Up First from NPR - Trump Warns Economic Warfare For Aiding Iran, Federal Debt Grows, Venezuela Oil Deals

Episode Date: August 20, 2026

President Trump is warning of economic consequences for any country that supports Iran as he tries to wind down the war, leaving Gulf allies worried about their future with their powerful neighbor.The U.S. national debt has topped 40 trillion dollars, with the government now spending more on interest than on defense and driving up the cost of everything from mortgages to small business loans.U.S. oil companies are signing deals in Venezuela for the first time in nearly two decades, eight months after American forces captured Nicolás Maduro, even as the country’s politics remain unsettled.Want more analysis of the most important news of the day, plus a little fun? Subscribe to the Up First newsletter.Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include sponsor-free listening. Learn more at plus.npr.org.Today’s episode of Up First was edited by Tina Kraja, Rafael Nam, Alfredo Carbajal, Mohamad ElBardicy and Taylor Haney.It was produced by Ziad Buchh and Nia Dumas.Our director is Kaity Kline.We get engineering support from Carleigh Strange and our technical director is Eowyn Fain.And our deputy Executive Producer is Kelley Dickens.(0:00) Introduction(01:55) Trump Warns Economic Warfare For Aiding Iran(06:13) Federal Debt Grows(10:06) Venezuela Oil DealsSee pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

President Trump is threatening economic warfare on any country that helps Iran. He wants allies to add pressure on Iran to end the stalemate in the Strait of Hormuz, but those allies live next door and are stuck with the fallout. I'm Lila Fodl, that's Sasha Pfeiffer, and this is up first from NPR News. The U.S. national debt has topped $40 trillion. You have to think about the impact that that will have on the interest payments. We are now spending more on interest than we're. We spend on national defense.

Experts say that higher debt is pushing up the cost of everything from mortgages to small business loans. And U.S. oil companies are making new deals in Venezuela. That comes eight months after U.S. forces captured Nicholas Maduro. Venezuela's politics and its future remain uncertain. Stay with us. We'll give you the news you need to start your day. The war with Iran is in its sixth month, and oil is still struggling to move through the strait of Hormuz. President Trump's tried bombing Iran into submission.

and now he's pivoting to economic warfare. In a lengthy post, he announced in all caps, quote, the most crushing economic operation ever taken against any country. And he called on allies to stand with the U.S. to unleash economic D-Day, as he called it, on Iran. With us to talk about this as NPR International correspondent Aya Batrawe. Good morning, Aya. Good morning. So this crushing economic operation that Trump posted about, do we know what this would look like?

I mean, more of the same sanctions, the existing blockade, and even more pressure now. He's calling on allies around the world, countries around, to join him in this isolation of Iran. And we've seen maximum economic pressure before by President Trump. You'll recall this was his policy the first time he was in office. But this is a step beyond because now there is that naval blockade in place. And it is blocking Iran from being able to export its oil. And this pivot from bombings to blockade comes as AAA says gas prices in the U.S. are up 30% on average from a year ago.

So in many states, people are paying a dollar or more per gallon than they were. Diesel for trucks and jet fuel for flying are even higher. Now, that is because of Iran's chokehold on the Strait of Hermuz since the beginning of this war. Windward Maritime Intelligence Tracking says five million barrels of oil a day did exit the strait on average per day in July, but that is a fraction of the 20 million barrels that were going through before the war.

And all that oil that had been pouring through was coming from Gulf Arab allies who depended on it for revenue, for their economies, yet they are now stuck with this stalemate and its consequences. So what's the regional view on this? Right. So the Iranian and Gulf oil is not going through that straight freely right now. Well, Trump's approach with Iran has swung wildly in this war. You know, we've heard him threatening to wipe out an entire civilization and then talking up a deal with Iran. But now there is no deal. And Trump says there are no talks with the Iranians. And there are differences of opinion among Gulf Arab allies about all of this. Alman, for example,

which borders the strait of Hormuz and is holding talks with Iran about its future management. Trump has threatened to bomb that country, Oman, because of those talks, which include possible tolls. That is despite Oman's history as a mediator between Washington and Tehran. Meanwhile, you have the United Arab Emirates, which this week took a step that aligns with Trump. The UAE halted all trade, commerce, and financial transactions with Iran after it says two Iranian missiles were fired toward it. It fell in open waters, but Iran denies that attack. However, you know, I spoke with Mohamed Bahrain. He runs the Dubai Public Policy Research Center in the UAE, and he backs Trump's current approach.

Everyone has realized the limitation of military power. And I think now what the U.S. is trying to do is use the same weapon Iran is using against the world versus economic sanctions. And he says that while the U.S. Israeli war launched on Iran triggered all of this, Iran's attacks now on oil and the global economy has to be stopped. Attacking the world economy is not justifiable. Attacking other countries because you've been attacked by one country is not justifiable. And remember, the UAE has dealt with the brunt of Iranian missile and drones throughout the war. A. briefly, you said the UAE has halted all trade, commerce, and financial transactions with Iran. Any sense, if that will have real consequences for Iran? So the UAE was the biggest importer of Iranian goods worldwide in 2024. That's according to data

from the World Trade Organization. And it is also a place where over the years, the U.S. has sanctioned Iranian shell companies that are moving illicit money and trade through the UAE, but it is also a place that connects Iranians to the rest of the world. Dubai Airport is a major transit hub that still has flights to and from to Iran. So the UAE is taking a step toward isolating Iran right now, but it has not yet cut off those flights or its ties altogether. So that leaves it room to maneuver with its powerful neighbor. And that is the bind that these Gulf Arab allies are in. They have to deal with Iran, even when Trump doesn't. That is NPR's Aeba Trowie. Thank you. Thanks.

The U.S. government's debt has reached a new high or a new low, depending on your point of view. A daily update from the Treasury Department on Wednesday said the federal debt had topped $40 trillion. This year alone, Washington is adding more than $2 trillion in red ink. And that's driving up interest expenses for the government and everyone else. And Pierre Scott Horsley joins us to explain. Hi, Scott. Good morning, Sasha. All right, Scott, we're not in a recession, we're not in a pandemic. Things like that might justify the debt. So why is the debt growing so fast?

It's growing because the government is spending more than it takes in by a pretty wide margin. Last year, the GOP Congress voted to extend the 2017 tax cuts, so tax revenue is growing more slowly than it otherwise would. The administration had hoped to offset some of that with the tariff revenue, but, of course, a lot of the president's tariffs were struck down by the Supreme Court, so the government's actually had to refund more than 100. billion dollars it collected. And meantime, spending just keeps going up. You know, a lot of the increased spending is the result of our aging population, which drives up costs for things like Medicare. But Carolyn Bordeaux,

who heads a deficit watchdog group called the Concord Coalition, says some of it's driven by the growth of the debt itself. The $40 trillion itself is just a number, but you have to think about the impact that that will have on the interest payments. We are now spending more on interest than we spend on national defense. It is one of the highest categories in terms of our expenditures, and it's one of the fastest growing. The government is spending more than a trillion dollars this year, just paying interest on the debt, and that's about 15% more interest than the government had to pay last year. Yeah, and those growing interest payments are problematic. Explain what's behind the big jump in the interest payments. Well, it's partly because the debt itself has gotten so

big, you know, when you carry a big balance on your credit card, the interest payments go up. but it's also because the people who lend the government money are demanding higher interest rates now. This week, the interest rate on a 30-year government bond was the highest been in almost two decades. And Bordeaux says that drives up borrowing costs for everyone else. Those interest rates are linked to everybody's mortgage payments. They're linked to small business loans. They're linked to the cost of living for Americans across the country. Mortgage rates, for example, have climbed to about 6.7 percent.

and of course that's making it harder for people who are trying to buy their first home. Very hard. Scott, is there any movement in Washington to get control over this growing debt? Some members of Congress have started making noises about maybe setting up a fiscal commission of some sort, but those efforts don't seem to be getting a lot of traction so far. And let's face it, most voters are not screaming that they want to pay higher taxes or see their own government benefits cut. maybe that will start to change as these borrowing costs continue to climb and become an even bigger drag on the U.S. economy.

What's really remarkable about all this red ink is that it's coming at a time of relative prosperity. You know, the government used to run big deficits in hard times, but then shrink those deficits relative to the economy in good times. That's no longer the case. And Bordeaux says that raises the risk that the next time the country faces some big challenge, it may not have the fiscal flexibility would like. One of the problems with running deficits at times like this is what do you do when you hit a really serious crisis? What do you do when you hit a recession?

What happens if we have another pandemic? What happens if we have an international global crisis, a war? We don't have a lot of headroom to issue more debt. The U.S. was fortunate during previous crises that it was able to borrow a lot of money at relatively low cost. but we can't take it for granted. That will always be the case. And Pira Scott Horsley, thank you. You're welcome. Venezuela's energy leaders say the country is open for business.

This week, U.S. oil companies signed some of the first deals with Venezuela in close to two decades. This comes eight months after the U.S. seized Venezuelan President Nicholas Maduro. Houston Public Media's energy reporter Natalie Weber has been reporting on this, and she joins us from Houston. Good morning, Natalie. Good morning. So I recall that after the U.S. captured Maduro, oil companies were hesitant to get involved with Venezuela, but now they're involved. Give us a sense of what's in these deals. Yeah, so the Dallas-based Hunt Oil Company entered into a contract to expand the country's oil and gas production. And then SLB, formerly known as Slumberger, a Houston oil field services company, also signed an agreement for oil exploration in Venezuela. And Venezuela's oil minister, Paula, now announced this. deal on state-run media.

These deals were signed on Tuesday while Venezuelan leaders were in Houston for an energy conference. And I attended the conference in Houston where I now spoke this week. She says the country has made changes to its laws that will make it easier for foreign companies to invest in Venezuela. Yeah. And so what she's saying right now is that the country's agreements with U.S. companies offer a chance to evaluate opportunities for.

investment in Venezuela. Now, at this time, we don't really know how much these deals are worth. That hasn't been made public yet. Natalie, could you give us some sense of the significance of these deals? Sure. Well, these are some of the first major agreements between U.S. oil companies in Venezuela since the Venezuelan government took control of foreign oil fields in 2007. The South American country has the world's largest proven oil reserves, according to OPEC. James Chester is the CEO of Energy Capital and Power, which organized the Houston Conference with Venezuelan leaders this week. Here's what he said. It's very significant that they're actually coming here. They're not waiting for people to come to Caracas. It's a tough time for Venezuela right now. The country needs

billions of dollars to rebuild after a devastating earthquake killed thousands of people in June. So the country needs money and soon. And these contracts are a meaningful milestone after many oil corporations have kind of hesitated to get involved in Venezuela. That's according to Francisco Manaldi. He's the director of Rice University's Latin America Energy Program. This could open up a new wave of investment. Still, we have to wait and see if companies actually deploy their resources. Still, a lot of energy CEOs say it could take time and a lot of money to ramp up Venezuela's

oil production. So as we just heard, it's unclear how this might play out, whether the companies will make money. Do we have any sense of whether this could become a trend of oil deals between U.S. companies of Venezuela? Sure. So it's hard to say, even if Maduro has been removed from office, the country is still being run by his vice president, Delci Rodriguez, under the title of acting president. And even if some companies are starting to make moves, there's still a lot of political uncertainty. Industry analysts told me energy companies may try to prioritize short-term deals. They say once President Trump leaves office, it's hard to say what U.S.

policy in Venezuela could look like, and that could have a huge impact on international business deals. And Natalie, as you just indicated, the U.S. is really playing a large role in this. What is the role of the U.S. government here? Sure. So the Trump administration says that it's still working to bring some certainty to the Venezuelan government. And U.S. Secretary of State Marco Rubio told reporters a few weeks ago that Venezuela could begin discussing a democratic transition of power this month. Venezuela has a lot of oil resources, but industry leaders say long-term investments also come with a lot of risk. And we'll have to see how that risk plays out. That is Natalie Weber from Houston Public Media. Thank you.

Thank you. And that's up first for Thursday, August 20th. I'm Sasha Pfeiffer. And I'm Lela Faldin. Today's episode of Up First was edited by Tina Craya, Rafael NAM, Alfredo Carbajal, Muhammad al-Radisi, and Taylor Haney. It was produced by Ziyadh and Mia Dumas. Our director is Katie Kline. we get engineering support from Carly Strange, and our technical director is A.O.N. Fane,

and our deputy executive producer is Kelly Dickens. Join us again tomorrow.