A new front in the US-China trade spat

The gulf in China trade policy between Europe and the US looks set to widen further. [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Since January, legislation has been making its way through the US Congress that takes the standoff with China to another level. The [Biosecure Act]( is notable for achieving a degree of cross-party consensus otherwise absent in a presidential election year. Under its provisions, US federal-funded medical providers would be restricted from contracting with “foreign adversaries,” with life sciences companies instructed to decouple from several named Chinese firms. Whether the bill becomes law before November’s election remains to be seen. But it’s already having an impact: one of those named companies, Shanghai-based WuXi AppTec, this week reported US revenue [was down as a result](. The US is taking its contest with China into the sphere of biotechnology while simultaneously expanding its curbs on semiconductor sales. Fresh unilateral restrictions are being weighed on China’s access to AI memory chips as soon as next month, [Mackenzie Hawkins reports](. With escalating US tech rivalry, it’s little wonder that Beijing should look to the European Union. Enter Giorgia Meloni. Meloni with Xi Jinping in Beijing on Monday. Photographer: Ding Haitao/Xinhua/Getty Images The Italian prime minister’s trip to China this week included a meeting with President Xi Jinping and earned glowing reviews in Chinese state media. [As Rebecca Choong Wilkins writes]( her success contrasts with earlier visits by the French and German leaders, suggesting that Beijing is playing on an EU faultline by offering lucrative bilateral ties to far-right governments in Italy and in Hungary, sowing tensions in the 27-nation bloc. Discord might help China stop a dispute over EU tariffs on Chinese electric vehicles from spreading to other sectors. At least Europe is still open to Chinese EVs, unlike the US, which slapped on 100% tariffs. It’s surely not lost on Beijing that the gulf in transatlantic trade policy between Europe and the US looks set to widen further, regardless of who wins the White House.— [Alan Crawford]( Chipmaking equipment from ASML of the Netherlands has become a flashpoint in US attempts to rein in China. Source: ASML Please note: Our email domain is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. Update your contacts to ensure you continue receiving it — check out the bottom of this email for more details. Global Must Reads Supreme Leader Ayatollah Ali Khamenei has ordered a direct strike on Israel in retaliation for what Iran said was the assassination of Hamas’ top leader in Tehran, [the New York Times reported](. The death of Ismail Haniyeh [has raised uncomfortable questions]( about the Islamic Republic’s ability to secure the safety of its most senior state officials and allies. Meanwhile, Israel said it had confirmed that Mohammed Deif, Hamas’ second in command, was [killed in a strike]( in Gaza on July 13. US officials are still pushing for a cease-fire in Gaza but concede it’s [harder than ever]( after the suspected Israeli strike in Tehran, sources familiar with the Joe Biden administration’s thinking say. Egypt, which has acted as a mediator, said the timing and lack of progress on the talks indicate “the absence of Israeli political will to calm the situation,” while the prime minister of Qatar questioned whether mediation can succeed “when one party assassinates the negotiator on the other side.” Pennsylvania Governor Josh Shapiro met with Kamala Harris representatives yesterday, as the Democratic candidate’s [search for a running mate]( nears its conclusion. Harris will make her pick within the next week, and the newly formed duo will kick off a tour of all seven key battleground states on Tuesday in Philadelphia. The US said the world should acknowledge that Venezuela’s opposition candidate Edmundo González [won last weekend’s election]( as President Nicolás Maduro insisted he’d won and said his opponents should be jailed for decades. Maduro has been ratcheting up his rhetoric against both González and María Corina Machado, the former legislator his government barred from running. The first delivery of F-16 fighter jets from NATO allies [has arrived in Ukraine]( a long-awaited move that may boost the nation’s ability to repel Russian attacks. Denmark and the Netherlands are supplying the aircraft, with Belgium and Norway also pledging jets. China installed a new army commander for its southern region, [an unexpected move]( that comes after recent clashes in the South China Sea inflamed tensions with the US and its allies. Thailand began signing up millions of beneficiaries for a cash-handout program, which Prime Minister Srettha Thavisin is [counting on to revitalize growth]( in Southeast Asia’s second-largest economy. Nigeria deployed security forces on the eve of nationwide protests over high prices of food and fuel that have [exacerbated a cost-of-living crisis]( in Africa’s most-populous nation. Washington Dispatch Republican nominee Donald Trump questioned Harris’ racial identity at a contentious roundtable yesterday with Black journalists, [fumbling an attempt]( to reach out to voters of color. The former president responded to a question about GOP attacks casting Harris as a [diversity, equity and inclusion]( hire by raising her Indian ancestry. (Harris is the daughter of Indian and Jamaican immigrants.) “I didn’t know she was Black until a number of years ago, when she happened to turn Black, and now she wants to be known as Black,” Trump said at the National Association of Black Journalists convention in Chicago. Harris, seeking to become the first Black woman and Asian American president in US history, condemned Trump’s comments as “the same old show” of “divisiveness” and “disrespect.” One thing to watch today: The ISM purchasing managers’ index is expected to show economic activity in the US manufacturing sector continued to contract in July, though at a slightly slower pace than [the previous month](. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Chinese students are among those to have been caught up in [an escalating UK campaign]( to “de-risk” higher education, following warnings from British security agency MI5 that universities are “magnetic targets for espionage and manipulation.” The government’s vetting process, known as ATAS, has kept thousands of foreign students out of higher education, with the rejection rate increasing almost tenfold over four years. Business leaders and academics worry the response jeopardizes the UK’s tech and science talent pipeline. And Finally Depression and cognitive symptoms worsen in the years following hospitalization for Covid-19, [according to a new study]( into the long-term effects of the disease. People admitted to hospital for a Covid infection still experienced “substantial” symptoms years later, with new ones also emerging, researchers from several British universities found. Almost half the patients in the study had moderate to severe depression, with a quarter reporting serious cognitive decline. The study of 475 patients found that one in four either worked less or stopped working. Photographer: Mark Felix/AFP/Getty Images More from Bloomberg - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa]( a twice-weekly newsletter on where the continent stands now — and where it’s headed - Explore more newsletters at [Bloomberg.com](. 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