Canada Imposes Fresh Tariffs; Oil Climbs amid Saudi Strikes

0:02Speaker 1:Bloomberg Audio Studios.

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0:10Speaker 1:Good morning, I'm Nathan Hager.

0:11Speaker 5:And I'm Karen Moscow. Here are the stories we're following today. Nathan, we begin with the latest volley in the U.S. trade wars. Canada has slapped 15 to 50 percent tariffs on hundreds of American products in retaliation for its 50 percent duties on about $ 20 billion in Canadian goods. As of a minute after midnight, Canada's import tax on many U.S. steel items is up from 25 to 50 percent, and a range of other consumer goods from motorcycles to cosmetics and cheese are facing higher tariffs as well. We get more from Bloomberg News Global Trade Editor Brendan Murray.

0:46Speaker 6:The Canadians hit back very strategically. You could argue that they could have gone even harder and that both sides are now going to sit back and look at what the next options are for the U.S. The Supreme Court reined in President Trump's authority to put tariffs unilaterally on countries, but now he's got this new 338 authority that he's used against Canada, and there are provisions in that particular authority statute that allow the U.S. president to target specific products from other countries that they feel are being discriminated against by that other country.

1:17Speaker 5:And Bloomberg's Brendan Murray reports U.S. officials have not specified how they could respond, but in a social media post, President Trump threatened to boycott Bombardier Jets, accusing the Canadian company of living off American buyers.

1:30Speaker 1:And Karen, crude oil is on the rise this morning, with Saudi Arabia facing new attacks near its border with Yemen. Iran-backed Houthi rebels have claimed responsibility for attacks on three Aramco facilities in southern Saudi Arabia that have since suspended operations. This comes as Iran says it is getting closer to a deal with Oman that could lead to transit fees through the Strait of Hormuz. Bloomberg Middle East News Director Will Kennedy reports that's putting pressure on the energy market as well.

1:56Speaker 7:If you think about where we were in July when we had the MOU, we'd seen oil fall quite far and touching into the 60s, I think. And it's rallied all the way back since then on this blockade and inflation. Iranian restrictions on ships going through. So, you know, that's the pivot point for the markets at this stage.

2:15Speaker 1:That's Bloomberg's Will Kennedy. And right now, Brent crude, the international benchmark is edging closer to $ 100 a barrel. Right now, it's just shy of $ 99, up 2% on the session. West Texas Intermediate's up more than 3% at $ 94. 34.

2:30Speaker 5:Well, the UK government, Nathan, is expected to ban trade with Israeli settlements in the West Bank. Let me go to London and get the very latest of Bloomberg's Ewan Potts. Ewan, good morning.

2:41Speaker 8:Karen and Nathan, Bloomberg has learned the UK is to announce a new sanctions regime targeting Israel but limited to Jewish settlements in the West Bank. Prime Minister Andy Burnham is seeking to pressure Israel over home building in a strategically important part of the Palestinian territory. The move risks division with the Trump administration. Israel says it will consider retaliation against the UK. In London, I'm Ewan Potts, Bloomberg Radio.

3:06Speaker 1:OK, Ewan, thank you. Now let's get to the latest in the war in Ukraine. Strikes on Kiev appear to have resumed after a three-day pause ordered by President Vladimir Putin of Russia came to an end. Ukraine says at least two people have been killed, 10 others injured in the drone and ballistic missile attack. We get more from Bloomberg Russia editor Greg Sullivan.

3:25Speaker 2:Well, in some ways, these airstrikes are increasing because the fighting on the actual front line, the ground fighting, is more or less at a stalemate. Any advances that are being made are usually marginal, very slow, and at great cost. So, in turn, both sides have taken to escalating these airstrikes to try to inflict costs. and drive the other side to a point where they're willing to make concessions.

3:47Speaker 1:Bloomberg's Greg Sullivan says the latest attack comes after U.S. envoys Steve Witkoff and Jared Kushner traveled from Moscow to Kiev over the weekend for talks aimed at ending the war.

3:56Speaker 5:Well, back in this country, Nathan, it is primary election day in New Hampshire, but attention is already turning to the November matchup for retiring Democratic Senator Jeanne Shaheen's seat. On the Democratic side, Congressman Chris Pappas is leading his primary opponents, including progressive medical scientist Karishma Mansoor. For the Republicans... Former Senator John Sununu has a comfortable lead over former Massachusetts Senator Scott Brown. The nonpartisan Cook Political Report still has New Hampshire leaning in the Democrats' favor, but Republican ally groups are spending about $ 24 million on Sununu's behalf.

4:34Speaker 5:That's almost twice as much as Democrats are spending on Pappas. He says the funding disadvantage is making him nervous, as New Hampshire has a history of electing Republicans, too.

4:43Speaker 1:President Trump, Karen, is causing a stir on social media with the idea of another name change. He put out a series of posts over the weekend suggesting New Mexico should be renamed New America. They included maps with the word Mexico crossed out and replaced with America and an AI-generated video of the president slapping an America label over a Welcome to New Mexico sign. Now, the posts have sparked a backlash from New Mexico leaders. Democratic Governor Michelle Lujan Grisham posted that the name is not up for debate and has been there since before the United States existed.

5:13Speaker 1:Senator Martin Heinrich posted on X that there are three things he will call by their actual names, the Gulf of Mexico, Lake Ontario, and New Mexico. President Trump has signed executive orders to rename the bodies of water, but he has no legal authority to change a state's name.

5:28Speaker 5:All right, let's turn to the markets now, Nathan, and futures. They are lower this morning as you begin a holiday-shortened trading week. Plenty for investors to digest this week. We get two key inflation reports with the highlight coming on Friday with the CPI report for the month of August. There's also a $ 58 billion bond auction later today.

5:47Speaker 1:And Karen, the yen is closing in on its strongest level this year after a breakthrough 155 per dollar triggered stop loss orders. Right now, the Japanese currency is at 154.05. Jeff Yu is senior macro strategist at BNY.

6:03Speaker 9:It feels like 160, that level, some deterrence has been established. So if you look at the BOJ accounts, has there been confirmation of intervention? I guess not of late. Timing is interesting as well, but there is an apprehension. If the BOJ do go above and beyond what's expected right now, you don't want to test that.

6:21Speaker 1:And being wise, Jeff Yu says the yen is up almost 4% this month, making it the best performer among Group of 10 currencies.

6:28Speaker 5:Well, in Europe, Nathan, disappointing drug results resulting in the worst stock performance in six years for Novartis. The Swiss drug maker suffered its third clinical trial setback in a week after a treatment for a rare muscle-wasting disease failed in a late-stage study. Now, the medicine was the centerpiece of Novartis' $ 12 billion takeover of Avidity Biosciences and touted as a potential blockbuster, and Novartis shares, they are lower, down almost 9%.

6:56Speaker 1:Karen Bloomberg News has learned Anthropix decided not to acquire artificial intelligence startup Descartes AI. Sources say the companies may still pursue other opportunities to collaborate. Descartes produces software that can reduce the cost of training and operating AI by helping chips work more efficiently.

7:16Speaker 5:Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning.

7:22Speaker 10:Good morning, Karen. Federal authorities are investigating an Amazon Prime Air Boeing 767 that crashed off the end of the runway while landing at Miami International Airport over the weekend. Five people were killed, others hurt. The plane traveled almost a quarter of a mile beyond the end of the runway, according to NTSB investigators. NTSB Chair Jennifer Homendy says the plane hit two vehicles, including a van with seven people on board. Then it went through a perimeter fence and hit a car.

7:54Speaker 5:We'll have to interview the crew. We'll have to interview others. We're going to want to talk to crew members of flights that may have landed prior to this flight.

8:05Speaker 10:Homendy says her teams have now collected the cockpit voice and data recorders. A state of emergency for the Hawaiian Islands as Hurricane Lowell churns in the Pacific. The surf is forecast up to 30 feet in some cases, and rainfall will be big as well, up to 16 inches on Kauai. Kauai County Mayor Derek Wakakami.

8:27Speaker 4:If you live along our coastal areas, we're going to see some surf that I myself, who has lived here my whole life, loves the ocean, hasn't seen the type of waves that is being forecasted to arrive.

8:41Speaker 10:Meanwhile, Big Surf headed toward the Southern California coastline from a weakening tropical storm Marie. Security was tight Monday for the 59th annual New York Carnival Parade in Brooklyn, celebrating Caribbean culture. But police say three people were injured in separate shootings near the parade, despite the NYPD touting a beefed-up parade presence this year. Also, five other people were stabbed nearby before the parade. However, this parade goer stayed positive.

9:10Speaker 9:Labor Day is West Indian Day. It's when we celebrate our rich Caribbean culture with its people, with its.

9:17Speaker 4:Food, with its music.

9:19Speaker 10:All of the victims are expected to survive. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen.

9:29Speaker 3:Thanks, Michael.

9:30Speaker 5:Time now for our Bloomberg Sports Update. And for that, we bring in John Staschauer.

9:34Speaker 10:Thanks, Karen.

9:35Speaker 11:Quarterfinals begin today at the USO for the top-seeded American Ben Shelton. Will tonight try to upset Carlos Alcaraz? The young American Lerner Tien last night blew a two-set-to-one lead loss to Corinne Kachanoff. Top seed Alex Zverev. won in straight sets, and so did Coco Gauff. College football, there was a power outage in Tallahassee. The game delayed nearly two hours. SMU then beat Florida State 27-24. The NFL season begins tomorrow with the Patriots in Seattle. and the Pats just locked up their All-Pro cornerback, Christian Gonzalez. That's your Bloomberg Sports Update.

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10:24Speaker 10:Good morning.

10:24Speaker 1:I'm Nathan Hager. And the latest volley in the U.S.-Canada trade war is coming from up north. As of one minute after midnight Wall Street time, Canada has new tariffs on hundreds of American products. in retaliation for 50% duties on about $ 20 billion of its exports to the U.S. For the very latest, we are joined by Bloomberg News Global Trade Editor Brendan Murray. Brendan, where are these tariffs hitting? What kind of impact could it have on both sides of the border?

10:49Speaker 11:Good morning.

10:51Speaker 3:They're hitting all sorts of products, hundreds of them, some of them raw materials like steel, but also things like furniture, dairy products, and even beer. So essentially what Canada has done is targeted a similar range of products that the U.S. put tariffs on several weeks ago. And so it's your classic tit-for-tat escalation in the amount of trade volume that goes on across the border. But To keep this in perspective, we're talking about $ 20 billion per side, so $ 40 billion total in a trade relationship of about $ 1 trillion in goods and services. So there's still a lot of room to escalate, and we'll have to see what the appetite is from the White House to do so. The ball is really in President Trump's court at the moment. But his trade advisors would also not want this to get much worse, given the fallout to American consumers and American businesses who rely on Canada for many of their exports and imports. So neither side really wants this to escalate.

11:59Speaker 3:But the goal now would be to get back to the negotiating table and try to see if they can hammer out this deal that was close a couple weeks ago. but fell apart at the last minute.

12:10Speaker 1:Well, we did see President Trump on social media floating the idea of boycotting Canadian Bombardier jets. How serious a threat could that be, and what kind of impact would that have?

12:19Speaker 3:Well, it's hard to say. He wasn't all that specific about whether that meant should American travelers not fly on Bombardier jets or American airlines not buy them or American private jet companies to restrict purchases. So it wasn't very clear. But what is pretty clear is that Bombardier is a Canadian company, but it employs several thousand American workers as well in states like Kansas and Arizona and Texas. And so, it's a classic kind of thing that, you know, threaten a multinational company with tariffs and, you know, it kind of backfires on you at a time when, you know, Republicans trying to preserve manufacturing jobs in those states wouldn't welcome such a move at all. So what we're seeing is President Trump trying to wield his tariff authority without the main one that he used over the past year and a half that the Supreme Court took away from him.

13:23Speaker 3:So there's a lot of unknowns about how far he could go to respond to what Canada has done today.

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