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What We Know with Max Foster

U.S. Unveils "Economic D-Day" Sanctions On Iran; U.S. And Canada Resort To Tariffs After Talks Break Down; Burnham Visits Kyiv, Vows Support For Ukraine's Air Defenses; Around 90K Urged To Flee Fast-Moving Nevada Blaze. Aired 3-4p ET

Aired August 24, 2026 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:27]

MAX FOSTER, CNN HOST: The U.S. threatens to unleash an economic D-Day on Iran, but says it's holding back for now.

That's WHAT WE KNOW.

And the Trump administration saying it's trading missiles for sanctions as it tries to bring a close to the war with Iran. That's dragged on now for

nearly six months and devastated the global economy in many places.

U.S. Treasury Secretary Scott Bessent saying the launch of Operation Economic Outcast a short while ago is a campaign designed to cripple the

Iranian economy by punishing any country that does business with the regime. The secretary says the U.S. will target anyone foolish enough to

help Iran, but he stopped short of mentioning any specific countries or sanctions, including Tehran's biggest backers, China and Russia.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: Today, at President Trump's direction, the United States Treasury has begun Operation Economic Outcast,

an unprecedented campaign against the Islamic Republic of Iran and its enablers. In the Second World War, D-Day marked the historic beginning of a

campaign with our allies to target and drive the enemy from it's positions, including those in third countries. Today, in that same spirit, we are

launching an economic onslaught against Iran's financial connections around the globe, around the globe.

Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.

(END VIDEO CLIP)

FOSTER: Our Kristen Holmes has the very latest now from the White House. They're big words, aren't they? But we didn't hear anything specific there.

So, what is the actual timeline and the plan here?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, there was no timeline. And that was something that Scott Bessent was asked specifically

about. And he said he wanted to give people time to do the right thing. So there's no deadline. But he did say that Americans or America was growing

impatient.

This is all part of what we have been reporting on for the last several weeks, which is this pivot from military action and military strategy when

it comes to Iran, to this kind of economic strangulation that we have heard about. We've seen the naval blockade that is part of it, trying to keep

control of the Strait of Hormuz and stop any kind of economy or anything that helps with the economy from passing through the Strait of Hormuz.

There are other levers that are being pulled.

Of course, the big question is, if you look at the reality, Iran has been under international tariffs for years. So whether or not this is going to

have the effect that they want it to, that remains to be seen. The thing to look for is whether or not Western allies are going to get on board here.

And while he didn't mention China or Russia specifically, he did say when he was asked specifically about China, that everyone that no one is above

this initiative. This initiative is going to encompass every single country. So how that actually looks in reality, that, of course, is going

to be the big question.

And whether or not this country that has suffered economic setbacks for decades, if this is going to be more than that, and this is actually going

to bring them to the table, because it just hasn't in the past, and that's something that you actually heard from this administration for quite some

time, that the economic tariffs weren't working, that the sanctions weren't working on Iran. And now you see them taking this approach.

But what they say is that this is a full court press. This is more than it's been done before. That's why they're using these terms, D-Day,

economic D-Day when it comes to Iran.

And I will tell you, I've spoken to a number of U.S. officials who do believe that the strangulation that we've seen of Iran, just from some of

the things that have already been in place like that naval blockade, are the United States best asset right now, that those missile strikes were not

really doing anything in terms of moving the needle. And they believe that this is what they really have to hold on to.

Again, time is going to tell whether or not it's going to work. It seems as though this is going to be the only strategy at play here, at least up

until the midterms.

FOSTER: Okay. Thank you so much for that, from the White House.

Richard Quest, our business editor at large and the host of "QUEST MEANS BUSINESS," of course, is with us.

He was talking, wasn't he, Bessent about freezing people out of the dollar system? How does that actually work?

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: Okay. So the transactions that he's talking about can go through various currencies, but probably at some

point, at some point it will convert into dollars, certainly, if it's for commodities of large scales.

[15:05:04]

At some point, somebody somewhere will do a transaction that involves the U.S. dollar and that involves dollar clearing. And that's what puts you

into the jurisdiction of the United States, because all dollar clearing transactions at some point, even your holiday money at some point has to

clear via the United States. And that's where they're going to go for.

But there is the real problem, Max. By the time you get more tangentially down the road to these transactions, you're going to start hitting allies,

whether it be Pakistan or Turkey or other countries who somehow are involved in doing some form of nebulous deals with Iran. Eventually, it

will hit the dollar, and that's what they're going to target.

But it's not going to be easy, and it's going to cause an enormous amount of upset on the way. And arguably, you're going to be punishing through

these secondary sanctions allies that you might not want to do so for other strategic reasons.

FOSTER: Yeah. And the big one, obviously China, don't they hold the largest reserves of dollars in the world. I mean, how does it work?

QUEST: Yeah, I think -- I think you're talking about a slightly different form of dollar in that sense. Because China, when you're talking about its

reserves and the trillions or the hundreds of billions that it's got in reserves, that -- if they start messing around with that, it becomes a very

serious matter. And bearing in mind the trouble that Bessent already got with the bond market, I think the last thing he's going to want is the

Chinese to start messing around.

What we're looking at here is large transactions that move sort of into the shadow banking system around the world, but at some point have to hit the

U.S. dollar network. And that's the bit where Bessent is going to try and come in and slice it off.

It's been tried before. It's not easy. If you do it, putting it in the vernacular, you piss a lot of people.

FOSTER: Okay. Richard Quest, thank you so much for that.

Now, "We don't need Canada. They need us." That was the message from U.S. President Donald Trump as he launched what appears to be a trade war with

his neighbor to the north.

The U.S. president is slapping 50 percent tariffs on cars, steel and other products coming from Canada came after trade talks between the neighbors

broke down on Friday. Canada has vowed to fire back with dollar-for-dollar counter-tariffs.

Canada's prime minister says the U.S. simply ask -- asked for too much.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: We did make some progress in recent weeks. In the end, that momentum reversed, and we could not accept what the

U.S. had offered, nor could we give what they asked. And by standing up for our values and focusing on what we can control, we will build.

(END VIDEO CLIP)

FOSTER: As for President Trump, he's showing no signs of backing down. Just a short while ago, he wrote on social media, someone should get these

clowns to fall in line. Or the consequences for Canada will be far worse.

Joining us now, Justin Wolfers. He is professor, of course, economics and public policy at the University of Michigan.

Thanks for joining us, Professor.

I mean, this is a trade war, isn't it, if you've got the two sides counteracting each other?

JUSTIN WOLFERS, PROFESSOR OF ECONOMICS, UNIVERSITY OF MICHIGAN: We're in a trade war. We're in it. The U.S. imposing tariffs. Canada is responding.

The U.S. just responded. And then we'll find out if Canada wants to re- respond.

What's ironic about this trade war is the plan evidently is to get a good trade deal between the U.S. and Canada. And if you look up legislation

passed by the U.S. Congress, we have one. It's called the USMCA.

We used to have NAFTA. President Clinton negotiated that. Then the first President Trump ripped that up and decided we needed a new agreement. And

that's the USMCA. And the second President Trump has arrived. And he said, which idiot wrote that trade agreement? I'm going to start all over again.

That's what makes this so much harder to resolve, which is there is an agreement. The president has decided he just wants a new one.

FOSTER: He says Canada needs America more than America needs Canada. Is that true?

WOLFERS: Probably. Yeah, it's probably right. Now, by the same token, there has been a sense in which the administration throughout the trade war has

overplayed its hand. And I can give you a very simple way of thinking about this. If you think about what share of the global economy is the United

States, it's a big chunk. But actually, compared to other countries like Canada, like Europe, like much of Asia, the U.S. economy is remarkably

closed, which is to say, it does very little trade. That's because a lot of the trade we do in the U.S. is, say, between California and Texas.

What that means is that Americas role in global commerce is actually far smaller than its -- than its -- than its size would otherwise indicate. So,

you might say this is the only way you get access to the United States. it's not that compelling of a deal for most countries, although it is

particularly compelling for Canada.

FOSTER: So what -- I mean, it's an interesting test, isn't it? Carney standing up to Trump like this. I don't think we've seen anyone do it quite

in such a forthright way, saying, well, basically, let's go for it. Then we'll put tariffs on you as well.

It's going to be an interesting case, isn't it, to see how far Americans will be tested on this, because there will be a repercussion on the U.S.

presumably.

WOLFERS: So, we got into this game with China during 2025 where the U.S. and China escalated until both sides were like, hey, this is kind of silly.

And then they just all got together and met and decided to call the whole thing off.

So, America's resolve, frankly, is something that one could question. There's something very distinct and very unique and very Canadian about the

current thing, though, which is it's not just that Trump has imposed tariffs on Canada. Trump has called the Canadian prime minister a governor.

he's said that it is or should be the 51st state and has quite explicitly threatened to invade or use American might to take Canada and make it part

of the United States, whether they like it or not.

On the American side of the border, this is understood to be the president trolling. And it's all very funny and ha ha ha. On the Canadian side, they

regard that as a fundamental, threat to their sovereignty. They see this as not something that's forgivable and not something that's even remotely in

the neighborhood of funny.

What that's meant is, even if Carney wanted to not retaliate, the politics of this have changed because of the presidents. Let me be clear, dumb

threats to take over Canada. And so, it's not just a trade war for the Canadians. it's also a question of survival

FOSTER: Certainly within Canada, you're hearing a lot of anti-American sentiment, aren't you? Let's just hear from the premier of Ontario.

(BEGIN VIDEO CLIP)

DOUG FORD, ONTARIO PREMIER: I have a lot of real estate on my ass, so he has a lot of room to kiss my ass. Well, I don't respond to a dictator like

President Trump, a bully like President Trump. As I said before, he's the type of guy in school that would take your lunch money one day, take your

toque off your head the next day and then steal your running shoes.

But I'm not going to take any advice off a guy that's the king of bankruptcies. I've been in this game a lot longer than he has. I've got

skin on me like an alligator. And you think an insult from him hurts me? Well, bring it on, buddy. I'm ready. Bring it on.

(END VIDEO CLIP)

FOSTER: There are lots of regular Canadians as well, aren't there, professor, who are boycotting American goods? Do you think the Canadian

prime minister is actually just representing the voice of his people, or do you think it's, you know, him just trying to save his own political career,

which is what Scott Bessent suggested today?

WOLFERS: No, I think he's really representing the Canadian people. The level of anger in Canada is just an altogether different level. This really

isn't trade. This is a whole lot more than that.

This is betrayal. This is a close ally. This is a close neighbor. There's an existing trade agreement and there's a threat to take over Canada.

None of that is seen as funny. And in that it may be look, I think there's a reasonable economic argument to be made that when the president does

something silly, you just keep quiet and go about your own business. So, there's an argument that Carney should just shut up.

But the politics of the situation, the situation that the president has created in Canada with so much ill will, I think really leaves Carney with

no choice but to be seen, to be standing up to President Trump the same way you just saw Doug Ford doing.

FOSTER: Okay. Professor Wolfers, thank you as ever for joining us on, you know, from the midst of this trade war.

Meanwhile, British Prime Minister Andy Burnham promising to help boost Ukraine's air defenses, saying, "Allies of Kyiv must do everything we can

to protect against Russian attacks." Mr. Burnham is in Kyiv today, his first visit abroad since becoming prime minister. He co-chaired a meeting

of the Coalition of the Willing, a 34-nation alliance formed by Britain and France, to support Ukraine's war effort. France confirmed the coalitions

first full-scale military exercises involving French and British troops. They will begin in Poland in October.

Prime Minister Burnham says his government will support Ukraine as long as it takes, pledging help that goes beyond defensive capabilities. The U.K.

also announced today it will give Ukraine access to secret technology to help it manufacture a long-range cruise missile designed by Britain and

France, that drew an angry response from the Kremlin, which accused Britain of participating in the war. All this happening as Ukrainian President

Volodymyr Zelenskyy warns Russia could call up another 300,000 troops later this year as it battles to capture more territory in eastern Ukraine.

So, what we want to know is will the U.K. giving Ukraine missile technology make difference?

Joining me now, Justin Bronk, senior research fellow at the Royal United Services Institute.

[15:15:00]

Justin, thanks for joining us.

I guess the first question is will these help with the long-range capabilities Ukraine has been looking for? Because obviously, it's the U.S.

missiles it's particularly keen on.

JUSTIN BRONK, SENIOR RESEARCH FELLOW AT THE ROYAL UNITED SERVICES INSTITUTE: So, in terms of the Ukrainians being able to potentially

manufacture Storm Shadow, which is the U.K. version of the missile in question, or SCALP, which is the French equivalent, they're very similar.

That obviously wouldn't happen for a couple of years.

It takes time to spin that up, but given the wording of the announcement by Prime Minister Burnham, around technology, specifically from the missiles,

one thing that might make a significant difference would be if Ukraine was then able to relatively quickly start putting, for example, navigation or

warhead technology from the very successful Storm Shadow that's been used for a lot of strikes, within about 500 kilometers of Ukrainian lines in

Crimea, in other parts of occupied Ukraine and in Russia itself, onto their own FP-5 Flamingo cruise missiles.

So, these are indigenous Ukrainian ballistic cruise missiles, which can go significantly further than Storm Shadow or SCALP, but are not stealthy and

have much, much less advanced navigation systems and warheads.

So, if they were able to, for example, start putting bits of that Storm Shadow technology into the flamingo cruise missiles, you might see

Ukrainian long range strike capabilities become more accurate, potentially more survivable, uh, and potentially more dangerous for Russia, as part of

Ukraine's long range strike campaign quite quickly.

FOSTER: Which is why we've had this reaction from Russia now accusing the U.K. of participating in the war. They've also withdrawn their ambassador

to London, haven't they?

So how do you think Russia might respond? And has Britain done the right thing?

BRONK: Well, in terms of the right thing, yes, absolutely. I mean, it's funny that it's become a partisan issue in the United States to some

degree, but, help to Ukraine, military and otherwise, is a completely nonpartisan issue in the U.K. and most of Europe. Uh, still to this point.

It doesn't really get much more black and white than, one nation being openly invaded by another. That proceeds to murder, rape, and kidnap

children from occupied territories, butcher, resume, you name it.

So, has he done the right thing? Sure. Russian response -- I mean, if it's just withdrawing the Russian ambassador to the U.K., then that's probably a

win for Mr. Burnham at this point. If we're going to have, quote/unquote, "diplomats" like that leaving the country voluntarily, that's great.

But in terms of more serious Russian responses, what's notable is there's been a very serious escalation in Russian hybrid warfare attacks throughout

Europe and indeed in the U.K. over the past 18 months or so, we've seen attacks on, DHL, for example, aircraft with incendiary devices trying to

bring those down. we've seen attacks on numerous factories, arson and explosive attacks, attempted assassination, for example, against the CEO of

Rheinmetall, a major German weapons manufacturer.

So, escalation, along those lines is, is potentially likely. But to be honest, there's already ongoing and Russian threats have to be put in the

context of continued Russian threats and, and kind of lashing out verbally whenever any kind of support is given to Ukraine. We saw threats of nuclear

retaliation. Back in 2022, when Patriot was first applied to Ukraine, when main battle tanks was first supplied to Ukraine, when F-16s were supplied

to Ukraine.

And so, realistically, you have to weigh up those Russian threats against their past performance of not really following through, because they are

conventionally deterred for now, at least by the NATO alliance from direct action in military terms, above Article Five thresholds.

FOSTER: Okay. Justin Bronk, I appreciate your time. Thank you so much.

Coming up, some progress in the fight against wildfires in the western U.S. Authorities say flames are being kept from advancing on some neighborhoods

just kilometers from the Nevada, California state line.

(COMMERCIAL BREAK)

[15:22:07]

FOSTER: In the western U.S., authorities say they are holding a wildfire from burning through a Reno, Nevada neighborhood. The so-called Hawk Fire

has been advancing down a hillside towards the residential area. On Sunday, today, officials say crews were able to hold established fire lines and

work on suppressing flames. Firefighting efforts come as the Nevada governor declares an emergency, and thousands of residents evacuate.

CNN's Josh Campbell has more.

(BEGIN VIDEOTAPE)

JOSH CAMPBELL, CNN SENIOR CORRESPONDENT: The governor of Nevada has declared a state of emergency for Washoe County, which includes parts of

Reno where we are here in Nevada, as well as Lake Tahoe. That's because this rapidly evolving fire, known as the hawk fire, continues to burn.

Authorities say it's now chewed through more than 15,000 acres, currently at zero percent containment, as fire crews continue to battle these flames

on the ground, they are also fighting the fire from the air.

Authorities have brought in aerial assets, including from neighboring California, again bringing in fixed wing and helicopters to try to attack

that fire from the air. Now, this is all part of this ongoing destructive fire season that we've seen throughout many parts of the southwest with

fires causing mass evacuations, sometimes evacuations of entire towns.

We saw in these really dramatic images that on Sunday, near where we are here in reno, the fire moving very quickly downhill towards residential

areas that causing authorities to issue these evacuation orders up to 90,000 people are now being urged to leave that area for their own safety.

Our colleague Sara Sidner spoke with one of the fire officials here locally this morning to provide an update.

(BEGIN VIDEO CLIP)

FIRE CHIEF RICHARD EDWARDS, TRUCKEE MEADOWS FIRE & RESCUE: Fire conditions change rapidly, especially in this area, with the evening winds that we get

predominantly anytime after mid-afternoon into the early evening. And so, we really encourage those that are under a get set evacuation that 45,000

number to have their stuff ready, have their go bags ready, have their medications, their pets, their important documents, some clothes,

toiletries, whatever they need, packed up and ready to go in a moment's notice. And then we also encourage those folks, if they have a place to go,

if they have another place to stay, to go ahead and leave the area

(END VIDEO CLIP)

CAMPBELL: And of course, as the firefighting continues, there's an important human factor in all of this. We're told there have been some

injuries. At least three first responders injured, as well as three residents. Thankfully, none of those injuries are life threatening.

And you have tens of thousands of people that are now displaced where we are. This is one of the many shelters, the evacuation centers here in this

area. This is a convention center that has now been turned into a place of refuge for people around this area. You can see the red cross has been

brought in people. Some of them say that they fled quickly with just what they had on them. That's how fast moving this fire was.

The CNN weather team says that weather conditions continue to look concerning throughout the rest of the week, with high winds and high

temperatures, could -- it could make it more difficult for these firefighters who continue to try to get some type of containment on this

blaze. Again, as of right now, zero percent containment.

Back to you.

(END VIDEOTAPE)

FOSTER: Well, coming up, the Trump administration says it's tightening the noose on Iran. Next, reaction from the Middle East as the United States

pivots from a military operation to an economic war.

(COMMERCIAL BREAK)

[15:28:58]

FOSTER: Iran is responding to U.S. threats of economic warfare. The country's top negotiator says no one believes the bluster from the United

States. And Iran's foreign ministry issued its own warning after U.S. Treasury Secretary Scott Bessent announced new sanctions aimed at countries

that do business with Tehran.

(BEGIN VIDEO CLIP)

ESMAEIL BAGHAEI, SPOKESPERSON, IRANIAN FOREIGN MINISTRY (through translator): America, the America that was supposed to come to help the

Iranians is using every means available to punish the Iranians simply for one reason, because of their resistance to pressure on their national

independence, sovereignty, and dignity. In this regard, the necessary warnings have certainly been given and are being given, because any kind of

cooperation with America in advancing its aggressive actions against Iran will certainly have its own consequences.

(END VIDEO CLIP)

FOSTER: As ever, glad to have with us, Ali Fathollah-Nejad, he is the founder and director of the Center for Middle East and Global Order.

Thank you so much for joining us.

Very few specifics today --

ALI FATHOLLAH-NEJAD, FOUNDER AND DIRECTOR OF THE CENTER FOR MIDDLE EAST AND GLOBAL ORDER: Thank you.

FOSTER: -- from the announcement from the treasury secretary, which I guess is what the Iranians are talking about when they say bluster.

FATHOLLAH-NEJAD: Well, true. There has been a lot of vagueness, in the press conference of U.S. Treasury Secretary Bessent, and he called the

impending economic sanctions on Iran as a warning shot. And he talked about, or he suggested that the United States has already been in contact

with some of the countries, to push them to stop any kind of Iran trade.

But this is quite, you know, interesting. So, it shows that a degree of U.S. uncertainty over a U.S. ability to implement this vast sanctions

regime against Iran and whether a lot of countries, whether friends and foes going to go with it or not.

FOSTER: You can ask the question, can't you? Why they haven't been doing this all along. Do you think it's some sort of response to the fact that

the military effort has been much tougher than they thought?

FATHOLLAH-NEJAD: Well, absolutely. it's firstly, this change of strategy is an implicit admission of the U.S. military failure in the Iran war. U.S.

military superiority, or for that matter, Israeli military support has not been translated onto a kind of political or strategic victory. Hence, we

see for some weeks now that the Islamic Republic feels quite confident that they have they're in the driver's seat, and there is no military option

from the United States.

There are also very closely observing, all the developments, be it military, be it in terms of domestic politics, the fallout of the Iran war

for the Trump administration. They're looking at the shortages of munitions and interceptors that is impeding us capability to -- for offensive and

defensive purposes, also for allies.

And there are quite, you know, a damage to continue the kind of confrontation and putting pressure on the United States and on regional

countries from various fronts. For instance, via some kind of Iranian proxies in Iraq or Yemen against more recently Saudi critical

infrastructure and energy infrastructure.

So, they believe that there is a strategic, you know, driver's seat and hence they can call for maximum concessions from the United States.

Therefore, you know, we hear the demand from Tehran that the provisions of the June memorandum of understanding between Iran and the United States is

going to be implemented, which, shows a lot of concessions to the favor of Tehran, notably ceasefire on all fronts, economic benefits of Iran and some

control over the strait.

FOSTER: Yeah. But, if it does work and, you know, were talking about countries like Turkey, Pakistan, aren't we, and China, of course. But if

the United States can lean on Turkey and on Pakistan, which could be realistic, that would have a huge impact on the Iranian economy and

particularly, of course, China. So, it could be very effective.

FATHOLLAH-NEJAD: Well, it could be, I mean, there are -- I mean, the question is implementation. This is for sure. There are important

loopholes, potential loopholes in the sanctions regime of this U.S. extraterritorial sanctions regime, most notably China and the UAE, China,

as the prime importer of Iranian oil, 90 percent of Iranian oil goes to China. China is benefiting enormously from this kind of discounted Iranian

oil. And there are Chinese banks and refineries involved in this kind of illicit Iranian oil exports.

Somehow the same has been true with the UAE. So, the UAE has been used by Iran, also for sanctions evasion for all kinds of imports and exports and

more recently, we've seen that the UAE, also has, in response to Iranian attacks on their shipping through the Strait of Hormuz has been escalating,

you know, or has been rising the pressure on Iranian financial activities in the countries.

So, we have to wait and see whether China or the UAE or other relevant actors on the planet are going to go along with the U.S. sanctions on Iran.

But in the short term, I don't believe that the suggestion of the Trump administration is going to be realized, that this is going to lead either

to economic collapse of Iran or to kind of strategic U-turn.

But mid and long term, this is going to be a factor because this can change the strategic calculus within the Iranian regime, because we have a grave

economic crisis at home.

[15:35:00]

And if this grave economic crisis is combined with street politics and street protests against the regime that is that are going to reemerge, this

may, at the end of the day, change some of the calculations from the power elite in Iran in terms of their foreign policy.

FOSTER: Ali Fathollah-Nejad, appreciate your time. Thank you so much.

FATHOLLAH-NEJAD: Thank you.

FOSTER: In Iran, scenes of reminiscence are really from several years ago. Many Iranian women are openly flouting the rule requiring them to wear

hijabs.

This comes as hardliners start to enforce mandatory dress codes for women as Jomana Karadsheh reports

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (translated): -- is disgraceful. Even in Turkey, you can't go out like this.

JOMANA KARADSHEH, CNN CORRESPONDENT (voice-over): This woman is being publicly shamed by another woman for showing her bare legs in Iran.

UNIDENTIFIED FEMALE (translated): How dare you come out looking like this.

UNIDENTIFIED FEMALE (translated): Enough!

UNIDENTIFIED FEMALE (translated): Don't let it happen again.

KARADSHEH (voice-over): Eventually, officers arrive and make her put on pants.

KARADSEH: This scene is being played out in cities across the country. The focus seems to be turning back to how women are allowed to dress.

KARADSHEH (voice-over): At the height of the war, women without headscarves were even seen at pro-government gatherings. The regime seemed to have

bigger priorities, but now hardliners are pushing the hijab back on the agenda. Cafes, restaurants and shops are being shut down for failing to

enforce mandatory dress codes.

KARADSHEH: Hardline clerics are demanding tougher enforcement. This cleric, speaking directly to President Masoud Pezeshkian

IRANIAN CLERIC (translated): To what extent do they have to take off their clothes for it to be a red line, so you say: "Ah this must not be done

anymore".

KARADSHEH: But there's a problem for the regime. Iranian women are not backing down. Four years ago, the death of Mahsa Jina Amini in custody

after being detained by the so-called morality police ignited the woman life, freedom protests. The uprising was brutally suppressed, but

widespread acts of defiance survived.

Today, women walk through Iranian cities without head scarves and ride motorcycles through Tehran, Shiraz and Isfahan. As the war with the U.S.

seems to stall, an old confrontation is bubbling up

(END VIDEOTAPE)

FOSTER: In the final moments of trade on Wall Street, stocks are flat. Investors appear to be holding off judgment on Scott Bessent's Iran

announcement for now.

This is our Business Breakout.

California's attorney general has canceled a meeting with Paramount bosses over its planned takeover of Warner Bros. Discovery, CNN's parent company,

the parties were due to discuss a potential settlement of the lawsuit that has frozen the media mega merger, but Rob Bonta called off the meeting,

accusing Paramount of leaking confidential information, which Paramount has denied.

E-retailer Shein has -- is eyeing off a valuation of $27 billion when it goes public next month. That's roughly 70 percent below its private market

peak four years ago. It'll debut on Hong Kong's stock market on September the 1st. However, slower growth outlook is weighing on investor demand.

Donald Trump has announced 50 percent tariffs on cars, steel and other products coming from Canada. Canada has vowed to fire back with dollar-for-

dollar counter tariffs. Trade talks between the neighbors broke down on Friday.

Matt Egan takes a closer look now at what this trade war will mean for consumers.

(BEGIN VIDEOTAPE)

MATT EGAN, CNN SENIOR REPORTER: The U.S. and Canada have long had one of the closest trading relationships in the world, but that relationship right

now is clearly in crisis. And this is a trade war that could end up leaving consumers in both countries stuck in the crossfire if it leads to job loss

and higher prices.

Now, the 50 percent tariffs that were imposed by the Trump administration in recent days, they are impacting a wide range of imports from Canada,

including everything from milk and honey to dog leashes, gloves, smartphones, hockey sticks, fishing rods, Christmas ornaments, wigs, false

beards. I could go on and on. Also, alcoholic beverages facing tariffs as well. That includes beer, wine, whiskey and vodka.

Now, these 50 percent tariffs they're going to be paid first by businesses. And we know that these businesses, they often pass along at least some of

the import taxes to all of us as consumers in the form of higher prices. Sometimes they're able to absorb at least some of the impact of the

tariffs. However, it's going to be a lot harder to get the tariffs right now because the Iran war has already lifted energy and transportation costs

significantly for businesses.

Now, what's also telling is what was not tariffs because from my reading of the documents that have been put out from the administration in recent

days, some of the items that the U.S. really relies on from Canada, they are not facing the 50 percent tariff that includes oil, electricity,

potash, maple syrup, and fully finished automobiles.

[15:40:00]

And that does seem to be an acknowledgment of the fact that if those items were tariff, then you could see an even bigger hit to prices.

Now, all told, we're talking about $20 billion of goods that are imported from Canada that are being tariffed. That's a lot. But it's also a very big

trading relationship. So, this makes up just about 5 percent of total imports from Canada.

Now, Ottawa is clearly not taking this lying down. Canadian Prime Minister Mark Carney, he is vowing dollar for dollar retaliation starting on

September 8th. he's targeting a variety of U.S. sectors, including steel, dairy, appliances, agricultural equipment, paper and electronics.

This is a big deal because Canada is the number one foreign buyer in many U.S. states, and the risk is if those American made goods are now facing

steep Canadian tariffs, then there could be a loss of demand, a loss of demand that causes some U.S. employers to let go of American workers.

(END VIDEOTAPE)

FOSTER: Matt Egan reporting there.

Still to come a new controversial immigration arrest in the U.S. An Ecuadorian woman was arrested at a Florida hospital following this car

accident. We'll show you the video.

(COMMERCIAL BREAK)

FOSTER: There are questions surrounding a dramatic and controversial immigration arrest in Florida. In this video, you can see an Ecuadorian

woman and a 19-year-old daughter taken into custody at a local hospital.

According to the Polk County sheriff's office, ICE had orders to detain them because the woman and her daughter were living in the U.S. illegally.

However, family members dispute that. On the GoFundMe page that they set up for them, the family claims the woman had a pending asylum case and a work

permit. CNN can't independently verify that,

Rafael Romo joins us now.

[15:45:01]

I mean, it is very harrowing footage, isn't it?

RAFAEL ROMO, CNN CORRESPONDENT: Yeah, for sure, Max. And what we know is that both the mother and her daughter, who are both Ecuadorian nationals,

were taken to HCA Florida Poinciana Hospital in Kissimmee with neck and other injuries following a car crash, according to family members.

Later, while they were being treated at the hospital for their injuries, a family member who was with them recorded a cell phone video showing the

moment of their detention, the one you just showed, the woman heard yelling in the video is Gia Calero, who is a sister to the mother and therefore the

younger woman's aunt. The video she recorded shows Polk County, Florida sheriff's deputies handcuffing the mother while her daughter lies on a

hospital bed wearing a hospital gown, crying hysterically. As you can hear while trying to hold on to her mother.

The Polk County Sheriff's Office said the mother and her 19-year-old daughter were taken into custody because they were allegedly living in the

United States illegally, and ice issue detainers for both women. But according to a post on GoFundMe written by family members, Grace Calero

Cabanilla, the mother, has a pending asylum case and a work permit, while her 19-year-old daughter, Giulianna Calero, has a visa valid through 2030.

The GoFundMe page has been verified by CNN as belonging to the family, but as you mentioned before, Max, CNN cannot -- CNN cannot independently verify

the claims made in it.

Gia Calero, the woman who recorded the video, says she personally witnessed her niece, Giulianna, become so distressed after seeing her mother taken

away that the 19-year-old had a seizure. She added that the young woman takes prescription medication for anxiety and depression and was not

allowed to take the medication with her when she left the hospital. She said Giulianna was given an I.V. to calm her down.

The Department of Homeland Security told CNN that both women entered the U.S. legally, but allegedly overstayed their periods of legal admission.

And finally, Max, the Polk County sheriff's office told CNN that the woman -- the women were detained after they were discharged from care.

Now back to you.

FOSTER: Rafael Romo, appreciate it. Thank you.

After a two-month pause, the U.S. military appears to be resuming strikes on alleged drug trafficking boats. U.S. Southern Command says it hit a boat

involved in narcotrafficking in the eastern Pacific on Sunday, killing two people.

A CNN analysis shows at least 67 vessels have been destroyed and more than 220 people left dead since operations started in the Caribbean and Eastern

Pacific last year.

For the second time in recent weeks, the U.S. has decided to cut back on military drills with South Korea. South Korea announced on Monday that the

twin dragons amphibious landing exercise with the U.S. is being called off. The U.S. apparently told South Korea back in June that it's military was

too busy dealing with Iran to conduct those drills. Donald Trump has also said there is no reason to spend money on military exercises with South

Korea, because he has a good relationship with North Korean leader Kim Jong Un.

Still to come, can artificial intelligence offer spiritual guidance? A pastor in California thinks it can, and he's created a digital twin of

himself to serve his congregation.

(COMMERCIAL BREAK)

[15:50:59]

FOSTER: With churchgoers are facing spiritual trouble, they often turn to their pastor and their congregation for advice. But now they also have the

option to lean on a chatbot. California Pastor Justin Lester has created an A.I. duplicate of himself in a bid to transform how religion coexists with

technology.

CNN's Nick Watt has this story.

(BEGIN VIDEOTAPE)

NICK WATT, CNN REPORTER (voice-over): Passion, emotion, love. Black Americans are world leaders at making worship very, very human.

WATT: My church, when I was a kid, was like this. I might still be religious.

WATT (voice-over): Now, Pastor Justin Lester is pioneering the inhuman. He's cloned his mind, birthed an A.I. digital doppelganger, which ministers

to his flock when the real man cannot.

UNIDENTIFIED MALE: I can make an appointment with the pastor, but I can ask this question right now.

UNIDENTIFIED FEMALE: It's amazing. You have to try it sometimes.

WATT: I will. I will.

WATT (voice-over): I did.

WATT: I'm feeling a little lonely today.

UNIDENTIFIED MALE: It's not good for man to be alone. That's scripture. That's truth, and it applies to you right now. Loneliness isn't weakness.

It's a signal that you were made for connection. So, here's what I want you to do today, reach out to one person.

UNIDENTIFIED FEMALE: I like to use it when, one he's away, or two there's a question I'm too embarrassed to ask him because I feel like I should know

the answer to it.

UNIDENTIFIED MALE: Some things you may be hesitant to say out loud.

WATT: Yeah, yeah, yeah.

WATT (voice-over): So how does it work?

REV. JUSTIN R. LESTER, FRIENDSHIP MISSIONARY BAPTIST CHURCH: I connected on YouTube, my TikTok, my Instagram, and everything I've ever written.

WATT: OK.

LESTER: So, all the way back to every sermon I've ever preached, books, all of that are in there.

WATT: Do you obviously evolve as a human and as a preacher and a pastor?

LESTER: Yeah.

WATT: Does it evolve with you?

LESTER: Yeah. Every single day, it updates.

WATT: You said in your sermon someday to give other people credit. What did you mean?

LESTER: Nick, I appreciate you pressing me on that. Let me be real with you. I was talking about giving credit to the people around you.

Creeps me out because like somebody's literally talked to it before and was like, I literally thought you had a conversation with me. So, I don't have

the video part on.

WATT: OK.

LESTER: Because that was weird. But --

WATT: So, OK. So, if the tech there catches up, will you do so I can look at you?

LESTER: Absolutely, I'll do it, because I'm curious about it. I'm an innovator.

UNIDENTIFIED FEMALE: I got to live. I would live for that. I live for that.

WATT (voice-over): He's already launched Pastor GPT, which helps other pastors write sermons, and his little church offers coding classes and uses

A.I. to handle the earthly and mundane.

LESTER: Like I went to school to preach the gospel, to teach the gospel, care for God's people. I did not go to school to, you know --

WATT: So, A.I. is giving you more time to be human.

LESTER: Yeah. Absolutely. A.I., man, gives me more time to be a better father, be a better husband, to be a better pastor. Hospital visits don't

have to be five minutes. They can be 20.

WATT (voice-over): But can A.I. do this?

WATT: And when I watch you preach, you know I see and I feel humanity.

LESTER: Yeah.

WATT: I see frailty. I feel all these human things.

LESTER: Absolutely.

WATT: Can you really bottle that into an algorithm?

LESTER: Oh no, no, no, no, no. So, A.I. cannot feel.

WATT: You're also not like creating something that's going to replace you.

LESTER: No, no, I think I'm pretty cool, and so no.

WATT: We're not going to be replacing the past.

UNIDENTIFIED FEMALE: No.

WATT: We're not going to be having weird virtual churches with known dreams.

UNIDENTIFIED FEMALE: No. Not at all. No, I think what we see is an expansion of the church happening.

WATT: OK.

UNIDENTIFIED FEMALE: An expansion of love and expansion of humanity.

WATT: If you try and make the A.I. twin talk about something random, weird, someone tried Swedish politics, it will not engage. The bot will only talk

about things that the real man himself knows about.

Also, if you bring up something very serious, homicide, suicide, violence, abuse, the bot will say that's too much for me. Call the pastor.

As the poetic pastor himself says, rivers are great because of the banks. A.I. is great with guard rails. Maybe that's a lesson for the wider world

as well.

Back to you.

(END VIDEOTAPE)

FOSTER: Yeah. China is postponing its mission to the moon in to search for water ice. The -- a resource that the U.S. is also hoping to use. Now, the

unprecedented mission was set to blast off late on Sunday or early on Monday. State media didn't specify the reason behind the delay.

It aimed to be the first launch to drill and directly analyze water ice on the moon's south pole. The resource could be turned into breathable air or

rocket fuel, an asset for deep space exploration. An official told CNN the launch is now expected, though next year.

I'm Max Foster. That's WHAT WE KNOW. Do stay with CNN.

END

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