US Hits Iran With Expanded Sanctions While Canada Prepares Retaliatory Tariffs as Trade Tensions Escalate

The Trump administration escalated economic pressure on two fronts simultaneously, rattling global markets. Treasury Secretary Scott Bessent, billing the move as an 'economic D-Day,' announced a sweeping expansion of secondary sanctions against Iran covering five sectors: crypto, technology, gold, aviation, and shipping. Countries that continue doing business with Iran were warned they risk being cut off from the dollar-based financial system entirely.

As part of the rollout, the US separately sanctioned oil trader Hossein Shamkhani's Wellbred group of commodities businesses for its links to Iranian oil networks. Iran vowed to retaliate and expressed confidence that major trading partners would resist Washington's pressure, while analysts noted the sanctions stopped short of the most sweeping possible action. Oil prices, which had dropped more than 2% in the prior session on the news, steadied on Tuesday as investors assessed the actual scope of the measures.

On the trade front, Canada confirmed it will unveil retaliatory tariffs against the US on Tuesday after trade talks with the Trump administration collapsed. Prime Minister Mark Carney accused Trump of wanting to destroy Canada's auto industry and said he would only resume negotiations if the US came with the right attitude. Canadian officials sharpened their rhetoric, with Finance Minister Francois-Philippe Champagne declaring 'enough is enough,' former Prime Minister Jean Chretien urging export taxes on energy, oil, natural gas, and potash, and Ontario Premier Doug Ford warning Canada must be prepared to cut off electricity and critical mineral exports if conditions worsen.

Former US Vice President Mike Pence broke with Trump, warning that a Canada trade war is the last thing the US needs and that tariffs could hurt American farmers. Asia-Pacific markets opened mixed-to-lower as sentiment was hit by the dual escalation, and Bloomberg flagged tariff-driven inflation risks returning as a consequence of the simultaneous moves on Canada and Iran. The Trump administration is also preparing a separate 7.5% tariff on China over cheap exports, timed to avoid disrupting the existing trade truce ahead of a planned summit between Trump and President Xi Jinping.