Trump China Tariffs, Border Separations, Elizabeth Holmes: CEO Daily for June 18, 2018
Good morning. Fortune London editor Claire Zillman here, filling in for Alan.
As expected on Friday, the Trump administration slapped tariffs on $50 billion of imports from China. And—as expected—China retaliated, imposing a 25% duty on $34 billion in exports from the U.S.—such as soybeans, corn, beef, poultry, and automobiles—with additional tariffs planned for goods like coal, crude oil, and gasoline.
Trump had vowed to introduce additional tariffs if China hit back, so it seems the U.S. could soon deliver yet another jab as the superpowers’ blow-for-blow trade war escalates.
China “does not want the trade war,” according to commentary in state media Xinhua early Monday, but a “capricious Washington” has given Beijing “no choice but to fight back vigorously in defense of its national interests.”
Andrew Polk, co-founder of research firm Trivium China, gave Bloomberg this perspective on how Beijing sees the looming trade war: “The Chinese view this as an exercise in self-flagellation, meaning that the country that wins a trade war is the country that can endure most pain.”
China “thinks it can outlast the U.S.”
Beijing, of course, has the distinct advantage of not facing an election in November or in two years. While Trump has seemed to praise Xi Jinping’s newfound “president for life” status—”Maybe we’ll give that a shot some day,” he said in March—he doesn’t have that luxury.
Speaking of counterpunches, a new Ipsos poll gives a peek into how Canadians are viewing their nation’s new tensions with the U.S. A whopping 70% said they will look for ways to avoid purchasing U.S.-made products following Prime Minister Justin Trudeau’s tiff with Trump. But that show of patriotism may be difficult for Canadians to pull off since—as Reuters notes—U.S. pop culture and consumer goods are revered in Canada; it is the largest market for U.S. products.
More news below.
Outrage over family separation at the U.S.-Mexico border continued over the weekend. There will be somewhat of a showdown over the issue on Tuesday, when two competing immigration bills, both drafted by Republicans, go to a vote in the House. The “compromise” immigration bill includes a provision to prevent family separation, in addition to providing a path to citizenship for so-called DREAMERs. The more conservative “Goodlatte” bill, meanwhile, provides temporary status to DACA recipients, makes deep cuts to legal immigration, and boosts interior enforcement. Vox
The Bank for International Settlements poured ice cold water on the cryptocurrency world yesterday, in a report that said digital assets like Bitcoin suffer from “a range of shortcomings” that could keep them from going mainstream. The Basel, Switzerland-based institution that serves as a central bank for other central banks, said cryptocurrencies are too unstable, consume too much electricity, and are vulnerable to too much manipulation and fraud to be legitimate means of exchange in the global market. Bloomberg
Google Goes Shopping
Google announced this morning that it’s investing more than half a billion dollars in China’s second-biggest e-commerce player, JD.com in a deal that will see Google receive more than 27 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share. The two say their partnership is aimed at developing retail infrastructure that will better personalize the shopping experience. CNBC
Theranos founder Elizabeth Holmes and her No. 2 Sonny Balwani were hit with criminal fraud charges on Friday for allegedly defrauding investors, doctors, and patients with their bunk blood-testing technology. If convicted the two could each face up to 20 years in prison, fines of $250,000, and restitution to every individual they allegedly ripped off. Fortune
Around the Water Cooler
A new wave of innovation is rolling through the automobile industry as car makers like Ford, GM, and Fiat Chrysler race to equip pickup trucks with fuel-efficient engines. Wall Street Journal
Major League Baseball is aiming to woo U.K. fans by bringing the league’s marquee rivalry to London. The MLB has announced a two-game series between the New York Yankees and the Boston Red Sox in London’s Olympic Stadium next summer after years of rumors of the league’s arrival in the U.K. CNN Money
A Lesson in Law
The Washington Post has the story of how Charlotte School of Law students aimed to teach their institution a final legal lesson. When the school shuttered, hundreds of them filed lawsuits against it in what WaPo deems a cruel irony: aspiring lawyers hiring real lawyers to sue a nonexistent law school. Washington Post
Queen of Content
Oprah Winfrey has inked a collaboration deal with Apple to create original content—film, TV, applications, and books—as the tech giant aims to reach a broader audience. Winfrey’s agreement with Apple will see her company Harpo Productions own any and all content that results from the partnership. Hollywood Reporter