Beijing confirms progress in trade talks with Washington
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NMLS ID 1702840. Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Beijing confirms progress in trade talks with Washington. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. Hello, I'm Nick Koreshi in Fort Leanneburn.

China has confirmed it's reached an agreement with the United States over rare earth minerals in a bid to end a trade war between the world's biggest economies. A White House official says it lays the groundwork for expediting rare earth shipments from China to the US. The BBC's Jake Kwan says it's taken a lot of work to get to this point.

America had accused China of stopping the export of these rare ingredients for any modern machinery, whether it's sensors, magnets, and it even has implications into national security because a lot of these components are used on weapons. And China accused America of stopping the sale of semiconductor chips.

Two weeks ago, the two sides met again in London to iron out that detail, and at the time we heard that they have agreed to a framework deal. And it seems that yesterday they finalized that framework deal, which really bodes well to those countries finishing their trade war. At the same time, this appears to be a middle step, and it will be a while to reach the final line.

Jake Kwan there. Meanwhile, in Europe, work continues on a trade agreement with the US before July the 9th. That is when the 90-day pause runs out. European leaders have been gathering in Brussels for a summit where they must decide on a common negotiating position towards the Trump administration. European Commission President Ursula von der Leyen confirmed the US had sent over its terms for a deal. She warned the bloc was considering all options.

Ursula von der Leyen. Let's do some numbers.

Oil prices are heading for their steepest weekly decline since March 2023. Risk premiums evaporated after the Iran-Israel conflict led to no major supply disruption. India's central bank has drained $10 billion of excess cash from the banking system. The first such operation in seven months aims to lift overnight borrowing costs.

And French consumer prices rose more than expected in June, up just under a percentage point year on year, according to early data. It ends a streak of declining inflation as service costs accelerated and energy price falls moderated.

Now, that 12-day war between Iran and Israel brought intense focus on a key waterway, the Strait of Hormuz. It runs between Iran and the Gulf states and is crucial to the global economy. A ceasefire has been in place since Tuesday. But how has the conflict affected a region so dependent on this strait? The BBC's Samir Hashmi reports from Dubai. 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 has

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.

In a region trying to chart a new course away from oil towards innovation and growth, stability is currency. In Dubai, I'm the BBC's Samir Hashmi for Marketplace. Finally from me, Chinese tech giant Xiaomi Corporation might be the world's third largest smartphone maker after Apple and Samsung, but it now seems to be making a big impact in the electric vehicle market. Firms launched a $35,000 sports utility vehicle to compete with Tesla.

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