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Trade Wars
China’s Factory Activity Slows In May, Raising Questions Over Its Economy
China’s factory activity was flat in May, according to an official survey released Sunday, raising questions about how much further the country’s economy can shield itself from the fallout of the ongoing Iran war and pressure on demand. The official manufacturing purchasing managers index moderated to 50 from 50.3 in April, according to the National Bureau of Statistics. Measured on a scale between 0 and 100, a PMI reading above 50 indicates expansion, while a reading below 50 reflects contraction.
The new orders sub-index dropped to 49.9 from 50.6 in April, while the sub-index on production edged down to 51.2 from April’s 51.5. The sub-index for raw material stockpiles fell to 48.6 from 49.3 in April. While China’s exports to the United States have dropped year-on-year during most months in the past year, its global exports have been robust, particularly to Europe and Southeast Asia. “Domestic demand is lagging, but high-end manufacturing and exports are holding the line,” Robin Xing, Chief China Economist at Morgan Stanley, wrote in a research note last week.
Read more at The AP
Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America
The Trump administration is expected to propose a change to the U.S.-Mexico-Canada Agreement that would require half of the components and materials in an automobile to come from U.S. sources in order to qualify for lower tariffs under the pact, according to people familiar with the plans. The rule would greatly increase the amount of U.S. content required in cars made under the so-called USMCA, measured by the dollar value of the components. The pact currently requires three-quarters of a vehicle’s materials to come from North American sources, but has no U.S.-specific content requirement.
The 50% U.S. content proposal is likely to be viewed skeptically by many automakers, who would struggle to source half of their content from U.S. sources, particularly if there is only a short phase-in period. Conversely, it would likely be welcomed by the United Auto Workers and other U.S. unions, who could see increases in work and employment as a result of the rule. Automobiles that meet the so-called regional content requirements are currently exempt from most tariffs under the USMCA, but it remains unclear whether that largely duty-free treatment will persist after renegotiation of the pact. Greer has said a renewed pact will likely include some level of tariffs on Mexico and Canada. Trump officials have said publicly that they want to direct more automotive production to the U.S. as part of the restructuring of the USMCA.
Read more at CNBC
Fanuc, Google Advance Industrial Robotics As Part Of Recent AI Deals
Industrial robot maker Fanuc has partnered with Google to deliver “smarter, more adaptive robots” for manufacturers, the companies said May 19. As part of the collaboration, Fanuc is leveraging Google’s technologies and advancing its open platforms by applying the latest AI across its robotics lineup. The robots vary from smaller models with three-kilogram payloads to larger ones that can carry multiple tons.
Fanuc’s robots support Robot Operating System, an industry standard platform for robot control, through its open-source ROS drivers. Google is a key contributor to ROS through Intrinsic, a robotics AI group. Fanuc said the open-platform capabilities allow manufacturers to “seamlessly deploy” physical AI robot systems with the latest technologies on the factory floor. “By combining Fanuc’s industrial-grade robotics with Google’s advanced AI, we’re enabling customers to take on more complex, variable production while maintaining the reliability and performance that production environments demand,” Mike Cicco, president and CEO of Fanuc America, said in a statement.
Read more at Manufacturing Dive
Kawasaki Opens A Silicon Valley Center To Expand Physical AI Collaboration Between The U.S. And Japan
Kawasaki Heavy Industries has opened its physical AI center in San Jose, California, in an effort to advance AI and semiconductor development and collaboration between the U.S. and Japan. Kawasaki CEO Yasuhiko Hashimoto said that he hopes the Silicon Valley center will be a starting point for global partnerships with industry leaders and academia in the region.The company plans to initially work with Nvidia, Analog Devices, Microsoft and Fujitsu to develop physical AI solutions with real-world applications in the healthcare and mobility sectors. Kawasaki held an opening ceremony on May 21.
“We will first focus on healthcare and elder care, where aging societies and labor shortages are global challenges,” Hashimoto said at the ceremony. Kawasaki will also deploy “integrated solutions across diverse fields” by expanding its physical AI and robotics across semiconductors, automotive and new mobility, he added. Through its external partnerships, Kawasaki plans to develop new solutions and combine physical AI with existing robotics, such as its surgical and indoor delivery systems. The company said its San Jose center will collaborate with other Kawasaki bases in Japan, as well as its research and development innovation center that opened in March in Strasbourg, France.
Read more the press release at Kawasaki
Pfizer Signs Up To $10.5B Oncology Deal With China’s Innovent
Pfizer and Innovent Biologics have entered into a global oncology partnership worth up to $10.5B, underscoring growing demand among multinational drugmakers for innovative therapies developed by Chinese biotech companies. The deal covers a portfolio of 12 oncology programs, comprising eight Innovent-originated early-stage assets and four Pfizer-proposed discovery programs. The companies will co-develop and share costs for select programs as they advance these programs through clinical development.
The partnership spans a portfolio of antibody-drug conjugates (ADCs) with novel differentiated payloads and multi-specific antibodies, comprising eight Innovent-originated early-stage assets and four Pfizer-proposed discovery programs. Under the financial terms of the agreement, Innovent will receive a $650M upfront payment and is eligible for up to $9.85B in development, regulatory, and commercial milestone payments. Additionally, Innovent will receive up to double-digit royalties on sales of each licensed product if approved. For the ‘co-developed, co-commercialized’ programs, the two companies will share the profits in the U.S. and Europe.
Read more at Reuters
UAW to Strike at Key General Motors Truck Supplier Plant
Nearly 1,000 workers at a Michigan automotive supplier are set to strike, stalling the production of key parts for General Motors’ midsize and full-size pickup trucks. Workers at the American Axle plant in Three Rivers, Mich. are at an impasse with the company over a new labor contract. Workers say their pay hasn’t recovered from 2008, when they agreed to slash wages in half to keep the plant running during dire economic times, despite high profit at American Axle in recent years on the strength of GM’s truck sales.
The American Axle plant produces axles for GM’s heavy-duty Chevrolet Silverado and GMC Sierra pickups, as well as for its midsize trucks, the Chevrolet Colorado and GMC Canyon. The plant also makes axle tubes that ultimately end up in light-duty Silverados and Sierras. While GM is its main customer, the plant also makes components for another automotive supplier and for Chrysler’s Pacifica minivan. The strike comes at an inopportune time for GM, which is trying to take advantage of its rival Ford Motor’s limited pickup production due to an aluminum shortage. It is also fending off renewed competition from Stellantis, whose Ram truck sales are up 23% in 2026 from a year earlier. GM’s trucks are among its most profitable models.
Read more at The WSJ
The $71.5 Billion Merger of Two Giant Railroads Just Hit a Snag
A federal regulator is pushing pause on its review of the blockbuster merger between Union Pacific and Norfolk Southern, imperiling the timetable of their $71.5 billion railroad deal. The Surface Transportation Board on Thursday said it needed more information to “thoroughly evaluate” the two railroads’ revised application for a merger that would create a transcontinental rail giant. Current merger rules for U.S. railroads compel applicants to show how a combined company would enhance competition and affect service, among other factors. The board has the power to accept or reject the merger.
The board ordered the two railroads to submit more details in the next 60 days, such as how competition would be enhanced and what would change for shippers that have fewer railroads to choose from. The two railroads control tracks on opposite sides of the Mississippi River. A merger of this scale and complexity, where a coast-to-coast freight-rail network would be run by a single operator, hasn’t happened before. Executives from the two railroads have said that the merger merits include reducing bottlenecks at interchange terminals which would speed up long-haul cargo deliveries. They expect more shippers to divert cargo to rail from trucks and projected that the deal will take 2.1 million trucks off the road.
Read more at The WSJ
Airbus, BMW Select Mistral AI as AI Partner
Airbus announced it has a partnership agreement with Mistral AI to expand its use of artificial intelligence across its commercial aircraft, helicopter, defense and space businesses. The goal, according to the aerospace group, is “cutting-edge, ethical, and trustworthy AI at the core of Airbus operations and processes, from initial design to on-board capabilities.” The Airbus announcement offered that it will work with Mistral AI researchers to develop customized solutions for aerospace applications. Airbus described some projects already in progress that include automating technical documentation, accelerating engineering and design processes using AI-driven simulations, developing onboard AI capabilities for aircraft and spacecraft, and supporting defense applications such as cyber investigations and coding assistance.
Mistral AI is a start-up developer of large language models and generative AI systems, emphasizing open and customizable AI models, flexible deployment options, and “European digital sovereignty.” It struck a separate partnership agreement with BMW Group, to develop AI models based on the automaker’s datasets and engineering resources. It intends to use Mistral’s AI models to analyze large volumes of crash simulation data, “to improve the speed, accuracy, and quality of engineering workflows.” BMW Group chief information officer Dr. Franz Decker said: “By combining our engineering datasets with Mistral AI’s model training capabilities, we are building specialized AI which supports complex development tasks.”
Read More at American Machinist
Verizon: Manufacturing in the Cybersecurity Spotlight, Again
At this point, anyone that doesn’t know manufacturing is one of the top sectors targeted by cybercriminals hasn’t been paying attention. In almost every cybersecurity report we read, manufacturing leads or tops the list of popular sectors to attack. The 2026 DBIR found the following top three business sectors for number of incidents and confirmed attacks with stolen data: Manufacturing – 3,627 incidents, 2,713 confirmed attacks with stolen data: Financial and insurance – 3,809 incidents, 1,300 confirmed attacks with stolen data. Manufacturing – 3,627 incidents, 2,713 confirmed attacks with stolen data. Public administration – 3,634 incidents, 2,410 confirmed attacks with stolen data Public administration – 3,634 incidents, 2,410 confirmed attacks with stolen data.
The primary motivation for cybercriminals to target manufacturers was financial in 87% of cases, with espionage following at 15%. Here are the top three attack types for cybercriminals in 2025, according to the report: System intrusion (61%). Social engineering (17%). Basic Web application attacks (10%) On a positive note organizations paid less in 2025 to unlock their data, with the average ransomware payment coming in at $139,875, versus $150,000 in 2024 and $177,614 in 2023. The percentage of organizations that did not pay ransoms at all rose to 69%, a 4% year-over-year increase.
.Read more at Industry Week
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