By Alexandra Sharp
Welcome back to World Brief, where we’re looking at U.S.-Iran peace deal conditions, a potential U.S. trade deal with India, and China’s efforts to combat dollar dominance.
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U.S. President Donald Trump speaks during a bilateral meeting with Egypt’s president (not pictured) on the sidelines of the G-7 leaders’ summit in Évian-les-Bains, France, on June 17.Mandel Ngan/AFP via Getty Images
U.S. President Donald Trump oscillated on Wednesday between praising the Iran peace deal and threatening to resume bombing if Tehran does not adequately implement the agreement’s conditions. “It’s a memorandum of understanding,” Trump told reporters at the G-7 leaders’ summit in the French Alps. “If [a final deal] doesn’t get done in 60 days, that’s all right. We go back to bombing.”
The U.S.-Iran deal is still set to be formally signed in Geneva on Friday, but a senior U.S. official disclosed the 14-point draft to several U.S. media outlets on Wednesday as Trump held a news conference about it. (Later on Wednesday, Iranian state media also posted the official text.)
Among the text’s main points, the deal declares an “immediate and permanent termination of military operations on all fronts,” including in Lebanon, where Israel and Hezbollah continue to fight. Lebanese state media reported fresh Israeli strikes in southern Lebanon on Wednesday in response to two Hezbollah drone attacks on Israeli troops in the area. The Israeli military said the drones injured five soldiers, one of whom is in serious condition.
G-7 leaders released a joint statement on Wednesday championing recent efforts to impose “an immediate robust ceasefire” in Lebanon. However, Trump took it a step further, delivering a rare rebuke of Israel’s actions in that conflict. “I think they could do better with respect to Hezbollah,” Trump said. “I am not saying they should not protect themselves. I am saying when two drones are shot into the desert and dropped harmlessly, you do not have to knock down buildings in Beirut.”
That was not Trump’s only statement likely to anger Israel. During his G-7 press conference, Trump said that Iran should be allowed to keep some of its ballistic missiles. “I mean, they have to have some, because other people have some,” Trump said. Contrasting them to nuclear weapons, he added, “Missiles aren’t the problem. Missiles, they hurt a little location, but they don’t blow up the planet.”
Ending the conflict in Lebanon, though, is just the first of the memorandum of understanding’s (MoU’s) 14 points. Here are some of the other key elements, as reportedly described by a senior U.S. official:
- The United States commits to ending the naval blockade on Iran commensurate with Iran reopening the Strait of Hormuz;
- The United States agrees to work with regional partners “to develop a definitive, mutually agreed plan with at least $300 billion” for Iran’s reconstruction and economic development;
- Immediately upon the MoU’s signing, the U.S. Treasury Department “will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.”;
- Iran “reaffirms that it shall not procure or develop nuclear weapons”;
- Iran’s stockpile of enriched uranium will be dealt with under terms that will be worked out as part of a final deal, “with the minimum methodology to be down-blending on site under the supervision of” the International Atomic Energy Agency, though other enrichment matters will also be discussed as part of negotiations for a final deal;
- And the United States will “make fully available for use” Iran’s frozen or restricted funds and assets upon implementation of the MoU.
Trump defended the deal’s conditions on Wednesday, particularly the controversial decision to return Iran’s frozen funds. “It’s their money, and we froze it,” Trump said. “At a certain point in time, I guess we have to give it back.”
Improving ties. Trump said on Wednesday that the United States is “very close” to finalizing a trade deal with India. “We’ve been there for a little while, and he’s a very tough negotiator, one of the toughest, actually,” Trump said of Indian Prime Minister Narendra Modi during a bilateral meeting on the sidelines of the G-7 summit, adding that he plans to visit New Delhi at some point.
The two countries agreed to a preliminary trade deal in February, but its finalization was delayed by the U.S. Supreme Court’s ruling just days later that struck down most of Trump’s tariffs. India’s ambassador to the United States, Vinay Kwatra, told FP’s Rishi Iyengar last week that since the ruling, India has “continued our engagement with the U.S. in true earnest with the objective of concluding the deal at the earliest possible moment.”
However, the two countries hit a rough patch recently after the U.S. military launched strikes on a commercial oil tanker near the Strait of Hormuz earlier this month, killing three Indian seafarers.
Still, Trump claimed on Wednesday that the two leaders have a “great relationship” and that the United States would defend India if it was targeted. “If anybody attacks that man, we’re going to be there,” Trump said, though he added that “if there’s a new leader, I’m not sure about that.”
Yuan vs. dollar. China’s central bank unveiled measures on Wednesday that aim to make yuan-denominated assets more appealing to foreign investors. Under the new initiatives, the People’s Bank of China will allow overseas central banks and financial organizations to obtain yuan liquidity against Chinese government bonds, and it will move toward an overnight policy-rate framework similar to how the U.S. Federal Reserve and other Western central banks function.
By deepening China’s control over short-term money markets, Beijing is hoping to transform the yuan into a global reserve currency that rivals the U.S. dollar. “China has sought to internationalize its currency for at least the past 15 years and has built the infrastructure to prove it,” Henry Tugendhat wrote in Foreign Policy last May. “But what it ultimately cannot control is who buys or uses the yuan.”
Until recently, foreign investors remained hesitant to use the yuan, preferring other currencies before relying on China’s. However, some experts argue that the Iran war may have upended this status quo and helped the yuan gain traction. Conflict in the Middle East is a potential “catalyst for erosion in petrodollar dominance,” Germany’s Deutsche Bank said.
Right-wing popularity. Support for Australia’s right-wing One Nation party is reportedly growing, as party leader Pauline Hanson blames the ruling Labor government’s immigration policies for fueling rising prices. “Undeniably, immigration or migration policy has our country in the state of crisis,” Hanson told the National Press Club in Canberra on Wednesday. “At the center of this crisis is the utterly flawed policy of multiculturalism.”
According to the Australian Bureau of Statistics, nearly 33 percent of the country’s population was born abroad. Hanson argued on Wednesday that this influx of migrants has raised housing prices and worsened Canberra’s affordability crisis. “We cannot be a multicultural society,” Hanson said. “We are a multiracial society. But we must be monocultural.”
Adding fuel to the fire, Hanson warned of “radical Islam,” refused to begin her speech with a customary acknowledgment of Australia’s Indigenous communities, and vowed to eliminate the country’s Special Broadcasting Service if she wins the next federal election.
One Nation was long seen as a fringe group. But Hanson’s growing popularity has bolstered the party’s standing, with one local opinion poll reporting on Monday that Hanson has now overtaken Prime Minister Anthony Albanese as Australians’ top choice for the premiership. Experts have compared her party’s rise to Trump’s MAGA movement and Nigel Farage’s Reform UK successes.
Between strained conversations at this week’s G-7 summit, foreign leaders still managed to bring rare moments of levity to the otherwise tense conference. News that Italian Prime Minister Giorgia Meloni had quit smoking last month drew enthusiastic congratulations from her fellow attendees. World Cup talk peppered into several conversation lulls, with British Prime Minister Keir Starmer calling Cape Verde’s surprise 0-0 draw against Spain “quite remarkable.” And Canadian Prime Minister Mark Carney noted that French President Emmanuel Macron had forgotten his watch at the group’s working lunch, prompting Trump to joke: “Give me it if he left. Gimme.”
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