Good morning.

Walmart and Target are joining up with more than 100 other retailers under the banner Americans for Affordable Products to fight Republican plans for a “border adjustment tax” as part of tax reform. The border tax would in effect impose a 20% levy on imported goods in an effort to encourage job creation in the U.S. (and also pay for The Wall). But opponents say the tax would be paid by Americans in higher prices. The new coalition intends to drive home the latter message.

The problem is that if you remove the border tax – estimated to bring in $1.2 trillion over 10 years – the GOP corporate tax reform plan quickly unravels. That money is key to reducing the corporate tax rate. And it’s far from clear that legislators can find another way to offset such a huge sum.

That’s one reason why early hopes of a quick win on tax reform this year are now fading. As Senate Finance Chairman Orrin Hatch told the U.S. Chamber of Commerce Wednesday, Republicans agree on the “fundamental issue and principles” for tax reform, but there are questions about the “design and detail” that have to be worked through. Translation: don’t hold your breath. Given all the distractions facing the new administration, as well as the deepening partisan warfare in Washington, it’s hard to see how this happens soon… if at all.

But Republicans could still opt for a simpler deal on a temporary tax cut for repatriated corporate profits – perhaps with some strings attached requiring the money go into job-creating investments. That’s why Apple CEO Tim Cook, whose company has a massive $246 billion locked overseas, said in his earnings call this week that he remained optimistic “that there will be some sort of tax reform this year.”

In the meantime, companies are continuing to dance to Trump’s tune. Samsung Electronics said it may build a U.S. plant for its home appliance business.

More news below.

Top News

• Facebook Repeals The Law of Large Numbers

Facebook continues to grow at multiples that most startups would be happy with. Mark Zuckerberg’s company said revenue rose 51% year-on-year in the fourth quarter, and beat Wall Street’s expectations on earnings by nearly 10%, allaying fears that its ad-driven revenue may be plateauing. It added a jaw-dropping 265 million new users in the quarter, as many as Twitter has in total, and is now closing in on 2 billion monthly active users. It’s not all plain sailing. The company was ordered to pay $500 million in damages to ZeniMax Media, a video game publisher who claimed Facebook’s virtual reality unit Oculus Rift stole its technology. It’s also still scrambling to overcome issues with fake news. However, nothing could stop the shares hitting a new all-time high in after-hours trading. Fortune

• Fed Caution Sends Dollar to 11-Week Low

The dollar fell to an 11-week low after the Federal Reserve declined to add anything new on the outlook for interest rates this year. Markets took as a sign of caution about the effects of the new administration’s policy on growth. Criticism of President Trump’s executive order on immigration has spread to Wall Street, with both bulge bracket banks and hedge fund figures such as Bridgwater’s Ray Dalio voicing concerns. However, short-term economic indicators continue to paint a picture of strength: the ISM purchasing managers’ index showed manufacturing activity at a two-year high, while ADP said private payrolls rose by 246,000 in January, setting the scene for a strong employment report Friday. Fortune

• Condom Maker Courts its Natural Hedge

U.K.-based consumer products group Reckitt Benckiser said it’s in talks to buy Mead Johnson, the company behind Enfamil milk formula and other nutritional products, for $16.7 billion. Reckitt, which makes Durex condoms and Scholl footcare products, has been under pressure to expand in higher-margin products after two cuts to its guidance last year. One can speculate about a maker of baby food being a natural hedge for a condom producer. The mooted price of $90 a share is nearly 30% above its current price, but well below the $105 level it hit during speculation over a bid from Danone in 2015. Danone ultimately bought organic goods group WhiteWave to bolster its U.S. presence instead. WSJ, Subscription required

• Tillerson Confirmed, Mnuchin Advances

The Senate confirmed former ExxonMobil CEO Rex Tillerson as Secretary of State, on an unusually divided vote (56-43) that underlined the strength of feeling on the part of minority Demcrats (as well as their weakness in the wake of November’s elections). The confirmation processes for Jeff Sessions, Tom Price and Steve Mnuchin to the posts of Attorney-General, Health Secretary and Treasury Secretary, respectively, all advanced to the Senate floor, but Betsy DeVos is struggling to pass muster, after two Republican Senators signaled they wouldn’t vote to confirm her as Education Secretary, citing her lack of experience. Fortune

Around the Water Cooler

• Deutsche Bids 2016 a Bitter Auf Wiedersehen

Deutsche Bank ended a dreadful 2016 with one last disappointment, reporting a worse-than-expected loss of 1.9 billion euros ($2.1 billion) for the final quarter, despite the fact that its settlement for suspected Russian money-laundering came in at the low end of expectations. Big-money clients had withdrawn from trading with the bank in the fourth quarter on fears that its settlement for fraudulent selling of mortgage-backed securities would wreck its balance sheet. As a result, it failed to profit from the “Trump bump” in trading to the same extent as its rivals on Wall Street. The bank’s shares fell 5% in Frankfurt. Reuters

• Activision Heeds the Call of Lucre

The company behind some of the world’s most popular video games (‘Call of Duty’, ‘World of Warcraft’, ‘Overwatch’) said it will create a ‘consumer products’ division to broaden the revenue stream from its franchises. It has tapped Disney and Mattel veteran Tim Kilpin to lead the unit, who has promised to be “more aggressive” in growing the business. Activision had been rumored to be considering options such as a movie studio and an e-sports division. Its CEO Bob Kotick recently had a promise of accelerated equity rewards if the stock rises more than 15% due to a “transformative” transaction. Fortune

• Shell Turns a Corner

Royal Dutch Shell said its profit fell 37% last year to the lowest in a decade, but its shares rose on perceptions that it is over the worst. Cash flow turned positive in the final quarter and debt fell as management started to deliver on the asset disposal program promised after the $56 billion merger with BG Group. That deal solved any problems of reserve replacement for the near term, allowing the company to target another $2 billion in capital expenditure cuts this year to $25 billion. That still suggests a general air of retrenchment, but at least the company is now covering the cost of its capex and dividends (a feat that rival BP has so far failed to match.) Bloomberg

• Brexit Begins

Britain’s House of Commons approved Prime Minister Theresa May’s bill to begin withdrawal from the EU by 498-114. The bill still needs approval from the House of Lords (whose life-long members don’t need to worry about re-election) and both the Lords and the Commons committees are expected to add hundreds of amendments that will require debate, but the chance of the process being derailed at this stage is extremely slim. Barring a sharp economic downturn that changes the political climate (which still seems no nearer despite an uptick in inflation and growing concern about the City of London’s future), Brexit is past the point of no return. Time

Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;

@geoffreytsmith