Geopolitics Daily Brief — August 25, 2026: China tariff plan, Storm Shadow access and Hormuz sanctions

1. US weighs 7.5% China tariff over excess industrial capacity

• The White House is considering a 7.5% tariff on China, according to three people familiar with the deliberations cited by the Associated Press; the proposal targets alleged excess industrial capacity. 1
• AP reports that officials view the level as compatible with the one-year trade truce and a possible late-September meeting between Donald Trump and Xi Jinping; the officials can still change the proposal. 1
• The proposal would add to 10%–12.5% tariffs announced for 60 economies, while China's trade surplus reached nearly $1.2 trillion in 2025, AP reports. 1

2. Britain opens Storm Shadow technology to Ukraine

• Britain will give Kyiv access to classified technology to begin domestic production of Storm Shadow long-range cruise missiles, Reuters reports. 2
• France has already agreed to license Storm Shadow technology for a European missile effort, according to Reuters. 2
• Volodymyr Zelenskiy said Ukraine needs at least 300 Patriot interceptors for winter and faces a $27 billion defence-funding gap this year. 2

3. Kyiv offers a conditional pause for Black Sea grain shipping

• Ukraine offered Russia a proposal to halt attacks on civilian targets and grain ships in the Black Sea, Volodymyr Zelenskiy said. 3
• Kyiv offered to let third-country vessels collect food exports from Ukrainian ports and said Ukraine would not attack those ships. 3
• Moscow wants any arrangement to include a halt to Ukrainian strikes on Russian refineries and pipelines, and rejected Kyiv's proposal as a half-measure; no agreement has been reached. 3

4. Washington widens Iran sanctions as Hormuz traffic thins

• The U.S. Treasury announced new secondary sanctions on 60 individuals, entities, and vessels; Chinese financial institutions suspected of facilitating Iran's oil trade were absent from the announced list. 4
• Treasury Secretary Scott Bessent warned that countries continuing to trade with Iran risk exclusion from the dollar-based financial system, but he declined to name the countries or give an effective date. 4
• Iran promised retaliation, while Reuters reported that only two commodity vessels transited the Strait of Hormuz on Monday, the lowest daily tally since early May. 4

5. Taiwan reports seven PLAN vessels and no PLA aircraft

• Taiwan's Ministry of National Defense said it detected seven PLAN vessels and four official Chinese ships around Taiwan up to 6 a.m. local time on August 25, 2026. 5
• The ministry said Taiwan's armed forces monitored the situation and responded. 5
• The ministry said it detected no PLA aircraft operating around Taiwan during that timeframe and therefore provided no flight-path illustration. 5