President Donald Trump’s penchant for scrambling the global order remains a primary focus of his second term, just 77 days before the midterm elections that will provide a referendum on his presidency. The president announced on Truth Social this morning there are “no talks or conversations going on, or scheduled” with Iran, just one day after the expiration of the MOU — a sign there’s still no offramp from the costly and unpopular war. The economy is responding in kind. U.S. 30-year Treasury yields hit their highest mark since 2007 today. At the same time, the S&P 500 slipped for its third-consecutive day. Meanwhile, a deal between the U.S. and Canada is now on Trump’s desk, POLITICO’s Daniel Desrochers, Oliver Ward and Ari Hawkins write in, after marathon talks over the weekend to avoid the president’s threats to slap a 50 percent tariff on about $20 billion of Canadian goods at midnight tonight. There’s still hope among negotiators that a deal can be struck. But automobiles remained a major sticking point in negotiations as U.S. and Canadian officials huddled in the afternoon, according to three people familiar with the status of the talks, per Daniel, Oliver and Ari. And the national debt is expected to reach $40 trillion later this week, months earlier than expected, in part due to lost revenue after the Supreme Court struck down Trump’s tariffs. Taken together, the converging conundrums reveal the limits of Trump’s ability to unilaterally disrupt global systems without consequence — and the increasingly fraught standing he occupies with voters just months out from Election Day. Trump’s approval rating sits at 33 percent, according to a recent Reuters/Ipsos poll, the lowest point in his presidency. Trump in the past has indicated he’s sensitive to the bond market, most notably when he reversed course on his “Liberation Day” tariffs after saying he saw “people were getting a little queasy.” But unlike tariffs, his preferred lever to singlehandedly prod the global economy, Iran is a far more complex issue for the president, and one that’s seen little movement in months. In his Truth Social post, Trump claimed the U.S. “Naval Blockade remains in full force and effect” and the Strait of Hormuz is “open and operating.” But traffic through the strait actually dropped about 20 percent last week. In an apparent joke that highlights his imperial inclinations, Trump also posted an image of the waterway captioned “NEW U.S. Territory.” In response, Iranian Deputy Foreign Minister Kazem Gharibabadi said on X that “soon [Trump’s] delusion regarding the Strait of Hormuz will either be corrected or we will correct the delusions of this deluded man.” Good Tuesday afternoon. Thanks for reading Playbook PM. Drop me a line at isentner@politico.com.
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