US-Iran war updates: China teases ‘countermeasures’ as Donald Trump threatens fresh tariffs

Australian households are bracing for more financial pain in the coming months as soaring fuel prices coupled with higher-for-longer interest rates crunch budgets.

The Reserve Bank of Australia has already delivered two successive interest rate rises this year, with another hike highly expected next month.

According to the survey, just over 80 per cent of consumers expect mortgage rates to increase over the next 12 months, with 40 per cent expecting a rise of more than 100 basis points.

Its mortgage rate expectations index, which tracks consumer expectations for variable mortgage rates over the next 12 months, rose 3.9 per cent to 177.2 in April, returning to recent highs.

A separate survey from National Australia Bank released the same day revealed business confidence crashed in March, with falls of this magnitude previously only seen in the Global Financial Crisis and the onset of the COVID-19 pandemic.

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Saudi Arabia is urgently pushing the US to abandon its blockade of the Strait of Hormuz and return to negotiations, fearing the high-stakes move could trigger a dangerous escalation across the region.

Arab officials warn the blockade — designed to choke Iran’s already battered economy — risks backfiring, with Tehran potentially retaliating by shutting down another global shipping chokepoint, the Bab al-Mandeb in the Red Sea.

That narrow passage between Yemen and the Horn of Africa is a critical artery for global trade, linking the Red Sea to the Indian Ocean and ultimately the Suez Canal — and any disruption there would send shockwaves through oil markets and international shipping.

The concerns highlight the enormous risks tied to Washington’s attempt to force open the Strait of Hormuz, which Iran effectively shut earlier in the war, slashing global oil flows by millions of barrels a day and sending prices soaring past $US100.

Despite the pressure campaign, Saudi Arabia has managed to maintain oil exports by rerouting crude across the desert to the Red Sea but that lifeline would be under serious threat if Iran’s Houthi allies in Yemen moved to choke off the Bab al-Mandeb.

Behind the scenes, Gulf nations are scrambling to de-escalate the crisis, pushing for fresh talks as fears grow the conflict could spiral further, even as both the US and Iran continue signalling they remain open to negotiations if the conditions are right.

Australia will join UK and France-led international talks this week about safeguarding the Strait of Hormuz but is still unlikely to send any support before the US-Israel-Iran war ends.

Acting Prime Minister Richard Marles said Australia continued to work with its partners and, like them, wanted to see freedom of navigation resume as soon as possible.

Iran has choked shipping through the vital route where 20 per cent of the world’s oil supplies passed before the war began at the end of February.

It is now reportedly seeking to charge multimillion-dollar tolls for ships to sail through.

US President Donald Trump has ordered his navy to blockade the passage of Iranian vessels through the strait while talks aimed at ending the war stall.

“We’re deeply invested in having an open Strait of Hormuz and the global fuel supply chain return to normality,” Mr Marles said on Tuesday.

“We’re working with all of our partners, and that includes the US, but we are very much working with countries like the UK and France.”

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Australians’ confidence has taken its biggest hit since the COVID pandemic as households brace for a new “cost of living shock”.

In its latest consumer confidence survey, Westpac-Melbourne Institute found sentiment crashed 12.5 per cent to 80.1 in April.

A score above 100 is considered optimistic about the future, while anything below suggests a pessimistic outlook.

Westpac head of Australia macro forecasting Matthew Hassan said it was near historic lows but above the extremes seen in pandemic and early 1990s recession.

“Australian consumers are being hit by another cost of living shock,” he said.

According to the survey data, all five sub indexes deteriorated sharply in April, especially those measuring the current conditions.

Surging fuel costs are weighing particularly heavily on the family finances compared with the subindex which plunged 16.7 per cent to 66.8 from a year ago.

It followed average pump prices hitting $2.40 a litre in early April, up 77 cents from February.

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Hezbollah leader Naim Qassem has dismissed planned talks between Israel and the Lebanese government as “fruitless”, vowing the group will not back down.

His comments come as Lebanese officials prepare to travel to Washington for negotiations with US and Israeli counterparts.

The talks follow a major shift in Lebanon, with the Government banning Hezbollah’s military activities in early March after the war with Israel erupted.

President Joseph Aoun has accused the Iran-backed group of dragging the country into a wider regional conflict.

But Qassem warned Israel was targeting “all of Lebanon” and urged the government to mobilise the army.

“You say you want a ceasefire, but what are they saying, and what leverage do you have?” he said.

“Our decision in the resistance is to neither calm down nor surrender.”

The Australian Government’s refusal to join the US-led naval blockade of the Strait of Hormuz is being highlighted in the latest viral Iranian propaganda video featuring LEGO characters.

Over recent days, Iranian-linked outlet Explosive News has produced numerous comical clips mocking US President Donald Trump and the US military operation, which have generated millions of views online through social media.

In a recently released instalment LEGO characters are featured in front of Australian flags and a document stating, “We will not join”, along with a narrator declaring: “the gavel is falling, the world is learning.”

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US Democrats will again try to force a Senate vote to stop the war in Iran, accusing Donald Trump of being “out of control”.

Senate Minority Leader Chuck Schumer said it would be the fourth attempt since the conflict began.

“For the fourth time, Republicans will have the chance to end this war,” he wrote on X.

Democrats have repeatedly tried to pass war powers resolutions requiring the president to seek approval from Congress before launching military action — but have been blocked each time.

Under the US Constitution, only Congress has the authority to declare war, not the president.

But Trump’s Republican allies, who hold narrow majorities in both chambers, have so far shut down the efforts.

Schumer also took aim at Trump’s military campaign, branding “Operation Epic Fury” an “Operation Epic Fail”.

He said the conflict had fuelled chaos in the Strait of Hormuz, driven petrol prices to years-high levels and failed to weaken Iran, which he said remained “standing” with its nuclear ambitions unchanged.

Iran’s parliamentary speaker Mohammad Bagher Ghalibaf taunted Mr Trump in an X post, saying: “Enjoy the current pump figures. With the so-called ‘blockade’, soon you’ll be nostalgic for $4–$5 gas.”

The post included an image of a map with gas station locations near the White House listing per-gallon prices.

The US military already has what it needs to implement a blockade in Iranian waters, thanks to a months-long build-up of naval forces in the region.

“You have multiple carrier strike groups in the region already and the US Fifth Fleet, which was already based in Bahrain,” Michael Horowitz, senior fellow for technology and innovation at the Council on Foreign Relations and a former deputy assistant secretary of defence, said.

He added that the US also had significant submarine and satellite capability.

“The American military has the ability to effectively monitor whether ships are coming or going in a way that lets the US vector to intercept those ships and prevent them from going to sell Iran’s oil,” he said.

Mark Cancian, a retired Marine colonel who is now a senior adviser to the Centre for Strategic and International Studies Defence and Security Department, said the blockade itself would be “cheap”, likely not adding additional expense to a war effort that has ballooned in costs — so long as it doesn’t restart open conflict between the two nations.

“You’re not firing million-dollar missiles at somebody,” he said. “All the costs of the ship and the crew are basically in the budget already.

“And you might even make money if you sell the oil, and of course that’s the sort of thing that would appeal to Trump.”

When America and Israel began their war on February 28, it was widely expected that Iran would choke off shipping in the Strait of Hormuz.

Few would have predicted that, less than two months later, Donald Trump would impose a blockade of his own, targeting traffic to and from Iranian ports and coastal areas. It went into effect on April 13.

Mr Trump hopes economic strangulation might force Iran to open the strait where bombardment has failed. It is a dangerous gamble that could compound the global energy crisis and lead to fresh escalation.

America’s rationale is simple. Iranian threats have drastically reduced tanker traffic through Hormuz.

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Donald Trump has personally collected an order of his favourite food - McDonald’s - as part of a media stunt.