Baltimore bridge collapse could disrupt US shipping

Good morning. Here's what happened overnight and what you need to know today.

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1.

Bridge collapse: A major bridge in the US city of Baltimore collapsed overnight when a container ship hit one of the bridge’s pylons. The impact caused a vast stretch of the 3 kilometre structure to fall into the Patapsco river, plunging vehicles and a number of workers into the water. The Francis Scott Key Bridge carries an interstate highway, and is currently blocking thoroughfare across major shipping hub, the Port of Baltimore. Shipping traffic has been suspended at the port until further notice. In 2023, the port handled a record 52.3 million tonnes of international cargo, worth about USD80.8 billion ($123.64 billion), and ranks ninth among US harbours for both tonnage and dollar value of foreign cargo passing through. Six people remain missing since the collapse. (Reuters)(Axios)

2.

EV trade war: China has filed a complaint at the World Trade Organisation, arguing that the US’ Inflation Reduction Act is discriminatory and has distorted fair competition. Under the rules brought in by Biden in August 2022, consumers in the US cannot claim a USD7,500 clean-vehicle tax credit if they buy cars containing battery components from a “foreign entity of concern” starting this year. The rules will extend to minerals that go into battery parts from 2025. The rules have been viewed by industry players as a way to reduce China’s role in the US’ EV industry supply chain. Beijing will use the WTO’s dispute-settlement mechanism to make the challenge, and said that the US used the pretext of climate and environmental protection to implement measures that violate WTO rules and disrupt global supply chains. (Wall Street Journal)

3.

Capped fees: Card giants Visa and Mastercard have agreed to cap their credit-card swipe fees in a move that could save USD30 billion for US merchants over the next five years. The settlement announced on Tuesday ends a long-running antitrust case that has seen the payments giants and merchants battle over interchange fees since 2005. Visa and Mastercard typically set the interchange fees, but banks tend to collect most of the revenue. The settlement means that the large banks including Bank of America, JP Morgan and Citi who issue cards through Visa and Mastercard are likely to incur a sizeable loss. The settlement provides clarity around a number of areas of contention between the payments players, including the reduction of interchange rates (by at least four basis points for at least three years), a five-year rate cap and simplified surcharge and discounting rules. (Capital Brief) (Visa press release)(Bloomberg)

4.

Swift progress: Global banking messaging system, Swift, is planning to launch a new platform in the coming two years to allow central bank digital currencies (CBDC) to connect to the financial system. CBDCs are a form of digital currency issued by a country’s central bank, and while similar to cryptocurrencies, their value is fixed by the central bank and is equivalent to the country’s fiat currency. Swift’s head of innovation, Nick Kerigan, told Reuters that its latest trial was one of the largest global projects on CBDCs and tokenised assets to date, with central banks, commercial banks and settlement platforms all participating. The trial showed that even if CBDCs were built on different underlying technologies, they could still be used in complex trade and foreign exchange payments, and that automation was also possible. (Swift press release)(Reuters)

5.

Lacking confidence: US consumer confidence has weakened to its lowest level since November, dropping to a reading of 104.7 for March. The figure missed economists’ expectations of 107, and is below February's reading of 104.8. The Conference Board also said that consumer expectations fell to 73.8 from 76.3 the month prior, stating that consumers are becoming more pessimistic about the future. Expectations around inflation remained almost flat at 5.3% in March, with fears over a possible recession trending downward. Consumers expressed more concern about the US political environment compared to prior months. (The Conference Board)(Financial Times)

6.

Big debut: Trump Media & Technology Group, the company behind Donald Trump’s Truth Social platform has soared on its Nasdaq debut, providing a much needed windfall for Trump as he endures a spate of legal action. Under the Nasdaq ticker DJT, shares in the group surged to reach USD70.46, which saw the company’s market capitalisation hit USD9.55 billion on an undiluted basis. The shares’ volatility prompted a temporary trading halt which lasted for a few minutes. The social media business merged with blank cheque company Digital World Acquisition Corp on Monday, with Trump owning 58% of the shares in the merged group. The approval of the merger and Tuesday’s listing ends a process which began in 2021, when the two groups agreed to take Trump’s media business public at an USD875 million valuation. (Reuters)(Bloomberg)

7.

IT layoffs: Dell has laid off 13,000 workers over the last fiscal year, a steeper headcount reduction than the IT giant had originally announced. Dell’s total workforce was down almost 10% to 120,000 employees compared to the year prior. In early 2023 the company announced that weak sales for personal computers would require a cut of around 6,650 roles, just half of the total number eliminated in the 2024 fiscal year. A Dell regulatory filing reads: “We continued to take certain measures to reduce costs, including limiting external hiring, employee reorganisations […] These actions resulted in a reduction in our overall headcount. Despite these difficult decisions, we continue focused efforts to empower our employees and attract, develop, and retain talent.” (Bloomberg)(Dell regulatory filing)

8.

Epic Google trial: In its opening submissions against allegations of anticompetitive conduct brought by Epic Games, Google barristers employed colourful language to analogise that Apple and Google are akin to shopping centre landlords in their operations of app stores. Google barrister Cameron Moore SC said the analogy was useful because of the rules shopping centre owners apply to vendors, which he said are similar to restrictions Google places on developers. “Rules are designed to make the overall shopping centre attractive. If there were pornography everywhere, or the place was a mess, [vendors] would not be able to compete so vigorously,” he said. A measure stipulating “no pornographers can supply their wares here” could be viewed as anticompetitive, but it actually allows existing competitors to compete more vigorously, Moore argued. The trial is currently in its second week, and is expected to continue for another 14. (Capital Brief)