Good morning. China said it plans to sanction Lockheed Martin over its role in a $620 million U.S. arms package for Taiwan—the latest in a series of tit-for-tat measures that have marked a souring of bilateral ties between China and the U.S. over a long list of issues, including trade, technology, human rights and territorial claims in the South China Sea.

Chinese Foreign Ministry spokesman Zhao Lijian announced the move as a response to the Trump administration’s decision last week to approve an upgrade package for Taiwan’s Patriot surface-to-air missiles. “China firmly opposes U.S. arms sales to Taiwan,” Mr. Zhao said at a news briefing Tuesday. “In order to safeguard national interests, China has decided to undertake necessary measures and impose sanctions on the main contractor for this sale, Lockheed Martin.”

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China considers Taiwan a part of its territory and has refused to rule out using force to gain control of the self-ruled island democracy. Beijing repeatedly has criticized U.S. arms sales to Taiwan as harmful to Chinese national sovereignty. The sanctions are expected to have limited impact since U.S. defense companies are broadly barred from making military sales to China, though Lockheed Martin has sold civilian helicopters to Chinese buyers through its Sikorsky Aircraft Corp. unit.

Meanwhile, President Trump said he signed into law a bipartisan bill that requires sanctions on Chinese officials who crack down on the rights of Hong Kong residents to free speech and peaceful assembly, as well as the banks that do business with those officials. And the British government said it would bar telecommunications companies from purchasing new equipment made by China’s Huawei Technologies for their 5G networks, a further sign of the deteriorating relations between Beijing and the West.

Engineers at Google have made changes that effectively preference YouTube over other video sources, people familiar with the matter tell The Wall Street Journal. Google executives in recent years made decisions to prioritize YouTube on the first page of search results, in part to drive traffic to YouTube rather than to competitors, and also to give YouTube more leverage in business deals with content providers seeking traffic for their videos, one of those people said. “All else being equal, YouTube will be first,” the person said.

A Google spokeswoman said there is no preference given to YouTube or any other video provider in Google searches.

A Journal investigation last year showed Google engineers make regular algorithmic changes to achieve specific business aims, contrary to the company’s public statements that its search results are purely objective and autonomous. The company’s competitive practices are under scrutiny amid allegations it uses its dominance in search to suppress competition in other markets.

• Apple won a major battle with the European Union, as the bloc’s second-highest court on Wednesday sided with the U.S. company over a €13 billion ($14.8 billion) tax bill that EU antitrust officials had said the company owed to Ireland. The case stems from a 2016 decision by the European Commission, the bloc’s top antitrust enforcer, which said that Ireland must recoup €13 billion in tax breaks from between 2003 and 2014, money the commission said constituted an illegal subsidy under the bloc’s strict state-aid rules.
   
• A federal judge rejected a multimillion-dollar settlement of sexual-misconduct cases against Harvey Weinstein, saying the proposed agreement improperly attempts to create a class action. The settlement, announced last month by the New York attorney general, represented the culmination of years of negotiations between the office, Mr. Weinstein and his accusers, creditors, insurers and former board members.
   
• The Trump administration agreed to rescind rules it issued last week barring international students from being in the U.S. if they were taking classes only online, a rare reversal by the government on immigration policy. The action resolves for now a lawsuit filed by Harvard University and the Massachusetts Institute of Technology in Boston federal court.
   
• Retired Gen. Joe Dunford has dropped out of consideration to lead a congressional panel overseeing $500 billion in coronavirus relief funds, according to people familiar with the matter. The former chairman of the Joint Chiefs of Staff had been the leading candidate to chair the five-member oversight commission, which is tasked with monitoring how the Treasury Department is using the funds to establish lending programs.
   
• GPB Capital Holdings LLC has denied fraud and other claims made by Massachusetts securities regulators in May, saying that the state failed to provide evidence to back its case and that it lacked jurisdiction, among other issues.

JPMorgan Chase, Citigroup and Wells Fargo took large hits to second-quarter profits to collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans—a signal from some of the largest U.S. banks that the worst of the coronavirus recession is yet to come.

“This is not a normal recession,” said James Dimon, JPMorgan’s chief executive. “The recessionary part of this you’re going to see down the road.”

A top official at the Federal Reserve said difficulty suppressing the new coronavirus will pose substantial risks for the U.S. economy, including a possible double dip in economic activity, and warned the nation faces a long, slow recovery even if those hazards are avoided. It is important for policy makers to recognize that the economy “will face headwinds for some time,” Fed governor Lael Brainard said.

James Bullard, president of the Federal Reserve Bank of St. Louis, however, said that as the economy adapts to the coronavirus pandemic, a solid recovery and a substantial decline in what is now a very high unemployment rate are both possible.

Early data from Europe and Asia, meanwhile, suggest the recovery from the economic crisis precipitated by the coronavirus pandemic could take longer than originally hoped, with countries facing a long slog to recover lost jobs and income.

TikTok, the embattled short-video app run by Chinese technology giant Bytedance, has written to Australian politicians to reassure them about the safety of user data and its independence, as concerns about the app’s Chinese ties grow.

Seeking to allay worries about state interference on the app, Lee Hunter, TikTok’s general manager for Australia, wrote in the two-page letter emailed to lawmakers that he was seeking to correct the record on a “number of false claims” made about the app and that TikTok is “not aligned with any Government, political party or ideology.”

Charles Lu, the co-founder and former chairman of Luckin Coffee, has lost control of all his shares in the Chinese coffee chain following a recent court ruling, according to people familiar with the matter. A court in the British Virgin Islands granted on July 9 an application by banks to wind up Haode Investments Inc., an entity controlled by Mr. Lu’s family trust that holds Luckin shares, and appointed KPMG as the liquidator of the assets, according to the people.

Luckin said Monday that Mr. Lu stepped down from the chairman post and is no longer a director on its board after a shareholder meeting last week. He has been replaced by Jinyi Guo, a longtime business associate of Mr. Lu’s who will also serve as Luckin’s permanent chief executive.

• AutoNation, the U.S.’s largest dealership chain, said its former chief executive, Cheryl Miller, won’t return to the company from a three-month medical leave, making her the second chief executive to exit from the top job in about a year. Chairman Mike Jackson will fill the CEO role permanently, with the board extending his contract through 2022.

• General Motors and Ford are continuing to struggle with keeping workers on the job as coronavirus cases surge nationwide, forcing the auto-making giants to cut shifts, hire new workers and transfer others to fill vacant roles. The absences are hampering efforts to recover from the economic havoc wreaked by the pandemic and return to normal production levels after a nearly two-month shutdown this spring.
   
• Delta Air Lines trimmed plans for more summer flights amid rising Covid-19 cases nationwide after a $5.7 billion loss for the latest quarter underscored the depth of the crisis facing the aviation industry. Meanwhile, Boeing culled another 183 jets from its order book in June and delivered just 10 aircraft. And Virgin Atlantic Airways said it secured a financial package worth about $1.5 billion that will enable it to stave off bankruptcy.

More than a dozen scientific papers published by Chinese researchers in internationally peer-reviewed journals are being withdrawn after an investigation this month highlighted the apparent reuse of images across more than 100 academic articles, amid increased concern about scientific integrity raised by the fight against the coronavirus.

Earlier this month, a report by Elisabeth Bik, an image-analysis expert and former researcher at the Stanford School of Medicine, found that six global journals had published 121 scientific papers that appeared to reuse identical sets of images, despite covering different topics over a four-year period. The authors hailed from roughly 50 cities across China.