Good morning. The U.S. has unleashed more than 1,000 sanctions on Iran over the past 18 months as part of its wider campaign to squeeze Tehran into submission.

Iran’s ability to withstand those sanctions so far exposes a hard fact for Washington: Economic pressure has largely failed to cow rogue regimes, as they game out more ways to sidestep U.S. restrictions.

• Dodging sanctions: Iran’s government has found ways to keep generating billions of dollars in revenue, mainly by selling oil to China, despite U.S. sanctions, weakening Washington’s leverage in the talks. Ultimately, President Trump’s White House was forced to physically blockade Iran’s ports to stem its oil exports—which earned Tehran an estimated $43 billion in 2024—and bring it to the negotiating table.
   
• Growing lists: Iran’s ability to navigate U.S. sanctions is mirrored elsewhere around the world. Washington has turned to sanctions more than ever in recent years to heap pressure on its adversaries, with annual new listings jumping from 880 in 2017 to over 3,000 in 2024, according to the U.S. Treasury.
   
• Rethinking: The Trump administration acknowledges the system requires some rethinking. It slowed the overall pace of sanctions designations last year, even as it has intensified penalties against Tehran. The most effective actions are aggressive and targeted, with defined timelines, Treasury Secretary Scott Bessent said in a May speech.

CME sues U.S. regulator to stop Kalshi from offering popular ‘perp’ futures.

CME Group sued the top U.S. derivatives regulator Thursday to thwart Kalshi, an upstart prediction-markets platform, from encroaching on its turf as the nation’s leading futures exchange.

The Commodity Futures Trading Commission recently approved Kalshi’s plan to list perpetual futures contracts, known as “perps,” a trendy flavor of derivative that never expires and trades 24/7. In its suit, filed in federal court in Washington, CME argued that the CFTC violated U.S. law by classifying Kalshi’s perps as futures and not swaps. In doing so, the CFTC decision allows Kalshi to sidestep rules intended to protect the economy from the “special dangers that unregulated swaps posed,” lawyers for the exchange operator wrote.

Coke takes on IRS with $20 billion at stake.

Coca-Cola is waging a high-stakes corporate battle with more than $20 billion at stake, and the opponent isn’t Pepsi or even Dr Pepper. It’s the Internal Revenue Service.

The dispute between the beverage company and the taxman heads to a federal appeals court in Miami this week. The legal issues are complex, but the core question is simple: Does Coca-Cola report too much profit abroad and too little in the U.S.?

• Canada’s banking regulator is lowering the level of capital the country’s largest banks must set aside, a move aimed at boosting lending at a time when the government is seeking to lure investment to kick-start the economy.
   
• Michelle Bowman, the Federal Reserve’s vice chair of supervision, spoke at an invitation-only, private dinner that Bank of America hosted for clients in New York, hours after the central bank announced its latest policy decision, according to people familiar with the event.
   
• China imposed trade restrictions on dozens of U.S. entities, including two producers of rare-earth minerals, in a sign that tensions between the two countries haven’t dimmed following the summit between President Trump and Chinese leader Xi Jinping.

U.S. and Venezuela join forces to target armed gangs in key mining region.

Venezuela has launched a U.S.-backed military campaign to target criminal groups in a lawless gold-mining region as it seeks to open the area to American investment.

U.S. officials said they are providing military and technological support as well as intelligence to Venezuela, once a bitter enemy, as the American-backed interim government in Caracas tries to rein in criminal groups that have long dominated a mining belt in the remote jungles of the country’s south.

U.S. officials say the joint effort will continue, a sign of the deepening cooperation between the U.S. and Venezuela since the American military ousted strongman Nicolás Maduro from office in January.

Iran says it is pausing talks after Trump threats.

President Trump warned the U.S. could strike Iran over its support for Hezbollah, as fighting between the militant group and Israel threatened to upend the preliminary peace deal he signed last week and close the strategic Strait of Hormuz.

Trump’s comments on social media came as Vice President JD Vance was in Switzerland for talks with Iran that had been diverted to focusing on last week’s flare-up in Lebanon instead of the discussion on Iran’s nuclear program that the administration had wanted.

The president’s threats prompted the Iranian delegation to leave the negotiation venue and it is unclear when the talks will resume, Iranian media reported.

• Iran Can Now Sell Oil. How Fast Can It Ramp Up?

• The peace between President Trump and European allies didn’t last long.
   
• The Iran war highlights how vulnerable major trade corridors are to geopolitical tensions.
   
• America’s economic anxiety is rising up the income ladder.
   
• European leaders are seeking new powers to hit back at China over a flood of exports hammering their industries, as they weigh whether they are ready for a trade war with Beijing.
   
• Ukraine is pounding Russian oil refineries with long-range drone strikes, leading to restrictions on fuel sales, surging gasoline prices and huge lines of cars outside gas stations hundreds of miles from the front lines.
   
• A blast tore through Qatar’s key natural-gas facility left dozens of people injured and 18 missing, and set back operations of one of the world’s most important gas exporters as it tries to restore shipments disrupted by the Iran war.

You can listen to new episodes every Friday on Apple Podcasts, Spotify and Amazon.

• British Prime Minister Keir Starmer on Monday said he would step down following a rebellion in his Labour Party, clearing the way for Andy Burnham, a left-wing former mayor, to take up the position. 
   
• States are betting that AI can solve the prison recidivism crisis.
   
• Jay Clayton has been a loyal ally and golf buddy of President Trump. Now he is a pawn in a larger chess game between the president and Congress.
   
• Polymarket has flooded social media with deceptive videos by paid creators, according to a Wall Street Journal investigation
   
• Charles Schwab is wading into the prediction markets.

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