Middle East in Flux
The conflict between Iran and Washington has evolved into a fight between Iranian resilience and US patience, and so far Tehran appears confident that the impasse will ultimately work in its favor. Iran knows that President Trump is hesitant to resume kinetic attacks—both because of the risk it this poses to American lives and the potential inability to achieve his goals through military means—but that he’s also eager to get the Strait of Hormuz back up and running and needs to move the needle. With this dynamic at play, Iran appears to believe that it can get greater concessions out of Washington than it had initially hoped.
Iranian officials anticipated Washington’s rejection of their latest counterproposal, and the hardliners remain in control. The 14-point plan demanded a 30-day end to all hostilities, the lifting of the US naval blockade in the Strait of Hormuz, the release of frozen assets, and reparations—terms the Trump administration could not accept without appearing to capitulate. Iran’s stance is partly posturing for a domestic audience, but it underscores that Tehran is betting that time and oil prices work in its favor. With Hormuz still effectively paralyzed and oil climbing back toward $100, that bet may have some logic.
During the pause in fighting, Iran has also built up its military capabilities—reports suggest the IRGC has restored around 70% of its missile stockpiles, and the IRGC Navy unveiled a new class of domestically built submarines designed for operations in the Strait of Hormuz. Regardless of their battlefield effectiveness, such systems complicate maritime security calculations and reinforce the broader reality that even limited regional escalation could carry significant consequences for energy markets and international shipping routes.
Given these dynamics, while President Trump is in China we can expect the ceasefire to nominally hold, and indirect negotiations will be at the fore, however finite those diplomatic channels may be.
Emerging World (Dis)Order
This week, Russian President Vladimir Putin remarked that the war in Ukraine may be “coming to an end,” a statement delivered at Russia’s most scaled-down Victory Day parade in decades. Of note, there were no tanks or ballistic missiles on display this year, and the guest list shrank dramatically—limited to Belarus, Kazakhstan, Uzbekistan, Laos, Malaysia, and Slovakia. Paired with recent reports that Putin is wary of an assassination or coup attempt from his inner circle, Moscow appears to be searching for a way out of the war—so long as it can project control rather than desperation.
Putin’s statement should not be mistaken for imminent collapse—Russian elites appear exhausted by the war and uncertain about its long-term direction, but organized opposition to Putin remains thinly evidenced. During Victory Day, the Kremlin made a tacit recognition that the war cannot be sustained indefinitely, but Putin still requires terms he can present domestically as a strategic success, and he’s unlikely to quit until he has them.
If Ukraine’s backers interpret these signals as evidence that Moscow needs an offramp more urgently than previously assumed, it could strengthen President Zelensky’s hand in negotiations. For much of the war, the prevailing assumption was that Russia’s larger economy, population, and military reserves would allow it to outlast Ukraine in a prolonged war of attrition. But if Putin is increasingly constrained politically at home while Russian forces struggle for meager territorial gains, the perception may begin to shift—it could be the Kremlin, not Kyiv, that is under greater pressure to bring the conflict to a close.
Weekly Wildcard
President Trump’s visit to Beijing this week is one of the most significant US-China summits since the start of the trade dispute, and the composition of the US delegation underscores the meeting’s economic focus. The presence of executives from major technology, finance, aerospace, and semiconductor firms suggests that although Taiwan, Iran, AI, and security issues dominate the formal agenda, supply chain stability, trade, and manufacturing will drive much of the engagement behind closed doors.
Rare earths will be a fulcrum, with implications on virtually every item on the agenda. Beijing approaches the summit believing its dominance over critical mineral refining—roughly 90% of global capacity—gives it retaliatory leverage if Washington escalates on trade or pushes arms sales to Taiwan. Meanwhile, companies jarred by Chinese export restrictions are rooting for the White House to clinch reliable access.
The Trump administration enters the summit facing legal uncertainty after a recent trade court ruling challenged parts of its tariff framework, complicating Washington’s leverage in negotiations. For President Trump, the main ask is about aligning Chinese economic pressure on Iran, something Beijing might only deliver in exchange for major concessions on tariffs, technology restrictions, and Taiwan.
But with significant geopolitical tensions in the backdrop, the private sector delegation creates its own dynamic, with business executives keen to access Chinese labor, manufacturing, and capital markets—showing Beijing that American business wants a deal, and potentially shifting President Trump’s initial desire to threaten trade war escalation.
