The briefing for Thursday, July 2.

The United States has declined to renew the US-Mexico-Canada Agreement in its current form, blocking an automatic 16-year extension that would have kept the trade pact in place until 2042. A senior US official said the administration chose not to rubber stamp renewal without addressing existing issues. The decision sets off a ten-year countdown that could lead to the deal's expiration by 2036 if unanimous agreement isn't reached.

The USMCA underpins roughly $2 trillion in annual trade across North America. US trade officials are pushing for major changes before committing to a long-term extension, citing concerns over automotive rules of origin, dairy market access, and preventing countries like China from exploiting the regional agreement. The US opting out will force all three nations to meet annually to negotiate changes.

Business groups including the US Chamber of Commerce had warned that manufacturing and agriculture sectors rely heavily on cross-border certainty. However, domestic trade groups like the American Iron and Steel Institute welcomed the shift, arguing annual reviews give American negotiators leverage to fix problematic provisions. The USMCA entered into force six years ago, replacing NAFTA with updated rules on digital trade, workers' rights, and regional manufacturing.

New Federal Reserve Chair Kevin Warsh said Wednesday that the central bank would remain independent and seek to bring inflation down to its 2% target, likely foreclosing the rate cuts President Trump has sought. Speaking at a central bank conference in Portugal, Warsh said businesses or households expecting the Fed to accept inflation above 2% would be disappointed. When asked about Trump's desire for lower rates, he underscored the Fed's independence from day-to-day politics.

Warsh's comments suggest a shift from his stance last year when he called for lower rates while essentially campaigning for the job. He declined to signal specific policy moves, consistent with his opposition to forward guidance. At the Fed's last meeting in June, nearly half of the 19 policymakers signaled support for higher rates this year. Wall Street investors expect the Fed could hike its key interest rate as soon as September, from roughly 3.6% to about 3.9%.

Inflation rose to a three-year high of 4.2% in May, pushed higher by the Iran war's impact on gas prices. However, as a peace agreement has been reached and gas prices have declined, inflation may have peaked. Warsh noted signs that the threat of persistent inflation has moderated, citing inflation expectations from surveys and bond prices, which have both declined in the past month.

The Vatican responded aggressively Thursday to Wednesday's unauthorized bishop consecrations by the Society of St. Pius X, declaring the traditionalist group in formal schism and excommunicating its bishops and priests. The decree goes beyond minimal sanctions foreseen by canon law, warning faithful who attend SSPX Masses that they too face excommunication and invalidating sacraments of confession and marriage administered by SSPX priests.

The Society consecrated four new bishops Wednesday at its Switzerland seminary in direct defiance of Pope Leo XIV, who had urged the group to hold off for the sake of church unity. The five-hour Mass attended by 15,500 people prompted the Vatican's doctrine office to declare the consecrations a schismatic act. The SSPX, which celebrates the ancient Latin Mass and opposes Vatican II modernizing reforms, had justified the consecrations citing a state of necessity to minister to its faithful.

The harsh sanctions reverse concessions the Vatican had granted in recent years as part of outreach efforts. French Archbishop Marcel Lefebvre founded the SSPX in 1970 in opposition to Vatican II reforms. He consecrated four bishops without papal consent in 1988, prompting similar excommunications that Pope Benedict XVI lifted in 2009. The group now has six bishops, 751 priests, and operates globally with five seminaries, representing what the Vatican sees as a parallel pre-Vatican II church.

President Trump's latest financial disclosure showed he took in approximately $2.2 billion in his first year back in office, with $1.4 billion coming from cryptocurrency ventures. The mandatory annual report showed Trump earned over $500 million from World Liberty Financial selling governance tokens and stablecoins, and more than $600 million from CIC Digital's meme coins stamped with his face. Both types of assets have plunged in value since his sales.

The crypto windfall raised conflict-of-interest concerns as several buyers had significant business before the administration. A Chinese billionaire spent $75 million on tokens and $200 million on souvenir coins shortly before settling a federal lawsuit for $10 million. A company linked to the UAE government bought a $500 million stake in World Liberty shortly before Trump's inauguration, with the UAE subsequently gaining access to advanced US chips previously banned over national security concerns.

Trump also expanded his international property portfolio significantly, earning tens of millions in fees from new hotel and resort deals in countries negotiating with the US over tariffs and military aid. Properties in the UAE generated $10.4 million, Saudi Arabia sent $9 million, and developments in Romania and Qatar each contributed $5 million. Mar-a-Lago generated $77 million, up 50% from the previous year. The White House has denied any conflicts of interest, stating Trump does not get involved in family business run by his sons.

German federal prosecutors have charged a former Ukrainian army officer over the September 2022 undersea explosions that damaged the Nord Stream gas pipelines between Russia and Germany. The suspect, identified as Serhii K., faces charges of causing an explosion, damaging property, disrupting public service, and being an accomplice to war crimes by attacking civilian objects. He was detained in Italy in August and extradited to Germany in November.

According to prosecutors, Serhii K. allegedly led a team of seven accomplices in an operation to destroy three of the four Nord Stream pipelines. The group used a yacht hired from a German company using forged IDs, setting off from the port of Rostock. The explosions on September 26, 2022, ruptured Nord Stream 1, which was Russia's main natural gas supply route to Germany until Moscow cut off supplies in August 2022, and damaged Nord Stream 2, which never entered service.

Prosecutors say the plot aimed to permanently disrupt gas deliveries and prevent Russia from using revenues from natural gas trading to finance military operations in Ukraine. The attack released record-breaking amounts of methane into the Baltic Sea and left the multi-billion dollar infrastructure inoperable. Russia has accused the US of staging the explosions, a charge Washington has denied. A second Ukrainian suspect was detained in Poland a month after the first arrest on another German warrant.

One week after Venezuela's twin earthquakes killed more than 1,900 people, doctors warn that untreated wounds and infectious diseases now pose the biggest threat to survivors. Thousands of displaced Venezuelans are sleeping in crowded shelters or outside without access to clean water amid dismal sanitary conditions. Aid workers say the aftermath has become a major medical crisis that could take more lives unless quickly controlled.

Hospital conditions were dire even before the quakes, with chronic shortages of water, energy, medical equipment, and trained staff. The government raised the number of injured to 10,571 on Tuesday, an increase of 5,000 from the previous day. Hospitals lack essential supplies including screws and plates for orthopedic surgery and medicated gauze to prevent infections. The earthquakes damaged or compromised 38 hospitals nationwide, and a nationwide shortage of ambulances has left most patients arriving in pickup trucks.

The US has scaled up assistance with 900 military personnel on the ground as of Wednesday, repairing the earthquake-damaged runway at Caracas's main airport and stationing naval assets offshore. The Trump administration has offered $300 million in assistance, though direct material damage from the quakes is estimated at over $6.7 billion according to UN satellite analysis. Aid workers warn that hot conditions and damaged infrastructure are creating conditions for vector-borne diseases to spread among displaced populations.