The Treasury Department on Wednesday announced that it will buy back more of its own bonds, a move that partially reversed a selloff in longer-term U.S. debt that is threatening to drive up politically important interest rates on mortgages and other consumer loans.

A number of factors have been pushing up yields on longer-term debt to their highest levels since 2007, such as concern that the conflict with Iran is showing little sign of resolution, growing competition for financing with borrowers that are building out artificial intelligence infrastructure and widening U.S. government deficits.

Treasury said it would “at least double” the size of its buybacks, in which the department reabsorbs older debt securities with a maturity of at least 10 years. The previous ceiling was $2 billion per operation, and that number will be at least $4 billion, effective Sept. 9 and through Nov. 4.

The move is the latest by Secretary Scott Bessent to affect U.S. Treasury yields. Earlier this month, the department conducted a joint intervention with Japan to boost the yen, which had been trading in July at its weakest level against the dollar in roughly four decades. Bessent warned in January that turmoil in Japanese government bonds was spilling into the Treasury market.

Treasury also recently signaled the possibility that it could decide to issue less longer-term debt in coming quarters.

The staff of the tiny agency on the front lines of President Donald Trump’s trade wars has shrunk to its smallest size in two decades as its responsibilities balloon. Its work is suffering.

Since Trump returned to the White House, the agency has rolled out new tariffs across the globe, launched trade negotiations with dozens of countries and reopened the signature pact governing North American trade. And after the Supreme Court struck down many of his initial tariffs, it has begun four probes into countries’ unfair trade practices to provide legal justification for new duties — with more threatened. 

The trade agency is attempting to do all of this with a staff that has dwindled by about a fifth, which along with a hiring slowdown and an intensely compressed schedule is leading to often slapdash work, according to eleven former trade officials from the Trump and Biden administrations who spoke to POLITICO.

Some of the errors are embarrassing, including letters sent to foreign dignitaries announcing new tariffs that went out addressed to the wrong titles and genders, according to one former official.

Others could undermine the president’s drive to impose new duties on dozens of trading partners. A recent investigation into whether other countries’ inaction on forced labor is giving their exports an unfair advantage was rushed out in a matter of months when previous investigations have taken more than a year. An announcement of a second investigation lacked basic details like what policies are harming U.S. businesses. Tariff challengers have already seized on similar weaknesses in court.

“When you’re rushing like that, right, it’s kind of like crap in, crap out,” said one former Trump USTR official, who, like others interviewed by POLITICO, was granted anonymity to discuss the agency’s inner workings. USTR officials are getting “crushed” under the administration’s workload, the person said.

The brain drain at the agency, including the departures of senior officials responsible for leading trade talks with key allies, is continuing even as U.S. Trade Representative Jamieson Greer has pushed to expand the budget and stepped up hiring efforts.

A USTR spokesperson said that under Greer’s leadership, the agency has “delivered an unprecedented volume of work on behalf of the American people that is thorough and outcomes-based.”

Greer inherited an agency that was already shorthanded, and the Trump administration wasted no time in rolling out its new tariff-focused trade agenda. In the opening months of the administration, the president unveiled new tariffs on Mexico, Canada and China, before rolling out sweeping new duties on almost every U.S. trading partner on April 2, 2025 — what the president dubbed “Liberation Day.”

But the Liberation Day rollout was filled with errors. In addition to slapping tariffs on an uninhabited island filled only with penguins, which was roundly mocked in the media, the administration sent letters informing countries of their new tariff rates that contained the wrong genders and titles for foreign officials, said the first former official. The calculation for assessing the tariff rates, which USTR eventually published on its website, showed a simple back-of-the-envelope formula based on countries’ trade surpluses with the U.S., an embarrassment for an agency that prides itself on its data-driven, reasoned trade analysis and deep technical knowledge.

The episode “made USTR look like a joke,” the former official said.

The Supreme Court in February struck down Trump’s Liberation Day tariff regime, leaving USTR to come up with alternative legal justifications for imposing sweeping duties. More serious than the embarrassing mistakes, former officials said, is that the agency has been rushing out the reports and announcements that are used to create those justifications, potentially handing tariff challengers legal ammunition.

A March announcement of a probe into countries’ manufacturing overcapacity did not initially identify any specific policies from trading partners that qualify as an unfair trade practice, said Ed Gresser, a former assistant USTR for trade policy and economics, who left the agency during the Biden administration. The omission could leave the probe more vulnerable to a legal challenge, he said.

Countries also pushed back against inaccurate information in that announcement. An initial version referred to Singapore — one of the investigation’s targets — as having a bilateral trade surplus with the U.S. of $27 billion in 2024. But that language was quietly removed from a later version after the Singaporean government pointed out publicly that it was, in fact, the U.S. that had a trade surplus of $27 billion with Singapore. USTR also quietly corrected the numbers it cited for both Indonesia and Cambodia’s trade surpluses with the U.S.

Tariff challengers are already filing court documents citing omissions in the USTR investigation into efforts to curb imports made with forced labor. The July report into countries’ forced labor practices, initiated under Section 301 of the Trade Act of 1974 and produced in just four months, lacked the depth featured in comparable reports from previous administrations, three former officials noted.

“It strikes me a lot more vulnerable to legal challenge than previous 301 reports have been,” said Gresser, who is now the vice president and director for trade at the Progressive Policy Institute.

Democratic attorneys general filed a suit earlier this month seeking to overturn the proposed duties tied to forced labor. “The USTR made no effort to link the scope of the tariffs to the scope of harm,” they wrote in their filing.

Burlap and Barrel, a vendor of imported spices that is also suing, noted that the USTR failed to provide a “reasoned, record-based explanation” for its tariff findings.

“You can tell they’re stretched,” said Peter Harrell, a former Biden administration economic official who is now a trade law professor at Georgetown Law. Officials are “not able to put in or do the level of detail that they’ve been able to do in the past.”

USTR’s staff of less than 300 people has always punched above its weight, almost all of the former officials noted. The Commerce and Treasury Departments, by comparison, count workforces of around 40,000 and 80,000 employees, respectively.

From 2023 to 2026, however, the number of USTR employees fell almost 20 percent, from 269 workers to 220, leaving it with the smallest workforce since 2005, according to data from the White House Office of Personnel Management.

The agency’s lowest staffing in more than 20 years continues a decline that began in the latter half of the Biden administration when the agency faced a staff exodus driven by frustration with the former president’s dormant trade agenda.

USTR’s in-house expertise has only continued to dwindle in the second Trump administration.

The agency’s most senior official responsible for North American trade, Daniel Watson, retired just days before the White House formally launched a review of the U.S.-Mexico-Canada Agreement on July 1. Meanwhile, Bryant Trick, the top trade official for Europe and the Middle East is also set to retire in the coming months at a time when U.S. talks with Europe over its digital trade practices, pharmaceutical pricing and implementation of a bilateral trade pact are in full swing.

Officials that left the agency during Trump’s second term did not agree on a single driving factor behind the recent departures. The first former USTR official cited their dismay over Trump’s ties to the late disgraced financier Jeffrey Epstein as a reason for their own departure. Others noted there was a cohort of staff nearing retirement age.

“I don’t sense that one can point to a morale problem or something like that,” a second former official said.

Greer, who served as chief of staff to Trump’s first-term trade representative, Bob Lighthizer, is widely respected at the agency, former officials said, and built up goodwill among staff for his handling of the administration-wide effort to cut the size of the government last year. USTR was spared from those cuts, which several former officials attributed to Greer’s assertiveness on personnel matters.

There is money available for USTR to staff up. The agency received $88 million in fiscal 2026, which should accommodate 274 employees, according toUSTR’s budget documents.Greer is also asking for $95 million in fiscal 2027 to beef up trade enforcement activities. The agency says the funding increase would allow for 301 full-time employees.

But it hasn’t been easy to hire.

Since Trump returned to office, the private sector has scrambled to bring on trade experts to help companies navigate the more complex tariff landscape, offering higher salaries than candidates and sitting officials can earn in government.

“It is no surprise that the private sector is eager to hire the well-regarded experts at USTR during this period of historic change in U.S. trade policy,” the USTR spokesperson added in a statement.

Three of the former officials said it is common for jobs to sit vacant for more than a year. One said they have seen the recruitment process drag on for two years, as the Executive Office of the President, which handles USTR’s hiring, prioritizes recruitment in other executive offices.

Shifts in human resources policies under Trump have also hurt recruitment efforts, two of the former USTR officials said, citing, in particular, new limits on remote work.

A flexible working environment “is one of the ways that you compete with better salaries and more certainty in other sectors,” one of the people said.

USTR is supposed to be a “nimble” agency, the person stressed — particularly so under Trump, where trade negotiations, investigations and new tariffs are rolled out on shortened timelines and responding to fast-moving developments in bilateral trade relationships.

“They’re being asked to do a lot,” the person said, but the hiring “system is just not set up to be nimble or to get results on any quick timeline.”

Paroma Soni contributed to this report.

LONDON — Prime Minister Andy Burnham’s government said the U.K. is willing to discuss American concerns over its digital services tax amid renewed pressure from the White House.

President Donald Trump in June threatened to impose 100 percent tariffs on European countries with DSTs which target U.S. tech firms, and in an interview with The Times newspaper published on Monday, Trump’s top trade official Jamieson Greer said the threat was “not a bluff” and the president’s demands that foreign governments abandon such taxes were “quite serious.”

“We remain open to discussing U.S. concerns and working with partners internationally,” a U.K. government spokesperson said when asked about Greer’s comments.

“This tax is about making sure that businesses pay their fair share of U.K. tax based on the value they derive from U.K. activities,” the spokesperson said, adding that the U.K. is committed to removing it “once a global solution is in place.”

The DST raised over £1 billion last year, predominantly from American tech firms, and has repeatedly drawn Trump’s ire.

The U.K. government has so far resisted calls to abandon the tax, including during trade negotiations last year. A U.K.-U.S. Economic Prosperity Deal signed by Trump and Burnham’s predecessor, Keir Starmer, did not mention the DST but said both sides would continue discussions to increase digital trade and address non-tariff barriers.

Greer added in his interview with The Times that the U.S. administration would not “set artificial timelines” and that relations with his British counterparts, including Trade Secretary Jonathan Reynolds and the prime minister’s business adviser Varun Chandra, are positive.

President Donald Trump paused a 50 percent tariff on Canadian goods hours before it was scheduled to kick in, saying the two countries had reached a preliminary deal.

In a post on social media late Tuesday, Trump announced that he would delay the duties, set to go into effect at midnight on Wednesday, for three days “based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!”

The president teased that the agreement could include resurrecting the Keystone XL Pipeline, a long-stalled pipeline extension intended to pump crude oil from Alberta, Canada to the Midwest of the United States.

President Donald Trump is waiting for Iran to cave to his economic pressure. Tehran may be willing to wait even longer.

Even as Treasury Secretary Scott Bessent promises a level of economic isolation “never seen before,” former Trump administration officials, U.S. ambassadors and other Middle East experts are skeptical that tightening the economic vise will force Iran to relinquish its desire to toll ships passing through the State of Hormuz and make the other concessions Trump is demanding to bring an end to the war.

“It’s an attrition campaign, and I am sure Treasury tweaks this or that to fill gaps or expand coverage of sanctions,” said James Jeffrey, a former ambassador who served in the Middle East during three presidential administrations, including Trump’s first term. “But, it’s hard to believe [there will be] something decisive after 20 years of U.S. sanctions and Iranian experience of going around them.”

It’s an acknowledgement that underscores the asymmetry of the situation. The Trump administration is staring down a consequential midterm election amid an unpopular war that has sent oil prices back up to roughly $90 a barrel and helped push long-term borrowing costs to their highest level in nearly two decades as hope dims that a peace deal is near.

Iran’s leaders, meanwhile, see the conflict as existential, giving Tehran reason to absorb the extraordinary economic pain rather than accept terms it believes could imperil the regime — especially as U.S. inflation remains elevated and treasuries sell off.

The yield on 30-year U.S. government bonds, a figure Trump has in the past been attuned to, jumped on Tuesday to its highest level since just before the global financial crisis.

The increase in the yield to its highest level in nearly two decades isn’t solely because of the six-month war; global fuel shortages and broader instability have kept energy prices higher for longer, increasing the threat of persistent inflation. And that’s heaped even more risk on global bond markets that have repeatedly blanched at Trump-related shocks.

“We are in a situation where we’re spending more and more to finance more and more,” said Julia Coronado, founder of MacroPolicy Perspectives. And the war has created “a riskier world full of more frictions, full of more supply shocks.”

Iran’s outsized incentive to muscle through the pain is partly why some former administration officials doubt that the naval blockade, while unprecedented in its scale in the modern era or whatever new strategies Bessent may unveil, will change Iran’s calculus.

“I think the economic pressure would need to hit them in new ways we haven’t seen so far to change the mindset of the regime,” said one former Trump administration official, granted anonymity to candidly assess the impact of the U.S.’s economic pressure campaign.

The administration has yet to indicate what further action it plans to take, but options include going after major Chinese banks that facilitate Iran’s oil trade, expand secondary sanctions on countries doing business with Iran and confiscating Iranian assets under U.S. jurisdiction instead of just freezing them.

Iranian leaders publicly mocked U.S. efforts to sanction them into submission.

“Americans think squeezing Iran harder will win concessions that were never part of the agreement,” Mohammad Bagher Ghalibaf, the speaker of Iran’s parliament, posted on X Tuesday.

“Bessent and [Defense Secretary Pete] Hegseth are way out of their league,” he wrote. “Stop waiting for the clown crew to pull a rabbit out of their hat and clean up the mess you made.”

White House aides, however, continue to contend that the leverage is on its side.

“The crushing sanctions and one of the most successful blockades that have crippled Iran’s economy and has left Iran completely broke,” said one administration official, granted anonymity to share the U.S.’s thinking. “There are many levers the president can crank harder in the weeks and months ahead.”

In the half-year since the Iran war began, the president has deployed an array of pressure tactics to choke Iran economically, including physically preventing the country from selling its most important export — oil — as part of an ongoing naval blockade of Iranian ports. The administration has also sanctioned foreign buyers of Iranian oil, targeted the country’s shadow fleet of ships that ferries it and sought to cut the country off from the financial networks it uses to move money.

That economic pressure has sent Iran’s economy, which was already troubled before the war, into a deeper tailspin. Now, Iran is grappling with year-over-year inflation of 88 percent, long lines and rationing at gas pumps and food prices that have more than doubled.

But those who have worked on previous Iran negotiations say that’s far from enough to get the regime to cave, especially after six months of U.S. bombing that has killed, by Tehran’s own measure, more than 3,000 Iranians.

“It’s undeniable that there is economic pressure. The question is whether there is a breaking point, and I would say for a regime that is fighting for its life and has never hesitated to transfer economic pain to its population, there is no breaking point,” said Ali Vaez, the International Crisis Group’s Iran project director, who helped work to bridge differences between Iran and world powers during negotiations over the 2015 nuclear agreement.

Yet Trump continued to project patience on Tuesday, signaling that he was prepared to let the pressure campaign play out.

“There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran. The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating. All water mines have been removed or detonated. Thank you for your attention to this matter!” Trump wrote on Truth Social.

A senior White House official, granted anonymity to discuss the situation in Iran, insisted that Iran will cave long before the pain in the U.S. or world markets become intolerable.

“Ultimately we want a deal, but in the interim, the Iranian economy is tanking … people are lining up for gas, just for a half gallon of gas. And there’s a lot of civil unrest going on in Iran, that’s not being played on the news for whatever reason,” the official said late last week. “We’re fine if that’s the route they want to take.”

Still, there are signs inside the White House that the economic impacts are a growing concern. Vice President JD Vance last week said on Fox News that the administration’s first goal in the Iran war was to “keep oil and gas cheap for Americans all over the country.” The president, meanwhile, has repeatedly insisted voters will bear the pain of higher gas prices for an end to Iran’s nuclear ambitions.

The voters have a more dyspeptic view. A Reuters/Ipsos survey released this week showed Trump’s approval rating at 33 percent, the lowest level of his presidency. Roughly 80 percent of Americans — 87 percent of Democrats and 71 percent of Republicans — think U.S. involvement in Iran “will go on for an extended period of time,” the poll found.

But some former Trump administration officials, however, are holding out hope that patience will be rewarded and that the administration’s economic pressure campaign will work, in part because they see the other options on the table, including putting U.S. boots on the ground in Iran, as politically untenable.

Fred Fleitz, Trump’s former National Security Council chief of staff and vice chair of the American First Policy Institute’s American Security, predicted that the U.S. could be “dealing with a different Iran” in 30 to 60 days.

“I think patience is the best approach,” Fleitz said. “I don’t believe that a large-scale military attack right now is going to make a difference in changing the regime’s position, and I strongly oppose the idea of seizing Kharg Island or sending in American troops. The American people don’t want that. That would really bog us down in a quagmire.”

Several independent U.S. oil producers are expected to sign production contracts with Venezuela’s state-run oil company in the coming days, according to three industry representatives familiar with the plans — a step forward for the Trump administration’s efforts to boost production in the beleaguered South American nation.

A signing ceremony involving several smaller U.S. producers and the Petróleos de Venezuela had been set for Tuesday evening in Houston, according to the people, who were granted anonymity because details of the event have not been made public. Venezuela’s oil minister is scheduled to attend, as is the head of exploration for PDVSA, one of the people said. The ceremony could be pushed back until Wednesday morning, another of the people added.

The White House, which did not immediately respond to a request for comment, is not expected to be formally involved with Tuesday’s ceremony, but it comes after top administration officials traveled to Caracas in late April to secure memorandums of understanding that laid the groundwork for formal production deals in the country that holds some of the world’s largest oil reserves.

It marks a sign of progress after the Trump administration’s effort to push new oil development in Venezuela, which began after the U.S. raid that captured former leader Nicolás Maduro in January, had slowed in recent months. Despite a boost from higher crude prices, negotiations have bogged down around key details like dispute resolution, while authorities in Caracas dealt with a devastating pair of June earthquakes that killed thousands.

Venezuela’s interim president Delcy Rodríguez last month unveiled new regulations offering more favorable fiscal terms to international oil companies.

The signings come after the Trump administration renewed pressure on Rodríguez to have PDVSA sign contracts with American companies, an industry source familiar with the negotiations. Those efforts included outreach from Secretary of State Marco Rubio to discuss how increased oil revenue could help the country after a devastating earthquake earlier this summer, this person said.

“There’s a renewed acknowledgement from Delcy that increased oil production is the pathway to rebuilding after the earthquakes and accomplishing what her government wants to do for the people who are suffering because of the earthquakes,” this person said.

David Goldwyn, head of the international energy consulting firm Goldwyn Global Strategies, said investment from independent oil producers and expanded production from existing fields are likely to be Venezuela’s “primary source of new oil growth for the next couple of years.”

“While the supermajors bide their time until they see how the politics sort out, and whether they can cherry pick the best assets, independents can derisk their projects in a short period of time,” Goldwyn said.

But those investments are only likely to add up to 300,000 barrels a day to the country’s oil production over the next year, far from the increase of millions of barrels the authorities in Caracas and Washington would like to see, Goldwyn said.

“Incremental production is all we will see until the framework improves, electricity is restored, and the political picture becomes clearer,” he said.