Oil prices and the on-again, off-again war with Iran:<\/strong> OWe will disentangle why this is\u2014including the role that depleted emergency inventories play\u2014and will provide commentary on where we see things going. The chart below shows the spot (dark blue line) and front-month futures (light blue line) price for Brent, the global benchmark. The chart shows rising prices in the wake of renewed hostilities. We\u2019ll be watching to see if prices rise as high as some people think they will. Understanding why markets respond the way they do will matter for how aggressively to use tools like a U.S. blockade going forward.<\/p>\n Lessons from Russia sanctions:<\/strong> Recent years have seen highly unusual and innovative policies to counter aggression from oil exporters, including\u2014most importantly\u2014the G7 oil price cap on Russia that was introduced late in 2022. We will flag lessons for policymakers and implications for markets looking forward. The light blue bars in the chart below show the rapid rise of the shadow fleet<\/a> in transporting Russian oil out of its ports in the Baltic as markets adapted to the G7 oil price cap. We\u2019ll be watching whether new sanctions and proposed secondary tariffs slow that adaptation\u2014or whether the shadow fleet continues to expand.<\/p>\n Diminishing fiscal space across the G10 and bond yields:<\/strong> Public spending needs across all advanced economies are rising because of defense build-ups and efforts to dampen the impact of high energy prices. In most cases, deficits have remained permanently wider than they were before COVID. Yet long-term government bond yields aren\u2019t rising at the expected pace, including in the U.S. There is one exception, however, which is Japan. The fact that its long-term yields are up so much\u2014even as the yen continues to weaken\u2014is an alarming signal. We plan to discuss this, why it is happening, and its implications for the rest of the advanced world. The light blue line in the figure below is the trade-weighted yen against its G10 peers.<\/p>\n Section 338 makes its 21st Century debut:<\/strong> On July 20, the Trump administration invoked Section 338 of the Tariff Act of 1930\u2014a long-dormant authority allowing the president to impose tariffs when another country discriminates against U.S. commerce\u2014to issue imposing 50% tariffs on what we estimate to be approximately 8.1 billion of Canadian imports beginning August 19. As the figure shows, the action affects only a small share of U.S. imports from Canada. Unlike the Section 122 tariffs<\/a>\u2014and the Section 301 tariffs<\/a> that took effect today, the Section 338 tariffs target a relatively small set of imports but with much higher duties. This action takes place amid ongoing USMCA negotiations, and the administration notes in its fact sheet<\/a> that Canada and China were the only countries to retaliate against earlier U.S. tariff actions. The significance of the action lies less in the amount of trade it covers than in what it may represent: the emergence of Section 338 as a new instrument of U.S. economic statecraft. We will be watching whether Section 338 remains confined to this instance or becomes a recurring instrument of U.S. trade policy and economic statecraft, how courts and Congress respond, and whether its use affects not only trade flows and prices but also investment and production decisions on both sides of the border. <\/p>\n \t The Brookings Institution is committed to quality, independence, and impact.![\"\"\/](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/07\/Canada.png\")
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