Washington, DC

1. Canada retaliates
2. Trump’s pressure campaign
3. Diplomats return to Middle East
4. Piker takes more heat
5. New home sales data

Primary runoff night: Polls close at 7 pm EST in South Carolina and 8 pm EST in Oklahoma.

Canada strikes back with tit-for-tat tariffs

Canadian officials announced they plan to impose tariffs on $20 billion worth of US goods in retaliation for new US levies. The tariffs will mostly mirror President Donald Trump’s, with the heftiest affecting steel and aluminum. “When the United States asked too much and offered too little, we chose to stand up for Canadians,” said François-Philippe Champagne, Canada’s finance minister. The move heightens the stakes for congressional Republicans in states that border Canada, many of whom are already taking heat for rising prices ahead of midterms. “If you are a Midwestern-northern state with a big auto industry, or you rely on Canadian tourism … I can’t imagine this is helpful,” Ernst & Young’s Blake Harden, former GOP trade counsel for the House Ways and Means Committee, told Semafor. “I don’t think this is the thing they really want to be talking about.”

— Eleanor Mueller

Trump finds the limits of maximum pressure

Trump’s crank-up-the-pressure approach to international affairs is being tested in two very different conflicts — in Iran and Canada. As the Iran war reaches the six-month mark, straining Pentagon resources, his administration is forgoing military escalation in favor of an economic “warning shot” that conspicuously excluded China, Tehran’s biggest trading partner. While Iran shows few signs of giving ground or returning to the negotiating table, Trump’s pressure is landing just as poorly with Canada. There, Prime Minister Mark Carney is punching back at the US with his own tariffs. He has the overwhelming support of his electorate in doing so; new polling shows that about three-quarters of Canadians saw walking away from talks with the Trump administration as “the right thing,” including half of those who voted for the opposition party in last year’s elections. Trump’s approval, meanwhile, is hitting record lows.

Diplomats directed to return to Middle East

The Trump administration is preparing to restaff diplomatic posts across the Middle East that were evacuated because of the Iran war, sources told Semafor, a move that indicates the US has no imminent plans to return to full-blown military conflict. “Based on our latest assessment, we are adjusting our staffing posture at certain posts in the Middle East to ensure we can continue advancing US foreign policy objectives while protecting the safety and security of our personnel,” a State Department spokesperson confirmed. The guidance applies to families of diplomats in the UAE, a regional embassy source confirmed. A Trump administration official noted there are different phases of the rollout for individual countries in the region. The move comes as Trump, facing voter dissatisfaction over the conflict and a looming midterm election, continues to shift towards economic measures as a way to pressure Iran.

— Shelby Talcott and Kelsey Warner

Slotkin denounces Piker as Michigan headache grows

Sen. Elissa Slotkin is denouncing remarks made by streamer Hasan Piker about American Jews — and her words matter for potential future colleague Abdul El-Sayed. Slotkin is the highest-profile Democrat in Michigan to step into a melee stirred by Piker, who suggested recently that American Jews could face threats of violence for advocating on behalf of Israel. “This shouldn’t be hard: No community should face the threat [of] violence for their political views,” Slotkin said. “No one should causally be suggesting that anyone, Jews or otherwise, are to blame for being targeted.” El-Sayed has attempted to distance himself from Piker and his recent comments after campaigning with the popular streamer during the primary. But some Democrats want him to go harder. “El-Sayed’s response was pathetic, and it did not answer the call,” said Rep. Josh Gottheimer, D-N.J.

— Burgess Everett

Rising mortgage prices sideline buyers

New home sales tumbled in July and consumer sentiment slid in August, according to new data. Sales of single-family homes dropped 10.5% last month to a seasonally adjusted annualized rate ‌of 607,000 units, according to the Commerce Department, the lowest since January. Rising mortgage rates drove the decline in new home-buying, according to analysts, who say steep borrowing costs are sidelining potential buyers, even as the median price of a new single-family home dropped 0.9% to $393,800. The average 30-year mortgage rate is 6.65%. At the start of the Iran war, rates had fallen just below 6%. Separately, a report by The Conference Board found just 5.2% of American consumers intend ⁠to buy a house in the next six months, down from 6.5% in July — the largest decline in more than five years. Overall, consumer confidence fell more sharply than economists predicted.

White House

• President Trump called for flags to be flown at half-mast for a week in honor of Dolly Parton, who died today at 80.
• Lawyers for the Trump administration warned that without a major renovation, the Kennedy Center could require demolition. — NYT

Campaigns

• Ralph Alvarado, who is running with President Trump’s endorsement for a House seat in Kentucky, removed a series of pro-Trump messages and a photo of the two standing together from his campaign website. — NBC

Economy

• Billionaire Stanley Druckenmiller defended his use of AI in drafting an op-ed for The Wall Street Journal criticizing the Treasury’s intervention in the bond market. — NOTUS

Immigration

• Arrests by Immigration and Customs Enforcement jumped to 50,000 in July, the highest of President Trump’s second term. — AP
• The Justice Department is considering bringing charges against an ICE agent who shot a Venezuelan immigrant in the leg this winter in Minneapolis. — CNN

Technology

• Anthropic is expected to tell investors that its revenue potential tops $30 trillion. — WSJ

Health

• Two people in Pennsylvania died from measles.

World

• CIA Director John Ratcliffe traveled to Moscow to meet with Russian officials. — CBS
• Thai officials said the USS Abraham Lincoln aircraft carrier will dock in Thailand next week following a prolonged deployment in the Middle East.

— Country music icon Dolly Parton, who died today at 80.

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Graph Massara and Lauren Morganbesser, copy editors

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel