Bessent Threatens Economic D-day; Canada Readies for US Trade Fight

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Nathan Hager** (0:10)
Good morning, I'm Nathan Hager.

**Alexis Christoforos** (0:11)
And I'm Alexis Christoforos. Here are the stories we're following today.

**Nathan Hager** (0:15)
Alexis, we begin with the Trump administration's pivot to economic war against Iran. Treasury Secretary Scott Bessent has unveiled what he's calling Operation Economic Outcast, threatening punishment for any country that does business with Tehran.

**Scott Bessent** (0:28)
Treasury has mapped every node, every facilitator, and every network that Iran has used to smuggle oil and evade sanctions. Beginning today, the actions of Treasury and other agencies will tighten the noose and block every potential source of revenue that funds the IRGC and the evil Iranian regime.

**Nathan Hager** (0:51)
Secretary Bessent announced sanctions on more than 60 entities with a focus on five of Iran's most vital lifelines, digital assets, technology, gold, aviation and shipping. The move could put the US on a collision course with China, which buys about 90% of Iran's oil. We get more from Bloomberg News Chief Asia correspondent, Rosalind Matheson.

**Rosalind Matheson** (1:11)
They are targeting some Chinese and Hong Kong companies, but these are quite small companies, private companies mostly, really intermediaries in this trade, and they can easily be shut down and other ones started. So it hasn't really given a sense that they're going to come for secondary sanctions so far, including against China. And that's really about targeting the banking sector.

**Nathan Hager** (1:33)
Bloomberg's Ros Matheson reports Bessent threatened to sanction a major financial institution by the end of the week, but he didn't say which one. He did acknowledge the risk of going after China now, saying, quote, Why would I want to blow up the global financial system?

**Alexis Christoforos** (1:45)
Well, Nathan, now the latest on the trade war between the US and Canada, the Canadian government plans to announce a range of measures to support businesses in response to 50% tariffs from the US. Sources tell Bloomberg they'll include expand jobless benefits and business loans similar to the COVID era economic support. Bloomberg Global Trade Editor, Brendan Murray, reports this dispute feels different from America's past trade wars.

**Brendan Murray** (2:09)
Remember, the Trump administration has gone to Japan, to South Korea, to the European Union, to the UK and said, congratulations, here's your new tariff. Canada has finally said, we're not going to stand up to it, and there seems to be a real ground swell of Canadian patriotism, a sort of survival instinct that says, you know, we're going to hunker down here.

**Alexis Christoforos** (2:28)
And Bloomberg's Brendan Murray reports the last-minute collapse of the trade talks now has Commerce Secretary Howard Lutnick in focus. Sources tell Bloomberg Lutnick saw US Trade Representative Jameson Greer's framework deal is too generous to Canada, and he emerged as a champion for US metal producers. We're told the Canadians blame Lutnick for moving the goalposts, while some business leaders credit him for derailing a threat to the US metals industry.

**Nathan Hager** (2:51)
And there's another note on the trade front this morning, Alexis. The US is set to impose a 7.5% tariff on Chinese goods. The levy is tied to US allegations of excess manufacturing capacity in China. It comes before the planned summit between Presidents Xi Jinping and Donald Trump next month.

**Alexis Christoforos** (3:07)
And UK Prime Minister Andy Burnham is planning to make his first trip to the United States since taking office. Let's go to London now and get the very latest with Bloomberg's Yuan Potts. Good morning, Yuan.

**Ewan Potts** (3:17)
Alexis and Nathan, the UK Prime Minister is to team up with other European leaders next month to head to the United States. Speaking to Bloomberg, Prime Minister Andy Burnham said he plans to lobby President Trump to allow Ukraine to access Patriot air defense missiles ahead of the winter. The war in Ukraine has depleted global Patriot stockpiles, leaving allies reluctant to provide them to Kiev.
Burnham told us he's optimistic that Ukraine's struggle with low interceptor numbers is, quote, fixable. In London, I'm Ewan Potts, Bloomberg Radio.

**Nathan Hager** (3:48)
All right, Ewan, thank you. Back in Washington, a couple of key rulings from the Supreme Court have gone President Trump's way. We get more from Bloomberg's Amy Morris in the nation's capital.

**Alexis Christoforos** (3:57)
The Supreme Court cleared the way for President Trump to move ahead with his executive order restricting mail-in voting. It is not clear how much his administration can implement before the midterms. The decision also appears to leave room for future court challenges. In a separate decision, the high court also gave the green light for construction of the White House ballroom to continue with Chief Justice John Roberts issuing a stay that will remain until further action from the court. In Washington, Amy Morris, Bloomberg Radio. Thanks, Amy. Let's turn now to the markets where futures are higher following yesterday's chip led losses on Wall Street. NVIDIA, which reports earnings tomorrow, has dropped for seven straight sessions. In addition to those earnings, investors are eagerly awaiting Kevin Warsh's first speech as Fed Chairman at Jackson Hole. Kelsey Burrow is Executive Director of Fixed Income at JPMorgan Asset Management.