Dear reader,

The United States may be a net exporter of petroleum products but just like their counterparts in China, American motorists are paying for the Iran war. A gallon of petrol has raced beyond US$4 in the past month, while fuel price rises across China have prompted more than one car owner to get up early to try to beat the increases. The two countries are joined at the hip pocket in pain from a global energy market that does not care where anyone comes from.

For a deep dive into the US-Israeli war on Iran, read our three-part series on the impacts of the conflict and the lessons China can draw from it. 

The Big Picture

TACO Tuesday  
After escalating his rhetoric to threats of civilisational destruction, Trump “TACOed” again and agreed to a two-week ceasefire with Iran.

• Why it matters: the truce is seen by some as a strategic failure for the US president
• Meanwhile, two big factors stand in the way of peace and Trump has an innovative proposal to manage the Strait of Hormuz
• Also, Iran eyes China as a security guarantor. But how likely is it and how is a Chinese-made drone involved in the conflict?
• Meanwhile, is the war a “loyalty test” for Nato and why did the EU shelve a rare debate on China?
• And, at least there is one safe haven for Iran’s ancient treasures

Strait forward
Communist Party chief Xi Jinping and Kuomintang chairwoman Cheng Li-wun discuss prospects for peaceful relations across the Taiwan Strait.

• Why it matters: the meeting is the first between the leaders of the two parties in a decade
• So, why did Cheng invite Xi to Taiwan and what is her message on Japan?
• Her trip is under close scrutiny in Taiwan, and divisive within her own party

Lessons learned
China is paying close attention to the way the Iran conflict is reshaping warfare and geopolitics.

• Why it matters: it can help China to gauge American wartime resilience, with implications for Beijing’s strategic assessment and decision-making
• So, what did Chinese experts make of the rescue of two US airmen?
• Meanwhile, what does China’s handheld coil gun look like?
• And, why might China’s new Y-30 outmatch the US’ C-130J?

Wins and Falls

Taiwan opposition leader Cheng Li-wun receives a high-level reception on the mainland 

Pakistan’s Asim Munir wins praise from both Trump and Iran for his role in the ceasefire mediation

Big Numbers

0.5% – the first rise in China’s factory-gate prices in three years

Direct Quote

“There are many differences, but the achievements of Taiwan and the mainland today are the great achievements of the Chinese nation.”

KMT chairwoman Cheng Li-wun assesses cross-strait progress