Economy
Trade tensions set to cool off as Trump, Xi eye breakthrough call
A breakthrough in stalled U.S.-China trade talks could be near, U.S. officials said Sunday, expressing hope that a call between Presidents Donald Trump and Xi Jinping – expected soon, might break the deadlock.
Tensions flared Friday when Trump accused Beijing of backtracking on a recent Geneva agreement that paused tit-for-tat tariffs for 90 days.
Adding to the strain, The Wall Street Journal reported China was dragging its feet on export licenses for rare earths critical to car and chip manufacturing – a claim later confirmed by U.S. officials.
Still, Treasury Secretary Scott Bessent struck a more optimistic tone on CBS’s Face the Nation, saying the remaining gaps “could soon be bridged.”
“I’m confident that when President Trump and Party Chairman Xi have a call, this will be ironed out,” Bessent said, noting that China was “withholding some of the products that they agreed to release during our agreement.”
When asked if rare earths were among those products, Bessent said, “Yes.”
“Maybe it’s a glitch in the Chinese system. Maybe it’s intentional. We’ll see after the president speaks with Xi,” he said.
Asked when the Trump-Xi call might take place, Bessent said: “I believe we will see something very soon.”
Kevin Hassett, director of the White House National Economic Council, told ABC that the call could happen “this week,” but said he had no confirmation of a scheduled time.
Since Trump returned to the presidency, he has imposed sweeping tariffs on most U.S. trading partners, with especially high rates on Chinese imports.
New tit-for-tat levies on both sides reached triple digits before the recent de-escalation, when Washington agreed to temporarily reduce additional tariffs on Chinese imports from 145% to 30%.
China, meanwhile, lowered its added duties from 125% to 10%.
Commerce Secretary Howard Lutnick told Fox News Sunday that China was “slow-rolling the deal,” adding: “We are taking certain actions to show them what it feels like on the other side of that equation.”
“Our president understands what to do. He’s going to go work it out,” Lutnick said.
Lutnick also said a U.S. court battle over Trump’s tariff strategy – one court ruling to block the tariffs has been stayed pending appeal – would ultimately end in a win for the president.
“Tariffs are not going away,” Lutnick said.
‘We’ve got to be ready’
Separate from the China deal, Trump said Friday he would double sector-specific tariffs on steel and aluminum to 50% starting June 4 – sparking ire from the European Union, which said it would retaliate.
Hassett said China’s dumping of low-cost steel was hurting U.S. industry – which in turn was hindering military preparedness.
“The bottom line is that we’ve got to be ready in case things don’t happen the way we want, because if we have cannons but not cannonballs, then we can’t fight a war,” Hassett told This Week.
“And if we don’t have steel, then the U.S. isn’t ready, and we’re not preparing ourselves for something,” he added.
“We have to have a steel industry that’s ready for American defense.”
Türkiye is making a strategic contribution to NATO’s future security architecture through its technology development capacity, engineering expertise and defense industry cooperation, according to the chief of the top Turkish defense contractor.
Remarks by Mehmet Demiroğlu, the CEO of Turkish Aerospace Industries (TAI), came during a panel, Perspectives from Ankara: The security and defense implications of the NATO Summit, hosted by the U.K.-based think tank Chatham House in London.
The panel addressed trends shaping the defense industry, evolving security requirements and the transformative impact of technology, Demiroğlu said on the Turkish social media platform NSosyal.
Discussions also focused on joint capability development, technology integration, and cooperation among NATO defense industries, as well as Türkiye’s strategic role in this transformation.
Demiroğlu said the Turkish defense industry had moved beyond merely developing military platforms and become a strategic stakeholder in the emerging security architecture shaped by the “NATO 3.0” vision.
He said Türkiye will continue contributing to NATO’s future security architecture through its ability to develop technology, its engineering strength, and its approach to cooperation.
Production capacity central to collective deterrence
Demiroğlu said production capacity, technological development, and joint industrial projects were becoming key elements of NATO’s collective deterrence.
Under the new security paradigm, security depends not only on military strength but also on a robust defense industry, sustainable manufacturing capacity, resilient supply chains, technological superiority and cooperation among allies, he said.
Türkiye’s defense industry ecosystem is well positioned to support this approach, while TAI contributes through its indigenous platforms, engineering infrastructure and production capabilities, he added.
Demiroğlu said Türkiye had become a major producer contributing not only to its own defense needs but also to the security of friendly and allied countries.
He also stressed the importance of stronger transatlantic cooperation for European security.
“We want to see a stronger NATO with contributions from both sides of the Atlantic,” he said.
Defense spending should be assessed not only by budget size but also by the capabilities developed to address specific threats, he added.
Hürjet strengthens Türkiye’s role in NATO ecosystem
Demiroğlu said the planned export of the Hürjet advanced jet trainer to Spain represented more than a commercial achievement.
The project is a strategic step strengthening the position of Türkiye’s aviation technologies within the European and NATO defense ecosystem, he said.
Hürjet can be adapted to different user requirements and conduct missions in line with NATO standards, helping deepen cooperation with allied countries, he added.
Demiroğlu said cost-effective systems that can be produced rapidly and adapted to operational needs were gaining importance alongside advanced platforms.
TAI will continue strengthening Türkiye’s global position in the defense industry while contributing to NATO’s and Europe’s future security architecture, he added.
Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz, including the collection of voluntary transit fees, a report said Tuesday. The proposal could provide a basis for ending the trade disruption in the waterway caused by the U.S.-Israeli war on Iran.
U.S. President Donald Trump, who abruptly called off a two-week U.S. bombing campaign over the weekend in his latest strategic U-turn, said there were “good talks” underway with Iran but threatened to restart strikes unless negotiations deliver.
Iran denies seeking to resume talks with the United States. Washington launched its renewed bombing campaign earlier this month to break Iran’s grip on the Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flowed before the war.
Iran effectively shut the strait to ships other than its own after the United States and Israel attacked on Feb. 28. A deal last month between the United States and Iran partially reopened it, but the agreement collapsed in early July after Iran fired on ships using a channel it does not approve.
Iran has said it wants to manage the strait alongside Oman, which controls the opposite shore, and charge service fees to ships that use it. Washington wants to return to the status quo prior to the war, when ships were able to pass freely with no payments, and says charging mandatory fees would be illegal.
Under the Omani proposal, Iran would not exercise sole control and fees would be voluntary, Reuters said, citing a Gulf source and a Western diplomat briefed on the matter.
The system would be analogous to one in place on Asia’s Strait of Malacca, where Indonesia, Malaysia and Singapore ask ships to pay voluntary contributions to fund navigation, environmental protection and search-and-rescue operations.
The Western diplomat compared it to a voluntary carbon tax for flights, where anyone buying a plane ticket can choose to tick a box if they want to pay to offset their emissions.
The Gulf source said that as of Monday evening there had been no formal response from Iran to the proposal. Omani officials met Iranians in Tehran over the weekend.
Iran’s Foreign Minister Abbas Araqchi discussed the Strait of Hormuz with his Omani and Saudi counterparts on Monday and stressed the need for regional cooperation, an Iranian Foreign Ministry statement said.
Trump warns of more strikes
Trump called off his latest campaign of airstrikes after receiving advice from military commanders that the strategy had run its course. The 13 nights of renewed U.S. bombing killed scores in Iran and destroyed bridges and tunnels across the south as well as military targets.
Iran had responded with attacks on U.S. bases in neighbouring countries that killed four service members, and strikes on civil infrastructure in Gulf states that it said were in response to U.S. strikes on civilian targets.
Iran has said it would hold fire as long as Washington does. But drone attacks were reported in Jordan, Saudi Arabia and northern Iran on Monday, and Jordan reported another drone being downed on Tuesday.
Speaking on Monday, Trump expressed optimism for a deal to end the five-month conflict, while warning that U.S. strikes would resume if negotiations failed to deliver.
“I think there’s a good chance that something could happen, and if it does, good, if it doesn’t, we go back to doing what we were doing two days ago.”
Iran says it has not sought any new negotiations with the United States, which it accuses of violating the agreement reached last month on a framework for talks to end the war.
The U.S. president is scheduled to meet Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday. Although Israel was involved in the initial bombing campaign, it has not been part of subsequent peace talks, and recent relations between the two leaders have been strained.
Trump has had to rein in the Israeli leader from attacking targets in Lebanon, complicating peace talks with Tehran.
The end of the U.S. bombing campaign over the weekend sent oil prices tumbling by around 8% on Monday, and the fall continued on Tuesday. Brent crude futures were down more than 2.5% at around $86 a barrel by mid-morning on Tuesday.
Washington and Tehran reached an agreement in June on a framework for talks meant to take place by the end of August to resolve major issues such as Iran’s nuclear program. But they have disputed the meaning of the memorandum’s language about the strait, with Washington insisting it requires Tehran to allow free travel, while Iran says it grants it the authority to supervise transit.
An electro-optic reconnaissance, surveillance and targeting system developed by Türkiye’s state-run defense contractor Aselsan has been integrated into the South African-developed multi-role tactical aircraft Mwari, a report said Tuesday.
That expands the Turkish company’s international footprint with ASELFLIR-500, a product the country developed indigenously following years of restrictions and embargoes on drone camera systems.
The integration enhances the capabilities of the aircraft, developed by South Africa’s Paramount Aerospace Industries, in intelligence, surveillance and reconnaissance, as well as target detection, tracking and designation, Anadolu Agency (AA) said, citing information provided by Aselsan.
Designed for both manned and unmanned aerial platforms, the ASELFLIR-500 combines a high-resolution mid-wave infrared camera, a daylight camera and a short-wave infrared imaging channel.
The system also features laser rangefinding, laser target designation, automatic target tracking, precision stabilization and advanced image-processing capabilities. Weighing approximately 54 kilograms, its laser rangefinder and designator have an operational range of up to 35 kilometers (22 miles).
Equipped with artificial intelligence-supported image processing, the ASELFLIR-500 enables long-range target detection and identification by processing imagery from multiple optical channels.
Its four-axis gimbal and two-axis optical stabilization system minimizes the effects of aircraft maneuvering and vibration, allowing operators to maintain a stable view of targets during missions.
The two-seat Mwari aircraft features an open architecture and plug-and-play integration approach, enabling it to be configured with a range of sensors, weapons and mission systems.
It is designed for intelligence, surveillance and reconnaissance missions, border and coastal security, counterinsurgency, counterterrorism and precision-strike operations.
Powered by a single turboprop engine, the aircraft can carry payloads of up to 1,000 kilograms (2,205 pounds) across six underwing hardpoints. It has a maximum cruise speed of about 230 knots, a service ceiling of 21,000 feet and a mission range of approximately 1,150 nautical miles.
The integration combines Türkiye’s expertise in electro-optical systems with South Africa’s aircraft development capabilities and is expected to support Aselsan’s expansion into new export markets while enhancing the Mwari’s competitiveness in international sales campaigns.
Aselsan began serial production of the ASELFLIR-500 in 2024. The system has since been integrated into multiple aerial platforms, including the world-renowned Turkish combat drones, including Bayraktar TB2 and Bayraktar TB3, and has been exported to more than 20 countries.
Montenegro has extended visa-free entry for Turkish citizens until the end of October, while announcing that nationals of Russia and Belarus will be required to obtain visas from November as the Balkan nation continues aligning its visa policy with European Union standards.
According to the new measures, visa-free access for citizens of Türkiye, China and Saudi Arabia will remain in force through Oct. 31, local media reported, citing a government decision.
The move forms part of Montenegro’s efforts to harmonize its visa regime with EU rules under Chapter 24 of its accession negotiations, which covers justice, freedom and security.
Under the updated rules, eligible travelers from the affected countries may stay in Montenegro without a visa for up to 30 days, provided they are traveling as part of organized tourist groups or hold diplomatic or official passports and can demonstrate onward or return travel arrangements.
Montenegro reduced the visa-free stay for Turkish citizens from 90 days to 30 days late last year following security-related incidents in the capital, Podgorica.
The government aims to complete full alignment of its visa policy with EU requirements by the end of next year under its reform agenda.
As Montenegro advances toward EU membership, its passport is expected to become more valuable in terms of international mobility, potentially increasing demand for Montenegrin citizenship, particularly among people with family ties to Serbia, Bosnia-Herzegovina and Türkiye.
An A350 jet being developed for record-setting commercial flights landed in France from Melbourne on Tuesday after Airbus completed a test flight lasting more than 24 hours, drawing heavy attention from online flight trackers.
The test marks a key step in Qantas’ Project Sunrise, which aims to launch the world’s longest commercial passenger services and reshape long-haul travel by eliminating stopovers between Australia and Europe.
The specially adapted A350-1000ULR airliner is due to debut with the Australian carrier’s nonstop Sydney-London route from 2027. Airbus has been conducting a two-month test campaign on the aircraft since June.
Airbus said the aircraft, which boasts a specially designed extra fuel tank, remained in the air for 24 hours and 24 minutes, covering 23,075 kilometers (14,338 miles) without stopping, before landing at the plane’s factory in Toulouse, France.
Flight-tracking provider Flightradar24 said the trip was the second-most-tracked flight ever on its channels, behind a 2024 flight carrying Queen Elizabeth II’s coffin, with more than 3.6 million people following its progress northward via Canada.
In 2005, a Boeing 777-200LR Worldliner flew 21,601.7 km from Hong Kong to London in 22 hours and 42 minutes.
Qantas has ordered 12 modified A350-1000ULR aircraft, designed to connect Australia’s east coast with London and New York in about 20 hours. The services aim to turn what was once a five-day journey on the “Kangaroo Route” to London into a single flight lasting 19 to 21 hours, depending on routing and winds.
The first aircraft, which carries 20,000 liters of fuel and can seat 238 passengers, is due for delivery in April 2027. Qantas expects to operate daily nonstop flights between Sydney and London from October 2027.
Prime Minister Anthony Albanese said Tuesday that Australia will consider building its first new oil refinery in more than 60 years, as conflict in the Middle East tightens overseas supplies and highlights the need to strengthen energy security.
Albanese said the project will help build Australia’s resilience and sovereign capability on fuel, potentially helping shield the country from future supply shocks.
If the project proves feasible, the new large-scale oil refinery will be built by industrial chemical producer Perdaman in Western Australia, Albanese said.
“The war in the Middle East … is having an impact here, like it’s having an impact right around the world,” Albanese told reporters from Karratha in Western Australia’s Pilbara region.
“One of the things that building national resilience does is it makes Australia less vulnerable to the impact of events around the world.”
Albanese said his government and the Western Australia state government will jointly spend AU$4 million ($2.8 million) on a feasibility study for the refinery.
“We want to make sure that we get the right location but we want to make sure as well that it’s a project that stacks up, that can go forward,” Albanese added.
Australia depends on imports for about 80% of its fuel needs and has been racing to secure supplies amid the Iran war.
The government’s push to cut its import dependence on oil comes after an Australian Treasury report warned that the global oil market has become more vulnerable “with weaker buffers against supply shocks.”
Global oil inventory levels have dropped since conflict in the Middle East intensified. At the same time, refined fuel markets are now at risk of tightening further, the treasury said in a briefing provided to Treasurer Jim Chalmers over the weekend.
Most of Australia’s domestic oil refineries were built during the 1950s and 1960s, but high operating costs and the emergence of large refineries across Asia forced many to shut down over the past three decades.
Ampol’s Queensland refinery and the Viva Energy facility in Victoria – both on the country’s east – are the only two operational now, compared to eight in 2000.
Western Australia’s only refinery was shut down in 2021 after BP decided to convert its 146,000 barrels per day Kwinana plant into a fuel import terminal.
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