Good morning. Businesses and their corporate trade teams for months have anticipated the U.S. Commerce Department would announce the so-called 50% export control rule that could affect thousands of companies.

Exactly what the rule will look like—or if it might be abandoned to secure a trade deal with China or others—are factors outside most companies’ control, however. The rule’s hazy future has left trade teams questioning the potential effect on customers and sales.

• Under the existing export control rule: Businesses on the Bureau of Industry and Security’s entity list are prevented from receiving certain U.S. technologies out of concern they might fall into the hands of adversaries. Some politicians have complained companies on the list can still receive technology via subsidiaries and affiliated companies.

• Controversy around 50%: Those critics have long advocated for the inclusion of any entities owned 50% or more by a company on the entity list to also be subject to the list, so versions of the rule—sometimes referred to as the affiliates rule, since not all companies owned 50% or more qualify as a subsidiary—have been discussed for years.

• Speculation on the timing of the rule: Matt Borman, now senior counsel at Akin Gump Strauss Hauer & Feld and a former principal deputy assistant secretary at BIS, said that while political appointees may wish to announce the rule sooner, it is likely the rule will have to wait until the end of trade negotiations with China, which would mean sometime later this year.

Trump sees emergencies everywhere. Judges are considering whether to rein him in.

Across the U.S. landscape, Donald Trump sees one emergency after another, and that is posing a host of challenges for the federal courts.

Since beginning his second term, Trump has declared in dozens of presidential documents that the U.S. faces emergencies requiring him to take extraordinary actions that circumvent normal government processes. That gambit offers him a path of unilateral action instead of the uncertain route of enacting legislation through Congress.

U.S. raises Brazil tariffs and sanctions judge, citing Trump ally Bolsonaro. 

The Trump administration escalated its pressure campaign against Brazil on Wednesday, announcing sanctions against a judge overseeing criminal proceedings against former leader Jair Bolsonaro and raising tariffs on the country to 50%.

President Trump on Wednesday signed an executive order implementing a 50% tariff on goods from Brazil. In a fact sheet, the White House said the tariffs would address Brazil’s policies toward U.S. tech companies, including “unusual and extraordinary policies and actions harming U.S. companies, the free speech rights of U.S. persons, U.S. foreign policy, and the U.S. economy.”

• The U.S. hit Iran with its largest sanctions package since 2018, as the Trump administration continues its maximum pressure campaign amid the continuing diplomatic impasse over Tehran’s nuclear program.
   
• The U.S. will likely target more banks under a tough anti-fentanyl law following actions against three Mexican financial institutions last month, a former U.S. Treasury Department lawyer said.
   
• The co-founders of cryptocurrency mixer Samourai Wallet have pleaded guilty to conspiring to operate an unlicensed money-transmitting business.
   
• President Trump on Wednesday threatened 25% tariffs and an unspecified “penalty” on India for buying Russian oil and military equipment.
   
• The Senate on Tuesday confirmed Justice Department official and former Trump defense attorney Emil Bove to a federal appeals court, clinching a lifetime judicial appointment over the objections of Democrats who accused him of acting unethically and abusing his power.

Fed holds rates steady, but two officials back a cut.

The Federal Reserve held rates steady for a fifth straight meeting Wednesday but faced rare dissents from two officials seeking an immediate cut.

The decision followed a period of intense political pressure on Fed Chair Jerome Powell by the White House to lower interest rates. Officials maintained their benchmark policy rate in a range between 4.25% and 4.5% as they weighed how importers, retailers and consumers will split the costs of higher duties on imports.

• U.S. Economy Rebounds in Second Quarter
• The Fed Chair Doesn’t Set Rates by Himself. Here Are the Other Voting Members.
• Powell’s Gamble: That the Economy Will Reveal Its True Self in the Next Two Months

• Two top Senate Republicans laid out a plan Wednesday to allow allies to finance donations of U.S. weapons and military equipment to Ukraine, following through on a proposal pushed by President Trump to raise billions of dollars a year for the war effort.
   
• Recognition of a Palestinian state by a growing number of Western allies will have little material impact in Israel or the Palestinian territories. But it does expose significant cracks in Western support for Israel that was once regarded as rock solid.
   
• The Netherlands announced plans to impose unprecedented sanctions against Israel over the humanitarian crisis in Gaza, saying it would pursue suspension of trade agreements and declare two far-right Israeli ministers “persona non grata” if conditions fail to improve.

• Australia said it will include YouTube in its social-media ban for young teenagers, reopening a debate over how best to regulate social media and reduce online harms.
   
• A powerful earthquake off the coast of Russia triggered tsunami warnings in Hawaii and California and sent people fleeing to higher ground across the Pacific, but initial fears subsided as the tsunami waves reached U.S. territory with little threat.
   
• An Army helicopter crew may have relied on incorrect altitude data before the aircraft crashed into an American Airlines regional jet in January, U.S. safety officials said Wednesday.

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