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Member Briefing April 23, 2025

April 23, 2025

Posted By: Harold King in Daily Briefing,

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IMF Slashes World Growth Forecasts Due To Trade War

The International Monetary Fund sharply downgraded its U.S. growth forecast, while also lowering its outlook for the eurozone and China on the back of President Donald Trump’s tariff blitz. The U.S. is now seen as growing by 1.8 percent this year, a 0.9 percentage point reduction from its January estimate, according to the IMF’s new World Economic Outlook, which is published twice a year. Growth forecasts for other major economies also were revised downwards: the eurozone saw growth knocked down by 0.2 percentage points and China by 0.6 percentage points.

Despite the downgrades, the U.S. is still expected to outperform the eurozone. The currency area is expected to grow by 0.8 percent in 2025, and 1.2 percent in 2026. Germany, its largest economy, is seen stagnating once again this year, with growth expected to pick up to 0.9 percent in 2026. The IMF flags Berlin’s decision to loosen its fiscal rules, as well as a pick-up in wages, as helping to fuel growth next year. In China, a combination of a downturn in its real estate market as well as domestic imbalances towards exports has contributed to its mounting economic difficulties. Tariffs have “disproportionately” hurt the Asian economy, according to the IMF, which notes that a rebalancing towards greater domestic consumer demand is stalling.

Read more at Politico

Inside the IMF-World Bank Spring Meetings as Leaders Navigate The Global Trade War

Hundreds of global finance leaders will descend on Washington this week, each with a singular mission: Who can I talk with to cut a trade deal? The semi-annual gatherings of the International Monetary Fund and World Bank Group are bustling affairs with high-level multilateral policy talks, but also one-on-one meetings between finance ministers eager to broker deals on things like project financing, foreign investment back home and, for poorer economies, debt relief. Tariffs are already darkening the IMF's economic forecasts, (see above) which will put more pressure on developing country debt burdens.

This year, rather than policy coordination on climate change, inflation and financial support for Ukraine's struggle against Russia's invasion, one issue will dominate: tariffs. More specifically, how to get out from under - or at least minimize - the pain from U.S. President Donald Trump's unprecedented barrage of steep import taxes since his return to the White House in January. And the focus may be largely on one man, new U.S. Treasury Secretary Scott Bessent, who is Trump's lead negotiator for tariff deals and whose support for the IMF and World Bank remains a question mark.

Read more at Reuters

Tackling Tariffs: What Some Companies Are Saying, And Doing, About Tariffs

Companies from a wide range of industries are having trouble assessing the impact of tariffs because of the constant uncertainty over whether and where the taxes will be imposed next or postponed, sometimes on a daily or weekly basis. Some tariffs remain in place against key U.S. trading partners, but others have been postponed to give nations time to negotiate. As a result companies have been giving somewhat shaky financial forecasts during their latest round of earnings updates. Here's how several big companies are dealing with the tariff confusion:

3M - William Brown, CEO of 3M Co., the maker of adhesives, coatings, Scotch Tape and Post-it notes, acknowledged that “tariffs are going to be a headwind this year.” The company stuck to a full-year forecast for profit of $7.60 to $7.90 per share, excluding the impact of tariffs. But 3M did include a slide in its presentation for analysts with a “tariff impact sensitivity,” Brown also said during a conference call that the company is looking at alternative production sites with different countries of origin to try and minimize the tariff impact.
RTX - Most of the RTX’s industrial base and supply chain is located inside the U.S., but tariffs are still poised to hurt the defense company behind missile and radar systems. RTX expects up to $800 million in cost impacts from tariffs imposed on Canada, Mexico, China and other nations. It hasn’t included the potential impact in its earnings forecast.
GE Aerospace - The maker of jet engines and aviation systems is also accustomed to low trade barriers within the aviation sector. The company now expects tariff costs of roughly $500 million after hopefully mitigating some of the impact through programs and strategies, such as expanding foreign trade zones.
Flexsteel Industries - The furniture company could see much more damage from a mix of tariffs and a downturn in consumer spending. Flexsteel has moved out of China, but Vietnam supports about 55% of its revenue, while operations in Mexico support almost 40% of sales, the company said. If the 46% reciprocal tariff rate on Vietnam, which is currently delayed, goes into effect, “it will have wide-reaching implications both on Flexsteel’s business and the overall U.S. furniture industry,” said President and CEO Derek Schmidt, in a conference call with analysts.

Read more at Yahoo Finance

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

Siena Poll: Hochul's Job Approval, Favorability Improve As Voters Support Her Top-Line Policy Items In State Budget Battle

New York Gov. Kathy Hochul saw an improvement in her favorability and job approval last month and strong support for her top-line policy items in the still unfinished state budget, according to a Siena College poll of registered New York voters released Tuesday. The governor has a favorability rating of 44-43%, up from 40-50% in March. Also improved from last month is her reelection stance with a year and a half until she’s set to face voters for a second full term, with 39% of voters prepared to reelect her, while 48% want someone else. Other Key findings in the poll:

Strong Support for Hochul Budget Issues – School Cell Phone Ban, Mask Ban, Discovery, Involuntary Commitment – But Not for Holding Up the Budget.
President Donald Trump’s favorability rating is 40-55%, up slightly from 39-57% in March. His overall job approval rating is 42-56%, little changed from 42-55% last month.
Senator Minority Leader Chuck Schumer has a 39-49% favorability rating, down from 45-41% in February. It is the first time his favorability rating has been negative since June 2024, and the worst it has ever been in a Siena College poll dating back to February 2005.
Rep. Alexandria Ocasio-Cortez has a 47-33% favorability rating, up from 38-39% the last time Siena asked about her statewide, January 2021.
In a potential Republican gubernatorial primary – fielded prior to Rep. Elise Stefanik’s trial balloon – Nassau County Executive Bruce Blakeman leads Rep. Mike Lawler, among registered Republicans, 28-22%, after trailing 13-25% last month.
A plurality of voters opposes building new nuclear power plants in New York, 47-35%. In December, voters were closely divided, with 43% opposing and 42% supporting.
A plurality of voters also opposes a state law mandating that all school bus fleets be entirely electric by 2035, 43-37%.
Currently, 41% of New Yorkers think the state is on the right track, while 45% say the state is headed in the wrong direction, an improvement from 38-46% last month.
Currently, 65% say the fiscal condition of New York State is only fair or poor, compared to 30% who say it is excellent or good, a small improvement from 68-27% in December.
New Yorkers continue to be more pessimistic about the direction of the country, with 37% saying the nation is on the right track and 56% saying it’s headed in the wrong direction, little changed from 36-54% in March.

Read more at the Siena College Research Institute

New York Received More Than It Paid To Federal Government In FY 2023

The New York state Comptroller's Office says former U.S. Sen. Daniel Patrick Moynihan pioneered the concept of balance of payments between the federal government and states with his first report in 1977. For the vast amount of time New York has reviewed those payments, it has been what Moynihan referred to as a “donor state.” The comptroller's office released a report Monday reviewing the 2023 Fiscal Year, and found that New York was a beneficiary for the fourth-straight year. However, three states do have a negative balance in the report, and per capita, New York's $1.06 return is 26 cents below the national average.

According to the report, the state now ranks 42nd in benefits per person, compared to 30th two years prior. Maria Doulis, deputy comptroller for budget and policy analysis said as the federal government has already frozen some funds and is discussing cuts to programs in which the state ranks high, like Medicaid, the disparity in balance of payments may become even more significant, although it likely won't materialize in reports for a year or two. She said in moments like right now, when federal and state relationships may be changing, it’s important to lay out numbers like the balance of payments in order to have those conversations.

Read more at NY State of Politics

Trump’s First 100 Days

Health and Wellness

Mental Health Is Becoming The New Workplace Safety Crisis For SMEs

Mental health is becoming a leading workplace safety risk, overtaking physical injuries like slips, trips, and falls, according to data from Pie Insurance. For small and medium-sized enterprises (SMEs), the rising tide of mental health-related claims poses a unique challenge, especially given their limited resources compared to large corporations. Carla Woodard, senior vice president of claims at Pie Insurance, has closely studied the trend and said the surge itself isn’t unexpected. “The trend is not surprising,” she told Insurance Business. “What was a pleasant surprise to us was the growing awareness that small business owners have of this particular risk.”

That awareness is critical. For years, physical safety dominated the conversation around workplace risk. Now, businesses are being forced to look at employees’ mental as well as physical well-being. "Mental health is part of our overall health. So, when we think about workplace safety and we think about employees, we have to think of them holistically," Woodard said.

Read more at Insurance Business Magazine

Industry News

Trade War Updates

Greek-Yogurt Maker Chobani To Invest $1.2 Billion In New York Plant

Greek-yogurt maker Chobani said on Tuesday that it would be investing $1.2 billion in building its third U.S. dairy processing plant in New York, and expects to create more than 1,000 full-time jobs. The privately held company, which announced a $500 million expansion in Idaho last month, said the new facility in upstate New York would help it keep up with rising product demand and also boost new innovations.

Smaller food brands including Chobani, Duke's and Mike's Amazing have been gaining market share in the U.S. while giving stiff competition to bigger conglomerates such as Unilever, as cost-conscious consumers switch to cheaper alternatives. Chobani's products are manufactured in New York, Idaho, Michigan and Australia, and are available throughout North America and distributed in Australia and other select markets.

Read more at Reuters

Cranky The Robot And Shorter Work Weeks: What Manufacturers See As The Value Of AI

As manufacturers look to adopt the latest artificial intelligence and automated technologies to drive efficiency on the shop floor and remain competitive, one of the biggest challenges is convincing their workers that the changes are a good idea. Today’s U.S. workforce is more worried than hopeful about future AI use — about a third of those surveyed recently by the Pew Research Center say it will lead to fewer job opportunities in the long run.

Manufacturing leaders convened at the North American Manufacturing Excellence Summit in Fort Worth, Texas, last week to discuss their strategies around how to quell anxieties and job security concerns. This includes tactics such as as implementing technologies that expedite tedious tasks and processes, like picking up parts or distilling hundreds of pages of business documents. Here are some examples of how manufacturers are incorporating AI, automation and robotics to not only boost productivity, but to improve company culture and help workers upskill for the future.

Read more at Manufacturing Dive

Consumers’ Comfort With EVs Rises, McKinsey Consumer Survey Finds

Consumer frustrations with electric vehicles have eased in the U.S., according to the results of a new McKinsey & Co. survey. More than three-quarters of EV owners, 76 percent, said they’ll stick with battery-electric vehicles for their next purchase. Fifteen percent said they intend to switch to a plug-in hybrid. The latest numbers present a sharp turnaround from previous results in the consulting firm’s annual “Consumer Pulse” survey. Last year, 46 percent of U.S. EV owners said they were likely to return to combustion-engine vehicles the next time they purchased a vehicle.

“Overall, the pain around the charging experience is starting to come down,” Philipp Kampshoff, co-founder of McKinsey’s Center for Future Mobility, told Automotive News. Sign up for the weekly Automotive News Mobility Report newsletter for the latest developments at the intersection of transportation and technology. The U.S. added more public chargers overall, more fast chargers are available, and charger reliability has improved, he said. More brands have access to the Tesla Supercharger network, further expanding charging options.

Read more at Yahoo Autos

Lockheed Martin’s Quarterly Profit Rises On Resilient Defense Demand

Lockheed Martin reported a higher first-quarter profit on Tuesday and reaffirmed its forecasts for the year on the back of resilient demand for its missile systems and fighter jets. The company posted earnings per share of $7.28, beating Wall Street analyst expectations of $6.34. U.S. President Donald Trump’s trade war has rattled markets and upset some allies. For example, Canada, which is hit by steep tariffs, has ordered a review of a C$19 billion contract for 88 of Lockheed Martin’s F-35 jets, with Prime Minister Mark Carney saying the country relies too much on the U.S. for security.

Still, defense contractors have benefited from a surge in demand for weapons against the backdrop of the war in Ukraine and conflicts in the Middle East. Legacy companies in the sector are also expected to get a potential boost from U.S. President Donald Trump’s review of military equipment export rules that he is seeking to ease. Lockheed’s aerospace business, which makes the F-35 fighter jet, posted a 3.1% rise in sales in the first quarter. Lockheed reported total revenue of $17.96 billion in the first quarter, up 4.5% from a year earlier. Sales during the quarter increased at all the company’s units, except its space division. The company’s net income rose to $1.71 billion, or $7.28 per share, in the quarter, from about $1.55 billion, or $6.39 per share, a year earlier.

Read more at CNBC

Boeing to Sell Some of Its Navigation Business in $10.55 Billion Deal

Boeing has agreed to sell portions of its Digital Aviation Solutions business to Thoma Bravo in an all-cash deal worth $10.55 billion as it looks to double down on its core business. The Arlington, Va., aerospace giant said Tuesday that the definitive agreement includes several assets that provide digital tools and services for aviation operations, such as Jeppesen, a provider of navigation charts and flight planning for pilots and airlines, and ForeFlight, another flight-planning and navigation app that helps with route optimization, weather tracking and flight management.

The move is part of Boeing’s broader effort to slash costs and raise money as it burns billions of dollars a quarter and struggles with a quality crisis in the wake of last year’s fuselage-panel blowout on an Alaska Airlines flight. Boeing burned $14 billion last year and has said it expects losses to continue into this year. Read more at Smart Industry. Analysts say the sale is a mixed bag. It delivers much-needed cash but, given that Jeppison is profitable, could come at the expense of longer-term profits.

Read more at the WSJ

Tesla Reports 20% Drop In Auto Revenue As First-Quarter Results Miss Wall Street Estimates

Tesla reported a miss on the top and bottom lines in its first-quarter earnings report on Tuesday as automotive revenue plunged 20% from a year earlier. Earnings per share were 27 cents adjusted vs. 39 cents estimated and revenue was: $19.34 billion vs. $21.11 billion estimated. Total revenue slid 9% from $21.3 billion a year earlier. Automotive revenue dropped 20% to $14 billion from $17.4 billion in the same period last year. Net income plummeted 71% to $409 million, or 12 cents a share, from $1.39 billion or 41 cents a year ago.

Tesla said one reason for the decline was the need to update lines at its four vehicle factories to start making a refreshed version of its popular Model Y SUV. The company also pointed to lower average selling prices and sales incentives as a drag on revenue and profit. CEO Elon Musk has spent much of his time in President Donald Trump’s White House, overseeing an effort to dramatically downsize the federal government. The president’s sweeping tariffs plan has led to concerns that costs will increase for parts and materials crucial for electric vehicle production, including manufacturing equipment, automotive glass, printed circuit boards and battery cells. The company refrained from promising growth this year and said it will “revisit our 2025 guidance in our Q2 update.”

Read more at CNBC

The Only U.S. Rare Earth Mine May Win Big From Trump’s China Tariffs

Since China retaliated against President Trump’s tariffs by restricting exports of rare earth minerals — crucial to making the magnets that go into electric motors, used for cars, electronics, robots and wind turbines — MP Materials founder and CEO Jim Litinsky’s phone has been ringing off the hook from companies desperate for new suppliers. “The sense of urgency, I've never seen anything like it,” he told Forbes. “It's pretty wild and exciting–and daunting.”

Litinsky runs the only U.S. rare earths mine, Mountain Pass in California’s Mojave Desert, supplying elements like neodymium and praseodymium that industries like defense, automotive and electronics rely on to build efficient electric motors. Once Litinsky’s staff of over 800 engineers, technicians and miners harvest the minerals from the earth, MP refines them, turning them into metals, which companies like General Motors need for EV motors. Starting this year, MP will also make high-powered magnets with those metals at a new plant in Texas, a market China currently dominates.

Read more at Forbes

SpaceX Launches Atomic Clocks With Lasers To Test Einstein Theory

Two cutting-edge atomic clocks — the most accurate ever created — have launched on a SpaceX rocket and are on their way to the International Space Station. In the coming months, they will use lasers to synchronize global clocks using global navigation satellite networks. The Atomic Clock Ensemble in Space will “redefine how we measure time,” according to the European Space Agency, which developed it. It will transmit the most accurate time signal ever from space and create an “internet of clocks,” comparing them to measure the flow of time. That will help scientists study Earth’s gravity. “We are placing the most precise timepiece ever sent to orbit aboard the International Space Station — opening new frontiers in fundamental physics, time transfer, and global synchronization,” said Daniel Neuenschwander, Director of Human & Robotic Exploration at ESA. He called it a “major milestone for European science and international cooperation in space.”

The ACES clocks — PHARAO and SHM — will be used to test fundamental physics from orbit, including Albert Einstein’s theory of general relativity and the search for dark matter, said ESA. It will do that by defining how time and space are related. Built by the French space agency CNES and Safran Timing Technologies in Switzerland, the ACES clocks are so precise that they would lose just one second in 300 million years. The ACES clocks have a time transfer system built by German company TimeTech that will use microwave and laser links to synchronize time between space and Earth. The mission will also test how to synchronize clocks worldwide using GPS satellites.

Read more at Forbes

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