Good morning. A reality is settling in across Washington and Beijing. The U.S. and China are starting to manage a messy divorce on the most sensitive issues of trade. Both view their economic competition as a matter of national security.

• Racing toward ‘decoupling’: China’s leaders have determined that disentangling the two economies—often called “decoupling” or “derisking”—is inevitable. The shift fulfills a longstanding Chinese ambition to no longer be a junior partner to the West. It’s a break with decades of Beijing’s orthodoxy that China’s economic success depended on selling low-cost goods to American consumers and building its technological might with U.S. money and know-how. China’s position today is a major pivot from Trump’s first term, when Beijing pushed back against the idea that it was a strategic economic competitor.
   
• Breaking U.S. dependence: The White House aims to break U.S. dependence on strategic commodities produced in China, such as the rare-earth minerals needed for electronics and military equipment. The effort is gaining urgency thanks to Beijing’s restrictions on exporting such materials.
   
• Coming counteroffensive: Beyond tariffs, administration officials said the U.S. is preparing a domestic counteroffensive that, through deregulation and new government equity stakes in sectors like semiconductors and critical minerals, will help America eventually gain independence from China in important sectors.

Top U.S. prosecutor in New York calls out prediction markets.

The top federal prosecutor in Manhattan said the growing online prediction market industry could be fodder for future criminal prosecutions.

U.S. Attorney for the Southern District of New York Jay Clayton said Thursday he expects future prosecutions tied to the platforms, which allow bets on sports, politics, culture and finance.

The credit-card rate cap has stalled.

The biggest credit-card issuers collected about $146 billion in revenue last year from America’s reliance on debt. The combined results from JPMorgan Chase, American Express, Capital One and Citigroup represent the money machine that could be at risk if the Trump administration continues to push for a federal cap on credit-card interest rates.

The effort has stalled in Washington because of meager support in Congress and a fierce lobbying effort by the banking industry. Treasury Secretary Scott Bessent suggested the administration was still pursuing the idea when lawmakers questioned him about a potential rate cap during a hearing Wednesday.

• Europe’s new anti-money laundering regulator is set to begin examining some 40 financial institutions in 2028.
   
• Novo Nordisk accused Hims & Hers of “illegal mass compounding” after the telehealth platform said it would offer a cheaper, compounded version of the Wegovy pill.
   
• Canada is ditching its electric-vehicle sales mandate and replacing it with more stringent tailpipe-emissions standards for automobiles.
   
• A recent Russia-linked enforcement action against Bank of Scotland by the U.K.’s sanctions authority honed in on an apparent breakdown in sanctions screening procedures at the bank, offering lessons for other financial institutions trying to stay within the law.

Trump calls for new nuclear pact with Russia as previous treaty ends.

President Trump on Thursday said that he wants the U.S. to negotiate a new strategic arms treaty following the lapse of the last major nuclear pact with Moscow. But he said nothing about how he hopes to constrain Russian, Chinese and U.S. nuclear forces in the months or years that it might take to draft a new nuclear pact.

The New Strategic Arms Reduction Treaty, or New Start, first brokered in 2011, formally expired on Thursday. Trump said in a social-media post that rather than work to extend the existing treaty, which he called a “badly negotiated deal,” he wants to work on a “new, improved, and modernized Treaty that can last long into the future.”

Weak hiring, layoff plans paint a gloomy labor-market picture.

The U.S. job market is off to a rough start in the new year, with companies announcing more layoff plans after freezing out job seekers, cutting back on hiring, and rattling markets.

More reports out Thursday, from both government and private data sources, point to sluggish job growth, employers’ reluctance to hire, and rising willingness to slash payrolls. They are filling in a picture of a labor market that slowed considerably in 2025 as economists wait for the government’s official January report, due next week.

• Further interest-rate cuts won’t necessarily help an economy that’s being pulled down by U.S. trade friction, advances in artificial intelligence and lower population growth, Bank of Canada Gov. Tiff Macklem said Thursday.
   
• Senior officials from Iran and the U.S. gathered in Oman for talks over Tehran’s disputed nuclear program on Friday, hoping to avert a new conflict in the Middle East amid an American military buildup in the region.
   
• President Trump toned down his criticism of a U.K. deal ceding sovereignty over an Indian Ocean island that hosts a U.S. military base, but said the U.S. had the right to secure and strengthen its presence there if it comes under threat.
   
• Cuban President Miguel Díaz-Canel said his government is willing to engage with the Trump administration as the Communist island braces for severe fuel shortages after the U.S. threatened to impose trade sanctions on countries shipping oil to it.

Iranian eggs cause supply-chain headaches in Doha.

Serving eggs on the breakfast buffet at Qatari hotels is creating a logistical challenge for Alfardan Group.

Some of the family-owned conglomerate’s hotels in the country are managed by American brands, which can’t conduct business with Iranian entities because of U.S. sanctions—but many eggs used in Qatar are imported from Iran.

“We can use Iranian eggs in some hotels, and then in others, we need to use Jordanian eggs or Pakistani eggs,” said Steven Mackenzie, director of supply-chain management at Alfardan.

• Compliance leaders are encouraging companies to take a cautious approach to implementing artificial intelligence, both in tools for customers as well as in programs used by employees.
   
• Dubai’s top financial regulator is bulking up its capabilities to monitor the growing cryptocurrency industry.

You can listen to new episodes every Friday on Apple Podcasts, Spotify and Amazon.