Canadian Prime Minister Mark Carney is visiting China this week to mend relations with the world's second-largest economy. It's the first visit by a Canadian leader in eight years. Carney aims to double non-U.S. exports over the next decade to reduce Canada’s reliance on Washington. The push is part of a major rethink as ties with the U.S. sour under President Donald Trump. Carney took office less than a year ago. He follows other leaders like Anthony Albanese of Australia and Keir Starmer of the U.K. in seeking to improve ties with China. Carney will also visit Qatar and attend the World Economic Forum in Switzerland. Carney's arrives in China on Wednesday.

President Donald Trump has arrived at a delicate moment as he weighs whether to order a U.S. military response against the Iranian government over its crackdown on protests. Trump has repeatedly threatened Tehran with military action if the Islamic Republic was found using deadly force against antigovernment protesters. But now, with Iranian officials indicating they want to have talks with the White House about the protests, the U.S. military appears to be on standby mode. Trump said Monday he would slap 25% tariffs on countries doing business with Tehran, a move that could affect China, the United Arab Emirates and Turkey.

Trump says Iran trade partners will face 25% tariffs from US as he looks to pressure Tehran over protest crackdown.

A week in which longtime tensions between neighbors China and Japan ratcheted up economically and politically is drawing to a close with no sign of improvements. The Chinese ambassador in Tokyo rebuffed his host nation and the Japanese reported delayed shipments to suppliers in China because of the spat. That capped a week where China underscored its displeasure with Japan by instituting export controls, condemning what it called Tokyo’s renewed militarism and cozying up to another regional neighbor, South Korea. It was the latest in several days of Chinese criticism toward Japan after its prime minister suggested in November she wouldn’t rule out intervening if China used military force against the island democracy of Taiwan.

They’re at it again. China and Japan are frenemies, trading partners and uneasy neighbors with a tortured and bloody history they’re still working through. Now they're freshly at each other’s rhetorical throats as 2026 begins. And it’s over the very sticking points that have kept them resentful and suspicious of each other for many decades. That's Japan’s occupation of parts of China in the 20th century, the use of the military in East Asia — and, of course, politics and economics. When it comes to the China-Japan relationship, anger remains a powerful and enduring tool on both sides. And there’s no indication that’s going away anytime soon.

Wall Street’s strong start to the year slowed. The S&P 500 slipped 0.3% Wednesday for its first loss in four days. The Dow Jones Industrial Average dropped 0.9% from its own record set the day before, while the Nasdaq composite added 0.2%. Some of the market’s sharpest drops hit industries that President Donald Trump targeted for criticism. Homebuilders fell after Trump suggested moves to prevent large institutional investors from buying single-family homes, in hopes of making it more affordable for people to buy houses. Crude oil prices fell, and Treasury yields swung in the bond market following mixed reports on the U.S. economy.

China has escalated its trade tensions with Japan by launching an investigation into imported dichlorosilane, a chemical gas used in making semiconductors. This came a day after it imposed curbs on the export of dual-use goods that could be used by Japan’s military. The Chinese Commerce Ministry says it launched the investigation after learning from the domestic industry that the price of dichlorosilane imported from Japan had decreased 31% between 2022 and 2024. Beijing has been showing mounting displeasure with Tokyo after Japan’s Prime Minister Sanae Takaichi late last year suggested its military could intervene if China were to take action against Taiwan – an island democracy Beijing considers its own territory.

The economy in 2025 was filled with contradictions, as growth was healthy while hiring slowed, inflation stayed elevated and unemployment rose. Last year’s odd outcomes raise a host of questions for the upcoming year: Will a growing economy eventually boost the sluggish job market? Or are last year’s weak job gains a sign of a stumbling economy that could get worse? Many economists are modestly optimistic that growth will continue in 2026 and hiring will follow.