Trade tensions ease between the world's two biggest economies.
During the meeting, President Xi emphasised that both countries exchanged in-depth views on important trade and economic issues.
He's a great leader of a very powerful, very strong country, China.
It's World Business Report from the BBC World Service.
This is Andrew Peach.
On the way, we'll be live in Iowa to hear from a soybean farmer whose exports to China are back on.
Also today, with its trade tensions with the US still very much on.
Can Canada become an energy superpower?
And a truce between the music industry and artificial intelligence?
Washington and Beijing could sign that trade agreement as soon as next week.
Welcome in.
President Donald Trump says he will slash tariffs on China after what he called an amazing face to face meeting with Chinese President Xi Jinping.
The announcement after a pivotal meeting in South Korea, which has dramatically reduced trade tensions between the two biggest economies in the world.
I thought it was an amazing meeting.
He's a great leader, a leader of a very powerful, very strong country, China.
It was an outstanding meeting. group of decisions I think that was made.
A lot of decisions were made too.
There wasn't too much left out there.
Here's the Chinese foreign ministry spokesperson Guo Jiekun.
The leaders of both countries agreed to maintain regular communication.
President Trump is looking forward to visiting China early next year and has invited President Xi Jinping to visit the United States.
During the meeting, President Xi emphasized that trade delegations of both countries exchanged in-depth views on important trade and economic issues and reached a consensus on resolving them.
They agreed China would suspend export restrictions on vital rare earth minerals for a year.
America would reduce tariffs on Chinese goods in return.
China will resume purchases of US soybeans.
Now soybeans are the top agricultural export from the US and the top US export of any kind to China.
Last year, those exports to China were worth $25 billion.
They are a huge crop grown in states including Illinois Arkansas Kentucky Nebraska, Minnesota and Iowa, where we find soybeans.
Barb Carback, who's a soybean farmer with us on World Business Report.
Barb, thank you very much indeed for coming back on the program.
How much of your crop is sold to China?
Well, supposedly about half, I guess.
But my crop, my personal crop goes to the nearest little town elevator.
I see.
And then it's sold on from there.
It's sold to a cooperative and then the cooperative sells it from there.
And just for people who don't know, what's it used for?
Because it's actually a crop that's native to East Asia, grown all over the States.
When it is sold, what does it tend to be used for?
It's used for protein in feed for animals.
It's a good protein source.
That's one of the big things that it's used for.
So it's part of the farming process.
Yeah, and also soybean oil.
That's a big thing.
Soybean meal that can be used as a protein in different foods.
So it's used in a lot of food that people eat as an ingredient.
Have the trade lines from your farm been directly affected by the tension between your country and China thus far, by the trade war, such as it's been, that's been going on?
Yes, they have, because the prices we receive are directly impacted by what goes on worldwide.
So whenever China, for instance, would make a big purchase of soybeans, our prices would go up locally here at the elevator.
Our product becomes more valuable, therefore the prices go up.
And, by the same token, when your biggest customer no longer buys any of your product, your prices go down.
How confident do you feel with the news reports that there's now an agreement after the meeting between Xi and Trump and everyone's happy and soybean sales will be back on?
I mean, are you popping the cork on a bottle of champagne or having a beer to celebrate?
I am not.
Number one, it should never reach this point.
And we've been in limbo for months wondering what would happen.
And we've watched China, our biggest customer, go to Brazil to get their beans.
And there doesn't seem to be a problem with getting their soybeans from Brazil, because Brazil also produces a lot of soybeans.
Right.
Z in this agreement.
Authorized quote unquote.
This is a Donald Trump quote.
A massive amount of soybeans will be purchased after they've had their agreement today.
But there are absolutely no numbers put with that.
There are there's no there's no information other than, yes, I will purchase some soybeans.
So I'm hesitant to I'm not rejoicing yet.
We'll see.
We'll just have to see what really happens with this agreement that was made.
That's interesting.
One might imagine you'd be nervous about the thing falling apart in some way.
But actually, what you're more worried about is that there might be a deal.
But China's now been forced to go and look for other suppliers of soybeans, and they might be perfectly happy with the supplies they've found.
Yes, they might be.
And, you know, I suspect that they are.
And I'm not quite sure what will bring them back.
And when you've spent, let's see, when do we start?
We started in what the 70s working with China when Nixon went over there.
So when you start building markets, you know like 50 years ago and you've built and worked with those markets for 50 years, and then you slam the door on it very rudely.
As a matter of fact, Donald Trump did slam the door on that market and force that country to go elsewhere looking for that same product.
And they just happened to find a really good source.
My belief is is that it will take years to re-access China as big a partner as it has been over the last 20 years.
Barb, thank you for being with us.
Barb is a soybean farmer in Iowa.
Kerry Lee, he's an economist at Columbia University in New York.
And Kerry, Barb's got real reservations about the return of the soybean market.
What's the reaction more generally been to these positive noises after the Trump-Xi meeting in South Korea?
Well, the markets took it pretty well, even though today was not a day that the market was up.
And the market likes anything that's going to improve trade, particularly surrounding rare earths.
And I think that's the ultimate card in the game of poker that our countries are playing and that they ultimately have the most important product of all, which is a rare earth.
And it'll probably take a minimum of three to five years for the US to really get up to speed, so they can basically wait us out.
Kerry, there's lots and lots of market news, lots of company news today.
We'll come back to you for it in just a second.
First of all, before the meeting with Xi Jinping, Donald Trump signed a flurry of deals with other Asian countries to secure the rare earths that you're talking about.
This is Japan, Malaysia, Thailand, Vietnam and Cambodia, all different sizes.
It's a bit soon to assess what the impact of these deals will be, but they do include efforts to diversify access to these minerals, which are needed for the manufacture of so many things these days, from electric cars to smartphones.
My colleague, our business correspondent Suranjana Tiwari, has been talking to the Malaysian trade minister, Tunggu Zafrul Aziz for his thoughts on the US-China talks.
With regards to China and US, it is what it is.
I think markets, as well as policymakers like ourselves, we've been watching this closely.
But we have also made sure that we continue to engage both separately.
Yeah, Malaysia's got relations with both countries.
Does your new trade agreement with the US risk pulling Malaysia to one side in that rivalry?
China continues to be a major trading partner for Malaysia and ASEAN, and US as well.
We continue to engage all and we do not have exclusive discussions with certain blocs or certain countries.
On the US deal that you've negotiated, there has been some criticism of the terms.
This is not like any other free trade agreements.
Any other free trade agreements.
It's both parties wanting to sit down and agreeing to have disagreement.
But in this case, like many other countries, we've all decided that we need to engage the US.
It was a unilateral decision.
This is a unilateral agreement.
If we don't engage the US, we'll be in a position, a much weaker position, when it comes to trade and investment.
I've explained in Parliament yesterday that whatever we've done with the US, it is important for Malaysia to continue to have trading and investment relationship with the US.
And how do you address the concerns that the deal allows the US to have too much influence over Malaysia's trade policies?
It doesn't.
That's why, you know, I mean, opposition will say that.
That's their job.
But if you look at that, I mean, if you can give me one example Okay, let's talk about rare earths then.
It doesn't say at all in any part of the agreement that we cannot supply to any other country, including China.
What it says is that we cannot stop from supplying downstream and midstream processed strategic minerals to the United States.
Just like palm oil, cocoa, even semiconductor.
Once you have the processing plant in Malaysia for agriculture.
We do not have a policy to restrict the supply of processed palm oil to the United States, nor to the UK, nor to China, nor to India.
Similarly for red earth, exactly the same.
So what have you agreed with the US when it comes to rare earths?
We have agreed that we will not stop the supply of processed mineral and strategic red earth processed red earth to the United States.
Will the US get any preference?
No.
Definitely not.
Okay.
How does Malaysia create the policies and form the trade alliances needed to protect jobs and, you know, to secure people's livelihoods?
Yeah.
Well, today we live in a world where it's very, very integrated, right?
Economic integration, especially an economy like ours where trade-to-GDP is close to 200.
There's no way that you know, if China and US slows down, Malaysia is not affected, even the region, for that matter.
These two countries are close to 50% of the world GDP.
So for us fortunately, this year we are on track to achieve 4 to 48 growth, although the third quarter numbers showing that we might end up stronger.
The third quarter advance estimate is around 5.2% GDP growth.
And inflation and unemployment continues to be low.
So it's conducive, but again, We can't be complacent.
At the same time, we need to be more inclusive.
So that's why we're pushing very hard for this digital framework economic framework agreement to happen.
And we have managed to substantially conclude that, which will then give opportunities for smaller and medium enterprises to participate in trade as well.
And that's the Trade Minister, Tunggu Zafrul Aziz, speaking to us at the summit of the Association of Southeast Asian Nations in Malaysia.
Now, at the same event, the Canadian Prime Minister, Mark Carney, has been pitching his country's energy exports to Asia because, of course, he's concerned about the trade battle that continues with the US.
Nearly all of Canada's oil and natural gas has historically just gone to the US.
So can Canada now become some kind of energy superpower?
From Vancouver, Sam Gruitt reports.
It's a real hive of activity here.
There are forklifts whizzing around, giant orange cranes lifting and stacking shipping containers and, in the distance, those big cargo ships, several hundred of which leave from here every year, carrying lumber, grain and minerals.
But increasingly, what's fuelling this port and the country's ambitions is energy.
APPLAUSE
We will be up to 50 million tonnes annually of LNG by the end of this decade.
In July, Canada's first cargo exports of liquefied natural gas, or LNG, left the West Coast bound for Asia.
It's cooled to a liquid and shipped, rather than transported as gas via pipelines.
We have the LNG Canada terminal now operating, now shipping across Asia.
We have two other LNG terminals currently under construction and two other very significant LNG terminals that have received approval from both the British Columbia and the Canadian governments.
And now we're looking for a final investment decision, hoping to secure those long-term contracts with those Asian allies.
For Heather Exner-Perot from Canadian think tank the Macdonald-Laurier Institute, expanding LNG exports by targeting orders from Asia is a no-brainer amid US trade tensions.
There's not a lot of bright spots in the Canadian economy these days, but LNG and investment in natural gas is one of those where you're really seeing growth and you're really seeing foreign interest.
And the obvious answer to that is Asia.
Some environmentalists oppose LNG and see any increase in natural gas production as harmful for long-term climate goals.
Others, like Conservative opposition leader Pierre Poliev, want to see an expansion of Canada's oil exports.
Something supported by Deborah Yedlin, president of the Calgary Chamber of Commerce, in the oil-rich province of Alberta.
From an economic standpoint, this is a very, very important part of our economic opportunity.
And so why not pull that lever and increase the access to new markets via pipeline?
But more oil could be a hard sell for Prime Minister Carney, as Reuters Canada Energy reporter Amanda Stevenson explains.
Oil pipelines are not unanimously supported in Canada, far from it.
So I think that Mark Carney, if he is interested in such a proposal, he's going to have to kind of balance the interests of environmentalists and the economy.
And I'm not sure how easy that's going to be.
This balance, Amanda says, will be a hurdle in whether Canada can become an energy superpower.
What is clear is that Canada has abundant energy resources and the potential to tap those resources even further.
Energy demand globally continues to rise.
However, there are climate concerns.
There are political concerns.
So whether or not Canada can truly become an energy superpower, that remains to be seen.
And to hear more about Canada's energy ambitions, search for Business Daily, wherever you get your BBC podcasts.
This is World Business Report with Andrew Peach here on the BBC World Service.
Kerry Leahy is from Columbia University in New York and with us to talk through a whole load of company news.
Amazon first of all, Kerry.
Amazon sales up 13%.
Why?
Well, they're doing very well in terms of all their cloud computing and the back office work which people forget is probably the most profitable line in their business.
They make a lot more money doing that than they do when you and I are clicking away and buying stuff on the web.
So the market likes the fact that they've opened up one of their largest facilities and they get a sense that maybe the supply is going to pick up more.
So they won't be less of an also-ran in that business.
So the market took it all very favorably.
Now news from Apple, record annual profits because we're all still buying iPhones.
That's right.
And the glimpse from CEO was that they're going to have a very Merry Christmas in Apple land in Northern California.
And the market liked that too.
Anytime the future looks more beautiful than the current situation or the past.
The market likes that.
And they like the fact that the new phone is off to a strong start going into Christmas.
Okay.
Meanwhile, Meta, their shares closed quite significantly down.
Why is things looking grim for Meta compared to the other tech companies?
Well, the danger there is artificial intelligence and the amount of money they're going to ask the bond market to give them.
I believe it's like 45 billion.
And there's always a problem that it may go down a rat hole if it doesn't turn itself into increased revenues and the like.
So the market got a little antsy about whether or not Meta's buying too much or moving too soon, too fast, and maybe the things they're going to break may be in their own company.
Okay, so it's just about the level of investment that Meta's considering making.
Just to give it a big picture flip, you could argue that the growth in the United States in the last six to nine months has been almost entirely in investment and almost entirely due to all this building and ramping up for AI.
Some of those investments turn out not to be profitable.
The answer to that is yes, but we don't know if it's going to be the next thing that Meta does, or will their bond offering actually bear fruit?
We keep coming back and back to this idea of the AI bubble, which is fuelling stock markets, particularly in the US.
Let's talk about cars.
Volkswagen's third quarter results have taken a big hit.
What's going on with them?
Well, they still are holding on and talking nice about their e-moves, but sales are basically flat.
And if you're closing down markets, I mean, the U.S. market is now more expensive.
And will they be able to break into the Chinese market?
The news there wasn't all that good.
And I believe also in particular a new e-model coming from Porsche hasn't yet gotten there yet.
And I think there was probably disappointment on the fact that they couldn't get that product on the road sooner than they're talking about.
So Volkswagen are down because of the threat of EVs, and yet the Chinese EV manufacturer BYD, is down as well.
Well yes, they're down for a similar reason, in that, while they now have to depend more on domestic demand, the US market is effectively closed.
And while the market in Europe has gone up, one wonders if Europe is really going to roll over and play nice to a company that if they can't sell the stuff in the US, can't sell the stuff in China, you're going to have to sell it in Europe.
That would be bad for the European business.
So it's one of those things that can they pivot and make their products desirable domestically, because international markets are slowing down.
There's so much going on.
There's perhaps less mention, at least in global news programs like this, of the US government shutdown than would otherwise be the case, because this is a huge thing and it's still going on.
Yes and, as some of your other programs may have talked about, a couple of CEOs talked to Trump in the White House about what it's doing to business.
And many people recall that the last shutdown under Trump actually ended when basically, US business rose up in alarm and said I can't get to my meetings because the various safety regarding plane flights is slowing down.
And so that was basically a decision to do that.
And people are thinking maybe that will happen again, because I think that will be the ultimate solution.
A tipping point for Trump is if a Fortune 500 executive can't get from point A to point B, happily he's going to be very mad with the White House.
But for now we've just got the White House and the Republicans going blame the Democrats, and the Democrats not looking like they're going to budge either.
No, I've never seen such little movement on this issue.
As some of our listeners may know, the House of Representatives is not even meeting in Washington.
The Senate is the only agency excuse me, legislature that's actually doing things right now, and they're not doing very much.
But there is no sense that anything's about to change dramatically.
Positions are really quite hard, and I think they're actually going to get worse before they get better.
Well, Kerry, thank you for talking all that through with me.
Appreciate it.
Kerry Leahy, economist at Columbia University in New York.
Now the record industry giant Universal, which owns the labels behind stars like Taylor Swift and Drake and Lady Gaga, has settled a legal dispute, a copyright dispute, with Udio, which has a platform that uses artificial intelligence to generate music like this.
In the echo of my room, I'm lost without your glow.
Heart shattered on the floor from your goodbye.
I'ma let you finish, but I rule the game with every rhyme.
See the throne, I'm sitting fine.
So what are the issues behind this legal dispute and what's the solution they've come up with?
To find out, I've been talking to Jem Aswad, who's the executive music editor at Variety magazine in New York.
The issue is one of copyright infringement.
And where they're saying the copyright infringement takes place is when...
Copyrighted music is being used to train quote-unquote train AI, in which AI will ingest thousands of songs and spit them out in a multitude of infinite different potential configurations.
The labels and publishers are contending that that is a copyright violation, which it certainly is, because it's using somebody's copyrighted intellectual property to create something else.
And the way things always go with... music companies and probably other arts companies.
And tech is tech says we're using this content.
We don't need a license.
And the labels or music publishers then say, yes, you do need a license.
And here's a lawsuit to prove that you do.
They battle it out in court.
They either settle or one side or the other wins.
And what almost always happens is the music companies prove that they are due something.
The tech companies say hey, you're right, let's cut a deal.
And they cut a deal and things move ahead.
So what's the deal that's being cut?
Universal has worked out an agreement so that they will be compensated and credited.
Their music will be compensated and credited for by this AI company.
They're going to work with this AI company to create new AI-created music from their catalog.
And they are just one of, well, three major labels.
A fourth represents all the independent companies.
So this is just one of four major music groups that has come to two terms with this company on this.
Obviously, you can't put the genie back in the bottle.
AI technology exists and it's going to be used to create music whether we like it or not.
What I'm thinking though, is it's all very well for a huge record label to do this, but what about everyone else who's composed music?
What rights do they have to stop AI pinching their ideas?
Well, the average person who doesn't have a record deal or a publishing deal really doesn't.
Now, the average person who doesn't have a record or publishing deal is probably not someone whose music is necessarily going to be used to train AI because they're going to want to use top shelf artists, top shelf song, you know, hit songs, things like that.
Independent labels have protection in a number of ways.
There's a collective called Merlin that looks after their rights.
And in a lot of cases maybe their distribute distribution company would be able to protect them in that way.
And again, Quite frankly, it is mostly the major labels Warner, Universal and Sony that own most of the music that is probably being used to train AI, but certainly not all of it.
But again, most of the other companies that aren't affiliated with those three are covered by Merlin.
And, Jim, while I've got you, there's another legal dispute within the pop music world.
This is one of the big K-pop bands, New Jeans, also in a legal case with their own label.
Tell us about that.
Well, I mean the situation there is that the Korean pop industry, and you know what is known as K-pop in general.
It's almost like the military.
You know, the artists and producers and songwriters generally are brought in when they're young.
They're signed to very stringent contracts.
They're basically in boot camp for a large part of their lives.
It is a very, very tough system.
And not surprisingly, the contracts are also very, very tough.
And new genes tried to get out of theirs and they were ruled against.
And we've seen the same sort of thing in many countries, where very young artists sign deals with record companies which they come to regret once they become famous and popular and they want some rights over their own artistry.
That's a very common thing.
But in most cases where that has happened in the past the biggest ones anyway those contracts have been signed in the US or the UK.
And obviously the laws are very different.
It's really that simple.
That's Gem Aswell, the executive music editor for Variety magazine with me from New York.
If you go to our website at bbccom slash news, much more there about what we're saying about these incredible results for Apple record profits.
Bbccom slash news for more.
But for me, Andrew Peach and the World Business Report team, thank you for being with us.
