war

The world today is no longer witnessing isolated geopolitical crises. From Ukraine and West Asia to Taiwan and the Indo-Pacific, almost every major flashpoint bears the imprint of an expanding strategic contest between the United States and China. The emerging order increasingly resembles a “Cold War 2.0” — though very different in structure, methods and consequences from the US-Soviet rivalry of the 20th century.

Unlike the earlier Cold War1.0, the present contest is not defined by ideological blocs alone. The US and China remain deeply intertwined economically, technologically and financially even as they posture against each other militarily, diplomatically and strategically. It is therefore a paradoxical competition: adversarial coexistence under conditions of mutual dependence.

The forthcoming summit between US President Donald Trump and Chinese President Xi Jinping in Beijing assumes significance far beyond bilateral optics. It is not merely about tariffs or trade balances. It is about whether the world’s two largest powers can manage competition without pushing the international system into prolonged instability.

Cold War 2.0: Similarities and Differences

There are unmistakable similarities between the old Cold War and the current strategic rivalry. Technology races, military posturing, proxy theatres, sanctions, espionage, supply-chain wars and ideological narratives are again shaping global politics. Taiwan today resembles what Berlin once symbolised during the original Cold War — a potential trigger point with global implications.

Yet the differences are even more important.

The US and Soviet Union operated largely in separate economic ecosystems. In contrast, America and China remain deeply integrated through trade, manufacturing, investment flows and technological supply chains. As a result, Cold War 2.0 is less about total decoupling and more about selective disengagement, strategic denial, and competitive coexistence. China’s rise has also changed the nature of power transition; unlike the Soviet Union, China is economically embedded within the global capitalist system while simultaneously challenging Western strategic dominance. Beijing does not seek immediate overthrow of the international order; rather, it seeks gradual restructuring of global institutions and norms to reflect Chinese power and preferences.

Because of this interdependence, direct conflict is expensive for both parties. As a result, selective disengagement, strategic denial, and competitive coexistence are more important in Cold War 2.0 than total decoupling.

The nature of power transitions has also changed as a result of China’s growth. China, in contrast to the Soviet Union, both challenges Western geopolitical dominance and is economically integrated into the global capitalist system. Beijing aims to gradually restructure international institutions and norms to reflect Chinese strength and preferences rather than topple the current international order.

Trump’s Return: Strategic Pressure with Transactional Flexibility

President Trump’s return has introduced a more personalised and transactional dimension to US-China relations. His approach combines aggressive economic nationalism with pragmatic deal-making. Trump views geopolitics substantially through the prism of economic leverage, tariffs, industrial revival and negotiated advantage.

During his earlier tenure, Trump launched the trade war against China, challenged Chinese technological expansion and questioned assumptions of unlimited globalisation. In his second term his tariff rhetoric and coercive stance seems tampering down by Beijing’s stiff retaliation and domestic vows through courts; hence appears focused on “managed competition” rather than ideological confrontation.

Current indications suggest that Trump seeks three broad objectives from Beijing:

• Reduction of trade imbalances and greater market access for American companies.
• Chinese restraint regarding Iran, fentanyl precursors and strategic technology transfers.
• Taiwan and Indo-Pacific tensions should be relatively stable to prevent unchecked escalation. At the same time, Trump appears willing to negotiate tactical understandings with Beijing if they produce visible economic or political gains domestically.

This reflects an important distinction between traditional American strategic establishments and Trump’s worldview. Washington’s institutional security establishment and deep state often sees China as a long-term systemic challenger. Trump, however, also sees Beijing through the lens of bargaining opportunity. This creates unpredictability both for allies and adversaries.

Xi Jinping’s China: Strategic Patience and Controlled Assertiveness

If Trump represents transactional nationalism, Xi Jinping represents centralised strategic continuity with greater diplomatic maturity.

Beijing’s military modernisation, naval expansion, technological aspirations, and Belt and Road outreach reflect a long-term strategy aimed at reducing dependence on the West while enhancing China’s centrality in global affairs. Under Xi’s leadership, China has evolved from a cautious economic power into an increasingly assertive geopolitical actor. Beijing’s long-term objective to lessen reliance on the West and increase China’s influence in world affairs is reflected in its military modernisation, navy expansion, technological aspirations, and Belt and Road outreach.

Xi’s leadership style is marked by centralised authority, ideological discipline and strategic patience. Unlike the short electoral cycles of Western democracies, China’s leadership can pursue long-duration geopolitical objectives with consistency.

Beijing today appears more confident than during Trump’s first presidency. Despite economic headwinds, demographic pressures and property-sector challenges, China has strengthened domestic technological capabilities and diversified export networks.

China’s approach to global dominance differs fundamentally from America’s traditional model.

The United States historically exercised leadership through alliances, military presence, financial systems and institutional influence. Its dominance relied substantially on coalition-building and normative legitimacy, an approach, which seems to be eroding under President Trump, America First/America only agenda.

China’s model is more infrastructure-centric, economically transactional and state-driven. Beijing prefers influence through trade dependency, technology ecosystems, strategic investments and manufacturing centrality. It avoids formal alliances but expands leverage through economic penetration and calibrated coercion.

In essence, Washington exports political influence backed by military power to dislodge all potential competitors; Beijing exports economic dependency backed by state capacity aims at not dislodging potential markets to include U.S., EU and India.

The Taiwan Factor and Indo-Pacific Competition

No issue captures Cold War 2.0 more sharply than Taiwan.

For China, Taiwan remains a core sovereignty issue tied to national rejuvenation. For the United States, Taiwan represents strategic credibility, Island chain dominance in the Indo-Pacific and the larger balance of power against China.

Neither side currently appears to seek direct military confrontation. Yet both are steadily preparing for prolonged strategic competition around Taiwan. China continues military signalling and grey-zone pressure, while the US strengthens Indo-Pacific partnerships and defence arrangements.

Trump’s Beijing visit is therefore expected to prioritise “stability management” rather than dispute resolution. Beijing seeks assurances against perceived American encouragement of Taiwanese independence and military capacity building, while Washington seeks deterrence against coercive reunification efforts.

With recent claims of President Trump on Greenland, Canada, and Panama and actions in Venezuela, he doesn’t have any moral leverage to lecture China on Taiwan, because his security concerns over these areas are woefully short of Chinese security concerns of Island chains. Thus the reality of Cold War 2.0 is more of escalation management more than genuine reconciliation, as competition remains.

The Real Issue: Supply Chains and Technology Agendas

Artificial intelligence, semiconductors, rare earths, cyber systems, quantum technologies and critical supply chains have become strategic weapons. Economic security is increasingly inseparable from national security.

America still leads in advanced innovation ecosystems, financial influence and military alliances. China dominates large parts of manufacturing, industrial supply chains and infrastructure scalability.

The contest is therefore asymmetric. Washington seeks to slow China’s technological ascent through export controls and alliance-based restrictions. Beijing seeks self-reliance through indigenous innovation and strategic diversification.

Simultaneously, both nations are competing to shape global narratives.

The US projects democratic resilience and rules-based order. China projects efficiency, development delivery and non-interference. Many countries in the Global South increasingly engage both sides pragmatically rather than ideologically.

US-Israel War on Iran: Uneasy Calm Amid Strategic Contestation

China and the United States both need  regional stability in Middle East to avoid economic shockwaves and disruption of global energy flows, but their strategic intentions are quite apart. Trump led America’s action plan, duly influenced by Israeli lobby includes military action, coercive deterrence, and the retaining American strategic dominance in West Asia, especially Petro-dollar domination. China, on the other hand, is attempting calibrated balance, openly supporting de-escalation while covertly defending its long-term geopolitical, economic, and energy links with Tehran.

Beijing will refrain from any overt alignment that could lead to direct conflict with Washington, but it is unlikely to desert Iran. China seems confident that it can endure supply chain crisis in Strait of Hormuz longer than Trump and Iran. In any case a over-engaged US with depleted reserves works towards Chinese strategic advantage.

The larger strategic picture shows for Beijing, the crisis offers an opportunity to project itself as a responsible stabilising power while gradually expanding influence through economic leverage and diplomatic positioning; as a result, the likely outcome is not cooperation in the classical sense, but competitive crisis management—limited convergence to avoid uncontrolled escalation, while China advances through strategic patience, economic penetration, and calibrated diplomacy. Demonstrating credibility and deterrence to adversaries, such as China, is another goal for Washington in the Iran theatre.

Thus, Iran becomes yet another arena in which China gains through strategic patience, economic penetration, and calibrated diplomacy, while the US primarily depends on military power and a weakening alliance structures.

Likely Outcomes of the Trump–Xi Engagement: Competitive Coexistence, Not Resolution

Expectations from the Trump–Xi engagement must remain realistic and free from rhetorical overstatement. The structural contradictions driving US–China rivalry — Taiwan, technological dominance, supply chain control, military competition, sanctions regimes and competing visions of global order — are too deep to be resolved through summit diplomacy alone. At best, both sides may seek temporary stabilisation of tensions to avoid simultaneous economic disruption and strategic overstretch. Therefore, the likely outcome is not reconciliation, but managed confrontation under conditions of deep interdependence.

Trump’s pressure tactics may slow certain aspects of China’s technological rise and compel tactical adjustments, but they are unlikely to reverse Beijing’s long-term strategic trajectory or ambition for greater influence in global governance structures.

Equally, China is not positioned to replace the United States as a singular global hegemon, as yet. Internal economic pressures, demographic decline, debt vulnerabilities, trust deficits and the absence of robust alliance structures remain important constraints on Chinese power projection.

Consequently, the more plausible scenario is a prolonged strategic contest marked by partial economic bifurcation in critical technologies, competing digital and AI ecosystems, intensified military signalling in the Indo-Pacific, and expanded geopolitical competition across the Global South through infrastructure financing, trade dependency, arms transfers and narrative warfare.

Emerging World Order: What should remaining World Do?

Cold War 2.0 will not produce a neat bipolar world nor purely multipolar. Unlike the 20th century, today’s international system is multipolar, economically interconnected and technologically diffused. Middle powers such as India, regional blocs and strategic swing states will play increasingly important roles in shaping outcomes through strategic balancing avoiding bloc politics. The aim remains to avoid collateral damage in a competition, which neither U.S. nor China can decisively win in the foreseeable future.

The prudent course lies in strategic autonomy backed by economic resilience, technological self-reliance, diversified partnerships and flexible diplomacy. Nations will increasingly pursue sector-specific alignments while resisting pressure to become instruments of either camp’s maximalist strategic narratives.

In this evolving landscape, Trump’s coercive unilateralism and “America First” orientation may paradoxically accelerate the very multipolarity Washington seeks to resist. Many nations, including close American partners, increasingly seek strategic hedging against unpredictability in US policy, even while remaining cautious of China’s expanding influence and coercive economic practices

Cold War 2.0 is unlikely to end through a dramatic collapse or military victory. It will instead remain a long geopolitical test of endurance, adaptability, economic resilience and strategic patience in an era of competitive coexistence, issue based cooperation and crisis management below the threshold of military confrontation.

Trump’s leadership may make the contest louder, sharper and more transactional, while Xi’s China may continue pursuing calibrated expansion with long-term strategic discipline. Yet the underlying structural reality remains unchanged: the US–China rivalry is here to stay, and the rest of the world must learn to navigate carefully between pressure and prudence, rhetoric and reality, competition and coexistence.

Iran’s First Vice President Mohammad Reza Aref said Tehran’s ‘right’ to the Strait of Hormuz is ‘established and the matter is closed’, state media reports.

BEIJING — President Trump arrived in Beijing on Wednesday for his hotly anticipated talks with Chinese President Xi Jinping on the Iran war, trade and U.S. arms sales to Taiwan.

The meat of the summit doesn’t start until Thursday, when the leaders hold bilateral talks, visit the Temple of Heaven, where Chinese emperors once prayed for bumper crops, and take part in a formal banquet. But the Chinese offered Trump a pomp-filled welcome, literally rolling out the red carpet for him after Air Force One landed in the Chinese capital.

The president was greeted by Chinese Vice President Han Zheng; Xie Feng, China’s ambassador to Washington; Ma Zhaoxu, executive vice minister of foreign affairs; and the U.S. envoy to Beijing, David Perdue.

The welcoming ceremony included a military honor guard, a military band and some 300 Chinese youths waving Chinese and American flags and chanting, “Welcome, welcome! Warm welcome!” as Trump made his way to his waiting limousine. The youth greeters were decked out in white and robin’s egg blue outfits that matched the paint job of the iconic presidential plane.

President Trump walks with China’s Vice President Han Zheng during an arrival ceremony Wednesday at Beijing Capital International Airport, as Eric and Lara Trump, Elon Musk, Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and U.S. Trade Representative Jamieson Greer follow.

(Mark Schiefelbein / Associated Press)

“We’re the two superpowers,” Trump told reporters as he departed the White House on Tuesday for the long flight to Beijing. “We’re the strongest nation on Earth in terms of military. China’s considered second.”

While Trump likes to project a sense of strength, the visit occurs at a delicate moment for his presidency as his popularity at home has been weighed down by the U.S. and Israel’s war with Iran and rising inflation as a consequence of that conflict. The Republican president is seeking a win by signing deals with China to buy more American soybeans, beef and aircraft, saying he’ll be talking with Xi about trade “more than anything else.”

The Trump administration hopes to begin establishing a Board of Trade with China to address differences between the countries. The board could help prevent the trade war ignited last year after Trump’s tariff hikes, an action China countered through its control of rare earth minerals. That led to a one-year truce last October.

But Trump is visiting Beijing when Iran continues to dominate his domestic agenda. The war has led to the effective closure of the Strait of Hormuz, stranding oil and natural gas tankers and causing energy prices to spike to levels that could sabotage global economic growth. The U.S. president declared that Xi didn’t need to assist in resolving the conflict, even though Iran’s Foreign Minister Abbas Araghchi was in Beijing last week.

Fellow rescuers carry the coffins of two members of the civil defense who were reportedly killed in Israeli airstrikes in Nabatieh the previous day, during their funeral in the southern city of Sidon on May 13, 2026. Israel hammered south Lebanon with strikes on May 12 ahead of talks between the two countries in Washington, as Beirut reported 380 people killed in Israeli attacks since an April 17 ceasefire took effect.

(Mahmoud Zayyat/AFP via Getty Images)

“We have a lot of things to discuss. I wouldn’t say Iran is one of them, to be honest with you, because we have Iran very much under control,” Trump told reporters Tuesday.

Taiwan high on the agenda

The status of Taiwan also will be a major topic as China is displeased with U.S. plans to sell weapons to the self-governing island, which the Chinese government claims as part of its own territory.

Trump told reporters on Monday that he would be discussing with Xi an $11 billion weapons package for Taiwan that the U.S. administration authorized in December but has not yet begun fulfilling. The arms package is the largest ever approved for Taiwan.

But Trump has demonstrated greater ambivalence toward Taiwan, an approach that’s raising questions about whether the U.S. leader could be open to dialing back support for the island democracy.

The Taiwanese flag at Democracy Boulevard is lowered at the end of the day as the Chiang Kai-shek Memorial Hall is seen in the background in Taipei on May 13, 2026.

(I-Hwa Cheng/AFP via Getty Images)

At the same time, Taiwan — as the world’s leading chipmaker — has become essential for the development of artificial intelligence, with the U.S. importing more goods so far this year from Taiwan than China. Trump has sought to use Biden-era programs and his own deals to bring more chipmaking to America.

The Chinese Communist Party’s news outlet, People’s Daily, published a strongly worded editorial ahead of Trump’s arrival underscoring that Taiwan is “the first red line that cannot be crossed in China-U.S. relations” and is “the biggest point of risk” between the two nations.

Trump was already portraying the trip as a success before he even left White House grounds. He openly mused about Xi’s planned reciprocal visit to the U.S. later this year, lamenting that the White House ballroom under construction would not be completed in time to properly fete the Chinese leader.

“We’re going to have a great relationship for many, many decades to come,” Trump said of the U.S. and China.

Counter snipers and other security forces watch over Air Force One while refueling at Joint Base Elmendorf during a trip with US President Donald J. Trump in Anchorage, Alaska, on May 12, 2026. Donald Trump was due in Beijing on May 13, 2026 on the first visit to China by a US president in nearly a decade, as he seeks to ramp up trade despite potential friction over Taiwan and Iran.

(Brendan Smialowski/AFP via Getty Images)

Trump embarked on Air Force One for the big meeting with a coterie of aides, family members and business world titans, including Nvidia’s Jensen Huang and Tesla and SpaceX’s Elon Musk. While en route to Beijing, he posted on social media that his “first request” to Xi during the visit will be to ask the Chinese leader to bolster the presence of U.S. firms in China.

“I will be asking President Xi, a Leader of extraordinary distinction, to ‘open up’ China so that these brilliant people can work their magic, and help bring the People’s Republic to an even higher level!” Trump wrote.

Tajikistan’s President Emomali Rahmon and China’s President Xi Jinping attend a welcoming ceremony at the Great Hall of the People on Tuesday, in Beijing.

(Maxim Shemetov—Pool / Getty Images)

Despite Trump’s outward confidence, China appears to be entering the meeting from “a much stronger place,” said Scott Kennedy, a senior adviser on Chinese business and economics at the Center for Strategic and International Studies, a Washington think tank.

China would like to reduce tech restrictions on accessing computer chips and find ways to reduce tariffs, among other goals.

“But even if they don’t get much on any of those things, as long as there’s not a blow-up in the meeting and President Trump doesn’t go away and look to re-escalate, China basically comes out stronger,” Kennedy said.

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met on Wednesday to discuss economic and trade issues at Incheon International Airport, just west of the South Korean capital of Seoul, according to the Chinese state run Xinhua News Agency.

Bystanders are kept back by police tape as they film the motorcade of President Donald Trump as he arrives at the Four Seasons Hotel on Wednesday in Beijing.

(Kevin Frayer / Getty Images)

Trump wants 3-way nuclear arms deal

Trump also intends to raise the idea of the U.S., China and Russia signing a pact that would set limits on the nuclear weapons each nation keeps in its arsenal, according to a senior Trump administration official who briefed reporters ahead of the trip. The official spoke on the condition of anonymity under ground rules set by the White House.

China has previously been cool to entering such a pact. Beijing’s arsenal, according to Pentagon estimates, exceeds more than 600 operational nuclear warheads and is far from parity with the U.S. and Russia, which each are estimated to have more than 5,000 nuclear warheads.

The last nuclear arms pact, known as the New START treaty, between Russia and the United States expired in February, removing any caps on the two largest atomic arsenals for the first time in more than a half-century. As the treaty was set to expire, Trump rejected a call by Russia to extend the two-country deal for another year and called for “a new, improved, and modernized” deal that includes China.

The Pentagon estimates China will have more than 1,000 operational nuclear warheads by 2030.

Madhani, Weissert and Boak write for the Associated Press. Boak reported from Washington. AP writers Darlene Superville in Washington, Huizhong Wu in Bangkok, Hyung-jin Kim in Seoul, South Korea, and Kanis Leung in Hong Kong contributed to this report.

BEIJING — The Trump administration has repeatedly framed the war in Iran as a quick, winnable fight, vowing to defeat the Islamic Republic “totally and decisively” — incomparable to the “dumb” wars in Iraq and Afghanistan.

But from China’s perspective, the parallels are clear.

“You can blow everything up — destroy it all,” one Chinese official told The Times, describing the Americans, “but you don’t have a strategy.”

President Trump arrives in Beijing this week for talks with a Chinese government that is confident as ever in its ascendance on the world stage, taking stock of its leverage and still baffled the U.S. administration chose yet another costly war in the Middle East.

China has watched as the United States, over seven weeks of fighting an outmatched enemy, has depleted nearly half of its stockpiles of high-end munitions — including its THAAD and Patriot batteries — and fired its Army chief of staff, among other Pentagon leaders, who had warned of critical shortages.

Marco Rubio, Trump’s national security advisor and secretary of State, has said the military operation that started the war known as Operation Epic Fury “is over.”

But the Strait of Hormuz, one of the world’s most vital commercial waterways, remains effectively shuttered. Iranian attacks in the region continue. And talks between Washington and Tehran have failed to reach a diplomatic agreement to bring a definitive end to the conflict.

“The Chinese have high regard for the operational proficiency of U.S. forces, but they recognize that, thus far at least, the Trump administration has not achieved its core objectives in going to war with Iran,” said David Ochmanek, a former deputy assistant secretary of Defense now with the Rand Corp.

The war has given Beijing an opportunity, Ochmanek said, “to double down on the claim they have made for the past year and a half that the [People’s Republic of China], not the U.S., is a force for global stability.”

The war has allowed China to demonstrate some diplomatic prowess. An initial ceasefire reached between the United States and Iran last month was only clinched after Beijing pressured Tehran to agree. And China’s advocacy for an open strait — rejecting Iranian attempts to impose a toll system — while opposing the U.S. war itself has allowed Beijing to maintain leverage with both sides.

It has also inflicted costs. Allies of Beijing noticed when the government did not leap to the defense of Tehran at the start of the war. And China has its own vested interest in a free and open waterway, where nearly 50% of the country’s crude oil imports pass through each day.

Building up to the start of the war and throughout its initial weeks, Washington diverted significant military assets from Asia — where Trump’s own national security strategy says they are needed most — to the Middle East.

The USS Abraham Lincoln was redirected from the South China Sea, along with scores of advanced missile interceptors from South Korea and Japan and nearly the entire U.S. inventory of long-range air-to-surface missiles in the Pacific.

Policy experts at the Pentagon were brought in to discuss a potential invasion of Kharg Island, the jewel of Iran’s oil industry, to draw lessons from planning a defense of Taiwan, according to a Defense official, who was granted anonymity to speak candidly. A Marine expeditionary unit was sent from Okinawa to the region for the potential operation.

Chinese officials and analysts have been candid in their assessments of U.S. hard power, impressed by a military they acknowledge remains the best in the world.

But Beijing sees a persistent flaw in U.S. strategy: the belief that military strength alone can reshape political realities, a view further weakened by the pressures on a democratic government whose public grows impatient with wars that drag on beyond days or weeks.

China’s autocracy is free from accountability to the public — and anyway has confidence that Chinese public opinion would be on its side if it were to launch a major military operation against its main target, Taiwan.

But there are lessons of caution to be learned from the Americans, as well.

Over the last year, the Taiwanese Navy has been practicing the rapid deployment of cheap and domestically produced smart mines for the sea — a potential bulwark against enemy blockades of ports and hostile invasion forces.

It is the type of asymmetric warfare that has so far frustrated the U.S. military in the Strait of Hormuz, protracting a war that Trump vowed would last a month or less.

Taiwan, too, would confront Beijing with political realities that military force cannot erase. Nearly 90% of the Taiwanese people oppose a Chinese takeover, and about 60% say they would resist it at all costs.

“Chinese analysts see two things at once,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “They are impressed by U.S. military reach, precision and operational capability, but they also see a familiar pattern of American power struggling to translate battlefield success into a durable political outcome.”

That matters for Taiwan, Singleton said, “because China’s own military modernization has borrowed heavily from the American model, relying heavily on joint operations, high-tech precision strikes, decapitation concepts and information dominance.

“If the world’s most experienced military can still struggle to convert military pressure into political success,” he added, “Beijing has to ask whether the [People’s Liberation Army] could do better in a far more complex Taiwan scenario.”

BEIJING — President Trump’s first visit to China in nine years is a high-stakes trip reflecting the rivalry and mutual dependence of two superpowers hoping to avoid a collision course — even if Trump cast it more as a meeting between close friends and business partners.

Speaking to reporters before departing Washington on Tuesday, Trump downplayed tensions between the two countries, including on trade, calling Chinese President Xi Jinping a “wonderful guy” and a friend and saying the working relationship between the two countries is “very good.”

Trump acknowledged China’s might — saying that the Asian nation and the United States are clearly the world’s two superpowers — and that the focus of the meeting “more than anything else will be trade.”

“We’re gonna have a great relationship for many, many decades to come,” Trump said. “My relationship with President Xi is a fantastic one. We’ve always gotten along, and we’re doing very well with China, and working with China’s been very good — so we look forward to it.”

Trump also downplayed the importance of the meeting for the war in Iran. He said Xi might be able to help the United States reach a deal to end the war, but that he doesn’t need it, “because we have Iran very much under control.”

The state visit marks the first by an American president to China since Trump’s trip here in 2017, only months into his first term. President Biden never came, becoming the first to not do so since diplomatic ties were normalized, an absence that underscored simmering distrust and animosity between Washington and Beijing that has only worsened since.

• Share via Close extra sharing options

In the capital, security forces sealed off an area around the Temple of Heaven roughly the size of 400 football fields ahead of the U.S. president’s visit, anticipating a stop at the monument to imperial China and Confucian thought.

On his previous trip, Trump received the rare honor of a state banquet inside the Forbidden City. This time he is expected to dine at the Great Hall of the People, an imposing structure off Tiananmen Square that hosts high-level gatherings of the Chinese Communist Party.

Trump’s positive spin on Tuesday aside, his agenda for meetings beginning Thursday with Xi highlights the vast array of American interests that depend on — and often clash with — Beijing’s policies.

After launching a trade war against China at the beginning of his second term, Trump now comes hat in hand requesting an extension of a tariff truce, fearful Xi might follow through on his threats to halt the export of rare earth minerals to the United States that are vital to the manufacturing of American goods, including everyday consumer equipment and advanced defense technologies.

His visit comes as a ceasefire in the war with Iran, brokered with help from Beijing, is on “massive life support,” according to the president. Trump is expected to appeal to Xi for assistance in getting Tehran to restore free and open passage through the Strait of Hormuz.

And in a dramatic reversal, the Trump administration has begun discussions with the Chinese about establishing a channel of communication on artificial intelligence, alarmed that recent technological leaps could pose global risks.

All of these requests are expected to come at a cost.

President Trump departs the White House on May 12, 2026, for his second state visit to China.

(Kevin Dietsch / Getty Images)

In earlier remarks before the trip, Trump said he expected U.S. arms sale to Taiwan — including one already approved by Congress — to become a chip in the negotiations.

“I’m going to have that discussion with President Xi,” Trump said. “President Xi would like us not to, and I’ll have that discussion. That’s one of the many things I’ll be talking about.”

The notion that U.S. support for Taiwan is a negotiable matter is sure to rattle America’s allies throughout the region, from Japan to the Philippines, which are reliant on U.S. security guarantees amid China’s Indo-Pacific military aggression.

Despite geopolitical tensions, both sides are expected to announce business and investment agreements, underscoring how deeply intertwined the world’s two largest economies remain.

China plans on making a significant purchase of Boeing aircraft, and the president has brought 17 American corporate leaders with him on the trip to discuss additional opportunities, including Apple’s Tim Cook, BlackRock’s Larry Fink, Meta’s Dina Powell McCormick and Tesla’s Elon Musk.

The two leaders are expected to have other opportunities to talk in person throughout the coming year, including potential meetings at the Group of 20 summit in Florida, the APEC summit in Shenzhen, China, and a state visit in Washington that Trump said he will host for Xi at some point in the coming months.

Trump on Tuesday said Xi’s visit will be “toward the end of the year” and “exciting.” He also lamented that the ballroom he is building on the White House grounds — on the site of the historic East Wing he demolished — won’t be ready in time.

Jennifer Hong, senior director at the Institute for Indo-Pacific Security, said her concern is that the state visit becomes part of a “tyranny of calendaring,” where the Chinese agree to schedule more high-level meetings sought by Trump that put off vital U.S. decision-making.

“I do think this trip is necessary for the U.S. government — I think that there are things that are on hold because he doesn’t want to rock the boat,” Hong said, noting the Trump administration’s delay in arms sales to Taiwan, despite the packages already having received congressional approval.

“I’m just worried this will be a stringing along of promises, or maybe some reprieve for a year or so,” she added, “as we continue to handicap ourselves on national security matters for the sake of more meetings.”

Trump on Tuesday repeatedly dismissed China’s potential help in resolving the war in Iran, which has driven up prices domestically and around the world as oil shipments through the strategic Strait of Hormuz have been badly disrupted and U.S. efforts to fully reopen the channel have so far been unsuccessful.

“I don’t think we need any help with Iran, to be honest with you,” Trump said. “They’re defeated militarily.”

Trump also said the financial pain many Americans are feeling from the war, including at the gas pump, simply isn’t a factor — “not even a little bit,” he said — in his ongoing negotiations with Iran.

“The only thing that matters when I’m talking about Iran [is that] they can’t have a nuclear weapon,” he said. “I don’t think about Americans’ financial situation. I don’t think about anybody.”

US president lauds Islamabad, but his Republican ally says he does not trust Pakistan to facilitate Iran diplomacy.

Donald Trump has reasserted his support for Pakistan to serve as a mediator between Iran and the United States after Senator Lindsey Graham, a close ally of the US president, disparaged Islamabad’s diplomacy.

In remarks on Tuesday, the US president lauded Pakistan’s Prime Minister Shehbaz Sharif and its army chief Asim Munir, who helped negotiate a fragile ceasefire in Iran that came into effect last month.

Trump added he is not reconsidering Pakistan as a mediator.

“They’re great. I think the Pakistanis have been great. The field marshal and the prime minister of Pakistan have been absolutely great,” Trump told reporters.

Hours earlier, Graham had pressed Pentagon chief Pete Hegseth and top US general Dan Caine about a CBS News report claiming that Pakistan is allowing Iran to park military assets on its airfields, in order to shield them from potential US and Israeli attacks.

Both officials declined to comment on the veracity of the report, citing the sensitive nature of the talks between the US and Iran.

Asked by Graham whether it would be “consistent” for Pakistan to act as a fair mediator if the CBS report is confirmed, Hegseth said, “I wouldn’t want to get into the middle of these negotiations.”

The Republican senator quickly interrupted the defence secretary.

“I do. I want to get in the middle of those negotiations,” Graham said.

“I don’t trust Pakistan as far as I can throw them. If they actually have Iranian aircraft parked in Pakistan bases to protect Iranian military assets, that tells me maybe we should be looking for somebody else to mediate. No wonder this damn thing is going nowhere.”

The senator — an outspoken foreign policy hawk who has been calling for regime change in Iran — is seen as one of the most influential figures in Trump’s circle.

Graham has also been one of the most vocal supporters of the war with Iran, repeatedly cautioning Trump against agreeing to a deal that would include concessions to Tehran.

Weeks before the war broke out on February 28, Graham met the US president in Florida, where he handed Trump a hat that says, “Make Iran Great Again.”

Pakistan has been pushing to revive the stalled diplomacy between Iran and the US, following the April 8 ceasefire agreement.

On Sunday, Trump said Tehran’s latest proposal to end the war was “unacceptable”.

In late April, the US president announced he was sending his envoys to Pakistan to meet Iranian officials, but he called off the trip after Iran pushed the US to lift the naval blockade against its ports as a condition for resuming the talks.

WASHINGTON — Defense Secretary Pete Hegseth faced tough questions Tuesday from Republican and Democratic lawmakers about the Trump administration’s end game for the Iran war, the cost of the conflict and its impact on diminishing U.S. weapons stockpiles.

For his part, the Pentagon chief softened his tone from hearings before Congress nearly two weeks ago, notably avoiding the same pointed criticism of lawmakers in his opening remarks as he outlined the Trump administration’s efforts to ramp up production of weapons and other military capabilities.

Even so, Hegseth insisted that the military has plenty of missile defense systems and other munitions for the Iran war or future conflicts as both Republicans and Democrats hammered him with those concerns.

“I take issue with the characterization that munitions are depleted in a public forum,” Hegseth said. “That’s not true.”

The cost of the Iran war has risen to about $29 billion, the vast bulk of which — $24 billion — is related to replacing and repairing munitions but also includes operational costs to keep forces deployed, Pentagon comptroller Jay Hurst said. That’s up from $25 billion that he told lawmakers nearly two weeks ago.

The powerful House and Senate Appropriations subcommittees that oversee defense spending are holding back-to-back hearings to review the Trump administration’s 2027 military budget proposal, which calls for a historic allocation of $1.5 trillion. The discussions in the House quickly veered into the handling of a war that appears locked in a stalemate as higher fuel prices pose political problems for Republicans in the midterm congressional elections.

Hegseth and Caine face bipartisan pushback on munitions stockpiles

Rep. Rosa DeLauro, the ranking Democrat on the House Appropriations Committee, told Hegseth that the “question must be answered at the end of this crisis: What have we accomplished and at what cost?”

“This administration has not presented Congress with any kind of clear or coherent strategy week to week, day to day, hour to hour,” DeLauro said. “The rationale shifts, the objectives change. The end game is ill-defined when it is defined at all.”

California Republican Rep. Ken Calvert, the House subcommittee’s chair, also asked about the impact of the Iran war on military funding as well as the U.S. military’s weapons stockpiles.

“Questions persist about whether we are building the depth and reliance required for a high-end conflict,” Calvert said.

Minnesota Rep. Betty McCollum, the defense subcommittee’s ranking Democrat, pressed Hegseth on whether the military has a plan to draw down troops in the Middle East if Congress passes so-far-unsuccessful efforts to end the Iran war.

“We have a plan to escalate if necessary,” Hegseth said. “We have a plan to retrograde if necessary. We have a plan to shift assets.”

He said he would not reveal any next steps publicly. Noting repeated questions from lawmakers over the military’s weapons stockpiles, drawn down from the Iran war, Hegseth said the concerns have been “unhelpfully overstated” and that “we have plenty of what we need.”

He said the defense industry has been told to “build more and build faster,” blaming the military industrial base’s inadequate capacity on previous administrations and U.S. aid to Ukraine in its war with Russia.

Trump administration faces pressure from impact of the Iran war

President Trump is facing increasing pressure from the economic shocks of Iran effectively closing the Strait of Hormuz, a vital shipping corridor where 20% of the world’s oil normally flows. The U.S. military in turn has blockaded Iranian ports and the two sides have traded fire, with American forces thwarting attacks on their warships and disabling Tehran-linked oil tankers.

Trump said Monday that the ceasefire is on “massive life support” and criticized Iran for its latest proposal, pointing to his demands that Iran significantly limit its nuclear program.

“I would call it the weakest right now after reading that piece of garbage they sent us,” Trump said.

The Republican president also said he wanted to suspend the federal gas tax to help Americans shoulder surging fuel prices. He has previously said higher costs are worth it to prevent Iran from getting a nuclear weapon.

Tuesday’s hearings are giving a mostly new group of lawmakers the chance to grill or applaud Hegseth and Gen. Dan Caine, chair of the Joint Chiefs of Staff, on the planning and execution of the war.

The Senate hearing later Tuesday will include Sen. Susan Collins of Maine, a Republican whose reelection this year is far from guaranteed. She voted with Democrats on an effort to halt the conflict late last month, saying she wants to see a defined strategy for bringing the war to a close.

Alaska Sen. Lisa Murkowski, another Republican on the Senate Appropriations defense subcommittee, has voted against the string of unsuccessful war powers resolutions but spoken of the need for congressional authorization so Americans will know the war’s limits and objectives.

He also will face plenty of friendly Republicans, including the Senate subcommittee’s chair, Sen. Mitch McConnell of Kentucky, and perhaps the Iran war’s biggest booster in Congress, Sen. Lindsey Graham of South Carolina.

Finley, Toropin and Barrow write for the Associated Press. Barrow reported from Atlanta.

Philippines Senator Ronald Dela Rosa has taken refuge in the country’s parliament, as police sought to detain him on Monday in accordance with an ICC arrest warrant.

This is what we know of his role in former President Rodrigo Duterte’s drug war, which prosecutors say killed tens of thousands.

One killed and four others wounded in attacks on Ukraine’s Dnipropetrovsk region, local administration chief says.

Russia and Ukraine have resumed air attacks after a United States-brokered three-day truce expired, with President Volodymyr Zelenskyy saying more than 200 drones were used to attack Ukraine overnight.

Russian aerial attacks across Ukraine’s Dnipropetrovsk region on Tuesday morning killed at least one person and injured four others, according to regional administration chief Oleksandr Ganzha.

Russian drones also hit energy infrastructure in Ukraine’s Mykolaiv region, causing outages, and struck residential buildings and a kindergarten in the Kyiv region, according to local authorities. Russia also carried out attacks on the regions of Kharkiv, Zhytomyr, Sumy and Chernihiv, according to authorities.

More than 200 long-range drones were used in the wave of attacks, Zelenskyy said. “Russia itself chose to end the partial silence that had lasted for several days,” he said in a post on X.

Russia’s military, meanwhile, said its defences downed 27 Ukrainian drones over the regions of Belgorod, Voronezh and Rostov.

The exchange of aerial attacks came after the expiry of a 72-hour truce announced by US President Donald Trump on Friday, which he said he hoped would mark “the beginning of the end” of Russia’s four-year war on Ukraine.

The May 9-11 truce overlapped with Russia’s Victory Day, which celebrates the defeat of Nazi Germany in the second world war.

But even before it expired, both sides accused each other of violating the truce by attacking civilians.

Zelenskyy said Russia was neither observing the truce nor “even particularly trying to”, adding there had been no calm in front-line areas despite a lull in large-scale attacks.

Meanwhile, Russia’s Ministry of Defence accused Ukraine of committing more than 1,000 ceasefire violations. It said Ukrainian forces attacked civilian targets in several Russian regions and carried out strikes against Russian military positions on the front line.

Russia’s military had “responded in kind” to the ceasefire violations, according to the Defence Ministry.

US-backed negotiations on ending the Russia-Ukraine war have made little headway and have been largely sidelined by the crisis in the Middle East amid the US-Israel war on Iran. Trump’s ceasefire announcement had raised some hope that US-led talks to end Russia’s invasion could be resumed.

On Saturday, Russian President Vladimir Putin suggested for the first time that the Ukraine war may be “coming to an end” and expressed a willingness to meet Zelenskyy in Moscow or a neutral country once an agreement to end the war is finalised. He also accused the “arrogant” West of risking a global conflict, warning that Russia’s “strategic forces” are combat-ready.

Secret Handshake, the anonymous arts and activism group behind an ongoing series of satirical public sculptures — mostly about President Trump’s alleged ties to convicted sex trafficker Jeffrey Epstein — has channeled its black comedy into a new video game about the Iran war called “Operation Epic Furious: Strait to Hell.”

“The game features furious tweet battles against Iranian schoolgirls, low-flow shower heads and other threats to American freedom like DEI and the Pope. And just to save you time, the only way you can lose is by trying to hold Melania’s hand. But it’s the Middle East, so you also can’t win either,” Secret Handshake wrote in an email to The Times.

The group placed three old-school arcade-style games inside the Neoclassical DC War Memorial, which is located near the Reflecting Pool in Ash Woods and resembles a domed, open-air bandstand. The pivot from sculpture to video games was necessitated by current events, said a member of the group.

A plaque beside three video games placed in the DC War Memorial by the satirical arts and activism group Secret Handshake.

(Secret Handshake)

“We didn’t sit down and say, let’s make a video game. The video game was the answer because that’s what was happening to us. It was about watching the actions take place in Iran and some truly, truly horrible things, and how that was being spun into something cool and hip and edgy through the actual administration, through the use of video games,” the man said. “They were literally cutting in ‘Call of Duty’ and ‘Grand Theft Auto’ and others as well into these hype videos for the war, almost as if it was before a concert or a wrestling match.”

The game, which is also available to play online, begins with a shot of the White House. “Another big, beautiful day as the best President ever,” a caption reads. The game moves into the Oval Office where Trump sits at the Resolute Desk under the words, “Uh-oh another one of your executive orders was halted by the courts.” Players can then choose whether to order a Diet Coke or bomb Iran — if you choose to do the latter, Secretary of Defense Pete Hegseth enters the room and says, “Hey boss! Just saw on Truth Social you declared war on Iran. Hell yeah!”

“Some call it a war, I call it renovating my Middle East ballroom,” Trump says.

“My delts are ready, let’s liberate some oil,” Hegseth yells.

FBI Director Kash Patel is featured in the satirical video game made by Secret Handshake.

(Secret Handshake)

A representative for Secret Handshake says if you choose to order six Diet Cokes something special happens. I tried. You unlock an achievement and are told your health is perfect.

Secret Handshake has been erecting satirical Trump sculptures on the National Mall for more than a year, making headlines in September when the park service toppled one of its pieces, titled “Best Friends Forever,” featuring Trump and Epstein gleefully holding hands. The statue, bruised and battered by its fall, ultimately went back up.

Secret Handshake is meticulous about getting the necessary permits to display its protest art, which is why the pieces have lately remained in their designated spots for up to a week. The “Operation Epic Furious” video games are scheduled to stay up for at least the next few days, the rep said.

The goal is to get people to think, not to mock or glorify violence in any way, the Secret Handshake rep said.

The video game “Operation Epic Furious” by Secret Handshake begins with a choice: Order a Diet Coke or bomb Iran.

(Secret Handshake)

“There is no violence in the game,” the rep said. “The damage that is done is political damage and the weapons are things like gas prices and Catholic guilt.”

It’s also important to the group to be mindful of various political viewpoints.

“I would say that everything we’ve done, we’ve tried to do with respect to the other side and to not make it cruel,” the rep said. “And also we’ve done it with permission.”

Protest art, yes. But the kind that is, hopefully, built to last.

US Department of Energy moves to transfer 53.3 million barrels amid rising oil prices.

The United States has announced its latest release of emergency oil stockpiles in coordination with the International Energy Agency (IEA).

The US Department of Energy said on Monday that it had begun transferring 53.3 million barrels from the strategic petroleum reserve after awarding contracts to nine companies under its emergency exchange programme.

Trafigura Trading LLC, a Texas-based commodities trading company, was granted the biggest haul of nearly 13 million barrels, with Marathon Petroleum Corporation and ExxonMobil set to receive 12.4 million barrels and 11.4 million barrels, respectively.

Macquarie Commodities Trading US, Atlantic Trading & Marketing, BP Products North America, Energy Transfer Crude Marketing, Mercuria Energy America and Phillips 66 will receive between 1.05 million and 6.55 million barrels each, according to the Energy Department.

Under the department’s exchange scheme, participating firms are required to replenish the stockpile with new barrels at a later date.

“These actions continue to move oil swiftly into the market, address near-term supply needs, and ensure that the Strategic Petroleum Reserve remains strong through the return of premium barrels,” Kyle Haustveit, the head of the department’s Hydrocarbons and Geothermal Energy Office, said in a statement.

The transfer comes after US President Donald Trump’s administration agreed in March to release 172 million barrels of crude as part of the IEA’s coordination of the largest unloading of global stockpiles in history.

Oil prices have surged since the US and Israel launched their war on Iran in late February, with Tehran’s retaliatory blockade of the Strait of Hormuz paralysing one of the world’s most important trade routes.

Maritime traffic in the strait has ground to a halt amid Iranian threats against commercial shipping, disrupting about one-fifth of the global oil trade.

Oil prices continued to edge higher on Monday after Trump dismissed Iran’s latest peace proposal and warned that the ceasefire between the sides was “on life support”, dampening hopes for a quick resolution to the conflict.

Facing growing public discontent over rising fuel prices, Trump on Monday also pledged to waive the 18.4 cents-per-gallon federal tax on petrol, though taxation is the purview of the US Congress.

Futures for Brent crude, the international benchmark, were up about 1 percent in Asia on Tuesday morning, topping $105 a barrel.

Russian institutions and officials accused of systemic deportation and indoctrination of children during the war on Ukraine.

The European Union and United Kingdom have imposed sanctions on Russian institutions and officials accused of systematically deporting and indoctrinating Ukrainian children.

The EU announced measures against 23 state institutions and people on Monday. The UK simultaneously unveiled a broader package targeting 85 people and entities, roughly a third of them linked to what was described as Russia’s campaign to forcibly deport and militarise Ukrainian children.

Russia has deported and forcibly transferred nearly 20,500 Ukrainian children since Moscow launched its full-scale invasion in February 2022, an EU statement noted. It branded the actions as grave breaches of international law.

The EU said its designations target institutions and individuals involved in programmes subjecting children to pro-Russian indoctrination, including patriotic events, ideological education and military-oriented activities.

The sanctions, which include asset freezes and travel bans, were approved by the EU’s 27 nations in coordination with Canada and the UK, which announced similar measures.

“Stealing children is not incidental. It is a deliberate Russian policy, a calculated attack on Ukraine’s future,” the EU’s top diplomat, Kaja Kallas, told a news conference.

The UK sanctions announcement named the Centre for Military and Patriotic Training and Education of Youth, known as the warrior centre, a Russian state institution at which Ukrainian children are reportedly subjected to military training and pro-Kremlin ideology.

Also targeted was Yulia Sergeevna Velichko, the Moscow-installed minister for youth policy in the so-called Luhansk People’s Republic, for her role in implementing state-led initiatives.

UK Secretary of State for Foreign Affairs Yvette Cooper said the UK would continue working alongside allies to support every effort to identify and trace children who had been taken.

Russia does not deny taking the children but has said it has done so for their protection, moving them away from front-line areas, and claims it is willing to return them when relatives come forward and can be verified.

The International Criminal Court (ICC) issued an arrest warrant for Russian President Vladimir Putin in 2023 for the war crime of illegal deportation of children from Ukraine.

Responding to the announced sanctions, Ukrainian President Volodymyr Zelenskyy said: “These are the ones who ‘rewire’ the identity of Ukrainian children, help make them hate their homeland, and one day take up arms to fight against Ukraine.”

The UK’s broader sanctions package also took aim at Russian information warfare operations, with the remaining measures targeting individuals and entities linked to alleged Kremlin propaganda campaigns.

Among them were 49 people working for the Social Design Agency, a state-funded Russian organisation accused of running disinformation and interference operations, including attempts to establish pro-Russia organisations in Armenia and influence the outcome of upcoming elections.

Traditionally a strong Russian ally, the Caucasian country has recently been moving away from Moscow’s orbit.

Last week, the Armenian ambassador was summoned to protest what the Kremlin described as “terrorist threats against Russia” made by Zelenskyy in a speech delivered in Yerevan.

Iran’s parliamentary speaker Mohammad Bagher Ghalibaf says US has ‘no alternative but to accept’ Tehran’s 14-point proposal to end war.

Iran’s Foreign Ministry spokesperson Esmail Baghaei says Tehran’s response to the latest US proposal to end the war was “not excessive.” He says it’s the US that continues to make “unreasonable demands” during negotiations over ending the war and reopening the Strait of Hormuz.

Global currency markets remained broadly stable on Monday despite escalating geopolitical tensions linked to the ongoing conflict involving the United States and Iran. The limited movement in the US dollar came after President Donald Trump rejected Iran’s response to a United States peace proposal, reinforcing concerns that the conflict in the Middle East may persist for an extended period.

At the center of global financial attention is the interaction between geopolitical risk, energy prices, and monetary policy expectations. Rising oil prices, driven by uncertainty in the Strait of Hormuz and broader regional instability, continue to shape inflation expectations across major economies. However, currency markets have shown relative restraint, suggesting that investors are balancing immediate geopolitical risks against expectations of eventual diplomatic stabilization.

The US dollar index, which measures the currency against a basket of major global currencies, remained largely unchanged. At the same time, oil prices rose sharply, reflecting renewed concerns about supply disruptions and prolonged conflict conditions.

Geopolitical Risk and Market Equilibrium

Financial markets are currently operating in a state of tension between short term geopolitical shocks and longer term expectations of resolution. The stability of the US dollar suggests that investors are not fully pricing in a sustained breakdown in global energy flows, despite elevated uncertainty in the Middle East.

The oil market, by contrast, continues to respond rapidly to political developments. The rise in crude prices reflects concerns that prolonged instability could restrict supply routes and tighten global energy availability. This divergence between currency stability and commodity volatility highlights the uneven transmission of geopolitical risk across financial systems.

Market analysts note that expectations of diplomatic engagement between the United States and China remain a key stabilizing factor. Investors increasingly view high level diplomatic meetings as potential mechanisms for de escalation, particularly given the influence both countries exert over global energy and trade systems.

The Role of the United States and China in Market Sentiment

A major factor influencing market behavior is the anticipated summit between President Trump and Chinese President Xi Jinping. The meeting is expected to cover a wide range of strategic issues including energy security, artificial intelligence, nuclear policy, and regional conflicts.

Markets are closely monitoring this engagement because both the United States and China possess significant leverage over geopolitical and economic developments in the Middle East. China’s role as a major energy importer and diplomatic stakeholder in the region gives it potential influence over Iranian policy, while the United States remains the dominant military and financial actor in global markets.

This dual influence creates expectations that broader geopolitical tensions may eventually be moderated through strategic dialogue. As a result, investors are partially pricing in the possibility of containment rather than escalation, which helps explain the relative stability of major currencies.

Inflation Expectations and Central Bank Positioning

Energy price movements remain central to global inflation dynamics. Rising oil prices directly influence transportation costs, production expenses, and consumer prices, creating upward pressure on inflation across both advanced and emerging economies.

In the United States, recent economic data has reinforced expectations that the Federal Reserve will maintain a cautious monetary stance. Strong employment figures combined with persistent inflation risks have reduced expectations of near term interest rate cuts. This has contributed to support for the US dollar, as higher interest rate expectations typically attract capital inflows into dollar denominated assets.

The interaction between monetary policy and geopolitical risk is becoming increasingly complex. Central banks are now required to respond not only to domestic economic indicators but also to external shocks originating from energy markets and international conflicts.

In this environment, currency movements reflect not just economic fundamentals but also expectations regarding central bank behavior under conditions of sustained uncertainty.

Diverging Currency Movements and Global Economic Signals

While the US dollar remained stable, other major currencies exhibited modest weakness. The euro, yen, and British pound all recorded slight declines, reflecting broader caution in global markets.

The movement of the Chinese yuan, which briefly strengthened to its highest level in several years, adds another dimension to the global currency landscape. This reflects both domestic economic data and broader expectations regarding China’s role in global trade and energy markets.

China’s economic performance, particularly in exports and industrial activity, continues to be closely linked to global energy prices and supply chain dynamics. Strong export growth suggests resilience in external demand, even amid geopolitical uncertainty and rising production costs.

These currency movements collectively indicate that global markets are navigating a period of uneven economic signals, where regional conditions and geopolitical developments interact in complex ways.

The Interplay Between Markets and Political Uncertainty

One of the defining characteristics of the current financial environment is the speed at which geopolitical developments translate into market expectations. Currency traders and investors are increasingly sensitive to political signals, particularly those involving energy producing regions and major global powers.

However, despite heightened volatility in oil markets, the US dollar’s stability suggests that investors still view the global financial system as structurally resilient. Rather than anticipating systemic disruption, markets appear to be pricing in cyclical instability followed by eventual stabilization.

This reflects a broader pattern in which financial markets absorb geopolitical shocks through short term volatility without fully abandoning long term confidence in global economic integration.

Analysis

The stability of the US dollar amid escalating geopolitical tensions highlights a critical feature of contemporary global markets. While energy prices and regional conflicts generate significant short term volatility, currency markets remain anchored by expectations of monetary policy stability and eventual diplomatic resolution.

The current environment is characterized by three overlapping dynamics. First, geopolitical risk is elevated due to sustained conflict in the Middle East and uncertainty surrounding diplomatic negotiations. Second, energy markets are highly sensitive to supply disruptions, producing rapid price fluctuations. Third, central bank policy expectations continue to play a stabilizing role in currency valuation.

The anticipated meeting between the United States and China represents a key focal point for market sentiment, as investors look for signals of broader strategic coordination or de escalation. However, the underlying structural tensions in the global system remain unresolved.

Ultimately, the current stability of the dollar should not be interpreted as a sign of reduced risk, but rather as evidence that markets are temporarily balancing competing expectations of conflict, diplomacy, and monetary policy. In such an environment, volatility in commodities and geopolitical headlines may continue, even as major currencies appear relatively stable on the surface.

With information from Reuters.

Iranian foreign ministry spokesman Esmaeil Baqaei says Iran’s latest response to the US had asked for an end to the war, removal of the naval blockade, and release of assets.

The US had dismissed the Iranian response, Baqaei said, as it clings to its ‘unreasonable demands’.

Russian ⁠President Vladimir ⁠Putin has suggested that former German Chancellor Gerhard Schroeder could coordinate talks with the European Union to secure a ⁠peace deal in Ukraine – a proposal met with scepticism by EU officials.

European Council President Antonio Costa said recently he believed there was “potential” for ⁠the EU to negotiate with Russia and to discuss the future of Europe’s security architecture.

Asked on Saturday whom he would like to see restarting talks with Europe, Putin said he would “personally” prefer Schroeder, who led Germany from 1998 to 2005 and has remained close to the Kremlin leader since leaving office.

A day later, the Russian leader said the ⁠four-year-old war may be “coming to an end”, adding that he was ready to hold direct talks with his Ukrainian counterpart, Volodymyr Zelenskyy, in Moscow or a neutral country.

Speaking after Saturday’s celebrations for Victory Day, which marks Russia’s victory over Nazi Germany in 1945 at the end of World War II, Putin added he would be willing to meet Zelenskyy only once the terms of a peace agreement had already been settled.

Russia had announced a unilateral two-day ceasefire on May 8-9 to mark Victory Day, while Zelenskyy countered it with his own proposed pause in fighting starting earlier, on the night of May 5-6.

As part of a broader Washington-led push for ⁠peace, United States President Donald Trump on Friday announced a three-day pause in the conflict, but both sides have since accused the other of breaking it.

As US-backed peace talks between Kyiv and Moscow stall, here is a look at who Schroeder is and whether he could be a trustworthy mediator.

Who is Gerhard Schroeder?

The 82-year-old leader of the Social Democratic Party (SPD) served as Germany’s chancellor from 1998 to 2005, focusing his political goals on European integration, reducing unemployment, liberalising German citizenship laws, curbing nuclear power and rebuilding the economy.

Disagreements over the Iraq war caused a serious rift in German-US relations in 2003, when Germany sided with France and Russia in opposing military intervention in the country over claims that the then-Iraqi president, Saddam Hussein, was producing weapons of mass destruction.

After leaving office in 2005, Schroeder ⁠almost immediately took a job as chairman of a controversial German-Russian ⁠consortium building a gas pipeline under the Baltic Sea. He held key roles in Russian energy projects, including work on the Nord Stream gas pipelines and a seat on the board of Russian oil firm Rosneft, which he gave up in 2022.

While he quit that role, the former chancellor has remained close to Putin, standing apart from most Western leaders since Russia invaded Ukraine in 2022 and facing heavy ⁠criticism in Germany.

His failure to publicly condemn Russia’s invasion of Ukraine has cost him several privileges normally granted to former chancellors, including receiving a state-funded office, making him a controversial figure at home.

What is his relationship with Putin?

Schroeder referred to Putin as “a flawless democrat” in 2004, declaring himself “thoroughly convinced that the Russian president wants to transform Russia into a democracy and that he is doing so out of a deeply held conviction”.

The then-German chancellor had little to say about Russian attempts to influence the elections in Ukraine during those years or about the Kremlin’s attacks on press freedom. On the contrary, under his leadership, Germany deepened its economic ties with Russia, grew trade and increased its dependency on Russian oil and natural gas.

In his book Klare Woerter (Straight Talk), Schroeder spoke about his relationship with the Russian leader, who worked as a KGB spy in the then-East Germany in the 1980s and is fluent in German.

“The most important thing for a friendship is a common language,” Schroeder, who has two adopted children from Russia – Viktoria and Gregor – said. “It makes everything easier.”

Their friendship reportedly continued to blossom over the years. Schroeder criticised moves to impose sanctions and eject Russia from the Group of Eight and even backed a Kremlin argument comparing the annexation of Ukraine’s Crimea region with NATO’s intervention in Serbia’s Kosovo province in 1999, which he himself helped lead as the German chancellor.

How are the Russia-Ukraine negotiations going?

The US-backed talks have faltered over the latest Russian offensive to seize the remaining parts of Ukraine’s eastern Donetsk ⁠region, which Moscow has demanded Kyiv cede before it considers ending its war. Meanwhile, the two sides continue to carry out strikes against each other, with Ukraine making significant inroads in destroying Russian energy infrastructure in recent weeks.

On Sunday, Ukrainian officials said Russian attacks had killed at least three people, and that close to 150 combat engagements had occurred on the front lines in the previous 24 hours, despite the three-day pause in fighting.

“In other words, the Russian army is not observing any silence on the front and is not even particularly trying to,” Zelenskyy said in his evening address, adding that Ukrainian troops were responding and defending their positions.

On Sunday, Russia’s Ministry of Defence accused Ukraine of violating the pause, saying it had ‌downed 57 Ukrainian drones over the past day and “responded in kind” on the battlefield.

Control of the Russian-occupied Zaporizhzhia Nuclear Power Plant, Europe’s largest, has also been a point of contention.

While Putin suggested the war was “coming to an end” on Saturday, Kremlin spokesman Dmitry Peskov said peace in Ukraine was a “very long way” away.

On Sunday, Russia’s Interfax news agency quoted Kremlin adviser Yury Ushakov saying that US envoys Steve Witkoff and Jared Kushner would visit Moscow “soon enough” to continue talks with Russia.

Are Ukraine and the West likely to trust Schroeder?

EU foreign policy chief Kaja Kallas reacted with scepticism to Putin’s proposal. “If we give the right to Russia to appoint a negotiator on our behalf, you know, that would not be very wise,” she told reporters on Monday in advance of foreign ministers’ talks in Brussels.

“Gerhard Schroeder has been a high-level lobbyist for Russian state-owned companies. So it’s clear why Putin wants him to be the person so that actually, you know, he would be sitting on both sides of the table,” she added.

Germany dismissed Putin’s suggestion on Sunday. The Reuters news agency quoted a German official as saying the offer was not credible because Russia had not changed any of its conditions, stressing that any talks with the EU would need to be closely ‌coordinated ‌with member states and Ukraine.

The official, who ⁠spoke on condition ⁠of anonymity, said Putin had made a series of bogus offers aimed at dividing the Western alliance.

The annual ritual that is the Victory Day Parade in Moscow serves a dual purpose. It reminds Russia’s citizenry and the Kremlin’s audience across the former Soviet Union of the glorious past. The muscle flexing on May 9 each year benchmarks Russia’s geopolitical fortunes.

Last year on the 80th anniversary of the Soviet triumph over Nazi Germany, Russian President Vladimir Putin was flanked by foreign dignitaries from far and wide: Chinese President Xi Jinping, Brazilian President Luiz Inacio Lula da Silva, Slovak Prime Minister Robert Fico, Serbia’s Aleksandar Vucic, Nicolas Maduro of Venezuela, Abdel Fattah el-Sisi of Egypt and Mahmoud Abbas, the head of the Palestinian Authority.

This year, the lineup was much less impressive. Leaders from Belarus, Kazakhstan, Laos, Malaysia and Uzbekistan attended – with Republika Srpska, Abkhazia and South Ossetia for some added flavour – but no heavy hitters like India or China.

The talk of Russia as a linchpin of a new multipolar world order rings a tad hollow today, not least because no heavy equipment was marched through during the parade out of fear of Ukrainian drone strikes. On top of it, United States President Donald Trump claimed credit for a three-day ceasefire between Moscow and Kyiv.

The relatively dull affair that was this year’s parade speaks volumes about Russia’s current state. On paper, everything is going just fine. Trump has not wholly abandoned the idea of a deal to freeze the war in Ukraine, even at the cost of major concessions by Kyiv. The current US National Security Strategy calls for “strategic stability” with Russia while blasting Europe’s “woke” policies.

The inconclusive war against Iran, meanwhile, has exposed the limits of US military might. Oil prices have jumped, filling Russia’s coffers and improving its fiscal balance. On top of it, Trump has removed sanctions on some Russian oil to increase the global supply. Meanwhile, the Europeans are signalling they want to talk to Moscow.

In reality, the mood is gloomy. The Russian war effort in Ukraine continues to be stalled no matter how much money, materiel and human lives the Kremlin throws into the meat grinder that is the so-called special military operation (SVO). Ukrainian drones have hit deep inside the Russian homeland with even Red Square apparently not being immune to aerial attack.

Trump has lost interest in wooing Putin. With Hungarian Prime Minister Viktor Orban gone, the European Union has consolidated ranks. In Russia itself, economic growth has plummeted from 4 percent in 2024 to a projection of just over 1 percent this year.

The prospects for long-term development, productivity growth and technological innovation are lacklustre. There are modest signs of discontent within the Russian elite. Even Putin’s sky-high popularity ratings are slightly down, according to pollsters.

The stifling of the mobile internet in Moscow and other big cities has been met with dismay. Russians could be excused for puzzling over how the SVO, sold as a glorious repeat of the 1941-1945 Great Patriotic War, has gone on longer than the latter with no end in sight. It is no wonder Putin felt compelled to say on Saturday that “the matter” is coming to an end.

While its resources are focused on Ukraine, Russia is on the back foot in what it still calls its “near abroad” too. The past week showed that Europe is gaining momentum there.

On Monday, Armenia hosted the annual summit of the European Political Community (EPC), where European leaders gathered. Ukrainian President Volodymyr Zelenskyy was in attendance too. Once Moscow’s loyal client and member of the Russia-led Collective Security Treaty Organisation and Eurasian Economic Union, Yerevan is now strengthening ties with the West.

Even if the EPC is dismissed as a pan-European talking shop – or maybe a transatlantic one, given that Mark Carney, the Canadian prime minister, came as well – observers cannot ignore the fact that it was followed by the first EU-Armenia summit.  The high-profile meeting signalled in no ambiguous terms that Yerevan sees its future in the EU. Strategically, it is looking at joining the trio of Ukraine, Moldova and Georgia.

The EU is reciprocating: The summit discussed up to 2.5 billion euros ($2.95bn) in investment in Armenia; cooperation on energy, transport and digital infrastructure; and visa liberalisation.

In parallel, both Armenia and Azerbaijan are courting the Trump administration. The two countries have welcomed the US as a peacebroker as they move closer to normalising ties. In August at the White House, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev signed a joint declaration pledging to seek peace.

In February, JD Vance became the first sitting US vice president to visit Yerevan and then hopped over to Baku. Armenians and Azeris are negotiating the opening of the Zangezur corridor running between Azerbaijan proper and its exclave Nakhchivan (from where the Aliyev family hails). The project has a name – Trump Route for International Peace and Prosperity.

In short, the US has scored a couple of points in Russia’s back yard with the help of Pashinyan and Aliyev. Moscow is watching from the sidelines as a former satellite drifts away from its embrace. And the EU but also Turkiye are to benefit because Armenia’s opening and interconnection with its neighbours favours their pro-integration agenda.

Of course, this does not mean that Armenia could simply jump ship from Russia to the West. Moscow retains stakes in the Armenian economy and, therefore, political leverage.

This will be put on display in the June general election, which will pit Pashinyan’s Civil Contract against the Armenia Alliance of former President Robert Kocharyan and Strong Armenia associated with the Russian-Armenian billionaire Samvel Karapetyan. Both Kocharyan and Karapetyan have strong connections to Moscow.

Public opinion is in favour of diversifying relations but not a complete break-up. That is a pragmatic position shared by Pashinyan too despite his focus on deepening ties with the West.

Russia failed to – or was reluctant to – support Armenia against Azerbaijan and prevent the loss of the Nagorno-Karabakh region, and Armenians are right to look for alliances elsewhere. But without a peace treaty with Azerbaijan and without full normalisation with Turkiye, one has to tread carefully and not burn bridges.

The Armenian leadership has to also factor in neighbouring Iran, with whom it enjoys positive ties. An escalation of the US-Israel war on Iran could threaten cross-border energy trade.

Putin would have loved to see Armenia and Azerbaijan attending Saturday’s parade. Ditto for Moldova, where pro-EU forces prevailed in the 2025 parliamentary elections. Or Georgia, which still has no diplomatic relations with Russia despite the rule of the authoritarian-minded Georgian Dream, a party viewed positively in the Kremlin.

The chances of those countries turning up next year are slim too. Even Kazakhstan and Uzbekistan will probably not confirm until the last minute, as they have been doing for years.

These days, Russia’s near abroad is much more abroad than near.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

US president says Tehran’s response to US peace proposal ‘unacceptable’, as the Iranian military warns it is ready if war resumes.

May 10 (UPI) — Energy Secretary Chris Wright said Sunday the Trump administration is “open” to the possibility of suspending the federal tax on gasoline sales as prices spike amid the U.S.-Israeli war against Iran.

Wright said during an appearance on NBC’s Meet the Press he and Trump are “open to all ideas” to lower energy prices, including following the lead of some U.S. states in temporarily shelving taxes on gas at the pump amid the price surge.

“All measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of,” he said. “We are constantly looking for different ideas.”

Citing previous measures such as releasing oil from the U.S. strategic petroleum reserves and “revising federal regulations on summer gasoline blends to make it easier for American refineries to produce more gasoline,” Wright said the suspension of the 18-cents-per-gallon federal tax on gas is also on the table.

“We are working every day to offset this rise in prices because of a critical conflict in Iran to drive prices down, and we’re open to all such ideas,” he said.

Wright’s comments came as the average national price of a gallon of unleaded gasoline stood at $4.52 per gallon as of Sunday, according to the Automobile Association of America.

U.S. drivers have seen sharp increases in pump prices in recent weeks after Iran blocked the vital Strait of Hormuz waterway connecting Persian Gulf oil and natural gas producers with world markets.

The move came in retaliation to a wave U.S.-Israeli bombing attacks on Iran beginning Feb. 28, which Washington and Tel Aviv claim were necessary to prevent the imminent development of a nuclear weapon by Iran’s rulers.

The price of regular gas last week surged 25 cents for the second consecutive week to $4.55 — $1.40 higher than they were a year ago and marking their highest level since 2022, the AAA reported.

Crude oil prices have dipped below $100 per barrel while a fragile cease-fire between the United States and Iran has been in place and negotiations to reopen the Strait have been ongoing. But with global oil supplies tightening, upwards pressure on pump prices continues.

In a separate appearance on CBS News’ Face the Nation on Sunday, Wright refused to predict were gas prices were heading.

“I don’t know the future of gas prices,” he said while admitting that “gasoline and diesel prices are up, and they will remain up while this conflict’s in place, and then they will come back down.

“And, ultimately, they’ll come back down lower than they were before.”

South Korea says it is investigating an incident on May 4 when two unidentified objects struck a Korean-operated cargo ship in the Strait of Hormuz.
The strike caused a fire and damaged the vessel’s stern.

President Donald Trump has warned that the United States will target any Iranian trying to reach the country’s highly enriched uranium, saying that the nuclear material is under constant surveillance by the US military.

In an interview with the syndicated TV show Full Measure that aired on Sunday, Trump appeared to play down the significance of the uranium, which is believed to be buried under the rubble of nuclear facilities, remaining in Iran for now.

“We’ll get that at some point, whenever we want. We have it surveilled,” Trump said.

“I did a thing called Space Force, and they are watching. If somebody walked in, they can tell you his name, his address, the number of his badge … If anybody got near the place, we will know about it, and we’ll blow them up.”

Iran’s highly enriched uranium is one of the major sticking points between Washington and Tehran in ceasefire negotiations to end the 10-week US-Israel war on Iran.

The US wants Iran to transfer the uranium outside the country and completely shut down its nuclear programme, but Tehran has stressed that it will not give up its right to a domestic enrichment programme.

Several international media reports have said that the uranium remains under nuclear sites that the US bombed in June 2025, but Tehran has not confirmed the location of the nuclear material.

Last month, Trump announced that Iran had agreed to allow Washington to retrieve the uranium and bring it to the US – claims that Tehran quickly dismissed.

Trump told Reuters on April 17 that the US would work with Iran “at a nice leisurely pace, and go down and start excavating with big machinery” to retrieve the uranium stockpile at the sites.

“We’ll bring ⁠it back to the United States,” he added.

Iran’s Foreign Ministry spokesperson Esmaeil Baghaei denied Trump’s claim. “Enriched uranium is as sacred to us as Iranian soil and will not be transferred anywhere under any circumstances,” he said.

Iran is estimated to have more than 400kg (882lb) of uranium enriched at 60 percent purity.

Uranium enrichment is a complex process of isolating and garnering the most radioactive variety – isotope – of the element to produce nuclear fuel.

When enriched to around 90 percent purity, uranium can be used to make nuclear weapons.

In 2015, Iran agreed to a multilateral deal that saw Tehran scale back its nuclear programme and cap its uranium enrichment at 3.67 percent under strict international supervision in exchange for lifting sanctions against its economy.

Trump nixed that agreement – known as the Joint Comprehensive Plan of Action (JCPOA) – and started reimposing sanctions on Iran.

In response, Tehran – which denies seeking a nuclear weapon – began to advance its enrichment programme well beyond the limits set by the JCPOA.

Trump has argued that the ongoing conflict with Iran aims to prevent the country from acquiring a nuclear bomb.

Asked about the rising oil prices due to the war, Trump said: “We cannot let Iran have a nuclear weapon because they’re crazy.”

The average price of one gallon (3.8 litres) of petrol or gasoline in the US has risen to more than $4.50 due to supply issues linked to the Iranian blockade in the Strait of Hormuz, fuelling inflation. It was less than $3 before the war.

Despite the truce that came into effect last month, skirmishes have erupted in the Gulf over the past week as the US continues to enforce a siege on Iranian ports amid Tehran’s Hormuz blockade.

Iranian state-affiliated news outlets reported on Sunday that Iran has delivered its response to the latest US proposal to end the war to Pakistan, which is mediating the talks.

But Trump said the war is not over while reiterating his claim that Iran has been “defeated”.

“They are defeated, but that doesn’t mean they’re done,” the US president said. “We could go in for two more weeks and do every single target. We have certain targets that we wanted, and we’ve done probably 70 percent of them, but we have other targets that we could conceivably hit.”