Our annual poll of FORTUNE 500 CEOs is due out later this week. Here’s an early teaser: We asked the CEOs to tell us, in their own words, what they see as the greatest threat to their business in 2018. And their answers clearly pointed to politics and government.

Of the 60 CEOs who responded to the question, a majority cited potential government actions of one form or another as their largest threat. That group mostly fell into two camps, suggesting the CEO class is as politically polarized as the rest of the country:

• The first camp worried that the president will spark a trade war (9), a geopolitical conflict (5) or simply said “Trump” was the greatest threat to their business (2).
• The second camp pointed to rising federal, state or local regulation (12). An additional corporate chief said the biggest threat was a “reversal of Trump” policies, and another cited “ESG (environment, social and governance) beliefs not based on reality.”

Four more CEOs referred vaguely to “Washington policies,” “administration policies,” “interference by politicians” and “inconsistent U.S. government actions,” without making it clear which side of the great divide they stand on.

In comparison to those worried about government action, only nine CEOs cited macroeconomic concerns—the risk of recession, inflation or rising market interest rates. A few also mentioned price wars (4), skilled labor shortages (4), cyber security (2), and other threats ranging from weather conditions to infrastructure problems.

With the economic expansion about to become the second longest in history, it’s a surprise (to me, at least) that so few CEOs are focused on the risk of overheating or recession. Instead, big-company CEOs seem to have taken James Carville’s oft-repeated dictum from the 1992 election—“It’s the economy, stupid”—and turned it upside down. Today, when it comes to business, “it’s politics, stupid.”

More news below.

Top News

Trump and ZTE

President Donald Trump raised all the eyebrows yesterday by tweeting that he was working with Chinese President Xi Jinping to rescue ZTE, a company on the brink of extinction thanks to a component ban from the Commerce Department, levied because ZTE broke U.S. sanctions on Iran. If this is a trade tactic, it's not clear what Trump is getting in return—and the Commerce Department always presented its ban as entirely unrelated to those trade negotiations. Fortune

Tesla Departure

Tesla has lost yet another key executive. This time it's Matthew Schwall, the main technical contact between Tesla and the National Transportation Safety Board, which is investigating multiple Tesla crashes—and which has a famously rocky relationship with Tesla CEO Elon Musk. Schwall is joining rival Waymo. Meanwhile, Tesla engineering chief Doug Field is taking a break, after Musk displaced him as production head. Wall Street Journal

Didi Tests

The Chinese ride-sharing company Didi Chuxing has been granted permission to test its autonomous vehicles in California. Baidu, the Chinese tech giant, is also allowed to carry out self-driving car tests in the U.S. state. Didi bought out Uber's Chinese operations when the American company decided to withdraw from the country. It expanded into Mexico last month and is considering an IPO. CNBC

Xerox and Fujifilm

Xerox's merger with Fujifilm is officially dead, thanks to the opposition of activist investors Carl Icahn and Darwin Deason. Xerox cited "material deviations" between audited and previous unaudited results from its joint venture with Fujifilm, Fuji Xerox. Icahn is happy; Fujifilm less so. "We do not believe that Xerox has a legal right to terminate our agreement," the Japanese company said. BBC

Around the Water Cooler

Blockchain First

The bank HSBC says it has completed the world's first trade finance transaction using a single blockchain platform. The transaction, with Dutch bank ING, is related to a shipment of soybeans for U.S. food giant Cargill. HSBC claims blockchain technology will simplify the export process by modernizing the slow and burdensome letters-of-credit system. Reuters

Italy Tax

The parties negotiating a potential governing coalition in Italy may introduce a flat tax rate in the country of 15%, or 20% for families earning more than $96,000 a year. The populist League and Five Star Movement parties are close to agreeing to a deal that would also unravel pension reforms that raised the retirement age. The current tax rate in Italy ranges from 23% to 43%. Bloomberg

United Suit

A civil rights lawsuit against United Airlines claims the carrier's crew removed a Nigerian woman and her children from a flight after a white passenger claimed she smelled bad. The white man had taken Queen Obioma's business-class seat and, after vacating her seat, tried to stop her from sitting there. After he complained that she was "pungent," the crew apparently sided with him. The airline says it "does not tolerate discrimination of any kind and will investigate this matter." Fortune

Forced Landing

A Chinese airliner hit a spot of trouble this morning while flying from Chongqing to Lhasa—part of the cockpit window fell out. Sichaun Airlines Flight 3U8633 managed to land safely in Chengdu, despite the co-pilot receiving facial cuts and a lower-back injury. A cabin attendant was also slightly injured, but the passengers were reportedly all fine. South China Morning Post

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.