Unpopular new policy comes as midterms loom and control of Congress could be decided by several Michigan races
Every day $1bn worth of goods crosses the river dividing Detroit, Michigan, and Windsor, Ontario, two largely blue-collar US and Canadian cities that have come to act as one in the creation of North America’s auto industry.
News this week of Donald Trump’s escalating trade spat with Canada has everyone worried. Political and economic leaders and observers labeled the move an act of “hubris” , blamed Trump’s “ego”, and called the escalation “insanity”.
A reminder that we are covering the latest out of Jackson Hole, Wyoming, where Kevin Warsh – the new chair of the Federal Reserve – will deliver his first speech as the head of the US central bank at the annual economic policy symposium.
As my colleagues note, Warsh is under pressure to provide clarity on how the FederalReserve should handle with inflation if price pressures don’t abate.
Earlier this year, a survey found that Canada, along with Switzerland, was the best-liked country in the world. We all know this kind of polling is about as scientific as a high school popularity contest, but at least anecdotally, Canadians have a reputation for being friendly and welcoming, respectful and polite. Many people would find it difficult to dislike Canadians.
But not Donald Trump, who in a “hold my beer” moment this week demonstrated that he, at least, finds it easy to resent Canadians. The US president called the country “difficult and unreasonable”, and in a particularly hysterical moment, threatened to rename a lake, after trade talks collapsed.
They should ask the question Reagan asked at the end of his debate against Jimmy Carter: ‘Are you better off now than you were before this presidency?’
The midterm elections are already upon us, and every Democrat and independent running against a Republican should ask voters the question Ronald Reagan asked on 28 October 1980, at the end of his televised debate against Jimmy Carter: “Are you better off now than you were before this presidency?”
Unless you’re very, very rich, the answer is obviously: “No, I’m worse off.”
Energy bills have increased three times faster than the rate of inflation while Trump has been president. The national average monthly utility bill reached $280 in early 2026, a 12% increase since the end of 2024, just before the second Trump administration took office.
Using the bathroom or having a cry is about to become more expensive for North Americans as the US and Canada enter a full-fledged trade war that threatens to flush away decades of peaceful trading between the two nations.
After trade negotiations broke down between the two countries last weekend, Mark Carney, the Canadian prime minister, vowed to match US tariffs “dollar for dollar” and unveiled a list of nearly 900 American goods that will face 25% to 50% tariffs starting on 8 September.
Are we seeing the first signs of panic in Donald Trump’s Treasury? The US is by far the world’s biggest debtor, and the steady rise in global long-term interest rates – which I have long argued was inevitable – is starting to cause real pain.
Until now, the Treasury secretary, Scott Bessent, has dismissed concerns about US debt, which recently surpassed $40tn, as a big nothingburger. Growth, in his telling, will be so spectacular the US will easily be able to meet its interest obligations without any significant tax rises or spending cuts, while the rest of the world will happily keep feeding it money. But if Bessent really believes that, why is he trying to strong-arm the bond market by fiddling with the maturity structure of government debt?
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.
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”.
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.
"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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