Good Morning. Panasonic will open its $4 billion EV battery plant in De Soto, Kansas, today. It’s a green shoot of optimism in a market that’s otherwise cooled amid tariffs and major policy shifts—the most recent of which is the end of a $7,500 EV tax credit, thanks to the “big, beautiful bill” now signed into law. (Ford was able to retain its federal tax credits at the last minute. Meanwhile, Honda recently postponed its EV investment in Canada, and demand at Tesla’s largest EV plant is down.)
I spoke with Panasonic North America CEO Megan Myungwon Lee about today’s news and what’s next in a murky environment for clean energy. “This is a big, long-term commitment that started four years ago,” she said. “Every CEO’s job is to navigate and make decisions in very ambiguous and uncertain times.”
Lee prefers to focus on the positive. “I am not saying it’s easy,” she told me. “But the current administration and previous administration believe in bringing technology into the market and creating manufacturing jobs, and that’s what we do.”
While the new policy environment might delay the timeline for ramping up to full production, about 1,100 of the 4,000 anticipated employees have been hired. And Lee anticipates sticking with that plan despite AI, tough market conditions, and the Japanese company’s recently announced plans to cut 10,000 jobs globally, about 4% of its workforce.
“Our manufacturing process is already highly automated and, for the volume we produce, we will still need, at this point, a few thousand employees to run the factory in Kansas.”
And she’s addressing the challenges that everyone in the industry now faces: “Especially in the battery business, the supply chain is global; there are raw materials that we just cannot get locally,” she added. But Panasonic transformed its supply chain during COVID and “our goal is to have at least 50% of our supply chain done within this region by 2030.”
“It’s a wonderful beginning and definitely a celebration, but we have to make sure that the business is successful and there’s a healthy return.” More news below.
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Top news
New tariffs on the EU and Mexico
On Saturday, President Trump imposed 30% tariffs on its two largest trade partners, Europe and Mexico. CNBC notes that the markets were closed that day. The EU is still formulating a response.
Why is tariff-fueled inflation failing to show up?
Economists have for months warned that tariffs would cause an inflation surge, but as of July, there’s little evidence of that in economic data, despite about $100 billion in tariffs already collected by the Treasury. Fortune asked economists to explain why. The possible reasons range from “it’s too soon” to “consumers won’t stand for it.”
Trump could fire Fed’s Powell, NEC director says
National Economic Council director Kevin Hassett left the door open to the forced removal of U.S. Federal Reserve Chairman Jerome Powell, in remarks to ABC on Sunday. A decision will be made after Powell responds to the July 10 letter sent to him by Office of Management and Budget head Ross Vought, which accuses Powell of letting renovations of the Fed’s HQ get out of control. “I think whether the president decides to push down that road or not is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed,” Hassett said. The Vought letter gives Powell seven business days to respond.
Google’s Chrome may be vulnerable to AI browser competition
AI startups are breaking into the web browser business, posing a threat to one of Google’s biggest businesses. Perplexity, which this week launched its own AI-enabled web browser, Comet, is leading the charge. Experts say Google’s relative slowness on AI has left an opening that could give AI startups a chance of grabbing market share.
Get ready for the price of coffee to go up
Trump’s 50% tax on imports from Brazil is likely to hit the price of coffee in the U.S. About 30% of all coffee drunk in America comes from Brazil. In May, coffee was $7.93 per pound, up from $5.99 the year before, the NYT reports.
Trump appears to be serious about arming Ukraine
The president said he would send Patriot missiles to Ukraine, and he appears to have moved dramatically away from Putin. “I haven’t agreed on the number [of missiles] yet, but they are going to have some, because they do need protection,” Trump said on Sunday. “But we will send … we will send them Patriots, which they desperately need, because Putin really surprised a lot of people. He talks nice and then he bombs everybody in the evening.” Some of the arms may include long-range missiles capable of reaching deep into Russia, Axios reports.
Apple’s Tim Cook in the age of AI
Apple has fallen behind significantly in the race to develop and roll out AI products and services. Fortune’s Geoff Colvin analyzed how that lag puts a mark on CEO Tim Cook’s otherwise successful legacy.
Benioff on AI vs humans
Salesforce CEO Marc Benioff wrote in an op-ed for the Financial Times last week that adopting AI has led to a pause in engineer hiring and led to a significant amount of employee redeployment in Q1. AI agents now handle 85% of customer service queries and developed 25% of net new R&D code in the quarter, Benioff said.
Trade expert blasts “unreliable” tariffs
Trade expert Kristen Hopewell told Fortune that President Donald Trump’s “unreliable” trade strategy means “any deal you strike with the administration is not worth the paper it’s written on.” According to Hopewell, “he can simply come back later demanding more.”
The markets
S&P 500 futures were off 0.39% this morning, premarket. The index itself closed down 0.33% on Friday but remains near its all-time highs. Bitcoin is now above $122K, another all-time high. South Korea’s Kospi was up 0.83% this morning. The Stoxx Europe 600 was down 0.41% in early trading. The UK’s FTSE 100 was up 0.37% in early trading. Hong Kong’s Hang Seng was up 0.26%. Japan’s Nikkei 225 was down 0.28%. China’s CSI 300 Index was flat, remaining above 4,000—near its all-time high.
From the analysts
Wedbush on AI usage: “Consumer use of Gemini increased over the last three months, while preference continues to narrow relative to other top consumer-facing generative AI tools. 30% of consumers indicated that they have used Gemini in the last three months (from 23% in our prior survey), in line with ChatGPT (29%) and above Meta AI (22%). AI Overviews in Google Search continue to be perceived more positively than negatively by a wide margin. 48% of consumers indicated that AI Overviews have improved their Search experience (from 45% in our last survey), while 42% have observed no change and just 9% believe AI Overviews have worsened the experience,” per Scott Devitt and Matthew Weiss.
Goldman Sachs on home price appreciation: “We are lowering our forecasts for US home price appreciation over the next two years to +0.5% in 2025 and +1.2% in 2026, from our previous forecasts of 3.2% and 1.9%, respectively,” per Vinay Viswanathan et al.
Wedbush on equities: “S&P 500 is nearly overbought and investor sentiment / exposure is rising but we remain sanguine. Market breadth is improving, interest rates are likely to move lower and stimulus (front-loaded tax cuts) should help lessen the blow of tariffs and the weakening “under-the-hood” jobs picture. … Subdued VIX suggests that investors do not expect current punitive tariff rates to stick (TACO: Trump always chickens out). We would not be surprised by higher volatility in the coming months,” per Seth Basham, and Abe Rimatzki.
Around the watercooler
Cybercrime is big business in Asia, and AI could be about to make things worse by Nicholas Gordon
Elon Musk and some Democrats like Reid Hoffman actually share common ground on U.S. debt by Jason Ma
OpenAI’s $3 billion deal with AI coding startup Windsurf collapses, as Google swoops in for licensing deal by Allie Garfinkle
Wall Street sees 35% Canada tariff as just a negotiation tactic: ‘Tariffs are Trump’s hammer for every nail’ by Paolo Confino
CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.
