President Trump made clear yesterday that his meeting with Chinese leader Xi Jinping at Mar-a-Lago next week isn’t going to be a love fest, and that trade will top the agenda. In a pair of tweets Thursday evening (140 characters won’t suffice for this complicated relationship) the president said: “The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits and job losses. American companies must be prepared to look at other alternatives.”

The president also plans to sign an executive order today calling for a country-by-country and product-by-product review of the U.S. trade deficit—which will ramp up the focus on the Chinese trade imbalance.

China’s Vice Foreign Minister Zheng Zeguang was conciliatory in his response, saying “China will continue to work with the United States to think creatively and keep pushing for greater balance in China-U.S. trade.” Some China watchers expect Xi to arrive bearing promises of job-creating investments in the U.S.

Not clear where this one is heading. But fresh off his health care failure, the President isn’t likely to abandon tough talk on Chinese trade quickly.

More news below. And thanks for all the thoughtful responses yesterday on AI and jobs. Enjoy the weekend.

Top News

• Flynn Seeks Immunity Deal

Former National Security Adviser Michael Flynn has requested immunity from prosecution in return for telling Congress about the Trump campaign’s ties to Russia (or lack of them). Flynn’s move suggests at least the suspicion of legal jeopardy, although his lawyers explain it as natural in the context of a “highly politicized witch-hunt.” If he testifies, Flynn is likely to be asked what commitments he made (or was asked for) in return for tens of thousands of dollars received in recent years from a Russian state-owned broadcaster and $530,000 for consulting work beneficial to the Turkish state. Ex-CIA director James Woolsey has said Flynn discussed extraditing a critic of Turkey’s president Recep Tayyip Erdogan with Turkish officials last summer. Fortune

• AT&T to Build First Responder Network

The U.S. government awarded AT&T a $6.5 billion contract for a dedicated wireless network for first responders, 16 years after communications breakdowns hampered the work of emergency services at Ground Zero. A dedicated public safety broadband network was a recommendation of the 9/11 Commission (and this is the first one to be implemented). The divisions that have delayed action till now still exist, and several states are still to decide whether to join the federal project or build their own networks (a provision of legislation passed by Congress in 2012). Fortune

• Islands of Profit in the Stream

The U.S. music industry had its best year in nearly two decades, with a 70% rise in revenue at streaming services driving an 11.4% gain in overall revenue to $7.7 billion. For the first time, streaming accounted for more than half of all revenues, while revenue from downloads and CD sales continued to fall. The figures won’t stop the Record Industry Association of America arguing that it still isn’t getting a fair deal from Alphabet’s YouTube, which it claims continues to enjoy an unfair advantage by exploiting loopholes in copyright legislation. Fortune

• First Pay the Check, Then We’ll Talk Trade

The EU batted back U.K. Prime Minister Theresa May’s request for talks on a lasting trade deal to run in parallel with those on the divorce settlement. The sequencing is important because investors in the U.K. (the biggest of which by far is the U.S.) want to know as soon as possible on what terms they’ll be able to trade with the Continent after Brexit. Brussels said it would only “engage in preliminary and preparatory discussions to this end…as soon as sufficient progress has been made” on settling the U.K.’s exit bill, which both sides are ominously calling a point of principle. Each are still largely defending starting positions, but the sad fact is that those positions amount to: business can wait until the politicians’ vanity has been satisfied. Reuters

Around the Water Cooler

• Oculus Founder Luckey Walks From Facebook

Palmer Luckey, the 24 year-old who sold Virtual Reality startup Oculus Rift to Facebook for $2 billion, is leaving the company. Neither side was in a hurry to explain the move Thursday, but it comes after an expensive lawsuit relating to alleged intellectual property theft. Luckey had been marginalized after generating unwelcome publicity last year by backing a group that spread Internet memes maligning Hillary Clinton during last year’s election campaign. That’s a sensitive topic given Facebook’s insistence that it isn’t legally responsible for material shared on its network. The Wall Street Journal reported that Facebook was due to pay Oculus founders another $300 million in cash and stock if certain milestones had been met by last Saturday.  Fortune

• Presidents Under Pressure

South Africa headed into a political crisis as President Jacob Zuma fired Finance Minister Pravin Gordhan and eight other cabinet members. Gordhan's efforts to stamp out cronyism in South Africa's economy had angered Zuma, who has relied increasingly on patronage networks to keep himself in power.  Business and labor leaders said the move would “cause severe damage to the economy.” Elsewhere, Korea’s impeached President Park Geun-hye was arrested on suspicion of corruption and abuse of power. Reuters

• History Made as SpaceX Recycles a Rocket

Elon Musk’s SpaceX made history Thursday, successfully launching a reused booster rocket for the first time. Musk said he expects to be able to inspect, refuel and relaunch rockets within 24 hours a year from now. Recycling rockets has been the cornerstone of SpaceX’s strategy to bring the costs of satellite launches down, and success brings that promise a big step closer to reality. That said, Musk will probably go easy on the discounting until he recoups the billion dollars invested in getting to this stage. Fortune

• N. Carolina Repeals the Trangender Bathroom Law

North Carolina repealed a law regulating bathroom use for transgender people, hoping to lure back businesses and sports leagues that boycotted the state because they saw the year-old measure as discriminatory. Under the law that will replace it, transgender people are free to use the bathroom of their choice, but they also lack any recourse should any person, business or state entity eject them. Civil liberties groups don’t like that version much better. Fortune