the two countries. So this seems to be a move or a sign of changing times that many American companies will have to do if they want to survive in this environment.

Absolutely. And it really is every company. Of course, Apple under tremendous pressure to move production away from China. They've made a huge investment in India and they're being encouraged by the president to make an investment in the U.S. I think, you know, in this particular instance, though, it's a combination of things, isn't it? It's that

product diversification, but also a really good fit with the existing customer base.

Absolutely. Thank you so much for joining us, Chris Lowe, Chief Economist at FHN Financial. Always a pleasure to speak with you. And we're just getting some more news from the wires about Donald Trump speaking at a rally celebrating U.S.-Japan Steel Partnership, hailing the deal of the Japanese company Nippon investing in this partnership.

where he had earlier opposed it. More on that on our sister program, Business Matters at Midnight GMT. For now, thank you for being with us on World Business Report.

Hey, it's Ryan Seacrest for Jewel Osco. Now through June 17th, shop in-store or online for your favorite personal care items and save $5 when you spend $15 or more. Stock up on items like Dove Body Wash, Degree Motion Sense Deodorant, Trace-A-May Hairspray, Dove Shampoo, Dove Bar Soap, Dove Men's Body and Face Wash, and Dollar Shave Club Blades.

and save $5 when you spend $15 or more. Hurry in before these deals are gone. Offer ends June 17th. Promotions may vary. Restrictions apply. Visit JewelOscar.com for more details.