Will the US and China make a trade deal?

0:02Good morning from the Financial Times. Today is Tuesday, September 16th, and this is your FT News briefing. Donald Trump suffered another setback on his mission to influence the Fed. And the U.S. and China are inching closer to a trade deal. Plus, Gen Z is toppling governments across Asia. I'm Sonia Hudson, and here's the news you need to start your day.

0:39Federal Reserve Governor Lisa Cook can keep her job for now. A U.S. appeals court made the ruling last night. President Donald Trump tried to remove her over allegations of mortgage fraud. She denied those allegations and sued to stay in her post. Yesterday's ruling means Cook will likely remain on the Federal Open Market Committee when it meets to decide on interest rates this week. It's a major blow to Trump, who has put a ton of pressure on the central bank to lower interest rates. But Trump did get a win last night. The Senate confirmed Stephen Myron for a different seat on the Fed's board of governors, which means Myron will also have the opportunity to participate in today's FOMC meeting.

1:32The U.S. and China seem to be making progress in their trade talks. The two countries just wrapped up negotiations in Spain, and President Donald Trump signaled yesterday that they've struck a deal on TikTok's U.S. operations. But around the same time, a Chinese regulator said it found U.S. chipmaker NVIDIA had violated antitrust laws. So what does this all mean for a potential trade deal? Here to help us read the tea leaves is the FT's Amy Williams. Hi, Amy. Hi, Sonia. Let's start with the potential TikTok deal. What do we know about that and how significant would it be? So if you remember, there was a huge furore over TikTok last year, and the U.S.

2:19Congress actually passed legislation to force ByteDance, which is the parent company that owns TikTok, to sell the app or face a ban in the U.S. The U.S. has extended the deadline a few times, and the latest deadline is this coming Wednesday. Trump, as he likes to do, has posted on Truth Social a tantalizing message saying that a deal has been reached, but was still awaiting the details. And Treasury Secretary Scott Besant has been a bit more cautious, and he said there would be a framework of a deal that needed to be approved by Trump and Xi Jinping on Friday. So until that happens, I don't think we'll see more concrete detail.

3:01How significant is a potential deal on TikTok for the U.S. and China? I think it would be helpful. I think Donald Trump really wants to see U.S. control of TikTok. I think a lot of his base and his voters love TikTok. So politically for him, I think it's it's quite a good thing. But in terms of the broader U.S.-China relationship, it's helpful, but it's not the top issue. Yeah. Can you give us a little bit more context on where trade negotiations stand between the two countries right now? Yeah. So if you remember in April, the U.S. ratcheted up extra tariffs on China to very high levels. The two sides met a few times in the following months.

3:44Both sides ratcheted down their tariffs again. And that's kind of where we are. We're in a holding pattern at the moment. And the two sides keep meeting to try and reach some agreement and some settlement that would free up trade. One of the things that China has done that rattled the U.S. is they restricted some exports of rare earth minerals and other critical minerals that the U.S. needs. And that is something that concerns the U.S. side and has been one of the flashpoints here. So there are other issues to talk about. Fentanyl is the other one. The U.S. is very annoyed and keeps accusing China of aiding the manufacturer of fentanyl, and they keep accusing China of not acting on that.

4:29OK, so there's a lot of outstanding issues, even if the TikTok issue does actually get put to bed. What about this Chinese crackdown on NVIDIA? Do you think this was like a way for China to apply pressure to the U.S.? It could be. I mean, it does provide China with some more leverage in these trade talks. NVIDIA, obviously, a hugely successful U.S. chipmaker, big, big U.S. company. So for China to say that it's violating the country's antitrust law is something that I think will almost certainly come up in talks between officials. What are you going to be looking out for going forward as these trade talks continue?

5:09I think we could possibly expect to see some progress on tariff levels. I think the U.S. will want to stabilize China's export controls on critical minerals and rare earth minerals. I don't think there's going to be a huge breakthrough deal here. Unfortunately, I think this is going to be very slow, painstaking work. There's another deadline in November where the tariffs are supposed to ratchet up to higher levels. U.S. Trade Representative Jameson Greer said from Madrid that there's a possibility that this deadline could be extended. So there are already signs that these talks are going to drag on.

5:51There's not going to be a quick resolution. Amy Williams covers trade for the FT. Thanks, Amy. Thank you, Sonia.

6:04U.S. President Donald Trump flies into the U.K. today. and the longtime allies want to use the visit to boost financial ties. That'll include exploring closer alignment of their capital markets. Prime Minister Keir Starmer wants to showcase Britain as an investment hotspot. U.S. private equity company Blackstone is pledging to invest £100 billion in British assets over the next decade. U.S. officials also said there would be at least$10 billion of investment deals in the tech sector. and an agreement on nuclear cooperation. But Trump's visit could cause problems for Starmer. The president is unpopular in Britain, and his schedule has been designed to shield him from any public protests.

6:57There's been a string of Gen Z-led revolutions in Asia over the past few years. Nepal is the latest example. Just last week, massive protests there caused the prime minister to resign. The FT's Andres Schiapani is here to talk more about this. Hi, Andres. Hello. So tell us what happened in Nepal last week. Well, so basically last Monday, thousands of youngsters, including students in school uniforms, took to the streets in Kathmandu to protest initially against a ban on social media platforms. But that was mainly the spark. They basically went out to protest against what they saw as an entrenched and corrupt political elite.

7:40And that led to a fierce response from the police on the first day, on the Monday, 19 protesters got killed, which led to a second day when other groups also joined the protest. And then some of the public buildings in the parliament got burned down, some of the ministries and the private residencies of some politicians, including the former prime minister Kipei Sharmaoli, got burned down. That prompted the resignation of prime minister Kipei Sharmaoli late on Tuesday. And where have we seen similar revolutions and protests take place in Asia recently? Well, the first domino, if we can call it that, was Sri Lanka in 2022.

8:26Well, again, thousands of protesters, mainly youngsters initially, overrun the presidential palace. And the then president fled the country. And then two years later, in Bangladesh, also students led a huge popular uprising and the Bangladesh authoritarian ruler, Sheikh Hasina then fled to India. Also late last month, something similar happened in Indonesia. Students took to the streets over some perks that new members of parliament rewarded themselves with, and they basically rose against President Subianto. But in the end, it led to the resignation of the finance minister. But the president stayed in power in Indonesia.

9:12Yeah, the president in Indonesia stayed in power, yes. Is there a common thread between all of these incidents? Well, I would argue there is. I mean, there is a pretty much complete disconnect between the political elites. I mean, these leaders, the one in Nepal was 73, the one in Sri Lanka was 76, the one in Bangladesh, 77, the one in Indonesia, 73. So the youngsters feel there's a big disconnect between what they say is entrenched political elites, which have been in power sort of like playing musical chairs. and this younger generation, which is very energetic, but in many cases they're either out of work or underemployed.

9:50For example, more than 80 % of the workforce in Bangladesh, Indonesia and Nepal is informally employed, which put them in a very precarious position. And at the same time, youth unemployment is very, very high. So that sort of like sense of political elite is taken away from us. what should be spread evenly, it's growing a lot of resentment. What's the outlook for these countries where this group of elites has been overthrown? Well, in Sri Lanka, they already elected a new president last year. He's 56, and he promised to tackle corruption. Bangladesh, after the revolution last year, they installed a co-taking government led by a Nobel Peace laureate, Mohammed Yunus.

10:39And last month, he called for elections in February. And then in Nepal, after negotiations between the president, the chief of the army, and some representatives from their Gen Z groups, they appointed a former Supreme Court justice, who is now the co-taking prime minister. And immediately after she was sworn in late on Saturday. She did solve parliament and called for fresh elections for March. Andres Cipani is the FT's New Delhi correspondent. Thanks, Andres. Thank you.

11:14You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

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