Will he or won't he?

Summary

Marketplace Morning Report: "Will He or Won't He?" – June 19, 2025

Hosted by Stuart Clarkson from the BBC World Service

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U.S. Involvement in the Iran-Israel Conflict and Its Impact on Oil Prices

The episode opens with an in-depth analysis of the ongoing tensions between Iran and Israel and the potential involvement of the United States. Stuart Clarkson reports on the uncertainty surrounding President Trump's decisions, highlighting the significant implications for global oil markets.

Key Discussion Points:

• U.S. Decision-Making: Reports indicate that President Trump has approved an attack plan but has not yet decided whether to implement it. This hesitation contributes to market uncertainty.

  Jane Sydenham, Investment Director at Rathbone's Investment Management, [02:11]: "The oil price has gone up, anticipating the possibility of the closure of the Strait of Hormuz, which is a very narrow shipping lane through the Middle East that carries about 20% of the world's oil."

• Strait of Hormuz Significance: As a critical chokepoint for global oil transportation, any disruption here can lead to substantial fluctuations in oil prices.

  Sydenham, [02:03]: "The oil price has gone up... but there are counterbalancing factors that had been keeping the oil price low."

• Market Reactions: The threat of conflict introduces volatility, with markets reacting negatively to the uncertainty. However, factors such as increased oil production by OPEC and high U.S. strategic reserves provide some stability.

  Stuart Clarkson, [03:03]: "We're expecting to see some rises if Trump says, yeah, we'll get involved in this."

• Broader Economic Implications: Energy prices are fundamental to global economic health, influencing costs across various sectors and impacting overall economic growth.

  Sydenham, [03:31]: "Energy prices are a huge input to the economy generally. It's the input cost for economies right across the board all the way around the world."

Global Economic Snapshots and Key Developments

Following the primary discussion on the Middle East conflict, the report transitions to a series of global economic updates, highlighting significant events and trends affecting various industries.

Notable Highlights:

• Air India's Operational Changes: In response to safety inspections and disruptions following a fatal crash in Ahmedabad, Air India will reduce the use of widebody aircraft on international routes by 15% until mid-July.

• Ireland's Export Surge: Ireland experienced a staggering 400% year-on-year increase in exports to the United States, reaching $25 billion in March. This surge is driven by heightened demand for ingredients used in weight loss drugs and diabetes medications.

• LA Lakers' Potential Takeover: A $10 billion acquisition of the LA Lakers basketball franchise is underway, potentially marking the most expensive sale of a U.S. sports team in history.

• Syria's Financial Reintegration: After 14 years of civil war, Syria has successfully completed its first international bank transfer via the Swift payment system, aiming to reintegrate into the global financial system.

Thailand's Economy Under the Threat of U.S. Tariffs

A significant portion of the episode is dedicated to examining how potential U.S. tariffs are impacting Thailand's export-dependent economy. Marketplace's host, Liana Burns, conducts an insightful interview with Ed Butler of the BBC and Rayong Kittipol, providing a comprehensive view of the situation on the ground.

In-Depth Analysis:

• Economic Overview: Thailand's economy is heavily reliant on manufacturing, particularly automotive parts, and tourism. The U.S. stands as Thailand's largest export market, accounting for $60 billion annually.

  Rayong Kittipol, [05:35]: "Thailand is the world's number one rubber exporter. ... the threat of these tariffs has caused the price to come right down and affects your bottom line."

• Impact on Agriculture: The rubber industry, a cornerstone of Thailand's exports, is experiencing significant price drops due to tariff threats, directly affecting farmers' livelihoods.

  Duang Chai (translated), [06:33]: "The price of the rubber is going down very much. ... it's not good, the price going down. She doesn't like it at all."

• Manufacturing and Investment: The uncertainty has dampened investor confidence, leading to reduced expansion efforts in industrial parks. Some factories, like a Chinese-owned solar panel plant, have already halted operations in anticipation of tariffs.

  Rayong Kittipol, [07:45]: "Depending how the trade deal between Thailand and the United States is gonna work out, there's less activity. Everybody is in the mode of wait and see."

• Government Response: Despite the economic challenges, the Thai government is initiating technical discussions aimed at negotiating the trade deal with the U.S., albeit without providing specific updates at this time.

  Rayong Kittipol, [08:33]: "Their progress is sensitive, it seems very sensitive. And for that reason, they're not going to say anything more right now."

Conclusion from Interview:

The looming tariffs have created a climate of uncertainty that pervades all sectors of Thailand's economy. While some areas like construction remain active, the overarching sentiment is one of cautious waiting, with businesses and farmers alike hoping for favorable negotiations to alleviate the economic strain.

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Final Remarks

Stuart Clarkson wraps up the episode by acknowledging the multifaceted economic challenges discussed, emphasizing the interconnectedness of global markets and the far-reaching consequences of geopolitical tensions.

Production Credits:

• Producer: Linda Walker
• Editor: Naomi Rainey

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This summary encapsulates the critical discussions and insights from the "Marketplace Morning Report" episode titled "Will He or Won't He?" providing listeners with a comprehensive overview of the key economic and geopolitical issues shaping the global landscape as of June 19, 2025.

Transcript

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[Stuart Clarkson]

Mixed signals on U.S. involvement in the Iran Israel conflict means a mixed performance for oil. Live from the uk, this is the Marketplace Morning Report from the BBC World Service. I'm Stuart Clarkson in for Liana Byrne. Good morning. Still unclear what action President Trump will take in the conflict between Israel and Iran. The BBC's US partner CBS says Trump has approved an attack plan but not taken a decision yet on whether to use it. The Middle east is home to some of the world's biggest oil producers, so it means uncertainty for prices. Let's talk to Jane Sydenham, investment director at Rathbone's Investment Management. Hello.

[Jane Sydenham]

Good morning.

[Stuart Clarkson]

So a couple of options for the US Getting more involved in this, trying to broker some peace talks and those two options could impact oil prices in a different way, I guess.

[Jane Sydenham]

Yes, most definitely. I mean, the oil Price has gone up, anticipating the possibility of the close of the Strait of Hormuz, which is a very narrow shipping lane through the Middle east that carries about 20% of the world's oil. Important to say that hasn't actually changed since 1972, despite other conflicts that have taken place in the Middle East. But of course, the worry of it is what's pushed up the oil price in the short term. And the oil price has been, if anything, a little bit weaker before the threat of this conflict because OPEC have added around a million barrels a day of production to world markets and the US Oil strategic reserves are at a pretty high level. So there are counterbalancing factors that had been keeping the oil price low. So I think it's really the worry about this rather than the reality at this point.

[Stuart Clarkson]

So we're expecting to see some rises if Trump says, yeah, we'll get involved in this.

[Jane Sydenham]

I think it adds to the uncertainty. Markets will always react negatively to that uncertainty in the short term, but it's, of course, very much going to depend on what happens with shipping in that part of the world.

[Stuart Clarkson]

And there's a lot of emphasis on the impact on oil prices of this conflict. And that is because they influence the price of so many other things that we buy every day, right?

[Jane Sydenham]

Yes. I mean, energy prices are a huge input to the economy generally. I mean, some people say that economic growth is, you know, energy transformed. I think that's not an unreasonable way to look at it, really, but it really is the input cost for economies right across the board all the way around the world.

[Stuart Clarkson]

And I guess we're all fairly helpless in what we can do to stop this happening. It's completely out of our hands, isn't it?

[Jane Sydenham]

Very much so. You know, it's right in the Middle east and there's nothing that we can do about it. Having said that, OPEC can produce more oil and the US Is now a much greater, you know, a much larger producer of oil than it ever has been. I mean, it is now exporting to the rest of the world. So that has improved the supply of energy outside the Middle East.

[Stuart Clarkson]

Thanks for being with us today. Really appreciate your time, Jane.

[Jane Sydenham]

Thank you.

[Stuart Clarkson]

Let's do the numbers now. And Air India says it will reduce the use of widebody aircrafts on international routes by 15% until mid July. It's because of ongoing safety inspections and disruptions following the fatal crash at Ahmedabad last week. There's been a 400% year on year jump in exports to the US from Ireland with sales worth $25 billion heading across the Atlantic in March due to demand for ingredients used in weight loss drugs and in diabetes medicines. A $10 billion takeover of the LA Lakers basketball franchise is on the cards. It would be the most expensive sale of a US Sports team in history. And Syria has done its first international bank transfer via the Swift payment system since the outbreak of the country's 14 year civil war. It's hoped the milestone will help reintegrate Syria back into the global financial system. Now Thailand has an export dependent economy and is potentially facing some of President Trump's most punishing tariff rates, threatening 36% if a reduction can't be negotiated. So how are key industries bearing up? My colleague and marketplace host Liana Burns spoke to the BBC's Ed Butler.

[Ed Butler]

Hello, Ed.

[Rayong Kittipol]

Hi there.

[Ed Butler]

So, Ed, can you just sketch out the nature of Thailand's economy for me?

[Rayong Kittipol]

Yeah, I mean, mostly Thailand makes stuff, actual manufactured goods, things like car parts. Tourism, of course, is also a big element of the country's income. But importantly, it is a big net X border. And the US is Thailand's biggest export destination. $60 billion a year goes there. And that's why it seems President Trump has set such a high potential tariff figure against Thailand. Some of this, of course, is agricultural goods, rubber, for example. Now, Thailand is the world's number one rubber exporter. And I visited a rubber plantation in the east of the country. It's a place called Thonburi. I spoke to a farmer there, her name was Duang Chai. She'd been harvesting SAP from tre in the area for 30 years nearly. And I asked her how she was feeling right now. Her words here are spoken by a translator.

[Duang Chai]

The price of the rubber is going down very much. So that's what she concerned. Even the price of rubber last year is better than this year.

[Rayong Kittipol]

So just the threat of these tariffs has caused the price to come right down and affects your bottom line.

[Duang Chai]

It's not good, the price going down. She doesn't like it. She doesn't like it at all. But there's no other alternative option for farmers, so we just have to keep doing it.

[Ed Butler]

So it's really clear from listening to that that that's really affecting her. What other sectors did you see that is also having effects?

[Rayong Kittipol]

Well, it's all of them really. I mean, the uncertainties had such a big impact on sentiment, feeling in the economy. I went to an industrial park near Bangkok which seeks to get in these foreign firms, get in foreign investment with tax breaks and they're keen to expand what they do. But the uncertainty is holding things up. Rayong Kittipol, who's the boss of the place, he showed me round in front.

[Unknown]

Of us is container, full load of concrete for the construction work. A lot of construction happening.

[Rayong Kittipol]

So you're still expanding.

[Unknown]

I think this depending how is a trade deal Thai and United States gonna work out is less activity. Definitely, yeah. Everybody in the mode of wait and see.

[Rayong Kittipol]

Yeah, wait and see. I mean, Rayen Kittapol showed me a Chinese owned solar panel factory that actually wasn't waiting. It had already been mothballed. He said because of the tariff situation, things are very quiet now. At a deep sea port that I went to, it was eerily quiet. I'm told that exports, since the initial announcements on tariffs have fallen. But the Thai government is putting on a brave face this week. They told me that technical discussions on a trade deal with America are starting this week. Their progress is sensitive, it seems very sensitive. And for that reason they're not going to say anything more right now.

[Ed Butler]

Not a great economic picture, Ed, but what a beautiful country. Not the worst assignment to be on.

[Rayong Kittipol]

Not at all.

[Ed Butler]

All right, the BBC's A.D. butler. Thank you so much for joining us in Marketplace.

[Rayong Kittipol]

Thanks for having me and thank you.

[Stuart Clarkson]

To you for listening today. Our producer was Linda Walker. Our editor is Naomi Rainey. In the uk, I'm Stuart Clarkson with the Marketplace morning report from the BBC World Service.

[Ed Butler]

This old house has been America's most trusted source for all things DIY and home improvement for decades. And now we're on the radio and on demand.

[Richard Karn]

I think you're breaking into this wall. Regardless.

[Unknown]

I was hoping you wouldn't say that.

[Rayong Kittipol]

I need to go and get some whiskey.

[Unknown]

I think I would get the whiskey for sure.

[Ed Butler]

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