Good morning. President Biden’s administration leaned heavily into sanctions after Russia’s 2022 invasion of Ukraine, taking unprecedented action that targeted a massive number of companies and individuals.

The zealous use of the tool—a low-cost way to press the U.S.’s agenda abroad—will likely continue as a permanent feature of U.S. foreign policy, regardless of who wins this year’s presidential election.

• Why sanctions: The U.S. has long leaned on its financial primacy and the dollar’s status as a reserve currency to exert worldwide influence. Imposing sanctions is in many ways an easy choice for Washington—they have far lower direct costs than other foreign-policy tools, such as sending military aid, and effectively deputize banks and other actors in the private sector to serve as their front line of their implementation.
   
• Increasing use of sanctions: The Biden administration added 1,621 entities and 879 individuals, or 2,500 targets total, to its sanctions list in 2023, up from 2,275 such targets designated in 2022, according to figures from the Center for a New American Security, a bipartisan think tank. That number is a dramatic increase from historic norms—from 2017 to 2021, the U.S. added on average about 815 targets to the list each year.
   
• Possible new administration: Harris’s campaign declined to make available an official who could speak about her views on foreign policy. Her campaign did recently tap Brian Nelson, a former Treasury official who until recently headed the department’s efforts to counter illicit finance, as a member of her team. Observers roundly expect that Harris’s approach would at least mirror, and perhaps be even tougher, than Biden’s. The Trump campaign didn’t respond to a request for comment. The former president’s views, despite his four years in the White House, can be difficult to read.

Tariffs are on the table for U.S. importers, whatever the election outcome. 

Until a few years ago, Chinese factories supplied the world with Sharpie retractable pens and Oster blenders. No more.

Consumer giant Newell Brands now makes those products, and more, at its own plants in the U.S. and Mexico. Many of its other products are made in factories in Vietnam, Indonesia and Thailand.

Tariffs are becoming an entrenched tool tying together geopolitics and trade, and they are playing a bigger role in long-term manufacturing and sourcing decisions. Nowhere are they hitting harder than in China, where importers and exporters are navigating an increasingly complicated regime of levies on goods ranging from semiconductors to mattresses.

Food industry pushes back against Kamala Harris’s 'price gouging’ plan. 

The food industry is hitting back at claims it is ripping off U.S. consumers after Democratic presidential nominee Vice President Kamala Harris called for a federal ban on “price gouging.”

Harris, set to formally accept her party’s nomination this week at the Democratic National Convention in Chicago, has blamed corporate greed for food-price inflation. Executives say costs ranging from labor to cocoa have surged in recent years and that profit margins must be maintained to fund the development of new products.

• Kamala Harris Wants to Ban Price Gouging. What Do Economists Say?

• A federal judge in Texas on Tuesday struck down a landmark regulation issued by the Federal Trade Commission that sought to ban employers from using noncompete agreements to prevent most workers from joining rival firms.
   
• Alaska Air and Hawaiian Airlines cleared a major milestone in their quest to combine after the Justice Department opted against challenging the deal on antitrust grounds.
   
• China has launched an anti-subsidy investigation into dairy imports from the European Union, marking the latest escalation in trade tensions between the two sides.
   
• Mike Lynch, once hailed as the British Bill Gates, spent his career battling the establishment in both the U.K. and U.S. and was recently cleared of fraud accusations. He is presumed dead after a storm capsized the yacht he was on.
   
• Three leading figures from the worlds of tech, banking and law, along with members of their families, are presumed dead after a luxury yacht sank off the coast of Sicily. Clifford Chance lawyer Chris Morvillo and his wife, Neda, were among the missing.
   
• Italian authorities are now focusing on a recovery mission as hopes of finding anyone alive in the wreck of a sunken yacht fade.

Nord Stream revelations ignite dispute between U.S. allies. 

The disclosures that a team of Ukrainians blew up the Nord Stream natural gas pipelines while using Poland as a logistical base have sparked a dispute between Berlin and Warsaw, two U.S. allies backing Ukraine in the war.

Polish Prime Minister Donald Tusk lashed out at Germany on Saturday after a nearly two-year German investigation found that a team of Ukrainians sabotaged the world’s largest offshore pipeline system in September 2022. The operation involved a small rented yacht and a six-member team, The Wall Street Journal reported last week.

• Israel recovered the bodies of six hostages from a tunnel inside Gaza during an hourslong operation overnight, authorities said Tuesday.
   
• As negotiations to halt more than 10 months of fighting in Gaza drag out with no clear breakthrough in sight, U.S. officials see a silver lining: Iran and Lebanese Hezbollah have for now held off on what many feared would be a major retaliatory attack against Israel.
   
• Wanting to halt defections to neighboring South Korea, North Korea’s Kim Jong Un has ordered the construction of new border walls, rearmed guard posts and installed more land mines. But North Koreans keep finding creative ways to flee.
   
• Japan’s balance of trade fell back into the red in July, with the yen’s recent appreciation dimming the outlook for the nation’s exports.

• Ancora Holdings is urging Forward Air’s board of directors to talk with potential buyers about selling the company, stepping up investor pressure for major changes at the expedited trucker since its troubled acquisition of a separate freight business.
   
• Shares of Boeing fell about 5% Tuesday after the plane maker found cracks in the structure of its 777X jetliner in initial test flights, the latest setback for the long-delayed airplane.
   
• A.P. Moller-Maersk said it is continuing to accept Canada-bound cargoes, walking back an earlier statement that it would limit those cargoes, as logistics companies and shippers brace for a pending labor disruption this week at Canada’s two major railroads.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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