US-Iran Strikes Extend to 10th Day; Trump Vows 50% Tariff on Canadian Goods

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1:10Good morning, I'm Karen Moscow. And I'm Alexis Christophorus. Here are the stories we're following today. Alexis, we begin with the latest developments in the Middle East. The U.S. and Iran have exchanged strikes for a tenth consecutive day. The escalation comes as mediators try to revive a truce. Bloomberg's Zia Daud said the Strait of Hormuz is the focal point of the latest fighting. Basically, the current situation that we've had since the signing of the Memorandum of Understanding in June is that both countries are trying to control Hormuz. Iran realizes that Hormuz is its main leverage and needs to keep control of it.

1:48And the U.S. is trying to weaken Iranian control over the Strait of Hormuz and prevent or maybe even get ready for future closures. And that's where we are now. Bloomberg's Ian Dawood said the Iran-backed Houthis say they would impose a maritime blockade on Saudi Arabia, putting at risk the flow of millions of barrels that the kingdom exports via the Red Sea. And Karen, oil has surged about 20 percent since the June 17th accord between the U.S. and Iran unraveled, and it could go even higher. Goldman Sachs says Brent could rally to more than$120 a barrel by the fourth quarter if disruptions to the Strait of Hormuz persist.

2:24Checking oil right now, we've got Brent crude at about$88.80 a barrel, down four-tenths of a percent. WTI crude down half a percent at$82.81 a barrel. Alexis, we're also keeping an eye on global trade. The Trump administration is threatening to impose new tariffs on Canada. Bloomberg's John Tucker joins us with more. John, good morning. Good morning, Karen. It is a big escalation. 50 % tariffs on things like milk, plywood, and some very Canadian items like hockey equipment and beer. There will be no exemptions for exporters shipping under the rules of the existing North American Trade Pact. But the Trump administration says this is the result of Canada's unfair treatment of certain U.S.

3:05goods. It was set to take effect in 30 days. And this further strains relations with America's second largest trading partner. Last week, President Trump, you'll recall, threatened higher tariffs to punish Canada for wildfire smoke. With tariffs being applied under Section 338 of the 1930 Tariff Act, that provision has never been used before. I'm John Tucker, Bloomberg Radio. All right, thanks, John. And U.S.-U.K. relations are also in the spotlight this morning. President Trump has reached out to new U.K. Prime Minister Andy Burnham. Let's go to London now and get the very latest from Bloomberg's U.N.

3:38POTS. U.N., good morning. Alexis and Karen, Andy Burnham began his first full day in No. 10 Downing Street with an announcement on the cost of living, a tax cut on energy bills. We're still awaiting details of any changes to foreign policy, but the new UK PM has already spoken to the leader of the country's most important ally. We're told that Burnham reassured President Trump that defence and security is at the top of his agenda. The US President also bagged himself an invitation for another visit to the UK, this time for the G20 summit set to be held in Manchester, where Burnham was mayor. In London, I'm Ewan Potts, Blingberg Radio.

4:14All right, Ewan, thanks. Back here in the U.S., Arizona Republicans are heading to the polls today to choose a nominee to challenge Democratic Governor Katie Hobbs in November. Bloomberg's Amy Morris reports from Washington. Two Arizona congressmen are vying for the Republican gubernatorial nomination. Five-term U.S. Representative Andy Biggs is a former chair of the House Freedom Caucus and has President Trump's backing. Eight-term U.S. Representative David Schweikart is giving up his competitive swing district seat after narrowly winning against strong Democratic challenges in the past three elections.

4:47Now, voters across the state will set the general election matchups for House seats and state and local offices. But Arizona's governorship is a top takeover opportunity for Republicans. In Washington, Amy Morris, Bloomberg Radio. Thanks, Amy. Let's turn to the markets now where tech stocks are leading futures higher. NASDAQ futures are up about one and a third percent. Yesterday was another volatile session. After rising as much as three quarters of a percent, the S &P 500 finished the day lower. Lori Calvacina is the head of U.S. equity strategy at RBC Capital Markets. Look, we have an 81.50 target over the next 12 months, so sort of a mid-2027 number at this point.

5:26But we have never said that it was going to get there in a straight line. And so we have been looking for pullbacks that would be, frankly, no worse than 5 to 10 percent. RBC Capital Markets' Lori Calvacina's S &P 500 price target is about 10 % above current levels, Karen. Alexis, Taiwan Semiconductor is raising prices. Nikkei Asia is reporting TSMC will boost prices for advanced and mature chip production services by up to 10 % in 2027. TSMC and other chip makers are grappling with the soaring cost of items employed in production, including materials, equipment, and power. And the London Stock Exchange will introduce nonstop trading next year.

6:04The LSE will open a new venue outside of its regular market hours and a move to offer near-continuous trading in the working week. The new offering, which will be called LSE24, will operate from 5 p.m. until 7.50 a.m. in London. It's expected to be ready for client testing by the end of the year. In company news, Alexis, a federal judge has granted a request to pause the Paramount Skydance takeover takeover of Warner Brothers' discovery for two weeks, saying it likely violates antitrust law. California and 11 other states opposing the transaction want a trial in April next year. Chris Palmieri is covering the story for Bloomberg.

6:41This deal's already been approved by the Justice Department. It's widely expected to get the blessing of regulators in Europe this week. This puts all of that on hold. And just to really further up the pressure, if this deal doesn't close by the end of September, Paramount has to pay Warner Brothers shareholders potentially hundreds of millions of dollars a quarter in essentially late fees. Bloomberg's Chris Palmieri says Paramount argues the deal is a net win for Hollywood and will provide much needed competition against tech giants. And Karen, visits to Taco Bell locations have plummeted following a parasite outbreak that authorities linked to lettuce sold by one of the company's suppliers.

7:19Placer AI says foot traffic on Friday was about 19 percent below the daily average. The outbreak is also having a broader impact on the restaurant industry, with chains like Chop, Chipotle, and Panera Bread experiencing declines in traffic as well.

7:35507 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. In New York City, a former U.S. Army soldier has been arrested after igniting a fire in front of a Manhattan federal building. Authorities say the suspect, Andrew Arabaka, allegedly shot a pellet gun and set off fireworks. The FBI says Arabaka made several anti-government and anti-Ice statements during the incident and was described as an anti-American, anti-government extremist. FBI New York Assistant Director James Barnacle.

8:12He had two axes, a hammer, a machete, and three knives. Three people suffered minor injuries. A fourth person has died as New York City deals with recent outbreak of Legionnaire's disease on Manhattan's Upper East Side. The health department says 76 people have been diagnosed with the disease. Seven remain hospitalized. Tropical storm Bertha is slowly beginning to grow around 100 miles south of the Florida coast. City officials in New Orleans are beginning their preparations ahead of a possible landfall Wednesday. New Orleans Sewage and Water Board Executive Director Randy Heyman. We will continue to monitor conditions around the clock and do everything we can to remain transparent and provide information to you so that you can protect yourself and your families.

9:00Officials throughout the region are urging people to stay out of the water as the storm could produce high surf and dangerous rip currents. Intense heat across eastern Texas is challenging the state grid's all-time power demand record. Voluminary estimates from the Electric Reliability Council of Texas show demand late Monday afternoon near the more than 85.50 gigawatts record set in August of 2023. Global news, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr and this is Bloomberg. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer.

9:39The Red Sox have been floundering all season. They fired their one-time World Series winning manager, Alex Cora. They had not had a winning streak of more than three games all season, and now suddenly the Red Sox have won 14 games in a row. They pulled out a 6-5 win over Baltimore. If they win again tonight, it ties the club record for longest winning streak. There'll be a new athletic director at Michigan. Ward Manuel had the job for 10 years, announced he's leaving at the end of the year. There have been off-field issues at Michigan. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

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10:34Coast 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. And good morning. I'm Karen Moscow alongside Alexis Christophoris. And the U.S. and Iran exchanged strikes for a tenth consecutive day. It comes as mediators work to revive a truce and as the Houthi militant group in Yemen threatened shipping in the Red Sea. Meanwhile, in the U.S., Democratic senators plan to once again force a vote on an Iran war powers resolution this week. And here's Senate Minority Leader Chuck Schumer. On Thursday, Trump insisted to the nation that we're winning big in Iran.

11:13And you'll see the fruits of that labor very, very shortly. But instead, and sadly, we saw three more brave American service members tragically lose their lives over the weekend because of Trump's reckless war in Iran. And that's Senate Minority Leader Chuck Schumer. We want to get the very latest now on the fighting with Bloomberg Middle East breaking news editor Dana Krejci. And Dana, good morning. So we did say a 10th straight day of strikes on Iran. What do we know about these latest attacks from the U.S.? Good morning. Yes, so the U.S. and Iran have continued these attacks. And tit for tat, if you want, the U.S.

11:48is striking Iran. And Tehran is retaliating against what it says are U.S. interests, U.S. bases in places like Kuwait, Bahrain, and Jordan. which has been the case for the past several days, especially these strict countries. Bahrain sounded alarms saying they intercepted aerial attacks. Jordan said it intercepted drones and missiles. And of course, we saw what happened over the weekend in Kuwait, saying an energy facility was targeted there, as well as a power desalination plant. And that was, of course, in response to what Iran said was U.S. attacks on the same things. So they're kind of keeping in similar attacks.

12:28So whatever the U.S. attacks, then Iran would attack in these different countries. And yesterday, as you mentioned, we saw the mediators trying to de-escalate and bring the two back to perhaps the status quo that existed even before the MAU was signed. A U.S. official that we have on background said that Trump is currently focused on punishing Iran for attacking ships in the strait and that the strikes will continue until the president chooses a different course of action. But again, that U.S. official said the diplomatic efforts to end that were continuing. Iran's interior ministers in Pakistan today and in Pakistan Qatar are, of course, the two intermediaries who are helping to de-escalate.

13:10And they're the ones who secured that MOU a few weeks ago. So it's still not clear what the mediators have come to and whether there is, as we've seen, reports of some 10-day ceasefire. This is very early to see. And perhaps the two, the U.S. and Iran, are not eager to immediately ceasefire right now, but to do this tit-for-tat, kind of like a managed conflict. So it's not an all-out war, but it's a managed conflict, especially in Hormuz. Well, also an issue, as we know, is the Strait of Hormuz. The UK Navy also reporting some strikes on two vessels in the strait. So that still remains an active area as well, doesn't it?

13:56Exactly. And we're seeing more tankers coming under attacks, oil tankers even, and consequently means traffic has declined significantly there. So in the week ending July 19, Hormuz crossings averaged seven tankers each day. And that's compared with 16 per day a week earlier. That's according to S &P Global Energy. So we're seeing this, you know, Hormuz is being deserted even further. And tankers are probably going to look for some sort of assurance that they can pass through and not come under attack from Iran. So if the Houthis impose this maritime blockage on Saudi Arabia, which we heard about as well yesterday, and we're having all of this going on still in the Strait of Hormuz, what kind of impact could this have on the oil market?

14:45Of course, that will compound whatever we are in right now and send oil prices soaring. If they do disrupt and if they do carry out the so-called maritime blockade on Saudi Arabia, that would translate to disrupting Saudi shipping via Red Sea through Bab al-Mandeb. They can do that, as we've seen the Houthis do since October 7, 2023, in support of the militant group Hamas. So they did that and were able to do that. And if that happens today or this week, then oil prices are going to shoot up, they're going to soar. And that means Saudi Arabia's main export route will be disrupted. And that's about four million barrels a day will also be cut out of the market.

15:31Saudi Arabia did say that they will protect their own ships and condemn the Houthis for those allegations and, of course, the maritime blockade. but it remains to be seen how this will play out. But of course, the market is definitely watching this very closely. 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.

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