Good morning. When the U.S. recently agreed to lift restrictions on exports to China as part of ongoing trade talks with the country, it undermined a longstanding defense for such measures.

The U.S. has under past administrations regarded the export control regime as critical to national security, and not subject to negotiation with foreign countries, but the Trump administration’s move could erode that longstanding norm.

• Give and take: Ahead of the U.S.-China talks in London last month, President Trump authorized Treasury Secretary Scott Bessent to negotiate away recent restrictions on the sale of a wide variety of technology and other products to China, according to people familiar with the matter.
   
• 'We don't negotitate': “When countries like China have asked to negotiate over U.S. export controls, the consistent answer from the U.S. government has been, ‘No we don’t negotiate over these because they are national security related and we don’t negotiate over our national security,’” said Matthew Axelrod, a former head of export controls enforcement at the commerce department who is now a partner at the law firm Gibson Dunn.
   
• Hard to defend: The moves could make it harder for the U.S. to defend new export controls, said former Commerce Department official Matt Borman. One new restriction could be the so-called 50% rule, which would expand a Commerce Department blacklist known as the entity list to include businesses at least 50% owned by a company already on it.

Airbus, ASML, Mistral Bosses ask EU to pause AI rules.

Chief executives from top European companies including Mistral and Airbus have asked the European Commission to delay fully wielding its landmark artificial intelligence act.

In a letter sent to commission president Ursula von der Leyen, executive vice presidents Stephane Sejourne and Henna Virkkunen and economy commissioner Valdis Dombrovskis, executives asked officials to hold off on enforcing its new AI rulebook–which is due to come into force next month–for two years.

U.S. hits Iran with new sanctions.

The U.S. announced new sanctions on a network of companies accused of buying and moving Iranian oil, along with other measures targeting Hezbollah, a U.S.-designated terror group seen as an Iranian proxy.

The Treasury Department said companies allegedly operated by Iraqi businessman Salim Ahmed Said blended Iranian and Iraqi oil so it could be sold as Iraqi-only oil and dodge Western sanctions.

• A tariff agreement with Vietnam emphasizes one of the White House’s top priorities in this frantic round of dealmaking over global trade: slamming shut any backdoor routes for Chinese goods to enter the U.S.
   
• A U.S. company that supplied Huawei has agreed to pay $4.25 million for violating U.S. export controls.
   
• Under threat from the Trump administration and activist groups over diversity programs, some companies and colleges are scrapping scholarships entirely.

California’s largest wildfire of the year forces evacuations.

A fast-moving California wildfire exploded to become the state’s biggest of the year, forcing evacuations and the closure of a highway, and evoking memories of the devastating blazes that laid waste to parts of the state in January.

The Madre Fire ignited Wednesday afternoon in San Luis Obispo County and grew to more than 70,000 acres by Friday afternoon, according to the California Department of Forestry and Fire Protection, or Cal Fire.

Xi has spent decades preparing for a Cold War with the U.S.

In the U.S.-China conflict, President Trump is waging an economic assault. But Chinese leader Xi Jinping is fighting a Cold War.

Xi is entering trade negotiations with a grand strategy he has prepared for years—one that, according to policy advisers in Beijing, is inspired by his understanding of what the Soviet Union got wrong during the first Cold War.

Well aware of the U.S.’s continued economic and military superiority, the advisers say, Xi is seeking to avoid direct confrontation, while holding China’s ground in a protracted, all-encompassing competition.

• China Accelerating Implementation of U.S. Trade Framework, Commerce Ministry Says

• Abortion is now banned or heavily restricted in about one-third of U.S. states, and some women of childbearing age say that has introduced a new calculus about where to live and work. Though migration patterns are complicated, early data show that the states with the most restrictive laws are seeing some residents leave.
   
• Hamas accepted the framework of a proposed new 60-day cease-fire and hostage-release deal in Gaza that, if concluded, would immediately trigger U.S.-backed negotiations between the militants and Israel aimed at a permanent end to the war, Arab officials involved in the talks said.
   
• The United Nations atomic agency is pulling its inspectors out of Iran over safety concerns, severing the link between the agency and Tehran, according to people familiar with the matter.

• Interest groups are targeting President Trump via television ads in West Palm Beach, Fla., where he frequently visits.
   
• Oracle is cutting the cost of its database software and cloud-computing service for the federal government, making it the latest tech giant to offer the Trump administration a significant discount on its services.
   
• Tesla CEO Elon Musk said Saturday he created a new political party called the America Party after reigniting a feud with President Trump.
   
• Volkswagen is building a robotaxi that it hopes will rival Waymo and Tesla.
   
• The search for those swept away by punishing flash floods in Central Texas over the holiday took on new urgency Sunday, as the death toll climbed to 82 and nearly a dozen girls from a private summer camp remained missing.

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