US Aims to Throttle Iran's Economy; Bessent Flags Bigger Debt Buyback Potential

**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 latest developments in the Middle East. Iran is dismissing US threats of economic pain and isolation. Treasury Secretary Scott Bessent says the Trump administration will give details of an initiative on Monday that President Trump describes as an economic D-Day. We get the very latest from Bloomberg News Director Will Kennedy.

**Will Kennedy** (0:36)
There aren't that many added things the US can do. There are sanctions that have been in place for many, many years. There's this blockade of oil tankers, which is, of course, having an impact. Iranian oil exports are very close to zero. It would really take an effort to persuade other countries like China not to trade with Iran, to make a big, further difference, one presumes. And putting secondary sanctions on China would be a very big step for lots of reasons, given the broader context on the China-US relationship, not least because Donald Trump is about to have a meeting with Xi Jinping.

**Nathan Hager** (1:12)
And Bloomberg's Will Kennedy says China will provide the biggest test of Washington's determination to follow through. Beijing is the main buyer of Iranian oil.

**Alexis Christoforos** (1:21)
And Nathan, there may be new tensions in the Asia Pacific. The US, Japan and South Korea held a three-way call to coordinate their response after North Korea fired a barrage of short-range ballistic missiles yesterday. The volley came after President Trump stunned South Korea by abruptly canceling decades-old joint military exercises, and the North rejected the president's bid to resume dialogue with leader Kim Jong-un.
North Korea says the two leaders may have an excellent relationship, but America's hostile policies haven't changed. Still, South Korea's president says he supports President Trump's decision to curtail the drills and reopen diplomacy.

**Nathan Hager** (1:57)
Alexis, new trade deadlines coming up for the US and Canada. The two sides have till midnight to reach a broader trade deal after President Trump announced a tentative agreement to avert 50% tariffs on billions of dollars in Canadian goods. Sources tell Bloomberg the current deal would lower tariffs on certain Canadian steel and aluminum exports to 25%, and Canadian car duties would fall to 15%.
Chrystia Freeland is a former Canadian Deputy Prime Minister. She says both sides need a better outcome.

**Chrystia Freeland** (2:26)
I think that is a bad outcome for Canada to have permanent tariffs on our steel, aluminum cars and car parts, really harmful for those sectors. But I think it's a bad outcome for the United States as well.
It's really important for people to recognize that you can lose by winning.

**Nathan Hager** (2:46)
Former Canadian Deputy Prime Minister Chrystia Freeland, and you can catch more of her remarks on Bloomberg Wall Street Week, tonight at 6 Eastern on Bloomberg Radio, Bloomberg Television and the Bloomberg Business App.

**Alexis Christoforos** (2:58)
Well, we have a winner in this week's special runoff in California to serve the rest of former Congressman Eric Swalwell's term. With 95 percent of votes counted, the Associated Press projects State Senator Ayesha Wahab will beat fellow Democrat Bay Area Rapid Transit Board President Melissa Hernandez 53 to 47 percent. Wahab will become the first Afghan-American to serve in Congress, and her campaign was backed by the Congressional Progressive Caucus. The result comes as Swalwell remains under investigation for sexual assault allegations. Federal agents seized electronic devices from the former congressman at San Francisco Airport over the weekend and later searched his home in Washington, DC.

**Nathan Hager** (3:37)
Alexis, the midterm elections are now less than 80 days away, and Republicans have a huge war chest sitting on the sidelines. The latest federal filings show President Trump's Super PAC MAGA Inc. has a nearly $404 million cash pile. The committee received another $3 million in donations last month, including from private prison operator GeoGroup and sugar producer Florida Crystals. At the same time, MAGA Inc. spent just $132,000 in July, mostly on operating costs. President Trump has said he plans to use MAGA Inc. to support Republicans. So far, though, he hasn't signed off on a plan.

**Alexis Christoforos** (4:12)
And Treasury Secretary Scott Bessent says he's prepared to ramp up buybacks of costly US government debt. That's despite the short-lived impact so far on long-term borrowing costs. Bessent also hinted at a new fiscal plan to address the highest Treasury yields in decades.

**Scott Bessent** (4:28)
Once the market understands that we are focusing on fiscal consolidation and that we are trying to bring the market back into equilibrium in a thinly traded market, I think, you know, I'm confident that bonds will continue declining.