Good morning. The European Union’s executive arm proposed a sweeping ban on imports of Russian oil and gas by the end of 2027, a major step in the bloc’s efforts to sever its energy ties with Moscow.

• All imports: The proposed regulation would prohibit imports of Russian natural gas–whether originating in or exported directly or indirectly from Russia–as well as the provision of services in EU terminals of liquefied natural gas to Russian customers. 
   
• Implemented in stages: Imports of Russian pipeline gas and LNG would be prohibited as of Jan. 1. Imports under existing short-term contracts would be banned as of June 17, 2026, while imports under existing long-term contracts as of Jan. 1, 2028.
   
• Weaponized energy: “Russia has repeatedly attempted to blackmail us by weaponizing its energy supplies,” European Commission President Ursula von der Leyen said Tuesday. “We have taken clear steps to turn off the tap and end the era of Russian fossil fuels in Europe for good.”
   
• Ramping up defense: Meanwhile, the European Union also wants to ramp up defense capabilities by loosening its knot of regulations covering everything from sustainable finance to merger enforcement.

Note to readers: The Morning Risk Report won’t be published Thursday in observance of Juneteenth in the U.S. We will be back Friday.

Private-equity firm ducks prosecution over subsidiary’s sanctions violations.

A Houston private-equity firm won’t be prosecuted for a subsidiary’s violations of U.S. sanctions on Iran and other countries, the U.S. Justice Department said.

White Deer Management is among the first firms to benefit from a 2024 Justice Department policy that says businesses can avoid prosecution by the national security division if they come forward and report potential issues at companies they acquire, the department said Monday.

Trump officials weighed broader China tech restrictions ahead of trade talks.

Commerce Department officials weighed new export limits on critical technology going to China ahead of recent trade talks in London, adding to the Trump administration’s arsenal if tensions between Washington and Beijing escalate again.

The Commerce Department unit overseeing export controls in recent weeks weighed tougher limits on semiconductors, including cutting off sales to China of a wider swath of chip-manufacturing equipment, people familiar with the matter said. Such a move would have covered equipment used to make everyday semiconductors, expanding beyond existing export limits on equipment for producing advanced chips.

• The Senate passed legislation to regulate a widely used type of cryptocurrency, a key victory for the digital-asset industry after it poured money into last year’s election.
   
• Joann’s suppliers have filed a lawsuit alleging company executives falsely painted a rosy picture of the fabric and craft retailer’s financial condition to persuade them to continue selling merchandise after it exited its first bankruptcy last year.
   
• President Donald Trump threw a lifeline to TikTok in January, and he did it again in April. Now, a repeat performance is widely expected by Thursday, when his latest extension is due to run out.
   
• The new FDA chief wants to fast-track some drugs and use more artificial intelligence.
   
• The Securities and Exchange Commission has ordered El Capitan Advisors and its chief executive officer to pay more than $21 million in fines and disgorgement over allegations the cannabis cash-management-focused investment adviser and its owner misappropriated client funds.
   
• The European Union’s tech enforcer accepted commitments from Alibaba Group-owned AliExpress to crack down on sales of illegal products, but said the e-commerce company may have underestimated the risks its platform poses and failed to properly penalize traders posting illegal content.
   
• Investigators believe Air India Flight 171 had an emergency-power generator operating when it crashed last week, raising questions about whether the plane’s engines functioned properly during takeoff.

Chobani CEO says food system needs immigration to function.

Chobani Chief Executive Hamdi Ulukaya said that the Trump administration’s stepped-up immigration enforcement poses risks to the food supply chain.

“We need to be very realistic,” Ulukaya said at The Wall Street Journal’s Global Food Forum in Chicago. “We need immigration and we need workers for our food system to work.”

Trump calls for Iran to ‘surrender’ as he weighs military action.

President Trump issued bellicose threats against Iran and its leadership Tuesday, suggesting the U.S. might join Israel’s strikes and pivot away from seeking a diplomatic agreement to restrict Tehran’s nuclear program.

Calling for Iran’s “UNCONDITIONAL SURRENDER,” he said in a Truth Social post that the U.S. knew Supreme Leader Ayatollah Ali Khamenei’s location but wouldn’t kill him, “at least for now.” He added: “We now have complete and total control of the skies over Iran,” implying collaboration with Israel’s attacks, even though there is no indication U.S. war planes are operating over the country.

• Iran’s Supreme Leader Says Country Won’t Surrender
• This ‘Bunker Buster’ U.S. Bomb Could Cripple Iran’s Nuclear Ambitions
• Israel Is Running Low on Defensive Interceptors, Official Says

• A day after President Trump signaled that Ukraine isn’t a top priority, and following Russia’s deadliest attack on Kyiv in weeks, Ukrainian President Volodymyr Zelensky arrived in Canada to lobby other allies for help against Moscow.
   
• Two oil tankers were on fire after colliding in the Gulf of Oman, as maritime officials warned that navigational systems are being jammed in the Middle East as a result of the military operations by Iran and Israel.
   
• Dozens of companies have pledged to build more manufacturing in the U.S. since President Trump took office. Generic drugmakers aren’t among them.
   
• Global banks significantly increased their financing for coal, oil and gas projects last year, according to a new report by climate advocacy groups, marking a reversal at a time when lenders are backtracking on climate pledges.
   
• Japan’s exports fell for the first time in eight months in May, bolstering views that the impact of President Trump’s tariffs could tie the Bank of Japan’s hands on rate hikes.

• Just three years ago, Bowling Green, Ky., was celebrating the largest industrial investment ever made in the city, a new sprawling electric-vehicle battery factory that would create 2,000 jobs. Today, the building is there. The jobs aren’t.
   
• Amazon.com, one of the largest U.S. employers, plans to reduce its workforce in the coming years because increasing use of artificial intelligence will eliminate the need for certain jobs.
   
• Senate Republicans’ plan to extract more savings from Medicaid as part of their revised tax and spending package triggered a backlash within the party, raising concerns that leaders could miss their self-imposed deadline of getting the bill to President Trump’s desk by July 4.
   
• Sam’s Club is evaluating which products it will raise prices on to offset higher costs from the Trump administration’s new tariffs, with candidates ranging from small kitchen appliances to outdoor decor such as yard art.
   
• Accident investigators are examining whether problems with a helicopter’s rotor blades contributed to the aircraft crashing near New York City earlier this year, according to people familiar with the matter.

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