What Hong Kong has in common with Trump's trade war

Today's Agenda Hong Kong's status in the global economy is at risk. China will probably lose the Tech Cold War. Prison abolitionists have at least part of a point. The T-Mobile-Sprint deal's on life support, while Ackman pesters United Tech. Hong Kong Feels the Xi Squeeze Mass protests in Hong Kong may seem to have little to do with President Donald Trump's trade war, but the two phenomena are cousins, if not siblings: Both spring from Xi Jinping's aggressive rule of China. Xi's "Made in China 2025" scheme and other nationalist economic ventures may have helped focus Trump's already significant ire toward China, resulting in a tariff-y pushback. Meanwhile, seeking a tighter embrace of Hong Kong, Xi pushed the government there to make it easier for other governments (namely a certain one in Beijing) to extradite people they consider criminals, writes Ben Bland. Hong Kong's people took to the streets in protest, and the government cracked down. With Xi breathing down its neck, it's unlikely to relent, Ben writes. Thus the longstanding tension between Hong Kong's promise and China's demands will likely be reconciled, probably not in a good way. Hong Kong's standing in the global economy is at risk.  But Tyler Cowen writes China has been slowly undermining freedom in Hong Kong for a long time; this is just the latest episode, and Tyler doubts it will be the last. It highlights a big blind spot for conservatives and libertarians celebrating both Hong Kong and Trump for enacting business-friendly policies with one hand while undermining civil liberties with the other, Tyler writes. It's almost Xi-like. China's Disadvantage in the Tech Cold War The trade war rolls on, meanwhile, with Trump still threatening huge tariffs and China hunkering down. China's command economy may weather the economic pain of slower trade. But exports are only part of this conflict. Perhaps more important to China is challenging America's dominance in technology. And there it will likely fail, writes Michael Schuman. The barriers to competing with top U.S. tech firms are too high, and isolating Chinese tech – or keeping it on an IV drip of government cash – won't exactly hone competitive edges. America's flagship tech firm, Apple Inc., is capable of building iPhones entirely outside of China. And such a distinction is already moot, writes Tim Culpan: iPhones are already mostly made in the U.S., if you measure by the value added along the manufacturing chain. The bulk of that appears in California, where the phones are designed. The last bit, the assembly currently done in China, is low-margin and can be easily replicated elsewhere, Tim writes. Further Trade-War Reading: Pakistan is having yet another financial crisis, but the trade war might help by attracting more export business. – Andy Mukherjee   Further Tech Reading: Intel Corp. is the latest company to feel used by Apple. – Alex Webb  Prison Abolitionists Have a Point By now we mostly agree the crime crackdown of the 1990s went too far. Now there's a new movement to not only reverse that crackdown but to abolish prisons and law enforcement altogether, writes Bill Keller. Such ideas go entirely too far, Bill writes, but the prison abolition movement has moved the Overton Window so much that even Trump has embraced some reform. There's still much more to do, meaning the abolitionists still have their place.  Everybody's a Critic, M&A Edition  In a week of big deals, it's got to sting a bit for T-Mobile US Inc. and Sprint Corp. that this is also the week their long-hoped-for merger nearly died, in Tara Lachapelle's estimation. Several states have sued to stop the merger, saying it would hurt consumers, pushing the Department of Justice to nix the deal. They're not wrong about that bad-for-consumers part, Tara writes; and though the deal may still miraculously pull through, it's time both companies contemplated what comes next. The biggest of the week's aforementioned big deals is United Technologies Corp.'s $52 billion bid for Raytheon Co. Now it too faces some resistance: Activist hedge-fund manager Bill Ackman says the merger lacks "strategic logic" and that Raytheon is a target of "inferior quality." Brooke Sutherland explains how Ackman is wrong on both counts. Further Antitrust Reading: The DOJ's antitrust chief really isn't a threat to Google. – Joe Nocera Telltale Charts Oil prices fell hard again today, on fresh signs of weak demand. Liam Denning digs into BP Plc's latest Children's Treasury of Oil Numbers and points out there were hints of this coming even when demand seemed strong. Bonus Oil-Data Reading: In the era of peak demand, proved oil reserves are no longer meaningful. – Liam Denning  The South's economy has struggled lately, but it has advantages that could boost it in the near future, writes Noah Smith. Further Reading Forcing employees into arbitration in sexual harassment cases shields harassers and bad corporate cultures and often denies victims justice. Congress should outlaw the practice. – Bloomberg's editorial board  A Florida case shows what happens when a Ponzi scheme and bond protections collide. – Brian Chappatta  Jeremy Corbyn's idea for a four-day workweek might boost productivity, but it's not ready for prime time. – Ferdinando Giugliano  Lately everybody assumes the Electoral College favors small states, butthe evidence isn't so clear. – Justin Fox  What the late Martin Feldstein taught me. – Karl Smith Patenting DNA is a terrible idea, but Congress is considering letting companies do it. – Faye Flam  Update: Bershidsky Vs. Trump Leonid Bershidsky wrote this week that Europe might want to raise travel costs to slow tourism. Unexpectedly, this column drew the attention of the president of the United States, who tweeted Europe's real problem is its currency is too cheap. Bershidsky responded today, saying Trump has it wrong: The euro may be undervalued, but that's certainly not causing overtourism. We await Trump's response. ICYMI Trump's threatening Germany now. Let's reassess Jack Welch. Kickers The U.S. still uses pesticides many other countries ban.   A 900-year-old grape variety is still used to make wine in France.  How to build something to last 10,000 years.  It's OK to pose for Instagram in Chernobyl.  Note: Please send Chernobyl selfies and complaints to Mark Gongloff at mgongloff1@bloomberg.net. New to Bloomberg Opinion Today? Sign up here and follow us on Twitter and Facebook. 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