Canadians are voting in an election dominated by the global trade war

0:06Hello and welcome to Business Matters. Namaste. I'm Devina Gupta joining you from India's capital city, Delhi. And on the show, from Canada's election with a future of trade with the US is on the line to a massive power outage throwing Europe into chaos. We are talking about it all. Plus, the Trump administration is marking 100 days in office this week. And with trade wars, spending cuts and big policy shifts, the impact is being felt everywhere. We'll talk to a food kitchen in West Virginia about how these cuts are hitting those who need help the most. I don't sleep at night worrying. I am frantically searching for other funding sources every day.

0:59We'll hear more on that story in just a short while. But also with tensions rising globally, we'll dive into the surge in military spending around the world. What does it mean for the markets? Where it's all headed? You can contact us on WhatsApp or send us voice note at plus 44-330-678-3033. We'd love to hear from you about all these stories, what your thoughts are. You can also email us at world.business at bbc.co.uk. Meanwhile, let's get the show on the road. It's a multi-continental show because my team is in the UK. It's Gideon, Ahmed and Jack who are there with us. And we are also extending a very warm welcome to our guests.

1:50We have Jessica Kain, Head of Asia for Asterisk Advisory Japan. She lives in Malaysia. But Jessica, you're joining us from the UK at this time. How are you? I'm very well, Davina. I'm delighted to hear your voice again. I hope you're enjoying Delhi. Well, I am. It's just 40 degrees, just shy of 45 of the heat that we usually get. So I'm really thankful. How are things at your end? Really happy to hear your voice as well. What's new and what's happening in your side of the woods? Well, I'm keeping an eye on Malaysia. But right now I'm looking at a view of the River Thames. So there you go. Well, can I just say I'm super jealous just at the start of the show.

2:38I miss it dearly. But let me get Sergio Guzman, who runs his own risk analysis company called Columbia Risk Analysis, joining us from Colombia. Sergio, welcome to the show. What's the view where you are? Devina, good evening. For me, it's 7 p.m. here in Bogota. It's around 14 degrees and it's going to rain soon quite heavily. So it's going to get colder. It's going to get colder, but I hope you have electricity. No power cuts for now. Yes. All right. And I hope, Jessica, same for you, because in India, we've been dealing with power cuts as soon as we have summer, there's power outage, but not like the one we'll be talking on the show.

3:20And this one's from Europe. And it was actually quite a bit surprising that's happening in that part of the world. But I don't want to give the show away. Let's first start with Canada. The first polls have closed in Canada's elections. Millions have been voting there. Already we know that 7 million people have cast their ballots in advance. 343 seats are up for grabs. The winning number is 172. But with growing pressure from the US over tariffs and uncertainty over trade ties with its biggest partner, today's election in Canada is just not about politics, but much more. It's about the future of Canada's economy and the impact could be felt well beyond its borders.

4:11So a few hours ago, I spoke to Faisal Islam, our economics editor, who's been following this election in Ottawa. It should be said, an astonishing intervention from Donald Trump, even by his own lofty standards, for him to send out a truth social post like that so clearly and abundantly interfering into the elections of his neighbours is extraordinary. and both main leaders have rejected that interference. But his presence on the border, and the important thing here, Davina, is it's not just about the tariff trade war, that is one thing, it is also the threats to Canada's sovereignty, this sort of half-joke, half-serious notion that Canada should become the 51st state.

5:00That is what Mark Carney has seized upon, using his economic expertise to say two things. Firstly, I can handle a crisis. But secondly, I know how to fight an economic war. He's a veteran of Brexit, the Eurozone crisis, the great financial crisis. So I have been travelling with him in his plane over the past 36 hours. And it's abundantly clear, even at a time of sensitivity where he pulled back on the attacks on Pierre Poulyev because of a very tragic event in Vancouver, He continued with the attacks on Donald Trump, and he's happy for it to be almost a referendum on Donald Trump. And that is one of the reasons why the polls have turned around.

5:42Now, polls can be right, they can be wrong. We're going to find out fairly shortly. So this is so much more important than just about Canada. If you think about Canada in the G7, it's almost like if Mark Carney gets a significant majority, but Pierre Poliev has also been forced into that same position, then they will be the sort of anti-Trump within North America, a significant kind of confusion to the world remaking that Donald Trump has been seeking. So big stakes here, not just for this beautiful country, but also for, I think, the sort of balance of the rest of the world. Faisal Islam, BBC's economics editor there.

6:23So as Faisal was talking about, two clear front runners are the Liberal Party, led by Mark Carney, which has been in power for over a decade, and the Conservative Party, led by Pierre Poliev. But the intro of Sam Gruet also has been finding out how are voters viewing this? What's driving them to the ballot box? At this wine bar and shop, there's many decisions to be made. Red, white or rosé. And of course, who the next Prime Minister should be. The tariffs are and Trump is like really top of mind for everyone. So obviously we provide a great space for people to get together and to talk about those things and commiserate over a glass of hopefully Canadian wine.

7:09Nicole Rolfheisen is the co-owner and director of Imports at Grape Witches. They have three locations across the city. What would be a game changer is to change the import laws. She's hoping the next prime minister will reduce trade barriers between Canada's 13 provinces. As it stands, some goods are subject to import taxes without leaving the country. Wines that are imported into the province to have the tax that is applied to them, which is an international tax, so it's the same tax that gets applied to a French bottle or an Italian bottle, to have that, you know, dramatically reduced or completely done away with.

7:46That would be the thing that, you know, on a national level could really support the Canadian wine scene.

7:56Whoever wins this election will have the task of rebuilding Canada's economy after years of stagnation and in the face of an escalating trade war with the United States. Most of the variables that whatever government gets selected has to manage are unknown at this point. And it's hard to judge somebody's strategy or policies against an unknown environment. Out on the street, I meet Mark, who says he's voting with tariffs in mind. It sucks. It's absolutely ridiculous. It's completely unnecessary. And I think that we're doing exactly what we should do. That's fight like hell. Canada's main federal parties agree that some form of retaliatory tariffs are needed, though they have different ideas on how the money raised by these levies would be used.

8:39The Liberals say they would help workers and businesses, while the Conservatives want to remove trade barriers between provinces. The NDP say they would put every dollar collected from tariffs towards supporting those affected. I'm looking for a steady hand in our leadership. A little way down the road, I meet Michelle and Alida out on a dog walk. Like Mark, Michelle is also voting with the economy in mind. I'm looking for the voice of reason and experience. and wisdom and knowledge and, you know, someone who has spent the time and put in the work to know the way economies operate. But not everyone's vote will be shaped by tariffs, including Elidus.

9:23The tariffs hurt everybody, that's true. But the US should not be deciding how I'm going to vote. You know, there's other things that matter. That's Sam Gruet from Toronto there. Jessica, how are you viewing elections in Canada? I have the impression that Carney is rated quite highly. But then remember, he has this distinguished CV with the Bank of England, governorship, etc. But some people do seem to like the fact that Poulièvre is a more classical career politician. That seems to be the big divide I'm seeing, Davina. Well, one thing that came out from all these conversations I was having earlier was that the liberals and conservatives are keen to seek trade partners outside the U.S.

10:16because that seems to be a major concern, the way it's been also pulled away in this tariff war by the U.S. Sergio, from where you are, does this also mean some advantage for South American countries? Well, in a way, Canada is going to look for partners whom it already has an existing trade agreement. Places like Colombia, Peru, Mexico could benefit from there. But we also have to be honest that the snowbirds from Canada, the people who move to the U.S. or south of the border for the winter, are not going to come winter in Colombia, where we have a different language, a different currency. Insurance is very different from from over there.

11:07They may go to Mexico or Costa Rica or other places in the Caribbean, but perhaps not Colombia. So it will have to be other types of trade that can't necessarily substitute the U.S. high-end manufacturing that will come to Colombia. So the country that's poised to make the biggest gains from this is Mexico. Really? What about Asia, Jessica? I think the Asians, if I'm not wrong, it's a friendly little club now. Xi Jinping is touring most of Southeast Asia. Ishiba, the Japanese prime minister, I think is in Vietnam today. And it is kind of, we will survive without you. We must have a more robust regional trade zone.

11:51Thank you so much. And goodbye, Mr. Trump. I think they're trying to put in sensible policies so that they can survive and thrive. Yeah, but could there be place for Canada to expand when it says between both the parties, they need new partners. Could there be trade agreements between Asian countries and Canada there? I haven't assessed the volume of trade, but I think there's a lot of goodwill. There's goodwill. All right. We'll know the results of these elections, most likely by Tuesday morning. The last polls will happen in British Columbia and will be in just about an hour and a half from now when they close.

12:37So you can also follow more on bbc.com slash news about polls in Canada. We're keeping a close eye on bears. But now, take a listen to this.

13:00Well, that's the sound of people cheering and applauding in Spanish capital Madrid a few hours ago as the lights started to come back on after a massive power cut. Spanish Prime Minister Pedro Sanchez says the Spanish grid operator has restored power in around half the country. The lights have started to come back in Lisbon and Portugal as well, but what exactly caused this outage remains a mystery. Here's Spanish Prime Minister addressing the nation earlier on Monday.

13:36We still don't have conclusive information on the reasons for this outage. So I ask the public, as we have done in past crises, to get their information from official channels. It's better not to speculate. We will know the causes later. We're not ruling out any hypothesis. But now we must focus on the most important thing, which is restoring electricity to our homes. And when it was happening at its worst, the outage paralyzed both the countries. This was one resident in southern Spain who spoke to us on Monday afternoon. Hi, I'm Juliana. I'm living in Malaga and right now there is no power, no electricity, no water, I have no internet, no way to charge our phones, laptops, iPads.

14:24I've been out in the streets and people are just wandering around. The shops and restaurants are closed. There's only a few that are open. And of course, you can only pay things with cash. It's a bit chaotic. And hopefully, this will be solved soon. Well, to be honest with you, I was surprised listening to the story, because as I mentioned at the start of the show in India, we do have power outage quite often when there is more demand for power than can be generated, especially during summer months, because most of these appliances like air conditioning is on. Also, all the electronics take more and more power.

15:02So we are used to having power outages, perhaps for not this long. Jessica, how has it been in Malaysia? Have you experienced these kind of power outages? I've been extremely fortunate, dear Malaysia. It's been a lovely host and I have not had trouble with power. But I do know that Penang, where I live, has had a lot of problem with water supplies. So I do know that the UNESCO World Heritage Capital, Georgetown, this weekend was effectively shut down. Businesses had to close restaurants, for example, and residents had to stockpile water. And I think it ended up being shorter than they thought.

15:44but it's a little bit disturbing that an island with 1.3 million 1.5 million people is forced sometimes to to say sorry there's no water for a couple of days mate can you fill your buckets oh my god and these are struggles of things that we take for granted Sergio what about you have you had an experience of living without electricity for a few hours or days In the 1990s, Colombia had massive power outages because our electricity grid didn't have enough redundancies, largely due to the attacks of a guerrilla organization called the FARC. So then the state did a very important thing, which was to better regulate all of the power in the country, build more hydroelectric dams and plan for the future so that we wouldn't have power outages anymore.

16:39But that was almost 25, 30 years ago. The systems that were built then are no longer operating at the scale necessary for the growing population. So we have had issues with hydroelectric dams not having enough water. And how do you manage then? Well, we do all have candles here in Bogota. And flashlight. Well, it seems that as if you were there in India with me, because here what we do is we have gen sets. A lot of people have inverter, which is a battery set, which is used as a backup once electricity goes. But I was looking at some of these pictures that were coming from Spain earlier, and I could see that some people standing outside a mall because car payments were switched off.

17:30So people queued at cash machines to withdraw cash. Supermarkets were forced to shut down their doors and air conditioning wasn't running there. Flights were cancelled. at some places people were asked to step out of trains so that they could go home because everything sort of came to a standstill. Even there were traffic jams because traffic lights stopped working. And I was surprised to see this happening in Europe. Jessica, were you surprised when you heard this news? It's happening in what many would consider the developed or a high income sort of part of the world? Yes, there was a comic element to it, although I'm sure it was a comic for, you know, for the people who were suffering from the problem.

18:17But I think that, you know, to suddenly lose 60 % of the nation's power in one fell swoop, I'm really quite concerned. And I do hope the government can act quickly. I did call friends in Spain straight away. But luckily, my friends were in Palma, which, of course, is a separate island. And they said that the only outage they'd had was on telecoms that they couldn't get through on some cell networks, etc. But I think for Portugal, for Lisbon, Madrid, I think it's been a tough experience today. Quite a shock. It indeed has been, because even we were trying to get in touch with our reporters there to find out what's the latest.

18:59but a lot of them couldn't even charge the phone and speak to us. Systems were down and because telecommunication systems were down, it was very difficult to find out what was happening. But no one knows exactly what caused this. And this is also perhaps a cautionary tale on how vulnerable these cities are. So we earlier spoke with Leanne Hunt, who is an expert in disaster and emergency management at Coventry University in the UK on what can be done. The important thing is we consider how we prepare for these kind of events and how we deal with them. You know, certainly the kind of world environment that we're in at the moment and with things like climate change and the risks that we might see from climate change increasing, cyber attacks, etc.

19:45You know, these power outages, whatever the reason is, there is a chance they're going to be more frequent and perhaps, you know, last for these sort of more prolonged periods of time. so I think it's about how we prepare for them on a national level but also how we support you know our communities on a local level how they can prepare for these kind of things you know like the lady in your clip just now was saying um you know people having to use cash you know certainly here in the UK you know now a lot of places they would rather you use your card than using cash you know I myself I very rarely have cash in my purse so you know just kind of being mindful of you know it's great we're moving along in this very technological world that we're in now but then when something like this happens it can really upskittle us and make things very problematic just for day-to-day life.

20:34I was looking at pictures on bbc.com slash news in which I can see that there are images of people collecting gas bottles to use an alternative to electricity during the outage and I'm joining you from India in the capital city Delhi it's quite common to have energy shortage and power outage, especially during summers here. And we always have these alternatives like having a genset or having a battery powered backup for electricity. Does this incident also expose vulnerability of European cities in responding to crisis such as this? Yeah, I think what it does is it shows vulnerabilities at all different scales.

21:18So very much at a national level, you know, and if you take different countries across the world, that level of vulnerability will look different. So will the level of risk in terms of this happening, because, you know, some countries will be more prepared. They'll have different types of energy source. They'll have more robust infrastructure or not, you know, depending on where you are. So, again, it kind of comes back to that preparedness and recognising where our vulnerabilities are. Lian Hunt, who's an expert in disaster and emergency management at Coventry University in the UK. Sergio, what are your thoughts here?

21:55What should be priority areas for such kind of emergency? Well, I think the world is always going to need more energy, not less energy. And so the preparedness for renewable energies, redundant systems, much more energy and much more energy efficiencies all around is very important. But we still don't know what the source of the power outage is. So if this was, for instance, a foreign attack or hacking of the Spanish grid, it would also lead to a lot of alarm and increased cyber defenses all throughout. Yeah, I mean, we still don't know what the official cause is. The investigation is on. We do know the first reports of an outage began around midday on Monday and the impact quickly escalated there.

22:49You can find more on this on bbc.com slash news. We're going to take a short break here on Business Matters. We'll be back with more.

23:06Welcome back to Business Matters on the BBC World Service with me, Devina Gupta. Our two lovely guests are still with us. Jessica Kain, who's head of Asia for Astros Advisory in Japan. She lives in Malaysia, but is right now in the UK. joining us from there, and Sergio Guzman, who runs his own risk analysis company, Columbia Risk Analysis, joining us from Columbia. Thank you both for being with us. Now, just a question out there, from the time that you've joined the show, and you've been speaking to so many people, how many times have you heard the name Trump and discussed Trump on the show, Jessica?

23:44First you. Crumbs. It won't be single digit, will it, Davina? No, I don't think so. What about, Sergio, does a day go by without hearing his name on the show? Absolutely not. It's like a thing that is with us perennially. I think so, too. I think there's something or the other which keeps happening every day. As journalists, we are monitoring more news, which is coming from the U.S. as well. And well, this week is going to be actually 100 days of the Trump administration. since the time Donald Trump took oath at the White House to be America's next president. And while we've been focusing a lot on trade policies and another big shift that has been the push has been the cut in government spending, cut in programs that have been too expensive, according to this administration.

24:37And that's what I want to talk about as well. This is a story which, according to the National Advocacy Group Feeding America, the Trump administration has slashed about$1 billion in federal aid to anti-hunger organizations. And that's having a real impact on food banks and kitchens that help feed people in need. So earlier I spoke with Sarah Bussey, who is the coordinator at Trinity Tables. It's a food kitchen in West Virginia that serves nearly 1 ,000 meals per month. We are receiving a lot less viable food that we can use to make a meal. We used to receive proteins that were easy to cook, and now we receive things like dried lentils, which are great, but there's only so many times I can cook lentil soup in a month.

25:31Without that food, we are now spending the money that we raise by fundraising on the basics and we don't have money to buy the extras. So we're running out of money quickly. Compare this to what was earlier, before the Trump administration. How were things then? Oh, they were good. We would receive large shipments, often pickup trucks and SUVs, and we would fill several of those with our monthly deliveries. And now it's down to one truck. And you said that you're now getting lentils, for example, just to make soup. How are you trying to stretch these few resources to go further? Well, we are purchasing other things.

26:13Some donations have been great and have helped us. We go to a local bakery once a week who gives us their leftover bread. We go to another bakery that gives us cookies every week, but bread and cookies isn't enough. So to provide a protein and fresh fruits and vegetables is becoming more and more difficult. Do you have to make cuts on the number of meals that you provide to people every month because of this? Not yet, because we are committed to continuing this ministry. How much longer can you sustain this way without any new support? Less than a year, less than a year. So would it mean that you'll have to stop your services completely to the community that you're serving?

26:58Yes, it means that. And I don't sleep at night worrying that that will happen. I am frantically searching for other funding sources every day, every day. Well, the Trump administration, the policymakers say they're trying to curb government spending to control the deficit which is there in the economy. That's the money that is coming in versus what they are spending right now. What message would you like to send there? Because that's a strong argument. They're saying we have no choice here. Well, I believe that waste is truly a problem. However, this is not fraud. Feeding our hungry neighbors who are unable to eat is not fraud.

27:43We are serving people, senior citizens who have worked their whole lives and have had one medical incident that sent them into poverty. We are serving children who, in an after-school program, who did not choose to be hungry. And a lot of people say we need to focus on the basis of this, you know, the drug problems and work and so on. They are doing the best they can. And if we can't feed them, then how is that fraud and how is that waste? That is not what that is. This is something that should never be happening. How would you see then President Trump's 100 days in the office from where you are now?

28:24An absolute failure. I believe that our government should be a safety net for our least able. And the fact that funding is being taken away from programs that help our most vulnerable citizens, well, it's downright criminal. That's Sarah Bussey, coordinator at Trinity Tables Food Kitchen in West Virginia, talking about the difficulties that her organization is facing because of funding aid cuts from what she says is from the federal government as well. Now, Jessica, and this story, while this one is in the U.S., has actually been repeated in many other countries, many low-income countries, which are dependent on American aid through organizations like USAID, where cuts were also announced under Trump administration.