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Trump’s Trade Fallout, Tech Hit, China Bear Market: CEO Daily for June 26, 2018

June 26, 2018, 10:40 AM UTC

Good morning.

Apple CEO Tim Cook kicked off the conversation Monday at the Fortune CEO Initiative in San Francisco, saying he felt compelled to speak out about the Trump administration’s treatment of children at the border last week because it was “squarely in the dignity and respect situation.”

In an interview with the Irish Times while in Dublin, Cook had called the administration’s zero tolerance policy “inhumane.” At Apple, he explained last night, “we don’t get into politics; we stick to policy.” But “business is just a collection of people, and if people have values, than a business should, too.” The administration’s separation of children from parents at the border violated Apple’s values, and “if you don’t speak out, you are in the appalling ‘silence of good people’ category.”

Cook acknowledged that some people believe his company should stay quiet and focus on issues that directly affect the bottom line. “You are never going to fulfill your mission of changing the world by doing that,” he said.

The Apple CEO also talked about the protection of people’s privacy as one of his company’s core values…while avoiding any specific mention of Facebook or Google. “We have felt very strongly on this issue from the beginning. We could see building a detailed profile on people likely would result in significant harm over time…that it could be used for nefarious purposes.”

Cook’s comments, in conversation with my colleague Adam Lashinsky, were the opener for the annual meeting of this community of CEOs, who are focused on how companies can strengthen their contributions to society. In the question and answer session, Cook was asked about whether short-term pressure from shareholders made it harder for companies to make decisions in the long-term interest of society.

“You have to have a board and a CEO and a management team that is willing to put aside the stock price and make the right decision,” he said. “If you make a decision based on short-term investors, you are going to make a terrible decision. You have to look yourself in the mirror and say: ‘I’m going to take the heat.’”

More news below.

Alan Murray

Top News

Trump's Trade Fallout

U.S. firms are starting to feel the effects of President Donald Trump's trade war efforts, with Mid-Continent Nail laying off workers and Harley-Davidson announcing plans to move some manufacturing offshore, in order to sell hogs to Europeans at reasonable prices. With stock markets roiled, Treasury Secretary Steven Mnuchin has tried to deny reports that the U.S. will take measures against Chinese companies' use of and investment into American tech, saying the White House will apply such measures to "all countries that are trying to steal our technology." Fortune

Tech Hit

Tech companies have been particularly affected in the aforementioned stock-market turbulence. Netflix fell by 6.5%, in its worst day since mid-2016. That said, its stock has still doubled in value so far this year. Square also dropped 6%, Twitter 5% and Stitch Fix 10%. Chipmaker Micron lost almost 7% of its value, and AMD and Nvidia each fell over 4%. CNBC

China Bear Market

Meanwhile, Shanghai's benchmark stock index is now in official bear territory. The Shanghai Composite Index fell 0.5% today, taking it down 20% from its peak in January. That loss is bigger than Canada's entire economy, by the way. If it loses another 6%, the biggest Asian stock market will instead be in Japan. Again, internet companies were particularly hard-hit, as were telecoms. Tariffs aren't the only worry—investors are concerned about a property bubble and debt risks, too. South China Morning Post

GE's Healthcare Spinoff

General Electric's self-dismemberment continues, this time with a reported plan to spin off its healthcare business and its stake in oil-services outfit Baker Hughes. According to the Wall Street Journal, this is the "conclusion" of CEO John Flannery's big strategic review, and it will be presented to investors today. WSJ

Around the Water Cooler

Child Detention Camps

A manager at a Texas facility for housing hundreds of migrant children has branded President Trump's policies—responsible for splitting those kids from their parents—as "dumb" and "stupid." The manager, who news organizations did not name, said: "All it did was harm children…This operation would not be necessary had it not been for the separation." Guardian

Instagram Value

Instagram is apparently worth more than $100 billion on its own, according to Bloomberg's calculations. The image-sharing service is—of course—part of Facebook, but it's an ever-larger part, with a billion monthly active users. Analysts reckon it will double that user base within the next five years. Crucially, its users are younger on average than Facebook's. Bloomberg

Heathrow Expansion

British parliamentarians have backed plans to build a third runway at London Heathrow airport. Environmentalists opposed the plan and Foreign Secretary Boris Johnson, who used to bitterly object to the expansion, conveniently found himself in Afghanistan on the day of the vote. The new runway will increase Heathrow's annual capacity to 130 million passengers, from a current level of 85.5 million. BBC

Copyright Debacle

Google is taking a lot of flack for opposing a major copyright reform in the EU. But, while the company is acting out of self-interest, it's also right in this case—the new copyright directive would make it much harder for people to share information (and memes), and it would boost surveillance and censorship on the internet. Here's a guide to what's happening as this debate reaches its end game. Fortune

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