Gulf dealmaking machine hits the brakes
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What is the current status of the Iran ceasefire?
Good morning from the Financial Times. Today is Tuesday, May 12th, and this is your FT News Briefing. All eyes are on this week's U.S.-China summit, and prospects for peace in Iran are looking worse by the minute. Plus, business in the Gulf was booming, but the war in the Middle East is forcing bankers to slow things down. I'm Mark Filippino, and here's the news you need to start your day.
The month-long ceasefire between the U.S. and Iran is hanging by a thread, or as U.S.
President Donald Trump puts it, I would say the ceasefire is on massive life support, where the doctor walks in and says, Sir, your loved one has approximately a 1% chance of living.
He spoke from the Oval Office yesterday after he rejected Tehran's counter-proposal to end the war.
After reading that piece of garbage they sent us, I didn't even finish reading it. I said, I'm not going to waste my time reading it.
Washington and Tehran have bounced peace deals back and forth since the temporary ceasefire came into effect in early April. But the two sides haven't been able to agree on what happens to Iran's stockpile of highly enriched uranium.
The leaders of two global superpowers and geopolitical foes will sit down together later this week. Donald Trump arrives in China tomorrow and he'll hold a summit with President Xi Jinping.
How is Keir Starmer responding to pressures within the Labour Party?
The two countries are locked in a bitter trade war. So can they find common ground? Here to tell us more is the FT's chief foreign affairs commentator, Gideon Rockman. Hey, Gideon. Hi. So give us some background about the trade environment this meeting is happening in. Who has the upper hand heading into the talks?
Well, I think probably you'd have to say that China slightly has the edge, simply because they responded to President Trump's very extreme tariffs of last year, which were up to 145%, by restricting the exports of critical minerals and rare earths. And that more or less forced America to cut tariffs to a level that China can cope with. And they haven't really gone up since then. And I think the Americans know that if they really went for the all-out trade war, that China could redeploy that critical minerals and rare earths weapon, which has really quite severe effects on American industry. Ford Motor, for example, were closing down production lines in response. So China, I think, does have the edge in the pure trade aspects.
So if China holds the slight edge here, what cards does the U.S.
What are the implications of the upcoming U.S.-China summit?
hold?
Well, I think there are things that China still wants from America. Ideally, they would like tariffs to go down even further. And there are these restrictions on tech exports, which are a serious inconvenience for the Chinese. That said, I think that one of the things that is also giving America pause is the sense that China is still making rapid technological progress, even in AI. And some leading American tech firms, such as NVIDIA, say that these tech restrictions are actually going to backfire on America because they spark indigenous Chinese development.
So that's the trade side of things. I also want to talk to you about geopolitics, particularly the war in Iran. China has tried to broker peace between Iran and the U.S. recently. How do you think Trump will play that with Xi?
Well, I think Trump's got a couple of issues. Firstly, I mean, he never likes to project weakness, but America is looking pretty frustrated in Iran. However, I think he'll want to put a brave face on it in China.
How has the Iran war affected dealmaking in the Gulf?
He doesn't want to look like he's losing this war. If China can help deliver the Iranians in some way, then obviously America would be very interested in doing that. On the other hand, if the price of that is an enlarged Chinese role in the Middle East, there'll be some in Washington who would hesitate about that.
How likely is that the two sides can agree to anything meaningful on either trade or Iran in these meetings?
Yeah.
Well, look, I think anything that comes out of the Chinese-American summit is meaningful in one sense, in that these are the two most powerful countries in the world.
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Chapters
8 chapters
1
What is the current status of the Iran ceasefire?
0:03–1:39
2
How is Keir Starmer responding to pressures within the Labour Party?
1:39–2:43
3
What are the implications of the upcoming U.S.-China summit?
2:43–3:40
4
How has the Iran war affected dealmaking in the Gulf?
3:40–4:58
5
What factors contributed to the Gulf's booming business environment before the war?
4:58–6:17
6
How are banks in the Gulf adapting to the current economic climate?
6:17–7:30
7
What are the best and worst case scenarios for Gulf financial centers?
7:30–8:29
8
How can listeners stay informed about these geopolitical developments?
8:29–10:06