Good morning. Arguments start today in the U.S. FTC’s antitrust suit challenging Facebook’s acquisitions of Instagram and WhatsApp.
In the almost three decades since Microsoft faced a federal trial over antitrust concerns, only Google has found itself in the same seat. Now Meta joins the club as the judiciary once again grapples with how to define “anticompetitive.”
This all got started in 2020 with a Trump administration; as Trump works to reduce the FTC’s independence, it may very well end that way, too. —Andrew Nusca
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Permanent tech tariff exemptions? Don’t hold your breath
The U.S. may have given China-made consumer electronics an import tariff exemption on Friday, but it won’t last for long.
Commerce secretary Howard Lutnick said Sunday that the so-called carve-out for the product category is temporary.
“[President Trump is] saying they’re exempt from the reciprocal tariffs,” Lutnick said of consumer electronics. “But they’re included in the semiconductor tariffs, which are coming in probably a month or two.”
In a series of escalations, the White House last week made imports from China subject to a 145% duty—a prohibitive barrier for tech companies and other businesses that manufacture goods in China.
But late Friday night, U.S. Customs and Border Protection issued exemptions for a number of semiconductor-based products including chips (CPU, GPU, FPGA, SoC, etc.) and the machinery used to manufacture them, smartphones, memory, solid state storage, flat panel displays, solar cells, modems, and amplifiers.
The move was “the best news possible for tech investors,” wrote Wedbush analyst Dan Ives.
It “takes a huge black cloud overhang for now over the tech sector and the pressure facing US Big Tech,” he wrote, adding: “Without these exemptions the US Tech industry would be taken back a decade and the AI Revolution thesis would have been slowed significantly.”
That no longer appears to be the case. President Trump had previously promised specific tariffs for electronics and pharmaceuticals; it now appears those are imminent.
As Lutnick put it: “We need our medicines and we need semiconductors and our electronics to be built in America.” —AN
Chinese suppliers are offering U.S. Amazon sellers a tariff solution, but it’s not legal
President Trump’s China tariffs are not just roiling the operations of Amazon sellers and other U.S. retailers big and small.
They’re also upending the businesses of Chinese manufacturers and distributors supplying goods to the U.S. from the other side of the world.
Some of these suppliers are trying to keep their businesses humming by offering a simple—but illegal—solution to U.S. Amazon sellers: lie about the value of the Amazon merchandise imported to the U.S. in an effort to lower the duties paid under the new slate of tariffs.
Yes, that sounds a lot like customs fraud.
In emails and WeChat messages viewed by Fortune, around a half dozen Chinese suppliers proposed such illegal workarounds to executives from a mid-sized household goods brand with a large presence on Amazon.
Some proposed another workaround called Delivery Duty Paid, or DDP, shipping. In this scenario, the supplier would handle getting the goods through customs, rather than the U.S. brand, and lie about the value of the shipment essentially on the brand’s behalf.
“Some have mentioned that they are doing this already for many of our competitors,” the founder of the household goods brand told Fortune, adding: “I am worried for smaller importers that don’t understand the legal trouble they can get into by following their suppliers’ problematic advice.” —Jason Del Rey
China’s EV giants shift toward the U.K. as tariff troubles mount in U.S. and Europe
Before the tariff wars, one of the biggest threats for European and American automakers was the inexorable rise of Chinese EV producers.
The EU and U.S. fought back with protectionism, but one country hasn’t, and it’s looking like an increasingly tempting market as a result: the United Kingdom.
Chinese EV brands have tended to first launch in Norway—the European poster child of EV adoption, with more than 4 in 5 vehicles sold being all-electric. But there has been a marked upswing in interest in the U.K., now Europe’s largest battery electric vehicle market.
MG, a brand from Chinese automotive giant SAIC but with strong British heritage, claimed a comfortable 4% of the U.K. market in March thanks to bestsellers like the MG4.
BYD is making even better inroads, with 5% of the U.K. market having only arrived in the U.K. in 2023. BYD just launched its Sealion 7 into the popular midsize SUV category, priced to directly compete with Tesla’s market-leading Model Y.
Meanwhile XPeng showed little intention of selling in the U.K. when it launched in Europe in 2021, starting in Norway. But the Chinese automaker brought its G6 SUV to the U.K. in February to again take on Tesla’s Model Y with a lower price.
Finally there’s Zeekr. A challenger brand from Chinese behemoth Geely, it had initially been noncommittal about selling in the U.K., instead focusing on the smaller markets with high EV market share. That has changed.
“The potential is there because the U.K. has confirmed it will not follow the tariffs in Europe, and that gives an additional business potential,” says Lothar Schupet, acting CEO of Zeekr Europe. “It also gives a little risk, because competition will be fierce. Everyone has realized the U.K. is a profitable market.” —James Morris
More tech
—Apple Vision…Air? Reports of a lighter, cheaper Vision Pro spatial headset.
—Alibaba’s Quark is the top AI tool in China, beating ByteDance’s Doubao and DeepSeek.
—It’s called “slopsquatting.” Bad guys + the popularity of generative AI tools for coding + the tendency for AI models to "hallucinate” = ruh roh.
—ChatGPT users doubled in the last few weeks, OpenAI CEO Sam Altman says at TED.
—Parole by algorithm. Louisiana blocks thousands of prisoners from early release based on risk scores that don’t change.
—Jack Dorsey sparks debate. “Delete all IP law,” writes the serial entrepreneur, who has dozens of U.S. patents to his name.
—The world’s No. 3 streamer: JioHotstar, thanks to cricket matches. (It trails only Netflix and Amazon Prime Video.)
—You had us at “autonomous ship.” An Amazon alum, a U.S. Navy officer, and a former iRobot VP are behind Blue Water Autonomy.
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