As I reported earlier this week, fears of a trade war with China are one of the greatest economic threats that Fortune 500 CEOs see on the horizon these days. But here’s an interesting tidbit from our survey: a majority of those CEOs actually support Trump’s tough tactics with the Chinese.
Words matter in a case like this, so let me tell you the precise question we asked:
Which of the following better represents your view of the administration’s trade initiative toward China, even if neither is perfectly right:
1. I favor the Trump administration’s trade action with China. We have allowed the Chinese to violate global trade norms for too long.
2. I oppose the Trump administration’s trade action with China, on the grounds that it is likely to hurt U.S. consumers and businesses more than help them.
Of the 76 Fortune 500 CEOs who answered that question, 53% chose the first statement, supporting Trump.
The president said yesterday that he doubted the talks with the Chinese would be successful: “The reason I doubt it is because China has become very spoiled….they always got 100% of whatever they wanted from the United States.” That public statement, however, was likely part of the president’s negotiating strategy, and probably aimed at the delegation that was in Washington negotiating yesterday. Other administration officials are more hopeful about the outlook, arguing that the Chinese have more to lose from a trade fight than the U.S. does.
Citing U.S. officials, reports yesterday indicated the Chinese delegation already has agreed to cut $200 billion from its bilateral trade balance with the U.S.—no small concession. However, China has now denied it made this offer.
The Chinese trade talks will continue in Washington today. Other news below.
China Sorghum Probe
Although Chinese officials are denying that they offered the U.S. a $200 billion cut in its trade balance, they have definitely made one big move to mollify the Americans: Beijing has dropped its anti-dumping probe into sorghum imports from the U.S. The Chinese commerce ministry says its high new tariffs on American sorghum hurt consumers and are not in the public interest. However, it will only make a final ruling on the continuation of the 178.6% tariffs after further investigation. BBC
CBS said yesterday that its board voted to remove voting control from Shari Redstone and her family. However, the Redstone family’s National Amusements says the vote—in which 11 of the 14 board members not affiliated with National Amusements supported the proposal—fell short of what’s needed to loosen the controlling shareholder’s grip on CBS. That’s because National Amusements had a day earlier amended CBS’s bylaws to say the dilution of voting power could only take place with 90% of board members’ approval. Wall Street Journal.
PayPal and iZettle
PayPal is buying the Swedish payments processor iZettle for $2.2 billion in an all-cash deal. Assuming the deal clears in Q3 as planned, it’s PayPal’s biggest-ever purchase. Like Square, iZettle provides point-of-sale apps and card-readers for small businesses. PayPal has been trying to move forward in this area too, and now it’s getting a big boost, particularly in Europe and Mexico, where iZettle has an established presence. TechCrunch
Italy’s populist Five Star Movement and far-right League have finally struck a deal on their common coalition platform. Five Star members will need to vote online on the deal today. On the EU front, there’s a lot of rolling back here—no mention of a referendum on the euro nor EU membership, no plans to ask the ECB for debt cancellation, and support for the goals of the Maastricht Treaty. The platform also includes a universal basic income, a dual-rate flat tax, and the possible relaunch of national airline Alitalia. Financial Times
Around the Water Cooler
Fiat—a company known for making affordable cars for the masses—is reportedly planning to kill off budget models such as the Punto and Mito, in order to instead focus on higher-end cars. According to Bloomberg, the Italian automaker will retool plants in Turin and near Naples to make Maseratis and Jeeps, and production of the Fiat Panda will move to Poland. Bloomberg
U.S. vs EU
European leaders need to keep trying to find common ground with the White House despite their growing tensions, according to World Economic Forum president Borge Brende. Those tensions relate to the U.S. withdrawal from the Iran nuclear deal—President Trump’s administration now wants European companies to cut ties with Iran, too—and trade. “There is not enough cooperation and dialogue in the world today,” Brende lamented. CNBC
After a New York lawyer was shown in a viral video making a racist rant against restaurant workers speaking Spanish, his law firm has been inundated with negative Yelp reviews. Aaron Schlossberg’s company now has just one star on the rating service, which has intervened saying its policy for newsmaking businesses is to remove posts “that appear to be motivated more by the news coverage itself than the reviewer’s personal consumer experience with the business.” Fortune
Does the Bitcoin network consume as much energy as Ireland does? A Dutch researcher named Alex de Vries says yes, but Stanford lecturer Jonathan Koomey is skeptical. “For two decades, people have been eager to overestimate electricity use by computing,” Koomey told NBC. “My concern is that we simply don’t have adequate data to come to the strong conclusions that he’s coming to.” NBC