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The Morning Risk Report: China, U.S. Trade Climate Barbs as Ties Fray
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Good morning. Climate policy is fast becoming a new bone of contention between Washington and Beijing, after China retaliated for this month’s visit to Taiwan by House Speaker Nancy Pelosi by halting talks with the U.S. over how to combat global warming.
The self-ruled island is already a focal point for a number of issues clouding Sino-U.S. ties, from rivalry in the Indo-Pacific and the clash between democratic values and autocracy to the strategic struggle for semiconductor supremacy. But up until Mrs. Pelosi (D., Calif.) defied Beijing’s warnings and made her whistle-stop trip, climate change had been a rare bright spot in the increasingly testy relationship between the world’s two biggest greenhouse-gas emitters.
[Continued below...]
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On Aug. 5, with Chinese warplanes and warships carrying out maneuvers off Taiwan’s coast in the wake of Mrs. Pelosi’s departure, Beijing said it would cancel or suspend cooperation with Washington on key issues, including climate change. The suspension of talks won’t affect either country’s targets in the short term because these will be driven by policy makers responding to domestic pressures, said Deborah Seligsohn, a professor of Chinese politics at Villanova University in Pennsylvania and a former U.S. diplomat.
But without agreement between China and the U.S., she said, it might prove difficult to prod other countries to adopt more ambitious measures at COP27, the next big United Nations climate conference to be held in Egypt in November.
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WSJ Risk & Compliance Forum
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Sign up for the next WSJ Risk & Compliance Forum on Nov. 16 for discussions on the critical issues facing corporate risk & compliance professionals, including keeping up with sanctions, screening for forced labor, and proposed U.S. rules on climate change and cybersecurity. Register here for a discounted ticket.
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The Sky Lakes Medical Center in Klamath Falls, Ore., was one of several U.S. hospitals attacked by the Ryuk ransomware. PHOTO: JOE KLINE FOR THE WALL STREET JOURNAL
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A Russian national who was extradited from the Netherlands to Portland, Ore., this week pleaded not guilty to charges of allegedly laundering cryptocurrency proceeds from ransomware attacks in the U.S. and abroad, the Justice Department said.
Denis Dubnikov, a 29-year-old Russian, was arraigned in federal court for the District of Oregon on Wednesday. Prosecutors alleged that Mr. Dubnikov and his co-conspirators laundered bitcoin extracted from victims of Ryuk ransomware attacks through financial transactions, in both crypto and fiat currencies, to conceal the source of the funds.
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A federal appeals court ruled that lawsuits by Delaware and Hoboken, N.J., seeking compensation from oil companies for the impacts of climate change should be decided in state, not federal courts.
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Contributions totaling $5 million to Donald Trump’s charity in 2007 and 2009 were among $19.6 million in unrecorded company expenses Vince McMahon paid out before he stepped down from World Wrestling Entertainment Inc. amid misconduct allegations, an internal board investigation found.
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The National Football League and Deshaun Watson reached a settlement that suspends the star quarterback for 11 games and assesses an unprecedented fine of $5 million to resolve violations of the league’s personal conduct policy stemming from sexual misconduct allegations against him. By settling, Mr. Watson avoids a pending decision from an appeals officer, and the NFL, meanwhile, does not have to worry about a possible court battle.
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Lawyers representing 3M Co. ’s bankrupt Aearo Technologies LLC subsidiary said that even though 3M itself didn’t file for bankruptcy, it also should be shielded from 230,000 pending lawsuits that alleged 3M’s military earplugs were defective.
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Allen Weisselberg, a longtime confidant of Donald Trump, pleaded guilty Thursday to 15 felonies for what he admitted was a tax-fraud scheme he committed while finance chief at the former president’s company. Meanwhile, a federal judge said that he would make public at least part of an affidavit detailing the evidence that led the FBI to search Donald Trump’s Mar-a-Lago home last week.
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Federal Reserve Board Chairman Jerome Powell speaking at a July 27 news conference in Washington. PHOTO: JIM LO SCALZO/SHUTTERSTOCK
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The Federal Reserve says it is going to keep raising interest rates.
Wall Street thinks it’s bluffing.
This could spell trouble for both of them.
Markets pummeled by the Fed’s rate increases in the first half of the year are racing upward. The S&P 500 is up 17% from its mid-June low. The yield on the 10-year U.S. Treasury note, which is used to help set rates on debt such as mortgages and student loans is down more than half a percentage point from its June peak. Even battered cryptocurrencies have jumped.
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Tether has long faced scrutiny over the assets backing its coins. PHOTO: TIFFANY HAGLER-GEARD/BLOOMBERG NEWS
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Tether Holdings, the issuer of the world’s largest stablecoin, said on Thursday it switched the accounting firm that signs off on its attestation reports to BDO Italia, the Italian member firm of BDO.
Stablecoins are a type of cryptocurrency that are pegged to government-backed currencies like the dollar. Stablecoin issuers say that each token is backed one-for-one with liquid investments. Cash and cash-equivalent investments would allow stablecoin users to redeem their stablecoins en masse without causing the collapse of the token.
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The U.K. Financial Reporting Council is set to gain greater control over auditors with a register that will determine who can audit the financial statements of large listed companies or financial institutions—so-called public-interest entities—and who cannot.
The country’s audit and accounting regulator is requiring audit firms and certain key individuals currently auditing these entities to apply to be included in a newly created index. If a firm or individual is found not to be “fit and proper,” they will not be admitted to the PIE register or will be removed from it, according to the regulator.
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Chewy co-founder Ryan Cohen in 2019. PHOTO: MARK ABRAMSON FOR THE WALL STREET JOURNAL
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Billionaire investor Ryan Cohen cashed out his entire position in Bed Bath & Beyond Inc. this week, roughly five months after taking a major stake in the company and advocating for changes.
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E-commerce company GigaCloud Technology Inc. made its debut on the Nasdaq Stock Market on Thursday, a rare instance of an initial public offering by a Chinese company in the U.S. as the two countries head toward a financial decoupling.
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