International Trade

The United Kingdom has announced a ban on the import of all goods produced in illegal Israeli settlements in the occupied West Bank, Foreign Secretary Ed Miliband said in Parliament on Tuesday.

It comes in response to an intensifying wave of Israeli settler pogroms and settlement expansions in the occupied West Bank and East Jerusalem.

The ban, set to come into effect within six to nine months, would target settlement exports such as dates, olive oil and agricultural products, with Miliband saying he did not believe “the British people want us supporting the occupation by accepting products from settlements in our shops”.

The International Court of Justice in July 2024 called Israel’s occupation of Palestinian territory “unlawful”. Months later, the United Nations passed a resolution calling for an end to the Israeli occupation within a year.

Israel’s response was furious, as it announced four “counter-measures”, including banning 12 British MPs from entering Israel and closing the British consulate in Jerusalem.

After Miliband’s speech, 11 more countries: Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain and Sweden, shared a joint statement supporting the so-called two-state solution and announcing their own intentions to impose restrictions on trade with illegal Israeli settlements.

Spain and Ireland had already announced their own national bans earlier this year, alongside the Netherlands and Belgium.

How much do these countries trade with Israel?

Aside from Canada and the UK, the rest of the countries considering or already banning settlement goods are European Union members.

The EU is Israel’s largest trading partner, accounting for 31.7 percent of Israel’s total trade in goods in 2025 (43.3 billion euros, or $50.4bn), according to the European Commission. The EU supplied 33.1 percent of Israel’s imports (28 billion euros, or $32.6bn) and received 29.4 percent of Israel’s exports (15.3 billion euros or $17.8bn).

Israel is the EU’s 27th largest trade partner, with Ireland, the Netherlands and Germany being its biggest individual trade partners.

According to a 2026 report by Global Echo Litigation Center, a Palestinian rights legal advocacy group, roughly 5,900 shipments from Israel were headed to Europe, with more than 17 percent containing products originating from settlements.

While no specific figures for settlement trade alone are known, it is understood to be a tiny fraction of total EU-Israel trade, meaning the ban’s impact is much more symbolic than economic.

The table below shows each country’s total trade with Israel for the European countries that have banned, or are introducing bans on, illegal Israeli settlement goods.

The top five European trading partners with Israel either enforcing or set to introduce settlement bans are Ireland, the Netherlands, the UK, France and Spain.

Ireland

Ireland-Israel bilateral trade totalled $5.36bn in 2025. Ireland is Israel’s second-largest export market for goods after the United States, driven largely by tech, particularly semiconductors and integrated circuits.

The Netherlands

Netherlands-Israel bilateral trade totalled roughly $4.8bn in 2025. The Netherlands is also Israel’s largest single foreign investor, accounting for roughly two-thirds of all EU investment in the country.

United Kingdom

According to UN Comtrade, UK-Israel bilateral trade totalled $3.73bn in 2025. An Al Jazeera investigation found at least 17 companies linked to illegal Israeli settlements hold more than 2.1 billion pounds ($2.85bn) in UK public-sector contracts.

France

France-Israel bilateral trade totalled $3.62bn in 2025. A large part of France’s trade with Israel constitutes export licences for surveillance and military technologies.

Spain

Spain-Israel bilateral trade totalled $2.79bn in 2025. In September that year, Spain banned the import of goods from illegal Israeli settlements in the occupied Palestinian territory, as well as the trade of arms.

What are Israeli settlements?

Israeli settlements are Jewish-only communities built illegally on Palestinian land.

Settlements are illegal under international law as they violate the Fourth Geneva Convention, which bans an occupying power from transferring its population to the area it occupies.

Illegal Israeli settlements continue to grow, decades after the 1993 Oslo Accords, which established limited Palestinian self-rule and were meant to lead to a permanent peace settlement.

At the time, about 270,000 settlers lived across the occupied territory. Today, that figure has more than doubled to between 600,000 and 750,000 people, about 10 percent of Israel’s Jewish population, living across some 250 illegal settlements in the occupied West Bank and East Jerusalem.

Trade tensions soar as Canada matches US tariffs ‘dollar-for-dollar’, impacting 700 products and multiple industries.

Canada’s retaliatory tariffs on imports from the United States have taken effect, escalating the trade dispute between the two countries.

Tariffs ranging from 15 percent to 50 percent will apply to nearly $20bn worth of US imports from 12:01am ET (04:01 GMT) on Tuesday, matching US-imposed levies on Canadian goods including machinery, textiles and consumer products.

The new retaliatory tariffs apply to products including steel, household appliances, agricultural equipment and dairy.

“Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses,” Canadian Prime Minister Mark Carney told reporters in late August.

US President Donald Trump announced 50 percent tariffs against Canada in July, citing “discriminatory treatment” of US products. The announcement prompted the countries to enter trade talks in August, but a final deal failed to materialise before a deadline imposed by Trump.

“Canada wants the benefits of being a State, without being one!!!” Trump posted on Truth Social in response to Canada’s announcement in August.

The Canadian government said in a statement that the counter-tariffs will impact more than 700 products, adding that it would launch a $5.42bn support package for affected small and medium-sized businesses and workers.

On the eve of Ottawa imposing its tariffs, Trump threatened to block Canada-based aircraft manufacturer Bombardier from selling its planes in the US unless it began manufacturing them in the country.

The dispute has also extended beyond tariffs, with Trump signing an order last month renaming Lake Ontario “Lake America” for US federal use.

The retaliatory tariffs could place a financial burden on US automakers as Canada is the largest buyer of US-manufactured cars.

Americans could soon see increased prices on 550 consumer goods from Canada. According to a report from the Kiel Institute for the World Economy, US importers and consumers absorb 96 percent of the tariff burden.

US sanctions Turkish bank over alleged IRGC ties, accusing it of facilitating millions in transactions for Iran.

The United States Treasury Department has imposed sanctions on a Turkish bank and its subsidiaries over alleged ties to Iran, as Washington seeks to economically isolate Tehran.

The Treasury Department accused Golden Global Yatirim Bankasi Anonim Sirketi (Golden Global Bank) on Friday of facilitating “tens of millions of dollars’ worth of transactions for the Islamic Revolutionary Guard Corps-Qods Force” and providing the Iranian government with banking access to move its funds internationally.

Washington alleged the bank “was established for the purpose of enabling Iran’s rahbar network [shadow banking system] to transfer oil revenues from China to Turkey” using gold and cash.

Golden Global Bank responded on Friday, saying it fulfilled all local and international banking compliance rules and would take legal action against the US-imposed sanctions.

There are no transactions conducted by Golden Global Bank that could substantiate the claims made by the US, the bank said in a news release.

“We will exercise all our rights of objection and legal recourse in the most effective manner and will take the necessary actions at the earliest against these allegations and the decision,” the Turkish bank added.

“Financial institutions continue to find out the hard way that we are serious about Operation Economic Outcast,” said Secretary of the Treasury Scott Bessent in a statement published by the department on Friday.

The sanctions place the bank and its two subsidiaries on the US Office of Foreign Assets Control (OFAC)’s Specially Designated Nationals list, cutting off access to the US financial system.

The bank said individuals and entities named in the OFAC decision “have never been and are not currently customers” of Golden Global.

US Ambassador to Turkiye Tom Barrack said on Saturday that it would be a mistake for Turkish officials “to read [the US’s] narrow measure as a judgement upon Turkiye”.

“The health of the Turkish financial system is not in question; the conduct of one institution was,” Barrack said on X.

Last week, the US took steps towards severing the UAE operations of Egypt’s second-largest bank from financial access after accusing it of processing transactions for companies linked to Iran’s shadow-banking system.

Bessent said on Tuesday on the sidelines of a G20 summit that Washington would likely announce a bank sanction this week and another next week, as it ramps up its economic campaign against Tehran.

The United States economy has added 162,000 jobs in August, with large gains in local government education and food services.

The unemployment rate remained unchanged, according to the monthly jobs report released by the US Department of Labor’s Bureau of Labor Statistics (BLS) on Friday.

The data was well above analysts’ expectations. Economists polled by Reuters had forecast 56,000 gains, the Wall Street Journal forecast 53,000, and Bloomberg had forecast 55,000, following a loss of 23,000 in July.

Local government education, or public schools, accounted for nearly 42,000 of the jobs added as the 2026–27 school year begins across much of the US. Teachers typically fall off payrolls during the summer months when school is not in session.

Food service jobs also saw large increases, with the sector adding 59,000 jobs for the month of August compared with the month prior.

There were also gains in construction, which added 22,000 jobs, and healthcare, which added 12,000.

The information sector, which accounts for industries like data processing, web hosting, publishing, broadcasting and telecommunications, fell by 23,000, with notable layoffs at companies including Scripps TV and Zillow, which fall under the umbrella of these industries.

The financial activities sector, which accounts for industries like insurance, commercial banking and real estate, dropped by 12,000.

Mixed data

The data comes in sharp contrast to the ADP national employment report, which tracks private payrolls and found 38,000 jobs added across the US economy.

Meanwhile, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report released on Tuesday revealed job openings were slightly changed, with 7.3 million in July, up from 7.2 million the previous month, while total separations fell to 5.1 million in July from 5.3 million in June.

The move in job gains comes ahead of the US Federal Reserve’s policy meeting later this month, where the central bank will vote on interest rates. Amid the job gains, CME Group’s FedWatch, which tracks the likelihood of monetary policy decisions, had a 60 percent chance of a 25 basis point rate increase to 3.75–4.00 percent, up from 49 percent on Thursday.

US President Donald Trump was quick to comment on the jobs report and push for rate cuts.

“Lower the interest rates because the U.S.A. is a much stronger credit than it was a short time ago!” he said in a post on his social media platform Truth Social.

He also ramped up threats to cut off trade with nations that the US has a deficit with if the central bank does not cut rates.

Despite a strong jobs report, US markets are trending downwards. The Nasdaq is down 0.2 percent, the Dow Jones Industrial Average is down 0.5 percent, and the S&P 500 is down 0.3 percent amid Trump’s comments.

Meanwhile, Canada released its jobs report amid the ongoing trade dispute with the US. The Canadian economy lost 41,700 jobs, according to Statistics Canada, with the unemployment rate holding steady at 6.4 percent.

“We expect the economy will continue struggling to create jobs in the near term as mounting headwinds from new US-Canada tariffs, greater uncertainty from a flare-up in the trade war, and the ongoing Iran conflict and a shrinking population weigh on hiring,” Tony Stillo, director of Canada Economics at Oxford Economics, said in a note provided to Al Jazeera.

The United States and Iran continue to make competing claims about who has greater control of the critical Strait of Hormuz in the Gulf.

Washington claims the strait is open and that dozens of ships, carrying millions of barrels of oil, are passing through each day. US President Donald Trump claimed last month that the US was in “total control” of the waterway, through which one-fifth of the world’s oil and gas is shipped during peacetime, but which has been closed since the US-Israel war on Iran began six months ago.

Iran, however, says the strait remains under its control and is closed except to pre-approved vessels using its designated channels. It has warned that other ships attempting to transit risk being targeted.

So what is really going on in the strait – and what explains the divergent accounts?

What are the latest US claims about the Strait of Hormuz?

The US says shipping through the Strait of Hormuz has significantly increased in recent weeks.

Two US officials told CNN that 40 commercial ships carrying some 18 million barrels of oil passed through the strait under US military escort on Tuesday, in what would be a new wartime record.

Trump gave a similar figure on Monday, saying the US Navy was helping some 30 ships pass through Hormuz every night. He later said the waterway was “under USA control”.

In terms of oil, US Treasury Secretary Scott Bessent said that “at least 10 million barrels” were getting through the strait each day, with between 15 million and 17 million on Tuesday.

The assessment comes after US CENTCOM commander Brad Cooper claimed last week that the US military had cleared Hormuz’s transit lanes of sea mines.

Before the war began, an average of around 100 ships and 20 million barrels of oil are estimated to have passed through the waterway each day.

According to figures from PortWatch, this has fallen to an overall average of seven vessels since March.

What does Iran claim about the strait?

Iran has acknowledged that some vessels are getting through the strait, but insists it remains in control of the waterway.

Iran’s Parliament Speaker Mohammad Bagher Ghalibaf on Tuesday said “the enemy managed to get some ships” through Hormuz, but stressed that Iranian forces remain “in complete control of the strait and will not allow it to be opened”.

Ghalibaf accused the US of giving ships “false guarantees” about their ability to cross a southern route in Hormuz, warning that ships that try to do so would be targeted.

The following day, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed two oil tankers had hit mines and were disabled while trying to cross an “illegal route” in the strait. Saudi Arabia, meanwhile, claimed an Iranian attack hit a Saudi oil tanker, killing two Filipino sailors.

What does shipping data show?

The latest ship-tracking data paints a different picture than the US claims, with far fewer vessels recorded as transiting the strait.

According to marine analytics firm Kpler, just six vessels crossed the strait on Wednesday, 11 on Tuesday and five on Monday. It put the 10-day average at 13 vessels per day.

Other ship-trafficking services show a similar pattern. Maritime data firm Lloyd’s List Intelligence recorded an average of around 12 transits per day from August 26 to September 1, though the latest data may be incomplete “due to a lag in identifying dark transits”, said the firm’s maritime intelligence and research director, Bridget Diakun. This means that some ships are switching off their tracking beacons.

From August 17-23, Lloyd’s List Intelligence recorded “about 14 non-Iranian-linked ships each day”, Diakun told Al Jazeera.

All these figures are far lower than the US claim that 40 ships transited the strait on Tuesday.

The Joint Maritime Information Center (JMIC), which monitors threats to shipping in the region, said in a September 1 advisory that commercial traffic through Hormuz was “far below baseline”, despite a “modest uptick from recent lows”.

The advisory put the risk level for Hormuz at “severe”, citing a “continued risk of drifting or uncharted mines”, despite US claims to have cleared the strait of mines.

What explains the discrepancy?

Diakun told Al Jazeera that it is difficult to explain the gap between US-claimed transit figures and those recorded by ship trackers without insight into how the US tallies its own figures.

She said it’s possible the US includes smaller or non-cargo-carrying ships in its total, unlike Lloyd’s, which only counts “cargo-carrying vessels over 10,000 dwt [deadweight tonnage]”.

Eirik Hooper, a senior associate covering the ports and terminals sector for maritime research consultancy Drewry, also pointed to possible differences in how the US counts vessel transits.

“A US operational count plausibly includes everything that moved under or near naval protection: naval auxiliaries, offshore support and tugs, coastal and small craft [and] dhows,” said Hooper, noting that ship-tracking firm Kpler filters out such vessels “on size or cargo grounds”.

Hooper also said the US has access to “satellite, airborne and other sensor coverage plus its own convoy manifests”, which enables it to see vessels not immediately picked up by the normal automatic identification system (AIS) tracking system.

“By late August, the majority of Hormuz crossings were classified ‘dark’ or unknown by route, and AIS data counts often need to be revised to include vessels that switch off their transponders, with confirmed movements backdated,” said Hooper.

More generally, both the US and Iran have an incentive to play up their influence in the strait, the status of which has become a major sticking point in their six-month conflict.

Former US Ambassador Henry Ensher recently told Al Jazeera that he believes the latest cycle of US-Iran confrontation was likely triggered by CENTCOM’s claims to have de-mined that strait, and said “both sides would be well served to stop talking quite so much”.

China has long been a rare partner to Iran, with the economic heft to blunt the United States’ efforts to strangle the Iranian economy.

Yet even as China opposes US President Donald Trump’s latest pressure campaign, few observers expect it to go much further than the modest economic links it has thus far forged with Iran to shield it.

While China opposes the Trump administration’s military attacks and sanctions against Iran, Beijing’s relationship with Tehran is just one consideration in a foreign policy that seeks to balance relations with numerous countries, including the US and the Gulf states, limiting its appetite to prop up the Iranian leadership at any cost, analysts say.

“China, with broader global interests, can only actively promote de-escalation of the US-Iran conflict, and cannot and will not engage in fierce confrontation with the US for Iran’s sake,” said Hongda Fan, director of the China-Middle East Center at Shaoxing University in China.

“Ultimately, the US-Iran conflict must be resolved by the two countries themselves,” Fan said.

China and Iran share substantial trade links, particularly in energy, and a mutual suspicion of US dominance, but their relationship is heavily lopsided, with Tehran depending on Beijing far more than vice versa.

That asymmetry in ties was on full display this week at the annual gathering of the Shanghai Cooperation Organisation, a 10-member bloc widely seen as a counterbalance to US hegemony, where Chinese President Xi Jinping joined more than a dozen non-Western leaders, including Iranian President Masoud Pezeshkian.

While Iranian state media reported that Pezeshkian held a “brief meeting” with Xi on the sidelines of the summit in Bishkek, Kyrgyzstan, Chinese outlets made no mention of the encounter.

Xi immediately followed his attendance at the summit with his first visit to Egypt in a decade on Tuesday, using the visit to call on countries in the Middle East to oppose “external interference” and reiterate his calls for a diplomatic resolution to the Iran war.

As Iran’s top trade partner, China has taken up to 90 percent of Iranian oil exports since the US and Israel launched their war in late February.

Iranian crude, however, accounts for only about 2 percent of China’s overall energy mix.

While China’s oil purchases have been an economic lifeline for Tehran, Chinese importers have not been immune to fears of exposure to US sanctions.

China’s major state-owned refiners such as Sinopec and PetroChina have shunned Iranian oil for years, leaving the trade to independent “teapot” refiners with minimal links to the dollar-based global financial system.

Though the Trump administration has imposed sanctions on these “teapot” refiners and a limited number of China- and Hong Kong-based firms and individuals, it has yet to target major Chinese banks accused of facilitating Iranian oil purchases.

The Trump administration has hinted at targeting China’s financial system as part of its ramped-up sanctions campaign, dubbed “Operation Economic Outcast”, though analysts are sceptical that Washington will risk provoking Beijing’s ire as the sides seek to lower the temperature in their trade war before a scheduled summit between Xi and Trump on September 24.

“The legitimate question is why third countries should be expected to adopt Washington’s unilateral economic policy towards another sovereign state,” said Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing.

“That does not, however, mean that Beijing will provide Tehran with a blank cheque,” Wang said.

“China is likely to continue opposing US secondary sanctions politically and to defend what it considers legitimate Chinese commercial interests. But past behaviour also shows that major Chinese banks and state-owned companies are highly conscious of sanctions exposure.”

Rhetoric versus reality

Even as Beijing and Tehran have forged closer ties, their relations have for years been marked by a substantial gap between rhetoric and reality.

While China pledged to invest up to $400bn in Iran over 25 years as part of a “comprehensive strategic partnership agreement” signed in 2021, few projects have materialised amid what analysts say is Chinese firms’ reluctance to navigate sanctions and the opaque Iranian bureaucracy.

In 2023, Iran’s then deputy economy minister, Ali Fekri, complained that he was “not satisfied” with China’s level of investment since the agreement, saying it had only amounted to about $185m.

“Iranian experts often blame their government for not doing enough to attract Chinese investors or not pushing Chinese companies to share more technology,” said Andrea Ghiselli, head of research at the ChinaMed Project.

“However, the reality is that there is no point for Chinese companies to give up their ties with the international financial system to expand their business in Iran,” Ghiselli said.

“It is much easier and more profitable to trade and invest elsewhere. Iran’s own domestic physical and bank infrastructure is also an obstacle.”

Meanwhile, the most tangible measure of China’s economic support, purchases of Iranian oil, has been dwindling amid the US blockade of Iranian ports.

Iranian crude exports via the Strait of Hormuz, mostly bound for China, fell from an estimated 1.85 million barrels per day (bpd) in March-April to just 240,000bpd in August, according to data from ship-tracking platform Kpler, though millions more barrels shipped before the blockade are still at sea.

In an interview with CNBC on Monday, US Treasury Secretary Scott Bessent said “only” about 30 million barrels of Iranian oil remained on the water and Chinese remittances to Iran were “going to run out”.

Kpler last month estimated that about 80 million barrels were in on-water shortage, enough to provide revenues to Tehran for up to six months.

“For China, Iran is valuable – but replaceable across many dimensions. Iranian oil matters, but China can obtain energy from Saudi Arabia, Russia, Iraq, the UAE, and numerous other suppliers,” said Mordechai Chaziza, an expert on China’s Middle East policy who lectures at Ashkelon Academic College in Israel.

“Iran offers geopolitical access, but China possesses relationships throughout the region. Iran supports China’s multipolar agenda, but so do many other states.”

China’s support for Iran is also not risk-free for Beijing, given its important relationships with Iranian rivals such as Saudi Arabia and the United Arab Emirates, Chaziza said.

“Saudi Arabia and the UAE are major energy and commercial partners.

“Gulf stability is vital because China obtains roughly half of its crude imports from the Middle East,” he added.

The “ideal outcome” for Beijing, Chaziza said, would be “a stable, sovereign, economically connected, and internationally non-Western” Iran, but not one “whose confrontation with Washington, Israel, or the Gulf monarchies forces China to choose sides”.

Wang, at the CCG, said that while Beijing appears determined to defend Chinese commercial interests, it is unlikely to sacrifice its broader interests in the region or elsewhere.

Beijing’s warning that it is ready to take countermeasures against unilateral sanctions is “not the same thing as promising to underwrite the Iranian economy”, Wang added.

For China, Iran is seen more as a customer than an ally, said Kerri Bitsoff, a former senior official at the US Treasury’s Office of Foreign Assets Control.

“I don’t think this is the alliance some people think it is, even though there’s real support. I think of a more like a customer relationship that Iran can’t walk away from,” Bitsoff said.

“And it was good for China – they got cheap oil, they got a US tied up in the Middle East, but I think that only lasts up until the point where it threatens China’s other interests,” she added.

Canadian Prime Minister Mark Carney has reprimanded the United States for what he describes as a flippant approach to the ongoing trade dispute between the two countries.

On Tuesday, Carney hit back against a series of insults and disparaging remarks from US President Donald Trump and his officials, saying that talks can proceed once Washington takes a more serious approach to the issues at hand.

“When the Americans stop doing memes, stop throwing shade and stop trying to be tough, and start being serious about having those discussions, we can have those discussions,” Carney told reporters in Ottawa. “It’s not constructive, but that’s their democracy.”

The Liberal Party leader’s remarks come as tensions flare once again between the US and Canada, which have historically had tight relations.

But Trump’s second terms have caused those ties to fray. Since returning to office in 2025, Trump has imposed a series of tariffs on Canadian products, prompting retaliatory actions.

The latest round of tariffs came on August 22, when negotiations between the two countries fell through.

As a result, 50 percent tariffs were imposed on roughly $20bn worth of Canadian goods. Canada has pledged to respond with tariffs on US goods, worth roughly the same dollar amount, starting on September 8.

In the aftermath of the failed negotiations, Carney blamed the impasse on last-minute US demands.

He accused the Trump administration of seeking to limit Canada’s ability to cement trade deals with other countries and of requesting changes to laws protecting Canada’s French language and culture.

Carney also said Trump’s team attempted to push an asymmetrical deal that would damage Canada’s industries.

“Canada’s a sovereign state. We will strike free trade deals with the countries we wish to strike free trade deals with,” Carney told reporters on Tuesday. He added, “Of course, we’re not going to accept those terms.”

The trade war between the two countries has prompted a surge of nationalism in Canada.

A June poll from the research firm Abacus Data found that national pride surged 12 points in two years, reaching 77 percent this year.

Carney has faced pressure not to yield to US demands. In addition to imposing steep tariffs, the Trump administration has also pushed Canada to cede its sovereignty and become a “51st state” within the US.

Trump has also taken symbolic actions designed to assert US dominance over the two countries’ shared border region. On August 27, the US president signed an executive order directing federal entities to refer to Lake Ontario as “Lake America”.

“They are one of the worst countries in the world to deal with,” Trump said of Canada in a recent radio interview.

Other cabinet-level officials in the Trump administration have echoed Trump’s remarks disparaging Canada.

US Treasury Secretary Scott Bessent told the news outlet CNBC that Canada’s economy is ill-equipped to handle a trade war with the US, and he blamed Carney for escalating the situation.

“Well, I don’t think you can be in a tit-for-tat with someone who’s 13 times larger than you are,” Bessent said on Monday.

Of Carney, he added, “He came to power on an anti-American, anti-Trump agenda. He was 20 points behind in the polls. And then he started this. And it’s unfortunate that he’s not doing what’s best for the Canadian people.”

US Secretary of Defense Pete Hegseth, meanwhile, posted an image of two female Canadian cadets on social media, in an apparent effort to mock the country’s armed forces.

“This is real,” he wrote beneath the image of the two women, alongside an emoji of the Canadian flag.

Hegseth, a former TV host, has frequently castigated efforts to include women, LGBTQ people and racial minorities in the military as “woke” distractions from the US military’s core mission.

When reporters asked Carney to respond to such messages, he replied that such comments were “beneath” the officials’ office.

“Our plan has always been standing up for Canada, first and foremost, here at home,” Carney said.

Wheat prices have risen sharply amid disruptions to Black Sea exports as the Russia-Ukraine war continues and as changing weather patterns cause droughts that have sharply reduced production.

Over the past month, Russia and Ukraine have stepped up attacks on each other’s grain terminals on the Black Sea. With Russia the world’s largest wheat exporter, and Ukraine among the top 10 grain-producing countries, these attacks have taken their toll on global wheat and grain supply.

Chicago wheat futures, the global benchmark for the grain market, hit a three-year high on Friday, before nudging down 0.54 percent on Monday to $7.79 per bushel by 02:00 GMT. Authorities in Russia’s Rostov region called a state of emergency on Friday after announcing that port closures and navigation disruptions in the Sea of Azov and Black Sea basin have led to a pile-up of agricultural products at farms.

Meanwhile, the rising temperatures and lack of rain have threatened to cut this year’s wheat harvest in South Africa’s Swartland, which produces about 20 percent of the country’s wheat.

Here’s what we know:

What impact is the Russia-Ukraine war having on prices?

Over the past month, strikes on ports, vessels and grain facilities amid the Russia-Ukraine conflict have disrupted grain terminals and forced shippers to delay or cancel cargo loadings during the peak export season.

While Russian missile attacks have impacted Ukraine’s grain exports, Ukraine’s drone attacks in the Sea of Azov have also sharply curtailed Russian shipments of both grain and wheat. At the same time, attacks on Russia’s Novorossiysk and Taman ports have increased shipping costs out of its Black Sea ports.

According to Ukraine’s Ministry of Infrastructure, in July, Ukraine suffered 35 Russian attacks on vessels in port, 22 at sea and 67 on port facilities. By comparison, the total number of vessel strikes for the whole of 2025 was just 14.

On Friday, Kyiv’s agricultural minister said recent Russian air attacks have destroyed around 90 percent of retailers’ food logistics. With transport of wheat curtailed, prices have risen, raising fears of food insecurity around the world.

Joe Glauber, a research fellow emeritus in the director general’s office at the International Food Policy Research Institute, said that the issue, therefore, is less the amount of wheat being produced and more about the cost of getting it to buyers and consumers.

“There’s plenty of wheat in Russia and Ukraine, and ultimately that wheat will make it out on to the market. But right now it can’t, or it comes out with a very high cost, and so wheat prices have reflected that,” he told Al Jazeera.

“There’s a lot of wheat in the world…it’s not a question of availability, it’s a question of affordability,” he added.

Egypt, the world’s largest wheat importer, usually spends around $3bn per year on importing wheat. In the first half of 2026, it sourced more than 82 percent of its stock from Russia and Ukraine.

In Asia, second-largest wheat importer Indonesia bought $361m of wheat from Ukraine and $102m from Russia between 2023 and 2024, according to the Observatory of Economic Complexity. Indonesia usually sources between 15 percent and 20 percent of its wheat from the two countries.

An official at Indonesia’s Flour Millers’ Association told Reuters last week that current stocks can meet immediate food-grade wheat requirements. “But we don’t have abundant or excess supply. We have to look at other origins such as Bulgaria, Australia, Romania and Argentina for cargoes that do not get shipped from Russia and Ukraine,” the official said.

How does climate change fit into this?

Besides the war in Ukraine, droughts and drier weather patterns have taken a toll on wheat production and contributed to rising prices.

According to the United States Department of Agriculture (USDA), as of July 1, the US, also one of the biggest wheat exporters, is forecast to yield “46.7 bushels per acre, down 0.1 bushels from last month and down 8.2 bushels from last year’s average yield of 54.9 bushels per acre”.

“If realised, the United States yield would be the lowest since 2015,” the USDA said.

In a report updated on August 14, the department wrote: “This year’s small crop is a product of long-term decline in US wheat acreage and widespread drought impacts on HRW [Hard Red Winter wheat] production in the Great Plains States. Total wheat supplies are forecast down 13 percent from the previous year, with larger beginning stocks dampening the effect of the smaller crop.”

For Canada, the world’s sixth-largest wheat producer, the USDA’s Foreign Agricultural Service found that for the 2026-2027 production year, total production is forecast to be 34.6 million metric tons (MMT) – also 13 percent lower than the year before – due to reduced planted area and a return to lower-than-average yields.

Amid the heatwaves that have hit European countries over the past three months, wheat production in the bloc has also reduced. According to COCERAL, the European association of trade in cereals, oilseeds, rice, pulses, olive oil, oils and fats, animal feed and agrosupply, the excessive heat is expected to reduce grain crops in 2026 by around 9 million tonnes to 286 million tonnes.

In a report published in July, COCERAL said: “The weather has started to affect corn pollination in the southern half of France and in Hungary. More damage is expected from the forecast heat in other parts of the EU.”

The El Nino weather pattern is also expected to bring drier-than-usual conditions to the Southern Hemisphere this year, with South Africa and Australia expected to experience droughts as a result.

What can be done to mitigate all this?

While the Russia-Ukraine war continues, in July 2022, the year the war started, a Black Sea Grain Initiative was brokered to allow for the safe exports of grain, food and fertiliser from Ukrainian ports to stabilise and lower global food prices.

While that agreement held, more than 1,000 ships full of grain and other foodstuffs left Ukraine, according to the EU. However, Russia ended the agreement in July 2023.

The answer to the current crisis is far from easy, experts say.

Bringing prices down now would necessitate a major shift in war strategy by both Russia and Ukraine, while the impact of climate change could be mitigated by governments implementing policies including improving water management on farms through the use of reservoirs to support drought-affected crops and reduce the loss of production.

Moreover, Glauber explained, while alternative routes exist to ship out grain from Russia and Ukraine, they are costly, adding that a return to a possible Black Sea Grain Initiative “would help calm wheat markets a lot”.

One answer may be for other countries to step in.

According to Glauber, during the 2022 global grain price surge, other wheat producing countries such as India exported more to make up for shortages.

“India, for example, had record exports in 2022. It’s probably less likely this year, just because of El Nino and other other factors affecting them, but they could also provide more wheat. I think the world wheat market proved very resilient in 2022, and I expect we’ll see the same in in 2026,” he said.

Washington has recently stepped up efforts to economically pressure Tehran amid the deadlocked truce talks.

Washington plans to impose sanctions on another bank this week as it steps up its campaign to economically isolate Tehran amid the deadlocked truce talks, the US Treasury chief has said.

In an interview with The Associated Press news agency on Sunday, Treasury Secretary Scott Bessent declined to name the bank to be targeted by sanctions.

The announcement comes just days after Washington said it would cut off the United Arab Emirates’s operations of Basque Misr from the US financial system after accusing Egypt’s second-biggest bank of doing business with the Iranian government.

“This is going to be financial violence if we have to,” Bessent told AP on Sunday. “We are showing people that we know who you are, you know who you are, and this has got to stop.”

⁠In an interview with the Reuters news agency, Bessent said the next step may be cutting off an institution entirely from the dollar-based financial system.

“You’re going ⁠to see a lot ⁠more of these every week,” he said on Sunday, ahead of a Group of 20 finance leaders ⁠meeting in Asheville, North Carolina. “We’re starting with the banks, and we’re telling ⁠the banks it’s not OK ⁠to have Iranian money and to aid the regime.”

The US has stepped up efforts to economically pressure Tehran to submit to Washington’s demands, a campaign dubbed “Operation Economic Outcast”, amid the stalled truce talks between both parties.

Last week, the Treasury Department imposed new sanctions on nearly 60 individuals and entities that Washington accused of being part of networks helping Iran generate oil revenue, procure weapons and conduct cyber-operations.

Iran, however, has rejected the latest US sanctions, with Minister of Finance and Economic Affairs Ali Madanizadeh saying they will fail.

Violence in the conflict resumed on Sunday, the first time since late July, with Iran launching missiles at two US bases in Jordan following a US attack on Larak Island in southern Iran.

Cooperation against Iran

Bessent is preparing to host the meeting of the G20’s finance leaders, where he will huddle individually with his counterparts from the world’s major and developing economies to encourage cooperation against Iran.

The US Treasury chief also told AP that he would speak to his Chinese counterparts at the meeting and “all options are on the table” in terms of sanctioning Beijing for its continued trade with Tehran. 

But he rejected the idea that the US was reluctant to confront China, calling it “a completely false narrative that the media picked up on”.

He insisted that Beijing and Washington agreed on the need to reopen the Strait of Hormuz and prevent Iran from developing a nuclear weapon.

US trade officials downplay French language dispute, calling claims fabricated.

Canada’s top trade negotiator with the United States, Dominic LeBlanc, says he “welcomes” a shift in the US position on “discoverability”, “labelling” and “measures to promote French language and Canadian culture” not being subject to US tariffs.

LeBlanc praised the move in a post on Thursday on X and added that Canada is looking “forward to further constructive U.S. clarifications on their other positions, which would create the possibility of a mutually beneficial trade agreement”.

Al Jazeera reached out to the White House for comment, but it pointed to an interview with US Trade Representative Jamison Greer on the Canadian broadcaster CBC in which Greer said French language discoverability on streaming services “is not something where we push hard or condition or red-line”.

Commerce Secretary Howard Lutnick echoed those comments at a news conference on Thursday outside the Kennedy Center in Washington, DC.

“Do I care about how the Quebecois speak? I mean, what could matter less to America? We don’t care. So the fact is we never brought those words up. This is manufactured, and that’s why the president put out a [post on Truth Social] saying it was a complete lie, right? It was manufactured,” Lutnick told reporters.

The comments come on the heels of tit-for-tat tariffs between Washington and Ottawa.

Canada announced retaliatory tariffs on roughly $20bn of US goods ranging from 15 to 50 percent that will go into effect on September 8. Those levies were in response to 50 percent tariffs announced by Washington on Canadian goods as negotiations collapsed over the weekend.

US President Donald Trump ramped up his rhetoric against Canada in recent days, including signing an executive order on Thursday to rename Lake Ontario, the easternmost of the five Great Lakes, which borders Ontario, to Lake America.

On Saturday, Canadian Prime Minister Mark Carney said US officials made “threats to the French language” as well as threats to the culture of Canada and Quebec specifically.

Canada’s retaliatory tariffs are to hit hundreds of consumer products, including ice skates, dishwashers and construction materials. However, on Wednesday, Ottawa scaled back some tariffs, including those on fish and other seafood products.

“Based on feedback, we have made select adjustments to protect against economic harms, including removing seafood and fish products from our list of counter-tariffs,” Canada’s Department of Finance said in a post on X.

“We are continually working with Canadian industries to assess the effectiveness of these measures, with a primary focus on industries that have been targeted by US tariffs.”

India has taken a major step towards opening one of its most sensitive areas of defence production to private companies.

Defence Minister Rajnath Singh approved the transfer of technologies developed by the state-run Defence Research and Development Organisation (DRDO) for all conventional missile systems to Indian industry for domestic production, the country’s Ministry of Defence said on Tuesday.

The move marks a significant shift for the sector dominated by government-run firms and research laboratories. Private companies will be able to compete for the technology and production rights, subject to technical qualifications, certifications and other regulatory requirements, the ministry said.

The Narendra Modi-led government says the aim is to move missiles from development into mass production faster, increase domestic manufacturing and reduce India’s dependence on imports.

So, does India’s private defence industry have the capacity to manufacture sophisticated missile systems at the scale and reliability the military needs, is the country moving towards developing its own military-industrial complex, and are there security risks involved?

What did the government announce?

India’s Defence Ministry said Singh had approved the transfer of DRDO-developed technology for all conventional missile systems to Indian defence companies for production inside the country.

“The objective is to enhance domestic manufacturing capabilities, strengthen the defence industrial base, and create opportunities for the participation of Indian MSMEs (micro, small and medium-sized enterprises) and other technology partners in the supply chain,” the ministry said in a statement.

The measure would enable the “successful transition of missile system development to industrial production” and create opportunities for MSMEs and other technology partners, the ministry added.

“DRDO remains committed to working closely with Indian industry to facilitate the transfer and absorption of advanced defence technologies and to further strengthen the country’s indigenous defence capabilities.”

The announcement spans a wide range of missiles, said Aditya Ramanathan, a research fellow with the Bengaluru-based Takshashila Institution.

“It will include surface-to-air missiles, air-to-air missiles, anti-radiation missiles, antitank systems, and so on. It will also include more heavy-duty hardware like land-attack cruise missiles,” he told Al Jazeera.

Why is India doing this?

India has traditionally relied heavily on state-owned defence companies to turn weapons developed by DRDO into large-scale production. Bharat Dynamics, one such state-owned company, has long held a monopoly in missile production.

Tuesday’s announcement is a “big change” because it ends that monopoly, said Ramanathan.

“Private companies have been making missile components for years, but what this decision does is allow them to move up the value chain and become prime integrators for these systems,” he said.

While India largely relies on domestically made missiles, it also imports missiles — especially from Russia and Israel, two key weapons suppliers to the country.

But under Modi, India has attempted to both encourage self-reliance in defence — a concept that the government calls Atmanirbhar Bharat or self-reliant India — and prod foreign defence majors to manufacture in India.

At a time when geopolitical allegiances are changing fast, and India faces uncertainties on both major borders — with rivals Pakistan and China — the country under Modi has more than doubled its defence budget, from $38bn in 2014 to $86bn in the current financial year.

The brief four-day conflict with nuclear-armed rival and neighbour Pakistan last year has injected fresh urgency into India’s defence preparedness plans. This year’s defence budget is 16 percent higher than the previous year’s.

Other geopolitical events have forced the government’s hand too, suggested Ramanathan.

“I don’t think this move would have happened as soon as it did if not for the experience of recent wars. Indian decision-makers have been looking at Ukraine, they’ve been looking at the US war with Iran, and of course they’ve been imbibing the lessons of operations from last year,” he said.

“One reason you’re going to need large stockpiles is that, as we’ve seen recently, you’re going to burn through your inventory pretty quickly. The other reason is that your adversary could also degrade your stockpiles using their own precision-strike systems.”

China, he said, was a major factor in India’s calculations.

“India believes that to deter China, which is its most capable adversary, it will need to demonstrate that it can both inflict and absorb really punishing attrition over weeks of gruelling warfare,” Ramanathan said.

To that end, India is also creating a tri-services conventional missile force. “To be a viable and effective force, it’s going to require serious magazine depth, and this cannot be achieved without the active involvement of the private sector,” he added.

What is India’s defence industry already manufacturing?

In June, India announced that it was preparing to spend more than $2bn on military drones from domestic manufacturers, reflecting the rapid expansion of the country’s private defence industry.

More than 600 companies were involved in India’s drone industry, including major groups such as Adani, Larsen & Toubro, and Tata Advanced Systems, as well as startups.

In July, India also approved the purchase of a range of military equipment for its defence forces worth $5.46bn, including missiles, electronic warfare systems and Kamikaze drones.

India is also pushing to rapidly modernise its navy with an eye on Beijing’s growing influence in key Indian Ocean shipping lanes. In December, New Delhi announced plans to procure at least 75 ships and submarines, with most expected to be constructed domestically.

At the same time, India is trying to diversify the foreign sources of its weapons. Over the past decade, New Delhi has worked to move away from its longstanding reliance on Russia for military hardware, expanding defence ties with countries such as the United States, France and — increasingly — Israel.

Does the private sector have the capacity to build missiles?

Private arms manufacturers in India have been increasing spending on bolstering military production in the past few years.

Major conglomerates have invested heavily in ammunition, drones, aerospace and military electronics. Of late, they have started to invest in facilities that aim to manufacture missiles.

Adani Defence & Aerospace, owned by business tycoon Gautam Adani, a close associate of Indian Prime Minister Modi, announced plans in 2024 to invest more than 30 billion rupees ($315m) in ammunition and missile manufacturing facilities in Uttar Pradesh.

The facilities would include capabilities for handling explosives used in missiles and precision munitions.

But commitments and intent don’t build missiles.

“Ultimately, I think the success or failure of this move will depend on how the Indian government places orders,” Ramanathan said. “Making missiles is an incredibly complex and costly affair, and companies are going to have to invest a lot in infrastructure, technology and people. These sorts of investments will only pay off if the government places large enough orders to justify them and also, hopefully, leave these companies with some profits that they can pour back into research and development.”

What missiles does India have?

India has a range of cruise and ballistic missiles, several of which are also capable of carrying nuclear warheads.

In May, on the anniversary of the 2025 war with Pakistan, India successfully test-fired the Agni-V, its most advanced nuclear-capable intercontinental ballistic missile that can reach a distance of 5,500km (3,418 miles) — a range that covers all of China, the Middle East and even parts of Europe.

Its other ballistic missiles have ranges from as little as the Prithvi-1 (150km or 93 miles) to the Agni-IV (4,000km or 2,485 miles), again covering everything from border skirmishes with Pakistan to India’s extended neighbourhood.

It also has powerful cruise missiles, like the BrahMos, co-developed with Russia, which has a range of up to 500km (311 miles), and was used in last year’s war with Pakistan.

Is India also exporting missiles and other weapons?

India has dramatically ramped up its military exports in recent years, from just $72m in 2014-15 — when Modi came to power — to $4bn in 2025-2016.

Paras Defence, one of India’s fast-growing defence manufacturers, said this month it expects its exports to more than double in the 2026–27 financial year, up to $14m, driven partly by increased demand linked to conflicts in the Middle East.

Indian arms makers have also been involved in joint ventures with companies abroad. Adani Defence, in partnership with Elbit Systems – Israel’s largest weapons manufacturer – produces the large Hermes 900 armed drone systems.

A 2024 investigation by Al Jazeera exposed how India was exporting rocket parts and ammunition to Israel, even as the Modi government was publicly calling for diplomacy to end the war on Gaza.

In June 2026, Amnesty International said in a report that India’s weapons exports to Israel made it complicit in the genocide in Gaza.

But it isn’t just Israel that has sought and received weapons from Indian manufacturers. Nor is it just bullets and weapons parts that India is exporting today — complete missiles are in demand, too.

In 2022, the Philippines bought three batteries of the BrahMos missiles from India. Since then, Vietnam and Indonesia have signed deals with India for the purchase of these missiles. And India has submitted a proposal to the United Arab Emirates offering to supply the Gulf country these missiles, too.

Is the latest move a step towards building a military-industrial complex?

That appears to be the intention.

While Tuesday’s announcement marks the first time that India’s state-run research and manufacturing facilities will transfer missile technology to the private sector, the government earlier this year shortlisted private firms to manufacture the country’s next-generation fighter jets.

Tata Advanced Systems, a subsidiary of Tata Sons, and Bharat Forge are among companies to be shortlisted, and are emerging as major makers of artillery systems, ammunition and aerospace systems. India has its homegrown jets, but imports the most cutting-edge planes in its arsenal, including the Rafale fighters from France. The Indian Air Force also relies heavily on Soviet-era jets.

Still, while India “wants to build a wider defence industrial base”, said Ramanathan, “it is very far from developing the sort of military-industrial complex that [former US President Dwight] Eisenhower worried about. Power in India still resides overwhelmingly with the government.”

What about India’s military imports?

Despite the surge in domestic manufacturing and exports of specific weapons systems and parts, India on the whole remains a major military importer.

India was the world’s second-largest importer of weapons between 2021 and 2025, according to the Stockholm International Peace Research Institute (SIPRI): Russia was its biggest source, accounting for 40 percent of India’s imported weapons.

Are there risks in transferring sensitive technology to the private sector?

As the US and Israel bombed Iran in March this year, a group of Iranian hackers claimed it broke into the servers of major US defence manufacturer Lockheed Martin, stealing blueprints of components used in the F-35 fighter jets.

The alleged data breach exposed the risks of private companies — which often have lower security standards and oversight than top-secret government laboratories — holding sensitive information.

But Ramanathan pointed out that in India’s case, “the companies that are most likely to get the missile contracts are all old hands”.

“They’ve been involved in the defence sector in some capacity for decades, and they have experience in dealing with confidentiality and secrecy,” he said.

The Indian government, on its part, also “doesn’t want the technology or its missile secrets to go to its adversaries, and it also wants to abide by its commitments to the Missile Technology Control Regime, which gives India several advantages,” he said, referring to one of the world’s major export-control regimes.

“So India has good reasons, in its own self-interest, to ensure that missile technology doesn’t leak.”

US President Donald Trump’s administration has said it aims to sever “every” economic lifeline sustaining Iran in what officials have warned will be the toughest sanctions campaign ever seen.

The threat, if followed through, would mean putting China, Iran’s biggest trade partner, squarely in the crosshairs of US sanctions.

That would be a risky proposition for Washington due to the likelihood of severe blowback from Beijing – so much so that some analysts doubt that the Trump administration’s measures, set to be announced on Monday, will match its rhetoric in scope or severity.

While the Trump administration has yet to provide details about what it has dubbed “economic D-Day”, US officials have made it clear that Iran’s trade partners are in their sights.

In an op-ed in the Financial Times on Sunday, US Treasury Secretary Scott Bessent warned that countries fearful of breaking ties with Iran should not “discount the cost of testing Washington”.

“The president has created the conditions to leverage every agency, every authority and action many assumed we would never summon,” said Bessent, who is scheduled to unveil the sanctions in a news conference at 17:00 GMT.

Brett Erickson, a sanctions expert and managing principal of Obsidian Risk Advisors, said the Trump administration’s willingness to target China will be an indication of its resolve to mount a sustained economic offensive against Tehran.

“That is not a relationship you degrade lightly. If the United States decides to really bring China into the ring, it will be a serious indication that the United States plans to wage this economic war for a prolonged period of time,” Erickson told Al Jazeera.

“If they do not, it will be a tacit admission from the Trump administration that they do not believe economic hardship can seriously bring about a change in the Iranian position,” Erickson said.

Any US pressure campaign that excludes China would be necessarily limited in scope given the outsized importance of Beijing and Tehran’s economic ties.

China reported $9.96bn in two-way trade with Iran in 2025, a figure that does not include some $31.2bn in Iranian oil shipments, according to the US-China Economic and Security Review Commission.

China’s purchases of Iranian oil have been a particularly crucial lifeline for Tehran, accounting for about 90 percent of its oil sales, according to the US Treasury Department.

Until now, the Trump administration’s Iran sanctions regime has targeted only a handful of relatively minor China-based entities.

In April, the Trump administration sanctioned Hengli Petrochemical (Dalian) Refinery, one of China’s largest independent refineries, commonly known as “teapots”, over its alleged purchases of Iranian oil.

The Trump administration also imposed sanctions on four firms in Hong Kong in May, followed by measures in August targeting six China and Hong Kong-based shipping lines.

Washington has so far left Chinese financial institutions, widely viewed as a key node in Iran’s oil trade, untouched.

“Cutting off Chinese economic ties will be key to the success of any attempt to increase pressure on Iran. However, the United States won’t do it,” Jennifer Kavanagh, a senior fellow at Defense Priorities, a Washington-based foreign policy think tank, told Al Jazeera.

“If it does, China will retaliate and has the leverage to impose costs on the US,” Kavanagh said.

China has vigorously opposed US sanctions against Iran, arguing that economic pressure will not resolve the nearly six-month-long war.

In a statement on Sunday, China’s Ministry of Foreign Affairs said that Beijing remained “committed to promoting peace talks” and willing to “continue making efforts for the early restoration of peace and tranquility in the region”.

Iran, for its part, has threatened to retaliate against countries that support the US measures.

Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, warned on Saturday that any country that participated in sanctions would be considered an “enemy” and that “not a drop” of oil would leave the Gulf if Iran’s neighbours joined the US campaign.

Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China, said Beijing would inevitably take countermeasures in response to any US sanctions and their intensity would depend on the “severity of US actions”.

“China maintains its desire to avoid conflict, but its bottom line cannot be crossed,” Wang told Al Jazeera.

For Trump, invoking Beijing’s ire would risk not only economic retaliation, but also unravelling efforts to stabilise US-China relations only weeks before the US president is due to host Chinese leader Xi Jinping at the White House.

Trump’s scheduled summit with Xi on September 24 would be their second face-to-face meeting aimed at lowering the temperature in US-China relations since Washington launched its war on Iran in late February, following Trump’s visit to Beijing in May.

Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing, said neither Beijing nor Washington were likely to want Iran to define the upcoming summit.

“Unless the US measures become very broad or directly target major Chinese interests, both sides are likely to try to keep this dispute from overwhelming the wider agenda,” Wang told Al Jazeera.

“That said, Chinese restraint should not be read as an absence of response,” Wang said.

“Beijing has often avoided immediate rhetorical escalation, but when unilateral US actions have materially affected Chinese companies or other Chinese interests, it has shown a growing willingness to answer with practical countermeasures.”

While the Trump administration could potentially make it more challenging and expensive for China to continue its economic support of Iran, it is unlikely to be able to stop Beijing outright if it is determined to maintain ties, said Erickson of Obsidian Risk Advisors.

“US sanctions can absolutely force companies to de-risk in order to avoid exposure, but there will always be an entity willing to fill this role,” Erickson said, adding that Xi is unlikely to “merely stand by while Trump flexes the powers of American economic statecraft without flexing Beijing’s own in return”.

Though US officials have stated their intention to “collapse” Iran’s government with ramped-up sanctions, Erickson expressed doubt that the Trump administration will be able to achieve its war goals through economic pressure alone.

“Unless the Trump administration is willing to burn serious bridges and employ all remaining levers of economic warfare simultaneously, there is no reasonable assertion that can be made that it will be able to produce the victory that kinetic warfare could not,” he said.

The PanStar Acro, bound for Europe via the Arctic, is testing whether a route opened by melting sea ice can be commercially viable.

A South ‌Korean container ship is sailing to Europe via the Arctic, ⁠in the nation’s first commercial voyage on the route to test its viability as the war in the Middle East rattles global shipping.

The PanStar Acro set sail from Busan New Port on Saturday. “We would like to inform you that the vessel for the Arctic route trial voyage departed” at 9:30pm (12:30 GMT), Seoul’s Ministry of Oceans and Fisheries said in a statement to the AFP news agency.

The PanStar Acro will sail north, the Reuters news agency reported, hugging eastern Russia’s Kamchatka Peninsula, then cross the Bering Sea, and ⁠take the Northern Sea Route, stopping in Felixstowe in the UK, Rotterdam in the Netherlands, and Poland’s Gdansk before returning.

The 2,758 TEU (twenty-foot equivalent unit) container ship operated by South Korea’s PanStar ‌has secured 837 TEU of cargo, including car parts, chemical products and about 100 empty containers on the government-backed voyage.

The journey is expected to take 40 to 45 days, according to the Oceans Ministry.

President Lee Jae Myung has made Arctic shipping ‌a priority for South Korea, with the hope of turning the southeastern ⁠port of Busan into a global maritime hub and position the Arctic as a regular trade route by 2030.

But this new route has been criticised for several different reasons. Environmental groups have warned the route could accelerate polar ice melt, meaning the increase in shipping could worsen global warming.

The project also risks increasing friction with Western allies hoping to keep Russia isolated in its war with Ukraine. Seoul has consulted with Moscow about the journey, Reuters reported, including whether the ship needed ⁠help to tackle any problems, such as ⁠getting stuck in ice.

Last year, 103 transits through the route were made by 88 vessels, up from ⁠97 in 2024 and 43 in 2022, chiefly from nations such as Russia and China, according ⁠to Norway’s Centre for High North Logistics.

But with the Iran war affecting global shipping, governments and shipping firms are scrambling to seek different routes, with the Arctic route increasingly viewed as a viable alternative due to technological advances and environmental degradation.

South Korea’s Vice Oceans Minister Nam Jae-hon said the Arctic route was “bound to become an alternative” to Middle Eastern shipping lanes.

The usual maritime route between Asia and Europe runs through the Suez Canal, but travelling through the Arctic can cut the journey by approximately 7,000 kilometres (4,300 miles) and about 10 days, according to the Korea Institute for International Economic Policy.

However, major carriers including CMA CGM, MSC and Hapag-Lloyd have pledged to avoid Arctic shipping routes due to pressure from environmental groups. The Arctic sea route is believed to be accessible only during the time of year when the ice is melted enough to allow transits without icebreakers.

“The Northern Sea Route has become increasingly viable as the Arctic warms about four times faster than the global average, leading to a sharp decline in sea ice,” South Korean environmental group Paran Ocean Citizen Science Center said in a statement last year. “But making the route commercially viable would require further warming, putting the policy at odds with efforts to combat climate change.”

The El Nino weather phenomenon is expected to increase the likelihood of drought and excess heat across the region.

The Panama Canal is expected to limit traffic starting in early September, as it prepares for lower water levels due to the El Nino weather phenomenon.

On Thursday, the Panama Canal Authority, the body that oversees the waterway, announced that daily transit caps would be set to address concerns about the drier weather conditions ahead.

Under the new measures, 34 vessels will be permitted to sail through the canal as of September 4. A further reduction will start on September 15, when the limit will be 32 ships.

The travel restrictions are a reversal for the Panama Canal Authority. Officials told the news service Reuters in May that they had no plans to limit crossings this year, citing water conservation measures imposed last year.

The canal, which handles about 5 percent of global maritime trade, usually has capacity to accommodate about 40 vessels per day.  Since June, it has seen a daily average of 35 transits.

Any significant decrease in travel through the canal is likely to translate into slower international shipping for industries that rely on the waterway. That, in turn, could increase costs.

A severe drought in 2023, for instance, cut traffic through the Panama Canal by roughly 36 percent, leading to disruptions in global supply chains.

The declining water levels that year were also attributed to El Nino, as well as climate change accelerated by human activities.

El Nino is a naturally occurring weather phenomenon that takes place every two to seven years, when the eastern tropical Pacific Ocean is warmer than usual.

The resulting weather patterns can have an impact across the region and even globally, putting some areas at risk of excessive heat and drought, while others suffer from flooding

Scientists expect a particularly strong El Nino in the coming months, potentially among the strongest on record. That could lead to an increase in cases of extreme weather events.

Panama Canal authorities have previously imposed vessel limits in order to conserve water.

The canal relies on a lock system that lifts and lowers vessels as they travel from the Pacific Ocean to the Caribbean Sea, and vice versa.

But the canal is fed, in part, by freshwater from nearby lakes and reservoirs, most notably Gatun Lake.

Panamanians rely on that lake as well to supply drinking water to nearby cities, including the capital Panama City, putting additional strain on the waterway during times of drought.

BREAKINGBREAKING,

Trump announces pause on 50 percent duty on Canadian exports shortly before midnight deadline.

The United States and Canada have reached a deal to avert steep tariffs on billions of dollars of Canadian goods, US President Donald Trump has announced.

Trump made the announcement shortly before the expiry of a midnight deadline for imposing a 50 percent duty on a wide range of Canadian exports, including electronics, industrial machinery, furniture, and dairy products.

“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!” Trump wrote in a post on Truth Social.

“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!”

More to follow…