Good morning. The U.S. Treasury marked the three-year anniversary of the disputed election of Belarusian President Alexander Lukashenko by expanding its sanctions on Belarus, targeting the country’s flagship airline, three other companies and a government office involved in suppressing a news site.

The Office of Foreign Assets Control on Wednesday said the broader sanctions responded to the country’s “complicity” in Russia’s war in Ukraine and its “callous crackdown” on Belarus’s pro-democracy movement.

In the enhanced sanctions package, OFAC designated Belavia, the country’s main airline, under an executive order that allows U.S. officials to seize any of its assets on U.S. soil and prohibits Americans from doing business with it.

In Wednesday’s round, OFAC also sanctioned a jet it said is operated by Belavia and used by high-ranking officials and family members connected to the Lukashenko regime. The agency also sanctioned a state-owned aviation plant and BSW, a state-owned steel works, along with a Bel-Kap-Steel, a Miami-based joint venture with BSW.

In response to the Treasury’s actions, the Belarusian Embassy in Washington said that “unilateral sanctions are illegitimate and contrary to international law,” calling U.S. statements about its support for the Belarusian people “the height of hypocrisy.”

Biden restricts U.S. investment in China

The U.S. will prohibit Americans from investing in some Chinese companies developing advanced semiconductors and quantum computers starting next year, escalating Washington’s efforts to prevent Beijing from producing cutting-edge technology for its military.

President Biden on Wednesday issued an executive order creating the rules after months of deliberations. The move could unsettle fragile efforts to rekindle diplomatic relations with China. Officials in Beijing have railed against U.S. policies restricting access to advanced technology, as tensions between the two superpowers have contributed to slowing U.S. direct investment in China.

• U.S. and China Poised to Drift Further Apart After Investment Ban

Some banks struggle to report uninsured deposits correctly

It seems like an easy question for a bank to answer: How much of its deposits are covered by federal deposit insurance and how much are uninsured? Turns out this is hard stuff for some banks.

A case in point: Provident Bank. On Feb. 14, the Jersey City, N.J.-based lender said its uninsured deposits were $5.0 billion as of Dec. 31. On June 13, it slashed that number to $3.1 billion, or 29% of total deposits.

There’s more. On July 14, Provident raised the number to $4.9 billion. Then, on July 28, Provident raised it to $5.3 billion, or 50% of total deposits. A spokesman for Provident, a unit of Provident Financial Services, declined to comment.

• A confrontation between the Teamsters union and Yellow that culminated in the trucker’s collapse is escalating as the company winds down in bankruptcy. 
   
• Italy’s government is navigating a narrow path as it tries to impose a special tax on bank profits without spooking markets and discouraging foreign investments.
   
• India’s Parliament on Wednesday passed a data-protection bill years in the making that the government says is needed to regulate tech companies and protect citizens, but that rights groups say gives New Delhi too much power.
   
• Special counsel Jack Smith obtained a search warrant earlier this year requiring X, the social-media company formerly known as Twitter, to produce data and records related to Donald Trump’s Twitter account, according to a newly unsealed court decision that upheld a fine imposed on the company for its slow response to the warrant.
   
• The state of New York debuted its first cybersecurity strategy, including plans to modernize government networks, provide digital defenses at the county level and regulate critical infrastructure.

China slips into deflation in warning sign for world economy

China’s consumer prices tipped into deflationary territory in July for the first time in two years, as a deepening economic malaise in the world’s second-largest economy enters a potentially dangerous new phase.

The data released Wednesday adds to a darkening picture for China, where the economic recovery has been losing momentum because of a host of problems. A drop in exports is accelerating, youth unemployment has hit record highs and the housing market is mired in a protracted downturn.

Now, the country is suffering an unusual bout of falling prices on a range of goods, from commodities such as steel and coal to daily essentials and consumer products such as vegetables and home appliances. It is the opposite of what happened in most of the rest of the world when Covid-19 restrictions eased, with many countries still trying to tame inflation.

• The downturn in world trade, exemplified by slumping Chinese exports and a decline in U.S. imports, mainly reflects a phase of weak global economic growth.

• Canada said Wednesday it is “highly probable” that China helped orchestrate an online disinformation campaign against a Conservative Party lawmaker in May, as officials step up efforts to detect and deter what they say is Chinese interference in Canadian politics.
   
• At least 36 people have been killed as a result of the wildfires that have torn throughthe Hawaiian island of Maui, devastating the popular tourist town of Lahaina, authorities said.

• WeWork reshuffled its board after the resignation of three directors who disagreed with its governance and strategy, replacing them with corporate bankruptcy experts as it cast doubt on its ability to survive turmoil in the office-building market.
   
• Brazilian President Luiz Inácio Lula da Silva has positioned himself as a global leader in the fight against climate change, pledging at a summit of South American leaders this week to fight deforestation as part of “a new Amazonian dream.” There is a significant contradiction, environmentalists say.
   
• John Overdeck, co-founder of the hedge fund Two Sigma, has feuded for years with the $60 billion firm’s other co-founder, David Siegel. The pair are so much at odds that the firm disclosed in a securities filing that they are unable to make basic management decisions. But now another rift might further complicate things: Overdeck’s wife has filed for divorce.
   
• A startup designed a new FDA-cleared tampon. Now it has to sell it.

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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