Beijing fumes

US House Speaker Nancy Pelosi became the highest-ranking American politician to visit Taiwan in 25 years—drawing expected criticism from China, which immediately engaged in saber rattling including military drills and missile tests near the island democracy. While the Biden administration has sought to tamp down any tension over the visit, Taiwan remains one of the most sensitive issues between the two nuclear powers. And though the White House maintains the US position of so-called strategic ambiguity, President Joe Biden has said he would defend Taiwan in an attack by China. What he meant by that however remains, well, ambiguous. In China, the Communist Party continues to tighten its grip under Xi Jinping, notably crushing civil liberties in Hong Kong and aligning itself closely with other authoritarian states such as Vladimir Putin’s Russia. Pelosi, who has assailed Beijing for years over its human rights record, didn’t do much on Tuesday to assuage anyone there, saying her visit “honors America’s unwavering commitment to supporting Taiwan’s vibrant democracy.” —Margaret Sutherlin

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Like the Obama administration’s strike that killed Osama Bin Laden, the US operation that killed al-Qaeda leader Ayman al-Zawahiri in took months of intelligence work, US officials said Tuesday. Al-Zawahiri, a mastermind behind the 9/11 attacks and the bombing of the USS Cole, was killed in a drone attack Sunday, Biden announced Monday night in a national address. The Democrat said the strike showed that the US military remained a force to be reckoned with in the region, even after the messy withdrawal from Afghanistan a year ago. He also argued that the strike affirmed his position that the US can reach its enemies from “over-the-horizon” without a military presence on the ground.

No one knows what Arizona Senator Kyrsten Sinema thinks about the historic climate and tax deal reached last week between other Senate Democrats. Coal state Senator Joe Manchin—who was long the holdout over climate legislation—said Tuesday he’d meet with her to address any concerns over the bill, which would raise an estimated $739 billion in revenue by imposing a 15% minimum tax on large corporations, beef up tax audits and force drug companies to offer Medicare lower prices for prescription drugs—all things Sinema has proclaimed to support in the past. The one thing she and her Wall Street donors have previously opposed is the cap on carried interest tax provision, which allows hedge fund mangers to pay a far lower tax rate on their earnings.

US job openings fell in June in the biggest decline since April 2020, a sign of moderating demand for labor. The job market has been a bright spot in the US economy of late, but less upward pressure on wages is exactly what the Fed has been hoping for. Here’s your market wrap.

Congress wants to question Department of Homeland Security Inspector General Joseph Cuffari, a Trump appointee at the center of a growing scandal tied to potential Jan. 6 evidence destruction involving the US Secret Service—a scandal that’s triggered Congressional calls for a criminal investigation by the Justice Department. Cuffari has already admitted delaying disclosures to Congress for months despite its ongoing investigation of the US Capitol attack. Now his testimony is being sought over what lawmakers say could be an attempted cover up of the erasure of critical text messages tied to the insurrection and Donald Trump. Two influential House committees say they’ve seen new evidence that suggests DHS officials knew of the texts last year—and knew about their deletion since last summer.

The $52 billion federal program to boost domestic chipmaking capabilities included one significant caveat: Companies that receive the funding have to promise not to increase their production of advanced chips in China. The provision will hit companies like Intel, TSMC and Taiwan Semiconductor, and is likely to raise tensions with China even more.

As Russia pounds the eastern front in its war on Ukraine, Kyiv moved forward with the evacuation of its citizens from Donetsk. The Kremlin announced Putin will meet Turkish leader Recep Tayyip Erdogan for talks in the Black Sea resort of Sochi on Friday, including on the deal brokered by Turkey and the United Nations to unblock Ukraine’s grain exports. Despite Russia’s agreement to the deal, grain exports remain largely blocked, threatening global food shortages.

Eastern Kentucky is reeling from historic flooding that’s killed at least 37 people and left hundreds homeless. Now, incoming extreme heat could complicate recovery efforts, warned Kentucky Governor Andy Beshear. The climate crisis isn’t only making extreme heat and heavy rainfall more frequent and intense, it’s also increasing the chances of experiencing overlapping or compounding disasters. In the Western US, states are frantically trying to fight spreading wildfires, just as water prices surge.

There’s a new wrinkle in the war for talent on Wall Street—and it’s at the trading desk. Inside a lucrative and envied Goldman Sachs trading squad, a pair of employees racked up praise. So when the duo accepted new jobs at a hedge fund this year, they said things went south with their old employer quickly. As trading is pulling a lot of weight in earnings, just about every bank is fighting a tidal wave of turnover—some of it much uglier than others.

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