Will Trump and Xi extend their trade truce?

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0:32Good morning from the Financial Times. Today is Wednesday, September 23rd, and this is your FT News Briefing. Donald Trump and Xi Jinping are talking trade this week, and UK Prime Minister Andy Burnham also got some face time with the US president. Plus, we look at conflicts of interest in a bid for a Russian oil company. I'm Sonia Hudson, InfoMark Filipino, and here's the news you need to start your day.

1:07U.S. President Donald Trump is meeting China's Xi Jinping this week. The highly anticipated summit is expected to cover topics from AI safety to trade and the Iran war. Dimitri Sevastopoulos is the FT's U.S.-China correspondent. He joins me now to discuss. Hi, Dimitri. Hi, Sonia. So what's the backdrop heading into this summit? What do people need to know? Well, Donald Trump went to Beijing for a state visit in May, and now Xi Jinping is coming to Washington for a reciprocal visit. In the background, the big thing that's happening is that the U.S. and China have a trade war that was launched last year by Donald Trump.

1:48They agreed a ceasefire in the trade war in October last year. There are still many issues on the table with relation to that that will be discussed on Thursday. But I think that's the kind of broad stroke. So what people need to pay attention to. Well, what does the U.S. want to get out of this summit? Well, the two countries are, you know, mired in what some people call strategic stability and other people call strategic stalemate. I think both sides are trying to maintain that stability. On the other hand, they also need to address some big issues like whether they can extend the ceasefire in the trade war.

2:23That ceasefire expires on November 10th. The U.S. wants to extend the ceasefire by only six months because they think it gives them continued leverage over China. The Chinese want to extend for the remainder of Donald Trump's term. That's one of the key issues in the summit. Another is Treasury Secretary Scott Besson told me on Sunday that the U.S. and China had agreed to set up an AI dialogue, a mechanism for the two sides to discuss guardrails, safety issues, which is becoming increasingly important. So I think that's going to be one of the big announcements that we see on Thursday. Dimitri, would you consider Trump or officials in his administration China hawks?

3:03I think you have to separate Trump from his officials. So Trump is a hawk when it comes to trade, but he is not really as hawk when it comes to security issues, defense, human rights. But his team is very, very hawkish. And, you know, one of the things we're focus on this week is looking at why it is that the many China hawks that populate Trump's administration have been unable to do some of the things that they've wanted to do over the past 20 months. And one of the reasons is he showers the Chinese president with a lot of respect, and he doesn't want his team to do things, particularly in the security area, that might upset his relationship with Xi Jinping or else jeopardize the trade war truce that the two sides signed.

3:44How do you think that dynamic could impact the summit this week? A lot of the topics they're focusing on are trade and not security issues. You know, one of the wild cards is what Xi Jinping will ask Donald Trump to do on Taiwan. And there are a lot of people in Washington who are worried that Donald Trump might sacrifice support for Taiwan to get something else from Xi Jinping, for example, support to end the war in Iran. And so people will be paying an awful lot of attention to that. Dimitri Sevastopoulos is the FT's U.S.-China correspondent. Thanks so much, Dimitri. Thank you.

4:25U.K. Prime Minister Andy Burnham had his first in-person meeting with Trump yesterday. It came on the heels of Trump's address at the United Nations General Assembly. The FT's political editor, George Parker, has more. It's always a trepidatious moment for any world leader meeting Donald Trump in the public spotlight. And I think you could say probably Andy Burnham's breathing a big sigh of relief that things turned out okay. They got in quite well. Donald Trump said he was someone he could do business with. Made a big contrast between Andy Burnham and his predecessor, Sir Keir Starmer. But, and there are always big buts, of course, when you meet Donald Trump, There's a discussion about the British deal to lease back the Diego Garcia base in the Indian Ocean from Mauritius, an idea which Donald Trump described as terrible.

5:12I think probably more significantly, in Donald Trump's speech to the UN, he was very strongly against the idea of some sort of globalist scheme to regulate the development of AI. Now, that's exactly what Andy Burnham is proposing for the British presidency of the G20 next year, some sort of effort to bring China and the U.S. together to try to eliminate some of the dangers of the development of AI. That's the FT's political editor, George Parker.

5:43The cost of hiring an oil supertanker has reached a record high. It's passed$1.2 million a day on routes between the Middle East and Asia. For most of last year, rates were between$20 ,000 and$50 ,000 a day. The rates have shot up because of the war in Iran. The conflict has caused a severe shortage of the world's largest tankers. That's because ships are having to redraw their routes and travel a lot further. These higher shipping costs add to the war's pressure on the oil market. One analyst told the FT that it might, quote, be the thing that breaks this market in the near term.

6:31Billionaire financier Todd Boley wants the international assets of Luke Oil. The Russian oil company was put up for sale last year after being hit with U.S. sanctions. Boley has secured the backing of both the U.S. government and Gulf power brokers in his bid. He's been working on a deal for months, according to two people close to the process. But it could come with some conflicts of interest. Here to discuss is the FT's energy editor, Malcolm Moore. Hi, Malcolm. Hi there. So get us up to speed, Malcolm. When did the bidding for Luke Oil start? It began last year when U.S. Treasury basically put sanctions on Russia's two biggest oil companies, Rosneft and Luke Oil.

7:14So in January, the U.S. private equity firm Carlyle, which is, you know, a major player in energy, they said that they had made a provisional deal with Lucoil for these assets. And then since January, it's basically gone quiet. The deal needed to be approved by not only Treasury, but by a number of other U.S. government departments. And that process has dragged and dragged. And it's a bit unclear why that delay has happened. And now you have Todd Boley. He recently sold his stake in Chelsea Football Club. He made his money in insurance and now is making a bid for Luke Oil. Tell me more about that.

7:54So Todd Bowley is a billionaire and he made his money in finance and has assembled a consortium of bidders. So it's him. It's also Sheikh Tarnoon, who is the brother of the president of the UAE, the Al-Qaeda brothers, who are these Qatari Syrian billionaires who have been increasingly close to some members of the Trump family. And, of course, the U.S. government itself is going to be involved, according to our reporting. So a government agency called the International Development Finance Corporation, they're going to take an equity stake in Todd Bowley's consortium. So he's basically assembled this kind of team of ultra-wealthy, Trump-aligned, and U.S.

8:39government backers. So he's kind of trying to rival with Carlyle to get the assets. Well, Malcolm, why is Bolli interested in Luke Oil at all? I think essentially these assets are a great prize. Luke Oil had amassed this huge international business as well as its business in Russia. And that spans everything from oil fields in Iraq and Central Asia to some of Europe's biggest refineries, oil refineries, to actually a petrol station network in New Jersey. There are$20 billion worth of international oil and gas assets on the line. You know, it's not very often that assets of this kind of scale come onto the market.

9:23And usually in oil and gas, you would face a lot of competition from, you know, the oil majors and other bidders. But this is a bit of a unique situation because it's kind of complicated by their Russian ownership. It takes a certain sort of bidder to be able to unlock a deal for them. Given all of this, what is the takeaway for you? So it feels like there's a conflict of interest here. You have Bowley's consortium backed by one arm of the U.S. government, while at the same time, another arm of the U.S. government is deciding who gets to win these assets. And then that raises the question of whether or not Carlisle's bid is going to be affected by this conflict.

10:04This is a situation that was created by U.S. government sanctions, and which at the end of this process could very well see the U.S. government itself take an equity stake in assets which are worth billions of dollars. That kind of tells us a little bit about how business is being done at the moment. And then the second takeaway would be, you know, that this administration is just very interested in oil and gas. And we should mention that the White House, Bolli and the company controlled by the Al-Qaeda family all declined to comment and Luke Oil did not respond to a request for comment. Malcolm Moore is the FT's energy editor.

10:41Thanks, Malcolm. Thank you.

10:47You 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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