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

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2:05Alexis, we begin with the Trump administration's pivot to economic war against Iran. Treasury Secretary Scott Besant has unveiled what he's calling Operation Economic Outcast, threatening punishment for any country that does business with Tehran. 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. Secretary Besant 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.

2:51The move could put the U.S. on a collision course with China, which buys about 90 percent of Iran's oil. We get more from Bloomberg News Chief Asia Correspondent Rosalind Matheson. 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. And 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. Bloomberg's Roz Matheson reports Besson threatened to sanction a major financial institution by the end of the week, but he didn't say which one.

3:29He did acknowledge the risk of going after China now, saying, quote, why would I want to blow up the global financial system? Well, Nathan, now the latest on the trade war between the U.S. and Canada. The Canadian government plans to announce a range of measures to support its businesses in response to 50 percent tariffs from the U.S. 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. 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.

4:07Canada has finally said we're not going to stand up to it. And there seems to be a real groundswell of Canadian patriotism, a sort of survival instinct that says, you know, we're going to hunker down here. 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 U.S. Trade Representative Jameson Greer's framework deal is too generous to Canada, and he emerged as a champion for U.S. metal producers. were told the Canadians blame Lutnick for moving the goalposts, while some business leaders credit him for derailing a threat to the U.S.

4:40metals industry. And there's another note on the trade front this morning, Alexis. The U.S. is set to impose a 7.5 % tariff on Chinese goods. The levy is tied to U.S. allegations of excess manufacturing capacity in China. It comes before the planned summit between President Xi Jinping and Donald Trump next month. And U.K. 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 Ewan Potts. Good morning, Ewan. Alexis and Nathan, the UK Prime Minister is to team up with other European leaders next month to head to the United States.

5:13Speaking to Bloomberg, Prime Minister Andy Burnham said he plans to lobby President Trump to allow Ukraine to access Patriot air defence missiles ahead of the winter. The war in Ukraine has depleted global Patriot stockpiles, leaving allies reluctant to provide them to Kyiv. 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. 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.

5:46The 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.

6:20NVIDIA, 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 Barrow is Executive Director of Fixed Income at JPMorgan Asset Management. This is a great opportunity for him to maybe clean up his messaging, to create some clarity, to create some stability. So there is a camp out there that thinks that the only way to get the long end under control is for him to sound very hawkish, to hint at a hike in September. I'm not necessarily in that camp. I don't think that you need to be hawkish to be credible.

6:56But to be credible, you do need to point to what data you're looking at. Allow the market to understand why there is a case to stay on hold. J.P. Morgan Asset Management's Kelsey Barrow. And a reminder, join us this Friday for a special edition of Bloomberg Surveillance, live from the Jackson Hole Economic Symposium. Tom Keene, Lisa Abramowitz, and Michael McKee speak with Fed experts on the path forward starting Friday, 9 a.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Business app. Well, Alexis Treasury Secretary Scott Besson's controversial plan to intervene in the bond market is drawing scrutiny from one of his earliest mentors.

7:32We get more on this from Bloomberg's John Tucker. John. Good morning, Nate. Besson trying to lower long-term interest rates and bond yields by doubling the Treasury's debt buyback program. But the guy who taught him a lot of what he knows says it ain't going to work. That's Wall Street legend Stan Druckenmiller. Druckenmiller, who mentored Besant in his early career as a hedge fund trader, writes in the Wall Street Journal, governments defending prices against fundamentals always lose. And Bloomberg Intelligence Rate strategist Ira Jersey agrees. You know, taking out an extra$2 billion in, you know, variety of sectors every single month, it's not going to help that much, really.

8:11Well, the debate comes as 30-year U.S. Treasury yields have risen to levels not seen in almost two decades, and U.S. national debt has topped, what,$40 trillion. In New York, I'm John Tucker, Bloomberg Radio. Thanks, John. The rally in Bitcoin continues. At one point, the cryptocurrency traded above$80 ,000. That's the first time across that level since May. Bitcoin has rallied 23 % over the past seven sessions. Analysts have pointed to a short squeeze as the main driver of rising prices. They also say Bitcoin is back in favor after the debasement trade was renewed by Treasury Secretary Scott Besson's plan to step up bond repurchases.

8:47And in Europe, Alexis unions at Volkswagen are warning the carmaker's planned cuts could affect as many as 140 ,000 jobs. VW CEO is due to present the restructuring plan to workers later today. Will Wilkes covers the car industry for Bloomberg. Bloomberg's argument is that Volkswagen has simply become too big, too expensive and too complicated for the world it now operates in. The group says its costs are around 30 percent higher than some key competitors. It has more than half a million vehicles of excess capacity. And profits are nowhere near where management says they need to be to fund the next generation of cars and technology.

9:22Bloomberg's Will Wilkes says Volkswagen's earnings have been battered by declining sales in China, high expenses in Germany, and underused factories. It's coming up on 509 on Wall Street. Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Alexis. The Hawk Fire in Nevada has now burned more than 15 ,000 acres. The National Guard has been deployed in Reno. Firefighters are trying to save homes from the fast-moving flames. Chief Richard Edwards is with the Truckee Meadows Fire Protection District.

9:57We do know that the fire was human-caused. We do not know if it was intentional or unintentional. And so the investigators are still working through that right now. More than likely, this fire will be classified as undetermined. The fire that broke out over the weekend has injured four civilians and three firefighters. So far, it is 27 percent contained. In Massachusetts, after nearly a month of testimony, jurors in the Lindsay Clancy murder trial are set to hear from the final witness in the case that has largely been about her mental state when she strangled her three young children. Testimony from a forensic psychologist will be on Clancy's psychiatric history and assessed the defense claim that she was suffering from postpartum psychosis.

10:42New York City business owners have sued Mayor Zora Mamdani to stop his plan to open a network of city-owned grocery stores. The Multicultural Business Coalition says the plan threatens to further exclude immigrant and minority business owners from opportunities and will put many of its minority members out of business. Mamdani's goal is to open one municipal store in each of the five boroughs where groceries will be 30 % cheaper than at private grocers. I continue to be fully confident in both the legality and the importance of our initiative to deliver five city-run grocery stores, one in each borough, to the people of our city.

11:20We are talking about a reflection of a cost-of-living crisis that has seen grocery prices increase by about 30 % over the last few years. Ma 'am, Donnie has allocated$70 million for the program that has been developed in partnership with the non-profit New York City Economic Development Corporation. Global news 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr, and this is Bloomberg Galactus. Thanks, Michael. Time now for our Bloomberg Sports Update, and for that, we bring in John Stashauer. The NFL season getting ready to begin in the Cleveland Browns named their starting quarterback.

11:59Deshaun Watson beat out Shador Sanders in 2022. The Browns signed Watson to a five-year, fully guaranteed$230 million contract that the team owner has already labeled a big swing and miss. He's hardly played due to injuries in NFL suspension. In baseball, Seattle ended the Phillies' nine-game winning streak 9-2. Cal Raleigh homered three times. He hit 60 last season and has only 17 this year. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

12:55trading day and trade global securities in U.S. dollars through a FINRA-licensed broker-dealer. In the first half of 2026, over$28.1 billion U.S. dollars traded on Moon ATS. Learn more about Moon ATS. Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version.

13:39So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock.

14:23You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The U.S. says it is putting Iran's trading partners on notice. on what President Trump has called an economic D-Day. Treasury Secretary Scott Besson says Tehran's days of doing business with the world are over. Let me be clear, any entity that facilitates money laundering on behalf of Iran will be removed from the U.S.

15:05dollar system. The clock just started ticking. That was Treasury Secretary Scott Besson at a news conference announcing Operation Economic Outcast. And joining us from Hong Kong is Bloomberg News Managing Editor Jill Deces. So Jill, the secretary says the clock is ticking. Does this look like the economic D-Day that the Trump administration had promised? Good morning. Good morning, Nathan. Yeah, lots of really strong rhetoric that we're hearing out of Scott Besson at this point. But I would point out that at this point, there's not really a clear timeline for some of these efforts. And also, a lot of this is still targeting some fairly small level Chinese and Hong Kong-based entities.

15:43just to take a look at some of the firms involved. We're looking at tech procurement networks centered in Hong Kong. So you're not looking at some of the really, really big, large Chinese banks that I think would really kind of move the needle when it comes to these sanctions. I mean, looking at Beijing's relationship with Iran, you're talking about one of Iran's major trading partners, the major trading partner, particularly with oil. And I think at this point, you're still waiting for more from Scott Besson. He didn't name China. He did sort of imply that maybe there's more to come, particularly when it comes to, you know, big, maybe a large financial institution.

16:21But we really haven't seen that yet. We're still waiting for more. And to that point about the idea of going after a major financial institution, what could the potential impact be if the U.S. did indeed take that step? I mean, that's a really, really big question when it comes to whether that jeopardizes the relationship between the U.S. and China. I'm not sure that the U.S. wants to take that step at this point. I would also point out, Nathan, we've got a really key meeting coming up, the summit between Xi Jinping and Donald Trump that's expected in Washington, D.C. next month. You've got, you know, we're just under a year of this trade truce between the United States and China that, you know, is still in effect.

16:56So I think that that does raise a lot of questions about whether or not that jeopardizes that relationship. We did hear earlier this afternoon from the Chinese foreign ministry having some pretty strong rhetoric about how they would retaliate against the United States if it ultimately comes to it. They were defending themselves, their relationship with Iran. So it does open up that question. Again, I don't think that we're there just yet, but we're on the lookout for whether or not that actually escalates. Well, we did see the administration announce 7.5 % alleged excess manufacturing capacity tariffs against China.

17:30In our last minute here, what could the impact be of that move ahead of the summit. Yeah, I don't want to put that one in context as well. This move by the U.S., they're set to impose a 7.5 % tariff on these Chinese goods. This is all related to these allegations of excess manufacturing capacity. This is something that the United States has accused China of for quite a while now. What this would do is restore the second-term duties, the Trump's second-term duties on China to around 20%. That is a level that Beijing has previously said is consistent with its trade truce with Washington. So I think what that is more of a matter of is Donald Trump trying to rebuild his tariff regime after several of those levies were struck down by the United States Supreme Court.

18:16So I do think that moves the needle a little bit, but still kind of keeps it within imaginable terrain for Beijing ahead of this summit between Trump and Xi. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM channel 121. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

18:56And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Alexis Christophorus. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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