Good morning. President Trump faces two extraordinarily consequential conundrums this week, the legacies of which could stretch far beyond his presidency.
China: Trump heads to China this week. In a way, he had set up his whole second term for this moment. With his early and aggressive use of tariffs, Trump was attempting to create enormous leverage over a weakened Chinese economy and finally rebalance the trade dynamic between the two countries. But much has changed in recent months. The Supreme Court clipped his wings on the use of tariffs, and the prolonged Iran fight has depleted a not-insignificant level of U.S. munitions.
Trump will have to decide whether to play hardball with Chinese leader Xi Jinping or seek to cut a deal. There will be so many variables, including discussions of the AI arms race, a possible demand for Chinese investment in the U.S., Chinese purchases of things like U.S. soybeans, and perhaps more restrictions related to fentanyl. What might China want in exchange? Watch for anything related to tariffs and how they discuss Taiwan.
Iran: The White House and Iran remain in a standoff over the Strait of Hormuz. The White House keeps saying Tehran is running out of time to cut a deal, but Trump on Sunday afternoon flatly rejected Iran’s response to the latest U.S. proposal as “TOTALLY UNACCEPTABLE!” When it comes to Iran, Trump has already had Operation Midnight Hammer, Operation Epic Fury and Project Freedom. It’s unclear if he is testing Iran’s patience or they are testing his. Trump has suggested he is both willing to wait this out and in a rush to cut a deal. Meanwhile, the longer the strait remains clogged the longer gas prices remain extremely elevated. The average price of regular gasoline was $4.52 a gallon, AAA reported Sunday.
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People and Policies I’m Watching
Iran war: Follow live updates as oil prices rose after Trump rejected Iran’s response to the latest U.S. proposal and Iran dismissed his rejection, leaving the two sides locked in a standoff, with Iran’s supreme leader MIA.
Home sales: April home-sales data are to be issued at 10 a.m.
Trump’s Monday: The president is to participate in a maternal-healthcare event at 10:30 a.m., followed by a policy meeting at 1:30 p.m., signing executive orders at 3 p.m., hosting national college football champions Indiana University at 4 p.m., a policy meeting at 5:30 p.m. and a Rose Garden Club dinner at 7 p.m.
What I’m Following
Inside the unlikely reunion between Trump and Ron DeSantis. The president once attacked the Florida governor, but the two men have repaired their relationship and speak often as DeSantis looks to his political future. With his term as governor ending in January, the man Trump mocked as “Ron DeSanctimonious” has again emerged as a possible cabinet pick after being considered for defense secretary early in Trump’s second term. And DeSantis isn’t ruling out another White House campaign.
Iran will loom large over the Trump-Xi summit. When Trump lands in Beijing, he’ll arrive prepared to push China, which relies on Iran for low-cost oil, to help broker an agreement that ends the conflict. Meanwhile Xi, with China in an economic mess, also wants the fighting to stop as Middle East turmoil restricts China’s oil supply and shrinks other countries’ ability to buy Chinese goods.
The U.S. has tied Ali Al Zaidi’s bank to Iran proxies—now he’s Trump’s choice to run Iraq. The White House endorsement has come with a demand that the prime minister-designate exclude Iranian-backed militias from Iraq’s next government and curtail Tehran’s influence in Baghdad, though Iraqi officials ran his nomination by Iran before announcing it. He has faced similar U.S. pressure before: Zaidi owns a bank that the Treasury banned from dollar transactions in 2024 over suspicions it was doing business with a militia leader linked to Iran’s Islamic Revolutionary Guard Corps.
What Else Is Happening
Think $6 gas is bad? It’s about to get even worse in California, which depends more on crude-oil shipments from the Middle East than any other U.S. state.Republicans are playing defense in Ohio and more other red states, where Democrats are counting on voter backlash to power them to victory this fall in their long-shot battle to retake the Senate.Trump and top aides are pressuring Republican leaders in South Carolina and other Southern states to pursue mid-decade redistricting plans after the Supreme Court weakened the Voting Rights Act.Political tensions are spilling into university commencements, a ceremony long reserved for good cheer.
What I’m Reading
Checkmate in Iran (The Atlantic)Taiwan Fears Trump Will Speak Off-Script on Its Fate in Beijing (Los Angeles Times)Trump Responds With Warning After Iran Refuses to Discuss Nuclear Program in Latest Peace Offer: ‘They Will Be Laughing No Longer’ (New York Post)
About Me
I’m Damian Paletta, The Wall Street Journal’s Washington coverage chief. I’ve covered Washington for 22 years as a reporter and editor. I’ve covered the White House, Congress, national security, the federal budget, economics and multiple market meltdowns.WSJ Politics brings you an expert guide to what’s driving D.C., every weekday morning. Send your feedback to politics@wsj.com (if you’re reading this in your inbox, you can just hit reply). This edition was curated and edited in collaboration with Lisa Donovan and Michael Connolly. Got a tip for us? Here’s how to submit.
