U.S. and China extend trade truce

Summary

Marketplace Morning Report: U.S. and China Extend Trade Truce Release Date: August 12, 2025

In this episode of the Marketplace Morning Report, host Liana Byrne delves into the latest developments in international trade, domestic labor disputes, and market movements, providing listeners with a comprehensive overview of the current economic landscape.

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U.S.-China Trade Truce Extended

Trade Suspension Details

The episode opens with a significant update on the ongoing trade tensions between the United States and China. As reported by Liana Byrne, “the US And China have extended their trade truce until November,” effectively delaying the implementation of substantial tariff hikes, some reaching as high as 145%. This pause comes after Beijing considered retaliatory tariffs of 125%, but for the moment, both nations have agreed to "buy more time" amid intricate negotiations (00:01).

Insights from China Correspondent Laura Bicker

Laura Bicker, Marketplace’s China correspondent in London, provides an in-depth analysis of the situation. She explains that the 90-day delay reflects the U.S. strategy to secure a favorable deal within three months. Bicker emphasizes the critical nature of this truce, noting that “China produces so many toys, so many goods that go under your tree. 70% of all the toys bought in the United States come from China” (00:39). This highlights the deep economic interdependence between the two giants and the potential disruption a trade war could cause.

Sticking Points in Negotiations

The truce, however, masks significant challenges. Bicker outlines two major sticking points:

1. Rare Earth Minerals: China’s control over approximately 70% of the world’s rare earth minerals is a bargaining chip. The United States is eager to reduce its dependence on these critical resources.
2. Advanced Computer Chips: Conversely, China seeks greater access to advanced computer chips produced by U.S. firms.

These issues underscore the complexity of reaching a comprehensive trade agreement, with both sides holding firm on essential economic assets (01:37).

Impact on Manufacturers and Small Businesses

The uncertainty has tangible effects on businesses. Bicker shares a poignant example: a sofa factory owner who produces for the U.S. market, including products in high-profile locations like Elon Musk’s living room, faces operational challenges. “He has to hire workers. He has to figure out how much material to buy, how many to make. He cannot do this if he doesn't know how much his product is going to sell and how much they will buy it for in the United States” (01:41).

Furthermore, Beth Benicki, founder of Minnesota-based Busy Baby, discusses her company’s strategic pivot in response to the trade uncertainty. “What I'm actually doing is pivoting and looking to sell to babies outside of America... I have an opportunity to try and find some international distributors to sell my products elsewhere” (02:22). This shift underscores how smaller businesses are adapting to the prolonged trade standoff by seeking new markets and diversifying their operations.

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Global Market Movements

Asian Markets and Japan's Nikkei 225

Following the extension of the trade truce, Asian markets saw a positive uptick. Notably, Japan’s Nikkei 225 closed over 2% higher, reaching a record high. This surge reflects investor optimism surrounding the temporary stabilization of U.S.-China trade relations, which has been a significant factor influencing global markets.

Cuba’s Economic Struggles

In contrast, Cuba faces economic challenges as its currency, the peso, plummets to a record low of 400 to the U.S. dollar. The Cuban government’s strategy to price some goods in U.S. dollars to combat inflation has inadvertently excluded approximately 40% of the population who lack access to foreign currency, exacerbating economic disparity and hardship.

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Domestic Labor Disputes: U.S. Waste Management Strikes

Overview of the Strike

The report shifts focus to a burgeoning labor dispute affecting several U.S. cities, including Philadelphia, Boston, and Seattle. Workers represented by the Teamsters union have initiated strikes demanding higher wages and improved healthcare benefits. The strikes have led to significant disruptions in waste management services, with over 2,000 workers currently on strike (03:47).

On-the-Ground Reporting from Boston

Robyn Levinson King provides live coverage from Boston, illustrating the immediate impact of the strike. She describes scenes of overflowing trash and recycling bins, coupled with the unpleasant consequences of prolonged waste accumulation. Local business owner Clacy dos Santos expresses her frustration: “I can't describe how. I don't know how to explain how frustrating it is” (04:02), highlighting the strain on small businesses that rely on consistent waste collection services.

Union and Company Standpoints

Mike Ortiz, a seasoned worker with 17 years in the industry, articulates the union’s stance: “The strike about right now is wages, health care” (04:48). The Teamsters argue that Republic Services, the waste management company involved, has the financial capability to meet their demands, given its status as a Fortune 500 company partially owned by Bill Gates. Despite Republic Services’ claims of having made significant offers, communities are taking legal action, accusing the company of breaching contracts.

Community Impact and Government Response

Greg Varga, Gloucester Mayor, underscores the broader community repercussions: “Negotiations between Republic and Teamsters weren't going so well... our DPW workers have been filling in, but that's not their typical task” (05:27). The extended strikes have not only hindered routine city maintenance but also introduced additional problems, such as increased seagull activity due to unattended trash bags.

Signs of Resolution

Amidst the turmoil, there are tentative signs of progress. Strikers in Seattle have reportedly reached a fair deal with Republic Services, suggesting that national pressure could lead to a comprehensive settlement. However, until a nationwide agreement is reached, millions of Americans remain uncertain about the continuity of essential waste management services (06:07).

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International Corporate Policies: Starbucks South Korea

In a lighter yet notable segment, the report mentions Starbucks in South Korea implementing new policies to enhance the café environment. The company has begun posting signs requesting customers to leave bulky office equipment like desktop computers and printers at home, aiming to maintain a comfortable atmosphere in their establishments. However, laptops remain permitted, balancing the need for remote work setups with customer comfort (06:22).

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Conclusion

This episode of the Marketplace Morning Report offers a thorough examination of pivotal economic and business issues, from the delicate balance of U.S.-China trade relations and their global ramifications to the immediate effects of labor strikes on local communities. Through expert interviews and on-the-ground reporting, listeners gain a nuanced understanding of how these developments shape both international markets and everyday lives.

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For more insights and detailed analyses, tune into the latest episodes of the Marketplace Morning Report.

Transcript

[Liana Byrne]

They were just hours from a full blown trade war. But instead, Washington and Beijing hit pause again. Live from the UK, this is the Marketplace Morning Report from the BBC World Service, I'm Liana Byrne. Good morning. Well, it came right down to the wire, but the US And China have extended their trade truce until November. This means those massive tariff hikes, some as high as 145, have been put on hold. Beijing was even ready to hit back with 125 tariffs. But for now, the sides have bought more time. The BBC's China correspondent Laura Bicker is covering this one. Hi, Laura.

[Laura Bicker]

Hello. How are you doing?

[Liana Byrne]

Good. Laura. Yet another 90 day delay. Why 90 days?

[Laura Bicker]

Three months seems to be the amount of time that the United States feels that they can get a deal with China. Now why is this important? Well, China produces so many toys, so many goods that go under your tree. 70% of all the toys bought in the United States come from China. So many manufacturers, factories will now be working overtime to get as many of their goods over to the United States. In that time, however, there are major sticking points. The first is China controls around 70% of the world's rare earth minerals. The United States has been desperate to try to get their hands on more of these rare earth minerals for China. China wants more exact, more access to advanced computer chips from the United States. So there is a possibility of a to be done, but it won't be easy.

[Liana Byrne]

It just really seems like they're kicking the can down the road all the time, doesn't it?

[Laura Bicker]

Yeah. And I think part of the problem for both manufacturers here in China and those buying goods in the United States is that this uncertainty is really playing havoc. Let me give you an example. If you're a factory owner now, I have met and been in a factory where he's making sofas that went to the United States. In fact, one of them sits in Elon Musk's living room. He has to hire workers. He has to figure out how much material to buy, how many to make. He cannot do this if he doesn't know how much his product is going to sell and how much they will buy it for in the United states.

[Liana Byrne]

Okay, the BBC's Laura Bicker, thank you so much for joining us in Marketplace.

[Laura Bicker]

Nice to talk to you.

[Liana Byrne]

And it's turning businesses off in the US too. Beth Benicki is the founder of Minnesota based Busy Baby, which makes baby products.

[Beth Benicki]

Well, what I'm actually doing is pivoting and looking to sell to babies outside of America. So hopefully I'll have products in the UK before Christmas. Fortunately, there's babies all over the world. So I have an opportunity to try and find some international distributors to sell my products elsewhere. We've invested additional funds in the safety testing required to meet the compliance standards in other countries. I can learn these things and I can implement them because I'm a very small company for bigger brands that have established supply chain and everything that they can't pivot as easily as I'm trying to.

[Liana Byrne]

Beth Benicki there. Now let's do the numbers. Asian markets ticked up after the US And China agreed to extend their trade truce with Japan's Nikkei 225 closing up more than 2% at a record high. And in Cuba, the pesos fallen to a record low of 400 to the dollar. On the street, the government's been pricing some goods in US Dollars to fight inflation has left many Cubans shut out since about 40% don't have access to foreign currency. This summer, several US cities, including Philadelphia, Boston and Seattle have been gripped by trash collection strikes. The Teamsters, the union representing the workers, say members deserve a pay rise and better health care benefits. The BBC's Robyn Levinson King reports from Boston.

[Robyn Levinson King]

I'm here outside a commercial dumpster where there is just piles of garbage that hasn't been collected. There's recycling, it's hot, it's starting to smell, the flies are buzzing. And this is what many businesses and residents have had to deal with in Boston.

[Clacy dos Santos]

My name is Clacy dos Santos and I'm a local coffee shop owner here in Malden. Oh, it's been horrible. I can't describe how. I don't know how to explain how frustrating it is. And then I call every day because I'm concerned, because my dumpster is full, very full.

[Robyn Levinson King]

The standoff began a month ago in the Boston area, a fight between Teamsters union members and a private waste management company called Republic Services. The strike has now expanded to other towns across the country. During the strike's peak, over 2,000 workers weren't showing up for the job. The union says workers deserve better wages and benefits like health care. They say their employer, a Fortune 500 company partly owned by Bill Gates, can afford to pay better. On the picket line outside of Boston, I spoke to Mike Ortiz, who's worked in the industry for 17 years.

[Mike Ortiz]

The strike about right now is wages, health care. Republic Services have not been budging. We've been budging on wages. The impact in the communities is devastating. You know, I walk through my neighborhood and there's just trash all over the place. And I'm from the city of Malden.

[Robyn Levinson King]

How long are you guys prepared to stay out here?

[Mike Ortiz]

As long as it takes. I'd rather die on my feet than beg on my knees.

[Robyn Levinson King]

In a statement, Republic Services told the BBC it had made significant offers to improve wages and health care. Meanwhile, several communities in the Boston area have sued the company for breaching their contracts. Gloucester Mayor Greg Varga says that they've been left holding the proverbial garbage bag.

[Greg Varga]

Negotiations between Republic and Teamsters weren't going so well. They had reached out to the seasoned towns in early June to indicate there may be an issue. But when they were talking to us before the strike, they said, don't worry about it. We're a national company. We'll have people in place and take care of everything. That has not been delivered on. Since day one, our DPW workers have been filling in, but that's not their typical task. So every second that they're spending picking up trash or recycling is time they're not cutting grass or doing other things they do around the city. We also have an issue of seagulls. So bags that lay around even for a day or two beyond the normal pickup are potential targets.

[Robyn Levinson King]

There are signs that things may soon settle down. Strikers outside of Seattle say that national pressure helped them reach a fair deal with the company, offering some signs that the two sides can come to terms. But until then, millions of Americans will be left wondering who's going to take out the trash.

[Liana Byrne]

That was the BBC's Robyn Levison King reporting. And finally, Starbucks in South Korea has a message for some of its customers. Your desktop computer and printer don't belong in the cafe. The chain's putting up signs asking people to leave bulky office gear at home, according to Korean media reports. But laptops are still welcome. I'm Lianna Byrne with the Marketplace Morning report from the BBC World Service.