Good morning. PayPal agreed to forgo approximately $30 million in transaction fees to end a Justice Department probe into allegations that the financial services company had adopted unlawful preferences for minority-owned businesses.

• Race-based bias? Justice Department officials had been investigating whether the company violated a federal civil rights law that prohibits creditors from discriminating against applicants based on race. The department’s probe targeted PayPal’s $530 million plan to support Black and minority-owned businesses, which the company created in 2020, shortly after the killing of George Floyd by a police officer prompted a nationwide conversation about racial inequality.
   
• No admission: PayPal didn’t admit wrongdoing as part of the settlement. Justice Department officials said the settlement requires PayPal to waive processing fees for $1 billion of transactions—worth roughly $30 million—for small businesses that are owned by veterans, as well as businesses involved in farming, manufacturing or technology.
   
• On notice: “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans,” acting Attorney General Todd Blanche said.

JPMorgan and the delicate art of paying off employees.

An employee comes forward with embarrassing workplace allegations fraught with legal risks. For company bosses, it presents a thorny dilemma: Fight or pay?

It is a situation JPMorgan Chase found itself in weeks before a former banker filed a lawsuit filled with sensational accusations. It offered $1 million to settle his claims that a female colleague had sexually harassed and assaulted him and that co-workers had subjected him to discrimination, The Wall Street Journal reported. The bank has said it investigated the claims and doesn’t believe they have merit.

Though such deals rarely come to light, paying employees to make potential scandals go away isn’t an uncommon practice across corporate America. Companies have long offered settlements to head off litigation or avoid claims that could tarnish their reputations—even if executives conclude the allegations lack merit.

Fugitive behind 1MDB scandal seeks pardon from Trump.

Jho Low, the alleged mastermind of one of the greatest financial frauds in history, is asking President Trump for a pardon.

The request was filed in recent weeks, according to people familiar with the matter, and if granted would remove U.S. criminal charges against the fugitive Malaysian financier. A Justice Department website lists a pending request for a “Pardon after Completion of Sentence” under Taek Jho Low that was filed this year.

• OpenAI Chief Executive Sam Altman offered a calm defense of his leadership of OpenAI in the third week of a blockbuster trial brought by Elon Musk that could shape the future of artificial intelligence.
   
• The European Union could present new rules to tighten restrictions on minors’ use of social media platforms this summer, European Commission president Ursula von der Leyen said.
   
• Food and Drug Administration Commissioner Marty Makary resigned Tuesday after months of policy fights with top officials in the Department of Health and Human Services and the White House.
   
• The U.S. financial crimes watchdog told banks to be on the lookout for signs of human trafficking connected with the coming FIFA World Cup, Risk Journal reports (free link).
   
• The head of the Commodity Futures Trading Commission has a message for state authorities: Prediction markets are a federal matter and not yours to attempt to regulate.
   
• Meta Platforms said it will let rival artificial intelligence chatbots use a WhatsApp tool for talking to users in the European Union for free for one month as the company attempts to avoid a potential fine from the bloc’s antitrust regulator.

Trump faces an emboldened China in return to Beijing.

When President Trump returns to China nearly a decade after his last visit, he will find a country that is more self-sufficient, militarily assertive and economically insulated from the tools the president has sought to use to stymie China and its ambitions.

China has caught up to or surpassed the U.S. in technologies such as batteries, robotics and advanced manufacturing. Its naval fleet is now the world’s biggest, while its nuclear arsenal keeps growing. It knows it has the capacity to respond to the many threats that Trump issues, with restrictions on rare-earth minerals or with other moves.

All of this has altered the balance of power between the U.S. and China, making it more likely that Beijing digs in on core issues of contention, say analysts and diplomats.

• What Trump and Xi Want to Achieve at Their High-Stakes Summit

• Potato-chip bags are going black and white because of the Iran war.
   
• The near-closure of the Strait of Hormuz has unleashed an unprecedented supply shock on global energy markets, one that could keep oil supplies constrained for months even after shipping through the vital waterway resumes, the International Energy Agency said.
   
• United Airlines will once again offer flights to Venezuela. Since capturing Venezuelan strongman Nicolas Maduro and removing him from power early this year, the Trump administration has embarked on an unusual arrangement to attract American investors to the country.
   
• Samsung Electronics’ talks with its labor union failed to reach an agreement over how the company’s massive profits are distributed, raising the likelihood of a strike next week.
   
• Tuesday’s hot readout on consumer prices is intensifying Wall Street’s anxiety about inflation.
   
• India has hiked tariffs on gold and silver imports, days after Prime Minister Narendra Modi warned that the Middle East crisis was pressuring the country’s foreign-exchange reserves.

• Walmart said Tuesday it would cut or relocate about 1,000 corporate workers as it looks to combine more of its global-technology and product teams, according to people familiar with the situation.
   
• More business schools are giving steep discounts on tuition that can save students up to 50%, or tens of thousands of dollars a year.
   
• The Wall Street Journal looks inside the quarantine "hotel" for Americans on the hantavirus cruise.
   
• Mayor Zohran Mamdani is abandoning his proposal to increase taxes on all New York City property owners.

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