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Tariff Pushback, E-Commerce Taxes, Kobe Steel: CEO Daily for March 6, 2018

Good morning.

I’m in Singapore, where our Brainstorm Design conference got under way a few hours ago. The premise of this new event is that design has become a key driver of business success. Why? Harry West, CEO of frog (I don’t know why it’s not capitalized), explained it this way: “Over the last 20 years or so, customers have been given much more power, more choice, and more ways to express their choice.” As a result, design has become a critical differentiator. “Brand communication still matters, but brand experience matters more.”

While the importance of design in business is on the rise, its effective integration into large companies apparently still has a way to go. “There is a big difference between saying design is important, and actually following through,” said Maria Giudice, the vice president of experience design at Autodesk. “I’m not sure companies know how to do it.”

One problem, according to Derrick Kiker of McKinsey and Jeanne Liedtke of Virginia’s Darden School, is that business people are trained to focus on efficiency, and design solutions can often add cost and inefficiency. But Liedtke says her research shows that a strong focus on customer-centric design can not only produce better products and services, but also help drive cultural change. We write a lot here at CEO Daily about how new technologies are going to force a rethink of virtually every business in every industry. It’s design, the folks here in Singapore argue, that will help companies navigate those changes successfully.

“I think it’s going to be vital for CEOs in the future” to be more fluent in design, said West. “Their products and services will need to change; customers will demand (them) to be ever better. You get there through design.”

Enjoy your Tuesday (mine is nearly over.) You can follow the conversations at Brainstorm Design here or by subscribing to the just-launched occasional newsletter Business by Design that will keep you up to speed on design, innovation, smarter corporate thinking, and the goings-on in Singapore this week.

News below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Tariff Pushback Dividends

Markets in Asia and Europe have taken heart at the news of opposition to President Donald Trump’s tariff plans from the likes of House Speaker Paul Ryan and Representative Kevin Brady. Trump doesn’t appear to be backing down, but Ryan’s pronouncement that many Republicans are “extremely worried about the consequences of a trade war” saw the Nikkei rise 1.8% and Korean shares regain all the losses they took after Trump announced his tariff plans last week. The Dax was up 1.3% at the opening of Tuesday trading, and the Cac up 0.7%. Reuters

E-Commerce Taxes

The White House has taken the side of traditional retailers in a Supreme Court case concerning the ability of state and local governments to collect sales taxes from online retailers. E-commerce operations such as Overstock.com oppose a South Dakota law that says it’s possible to collect sales taxes from them even if they lack physical stores in the collecting state. The Trump administration says the Supreme Court should uphold the law. Bloomberg

Kobe Steel Scandal

The CEO of Kobe Steel is resigning after the Japanese firm admitted falsifying data about the metal it was supplying to customers. The company told the makers of planes and cars, among other products, that it was supplying them with copper, aluminum and steel that met their specifications, when this was in fact not true. Hiroya Kawasaki, who will step down on April 1, said Kobe Steel had “hugely damaged” the trust it had built over 112 years in business. CNN

Smurfit Kappa

Smurfit Kappa, the largest manufacturer of cardboard boxes in Europe, has rejected an unsolicited takeover over from the U.S.’s International Paper. “The board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic proposal. It does not reflect the group’s true intrinsic business worth or its prospects,” said Liam O’Mahony, the Dublin-based company’s chairman. The value of the offer was undisclosed, but Smurfit Kappa is estimated to be worth around $12 billion. Financial Times

Around the Water Cooler

State-Level Net Neutrality

Washington has become the first U.S. state to introduce net neutrality legislation, countering the FCC’s federal roll-back of the rule. Oregon seems likely to be next. Meanwhile, the governors of several other states have issued executive orders mandating net neutrality, and a couple dozen state attorneys general are suing the FCC over its December decision. Fortune

Airbus and Brexit

Airbus wants clarity over post-Brexit customs rules in the U.K., otherwise it’s threatening to consider its position in the country. “It’s critical for our business to ensure that the wings that we build in Broughton and in Filton [in the U.K.] can get to France and Germany for the final assembly line,” says Katherine Bennett, the aerospace firm’s senior vice president for the U.K. “It’s really important that the parts don’t get held up in warehouses. We have a very just-in-time delivery system.” Guardian

Uber and Bikes

Richard Fries, the executive director of The Massachusetts Bicycle Coalition, has good things to say about Uber allowing people to reserve and rent JUMP Bikes from within its ride-hailing app. He writes for Fortune that this approach could avoid the mess sometimes caused by dockless bike schemes that create “irritating urban clutter.” “It is telling that Uber, the company that massively disrupted the automotive space, passed over the most disruptive model entering the bike share market,” says Fries. Fortune

Russian Spy

A former Russian military officer—who had been imprisoned there for spying for the British, then given refuge in the U.K. under a 2010 spy swap—was found critically ill on a bench at a shopping center in the west of England. The police are trying to establish what mystery substance caused Sergei Skripal, and a 33-year-old woman found with him, to fall ill. “We are working with partners to prioritize this diagnosis and ensure that they receive the most appropriate and timely treatment,” the police said. BBC

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.