☕ 100% tariffs

The northern lights dazzle around the world... [Advertisement] May 13, 2024 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [Slack]( Good morning. Heads up: Later today, OpenAI will announce “new stuff” that “feels like magic,” according to CEO Sam Altman. What could it be? Here are the current odds at the Morning Brew Sportsbook. - A ChatGPT search feature that would compete with Google (-500). Reuters reported this would be the big announcement, though Altman said it’s “not a search engine.” - A partnership with Crocs (+100). - He’s buying pizza for the office every Wednesday (+250). - OpenAI will make copyright law disappear (+500). - Altman is the new James Bond (+2500). Place your bets, and we’ll check back in tomorrow. —Neal Freyman, Dave Lozo MARKETS: YEAR-TO-DATE Nasdaq $16,340.87 +10.67% S&P $5,222.68 +10.12% Dow $39,512.84 +4.77% 10-Year 4.504% +55.8 bps Bitcoin $61,211.46 +44.83% Oil $78.20 +11.11% Data is provided by *Stock data as of market close. [Here's what these numbers mean.]( - Markets: April showers have brought May flowers to the stock market. After sliding 4.2% last month, the S&P 500 has risen 3.7% so far in May and is less than 1% from its record high. [Strong corporate profits]( have helped drive the spring rally—with more than 80% of the S&P having reported Q1 results, companies are on pace to have boosted earnings by 7.8%, compared to expectations of 5.1%.  GEOPOLITICS [Biden does not want you to buy a Chinese EV]( [BYD cargo ship]( Images The Biden administration is preparing to build a [towering wall of tariffs]( to block Chinese EVs from coming into the country and eating American automakers’ lunch. On Tuesday, the US government is set to announce that tariffs on Chinese vehicles will quadruple from the existing 25% to 100%, making it almost prohibitively expensive to sell them in the country, the WSJ reported. The Biden administration will also raise tariffs on other clean energy goods sourced from China, such as batteries, minerals, and solar cells, to protect American manufacturers that make those items. These jacked-up tariffs would reflect a significant escalation in the US–China trade war and highlight how the conflict has shifted into a new arena: climate technologies. Why the US is so concerned about Chinese EVs Because of their high quality and low cost (thanks to heavy government subsidies), Chinese EVs represent an existential threat to American automakers, industry journalists and execs have argued. The average cost of an EV in the US is $47,500, compared to $28,000 in China, according to Dunne Insights. And by all accounts, they’re great cars: - Inside EVs writer Kevin Williams went to the Beijing Auto Show last week and [was floored]( by the vehicles he saw. His conclusion: “Western automakers are cooked.” - Tesla CEO Elon Musk agrees. In January, he said Chinese EVs “will pretty much demolish most other car companies in the world” if countries don’t slap tariffs on them. President Biden is happy to oblige. He heard [complaints]( from the devastated US solar industry when cheap Chinese products flooded the market—prices plummeted 50% over the last year—and does not want the same thing to happen to Detroit automakers. Chinese EVs could face challenges expanding into other markets, too. The EU is investigating whether the cars received unfair subsidies from Beijing and could place higher tariffs on them. The pushback: Critics of Biden’s upcoming tariffs say they’re counterproductive to reducing emissions. If the US wants to increase EV adoption—and a main barrier is the high cost—why block cheaper models from entering the US market? Meanwhile, in Europe, top execs at BMW and Volkswagen came out against tariffs, which could threaten their substantial sales in China. “We don’t think that our industry needs protection,” BMW CEO Oliver Zipse said.—NF PRESENTED BY SLACK [Your partner in crushin’ it]( [Slack]( No, not your cold brew or your daily planner. Those are mere accessories compared to the tool that helps fuel work wins every day of the week: [Slack](. You know Slack like the back of your hand. Speaking of which, Slack plays quite a hand in helping you do your best work. But did you know it’s got tons of [next-level features powered by trusted AI]( You can: - Find that file or message you need with AI-powered search. - Automate routine tasks with Workflow Builder. - Use Catch Up to quickly sort through unread conversations. Ready to automate away the mundane and spend more time working on what matters most? Go ahead—[boost your biz with Slack](. WORLD [Tour de headlines](#) [Russian President Vladimir Putin (L), accompanied by defence minister Sergei Shoigu, guides a boat during his vacation in the remote Tuva region in southern Siberia]Vladimir Putin and Sergei Shoigu take a vacation together in 2017. Alexey Nikolsky/Sputnik/AFP via Getty Images Putin makes biggest security shake-up in over a decade. Being Vladimir Putin’s [fishing buddy]( doesn’t grant you job security—just ask Sergei Shoigu, who was [removed]( by Putin as defense minister after serving in the role since 2012. The leadership shuffle is the result of growing frustration with the economic cost of Russia’s invasion of Ukraine: The Kremlin set aside a record $118.5 billion for defense spending in the current year, and its security budget has grown to account for 6.6% of GDP, according to the FT. Longtime Putin economic advisor Andrei Belousov will replace Shoigu. Georgians hold mass protest over controversial bill. Roughly 50,000 people in the country of Georgia marched in the pouring rain against a proposed Kremlin-style “[foreign agents]( law that critics see as stifling dissent and threatening democracy. The bill set off sirens as far as Washington, DC: “We are deeply alarmed about democratic backsliding in Georgia,” White House National Security Advisor Jake Sullivan wrote on X. Georgia is attempting to become a member of the EU, but bloc officials have said that passing the bill could jeopardize its candidacy. Biden’s $8 cap on credit card late fees was blocked. A federal judge in Texas [temporarily blocked]( a new federal rule that would limit fees on late credit card payments to $8 per month. The preliminary injunction is a win for banking and credit card companies, who called the rule unconstitutional and filed a lawsuit to stop it. The $8 cap, which was first unveiled in March and would have gone into effect tomorrow, would save American households $10 billion a year, according to the Consumer Financial Protection Bureau. WEATHER [Northern lights go on world tour to rave reviews]( [A geomagnetic storm lights up the night sky above the Bonneville Salt Flats on May 10, 2024 in Wendover, Utah]( lights over Wendover, Utah. Blake Benard/Getty Images People all over the world were treated to a rare view of the aurora borealis this weekend that is usually reserved for places like Iceland, Norway, and [Principal Skinner’s kitchen](. It was the result of a solar eruption so powerful that the National Oceanic and Atmospheric Administration (NOAA) released a severe geomagnetic storm watch for the first time in nearly 20 years. However, that same radiation from the sun that gave some [incredible photos]( and others FOMO can disturb communications, power grids, and GPS systems used by many industries but never by your dad, who knows how to get there on his own. Luckily, there were only a few reported instances of [minor disruptions]( to commerce. - Transpolar flights from the Gulf to the US’ West Coast were [diverted]( to the south, away from the geomagnetic storms that can wreak havoc on guidance systems. - Elon Musk’s Starlink satellites dealt with degraded service but the Iron Man 2 star said on X they were holding up. Power grids maintained integrity as well, a welcome change from 2003, when a geomagnetic storm knocked out power in Sweden and damaged transformers in South Africa. A celestial encore: Like Olivia Rodrigo adding dates to her world tour, the aurora is extending its stay through Tuesday. Here are [tips]( from the NOAA for how and when to see the lights.—DL TOGETHER WITH MISO ROBOTICS [Miso Robotics]( Automate or fail. The $1t fast-food industry is in trouble. A 3m-person labor shortage. $20/hour minimum wages. That’s why [top brands like White Castle automate with Miso Robotics]( which can boost profits by $20k/month per store. A market and solution so big that $3.5b in revenue could be conservative. 34k+ investors already see Miso’s potential. [Invest before Miso cooks your next meal](. CALENDAR [The week ahead](#) [Caitlin Clark]Michael Hickey/Getty Images The Caitlin Clark era begins in the WNBA. The basketball phenom will make her WNBA regular-season debut on Tuesday night when Indiana visits Connecticut. Courtside tickets are [selling]( for close to $5,000. It’s a busy week for sports all around: The NBA and NHL playoffs continue, the NFL will release its schedule for the upcoming season on Wednesday, the PGA Championship begins Thursday, and the final day of the tense Premier League season is Sunday. Investors gird for inflation data, earnings. Remember when the Fed said higher inflation readings in January and February were a hiccup? Then March came in hot, delaying rate cuts even further? Well, April’s numbers drop on Wednesday, and the consumer price index is expected to climb 3.4% over last year—just about in line with last month’s reading and well above the 2% target. On the [earnings front]( Home Depot, Cisco, and Walmart will report Q1 financials this week. Cannes, Billie Eilish highlight the week in entertainment. The curtains go up on the Cannes Film Festival on Tuesday, where Greta Gerwig will be the first American woman director to head the jury that decides the winner of the Palme d’Or. Here’s the [lineup]( which includes Francis Ford Coppola’s much-ballyhooed Megalopolis. Over in the music world, Billie Eilish will drop her third studio album, Hit Me Hard And Soft, on Friday. Everything else… - Star witness Michael Cohen is scheduled to testify at Donald Trump’s hush money trial today. - Find out which dog is judged to be Best in Show on the final day of the Westminster Kennel Club Dog Show on Tuesday, although let it be known they are all perfect angels. GRAB BAG [Key performance indicators](#) [Sriracha bottles]David McNew/Getty Images Quote: “It is too green to proceed.” Another year, another potential sriracha shortage. Plagued by supply issues in recent years, Huy Fong Foods once again [announced]( it is halting production of its popular sriracha sauce until after Labor Day because the red jalapeño chile peppers that give the sauce its signature red color are too green, which is affecting the product. There’s no need to worry about availability yet, according to NMU vegetable specialist Stephanie Walker. She told USA Today that other sriracha makers aren’t reporting pepper problems, and that Huy Fong Foods is likely facing issues because the company lacks relationships with dependable jalapeño growers. Stat: Venezuela’s final glacier has melted enough to be [reclassified]( as an ice field, making it the first country to lose all of its glaciers in modern times to climate change. A glacier is generally considered to be a piece of ice that covers at least 0.1 square kilometers, but rising temperatures have reduced the glacier—known as the Humboldt or La Corona—from as much as 4.5 square km to 0.02 square km. According to climatologist Maximiliano Herrera, the next countries in line to lose their glaciers are Indonesia, Mexico, and Slovenia. Read: How Starbucks’s mobile ordering boom is hurting its brand. ([SatPost]( NEWS [What else is brewing](#) - [Swiss singer Nemo]( won the Eurovision Song Contest, becoming the first nonbinary artist to do so. - [Dozens of students]( walked out of Duke University’s commencement ceremony when Jerry Seinfeld, a public supporter of Israel, was introduced to give a speech. - [Employees]( at the Apple store in Towson, MD, voted to authorize a strike. Date: TBD. - [A 62-year-old man]( who received the first-ever pig kidney transplant two months ago at Massachusetts General Hospital has died. The hospital said there was no indication that his death was due to the transplant. - [Donald Trump]( may owe the IRS more than $100 million for claiming improper tax breaks, according to the New York Times and ProPublica. - [Kingdom of the Planet of the Apes]( topped the box office with a strong $56.5 million haul at North American theaters. It had zilch for competition. RECS [Monday to-do list image] Get a grip: The [origin story]( behind the tiny handles on syrup bottles. Go back in time: Enjoyed seeing AI turn the [The Simpsons]( into a 1950s TV show? [There’s more]( where that came from. Grade A beef: The Ringer ranks the [greatest diss tracks of all time](. Strolling in the deep: Here are Ben Pobjoy’s [tips for long walks](. Spend $1 for 90% off flights: Until midnight, try [Dollar Flight Club]( for just $1 and save on round-trip flights like Paris from $293 and Miami from $38. [Travel like a pro with $1 today]( *A message from our sponsor. GAMES [The puzzle section](#) Turntable: Mary got meta with the pangram in today’s Turntable. [See if you can find it](. Eurovision trivia Nemo’s Eurovision victory for Switzerland was the country’s first win since 1988. Which artist represented Switzerland that year? Hint: She’s very famous, and she’s not Swiss. SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=a905682a]( ANSWER Answer: Celine Dion Word of the Day Today’s Word of the Day is: gird, meaning “to prepare oneself for action.” Thanks to Natalie C. from Oxford, Mississippi, for the suggestion. Submit another [Word of the Day here](. ✳︎ A Note From Miso Robotics This is a paid advertisement for Miso Robotics’ Regulation A offering. Information presented as of publication, and forecasts are based on anticipated sales and use, which may be different, and adversely affect forecasts. Please read the offering circular at [invest.misorobotics.com](. Written by [Neal Freyman]( and Dave Lozo Was this email forwarded to you? Sign up [here](. 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