Morning Brew Daily
Boeing Caught in US-China Crossfire & Zuckerberg Takes The Stand
Wed, 16 Apr 2025
Episode 562: Neal and Toby talk about the latest chapter in the US-China trade war, with China holding out on two things: rare earth minerals and Boeing deliveries. Then, Mark Zuckerberg takes the stand in the trial against the FTC where old emails are being dubbed the ‘smoking gun’. Also, LVMH loses its crown to Hermès in market cap. Plus, Twitter founder Jack Dorsey and Elon Musk agree on something: IP law should be deleted. Do they have a strong case? Finally, American Airlines offers free WI-FI, OpenAI’s naming flubs, and the baseball to photographer career path. 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 How much progress have we made this year: https://year-progress.cnln.dev/ 00:00 - Year in Progress 03:00 - China Makes a Move vs US 07:40 - Meta vs the FTC 12:35 - LVMH Sto Drops 17:40 - IP Law Debate 21:45 - Headlines Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: How much progress have we made in 2025 so far?
So our coworkers found this fun website that tells you how much progress we've made in the year so far and puts that into context in other areas. As of this morning, we are 29% of the way through 2025, which means in a 40-hour work week, it would be 12.33 p.m. on a Tuesday. In a marathon, you'd have about 19.2 miles left to run.
And in the book, The Hobbit, Bilbo would be performing riddles in the dark.
Honestly, I took a lot of optimism from this because I don't want the year to fly by. It still feels like we're in the early inning. So I want to have 19 miles left of the marathon that is 2025. And I want it to be early afternoon on a Tuesday. There's still so much to get done and so many podcasts to record, Neil. Though I will say the first part of the year has definitely felt like a Monday.
But yes, a very fun site. Do you have the URL on you right here? We'll put it in the show notes. We'll put it in the show notes. Go check it out. It's pretty fun to just mess around. And now a word from our sponsor, Planet Oat. Neil, you ever notice how some puzzle pieces just click into place?
Oh, that sweet little snap. I'd like to add a little tap, tap, tap for good measure. That's the sound of destiny.
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In the high-stakes geopolitical poker match between the two biggest superpowers, China might have the stronger hole cards. Over the past few days, the U.S. 's chief trade adversary has pulled two major levers. The first was suspending exports of so-called rare earth metals, which are critical to a range of technologies from electric vehicles and smartphones to wind turbines and missiles.
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Chapter 2: What is China's latest move in the US-China trade war?
So Neil, you have China moving to limit these all-important metals, which could lead to disastrous consequences for everything from American manufacturing to military power and hitting a struggling U.S. manufacturing giant while it's down. In other words, it's fighting back.
Chapter 3: Why is the rare earth metals export halt critical to the US and Boeing?
To bring the poker metaphor back, this is China sitting next to the United States and maybe bleeding a little bit, showing its cards that it can play because these are extremely powerful cards. Boeing is the largest exporter by dollar value in the United States. Nearly a quarter of all of its output went to China, which is a huge aviation market.
Bank of America strategist came out yesterday and said, we see this. We don't see this. as sustainable. The Trump administration can't ignore Boeing. Boeing stock fell on the news yesterday. It looks like this is just going to be part of a broader negotiation. It's a bargaining chip that says we can block Boeing now. It might not last that long and it'll be part of broader negotiations.
But it would just be so devastating for Boeing, which, yes, has had its own internal issues. But if it can't sell its planes to China, a massive market, I mean, that would be a huge financial blow.
And China's like, listen, we have Airbus too. They buy more of their planes from Airbus anyway. So yes, it would impact China's ability to sustain its growing airline industry. But they're saying we could probably get by without Boeing for a while. So we don't necessarily need you. We have this other manufacturer to step in and fill the gap.
I do want to talk about these rare earth metals, though, because they are very important. They impact so many aspects of your life. A good proxy for how it might impact your life If it beeps, it probably depends on these rare earth minerals. And it's not just the metals themselves, like literally getting them from the earth.
It's the refining capacity that China has that makes it such an integral part of the supply chain. Even if you have deposits within your country, which some countries do, Ukraine has been one that has been tossed up a lot in negotiations where Trump is like, we can source a lot of our minerals from there.
But if you don't have the refining capacity that China has, then these minerals are functionally useless. You need to turn them into these powerful magnets that are used in things like batteries, wind turbines, LED light bulbs, semiconductors, like the list goes on. So it's not just that they have the supply. They also have the ability to turn them into something useful.
And the U.S. does have one rare earths mine, just one. It's in California. But as you said, we can extract the rare earths from that particular mine, but they still need to send it to China in order to get refined into magnets that are used in all of these various products. So they are working, this mine in California is working on developing a refining process, but it's going to take years.
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Chapter 4: What are the implications of China stopping Boeing deliveries?
The big question here is what this means for national security. and the military because defense contractors are warning that if there's no supply of rare earths, then they won't be able to make weapons. Obviously, China is a big geopolitical adversary.
One incredible stat is that every F-35 fighter contains around 900 pounds of rare earth materials, and some submarines need more than 9,200 pounds of the materials. So you can't really make these things without China, which is a huge problem.
Yeah, and these weapons are the cornerstone of kind of Americans' military. So if you lose the cornerstone, you can see why the Department of Defense is all up in arms trying to figure out our own domestic supply chain, our own domestic ability to refine these things. Because without them, you're right, it takes a lot of metal to create the U.S. military.
And we are just massively exposed to China, which is why they're pulling this all-important lever.
Meta's landmark antitrust trial against the government kicked off on Monday in federal court, and it unearthed some past emails Mark Zuckerberg would probably not want everyone to see. As a reminder, the FTC is accusing Meta of illegally stifling competition in social media through its acquisitions of Instagram and WhatsApp back in 2012 and 2014, and wants those two behemoths spun off.
This is pretty much existential for Meta, given that Instagram accounts for over half of its ad revenue, and WhatsApp is the most popular messaging app on planet Earth. As the trial kicked off, a surprise witness took the stand, Zuck himself.
The government's lawyer presented him with a binder of past correspondence, and like anyone who's scrolled many years back on their Instagram feed, he probably thought, well... I regret sending this.
One of the key emails called a smoking gun by the government was a message sent to then COO Sheryl Sandberg in which Zuck talked about the rise of Instagram and the importance of, quote, neutralizing a potential competitor. In another email to Sandberg post Instagram acquisition, he wrote Messenger isn't beating WhatsApp.
Instagram was growing so much faster than us that we had to buy them for one billion dollars. That's not exactly killing it. The FTC claims these comments were a crystal clear example of Meta pursuing a buy or bury strategy that cemented its unfair dominance in social media. And Toby, these emails weren't the only big revelation so far from the trial.
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Chapter 5: What new details emerged from Mark Zuckerberg's FTC trial testimony?
Yeah, and I will say the defense is kind of getting some laurels on social media too because the slide deck they've been using has been animated and he's making jokes. The lawyer is making jokes like that slide that you just depicted, like a boxing ring with app logos in it.
So they're almost taking it like saying, they're like laughing at the suit basically and injecting humor into their defense because it's so laughable to think that they're only competing with MeWe and Snapchat when there is just this massive overall landscape that, of apps like TikTok that you can switch interchangeably between Meta and them.
And then the final, just kind of like funny detail that has come out so far is that in that smoking gun email, later in the chain, you scroll down and for some reason, Sheryl Sandberg and Mark Zuckerberg start discussing Catan playing and Sheryl Sandberg's like, hey, I'd love for you to teach me one of these days.
So if you're scrolling through headlines about Meta and you see Catan mentioned, it really was just because in this very important moment in the company's history, Somehow, Settlers of Catan came up, so if you are a Catan fan, press the button Catan mentioned in this story.
The king of luxury has been dethroned. Yesterday, France's LVMH was surpassed by Hermes as the most valuable luxury company in the world. The abdication of the Golden Throne came after LVMH had a howler of an earnings report, reporting that revenue dropped 2% from the same period last year, much lower than expectations.
That caused its stock to drop 8%, its worst one-day performance since March 2020, clearing the way for Crosstown rival Hermes to take the top spot. This is about more than a changing of the luxury guard, though. It's a warning shot across the entire sector and perhaps the economy more broadly. LVMH, because it owns 75 brands, is seen as the industry bellwether.
It sells champagne, Tag Heuer watches, Dior jackets, Tiffany engagement rings. If there's something you want to buy but a store manager needs to grab a key to go unlock the case, it's probably LVMH. To be sure, luxury has been stumbling ever in the years following the pandemic, but now it's facing a potentially daunting double whammy.
Chinese consumers, a key clientele, are pulling back, and President Trump's trade war has injected a massive dose of uncertainty across the economy. LVMH's CFO said tariffs put the company in quote, unknown territory.
The unknown territory is an interesting place to be because is it structural where people just don't want these goods anymore, where they think the economy is crashing, or is there something else going on here? And LVMH kind of tried to push analysts towards the latter because one thing they called out was the Japanese market had this huge boom in demand last year.
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Chapter 6: How is the FTC defining Meta's social media market in the antitrust case?
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Jack Dorsey set the social media site he invented a titter this past week when he posted four simple words, delete all IP law. Then the new owner of his site, Elon Musk, added fuel to the fire by replying, I agree. The seemingly casual exchange between the former and current owners of the site, now known as X, deserves scrutiny because what? Where is this anti-IP sentiment coming from?
And why do some of the most powerful people in tech agree on this issue? It's not totally clear what compelled Jack to log on and start some discourse, but his thoughts do come against a backdrop of AI companies staring down multiple lawsuits claiming they violated copyrights when they feed content to train their AI models.
OpenAI and Microsoft are currently locked in a battle with the New York Times for the unpermitted use of their articles to train its large language models, so the AI industry has begun to mount a counterattack.
In the UK, AI companies are pushing to reform copyright protections in order to make owners opt out if they don't want their work to be used to train AI systems rather than the other way around. Also in Jack and Elon's corner are some pro-AI believers who say that automated IP fines for AI infringement may become the substitute for putting poor people in jail for cannabis possession.
as tech evangelist Chris Messina put it. But critics have fired back. Delete IP law and you delete one of the main incentives to create at all, Ed Newton Rex, a former executive at Stability AI, told Fast Company. So Neil, it was just a simple post, but it set off this very serious debate on how to handle IP law in the age of AI.
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Chapter 7: Why did LVMH lose its crown to Hermès in market capitalization?
Constitution says establish copyright and patents in order to promote the progress of science and useful arts. So Doing what Jack Dorsey and Elon Musk are saying by deleting all IP law is certainly an uphill climb, but it has sparked a discussion about whether copyright protections could be loosened in order to give AI companies an easier pathway to train models.
Chapter 8: What challenges is the luxury market facing according to LVMH's recent report?
They say it's a national security issue because China doesn't care about that, and the U.S. has these stringent laws, and so does the U.K., but it's certainly coming up in governments and legislators right now.
Yeah, so some of the arguments for reforming or, I mean, deleting is a little extreme IP law. One, the current system wasn't built for this new age. There's so many legal gray areas. Is scraping the internet for training data fair use or is it theft? The law doesn't really know yet, so there probably should be some level of reform there.
And you're right, creativity can't really scale up if everything is locked up. If every piece of content needs licensing, innovation is going too slow. So in this arms race against China, that is one of the main reasons for just freeing up these AI companies. And then like the third kind of, I don't know, metaphorical or philosophical argument
approach to this is that AI can't necessarily copy in the traditional sense. They don't memorize or reproduce exact texts, or at least they don't do it intentionally. They synthesize patterns. So the argument I've seen is saying that a writer can't read books before writing a book of their own. Of course, it's just an input, and then you create this different output.
So those are some of the reasons for why tech people and AI evangelists say that we need to change the current system because right now it's far too onerous, far too much of a burden on innovation in these very important space right now.
On the other hand, artists, inventors, creators on the other side, you know, could not be more upset about this and say that, you know, we will produce less. We will just, they're like the impacts of people creating less if IP law is scrapped or watered down.
as these AI executives want will just be so catastrophic for the artistic community, for the creator community, for anyone who wants to invent something. Huge ripple effects across the economy. Let's sprint to the finish with some final headlines. American Airlines is finally joining the Mile High Wi-Fi Club, announcing plans to offer free internet on flights starting in January.
It will be the last of the major U.S. airlines to let you browse the web at no charge while up in the air. JetBlue has offered it for years. Delta started free Wi-Fi in 2023. And United is currently outfitting its fleet with satellite Wi-Fi from Starlink. Americans will be powered by Intelsat and Viasat and made available to members of its A-Advantage loyalty program, which is free.
Toby, free Wi-Fi is no longer a perk from airlines. It's table stakes.
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