Chinese bombers. Chinese hypersonic missiles. Chinese cyberattacks. Chinese anti-satellite weapons.
To a remarkable degree, the 2020 Pentagon budget proposal is shaped by national security threats that Acting Defense Secretary Patrick Shanahan has summarized in three words: "China, China, China."
The U.S. is still fighting small wars against Islamic extremists, and Russia remains a serious concern, but Shanahan seeks to shift the military's main focus to what he considers the more pressing security problem of a rapidly growing Chinese military.
This theme, which Shanahan outlined Thursday in presenting the administration's proposed 2020 defense budget to the Senate Armed Services Committee, is competing for attention with narrower, more immediate problems like President Donald Trump's effort to use the military to build a border wall.
The hearing, for example, spent more time on the wall and prospects for using military funds to build parts of it than on any aspect of foreign policy, including the conflict in Syria or military competition with China, Russia or North Korea.
Shanahan is hardly the first defense chief to worry about China. Several predecessors pursued what the Obama administration called a "pivot" to the Pacific, with China in mind. But Shanahan sees it as an increasingly urgent problem that exceeds traditional measures of military strength and transcends partisan priorities.
"We've been ignoring the problem for too long," Shanahan told a senator.
"China is aggressively modernizing its military, systematically stealing science and technology, and seeking military advantage through a strategy of military-civil fusion," he wrote in prepared testimony to the committee, which is considering a $718 billion Pentagon budget designed in part to counter China's momentum.
The $25 billion the Pentagon is proposing to spend on nuclear weapons in 2020, for example, is meant in part to stay ahead of China's nuclear arsenal, which is much smaller than America's but growing. Shanahan said China is developing a nuclear-capable long-range bomber that, if successful, would enable China to join the United States and Russia as the only nations with air-, sea- and land-based nuclear weapons.
Shanahan ticked off a list of other Chinese advancements — hypersonic missiles against which the U.S. has limited defenses; space launches and other space efforts that could enable it to fight wars in space; "systematically stealing" of U.S. and allied technology, and militarizing land features in the South China Sea.
Bonnie S. Glaser, director of the China Power Project at the Center for Strategic and International Studies, says the U.S. has been lacking effective strategies for competing with China on a broad scale.
"It is overdue," she said of the Shanahan focus. "We have been somewhat slow in catching up" in such areas as denying China its regional ambitions, including efforts to fully control the South China Sea, which is contested by several other countries.
Some defense analysts think Shanahan and the Pentagon have inflated the China threat.
"I do think it's worth asking what exactly is threatening about China's behavior," said Christopher Preble, vice president for defense and foreign policy studies at the Cato Institute. He doesn't discount China as a security issue, including in the South China Sea, but doubts the U.S. military is the institution best suited to deal with such non-military problems as cyber intrusions into American commercial networks.
In Preble's view, competition with the Chinese is not mainly military. "I still don't believe the nature of the threat is quite as grave as we're led to believe" by the Pentagon, he said. "They tend to exaggerate the nature of the threat today."
In his previous role as deputy defense secretary, Shanahan and President Donald Trump's first defense secretary, Jim Mattis, crafted a national defense strategy that put China at the top of the list of problems.
"As China continues its economic and military ascendance, asserting power through an all-of-nation long-term strategy, it will continue to pursue a military modernization program that seeks Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global pre-eminence in the future," that strategy document says.
That explains in part why the U.S. is spending billions more on space, including means of defending satellites against potential Chinese attack, and on building hypersonic missiles to stay ahead of Chinese and Russian hypersonic weapons development.
It also explains some of the thinking behind preparing for an early retirement of the USS Harry Truman aircraft carrier, a strategy that views carriers as a less relevant asset in a future armed conflict involving China.
This concern about countering China has permeated the entire U.S. military. Gen. Thomas Waldhauser, head of U.S. Africa Command, said last month that dozens of African heads of state were invited to Beijing last fall to consider billions in Chinese loans and grants, and that China is building thousands of miles of railroads in Africa, mostly linked to Chinese mineral extraction operations.
"They're heavily invested and heavily involved" in Africa, he said.
The top U.S. commander in Europe told Congress this week that China also is making inroads in Europe.
"China is looking to secure access to strategic geographic locations and economic sectors through financial stakes in ports, airlines, hotels, and utility providers, while providing a source of capital for struggling European economies," Gen. Curtis Scaparrotti said.
NEW YORK (AP) — Oil prices dropped more than 10% Friday, and U.S. stocks raced toward another record after Iran said the Strait of Hormuz is open again for commercial tankers carrying oil from the Persian Gulf to customers worldwide.
The S&P 500 leaped 1.2% as Wall Street rallied to the finish of a third straight week of big gains, its longest streak since Halloween. A freer flow of oil would take pressure off prices not only for gasoline but also for groceries and all kinds of other products that get moved by vehicles. It could even ultimately help people pay less on credit-card interest or mortgage bills.
The Dow Jones Industrial Average briefly climbed 1,139 points and was up 942 points, or 1.9%, as of 2:05 p.m. Eastern time, while the Nasdaq composite was 1.4% higher
The U.S. stock market has jumped more than 12% since hitting a bottom in late March on hopes the United States and Iran can avoid a worst-case scenario for the global economy despite their war. Friday’s reopening of the Strait of Hormuz, which may only be temporary, is the clearest signal yet for optimism, and President Donald Trump said late Thursday that the war “should be ending pretty soon.”
The price for a barrel of benchmark U.S. crude plunged immediately after Iran’s foreign minister, Abbas Araghchi, posted on X that the passage for all commercial vessels through the strait “is declared completely open” as a ceasefire appears to be holding in Lebanon. He said it would stay open for the remaining period of the ceasefire, and U.S. oil tumbled 11.6% to $83.65 per barrel.
Brent crude, the international standard, dropped 9.2% to $90.25 per barrel. To be sure, it remains above its $70 price from before the war, indicating some caution is still embedded in financial markets.
Several times since the war began, optimism on Wall Street has quickly swung to doubt about a possible end to the fighting. That in turn has caused vicious and sudden swings of prices for everything from stocks to bonds to oil.
Minutes after the Iranian foreign minister’s announcement of the reopening of the Strait of Hormuz, Trump said on his social media network that the U.S. Navy’s blockade of Iranian ports remains “in full force” until both sides reach a deal on the war. He, though, also said that “should go very quickly in that most of the points are already negotiated” and emphasized it by using all capital letters.
Companies with big fuel bills soared to some of Wall Street’s biggest gains following the easing of oil prices.
United Airlines surged 7.1%. On Thursday, the head of the International Energy Agency had said that Europe has “maybe six weeks or so” of remaining jet fuel supplies.
Operators of cruise ships, which guzzle fuel, also steamed higher. Norwegian Cruise Line jumped 6.6%, and Royal Caribbean Group gained 8.6%.
Housing and auto-related companies also got some relief from the drop in oil prices.
With less threat of high inflation hurting the economy, a sustained drop in oil prices could convince the Federal Reserve to resume its cuts to interest rates to invigorate the economy. The yield on the 10-year Treasury sank to 4.25% from 4.32% late Thursday, and lower yields can bring down rates for mortgages and other loans going to U.S. households and businesses.
Builders FirstSource, a supplier of windows and other products, rose 6.2%, and homebuilder Lennar gained 5.1% on hopes that lower mortgage rates will spur more people to buy houses. Carvana climbed 6.9% because lower loan rates can get more customers into new autos.
A strong start to the earnings reporting season for big U.S. companies has also helped to support the U.S. stock market, and several more financial companies joined the list of companies delivering bigger profits for the start of 2026 than analysts expected.
State Street rose 4.1%, and Fifth Third Bancorp added 1.7% after both reported better results for the latest quarter than expected.
They helped offset a 10.2% slide for Netflix, which fell even though it likewise delivered a better profit than expected. It did not raise its forecast for revenue growth for the full year, which analysts said may have disappointed some investors.
It also said Reed Hastings, cofounder and chairman of the streaming company, will step down from its board of directors in June when his term expires.
In stock markets abroad, stock indexes leaped in Europe following Iran’s announcement about the Strait of Hormuz. France’s CAC 40 jumped 2%, and Germany’s DAX returned 2.3%.
In Asia, where trading finished for the day before the announcement, indexes were weaker. Japan’s Nikkei 225 lost 1.8%, and Hong Kong’s Hang Seng fell 0.9% for two of the bigger losses.
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)
A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)
