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Member Briefing August 6, 2025

Date postedAugust 6, 2025
Posted By: Harold King Daily Briefing,

Top Story

Trade Gap Narrows as Imports Continue to Fall in June

The U.S. trade deficit narrowed in June on a sharp drop in consumer goods imports, the latest evidence of the imprint on global commerce President Donald Trump is making with sweeping tariffs on imported goods. The overall trade gap narrowed 16.0% in June to $60.2 billion, the Commerce Department's Bureau of Economic Analysis said on Tuesday. Days after reporting that the goods trade deficit tumbled 10.8% to its lowest since September 2023, the government said the full deficit including services also was its narrowest since September 2023.

Exports of goods and services totaled $277.3 billion, down from more than $278 billion in May, while total imports were $337.5 billion, down from $350.3 billion. Based on tariff revenue and imports, the average trade-weighted tariff rate rose to 10% in June. We expect this to move higher over the coming months.

Read more at Wells Fargo

ISM: US Services Activity Flatlined In July

U.S. services sector activity unexpectedly flatlined in July with little change in orders and a further weakening in employment even as input costs climbed by the most in nearly three years, underscoring the ongoing drag of uncertainty over the Trump administration's tariff policy on businesses. The Institute for Supply Management (ISM) said on Tuesday its nonmanufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June. Economists polled by Reuters had forecast the services PMI would rise to 51.5. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy.

The ISM survey's new orders measure declined to 50.3 last month from 51.3 in June, with export orders falling back into contraction for the fourth time in five months.

The survey's measure of services employment fell to 46.4, the lowest level since March, from 47.2 in June. It has contracted in four of the last five months, and the reading followed the release last week of the Labor Department's surprisingly soft U.S. employment report.

The survey's prices paid index rose to 69.9, the highest level since October 2022, from 67.5 in June.

Read more at Reuters

Survey: A Stronger Skilled Workforce Would Boost Reshoring

The 2025 USA Reshoring Survey of 500 U.S. manufacturers, a collaboration between the Reshoring Initiative and Regions Recruiting,  reached an actionable conclusion. A sufficient quantity and quality of U.S. workforce would bring back more manufacturing than any of the other surveyed options  — tariffs, a lower U.S. dollar, lower tax rates or fewer regulations. The survey was designed to glean 3 key insights: first, to understand the decision-making process or the “why” behind Original Equipment Manufacturers (OEMs) reshoring; second, to understand the perspective of contract manufacturers (CMs) in the OEM supply chain; and third, to acquire a deeper understanding of the actions needed to increase the rate of reshoring.

The top trigger for increased reshoring was having a larger, stronger skilled workforce available in the U.S. Given that resource, OEMs would reshore 30% of their products currently offshored. If 15% tariffs were applied to all imports from all countries, OEMs said they would bring back 23% of what they currently offshore. This was followed by a 15% reduction of the USD (21%), corporate tax rate cuts from 21% to 15% (18%) and U.S. regulations set to match those offshore (17%). Companies understand they need more workforce quantity to increase output and better training to improve competitiveness. Successful reshoring also requires an established ecosystem of suppliers and intermediaries encompassing all steps, from raw materials to finished product.

Read more at Foundry Magazine

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Policy and Politics

Trump and Schumer Couldn’t Clinch A Deal. Now A Shutdown Hangs In The Balance.

Donald Trump and Chuck Schumer went head-to-head last week for the first time in nearly six months. Turns out they were only shadow-boxing — and the real bout is still to come. The president pulled the plug on a possible deal to confirm some administration nominees, while the Senate’s top Democrat — under pressure from his party to take a tougher stand — boasted afterward that Trump came away with nothing. Now, the two men are headed toward a fall rematch with much higher stakes: whether to keep the federal government open past a Sept. 30 funding deadline.

Despite decades of history between them, their relationship is now almost nonexistent. They haven’t had a formal one-on-one meeting since Trump’s second inauguration. And they did not speak directly as part of the nominations negotiations, according to two people granted anonymity to discuss private details. The unraveling of a typical pre-summer-recess nominations deal has many on Capitol Hill concerned about what is to come. While other congressional leaders are sure to figure into the negotiations, it’s Schumer — who will determine whether Senate Democrats filibuster spending legislation — and Trump — who has to sign any shutdown-averting bill — who will be the key players.

Read more at Politico

CBO Analysis: Trump's One Big Beautiful Bill Act Will Dd $4.1 Trillion To Federal Deficits Over The Next Decade

A new estimate from tthe nonpartisan Congressional Budget Office shows President Donald Trump's tax and spending law, the One Big Beautiful Bill Act, will add $4.1 trillion to federal deficits over the next decade — a roughly $700 billion jump from a previous CBO projection from a few weeks ago. The analysis says higher interest rates will make it more expensive for the government to borrow and pay back debt. The government issuing more debt through bonds, a main source of raising revenue, will likely lead to the treasury having to pay higher rates of return on those bonds to secure investors.

The price tag could keep going up. In responding to a request from Senate Budget Committee ranking member Sen. Jeff Merkley, D-Oregon, the CBO says the president's law could add $5 trillion total to deficits over the next 10 years if popular temporary tax relief provisions, like no taxes on tips, overtime, car loans and the senior deduction, are made permanent. Republicans argue against the CBO's findings, saying the law will spur economic growth, generate revenue and offset any shortfalls made through tax cuts.

Read More At WISN ABC

California Congressman Kevin Kiley To Introduce Legislation To Ban Mid-Decade Congressional Redistricting

A Republican congressman from California says he will introduce legislation to ban states from redrawing their congressional districts in the middle of the decade – a response to Texas Republicans moving to redraw district lines this year to elect more Republicans to the U.S. House in 2026. Rep. Kevin Kiley says his legislation, if enacted, also would nullify any new maps adopted by Texas and other states before the 2030 census.

“We're only supposed to do this once every decade, not in the middle of the decade. It's extremely disruptive to be upending district lines from one state to the next, as we could now see happening,” said Kiley in an interview with Spectrum News Monday. “It's not good for representatives, it's not good for voters, it's not good for Democrats, it's not good for Republicans, it's not good for the country.”

Read the more at Spectrum

Political Headlines


Health and Wellness

Mayo Clinic’s AI Tool Identifies 9 Dementia Types, Including Alzheimer’s, With One Scan

Mayo Clinic researchers have developed a new artificial intelligence (AI) tool that helps clinicians identify brain activity patterns linked to nine types of dementia, including Alzheimer's disease, using a single, widely available scan — a transformative advance in early, accurate diagnosis. The tool, StateViewer, helped researchers identify the dementia type in 88% of cases, according to research published online on June 27, 2025, in Neurology, the medical journal of the American Academy of Neurology. It also enabled clinicians to interpret brain scans nearly twice as fast and with up to three times greater accuracy than standard workflows. Researchers trained and tested the AI on more than 3,600 scans, including images from patients with dementia and people without cognitive impairment.

This innovation addresses a core challenge in dementia care: identifying the disease early and precisely, even when multiple conditions are present. As new treatments emerge, timely diagnosis helps match patients with the most appropriate care when it can have the greatest impact. The tool could bring advanced diagnostic support to clinics that lack neurology expertise. StateViewer was developed under the direction of David Jones, M.D., a Mayo Clinic neurologist and director of the Mayo Clinic Neurology Artificial Intelligence Program.  To bring that vision to life, Dr. Jones worked alongside Leland Barnard, Ph.D., a data scientist who leads the AI engineering behind StateViewer.

Read more at Mayo Clinic

Industry News

Trade Wars

Caterpillar’s Profit Falls, Warns Of Up To $1.5 Billion Impact From U.S. Tariffs

Caterpillar reported a lower second-quarter profit on Tuesday due to sluggish construction equipment demand and warned of up to $1.5 billion hit from costs related to U.S. tariffs in 2025. Shares of the company, often viewed as a bellwether for the industrial economy, fell about 4% in premarket trading after it also flagged a tariff impact of $400 million to $500 million in the third quarter.

Sweeping tariffs on U.S. imports have impacted companies across sectors, prompting many to rejig their supply chains and localize production. Additionally, high interest rates and inflationary headwinds have pushed dealers to scale back on equipment orders and realign inventory to match demand. Adjusted profit in the second quarter fell to $4.72 per share, compared with $5.99 a year ago. Its sales and revenue for the quarter fell 1% to $16.7 billion from a year ago. The company now expects its annual sales and revenue to be slightly higher than last year and compared to its prior expectations of about flat.

Read more at CNBC


Semiconductor Industry Faces Water, Sustainability Challenges

As billions of dollars in promised funding flood the U.S. semiconductor industry, manufacturers are increasingly turning their attention to a key issue: Water usage.  In the U.S. — where domestic chip manufacturing capacity could triple by 2032— water sustainability isn’t just a PR strategy. It’s central to both success and survival.  “Water is actually the largest volume chemical used in semiconductor manufacturing,” said Paul Westerhoff, a regents professor in Arizona State University’s School of Sustainable Engineering and the Built Environment.

To address challenges in the quantity and high quality of ultrapure water, or UPW, manufacturers are reducing their water consumption, repurposing it within facilities, discharging it into the community and replacing other water resources with reclaimed water. But sources say much more is needed — and possible — to make semiconductor manufacturing’s water use a sustainable enterprise. Regardless of their location, experts expect that fabs and their locales will need to think even more about water sustainability in the years ahead.

Read more at Manufacturing Dive

TSMC Fires Workers For Breaching Data Rules On Cutting-Edge Chip Tech

Taiwan Semiconductor Manufacturing Co. said on Tuesday that it had detected “unauthorized activities” that lead to the discovery of potential trade secret leaks. The world’s biggest semiconductor manufacturer told CNBC that it has taken “strict” disciplinary action against the personnel involved and that it has also launched legal proceedings. TSMC, headquartered in Taiwan, dominates the market for the manufacturing of the world’s most advanced chips and counts major tech giants including Apple and Nvidia as clients.

TSMC identified the issue early due to its “comprehensive and robust monitoring mechanisms,” the company said, adding that it carried out swift internal investigations. Nikkei Asia, citing multiple sources familiar with the matter, reported on Tuesday that several former employees of TSMC are suspected of attempting to obtain critical proprietary information on 2-nanometer chip development and production while they were still working at the company. Production of the 2-nanometer chip is among the leading edge manufacturing processes in the semiconductor industry currently. TSMC said it did not have any additional information to share when asked by CNBC about the Nikkei report.

Read more at CNBC

Palantir Tops $1 Billion In Revenue For The First Time, Boosts Guidance

Palantir topped Wall Street’s estimates Monday, surpassing $1 billion in quarterly revenue for the first time, and hiking its full-year guidance. Shares rallied 3% after the bell. Earnings per share were 16 cents adjusted vs. 14 cents expected and revenue was $1 billion vs. $940 million expected The artificial intelligence software provider’s revenues grew 48% during the period. Analysts hadn’t expected the $1 billion revenue benchmark from the Denver-based company until the fourth quarter of this year.

The software analytics company also boosted its full-year outlook guidance. For the full year, Palantir now expects revenues to range between $4.142 billion and $4.150 billion, up from prior guidance of $3.89 billion to $3.90 billion. For the third quarter, Palantir forecast revenues between $1.083 billion and $1.087 billion, beating an analyst estimate of $983 million. Palantir also lifted its operating income and full-year free cash flow guidance.

Read more at CNBC

Apple Manufacturing Academy Opens In Detroit On August 19

Apple will open its all-new Apple Manufacturing Academy in Detroit on Tuesday, August 19, with free programming to train and support American businesses, innovators, and manufacturers. The academy is part of Apple’s pledge to spend more than $500 billion in the U.S. over the next four years, and builds on the company’s long history of investment in American innovation and advanced manufacturing.

Beginning August 19, Apple, in partnership with Michigan State University, will host small and medium-sized businesses from across the country in Detroit for various workshops with Apple experts. The courses are designed to help American companies transition to advanced manufacturing by implementing artificial intelligence and smart manufacturing techniques. Sessions will focus on machine learning and deep learning in manufacturing; automation in the product manufacturing industry; leveraging manufacturing data to improve product quality; applying digital technologies to enhance operations; and more.

Read more at Apple

Pfizer Hikes 2025 Profit Outlook On Cost Cuts, Strong Quarterly Results

Pfizer on Tuesday hiked its full-year adjusted profit guidance on its cost cuts and strong business performance this year. The company also reported second-quarter results that topped Wall Street’s estimates for the period, as revenue from its Covid products and some other drugs jumped. Pfizer now expects full-year adjusted profit to come in between $2.90 to $3.10, up from a previous guidance of $2.80 to $3 per share. The company maintained its 2025 revenue forecast of $61 billion to $64 billion.

Pfizer reported earnings per share of 78 cents adjusted vs. 58 cents expected and revenue of $14.65 billion vs. $13.56 billion expected. For the second quarter, Pfizer booked net income of $2.91 billion, or 51 cents per share. That compares with net income of $41 million, or 1 cent per share, during the same period a year ago. The results come after Pfizer in April expanded its cost-cutting efforts, which aim to help the pharmaceutical giant recover from the rapid decline of its Covid business and stock price over the past few years. With the added cuts announced in April, Pfizer now expects to deliver around $7.7 billion in savings by the end of 2027 from two separate cost-cutting programs.

Read more CNBC

Big Tech is Power-Hungry, And America's Aging Grid Can't Keep Up

For more than a decade, the demand for power across the US has been nearly stagnant, growing by less than 1% per year. Then came the data center revolution. The world's largest tech companies are waging a power-driven arms race to be at the forefront of the computing and AI technology wave. These so-called hyperscalers — including tech giants like Microsoft, Amazon, Alphabet, and Oracle  — have poured money into pushing artificial intelligence development and computing ability ever further.

But America's tech industry may be overestimating just how much pressure the power grid can take — and how quickly the nation's utilities will actually be able to meet the rampant demand. Aging infrastructure well beyond its useful life, decades of stagnant industrial investment, and years-long delays in getting new power connected to the grid may put a wrench in Big Tech's plans. In some of the country's most important markets, this "misalignment of expectations" could equal a lag of at least one to two years, if not longer, before the power that data center developers are seeking is actually available, according to a July report by clean energy fuel cell provider Bloom Energy (BE).

Read more at Yahoo Finance

Tesla Sales In Britain And Germany Fall By More Than 55% As China’s BYD Soars

Tesla’s new car sales plummeted in both Britain and Germany in July, according to industry data published Tuesday, extending a protracted European downturn for the U.S. electric automaker. Data published by the U.K.’s Society of Motor Manufacturers and Traders (SMMT) showed Tesla’s new car sales dropped by nearly 60% to 987 units last month, down from 2,462 a year ago. In Germany, Tesla car sales fell to 1,110 units in July, down 55.1% from the same month in 2024. The number of Tesla’s sold in Europe’s largest economy over January-July, meanwhile, plunged by 57.8% to 10,000 units, data from road traffic agency KBA showed.

In sharp contrast, China’s EV giant BYD posted astronomical growth in two of Europe’s largest car markets last month. BYD sold 3,184 units in the U.K. in July, more than quadrupling its sales from a year ago. The company enjoyed similar success in Germany, notching a year-on-year sales uptick of nearly 390%.

Read more at CNBC

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