Another Week That Was: A Perilous Moment

Wow, this past week was a doozy. We had our first fatality involving a self-driving vehicle. We learned that London-based consultancy Cambridge Analytica misused personal data from 50 million Facebook users and President Trump took the first steps toward imposing tariffs on $60 billion in Chinese goods.

Meanwhile, high-profile departures from the administration continued, and on a broader spectrum, the president may soon be fighting a multi-front war. Be advised that all of these things can touch our lives in one way or another.

Pull Back from the Brink

China urged the United States on Friday to “pull back from the brink,” as escalating tensions sent shivers through financial markets.

“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry said in a statement.

A presidential memorandum signed by Trump allows for a 30-day consultation period that start once a list of Chinese goods has been published, creating some room to avert an all-out trade war with the second largest economy in the world.

The president’s memorandum comes after a seven-month investigation into allegations that China engages in a range of violations, including policies that force American companies to transfer technology and the accessing of trade secrets through hacking.

Trump has blamed China for the hollowing out of the American manufacturing sector and the loss of 60,000 factories and 6 million jobs, a number that most economists attribute to both Chinese competition and automation.

The president cites unfair Chinese trade practices as the reason for the widening U.S. trade deficit with China, which has reached a record $375 billion.

"This is the first of many" trade actions, the president said.

A Muted Response

To date, China’s response has been muted. Its commerce ministry has come up with a list of 128 U.S. products as potential retaliation targets, which had an import value of $3 billion in 2017. Those U.S. goods include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said.

Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminum goods, according a ministry statement. Chinese imports from the U.S. are expected to be $172 billion this year, so $3 billion is not a big number in the scheme of things.

Still, economists, prominent retailers and politicians alike worry that an escalation of tariffs could bring about a global trade that would stifle economic growth and force consumers to pay higher prices. The Tax Foundation says Trump's tariffs on China would cancel out about 20 percent of the benefits of the recent GOP tax cuts.

This story is far from over.

Catastrophic Failure

Tech companies and automakers have been spending billions developing self-driving cars in the belief that the market for them could one day be worth much more. The fatal accident in Tempe, Ariz., resulting in the death of a pedestrian, may be a major setback for that commercial effort.

While there is no clear answer as to what went wrong, some autonomous-vehicle experts who've watched an onboard video showing the crash say the driverless car's broad array of sensors, which include a system of cameras, radar and lidar sensors, should have detected Elaine Herzberg before she was hit.

Ms. Herzberg was walking her yellow bike loaded with bags across a dark road when the accident occurred. Tempe police say the Uber car did not slow down or swerve but hit her traveling at 38 mph.

“This is exactly the type of situation that Lidar and radar are supposed to pick up,” David King, an Arizona State University professor and transportation planning expert, told the British newspaper The Guardian.  “This is a catastrophic failure that happened with Uber’s technology.”

The videos also seem to show that the “safety driver” inside the car was not monitoring the road, raising concerns about how Uber and other self-driving car companies are doing the testing.

If nothing else, the accident shows that driverless cars are still a work in process. Most of the testing has not occurred on public streets because the cars are still learning how to drive and complex situations do arise.

Uber has halted self-driving operations in cities where it's been testing its vehicles, including Tempe, Phoenix, Pittsburgh, San Francisco and Toronto.

A Breach of Trust

Another prominent tech company, Facebook, is taking a public beating following blockbuster reports about user data being scraped without their consent.

Already suspect for allowing fake news to be spread on its platform and the meddling by Russian trolls during the 2016 presidential election, Facebook came under fire yet again for having its platform exploited by Cambridge Analytica, a digital analytics firm hired by the Trump presidential campaign.

Facebook didn’t help its case by being quiet about how Cambridge Analytica got its hands on personal data from 50 million users. Finally, after five days of silence, Facebook CEO Mark Zuckerberg acknowledged a “breach of trust” and outlined steps the company was taking to prevent a future breach. 

Most astonishing is that he said he would be open testifying before Congress and to government regulation on the sharing of personal data. "I'm not sure we shouldn't be regulated," he said.

"Mea culpas are no substitute for questions and answers under oath," Sen. Richard Blumenthal, D-Conn., a member of the Judiciary Committee, told Bloomberg News. "Congress has failed to hold Facebook accountable and legislate protections on privacy, which are manifestly necessary."

Facebook, which boasts about 2 billion monthly users, found out about the infraction in 2015 but didn't inform the public. Instead, the social network demanded that all the parties involved destroy the information. But reports revealed that not all the data was deleted. 

The Adults are Gone

On the same day that President Trump announced slapping $60 billion in tariffs on China, President Trump also announced he was replacing national security adviser H.R. McMaster with the famously hawkish John Bolton, a man who has advocated war with Iran and a preemptive strike on North Korea, and remains an unapologetic supporter of the Iraq War despite the flawed intelligence used to justify the US invasion.

This comes on the heels of firing the firing of Secretary of state, Rex Tillerson and the resignation of Gary Cohn, director of the National Economic Development Council. McMaster, Tillerson, and Cohn, were great talents, men who would speak truth to power. They were, in fact, the adults in the room.

Now they are gone, replaced by yes men who will not attempt to moderate the excesses of a president that is lashing out. This does not bode well for the future.

A Perilous Moment

Richard Haass, a high-ranking official from former President George W. Bush's State Department and now president of the Council on Foreign Relations, is far from an alarmist. But he says we are now living in "the most perilous moment in modern American history."

President Trump "is now set for war on 3 fronts: political vs Bob Mueller, economic vs China/others on trade, and actual vs. Iran and/or North Korea," Haass tweeted Friday. "This is the most perilous moment in modern American history -- and it has been largely brought about by ourselves, not by events."

Folks, I don’t mind telling you that I am a bit concerned. No strike that. I am becoming downright alarmed, and I don’t like to think of myself as an alarmist.

I’ll see you down the road.

Dean Barber is the principal of Barber Business Advisors, LLC, an economic development and corporate location consulting firm based in Dallas. Dean is available as a keynotes speaker and can be reached at [email protected]. Visit us at www.barberadvisors.com to learn more.