Axios

Trade disputes rarely escalate as quickly and intensely as the current U.S.–China spat, which has resulted in tariff volleys and vehement rhetoric from each side. But recent statements from both countries suggest that tensions may now be falling.

What's next: Trump indicated on Tuesday that he would send Treasury Secretary Mnuchin to China next week. As both sides have softened their stances, the stage is set for the two sides to consider returning to the negotiating table.

At a joint news conference today, French President Emmanuel Macron said he and President Trump had agreed to work on a “new deal” that includes the 2015 nuclear agreement with Iran but incorporates additional measures.

What to watch: The enlarged deal would contain three more “pillars”: assurances that Iran cannot reconstitute a large nuclear program after certain JCPOA restrictions expire in 2025; limits on Iran’s ballistic missile development and transfers of weapons to regional proxies; and diplomacy to resolve the conflicts in Syria and Yemen.

President Trump said that North Korean leader Kim Jong-un was “very honorable” and “very open," adding that North Korea wants to hold a meeting "as soon as possible." His comments came during an expanded bilateral meeting during French President Emmanuel Macron's state visit.

Flashback to January: "Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!"

Trump said if Iran attempts to restart its nuclear program if the U.S. pulls out of the nuclear deal, "they will have bigger problems than they have ever had before.”

The backdrop: The comments came ahead of an Oval Office meeting with French President Emmanuel Macron, in which Macron is expected to attempt to convince Trump to remain in the nuclear deal. Iran's foreign minister has said Iran will restart its nuclear program if Trump decides to stop waiving sanctions next month.

In a meeting with Pakistan’s Chief of Naval Staff in Beijing on Friday, Chinese Defense Minister Wei Fenghe announced that China was “ready to provide security guarantees for the One Belt, One Road project” (OBOR).

Why it matters: Beijing has long pitched OBOR — a $4 trillion–$8 trillion integrated energy, transport and mega infrastructure project envisioned as a modern Silk Road — in economic terms. But this latest statement contrasts with Beijing’s earlier rhetoric, suggesting that the project has more important defense-related motives.

Sri Lanka's economy is struggling under the weight of massive debts owed to China, with the rupee hitting an all-time low on Monday.

The big picture: As the small South Asian country's economy spirals downward, it's freeing itself from debts by selling Chinese-funded infrastructure projects back to China, giving Beijing influence over strategic ports close to its rival India's shores.

Government officials are considering sanctions barring Kaspersky Lab from doing business in the U. S., CyberScoop reports.

Kaspersky's products have already been barred from federal systems as an alleged security risk, with reports the company's computer security software had been hijacked by Russian intelligence operatives to steal U.S. secrets. The company denies knowing involvement in any such scheme.

Last week, Kim Jong-un set the stage for upcoming summits with South Korea and the U.S. by announcing the suspension of North Korea's nuclear and long-range missile tests and the closure of its northern nuclear test site.

The big picture: Although Kim’s move is clever, we have been here before, and it does not change the game. North Korea may have no need of another nuclear test in the near future — there hasn't been one since September — and Kim knows that this concession is the bare minimum he will need to offer at his meeting with Trump.

The run-up to the U.S. and allied missile strikes in Syria last week brought the U.S. and Russia closer to a direct military collision than they've been since the early 1980s. The strikes themselves turned out to be limited and carefully executed, but Syria remains a volatile arena for U.S.–Russia relations.

The big picture: While the proxy war in Syria does hold the potential for a clash between U.S. and Russian forces, it is only one of several theaters in which a larger conflict between the two countries is playing out.

Kaspersky Lab identified a large number of servers used as infrastructure for a hacking campaign widely believed to be run by the Kremlin. One of those servers belongs to a Russian opposition party.

The background: Energetic Bear, also known as Dragonfly or Crouching Yeti, is a Russian-speaking hacking group targeting the energy sector and other industrial systems. Moscow-based Kaspersky Lab does not traditionally attribute attacks to governments, but many observers — including the U.S. government — believe that Energetic Bear is an espionage operation conducted by Russia.

Eurasia Group founder Ian Bremmer, whose new book, "Us vs. Them: The Failure of Globalism," is out tomorrow, broke down North Korean leader Kim Jong-un's recent promises to shut down his country's nuclear and missile testing for Axios.

The bottom line: With his trademark (non)-punctuation, Bremmer writes Axios future editor Steve LeVine, "kim wants to look solicitous right before the s korea and us summits. important for him that they go well — and it’s implausible that he’s actually going to denuclearize."