signals

In the latest twist in Canada’s long-running saga to field a new fighter, the country’s defense minister has said that Ottawa is “interested in learning more about” the Global Combat Air Program (GCAP) next-generation fighter. GCAP is currently a trinational effort, led by the United Kingdom and involving Italy and Japan. Its centerpiece is the Tempest crewed fighter. A demonstrator for this jet is currently taking shape with BAE Systems in the United Kingdom.

David McGuinty, the Minister of National Defense of Canada, made the remarks after a meeting in Tokyo with his Japanese counterpart, Shinjiro Koizumi. Breaking Defense reports that McGuinty confirmed he had spoken with Koizumi about the GCAP, which the Canadian official described as a “promising initiative.”

“We are interested in learning more about it. I’ll take it back to my team and see what it looks ‌like,” McGuinty told Reuters.

Until now, no senior Canadian official appears to have spoken publicly about interest in GCAP. However, the development comes as Ottawa weighs up the option of a split fighter buy, which would involve acquiring the U.S.-made F-35 and one other type. This thinking has been driven by a growing rift between Ottawa and Washington.

However, the possibility of Canada coming on board GCAP as an ‘observer’ had been raised in March of this year. According to The Asahi Shimbun, a Japanese daily newspaper, unnamed Japanese officials disclosed that, during a previous meeting, McGuinty and Koizumi discussed such an arrangement.

Canada’s joining GCAP with observer status would provide it access to information on the program and could be a stepping-stone to deeper involvement.

Earlier this week, Italian Defense Minister Guido Crosetto raised the possibility of other nations joining GCAP, noting that, were that to happen, “we would be completely willing, because the more there are, the greater the chances of creating something and bringing down costs.”

Crosetto then identified Canada as “the country most interested [in GCAP] at the moment.” He said he would be “fully open” to Canada joining as an observer.

For Canada, however, GCAP would require a rethink of Canada’s potential pursuit of a split-buy approach to its new fighter.

Until now, the Saab Gripen E had been identified as the most likely candidate to be bought alongside the F-35.

Sweden has made a strong push to sell Gripen to Ottawa, and Saab offered to build the jet in Canada, in an effort to secure support for its previous bid, which it lost to Lockheed Martin. Since then, Saab has also emerged as the preferred candidate to supply Canada with its future airborne early warning and control (AEW&C) via its GlobalEye.

In April of this year, McGuinty confirmed that Ottawa was still reviewing its earlier plan to buy 88 F-35s.

“The review of the purchase of the F-35s is continuing… We are taking the necessary time to study very, very closely the question of the fighter fleet,” McGuinty told the Senate’s defense committee.

The split-buy option emerged since Canada has already made a firm commitment to buy 16 F-35As to start replacing its aging CF-18 Hornets. Canada’s industry also has a significant degree of involvement in the Joint Strike Fighter program.

Canada currently has around 75 CF-18A/B+ jets and has also added 18 upgraded former Royal Australian Air Force (RAAF) F/A-18A/Bs, plus seven more as spares, to help bolster its fleet.

Of Canada’s first 16 F-35s, four have already been paid for in full, while parts for eight others have also been purchased. The first Canadian F-35s were expected to be delivered for training at Luke Air Force Base, Arizona, in 2026.

Back in 2023, Canada’s Liberal government announced plans to buy 88 F-35s, a decision that appeared to bring closure to what had already been a very protracted process. You can read about this here.

However, amid growing trade tensions and a war of words with the United States, Liberal Prime Minister Mark Carney launched a review of the F-35 program shortly after taking office in the spring of 2025.

There are other arguments for a split buy, too. Back in 2019, the cost of buying the planned 88 F-35s was put at $19 billion. Now it has rocketed to $27.7 billion, not including weapons and infrastructure.

Bill Blair, who was Canada’s defense minister when the review of the F-35 buy was launched last year, pointed to the advantages of a mixed fleet, saying it would give the RCAF more options to handle different types of threats.

“What happens if you have to persist in that space for months and months and years? The tool that you use, is it the right tool to do that job?” Blair said. “We need to have a whole wide range of capability sets to deal with all the eventualities that we could face.”

Were Canada to procure the Tempest, it would surely have to wait longer than 2035 — the prospect of GCAP’s fighter entering service at this date, as planned, is highly unlikely. Canada would be fourth in line behind the three core partners. Ottawa would need to buy more F-35s, perhaps around two thirds of its original intended number, or around 60 aircraft, and also keep the best of its CF-18s in service for longer, if that’s even possible. The Hornets are getting very old and disappearing from service abroad. Supporting them will become increasingly problematic. When the Tempest finally arrived, it would provide a flipped high-low fighter mix. This is essentially the same approach that the United Kingdom, Italy, and Japan — all current F-35 operators — are taking.

However, the Tempest does appear to be especially well-suited to Canada’s fighter requirement.

The design of the jet will stress extreme range and a large payload — roughly twice that of the F-35A. Senior GCAP officials have said the jet could potentially carry enough internal fuel to fly across the Atlantic without refueling.

While these attributes are optimized for a future conflict in the Indo-Pacific region, they are equally applicable to dealing with the ‘tyranny of distance’ and the increasing Russian threat posed around Canada’s enormous land mass, which extends far into the highly strategic Arctic region.

“Both China and Russia have fifth-generation fighter aircraft and fifth-generation missiles that are able to go at much greater speeds and with much more that are holding Western allies at risk at this moment in time,” the commander of the Royal Canadian Air Force (RCAF), Lt. Gen. Jamie Speiser-Blanchet, said in the past.

Plans to arm the Tempest with larger air-to-air missiles offering a longer range than those currently used by any of the three GCAP partner countries have also been revealed, as you can read about here.

If Canada decides it wants a sixth-generation combat aircraft to tackle current and emerging threats from China and Russia, the GCAP might be the only realistic choice. The rival pan-European Future Combat Air System (FCAS) has collapsed, and there is little chance of Canada getting its hand on the Boeing F-47.

But any kind of split buy “would duplicate a certain amount of infrastructure and training,” Speiser-Blanchet admitted.

In some cases, however, there could be cost-benefit arguments in having a mixed fighter fleet, as well as the important factor of not relying entirely upon one source of this type of combat equipment.

There is also the question of how feasible it would be for Canada to join GCAP at this point, at least in terms of industrial participation and steering requirements. The latter point seems next to impossible, with national requirements already set, and most of the workshare agreement has also been divided up between the three partners.

The same applies to India, which has also looked at joining GCAP in the past.

There has been talk of Saudi Arabia possibly joining GCAP in some capacity, and, more recently, Poland has been reported as being interested in buying the aircraft, too.

With that in mind, Canada’s best shot might be to buy the jet ‘off the shelf,’ rather than hope for industrial windfalls.

At the same time, Canada and the United Kingdom are partners on some other key military programs, including the Royal Canadian Navy’s future River class Canadian Surface Combatants, derived from BAE Systems’ Type 26 design for the U.K. Royal Navy. 

Meet The River-Class Destroyer – State-of-the-art WARSHIP!

Returning to the Tempest, the broader GCAP program still has to survive considerable challenges, both technical and political, that lie ahead.

As we have explained many times in the past, the process of creating an all-new fighter, especially one incorporating stealth technologies, brings very lengthy development times and high costs.

At this point, BAE Systems is in the process of building a demonstrator as part of the GCAP program, with a first flight planned by the end of 2027.

The latest rendering of that demonstrator appears at the top of the story. Notably, it retains the Typhoon’s EJ200 turbofan engines, with non-stealthy nozzles. The Tempest will have an all-new powerplant.

As we have argued in the past, the more time that passes, and the more deeply intertwined with the F-35 Canada becomes, the arguments in favor of a split fighter buy become harder to justify. Buying the Tempest would certainly not be the cheapest option, and would force a rethink of timelines, but it does underscore the fact that Canadian officials are casting their net wider, looking at very high-end capabilities, and seeking to build deeper strategic relationships outside of the United States.

Contact the author: thomas@thewarzone.com

EVIAN-LES-BAINS, France — The United States could soon reimpose sanctions on Russian oil shipments after President Trump and fellow leaders at the Group of Seven summit of major industrialized democracies moved Tuesday to put the war in Ukraine back on top of their agenda, more than four years after Russia launched its full-scale invasion.

The Iran war has recently overshadowed Ukraine, but Trump said he wants to shift the focus following the announcement of an agreement to end the 3½-month-old conflict in the Gulf.

Trump said Iran will soon be “back in the rearview mirror.”

Trump said the sanctions on Russia that were eased during the Iran war to help lower oil prices can go back in place as more oil moves through the Strait of Hormuz.

“Soon we’ll be able to do that because the oil is now flowing,” Trump told reporters in Evian, the French spa town close to the Swiss border that is hosting the summit. “We’re in a position to do that soon.”

The U.S. in March temporarily eased some sanctions on some Russian oil shipments as crude prices sharply increased. The waiver has been extended.

Zelensky joins G7 leaders for talks

Ukrainian President Volodymyr Zelensky joined the G7 leaders for talks on the war in his country. They wrapped quickly, after just 75 minutes.

Zelensky said Ukraine is serious about peace while Russia toys with world leaders. “The entire ‘Seven’ supports Ukraine unanimously today,” he said.

Zelensky added that G7 leaders supported Ukraine’s need for more Patriot missiles and discussed how to increase production by licensing production. Patriot missiles are able to counter Russian ballistic missile attacks on Ukraine’s power grid and cities.

As the U.S. under Trump has cut back aid to Ukraine, France and its European allies are now the biggest providers of military and financial support to Kyiv.

Trump downplayed the impact of the Russia-Ukraine war on the U.S. but lamented the death toll.

“The whole thing is ridiculous,” Trump said. “So, yeah, I’m going to do whatever I can.”

Meanwhile, the U.K. announced new sanctions targeting the “shadow fleet ” Russia uses to ship oil and gas, and the finance networks used by Moscow to evade Western sanctions. The ships targeted include several recently purchased by Russia to transport liquefied natural gas from its sanctioned Arctic LNG 2 project.

Russia fires again at Ukraine’s biggest cities

Hours before the summit began Monday, Russia fired hundreds of drones and dozens of missiles at Ukraine’s biggest cities in a barrage that killed 11 people and set fire to a religious landmark.

The attacks came after Zelensky and Putin spoke separately by phone with Trump on Sunday, the U.S. leader’s 80th birthday.

While campaigning in 2024 for a return to the White House, Trump claimed he could end the Russia-Ukraine war within 24 hours of taking office. However, negotiations have faltered and Trump has acknowledged it has proved much harder than he thought.

Ukraine on Monday officially started European Union membership negotiations, launching a process that will require its government to commit to years of political reforms even as it fights the Russian invasion.

Ukraine sees EU membership as a security guarantee for a stable future once the war ends. Its best guarantee would be membership in the NATO military alliance, but the Trump administration insists that cannot happen, and others are wary of Ukraine joining while the war continues.

Trump says he may send Iran deal to Congress

The U.S.-Iran ceasefire deal got plenty of attention at Tuesday’s sessions, with Trump voicing his openness to sending the deal to Congress for review. The text has not been made public.

“I like the idea, send it to Congress please,” Trump said at the start of a meeting with United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan on the summit’s sidelines. He added, “I mean who wouldn’t approve it?”

Republicans on Capitol Hill say they want Trump to provide more information about the agreement, with some expressing skepticism that the deal can deter Iran from pursuing a nuclear weapon.

Trump also met with the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani. The Gulf nations are not part of the G7, but French President Emmanuel Macron extended invitations to their leaders at a fraught moment for their region.

Trump also expressed frustration over Israel’s continued hostilities with the Iranian-backed militia Hezbollah in Lebanon, telling reporters he’s “not happy with the way Israel has handled themselves with Lebanon and with Hezbollah.”

Trump said Israeli operations to target Hezbollah “should have been able to deal with them faster,” adding: “It just goes on forever. And when that happens, it throws a negative light on the big deal. And that’s the deal with Iran.”

Macron said France and other Western partners are “ready to take action very quickly” to help reopen the Strait of Hormuz peacefully to ease the economic impact of rising oil prices. France and the U.K. have championed a mission to restore maritime security there as soon as conditions allow.

The G7 comprises France, the United States, Canada, Germany, Italy, Japan and the United Kingdom. Other guest nations, including Brazil, India, Kenya and South Korea, were invited to participate in some discussions.

Superville, Corbet and Madhani write for the Associated Press. Madhani reported from Geneva. AP writers Jill Lawless and Samuel Petrequin in London, Collin Binkley in Washington and Illia Novikov in Kyiv contributed to this report.

Japan’s stock market surges to record high on hopes of an end to US-Israel war on Iran.

Oil prices have fallen sharply amid tentative hopes for a deal to end the US-Israel war on Iran.

Brent crude, the primary benchmark for global oil prices, fell about 5 percent on Sunday as US President Donald Trump gave mixed signals on the prospects for a permanent end to the conflict.

Brent futures for July stood at $98.47 a barrel as of 01:05 GMT, down about 9 percent from a month ago but still up by more than a third compared with before the start of the war.

Japan’s benchmark stock index, the Nikkei 225, surged more than 3 percent in morning trading, hitting an all-time high after closing at a record peak on Friday.

Trump said in a social media post on Sunday that negotiations with Tehran were proceeding in an “orderly and constructive manner”, but he had instructed officials “not to rush into a deal”.

“Both sides must take their time and get it right. There can be no mistakes!” Trump wrote on Truth Social.

Trump’s remarks came after he raised hopes for a breakthrough on Saturday by announcing that a deal had been “largely negotiated,” with the terms including the reopening of the Strait of Hormuz.

“Fundamentally, there is no change to the underlying picture, where 10-11 million barrels per day of crude oil continue to be shut-in for every day the Strait of Hormuz remains shut,” June Goh, a senior oil market analyst at Sparta in Singapore, told Al Jazeera.

“However, markets are expecting a gush of 100 million barrels of crude oil from the stranded ships to flow out once the deal is in place.”

Goh said markets are likely to remain on edge for some time after any deal is finalised.

“Sparta estimates still about three to six months required to get everything back to status quo, including time to bring production and refineries back online,” Goh said.

Iran has effectively blockaded the strait since the start of the war in late February, disrupting about one-fifth of the global oil trade.

The US has imposed its own blockade of Iranian ports since mid-April, further disrupting commercial shipping in the waterway.

In his Truth Social post on Sunday, Trump said the US blockade would remain “in full force and effect until an agreement is reached, certified, and signed”.

May 15 (UPI) — President Donald Trump told reporters Friday that the first sentence of Iran’s peace proposal was “unacceptable” and accused the country of backtracking on its nuclear policy, but Iran signaled it’s still ready to negotiate.

Trump said the first sentence was an “unacceptable sentence, because they have fully agreed no nuclear, and if they have any nuclear of any form, I don’t read the rest,” CNN reported he said. He added that he is unsatisfied with the “level of guarantee from them.”

Trump said Iran had agreed to give up its enriched uranium, which he calls “nuclear dust.” But “then they took it back,” he said.

But Iranian Foreign Minister Abbas Araghchi said Friday that discussion about uranium enrichment “is currently not on the agenda of discussions or negotiations,” but the country is willing to talk about it later in negotiations, according to Iran’s news agency Tasnim.

Iran has said it doesn’t plan to build a nuclear weapon but has refused to give up its uranium.

Trump’s comments were on his trip from Beijing after meeting with Chinese President Xi Jinping.

When reporters asked if Xi had agreed to pressure Iran to reopen the Strait of Hormuz, the president replied, “We don’t need favors,” but that “we may have to do a little cleanup work,” without clarifying what he meant.

“We had a little monthlong cease-fire, I guess you’d call it, but we have a blockade that’s so effective, that’s why we did the cease-fire.”

China appears hesitant to get involved in the conflict, Al Jazeera reported.

Trump said the United States and China agree that the strait must be opened and the war must end. About half of China’s crude oil comes through the strait.

Araghchi said Iran would welcome Chinese diplomacy to help defuse the war with the United States.

“Any effort made by the Chinese to support diplomacy will be welcomed by the Islamic Republic of Iran,” he said at a press conference in New Delhi, India. He was attending the BRICS foreign ministers’ meeting.

But he also said that Iran considers itself as the protector of the strait.

Araghchi said on X that with Indian Foreign Minister Subrahmanyam Jaishankar, he “clarified that Iran will always carry out [its] historical duty as protector of security” in the Strait of Hormuz.

He added that “all friendly nations” can “rely on safety of commerce.”

Following his visit with Xi, Trump also said he is considering removing sanctions on Chinese companies that have been buying Iranian oil as the war and high gas prices linger.

“I’m going to make a decision over the next few days. We did talk about that,” Trump said on Friday.

U.S. Energy Secretary Chris Wright told CNBC Friday that China will likely buy more oil from the United States.

“I suspect we’ll see a growth in their oil imports from the United States,” Wright said.

“But ultimately, the world needs to get the Persian Gulf open. Iran’s attempt to hold the whole world hostage, people know it’s temporary.

“One way or the other, we will see an end to the Iranian nuclear program and we will see free flow of traffic through the Strait of Hormuz. That can happen relatively rapidly with an agreement with Iran,” he said.

Iran has said it will only accept a fair and comprehensive agreement in ongoing negotiations with the United States, as talks continue alongside a fragile ceasefire in the Middle East conflict. Foreign Minister Abbas Araqchi made the remarks following discussions with Wang Yi in Beijing.

At the same time, Donald Trump has pointed to what he described as significant progress, announcing a temporary pause in US naval operations linked to the Strait of Hormuz to support negotiations. The strait remains largely restricted, disrupting global oil flows and contributing to an ongoing energy crisis.

What does Iran mean by a comprehensive agreement
The key question is what Iran is asking for. A comprehensive agreement suggests Tehran wants more than a temporary ceasefire. It likely includes guarantees on sovereignty, relief from military pressure, and recognition of its rights under international agreements such as nuclear development for peaceful purposes.

This position indicates Iran is negotiating for long term security and political legitimacy rather than short term concessions.

What is the United States offering in response
The United States appears to be using a mix of pressure and incentives. Military actions and blockades continue, but the pause in naval escort operations signals willingness to de escalate if progress is made.

Statements from US officials show a firm stance on preventing Iran from controlling key shipping routes, while still leaving room for diplomacy. This creates a dual track approach of negotiation backed by force.

Why is the Strait of Hormuz central to the talks
The Strait of Hormuz is critical because it carries a significant share of global oil supply. Its disruption has already triggered sharp movements in energy markets and raised concerns about global economic stability.

Control over this route gives Iran strategic leverage, while reopening it safely is a priority for the United States and global markets. This makes the strait a core bargaining point in negotiations.

Implications for global markets and politics
The negotiations are directly influencing oil prices, currency markets, and investor sentiment. Even signals of progress have led to falling oil prices and improved market confidence.

Politically, the situation affects domestic dynamics in the United States, where rising energy costs are a concern ahead of elections. It also shapes regional power balances across the Middle East.

Analysis what are the possible outcomes
There are three main paths forward. First, a comprehensive agreement could stabilise the region, reopen energy routes, and reduce global economic pressure. Second, prolonged negotiations without resolution could keep markets volatile and maintain the current fragile ceasefire. Third, a breakdown in talks could lead to renewed escalation, further disrupting oil supply and increasing geopolitical risk.

The most realistic short term outcome appears to be continued negotiations with limited de escalation steps. A full agreement will likely require compromises on both security concerns and economic demands.

With information from Reuters.

EXPLAINER

Iran’s president calls the US siege ‘intolerable’ as Donald Trump says war may resume.

Tensions remain high across the region, with Iran, the United States and Israel trading warnings as violence continues.

Iran’s President Masoud Pezeshkian has described the US naval siege of Iranian ports as an “extension of military operations” that is “intolerable”, while US President Donald Trump said Washington “might need” to restart the war, adding that only a handful of people know the details of ongoing talks.

Here is what we know:

In Iran

• Air defences activated in Iran: Air defences were heard in the Iranian capital, Tehran, on Thursday night after being activated to counter small aircraft and drones, Iran’s Tasnim and Fars news agencies reported.
• Iran accustomed to harsher sanctions: Analysts say Tehran entered the blockade prepared, with oil stockpiled at sea, high prices cushioning the impact, and a large domestic market, noting the country is used to “much harsher” conditions after years of pressure.

War diplomacy

• Impasse likely despite pressure tactics: Retired US General Mark Kimmitt said Iran’s strategy of military pressure and economic pain is unlikely to force Washington into talks, warning “the compass needle doesn’t change” and a deadlock could persist, though mounting international pressure would likely push for negotiations and prevent Tehran from asserting control over the Strait of Hormuz.
• US urges meeting of Israel, Lebanon: The US embassy in Lebanon called for a meeting between Lebanese and Israeli leaders as the Lebanese Ministry of Public Health said Israeli strikes on the country’s south killed at least 15 people despite an ongoing ceasefire.
• Trump mulls US troop cuts in Italy, Spain: The US president said he may pull US troops from Italy and Spain due to their opposition to the Iran war, a day after proposing a similar reduction in Germany.

In the Gulf

• UAE urges citizens to leave Iran, Lebanon and Iraq: The United Arab Emirates has banned its citizens from travelling to the three countries and called on those already there to leave immediately and return home, citing regional developments.

In the US

• Trump signals Iran war still possible: The US president said he has not ruled out restarting the war, claiming Iranian leaders “want to make a deal badly”, while touting damage to Iran’s drone and missile capabilities and predicting falling petrol prices once the conflict ends.
• Hegseth on civilian deaths: US Defense Secretary Pete Hegseth told senators the Pentagon has “every resource necessary” to limit harm to civilians, after lawmakers pressed him over a strike early in the war that killed about 170 people at a primary school in Iran.
• He said human oversight remains in place when AI is used in military decisions. The US-based Human Rights Activists in Iran news agency says at least 1,701 civilians have been killed in the war, including 254 children.
• Hostilities ‘terminated’: For War Powers Resolution purposes, US hostilities with Iran that began in February have now “terminated”, a senior official in the US administration said. “Both parties agreed to a two-week ceasefire on Tuesday, April 7, that has since been extended,” the official said. “There has been no exchange of fire between US Armed Forces and Iran since Tuesday, April 7.”

In Israel

• Israel warns Iran: Israel’s defence minister Israel Katz said his country may soon have to “act again” against Iran, to ensure the Islamic republic “does not once again become a threat to Israel”.

In Lebanon

• Deadly Lebanon strike: Israeli strikes on three south Lebanon villages killed nine people, among them two children and five women, according to Lebanon’s Health Ministry, nearly two weeks into a ceasefire between Israel and Hezbollah.
• Two Israeli soldiers wounded in Lebanon: Two Israeli military personnel were injured after an explosive drone detonated in southern Lebanon, according to the army. An officer and a non-commissioned officer sustained moderate wounds and were taken to hospital for treatment, Israeli media reported.

Global economy

• Oil at four-year high: Oil prices soared to four-year highs, with the US crude benchmark Brent for June delivery spiking more than 7 percent to $126.41, while West Texas Intermediate was up 3.4 percent to $110.31, before later paring gains.

Chris Weafer, the CEO of Micro-Advisory Partners, says the UAE’s OPEC exit frees one million barrels of spare capacity. He warns Kazakhstan and Venezuela may follow, leaving OPEC far less influential on global oil pricing.

The Jamieson Greer has told Mexican industry leaders that tariffs imposed by Donald Trump will remain in place, even as negotiations to revise the United States-Mexico-Canada Agreement intensify ahead of a July review deadline.

The remarks, delivered during meetings in Mexico City, signal a major shift from decades of tariff free trade under USMCA and its predecessor NAFTA.

End of Zero Tariff Era

According to multiple sources, Greer made it clear that the United States does not intend to return to a zero tariff framework.

This marks a fundamental change in North American trade policy, where free trade in autos and parts had been the norm for over 30 years. The introduction of tariffs, including a 25 percent duty on automotive imports, has disrupted deeply integrated supply chains across the region.

Impact on Key Industries

The implications for Mexico are significant:

• More than half of Mexico’s auto and steel exports go to the United States
• Vehicle exports have already declined, with job losses in the auto sector
• Steel and aluminum industries face steep duties, some as high as 50 percent

These pressures have weakened Mexico’s competitive position, especially as the United States has negotiated lower tariffs with other partners.

Shifting Trade Rules

U.S. negotiators are also pushing for stricter rules of origin.

Proposals include requiring 100 percent North American sourcing for key components such as engines and electronics, up from current thresholds of around 75 percent. This would force manufacturers to further regionalize supply chains, potentially increasing costs but aligning with Washington’s goal of boosting domestic production.

Mexico’s Position

The Mexican government, led by Claudia Sheinbaum, is seeking relief from tariffs as part of the USMCA review. Officials aim to secure at least partial reductions, particularly in the auto and steel sectors, before finalizing broader trade revisions.

However, the latest signals from Washington suggest that while some easing may be possible, a full rollback is unlikely.

Why It Matters

This development underscores a broader shift in global trade policy away from pure free trade toward managed trade and economic security.

For Mexico, the stakes are high due to its deep economic integration with the United States. Persistent tariffs could reshape manufacturing patterns, investment decisions, and employment across North America.

What’s Next

Formal negotiations are set to begin in late May, with both sides aiming to resolve key disputes before the July deadline.

Key areas of focus will include:

• Tariff levels on autos and metals
• Rules of origin requirements
• Broader economic security cooperation

The outcome will determine the future structure of North American trade.

Analysis

The U.S. position reflects a strategic recalibration rather than a temporary policy shift. By normalizing tariffs, Washington is prioritizing domestic industry and supply chain control over traditional free trade principles.

For Mexico, this creates a structural challenge. Its export driven model, built on open access to the U.S. market, now faces persistent barriers. While some adjustments may preserve competitiveness, the era of frictionless trade appears to be over.

Ultimately, the negotiations will test whether North America can adapt to a new trade paradigm or whether tensions will deepen within one of the world’s most integrated economic regions.

With information from Reuters.

Brent crude rises more than 7 percent as Washington and Tehran offer conflicting accounts on ceasefire negotiations.

Oil prices have risen sharply following attacks on commercial vessels in the Strait of Hormuz and conflicting messages about the prospect of renewed negotiations between the United States and Iran.

Brent crude futures, the primary benchmark for global prices, jumped more than 7 percent in Asia on Monday as the outlook for peace between Washington and Tehran darkened.

Prices eased somewhat later in the morning, with the benchmark at $94.69 a barrel as of 02:05 GMT, up from just under $90.40 on Friday.

The latest price surge came after US President Donald Trump said US forces seized an Iranian-flagged cargo vessel that had attempted to evade the US blockade of Iran’s ports.

Trump’s announcement followed reports by the United Kingdom Maritime Trade Operations (UKMTO) Centre over the weekend that two vessels came under attack while transiting the strait.

Iranian gunboats fired on a tanker, while an “unknown projectile” struck a container ship, according to the UKMTO.

After declaring the strait “completely open” on Friday, Tehran reversed course less than 24 hours later, citing the ongoing US blockade.

Earlier on Sunday, Trump said that a US delegation would travel to Pakistan on Monday to hold a second round of ceasefire talks with Iranian officials.

Iranian state news outlet IRNA later reported that Tehran would not participate in the talks, citing the US blockade and Washington’s “excessive demands” and “unrealistic expectations”.

A two-week ceasefire between Washington and Tehran is set to expire on Wednesday if the sides cannot agree on an extension.

An initial round of talks held in Islamabad earlier this month broke down without any agreement between the sides.

Iran’s effective closure of the strait, which usually carries about one-fifth of global oil and natural gas supplies, has driven a surge in fuel prices worldwide, forcing governments to tap emergency supplies and roll out energy-saving measures.

Nineteen vessels crossed the strait on Saturday, up from 10 the previous day, but far below the historical average of 138 daily transits, according to the UKMTO.

Asia’s main stock markets opened higher on Monday despite the dimming prospects of de-escalation.

Japan’s Nikkei 225 rose more than 1 percent in morning trading, while South Korea’s KOSPI gained about 1.3 percent.

Hong Kong’s Hang Seng Index rose about 0.5 percent, while the SSE Composite Index in Shanghai gained more than 0.4 percent.

Donald Trump has indicated that the conflict with Iran could conclude “soon,” citing progress in negotiations and a possible meeting between the two sides in the coming days. A temporary ceasefire between Israel and Lebanon has added to cautious optimism, though the broader regional situation remains unstable. The war, which began with U.S.-Israeli military action, has had sweeping geopolitical and economic consequences.

Ceasefire in Lebanon:
A 10-day truce between Israel and Lebanon has come into effect, offering a brief pause in cross-border hostilities. However, early reports of violations underline the fragility of the arrangement. Hezbollah, aligned with Iran, has been urged by Washington to maintain restraint during this critical window.

Diplomatic Breakthrough Efforts:
Backchannel diplomacy, with Pakistan playing a mediating role, has reportedly led to progress on key issues. Talks are expected to produce an initial memorandum of understanding, potentially followed by a comprehensive agreement within weeks. Engagement between U.S. and Iranian officials is likely to intensify in the immediate term.

Global Economic Shock:
The conflict has disrupted global energy flows, particularly through the Strait of Hormuz, through which a significant share of the world’s oil supply passes. This has triggered sharp oil price fluctuations and raised concerns about a broader economic slowdown, even as markets show signs of stabilizing on hopes of a resolution.

Nuclear Issue as Core Dispute:
Iran’s nuclear program remains the central obstacle in negotiations. Washington is pushing for long-term restrictions, while Tehran seeks shorter commitments and the lifting of sanctions. Bridging this gap will be critical to securing a durable settlement.

Political Pressures and Regional Stakes:
The war has created domestic political challenges for Trump, particularly ahead of upcoming elections. At the same time, regional actors are closely watching the outcome, as any agreement will shape the balance of power and security dynamics across the Middle East.

Analysis:
Momentum toward a deal is clearly building, but the situation remains precarious. The ceasefire in Lebanon and progress in diplomacy suggest a window of opportunity, yet unresolved issues, especially around nuclear limits and sanctions relief, could still derail negotiations. Trump’s urgency reflects both strategic calculation and domestic political pressure, while Iran appears willing to engage but not at any cost. If a preliminary agreement is reached, it would mark a significant de-escalation, but sustaining peace will require careful management of deep-rooted tensions and competing interests on all sides.

With information from Reuters.

KeyCorp plans to repurchase at least $1.3 billion in shares in 2026, raised from prior guidance of $1.2 billion, and indicated that Basel III revisions could add over 100 basis points to CET1, potentially enabling even more buybacks if market conditions allow.