- In today’s CEO Daily: Peter Vanham on Europe’s return to corporatism in the face of U.S. and Chinese competition.
- The big story: Trump’s tariff letters go out today.
- The markets: Mixed.
- Analyst notes from Wedbush on Elon Musk’s America Party, UBS on Trump’s shifting tariff deadlines, and Pantheon Macroeconomics on the jobs market.
- Plus: All the news and watercooler chat from Fortune.
Good morning from Geneva. For years, European policymakers and business leaders have been fretting about what the right response is to the rising economic competition from the United States and China. Last week, the answer became clear: Europe intends to return to corporatism, meaning a closer alignment between business groups and government.
At a meeting in Brussels last week, facilitated by the World Economic Forum (where I worked from 2014 to 2022), several dozens of CEOs of Fortune 500 Europe companies met with European Commission President Ursula von der Leyen and four of her deputies. They held an open-ended discussion that touched on simplifying and delaying ESG rules, recasting clean energy as a matter of European independence, crafting an industrial AI strategy to compete with the US, and creating a single regime for companies to operate all over Europe.
It was also agreed that the exchange between big business and the European Commission would be repeated every six months, marking a turning point from the past.
“Up to now, the process was that every company needs to speak to E.U. and member states on their end,” Jesper Brodin, CEO of Ingka Group (IKEA), and one of the instigators of the meeting, told me. “That takes a lot of time. So we agreed to have a biannual CEO meeting with Ursula and the commissioners.”
The point of these exchanges is clear: to prop up the competitiveness of European multinationals, which have been sliding down Fortune’s Global 500 list for over a decade.
The ambition to simplify Europe’s Kafkaesque and multi-layered regulation is one element of the new, corporatist approach, applauded by the business participants last week. “I’m not against regulation,” Christian Klein, CEO of SAP, told me. “But we can do it better together. We should have joint working groups, to make sure we do this in the right way.”
But changing tack on competition and antitrust, where Europe has historically been aggressive, was another element both sides now seem to agree on.
“Our strategy on antitrust has changed somewhat,” Stéphane Séjourné, the European Commission Executive Vice President in charge of Industrial Strategy, told me. “The Commission now considers our tech companies in relation to international competition, not just internal European competition. […] So that means encouraging mergers where possible in certain sectors, to give companies sufficient size to compete globally.”
But for all the enthusiasm, European corporatism is only in its beginning stages, with a lot of listening and educating still needed to achieve a true alignment. Klein told me one his repeated messages to the Commission last week was to let go of fetishes such as competing with the US on the “giga factories” and chips needed for generative AI. “That train has left the station,” he told me. Instead, he noted, Europe should focus on industrial AI. “We have industry data. This train hasn’t left the station.”—Peter Vanham
Top news
Tariff letters go out today
The White House will start sending tariff letters today, the president said. The letters will impose tariff levels on countries that have not yet reached a deal with the Trump Administration. Those without deals will see their tariffs revert to the level they were assigned back in April. Those levels—10% to 70%—will kick in on August 1.
But there’s a new wrinkle: The BRICs
“Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy. Thank you for your attention to this matter!,” Trump posted last night.
Musk announces “America Party”
Tesla CEO Elon Musk announced the formation of the America Party over the weekend to combat the country’s two-party system. Just before that, OpenAI CEO Sam Altman declared himself “politically homeless” in a post on X and endorsed “techno-capitalism.”
Naturally, Trump blasted the idea
“I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States,” the president said on social media. Treasury Secretary Scott Bessent stuck an elbow in, too.
BCG involved in ‘Gaza Riviera’ plan
A two-part investigation by the FT on a set of documents produced in part by Boston Consulting Group that imagined paying Gazans to leave the territory and rebuilding it from scratch in the style of Dubai.
Inside Elliott Management’s interest in HPE
Two months ago, the first reports came out that Elliott Management had purchased a $1.5 billion stake in Hewlett Packard Enterprise. Sources tell Fortune that what Elliott wants with the company is hidden in plain sight.
How Crayola skirted offshoring
Decades ago, when other American CEOs were pivoting to offshoring, Pete Ruggiero—now CEO of Crayola—convinced the company to keep most of its manufacturing in the U.S. Doing so has saved the company millions, and Ruggiero told Fortune that he “saw the writing on the wall that was coming.”
New TikTok app coming for the U.S.
TikTok is building a new version of the app for the U.S. market, ahead of its planned forced sale. Trump says he will talk to China this week about the fate of the app.
The markets
- S&P 500 futures were off 0.43% this morning, prior to the open. The S&P 500 index closed up 0.83% on Friday, hitting a new all-time high at 6,279.35. Bitcoin was above $109K. Japan’s Nikkei 225 fell 0.56% this morning. China’s CSI 300 fell 0.43%. Stoxx Europe 600 was flat in early trading.
From the analysts
- Wedbush on Elon Musk’s America Party: “Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story. … After leaving the Trump Administration and DOGE there was initial relief from Tesla shareholders and big supporters of the name that Tesla just got back its biggest asset, Musk. That relief lasted a very short time and now has a taken a turn for the worst with this latest announcement,” per Daniel Ives et al.
- UBS on Trump’s ever-shifting tariff deadlines: “The additional taxes US President Trump intended to impose on US consumers from Wednesday will now be delayed until 1 August. That means that, allowing for some stockpiling ahead of Christmas, consumers may not experience the inflation spike from these taxes until January next year—assuming that Trump does not retreat again,” per Paul Donovan.
- Pantheon Macroeconomics on the jobs market: “June private payrolls ex-education and healthcare rose just 23K; revisions will reveal an even weaker picture. Hiring intentions remain depressed; new tax breaks are unlikely to offset tariff costs and uncertainty soon. The drop in unemployment looks like noise; payroll growth will undershoot the break-even rate in H2,” per Samuel Tombs and Oliver Allen.
Around the watercooler
Starbucks is pioneering the ‘coffeehouse of the future’ with comfy chairs and couches as its CEO pushes to reimagine stores by Marco Quiroz-Gutierrez
The CEO of one of the largest office maintenance firms in America says employers are changing their workspaces in 4 key ways by Brit Morse
As Trump pushes Apple to make iPhones in the U.S., Google’s brief effort building smartphones in Texas 12 years ago offers critical lessons by Verne Kopytoff
CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.
