Tariffs on Canada, threats against Iran’s partners and bond market intervention show a president weaponising US power while making Americans poorer at home

Three moves in the last week have exposed the limits of Donald Trump’s economic bullying. The US slapped 50% tariffs on another $20bn of Canadian goods – then threatened the same rate on the cars, trucks, parts and steel that America Inc depends on. On Monday, the Treasury secretary, Scott Bessent, menaced Iran’s trading partners with exclusion from the US financial network, hoping that coercion can deliver what months of war have not. And as the costs of war, tariffs and pro-billionaire tax cuts helped send US bond yields higher, the Treasury stepped in to tame long-term rates. These are not contradictory policies but a gamble: that US economic power can be repeatedly weaponised without reducing others’ willingness to depend on it.

The Trump administration’s “D-day” sanctions are potentially the most consequential because they expose the scaffolding of American financial power. While markets shrugged off the immediate threat, that calculation might change were the US to target a major Chinese refinery or bank. Such an escalation could spark a trade war with Beijing. The US has leverage. But China has pressure points – especially farmers in Republican states – that make using it costly. In the long run, there is a price to pay. Nations hold one another’s currencies partly because they trust the political relationship. Mr Trump is testing what happens when they don’t.

Announcement of tariffs on $20bn worth of US goods follows through on Mark Carney's vow to match US tariffs 'dollar for dollar'

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On Truth Social, however, the president shot down assertions that the US talks with Canada collapsed in part due a proposed trade deal that would have weakened French language protections.

“I would never interfere with Canadians speaking French!” he wrote. “In fact, I have never even thought of doing such a stupid thing. This lie was made up by a weak and ineffective Prime Minister in an attempt to gain political support, which he has totally lost, from the people of Quebec.”

Move is latest deterioration in trade relations between neighbors with historically strong economic ties

Donald Trump announced a new 50% tariff on automobiles and crucial raw materials from Canada, the latest deterioration in trade relations between the two neighbors with historically strong economic ties.

The US president said that the increased tariffs would start on 1 January 2027 on all cars, trucks, automobile parts and steel. He also derided the nation’s tariffs on American farmers, writing on social media that Canada has been “ripping off” the US “for years”.

Prime minister praised for rejecting US trade proposal as Trump shows little interest in retreating from dispute

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Mark Carney said on Monday that while American negotiators saw the French language in Canada as an “irritant … in Quebec, these are rights,” days after receiving widespread praise from political leaders for rejecting a US trade proposal that many perceived as weakening the country’s Francophone culture.

The prime minister’s remarks came hours after the US president, Donald Trump, showed little interest in retreating from the spat, posting on social media that Canada had been “ripping off the United States of America for years” and threatening a swath of new, economically devastating tariffs on cars and trucks.

The Council of the EU on June 12 approved fresh tariffs on fertilizers and remaining agricultural goods from Russia and Belarus, aiming to reduce Russian export revenues.

The measures target those goods that have not yet been subject to additional customs duties and will enter into force on July 1. The tariffs on fertilizers will increase gradually over the next three years.

The step comes as the EU readies additional sanctions against Russia as it continues to wage its all-out war against Ukraine.

"Polish Presidency motto is 'Security, Europe!' and these measures increase our economic security by reducing dependencies from Russia," said Michal Baranowski, the trade undersecretary at the Polish Economy Ministry.

"We are further reducing Russia’s export revenues and therefore its ability to finance its brutal war. This is united Europe at its best," he said in a statement.

The new tariffs will apply to goods that made up around 15% of all agricultural imports from Russia in 2023. Fertilizer tariffs will focus on certain nitrogen-based products, the Council said in a statement.

Russian fertilizers accounted for more than a quarter of all of the EU's imports in this sector in 2023, worth almost $1.5 billion.

Apart from stifling Russia's trade revenue, the step also aims to reduce the EU's dependence on Russian and Belarusian goods, protect European farmers, and diversify the supply.

The EU adopted higher tariffs on cereals, oilseeds, and some other products from Russia and Belarus in May 2024. Earlier this year, the European Commission proposed imposing similar measures on all remaining agricultural products from the two countries.

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The Kyiv IndependentKate Tsurkan