That's incredible

MARKETS

• U.S. markets: The opening volleys of the U.S.-China trade war (more on that later) were enough to send the markets tumbling, although the damage wasn't as bad as you might expect.
• Bond markets: Moody's downgraded AT&T's credit rating to just two levels above junk status. That's a result of a federal judge approving its $85 billion acquisition of Time Warner...and all the debt that'll add.

TRADE

The U.S. and China Take the Gloves Off

First there's a trade war, then there's not a trade war, then there's a trade war again...it's like, make up your mind already, do you want economic destabilization or not?

The U.S. answered that question Friday when it instituted 25% tariffs on $50 billion worth of Chinese goods.

And just as expected, the tariffs targeted industries key to Xi Jinping's "Made in China 2025" plan—an initiative that aims to leapfrog China into global dominance across aerospace, AI, 5G, and other advanced technologies.

Surprise, Beijing wasn't smiling

Almost immediately, the country pushed back at the U.S.

• It said its response would be of "equal scale and equal strength."
• What's that mean? It's putting tariffs on $34 billion worth of products beginning on July 6.
• China pleaded with the U.S. to "put an end to this outdated and regressive behavior."

Here's why we're surprised: We thought there was a little more time for negotiation here—just last month China offered to buy $70 billion worth of U.S. goods to lower the $370 billion trade deficit. But clearly that proposal fell on deaf ears.

So with the trade war on tap, should I order the Doomsday Prep Deluxe Pack?

No—and not just because it's way overpriced. As The Upshot notes, $50 billion worth of goods is basically "a rounding error" compared to our GDP of ~$20 trillion. So don't expect the economy to curl up in the fetal position.

• Here's another reason not to freak out: The tariffs on China are directed at industrial inputs instead of consumer products. This isn't a direct tax on your shopping list.

Still, tariffs will have very real effects: Companies (especially in agriculture) will have their operations disrupted. And they'll have trouble sleeping at night knowing that the Trump administration is considering ramping up this conflict even further.

MEDIA

Okay, Oprah: The Content Wars Are On

If the AT&T-Time Warner approval didn't shake up media enough—the race for original content should.

Oprah Winfrey just signed a multiyear contract with Apple, which plans to take Netflix, HBO, Amazon, and any other content creator head-on.

• Apple made this clear when it poached two top Sony media execs (the guys behind "Breaking Bad" and "The Crown").
• It also committed at least $1 billion towards original content (perspective: Netflix is spending $8 billion this year).

Apple already locked in contracts with a few big names like Kevin Durant and Steven Spielberg. But Oprah's deal, which follows Netflix's multiyear contract with the Obamas, raises the bar.

Our Monday morning hot take: Apple is sitting on $267 billion in cash. If you're a big time TV or movie personality, you might be getting a call.

ENTERTAINMENT

Disney Doesn’t Make Movies—It IS the Movies

Pretty Incredibles: Raking in $180 million at the domestic box office, Incredibles 2 set a record for the highest grossing opening weekend for an animated movie. What'd it pass? Finding Dory, which topped $135 million in 2016.

Zoom out: Brushing off its recent flop—Solo: A Star Wars Story—Disney has built up a cinema moat that not even Thanos could breach.

• It's got brands: Lucasfilm (Star Wars), Marvel, Pixar, Disney.
• It's got money: Nine of the top 10 highest grossing domestic box office weekends belong to Disney.
• It's just getting started.

Disney agreed to a $52 billion (all stock) deal for a chunk of Fox's media assets. If it goes through—Comcast laid down a competing $65 billion (all cash) offer last week—Marvel would finally meet Fox's X-Men. Then consider the potential for live-action Disney remakes.

Anyone else catch that Dumbo trailer?

MEDIA

Local Billionaire Buys Newspaper

By Morning Brew

LOS ANGELES—Today, biotech magnate Dr. Patrick Soon-Shiong will officially acquire the Los Angeles Times and the San Diego Union Tribune from media company Tronc for $500 million.

Doctor who? A guy who's somehow managed to rack up every single job title known to humankind:

• Surgeon, philanthropist, entrepreneur, adjunct professor, billionaire, minority owner of the LA Lakers, issuer of over 230 patents...and now?

Newspaper owner, a title he doesn't take lightly at all. Soon-Shiong will have to work some magic on the LA Times, a paper whose staffers were basically in open rebellion last year over several questionable decisions by ownership.

And then, of course, there's the huge challenge of navigating a newspaper industry that's struggling to adapt to the digital age.

Maybe he and fellow billionaire Jeff Bezos (owner of the Washington Post) will talk strategy together.

CALENDAR

The (Much More Chill) Week Ahead

The calendar gods decided to give us a break after last week's barrage.

Monday (June 18): The Senate votes on whether to block Trump's ZTE deal

Tuesday (June 19): Earnings (FedEx, Oracle)

Wednesday (June 20): Fox's board weighs Comcast's offer; World Refugee Day

Thursday (June 21): The Fed releases its report on stress tests for big banks; Summer is officially here

Friday (June 22): OPEC and friends meet in Vienna; Take Your Dog To Work Day

WHAT ELSE IS BREWING

• Theranos founder Elizabeth Holmes and the company's ex-president were indicted on criminal charges.
• GM is considering taking its self driving unit public. Buckle up.
• A trade war is looking very possible—here's a good read from the NYTimes on what that means for the economy.
• Elon Musk sent an e-mail to Tesla employees saying "radical improvements" are needed for the carmaker to hit its Model 3 production targets (while offering congrats on a job well done so far).
• Foxconn, the Taiwanese electronics manufacturer, is setting up its U.S. HQ in Milwaukee, WI.

BREAKROOM

PRODUCTIVITY TIP

Spend the last 15 minutes of your day making a list of everything you need to do...for tomorrow. Just think about it: Why would you wait until the next day to jot down thoughts that are already on your mind?

*We got this tip from Lauren, a Brew Insider. It's an exclusive network that shares everything from life hacks to job openings to book recommendations. It's not hard to join, just get 10 referrals.

MONDAY MORNING PLAYLIST
Best of Paul McCartney—to celebrate the legend's 76th birthday.

TRIVIA
In honor of Incredibles 2 hitting theaters over the weekend, can you list Pixar’s top 3 most profitable movies?

(Answer located at bottom of newsletter)

Breakroom Answers