How will the latest US-China trade deal impact businesses?

Bisi Adebayo (0:01)

A little less tariff trouble between the US and China. It's World Business Express from the BBC World Service, I am Bisi Adebayo.

Also, why are some people struggling to access their own money in Ethiopia's Tigray region? And in Japan, what do you do with an old golf course? Increasingly, you cover it in solar panels.

So the US and China have revealed more details of their latest trade deal, with the two countries cutting tariffs on around $60 billion worth of each other's goods. Import taxes will be reduced on $30 billion of goods heading into the US., including toys, sports equipment, household products, and fireworks. And China will cut tariffs on $30 billion of American goods, including meat, seafood, dairy products, grain, coal and medical equipment. The deal was reached during President Xi Jinping's visit to Washington for talks with President Donald Trump. I had a chat with Jay Foreman, who's CEO of U.S.-based toy company Basic Fun.

Jay Foreman (1:08)

We've never had tariffs in the past on toys forever, really. Certainly for the 40 years I've been doing it.

So it brings a bit of normalcy to our business after a long time of real uncertainty. I kind of call this Liberation Day 3.0, 1 being when the tariffs first started, a hit 2 being when the courts ruled to take tariffs down, and now 3 when actually the policy that we'd hoped would be put in place as it relates to tariffs starts to happen, which is approaching this problem with a scalpel and not a hacksaw or a chainsaw. So I think that the parties are realizing that while there are a certain amount of strategic and strategically important merchandise that should be controlled in and out of each market, there's a broad range of products that aren't strategic and aren't core to anybody's manufacturing base, that we should let flow freely for the benefit of consumers and industries, toys, agriculture, certain other products are part of that. So we're extremely happy with the result of this summit.

Bisi Adebayo (2:13)

You've had years now of uncertainty around US-China trade. I wonder how difficult has that made it to plan ahead?

Jay Foreman (2:22)

It's been really tough because if you think about it, the last 20 months, tariffs went from 10% to 20%, 145% to 30%, coming off completely, going back up to 10% and then going to 12.5%. And now to have them come off just makes it a little bit easier to plan your business. You know, one of the things you talk about certainty that we bet on here at Basic Fund is the certainty of the necessity for a good relationship between China and the US and really China and the rest of the world. We're all tied together in a trade balance and we're all better off trading and working together than we are fighting. So this is the first good step. The trade balance between the US and China is too important to upset.

Bisi Adebayo (3:08)

And speaking about the trade balance, we're talking about $30 billion, which sounds like a lot of trade. But from where you sit, does this feel like a significant change or just a small step towards easing the tensions?

Jay Foreman (3:22)

For the toy industry, it's a huge step because if the majority of toy products imported into the US are tariff free, for our industry, it's huge. I would say for the global trade or the U.S.-China trade, it's a small first step, but it's a step in the right direction. It's a step that is showing that targeted, thoughtful use and implementation of tariffs is the way to go, and across the board, implementation of blanket tariffs is not really working. It's pushed the price of goods up, it's shaken up the Chinese manufacturing base, and it hasn't been good for either country. It's taken almost 20 months to sort out, but it seems like it's all moving in the right direction.

Bisi Adebayo (4:02)

Jay Forman there, well, time to bring in Jane Sydenham, who's Senior Investment Director at Redbones Investments Management. Jane, let's start with oil. Prices have remained volatile. What's the latest?

Jane Sydenham (4:14)

So it's really, you know, President Trump rejected the seven-day ceasefire proposal from Iran and that he said he might resume bombing after the midterm elections. And clearly, you know, we've gone back again into another period of uncertainty. Every time we sort of feel as if we might have a resolution, something happens and we seem to go back the other way, which is causing the rise today.

Bisi Adebayo (4:34)

Well, there's also news about Paramount looking to raise more money to fund its Warner Brothers discovery takeover. What are you hearing?