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Member Briefing March 6, 2025

March 6, 2025

Posted By: Harold King in Daily Briefing,

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Trump Exempts Carmakers From Canada And Mexico Tariffs For One Month

President Donald Trump approved a one-month exemption on newly implemented Canadian and Mexican tariffs for U.S. automakers, Press Secretary Karoline Leavitt said Wednesday after members of the Trump administration reportedly met with the three biggest U.S. carmakers. Leavitt said at the White House press briefing Wednesday the U.S. is “going to give a one month exemption on any autos coming through USMCA,” or the United States-Mexico-Canada Agreement that Trump previously negotiated—a trade deal that includes rules around cars.

Leavitt said reciprocal tariffs—or tariffs equal to those that other countries charge for U.S. goods—will still go into effect on April 2, but “at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage.” Officials in the Trump administration met with the leaders of Ford, General Motors and Chrysler parent Stellantis on Tuesday, Bloomberg reported, and another meeting may take place Wednesday. Experts warned before the tariffs went into effect that the auto industry could “withstand only a few weeks” of the 25% tariffs before costs to automakers and suppliers would “rise astronomically,” The Detroit Free Press reported.

Read more at Forbes

US Factory Orders For January Up 1.7% Versus 1.6% Expected

New orders for U.S.-manufactured goods rebounded in January amid a surge in commercial aircraft bookings, but the broader manufacturing sector's recovery is likely to be hampered by tariffs on imports. Factory orders increased 1.7% after a revised 0.6% decline in December, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast factory orders increasing 1.6% after a previously reported 0.9% drop in December. Factory orders advanced 3.5% on a year-on-year basis in January. Manufacturing, which accounts for 10.3% of the economy, has been showing tentative signs of recovery after being undercut by the Federal Reserve's aggressive interest rate hikes in 2022 and 2023.

Civilian aircraft orders soared 93.9% in January after dropping 28.9% in December.
Orders for motor vehicles and parts decreased 1.5%.
Transportation equipment orders rebounded 9.9%. Excluding transportation equipment, factory orders gained 0.2%.
Orders for non-defense capital goods excluding aircraft, seen as a measure of business spending plans on equipment, increased 0.8% in January.
Shipments of core capital goods slipped 0.3%.
Nondefense capital goods orders rebounded 12.8%.
Business spending on equipment contracted in the fourth quarter after double-digit growth in the July-September quarter, weighed down by aircraft deliveries.

Read more at Reuters

Global Manufacturing Expands for Second Month, Input Costs Rise – Bloomberg

The global manufacturing sector moved further into expansion territory in February, signalling improving economic conditions. At 50.6, up from 50.1 in January, the Global Manufacturing PMI, sponsored by J.P. Morgan and compiled by S&P Global Market Intelligence, edged above the 50.0 no-change level to signal a second month of improving operating conditions, albeit at a still-modest rate of change. Regional variations were again marked, notably with improved performance in the US helping drive the global upturn. However, the US also reported weakened exports and a particularly steep rise in factory selling prices amid rising input costs. Here are our top five takeaways from February's manufacturing PMI survey sub-indices, which provide a deeper insight into business conditions.

Global production growth at eight-month high.
US outperforms in terms of production growth.
Global goods trade shows signs of stabilising despite increased drag from North America.
US sees especially steep price growth.
Manufacturing sentiment improves.

Read more at S&P Global

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

Manufacturers to Trump and Congress: Act Now on Comprehensive Manufacturing Strategy as Tariffs Hit Industry

National Association of Manufacturers President and CEO Jay Timmons released the following statement ahead of President Donald Trump’s address to a joint session of Congress: “The stakes couldn’t be higher for manufacturers right now. Many manufacturers are operating on thin margins, and the tariffs imposed today will further strain their resources. “To mitigate the adverse effects of today’s tariffs, manufacturers call on President Trump and Congress to implement a comprehensive manufacturing strategy that would create predictability and certainty to invest, plan and hire in America. This strategy includes the following actions:

Make President Trump’s 2017 tax reforms permanent and more competitive now. When President Trump signed these tax cuts into law, it was rocket fuel for manufacturing in America and made the U.S. economy more competitive on a global scale. That fuel is about to run out as key provisions have expired, and others are about to lapse.
Restore regulatory certainty. Manufacturers are spending $350 billion each year just to comply with regulations—money that could be spent on expanding factories and production lines, hiring new workers or raising wages.
Expedite permitting reform to unleash American energy. President Trump is already ending the war on America’s energy producers, but there is more work to do. America should be the undisputed leader in energy production and innovation, but we will not reach our full potential without permitting reform.
Strengthen the manufacturing workforce. Over the past year, we have averaged 500,000 open manufacturing jobs in America—well-paying, life-changing careers. Manufacturers are struggling to fill critical jobs. We need a real workforce strategy that ensures we have the talent to grow, compete and lead.
Implement commonsense trade policies that open global markets fairly and effectively. Building things in America only works if we can sell them around the world. That’s why we’re urging President Trump and Congress to provide greater predictability and a clear runway for manufacturers to adjust to new trade realities, while also making way for exemptions for critical inputs, enabling reciprocity in manufacturing trade.

Read more at NAM

UHY Siena College Business Leaders Survey: A Cautious But Improving Outlook For The State’s Economic Future

A survey conducted by the Siena College Research Institute (SCRI) in partnership with UHY and the Hudson Valley Economic Development Corp of more than 500 CEOs across upstate New York reveals a cautious but improving outlook for the state’s economic future. Business leaders express increased confidence in economic conditions over the next three to five years, with technology, manufacturing, tourism, education, and medical sectors expected to drive growth. However, concerns about taxation, regulatory burdens, workforce availability, and inflationary pressures continue to weigh on decision-making.

17% of CEOs believe New York State’s economy has improved over the past year, while 53% say conditions have worsened. This marks a slight improvement from last year when 59% saw worsening conditions. 31% of CEOs expect economic conditions to improve throughout 2025, a 13-point increase from last year. However, 35% anticipate further economic deterioration. When asked if they had to do it over again would start their business in NY or someplace else 40% of Hudson Valley executives said they would stay in NYS, 60% would be someplace else.

Read more at UHY

Democrats Digging In Against Full-Year CR As Shutdown Deadline Ticks Closer

House Democrats are digging in against the Republicans’ plan to fund the government at current levels through September, setting up a clash with GOP leaders and heightening the odds of a shutdown in the middle of next month. The push to move a one-year continuing resolution (CR) has taken off since Thursday, when President Trump threw his weight behind a “clean” CR, which would extend 2024 funding levels through the remainder of fiscal 2025. Speaker Mike Johnson (R-La.) backed the plan over the weekend, vowing to finalize a bill before next week, and even some members of the far-right House Freedom Caucus appear open to supporting it.

The GOP’s strategy has shifted the focus of the debate back to the Democratic side, where a number of lawmakers — including the top Democrat on the House Appropriations Committee — have already rejected the idea out of hand. “A one-year CR is a nonstarter,” Rep. Rosa DeLauro (D-Conn.) told reporters Tuesday in the Capitol. She’s holding out hope that months of negotiations will result in a bipartisan deal on 2025 spending.

Read more at the Hill

Trump’s First 100 Days

Health and Wellness

Scientists Crack How Aspirin Might Stop Cancers From Spreading

Tantalising data from more than a decade ago showed people who were already taking a daily aspirin were more likely to survive if they were diagnosed with cancer. But How? A team at the University of Cambridge says the answer appears to centre on a moment of vulnerability for a cancer - when a lone cell breaks off from the original tumour and tries, like a seed on the wind, to spread elsewhere in the body. This process is called metastasis and is the cause of the majority of deaths from cancer.

Part of our immune defences - a white blood cell called a T-cell - can swoop in and destroy the spreading cancer as it tries to take root. But the study showed that another part of our blood - the platelets that normally stop bleeding - were suppressing the T-cells and making it harder for them to take out the cancer. Aspirin disrupts the platelets and removes their influence over the T-cells so they can hunt out the cancer. Prof Rahul Roychoudhuri, from the University of Cambridge, told me: "What we've discovered is that aspirin might work, surprisingly, by unleashing the power of the immune system to recognize and kill metastasizing cancer cells." He thinks the drug would work best in cancers that have been caught early and could be used after treatment such as surgery to help the immune system find any cancer that might already have spread.

Read more at The BBC

Industry News

The ISM Services Index Picked Up In February, Improving To 53.5

Service sector activity seemed to have pushed through the swirl of policy uncertainty coming out of Washington, D.C. in February. The ISM Services Index improved to 53.5 last month. Current activity was little changed over the month with the business activity index down a tick and still comfortably in expansion territory at 54.4. Rather, the improvement stemmed from the employment index, which rose 1.6 points to an 18-month high, and an increase in new orders (+0.9 points).

Some of this improvement in new orders may reflect a pull-forward of activity as the prospect of a higher tariff environment came to the fore at the start of last month with only an eleventh-hour reprieve on tariffs on Canada and Mexico, which have subsequently gone into effect. As in the manufacturing sector, the scramble to secure product led to a rise in the services supplier deliveries index in February (+0.4 points). Businesses also appeared to be stocking up on product ahead of potentially higher prices, with the inventory index rising just over three points last month. While the looming threat of tariffs left a limited mark on activity in February, the anticipation may nonetheless already be seeping into prices.

Read more at Wells Fargo

NY Fed: Firms’ Inflation Expectations Have Picked Up

After a period of particularly high inflation following the pandemic recession, inflationary pressures have been moderating the past few years. Indeed, the inflation rate as measured by the consumer price index has come down from a peak of 9.1 percent in the summer of 2022 to 3 percent at the beginning of 2025. The New York Fed asked regional businesses about their own cost and price increases in February, as well as their expectations for future inflation.

Service firms reported that business cost and selling price increases continued to moderate through 2024, while manufacturing firms reported some pickup in cost increases but not price increases. Looking ahead, firms expect both cost and price increases to move higher in 2025. Moreover, year-ahead inflation expectations have risen from 3 percent last year at this time to 3.5 among manufacturing firms and 4 percent among service firms, though longer-term inflation expectations remain anchored at around 3 percent.

Read more at The NY Fed

Hiring Slowed In February As Economic Uncertainty Created 'Hesitancy' To Add Jobs Last Month, ADP Data Shows

On Wednesday, fresh data from ADP showed the private sector added 77,000 jobs in February, far fewer than economists' estimates of 140,000 — and significantly lower than the 186,000 jobs added in January. January's number of job additions was revised up from a prior reading of 183,000. February's data marked the largest month-over-month decline in private payroll additions since March 2023.

"Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month," ADP chief economist Nela Richardson said in a press release. "Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead." Another update on the labor market is expected Friday with the release of the February jobs report from the Bureau of Labor Statistics. Economists expect the US labor market added 160,000 jobs during the month while the unemployment rate held flat at 4%.

Read More at Yahoo Finance

Spirit Aerosystems Loses $2.1B In 2024

Spirit AeroSystems ended 2024 with a $2.14 billion net loss as a result of production and delivery changes implemented by its biggest customer Boeing, according to a Feb. 28 earnings report. The changes included lower than planned Boeing 737 production rates, the aerospace supplier said. Other challenges included a lack of price increases on Airbus’s plane programs. Spirit AeroSystems’s Q4 2024 revenue was down 8.9% year over year to $1.7 billion. Full-year revenue, however, was up 4% YOY to $6.3 billion as a result of higher Boeing 737 deliveries, as well as the timing of working capital, according to the securities filing.

In addition to the losses, Spirit AeroSystems’ backlog in Q4 was approximately $47 billion, which included work packages from Airbus and Boeing’s commercial platforms backlog. Boeing and Airbus are Spirit AeroSystems’ largest customers, with 58% and 21% of its revenue generated from the two companies’ sales, respectively, according to its FY2024 annual securities filing.

Read more at American Machinist

TSMC Invests $100B To Build 3 Fabrication Plants, 2 Advanced Packaging Facilities, And An R&D Center In The U.S.

TSMC has announced plans to expand its investment in advanced semiconductor manufacturing in the United States. The company will invest an additional $100 billion on top of the previously announced $65 billion investment to fund TSMC’s advanced semiconductor manufacturing operations in Phoenix, Arizona. This new funding will be used to build three new fabrication plants, two advanced packaging facilities, and a major R&D team center.

The company expects the project to generate hundreds of billions of dollars in semiconductor value for AI and other applications, as well as create tens of thousands of new jobs. TSMC claims that this expansion will help strengthen the U.S. semiconductor ecosystem by increasing American production of advanced semiconductor technology.

Read more at Plant Services

Weekly Mortgage Demand Surges 20% Higher, After Interest Rates Drop To The Lowest Since Last Year

A sharp drop in mortgage interest rates finally lit a fire under loan demand. Both current homeowners and potential homebuyers jumped back into the market, after a lackluster showing for this year so far. Total mortgage application volume jumped 20.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. This was not only the first increase in three weeks, but it is an outsized weekly move.

Mortgage rates were clearly the culprit. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.73% from 6.88%, with points falling to 0.60 from 0.61, including the origination fee, for loans with a 20% down payment. That is the lowest level since December 2024. Applications to refinance a home loan, which are most sensitive to weekly moves in interest rates, jumped 37% for the week and were 83% percent higher than the same week one year ago. While the vast majority of borrowers today still have loans with rates well below what is being offered today, more recent buyers from the last two years are now able to benefit from a refinance.

Read more at CNBC

Oil Slips To Lowest Level In 6 Months Amid Trade War Fears

On Wednesday morning West Texas Intermediate crude (CL=F) dropped more than 3% to hover near $65 per barrel while Brent futures (BZ=F) broke below $70 per barrel. Oil has plunged roughly 5% over the past three sessions amid fears of a tariff war impacting economic growth, more crude supply about to enter the market as recently announced by the Organization of Petroleum Exporting Countries (OPEC), and efforts to end the Ukraine-Russia war.

"For now, oil markets are threatening to breach the lower end of the price range oil [has] maintained for the past two years, in the mid-$60’s per barrel according to West Texas Intermediate prices," Rob Haworth, senior vice president and senior investment strategist at US Bank Asset Management, told Yahoo Finance. "A breakthrough at that level could lead to more downside, especially if growth indications continue to slow in the US," he added. Worries of an escalating trade war have put downward pressure on crude prices.

Read more at Yahoo Finance

Nuclear Power’s Revival Is Here. What Do You Do With All the Radioactive Waste?

A nuclear power renaissance—driven in part by power-hungry AI data centers—has revived a thorny problem: what to do with the radioactive waste left behind. Already, more than 90,000 metric tons of spent nuclear fuel is being stored at sites in 39 states. These include 73 commercial nuclear power plants and more than three dozen university and government facilities, according to a 2024 report by the Pacific Northwest National Laboratory. The waste has accumulated in spent-fuel pools and dry casks intended for temporary storage since the U.S. nuclear industry began to take off in the 1960s, and the DOE’s failure to permanently dispose of the waste as required by law has cost taxpayers tens of billions of dollars to compensate the utilities.

New efforts to store nuclear waste away from reactor sites are also getting pushback. On Wednesday, the Supreme Court will hear arguments in a case that will determine whether private companies can temporarily store spent fuel at facilities in Texas and New Mexico. Meanwhile, nuclear reactors continue to provide almost 20% of U.S. electricity and produce about 2,000 metric tons of waste each year. As additional plants become available to meet the demands of data centers, industrial plants, homes and electric vehicles, the waste pile is poised to grow even more. The nation’s first new reactors in three decades were completed last year in Georgia. Plans are in the works to reopen closed reactors in Michigan, Iowa, Pennsylvania and South Carolina.

Read more at the WSJ

How to Assess the New Legal Risks of Your DEI Policies

With Attorney General Pam Bondi’s February 5th memo directing the Justice Department’s Civil Rights Division “to investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector,” leaders are understandably and urgently looking for guidance on how to pursue their lawful, fair, and business-driven DEI initiatives. Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas has illuminated the kinds of measures she considers appropriate. This is significant because the EEOC will play a central role in enforcing the administration’s views.* Lucas has unsurprisingly warned companies to avoid rules that base decisions on race or gender, but she has expressed support for:

Standardizing interview questions, promotion criteria, and hiring policies
Removing “culture fit” from hiring and promotion practices
Widening the pool of applicants by expanding colleges and geographical areas where you recruit
Conducting regular audits to identify potential areas of legal risk

Read more at Harvard Business Review

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