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WASHINGTON — The U.S. House Foreign Affairs Committee plans to take up legislation Tuesday that would give President Joe Biden the authority to ban TikTok, the Chinese social media app used by more than 100 million Americans.
The panel is scheduled to vote on a series of China-related bills Tuesday afternoon, including one that would revise the longstanding protections that have shielded distributors of foreign creative content like TikTok from U.S. sanctions for decades. Introduced last Friday, H.R. 1153 is expected to pass the committee on Tuesday.
The bill that could ultimately ensnare TikTok, owned by China’s ByteDance, only has one sponsor, the committee’s newly seated Republican chairman, Texas Rep. Mike McCaul.
Typically, a bill this new, with only one sponsor, would not move to committee votes just days after it was introduced. But the choice of which bills will advance through a committee is made by each committee’s chairman, so McCaul’s sponsorship is effectively all the bill needs.
If the measure is approved by a majority of the committee members and referred to the full House for a vote, as expected, H.R. 1153 will effectively leap frog several other proposals to ban TikTok that were previously introduced in the House and Senate, but haven’t yet advanced through the committee process.
After that, McCaul’s bill would likely pass the Republican-controlled House easily. But its fate in the Democratic majority Senate is unclear.
Despite the bitter divisions between the two parties on nearly every major issue, there is one thing both Democrats and Republicans overwhelmingly support: proactive measures to stem China’s growing global influence. And H.R. 1153 could do that.
In practical terms, the bill would revise a group of rules known as the Berman amendments that were first enacted near the end of the Cold War, intended to shield “informational materials” like books and magazines from sanctions-related import and export bans.
Over time, however, the Berman amendments were expanded into a broad rule that courts interpreted as prohibiting the government from using sanctions powers to block trade in any informational materials, including digital content, to or from a foreign country.
In 2020, TikTok argued successfully in court that it was covered by the Berman amendments exemption when it beat back attempts by the Trump administration to ban its distribution by Apple and Google app stores.
McCaul told CNBC his bill would change this. “Currently the courts have questioned the administration’s authority to sanction TikTok. My bill empowers the administration to ban TikTok or any software applications that threaten U.S. national security,” McCaul said in a statement Monday.
Under McCaul’s bill, the Berman amendments exemptions that have protected TikTok in the past would no longer apply to companies that engage in the transfer of the “sensitive personal data” of Americans to entities or individuals based in, or controlled by, China.
On first reading, McCaul’s legislation appears to be broader than some of the other TikTok bills that have been introduced so far.
Critics and TikTok lobbyists have argued that those prior bills amounted to punishing the company for a crime outside the legal system. They also argue that any ban is tantamount to censorship of content protected by the First Amendment.
“It would be unfortunate if the House Foreign Affairs Committee were to censor millions of Americans,” TikTok spokeswoman Brooke Oberwetter told CNBC in an email Monday.
TikTok is no stranger to rough political waters, having been in the crosshairs of U.S. lawmakers since former President Donald Trump declared his intention to ban the app by executive action in 2020.
At the time, ByteDance was looking to potentially spin off TikTok to keep the app from being shut down.
In September 2020, Trump said he would approve an arrangement for TikTok to work with Oracle on a cloud deal and Walmart on a commercial partnership to keep it alive.
Those deals never materialized, however, and two months later Trump was defeated by Biden in the 2020 presidential election.
The Biden administration kept up the pressure. While Biden quickly revoked the executive orders banning TikTok, he replaced them with his own, setting out more of a road map for how the government should evaluate the risks of an app connected to foreign adversaries.
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TikTok has continued to engage with the Committee on Foreign Investment in the U.S., which is under the Treasury Department. CFIUS, which evaluates risks associated with foreign investment deals, is scrutinizing ByteDance’s purchase of Musical.ly, which was announced in 2017.
The CFIUS review has reportedly stalled, but TikTok spokeswoman Oberwetter said the company still favors the deal.
“The swiftest and most thorough way to address national security concerns is for CFIUS to adopt the proposed agreement that we worked with them on for nearly two years,” she told CNBC on Monday.
In the meantime, government officials from the FBI and the Department of Justice have publicly warned about the dangers of using the app, and many states have imposed bans of their own.
On Monday, the Biden administration released new implementation rules for a TikTok ban that applies only to federal government-owned devices, which was passed by Congress in December.
Earlier this month, Sens. Richard Blumenthal, D-Conn., chair of the Senate Judiciary subcommittee on privacy, and Jerry Moran, R-Kan., a member of the Senate Select Committee on Intelligence, said in a letter that CFIUS should “swiftly conclude its investigation and impose strict structural restrictions between TikTok’s American operations and its Chinese parent company, ByteDance, including potentially separating the companies.”
But while the executive branch scrutinizes TikTok through CFIUS, McCaul and the GOP-controlled House are not waiting around for them to act.
“TikTok is a security threat. It allows the CCP [Chinese Communist Party] to manipulate and monitor its users while it gobbles up Americans’ data to be used for their malign activities,” McCaul told CNBC.
If TikTok-related legislation looks like it’s moving swiftly through Congress, that could spook investors, and work to the benefit of some of the company’s biggest competitors.
TikTok has been taking market share from Facebook, Instagram and Google‘s YouTube, which have all seen advertising slow dramatically over the past year.
According to Insider Intelligence, TikTok controls 2.3% of the worldwide digital ad market, putting it behind only Google (including YouTube), Facebook (including Instagram), Amazon and Alibaba.
— CNBC’s Ari Levy contributed to this story from San Francisco.
A Zoox autonomous robotaxi in San Francisco, California, US, on Wednesday, Dec. 4, 2024.
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Amazon‘s Zoox robotaxi unit issued a voluntary recall of its software for the second time in a month following a recent crash in San Francisco.
On May 8, an unoccupied Zoox robotaxi was turning at low speed when it was struck by an electric scooter rider after braking to yield at an intersection. The person on the scooter declined medical attention after sustaining minor injuries as a result of the collision, Zoox said.
“The Zoox vehicle was stopped at the time of contact,” the company said in a blog post. “The e-scooterist fell to the ground directly next to the vehicle. The robotaxi then began to move and stopped after completing the turn, but did not make further contact with the e-scooterist.”
Zoox said it submitted a voluntary software recall report to the National Highway Traffic Safety Administration on Thursday.
A Zoox spokesperson said the notice should be published on the NHTSA website early next week. The recall affected 270 vehicles, the spokesperson said.
The NHTSA said in a statement it had received the recall notice and that the agency “advises road users to be cautious in the vicinity of vehicles because drivers may incorrectly predict the travel path of a cyclist or scooter rider or come to an unexpected stop.”
If an autonomous vehicle continues to move after contact with any nearby vulnerable road user, it risks causing harm or further harm. In the AV industry, General Motors-backed Cruise exited the robotaxi business after a collision in which one of its vehicles injured a pedestrian who had been struck by a human-driven car and was then rolled over by the Cruise AV.
Zoox’s May incident comes roughly two weeks after the company announced a separate voluntary software recall following a recent Las Vegas crash. In that incident, an unoccupied Zoox robotaxi collided with a passenger vehicle, resulting in minor damage to both vehicles.
The company issued a software recall for 270 of its robotaxis in order to address a defect with its automated driving system that could cause it to inaccurately predict the movement of another car, increasing the “risk of a crash.”
Amazon acquired Zoox in 2020 for more than $1 billion, announcing at the time that the deal would help bring the self-driving technology company’s “vision for autonomous ride-hailing to reality.”
While Zoox is in a testing and development stage with its AVs on public roads in the U.S., Alphabet’s Waymo is already operating commercial, driverless ride-hailing services in Phoenix, San Francisco, Los Angeles and Austin, Texas, and is ramping up in Atlanta.
Teslais promising it will launch its long-delayed robotaxis in Austin next month, and, if all goes well, plans to expand after that to San Francisco, Los Angeles and San Antonio, Texas.
Shares of Intuit popped about 9% on Friday, a day after the company reported quarterly results that beat analysts’ estimates and issued rosy guidance for the full year.
Intuit, which is best known for its TurboTax and QuickBooks software, said revenue in the fiscal third quarter increased 15% to $7.8 billion. Net income rose 18% to $2.82 billion, or $10.02 per share, from $2.39 billion, or $8.42 per share, a year earlier.
“This is the fastest organic growth that we have had in over a decade,” Intuit CEO Sasan Goodarzi told CNBC’s “Closing Bell: Overtime” on Thursday. “It’s really incredible growth across the platform.”
For its full fiscal year, Intuit said it expects to report revenue of $18.72 billion to $18.76 billion, up from the range of $18.16 billion to $18.35 billion it shared last quarter. Analysts were expecting $18.35 billion, according to LSEG.
“We’re redefining what’s possible with [artificial intelligence] by becoming a one-stop shop of AI-agents and AI-enabled human experts to fuel the success of consumers and small and mid-market businesses,” Goodarzi said in a release Thursday.
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Goldman Sachs analysts reiterated their buy rating on the stock and raised their price target to $860 from $750 on Thursday. The analysts said Intuit’s execution across its core growth pillars is “reinforcing confidence” in its growth profile over the long term.
The company’s AI roadmap, which includes the introduction of AI agents, will add additional upside, the analysts added.
“In our view, Intuit stands out as a rare asset straddling both consumer and business ecosystems, all while supplemented by AI-prioritization,” the Goldman Sachs analysts wrote in a note.
Analysts at Deutsche Bank also reiterated their buy rating on the stock and raised their price target to $815 from $750.
They said the company’s results were “reassuring” after a rocky two years and that they feel more confident about its ability to grow the consumer business.
“Longer term, we continue to believe Intuit presents a unique investment opportunity and we see its platform approach powering accelerated innovation with leverage, thus enabling sustained mid-teens or better EPS growth,” the analysts wrote in a Friday note.
FILE PHOTO: Apple CEO Tim Cook escorts U.S. President Donald Trump as he tours Apple’s Mac Pro manufacturing plant with in Austin, Texas, U.S., November 20, 2019.
Last week, Trump said he “had a little problem with Tim Cook,” and on Friday, he threatened to slap a 25% tariff on iPhones in a social media post.
Trump is upset with Apple’s plan to source the majority of iPhones sold in the U.S. from its factory partners in India, instead of China. Cook officially confirmed this plan earlier this month during earnings.
Trump wants Apple to build iPhones for the U.S. market in the U.S. and has continued to pressure the company and Cook.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted on Truth Social on Friday.
Analysts said it would probably make more sense for Apple to eat the cost rather than move production stateside.
“In terms of profitability, it’s way better for Apple to take the hit of a 25% tariff on iPhones sold in the US market than to move iPhone assembly lines back to US,” wrote Apple supply chain analyst Ming-Chi Kuo on X.
UBS analyst David Vogt said that the potential 25% tariffs were a “jarring headline,” but that they would only be a “modest headwind” to Apple’s earnings, dropping annual earnings by 51 cents per share, versus a prior expectation of 34 cents per share under the current tariff landscape.
Experts have long held that a U.S.-made iPhone is impossible at worst and highly expensive at best.
Analysts have said that made in U.S.A. iPhones would be much more expensive, CNBC previously reported, with some estimates ranging between $1,500 to $3,500 to buy one at retail. Labor costs would certainly rise.
But it would also be logistically complicated.
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Supply chains and factories take years to build out, including installing equipment and staffing up. Parts that Apple imported to the United States for assembly might be subject to tariffs as well.
Apple started manufacturing iPhones in India in 2017 but it was only in recent years that the region was capable of building Apple’s latest devices.
“We believe the concept of Apple producing iPhones in the US is a fairy tale that is not feasible,” wrote Wedbush analyst Dan Ives in a note on Friday.
Other analysts were wary about predicting how Trump’s threat ultimately plays out. Apple might be able to strike a deal with the administration — despite the eroding relationship — or challenge the tariffs in court.
For now, most of Apple’s most important products are exempt from tariffs after Trump gave phones and computers a tariff waiver — even from China — in April, but Apple doesn’t know how the Trump administration’s tariffs will ultimately play out beyond June.
“We’re skeptical,” that the 25% tariff will materialize, wrote Wells Fargo analyst Aaron Rakers.
He wrote that Apple could try to preserve its roughly 41% gross margin on iPhones by raising prices in the U.S. by between $100 or $300 per phone.
It’s unclear how Trump intends to target Apple’s India-made iPhones. Rakers wrote that the administration could put specific tariffs on phone imports from India.
Apple’s operations in India continue to expand.
Foxconn, which assembles iPhones for Apple, is building a new $1.5 billion factory in India that could do some iPhone production, the Financial Times reported Thursday.