The U.S. suddenly faces a new arms race that could be more dangerous than the Cold War: This time there'll be three nuclear superpowers.

• China is on track to become a nuclear peer with the U.S. and Russia — and Moscow and Beijing have shown signs they could align against Washington, Axios World editor Dave Lawler writes.

Why it matters: The U.S. "is now facing questions about how to manage a three-way nuclear rivalry, which upends much of the deterrence strategy that has successfully avoided nuclear war," write The New York Times' David E. Sanger, William J. Broad and Chris Buckley.

What's happening: Chinese President Xi Jinping's apparent determination to close the gap with the Cold War-era nuclear behemoths — and his increasingly close relations with Russian President Vladimir Putin — mean the next arms race could be more unpredictable than the last one.

• 🇨🇳 China is reportedly building new nuclear silos, mobile missile launchers and more advanced nuclear submarines.

Breaking it down: Beijing's arsenal is still a fraction of the size of Moscow's or Washington's. But China is on track to roughly quadruple its stockpile of nuclear warheads to around 1,500 by 2035, according to the Pentagon.

• 🇷🇺 Russia is also developing new nuclear delivery systems.
• Putin announced in February that he was suspending its participation in New START, the last remaining U.S.-Russia arms control pact.

Between the lines: U.S. nuclear policy is based first on deterrence, and then on the idea that if nuclear war can’t be averted, the U.S. must be able to destroy as much of an enemy’s nuclear forces as possible before they can be used against the U.S. or its allies, says Jon Wolfsthal, senior adviser at Global Zero and former senior director on the National Security Council under Barack Obama.

• Now, says James Acton, director of the Carnegie Endowment's nuclear policy program, some in the U.S. government and military are arguing the U.S. needs to be equipped to fight Russia and China at the same time.

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Treasury Secretary Janet Yellen today will offer China fresh guidelines on where the U.S. is prepared to cooperate — and where it won’t compromise, Axios' Hans Nichols reports.

• Why it matters: Direct diplomacy with China is on ice. Yellen’s speech is a step toward President Biden’s goal of improved communications with China, which he announced next to President Xi last year.

State of play: Yellen and Secretary of State Tony Blinken postponed separate trips to China earlier this year after China flew a spy balloon across the U.S. before the U.S. shot it down off the South Carolina coast.

• Those visits haven't been rescheduled. Yellen said last week that she still hopes to visit Beijing.

What's happening: Yellen will use today's speech at John Hopkins University's School of Advanced International Studies to outline three principal objectives behind the U.S.'s economic approach to China.

1. "The United States does not seek competition that is winner-take-all,” Yellen will say, according to remarks prepared for delivery.
2. Yellen will pledge to "clearly communicate to the PRC [People’s Republic of China] our concerns about its behavior," while noting that U.S. actions could have "economic impacts."
3. She will emphasize: "[O]ur goal is not to use these tools to gain competitive economic advantage."

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Mixed in with President Trump's online rants about his legal jam are specific vows about what he'd do if he won power again, Axios' Sophia Cai reports:

• In criticizing the Manhattan D.A. who charged him with 34 criminal counts, Trump last week vowed "sweeping" investigations of "Marxist prosecutors," with an eye toward replacing them with conservatives.
• He proposed giving the president the authority to hire and fire federal workers at will — not a new idea, but now part of a broad effort to "clean out" investigators and officials he sees as disloyal.
• In a video last month, Trump promised a "Truth and Reconciliation Commission" on "Deep State spying" ... "a major crackdown on government leakers" ... "an independent auditing system to continually monitor our intelligence agencies to ensure they are not spying on our citizens or running disinformation campaigns."
• In a furious burst of messages on social media after his arraignment in New York this month, Trump made many Republicans in Congress cringe by calling on them to "defund" the Justice Department and the FBI.

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Tesla's repeated price cuts are taking a toll on the bottom line, Matt Phillips writes for Axios Markets.

• Elon Musk's electric vehicle company yesterday reported that profits fell 24% in Q1, compared with the same quarter last year.
• The earnings were worse than Wall Street analysts had expected, sending the stock down 3% in the after-hours trading session.

The big picture: Amid growing electric-vehicle competition, market leader Tesla is trying to cling to the pole position. Tesla has turned to price cuts as a means to boost — or at least preserve — market share.

• Vehicle sales rose, with Tesla delivering 422,875 vehicles during the first quarter — 36% more than the prior year.

🔮 What's next: More price cuts could be coming.

• Musk said on a post-earnings conference call: "We're taking a view that pushing for higher volumes and a larger fleet is the right choice here versus the lower volume and higher margin. However, we expect our vehicles over time will be able to generate significant profit."

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The recent online leak of Pentagon information is giving déjà vu to gamers, who've seen the release of military secrets in video game forums before, Axios gaming reporter Stephen Totilo writes.

• Why it matters: It's easy to post documents online, and the urge to win an argument or otherwise impress online peers is strong.

Since mid-2021, fans of the realistic military-themed game War Thunder have occasionally posted classified or otherwise restricted information related to British, French, Chinese and U.S. weapons systems, sending forum moderators scrambling to delete the messages.

• The most recent leak on War Thunder's forum, involving restricted documentation about the capabilities of the U.S.-made F-16A fighter jet, was published by a user on Jan. 15.
• It was deleted the next day after another user questioned whether it violated publisher Gaijin Entertainment's extensive prohibitions on posting "restricted information."

"Our players are very passionate about War Thunder and military vehicles, and sometimes they're too passionate," Anton Yudintsev, founder of Budapest-based Gaijin Entertainment, tells Axios.

• War Thunder lets players battle each other using virtual versions of real tanks and planes, which the developers aspire to depict as accurately as possible.

Players expect authenticity, Yudintsev says, offering a notable example of a tank used by the French military: "When someone prefers to play Leclerc in War Thunder, they are usually motivated to convince the dev team to increase the tank performance by providing some documentation."

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Home prices continued their downward tumble in March: Median sale prices were 3.3% lower than a year ago — the biggest annual drop since 2012, per Redfin, Emily Peck writes for Axios Markets.

• Why it matters: It's the second month in a row of negative year-over-year prices.

You know the drill: Mortgage rates are high — and homeowners don't want to sell and lose their cheap mortgages.

• Home prices in Boise, Idaho — the iconic Zoom boom town — fell 15.4% from last year, the most of any U.S. metro.

India should pass China's population midway through this year, according to a new UN projection.

• Demographers are unsure exactly when India will take the title as most populous nation in the world, because they're relying on estimates — India's last census was in 2011, AP reports.

Both China and India have more than 1.4 billion people. Combined, they make up more than a third of the world's 8 billion people.

Colorado is partnering with the marijuana industry to combat cannabis-impaired driving, Alayna Alvarez writes for Axios Denver.

• Why it matters: 10 years after weed was legalized in the state, fatal crashes involving the drug persist — and appear to be rising.

What's happening: As part of a 4/20 safe driving campaign, industry members met yesterday with officials from Colorado's transportation agency to discuss how budtenders can act on the frontlines to prevent people from driving while high.

• The state wants dispensaries to train employees on the signs of high customers — from glassy eyes and dilated pupils to short-term memory loss — and what they can do to keep them from driving.
• That includes budtenders asking how people are feeling, refusing to sell a product to customers, or offering to call them a ride home.

What's next: To help keep people off the roads, Native Roots is offering free weed delivery in Denver through Saturday, in honor of 4/20.

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