Proposed US-Canada Tariff Cut and Oil Standoff Lead Late Tape

The first report said the United States plans to cut tariffs on Canadian steel and aluminum by 50% as part of a proposed trade agreement, and that different tariff rates could apply to certain metal derivative products. The US-Canada tariff agreement had not yet been finalized.

A subsequent report added that top-line US tariff rates on Canadian steel and aluminum are expected to be cut to 25% while quota arrangements are included. Those quotas may favor incumbent importers over spot suppliers and limit downside for domestic producers; downstream manufacturers would get margin relief while Canadian exporters would see improved access to US customers.

Oil extended gains for a fourth straight session as prospects for resolving the nearly six-month US-Iran conflict remained limited. Brent climbed toward $92 a barrel after gaining 4.5% over the previous three sessions, while WTI traded near $86. Trump said no negotiations with Iran were underway, leaving the Strait of Hormuz contested and traffic severely constrained. The US was preparing additional economic measures, the UAE had suspended trade and financial transactions with Iran, and disruptions to Russian refining were tightening global diesel markets.

A separate Aug. 17 outlook noted that although active fighting had largely stopped and oil volatility had eased, the range of plausible outcomes had widened. Iran appeared willing to hold out for better terms, while Washington appeared less willing to meet them, leaving no clear timetable for a full reopening of the Strait of Hormuz. The base case was closer to a resolution within months than years, but Gulf states were already spending heavily on alternative export routes. Current oil prices may understate the risks: a deal could push crude toward $70 or lower, while a threatened Strait could send prices into triple digits. SPR drawdowns were becoming less effective, refinery disruptions had pushed US gasoline above $4 a gallon, and the main uncertainty was how long higher energy costs persist and how much they spill into core inflation. For monetary policy, the risk was greater in the US than Canada because the US labor market is tighter and core inflation is already around 3%; a return to headline inflation above 4% alongside firmer core inflation would make it harder for the Fed to stay on hold.

Gold traded back above $4,360 an ounce as the Treasury market steadied following its recent selloff, helped by renewed investor demand and continued official-sector buying, including from China. Looking ahead, the July FOMC minutes and Kevin Warsh's Jackson Hole speech were flagged as the next key events for the rates outlook and gold.

In Asia-related technology, a newsletter reported that a chip squeeze is hitting Chinese smartphones in India as Apple and Samsung gain an edge.

Elsewhere, Turkey and Syria signed a memorandum of understanding on a mining and energy partnership, according to a minister.