Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

1346 ET - Treasury Secretary Scott Bessent says the department is launching an "economic onslaught" against Iran's global financial connections. Beginning today, actions by the Treasury and other agencies will "tighten the noose" and block every potential source of revenue funding the IRGC, enforcing a "zero leakage" approach. Bessent said new sectoral sanctions target five of Iran's most vital lifelines in other countries: digital assets, technology, gold, aviation and shipping. "I want to emphasize that we are spreading out across the world as we speak...you will see a wave of sanctions when you leave this meeting today, and you should expect that cadence to continue," Bessent said. Markets showed muted initial reaction to the press conference. (jessica.coacci@wsj.com)

1140 ET--Canada's auto-parts makers are some of the hardest hit stocks on the TSX as President Trump threatens 50% tariff on the country's auto sector. Trump is planning to impose 50% tariffs on automobiles and parts from Canada starting in January 2027. The escalation comes after cross-border trade talks collapsed over the weekend after the U.S. added last-minute requests to a nearly completed deal. U.S. tariffs on Canadian automobiles now stand at 25%, with discounts for the U.S. content in cars, while steel tariffs are at 50%. Magna International, the largest auto-parts maker, is down 4%, while Linamar declined by 4.9%. Martinrea International shares are down 6.3%. (adriano.marchese@wsj.com)

1127 ET -- The Canadian dollar is weaker in trading amid an escalation in trade tensions between the U.S. and Canada. However, risks abound in attempts to short CAD, says Brent Donnelly, head of forex-research firm Spectra Markets. "I would not be chasing short CAD here," he says. "The CAD trade features too many crosswinds to make any sense, whether it's vs. GBP, JPY, USD or anything else." He adds CAD hasn't taken a substantial drubbing because forex traders are accustomed to President Trump's on-and-off trade threats. "It's hard for the market to get excited and/or scared of a theme when the theme is 18 months old and the tariff threats go on and off like Delta Wi-Fi." (paul.vieira@wsj.com, @paulvieira)

1100 ET--It would be a mistake to dismiss the impact of the Trump administration's new 50% tariff on $20 billion of Canadian goods, says National Bank of Canada economists. For sure, 80% of Canadian goods will remain exempt from U.S. tariffs. Still, for firms directly affected, National Bank says the new tariff "could simply render their products uncompetitive in the U.S. market ... A prohibitive tariff concentrated in a handful of sectors can trigger a sharp drop in exports, lost market share, factory closures and weaker investment." The economists estimate the average tariff on manufacturers will jump to 10% from the current 6% level. National Bank adds it is paramount that Canadian policymakers tackle domestic factors that thwart growth as a way to soften the tariff blow. (paul.vieira@wsj.com, @paulvieira)

1033 ET - The escalation in U.S.-Canada trade tensions -- with President Trump now threatening 50% tariffs on all Canadian autos and auto parts -- tilts toward the Bank of Canada cutting rates in the months ahead, says Sebastien Mc Mahon, chief economist at IA Financial Group. The new 50% tariff on $20 billion of Canadian goods "are a real downside risks." He expects the BOC at its Sept. 2 decision to keep the policy rate steady at 2.25%, and flag trade tensions as a downside risk to growth. There's no urgency for the BOC to act, given a pickup in growth in 2Q and solid hiring in recent months. "If the trade damage shows up in the hard data this fall, the door to a rate cut stays open," Mc Mahon says. (paul.vieira@wsj.coml @paulvieira)

1024 ET - Heavyweight industrial and export-focused Canadian names are bearing the brunt of a sell-off as markets digest U.S. cross-border supply chain disruption. Among the biggest decliners are manufacturing and auto-parts stocks like Magna International, Linamar and also transformers and electrical equipment manufacturer Hammond Power Solutions, all of which face immediate headwinds under the non-CUSMA content penalties. Aerospace, materials and tech growth plays are also pulling back, including business-jet maker Bombardier, BlackBerry, specialty semiconductor producer 5N Plus and satellite maker MDA Space. Toronto indexes, however, remain flat as gains in mining, metals and financials offset the pressure. (adriano.marchese@wsj.com)

1021 ET - The breakdown in U.S.-Canada trade talks does not bode well for the future of the USMCA trade treaty, which exempts the bulk of U.S.-bound Canadian exports from tariffs, says Bradley Saunders, economist at Capital Economics. Canada PM Mark Carney said this weekend the prospect of an intensified U.S.-Canada trade conflict marked a setback about USMCA. The Trump administration declined in July to renew USMCA for another 16 years, and instead subject the deal to annual reviews for a decade. This increases the risk of U.S. withdrawal from the pact. Saunders says a renewed trade war will delay USMCA talks, "dealing yet more damage to business sentiment and creating fresh challenges for the Bank of Canada as it balances worsening growth and inflation prospects." (paul.vieira@wsj.com; @paulvieira)

0939 ET - The Bank of Canada is likely to be on hold through the rest of 2026 and the first half of 2027 as it assesses the impact from the escalation of trade tensions between Ottawa and Washington, says BofA Securities economist Carlos Capistran. The hit to the Canada GDP might end up being modest, but Capistran says he anticipates sizable damage to business confidence. "Renewed uncertainty is likely to weigh on investment, and potentially hiring, more than the tariffs themselves," Capistran says. Canada's economy had exhibited encouraging signs of life, but America's new 50% tariff, Ottawa's intention to retaliate and elevated uncertainty "are likely to cap the upturn and keep the BOC cautious." (paul.vieira@wsj.com; @paulvieira)

0926 ET - Investors should avoid worst-case scenarios about the Canadian economy in the aftermath of failed U.S.-Canada trade talks and threats of a renewed trade war, says Derek Holt, economist at Bank of Nova Scotia. "Resist the temptation to go to the darkest place," he tells clients in an analysis about the state of U.S.-Canada trade. He says the 50% tariff would represent a "micro shock" to the broader economy, as it targets 5% of total Canadian exports to U.S. Canada's decision to delay implementation of retaliatory tariffs until after Labor Day leaves open the possibility of renewed talks toward a resolution. Holt adds initial CAD weakness and lower bond yields will provide some support to Canadian exporters, alongside an expected dose of federal stimulus. (paul.vieira@wsj.com; @paulvieira)

0704 ET - The Swiss tech industry is experiencing a modest recovery, with an increase in sales and exports, but higher U.S. tariffs threaten to stifle the rebound, Swissmem says in a statement. Since the end of July, the U.S. has imposed a new tariff rate of 12.5% on goods from the Swiss tech industry, which is higher than the levies applied to products from the EU, the Swiss tech trade group says. "Should the tariff differential with the EU increase, the consequences would be severe," it says. "An agreement that does not put us at a disadvantage relative to our most important competitors remains essential," Chairman of Swissmem Martin Hirzel says. (andrea.figueras@wsj.com)

0659 ET - For Canadian wood products companies, exposure to the new U.S. tariffs should be minimal and manageable, says RBC's Matthew McKellar. In a report, the analyst says that the trade friction primarily hits niche value-added products like engineered wood, paperboard and corrugated boxes. For those, operational flexibilities and shifting where products are produced give Canadian producers a buffer against the worst drag on earnings. Meanwhile, major commodities such as lumber and oriented strand board are completely exempt from the new tariffs, McKellar notes. Still, he says that the tariff environment remains dynamic and there is "significant uncertainty around potential further action by either the U.S. or Canada." (adriano.marchese@wsj.com)

0656 ET - The Canadian dollar's losses could remain contained for now following the collapse in U.S.-Canada trade negotiations, MUFG Bank's Derek Halpenny says in a note. There was always a risk of a breakdown in talks to avoid U.S. tariffs on Canadian goods, so there is unlikely to be a large selloff in the Canadian dollar in the near term, he says. Elevated oil prices also remain supportive. However, the medium term implications of the trade spat for the currency depends on whether the situation intensifies and investors price in greater economic harm for Canada, he says. "Canadian dollar downside risks will intensify the longer there is no resolution to this escalating trade war." The U.S. dollar rises 0.5% to 1.3831 Canadian dollars.