US-Canada Trade Breakdown; Warsh Readies for Jackson Hole

**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 new trade war for the US with its northern neighbor. The US has slapped 50% tariffs on around $20 billion of Canadian goods after talks collapsed late Friday.
Now Canada is preparing retaliatory tariffs, and Prime Minister Mark Carney says he's also preparing a domestic aid package for businesses affected by the spat. Transportation Secretary Sean Duffy says this won't end well for Canada.

**Sean Duffy** (0:38)
To think that they're going to go to war with Donald Trump and actually win that war with the US, I think it's foolish on their part. I think you're going to see Mark Carney come to the table very, very quickly because it's going to be devastating for his country.

**Nathan Hager** (0:50)
Transportation Secretary Sean Duffy appeared on Fox News Sunday, heard every Sunday on Bloomberg Radio. Bloomberg Global Trade Editor Brendan Murray reports Canada sees little chance, though, of resuming talks with the US before the November midterms.

**Brendan Murray** (1:03)
It looks like the calculus from Ottawa's perspective to some extent is that the political costs here for Donald Trump to engage with Canada in a trade war, to slap tariffs on each other, might be detrimental to the Republican Party heading into the midterm elections here.

**Nathan Hager** (1:22)
Bloomberg's Brendan Murray reports Canada's retaliatory tariffs won't take effect until September 8th, but sources tell Bloomberg News Canada's domestic aid package could remain in place through the rest of President Trump's term, if need be.

**Alexis Christoforos** (1:34)
And Treasury Secretary Scott Bessent is preparing to announce an economic D-Day for Tehran. We get more from Bloomberg Middle East correspondent Abir Abou-Amar in Dubai.

**Abir Abou-Amar** (1:43)
We have to await, of course, the details of what Scott Bessent will lay out in this press conference, but what is widely expected is an announcement of some kind of secondary sanctions against countries that continue or choose to continue to do deals or trade deals with Iran. Now, that, of course, includes countries in the Gulf, namely the United Arab Emirates, that of course includes India and the big one, China, which buys about 90% of Iranian oil. China actually came out over the weekend and said that it will continue to support the diplomatic route between the United States and Iran, but any kind of secondary measure against China will bring out a bigger conversation about tariff or trade wars between the United States and other countries.

**Alexis Christoforos** (2:27)
Bloomberg's Abir Abul Omar reports Secretary Bessent previewed the effort in a Financial Times opinion piece, writing that the objective is to, quote, Severe every economic lifeline that sustains the tyrannical regime until Tehran stands alone. Ahead of the announcement, Iran's currency weakened to an all-time low against the dollar, falling 4.5% since President Trump announced the crushing economic operation.

**Nathan Hager** (2:50)
Alexis, world leaders have gathered in Kiev to mark 35 years since Ukraine declared independence, and the dignitaries include UK Prime Minister Andy Burnham. Let's go to London and get the latest from Bloomberg's James Wolcott. Good morning, James.

**James Wolcott** (3:03)
Good morning, Nathan and Alexis.
Many of Europe's leaders took the overnight train into Kiev, along with fresh pledges of cash for the war effort. It's become a familiar trip for the likes of the EU's Antonio Costa, but it's the first for the UK's relatively new leader Andy Burnham, who's chairing a meeting of Kiev's allies to mark the 35th anniversary of Ukraine declaring independence. It's the independence they've guarded now for more than four years of war with Russia, but it's a war with no clear end in sight. In London, James Wolcott, Bloomberg Radio.

**Alexis Christoforos** (3:34)
Thanks, James. Meantime, the US military has scrapped an amphibious landing exercise with South Korea due to shortages related to deployments to the Middle East. That's according to a spokesperson for South Korea's Marine Corps. The postponement comes after President Trump recently ordered the scaling back of a separate joint military exercise with South Korea. The president cited his desire to maintain his relationship with North Korean dictator Kim Jong-un and Seoul's purported refusal to help Washington with its conflict against Iran.

**Nathan Hager** (4:03)
Let's turn to the markets and the economy now, Alexis. Investors are looking ahead to Fed Chair Kevin Warsh's comments in Jackson Hole, Wyoming this week for clues on the path for interest rates. Jack Manley, global market strategist at JPMorgan Asset Management, does not expect Warsh to say much.

**Jack Manley** (4:19)
I think we're going to hear a whole lot of nothing, you know, to probably oversimplify things. I mean, Warsh has made it extremely clear that he wants to hold the cards as close to his chest as he possibly can. He is not particularly interested in forward guidance. I think it's going to be a lot of cryptic talking. I think we'll probably get an update on where those task forces are and how that progress or how those things are progressing. But don't expect a whole lot of clarity on what the Fed's going to be doing over the next 12 to 18 months. That is not Warsh's story.