Are US-China relations back on track?
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This BBC podcast is supported by ads outside the UK. Hello and welcome to the World Business Report from the BBC World Service. I am BC at Debaio and on this edition, China and the US dialed down tensions with a new deal to speed up the flow of strategic minerals. And in Brazil, the Supreme Court says social media companies can now be held responsible for what their users post.

So, of course, the Supreme Court is threading on a very delicate line here, and I'm sure that this will still be questioned in the coming months.

...era as Microsoft retires the blue screen of death after 40 years. All that to come in just a moment. But for now, let's kick off with a rare moment of agreement between the world's two biggest economies. China has confirmed a breakthrough in trade talks with the US, with both sides agreeing to fast-track shipments of strategic minerals, a key step towards easing months of economic tension. But here is the US Treasury Secretary Scott Besson speaking to Forks Business.

I am confident now that we, as agreed, the magnets will flow. In the meantime, we had put countermeasures versus the Chinese in place. We had held back some of the vital supplies for them. So what we're seeing here is a de-escalation under President Trump's leadership.

And a Chinese foreign ministry spokesperson, Zhuo Jiekun, gave this update to reporters on Friday. A spokesperson for the Chinese Ministry of Commerce had already made relevant comments on this matter. I would like to stress that we hope that the United States side will work with China to implement the important consensus reached during the phone call between the two heads of states.

reduce misunderstandings, strengthen cooperation and promote the stable, healthy and sustainable development of China-US relations.

Right. At the heart of these conversations are rare earth minerals, which are vital components in everything from electric vehicles to fighter jets. And the U.S. relies heavily on China for these materials. So the deal is seen as a key step towards securing critical supply chains. Well, let's hear from Neha Mukherjee, who is a rare earth analyst at Benchmark Mineral Intelligence in London. Many thanks for joining us, Neha. Neha,

Tell us, why are rare earths such a big deal for the U.S. economy? Hello. So rare earths are 17 chemically similar elements and they're used everywhere in our daily lives. In light bulbs, in currency notes, in laptops, but also in EVs and fighter jets and submarines. Now, USA accounts for the highest share of demand of rare earths when it comes to defense.

Both USA and Europe have significantly high share of demand for EVs as well. And China holds the monopoly in supply of these minerals. So the highest consumers are basically strategically dependent on a very concentrated supply chain. And now I presume you've spoken to companies who are directly affected by this. What are they telling you about the delays, the shortages and the actual shipments?

So it has affected some businesses more than others. It has affected EV manufacturers and defense manufacturing companies the most.

Some companies have applied for hundreds of licenses and only a fraction of five or six have been approved. So far, thousands of applications just from European EV manufacturers have been have come in and only a quarter have been approved, which has slowed down a lot of manufacturing. A lot of companies have been whistleblowing that their stockpiles are running out.

A couple of companies have also had to temporarily shut down production. So, I mean, when do we begin to see some respite with this agreement announced now, even though the details are still sketchy?

This is a meaningful first step. I mean, this new framework, it formalizes a broader, faster approval process. Some businesses might feel it sooner than others, but the average time is 45 days. It can be longer in customs if the end use is a defense equipment manufacturing company. Usually what we are seeing that if they have contacts in the Chinese government, the approval process is quicker.

And we wonder how many of them actually have, you know, that kind of leverage with the Chinese government, you know, to get it quicker for them. Exactly. It's been very difficult for USA and European manufacturing companies to get hold of licenses. I can only imagine. But it's rather interesting, you know, that China has made this announcement publicly. Could there be a possibility of any political undertone here?

China uses critical minerals as a strategic leverage in this trade deal. And this is the biggest proof of that, this trade. As soon as tariffs started escalating, China responded with

counteractive measures by putting in export control. Well, it's not a direct on paper export ban, but it's been considered as a de facto ban. And anytime any geopolitical event happens, they use this as a leverage. It's basically like a tap. They can turn it on whenever they want to and they can turn it off whenever they want. Right. And let's just look ahead now before we wrap up this conversation. Is this likely to open up doors to broader conversations between both economic giants?

It will. Again, it is a meaningful first step. China will speed up licenses. USA in response will ease trade bans and critical minerals will flow freely. But it is still a strategic framework. It's not an open tap yet. Yes, it has thawed some trade tensions and boosted investor confidence. But

But it is essential to see what the ground reality actually is after these trade deals are signed. All right. Many thanks, Neha Mukherjee, for joining us this afternoon. Thank you so much. All right. At this point, let's bring our North America business correspondent, Michelle Fleury, who is in New York. Michelle, so we've seen Beijing confirming this deal around rare earths. What exactly is on the table here?

Yeah, I mean, this is sort of something that a dance, if you like, between these two superpowers that started back in May. You may recall that's when the two countries had an agreement to try and de-escalate those hefty sort of so-called April Liberation Day tariffs that kind of ended up with the US and China in a situation where the US was levying 145% tariffs on Chinese goods. So that deal was trying to kind of lower the temperatures, if you like. But then...

The US got angry that China was not letting in enough rare earth exports. And so temperatures began to rise again. And that ultimately led to more negotiations, this time in London. And what we're seeing is the finalizing of the deal that came out from that, in which China, according to the Americans, is going to deliver rare earths to America. And in return, they're going to remove some of their countermeasures. That's things like expert control.

export curbs that the US imposed on China. And we've seen this tension boil for months, just as you mentioned. Does this actually signal a genuine shift or is this just a tactical pause that we're seeing here?

Look, I think it's a lowering of temperatures. You know, it's a de-escalation. And certainly where I am in New York, you know, not far from Wall Street, that was something that investors have been cheering. The reality is that these two countries, their economies are in many ways still intertwined. And what was interesting is that China's Commerce Ministry put out a statement saying that they hope the two sides would

continuously enhance consensus, reduce misunderstandings and strengthen cooperation. And I think that idea of reducing misunderstandings is key here and sort of trying to find ways they can work together, even though clearly both countries have very different interests. Exactly. And with those different interests, what are we likely to see in the coming days?

Well, in the coming days, I think the focus will shift in some ways away from China and to some other countries that are facing stiff tariffs from the United States. Remember, they had set a July 9th deadline. It's not clear how hard and fast that deadline actually is, but how would luck

Nick, the U.S. Commerce Secretary was talking about, you know, maybe deals on the table with the U.S. and EU being kind of close to being finalized. And he said 10 other deals were also close. But then you've got the U.S. Treasury Secretary today coming out and saying, actually, he thinks, you know, the more realistic timeline is Labor Day getting things done. That is the end of summer here in America. Many thanks, Michelle, for that.

At this point, let's bring in Randip Sumel, who's a fund manager at M&G Investments. Randip, tell us, how are the markets responding to this news?

Hi, very strongly this morning. So the US has only just opened, but the S&P is up 60 basis points and Europe is also up. Of course, the Chinese market is closed since this news came out. It is flat for the year. So hopefully that would lead to a positive momentum when it opens on Monday morning. But at the moment, it looks as if the news has been taken positively. But the pinch of salt here is that there isn't any detail yet.

and what this trade deal will look like, except for the fact that we know that the two sides are talking and the talks are moving forward positively. All right, Randy, just stick around. We'll come back to you much later on the programme. But for now, let's head to Brazil, where the Supreme Court has ruled that social media platforms can be held directly liable for content posted by their users. Well, it's a major step in a country that famously took Elon Musk's ex-

offline for 40 days last year over disinformation. Lies Martins is a Brazilian investigative journalist based in Sao Paulo and I asked her how we got to this point in the first place.

The Internet Bill of Rights is a law that was passed in 2014 when the Internet was quite a different place. And in the last few years, especially in the face of these attacks on democracy and democratic institutions in Brazil, like the Supreme Court itself,

and civil society, but also Congress members and Supreme Court justices have come to realize that maybe the rules that were set back in 2014 were no longer sufficient to contain the role that platforms and social media companies were playing in our democracy. So over the past few years, there's been this consensus built that we either have to pass legislation through Congress that changes these rules or

But that has failed. So this has led the Supreme Court to step up and now change the regime that we have for third party content on social media. And what about the users of social media themselves? Did they lend their voice for this push as well? There's a division between people on the right that tend to be aligned with former President Jair Bolsonaro,

that any type of enhanced control on platforms and enhanced rules on what platforms can or cannot let online would be some sort of censorship. They're very much against any type of regulation, whether it's coming from Congress or from the Supreme Court. But on the other hand, I would say there is a bigger share of society that understands and acknowledges that

The way the rules were set up currently, it wasn't enough to contain harms that were being promoted online, but also against children, teenagers, and ultimately against democracy. But with this division that you've talked about then, who then decides what qualifies as illegal content? That's the biggest question at the moment. So

The Supreme Court had this very big challenge of deciding what they consider to be the illicit content. Illicit crimes, and here we would include crimes such as racism, but also attacks against democracy, attacks against vulnerable groups such as children.

These types of content, companies can be held accountable after failing to take action after being notified by the users themselves. But then crimes against honor, and this is a really complicated definition also, but crimes against honor, we would say like defamation attacks, smear campaigns. This still needs a legal order from a court that tells platforms that they should take down content.

So, of course, the Supreme Court is threading on a very delicate line here, and I'm sure that this will still be questioned in the coming months. And are we likely to see any signs of pushback from the big tech companies? Well, we've seen in the past few weeks leading up to this decision, we've seen some pushback.

sort of communication from the companies that this would change the way they operate in Brazil, that they've warned of what they call this chilling effect, which would be they're more prone to remove content, fearing any type of decisions. But I think this is still to be seen. They have been preparing for such a decision for at least a few years now, ever since Congress tried to pass a law in this sense.

So I do believe that they've had time to prepare and think about what this means for this operation. But of course, there has been lobbying in the past few years, but specifically around this decision, they've only lamented the way the Supreme Court has made this decision. That's Laís Martins, a journalist based in Sao Paulo there.

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You're with the World Business Report on the BBC World Service. Now let's head straight to the Strait of Hormuz, one of the world's most critical shipping routes. And after 12 days of war between Iran and Israel, a ceasefire has been holding since Tuesday. But the conflict brought fresh focus to this narrow waterway, which carries a fifth of the world's oil supply. So what's the lasting impact on a region so dependent on it? Samir Hashmi reports from Dubai.

A bomb strikes Tehran.

For nearly two weeks, Iran and Israel were locked in their most intense conflict in decades. And for a few hours, it felt like the Gulf was on the brink. One of the biggest fears? That Iran might block the Strait of Hormuz, one of the world's most important shipping routes and its most vital oil transit chokepoint, with nearly 20% of the world's oil passing through it. Ben Cahill is an energy expert at the Center for Strategic and International Studies.

He says Iran closing the Strait was never a likely scenario. The full closure of the Strait would cut off Iran's critical source of export revenues, foreign currency revenues. And that's definitely not in the interest of the Iranian state or the oil sector. So that would be a major reason why Iran would not decide to go for a full-scale closure of the Strait. And no matter what happens in the months to come, I mean, Iran will be highly dependent on oil revenues. But it wasn't just oil that was affected.

I'm standing right now at Dubai Creek, the heart of all Dubai's trading routes. But now this place has become more symbolic than strategic. But just a few kilometres away from here sits Jabal Ali, the largest port in the Middle East and one of the busiest in the world. Over the last few decades, Dubai has emerged as a major global trade hub, connecting Asia, Africa and Europe. But the recent Israel-Iran conflict

threatened to disrupt that rhythm. Average container shipping rates jumped by 55%. Rashman Manoli is the vice president of freight forwarding at Consolidated Shipping Services, one of Dubai's largest freight companies.

At the moment, it's still fluid. Everybody's waiting and watching how things unfold. And the prices that go up, do they immediately come down or does it take some time then for the prices to gradually settle down? It gradually settles down. Initial impact is when you have a choke point and when you have a situation of backlogs,

Obviously, the vessels will need to be diverted to other ports and then moving those containers from those transshipment ports back into UAE, that's additional cost. So yes, if there is a long term, then the prices will continue to be long term. Throughout the conflict, Gulf states tried desperately to avoid being dragged in. The region also houses some of the world's largest oil and gas facilities, infrastructure that has been targeted in past attacks.

Since then, Saudi Arabia and the UAE have worked to thaw relations with the Iranian regime, even as they have deepened security ties with the United States. Badr al-Saaf, a Gulf-based geopolitical analyst and a professor at the Kuwait University, believes that the recent conflict will push Gulf states to double down on improving ties with Tehran.

Look, the Gulf states have been pursuing a nimble foreign policy that caters to fast-changing dynamics, that advances their security, their national interests, that also advances their domestic needs. And those plans require peace and stability. For the Gulf economies, war is not just a matter of geopolitics. It's about survival. In a region trying to chart a new course away from oil towards innovation and growth, stability is currency.

Samir Hashmi reporting there. And you can hear more by searching for Business Daily wherever you get your BBC podcasts. Well, let's bring back Randip Samel, fund manager at M&G Investments, for what the markets are saying at this time. Randip, we just had that report there. The markets have been calm since that ceasefire on Tuesday. But how are they faring this afternoon?

They're strong this afternoon. I think the trade deal has helped move the US market into a positive direction. We've, of course, seen the oil price coming down over the course of this last week. It hit a high of $78 last week, and we're currently at $67.

So that means inflation can be tempered. And at the same time, that leaves central banks more scope to reduce interest rates. So at the moment, the markets have taken all the news that's coming out, whether it be the ceasefire in the Middle East or the trade talks that are going on. And it's not just China. The Commerce Secretary has said that there's 10 parallel trade talks going on that they're getting closer to. So all of that has provided for a backdrop of optimism.

And you see that optimism, you know, going ahead, even as we move into a new week next week? Yeah, I mean, so far, so good. We're actually seeing them across the board. All sectors are looking quite strong. All right. Let's talk about Nike, which is having it tough at the moment. Tell us more about that. What exactly is going on?

Yes, Nike was heavily hit by the Liberation Day tariffs. A lot of its production comes from Asia and China specifically that goes around the world, but including into the US that would have been hit by those very large tariffs that the Trump administration decided to put in. They reported results after close yesterday and on open this morning, they were up 15%, a huge move for what is a relatively large and well-known company.

They've officially said that 16% of their imports into the US come from China. And by the end of next year, those will be down to the high single digits. So they are working around the tariffs, assuming no deal is made. If the deal is made, and I suspect this is another reason the shares are so positive, that will alleviate some of the issues that they've been having on the share price.

as well. They've also said that the Chinese market for them in general is beginning to improve again. We've seen quite a slowdown across the board in China when it comes to the consumer, all the way from LVMH at the very high end, right down to basic trainers or sneakers, as they call them, at the lower end. So the fact that the Chinese consumer is getting a little bit stronger, and no doubt these trade talks will help,

has provided for a positive backdrop on what has been a very difficult year for Nike. And a lot happening with Chinese stocks now. We've seen the Chinese firm Xiaomi shares also having a good day off the back of pre-orders for its latest electrical vehicle.

Yes, that's right. They bought out their new model, the U7. So it's their second electric vehicle model. And on open, as soon as it became for sale, they got nearly 300,000 orders. So, you know, they're looking to come into this market quite strongly. They were previously a manufacturer of electronic components like mobile phones, and they've moved into EVs. The first car was taken very well, and now we're moving on to their second car, which on an orders basis is now outselling Tesla.

Many thanks there, Randy, for your time. Well, let's move on now. If you've ever used a computer which has the Microsoft Windows operating system, there are chances that you've come face to face with the dreaded blue screen of death. At least I have. But in the move that marks the

end of an era. Microsoft is giving it the boot. So what's replacing it? Let's find out now from Barry Collins, who's a journalist with PC Pro Magazine. Many thanks for joining us, Barry. Tell us, what's this change we're seeing after 40 years?

A pretty minor change. They're just changing the background to blue and black to black and making the messaging a little clearer. Because if you've seen those error messages before, often you get some hideous 16 digit code that you've got to try and get jotted down in two minutes flat before it restarts the entire computer to try and work out what went wrong with your system. So they're just trying to make it a bit simpler. Simpler. What's the difference between blue and black?

It's a very good question. I think Microsoft's probably a little bit, especially after the CrowdStrike incident last year, where millions of screens were hit with that blue screen of death error. I suspect they're just trying to subtly move the brand in a way a little bit. And from what I've seen lately, and perhaps you've also noticed this as well, Windows computers seem a bit less likely to show that blue screen of death these days. Is that actually a fair observation?

Yeah, definitely. I mean, back in the sort of Windows 95 era, you could probably see one a day, if not more frequently. But over the years, they've made Windows more stable. It's more robust. It's better able to handle those serious crashes that once would have taken down a system. They can just shut down an application or a process, for example, and the computer stays upright a bit more often than it used to.

Infamously, there was a demonstration of Windows 98 at the Comdex show in the US, and they actually managed to crash Windows 98 live on stage. That's probably why they don't do live demos much anymore. For many people like me who are not actually so tech savvy, you know, it always just felt catastrophic when it appears. Is it actually that serious?

It really depends. I mean, the most annoying thing about blue screen is it wipes out whatever's on the computer. You can't save or recover anything. So if you're, as a journalist, sometimes you have 3,000 words into a document you've forgotten to save for a few hours and bang, it goes. And...

they've got much better at recovery as well. So often those things auto-save now in the background. So a big crash isn't that catastrophic. But nine times out of 10, the computer comes back after it powers back on anyway. And you've actually covered Windows updates for years. And do you think this change is mostly about optics or is it part of a deeper shift to how Windows actually handles crashes? Yeah.

I think this particular change is largely cosmetic. They are looking, as part of that CrowdStrike incident last year, they set about a process of trying to make PCs more robust, particularly when you get a 40 update like that CrowdStrike update that just meant millions of computers worldwide couldn't switch back on.

So they've been on this process for about a year, trying to make the system more robust, less likely to fail completely like it did in that occasion. So it's partly cosmetic, partly a serious effort to try and make windows a bit more stable. Barry Collins, journalist with the PC Pro magazine. Many thanks for sharing your thoughts with us. Let's bring back Randy, just a final thoughts there. What do you think about the exit of the blue screen of death after 40 years?

I think Microsoft has moved on a long, long way from when even I started using them in the early 1990s. The computer is a lot more robust. You have a lot more of your information stored in the cloud now. So the PC isn't doing as much as the work as it used to be, especially when it comes to saving data. So I found that it's become a lot more reliable than it used to be. And I think Microsoft probably, like the previous guest said, just want to refresh the brand to show that the way these systems operate now has changed greatly.

That would be a good place to leave the conversation. Randip Somal, many thanks for joining us on the World Business Report. And just before we go, a reminder of our top story. Washington and Beijing have signed a new trade agreement aimed at unblocking the flow of rare earth minerals and magnets from China to the U.S.,

These minerals are vital for everything from manufacturing to microchip production and had been restricted after China hit back at the US tariffs imposed by the Trump administration. You can catch details of this on our website bbc.co.uk. Thank you for listening to the World Business Report and thanks to the production team Neil Murrow and Luke Jarby.