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Good morning from the Financial Times.
Today is Monday, September 22nd, and this is your FT News briefing.
Visas for skilled foreign workers in the US are getting a lot more expensive and Europe looks to protect its digital sovereignty from US big tech.
Plus, a Chinese retail giant is struggling with its European expansion plans.
JD is really desperate for growth outside of China.
For a company of this size, it's absolutely imperative that it needs to go global.
I'm Victoria Craig, and here's the news you need to start your day.
$14 billion.
That's how much US companies could rack up in new fees next year if they want to hire as many skilled foreign workers as they did in 2024.
It comes after President Donald Trump on Friday signed a proclamation introducing a 100000 application fee for new H-1B visas.
The rule is designed to encourage companies to hire more American employees, but would hit the US tech industry particularly hard, as Silicon Valley relies heavily on the program for engineers, scientists and coders.
Critics say the order could be a boon to foreign tech companies looking to hire the world's best and brightest.
The rule could also face legal challenges.
America's tech titans are losing a political battle in Brussels.
After two years of negotiations, the European Union might exclude Meta Apple, Google and Amazon from a new system designed to share financial data.
The idea was to allow third-party companies to access data in order to develop new digital finance products for consumers.
But Europe's finance industry has been fighting to restrict big tech's access.
Barbara Moons is the FT's EU correspondent in Brussels.
Hi, Barbara.
Hi.
So just bring us up to speed on this regulation.
What is it intended to do and who is it trying to help?
This regulation that is called the financial data access regulation, so a kind of nerdy fintech regulation, helps to make sure that service providers can use data from banks, insurances and use them to create new services, such as financial advice, digital display that you can kind of combine all your different accounts when it comes to financial services insurances, etc.
It's a very sensitive regulations for the financial industry in Europe and they have been lobbying for a long time to restrict the access of a number of tech companies because they argue it would exploit sensitive data that the European financial institutions have right now.
And let's dig into that argument, because the financial industry in Europe is backed by the European Parliament, the Commission and key European capitals, including Berlin.
Why are these political institutions sort of backing this push and what does it mean for the future of this regulation, the finalization of it really?
You have to really see it in the broader political context that there's a lot of momentum right now in Europe to have more digital sovereignty, as they call it, vis-a-vis the American tech companies.
And you see that, especially in the last couple of months since the new US, That argument has really been picking up and is also influencing these negotiations.
For example, when it comes to the German government, which has used the argument that Europe should have more digital sovereignty for its consumers.
And that has been helping the financial industry in Europe.
That has been saying the same thing for quite a long time.
It seems more and more that the financial industry is winning the fight and that they are set to exclude a number of big tech companies, such as Apple Meta Amazon, from having this access to financial data in Europe.
So who is likely to take advantage of this exclusion?
And has the U.S. big tech industry responded to this effort to exclude them?
So the big winner, so to say, if this would go through is obviously the existing financial industry in Europe, because they are able to protect a little bit more the market power that they have at this moment.
You see, obviously, the tech lobby also picking up the arguments.
In Brussels.
They are saying that it would actually reduce the access for a lot of consumer, that it would limit the consumer choice, that you would have much more opportunities if a number of players that are already very active in Europe, such as Amazon Apple, would actually use this data and allow better services for European customers.
And that it would only help the legacy player over a number of data that they already have.
So the tech companies are definitely lobbying against that.
But so far, they seem to be losing the argument.
And you write that they're aiming to come to a final deal on this legislation as early as the autumn.
There's sort of an elephant in the room with all of this because U.S.
President, Donald Trump has threatened tariffs on countries that quote discriminate against US tech companies.
So could that threat shape how this regulation does finally come together?
It's definitely something that is looming over the negotiations which indeed, they're hoping to conclude, ideally in the next coming weeks, but definitely this fall.
A lot of the transatlantic fights on tech have been more focused on other legislations and on other discussions, especially on fines on big tech groups.
So it'll be interesting to see whether or not this also tracks the attention of the US government at some point, and whether they will possibly even retaliate if this actually comes to fruition.
Barbara Moons, the FT's EU correspondent for us in Brussels.
Thanks for your time.
You're welcome.
In a coordinated landmark announcement, the UK, Australia and Canada on Sunday formally recognized the state of Palestine.
The decision comes ahead of a formal recognition by several other countries at the UN General Assembly this week and as international outrage mounts over the worsening humanitarian situation in Gaza.
U.K.
Prime Minister Keir Starmer said he hoped the symbolic move would be a step toward peace and that it would revitalize progress toward a two-state solution to the Israeli-Palestinian conflict.
Israel expanded its operations in Gaza last week and recently approved major settlement blocks in the West Bank.
For its part, Israel's foreign ministry warned the coordinated push by several of its allies to recognize Palestine amounted to a quote.
The militant group's attack on October 7, 2023 triggered the current war in Gaza.
Growing pains are an inevitable side effect of any company's expansion strategy.
Chinese tech billionaire Richard Liu has been nursing a few of those lately.
Liu is founder of China's e-commerce behemoth JDcom, and he said a crucial element of his company's future is expanding into Europe.
But that effort has hit some roadblocks recently.
Here to explore why and what it means for the company is the FT's China tech correspondent, Eleanor Olcott.
Hi, Eleanor.
Hi, Victoria.
So the most recent stumble for Leo was just in the last week when a bid to buy UK retailer Argos collapsed.
And talks had been ongoing for months with its owner Sainsbury's to solidify that deal.
Just walk us through what exactly happened.
Why did those talks fall through?
So JD.com a few months ago approached Sainsbury's about the purchase of Argos.
That's the UK retailer that's kind of embedded into the Sainsbury's supermarkets.
The talks were at a fairly late stage, but people close to the deal said that after the news was leaked in the UK press, JD and Sainsbury's were no longer able to agree on the terms and the talks collapsed in acrimony.
The Chinese e-commerce market is powered by millions of delivery workers who don't get paid very much.
So reproducing that in a market where the labor costs are much higher and the delivery systems are much slower is not going to be possible with the same kind of efficiency as China.
The Argos acquisition would have been very, very helpful for realizing some aspects of this goal, because Argos does have very good delivery system and it guarantees kind of same day delivery for a lot of its goods.
The thing is, this isn't the first time that Leo has tried and failed to buy a British retailer, but I'm just curious why they haven't been successful.
Is there a common thread among these deals or are they sort of just one-off coincidences really?
So JD also considered a bid for the British electronics retailer Curry's last year, which was abandoned.
It is important to note here that JD did successfully bid for German retailer C Economy.
The terms of that deal have been agreed.
It's just being under review from the European regulators.
So from the perspective of the company, it's not that every deal that they go after fails, but certainly there have been major roadblocks on the UK side.
And you mentioned some efforts on the European continent itself.
Why is Europe a priority for JD?
JD is really desperate for growth outside of China.
The Chinese e-commerce market is notoriously competitive.
The Chinese economy is slowing down.
Consumption is very weak.
So for a company of this size, it's absolutely imperative that it needs to go global.
We've obviously seen a lot of Chinese e-commerce companies like Xi'an and Taimu entering the European markets recently, but they've adopted a very different strategy to JDcom.
They've done this kind of cross-border e-commerce strategy of shipping goods directly from China to the UK, to Europe, without building much of an infrastructure presence in the countries.
Whereas JDcom says okay, we need to fix this by actually improving the logistics on the consumer end.
And it wants to be a serious competitor to the likes of Amazon.
So it seems like a fair bit of balancing that Leo is trying to do across multiple continents.
I'm curious, though, what happens to JD if these plans to expand across Europe are not successful?
JD in its home market has actually pulled back a little bit in recent months from the delivery push because it's become really really expensive.
And there's also been this late entry of Alibaba, which is another e-commerce giant into the race.
So you see in China that they're kind of calibrating their strategy.
But in Europe, they're still full steam ahead.
The Argos purchase was really intended to bolster JDcom's warehouse and logistics infrastructure in the UK ahead of the launch of a new e-commerce platform called Joybuy.
The company says that those plans have not been disrupted by the Argos deal collapsing.
Plenty to keep you busy, I think, Eleanor.
The FD is China tech correspondent Eleanor Olcott.
Thanks so much for your time.
Thank you.
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