this is your business briefing. i'm sally bundock. trade war on hold — the united states and china call a truce and agree to drop their tariff threats while they continue to talk. two italian populist parties are set to formally announce plans to form a coalition government. but can they agree on an economic policy? the financial markets are riding high on the news of progress in the trade talks over the weekend between the us and china. so the us trade war with china is on hold, after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement. officials from washington, dc and beijing say they are setting up a framework for addressing future trade imbalances.

the treasury secretary steve mnuchin has been speaking to the press about the progress they are making. with me is deborah elms, executive director of asian trade centre. welcome. good to have you on the programme. tell us your thoughts about this progress we have seen over the weekend. i think it is fine as far as it does but it is a little unclear as far as it does but it is a little u nclear yet as far as it does but it is a little unclear yet where they are out, i liken this to a couple that is headed for divorce and instead of getting a divorce, they announced they are going to start marriage counselling, which is great, immediately send not getting divorced. but the problem i see at the moment is that we do not have an appointment with a counsellor, we do not even have an agreement on which counsellor to use, so i think we are getting ahead of ourselves that we are celebrating the end of the trade war because we are not there yet. also, china saying, both sides are trying to put out a positive

statement, as it were. one of them is china saying we will cause china to buy some $200 billion worth of goods and services on the united states, of course this big, huge trade deficit with the united states has been president trump's dig as bugbear. how does that work?m doesn't work. first of all, i don't know how you would get $200 billion, that number is acting too high to begin with. secondly, it a piece of irony, the only way he could do that is with managed trade, which is precisely what the us is mad with the chinese about. the us keep saying to the chinese who are involved in managed trade, you are telling your company ‘s what to do, etc, but then they turn around and say to the chinese wanted to buy american iraq's. you are asking the chinese to do exactly what you are accusing them of doing. but it is not just companies, it accusing them of doing. but it is notjust companies, it is also the individual. -- american products. home—made chinese product is

actually a lot cheaper in many cases. there are american products that do well, starbucks is doing phenomenally well in china. there are products that are selling quite nicely thank you very much in china, but to get another $200 billion i think is going to almost impossible. we don't know the timelines, this is very difficult. at the same time though the two are working together, putting out those strong trade state m e nts putting out those strong trade statements helps in president trump's upcoming meeting with kim jong—unin trump's upcoming meeting with kim jong—un in singapore. trump's upcoming meeting with kim jong-un in singapore. it does, at the us side, the procedures it needs to do in order to impose tariffs, if at any point after that meeting, if trump got upset on tuesday, he could say ok, now i impose the tariffs. it

did not work, the marriage counselling did not work for me. we're not talking again. exactly. thank you so much. as we know, we will keep across this for you, every single twist and turn. members of the world's leading economies are meeting in argentina at the g20 forum. they have to try to reach a consensus on a variety of sensitive issues, including terrorism and climate change. our south american business reporter daniel gallas says problems facing emerging markets may take centre stage. foreign ministers from g20 countries are meeting today in argentina at a time of great distrust for emerging markets. post has just ramped up its interest rates to 40% is asking for a multi— billion—dollar loan from the imf, but other emerging markets are suffering too. the currency has lost a lot of its value over the last year, a lot of it due to

changes in interest rates in the united states. that is exactly the topic that many emerging markets will be complaining about to their peers. now, the italian government could be about to end 11 weeks of deadlock following its general election in march. the country's two anti—establishment parties, the five star movement and the league occupy the most seats in parliament and they've put forward a joint plan for economic reform. the potential coalition has proposed an ambitious programme of spending, including a basic income worth over $900 per month for the poorest families. earlier drafts of the economic plans suggested that the government could seek to leave the euro. but the latest document has dropped this controversial proposal. european leaders will also breathe a sigh of relief that the two parties have rolled back on another of their demands — the final draft does not suggest that the government will request the european central bank cancel

nearly $300 billion worth of italian debt. with me is lorenzo codogno, who is from the london school of economics and political science and lc macro advisors. he was also with the italian treasury for some time as their top economist. you will there under all sorts of different governments, when she? including was at silvio berlusconi at one point? at one point, yeah. this is a very familiar story in italy, a coalition government also. tell us what you know about these two parties coming together and what they mean to the italian economy. well, it is a new world actually because these two parties are antiestablishment, populist, and so they have no big experience in government, although we have to say that the league has beenin we have to say that the league has been in government, they have experience, but the five star

movement is a new party, that did not exist ten years ago and now is in power. and actually, what probably, would be one person very close to the movement became the prime minister. that these two parties are not necessarily good bedfellows, a re parties are not necessarily good bedfellows, are they? they do not see eye to eye on everything, they have sought of been forced to come together really. together, they have an outright majority in parliament and they are perceived to be both kind of outsiders, so they tried to find a deal and they managed to strike an agreement on the programme. it is what is called a contract, so they sign a contract in which there are, as you mentioned, almost 100 billion spending promises, which i think is... very

ambitious. very ambitious. it won them votes though, and how they deliver on it, that is the question. that is a very big question. i think one way to consider that is that this is just the one way to consider that is that this isjust the political campaign, survey finds compromise and then from now on, things will change. but they have got a little bit too far and promising, so it will be difficult to kind of step back without losing their face. so difficult to kind of step back without losing theirface. so my guess is that it least initially, there will be a very confrontational sta nce there will be a very confrontational stance with europe on fiscal rules and it will be a difficult time. they will want to appease those who voted them in, and a lot of those who voted them in the who have been struggling with unemployment, lack of prospects for decades really. absolutely, the ones that voted for these two parties are the ones that have not much to lose and they want

to change, and so that is what they got. we will see because again, as you mentioned, these parties at definitely eurosceptic and they have to find an enemy to justify the fact that they cannot deliver what they promised, so we will see. we will see how it plays out. i will talk again about this, i am sure, as this progresses. thanks again for coming in this morning, so very early. now let's brief you some other business stories. japan's exports accelerated in april on increased shipments of cars and machines used to make semiconductors. exports went up by 7.8% compared to the year before, highlighting a rebound in demand from overseas economies. that's slightly lower than expected, but substantially higher than the 2.1% year—on—year rise they saw in march. today an inquiry opens into the grenfell tower disaster here in london, and the construction industry around the world will be watching it

very, ver closely. it's expected to lead to a shakeup in standards of design and safety of materials used, like the controversial cladding on the building, which helped the fire spread. the role of regulators, provision of fire escapes, and the building material used will be scrutinised. let's quickly show you financial markets in asia. i have already mentioned the fact that they are all higher on the fact that the us —— hope that the us and china could be ending this trade war. tariffs are certainly suspended for now, but not necessarily coming to fruition in the future. we will keep you across how they do get on. news briefing in a moment. community policing has undergone a sharp decline

in the last decade, according to a new report. independent think tank, the police foundation, says resources are being used up to respond to incidents and investigate crimes, rather than engage with local neighbourhoods. our home affairs correspondent danny shaw reports. what's happened to the bobby on the beat? ten years ago after significant investment, there were almost 30,000 neighbourhood police and community support officers across england and wales. patrolling the streets, meeting local residents in helping solve problems in communities. official figures suggest there is the same number now, but a report from the police foundation says many of them are not doing core neighbourhood policing. the report says neighbourhood teams now have the respond to emergencies and investigate crime. that means there is less committee engagement, which has left neighbourhood

policing under strain everywhere, according to the report. the police foundation blame of funding cuts, an increase in workload and shifting priorities. one inspector told researchers there was a tug—of—war between the control rooms, which needed offices to respond to calls, and neighbourhood teams. but the home office said most police and crime commissioners had set up plans to protect or improve frontline policing this year. mps have accused the government of failing to protect national security by not taking measures to prevent the year the laundering of money from russia. there is a lot more on that story and the other main news stories coming up at six o'clock. dan walker and louise minchin will have all the day's news, business and sport.

that is all coming up injust over 15 minutes's time. this is the briefing from bbc news. the latest headlines: the public inquiry into the grenfell tower fire begins today. 71 people died in the disaster lastjune. nicolas maduro has been re—elected as president of venezuela, in elections boycotted by most of the opposition. and authorities fighting an ebola outbreak in the democratic republic of congo say they're prepared for a worst—case scenario. let's look at some of those stories and a bit more detail than that. how is the media discussing and digesting them? we begin with the independent‘s front page

showing a river of molten lava during fresh eruptions from hawaii's kilauea volcano. it's feared major evacuation routes could be blocked off by the streams — which have already claimed dozens of houses. this is buzzfeed, which says the number of people who have died from an ongoing outbreak of the deadly tropical disease ebola in the democratic republic of the congo has climbed to 26, with concerns rising that it could spread to neighbouring nations. the guardian looking at russian billionaire and chelsea football club owner roman abramovich‘s uk visa has expired and british authorities have not yet issued him with a new one. the incident comes as the british government may be considering sweeping sanctions on oligarchs and officials close to vladimir putin. the telegraph continues its in depth coverage of the royal wedding and reveals that meghan markle, now the duchess of sussex, has been given the blessing of buckingham palace to use her position to fight

and champion feminism causes. and in vox, starbucks says it will treat anyone who walks into one of its cafes as a customer, whether or not they buy anything. the announcement follows the coffee company taking a huge overhaul after the public outcry over the recent arrest of two black men in one of its coffee shops. we have