Good morning. Washington’s message to American corporations is becoming harder to ignore: The Trump administration expects its political priorities to shape how companies are investigated and regulated, James Rundle reports for Risk Journal.

• The agenda: The White House is increasingly using corporate enforcement to advance broader political and ideological goals, and companies should take those priorities “literally” when assessing their risk, said Brian Rabbitt, leader of the Justice Department’s criminal division during President Trump’s first term, who spoke at the Dow Jones Risk Journal Summit in London on Thursday.
   
• DEI as one example: Rabbitt, now a partner at Jones Day, pointed to the administration’s pursuit of corporate diversity, equity and inclusion programs as one example. Last month, International Business Machines agreed to pay $17 million to settle a Justice Department probe into its DEI practices, marking one of the first major resolutions tied to the administration’s Civil Rights Fraud Initiative, which uses federal antifraud laws to challenge diversity programs at government contractors. IBM denied wrongdoing as part of the settlement.
   
• At their word: “In the first Trump administration, there was this saying, ‘take them seriously, but not literally,’” Rabbitt said. “And I think now it may be the case that those who kind of operate in this space should also take some of the things the administration’s saying in terms of their political priorities literally when it comes to white-collar criminal enforcement.”
   
• For more coverage from the Dow Jones Risk Journal Summit, see below as well as in Tuesday's edition of the Morning Risk Report. 

Block sets aside $240 million for settlement with U.S. authorities.

The owner of payment platforms Cash App and Square said it has set aside $240 million for settlements with the Justice Department and state attorneys general, Risk Journal's Max Fillion reports. (free link)

Block is in settlement negotiations with the Justice Department after receiving subpoenas related to a March 2023 short-seller report that accused the company of fraud and misleading investors, the company said in a Thursday securities filing.

The payments operator is in separate settlement talks with multiple state attorneys general offices, who are investigating the company’s handling of customer complaints, the filing said. The Securities and Exchange Commission dropped its investigation into the company in March, according to the filing.

U.S. imposes more sanctions on those it says are helping Iran

The U.S. State Department sanctioned three companies based in China for providing satellite imagery it said enabled Iran to strike against U.S. forces in the Middle East. The sanctions come just days before President Trump is due to depart for Beijing to meet with Chinese leader Xi Jinping.

Meanwhile, the U.S. Treasury Department said Friday it has sanctioned 10 people and companies with ties across the Middle East, Asia and Eastern Europe, accusing them of helping Iran secure weapons and the parts to make them. The companies are based in China, Dubai and Iran, the Treasury said, and allegedly helped secure weapons and obtain materials for Iran’s Shahed drones and ballistic missiles.

• Wesley Edens, the co-founder of Fortress Investment Group, answered a LinkedIn message from a China-born entrepreneur in 2022 that blossomed into a correspondence. The correspondance then expanded into a brief relationship, then spiraled into an alleged extortion plot.

• The fight between Disney’s ABC and the Federal Communications Commission escalated this week as the network accused the regulatory agency of potential First Amendment violations.
   
• President Trump has signed off on a plan to fire Food and Drug Administration Commissioner Marty Makary, according to people familiar with the matter, following a tumultuous period for the regulator that included clashes over vaping, abortion and drug policy.
   
• Regulators determined that Robinhood Markets won’t have to issue a disclosure document describing the firm’s business to clients who open Trump Accounts, the president-endorsed investment accounts for children and newborns. The Treasury Department tapped Robinhood to serve as the brokerage firm and initial trustee for the accounts.
   
• The U.S. designated Cuba’s military-controlled conglomerate Grupo de Administración Empresarial, along with its executive president and a Canadian-Cuban mining joint venture, Risk Journal reports. (free link)
   
• President Trump has renewed the national emergency edicts underpinning U.S. sanctions against Iraq and the Central African Republic, preserving the legal basis for restrictions on both countries for a further year, according to notices published in the Federal Register on Thursday. (free link)
   
• G-7 trade ministers meeting in Paris warned they would take action against economic coercion through export restrictions on critical minerals while pledging to develop concrete tools to reduce Western dependence on concentrated supply chains. (free link)

• Europe and others are following in the footsteps of the U.S. in directing anti-money-laundering authorities to give priority to tackling cartels and organized criminal groups, financial crime experts said. (free link)
   
• Facing an alphabet soup of increasingly complex cybersecurity and data privacy regulations, many companies are veering away from efforts to satisfy every requirement to the letter, and instead falling back on industry standards. (free link)
   
• The legal team at one of the U.K.’s largest energy companies is using artificial intelligence to speed up tasks such as reviewing contracts. (free link)

Muted U.S. response to Iranian attacks deepens Gulf fears about cease-fire.

The Trump administration’s attempts to shrug off exchanges of fire with Iran last week deepened concerns among Arab Gulf states that any deal to end the war will expose them to future conflict with a vengeful Iran.

Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, dismissed the attacks by Iran on ships in the Strait of Hormuz this week as “low harassing fire.” On Thursday, President Trump said Iran “trifled with us.” The efforts to play down the attacks came as the Trump administration tried to protect a fragile cease-fire and keep peace talks moving forward.

• Iran Dismisses Trump’s Criticism of Latest Proposal
• Iran’s Lengthy Response to the U.S. Leaves Some Gaps
• Trump Says Iran Response to U.S. Proposal Is ‘Totally Unacceptable’
• Iran War Hangs Over China Summit
• Iran’s Supreme Leader Is MIA, Just When Negotiators Need Him Most

Xi’s China: Dazzling technology, military muscle—and an economic mess.

More than a decade into Xi Jinping’s rule, China’s military has grown more formidable, its factories dominate global manufacturing and its technology pioneers are closing the gap with Silicon Valley.

Yet big parts of its economy are a mess. A colossal property bust has destroyed trillions of dollars in wealth, consumer confidence has been gutted and the job market has grown bleak. The disconnect shows how Xi has made China’s security a priority over its economy. 

• China’s Cars Aren’t in the U.S., but Its Auto Parts Are Everywhere
• The Factory Town Known as China’s Furniture Capital Is Fighting to Survive
• China Exports More EVs Than Traditional Cars for First Time in April

• War in the Persian Gulf and new Chinese export restrictions have sent sulfuric-acid prices soaring and raised concerns about the availability of a chemical that the world relies on for food, metal, paper, computer chips and clean water.
   
• Consumer sentiment fell below the previous month’s record low as higher gasoline prices exacerbated shoppers’ concerns about the U.S. economy, according to the initial reading from the University of Michigan’s monthly survey.
   
• Secretary of State Marco Rubio, who met Italian leaders here on Friday, offered allies rankled by President Trump words of both support and warning.
   
• Russia staged a sharply scaled-back version of its annual military parade on Saturday, amid fears of drone strikes by Kyiv, growing criticism of the Kremlin and increasing difficulties for its armed forces in Ukraine.
   
• Vice President JD Vance expressed alarm on a recent call with technology CEOs over new AI models such as Anthropic’s Mythos. The White House is weighing an executive order that could create a formal oversight process for the most advanced AI models.
   
• World food prices rose for a third consecutive month, driven by higher energy costs and supply disruptions in the Middle East, the United Nations’ Food and Agriculture Organization said.
   
• Kim Jong Un is taking his nuclear ambitions to the high seas.
   
• Across Europe, voters are fed up and taking it out on their leaders.
   
• The numbers that researchers have been using to predict which jobs could be lost to artificial intelligence may be unreliable. One of the culprits could be AI itself.

You can listen to new episodes every Friday on Apple Podcasts, Spotify and Amazon.

• OpenAI allowed employees to sell up to $30 million worth of shares each in a recent financing, making them some of the earliest financial winners of the artificial-intelligence boom.
   
• Private-credit firms delivered eye-popping returns to investors in recent years. That hot streak is over.
   
• The American labor market is tilting away from men.
   
• Chirayu Rana set off a PR crisis inside America’s biggest bank. Now, his claims have gone viral, stoked by AI fakes.
   
• The cruise ship at the center of the hantavirus outbreak arrived early Sunday in Spain’s Canary Islands, setting in motion a delicate evacuation process designed to end the weekslong ordeal of those on board while avoiding the spread of a contagion that left three passengers dead.

Follow us on X at @WSJRisk. Send tips to our reporters Max Fillion at max.fillion@dowjones.com and Richard Vanderford at richard.vanderford@wsj.com.

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