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Elon Musk’s SpaceX and two partners have emerged as frontrunners to win a crucial part of President Donald Trump’s “Golden Dome” missile defense shield, six people familiar with the matter said. Musk’s rocket and satellite company is partnering with software maker Palantir and drone builder Anduril on a bid to build key parts of Golden Dome, the sources said, which has drawn significant interest from the technology sector’s burgeoning base of defense startups. In his January 27 executive order, Trump cited a missile attack as “the most catastrophic threat facing the United States.” All three companies were founded by entrepreneurs who have been major political supporters of Trump. Musk has donated more than a quarter of a billion dollars to help elect Trump, and now serves as a special adviser to the president working to cut government spending through his Department of Government Efficiency. Despite the Pentagon’s positive signals to the SpaceX group, some sources stressed the decision process for Trump’s Golden Dome is in its early stages. Its ultimate structure and who is selected to work on it could change dramatically in the coming months. The three companies met with top officials in the Trump administration and the Pentagon in recent weeks to pitch their plan, which would build and launch 400 to more than 1,000 satellites circling the globe to sense missiles and track their movement, sources said. A separate fleet of 200 attack satellites armed with missiles or lasers would then bring enemy missiles down, three of the sources said. The SpaceX group is not expected to be involved in the weaponization of satellites, these sources said. One of the sources familiar with the talks described them as “a departure from the usual acquisition process. There’s an attitude that the national security and defense community has to be sensitive and deferential to Elon Musk because of his role in the government.” SpaceX and Musk have declined to comment on whether Musk is involved in any of the discussions or negotiations involving federal contracts with his businesses. The Pentagon did not respond to detailed questions from Reuters, only saying it will deliver “options to the President for his decision in line with the executive order and in alignment with White House guidance and timelines.” The White House, SpaceX, Palantir, and Anduril also did not respond to questions. SUBSCRIPTION SERVICE In an unusual twist, SpaceX has proposed setting up its role in Golden Dome as a “subscription service” in which the government would pay for access to the technology, rather than own the system outright. The subscription model, which has not been previously reported, could skirt some Pentagon procurement protocols allowing the system to be rolled out faster, the two sources said. While the approach would not violate any rules, the government may then be locked into a subscription and lose control over its ongoing development and pricing, they added. Some Pentagon officials have expressed concerns internally about relying on the subscription-based model for any part of the Golden Dome, two sources told Reuters. Such an arrangement would be unusual for such a large and critical defense program. U.S. Space Force General Michael Guetlein has been in talks on whether SpaceX should be the owner and operator of its part of the system, the two sources said. Other options include having the U.S. own and operate the system, or having the U.S. own it while contractors handle operations. Guetlein did not respond to a request for comment. Retired Air Force General Terrence O’Shaughnessy, a top SpaceX advisor to Musk, has been involved in the company’s recent discussions with senior defense and intelligence leaders, the two sources said. O’Shaughnessy did not respond to requests for comment. Should the group led by SpaceX win a Golden Dome contract, it would be the biggest win for Silicon Valley in the lucrative defense contracting industry and a blow to the traditional contractors. However, those long-standing contractors, such as Northrop Grumman, Boeing and RTX are expected to be big players in the process as well, people familiar with the companies said. Lockheed Martin put up a webpage as a part of its marketing efforts. MANY BIDS The Pentagon has received interest from more than 180 companies keen to help develop and build the Golden Dome, according to a U.S. official, including defense startups like Epirus, Ursa Major, and Armada. Members of the White House’s National Security Council were briefed by a handful of companies about their capabilities, four sources said. The Pentagon’s number two, former private equity investor Steve Feinberg, will be a key decision-maker for Golden Dome, two U.S. defense officials said. Feinberg co-founded Cerberus Capital Management which has invested in the cutting-edge hypersonic missiles industry but not in SpaceX. Feinberg, who did not respond to a request for comment, has said he would divest of all his interests in Cerberus when he joined the administration. Some experts believe the overall cost for Golden Dome could reach hundreds of billions of dollars. The Pentagon established several timelines for capabilities to be delivered starting with early 2026 to those delivered after 2030. SpaceX is pitching for the part of the Golden Dome initiative called the “custody layer,” a constellation of satellites that would detect missiles, track their trajectory, and determine if they are heading toward the U.S., according to two sources familiar with SpaceX’s goals. SpaceX has estimated the preliminary engineering and design work for the custody layer of satellites would cost between $6 billion and $10 billion, two of the sources said. In the past five years, SpaceX has launched hundreds of operational spy satellites and more recently several prototypes, which could be retrofitted to be used for the project, the sources said. Reuters reviewed an internal Pentagon memo from Defense Secretary Peter Hegseth issued shortly before a February 28 deadline to senior Pentagon leadership asking them for initial Golden Dome proposals and calling for the “acceleration of the deployment” of constellations of satellites. The time frame could give SpaceX an advantage because of its fleet of rockets, including the Falcon 9, and existing satellites that could be repurposed for the missile defense shield, the people familiar with the plan said. Despite these advantages, some of those familiar with the discussions said it was uncertain whether the SpaceX group would be able to efficiently set up a system with new technology in a cost-effective way that can protect the United States from attack. “It remains to be seen whether SpaceX and these tech companies will be able to pull any of this off,” said one of the sources. “They’ve never had to deliver on an entire system that the nation will need to rely on for its defense.” Mike Stone and Marisa Taylor, Reuters
Category:
E-Commerce
China-founded e-commerce sites Temu and Shein say they plan to raise prices for U.S. customers starting next week, a ripple effect from President Donald Trump’s attempts to correct the trade imbalance between the world’s two largest economies by imposing a sky-high tariff on goods shipped from China.Temu, which is owned by the Chinese e-commerce company PDD Holdings, and Shein, which is now based in Singapore, said in separate but nearly identical notices that their operating expenses have gone up “due to recent changes in global trade rules and tariffs.”Both companies said they would be making “price adjustments” starting April 25, although neither provided details about the size of the increases. It was unclear why the two rivals posted almost identical statements on their shopping sites.Since launching in the United States, Shein and Temu have given Western retailers a run for their money by offering products at ultralow prices, coupled with avalanches of digital or influencer advertising.The 145% tariff Trump slapped on most products made in China, coupled with his decision to end a customs exemption that allows goods worth less than $800 to come into the U.S. duty-free, has dented the business models of the two platforms.E-commerce companies have been the biggest users of the widely used exemption. Trump signed an executive order this month to eliminate the “de minimis provision” for goods from China and Hong Kong starting May 2, when they will be subject to the 145% import tax.As many as four million low-value parcelsmost of them originating in Chinaarrive in the U.S. every day under the soon-to-be canceled provision.U.S. politicians, law enforcement agencies, and business groups lobbied to remove the long-standing exemption, describing it as a trade loophole that gave inexpensive Chinese goods an advantage and served as a portal for illicit drugs and counterfeits to enter the country.Shein sells inexpensive clothes, cosmetics, and accessories, primarily targeting young women through partnerships with social media influencers. Temu, which promoted its goods through online ads, sells a wider array of products, including household items, humorous gifts, and small electronics.Last year the companies were among the largest advertising spenders on social media platforms, but they’ve both slashed that spending in recent weeks, according to data analytics provider Sensor Tower. That could be bad news for the platforms such as Facebook, Instagram, Snap, X, and TikTok that rely on advertising.In November, American e-commerce giant Amazon launched a low-cost online storefront featuring electronics, apparel, and other products priced at under $20. Many of the electronics, apparel, and other products on the storefront Wednesday resembled the types of items typically found on Shein and Temu.In their customer notices about the pending price increases, the companies encouraged customers to keep shopping in the days ahead.“We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time,” Temu’s statement said. “Were doing everything we can to keep prices low and minimize the impact on you.” Mae Anderson, AP Business Writer
Category:
E-Commerce
An aggressive U.S. tariff policy will trigger a significant slowdown in the U.S. economy this year and next, with the median probability of recession in the next 12 months approaching 50%, according to economists polled by Reuters. A sudden 90-day pause in reciprocal tariffs on trading partners imposed by President Donald Trump hasn’t done much to improve the U.S. outlook given a trade war with its biggest trading partner, China, is escalating and damaging business sentiment. Most forecasters, like U.S. consumers in recent months, have significantly raised their inflation expectations. They have also slashed their growth outlook. Median inflation forecasts in the April 1417 Reuters poll have surged since last month, potentially restricting the Federal Reserve from delivering more than two interest rate cuts between now and year-end. The probability of a U.S. recession over the coming year has surged to 45%, the highest since December 2023, from 25% last month. “Sentiment is incredibly weak right now and that points to households being very nervous about spending . . . Prices, jobs, and wealth are all moving against the consumer and that is a pretty toxic combination for consumer spending growth going forward,” said James Knightley, chief international economist at ING. “That’s the real issue for U.S. growth that raises the recession risk . . . The lack of clarity on the trading environment faced by U.S. companies makes them naturally more wary about putting money to work in the U.S. economy.” All 45 economists who answered an additional question said tariffs had negatively impacted business sentiment, with almost half saying they were very negative. The economy, which started the year on a solid footing of strong growth, consumer spending and hiring, is expected to grow just 1.4% in 2025, a sharp downgrade from 2.2% predicted last month. An overwhelming majority of common contributors, 46 of 50, have lowered their 2025 growth outlook by around 80 basis points on average just in the past month. Economists as a group have not downgraded their forecasts by that much in such a short span of time since July 2022. Next year, the economy is forecast to expand 1.5%, well down from 2.0% expected in a March poll. “Damage has likely already been done by uncertainty about tariffs, and that uncertainty stands to reduce growth, increase inflation, and amplify tail risks on an ongoing basis,” said James Egelhof, chief U.S. economist at BNP Paribas. Similar worries have also dented confidence in U.S. assets with many strategists in separate Reuters surveys recently saying they were concerned about the safe-haven status of U.S. Treasuries and the dollar. INFLATION EXPECTATIONS SURGE Economists have raised their outlook for all inflation measures surveyedconsumer prices, core CPI, personal consumption expenditure, and core PCEand all were expected to remain well above the Fed’s 2% target until at least 2027. Most regular contributors have revised their CPI forecasts for this year from the March survey by nearly 60 basis points on average, the biggest monthly change since March 2023. U.S. Federal Reserve Chair Jerome Powell on Wednesday warned Trump’s tariff policies risked pushing inflation and employment further from the central bank’s goals and said the Fed was “well positioned to wait for greater clarity.” A more than 60% majority of economists, 62 of 101, predicted the Fed would hold its federal funds rate at 4.25%4.50% until at least July. There was no clear consensus on where the rate would be by end-2025 but about two-thirds of economists predicted it at 3.75%4.00% or higher. Just over a third, 35, are expecting three or more reductions this year, in line with what interest rate futures are pricing. Kevin Khang, a senior economist at Vanguard said “it’s the ubiquitous presence of tariffs that makes the likelihood of upward price pressure an extremely likely scenario. And that’s why we think price stability will be marginally more prioritised over full employment.” Unemployment rate forecast changes in the poll were modest compared with the large downgrades to growth and upgrades to inflation. The jobless rate, currently 4.2%, was expected to average 4.4% and 4.6% this year and next, respectively. Indradip Ghosh, Reuters
Category:
E-Commerce
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