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US President Donald Trump said trade would dominate discussions during his upcoming summit with Chinese President Xi Jinping, even as tensions surrounding the Iran conflict continue to pressure global energy markets.
Oil prices surged above $100 per barrel as hopes for a peace agreement between the US and Iran weakened further.
Meanwhile, the US Senate confirmed Kevin Warsh to the Federal Reserve Board, clearing the way for his expected appointment as Fed chair.
Separately, US inflation accelerated to 3.8% in April, driven largely by rising energy prices linked to disruptions in the Middle East.
Trump-Xi talks to focus on trade and not Iran
US President Donald Trump said trade discussions would take priority during his meeting with Chinese President Xi Jinping in Beijing, while downplaying the role of the Iran conflict in the summit.
“We’re going to be talking to President Xi about a lot of things. I would say, more than anything, trade,” Trump told reporters Tuesday at the White House before departing for China.
Trump added that Iran would not be a major focus of the discussions.
“We have a lot of things to discuss. I wouldn’t say Iran is one of them, to be honest with you, because we have Iran very much under control,” he said. “We’re either going to make a deal or they’re going to be decimated one way or the other.”
The meeting comes as Washington and Beijing work toward extending the trade truce reached last fall and seek broader agreements governing economic relations between the world’s two largest economies.
China remains one of Iran’s largest oil buyers and has pushed for the reopening of the Strait of Hormuz, which remains heavily disrupted amid the ongoing conflict.
Oil climbs as Iran tensions deepen
Oil prices extended gains Tuesday as markets increasingly doubted that negotiations between the US and Iran would produce a near-term peace agreement.
Brent crude rose $3.10, or 2.97%, to $107.31 per barrel, while US West Texas Intermediate crude gained $3.56, or 3.63%, to $101.63 per barrel.
The latest gains followed Trump’s comments that ceasefire talks were on “life support” after disagreements emerged over Iran’s demands, including sanctions relief, compensation for war damage, the removal of the US naval blockade, and sovereignty over the Strait of Hormuz.
The US Energy Information Administration said it now expects the Strait of Hormuz to remain effectively closed through late May rather than reopening earlier as previously expected.
The agency estimates that roughly 10.5 million barrels per day of Middle Eastern oil production were lost during April because of disruptions tied to the Strait closure.
Senate confirms Warsh to Fed Board
The US Senate confirmed Kevin Warsh to a 14-year term as a Federal Reserve governor on Tuesday, moving him closer to becoming the central bank’s next chair.
The Senate approved the nomination by a 51-45 vote, with Democratic Senator John Fetterman joining Republicans in support.
The Senate also advanced Warsh’s separate nomination for a four-year term as Fed chair, potentially setting up final confirmation as soon as Wednesday.
Current Fed Chair Jerome Powell’s term expires Friday.
Warsh’s expected elevation comes amid growing tensions between the Trump administration and the Federal Reserve over interest-rate policy.
Trump has repeatedly pressured the Fed to lower rates more aggressively while criticizing Powell’s cautious stance amid persistent inflation concerns.
US inflation hits highest level since 2023
US consumer inflation accelerated to 3.8% in April, exceeding economists’ expectations and marking the highest annual inflation reading since May 2023.
The Bureau of Labor Statistics said the Consumer Price Index rose 0.6% during the month after increasing 0.9% in March.
The inflation report showed that higher energy prices linked to the Iran conflict continued spreading across the broader economy.
The energy index climbed 3.8% in April and accounted for more than 40% of the monthly increase in headline inflation.
Core inflation, which excludes food and energy, also remained firm, rising 0.4% during the month and 2.8% annually.
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