Shownotes Transcript
This BBC podcast is supported by ads outside the UK.
and save $5 when you spend $15 or more. Hurry in before these deals are gone. Offer ends June 17th. Promotions may vary. Restrictions apply. Visit JewelOscar.com for more details.
This Father's Day at Lowe's. Score free gifts for the greatest dad. Right now, get a free select DeWalt, Craftsman, or Cobalt tool with purchase of a select battery kit. Plus, get a free Werner 2-foot aluminum ladder when you buy an 8-foot fiberglass ladder. Shop these deals and more this Father's Day at Lowe's. We help, you save. Valid through 615. While supplies last, selection varies by location.
This is Andrew Peach with World Business Report from the BBC World Service. Today is an end to the trade war in sight. President Trump says the US and China will talk on Monday to try to reach a deal. We'll ask whether Elon Musk's time at the White House has achieved anything for the tech sector that will survive his rift with the president. And why the main diamond company in Botswana is halting production, at least for now. Those stories on the way after the latest BBC News.
BBC News with Moira Alderson. A man who was wrongly deported from the United States to El Salvador three months ago is now back in the US. The Supreme Court had ruled that the White House should facilitate Kilma Abrego-Garcia's return. The US Attorney General said the Salvadoran national would now face charges of smuggling undocumented migrants.
Republican politicians in the US have sought to contain the public row that exploded on Thursday between Donald Trump and his former advisor, Elon Musk. The dispute began when the president said he was disappointed by the tech billionaire's criticism of a major spending bill. President Trump says three of his cabinet officials will meet representatives of the Chinese government in London on Monday to discuss a trade deal.
The Russian mercenary group Wagner has announced it's leaving Mali, saying its mission had been successfully completed. The Malian army and Wagner fighters have been accused of rights abuses while fighting Islamist militants. Police in Togo have fired tear gas to disperse a rare anti-government demonstration in the capital Lome. Civil society activists had used social media to encourage people to gather to denounce a crackdown on dissent, including the arrest of a popular rapper.
Rescuers in Gaza say 38 people have been killed in Israeli strikes across the territory on Friday. They say 11 died in a single attack in the northern city of Jabalia. President Trump has signed an executive order lifting a more than 50-year ban on the use of supersonic commercial aircraft over the United States. The White House said advances in engineering and noise reduction made supersonic flight safe and commercially viable.
At the French Open Tennis Championship, the world number one Yannick Sinner is to face the title holder Carlos Alcaraz in the men's final on Sunday. Sinner obtained his place in the final by beating Novak Djokovic, who'd been hoping to win a record-breaking 25th Grand Slam. BBC News.
This is Andrew Peach with World Business Report. On the way, the US and China will talk trade on Monday. So has that phone call between Donald Trump and Xi Jinping ended the tariff war? The latest in a moment for you. It's just a week since Elon Musk left the White House. So what next? I think what we're really going to see is whether or not Donald Trump uses the full weight of the state to start reining in particularly Musk's companies.
And we're on the road in China, in a truck with no driver. It is better at driving than I am. On the freeway, it saves time, effort and is reliable while avoiding obstacles.
First, President Trump says three of his cabinet officials will meet representatives of the Chinese government in London on Monday to talk about a trade deal. The announcement comes a day after Mr Trump spoke to the Chinese leader, Xi Jinping, to try to find a way to de-escalate their tariff war. You remember President Trump targeted China with tariffs on goods of up to 145%.
although they were lowered to 30% last month to allow for talks. Let's go live to Lannan Nguyen, Reuters US editor, to talk us through what's been announced in the past couple of hours. Lannan, what do we know?
Hi, Andrew. What we know is that three of the top economic officials from the U.S. will be headed to London for these talks. We don't know who from the Chinese delegation is going to be there. But obviously, given the high level and sensitivity of these talks, we imagine that they'll be very closely watched. And it's likely that both sides will want to come out of this looking like there has been some progress made. But...
You introduced this subject by saying, you know, Trump wants to de-escalate trade tensions. I mean, he has also escalated trade tensions. So it's possible that trade tensions could escalate as a result of these talks as well if there is no positive result. Now, just remind us how we ended up in this situation. Why are we in a trade war?
Well, Trump has been ratcheting up his commentary about China for years now, including attacking the Chinese for manipulating currencies, in addition to these unfair practices that he claims the Chinese are making on trade. So this has been ratcheting up for years and obviously culminated with these huge tariffs that Trump announced and then paused. And now after yesterday's phone call between the two countries' leaders,
There is some progress being made in terms of sitting down at the table, but we'll have to see whether that leads to any more agreements with regard to critical minerals or electric vehicles or nuclear plant parts. Those are some pretty key areas. Is it possible to see the kind of, you know, the path to some kind of agreement when there's been such strong language used about China ripping the US off and all this stuff?
It's up to the negotiators and trade deals are typically very, very difficult to reach anyway. They're usually extremely detailed and very finely pointed. But in this case, obviously, the rhetoric on both sides has definitely escalated. And so we'll have to see what the negotiations
strategy is on both sides as well to reach an agreement and the motivation for both countries to reach an agreement. So it's, I think, too soon to tell. Markets in the U.S. for sure were cheered by the fact that there was going to be some additional negotiations after the call with Trump and Xi yesterday. But it still remains to be seen. The last few months have been extremely volatile in
given the amount of news that we're getting on trade. And so I wouldn't rule out more turbulence going forward. Sure, Lennon, thank you very much indeed for that. At least there seems to be some will there. And of course, we'll follow this on Monday for you here on the BBC World Service. Now, the insults and threats may have subsided for now between President Trump and his former advisor, Elon Musk. Senior Republicans, even the Speaker of the House, Mike Johnson, have all been weighing in, trying to contain this row, which began with
criticism of government spending, and then escalated really quickly into a call for the president to be impeached and a threat to revoke tens of billions of pounds of government contracts.
It's all such a long way from the campaign trail. There was talk of a phone call today to try to patch things up, but then President Trump said he had no plans to speak to Elon Musk and might get rid of his own Tesla. Victoria Elliott is senior writer on politics for the US-based magazine Wired. She told me it won't mean dramatic changes to US government policies. What?
Doge really did for the Trump administration was that Doge executed a lot of visions that were laid out in Project 2025, which was created by the conservative think tank, the Heritage Foundation, a 600 page document that outlined how a second Trump presidency might consolidate power under the executive branch and really take control of the government. And
And Doge kind of became the face of a lot of those unpopular decisions. The idea of laying off a bunch of civil servants and long-term government workers, that's also in Project 2025 and replacing them with loyalists. That was a key pillar of Project 2025. And Russell Vought, who is now –
kind of going to be taking over these operations more fully was a co-author of Project 2025. The sort of consolidation of data and the crackdown on immigration. These are all things that were laid out in
sort of separately from Doge, although they overlapped. And so I think the thing to keep in mind here is that just because Musk is gone doesn't necessarily mean that what Doge was doing was antithetical to the goals of the Trump administration and won't be continued. I think the bigger thing here is that the Musk-Trump alliance was really a reflection of a greater new political alliance between what I would describe as the tech right
People in the very powerful and wealthy people in the tech industry who have gone from sort of the techno-libertarianism form of right into this more techno-authoritarianism form right and their alliance with the populist right represented bondage.
by Donald Trump. And I think this was always a sort of tenuous alliance, right? Because there are definitely some overlaps in their goals and in their priorities. But I think we saw even before inauguration, the tension between the populist rights, anti-immigration stance and Elon Musk and other tech
billionaires who advocate for the H-1B visa, the skilled worker visa, because so many companies rely on foreign talent. What did the tech sector get out of Trump in the end? And will it be sustained? Whatever's on that list?
Is it susceptible to Trump going, well, I've fallen out with you now, so we can reverse that, that and that? In terms of the tech industry more broadly, you know, Musk is not the only person who supported Trump from the tech industry. Mark Andreessen, the venture capital investor, he has been very aligned with Trump. He has...
Andreessen Horowitz, his firm, put out this big sort of treatise called American Dynamism that was all about using tech to invest in the defense industry and American supremacy. That still aligns with a lot of the Trump administration's values. There's talk of him wanting his own crypto exchange. So I think those types of dynamics
tech industry things, whether that's defence tech or crypto that sort of have inherently benefited him or his administration, I think. If you're going to design a guerrilla marketing exercise for social media platforms, you could not have come up with a better one than this. Twitter now X is full of people going, I haven't been on here for months. And look at it. It's absolutely brilliant. So entertaining watching all of this going on. And obviously, it's in Elon Musk's
interests to have that happen. Donald Trump has his own social media platform, which has also been an active player in the last 24 hours. I'm struggling to think that you couldn't have designed this better if you'd planned it, if you'd thought about it for months. People are flocking back to X, but I do think if this falling out is sustained, there is a way in which Musk actually has
control over really powerful communications channels that otherwise had really benefited Trump. And I think that's a big question mark. That was Victoria Elliott from Wired. Let's talk about diamonds now. The main diamond company in Botswana says it's temporarily halting production of some of its mines because of a prolonged fall in demand.
Debswana, which is a joint venture between the government and the global mining giant De Beers, saw its sales revenue drop by almost 50% last year. Let's talk to Paul Zimnicki, who's a diamond expert in New York, about this. Paul, thank you for being with us on World Business Report. The demand for diamonds has fallen so radically. Why?
So diamond prices traded at all-time highs in 2022, but they've since come off. And if you take a step back and really look at where we are right now,
Prices are pretty much where they were 15 years ago. And in the interim, there's been a lot of inflation on the production cost side. So this has pressured mine economics, if that makes sense. And I think the news of Botswana pulling in production is reflective of that, meaning they're essentially saying prices need to be higher for us to produce more. And that mechanism theoretically supports diamond prices. So
I guess what I'm saying is I do think diamond prices will go higher from here. Right. And is there demand issue because people don't want them because there are lab-grown diamonds now? What's driving that, do you think?
So you have to remember that diamonds are a luxury product. You know, we're talking about jewelry here. Industrial diamonds are just peanuts if we're talking, you know, natural diamonds. Most of that's produced synthetically in China. But with natural diamond jewelry, you know, people don't need it. They want it. It's a discretionary purchase. You know, maybe an engagement ring is a little bit less discretionary. But, you know, even ultimately there, the recipient wants it, hopefully.
But, you know, by and large, the want for diamonds is driven by the industry creating desire for its product. And, you know, marketing is a big part of that. And, you know, that's the case for most discretionary items, especially luxury items. And diamonds are no different. So...
I think the diamond industry lost its way a little bit on that front over the last decade or so. And it has a uniquely acute impact in Botswana, where three quarters of the country's foreign exchange earnings are from diamonds. A third of the government's income is from diamond wealth.
Yeah, so Botswana is the second largest producer of diamonds in the world. They're the largest by value, if we're looking at dollars sold. And I think Botswana really needs to kind of dig in and sell its product, tell the story of its diamonds, which it's proud of, and it should be. Diamonds fund public health care and education in Botswana. You know, Botswana has been a great success story of a government really leveraging its mineral wealth. And I think
enough, you know, diamond consumers, you know, don't know this, don't understand this. And I think if they did, they'd be willing to pay a premium, you know, for its diamonds relative to, say, a man-made diamond manufactured in China. And when production is paused, we very often see it never starts again. Do you think that'll be the case here? Or will this actually be a temporary pause in diamond production?
So this move is actually in line with Anglo-America, which is De Beers' parents' production guidance for the year that they came out with a few months ago. So this is kind of reflective of that. You know, the industry has gone through periods like this before, and this is kind of the method or tactic it has used. So, yeah, I think I'd be extremely shocked if those mines weren't turned back on. They're the most prolific diamond mines in the world.
Interesting. Thank you very much indeed, Paul, for your analysis. Appreciate it. Paul Zimnitsky is a Diamond Industry Analyst and joined us live from New York. Millions of men quietly struggle with low testosterone. Now there is a new treatment under development. Akisi's Biomed is pioneering a groundbreaking medical solution designed to instruct the body to produce its own natural testosterone. You can be a part of this breakthrough.
Help make this treatment a reality by investing in Akisis. Visit netcapital.com slash companies slash Akisis. That's A-C-E-S-I-S. Together, we can improve men's well-being.
Offer ends June 17th.
Promotions may vary. Restrictions apply. Visit Jewelosco.com for more details. You're listening to World Business Report here on the BBC World Service. I'm Andrew Peach. Bring on Chris Lowe now, Chief Economist for FHN Financial, also in New York, to look through some of the day's other stories. Chris, thank you for joining us. Let's talk about U.S. job numbers that have come out today. What do you make of them? Well, Andrew, they were...
On the surface, anyway, a little better than expected job growth of 139,000 compared to expectations of about 125,000. But there was a big downward revision to March and April. It was revised down by 95,000. And the unemployment rate held at 4.2, which is the highest it's been in the past year. And in fact,
The number of unemployed is creeping up slowly, has been for a couple of months now. Right. So hiring has slowed down, but there are sort of two sides to it, aren't there?
Well, that's right. You know, we're sort of in a policy deadlock here in the U.S., even as the ECB and Bank of England are cutting interest rates. The Fed is stuck. They can't do anything until they know whether there's an inflationary impact from the tariffs. And so we watch these numbers every month as they come in.
are honestly nervous that they'll show extreme weakness because that would mandate rate cuts that can't come. Thankfully, we've gone another month without tripping that. In the meantime, though...
The job market is tightening up, at least partly because immigration in the U.S. has come to a standstill with the border closed. And that means that foreign-born labor participation has slowed dramatically this year. That keeps the job market tight.
and in May began to put a little upward pressure on wages. And market reaction is always so interesting because market reaction is very much about the difference between what happened and what was expected. So even though this wasn't great news, it was actually a bit better than the markets had expected, therefore they rose.
Yeah, and I think, you know, as far as that goes, we've got GDP growth that fell slightly in the first quarter. It's tracking much better growth in the second quarter. The average is going to be something a little less than a 2% growth rate in the first half.
So that looks pretty good. You get an employment report that is consistent with that kind of growth. So it looks like the economy is still trundling along at this moderate pace.
And that buys time. You know, I think the biggest fear for equity investors is recession. And as long as the data are consistent with growth, well, we can live without the Fed cutting rates. Interesting. Let's talk about the regulation of the Fed. And what are the officials laying out this agenda for looking at various rules that govern banks in the U.S.?
Yeah. Well, this story goes back to right after the election when Donald Trump was elected president. Michael Barr, who was the vice chair at the Fed for supervision, he's been working on a big bank run.
reform package for years and honestly struggling even under the Biden administration to get that across the finish line. I think when Trump was elected, he resigned in frustration and Governor Mickey Bowman was nominated to take his place. The Senate confirmed that nomination, that appointment this week. And today she gave a
big speech outlining her vision for bank supervision under her tenure. And not surprisingly, a Trump appointee, she is looking at reducing regulation, making it easier for banks to operate by streamlining the rules and by simplifying the bank certification process. I
Not necessarily a bad thing, by the way, because bank regulation is so tight in the U.S. It's pushed trillions of dollars of lending into unregulated non-bank loans, a potential crisis brewing outside of the regulatory purview.
Chris, thank you for that. Chris Lowe from FHN Financial in New York. Now to China, where the era of the driverless truck has arrived. They're being tested out under supervision along the 106-mile route between Beijing and Tianjin Port in the southeast. Elsewhere in China, smaller driverless delivery vans are sharing suburban streets with human beings. Our correspondent there is Stephen Macdonald.
In China, the era of the driverless truck is already upon us, at least to some extent. There have been test runs of heavy lorries driving along public roads with nobody in the front seats.
Pernier AI's vehicles use a combination of sensors and cameras to navigate through traffic, and its vice president, Li Hongyu, says this fast-developing technology will revolutionise not only the cost, but the capabilities of long-haul transport.
In the future, with driverless operations, our transportation efficiency will definitely be greatly improved. For example, labour costs will be reduced, but more importantly, we can deal better with harsh environments and long hours driving. But is it dangerous for people to share the streets with large trucks that don't have human drivers? Pony AI says no.
It's now making deliveries between Beijing and Tianjin Port. For the moment, it's using safety drivers along this route, who, at various points, put the computer in charge. We went along for the ride. Well, on the outside, these driverless trucks look the same. Let's get in and have a look, though.
Just say hello to the driver. Huo Kangtian explains his role. My job as a safety driver is to act as the last line of defence. For example, in the case of an emergency, I would have to take back control of the vehicle immediately to ensure everyone's safety. And we're away, at least at the beginning.
It's like normal. But then, a bit further down the road, he flicks a couple of buttons on the screen, takes his hands off the wheel, and the truck is in control of itself. I have to say it's pretty strange, flying down the highway, looking across and seeing the driver doesn't have his hands on the wheel.
It's the size of the truck, its power, its speed, having other vehicles also racing past us at high speed and thinking that it's the technology which is in charge of our destiny right now.
Ask our driver if he thinks he or the truck is more skilful. It is better at driving than I am. On the freeway, it saves time, effort and is reliable while avoiding obstacles. They also ask him if he is worried that these trucks will eventually, one day, render his job obsolete. I don't really know about this.
It's the diplomatic answer. While replacing all truck drivers may be a way off when it comes to heavy lorries, smaller driverless delivery vans have already been cleared to operate freely on suburban streets in many parts of China.
The eastern city of Hefei is the most developed. Here, Rhino AI has robo-vans taking parcels from large distribution hubs run by courier companies to neighbourhood stations where scooter drivers will then drop packages to the front door.
Zhang Qichen is Rhino AI's regional manager. The driverless vehicle industry is growing really, really quickly. Apart from express delivery companies, our customers include supermarkets, hospitals and universities. And that report from Steve McDonald in China.
The Brooklyn Conservatory of Music has just learned, like many arts organisations in the US, it's losing grant money that funds music lessons for young people. Last month they put on an event in Brooklyn where musicians performed on people's porches on their front steps. Samantha Field spent an afternoon with Open Stages Brooklyn to hear what music means to the children.
One Saturday every spring, you can wander around the Park Slope neighborhood of Brooklyn and hear live music everywhere for free. Jazz groups playing on brownstone stoops. Drummers playing in gardens. And elementary and middle school kids playing trumpets, flutes, and drums outside the Brooklyn Conservatory of Music, the local nonprofit that puts on this Open Stages event. ♪
Mila Suarez is on percussion there. She's 11 and lives in Brooklyn. I didn't get as nervous because we always have concerts at the end of every semester. It was just really nice because I got to do what I love in front of a lot of people. Suarez takes both percussion and guitar lessons at the conservatory's community music center in her neighborhood.
Her mom, Anclen Suarez, signed her up three years ago. As soon as she learned, the center would be offering lessons to low-income families at little to no cost. From the get-go, I mean, I didn't ask my kids. I was like, you know, otherwise we wouldn't be able to be honest with you to afford, you know, the type of music education that they were providing. And it was like a no-brainer. When Suarez was a kid in the Dominican Republic, she didn't have any kind of music education.
And so, you know, though I listen to music and I like music, I never had access to it. So that was something that I wanted to provide for my kids. The Community Music Center and the heavily subsidized lessons it offers have been funded in part by a $50,000 grant from the National Endowment for the Arts. The conservatory had been hoping and expecting to have that money doubled this year.
Instead, Director Dorothy Savage says it was all pulled. This puts tremendous pressure on our programs. We're going to do all we can. We're going to find a way. We're asking our other funders and colleagues and families and all our supporters to help us. So far, she says the outpouring of support has been huge.
But even if private donors are able to bridge the gap for now, Chad Cooper, the conservatory's executive director, says there are few private funders willing to take chances like the federal government has. When a brand new program got a grant from the National Endowment for the Arts... It said the NEA thinks this is a great program and that helps us attract other funders and that telegraphs to a whole group of people a certain kind of credibility.
In the absence of federal funding, Anclan Suarez is concerned about the future of arts education in low-income communities like hers. It's crucial for, you know, development of our kids, for their emotional health. What they get from it is not only discipline, it's a sense of community, it's a sense of peace within themselves, you know, it's a self-expression. It's a way to get away from reality. A way to get away from reality, Mila says. ♪
Whenever you're playing your hardest, you forget that there's anything else in the world. And it's just really fun and you don't have to worry. At 11, she already knows she wants to keep playing music for a long time. And from me, Andrew Peach, and the team here on World Business Report, thanks for listening.