Latest news with #US5
West Australian
2 days ago
- Business
- West Australian
Businesses are finding a workaround for tariffs — and it's entirely legal
Businesses are finding a workaround to minimise the most significant hit from tariffs, using a decades-old piece of legislation known as the 'first sale rule'. Within US customs law, the first sale rule allows US importers to use the price of the first sale in a number of transactions to calculate customs duties. For instance, a Chinese manufacturer sells a T-shirt to a Hong Kong vendor for $US5. That Hong Kong vendor then sells the T-shirt to a US retailer for $US10. That US retailer then sells the T-shirt to consumers for $US40. Under the first sale rule, the US retailer can pay the import duty on the initial $US5 price of the good, rather than the vendor's inflated $US10, thus stripping out the cost associated with the middleman's profit. 'What the rules allow you to do is use that initial sales price from the factory to the vendor to determine the final duty price,' Brian Gleicher, senior lawyer and member at Miller & Chevalier Chartered, said. The first sale rule has been around since 1988, but gained renewed attention under US President Donald Trump's first administration and, now, during his latest tariff regime. 'When the first administration had 25 per cent tariffs [on China in 2018], that's when we started getting calls. Now with the new tariffs, the first sale rule has started coming up again,' Sid Paruthi, partner at US consulting firm Moss Adams, said. 'It's been around for a very long time but ... everybody's beginning to explore it with more interest,' Gleicher said. Here are the criteria businesses must fulfil to apply the rule: For some companies, that can be easier said than done. Typically, the default duty imposed by US customs is based on the import price of a good, putting the burden of proof on the importer to demonstrate the initial cost of that item. That may not always be something a vendor is willing to reveal. 'If you're an importer, you need to get that first sale price. You need to have the data,' Gleicher said. 'Vendors may not want to give that information.' Rich Taylor, a corporate business development consultant based in Chinese hub Ningbo who has been advising Fortune 500 companies on the first sale rule since Trump's first term, noted 'there has to be a level of trust between all parties' because of the risks involved. Nevertheless, the additional complexities can be worthwhile, given the potential cost savings. 'You [suppliers] are keeping your customer. You're showing them that you're trying to give them every tool to reduce their cost,' Taylor said. 'If you don't use it, then the end cost is going to go up. And if your competitor is using the [first sale] rule, then you're going to lose you that advantage over them.' Companies appear to be cluing into that. While the first sale rule is broadly applicable across products and industries, it is considered particularly useful in higher-value consumer goods and luxury products, where margins are greater. Last month, Italian luxury fashion brand Moncler flagged the first sale rule as providing 'significant benefit' to its cost structure. 'First cost [sale], of course, the industrial cost ... is much lower than the retail price, and it is about 50 per cent of the intercompany price. So, of course, it's a significant benefit,' Luciano Santel, executive director and chief corporate and supply officer at Moncler, told investors during an April 16 earnings call. Swiss-headquartered biotech Kuros Biosciences earlier this month said that it was altering its operations, which would allow it to adopt the first sale policy. 'What we will now do is we will switch in between Zurich as a wholesaler hub ... which in essence means we can adapt the so-called first sale method,' Daniel Geiger, chief financial officer of Swiss-headquartered biotech Kuros Biosciences, said during a May 13 earnings call. During first-quarter earnings calls, US BBQ-maker Traeger and manufacturing firm Fictiv also both cited first sale as 'supply chain mitigants' and means to 'minimise tariff and duty costs,' respectively. Use of the first sale rule, while perfectly legal, nevertheless could undermine the Trump administration's efforts to boost tariff revenue and boost onshoring of manufacturing. The White House did not respond to CNBC's request for comment on use of the first sale rule and its implications for tariff policy. US Customs and Border Protection said it could not provide data on the recent use of the first sale rule by importers. CNBC
Sydney Morning Herald
21-05-2025
- Business
- Sydney Morning Herald
The man who designed the iPhone sells his secretive company in $10 billion deal
Apple shares dropped as much as 2.3 per cent in New York on Wednesday. They had been down 17 per cent this year through Tuesday's close. As part of the deal, OpenAI is paying $US5 billion in equity for io. The balance of the nearly $US6.5 billion stems from a partnership reached in the fourth quarter of last year that involved OpenAI acquiring a 23 per cent stake in io. Separately, OpenAI's startup fund also invested in Ive's company at that time. Billionaire philanthropist Laurene Powell Jobs is an io backer as well, through her firm the Emerson Collective. Other investors include Sutter Hill Ventures, Thrive Capital, Maverick Capital and SV Angel. Altman doesn't have equity in io, OpenAI said. The deal is expected to be completed this summer, pending regulatory approvals. The takeover of io will provide OpenAI with about 55 hardware engineers, software developers and manufacturing experts — a team that will build what Ive and Altman expect to be a family of devices. The two executives had already been exploring some early ideas for about two years, they said. The pair expects their first device to be a truly novel type of product. 'People have an appetite for something new, which is a reflection on a sort of an unease with where we currently are,' Ive said, referring to products available today. Ive and Altman's first devices are slated to debut in 2026. When he left Apple six years ago, Ive started the firm LoveFrom, a collective of designers and engineers. The staff includes veterans of Apple's hardware and software departments, as well as friends of Ive and other collaborators. Loading He then co-founded io last year with Apple alumni Scott Cannon, Evans Hankey and Tang Tan. Hankey was Ive's successor at Apple and remained at the company until 2023, while Tan led iPhone and Apple Watch product design until 2024. Cannon worked at Apple before co-creating the once-popular email app Mailbox, which was acquired by Dropbox Inc. At io, the group set out to develop, engineer and manufacturer a collection of products for an era of artificial general intelligence — the point when technology achieves humanlike cognitive abilities. The team will now continue that mission at OpenAI, becoming a threat to the very devices that the designers helped create. That adds to the challenges of Apple, which has fallen behind its Silicon Valley peers in artificial intelligence. The company's AI platform, released last year, lacks the capabilities of rival systems and relies in part on OpenAI's ChatGPT chatbot to fill in the gaps. Still, Ive and Altman don't see the iPhone disappearing anytime soon. 'In the same way that the smartphone didn't make the laptop go away, I don't think our first thing is going to make the smartphone go away,' Altman said. 'It is a totally new kind of thing.' 'The phone, as it currently is, is a remarkable general-purpose device,' Ive said, adding that people will connect with AI in 'very new ways.' OpenAI, founded a decade ago as a research organisation, became a driving force in AI with the release of ChatGPT in 2022. The company's valuation has swelled to $US300 billion, and it's looking to expand its reach through acquisitions. OpenAI is working on other transactions, such as a $US3 billion deal for AI coding software company Windsurf. OpenAI also shook up its management ranks this month, with the San Francisco-based company appointing Instacart chief Fidji Simo as the CEO of applications. She reports directly to Altman, allowing him to focus on the broader strategy. Loading Hankey, who will become an OpenAI employee along with Tan and Cannon, said that ChatGPT's debut prompted a realisation that hardware technology would have to change. 'A number of us looked at each other and said, 'This is probably the most incredible technology of our career,'' she said in an interview. While Ive and LoveFrom will remain independent, they will take over design for all of OpenAI, including its software. Altman said his first conversations with Ive weren't about hardware, but rather about how to improve the interface of ChatGPT. 'We are obviously still in the terminal phase of AI interactions,' said Altman, 40. 'We have not yet figured out what the equivalent of the graphical user interface is going to be, but we will.' LoveFrom has a number of former Apple designers who helped create the look of the Mac and iPhone operating systems, including Bas Ording, Mike Matas and Chris Wilson, Ive said. They could help redesign OpenAI's app for a new generation of consumers. LoveFrom will continue its existing relationships with customers like Ferrari and Airbnb but won't take on major new clients. The new hardware team within OpenAI will be overseen by Peter Welinder, who will report to Altman as a product vice president. Ive said ChatGPT was initially put on his radar by one of his twin sons, Charlie, and he immediately knew he had to meet Altman after using it. The new team at OpenAI will work at io's existing workspace in Jackson Square, a neighbourhood in San Francisco, and OpenAI's current offices. 'I have felt that my most important and useful work is ahead,' Ive said, adding that he's been 'training' for this moment. He compares the experience to Apple in the late 1990s and early 2000s, before the iPod and iPhone. 'I'm just really, really grateful we all found each other.' Loading Ive and Altman wouldn't elaborate on what hardware products they are working on, but they will be entering a market in its infancy. Meta, the owner of Facebook and Instagram, is perhaps the most notable maker of AI devices. It sells popular Ray-Ban smart glasses that use cameras and microphones to provide context about the surrounding environment. There have been public failures as well, such as the Humane Ai Pin and the Rabbit r1 personal assistant device. 'Those were very poor products,' said Ive, 58. 'There has been an absence of new ways of thinking expressed in products.' Tan, who was central to developing every version of the iPhone within Apple's hardware engineering department, said the new team isn't tied to a 'legacy' and will have an opportunity to 'rethink this space.' Still, actually delivering a product will take a while. 'It will be worth the wait,' Altman said. 'It's a crazy, ambitious thing to make.'
The Age
21-05-2025
- Business
- The Age
The man who designed the iPhone sells his secretive company in $10 billion deal
Apple shares dropped as much as 2.3 per cent in New York on Wednesday. They had been down 17 per cent this year through Tuesday's close. As part of the deal, OpenAI is paying $US5 billion in equity for io. The balance of the nearly $US6.5 billion stems from a partnership reached in the fourth quarter of last year that involved OpenAI acquiring a 23 per cent stake in io. Separately, OpenAI's startup fund also invested in Ive's company at that time. Billionaire philanthropist Laurene Powell Jobs is an io backer as well, through her firm the Emerson Collective. Other investors include Sutter Hill Ventures, Thrive Capital, Maverick Capital and SV Angel. Altman doesn't have equity in io, OpenAI said. The deal is expected to be completed this summer, pending regulatory approvals. The takeover of io will provide OpenAI with about 55 hardware engineers, software developers and manufacturing experts — a team that will build what Ive and Altman expect to be a family of devices. The two executives had already been exploring some early ideas for about two years, they said. The pair expects their first device to be a truly novel type of product. 'People have an appetite for something new, which is a reflection on a sort of an unease with where we currently are,' Ive said, referring to products available today. Ive and Altman's first devices are slated to debut in 2026. When he left Apple six years ago, Ive started the firm LoveFrom, a collective of designers and engineers. The staff includes veterans of Apple's hardware and software departments, as well as friends of Ive and other collaborators. Loading He then co-founded io last year with Apple alumni Scott Cannon, Evans Hankey and Tang Tan. Hankey was Ive's successor at Apple and remained at the company until 2023, while Tan led iPhone and Apple Watch product design until 2024. Cannon worked at Apple before co-creating the once-popular email app Mailbox, which was acquired by Dropbox Inc. At io, the group set out to develop, engineer and manufacturer a collection of products for an era of artificial general intelligence — the point when technology achieves humanlike cognitive abilities. The team will now continue that mission at OpenAI, becoming a threat to the very devices that the designers helped create. That adds to the challenges of Apple, which has fallen behind its Silicon Valley peers in artificial intelligence. The company's AI platform, released last year, lacks the capabilities of rival systems and relies in part on OpenAI's ChatGPT chatbot to fill in the gaps. Still, Ive and Altman don't see the iPhone disappearing anytime soon. 'In the same way that the smartphone didn't make the laptop go away, I don't think our first thing is going to make the smartphone go away,' Altman said. 'It is a totally new kind of thing.' 'The phone, as it currently is, is a remarkable general-purpose device,' Ive said, adding that people will connect with AI in 'very new ways.' OpenAI, founded a decade ago as a research organisation, became a driving force in AI with the release of ChatGPT in 2022. The company's valuation has swelled to $US300 billion, and it's looking to expand its reach through acquisitions. OpenAI is working on other transactions, such as a $US3 billion deal for AI coding software company Windsurf. OpenAI also shook up its management ranks this month, with the San Francisco-based company appointing Instacart chief Fidji Simo as the CEO of applications. She reports directly to Altman, allowing him to focus on the broader strategy. Loading Hankey, who will become an OpenAI employee along with Tan and Cannon, said that ChatGPT's debut prompted a realisation that hardware technology would have to change. 'A number of us looked at each other and said, 'This is probably the most incredible technology of our career,'' she said in an interview. While Ive and LoveFrom will remain independent, they will take over design for all of OpenAI, including its software. Altman said his first conversations with Ive weren't about hardware, but rather about how to improve the interface of ChatGPT. 'We are obviously still in the terminal phase of AI interactions,' said Altman, 40. 'We have not yet figured out what the equivalent of the graphical user interface is going to be, but we will.' LoveFrom has a number of former Apple designers who helped create the look of the Mac and iPhone operating systems, including Bas Ording, Mike Matas and Chris Wilson, Ive said. They could help redesign OpenAI's app for a new generation of consumers. LoveFrom will continue its existing relationships with customers like Ferrari and Airbnb but won't take on major new clients. The new hardware team within OpenAI will be overseen by Peter Welinder, who will report to Altman as a product vice president. Ive said ChatGPT was initially put on his radar by one of his twin sons, Charlie, and he immediately knew he had to meet Altman after using it. The new team at OpenAI will work at io's existing workspace in Jackson Square, a neighbourhood in San Francisco, and OpenAI's current offices. 'I have felt that my most important and useful work is ahead,' Ive said, adding that he's been 'training' for this moment. He compares the experience to Apple in the late 1990s and early 2000s, before the iPod and iPhone. 'I'm just really, really grateful we all found each other.' Loading Ive and Altman wouldn't elaborate on what hardware products they are working on, but they will be entering a market in its infancy. Meta, the owner of Facebook and Instagram, is perhaps the most notable maker of AI devices. It sells popular Ray-Ban smart glasses that use cameras and microphones to provide context about the surrounding environment. There have been public failures as well, such as the Humane Ai Pin and the Rabbit r1 personal assistant device. 'Those were very poor products,' said Ive, 58. 'There has been an absence of new ways of thinking expressed in products.' Tan, who was central to developing every version of the iPhone within Apple's hardware engineering department, said the new team isn't tied to a 'legacy' and will have an opportunity to 'rethink this space.' Still, actually delivering a product will take a while. 'It will be worth the wait,' Altman said. 'It's a crazy, ambitious thing to make.'
West Australian
21-05-2025
- Business
- West Australian
Wall Street slips amid focus on Trump's tax bill
Wall Street's main indexes have slipped and government bond yields risen as investors closely watched a pivotal debate over US President Donald Trump's tax-cut bill that has fanned concerns about the country's growing debt. The gate-keeping House Rules Committee scheduled an unusual 1am ET hearing that is expected to run well into daylight hours, as Republicans try to overcome internal divisions about cuts to the Medicaid health program and tax breaks in high-cost coastal states. Non-partisan analysts say the proposed plan could add $US3 trillion to $US5 trillion ($A4.7 trillion to $A7.8 trillion) to the federal government's $US36.2 trillion in debt. "(We're seeing) the American exceptionalism narrative unwind, so you have a natural process of something weakening after years of concentration," said David Russell, global head of market strategy at TradeStation. "We're kind of pouring gasoline on the fire with tariffs and all of this budgetary uncertainty." In early trading on Tuesday, the Dow Jones Industrial Average fell 352.28 points, or 0.83 per cent, to 42,324.96, the S&P 500 lost 31.84 points, or 0.54 per cent, to 5,908.62 and the Nasdaq Composite lost 97.35 points, or 0.51 per cent, to 19,045.36. All 11 S&P sub-sectors traded lower, with information technology and consumer discretionary amongst the worst hit. US bonds have been under pressure since the start of the week, when Moody's downgraded the country's sovereign credit rating. On Wednesday, yields on the 30-year note were back up to 5.01 per cent and the benchmark 10-year yield climbed 5.2 basis points to 4.53 per cent. Highly valued technology stocks weakened as rising rates tend to discount the present value of future profits. Amazon, down 1.5 per cent, led losses among top megacap and growth stocks. UnitedHealth Group dropped 5.1 per cent as a Guardian report said the healthcare conglomerate secretly paid nursing homes thousands in bonuses to help reduce hospital transfers for ailing residents. HSBC also downgraded the stock to "reduce" from "hold". On the earnings front, retailer Target fell 6.7 per cent after slashing its annual forecast due to a pullback in discretionary spending. Wolfspeed tumbled 66.5 per cent following a report that the semiconductor supplier was preparing to file for bankruptcy within weeks. US stocks closed lower on Tuesday, with the S&P 500 snapping a six-day winning streak while the Dow logged its first decline in four sessions. Despite the losses, they have had a solid month so far. The S&P 500 has climbed more than 17 per cent higher from its April lows, when Trump's reciprocal tariffs roiled global markets. A pause in the tariffs, a temporary US-China trade truce and tame inflation data have pushed equities higher although the S&P 500 is still about 3.0 per cent off its record highs. Brokerage Morgan Stanley upgraded its stance on US equities to "overweight," saying the global economy was still expanding, albeit slowly, amid policy uncertainty. Declining issues outnumbered advancers by a 3.93-to-1 ratio on the NYSE and by a 2.98-to-1 ratio on the Nasdaq. The S&P 500 posted two new 52-week highs and no new lows while the Nasdaq Composite recorded 16 new highs and 17 new lows.
Perth Now
21-05-2025
- Business
- Perth Now
Wall Street slips amid focus on Trump's tax bill
Wall Street's main indexes have slipped and government bond yields risen as investors closely watched a pivotal debate over US President Donald Trump's tax-cut bill that has fanned concerns about the country's growing debt. The gate-keeping House Rules Committee scheduled an unusual 1am ET hearing that is expected to run well into daylight hours, as Republicans try to overcome internal divisions about cuts to the Medicaid health program and tax breaks in high-cost coastal states. Non-partisan analysts say the proposed plan could add $US3 trillion to $US5 trillion ($A4.7 trillion to $A7.8 trillion) to the federal government's $US36.2 trillion in debt. "(We're seeing) the American exceptionalism narrative unwind, so you have a natural process of something weakening after years of concentration," said David Russell, global head of market strategy at TradeStation. "We're kind of pouring gasoline on the fire with tariffs and all of this budgetary uncertainty." In early trading on Tuesday, the Dow Jones Industrial Average fell 352.28 points, or 0.83 per cent, to 42,324.96, the S&P 500 lost 31.84 points, or 0.54 per cent, to 5,908.62 and the Nasdaq Composite lost 97.35 points, or 0.51 per cent, to 19,045.36. All 11 S&P sub-sectors traded lower, with information technology and consumer discretionary amongst the worst hit. US bonds have been under pressure since the start of the week, when Moody's downgraded the country's sovereign credit rating. On Wednesday, yields on the 30-year note were back up to 5.01 per cent and the benchmark 10-year yield climbed 5.2 basis points to 4.53 per cent. Highly valued technology stocks weakened as rising rates tend to discount the present value of future profits. Amazon, down 1.5 per cent, led losses among top megacap and growth stocks. UnitedHealth Group dropped 5.1 per cent as a Guardian report said the healthcare conglomerate secretly paid nursing homes thousands in bonuses to help reduce hospital transfers for ailing residents. HSBC also downgraded the stock to "reduce" from "hold". On the earnings front, retailer Target fell 6.7 per cent after slashing its annual forecast due to a pullback in discretionary spending. Wolfspeed tumbled 66.5 per cent following a report that the semiconductor supplier was preparing to file for bankruptcy within weeks. US stocks closed lower on Tuesday, with the S&P 500 snapping a six-day winning streak while the Dow logged its first decline in four sessions. Despite the losses, they have had a solid month so far. The S&P 500 has climbed more than 17 per cent higher from its April lows, when Trump's reciprocal tariffs roiled global markets. A pause in the tariffs, a temporary US-China trade truce and tame inflation data have pushed equities higher although the S&P 500 is still about 3.0 per cent off its record highs. Brokerage Morgan Stanley upgraded its stance on US equities to "overweight," saying the global economy was still expanding, albeit slowly, amid policy uncertainty. Declining issues outnumbered advancers by a 3.93-to-1 ratio on the NYSE and by a 2.98-to-1 ratio on the Nasdaq. The S&P 500 posted two new 52-week highs and no new lows while the Nasdaq Composite recorded 16 new highs and 17 new lows.
