Good morning. I called some CEOs yesterday to get their thoughts on Nvidia and AMD’s deal to give the U.S. government a 15% cut of AI chip sales to China to secure export licenses. Most were surprisingly sanguine about the unusual arrangement.
Corey duBrowa, who is global CEO of communications giant Burson, described the deal as “another novel approach that’s being implemented by the Trump administration as they continue to rewrite trade norms and practices.”
A veteran leader in the manufacturing space described the deal as proof of Trump’s commitment to American manufacturing, adding that the cost was likely worth it. Another U.S.-based CEO called it “brilliant, a tariff that we don’t have to pay.”
But some also raised questions:
What does this mean for national security? Such restrictions are designed to address national security concerns, not raise revenue. Governments typically only make money when penalizing those who break the rules. Could financial incentives put security priorities on hold? Allies are historically able to buy military equipment and sensitive technologies that others are not. Could this further erode trust?
How will this impact trade deals? Many CEOs believe tariffs are here to stay, as America’s trading partners create their own walled fortresses and blocs. Allies are historically able to buy military equipment and sensitive technologies that others are not. Could this further erode trust?
Where will the money go? Export fees and tariffs mean higher costs for U.S. consumers and companies, and higher revenue for the government. Tariffs alone are expected to bring in $50 billion a month. The Nvidia/AMD deals could add another $4 billion to Treasury coffers next year. Will that be used to pay down debt, help consumers, or be spent some other way?
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top news
U.S.-China trade deal pushed back another 90 days
Both countries will pause tariffs on each other in favor of a 10% levy while negotiations continue. There are signs that President Trump and President Xi Jinping will meet before the deal is signed. The previous deal lowered tariffs from their peak rate of 145% to 30%.
Trump’s last-minute demand for Nvidia cash
Nvidia CEO Jensen Huang had been working for months behind the scenes to create a deal that would allow his company to continue to sell H20 chips to China. The deal included a $500 billion U.S. investment promise and the notion that China would remain independent on Nvidia’s less powerful chips. And then President Trump demanded money, the WSJ reports.
Intel CEO has positive meeting with Trump
Last week, the president demanded the resignation of Intel CEO Lip-Bu Tan because of his history of Chinese investments. Yesterday, Trump called his meeting with the executive “a very interesting one.” “His success and rise is an amazing story,” Trump said. The company said it would work with the White House to “restore this great American company.”
President Trump prepares to meet Putin without Europe or Ukraine
The meeting will deliver to Putin exactly what he wants—the visual that the key parties in the negotiations are Moscow and Washington not Kyiv or Brussels.
Reality check: There is no sign of imminent peace in Ukraine
Russian battlefield maneuvers show they are preparing yet more offensives inside Ukraine. Meanwhile, Europe is building for war: Satellite photos show defense facilities have added 7 million square metres of new industrial development at 150 sites in 37 countries, the FT reports.
Stifel analysts warn of stagflation
Analysts from investment bank Stifel warn in a new research note that a slowdown in consumer spending and fading effects of COVID-era stimulus have left the U.S. economy vulnerable to stagflation, predicting a selloff of 10% or more in the S&P 500. Despite seemingly strong account balances, underlying weakness and diminishing savings signal that the current market highs are built on a ‘money illusion’ that may soon dissipate.
Moody’s Mark Zandi on tariff revenue
Moody’s Chief Economist Mark Zandi believes tariffs will be under intense political pressure to be cut in any recession, making them unreliable as a long-term funding source. Though President Donald Trump’s tariffs are generating revenue for the federal government at an annual rate of about $300 billion, most tariff costs are being passed on to consumers as higher prices, acting effectively as a sales tax, according to Zandi.
In other news: … Elon Musk threatened to sue Apple for not giving prominence to his Grok apps in the App Store … A federal judge declined to release grand jury transcripts from the case against Ghislaine Maxwell, the imprisoned ex-partner of Jeffrey Epstein … Trump appointed E.J. Antoni, chief economist at the Heritage Foundation, to lead the Bureau of Labor Statistics. Antoni is one of the authors of Project 2025 and a longtime critic of the BLS.
The markets
S&P 500 futures were flat this morning, premarket, after the index closed down 0.25% on Friday. STOXX Europe 600 was up 0.26 in early trading. The U.K.’s FTSE 100 was up 0.27% in early trading. Japan’s Nikkei 225 was up 2.15%, hitting a new all-time high. China’s CSI 300 was up 0.52%. The South Korea KOSPI was down 0.53%. India’s Nifty 50 was up 0.17%. Bitcoin declined to $118.9K.
Around the watercooler
Exclusive: Fintech giant Stripe building ‘Tempo’ blockchain with crypto VC Paradigm by Ben Weiss and Leo Schwartz
The new American workplace crisis: Return-to-office mandates lead to a working mom exodus by Ashley Lutz
OpenAI’s CEO Sam Altman says in 10 years’ time college graduates will be working ‘some completely new, exciting, super well-paid’ job in space by Preston Fore
Southeast Asia’s cities at ‘high risk’ of flooding and heatwaves, thanks to climate change by Lionel Lim
CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.
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