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Time for New Trade Tactics With China: Data Sheet

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Eleven long months ago, at Fortune’s Brainstorm Tech conference in Aspen, Colo., New York Times columnist Thomas Friedman cogently explained how a rational, effective president of the United States would handle a trade dispute with China. He’d sign the Trans-Pacific Partnership trade deal, bring European allies into the agreement, and then negotiate quietly with the Chinese in a way that would save them embarrassment.

The current president did none of these things, and the tech industry is an important segment of the global business community that may well pay a price for the president’s petulance.

Friedman himself reprised his themes last week. Over the weekend his news-side colleagues reported that the Chinese government had summoned representatives for several Western technology companies, warning them not to honor U.S. restrictions from working with Huawei, the Chinese communications equipment company. Also over the weekend, it emerged that the White House’s acting budget director asked the administration to delay implementation of the Huawei ban after rural telephone companies and other businesses complained of the harm it would cause.

Depending on your level of charity toward the administration, the request is a sign either of a poorly considered policy in the first place or an example of government responsiveness to the concerns of its citizens.

Two truisms are at play here. First, the Chinese need to be held to account for their trade practices. Few reasonable businesspeople dispute that. Second, the global technology industry is deeply interwoven with China. (The Economist explains this well here.) If the world’s greatest dealmaker wants to make progress on the former without badly screwing up the latter, a change in tactics might be in order.

***

Fortune’s CEO Initiative, an annual meeting devoted to discussing how business can be a force for good, convenes in New York this evening. I’ll be interviewing Microsoft President Brad Smith, who is working on everything from housing affordability to smart regulation of A.I., and Raghuram Rajan, a University of Chicago professor whose new book, The Third Pillar, argues for renewed attention on communities as a counterbalance to the typical focus on markets and the state.

Despite my enthusiasm for our event, I have become increasingly skeptical that most business leaders do little more than pay lip service to “changing the world.” I also cringe at their self-serving contention that only business can solve the problems government can’t. In this regard, I have become an acolyte of Anand Giridharadas, whose book Winners Take All argues that global elites, including CEOs, could do as much good by helping strengthen government and other civic institutions as by supporting good works of their own choosing.

I’ll monitor the proceedings with these thoughts in mind, and I’ll report back to you what I learn.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

I know where you’ve been: Apple’s iOS 13 will displays a map to show users when third party apps track their location. The privacy notification will also include the app’s explanation for the tracking, and offer an option for users to tweak their privacy settings.

Tell me more: A judge refused to throw out a class action that alleges Google displayed bias against conservatives. This means the case will proceed to discovery— meaning all sorts of juicy internal emails and HR documents could come into public view.

Tightening the screws: Among the U.S. tech execs summoned by the Chinese government (as noted by Adam above) are those from Microsoft and Dell. This came days after Beijing announced a list of “unreliable” companies and individuals.

Salesforce buys Tableau: CEO Marc Benioff confirmed the software giant has acquired Tableau in an all-stock deal that gives the data visualization company an enterprise value of $15.7 billion.

Cops vs passwords: A Florida man spent 44 days in jail for contempt rather than disclose his iPhone password. The case is one of many around the country that highlights the unsettled legal question of whether forcing someone to reveal their password violates the Fifth Amendment’s guarantee against self-incrimination. 

Did someone say antitrust? Google carried out 270 acquisitions over the past two decades, but its 2010 purchase of a travel firm was the only one challenged by regulators (it was approved). Meanwhile, Facebook has acquired 97 companies, and shut down 39 of them—all without a peep from the feds.

FOOD FOR THOUGHT

A new chip for the age of AI. A UK company called Graphcore represents a third wave of chip design that’s poised to supercede CPUs and GPUs. The chips stand out because they are less math-intensive: they are to built to be intuitive rather than deploying max processing power in response to a given command. Bloomberg BusinessWeek has a profile of Graphcore, which is backed by Microsoft and BMW, and raised $200 million last December:

Put another way, Graphcore is developing a brain for computers that, if its co-founders are right, will be able to process information more like a human instead of faking it through massive feats of number crunching. “For decades, we’ve been telling machines what to do, step by step, but we’re not doing that anymore,” Toon says, describing how Graphcore’s chips instead teach machines how to learn. “This is like going back to the 1970s—we need to break out our wide lapels—when microprocessors were first coming out. We’re reinventing Intel.”

IN CASE YOU MISSED IT

Uber CEO Takes More Control by Absorbing the COO’s Role By Danielle Abril

Microsoft Removes Face Recognition Photos Amid Privacy Controversy By Jeff John Roberts

NASA Reverses Course on Space Tourism, Opens ISS to Private Astronauts, Companies By Chris Morris

Google Is Changing Its Search Results. Here’s What to Expect By Alyssa Newcomb

E3 2019: Microsoft Reveals Project Scarlett, Its Next Console With Cloud Gaming Capabilities By Lisa Marie Segarra

There’s No Roadmap to Breaking Up Facebook—But Here’s Where the Government Might Start By Erik Sherman

BEFORE YOU GO

If you have writer friends, you may have noticed their feelings about their job can ricochet from smug elation to profound dejection—often in the same hour. If you wonder what drives this emotional rollercoaster, Fortune alumna Erin Griffith has tweeted out a funny chart that shows the events that inform a writer’s self-esteem.

This edition of Data Sheet was curated by Jeff John Roberts. Find past issues, and sign up for other Fortune newsletters.