Government and Policy Sector

The U.S. imposed 50% tariffs on roughly $20 billion of Canadian goods Saturday after trade negotiations collapsed late Friday, and Canada promised to match the levies dollar-for-dollar starting September 8. Trump invoked Section 338 of the 1930 Tariff Act—a Depression-era statute never before used to raise tariffs—to bypass investigation or time limits. The duties hit about 5% of Canada's annual exports to the U.S., spanning hockey sticks, wine, cement, dairy, agricultural products, and some goods previously shielded under the U.S.-Mexico-Canada Agreement. Prime Minister Mark Carney said the U.S. added last-minute demands in final hours—reducing tariff relief for Canadian vehicles, restricting Canada's ability to strike deals with other countries, and weakening cultural and sovereignty protections—that made the offer unacceptable. Canada will target steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics in retaliation. No further talks are scheduled. The breakdown reverses the tone from two days earlier, when both sides signaled compromise was near; Carney accused Washington of using "economic integration as a weapon," while U.S. trade representative Jamieson Greer said the administration had offered cuts on steel, autos, and lumber but Canada "didn't want that." Experts warn the tariffs will raise costs for businesses and households across nearly all industries in both countries.

Kalshi is blocked from operating in Washington state, Michigan, and Nevada as the prediction market platform battles state regulators in court while its federal overseer, the CFTC, drafts new rules to assert jurisdiction over the industry. A Washington state court issued a preliminary injunction last week barring Kalshi from offering contracts on sports, elections, politics, culture, technology, science, and other events, finding the company likely violated state gambling and consumer protection laws. Kalshi notified customers this week and filed a motion asking the judge to reconsider, arguing that Washington state has agreed not to enforce the same restrictions against Crypto.com, a competitor offering identical event contracts. The legal fight is escalating across multiple fronts: Connecticut and New York have sued Kalshi in federal court, with New York seeking at least $36 billion in damages and calling it an unlicensed gambling operation; the Second Circuit denied Kalshi's request for temporary relief in Connecticut; and the CFTC has issued an emergency order allowing Kalshi to continue trading even if a court orders it to stop. At a CFTC roundtable on August 21, CME Group Chairman Terry Duffy called prediction market operators "carnival barkers" and questioned whether they face the same regulatory scrutiny as established exchanges, while Kalshi co-founder Luana Lopes Lara shot back that CME should "learn a bit about efficiency." The CFTC, which claims exclusive federal authority over prediction markets, is simultaneously drafting new rules on consumer protection and product governance, a move critics say is an attempt to shore up the agency's legal position after courts have sided with states. A U.S. survey published August 12 found that 79% of prediction market users lost money in the past year, with 51% using borrowed funds, adding a consumer protection dimension to a dispute framed primarily as a jurisdictional battle between federal and state regulators.

The Department of Justice is investigating Andreessen Horowitz over whether its partners' board seats at competing data infrastructure companies violate Section 8 of the Clayton Act, a 112-year-old antitrust provision that restricts interlocking directorates. Ben Horowitz sits on Databricks' board while partner Martin Casado serves on Fivetran's board; the two companies now operate in overlapping parts of the data infrastructure market, with Databricks having expanded into AI data pipelines. The probe has been running for nearly a year and centers on whether the same venture firm can hold board representation at companies whose competitive overlap has grown since the initial investments were made. No wrongdoing has been established. The investigation signals that the DOJ, under the Trump administration, is applying antitrust enforcement more directly to venture capital governance—a practice that has been common in the industry for decades but rarely subject to strict legal scrutiny. For the broader venture capital industry, the outcome could force firms to rethink how they manage board seats across portfolios of companies in adjacent sectors, potentially requiring stricter separation between competing portfolio companies or reduced board involvement. The case will test whether antitrust law treats venture investors differently when their portfolio companies' market boundaries shift after initial investment.