☕ Tit for tat

• Markets: Stocks fell yesterday, with the Dow getting hit particularly hard as the Iran war continued to drive up oil prices. Meanwhile, Novartis got slammed after its third consecutive drug trial setback.

TIT FOR TAT

Illustration: Morning Brew Inc., Photo: Bombardier

Another trade war is blowing in, this time with people who have a lot of practice waiting out the storm. Canada officially instituted its $20 billion retaliatory tariffs yesterday on steel, cosmetics, hockey sticks, appliances, and other US products, in response to the US’ tariffs on the country.

After the tariffs went into effect, the Trump administration slapped even more tariffs on Canada and also moved to ban imports of some products like rye whiskies and motorcycles.

President Trump also called for a ban on sales of planes from Canadian aerospace company Bombardier. He didn’t provide details on how he would enforce this ban, but Bombardier was quick to point out the company’s vast US footprint:

• Its supply chain sources parts, like wings and engines, from roughly 2,800 US companies in 47 states.
• Kansas Sen. Jerry Moran objected to the president’s proposal, noting that Bombardier supports a 1,000+ workforce in his home state.

How did we get here?

On Aug. 18, things couldn’t have looked better. Trump announced a preliminary deal between the countries, but things quickly fell apart with the intensity of a day-four family vacation crashout. A flurry of claims from each side about non-negotiables and bad faith proposals followed:

• Canadian officials said the US wanted changes to how French-language content appears on streaming platforms, which the US denied.
• US Commerce Secretary Howard Lutnick claimed the deal stalled because of an 11th-hour addition from Canada around tariff relief for trucks. An initial deal included the possibility of the current 25% levies dropping to at least 15%.

Yesterday, Canadian Prime Minister Mark Carney said the retaliatory tariffs were meant to protect Canadian workers. He also accused Trump of wanting Canada to be dependent on the US rather than seeking a “true economic partnership.”

What’s next…The countries could ratchet the tit-for-tat levies even further, just ahead of an intense midterm season in the US. Ontario Premier Doug Ford even teased restricting electricity exports to border states like New York and Michigan.

And as Canada’s relationship with the US sours, it’s strengthening ties to Europe: Canada and the EU are reportedly planning to form an economic and defense partnership.—MM

      

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World

Tour de headlines

Timothy A. Clary/Getty Images

📱 Apple expected to debut foldable iPhone today. Fans of nonchalantly flicking open a flip phone to answer a call are in for a great day. At its annual product event today, Apple will reportedly announce a new iPhone that opens and closes like a book. It would be the popular phone’s biggest redesign since launching in 2007, as well as a huge moment for brand-new CEO John Ternus as he looks to reinvigorate a brand that critics have accused of getting stale. Foldable phones, including from rival Samsung, have been available for years, but still only make up a small portion of the smartphone market, per the New York Times. Apple’s version is expected to cost at least $2,000—about twice as expensive as the iPhone 17 Pro.

🤝 Amazon inks major AI chip deal with Qualcomm. The company that started off just selling books online has the option to acquire $4 billion of stock in chipmaker Qualcomm in exchange for custom chips to power its AI data center infrastructure, according to SEC filings. The deal is seen as a big win for Qualcomm, which has long manufactured chips for mobile devices but now wants a stronger foothold in data centers to challenge Nvidia’s dominance. “The company is transforming,” Qualcomm’s CFO said at a conference yesterday.

📚 Report: Students who use AI do worse on exams. File this under “things you suspected but could not prove.” According to OECD’s flagship education report, students who use AI for schoolwork underperform those who don’t by a significant amount. Case in point: Students who never use AI scored 509 on a science test, vs. 481 for students who use it very frequently—the equivalent of about a year and a half of education when adjusted for socioeconomic status, Bloomberg reported. Still, the report emphasizes that AI can still be a useful tool for students if used responsibly: Students who use AI once or twice a week often outperformed those who used it less often.—AE

Butts in seats

Illustration: Morning Brew Inc., Photos: Sony Pictures, Walt Disney Studios, Universal Pictures

This summer, Americans remembered that the couch wasn’t the only setting to enjoy cinema. The US domestic box office notched a record $4.76 billion haul from May through Labor Day, according to Rentrak, signifying a recovery from a multi-year slump.

The summer box office was up almost 30% from last year, beating the previous record of $4.755 billion from 2013. Here’s what powered Hollywood’s hot summer:

• Sequels ran the show. Spider-Man: Brand New Day was the top blockbuster of the summer, earning $923 million in the US. Toy Story 5 and Devil Wears Prada 2 rode the nostalgia wave to collect $480 million and $221 million, respectively.
• IMAX 70mm blew it out of the water. Christopher Nolan’s The Odyssey was the summer’s second-highest-grossing movie at $589 million domestically.
• Gen Z flocked to watch breakout hits. Word of mouth propelled indie horror flicks Obsession and Backrooms to gross $263 million and $197 million domestically, on budgets of $750k and $10 million, respectively.

But a few releases stumbled: Disney’s $250 million live-action Moana flopped, as did DC’s Superman follow-up Supergirl and Amazon MGM’s Masters of the Universe.

There’s a caveat. Adjusted for inflation, the box office was still down 17% from the pre-Covid summer of 2019. Analysts say that a constant stream of exciting releases aimed at diverse audiences is needed to make moviegoing a habit for consumers.—SK

      

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ART OF THE STEAL

Niv Bavarsky

A pair of thieves absconded from a French museum with two Renoir paintings, the latest heist involving valuable works of art in the country that brought us Joan of Arc and Kylian Mbappé.

The bandits struck just before 6am yesterday. They carried out four paintings from Musée Renoir on the French Riviera but only left with two—Madame Colonna Romano, which is worth ~$2.3 million, and Jeune femme au puits, which is valued at $232,000, CNN reported. The crew dropped the other two (Madame Pichon and Coco Reading) as they fled, a sign that the thieves may have realized those works would clash with their living room decor.

It’s been nearly a year since the Louvre was pilfered for $100 million in royal jewels. Other recent museum thefts in the country have seen crooks purloin $11 million in porcelain, $700,000 in gold, and a 2,500-year-old gold torque.

More to come? There’s an alarming (ironically) lack of security at French institutions. A recent parliamentary report found that many museums lack resources to keep their possessions safe, and in 2024, a survey found that nearly half of museums lacked video surveillance. An art theft expert told the Associated Press that thefts will continue unless there’s an increase in funding for security.—DL

      

Sam’s stock of the week

Quantum stocks pop after US buys stakes

D-Wave

On Wednesdays, the Brew’s Sam Klebanov highlights a fascinating stock, commodity, or other asset that’s worth your attention.

Uncle Sam has gone quantum. The Commerce Department said yesterday that it’s plugged D-Wave Quantum, Rigetti Computing, and Quantinuum with $100 million each, in exchange for a minority stake.

Their shares popped as much as 10%, 7%, and 7%, respectively, yesterday on news of the US government’s stake. Each company plans to use the cash for its own approach to clearing technical hurdles that are slowing the building of ultra-powerful quantum computers:

• The government views advancing the emergent field as a national security priority, since it could potentially turbocharge defense, cybersecurity, and drug discovery.
• But some skeptics doubt the feasibility of commercializing the experimental tech.

Big picture: Shares of D-Wave Quantum, Rogetti Computing, and Quantuminium are down 32%, 29%, and 16%, respectively, since the start of the year as Wall Street questions their path to profitability.—SK

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News

What else is brewing

• Hurricane Lowell damaged homes and knocked out power in Kauai, making the Category 2 storm the strongest to hit the main Hawaiian islands since 1992.
• TSA is bringing back a program to allow gate access to some people without tickets for the first time since the Sept. 11 terror attacks.
• The UK, France, and Canada announced sanctions on Israeli settlements in the occupied West Bank, including a ban on importing goods from them.
• Amazon was accused of discriminating against pregnant workers in a new class-action lawsuit, USA Today reported.
• OpenAI says it solved the infamous Navier–Stokes Millennium Prize math problem, though some academics believe the claim is misleading.
• Snoop Dogg is hiring an international ice cream taster who will be paid $10k a month. Polish those resumes.

recs

• Eight interior design rules you should never break.
• The unsettling first trailer for Artificial, about OpenAI CEO Sam Altman.
• The 10 best sports TV shows of all time.
• A fun collab between MoMA and Baggu.**

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Play

Word Search: The theme of this week’s puzzle is single-letter logos. We bet you know these puppies…or at least most of them. Play Word Search here.

Chemistry trivia

Name the 14 elements of the periodic table with one-letter symbols.

Answer

B - Boron, C - Carbon, F - Fluorine, H - Hydrogen, I - Iodine, K - Potassium, N - Nitrogen, O - Oxygen, P - Phosphorus, S - Sulphur, U - Uranium, V - Vanadium, W - Tungsten, Y - Yttrium

Word of the Day

Today’s Word of the Day is: absconded, meaning “departed secretly.” Thanks to Kyle from Vancouver and others for the suggestion. Submit another Word of the Day here.