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Member Briefing March 24, 2025

Date postedMarch 24, 2025
Posted By: Harold King Daily Briefing,

Top Story

White House Narrows April 2 Tariffs

The White House is narrowing its approach to tariffs set to take effect on April 2, likely omitting a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that account for the bulk of foreign trade with the U.S. President Trump has declared his April 2 deadline to be “Liberation Day” for the U.S., when he will put in place so-called reciprocal tariffs that seek to equalize U.S. tariffs with the duties charged by trading partners, as well as tariffs on sectors like automobiles, pharmaceuticals and semiconductors he repeatedly said would be enacted on that day. Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal tariff action on that day, though planning remains fluid.

The focus of the reciprocal action now looks to be more targeted than originally thought, according to people with knowledge of the planning, though it will still hit countries that account for most of the U.S.’s imports. The administration is now focusing on applying tariffs to about 15% of nations with persistent trade imbalances with the U.S.—a so-called “dirty 15,” as Treasury Secretary Scott Bessent put it last week. Those nations, which Bessent said account for most of the U.S.’s foreign trade, will be especially hard-hit with higher tariffs, said people with knowledge of the matter, though other nations could be given more modest tariffs as well.

Read more at The WSJ

Trump Announces Boeing Has Been Selected To Build Multibillion-Dollar NGAD Jet Fighter Program

President Trump announced on Friday that Boeing has been selected to build what may turn out to be the most expensive fighter in history, a sophisticated jet the Air Force believes is vital to deter China’s military in the decades ahead. The piloted planes are to be fielded in the 2030s and would fight alongside semiautonomous drones, as the Pentagon seeks to gain a technological edge over U.S. adversaries.

The Pentagon hasn’t released cost estimates for the program. But experts say the total research, development and acquisition costs could top $50 billion. Lockheed Martin had been vying with Boeing for the contract. Air Force officials have argued that piloted planes are still vital for fighting the wars of the future, especially if they incorporate cutting-edge designs, sophisticated sensors, more powerful engines and control the semiautonomous drones that operate with them. The Air Force’s head of war gaming said last month that the new fighter and the drones it would operate with would make it much easier to prevail in the wars of the future against highly capable adversaries.

Read more at The WSJ

Fed Projections See an Economy Dramatically Reset by Trump’s Election

The Federal Reserve’s first set of projections since Donald Trump’s inauguration underscored—in the central bank’s understated and technocratic fashion—just how much the president’s plans to press ahead with widespread tariffs have turned the economic outlook on its head. Months ago, policymakers presumed they would spend 2025 gradually cutting rates to keep inflation heading down without a big rise in joblessness to achieve the so-called soft landing. At least in the short run, the latest projections point to the prospect that tariffs covering a swath of goods and materials will send up prices while sapping investment, sentiment and growth, 

“We now have inflation coming in from an exogenous source, but the underlying inflationary picture before that was basically 2½% inflation, 2% growth and 4% unemployment,” said Fed Chair Jerome Powell on Wednesday.  Fed officials projected weaker growth, higher unemployment and higher inflation than they had anticipated in December. Moreover, nearly all officials judged that if their forecasts were to be proven wrong, it would be in the direction of even softer growth, more joblessness and firmer price growth. “You’re looking at a whiff of stagflation,” said Jay Bryson, chief economist at Wells Fargo. “I say stagflation with a small ‘s,’ not a capital ‘S.’ Those of us who are old enough to remember the late ’70s and early ’80s—this is not the stagflation of those years.”

Read more at the WSJ

Home Sales Rose 4.2% in February, Beating Expectations

U.S. existing home sales unexpectedly increased in February as rising supply pulled buyers back into the marke. Home sales rose 4.2% last month to a seasonally adjusted annual rate of 4.26 million units, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home resales would drop to a rate of 3.95 million units. The increase occurred despite drops in pending contracts, which lead sales by a month or two, in December and January when the average rate on the popular 30-year fixed-rate mortgage was hovering around 7%. On a year-on-year basis sales fell 1.2% in February.

  • The average rate on a 30-year fixed-rate mortgage declined to about 6.65% by mid-March.
  • The inventory of existing homes increased 5.1% to 1.24 million units in February. Supply rose 17% from a year ago.
  • The median existing home price increased 3.8% from a year earlier to $398,400 in February, a record for the month.
  • At February's sales pace, it would take 3.5 months to exhaust the current inventory of existing homes, up from 3.0 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.
  • First-time buyers accounted for 31% of sales, up from 26% a year ago. Economists and realtors say a 40% share is needed for a robust housing market.
  • All-cash sales constituted 32% of transactions, down from 33% a year ago. Distressed sales, including foreclosures, made up 3% of transactions, creeping up after hovering around 2% in recent years.

Read more at Yahoo Finance

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Policy and Politics

Oil Firms Seize Chance to Fight State Climate Laws, Including New York’s, With Trump’s Help

Oil-and-gas executives raised their concerns about recent state laws that will fine them for contributing to greenhouse-gas emissions, at a White House meeting Wednesday with President Trump. They also discussed the dozens of climate lawsuits filed by state and local governments against Exxon Mobil, Chevron, Shell S and others, according to people familiar with the matter.  Trump appeared to agree with the industry that the states’ actions had the potential to undermine his energy-dominance agenda and signaled he would consider ways his administration could help the industry, the people said.

The industry is making a case for the Justice Department to file briefs in support of its lawsuits, or file its own suits against Vermont and New York. Last year those states passed climate superfund laws designed to collect fees from fuel-burning oil companies to help cover costs for environmental projects and infrastructure. The industry thinks the Justice Department might have grounds to file suits against states it sees as encroaching on the territory of the U.S. government on climate policy. The fossil-fuel industry has learned from the mammoth lawsuits that clobbered tobacco companies and wants to avoid the same fate. Executives are seeking a predictable environment to navigate, and think that now is the time to push back against claims, people familiar with the lobbying push said.

Read More at The WSJ

Packaging Reduction Bill Gains Momentum In N.Y. As Opponents Push Alternative

A push to pass the Plastic Reduction and Recycling Infrastructure Act is once again picking up steam in New York. The "extended producer responsibility" legislation passed through the Environmental Conservation Committee in the state Senate and Assembly, and advocates held a rally at the state Capitol this week to capitalize on the momentum. The bill would enforce regulations on companies with an income in excess of $1 million that advocates say will reduce plastic packaging by 30% incrementally over 12 years.

The Business Council is backing another bill sponsored by state Senator Monica Martinez that also claims to put the responsibility on the producer. They argue it avoids what they describe as unrealistic mandates, excessive material bans that they say target materials already regulated by the FDA, and would allow more industry input. “It gives the producers themselves who have the expertise a far greater role in designing what this program is supposed to look like,” said Ken Pokalsky, vice president of government affairs for the Business Council.

Read more at NY State of Politics

‘Bell to Bell Ban’ - New York School Administrators Seek Cellphone Policy Flexibility

Gov. Kathy Hochul has proposed a bell-to-bell ban on cellphones in schools in her executive budget, along with a $13.5 million appropriation to implement the ban. While the proposal has the support of the teachers’ unions, there are a couple of other ideas floating around that aren’t as stringent as the governor’s that are gaining traction. The state Senate’s one-house budget counters that local school districts should be able to determine if phones may be used outside of the classroom. The Senate bill also prohibits schools from suspending students who violate the rules and use their phones. 

The Assembly didn’t include a cellphone proposal in its one-house budget, but Education Committee chair Michael Benedetto introduced a stand-alone bill requiring districts to establish cellphone policies tailored to their own “specific school environments." Brian Fessler, chief advocacy officer with the New York State School Boards Association (NYSBBA), and Greg Berck, assistant director for governmental relations and assistant counsel at the New York Council of School Superintendents (NYCOSS), discussed the issue with Capital Tonight’s Susan Arbetter.

Read more at NY State of Politics

Trump’s First 100 Days


Health and Wellness

The Reason Dementia Rates Are Rising Is Surprisingly Simple

In January, a study published in the journal Nature Medicine suggested that by 2060, the number of Americans with dementia will double to a total of one million. Also doubling: The estimated lifetime risk of developing the condition, compared to previous estimates. Figures like these can sound scary — and indeed, dementia projections carry some warnings. For one, they suggest the U.S. urgently needs to pour resources into growing its caregiving workforce to meet future needs. But paradoxically, this number also tells a success story.

Today, thanks to decades of social and medical progress, more Americans than ever are living long enough to get dementia; in the past, more people would have died of cardiovascular disease or cancer at earlier ages. These health advances have also delayed the condition’s onset for many people. Perhaps the most hopeful news about dementia is that there’s a lot people can do to lower their chances of developing it, says Michael Fang, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health and lead author of the recent study. The new study hints at the potential disruption to families, caregivers, and the economy if nothing changes to reduce dementia risk, he says. “But if we do do something, there is an opportunity and a potential to bend the curve a little bit.”

Read more at Nat Geo

Industry News

GE’s $1B CapEx Plan to Update Manufacturing

GE Aerospace has issued a new forecast of its 2025 capital-spending plans, outlining nearly $1 billion in programs for its U.S. manufacturing sites and supply chain. The amount is almost twice the CapEx total for 2024, according to the company. GE also committed to hire about 5,000 new workers across 16 states during 2025, including manufacturing and engineering positions. Included in the spending program is more than $100 million targeting GE’s supplier network, to ensure suppliers have invested in the advanced equipment and systems to produce parts, and to reducing defects and supply chain constraints.

"Investing in manufacturing and innovation is more critical than ever for the future of our industry and the communities where we operate," stated chairman and CEO H. Lawrence Culp, Jr. "We are committed to helping our customers modernize and expand their fleets while scaling technologies that will truly define the future of flight. Together, this will keep the United States at the forefront of aerospace leadership." Some of these investments include $113 million for plant updates and new equipment at sites in greater Cincinnati, where GE Aerospace is headquartered, and where it develops, tests, and assembles the CFM LEAP commercial jet and several military aircraft engines. A further $70 million is set for an expansion in Muskegon, Mich., to produce parts for the LEAP engine hot section of the engine.

Read more at Manufacturing Dive

No Momentum for Cutting Tool Demand

U.S. machine shops and other manufacturing businesses ordered $199.9 million worth of cutting tools during January 2025, a 9.2% rise from the cutting-tool order volume for the previous month. The monthly Cutting Tool Market Report also revealed that the January result fell -4.1% below the order total for January 2024. “January was quite soft for most tooling companies, even more so than normal,” observed AMT Cutting Tool Product Group president Jack Burley. “New investments are on hold, and most shops are only buying what they need to keep spindles turning.”

According to Burley, “Until the political conditions settle and the uncertainty they create for manufacturing is resolved, I expect to see very little improvement in consumption, especially for small businesses. There are different opinions on the speed at which we can bring more manufacturing back to the United States, so we can only wait and see how companies respond.”

Read more at American Machinist

Nvidia To Invest Billions In US Chip Production Over Four Years

Nvidia (NVDA) plans to invest hundreds of billions of dollars in U.S.-made chips and electronics over the next four years, the Financial Times reported on Wednesday, quoting CEO Jensen Huang. The artificial intelligence chip giant expects to spend around half-a-trillion dollars on electronics during the four-year period, according to the report. "I think we can easily see ourselves manufacturing several hundred billion of it here in the U.S.," Huang told FT, adding that the Trump administration could help accelerate the expansion of the U.S. AI industry.

Huang has been working to allay investor concerns over demand for Nvidia's expensive AI chips, which have made the company one of the world's most valuable, following China's DeepSeek launching a competitive chatbot with allegedly fewer AI chips. Huang said Nvidia can now manufacture its latest systems in the United States through suppliers such as Taiwanese chipmaking giants TSMC and Foxconn, while also noting a growing competitive threat from Chinese telecoms firm Huawei, according to the report. "TSMC investing in the U.S. provides for a substantial step up in our supply chain resilience," Huang said.

Read more at Yahoo Finance

Hitachi Energy Invests $250M To Expand Manufacturing Of Transformer Components

Hitachi Energy has announced plans to increase production of critical components for transformers to meet escalating global demand. The technology company, which is working towards a sustainable energy future for all, will invest over $250 million into the project, which will help scale up transformer production and strengthen supply chains in the U.S. and worldwide.

According to the company, this announcement will improve Hitachi Energy’s manufacturing capabilities across the U.S. This includes enhancing production capacity at the company’s transformer factories in Virginia, Missouri, and Mississippi. Hitachi Energy hopes this investment will help lessen the transformer supply shortage by increasing production capacity and supply-chain resilience.

Read more at Plant Services

Air Force, Navy Pitched Trump to Keep Their NGAD Programs Intact

The Air Force and Navy have briefed President Donald Trump on their respective Next-Generation Air Dominance programs, asking that the projects proceed largely as they now stand, government and industry sources told Air & Space Forces Magazine. It’s not clear whether the services came away with firm decisions about the future of the aircraft. The White House requested the briefings, sources said. Chief of Staff Gen. David W. Allvin presented the Air Force case, while Vice Chief of Naval Operations Adm. James Kilby gave the Navy brief. 

While the Navy intends to award a contract of its version of a sixth-generation fighter—called the F/A-XX—in the coming months, the Air Force NGAD has been on a “pause” since last summer, when former Air Force Secretary Frank Kendall ordered a review of the program. He wanted to know if NGAD as structured was still necessary, or whether air superiority can be achieved in a less costly way. Kendall has quoted a figure of “multiple hundreds of millions” per NGAD fighter, which would succeed the F-22 as the Air Force’s most advanced air superiority aircraft. Kendall later said another option looked at was a more “multirole” aircraft, along the lines of the F-35, but designed to control many autonomous Collaborative Combat Aircraft. The CCA effort is on the same budget line as NGAD.

Read more at Air and Space Forces

UAW, VW Contract Talks In Chattanooga Heat Up As 1-Year Mark Nears

The United Auto Workers union said on Thursday it filed unfair labor practice charges against Volkswagen as the automaker cut jobs at a factory in Tennessee where the union is negotiating its first contract after winning an election there last year. "The UAW has notified the Trump Administration of Volkswagen’s unacceptable, anti-union, anti-worker, and anti-American conduct," UAW President Shawn Fain said in a statement. The approaching one-year anniversary of the UAW’s historic election victory at Volkswagen’s Chattanooga plant and the prospect of job cuts on the assembly line are increasing the urgency of already-tense contract negotiations.

A spokesperson for Volkswagen said it is cutting production in Tennessee to a two-shift model out of caution for lowered electric vehicle demand. Workers at the Tennessee plant assemble the ID.4 electric SUV. The Germany-based automaker is offering production employees a "voluntary attrition program," including a severance package, retirement options and benefits, the spokesperson said. "We remain committed to our team members, our customers, and our presence in Chattanooga. This change supports that commitment," the company said in a statement.

Read More at Reuters

Mitsubishi Motors Plans To Outsource EV Production To Taiwan's Foxconn, Kyodo Says

Japan's Mitsubishi Motors, a junior partner of Nissan Motor, plans to outsource production of electric vehicles to Taiwan electronics contract manufacturer Foxconn, Kyodo News said on Thursday. The move is aimed to help the carmaker cut output costs and speed development of its product lineup, while Foxconn, formally called Hon Hai Precision Industry, hopes to secure a foothold to collaborate on EVs with Nissan and Honda, Kyodo said.

Mitsubishi Motors said it did not provide the information and would continue to "explore collaboration opportunities with various partners to achieve sustainable growth". Foxconn said it had no comment. Earlier this month Foxconn told a quarterly earnings conference it expected to sign an EV deal with an unspecified Japanese car maker within two months. Earlier, it had also said it would consider taking a stake in Nissan for cooperation, as the world's largest contract electronics maker, best known for its role as an Apple supplier, has ambitions to diversify into EVs.

Read more at Nikkei Asia

Chobani Announces $500-Million-Dollar Expansion In Idaho

Last Wednesday Chobani unveiled plans to expand their world's largest yogurt factory in Twin Falls Idaho. Since its start in 2012, the Twin Falls Chobani plant has been a powerhouse of production in the yogurt world, dominating store shelves across the country and around the globe. In return, providing over a thousand jobs for the Magic Valley community. Now, the world's largest yogurt factory is getting ready to grow — by adding another 500,000 square feet.

The $500-million-dollar expansion aims to increase production by 50% and bring the company's total investment into the State of Idaho up to $1.8 billion. "Basically, we're going to double our milk usage and then we're going to be tripling it,” said CEO of Chobani Hamdi Ulukaya. “Right now, we're getting about four million pounds of milk a day, this will get us to over 10 million pounds per day." Chobani does have facilities in New York State and Australia, but when it comes to big-time investments; Idaho is where the yogurt giant hangs its hat.

Read more at Idaho News6

Estée Lauder

German container line Hapag-Lloyd said a fragile economic and geopolitical climate would cut its earnings for the year, with protracted tensions in the Middle East and escalating trade disputes clouding the outlook for ocean shipping. The fifth-largest container carrier by capacity said it expects a key earnings measure to drop to between 2.4 billion and 3.9 billion euros ($2.62 billion-$4.25 billion) this year, from 4.65 billion euros in 2024. The carrier based its forecast on an assumption that shipping through the Red Sea would gradually resume in the second half of the year.

The resumption of the war in Gaza, U.S. airstrikes against Houthi rebels in Yemen and new U.S. tariffs are breeding uncertainty, leaving the company to focus on cutting costs and boosting its competitive position. However, it said increased vessel capacity and its new Gemini Cooperation–an alliance with A.P. Moeller-Maersk–should boost transport volumes.

Read more at The WSJ

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