What you need to know

Possible Israeli Strike on Iran Raises Tensions Amid U.S. Diplomacy

The U.S. government has claimed that Israel is preparing for a possible strike on Iranian nuclear facilities, even as President Donald Trump’s administration continues to pursue a diplomatic agreement with Tehran.

The likelihood of a strike has grown in recent months, driven by Israel’s discontent with the parameters of a potential U.S.-Iran deal, particularly if it allows Iran to retain any uranium enrichment capacity.

Trump has issued a private ultimatum to Iran, giving negotiations only weeks to succeed before considering military options. Yet for now, Washington remains committed to diplomacy.

Israel sees a strategic window, viewing Iran as militarily vulnerable and economically weakened by sanctions and the loss of key regional proxies. However, there is internal disagreement within the U.S. government about whether Israel would act without U.S. support.

The situation presents a political dilemma for Israeli Prime Minister Benjamin Netanyahu, who must balance his opposition to a "bad deal" with the need to maintain strong ties with Trump.

It is highly possible that Israel may be using the threat of military action as leverage to shape the negotiations. But this is more than a bluff, the threat is real, and rising.

Iran remains defiant. Supreme Leader Ayatollah Ali Khamenei yesterday dismissed the likelihood of a successful agreement.

Oil markets have still not responded seriously to the escalating tensions. Oil was up about 1.5% over the past 24 hours. But to put that into perspective, the most watched oil prices, West Texas Intermediate and Brent Crude, have fluctuated over 17% and 5% respectively over the past two weeks.

A fifth round of talks is expected in Rome this weekend, though expectations for a breakthrough are low. Iran’s deputy foreign minister, Kazem Gharibabadi, confirmed that Tehran is reviewing a new U.S. proposal.

In a notable shift from 2015, when Gulf states vehemently opposed the Obama-era nuclear deal, countries such as Saudi Arabia, the United Arab Emirates, and Qatar are now encouraging Trump to strike an agreement, reflecting their recently improved ties with Tehran and concerns about long-term U.S. reliability.

The rising Middle Powers: India, Türkiye, Vietnam, Indonesia, South Korea, Japan, the GCC nations

Thailand and Indonesia agree on strategic partnership, boost defense ties

Thailand and Indonesia announced on Monday that they would deepen trade relations and expand defense cooperation, following a visit to Bangkok by Indonesian President Prabowo Subianto. Thai Prime Minister Paetongtarn Shinawatra said the two countries—Southeast Asia’s largest economies—also pledged to increase investment in each other's markets, and to enhance cooperation in tourism and food security. Subianto’s trip marked the first by an Indonesian head of state in two decades and coincided with the 75th anniversary of diplomatic ties between Jakarta and Bangkok.

On defense, the leaders discussed strengthening maritime security coordination, counterterrorism efforts, and joint military exercises. Paetongtarn added that police forces from both countries would step up cooperation in combating transnational crime, including drug and human trafficking.

As of 2024, the bilateral trade between Indonesia and Thailand was approximately $18.16 billion. This figure comprises $9.46 billion in exports from Thailand to Indonesia and $8.7 billion in imports from Indonesia to Thailand

It's now the US vs China, everyone else needs to pick a side

EU and UK announce new actions to target Russia’s shadow fleet

The European Union and the United Kingdom agreed on Tuesday to expand sanctions on Russia, targeting approximately 189 vessels associated with Moscow’s so-called “shadow fleet” used to circumvent oil embargoes. The new measures also extend to financial institutions that have helped Russia sidestep sanctions imposed after its 2022 invasion of Ukraine. U.S. Secretary of State Marco said on Tuesday afternoon that the U.S. would issue additional sanctions should there be no meaningful progress toward a peace deal with Kyiv. The sanctions were endorsed in Brussels by EU foreign ministers.

Britain’s Foreign Office stated the sanctions would hit entities linked to Russia’s military, energy exports, and disinformation campaigns. They will also disrupt weapons supply chains, including for Iskander missiles. Ukrainian President Volodymyr Zelensky welcomed the new measures. During testimony before the Senate Foreign Relations Committee, Rubio was asked whether he would support a bill spearheaded by Republican Senator Lindsey Graham to impose sweeping new sanctions on Russia. The proposed legislation includes a 500% tariff on imports from any country purchasing Russian oil or gas. Rubio noted that “it may very well come to that point,” though he cautioned that President Donald Trump preferred to keep diplomatic channels with Moscow open, warning that aggressive sanctions rhetoric could discourage dialogue.

China’s Xi Jinping calls for self-sufficiency

President Xi Jinping of China has urged a renewed push for national self-reliance in manufacturing, delivering his remarks just a week after Beijing agreed to a 90-day truce with Washington in their protracted trade dispute. His comments reflect long-standing concerns among economists that China must reduce its reliance on high-tech exports and stimulate domestic consumption.

For decades, China has leaned heavily on industrial output and foreign trade to drive growth—an approach that left it vulnerable when President Donald Trump imposed tariffs of up to 145% on Chinese goods entering the U.S.

Speaking on Tuesday, Xi defended the country’s industrial focus, declaring that China had become “the world’s largest manufacturing country.” In 2015, he launched the "Made in China 2025" initiative, a policy designed to expand domestic market share in strategic sectors using state subsidies. This campaign has accelerated since the start of Trump’s first term.

Late last year, however, Beijing signaled a tentative pivot, emphasizing the need to boost domestic consumption. The government introduced modest monetary easing measures, but these have so far failed to engineer a meaningful shift away from export-led growth.

Trump says ‘Golden Dome’ will be completed within his term, cost $175 billion

President Donald Trump said on Tuesday that the so-called Golden Dome missile defense system would be completed within his current term. The project, estimated at $175 billion, is designed to shield the U.S. from hypersonic missile attacks, including those launched from intercontinental ranges or outer space. The initiative is expected to involve firms such as Elon Musk’s SpaceX, defense-tech start-ups like Anduril and Palantir, and established contractors including Lockheed Martin and RTX.

The name Golden Dome is a nod to Israel’s Iron Dome system. However, the core technology—an orbital satellite network capable of detecting, intercepting, and destroying nuclear ballistic missiles—has yet to be developed.

Trump expressed confidence in the ability of Silicon Valley companies to create the necessary systems. He also claimed that Canada was interested in joining the initiative. Yet the project is widely expected to exceed both its budget and timeline.

Earlier this month, 43 Democratic lawmakers, led by Elizabeth Warren, called on the Pentagon’s inspector general to review the contracting process behind Golden Dome, raising concerns about potential conflicts of interest given Elon Musk’s dual role as a contractor and public figure with ties to the administration.

Pakistan and China pledge to deepen economic ties

Pakistan and China have agreed to expand trade and investment as Pakistani Foreign Minister Ishaq Dar begins a three-day visit to Beijing.

On Tuesday, Dar met Chinese Foreign Minister Wang Yi, who also voiced support for efforts by both Pakistan and India to manage their disputes through dialogue. The comments come just weeks after the nuclear-armed neighbors reached a ceasefire following several days of intense fighting.

The relationship between China and Pakistan remains close and strategically significant—an arrangement that continues to unnerve India.

Pakistan depends heavily on Chinese military support, with Chinese arms accounting for more than 80% of Islamabad’s weapons imports between 2020 and 2024.

Dar and Wang also agreed to bolster cooperation in agriculture and industrial development, and announced plans to extend the China-Pakistan Economic Corridor into Afghanistan.

According to Pakistan’s Foreign Ministry, the two also held a separate meeting in Beijing with Amir Khan Muttaqi, the acting foreign minister of Afghanistan, to explore ways to coordinate on China’s Belt and Road Initiative.

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