"I think that the approach that we've taken with tariffs toward Canada is very adverse for Canada, for the United States, for economic well-being, and it concerns me."
Former U.S. Treasury Secretary Janet Yellen on the latest U.S. tariffs on Canadian goods.
What Janet Yellen said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Former Treasury Secretary Janet Yellen discussed the administration's economic policies. She said secondary sanctions on Iran make sense, noting Treasury has experience but faces limits from shadow fleet and Chinese purchases. On bond buybacks, she argued small interventions have only short-term impacts, citing the quick reversal of the recent operation. She emphasized the large budget deficit, nearly 6%, and fiscal sustainability as key market concerns. Yellen said current inflation from three supply shocks (tariffs, energy, AI) could pass, but the Fed must watch for wage momentum and keep an open mind on rates. She called the tariffs on Canada very adverse, harming both countries by raising prices on oil, steel, and aluminum imports.
Key takeaways
Secondary sanctions on Iran are a sensible step but face practical limits from shadow fleet and Chinese purchases.
The U.S. budget deficit is nearly 6%, and fiscal sustainability is what bond markets are focused on.
Current inflation from three supply shocks could pass, but the Fed should watch data and keep an open mind on rates.
Tariffs on Canada will greatly harm both countries by raising prices on oil, steel, and aluminum.
Good evening. We begin tonight with the United States waging economic warfare on multiple fronts. The US Treasury Secretary, Scott Bessent, threatens new sanctions on countries that refuse to cut economic ties with Iran. Secondary sanctions. He did not provide many details on Iran's top negotiators, arguing the U.S. is not in a position to further restrict its relations with other countries. A second front of war: the Canadian Prime Minister, Mark Carney, says his country is at war with the United States, and President Trump is planning to impose 50% tariffs on vehicles, steel and other items from Canada as the administration ratchets up the economic tensions. The Treasury is trying to calm things down, if you will. A report from CNBC says Scott Bessent might actually tap into the Treasury's $1 trillion general account to fund more bond buybacks at the long end of the curve. It's all aimed at borrowing, reducing borrowing costs. My next guest is uniquely qualified to address all of this. Janet Yellen led the U.S. Federal Reserve from 2014 to 18. She also served as the Treasury Secretary under President Biden, and during that time, the Treasury sanctioned Iranian oil and some of the ghost fleet, bringing it to market. Treasury, former Secretary, Treasury Secretary, and Fed Chair Janet Yellen is with me now. Madam Secretary, there is so much for us to get into whichever way we look. Whoever knew economics could be so exciting. Let us start with today's announcement at the idea that somehow the U.S. can extend the range of secondary sanctions in this economic warfare to bring Iran to its knees, as announced by Secretary Bessent today. What do you make of that? Is it viable?
Well, I think it's a step that makes sense. And it's one that Treasury has a lot of experience with sanctioning Iran, but there are ways that Iran and other countries have to get around these sanctions. Using the shadow fleet. Purchases by Chinese firms. That really are all but immune to the impact of sanctions from corporations that Iran uses to buy materials to produce drones and missiles. And so it can be difficult, but I think it makes sense to clamp down and to try to use all of Treasury's tools.
And even if this means and involves, as it invariably will, arguably, you know, annoying, frustrating allies, whether it be, say, for example, Turkey or indeed Pakistan or any of the other countries that somehow manage to still do business in one shape or form, even if several positions removed from Iran, because ultimately it is the dollar where everything finally ends up. And that's the strong part.
Yes. And the fact that the dollar is used for so much of trade means that Treasury has a great deal of scope to threaten sanctions, to use secondary sanctions. There can be costs involved in doing that, that the United States has to weigh very carefully. Foreign policy costs. And as I say, some practical limits to what can be accomplished.
So I'm not trying to weigh in on what the broader strategy should be that the administration should be using with respect to resolving the war with Iran. But it is an approach that can increase the economic pressure on Iran. If that's the route that the President wants to take.
You're uniquely qualified, having been Treasury Secretary and Fed. This maneuver that the administration is doing, trying to twist the yield curve down at the long end. Now, the sums involved are much less than they were in 2011. The market has given its reaction to it by basically restoring long yields to where they were. And on this war against the bond market, do you think it's doomed? Is it just inevitably and also arguably trying to pull down the long end whilst also worried about the short end? It seems like a no-hoper?
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Yellen, J. (2026, August 24). Former U.S. Treasury Secretary Janet Yellen on the latest U.S. tariffs on Canadian goods [Interview transcript]. Quest Means Business. CEOInterviews.AI. https://ceointerviews.ai/interview/1255241/
MLA
Janet Yellen. "Former U.S. Treasury Secretary Janet Yellen on the latest U.S. tariffs on Canadian goods." Quest Means Business, 24 Aug. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1255241/.
BibTeX
@misc{yellen2026_1255241,
author = {Janet Yellen},
title = {Former U.S. Treasury Secretary Janet Yellen on the latest U.S. tariffs on Canadian goods},
howpublished = {Interview transcript, Quest Means Business. CEOInterviews.AI},
year = {2026},
month = {aug},
url = {https://ceointerviews.ai/interview/1255241/},
note = {Speaker-attributed transcript with timestamps}
}
