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It's been a day of warming ties and cooler jobs news. The US is getting friendlier with two major players. President Trump is in Saudi Arabia talking big money and investment, while over in China, the ban on Boeing deliveries has been lifted. We'll hear how the trade talks may have worked out well for both sides.
Economic instability in China can mean social instability, and that's something that the Chinese leadership is always concerned about.
But while diplomacy may be warming, the jobs market is starting to feel the chill. Nissan announces it's cutting its 20,000 jobs and the tech firm Microsoft also begins a fresh round of layoffs. So where does that leave businesses, workers and the broader economy? Find out here over the next 30 minutes.
Let's start with President Trump's trip to Saudi Arabia, where he and Crown Prince Mohammed bin Salman have announced a wave of commercial agreements worth more than $600 billion, a sweeping package the White House describes as a milestone in US-Saudi relations. With this historic state visit, we celebrate more than 80 years of close partnership between the United States and the Kingdom of Saudi Arabia,
Ever since President Franklin Roosevelt met with King Solomon's father, King Abdul Aziz, aboard the USS Quincy in 1945, the U.S.-Saudi relationship has been a bedrock of security and prosperity.
Today we reaffirm this important bond and we take the next steps to make our relationship closer, stronger and more powerful than ever before. At the heart of the deals is a record-breaking $140 billion defence contract. We're adding over $1 trillion more in terms of investment and investment into our country and buying our products and
You know, nobody makes military equipment like us. We have the best military equipment, the best missiles, the best rockets, the best everything. Best submarines, by the way. Most lethal weapon in the world. In addition to purchases of $142 billion of American-made military equipment by our great Saudi partners, the largest ever.
Now, other agreements focus on trade and investment in key growth sectors like energy, mining, infrastructure and artificial intelligence. And it's artificial intelligence that we're going to have a talk about now with Jonathan Panikoft. He's the director of the Scowcroft Middle East Security Initiative at the Atlantic Council. He's in Washington and he's also worked with the government on overseeing foreign investment into the US.
Jonathan, thank you for being with us. Now, as part of this deal, the US has lifted restrictions on advanced AI chip exports to Saudi Arabia, thus enabling deals like NVIDIA's supply of chips to the kingdom. How will this shift in US policy towards AI technology and sharing with its Middle East allies? How do we reflect on that?
Thank you so much for having me with you. Look, it is quite a shift from where the Biden administration was. You had diffusion under the Biden administration, which was basically a question of export controls from the U.S. Commerce Department.
The Biden administration was basically saying, look, we've had this long running debate. Do we try to stay ahead of China or do we try to block China from engaging with partners, with allies? And ultimately hit kind of the middle of the road. It didn't really satisfy anyone. The Trump administration through this has clearly made a decision, look, with our closer allies, we're going to be much, much more forward leaning and say, no, you can have access to the most sensitive
chips. You can have access in ways that will help grow your AI economies. You can have access in ways that could pose a long-term security threat, but we're not going to worry about that right now. Well, where does it leave the China tech rivalry with the U.S. then?
Well, I think it actually leaves it pretty – quite alive. Unfortunately, right, I think deep seek when it came online was quite a shock to the US system. I think it got overwhelmed, frankly, in the news cycles a little bit by the election, by Trump coming in, but really had a big impact here in Washington. And so Washington is trying to say, look, we can't – if we're not going to compete with China, which is what a lot of our middle class
and Saudi Arabia and the UAE have always asked, then China's just going to get to eat the field and we're going to get everything that they want. We want to have to make a choice. We want our allies to make a choice. We want them to choose the U.S. And that means that we need to go forward and give them access to more advanced chips. Well, does it not open the door a bit more to China because of China's relationship with the Middle East?
It certainly can, and security experts here in D.C. are very, very skeptical. This is one of the challenges that you've had even under the Biden administration, that if you do this, eventually what we know is China's history of simply not just stealing IP, but actually stealing designs, actually being able to take designs back and copying them when they don't have the capacity to actually invent and produce them itself.
means that they'll catch up. But I think what the Trump administration is saying, perhaps rightly, is that, look, the way technology is moving, the speed at which it's moving, you're not going to be able to permanently block China out anyways. It has to be about staying one to two designs ahead, one to two generations ahead. And that's better and more likely to happen if we're engaged with our allies than if we're simply just letting them have the field, letting China have the field with them.
Do you think some U.S. tech firms might hesitate about going into partnership with some Saudi Arabian firms because of ongoing concerns about the kingdom's human rights record? I think for those who put a priority certainly on some of those issues, not just in Saudi Arabia, but I think we're going to see coming down the line when Trump goes to the UAE in a
related to where the UAE is trying to advance its artificial intelligence work as the region's leader. Yes, I think you certainly could have some that have concerns and pull back. But for the most part, this is really a huge growth opportunity and a region of
potential really big growth that I think a lot of them are going to make the decision that this is the right way forward. Human rights concerns are obviously critical and important. They'll look for other ways to highlight those concerns. But I'd be surprised if that many companies said, no, we're not going to work with Riyadh or with Abu Dhabi on advancing their chips and having them have
more advantage chips. Jonathan Panikoff, thank you very much for joining us today from the Atlantic Council in Washington. Well, how are investors feeling about this huge deal? George Conboy joins us. He is chairman of Brighton Securities, which is based in New York. George, thanks for being with us. The stock price for the chipmaker NVIDIA has reacted particularly well, hasn't it? Tell us about that.
Well, we're up 5% today, Sam. A very good day for NVIDIA and one of the best days we've had in several months. So the investors certainly like the deal. So they're all sort of having a little bit of a party. And actually, stocks are up, aren't they? And have made back some of those gains from Donald Trump's tariffs. Standard & Poor's index up 2%.
to positive territory for the calendar year and the Nasdaq composite entering bull market territory. I'd say that's two thumbs up from investors. George, stay with us. We'll come and talk to you again in just a moment. So with American firms poised to collaborate with Gulf investors and tech companies,
I spoke to one of them, Hadi Malheb. He is the CEO of Agora Group. It's a Dubai-based AI investment company. And I asked him about this deepening partnership and what it means for the region's ambitions to become a global tech powerhouse. It is amazingly exciting. Not Saudi Arabia only, but the whole region. You have right now basically three hubs. You have Saudi Arabia, you have Qatar and you have the UAE.
UAE with Dubai, I mean, Dubai has been trying and successful at positioning itself as a hub for entrepreneurs and for innovation. And they have been able to attract talent from all over the world to come and relocate to Dubai. Now, Saudi Arabia is doing the same exercise. I mean, they are really, really pushing with all their economic and political might to
to establish Riyadh as well and Saudi Arabia in general as a hub for innovation and for entrepreneurship. We have seen how the U.S. and the new administration can yield their economic power to impose new conditions and new world order. And the Arab nations and the Middle East region want to make sure that they are part of that new shift and
And they are an important contributor and player in it as opposed to just suffer the consequences. And I suppose the concern that they might have is that Donald Trump has shown himself to be, in some respects, an unreliable partner, hasn't he? Because of the tariffs that he's imposed on various nations and then removed them as quickly as they've arrived. Correct. I mean, some would argue that this is part of his game theory tactics, right?
And the confusion is intended. This is his way of trying to work out a deal, as he would say. However, business in general and economies in general don't like uncertainty. That's why we've seen a huge drop in all major stock exchanges in reaction to the traffic that have been imposed. And just lately, when these have been revoked or put on hold for 90 days,
you saw the exact same thing happening again. Everything went up. And it's not because tariffs or no tariffs. In my opinion, it is because of the uncertainty. There was no clarity on where things are going. Donald Trump plans to leverage about a trillion dollars worth of US investments into the US via the sovereign wealth funds. There are some questions, though, about the scale of that, that actually you might not be able to afford that kind of investment. Of course.
Correct. Correct. I mean, you're talking about a trillion dollar and that's probably so. So far, the Saudis have committed to around, I think, 600 billion or 800 billion, some ridiculous number like this. And then the UAE has committed also verbally to around one point three billion dollars in investment into the US. The Qataris will not be outplayed in this. They haven't announced yet the exact figures.
But I'm assuming that during Trump's visit to Qatar, they will also announce something substantial. And it is worrying because it is a lot of money. However, just the sheer volume of these investments, it ties them in bed with the U.S. They become more
very important for each other. So I think it is also a strategic long-term plan to ensure that the strategic interests of the US and those of Saudi Arabia and the UAE and Qatar are aligned. At the moment, how easy is it for you to do business with the United States? It is quite easy or easier than other parts of the world because the tariffs that were imposed on Saudi Arabia and
and UAE in particular, were around 10%, which is not a very significant barrier to entry to the US or from the US to the region. There is extremely strong ties as far as investments are concerned right now between the US and the region. And this visit will make it more strategic and easier to do business between these two countries. So it could accelerate those relationships, really? Yes.
Absolutely, absolutely. There is a side that is a little bit worrying, which is, I mean, the public opinion in the Arab world is increasingly critical of perceived U.S. complicity in Gaza, especially arms sales to Israel. And I mean, this is, I think, the only hurdle that needs to be addressed here.
That was Hadi Malab from the Agora Group. It's an AI investment company based in Dubai. Do you ever find yourself playing the budgeting game? Shifting a little money here, a little there and hoping it all works out? Well, with the Name Your Price tool from Progressive, you can be a better budgeter and potentially lower your insurance bill too. You tell Progressive what you want to pay for car insurance and they'll help find you options within your budget. Try it today at Progressive.com.
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Offer ends May 20th. Restrictions apply. Promotions may vary. Visit Jewelosco.com for more details. With BBC World Service, this is World Business Report. Well, Washington's arm of friendship appears to be stretching far and wide. Hot on the heels of the trade talks with China, Beijing has lifted its ban on Boeing aircraft deliveries, a sign of easing tensions with the U.S.,
But could this open the door for other American firms? I put that question to Bonnie Glasser, Managing Director of the Indo-Pacific Program at the German Marshall Fund. Well, the United States has signaled to China, including in the negotiations that took place over the weekend in Switzerland, that China should purchase more products from the United States because China has a massive trade surplus with the United States.
And China had sent three Boeing aircraft back to the U.S. that had been delivered to China just last month. And they had started buying soybeans from Brazil. So there had clearly been some trade diversion that was taking place. And the United States wants China to start buying from the United States again. Of course, Boeing has said,
been scheduled to produce, I think, about 50 aircraft this year for China. And China has yet to have its airlines take delivery of about 25 of the 30 remaining 730 MAX jets.
that are sitting and waiting to be delivered. So I think that this was a good move by Beijing, not completely unexpected once we heard that there was a deal that had come out of the Switzerland discussions. So do you think this is down to sort of diplomacy between the two countries? Or do you think these decisions do actually have an economic impact on China's economy?
Well, certainly the Chinese economy has been suffering from headwinds even before the tariffs were increased by the Trump administration. And the Chinese factories that have been producing products for the United States have essentially been temporarily shut down. More people are out of work.
And I think that this has exacerbated the economic concerns that Chinese leaders have. And so I think that they were keen to restore some normalcy to the U.S.-China economic relationship because ultimately economic instability in China can mean social instability. And that's something that the Chinese leadership is always concerned about.
One thing that seems to be clear from the people that we've spoken to on the programme is that there's still a lot of uncertainty around what's going on with tariffs and maybe about these deals that are being done, whether it's for soybeans or whether it's for Boeing. Do you think that they are going to stick or do you think that they could fall away again quite quickly?
Well, right now there's a freeze on most of the reciprocal tariffs that the Trump administration imposed on China. But still, most products face at least 40 percent tariffs because there's also the Section 301 tariffs from previously. There's 20 percent tariffs that remain that are connected to fentanyl.
and 10% as a result of the reciprocal tariffs being rolled back from the high 34% that had been imposed by Trump on Liberation Day in early April. So China still faces fairly high tariffs. I think that some of these products will begin to be shipped by China, and they're sitting on container ships just waiting, I think, to sail for the United States.
But there may be some areas where it will be difficult to resume trade if producers don't want to actually pay that or pass along the cost to the consumers.
So we could eventually see a deal that resembles what I would call the Trump 1.0 deal. That was the phase one trade deal that was signed in January of 2020. Perhaps we can see a more comprehensive set of issues that results in a more substantial deal. But when that was negotiated during the first Trump administration, it was rejected by China's leadership.
So it's not yet clear what the trade negotiation agenda looks like. So right now we have a pause, but tariffs still remain higher than they were when Trump took office. And the future, yes, it is uncertain.
Monique Glasser there from the German Marshall Fund. Let's go back to George Conboy, chairman of Brighton Securities, based in New York. This deal is important for Boeing, hasn't it? It's had a terrible 12 months. Absolutely. It's really had a terrible five years, Sam. So this is a
A little breath of fresh air for Boeing. It's very welcome news. Investor cheers the news today and push the shares up. Yeah, and it's not just the Chinese placing orders for these aircraft, is it? The leasing firm owned by Saudi Arabia's Sovereign Wealth Fund has also placed an order for 30 of the company's 737 MAX jets. So a good day for them all round. And interesting that, you know, where Donald Trump is today is,
and where he was earlier in the week and over the weekend talking to the Chinese. Right. Strikes me as no accident, Sam, that that announcement came today with the visit to the Middle East. No, no accident at all. Let's talk about this economic data which came out of the US on Tuesday. Inflation data, it eased to 2.3% year on year in April. So a welcome sign there about concerns with regard tariffs possibly pushing prices higher.
You know, we've spent the last few months with investors, some investors, ready to throw themselves under a train because of fear of tariffs, fear of inflation. Maybe it's egg prices. And some people think the Trump administration is full of brilliant geniuses. Others seem to think it's full of ignorant buffoons. The reality is this. It's somewhere in the middle.
And if we ask for advantages and we negotiate, chances are pretty good we'll come out a little bit better. So investors seem to be taking that to heart today and in the last few weeks. I think it bodes well for the economy and certainly for U.S. stocks. It's still a bit sticky, though, isn't it? So food prices in this today's data was down a bit. Car insurance was up. Energy prices also up despite a fall in oil prices.
Right. A mixed bag. But when you take all of those pluses and minuses and average them, not terrible. It looks pretty good for U.S. consumers, especially as our economy is a big consumer of energy. Energy prices have been down net net. I think we're looking for a good six months coming. I want to talk about Microsoft now because they're cutting three percent of their global workforce. That's pretty high, isn't it? Three percent across the world.
Well, it depends. It's really high, maybe too high if you're in that 3%. But a small single digit cut from a large, large employer like Microsoft is almost what you expect. Nobody wants to face that. Yeah, it's about 6,000 roles, I think. Right, right. But it's a huge, huge employer. So it's about 2% of the workforce.
So you look at an employer like that and you look at the kind of change with AI and, of course, the acquisition of the gaming business, the computer gaming business. You look at the size of Microsoft and the cutting edge businesses they're in. If they're going to stay fresh and compete, they need absolutely top people. As regrettable as it is to see workforce losses, this is not the Department of Motor Vehicles.
This is a technology firm. You're going to see that kind of employee churn. I think it bodes well for Microsoft, and investors seem to think so too.
Thank you very much, George Convoy from Brighton Securities for joining us today. While there are more job losses at the Japanese carmaker Nissan, it's cutting 20,000 jobs and that's about 15% of its global workforce. They're even going to close seven factories worldwide as well. And this move comes in response to a $4.5 billion annual loss.
Andy Palmer is with us now. He's the former chief operating officer and longtime executive at Nissan. He's now at the European electric battery startup InnoBat. So, Andy, what gives at Nissan? Good evening. They're having a hard time. And it's a hard time that's been coming along recently.
For 10 years, it's basically the result of, I think, poor product planning. They've failed to pivot to new requirements by the customer, the hybrids in the United States and electric cars in China. They've seen a steady decline and they're really suffering now. And yes, it's really bad news now.
For a lot of my old friends, basically facing 20,000 redundancies. It's really bad news. So it's not just the China's dominance in the EV sector. It's also the fact that they haven't brought in enough hybrids in the US. They don't sound like, from what you're saying, they're not kind of really attacking their markets.
No, absolutely. There's been a, I mean, remember, Nissan were real leaders in electric cars back 10 years ago. In fact, in 2010, they launched the Nissan Leaf and it was really on the cutting edge.
And then around 2014, you started to see a brain drain. You started to see a lack of investment in new technologies. They stopped the investments in the EV and the rollout, and they lost that dominance in EVs to the Chinese. The Chinese market has turned EV. They don't have the products. The American market has turned to hybrid. They don't have the products.
And really, they're just treading water. And in the auto industry, treading water is the same as going backwards. And then earlier this year, we've talked on the programme about a merger between them and Honda, but that fell apart. They've now got this $4.5 billion loss. What happens next for Nissan? Well,
Well, I wish Ivan Espinosa, who's the new CEO of the company, I wish him well. He used to work for me. He's a great guy, but he's got his hands full. It's not impossible to imagine Nissan disappearing. They have a huge debt pile. They're losing money. They've lost their way. They really needed to do some kind of deal with Honda. That hasn't worked. I hope Ivan can bring that back.
But without friends in the industry, without collaboration, it's difficult to see them surviving without being saved by the Japanese government. And remember, if you go back to the alliance with Renault, the Japanese government wasn't prepared to step in then and may not be prepared to step in this time either. It's a lot of money to step in, $4.5 billion loss, isn't it?
It's huge. It's huge. It's unbelievable for a company that 10 years ago was the most profitable in the industry. And the auto industry, you think, probably at a tipping point right now, just briefly, Andy. Very much so. I mean, clearly you're seeing now that the Chinese industry, the Chinese market, which is the biggest in the world, flipping over to dominance with both EV and something that we need to get used to, which is REV, range extended EVs.
Well, there's a good one. Thank you very much, Andy. We must leave it there. Thank you to you for listening. That was World Business Report. Oh, no, I am finishing too early for the programme. We can actually go and talk to Andy for a little minute longer. I completely misread the clock. Andy, I'm so sorry I cut you off far too prematurely. You were giving us a whole new term there, weren't you? A whole new term, yes. Tell us what it is. You've got a whole minute. R-E-V.
REV.
and it's starting to find some traction in the Chinese market, and I think it will find traction elsewhere. For those people that need to go a little bit further, the battery will carry them. So a big move in that area. Andy, I'm so glad we had time for you to explain that to us. Thank you very much for joining. I will now close the programme. Thank you to you for listening. That was World Business Report from the BBC World Service.
Do you ever find yourself playing the budgeting game? Shifting a little money here, a little there, and hoping it all works out? Well, with the Name Your Price tool from Progressive, you can be a better budgeter and potentially lower your insurance bill, too. You tell Progressive what you want to pay for car insurance, and they'll help find you options within your budget. Try it today at Progressive.com. Progressive Casualty Insurance Company and Affiliates. Price and coverage match limited by state law. Not available in all states. Progressive.com.