Latest news for 2 September 2026

IRAN

The latest.

The US and Iran have again exchanged fire in the most intense bout of fighting in weeks, with Tehran targeting more US sites in Bahrain, Jordan, Kuwait, and Iraq, while the US has resumed direct strikes on Iran’s mainland. Both foes are now warning they’ll escalate further. (BBC)

Comment: Some had hoped DC’s ‘Economic D-Day’ might somehow end the tit-for-tat, but the problem with tit-for-tat is neither side can afford to let the other get the final tat. Meanwhile, the free world’s free press means the regime is perfectly aware of DC’s reported munitions constraints.

CHINA

Two birds, one ship.

Beijing is rejecting US allegations that China’s state-owned shipping giant COSCO hides surveillance equipment to intercept rival military comms across Europe, North America, and Asia. The US flagged COSCO’s military links back in January 2025. (Independent)Comment: That countries spy on one another is nothing new. That they use civilian fronts as cover is also nothing new. But that doesn’t make these claims any less spicy: COSCO is one of the world’s largest liner fleets, with a hall-pass to strategic Western ports every week. The timing is interesting too, just ahead of Xi’s planned trip to the US — these kinds of pre-visit leaks can be a way to build leverage and shape the narrative.

SYRIA

Nuclear suspicions confirmed.

It turns out the old Assad regime was indeed building a nuclear reactor in Deir el-Zour, according to a new UN report. Israeli airstrikes levelled the suspicious site back in 2007, and new IAEA verification work greenlit by Syria’s post-Assad government seems to have confirmed those fears. (AP)

Comment: These findings now open up two new fights: first, who was building this secret nuclear site? The long-standing suspicion (backed by design similarities) is North Korea. Second, what happens to any remaining nuclear material? Damascus is playing nice with the UN watchdog, though has also flagged any nuclear material remains under Syrian control, hinting at a possible civilian nuclear energy programme under international safeguards. It’s hard to see Israel liking that.

CUBA

Unpaid lawyers quit.

The regime’s London solicitors have quit a years-long UK case after going more than a year without fees. The fight is with a Cayman fund that bought defaulted 1980s Cuban loans on the cheap. Havana claims the paper was never validly assigned, and the issuing bank is no longer Cuba’s central bank, though UK judges are increasingly leaning the other way. (Bloomberg $)

SOUTH KOREA

Record budget.

Seoul has unveiled a record $597B budget for 2027, a ~13% increase largely funded by a ~doubling of corporate tax receipts amid the AI boom. (Reuters)

Comment: President Lee is spending some of that AI windfall on even more AI to keep the good times rolling, plus helping cohorts (like youth and regions) most vulnerable to AI’s disruptions. He’s effectively stuffing another $76B chunk under the mattress for if/when the AI boom ends. A pretty adult approach to a windfall by world standards, notwithstanding some opposition grumbling that he should’ve paid down more debt (which is relatively low and falling).

GERMANY

Guess who.

Berlin has now officially blamed Moscow for last month’s discovery of explosive-laden drones at Leipzig airport, including one near a cargo plane carrying arms for Ukraine to defend itself against Putin’s attacks. The Germans have now announced a series of retaliatory diplomatic actions, including the closure of Russia’s consulate in Bonn. (Politico)

Comment: A faulty detonator seems to be the one reason anyone is still describing this as a mere ‘hybrid’ attack worthy of a mild diplomatic response. The free world should probably start thinking very carefully about how it’ll respond when Putin’s detonators start working.

SENEGAL

Hidden-debt hangover.

The IMF has announced a new $2.2B, three-year deal with Senegal and is formally parking the old deal after it emerged that the previous government was under-reporting its debt. (France24)

Comment: It’s still just a staff-level agreement (ie, pending board approval), but might be an elegant solution to this mess. The fact Senegal’s bonds just hit record new lows hints at the tougher reality: markets were lending against fake numbers that are now getting priced in, with official debt now at ~132% of GDP once you include those missing loans.