← The Globalist
The Globalist
Japan and the US announce an unexpected trade deal. Plus: the 82nd Venice International Film Festival
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UBS Announcer
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Emma Nelson
You're listening to the Globalist, first broadcast on 23 July 2025 on Monocle Radio. The Globalist in association with U. Live from London. This is the Globalist with me, Emma Nelson. A very warm welcome to today's program.
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Inga Thordar
Coming up, I just signed the largest.
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Tim Abrams
Trade deal in history, I think maybe the largest deal in history with Japan.
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Emma Nelson
Markets surge after an agreement is reached between Washington and Tokyo. We'll ask how the trade deal will affect the Japanese economy amid rumors that that the prime Minister is to step down. Also ahead in the next 60 minutes, Iran tries to stave off the return of sanctions, but will talking to Moscow and Beijing do anything to help? And more talks in Turkey as Ukrainian and Russian negotiators try a third attempt at bringing about an end to the war. Hopes are not high. Plus, we'll hear now the EU could retaliate against any tariffs imposed by Donald Trump. We'll go through the papers and.
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Karen Krasanovich
You.
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Emma Nelson
Tend to choose people because they worship.
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Tom Keating
You, not because of any actual merit on their part.
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Emma Nelson
We'll enjoy a preview of the Venice Film Festival. That's all coming up on the Globalist live from London. First, a quick look at what else is happening in today's News. More than 100 aid agencies have issued a warning of mass starvation in Gaza. Ukraine's President Volodymyr Zelensky has signed a new law which critics say removes the independence of two key anti corruption bodies. And sales of alcoholic spirits made in the United States have plummeted in Canada after Donald Trump imposed tariffs on Canadian imports and suggested the country should become a US State. Stay tuned to Monocle Radio throughout the day for more on these stories. But first, the US has announced a trade deal with Japan. President Trump described the agreement as massive, with Japan investing US$550 billion into the US and paying a 15% reciprocal tarif. Japan's Nikkei leapt by as much as 3.3% of the news, which brought relief to the country's car manufacturers. Their shares are up too well to tell us more. To get us a view from the Japanese capital, I'm joined by Fiona Wilson, Monocle's Tokyo bureau chief. Good afternoon, Fiona.
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Fiona Wilson
Hi, Emma.
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Emma Nelson
So tell US what's in the deal?
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Fiona Wilson
Well, we don't have the full detail yet. What we know is from Donald Trump's truth social post, which is his favored means for announcing these huge bits of news. I mean, and you said it, you know, he said it's the largest deal ever made. You know, we'll have to confirm that Japan will be investing $550 billion. It will be paying 15% on imports into the U.S. and it's, you know, Donald Trump said it'll be opening up the, you know, the Japanese market to cars, trucks, rice, other agricultural products. Now, these were all the things that were sticking points, but we don't know the full detail yet. 15% is the number that everyone's looking at. Japan was threatened with this 25% import tariff. And as it is, it's better than 25. 15% is still better than 25. And I think, you know, many people are saying here, hats off to Ryosei Akazawa who's been the chief negotiator for Japan. There's been eight rounds of talks which really weren't going anywhere. So I think today it was a bit of a surprise, August 1st deadline was coming up, but the talks really seemed to be stuck. Donald Trump had been calling Japan spoiled. He'd been making all sorts of noises about I might even ask for more of a tariff than would near 35%. So it's been a difficult few weeks and I think there's a lot of relief certainly in the auto industry.
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Emma Nelson
Indeed, this relief in the auto industry comes, I mean, admittedly, the Japanese market has to open up more to American cars, which is obviously going to introduce a new level of competition. But there had been a genuine sense of worry here that higher tariffs would have absolutely crippled Japan.
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Fiona Wilson
I mean, there was a massive concern about that 25%. It's a country that really, it's an export centered economy. To hit the auto industry like that would have been very, very bad news. So that will be a huge relief. I mean, the interesting thing about cars is the US Car, the cars were, there was no tariff on US Cars coming into Japan. The big problem for US Cars is that Japanese people don't want to buy them. So it'll be interesting to see what the detail is there. If they've slightly tweaked some regulations, which is what the US Team wanted, so that US Cars be sold more easily here, you know, that there were other tariffs apart from just that. You know, people said, yeah, it's tariff free, but there's still other problems.
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Emma Nelson
One of the things that has come out in the last couple of hours though, is it looks like that the Prime Minister is going to step down now. This has not been a good week for Prime Minister Ishobo, has it? Given the fact that they lost his party, his coalition, lost the control of the upper and both now lower house on Monday and everyone was looking at him to say, well, what are you going to do with the trade deal?
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Fiona Wilson
Absolutely. I mean, the trade deal was really one of the problems in this election on Sunday with the upper house. Yeah. So, you know, you have to feel a bit sorry for Shigurai Shiba. He's lost the upper and lower house now. So, you know, he's running a minority government. Lost the upper house. In the background you had this issue about inflation and the potential for tariffs, which was about to really deal this massive blow to the economy. So the trade deal's happened, hasn't come quickly enough for him. He said, look, I need to read the detail. He has a meeting this afternoon with three former prime ministers. I don't think I'd want to be the Ishiba in that scenario. And these are three bigwigs in the LDP they are feeling, and so are some of the younger members. They think it's time for Ishiba to take responsibility for what happened on Sunday, regardless of this deal now being completed. And they think he should go. The big question is who would take over?
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Emma Nelson
Indeed, what's the mood like in Japan? Because obviously you have this trade deal which provides some relief at least, yet at the same time you go into political uncertainty again.
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Fiona Wilson
Yeah, I think that, you know, this tariff deal was really swirling. It was creating so much uncertainty in the market. I mean, you only had to see the Nikkei jumped, the yen jumped, obviously Toyota shares jumped, Nissan, Honda shares all went up. So that was a stability that those, you know, that people were looking for. But yeah, I think there's still uncertainty. The cost of living, that crisis isn't going away. People are really feeling the pinch. Salaries are not keeping up with inflation and that's where people are hurting. And where you've seen this sort of arrival of these new younger parties like San Sato, that there's been a lot of discussion about these far right parties and I think the issue is the economy. That's the massive thing. And you know, looking, we were just looking at social media here. I mean, I think there's a. They do welcome this deal, but a lot of people not thrilled with Donald Trump's rather triumphant tone. So I don't think he's won any friends in Japan. But, yeah, it'll be interesting to see that it is still a period of uncertainty and I think it's a difficult role to jump into. Now, who wants to be Prime Minister with a minority government? This cost of living crisis. And you've got. You don't have control of the upper house either. So it's a very difficult role to step into.
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Emma Nelson
And not only that, you mentioned the fact that obviously the economy is in a mess, they have a minority government, but dealing with Donald Trump is something that any incoming prime minister is going to have to do and is going to have to fight. Japan's corner. Is this deal being seen as a good thing, given the fact that the 15% is currently higher than the 10% tariffs that are being imposed on Japanese exp. But also there are areas that are fundamental to the Japanese economy which are having to open up. We're talking about rice, we're talking about wider areas of agriculture.
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Fiona Wilson
Yeah, I mean, that's all very interesting and I think you're absolutely right. These are, these kind of. Rice is a very, kind of emotional issue, if anything, in Japan. But I think, again, you have to look at the detail. I mean, in spite of what Donald Trump was saying, the US was the top importer of rice into Japan. Prior to this, there was already an agreement with the WTO where there was a sort of minimum access treaty where Japan had to take a certain amount of ice from overseas, and America was top of that list. So the detail is going to be very, very important. And again, with this investment into the us, I mean, earlier in the year, when Donald Trump and Shigeru Ishiba sat down for their first summit in February, Ishiba was talking about investing a trillion dollars in the American economy. So the numbers are absolutely huge. And Donald Trump is talking about $550 billion. It's a huge number. It was always going to be a huge number. And Japanese investment in the US is absolutely enormous. It's the number one direct investor in the us So I think perception is important. I think presentation is very important as well. And at the moment, we're just hearing it from Donald Trump's side. I think people need to sort of absorb the figures and really work out what does this 15% tariff mean. And I think just the relief that it's not 25%. It was actually 27.5% for the auto industry, which was very bad. I think that will be the thing that most people will think, okay, it's not as bad as it was.
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Emma Nelson
And indeed Japan can probably take a little credit on the world stage, as you say. We've only just heard what Donald Trump thinks, but the fact that Japan can actually get on and negotiate a trade deal at pretty good speed as well is probably a sign that the Japanese are very good at doing business.
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Fiona Wilson
Yeah, I mean, it's interesting that there was quite a lot of provocation. Donald Trump, maybe it's his negotiating style was quite insulting about Japan and, and I think that the Japanese were very restrained, they didn't retaliate. And the other thing is you've got Ursula von der Leyen here this week in Japan. Now they are also looking at the EU and doing some good deals there. I think that's the thing that is not being sort of factored into this trade deal with the US is that Japan and China, she's going on to China after here. They're also looking at the eu, they're looking at broadening their trade partnerships with the eu. And I think that's where long term the US has damaged its position in Japan, seen as the ally that maybe people thought it was. And I think people felt there was a special relationship with the US and unfortunately this whole situation has exposed that as being completely untrue.
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Emma Nelson
Fiona Wilson in Tokyo, thank you so much for joining us. You're listening to the Globalist live on Monocle radio. It's what, 711 here in London. Now, Iran has held meetings with both Russia and China this week. The purpose was to establish a possible response to any fresh sanctions imposed on Tehran by the so called E3, the UK, Germany and France. If it is indeed established that Iran has returned to reviving its nuclear weapons programme, the so called snapback mechanism may be triggered which could lead to the immediate return of sanctions. Well, to explain all, I'm joined in the studio now by Tom Keating, Director for the Centre for Finance and Security at the Royal United Services Institute. Rusi here in London, Good morning. Tom, good to have you with us.
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Tom Keating
Thank you for having me.
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Emma Nelson
Just for a little bit of clarity, how much of a nuclear development program does Iran currently have given what happened last month?
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Tom Keating
Well, who knows? I mean, that's part of the problem, isn't it? After the bomb strikes by the Americans. I mean, I think when we look at this story, we have to go back quite a number of years because of course, for many, many years, decades indeed, Western allies have been trying restrict Iran's ability to develop a nuclear weapons program. And that all came to a head with the so called Joint Comprehensive Plan of action in 2016, the nuclear deal whereby Iran agreed to restrict whatever program it had to within certain limits. Donald Trump withdrew the United States from that in 2018. The Europeans have tried to keep it together. With the return of Donald Trump to the White House this year, the topic has risen back to the top of his security agenda with his maximum security campaign. We've had the military strikes and now we wait to see what happens, whether UN sanctions, which were lifted as part of the nuclear deal, as you say, snap back.
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Emma Nelson
And now we have the meeting between Russia and China and Iran. Was this two separate meetings or was this one sit down. Big, big discussion and indeed what came from this meeting or these meetings?
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Tom Keating
So I obviously don't know precise details. I think what I would say is that these three countries have been working together on a number of sanctions files. I mean, they rail against the fact that the United States, the eu, the UK are weaponizing, in their view, the financial system, the global trading system, in order to coerce Iran when it comes to its nuclear program, Russia when it comes to its full scale invasion of Ukraine, China for supporting both of them. So there is this closer cooperation between these countries to try and develop, develop systems and workarounds that avoid this financial pressure. So new financial systems, for example, that don't use Western banks, that don't use all the technicalities that the Western financial system brings for global good. So this is an ongoing challenge that these countries are collaborating on, which is try to essentially lever themselves out of the embrace of the Western hegemony.
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Emma Nelson
And how strong a voice does Iran have?
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Tom Keating
So it's interesting because actually a bit of advertising, I wrote a paper a couple of years ago called Learning Bad Habits, something like that, which is basically how is Iran teaching Russia to evade sanctions? So Iran in a way has many, many years of experience of how to evade sanctions. It's obviously it exported its drone technology to the Russians and those drones are crashing down on Kyiv every night. It's provides cheap oil to the Chinese. So Iran has quite a lot to offer, even though it's obviously not this kind of massive economy like China or this threat to Europe in the way that Russia is doing.
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Emma Nelson
So this meeting that's happening on Friday, we have the E3, the UK, Germany and France sitting down with Iran. Excuse me, what are they going to talk about exactly? Because we need to explain a little bit more about just how enormous the snapback mechanism is. It sounds quite quick and light, but it isn't. This is a full on return to full sanctions On Tehran, ironically, it was invented by Sergei Lavrov, is that right?
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Tom Keating
Yeah. So back to the nuclear deal in 2016. As part of that, UN sanctions related to Iran's nuclear program were lifted. And it's really important here we're talking about UN sanctions because we kind of forget about the UN these days. It's broken the P5, the permanent five veto of Russia, China, France, the UK and the US basically mean that it can't come to any conclusions on anything. So the UN sanctions were lifted back in 2016 and the idea was that Iran would get this fantastic economic benefit from the fact that banking systems were reopened, trade could reopen, all that kind of stuff. Now that didn't really materialise the Europeans, particularly the French and the Germans, less. So the UK kind of lent in to trying to re establish economic ties with Iran. As I say, the US withdrew from that. So the return of UN sanctions, just the very fact that it's UN sanctions, given the way the UN functions these days, is pretty extraordinary. And this is kind of baked in. The snapback is baked in. And that would again restrict trade, restrict banking access for Iran and basically some might say put Iran back into the stone age when it comes to its ability to trade with the international community. But what's happened in the last 10 years is all these new connections have been made around the world. And so the extent to which these sanctions will actually be observed by the Chinese, by the Russians, by others, and be effective as they were 10 years ago, remains to be seen.
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Emma Nelson
So we have the possibility that the not necessarily circumvention of the sanctions, but workarounds are being actively discussed. But from the point of view of Tehran, how willing are they or how useful is it to engage with the E3, the UK, Germany and France, given the fact that if we look at last month when Israel and Iran had that 12 day conflict, the German Chancellor described what was going on as Israel doing our dirty work. I mean, they do not go in with, let's say, the healthiest of relationships.
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Tom Keating
No, I think that's absolutely right. So if you go. I mean, I think the history of this is that the Europeans really wanted the nuclear deal to work back in 2016 and as I say, tried very hard to make it work, created all sorts of technical channels for trade and that sort of thing to try and make it work. I think now, frankly, the way of the world is that the Europeans are probably, I mean, they would obviously like snapback not to happen because that would mean that there was a consensus that Iran's nuclear ambition was curtailed or controlled. So snapback is a sign of failure, you could say. At the same time, if you look at how Iran has positioned itself vis a vis the thing that really matters to Europeans, the war in Ukraine, then obviously there, there is no sympathy for what happens next in Iran from a European perspective because of the way in which it has very successfully and very unfortunately supercharged Russia's ability to wage war on Ukraine.
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Emma Nelson
Indeed. And we know. So let's move more generally towards the Russia, China and Iranian relationship. You mentioned already that they are looking together to try to circumvent extra sanctions, new sanctions, they do their work around. Am I right in thinking that there is a course now taught in Moscow on how to evade or how to work around sanctions?
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Tom Keating
There is. I've been talking about that to everyone I can speak to. But funnily enough, while I was sitting in the control room waiting to come on air, I was writing an outline of an article that I'm writing with a colleague on exactly this. And I got myself thinking, you know what? But if you look at the King's College London website, there's a course on sanctions, so why should there not be a course on sanctions circumvention at a university in Moscow? But yes, you're absolutely right. And this in a way gives you a sense of the extent to which circumventing sanctions, this is not a sideshow for these countries. This is core and in the context of Iran and Russia, it's existential. If they can't sell their oil, in particular both Russia and Iran, then how do they fund their economy? How do they fund their nuclear program? How do they fund their war in Ukraine? So it matters. And yes, training the future generation on how to circumvent sanctions shows that they're in it for the long haul.
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Emma Nelson
Indeed. But we now have the, we now have EU sanctions against Russia following the full scale invasion of Ukraine. And therefore this workaround, does this now mean that Russia and China are pulling together? In what way are they? I mean, you mentioned the idea of financial mechanisms and things like that, but could Russia and China, and indeed, let's go back to the beginning of this discussion, Iran find sort of a permanent, solid and workable long term strategy that means the EU sanctions don't work or do EU sanctions still have that ability to drive wedges between countries and indeed to bite?
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Tom Keating
So Western sanctions, I think we have to talk about the us, the EU and the uk they obviously do still have bite because countries try to avoid them. So clearly they are a problem. That being said, once you've been sanctioned once, fool me twice, or whatever the saying is, the point is I'm going to learn from that and I'm going to shape shift so that I permanently can operate beyond the reach of your sanctions. So the Chinese are critical in all of this because they're buyers of Russian oil, they're buyers of Iranian oil and they provide technology to particularly the Russian military. What the Chinese don't like is being called out on this. If you look at the sanctions list, there are a very great many Chinese names on that. And I know from conversations I've had in Brussels, in London and elsewhere that whenever Chinese names appear on the sanctions list, they get terribly upset about this. How dare you shine a light on us. Well, how dare you fund these kind of rogue states. So I think we kind of need to work with the Chinese. They are the key element in all of this. We need to persuade the Chinese that actually, you know what, it's not in your interests to be funding Russia's war in Ukraine or to be funding Iran's nuclear program by buying its oil and outing them on. This, I think is not a bad thing to do. Even if by issuing the sanctions, we're not necessarily impacting their economy, we are at least publicly naming and shaming the Chinese companies involved in this.
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Emma Nelson
Tom Keating, Director for the Centre for Finance and Security at rusi. Thank you so much for coming into the studio today. You're listening to the Globalist. And still to come on today's program.
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Joel Flynn
I determined that the memory of my evils.
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Tim Abrams
Should die with me.
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Emma Nelson
That's Frankenstein, ladies and gentlemen. And we'll hear more on that and the latest from the Venice Film Festival a little later on the global list.
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Emma Nelson
Let's continue with today's newspapers. Joining me in the studio is Inga Thordar, his Chief External Relations Officer at the Ocean Born foundation. Also a former senior editor at both the BBC and cnn. Good morning, Inga. How are you? You?
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Inga Thordar
Good morning. I'm very well, thank you. Two days away from a break. What?
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Emma Nelson
Oh, right. Where are we going?
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Inga Thordar
Oh, we're going home to Iceland.
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Emma Nelson
Oh, wow. And what's in Iceland? What's going to be in Iceland when you get there. This is more important than the news. Yeah.
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Inga Thordar
Hopefully a little bit of sunshine. That's what I'm definitely hoping because Iceland in good weather is very beautiful. And then family and friends.
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Emma Nelson
Wonderful. And we wish you the very, very best for your little break. Before you do that, would you do us a favor and go through the papers for us?
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Inga Thordar
I would love to do that, Emma.
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Emma Nelson
Okay, lovely. Let's have a look at the New York Times is going big on Epstein and we have quite a lot happened in the last 12 hours, hasn't it? And the New York Times has absolutely kept up across this. One of the things is the fact that the House is going to be curtailed in the duration of its business so that everyone's being basically sent on their summer holiday so that they don't have to talk about Jeffrey Epstein.
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Inga Thordar
That's right. This happened just sort of overnight for us, I guess. But Mike Johnson, the Speaker of the House, who was also a Republican from Louisiana, I think it's important to make that note. He managed to basically prevent the vote that was being threatened by the Democrats and they want to release the files from the grand jury in the Epstein case, but he prevented that by sending them home on their month long break early. Now, of course there's been criticism and I think the important thing is it's not just the criticism from the Democrats. It's also a real division within the Republicans about this because many Republicans want these files to be released because they believe that accountability and transparency is hugely important, which is pretty much what the Democrats are saying. And it's extraordinary that these files go back to 2006. So here we are almost 20 years later and they're still trying to get everything out in the open about how the heinous crimes that Epstein committed and the associations he had with rich and powerful people.
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Emma Nelson
And indeed there are pictures emerging in the last 12 hours that that do suggest that there was quite a strong relationship between Trump and Epstein.
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Inga Thordar
That's correct. So CNN has this morning published a photo from the wedding, Trump and Melania's wedding at Mar a Lago, which Epstein clearly came to. I think it's really important to say that there has been no evidence to suggest that Trump had anything to do with Epstein's crimes. But he definitely had some kind of relationship with him and he said that he cut that relationship off early in the 2000. So he has definitely tried to distance himself quite a lot. And we saw that overnight as well when he did his usual thing when the cases come up that are uncomfortably close to him. He used blame and deflect and started to try to focus on Obama, saying that Obama had committed treason and that without any evidence of that either, I should say. And that sort of related back to the Russia inquiry. So he is definitely trying to move the conversation away from himself and the Mike Johnson and the Mark Republicans are trying to keep him happy.
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Emma Nelson
Indeed. I mean, how successful do you think Trump's efforts to sort of put a lid on this are going to be given the fact that once pictures start to swirl around? And he had a chat with CNN yesterday and said this is fake news, the usual batting off. But one wonders how much this will stick because in everything that Donald Trump has been involved in, including criminal convictions, he has seen it as a victory and he has always managed to somehow turn it to his advantage. He has.
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Inga Thordar
And I mean, there's no reason to doubt that that wouldn't happen here. But equally, I don't think a month long break at Congress is going to kill this debate or the calls for these files to be released. And we have Ghislaine Maxwell now likely to speak to the DOJ as well as being subpoenaed by the House Oversight Committee. So this saga isn't over.
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Emma Nelson
This is going to continue. Okay, thank you for that. Let's read a little bit more. Tell us a little bit more about the International Court of Jo Justice. It is going to publish its advisory on climate change. Explain to us what that advisory, why that has come about and the significance of the ICJ.
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Inga Thordar
Yeah, we're going to hear at 3:00 today the outcome or the advisory opinion from the ICJ of this case, which has been going on for years. It started, and I think this is a really important point, it started with a youth movement in the South Pacific and Vanuatu, then picked it up and got an agreement in the General. And now the court is going to, well, has agreed to hear it. And there's been a record number of submissions to the court. That's why it's also taken so long. Every state wanting to have their say about this. But there's a couple of important things here. I mean, first of all, we have to remember that it's not legally binding what the ICJ says, but it can have an effect on domestic law. And also the court does not just have to look at climate frameworks or climate law. It can look at human rights law, investment law, trade law and everything. So it gives it a very wide remit. And then I mentioned that it came from a youth group. I think that's the other important point is that the opinion will address what obligation exists, but also the future obligation or obligation to future generations. So it's not just saying what we have to do for ourselves right now, but it's also addressing what we have to do now to protect future generations.
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Emma Nelson
And who is the advisory being directed at? Is it at governments, is it at private? Or is it just a cry to the world in general?
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Inga Thordar
Well, the ICJ deals with states, so it's the obligation of states towards, well, people or the world. So what it will open up is states taking cases against states or domestic legislation perhaps needing to be changed or can be used to make cases. And I think it's really interesting that we have to remember that there has been a trend in courts recently to rule that states have an obligation when it comes to climate change. And the one of them is the inter American court that just reeled very recently that states have an obligation to stem climate change for future generations.
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Emma Nelson
We need to pay tribute to Ozzy Osborne.
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Inga Thordar
We do need to pay tribute to him. I mean, there wasn't a paper anywhere that wasn't headlining Ozzy Osbourne's death, very tragic death, so soon after his sort of farewell concert in Birmingham earlier this month. But not just from here and from America, but in Scandinavia and everywhere. It was clearly his impact on the music industry is enormous. And, well, we knew that he was definitely a genre artist, but, you know, he had been ill for a long time with Parkinson's, so maybe not a surprise.
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Emma Nelson
There was something rather delightful about him. I was very lucky. I interviewed him once, but a million years ago, and I was a brand new reporter and he absolutely ate me for breakfast. He just sort of steamrolled me brilliantly, as one should. But there was something about him that he was a total delight. And I think his former manager yesterday said that he obviously wanted to be the Prince of Darkness who accidentally would bite the head off a bat. But in actual fact, he was just the sweetest, kindest individual. And I think we saw that when he got into the reality TV shows that he actually was a genuinely nice man.
- [31:12]
Inga Thordar
Yeah, I mean, I think the sort of stage Persona can often be different from the individual. And you're kind of seeing that in the outpouring from fans, from other bands, from fellow artists and everything. I didn't interview him, but I saw him in concert, although it's not my kind of music, but, you know, but it was a quite an experience and his followers were clearly dedicated so it's, it will be a loss to the music industry for sure. But he leaves a huge legacy.
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Emma Nelson
There are not many like him. Inga Thurdar, thank you so much for joining me in the studio. You're listening to the Globalist on Monocle Radio. A quick look now at some of the other stories we're keeping an eye on today. More than 100 agents agencies have issued a warning of mass starvation in Gaza. The UN Secretary General Antonio Guterres told the UN Security Council that malnutrition is soaring and starvation is knocking on every door. Israel insists it's acting within international law. Ukraine's President Volodymyr Zelensky has signed a new law which critics say removes the independence of two key anti corruption bodies. Thousands of protesters gathered in Kyiv to denounce the legislation. It brings the anti corruption offices under the direct authority of a political appointee of Mr. Zelensky. Sales of alcoholic spirits made in the United States have plummeted in Canada after Donald Trump imposed tariffs on Canadian imports and suggested the country should become a US State. Bourbon and tequila sales dropped by two thirds in March and April. And Ozzy Osbourne, the frontman of the metal band Black Sabbath, has died at the age of 76. His death comes just a few weeks after Black Sabbath reunited for a huge farewell concert. And those are the headlines on NOW for a look behind some of the headlines we're following here at Midori House. Here's Monocle's fashion director, Natalie Theodoti and why Elle Catterton is looking beyond fashion to invest in private jets.
- [33:15]
Natalie Theodoti
LVMH founder and CEO Bernard Arnault has looked beyond fashion for his latest investment. El Catterton, the private equity firm backed by the French billionaire, has led an $800 million in Flexjet, the second largest private jet company in the world. That will help further establish a company's position in the luxury industry and offer its customers access to bespoke experiences such as perhaps money can buy tickets to some of the many fashion shows LVMH houses host throughout the year. The deal highlights the surge in demand in private jet travel, but equally the fashion industry's increasing focus on servicing the higher end of the market. Arnault and Elcaterton are leveraging their extensive fashion network and in turn gaining access to flexjet's high net worth clientele. With declining revenues across the fashion sector, LVMH stalwarts including Dior and Celine have all reported drops in sales. It's not a surprise that the firm would look to strengthen its relationships with high spending customers and at the same time invest in sectors promising faster returns.
- [34:37]
Emma Nelson
And my thanks to Monocle's fashion director Natalie Theodoti for that. For more from our editors and correspondents around the world, sign up for our free daily newsletter. It's called the Monocle Minute and you can find it@monocle.com minute 9:34 in Istanbul, 7:34am here in London. Now, lots of diplomatic work lies ahead. That was reportedly the warning from the Kremlin ahead of today's fresh direct talks between Russia and Ukraine. The negotiations in Istanbul mark the third time the two sides at war since Russia's full scale invasion in 2022 have come together. But on the previous two occasions, scant progress was made. So let's see what's going to happen today. Well, I'm joined now by Joel Flynn, who's Europe correspondent of the Turkish TV channel TR World. Good morning to you, Joel. How's Turkey looking today?
- [35:35]
Joel Flynn
I think it's looking optimistic from the Turk's point of view. I think the Ukrainians and the Russians will be rather more skeptical about whether this can result in any meaningful progress. But you know, the fact that it's happening in the first place I think is a positive and most people around the world will see it that way.
- [35:51]
Emma Nelson
Indeed. I mean, what do we know about these talks?
- [35:55]
Joel Flynn
Well, the Turks have been very keen to play mediator in this situation, have them basically from the start. The Black Sea initiative was Turkish sponsored and proved to be pretty successful until it concluded in 2023. The fact that the Ukrainians and Russians are sitting at the same table I think is a testament to the unique role that Ankara can play in trying to figure out a way forward in all of this. But I think the difficulty really lies in the fact that the two sides seem so intransigent in their positions. And this question about negotiations I think really needs to be seen in the context of that. With neither Kiev nor Russia really willing to mitigate their claims and their respective positions, I just don't see how this is going to result in anything significant or meaningful. It is positive that they are taking place. It would be a positive if they were to negotiate just something as seemingly mundane as a POW exchange. But whether this can bring either side closer to some sort of reconcilable position I think is a really difficult thing.
- [37:02]
Emma Nelson
To see indeed, because we've seen prisoner swaps be the chief result of the last two rounds of talks and to have that possibility of a third prisoner's swap on the Table slightly recalibrates the purpose of the talks, doesn't it? Does it suddenly become a sort of a kind of catch up, low level discussion every time they meet or, you know, does that sort of suck the ambition out of these talks?
- [37:30]
Joel Flynn
Yeah, no, I think. I mean, from the Russian point of view, at least on the surface, it is hard to understand the motivation because they are publicly, and we've heard from people like Sergei Lavrov, the Russian Foreign minister, repeatedly, that these talks are preconditions for any sort of ceasefire that they would negotiate. So they have a stake in it as far as that is concerned. But every time they've turned up to these talks, and particularly the ones that took place the last time they happened in Istanbul, the Russians showed little to no willingness in actually trying to figure out a way forward towards a ceasefire. Indeed, the Ukrainians will tell you every single Russian ceasefire that has been in place since 2014, which one estimate is in the high 20s now, has been breached by the Russians repeatedly. So even were there to be a ceasefire, and there is very little expectation of that. I think it must be said, the idea that that might actually result in any meaningful difference to the front line, to the experience of Ukrainian civilians in the cities that are bombarded every night by Russian drones and Russian airstrike, I think is a rather more remote prospect. On the Ukrainian side, I think too, there is a lot of difficulty in seeing how they are going to change their negotiations in order to find some sort of middle ground. They have, at least on the surface, seemed more amenable to finding some way forward in compromising what might have been their demands at the outset of the war and their territorial demands, for instance, among them. But again, trying to see how that might be met in the middle somewhere. Even with Turkish mediation, which has proved successful in some form just in the fact that they got them to the table, it's really, really difficult to see.
- [39:13]
Emma Nelson
There is, however, that extra impetus now that Donald Trump has now said that there's a 50 day deadline imposed on Moscow to bring about an end to the war. How does that change things?
- [39:27]
Joel Flynn
Yeah, I don't know how many people will take that seriously. We have seen Trump deadlines come and go before in the past, and the impression is that the Kremlin may not be taking that as seriously in private as it might claim it does in public. We certainly heard from a lot of senior Russian politicians in the wake of some of those Trump comments last week and before that, that they are concerned about the direction in which the US rhetoric has shifted against Russia. But again, Trump's bluffs have been called before and we know that Trump's relationship with Putin is very, very close and has proven to be repeatedly. I think much more at stake is going to be put from the Ukrainian perspective in what the military support will translate to. I think it's very tempting to see things like Patriot missiles being committed and think that this is going to make a big difference to the war. I think the reality is certainly from my experience on the ground that these things take a very, very long time to actually translate, not only to getting this military equipment into action, but, but for actually to make a difference. But nonetheless, it's a very public declaration of support. And certainly the broader perspective is that the support of the United States has been thrown more heavily behind Kyiv ahead of these talks. So how that affects everything I think is difficult to say. I think the other shadow hanging over Volodymyr Zelenskyy going into this is obviously these anti corruption protests going on overnight and the idea that maybe the country might not be as unified and not as publicly supported, as easily supported by its Western allies as it was just a couple of days ago.
- [41:03]
Emma Nelson
Indeed, just very briefly on those protests, this is because Zelenskyy signed a new law which critics say takes away the independence of two anti corruption bodies. This is like you say, not a good sign of stability with inside Ukraine.
- [41:19]
Joel Flynn
Yeah, it's a very difficult thing to paint the full nuance of. Look, corruption has and will always be an issue for, for countries like Ukraine. It is a former Soviet republic and has long standing issues with things like oligarchs. And if you talk to the average Ukrainian, there is a lot of cynicism around that sort of thing. So it would be no surprise to people to see that senior members of Volodymyr Zelenskyy's cabinet are involved in things like land grabs and that they've been caught up in other series of scandals as well. But the argument that Zelenskyy and others will make is that this is necessary because there seems to be quite significant penetration of senior echelons of Ukraine by Russian security services. We saw the assassination of a senior member of the Domestic Security Service, Ukraine's equivalent of MI5, last week in Kyiv. And those sorts of things are not unusual at this point. There is a lot of paranoia in the halls of power in Kyiv around where these Russian agents may or may not be and the extent to which their influence may be able to change things. So that's the argument that put forward. But when you're seeing protesters coming out against your own government under martial law during a war and of the size that we haven't seen in quite some time, it is a very difficult thing for the Ukrainians to justify, particularly going into such a public diplomatic theater.
- [42:46]
Emma Nelson
Joel Flynn, Europe correspondent of the Turkish TV channel TRT World, thank you so much for joining us on the Globalist. An update now on the countdown to August 1, the day when Donald Trump says tariffs will be imposed, among others, on the European Union. With no trade agreement yet in place, member states are bracing themselves and they're also pressing Brussels to be ready to retaliate. Well, Kim Mackerel is reporter for the Wall Street Journal. She joins us now from Russell's and has been Brussels, I should say, and she has been writing about this. Good. Good morning, Kim, Good morning.
- [43:20]
Kim Mackerel
Thanks for having me.
- [43:22]
Emma Nelson
A pleasure. So this is by all accounts a very a much more forward facing and almost it feels like Europe, especially France and Germany are on the offensive here.
- [43:32]
Kim Mackerel
Yeah. I think what we're seeing now is and the really interesting shift I should specify is that we have seen this sort of more more being prepared to take a confrontational approach from France for a little while now. Seeing that's different really as of a few days ago is more of a shift from Germany in looking at doing the same thing. The biggest reason that matters is those are the two most powerful economies in Europe. They hold the most heft. And when you see France and Germany get behind something together, quite often a lot of other member states do line up and agree to do something similar, even if you've got a bit little bit of dissent.
- [44:16]
Emma Nelson
So that's a significant shift.
- [44:17]
Kim Mackerel
And I think what we're, I should say, I don't know if that mean I don't know that that means that further retaliation will actually happen. And it is important to think about in this context that, you know, the European Commission officials in Brussels, France and Germany and other member states, they all want a deal. They would all much prefer, prefer to negotiate a deal and have basically all accepted that that's going to mean higher tariffs than they would like to see on European products. But I think that what we've seen now is this shift toward thinking, you know, maybe that deal isn't as certain as we were thinking a few weeks ago. And maybe we need to have more ready and ready to go in terms of potential retaliation if we're not there.
- [45:09]
Emma Nelson
We've just seen the Japanese sign a trade deal with Donald Trump in the.
- [45:13]
Inga Thordar
Four or five hours is there a.
- [45:14]
Emma Nelson
Sense that once the United States gets on a roll that other bodies such as the European Union will actually have to make more concessions and knuckle under a bit more.
- [45:26]
Kim Mackerel
Yeah, it's a great, it's a great question. And I think earlier on a lot of European officials and diplomats were thinking they would look at the UK deal and actually initially say, oh, 10%, that's pretty bad. We can better than that. Now we're starting to see deals where it appears countries are agreeing to accept significantly higher baseline tariffs than that. So we're seeing in the range of 15, I think 19% if I remember right, for Indonesia and even higher. So I think that there's a recognition in Europe that there's a real possibility and they were actually told last week that they should expect to be prepared for those tariffs to be higher than they would have hoped if they're to get a deal. But you're absolutely right. We're starting to see a little bit of, including with some announcements yesterday, starting to see a little bit of a cascade of deals being announced. And I think this is the US is seems to be saying and has said in the last couple of days that they consider August 1st to be quite a firm deadline. So you know, if this is increasingly becoming quite a small window to try to get something done, if you want that done before August 1st.
- [46:49]
Emma Nelson
Kim Mackerel, reporter for the Wall Street Journal on the line in Brussels. Thank you so much for joining us. On Monocle Radio, you were the globalist.
- [46:59]
UBS Announcer
There's a craft to every corner question, which is why at UBS we query every aspect of the market, working with specialized experts and award winning research teams covering over 3500 stocks in 50 countries, all delivered in a comprehensive library, answering what you want with what you need. UBS banking is our craft.
- [47:37]
Emma Nelson
8:47 in Zurich, 7:47 here in London. Let's talk design and architecture now. Tim Abrams is contributing editor to the Architectural Record and also a regular voice on Monocle Radio. Good morning, Tim.
- [47:48]
Inga Thordar
How are you?
- [47:49]
Tim Abrams
Good morning. Very well. How are you doing?
- [47:51]
Emma Nelson
Very well and happy to hear that you're going to be talking to us about the European Central Bank. What are they doing in the world of design?
- [47:58]
Tim Abrams
Indeed, the European Central bank has today launched a public contest for the design of the next generation of European banknotes. Hooray. Before you get too excited though, designers listening, the next step in the banknote redesign process has largely been decided pretty locked in. So you've already got two possible themes for the future euro banknotes These are European culture, focusing on shared cultural spaces and important Europeans, or rivers and birds, focusing on the diversity of Europe's natural bird life. So before you take pen to paper and conjure up images to go on the banknote, you have to bear in mind that if you choose European culture, the motif has already been selected for the €10 note. So that's Beethoven on the front, it's got Beethoven on the front and on the rear it's got to have a song festival with a choir of children and young adults singing. If you want to choose the other approach, rivers and birds, the €10 note will be a kingfisher in a waterfall on the front and a depiction of the European Commission on the back. So people will need to be good at drawing birds and depicting transnational executive groups as well. Indeed, the rivers and political bodies approach will throw up some interesting pairings. The €200 note will have a seascape featuring a northern gannet flying over big ocean waves. Very romantic. And the European Court of Auditors on the back, something to stretch the best of designers there. Currently the euro banknotes have windows and doors on the front and bridges on the back. These bridges on the euro banknotes were fictional of course, but actually turned into a reality in the town of Spaikinisse, just outside Rotterdam, where they actually built all seven abstract generic bridges. So in years to come people will wonder why this small Dutch suburb has a fake triple tier Roman bridge in it, the notes having disappeared and being replaced by Beethoven or Kingfisher's, whichever the one they go for.
- [49:51]
Emma Nelson
This seems really unfair. It reminds me of being in art class at school and there was always one kid who was really good at drawing one thing. And so is this if I effectively sort of a prize for the best picture of Beethoven and the best picture of Kingfishers, because that sort of cuts.
- [50:07]
Tim Abrams
The imagination, doesn't does limit things a little bit. But then when you think about how incredibly specific some of the decisions have been to actually some of the prescription of what there actually means, you're gonna have to really work very hard to depict. The hundred euro note has Leonardo da Vinci on the front and adults and children are buying some examples of street art on the back. So in being very specific, in making things very limited, I think the imagination and the qualities of the artist will really have to come through. I suppose it's one of those situations whereby making something very controlled one's imagination flows freer, one might hope.
- [50:56]
Emma Nelson
And just on that note, the relevance of banknote nowadays, as we move further and Further towards a cashless society, for good or for bad. Why is a banknote still seen as an important piece of design?
- [51:09]
Tim Abrams
It's a very rare opportunity for an organization like the European Union to be able to communicate its values in a lot of ways. One of the great criticisms of the European Union, its branches, the Commission and the Parliament, so on, is very remote. So even in this situation, even these circumstances, limited, increasingly though they are, it's still an opportunity for them to convey their values to a wider population. I think the Bridges notes were very successful as the way in which they were picked up and actually turned into a real design shows that they actually communicated something of the organization. I know it's a very kind of simple metaphor, the idea of a bridge between peoples. And from the European Union outwards, it still actually conveyed in quite a soft way some of the values that sit at the heart of the organization. Even as you say, those opportunities to use the notes are getting more and more limited as we go on.
- [52:14]
Emma Nelson
Finally, you have a scant minute to talk about Legoland Shanghai.
- [52:18]
Tim Abrams
Yes. As parents look forward to the school holidays, spare a thought for the Chinese, who now have 400 theme parks in China to consider. The newest is the Legoland Shanghai, which has opened, located about 50 km outside the city, Lego replica of Great Wall of China, the Bund waterfront in Shanghai itself. And a sign of increasing collaboration between the Chinese state and external entertainment organizers, an attempt to encourage sluggish spending in China. The one area where the Chinese seem willing to splash out is on things for their children, something that they will be doing, no doubt, as the holidays go forward.
- [53:04]
Emma Nelson
Tim Abrams, contributing editor to the Architectural Record, thank you so much for joining.
- [53:09]
Inga Thordar
Us on the line.
- [53:10]
Emma Nelson
You're listening to the Globalist on Monocle Radio. Finally, on today's program, September 6th is the day for all those wishing to attend a Venice film festival. That's when it starts. Yesterday we had the lineup announced, and to tell us more, I'm joined by the film critic Karen Krasanovich. Thank you so much for joining us. Karen, good morning to you. How are things?
- [53:41]
Karen Krasanovich
Yeah, good morning. Great. Everything. So September 6th is when it ends. So try to get to the festival before then. That teaches you back in the closing film.
- [53:50]
Emma Nelson
That'll tell you how good a researcher I am. When does it start?
- [53:54]
Karen Krasanovich
Karen starts on. I think it's 26th. I think 26th, 27th. When did I book my flight? Well, anyway, it's an exciting year.
- [54:03]
Emma Nelson
It is. It's a big year. Tell us what's on the. On the who are the runners and riders this year?
- [54:10]
Karen Krasanovich
Oh God, there's so many. I don't think we've got time. But I wanted to say that everybody talks about can can being, you know, Oscar and all this stuff. And actually it's Venice because Venice gives filmmakers who are putting a wrap on their films a little bit more time to get things together. And also it's just a lot more. I don't want to say it's a more serious festival, but it's a more serious festival. It's a little more glamorous, a little more laid back. It's on the Lido in Venice and you don't have barriers, which is what you have in Cannes. Cannes is very glitzy and bling and Venice is sort of smooth and delicious. So we've got some fantastic things titles this year. We've got Benny Safdie's the Smashing Machine starring Dwayne Johnson as two time UFC heavyweight champion. I know you're waiting for this one. Emma, Mark, Cara and Emily Blunt as his wife Dawn. And I've seen some of the, some of the footage from that and it just looks amazing.
- [55:00]
Emma Nelson
Tell us a bit more about it.
- [55:02]
Karen Krasanovich
Oh, it's, it's, well it's, it's, it's a, it's basically a wrestling sports movie and it's just looks beautiful. I mean the Safdies always will bend. He always, always makes a very pacey, very watchable film. I mean you may not enjoy it all the time because sometimes it can be a bit rough, but it's just, it just looks amazing and I think it's going to be one of the, one of the top liners along with Luca Guadagnino's and I always say his name wrong, you have to correct me. It's a me too inspired thriller we've been waiting called after the Hunt and that's made for Amazon, MGM with Julia Roberts, Andrew Garfield and flavor of the month, Ayo Edebiri, who's in Lots and lots of Things Coming. And it's about a college professor who discovers that a star student is bringing allegations against one of her colleagues. And this also brings out shadows in her own life.
- [55:54]
Emma Nelson
It's an interesting thing there that you've talked about a wrestling movie and a MeToo movie which are going to immediately divide an audience. So obviously the human element and the storyline must be needs to transcend this kind of thing, doesn't it?
- [56:09]
Karen Krasanovich
Well, you know, when you go to a festival you don't about genres necessarily and sometimes you do. If you're wondering, should I go for this at classrooms or something else? But generally films are here because they're fantastic. They're here because they need to be seen. For example, like Grandma del Toro's Frankenstein. Did you know we needed another Frankenstein? We do. It's got Jacob Elordi, who's massively tall as the monster, Oscar Isaac as Frank Stein and Mia Goff. And that's for Netflix, so that's going to be very exciting as well. There's just. There's so much as Kim Novak, who's going to be celebrating her golden lion lifetime achievement, Verna Herzog as well, of course. He's celebrated virtually everywhere every year. But there's a documentary about her life as well. She went from a star to being a reclusive artist in Oregon. And there's some. It's just also. I want to talk about the closing film. So if you're going this. It's called 51. I can. I can't say it in French, but it has all of the exciting things of spectacular scenes, 500 extras and AI in the police system. So that sounds absolutely spectacular Indeed.
- [57:22]
Emma Nelson
And Siennau.51 has got big bankable actors and it's got Adele Exar and Gilles Lelouch. And so that idea that Venice becomes a very international place, it's hugely international.
- [57:37]
Karen Krasanovich
But it's also, I don't want to say it embraces more quality than can, because that's would be a bit wrong. Cannes is a little more sort of, look at me, look at me. Where Venice is sort of, you know what you want. Here it is. That's how I think of it.
- [57:50]
Emma Nelson
And it's not often. And you've been doing this for a little while when Venice comes along. I mean, you clearly sound more excited about Venice than you do often about other film festivals that you have covered for a long time.
- [58:04]
Karen Krasanovich
Yes, that's true. And it's not because I like pizza or pasta or spritzes, although that's true. Venice is a. Is a different kind of festival compared to kids. It's also. The Toronto International Film Festival is also very, very important. It happens immediately, pretty much after this. And it's just for important. When I say important films. These are films that we are going to see in the next few years. So they're either going to be award winners, nominees, or you'll see them at your multiplex. It's those kind of films where there's so many times going to places like San Sebastian where you'll see a movie. As I have that you fall in love with. It never gets distribution and it disappears. It's just heartbreaking. So that's why I go to Venice. Berlin is quite a market worthy, more documentary style festival. Sorry, I'm standing right next to a bunch of vehicles.
- [58:55]
Emma Nelson
It's fine. We can't hear it, Karen, but we will let you go because we've actually run out of time on the program so you can go and look at your vehicles. Karen Krasanovich, thank you so much for joining us from wherever you are on the Globalist. And that's all the time we have for today's program. The warmest of thanks to all my guests and to our producers, Monica Lillis and Tom Webb. Our researcher was Henry King and our studio manager was Flynn Simons. After the headlines. There's more music on the way. The briefings live at midday here in London. The Globelist is back at the same time tomorrow. But for now, from me, Emma Nelson, goodbye. Thank you very much for listening.