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What Trump and Xi’s Agreement Means: CEO Daily

July 1, 2019, 9:43 AM UTC

Good morning.

Asian markets are celebrating the Saturday agreement by Presidents Trump and Xi to restart trade talks. But there is widespread skepticism on both sides of the world that the handshake in Osaka has done much to change the dynamics of the dispute between the two countries.

The agreement, unlike the one in Buenos Aires last December, carries no timetables or deadlines. Rather than moving the two sides closer to a deal, it seems to be, in the words of one analyst quoted in the South China Morning Post, “kicking the can further down the road.” The Wall Street Journal says both sides face a tough job “appeasing hard line factions within their own government.” And an analysis in the New York Times says the deal “could further cement a broad reshuffling of the global economic order that undermines China’s decades-long role as the world’s factory floor.” (Interestingly, Apple moved against that trend Friday, announcing it was moving production of the Mac Pro to China.)

The biggest news from the two leaders’ 80-minute trade talk, aside from some massive new Chinese purchases of soybeans, was an easing of some of the restrictions on Huawei. But that brought a warning from hardline U.S. legislators not to let national security become a bargaining chip.

I’m in Hong Kong this morning, where markets are closed to celebrate the 22nd anniversary of Hong Kong’s handover to China. Protestors are disrupting the day’s celebrations.

More news below.

Alan Murray

Top News

DMZ Step

President Trump stepped into North Korea yesterday, giving dictator Kim Jong-un a huge validation coup. As AP put it: "Afterward, it was unclear whether the meeting was more show than substance. Other than the headline-grabbing moment and the unprecedented images, Trump's only accomplishment appeared to be securing an agreement to restart nuclear talks that he himself had walked out on in February during his last summit with Kim in Vietnam." Fortune

Swiss Stocks

Amid a breakdown in trade talks between the EU and Switzerland, the European Commission has allowed the expiration of the Swiss stock exchange's "equivalence" status. That means no more cross-border trading for now, with harsh penalties for those who try—as of today, European investors could be imprisoned for up top three years if they try trading Nestlé or Novartis shares in the EU rather than in Zurich. Financial Times

Hard Brexit

Jeremy Hunt, the rival to Boris Johnson for the post of U.K. prime minister, is trying to out-hardcore Johnson on the Brexit front. "At the beginning of October, if there is no prospect of a deal that can get through Parliament, then I will leave at the end of October because that is our democratic promise to the British people," he said in a TV interview. And would he be willing to look business-owners in the eye and tell them that their firms will go bust in order to achieve Brexit? "I would do so but I’d do it with a heavy heart." Guardian

Census Disinformation

Facebook will ban disinformation about the 2020 U.S. census, as civil rights groups and the U.S. Census Bureau have been asking it to do. "We’re going to treat next year’s Census like an election — with people, policies, and technology in place to protect against Census interference," said Facebook operations chief Sheryl Sandberg. NBC News

Around the Water Cooler

Make Some Noise

As of today, new four-wheeled electric vehicles in the EU will need to include a noise-emitting device to ensure pedestrian safety. The devices will need to make some noise when the vehicle is reversing or travelling below 12mph—these are the circumstances where pedestrians tend to be nearby. From 2021 the devices will need to be fitted to all electric vehicles, not just new cars. BBC

EU Manufacturing

European Union factory activity contracted for the fifth month in a row, per the latest IHS Markit PMI figures. In fact, June's shrinkage was faster than previously thought. Reuters

Bitcoin Fall

Bitcoin lost more than a tenth of its value over the weekend—unusually, because many of its gains this year have taken place over weekends. The best-known cryptocurrency has still appreciated in value three-fold this year. Bloomberg

Extinction Event

A bunch of German entomologists say the volume of insects they catch/observe has fallen by more than three quarters since the early 1980s. This is one of the biggest die-offs in the history of the Earth, and it's due to urbanization and intensive agriculture practices. They noted: "Unless we change our ways of producing food, insects as a whole will go down the path of extinction in a few decades." AFP

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