UK bans trade with Israeli West Bank settlements

0:00This BBC podcast is supported by ads outside the UK. September's always busy. Whole Foods Market can help. Their September stock up event makes it easy to load your pantry and freezer with flavorful nourishing food. Even better, there are hundreds of sales. Get dinner going with canned soups and veggies. Lean on frozen pizzas, pastas and seafood. Everyone loves their build your own family meals feeds for for just $35. Stock up at Whole Foods Market. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at CME Group.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell, or attain any specific investment or service.

1:06Will sanctions succeed where diplomacy has failed? I just don't think maybe the brits are thinking through the implications of this policy they're about to enact because when they do, are they willing to stop doing business with a number of US states in which they currently have commerce? Because that's what's going to happen. It's World Business Report from the BBC World Service. I'm Vashada Sripathma. On the way we take a look at the growing economic pressure on the West Bank. As the UK, France, and Canada slap economic sanctions on Israeli settlements there. Plus Canada hits back in the trapeh with the US. Some businesses are worried they'll pay the price. Plus art thieves strike again in France. So the UK has announced fresh sanctions targeting Israeli settlements in the occupied West Bank, including a ban on trade with businesses there. The move is part of a joint declaration backed by a dozen countries increasing international

2:09pressure on Israel over the expansion of settlements in the territory. Israel has responded by announcing plans to close the British continent in East Jerusalem and unveiling a number of other measures in retaliation. Speaking in Parliament earlier, the British foreign secretary Ed Miliband said the UK was acting because it believes the current situation is making the prospect of a two-state solution increasingly difficult. Here's what you have to say. Ethnic cleansing is defined by the UN as a purposeful policy designed by one ethnic or religious group to remove by violent and terror-inspiring means the civilian population of another ethnic or religious group from certain geographic areas. The British government agrees that there is ethnic cleansing of Palestinians in areas of the West Bank, perpetrated by settler terrorists. And all too often the Israeli government has turned a blind eye to this, and worse, members of it have made statements and taken actions to support the forced

3:10displacement of Palestinians. Now Madam Deputy Speaker, I recognise the gravity of saying this, but the truth is the least the people who face such, it is the least the people who face such, such suffering deserve and it should be the prelude to justice. So strong words there by the foreign secretary here in the UK. The US ambassador to Israel is Mike Huckabee, he says without a doubt there will be repercussions. I just don't think maybe the British are thinking through the implications of this policy they're about to enact because when they do, are they willing? I'm going to use the expression again. Are they willing to find 25% of their pharmaceutical somewhere else? Are they willing to stop doing business with a number of US states in which they currently have commerce? Because that's what's going to happen. Moment Synclot is a Palestinian local exporter in the occupied West Bank who sells to the UK. Moment believes ending trade with settlement could curb its growth.

4:10Settlers are very active in the Jordan Valley and increasingly active and they are not obeying any laws or rules or anything even from the Israel army itself. They are going to the fields of the growers, they are stealing from them and they are controlling more and more land. So differing reactions on what these sanctions might actually do. Joining us now is Megan Suckliffe a geopolitical and security analyst with private intelligence firm Sivirline, hi Megan. Good evening. Megan, thanks for joining us. Megan in purely economic terms, how significant are all of these sanctions? Will it be felt by the Israel economy? Well, it's not exactly clear the extent to which the ban on the import of goods from illegal settlements in the West Bank is going to be to the trading relationship between Israel and the UK and therefore the Israeli economy. Israel and the UK engaged in approximately six billion pounds worth of trade in the last financial year but it's not clear how much of that stems from activity in the West Bank and it is even less clear how much of that stems from

5:15activity in illegal settlements in the West Bank which are what are being targeted by the UK's measures today. This paints a complex economic picture but when we're looking at the tensions that this has brought between the UK and Israel and the implications that will have for broader trade unfortunately the situation does not look particularly positive. Yes and on that point about broader trade could this widen? Could we see measures affecting the much larger, larger UK Israel trading relationship? Unfortunately that is something that is going to be increasingly likely if we see the UK moving forward and implementing these measures on the six to nine month time frame that Ed Miller banned outlined earlier today in the House of Commons. Already Israel has indicated that it believes that these measures are anti-Israelian, that they are not something that they are willing to abide by and therefore we have seen the closure of the UK's consulate in East Jerusalem and we've also seen the Israeli authorities suspending various

6:16British activity in the Palestinian territories such as British activity to train the Palestinian authorities forces and so what we're likely to see is potentially a revision of important export licenses for British linked businesses within Israel and that in general will undermine the continuity of business between the approximately 7000 VAT registered businesses in the UK that trade directly with Israeli entities that will undermine trade and undermine the good will that underpinned the broader trade and partnership agreement that exists between the UK and Israel. So only has the UK, France and Canada decided to do this. Is this quite a tough economic gamble for them? It is a pretty substantial change in policy and one of the most significant shifts in British policy towards Israel and towards the West Bank in many many years and the fact that it is accompanied by similar actions like France and Canada certainly makes it even more significance and increases Israel's isolation on the global stage both economically and politically.

7:19However, if we're actually looking at what this does right here and right now to trade between the UK and Israel, it really brings in a greater regulatory burden for British businesses and what it means is that particularly sectors that are engaged with Israel such as food retailers as well as pharmaceutical entities figuring out an increasingly complex regulatory landscape is likely going to be the primary cost to bear. And we had there from the US ambassador that US states might retaliate. Do you think that will happen? I think it is entirely possible that we will see both the US's federal government and various state authorities in the United States retaliating to these measures. We know that President Trump is someone who does not necessarily react well to partner nations, not necessarily engaging with Israel in the way that he would necessarily see fit. And so it is entirely possible that we will see the President threatening further tariffs against the UK in the coming days due to these measures targeting Israel. It's also possible that state legislation within the US in states such as Florida will limit the engagement of British

8:24based businesses with state authorities in those particular jurisdictions. That relationship isn't necessarily clear. It's not something that's likely going to be critical to things like British travel or British tourism, but it is again another complexity that businesses are going to have to navigate in this environment. And Meckan just briefly, do you think this will achieve what it's meant to achieve? What diplomacy clearly hasn't managed to do? It's again a challenging question to answer. Ed Miliband framed these policies as being part of the UK's broader support for the peaceful progress towards a two-state solution. That being the establishment of a Palestinian state essentially in harmony with the state of Israel. But at present, it's not clear how these measures are actually going to contribute to that goal. Yes, it potentially increases slight economic pressure on Israel, but at the same time, it doesn't necessarily incentivize Israel to work more meaningfully towards that two-state solution. Rather, the reaction we've already seen from the foreign minister, Gideon Saar, would

9:27indicate that Israel's not willing to play ball in that particular area. The key point that is going to be the upcoming Israeli election, which will take place in late October, depending on what government emerges from that election and subsequent coalition negotiations. That will potentially be the key pivot point here for progress towards the establishment of the two-state solution. But again, none of that is guaranteed. Okay, Megan, thank you very much for joining us. Megan Scott Cliff there, and you can read more about that story on our website bwce.co.uk. Well, the gloves are off in the latest round of trade tensions between Canada and the US. Canada has responded to President Trump's latest tariffs with measures of its own, targeting around $20 billion of American imports. The government says it's returning the favor dollar for dollar. Here's Canada's finance minister, Francois Philippe Champagne. This is a non-precedented challenge imposed on Canada. But Canada will meet the moment. Canadians will meet the moment. And as the Prime Minister has said, we'll support our workers,

10:33our businesses and our industry with whatever it takes for as long as it takes. So that was Canada's finance minister, signing a rather defiant there. For many American companies, the challenge now is navigating an increasingly uncertain trading environment. Scotty Morden is chief operating officer at Natural Choice, which is Ohio's biggest family-owned dairy business. And he gave his perspective to my colleague, Luke Wilson. We buy some machinery from Canada in the last year. We've seen our vendors not really know how to plan for those potential tariffs and one ahead and of course, added them where they were by law required to. And it added about 20 to 30 percent on top of a piece of equipment that was already costing, let's say, $300,000. So those are things we were not expecting. Another impact is the potential feed tariff last summer in 2025. Over night, we learned about a potential

11:35tariff on an input feed. It was later determined that those products were exempt. Of course, there was a lot of uncertainty. We were really kind of exposed in the future months there with regard to price. You've seen our diesel prices this year on the farm are more than double what they were this time last year. And there's only so much risk of mitigation you can do with certain times types of inputs. Yeah, and how challenging is the tariff situation, the trade situation, how hard is it to run your business? It is no doubt frustrating because we have had to kind of overnight change our thinking on where we're going to be purchasing our assets, the pieces of equipment that we use to run our business day to day. We have several million dollars worth of equipment that are always running around 24 hours a day as you can understand in the dairy business. It's affected really where we're thinking about sourcing some of our equipment that used to come from overseas. And I think maybe that was the intention of the administration to begin with,

12:38is to force people or strongly reconsider to purchase those items that are made in the United States. And all of this feeds through to prices, doesn't it? Obviously you're a businessman running a business, but you're also someone who goes to the store to buy food. Are you seeing that impact? Absolutely. Our employees are feeling at two, of course, with the dairy industry, particularly in the United States. We always say that we are kind of price takers, not price givers. And so our end product that we sell, our raw milk, of course, is set by the Chicago Board of Trade, or at least it is guided by that. And so just because a tariff will increase our price, or our cost of production, let's say by five or even 10%, we do not get the opportunity to go directly to our end consumer who drinks the gallon of milk to say, I need 10 or 15% more. So that was Scott Inverdon, who runs a dairy business in the US state of Ohio. Well,

13:40just before we came on air, I spoke to Andrew Colburn, who is a founder of Great Lakes Bicycle Company, which is based in Point Edward, Ontario, Canada. I mean, right now, it's nothing really affects it. We did lose a brand when the first round of tariffs went out, like at the beginning of last season, I deal with an American brand and they, because they get all their stuff direct from China and to ship it into Canada from the US, they were like, we can't send you these bikes. So I lost a complete line of bicycles. But I mean, for the most part, it hasn't been super terrible, just annoying more than anything, because everybody else is sort of around me, is a good get hit with something or another. And we're an industrial town. So people are really feeling that feeling the fence, especially down wherever. Take us inside your business, that when a tariff goes up, what do you actually feel at first? Is it through the components, the price of the finished bicycle? I mean, for us, luckily, because things are designated

14:45for Canada from our distributors, we don't necessarily feel it directly here, where we see it is, is people coming in to buy it. You know, people in other industries, you know, just general consumers coming in, they're like, well, it's more uncertainty that's keeping people sort of sitting on their wallets, versus like me having it like jack components up and make bikes really expensive. And so do you have much of your supply chain that crosses the US border? Some of it does, but it's because it's designated for Canada from the initial supplier, we don't, it's not subject to the tariff. So just the way some of that, I do deal with a couple of American brands and they aren't, they aren't getting hit with it. And so, which is lucky for me, because then I don't get hit with it. And I can just pass on the same price to my consumers. And can you realistically replace American suppliers, or does that take years, rather than months, I mean, you know, that would be more of a not necessarily me as the independent bicycle dealer,

15:52it's more of the distribution network and the, and the producers of the components that would be having to, you know, sort of change their, their buyer network and, you know, that kind of thing. So a lot of the stuff is made in Asia, as far as components go and even frames and stuff. So, you know, they're, you know, if they're going to bring it into the States, they're going to hit it harder, but if it's designated for Canada, I don't believe that they get, it doesn't, it doesn't necessarily affect them. In terms of cost, are you absorbing any additional costs then? Or can they be customers going to have to pay more for bikes as a result? If, if they wanted to go direct to an American company and get it direct from America, they would definitely, I believe, get hit, bringing it over the border. But again, because my dealer network is, because I'm a Canadian dealer and the brands that I deal with have Canadian distribution houses, where we don't necessarily feel any of it directly.

16:57And Canada says retaliation is necessary to put pressure on Washington. As a business owner, do you support that approach, even if your own company might have to pay a price in that? I mean, I think so. I just think it's, you know, we are a country that is not, that doesn't, I mean, like anybody, like nobody likes to get pushed around. So, I mean, I feel that this is the best way to deal with the bullies, to stand your ground. And, you know, whether the bullie understand it's or not, it, I think it's the right thing to do. We didn't add in those sound effects, by the way. That was Andrew Colburn, founder of the Great Lakes bicycle company, which is based in Point Edward in Ontario, Canada. You're with World Business Report from the BBC World. September's always busy. Whole Foods Market can help. Their September stock-up event makes it easy to load your pantry and freezer with flavorful, nourishing food. Even better, there are hundreds

17:58of sales. Get dinner going with canned soups and veggies. Lean on frozen pizzas, pastas and seafood. Everyone loves their build your own family meals feeds for for just $35. Stock up at Whole Foods Market. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at cmegroup.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell or attain any specific investment or service. Service It's time to check in with the financial markets and Jennifer Snyder is a financial advisor at Brighton Securities in Rochester, New York. Hi Jennifer. Hello. Happy belated

19:00Labor Day to you. Do you get off to anything nice? Thank you. Yes, actually I was just sharing with Neil. I went sailing on Lake America. Oh wow. Lake the newly named Lake America. We're right there. I took off from Ontario Park into Lake America. It was glorious and all things remain the same with all the sailboats and a glass of Sauvignon Blanc. So it was wonderful. That sounds magical. I could do the glasses Sauvignon Blanc after the program. You've been sliding me. So we were just hearing that about that. We're just hearing that about the US Canada tariff war. In the US, are people worried about these retaliatory tariffs? I don't think as much per se. Again, there's a lot of the conversation that comes back to how Trump has approached this from day one, which is trying to create the free trade. Some things that I did find that were kind of interesting though is that there are some serious tariffs that Canada imposes on products that the US imports into Canada. You hit a certain quota, which is definitely less than what the,

20:03let's say, the American cheese farmer would like to import. Once it hits that, it's about 245% of a tariff that gets hit on that cheese. Butter is almost 300% once it hits that quota. So I think it's looking at there's free trade to some degree. But then once it hits this level, that door gets very small of what you're able to import and really knocks off any of the fair trade. So again, I think this rhetoric, this argument, all of these things continue to come back to that can we create fair trade? That's the question. And it must be really concerning for investors because how are you then able to price for the future? Yeah, I mean, if you're able to create more economic stability and back-and-forth trade where it does feel fair on both sides, I mean, I definitely hear your previous commenter sharing that we don't want to get bullied around, but there is also that thought of, well, that seems pretty extreme to have that in crazy of an additional tariff once you hit a certain quota. So I think you've got to look at all

21:08the pieces. Yeah, Jennifer. Yes, it will be interesting to see what happens next with the US and how they react. Jennifer Snyder, financial advisor at Brighton Securities in Rochester, New York. In today's business daily podcast, our sister program Hannah Malayne has been speaking to students from around the world to find out if going to university is really worth the money that it cost students among those she spoke to was Anisha from India who studied in the United States. Yeah, absolutely. A hundred percent, you know, coming from India of course, which is a weaker currency, greenery, where I went was the school that offered me the most scholarship. It was $60,000 just tuition. It just became about taking as much load of my parents as I could. I think there's some skills I learned in university that I still carry with me today, which is that made me very good writer, made me good critical thinker. But if I had to talk about my degree solely as an academic piece, I don't even do anything in the same field. I learned from the job. I'm now, you know,

22:11running marketing and growth for a healthcare startup. And you can hear more about the cost and the value of the university education by downloading today's edition of Founders from Business Daily, wherever you get your podcasts. So that's the French TV station BFM reporting that on Tuesday, thieves had broken into a museum dedicated to the impressionist painter Pierre Auguste Renoir, stealing two works of art worth millions of dollars. Now the robbers entered the building, but fled after alarms alerted police. They made off with four paintings, but two were abandoned in the museum's garden as they rushed from the scene. Now it's not the first time that a high profile theft from a French museum has happened a year ago. The say called French Crown Jewels was stolen from the Louvre in Paris. So it's arts theft a growing problem. That's what I asked Robert

23:13Reed, the head of Fine Art for the insurance company, Hiscox. Well, I don't think it has happened more so now than 10 years ago. I think the motivation for thefts happening now is slightly different because financially it's a really dumb crime to to carry out because whatever these items are worth, the thieves will then get a fraction of that if anything, because they're such well-known paintings they can't be re-sold. So we often say theft is the dumbest form of art crime. If you're a more sophisticated art criminal, you're going to be selling fakes and forgeries or using dodgy art as collateral for a loan, any of those things which much harder to be caught at and have a much better return. So it's a pretty dumb form of art crime. What we believe happens is sometimes well-known items get traded in the criminal underworld for favors or for arms, for drugs, whatever it is, it gives them some credibility as a calling card. And the second reason why thefts might happen is to embarrass the institution or the nation as was probably the case with the is there really a secret market of wealthy collectors willing to buy stolen masterpieces or as

24:15that just a little bit of a holiday room? No, no, there isn't. I mean I'm sure there was hundreds of years ago, you know, you didn't have the internet, you can tell whether something was stolen etc, but it's so easy to find out whether something's been stolen, especially when it's as well known as these items are. You know theft is not the main risk in museums, the main risk is really accidental damage typically when the items have been moved. What happens with the thefts as they get all the headlines and people think it's a much bigger issue than it is. The truth of the matter is that's not where the main risk is. Okay, so from your point of view, where is the biggest vulnerability then? Our museum is more vulnerable, for example, than private collections. Museums are less vulnerable because generally they have professionals doing all the moves and they have professionals looking after all the items who are used to handing them, who are trying to use the highest standards in terms of hand being, whereas private collectors might just do something wrong just because they don't know. So the knowledge base of museum professionals is that much greater than private collectors and also their primary desire is to protect them, look after the items and so

25:20they tend to be less careless than private collectors. So when a major event happens, so when a major work is stolen, what happens next from an insurers point of view? From our point of view, we have the team that would look into their various experts out there can help you recover them, who have good connections with the wrong kind of people so that you can try and make contact and try and see if you can negotiate for the items to be recovered in a legitimate way. And have you ever had to do that? Yeah, many times. It's famously a fall because I can say this because it was written about is the two turners that were stolen from the Shrin Kunstalla in Frankfurt that belonged to the Tate Gallery. We were in the insurers and we're part of the team that helped to recover them. When it comes to ensuring something, so we hear about pieces of work that are irreplaceable. How do you ensure something like that? Yeah, it's a good question. But at the end of the day, everything has a value. It needs to have a value to be insured because they're irreplaceables. That's not a number. We need a number. So if you're ensuring something,

26:24you've got to agree a number and sometimes those numbers can be big. Look at the bio tapestry, which is insured under the government indemnity scheme. So a number has to be agreed upon and that's what it is because ultimately just saying irreplaceable is pie in the sky. I mean, it really is. I mean, and you know, something that's the most emotionally important thing to me, it might well be but we need a number to ensure it. And how do you come to that number then? Does the person wanting the insurance effectively pull it out of the sky? I don't know. How does it work? It's not quite pulled out of the sky, but there are various comparables. But often when lenders lend artworks to public exhibitions, they ask for very high valuations. And that's just part of the game because, of course, you're not paying the premium. You want to make sure you're absolutely protective of the max when you lend something. And borrowers have got used to accepting that. So yes, sometimes the lenders are throwing incredibly ambitious valuations, which people might not accept, but most of the time people would accept it. Valuations in the art world, it really is not a black and white clear number. It's not like selling your secondhand car where you know of an hundred pounds,

27:25what it's going to be. It is much more. This is what it might be. And let's not forget that the art market is tiny anyway. So that if you were selling this commercially, the amount of buyers who can buy a work of worth is over $50 million or something, there's any hand full of them in the world. And no one knows what they might feel like on the day if you were trying to sell it. So it is very hard to value extremely valuable items, but there is a sort of accepted methodology out there which ensures and collectors and museums accept. And so we do eventually agree a number. If you look up this story on social media, there are lots of people that seem to agree with our guest that the most stupid form of art crime is stealing art. It's quite amusing actually. People rather scathing as well about the thieves and the painting, unfortunately. It's rather the museum should look it up and you can read more about that story on the BBC News app. That's it for World Business Report. You can follow me on socials. I'm at BBC Vishal Airspeed. Thanks for listening.

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