Trade War Winners and Losers, Using VR to Make Promotions, and Silicon Valley’s Trial of the Century

Get the Oxford Morning Report every day. Click here for a free subscription.


The winners from President Trump’s trade announcement include China, retailers and consumers: “Trump agreed he would not put tariffs on the remaining $300 billion of Chinese imports while they keep talking. Trump also rolled back some restrictions on Huawei, which faced a far darker future if it couldn’t do business with US tech companies. In exchange, China agreed to resume some purchases of US agricultural products—something China wants anyway and has been offering for more than a year. (It’s not clear how much China will buy.)

“American retailers (Walmart, Target, Amazon, etc.)—Big sigh of relief. Trump had threatened to put tariffs on all remaining Chinese imports, including items such as smartphones, baby products and shoes. But those tariffs are off the table for now. This is a huge win for retailers who typically import nearly all the products for the major holiday shopping period in July, August and September. US consumers—Trump’s current tariffs cost a family of four about $800 more a year. Had he gone ahead with his threat to tax all remaining Chinese imports, a typical family’s costs would have more than doubled to over $1,800.”

Chinese tourists used to visit luxury stores in Los Angeles by the busloadbut no more: “In the past, Chinese luxury shoppers made a majority of their purchases abroad, keen to avoid domestic prices inflated by steep tariffs placed on high-end foreign goods. According to an analysis from investment firm Exane BNP Paribas, as recently as early 2017, luxury goods bought in China cost 21 percent more than their global average. This historical price gulf had led to a booming global high-end retail business, as tens of thousands of Chinese would travel abroad with the intent of snapping up Gucci, Chanel and Coach handbags on their way through shopping hubs such as Paris, New York and Los Angeles.

“Chinese luxury spending abroad reached about $70 billion in 2018, according to Bain & Co., representing nearly a quarter of the global luxury goods market. Now these shoppers are shifting their spending east. Luxury goods prices in China fell last year after the government slashed tariffs by more than half, to 6.9 percent from an average of 15.7 percent. The cuts are, in part, an indirect effect of the US-China trade war and President Trump’s demands that China lower barriers to its markets, but they are also part of a broader push by China to strengthen domestic consumption.”


Walmart is using virtual reality to determine pay cuts and promotions: “VR training is becoming more common in a variety of industries to educate a large number of workers quickly or assess the technical ability of high-skilled workers like electricians or pilots. But Walmart’s use of the technology to gauge a worker’s strengths, weaknesses and potential is significant because it pushes VR evaluation out to a massive hourly workforce and in some cases helps determine who gets raises and who gets demoted. … 

“Walmart executives hope the technology will limit bias inherent in many traditional hiring decisions, increase diversity and reduce turnover among its 1.5 million US employees in a tight labor market. The assessment yields a color-coded report for hiring managers that describes strengths and weaknesses—perhaps weak leadership skills, but strong knowledge of the fresh produce department—that can help determine promotion decisions or the need for additional training, said [senior VP of associate experience Drew] Holler.”


A tire startup, Zohr, brings the store to its customers with a focus on transparency: “In the age of on-demand delivery and to-your-door services, the brothers hope you never have to see the inside of a tire shop again. Their startup Zohr offers services for everything you might need for your car’s tires right at your home or office, with just the push of a button on their website. … With Zohr, services are scheduled through its website. Users select their car or tire type, choose a two-hour window and select which services they need. Services include flat tire repair, tire replacement, tire rotation, alignment checks and wheel rebalancing. The idea of changing the tire industry isn’t lost on big-name companies, which are increasingly exploring new ways to modernize the tire shop. … Zohr offers new tires starting at $60 each.”

If you were forwarded this newsletter, click here for a free subscription.


Fast-casual restaurants like Dig Inn and fresh&co are buying their own farms: “‘We wanted to go a step further with farming our own land, in order to take our quality and target taste profiles to the next level,’ said George Tenedios, co-founder and CEO of fresh&co, which owns 18 locations in NYC and purchased a 35-acre farm on the North Fork of Long Island in 2017. Currently, about 15 to 20 percent of the produce used in the restaurants is from its farm … [which] is ramping up to a goal of supplying more than 25 percent of the restaurants’ produce while fresh&co’s farm partners fill the rest.

“The farms give brands a way to highlight their seasonal ingredients along with the work of farmers. Both Dig Inn and fresh&co market their farms on social media, and Dig Inn has even given out bags of produce from its farm at the openings of new locations. And while Dig Inn and fresh&co don’t expect to source 100 percent of their food from their own farms, they both believe that owning farms helps them be better partners to the farmers they work with. ‘Fostering direct relationships with a large community of farm partners is core to our business, but this farm will be immensely helpful in education and training for our culinary team,’ Dig Inn founder, Adam Eskin said.”


Subway franchisees, like Manoj Tripathi, suspected the chain was out to get himand he was right: “Ms. Husler really was out to get him. She had specific instructions from her boss, the regional Subway supervisor, to find fault with the store, she said in an interview. ‘I was kind of his hit man,’ she said, sipping an iced tea at a Starbucks in the Bay Area. Ms. Husler worked for the regional supervisor for nearly a year, she said, and she has come to regret the role she played in pushing a group of store owners out of their investments. …

“Subway parcels its vast network of stores into more than 100 regional fiefs. Each is overseen by a development agent, who recruits new franchisees, approves buyers for existing stores and sends inspectors—known as field consultants—to conduct monthly reviews. But usually, development agents are also franchisees themselves. When that is the case, they are both in charge of and competing with other store operators, and their own locations are inspected by people they hire. These feel like conflicts of interest to many Subway owners—giving development agents the means and motivation to shut down competing stores and take over profitable ones by manipulating inspections. Many franchisees who have lost their restaurants say that they have recouped little of their original investments. Intervention from Subway’s headquarters in Connecticut is rare.”


It is getting harder for companies to avoid taking political stands: “The Wayfair protest has become an inflection point in how consumers and employees interact with major corporations. Americans are desperate to channel their outrage over the emergency playing out at the US-Mexico border, crisis management experts say, and are increasingly looking to companies to take a stand. The effects of President Trump’s immigration policies on migrant children, they say, transcends politics. ‘For decades, the counsel was: Don’t touch politics, don’t get involved,’ said Chris Allieri, a crisis management expert and founder of Mulberry & Astor, a public relations firm in New York. ‘But that’s no longer enough. Today’s companies need to have a moral compass. They need to ask themselves: What side of history do we want to be on?’”


A judge has reduced the jury award given to a bakery in its suit against Oberlin College: “The protests occurred after three black students were arrested for assaulting David Gibson’s son, who is white and also named Allyn, after he caught one of them shoplifting two bottles of wine from the market in November 2016 and ran after him. The students pleaded guilty to misdemeanor assault and read statements in court saying Allyn Gibson’s actions that day were not racially motivated. The lawsuit claimed that college officials encouraged and participated in the two days of protests following the arrests. The school for a month stopped buying baked goods from Gibson’s and stopped again after the family filed suit in 2017.”


More people support the right of businesses to deny service based on religion: “When asked if business owners ‘should be allowed to refuse to provide services to gay or lesbian people if doing so violates their religious beliefs,’ 30 percent of US adults said they should be allowedup from 16 percent in 2014. Men (34 percent) were more likely than women (26 percent) and people 65 and older (39 percent) were more likely than those aged 18-29 (26 percent) to affirm this position. All groups saw an increase in supporting religiously based refusals over the past five years. Republicans saw the greatest increase in support of such refusalsa 26 percent increase since 2014 to 47 percent supporting this position. By comparison, 24 percent of independents currently hold this view (up eight percent) and 18 percent of Democrats (up seven percent).”


Scooter Braun, a celebrity talent manager, has acquired Big Machine Label Group, a record label specializing in country and pop artists. The acquisition is reported to be more than $300 million. “The deal for Big Machine comes amid a wave of consolidation among media companies seeking to bulk up to compete, as streaming has upended how consumers watch television and movies and listen to music.”


NowSecure, a developer of security software designed to automate mobile application security testing, raised $15 million in a Series B Round.

Fungible, a Santa Clara, Calif.-based provider of data-centric computing, raised $200 million in Series C funding.

Aera Technology, a Mountain View, Calif.-based firm focused on self-driving execution, raised $80 million in Series C funding.


Currently, marijuana cannot be legally shipped between two states even when the drug is legal in both. It would be a logistical nightmare if that were to change but investors aren’t worried: “Given how chaotic this process is likely to be, and the fact that cannabis stocks are already highly volatile, it may be safer to back companies that provide services to growers but don’t actually ‘touch the plant.’ For example, Scotts Miracle-Gro supplies pot farmers with fertilizer; KushCo Holdings offers packaging. 

“Investors aren’t paying heed: Since the start of 2018, $3.5 billion has been invested in cultivation and retail marijuana companies based in the US, according to data from cannabis investment bank Viridian Capital Advisors. Far less is flowing into cannabis consumption equipment or specialized industry software, which attracted capital worth $600 million and $210 million respectively over the same period.”


Online reputation managers can clean up someone’s digital persona even if he’s in jail: “These campaigns can pollute the online information ecosystem and enable people to hide important details about their lives from potential employers, customers, and romantic partners. Along with adding to the epidemic of fake social media accounts, they also litter legitimate websites with false information. 

“A BuzzFeed News investigation has found examples of executives, doctors, criminals, and even a Russian oligarch all benefiting from search engine manipulation campaigns to suppress negative content. In one example, the search results for Ian Leaf, a famous fraudster from the UK who also goes by Ian Andrews, are being influenced by an Ian Leaf persona that claims to be an expert in fraud prevention. This is a strategy to ensure positive content appears when people search for information about him and his crimes. The dubious Ian Leaf and Ian Andrews personas have also self-published books on Amazon to bolster their credibility and search results.”


Silicon Valley’s trial of the century has been scheduled for August: “Elizabeth Holmes, the founder of disgraced blood-testing startup Theranos Inc., will face trial in federal court in August 2020 alongside her former deputy on charges that they lied to doctors and patients about test results and deceived investors about the company’s finances. US District Judge Edward J. Davila scheduled the trial for Ms. Holmes and her former deputy, Ramesh ‘Sunny’ Balwani, at a hearing here on Friday. Jury selection will start the week of July 28, 2020. The trial is scheduled to start Aug. 4 and will last about three months, he said.”

And that’s what’s ahead.

Please send comments and suggestions to and