Morning Brew Daily
Smartphones Exempt From Tariffs… For Now & Meta vs. FTC in Antitrust Trial
Mon, 14 Apr 2025
Episode 560: Neal and Toby review the exemption for smartphones, computers, and other electronics from Trump’s reciprocal tariffs since a massive portion of our electronic manufacturing comes from overseas. Then, the US dollar and bond market has tumbled in the last few weeks, leading to world markets selling off all-things USA. Also, Meta has its day in court against the FTC, who accuses it of using antitrust ways to squash its competitors. Meanwhile, the resale market is booming and golfers are eyeing the coveted green Masters jacket, making it the weekend’s winners. Finally, what you need to know in the week ahead. 00:00 - Vote for Macy and Dan at the Webby’s! 2:15 - Tariff exemptions…for now 7:00 - Sell USA era? 10:40 - Meta vs. FTC trial 15:00 - Winner: Resale market 17:30 - Winner: Masters’ green jacket 21:00 - Week Ahead Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative and involves a high degree of risk. Cryptocurrency holdings are not protected by the FDIC or SIPC. APY as of 3/18/25, subject to change. *Terms and Conditions apply. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Who are the hosts introducing the episode and today's main topics?
Then Trump gave the electronics business a welcome reprieve from the most punitive tariffs. Only to clarify that, psych, it's going to be short-lived. It's Monday, April 14th. Let's ride.
Good morning, welcome back to the week. To kick off the show, we wanna give a huge shout out to our coworkers and incredible business creators, Macy Gilliam and Dan Toomey, who have been nominated for Webby Awards, aka the best of the internet. Dan was nominated for his hilarious Good Work series, which explores big questions like, what does Palantir actually do?
And is Zinn gonna kill me and the boys? Macy was nominated for her incredible video in which she worked as a New York City hot dog cart vendor for the day. You can head to the Webby website to vote or check out the Brew newsletter this morning for the direct links.
We sit next to these people every day and basically just hear them giggle to themselves as they cook up some of the funniest but also the most educational business content on the internet. But they also work extremely hard. I mean, Macy literally slept in a van on the street of New York for her hot dog video.
So if you're a fan of Morning Brew, go show them some love and help them bring home some hardware. Plus, if they don't win...
They're fired. All right. And now let's hear a word from our new sponsor, Planet Oat. Toby, you know how a good soundtrack can make an okay movie feel epic?
Don't I ever throw a massive orchestra behind a guy tying his shoes and suddenly it's a heroic journey. There's a reason why my top genre on Spotify last year was actually movie soundtracks.
That's what Planet Oat does for your coffee or your cereal or your smoothie. It doesn't just show up, it elevates everything around it.
It's rich, creamy, delicious, and crafted to blend like dairy milk or a perfect melody.
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Chapter 2: What is the current status of smartphone and electronics tariff exemptions?
The administration issued a notice that carved out exemptions for smartphones, computers, semiconductors, and other consumer electronics that had companies from Apple to Dell breathing a little easier over the weekend. Still, it's by no means a full exhale. First, because other tariffs, around 30% total, still apply to electronics and smartphones coming into the U.S. from China.
And second, because Howard Lutnick, Trump's Commerce Secretary, went on TV to explain that these reciprocal tariff exemptions are likely to be short-lived and that separate tariffs are coming soon. On ABC, Lutnick clarified that
All those products, meaning smartphones, computers, etc., will fall under semiconductors and they're going to have a special focus type of tariff to make sure that those products get reshored. And Trump followed up that appearance with a post on True Social explaining that no tariff exception was announced at all on Friday and that the products are just moving to a different tariff bucket.
So the companies that we're celebrating are now left in another uncertain position, once again hanging in limbo as the administration works out sector-specific tariffs.
Neil, just another weekend on the tariff beat. Still, this is good news for Apple. I mean, all indications point to the fact that even if they move these tariffs to a separate bucket, right now, you know, those widespread reciprocal tariffs on China are at 145%. The sectoral tariffs that we've seen the Trump administration apply on things like aluminum steel autos. Those are at 25 percent.
So it doesn't look like we're getting to the doubling of price that would have happened under the previous tariff regime for these specific electronics products. But yeah, this is this is overall very good news for Apple. Its stock is ripping this morning since that initial tariff announcement. Apple has lost $640 billion. The cost of an iPhone was projected to go up to as much as $3,500.
They were shipping in planes of iPhones. People were panicked buying iPhones. Now it looks like Apple's iPhones and other products are going to be at the same price point, at least for the next few weeks and months.
Yeah, the one thing that Apple can definitely hang on to, I'm using Apple here as kind of a proxy for any company that imports electronics, is that the tariffs are going to be lower. 125% was just kind of astronomical and caused those shipments of iPhones to come in via plane. But it does look like sector-specific tariffs are going to be probably around that 25% range.
Trump has also said that we're going to be very specific on Monday. So today is Monday. We'll get some of those specifics. Don't remind me. Yeah, everyone, it's Monday. But also these latest exemptions were a big deal because it covered $390 billion worth of U.S. imports, including more than $100 billion from China.
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Chapter 3: How are recent tariff changes impacting Apple and the electronics market?
just if you're keeping track at home, I just want to give one last run through of what has happened. So reciprocal tariffs from Liberation Day were applied. Then there was a removal of those back down to 10% across the board. Then there was the extra 50% Chinese tariffs, then 104%, then 125%, then 145%. Then electronics were exempted. Psych electronics are probably coming down the pipeline.
So Neil, good luck planning on where to locate your supply chain if you are a big electronics company these days. That was very helpful. Thank you. As all the uncertainty continues to swirl around exemptions that aren't exemptions and tariff rates that change by the hour, an interesting trade has begun to emerge amongst global investors. Sell America.
For a long time, American capital, currency, and bond markets were the most attractive games in town, but now all three look shakier than Rory McIlroy's wedge play down the stretch. Take the U.S. dollar. Its exchange rate with the euro hit a three-year low on Friday and meaning Americans are only getting 88 cents on the euro on their vacations abroad.
The dollar has also seen drops compared to other so-called safe haven currencies like the Japanese yen and the Swiss franc. Demand for U.S. bonds and other treasury notes also largely fell last week, while German bonds gained ground as money flocked outside the U.S.A. So really what we have here is a reckoning. What if the U.S.
dollar and government securities are not the global safe haven assets they have been for generations? It's an especially pertinent question coming off a wild week where riskier assets like stocks declined, but so did safer things like U.S. treasuries. That is something that just doesn't happen, or at least didn't happen under the previous economic world order.
But now, Neil, sell America has totally upended things.
You know that quote, there are decades where nothing happens and there are weeks where decades happen? Certain people on Wall Street were saying last week was that moment where perhaps we're seeing this reordering of the U.S.-led economic system because you just don't see a simultaneous sell-off in equities, bonds, and the dollar at the same time. That's exactly what happened.
Then you have leaders coming out, analysts saying, I think what we're seeing is this massive sea change with markets
you know enormous consequences the chief investment officer at jp morgan asset management there is now a very good case for the end of american dollar exceptionalism here's deutsche bank strategist george saravellos the market is reassessing the structural attractiveness of the dollar as the world's global reserve currency and is undergoing a process of rapid de-dollarization.
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Chapter 4: Why is the US dollar and bond market experiencing a sell-off?
But that's basically what, you know, everyone is Wall Street is paying attention to is these these bond auctions, which, you know, are typically kind of under the radar, I would say. More than a decade ago, the U.S. Federal Trade Commission gave Facebook its blessing to buy WhatsApp and Instagram, two acquisitions that ultimately cemented Mark Zuckerberg's dominance in the social media sector.
Now it wants a take back. Starting today, the FTC and Meta, as the company is now called, square off in a landmark antitrust trial that could shape the future of social media feeds everywhere. The FTC has accused Facebook of illegally monopolizing the personal social networking market through its purchases of WhatsApp and Instagram to would-be competitors and wants those acquisitions unwound.
Regulators say there are no serious alternatives to Meta's apps when it comes to staying up to date and connecting with friends and family in a shared social media space online. Meta has responded, Are you for real? To quote a spokesperson, the evidence at trial will show what every 17-year-old in the world knows.
Instagram, Facebook, and WhatsApp compete with Chinese-owned TikTok, YouTube, X, iMessage, and many others. Over the next few weeks, both Meta and the government will trot out evidence that supports their claims and the stakes could not be higher. Meta derives billions of dollars in revenue from Instagram and a forced separation could leave it without its cash cow.
Plus, it's the rare antitrust trial that involves products billions of people use every day. So the world will be watching how it plays out. Toby, this is an existential threat to Meta. It can't lose Instagram.
Yeah, and it's also the FTC swinging for the fences here. I mean, we haven't seen a corporate breakup of this scale since AT&T was broken up 40 years ago. So this is definitely a big kahuna that they're going off of here. Meta obviously doesn't want to lose Instagram because of the ad revenue it generates. It's going to generate around half of its ad revenue, which is a massive business for Meta.
But also, they don't want to lose the distribution networks that Meta and what are that – WhatsApp and Instagram provide for their AI chatbot that right now they think that's the next frontier, that's the next big tech war that they're fighting.
So obviously losing 50% of the revenue for their advertising business would be horrible, but losing the distribution channels is just the secondary effect that makes them really, really not happy about this case that the FTC brought against them.
Now, you might be wondering, like, why is the FTC going after Meta? Lina Khan, who was the chair of the FTC, was known as this big tech critic. She's gone, along with the rest of the Biden administration. So is this new guy, Andrew Ferguson, who leads the FTC, really going to go after Zuck? After all, Zuck has been trying to— cozy up to the Trump administration.
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Chapter 5: What is the significance of the Meta vs. FTC antitrust trial?
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Welcome to Winners of the Weekend, the segment where Toby and I pick two things that had a better weekend than your CPA friend who sees the light at the end of the dark tax filing tunnel. I won the pre-show dramatic 1099 reading, so I get to go first. And my winner is thrifting, because if there's anyone that may benefit from tariffs, it's your local thrift store.
With 125% tariffs on Chinese imports threatening to drive up prices substantially on clothes and other home goods, consumers may increasingly turn to resellers for their weekend outfits, since those clothes are already in large part in America already and therefore tariff-free. That's not the only tailwind behind this industry.
Trump also closed the so-called de minimis loophole that allowed companies like Shein and Taimou to ship in products for ultra-cheap. Resale has already been booming before these tariffs were applied. The U.S. market for secondhand apparel surged by 14% in 2024, its biggest growth year since 2021, and it's expected to reach $74 billion overall by 2029. Tariffs could push those numbers even higher.
A thredUP study found that nearly 60% of consumers and 70% of millennials would seek more affordable options like secondhand if tariffs make apparel more expensive.
Plus, one of the big tailwinds, too, is people like shopping vintage now. It's cool. It's part of the fashion trend du jour right now, so that is another tailwind behind it. I do want to pour a little bit of cold water on this, though, mainly because if we enter into economic recession, that's not good for people buying any discretionary items, and vintage clothing might fall into that bucket.
And then secondly, too, you're seeing all these sites like Poshmark, like ThredUp, might... see this huge surge of supply because people are looking at their closet and saying like, hey, maybe I can make a little extra buck off of this shirt that I never wear. And so you're going to see this flood of supply coming onto the market right when demand might be drying up.
So that's not a good market force if you are within this secondhand industry. So there's multiple pathways ahead here, one of them being that people want to buy stuff that is not imported and therefore not subjected to tariffs. But then the other might be that supply and demand economics get all wonky and it doesn't see the boom that a lot of people are expecting.
You're not allowed to yuck my winner.
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Chapter 6: How could the outcome of Meta's trial affect social media and advertising?
Sorry for yucking at your yum here. But yeah, I mean, I guess I'll just end on a positive note for sure here. And the more aggressive the U.S. trade policy becomes, maybe the better positioned secondhand sellers actually are, especially in the war against fast fashion sellers like Shein and Timu.
My winner of the weekend is Neil and Toby because we made it this far into the show without really talking about what happened at the Masters. But talk about it, we must. Rory McIlroy finally got the monkey off his back, which thank goodness because my heart could not take his shenanigans anymore.
And as he put his arms through the sleeves of one of the most unique prizes in golf, a green jacket, a thought struck us. What is a green jacket actually worth? Luckily, The Athletic did a deep dive and their answer was multifaceted. On the one hand, Rory took home a record $4.2 million for winning the Masters. But what if the jacket itself made it to a secondary market? What could it fetch?
Thankfully, we have a few data points thanks to an auction house formerly known as Green Jacket Auctions, who was subsequently sued and changed their name to Golden Age Auctions. A green jacket belonging to 1957 champion Doug Ford sold for over $60,000 back in 2010. while a 1959 winner, Art Wall's coat, fetched a similar price.
Those are small potatoes, though, compared to Horton Smith's green jacket from his 34 and 36 wins, which sold for 10x the price of the others, bringing in $682,000 in 2013. Now, no offense to Horton Smith, but the second priciest auction for a green jacket has a way cooler backstory.
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Chapter 7: What are some weekend winners like the resale market and the Masters’ green jacket?
Somehow, the most coveted prize in golf ended up in a pile of old blazers at a Toronto thrift store where someone bought it for $5. The name tag inside was cut out, but the so-called thrift store jacket sold for $139,000 in 2017. So the answer to the question, how much is a green jacket worth, is somewhere between $5 and $682,000, Neil.
I mean, some things are so a part of your life where you don't realize how kind of weird and bizarre they are. And yesterday, as we were thinking about this story, I was like, wow, this person wins a golf tournament and they get a jacket that is green. Like, that's a little weird. But in terms of the secondhand secondhand sales, the Masters does not like that this is happening.
So in 2010, they declared ownership over the green jacket. And now you can't. They're clamping down on all these secondhand auctions. Rory McIlroy or whoever wins the Masters is the only person who can wear that. the green jacket outside of the grounds of Augusta National Golf Club over the year.
So it's become a system very much like the Oscars, where they retain ownership because they don't want these things being sold on the secondhand market. They want to kind of keep it all in house and you can rent it out. And that's kind of how they've played this, because they don't want
And, you know, people like Toby come around being like, did you see how like this green jacket was sold for X number of dollars on on at the thrift store? So that's kind of what they've been clamping down. Everything in the Masters is kind of very buttoned up. And so is these jackets.
And then finally, one of the greatest stories from green jacket lore that goes even beyond a Horton Smith six hundred and eighty two thousand dollar jacket is Arnold Blanchard.
palmer's master screen jacket had been discussed in a sale of 3.65 million dollars back in 2022 and the way that that jacket was actually brought to that auction was it was stolen and eventually intercepted by the fbi in a sting operation there was this master's employee augusta employee who'd been stealing merchandise he filched the arnold palmer jacket was going to sell it off for nearly four million dollars but then the fbi got involved so
Just some crazy lore when it comes to $5 thrift store jackets all the way up to nearly $4 million Arnold Palmer jackets that were busted by the FBI in a sting operation. The only way to get your hands on one is to just putt better if you're Rory or steal one and try to buy it on the black market.
All right, it's Monday, so here's what you need to know about the big events of the upcoming week. Katy Perry will finally realize her goal of living like an extraterrestrial. Later this morning, a Blue Origin rocket will launch from Texas carrying an all-female crew, the first time since 1963 that a spacecraft will launch with only women aboard.
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Chapter 8: What important events should listeners watch for in the week ahead?
I mean, sending your soon-to-be wife, because they are getting married soon, up to space with all her friends, that is some high-stakes spaceflight right there. And also, I mean, I'm not the first one to make this joke, but saying... hey, honey, you want me to send you to space?
That might be inauspicious before your wedding, but first all-female crew to reach the internationally recognized boundary of space. So definitely a trailblazing moment and hope everything goes smoothly.
Back here on Earth. earning season gets going in a big way after other banks like JP Morgan topped estimates last week. Goldman Sachs, Citigroup and Bank of America will hog the spotlight to start this week. And then later on, Taiwan Semiconductor, United Health, Netflix and American Express will share their Q1 results to a crowd of jittery investors.
Elsewhere on the economic calendar, the government will release its monthly retail sales data on Wednesday, offering insight into consumer spending during these uncertain tariff filled times.
Yeah, I'm definitely looking forward to TSMC, ASML to see how the semiconductor industry is affected by all this tariff uncertainty. And then also, yeah, that retail sales data is kind of a very, almost a real-time look into how consumers are feeling. So very curious about that as well.
Yesterday, the NBA's regular season wrapped up, an 82-game roller coaster defined by shocking trades and coaching changes, and the play-in tournament for the playoffs starts tomorrow. The top three seeds in the East are the Cavs, Celtics, Knicks, and the West, it's the Thunder, Rockets, and Lakers.
And tonight we got WNBA draft as well. So Paige Becker's lottery is now open. So a lot of good basketball news coming down the pipeline.
And in other sports news, don't want to leave out my hockey fans out there. The NHL playoffs start on Saturday. And then finally, it's going to be a short trading week since markets are closed for Good Friday on Friday. And two days later is Easter Sunday, which is also 420. I hope you stockpiled those eggs, everyone, because they're going to be expensive. Let's wrap it up there.
Thanks so much for starting your morning with us and have a wonderful start to the week. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Dan Bauza is on audio. Hair and makeup is gone thrifting.
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