Hormuz strikes, G20 trade friction, and Taiwan's trillion-dollar defense plan: Five geopolitical signals for September 2, 2026

1. US strikes put Hormuz shipping back at center

• On September 1, US Central Command said US forces had begun striking Islamic Revolutionary Guard Corps targets in Iran after what it described as attempted attacks on commercial shipping in the Strait of Hormuz and on US service members in the region. 1
• Explosions were reported on Qeshm Island and in the port cities of Bandar Abbas and Chabahar, with reports also coming from Jask and Sirik; two supertankers carrying Saudi oil were hit by unknown projectiles while leaving Hormuz, according to Marisks and Kpler. 1
• Iranian officials warned that Tehran could prevent oil exports from the Gulf, while Brent crude, already up 2% that day, gained almost another 2% after reports of the US strikes. 1

2. Xi's Egypt visit brings ports, energy and military ties into view

• Chinese President Xi Jinping arrived in Egypt on September 1 for his first visit to the Arab world's most populous country in a decade, and Egyptian President Abdel Fattah al-Sisi welcomed him at Cairo International Airport. 2
• Reuters reported that Chinese investment in Egypt has grown across manufacturing, ports, solar energy, green hydrogen and satellite technology; Egypt also controls the Suez Canal, a major trade route linking the region and global markets. 2
• Egypt held its second annual military exercise with China in August, including the first deployment of Chinese J-16 fighters to Africa, drills with French Rafales and a Chinese tanker refueling a Rafale; Egypt receives about $1.3 billion a year in US military aid. 2

3. G20 trade statement splits China from other finance chiefs

• G20 finance leaders backed action against "non-market" policies and trade distortions at a September 1 meeting in Asheville, North Carolina, with China the sole dissenter. 3
• The chair's statement called on countries with persistent external surpluses to reduce distortions that constrain domestic consumption and over-reliance on exports, and urged governments to avoid unnecessary export restrictions so supply chains can function normally. 3
• Reuters reported that China's exports rose 23.9% year on year in July as Chinese producers expanded shipments of electric vehicles, semiconductors and other goods; US Treasury Secretary Scott Bessent was pressing for tariff-based action. 3

4. Russian air attacks hit Kyiv-region transport and energy links

• Reuters reported 12 deaths in Kyiv and the surrounding region: eight in Kyiv, most of them railway workers, and four in Boryspil, where 13 people were injured. 4
• Russian strikes hit railway infrastructure and residential areas, including an apartment block set on fire by a daytime drone attack in Kyiv; a border crossing with NATO member Romania in the Odesa region was also targeted. 4
• Reuters said thousands of families in the Odesa region were left without electricity and reported that Ukraine remained critically short of Patriot interceptors as allies were urged to provide more air defense and energy support. 4

5. Taiwan's proposed 2027 defense budget crosses T$1 trillion

• Taiwan's proposed 2027 defense budget is expected to exceed T$1 trillion, or about $31.47 billion, for the first time. 5
• President Lai Ching-te said the spending would support defense self-reliance and plans to develop Taiwan's military-industrial sector, artificial intelligence and unmanned vehicles. 5
• China's Taiwan Affairs Office spokesperson Zhang Han criticized the proposal, while Lai said only Taiwan's people can decide the island's future. 5