Preparing for a wider war

Donald Trump called for the “unconditional surrender” of Iran five days after Israel’s surprise attack triggered a new war in the Middle East, one which has so far killed hundreds of Iranians and dozens of Israelis, according to government officials. Trump also alluded to the possible assassination of Iran’s Supreme Leader, Ayatollah Ali Khamenei. In a social media post, the 79-year-old Republican said he didn’t want the Iranian leader killed “for now.” (In his first term, Trump ordered the targeted killing of a top Iranian general.) Trump’s all-caps call for the country to surrender followed.

The US president’s early departure from the G7 meeting in Canada yesterday spurred questions about whether he seeks to end the conflict or escalate it. Today, Trump called a meeting of his security advisers and has declared Iran cannot have a nuclear weapons program. German Chancellor Friedrich Merz, who’s been attending the G7 summit, told the country’s public broadcaster ZDF that a US decision on whether to join the war militarily would come “in the course of the day” and said that if Iran doesn’t return to the negotiating table, then “the complete destruction of Iran’s nuclear program may be on the agenda.” (Trump discarded a previous Iranian nuclear accord reached by President Barack Obama.)

Whether a negotiating tactic or real threat, the risk of a wider conflict has others in the region taking precautions. Turkish President Recep Tayyip Erdogan ordered officials to increase the production of medium and long-range missiles, an acceleration of plans to develop a strong home-grown industry. Meanwhile Russia is watching Israel’s bombardment of Iran with mounting concern for the survival of a key ally. —Jordan Parker Erb and David E. Rovella

What You Need to Know Today

Republican leaders are aiming for quick negotiations over changes to the newly unveiled Senate tax bill which currently lacks the votes to secure majorities in both GOP-controlled chambers of Congress. The bill, which some critics of the House version had hoped would be less severe when it came to safety net programs for poor and disabled Americans, turns out to be harsher. The new bill would make more aggressive cuts to Medicaid spending as Republicans search for ways to fund Trump’s proposed tax cuts, most of which would benefit the wealthy and corporations, while others fulfill populist campaign promises, such as eliminating taxes on tips.

The Senate bill also takes a hardline stance against raising the $10,000 cap on the state and local tax deductions, earning it an immediate thumbs-down from a faction of New York, New Jersey and California GOP House members who have threatened to block the bill if it doesn’t include the $40,000 cap. Those states tend to have higher taxes and are more dangerous territory for Republicans hoping to keep their seats in the midterms. A poll published by the Washington Post showed that, overall, Americans oppose the proposed GOP tax legislation by a 2-1 margin.

New York City Comptroller Brad Lander was arrested outside of an immigration courtroom in lower Manhattan as he sought to escort a man targeted by Trump administration immigration agents for detention. The comptroller’s arrest comes as Trump escalates his immigration offensive. On Sunday, he ordered federal officials to enact the “single largest mass deportation program in history,” in part by targeting cities and states run by members of the Democratic Party.

In recent weeks, agents for the Trump administration have detained, arrested or charged a state judge and several Democratic officials, including a mayor and members of both the House of Representatives and the US Senate—unprecedented prosecutions of the kind Trump claimed the previous administration would engage in. In the case of US Senator Alex Padilla of California, 52, a group of federal security agents shoved him, pushed him to the ground and cuffed him, one placing a knee on his back. Padilla had sought to ask Homeland Security Secretary Kristi Noem a question at a Los Angeles press conference.

Lander, 55, is a Democratic candidate for New York City mayor. As he walked with the man from the courtroom on Tuesday, video showed he was grabbed by at least five masked men who separated the two and pushed the comptroller, one of the most senior officials in New York City, against a wall. Lander reportedly claimed he was being illegally detained. According to The City, a local New York news outlet, a reporter heard one federal agent say to another shortly before the incident, “do you want to arrest the comptroller?” A photo caption in the New York Times Tuesday reported that the governor of New York, Kathy Hochul, a Democrat, was blocked by Trump administration agents from speaking with Lander after his arrest.

The US Supreme Court was asked to consider striking down Trump’s most sweeping tariffs, putting the justices closer to a high-stakes fight with worldwide economic implications. The request, which two educational-toy makers said they filed Tuesday, seeks to put the case on an expedited track with the possibility of a definitive Supreme Court ruling by the end of the year.

A federal appeals court in a separate case has said the tariffs could stay in effect until that panel hears arguments July 31, and a dozen other challenges have been filed. The toy companies said the issue of Trump’s tariff authority under the International Emergency Economic Powers Act is so economically weighty that the justices should intervene immediately. Legal scholars and a federal court have said Trump’s use of the actis unprecedented and illegal.

US retail sales fell for a second straight month in May, perhaps suggesting anxiety over Trump’s tariffs and their personal finances. The value of retail purchases, not adjusted for inflation, decreased 0.9%, the most since the start of the year and restrained by autos, according to Trump administration data Tuesday. That followed a downwardly revised 0.1% drop in April, marking the first back-to-back decline since the end of 2023. Other data out Tuesday pointed to cooler demand across sectors of the economy. Industrial production decreased in May for the second time in three months, reflecting weaker utility output and soft manufacturing, according to the Federal Reserve. Plus, confidence among homebuilders in June slumped to the lowest since the end of 2022, as would-be buyers stay on the sidelines, according to a survey by the National Association of Home Builders and Wells Fargo.

JPMorgan is hiking the annual fee on its popular Sapphire Reserve credit card to $795, which has been $550 a year since 2020. The bank will also launch a similarly priced version for businesses. The changes mark the firm’s latest volley in the ultra-competitive world of premium credit cards, and follow what American Express on Monday called its “largest investment ever” in a credit-card refresh. JPMorgan said it will be reshaping its rewards for the cards, placing more emphasis on travel and dining offerings that the bank itself has assembled through a recent series of acquisitions and investments.

More of Wall Street is following Ken Griffin to Florida. In the years since the billionaire Citadel Securities founder pulled up stakes and migrated his firm to South Florida, more hedge fund managers have followed. Drawn by sunny weather, lower taxes and lighter regulation—and, in some cases, proximity to Trump’s Mar-a-Lago compound—the financial elite are steadily building Wall Street South. But it hasn’t come without challenges, including a cost of living that increasingly rivals New York and a lack of sufficient infrastructure to support a booming population. In the premiere episode of the new Bloomberg Originals series Bullish with Sonali Basak, we pull back the curtain on this momentous shift in financial power, showing how it happened and whether it has legs. Plus, Griffin shares his views on Trump and his Harvard, his alma mater.

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