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The Trump administration is considering its first major trade action against Beijing, with officials engaged in “serious discussions” about launching a probe into a Chinese intellectual property regime that requires foreign companies to transfer technology to local subsidiaries and partners.

The move would target one of the major concerns expressed by US, European and other businesses operating in China and would mark a shift in tone for the administration, which has spent most of this year adopting a more cautious line and has sought to convince Beijing to apply more pressure on North Korea.

Meanwhile, Chinese official media has begun to mock the US president, over his “emotional venting” on Twitter over China’s failure to rein in North Korea

“Taking out this outrage on China is clearly finding the wrong target,” said Xinhua. Taming Kim Jong Un, the state news agency added, is not China’s responsibility. “What the peninsula needs is immediately stamping out the fire, not adding kindling or, even worse, pouring oil on the flames,” Xinhua said, warning the US not to “stab China in the back”. (FT, NYT)

In the news

Apple reports revival in iPhone and iPad sales
Apple has signalled a continued recovery in its iPhone sales for its most recent quarter following last year’s decline, while iPad sales returned to growth for the first time in more than three years. Looking ahead to the fiscal fourth quarter, Apple forecasts revenue to be in the range of $49bn to $52bn, a rise of between 5 and 11 per cent year-on-year, potentially putting it ahead of Wall Street’s consensus forecasts of $49.1bn. The company’s shares surged 6 per cent in after-hours trading to a record high above $159. (FT, Bloomberg)

Venezuela opposition targeted 
Opposition leaders Leopoldo López and Antonio Ledezma were taken from their homes, where they were serving house arrest, family members said on Tuesday, adding that President Nicolás Maduro was responsible for their fate. Both leaders in recent days had called on Venezuelans to join protests against Mr Maduro over the creation of an all-powerful legislative body called the constituent assembly, which was elected on Sunday. Here’s how the US, which has issued sanctions against Venezuela, could target the country’s oil industry with import and export blocks. (FT)

1MDB given five days to pay $603m
An Abu Dhabi sovereign fund has given scandal-hit Malaysian fund 1MDB five days to make a missed $603m payment, complicating the fraught unwinding of the two funds’ relationship. 1MDB failed to make the payment to the oil-rich emirate’s state-owned International Petroleum Investment Company, which fell due on July 31. In a statement, the Malaysian fund said it would make the payment later this month. (FT)

Senate defies Trump on Obamacare
A Senate chairman on Tuesday took a significant step towards working with Democrats on stabilising a core facet of Obamacare — the healthcare exchanges. Lamar Alexander, head of the Senate Health Committee, said he would hold bipartisan hearings next month on strengthening Obamacare’s individual markets for 2018. The hearings will give Democrats a seat at the negotiating table on healthcare for the first time. President Trump has suggested he’ll let Obamacare implode, but in working with Democrats, Senator Alexander is actively trying to prevent that from happening. (The Hill)

German carmakers try to head off diesel backlash
Germany’s carmakers will promise to upgrade millions of diesel vehicles to reduce their harmful emissions, as they scramble to head off a mounting backlash against a technology that is critical to the future of the German auto industry. A “ diesel summit” in Berlin on Wednesday will brings together the bosses of all the country’s big car companies as well as ministers and regional leaders in a sign of the alarm spreading in German business circles and in the corridors of power in Berlin over the diesel crisis. “They might as well not bother”, says the FT’s John Gapper: diesel is dying and the only question is how long it will take. (FT)

The day ahead

Temer criminal vote
Brazilian President Michel Temer is set for a vote in congress over whether he should face a criminal trial for allegedly discussing bribes with a businessman. A full session of congress is set to debate the matter, in which Mr Temer was secretly taped in March talking to Joesley Batista, former chairman of JBS, the world’s largest meatpacker, allegedly about bribing politicians and officials. (FT)

Regulator targets Volcker rule
A bank regulator appointed by President Donald Trump will take a first step towards loosening the Volcker rule banning banks from placing market bets with their own capital, targeting a post-crisis prohibition that is reviled on Wall Street. The Office of the Comptroller of the Currency, which oversees national banks, will initiate the process of amending the Volcker rule by formally seeking public comment from banks and others on how it is working, say people familiar with its plans. (FT)

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

The story behind Fox’s concocted Seth Rich story
The Fox News Channel and a wealthy supporter of President Trump worked in concert under the watchful eye of the White House to concoct a story about the death of a young Democratic National Committee aide, according to a lawsuit filed on Tuesday. The explosive claim is part of a lawsuit filed against Fox News by Rod Wheeler, a longtime paid commentator for the news network. The suit was obtained exclusively by NPR. (NPR)

Moment of truth for bitcoin
A bitter ideological dispute over how to scale bitcoin has led to a breakaway version of the currency. Because of the way bitcoin is designed, if this breakaway copy gains traction with miners, corporations and users — something we could know within a few hours or days — it could immediately expand bitcoin’s lifetime money supply to 42m from 21m. That makes the bitcoin fork a judgment of Solomon moment. Only a decisive win by either side will prevent bitcoin from splitting itself apart. Who, if anyone, gives way in the event of a stand-off will be a telling indicator of what really motivates the community. (FT)

Migration opens the door to Italy’s populists
Rome feels it has been abandoned by Europe over the migrant crisis just as a local backlash is boosting the opposition. (FT)

What to wear to pitch your start-up Mark Zuckerberg is known for his uniform of a hoodie, grey T-shirt and jeans, but this typical start-up look does not work for everyone. Venture capitalists and entrepreneurs weigh in on what’s best to wear when pitching your company. (FT)

Treat Uber like a stock exchange
Robin Harding on why we need to recognise that the ride-hailing app is a marketplace where buyers meet sellers to trade. (FT)

Video of the day

Contagious investor confidence
Low volatility encourages risk taking, as does rising prices. The FT’s capital markets editor Dan McCrum says confidence is contagious and most of the world seems to have it. (FT)

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