Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

Some companies that shifted manufacturing and sourcing out of China to avoid higher U.S. tariffs are moving orders back after encountering production constraints, supply-chain disruptions, higher costs, and infrastructure challenges elsewhere. Target has reportedly restored some orders to Chinese suppliers, Shein is scaling back some operations in Vietnam, and several manufacturers have abandoned overseas production after struggling to replicate China’s skilled labor, extensive supplier networks, equipment availability, and reliable power supply. The financial incentive to relocate has also weakened as the U.S. has expanded tariffs to more countries, narrowing the gap between China and alternative manufacturing hubs such as Vietnam, Indonesia, and Thailand. Companies also point to China’s greater resilience during periods of energy and commodity disruption, although production elsewhere can still provide a hedge against future tariff increases. Despite the partial reversal, the broader “China plus one” strategy remains intact, with Southeast Asia continuing to attract billions of dollars of manufacturing investment. Some businesses are maintaining smaller operations outside China to diversify geopolitical and tariff risks, while others are looking beyond the U.S. for new export markets amid continued uncertainty over trade policy.

 

Reuters

Environmental Protection Agency (EPA) administrator Lee Zeldin has said rules aimed at limiting pollution from coal and gas power plants are being scrapped, and the agency would also take steps to prevent future administrations from regulating power plant emissions. "The reality is that America produces energy better and cleaner than anywhere else in the world, and our power plants should not be unfairly targeted," Zeldin said in a speech at a G20 energy meeting in Houston. If finalised, the proposal could save more than $300bn, the EPA said. "They're propping up fossil fuel industry profits and completely sidelining people's health and well-being," Rachel Cleetus of the nonprofit Union of Concerned Scientists, told AFP. "The EPA has deserted its mission entirely, and they're doing it in a way that's cruel. They're gleefully taking credit for it." Environmental groups have said they will sue.

 

AFP

Financial Times

New York Times

BBC News

Microsoft has drafted a code of conduct to apply to the training of new AI models amid growing fears that technology companies could lose control of their AI products. Mustafa Suleyman, the CEO of Microsoft AI, wrote: “AI must be subordinate and always in service of people. The fears about possible loss of control are real.” A parallel post on the company’s website said: “The purpose of technology is to serve humanity and accelerate human flourishing. Any technology that doesn’t achieve that is a failure, and it should be rejected. That is the starting point of our approach at Microsoft AI, where we’re building towards Humanist AI, one that is subordinate, aligned, and contained.” Microsoft asserted that its AI is "not conscious," observing: "We reject the pursuit of legal personhood, or the idea that models might ​deserve welfare, or be entitled to rights.” 

 

Silicon Republic

Reuters

The Guardian

Bayer’s Monsanto unit has urged a Missouri judge to approve a $7.25bn settlement aimed at resolving nearly all existing and future U.S. lawsuits alleging that Roundup causes cancer. Bayer currently faces around 65,000 claims. The proposed settlement would provide payouts of between $10,000 and $165,000 to eligible claimants with non-Hodgkin lymphoma, although opponents argue that the compensation is inadequate. Bayer, which denies that Roundup causes cancer, has said the agreement is fair and has broad support among plaintiffs’ lawyers. The litigation has cost Bayer billions of dollars since its 2018 acquisition of Monsanto, including around $10bn committed in 2020 to resolve most claims existing at the time.

 

Reuters

Arizona has sued L’Oréal and its U.S. subsidiary, alleging the cosmetics group concealed potential cancer risks associated with hair relaxers predominantly used by African American women. Attorney General Kristin Mayes claims L’Oréal violated consumer protection laws by failing to warn customers about alleged ovarian and uterine cancer risks. Arizona is seeking damages, penalties and restrictions on sales without warnings. L’Oréal denies the claims and maintains its products are safe. The company already faces more than 12,000 similar lawsuits consolidated in federal court in Chicago, with trials potentially beginning next year.

 

Reuters

China's new travel regulations, effective Tuesday, empower authorities to block citizens from leaving the country, transforming temporary bans into a permanent measure against capital and talent flight. Neo Wang, a strategist at Evercore ISI, observed: "The goal is to restrict outbound personnel flows, so as to keep home the capital and talent that might otherwise leave with them." Private bankers are said to be adapting by altering their approaches to client events and documentation to avoid government scrutiny. Additionally, the regulations impose a 20% income tax on assets moved into offshore trusts, further complicating wealth management for affluent Chinese. "The various measures create the perception that laws may change without notice with retroactive effect, the tightening is coming from all sides," said Clifford Ng, partner at Zhonglun Law firm. 

 

CNBC

The Supreme Court has rejected President Donald Trump's attempt to limit mail voting by imposing new Postal Service regulations for the midterm elections. The administration had proposed a plan that would require states to adopt a uniform envelope style for mailed ballots and submit lists of eligible voters to an online portal it was developing. The Postal Service could refuse to deliver ballots to states that didn't comply. The efforts had the potential to be especially disruptive in states such as Washington and Oregon that send out ballots entirely by mail. “Washington's election workers are already hard at work preparing to carry out a safe, secure, and accurate election,” Washington Secretary of State Steve Hobbs said. “Now, that work continues without having to upend our election processes to meet unrealistic ballot mail requirements.”

 

The Hill

Boston Globe

Jurist

U.S. News

 

Bloomberg

Reuters

The 10-year U.S. Treasury yield briefly climbed above 5% on Monday, reaching 5.012%, its highest intraday level since 2007, before retreating to close at 4.960%. The move has been driven by mounting concerns over inflation and energy prices as the Middle East conflict disrupts shipping and pushes Brent crude above $100 a barrel. Higher Treasury yields are already feeding through to the broader economy, with mortgage rates moving back toward 7%, while increasing borrowing costs could add further pressure to U.S. government finances. Investors are now debating whether 5% will again prove to be a ceiling, as it did in 2023, or whether the market is entering a more sustained period of elevated interest rates reminiscent of the 1990s and 2000s. Expectations have shifted as the U.S. economy remains relatively resilient, inflation stays firm, and markets increasingly anticipate that the Federal Reserve will raise short-term interest rates. At the same time, federal debt has reached $40tn, increasing the supply of Treasurys and potentially putting further upward pressure on yields.

 

CNN

Reuters

Washington Post

Wall Street Journal

A federal judge has ruled against the Trump administration's attempt to reduce the Federal Emergency Management Agency's (FEMA) workforce by 50%, saying that the Department of Homeland Security (DHS) overstepped its legal authority. The ruling is a significant win for labor groups that argued the cuts violated protections meant to ensure FEMA's independence. Although the cuts were not implemented, the agency has faced significant staff departures, with over 4,300 employees leaving in the 2025 budget year. U.S. District Judge Susan Illston observed: “Frankly, the FEMA staffing plan number appears as if pulled from thin air.” FEMA responded in a statement late Saturday, saying: “DHS and FEMA are ready for the 2026 hurricane season . . . We're ensuring workforce stability and a strong, deployable force for upcoming national events and potential disasters; making the agency leaner, faster and laser-focused on supporting state, local, tribal and territorial partners before, during and after disasters . . . FEMA continues to maintain a roster of experienced leadership and support staff across headquarters and regional offices.”

 

Los Angeles Times

Coca-Cola will not respond aggressively to rivals’ pricing in India, chief executive Henrique Braun has said, despite growing competition from Reliance's Campa Cola. Instead, the company will focus on brands, packaging and revenue-growth management. Campa Cola's market share has risen rapidly through competitive pricing and Reliance’s distribution network. Coca-Cola plans to increase marketing and distribution spending while relying on its local bottling network and tailored portfolio. Braun said India remained a long-term opportunity despite short-term fluctuations in market share and growth.

 

Economic Times

Costco has raised the price of its Kirkland Signature synthetic motor oil to $57.99 from a typical level of around $30 and limited purchases to two units every seven days per membership, as disruption to global oil supplies drives up costs. Mobil 1 motor oil purchases have also been capped at five units per membership. The restrictions come as Middle East conflict and damage to Saudi Arabia’s East-West oil pipeline have tightened crude supplies, with Brent crude settling at $105.68 a barrel on Monday and WTI at $101.39. Refiners have also prioritized higher-margin gasoline and diesel production over base oil, a key component of synthetic motor oil, further constraining supply. The pressure has spread across U.S. fuel markets, with gasoline recently reaching a Labor Day record and diesel climbing above $6 per gallon.

 

Des Moines Register

The Hill

CNBC

Burger King is investing in higher-quality food as it seeks to differentiate itself in a competitive U.S. fast-food market. The country’s second-largest burger chain by sales is upgrading its Whoppers, chicken nuggets, sauces, buns, and packaging, with executives betting that better products can help drive sales without relying heavily on discounts. The strategy comes as rising food costs put pressure on restaurant operators, leaving Burger King to convince franchisees that the required investments will generate sufficient returns. Improvements being tested include juicier chicken nuggets and changes designed to ensure Whoppers are served hotter.

 

Wall Street Journal