The US-China trade conflict just entered dangerous new territory, and the warning signs are flashing red across multiple fronts. If you've been treating tariff headlines as background noise, it's time to pay attention. The latest escalation carries implications that will reshape strategic planning for the next 18-24 months.
President Trump's announcement of 100% tariffs on Chinese goods, triggered by Beijing's restrictions on rare earth mineral exports, marks a qualitative shift in economic confrontation. China's commerce ministry responded with defiance, declaring it's "not afraid to fight." Markets reacted swiftly—the S&P 500 shed more than 2% as investors repriced risk. Meanwhile, diplomatic channels remain frozen, with Trump threatening to cancel his scheduled meeting with Xi Jinping.
Previous trade disputes centered on traditional manufactured goods and agricultural products. This conflict targets the circulatory system of modern manufacturing: rare earth elements essential for semiconductors, electric vehicles, defense systems, and consumer electronics.
China's dominance in rare earth processing—controlling roughly 70% of global supply—gives Beijing asymmetric leverage. This isn't just another round of tit-for-tat tariffs; it's economic coercion aimed at critical infrastructure.
The automotive sector illustrates the real-world impact. Detroit's Big Three are projecting $7 billion in combined tariff-related losses for 2025. One industry executive didn't mince words, calling the situation "existential." When established manufacturers with century-old business models use that language, it signals structural disruption, not cyclical turbulence.
Here's what should concern every CEO: Financial Times research warns of "cracks in the foundation" despite surface-level economic resilience. The US economy has appeared to weather previous tariff rounds, but economists gathering at the IMF and World Bank meetings are questioning whether we're "living on borrowed time." Strong consumer spending and employment figures can mask deteriorating business investment and supply chain degradation—problems that compound quietly before manifesting suddenly.
China's economy presents its own vulnerabilities. Growth was already decelerating before this latest escalation, creating a scenario where neither superpower has much cushion for miscalculation. Think of two boxers, both already fatigued, deciding to escalate rather than clinch. The risk of systemic damage increases exponentially.
Bloomberg reports that Trump and Vice President Vance have "opened the door" to potential deals with China. But optimism should be tempered. The fundamental contradiction—deep economic interdependence paired with strategic competition—remains unresolved. As a Washington Post editorial aptly noted, this resembles "a couple headed for divorce but still cohabitating."
First, scenario planning must now include sustained trade conflict through 2026. The days of assuming diplomatic breakthroughs are over. Second, supply chain resilience is no longer a cost center—it's a competitive advantage. Third, China exposure requires explicit board-level governance and regular stress testing. Fourth, capital allocation decisions should factor in heightened geopolitical risk premiums.
The cheap globalization era has ended.
The question facing leadership teams: Has your strategy evolved accordingly, or are you still operating with yesterday's assumptions in tomorrow's reality?
How is your organization navigating this new landscape?
Enjoy the ride + Plan accordingly.
-Marc
The media trust crisis that should alarm every leader
A Gallup survey finds American confidence in mass media has collapsed to 31%.
This number is a historic low with profound implications for anyone leading in business or government. The latest numbers, from a survey conducted from September 2 to 16, 2025, mark the first time this Gallup measurement has fallen below 35%.
This isn't a partisan talking point.
When Gallup began measuring trust in news media in the 1970s, between 68% and 72% of Americans expressed confidence in reporting.
Today, trust has cratered across the political spectrum: Republican confidence sits at 12%, independents at 27%, and even Democrats have declined to 54%. When two-thirds of Americans actively distrust the institutions meant to inform public discourse, we face a crisis in our information infrastructure.
The generational data is particularly sobering. Only 38% of Americans 65 and older trust media, while younger cohorts register at 31% or below. As demographics shift, institutional credibility is likely to deteriorate further without significant intervention.
Top six insights:
1. Trust in media has reached a historic low: At 31%, this marks the lowest confidence level since Gallup began tracking this metric in the 1970s, when trust ranged from 68-72%.
2. Republican confidence has collapsed to 12%: This represents a dramatic decline from already-low levels, and Republican trust hasn't exceeded 21% since 2015.
3. Democratic trust has also declined significantly: Only 54% of Democrats now express confidence in the media, down from historical highs and representing a concerning erosion even among the media's most supportive demographic.
4. A generational divide persists, but everyone's trust is declining: While 38% of adults aged 65+ trust the media compared to 31% or less in younger age groups, even older Americans show substantially lower trust than in previous decades.
5. Two-thirds of Americans are actively distrustful: 67% of US adults express either "not very much" confidence (36%) or "none at all" (31%) in news media, demonstrating widespread skepticism rather than neutral indifference.
6. The decline is universal across all partisan groups: While partisan gaps remain significant, confidence has reached new lows among Republicans, independents, and Democrats alike, indicating this is a systemic issue affecting the entire media landscape.
Why this matters:
Communication becomes nearly impossible when your stakeholders don't trust information sources. Market-moving news faces immediate skepticism. Corporate reputation management operates in an environment where traditional media channels lack persuasive power. Crisis communication strategies built on earned media are fundamentally compromised.
For Capitol Hill staffers, this helps explain why constituents are increasingly rejecting expert consensus and official messaging. For CEOs, it underscores the importance of direct communication channels and authentic engagement more than ever, for private equity executives evaluating portfolio companies, media strategy and stakeholder trust should be top priorities in due diligence.
The challenge isn't simply fixing media. It's recognizing that every leader must now build trust directly with their stakeholders. Your voice, your transparency, and your accountability matter more than any press release ever will.
Access the full Gallup survey here:
-Marc
On writing
Recently, a client said to me, "Writing is thinking."
Brilliant.
Writing is thinking.
Writing is clarification.
Writing is action.
And few documents are more potent than a well-crafted and well-executed shareholder letter.
Lawrence Cunningham has long recognized the value of a shareholder letter. Cunningham is an authority on corporate governance, corporate culture, and corporate law, and teaches business-related courses at George Washington University that span these fields.
He has written dozens of books and scores of articles on a wide range of subjects in law and business. These include the leading textbook on accounting used in law schools, a popular narrative on contracts, and best-selling books on Berkshire Hathaway and Warren Buffett (The Essays of Warren Buffett: Lessons for Corporate America and Berkshire Beyond Buffett: The Enduring Value of Values).
When individual investors ask what resources to consult when searching for great companies, Cunningham advises them to read the shareholder letter that the company sends out annually.
Next to the financial figures, it is probably the most important and most accessible source of valuable information. These communications reveal a lot about a company and its CEO. In a well-written and purposeful shareholder letter, the CEO's commitment, desires, goals, and long-term visions are all visible.
Some CEOs use their shareholder to obfuscate, others patronize, and many appear to be ghostwritten, but the best ones share business insights that help readers understand a company.
Use these clues as filters, just as you would the company's financial statements. Many companies post such letters on their websites, typically as part of their annual reports.
The gold standard of the genre is Warren Buffett, whose pithy statement from his 1997 letter to shareholders of Berkshire Hathaway sums it up:
"When you receive a communication from us, it will come from the fellow you are paying to run the business. Your Chairman firmly believes that owners are entitled to hear directly from the CEO regarding the current state of the business and its prospective outlook. You would demand that in a private company; you should expect no less in a public company."
In "Dear Shareholder," Cunningham's latest book features letters from more than 20 different leaders from 16 companies - several of my favorite companies, including Amazon, Google, Coca-Cola, and Pepsi.
This book is a powerful go-to for inspiration, creativity, and patience. Written to be consumed more like an encyclopedia, you can quickly jump to topics, companies, and leaders, and read for 30 minutes or three minutes.
Cunningham's collection of the best-in-class shareholder letters provides valuable insights, whether it be better company management or improved communication.
-Marc
