President Trump’s first 100 days - "Strategic uncertainty"?
26:27 Share

Hello and welcome to World Business Report from the BBC World Service. I'm Roger Hearing and on this edition, the onus is on China, the no backing down view of the US Treasury Secretary Scott Besant on the trade war and tariffs. Also, there's been a White House attack on Amazon. We'll have the latest. We hear from Mexicans deported from the US under President Trump's push on immigration as he marks 100 days in office. Hello.

We all are dealing with culture shock. We have all of our life over there, went to school over there, watched TV over there, you know, like brought up on American culture. And we have family over there. So it's like, you know, we're from here and we're from over there too.

Also, Canada returns the Liberals to power in an election shaped by fear and anger over the actions of US President Donald Trump. Spain and Portugal try to recover from a day-long power cut. But at what cost? And no more golden passports. Malta is told by the European Union its money-raising citizenship scheme is illegal. Not every Maltese wanted it anyway.

Malta is not a poor country. It might have been 50 years ago, but it no longer is. It's one of the fastest growing economies in the European Union, and we don't need this scheme. But first, the pressure is mounting on the Trump administration as the president reaches his first 100 days in office.

And in the last few hours, we've had some interesting new insights into the latest thinking in the White House on tariffs and the trade war. The Treasury Secretary, Scott Besant, told a news conference the onus was now on China to make a deal on tariffs, which he said were unsustainable for them.

Chinese tariffs are unsustainable for China. I've seen some very large numbers over the past few days that show if these numbers stay on, Chinese could lose 10 million jobs very quickly. Remember that we are the deficit country. They sell almost five times more goods to us than we sell to them. So the onus will be on them to...

take off these tariffs. They're unsustainable for them. And one of the key complaints from the markets has been the uncertainty, the on-off nature of White House policy announcements, imposing them and then suspending the tariffs. Well, asked about that, Scott Besson said it was deliberate.

I think one thing that has been a little disconcerting for the markets is, you know, President Trump creates what I would call strategic uncertainty in the negotiations. So he is more concerned about getting the best possible trade deals for the American people. What we are doing is we've created a process. I think the aperture of uncertainty will be narrowing. And as we start moving forward announcing deals, then...

There will be certainty, but certainty is not necessarily a good thing in negotiating. There was also an interesting exchange on Amazon, which is reported to be planning to show prices indicating to U.S. consumers how much of the cost is due to the impact of tariffs. Well, the White House press secretary, Caroline Leavitt, said she had just spoken to President Trump about the Amazon announcement, but his message about it was, this is a hostile and political act by Amazon.

This is a hostile and political act by Amazon. Why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years? And I would also add that it's not a surprise because as Reuters recently wrote, Amazon has partnered with a Chinese propaganda arm.

So this is another reason why Americans should buy American. It's another reason why we are on-shoring critical supply chains here at home to shore up our own critical supply chain and boost our own manufacturing here.

Carol, I'll leave it. Well, I should say that within the last few moments, Amazon has said its main site never considered listing import charges for the main Amazon site. Let's speak now to Fiona Sincotta, Senior Market Analyst at City Index. Fiona, thanks for joining us. A number of interesting developments. And first of all, let's take on that Amazon one. I mean, it's an interesting rift, if indeed it comes out to be that, between Jeff Bezos, who'd been quite supportive of Donald Trump and the White House.

Yes, definitely. And I mean, I think it just sort of goes to show that there are, you know, many, many moving parts in this as well. And a lack of clarity. There are also reports today that Amazon is sort of, you know, seeking actually steep discounts from suppliers in China as well. Because if we think about what this actually does mean for Amazon, which does feel like this £800 gorilla in the room of negotiation, you know, the levy's

could actually hit Amazon by around 5 to 10 billion, according to Goldman Sachs. So that would be an operating profit hit of around 6 to 12%. So they definitely do have a purpose and a reason to try and sort of, you know, make this as easy as possible for themselves. Interesting. And lots more, of course, that Scott Besson was saying about tariffs and also this strategic uncertainty, as he called it, this somehow needed to be or could be part of a negotiating strategy.

It's interesting that U.S. consumers don't seem to be that convinced about it. We have a stat from the conference board now, which monitors these things, saying U.S. consumer confidence has hit its lowest level since the onset of the pandemic.

Yes, completely. I mean, you know, there's a lot of uncertainty. And that idea that it was strategic, I'm not sure that stockholders will be feeling that it was a strategic move at all. But, you know, it does feel that it's very uncomfortable for the US. Obviously, we've seen consumer confidence fall. And the expectations part of that index that

that you talked about here, the consumer confidence, which is the short-term outlook, has actually fallen to its lowest level since 2011. So, this really does highlight the concerns. Obviously, when consumers are worried, they tend to spend less, which

is why we've got these warning signs for a slowdown in the US economy. And, of course, you know, data about mood is one thing, data about actual dollars is another. And we had some interesting on that. HSBC cut its year-end S&P 500 target by 16%, which is interesting. They citing tariff pressure on earnings. And General Motors slipping 2.8% in share terms after it pulled its annual forecast due to tariff uncertainty.

Yes, completely. You know, we are in the midst of earnings season right now. We've obviously got some really big names reporting this week, including the likes of Apple, Amazon, Meta. And so, you know, the market is going to be very, very focused on what they're saying as far as forward guidance is concerned and what the impact could be on their top and bottom lines. Fiona, thanks. Stay with us, if you will. We'll come back to you. There's much more to chew of in a moment.

But let's also look at another plank, really, of Donald Trump's 100 days in office. Certainly tariffs were front and centre, but also immigration. And it is interesting. He authorised immigration agencies to carry out what he called the largest deportation in American history. Following initial push, the deportation rate has, in fact, levelled out to broadly the same as under previous administrations.

Many of those deported to Mexico won't have even seen that country since they were children and urgently need employment and stability. But a handful of companies actively recruit deportees as employees, as Will Grant reports now from the Mexican border city of Tijuana. Over a steady hum of activity, operators at the Easy Call Centre in Tijuana work through long lists of US phone numbers.

Some are making promotional calls and sales. Others are contacting customers about debt collection and refinancing. All the agents speak fluent English, and the people at the other end of the line are none the wiser. They're talking to agents in Mexico rather than the US.

In fact, virtually every phone operator in the company is a deportee, including Easy Call Centre's owner, Daniel Ruiz. We all are dealing with culture shock. We have all of our life over there. We went to school over there, watched TV over there, you know, like, bought up on American culture. And we have family over there. So it's like, you know, we're from here and we're from over there too. Born in Mexico, he grew up in the United States before he was deported for low-level drug crime in his early 20s.

Today, he runs the successful telesales company and co-founded a humanitarian organisation called the Borderline Crisis Centre, which provides food, shelter and support to deportees on their arrival in Mexico. When I got here to Mexico, I really felt lost. Everything's different. Life is way faster. The latest US returnee at the company is Alberto Salagan, who was deported to Tijuana in January, just as President Trump took office. I

I had to do something to get back on my feet, and thanks to the call center, I have a job, you know. I will declare a national emergency at our southern border. From day one, President Trump began taking steps towards what he calls the largest deportation in American history.

He's spoken often of the removal of hundreds of thousands, even millions of undocumented people from US soil. And in the early days of his presidency, ICE immigration agents made workplace raids from Chicago to California.

So far, though, evidence of a mass deportation, such as bottlenecks of migrants at border crossings or overflowing migrant hostels, hasn't materialised, at least not in Tijuana. I'm at the San Isidro border crossing, one of the busiest international border crossings in the world that links Mexico to the United States.

For so many deportees, being returned to Tijuana with the United States still visible on the other side of the border is a harrowing experience. Some haven't lived in this country since they were children or even babies. Nevertheless, some people have learned to make the best of a difficult situation and some companies have found distinct advantages to employing deportees as staff members.

So we're looking at where our agents work. This is a main area for... In particular, one company, the American Survey Company, or ASC, stands out. It's one thing for a smaller venture like Easy Call Centre to rely on deportees, but ASC and its sister company, Voxcentrics, have some 550 call centre stations in Tijuana.

Wages aren't high, but the work is steady and dependable, and agents can earn incentives, including sales commissions. Whatever happened in the U.S. stays in the U.S. We don't really do background checks regarding that. Nora Diaz is the chief happiness officer at the company. Basically, she says, an HR officer concerned with the employees' well-being.

We understand that there's a past. Everybody has a past. We don't judge based on that. We don't, during our interview process, that is something that we don't go into. We don't ask about it. We just need people who speak good English, good Spanish, and they're willing to learn and commit to a job. Northwest 7th Avenue.

So far, the Trump administration's threat of mass deportation remains exactly that, a threat. But it has become a powerful tool in dissuading migrants from even attempting to cross into the US. Over the past three months, border agent encounters with undocumented immigrants on the US-Mexico border have dropped to their lowest levels in decades. Those due to be deported in the coming months, though, will need a bit of assistance to get back on their feet.

In Tijuana, many may find it at the end of a telephone line. A message has been sent. Thank you for calling. Goodbye.

That report by Will Grant in Tijuana, all from south of the US border to north of the other border, Canada. There's been an extraordinary political comeback there by the Liberals. Despite being in power for more than a decade, they had been on course to suffer a heavy defeat in the federal election. In fact, they won. And it's largely been due to the words and actions of the man leading the country next door, Donald Trump.

Mark Carney, the man who's been returned to the office of Prime Minister in Ottawa, has been firm in his denunciations of President Trump's tariffs on Canadian goods and his wish to turn the country into the 51st US state. His main Conservative rival was widely seen as following some of Donald Trump's populist agenda.

Well, after his victory, Mark Carney said Canada was facing a new reality in its relationship with the U.S. He also said Canadians needed to stand strong in the face of threats from President Trump to make Canada part of America. We are once again at one of those hinge moments of history. Our old relationship with the United States, a relationship based on steadily increasing integration, is over. The system...

of open global trade anchored by the United States, a system that Canada has relied on since the Second World War, a system that, while not perfect, has helped deliver prosperity for a country for decades, is over.

Mark Carney. But what practical steps can he now take to try to defend the Canadian economy? Joining me now is Josipa Petrunic, who's president and CEO of the Canadian Urban Transport Transit Research and Innovation Consortium, known as Kutryk, and very much involved in the design and manufacture of electric buses. Josipa, thanks so much for being with us. What would you like to see Mark Carney do in concrete terms to try and ease the situation?

Yeah, absolutely. Well, I think everybody is waking up this morning recognizing that this election in Canada is really the result of those tariff threats primarily. So there's three big things right now that are hitting Canada. The general tariffs overall that came into place on March 4th, which lots of our bus manufacturers, our automotive manufacturers might be able to avoid if they're USMCA compliant.

So North American trade compliant. But those steel tariffs mean we don't have a privileged place anymore. And those auto tariffs that are coming into play are really worrisome to a very large number of workers in the country. So you see the heavy duty side and car side. My point then is, what can he do? He talks a good game. But what can he do?

Well, he's already started now in his campaign, campaigns being campaigns in terms of promises. They have promised a few things. One is a lot of new spending. And of course, if you're a conservative voter and you see that you just lost the election, you're not going to be too happy to hear about this, depending on whether it helps you. But there's about 100 some billion, 130 new billion dollars that the Liberals promised to spend to address the tariffs.

But to spend on what? To spend on what?

On the American side, of course, is the negotiation, negotiation, negotiation. There are some indications right now that Carney has had some good relations with Donald Trump, enough at least that maybe a negotiated deal might be coming out for Canada to return us to some kind of privileged place in the North American family. That will be determined. A

Of course, as we all heard, Donald Trump did come out again talking about the 51st state. Nobody's a fan of that. So really what Mark Carney is going to have to do is roll up his sleeves, get a great cabinet going immediately and get into the negotiation with Donald Trump to make sure that anything that's North American compliant on auto or energy is excluded from tariffs. So those tariffs come down to give us a privilege. Is that going to work? Really? Do you think so?

I think in part, yes, where it comes to critical minerals, energy and some of the automotive parts integration that is just so important to the American economy that it's going to hit workers and voters for the Republican Party in the U.S. That's already starting to crop up. I think on those areas, we've got some wedge issues that we can pry open. We're probably going to have to negotiate away some elements in dairy and agriculture in that process.

On the other side, you know, I think Canadians are all preparing, especially under Mark Carney's government, to have a more independent economy. It's going to be difficult. So I think we're looking to Europe. It's definitely going to be difficult. Yes, Sipa, thank you so much for giving us some ideas on the Sipa Petrinic there of Kutryk. You're with World Business Report from the BBC World Service. Let's turn our thoughts to Europe. And the lights have come back on in Spain and Portugal.

Well, there, that's some of the reaction in Madrid as the power was finally switched back on after the huge blackouts across the Iberian Peninsula on Monday. Electricity supplies have been restored, but the fallout from Monday's chaos continues. Large numbers of stranded people had to sleep on floors at stations. They're still trying to get to their destinations as train services begin to resume.

Shops that had closed because electronic payment systems were down have now begun to reopen. Amongst those affected were small businesses like Bill Monte. It's an ice cream shop. The manager, Gonzalo Ovaches, was trying to keep control of things at his central Barcelona shop while he was trapped at home outside the city.

I worked with my supervisor, Simona. I was on the distance trying to help them, but this was very difficult because I cannot reach nobody by cell phone. We closed the shop at five because no power, no electricity. The fridge is not working. The ice cream is not going to be good. It's not the quality that we serve. I need to...

throw away the ice cream and everything I have in the fridge is not going to work. We need to throw away all the milk that we have reserved for production for tomorrow and I need to increase the oil for tomorrow. It's not good for the business.

It's not a typical day. Not at all. Gonzalo Avales there. The Spanish Prime Minister, Pedro Sánchez, said about half of Spain's power had been restored 12 hours after the power cut hit. Technical experts say they believe a power interconnector between France and Spain had apparently failed. But speaking at a news conference, Mr Sánchez said no cause was being ruled out.

We have set up a commission for technical analysis and investigation. This is an independent committee working with private actors so that we can carry out our own analysis of what has happened. And we will demand accountability to private service operators if that is necessary. And we will then implement all measures necessary so as to ensure that this situation does not occur ever again.

Many theories are being explored, but the authorities in Spain and Portugal have effectively ruled out a cyber attack. Michael Hogan is a senior advisor from the Regulatory Assistance Project, an expert in power blackouts. In this case, the system actually did collapse, and collapsed very quickly. And those kind of outages are almost all...

always initiated by a major transmission facility failure. The other thing that tends to be common to them is that somewhere in the chain of events, someone did something they weren't supposed to do or someone didn't do something they were supposed to do. And the investigation proceeds, we'll find out more

Michael Hogan there. Let's come back to Fiona Sincotta, who's still with us. Fiona, I mean, the actual economic impact of a day like that, is it going to be pretty bad? We know Spain's just had some GDP figures out. They don't look too bad, but is that going to be affected going forward?

Yes. So, I mean, as you said, the GDP figures were actually fairly resilient, which is encouraging news. But when we talk about what actually happened, it was equivalent to the Spanish economy shutting down for one day. So I think, you know, that will have a short term impact, potentially on a monthly basis, we could see the GDP affected. But I think, you know, when you take the whole year into account, then the actual impact will be significant.

relatively small. OK, but if yesterday wasn't a great day for Spain, also not terribly good for BP. BP's figures coming out at the moment and, well, they're not pretty, are they?

No, not at all. I mean, profits dropped 70%. So, that's to $687 million, down from $2.3 billion. And that was basically on weaker gas sales and lower refining margins. Total revenue, so total sales also fell 4% to just under $48 billion. I mean, BP and other oil majors have been hit recently by the CISO.

slump in oil prices. Oils dropped 14% in April because of these concerns over the impact of Trump's tariffs. Indeed. It all comes back to that, doesn't it? Thanks so much for being with us, Fiona. Fiona Sincotta there of Citi Index.

Now, if you're a high-flying business person, maybe Russian or Chinese, and you want to have an option to live in the European Union, to be an EU citizen, just in case things go wrong at home, what do you do? Well, up to now, if you had a million euros, you could buy a so-called golden passport in Malta. Plenty of Russians did, though they were in fact excluded from the scheme since the start of the Ukraine war.

Now, the European Court of Justice has finally ruled that the scheme is illegal. The court said it eroded the principle of mutual trust between EU member states. A member state cannot grant its nationality, it said, and indeed European citizenship in exchange for predetermined payments or investments, as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction.

Well, I've been speaking about all this with Matthew Caruana. He's director of the anti-corruption pressure group, the Daphne Caruana Galizia Foundation in Valletta. Malta operates two schemes, one where we sell residency visas, the so-called golden visas, and one where we sell passports, citizenship outright.

That's the golden passport scheme. Neither of the schemes will stop outright immediately unless action is taken to scrap the scheme and comply with the judgment. That action can only be taken by the government. If the government doesn't comply with the judgment and scrap the scheme or change it completely, then Malta could be fined by the European Union.

So the golden passports, as I understand it, essentially you have to have an investment of around a million euros in order to get a passport. But then the passport is pretty much given straight away, apart from two Russians, Belarusians and Ukrainians since the start of the Ukrainian war.

Applications from Russians and Belarusians have been suspended, yes. Applications from Russians made up the bulk of applications for golden passports and made up the bulk of new Maltese citizens. I mean, they were a plurality of new Maltese citizens. And does it bring a lot of money? Is it a very active scheme? Does it bring a lot of money to Malta?

Theoretically, it does bring a lot of money. I say theoretically because the Maltese people have not seen the investment that should have been made thanks to the funds that were coming into the scheme. The Prime Minister yesterday cited an example of a donation of 5 million euros.

that has been made from the scheme to a charity that provides healthcare to children. But that donation was from five years ago. So I'm left wondering if that is the best example that he can give.

of a social benefit, one from five years ago and a relatively tiny one in comparison to the billion euros that should be in the fund, then where is the money actually? And where are the investments that should have materialized? Are there a lot of Russians then resident in Malta? There are very few Russians who are actually physically resident. The reason for that is that very few to none of the passport buyers are actually interested in

living in Malta. The government has therefore tried to redefine the concept of residency as virtual residency, where people don't need to be physically resident in Malta. They just need to rent an address and leave that property empty. So when we knock on all the doors where Russian passport buyers or

Matthew Caruana, The New York Times.

there and we have reached out for the other side of this as it were and we did get a statement from the Maltese Prime Minister's Cabinet

which said the government recalls that since its inception in 2015, this legislative framework has directly generated over €1.4 billion in revenue for Malta. These funds, they say, have always been divided between the National Development and Social Fund, through which several beneficial projects and investments were and continue to be carried out, and the Consolidated Fund. We also got an interesting statement from one of the key proponents of the scheme, the company Henley & Partners, saying,

They said they were disappointed by the characterisation of Malta's citizenship programme as an infringement of EU law, a commercialisation of citizenship. This ruling, they say, targets the smallest EU member state and it sets a worrying precedent for undemocratic extension of EU competencies beyond its treaty-based limits. That statement from Henley and Partners. That's it from World Business Report. Bye-bye.