Member Briefing May 13, 2025
Truce - What Does The US-China Tariff Deal Mean?
The US and China have agreed a truce to lower import taxes on goods being traded between the two countries. The agreement marks a major de-escalation of the trade war between the world's two biggest economies, which has sent shock waves impacting countless other countries, including the UK. Here's what it all means.
- Both the US and China have confirmed a reduction in the tariffs they imposed on each other following the initial escalation by President Donald Trump earlier this year.
- The deal involves both nations cancelling some tariffs altogether and suspending others for 90 days, by 14 May.
- The result is that US tariffs on Chinese imports will fall to from 145% to 30%, while Chinese tariffs on some US imports will fall from 125% to 10%.
- China has also halted and scrapped other non-tariff countermeasures, such as the export of critical minerals to the US, which it put in place in response to the initial escalation.
- The US measures still include an extra 20% component aimed at putting pressure on Beijing to do more to curb the illegal trade in fentanyl, a powerful opioid drug.
- The announcement came after the two countries held talks in Switzerland, the first between the two countries since Trump sparked the latest tariff war.
Wells Fargo: What To Expect In The BLS Release The April Consumer Price Index Report Later This Morning
After an unexpected slide in March, the monthly change in the CPI in April is likely to rebound to its six-month trend. March’s tame reading could be traced back to weakness in the more dynamic components of the CPI; amid the flurry of federal government cost-cutting efforts and looming “Liberation Day” announcement of tariffs, concerns about the economy sent oil prices, airline fares and hotel prices sharply lower. Though uncertainty and recession fears bled into April, seasonal factors should be less favorable in tamping down price growth, and the reality of tariffs will likely have started to influence pricing decisions (especially in autos).
Still, despite the actualization of tariffs we do not expect April to be a light-switch moment in goods inflation. The pull-forward of imports, efforts not to alienate customers and general confusion over policy changes are likely to result in a more incremental strengthening in prices. We have penciled in a 0.24% increase in core goods prices for April but expect the monthly pace to be double that by the summer if current trade policy remains in place. Overall, we look for the headline CPI to rise 0.2% in April, leading the year-ago rate to dip to a four-year low of 2.3%. We would not be shocked to see a 0.3% rise if some components bounce back more than expected. Excluding food and energy, we forecast the core CPI to rise 0.25%, keeping the annual rate unchanged at 2.8%.
Crude Oil Jumps 4% On Hope Economic Growth Will Rebound From Temporary U.S.-China Trade Deal
Crude oil futures jumped 4% on Monday, after the U.S .and China agreed to slash tariffs, easing trade tensions between the world’s two largest petroleum consumers. U.S. crude oil was up $2.52, or 4.1%, to $63.54 per barrel. Global benchmark Brent rose $2.33, or 3.65%, to $66.24 per barrel. U.S. tariffs on Chinese imports now stand at 30%, while Beijing’s tariffs on American goods are now 10%. The previous rates had effectively amounted to a trade embargo, U.S. Treasury Secretary Scott Bessent said previously.
Oil prices had plunged the lowest level in four years earlier this month as President Donald Trump’s global tariff regime raised the risk of a recession that would slow demand. At the same time, OPEC+ has agreed to rapidly increase supply to the market this month and next. Low prices are pressuring U.S. shale oil producers, who generally need crude prices at $65 per barrel to drill new wells profitably. Diamondback Energy executives told investors last week that U.S. production will likely peak and start to decline if crude don’t bounce back.
Global Headlines
Middle East
- US Says Latest Round Of Nuclear Talks With Iran Were 'Encouraging' – BBC
- 'Difficult' US-Iran Talks Under Threat as Trump Heads to Middle East - Newsweek
- Israel Urges Evacuation Of Yemen Ports After Strikes Target Houthi Strongholds – France 24
- Hamas Frees U.S.-Israeli Hostage, Israel Says No Ceasefire - Reuters
- Trump Heads to the Middle East Focused on Business Deals, Not Diplomacy - NYT
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Trump Floats Traveling To Turkey This Week For Russia-Ukraine Peace Talks – Politico
- Ukraine Says Russia Is 'Completely Ignoring' Ceasefire Call – France 24
- Russia Responds To Ceasefire Call With Drone Attacks - Politico
- Kremlin Focuses On Draft 2022 Deal For Proposed Peace Talks - Reuters
- Ukrainian Drones Patrol A 16-Mile Kill Zone. ‘If You Simply Drive On Any Roads, You Risk Your Life,’ One Russian Blogger Warned. - Forbes
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- Polls Close In Philippines Midterms As Marcos-Duterte Feud Heats Up - BBC
- Philippine Elections Deliver Surprise Backing For Ex-President Duterte – Nikkei Asia
- Fragile Ceasefire Between India And Pakistan Holds Despite Clashes – France 24
- Indian Army Says Talks With Pakistan's Military Operations Chief Delayed - Reuters
- Kurdish PKK Disbands And Ends 40-Year Turkey Insurgency - Reuters
- Von der Leyen Faces Critical Test As EU Court Decides On Secret ‘Pfizergate’ Texts - Politico
- Pope Leo Seeks to Balance Francis’ Inclusive Approach With Tradition - WSJ
- Pope Leo XIV Explains His Name Choice—Here's What He Told Cardinals - Forbes
- Canada's Liberal Party One Seat Closer To Majority After Quebec Recount Gives Candidate 1 Vote Margin – BBC
Policy and Politics
Health Care Spending Reaches Two-Decade High
According to an American Medical Association (AMA) policy report on health spending trends, health care spending grew by 7.5% in 2023, significantly above growth rates of 4.6% in 2022, 4.2% in 2021 and 4.4% in 2019. In 2020, health care spending skyrocketed to 10.4% as COVID-19 emerged, but before that, the highest growth in health care spending came in 2003, when it reached 8.5%, said AMA. “The rapid growth was primarily due to higher utilization of health care goods and services, along with high enrollment in private health insurance and Medicaid,” said the report.
Personal health care consumption made up the largest share of total health care spending in 2023 at 84.4%, while physician services encompassed 14.8% of total health care spending. Spending for physician and clinical services saw the fastest growth rates in 2023, rising by 7.6% and 7% respectively, compared with 4.9% and 3.8% growth the previous year. “The faster growth is driven by increased utilization, as evidenced by the fact that — after adjusting for price changes — spending on hospital care, prescription drugs, and physician and clinical services all accelerated compared to the previous year,” said AMA economist Allen Hardiman.
Proposal Cutting Medicaid Aims for GOP Middle Ground
House Republicans are releasing their plan to cut Medicaid spending, with the program’s defenders in the GOP appearing to win the intraparty clash over how aggressively to change the system that provides health insurance to more than 70 million low-income and disabled people. A section-by-section summary of the bill text, which was viewed by The Wall Street Journal, includes some of the changes Republicans have weighed for Medicaid, including work requirements and more frequent eligibility checks. But it doesn’t lower the minimum share the federal government contributes to Medicaid in each state, cap per-person federal spending in the program or other steps some spending hawks sought.
The proposal includes efforts to clamp down on states’ use of special tax arrangements to pay their share of Medicaid costs. The Republican plan would freeze at current rates the arrangements known as “provider taxes” and ban states from establishing new ones. The legislation also seeks to ensure only those who are eligible remain on Medicaid rolls, delaying Biden-era rules on looser eligibility checks and blocking federal funds for Medicaid recipients whose citizenship or immigration status is unverified. The bill would also reduce federal Medicaid payments to states that provide healthcare coverage for immigrants in the country illegally.
Newark Airport Crisis: Equipment Issues Reported Sunday Morning As Duffy Says Flights Should Be Scaled Back
Newark Liberty International Airport experienced a lengthy air traffic control outage Sunday morning, shortly before Transportation Secretary Sean Duffy said the airport should scale back its operations amid air traffic control issues at the busy New Jersey airport. Newark had a ground stop because of an air traffic control equipment outage that lasted about 45 minutes Sunday morning and prevented flights going to Newark from taking off, CNN reported—marking the latest outage at the high-traffic airport recently. As of 10:25 a.m. EDT, 37 flights leaving Newark had been canceled and 14 had been delayed, and 41 flights going into Newark were canceled and 25 had been delayed, according to FlightAware.
A 90-second telecommunications outage around 3:55 a.m. Friday impacted communications and radar display at Philadelphia terminal radar approach control tower (TRACON) Area C, which guides aircraft in and out of Newark Liberty International Airport airspace, the FAA said in a statement. Duffy said on “Meet the Press” on Sunday that Newark “100%” needs to scale back its operations, noting: “We have less controllers working the Newark airspace right now. And, you know, we're having these–these glitches in the system. So we slow it down and keep people safe, that's what we do.”
Political Headlines
- Trump Signs Executive Order Aimed at Lowering Drug Prices - WSJ
- Donald Trump's Prescription Drugs Executive Order Explained - Newsweek
- Hospital Groups Slam Cuts To Medicaid In Megabill - Politico
- Justices Will Hear Arguments On Trump’s Effort To End Birthright Citizenship – SCOTUS Blog
- Trump Defends Plan To Accept Luxury Air Force One Plane As Gift From Qatar—Here’s What We Know - Forbes
- Duffy To Allow Exemptions To Extend Retirement Age For Air Traffic Controllers – The Hill
- Rep. Lawler Discusses Positions on Bill Maher television program – Mid-Hudson News
- Six Facts About David Steiner, the New U.S. Postmaster General - WSJ
- USPS Readies July Rate Hikes For Ground Advantage, Other Services – Supply Chain Dive
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
'Perfect Storm': Expert Reveals Why Pollen Allergies Are Getting Worse
You know it's spring when your car has turned yellow and pollen blankets your patio furniture and anything else left outside. Suddenly there are long lines at every car wash in town. Evolution has fostered many reproductive strategies across the spectrum of life. From dandelions to giraffes, nature finds a way. One of those ways creates quite a bit of suffering for humans: pollen, the infamous male gametophyte of the plant kingdom.
Trees don't have an easy time in the reproductive game. As a tree, you have two options to disperse your pollen. Option 1: Employ an agent, such as a butterfly or bee, that can carry your pollen to another plant of the same species. Option 2, the budget option, is much less precise: Get a free ride on the wind. Wind is not an efficient pollinator, however. The probability of one pollen grain landing in the right location – the stigma or ovule of another plant of the same species – is infinitesimally small. Therefore, wind-pollinated trees must compensate for this inefficiency by producing copious amounts of pollen, and it must be light enough to be carried. For allergy sufferers, that can mean air filled with microscopic pollen grains that can get into your eyes, throat and lungs, sneak in through window screens and convince your immune system that you've inhaled a dangerous intruder.
Industry News
Trade War Updates
- How Hudson Valley Businesses Are Responding to Tariffs – Chronogram
- Chipmakers Onsemi, Lattice Expect Minimal Direct Tariff Impacts – Manufacturing Dive
- Donald Trump Says He May Speak To Xi Jinping This Week Following US-China Tariff Agreement - SCMP
- US-China Deal Reportedly Does Not Cover de Minimis Exemption For E-Commerce Shipments - Forex
- Apple Considers Raising iPhone Prices, Without Blaming Tariffs - WSJ
- Trump: The EU Is ‘Nastier Than China’ - Politico
- Bessent Sees Tariff Agreement As Progress In ‘Strategic’ Decoupling With China - CNBC
- US Opens National Security Probe Into Imported Commercial Jets, Engines - Reuters
- Taiwan's Lai Urges 'Non-Red' Supply Chain To Counter 'Unfair' China Trade – Nikkei Asia
Paper Highlights Benefits Of 1979 Agreement On Trade In Civil Aircraft
The Aerospace Industries Association (AIA), an organization representing aviation and aerospace manufacturers, recently published a whitepaper detailing the benefits the U.S. aerospace industry receives from the 1979 Agreement on Trade in Civil Aircraft. Since the agreement went into affect, U.S. commercial aerospace exports increased by more than 2,100 percent. The industry has the highest trade balance of any manufacturing sector at nearly $75 billion and the second highest level of exports at more than $135 billion.
The paper also highlights the agreement’s role in aviation safety and how the aerospace industry aligns with the Trump administration’s vision for a “production economy.” The 1979 agreement provides duty-free trade of civil aircraft, engines, flight simulators, and related parts and components. “The little-known Agreement on Trade in Civil Aircraft has unlocked enormous benefits for the American workers, the economy, and our ongoing safety and prosperity. As the Trump Administration determines a path forward on tariff policy with partner countries, we urge the administration to reaffirm commitments made in this agreement and work with our industry to further expand America’s leading manufacturing export sector,” AIA Vice President of International Affairs Dak Hardwick said.
Read more at Transportation Today
UK Group IAG Orders Dozens of Long-Range Jets
International Airlines Group, a London-based holding company that controls British Airways, Iberia, Aer Lingus, and several more EU-focused carriers, announced it will acquire 71 long-range aircraft from both Boeing and Airbus as it works to expand transatlantic service. Most of those new jet orders were announced by IAG in its quarterly statement one day after the revelation of a new trade agreement between the United States and the United Kingdom.
IAG identified its purchases as 32 Boeing 787-10 Dreamliners and 21 Airbus A220-900neo aircraft, to be delivered between 2028 and 2033. Following news of the U.S.-U.K. agreement, Commerce Department sources indicated the U.S.-sourced aircraft will carry an estimated of $10 billion. Along with those purchases, in March IAG exercised previous options to acquire six Boeing 777-9 (estimated, $1.75 billion) and 12 Airbus A350 jets ($3.7 billion.) These aircraft will be delivered between 2027 and 2030. The buyer described its investments as part of its ongoing investment in new aircraft to promote operational efficiency, reduce emissions, and enhance customer service.
Read more at American Machinist
Nissan To Cut Over 10,000 More Jobs Globally, NHK Reports
Nissan Motor will additionally slash more than 10,000 jobs globally, bringing the total cuts including previously announced layoffs to about 20,000 or 15% of its workforce, Japan’s public broadcaster NHK reported on Monday. The struggling Japanese automaker warned last month it would likely book a record 700 billion yen to 750 billion yen ($4.74 billion-$5.08 billion) net loss in the financial year that ended in March due to impairment charges.
Japan’s third-biggest automaker is set to announce its full-year results on Tuesday. Nissan is looking to make its business leaner and more resilient after doing poorly in its top market the United States, where its performance suffered heavily from a lack of hybrids and an ageing line-up. It is also struggling in China, where it is looking to stop a punishing sales slide with the launch of some 10 new vehicles in the coming years.
Panasonic To Lay Off 10K Workers Globally
Panasonic Holdings plans to lay off 10,000 workers around the globe as part of a corporate restructuring, the electronics maker announced on Friday. The company aims to cut 5,000 workers in its home country of Japan, as well as 5,000 workers at other locations around the world. Panasonic will also shutter some loss-making businesses and sites as part of the cuts. The company currently operates one lithium battery production site in Sparks, Nevada, where it supplies Tesla. Panasonic also has an office in Reno, Nevada and is readying to open a new $4 billion battery factory in De Soto, Kansas this spring.
The moves are part of Panasonic’s plan to mitigate slowing demand across multiple markets. The company’s sales for fiscal year 2025, which ended in March, were down 0.5% year over year to 8.5 trillion yen, with particular slowdowns in its auto segment. For the current fiscal year, Panasonic forecasts a roughly 13% drop in operating profit down to 370 billion yen. The forecast does not take into account any impact from the Trump administration’s tariff policies.
Read more at Manufacturing Dive
Thermo Fisher Scientific Invests $2B To Expand Life Sciences Manufacturing Facilities In The United States
Thermo Fisher Scientific has announced plans to expand its life sciences manufacturing facilities across the United States. The company, which enables biopharma companies to develop and produce medicines, is investing $2 billion into the expansion and supporting the creation of high-paying jobs nationwide. Marc N. Casper, chairman, president and chief executive officer, Thermo Fisher Scientific, said, “Thermo Fisher’s commitment to U.S. manufacturing reflects our confidence that America will continue to lead the world in science and innovation. Thermo Fisher is proud to serve as a growth engine for the American economy. By expanding our U.S. operations, we ensure that life-saving medicines and therapies will continue to be developed and produced in America for decades to come.”
The investment includes $1.5 billion in capital expenditures to enhance and expand U.S. manufacturing operations, along with $500 million dedicated to research and development. Thermo Fisher operates 64 manufacturing sites in 37 states, producing analytical instruments, specialty diagnostics, and life sciences solutions. The company also provides contract development and manufacturing services to pharmaceutical innovators.
Gilead Plans $11B In US Drug Production
Gilead last week became the latest U.S. drugmaker to pledge new investments in U.S. manufacturing, as President Trump threatens the worldwide industry with tariffs. The California biotech said it’s now planning an additional $11 billion in capital and operational investments in the U.S. on top of $21 billion already committed for U.S. manufacturing, research and development through 2030. The figure includes $4 billion for capital projects, $5 billion for technology, operations and research activities and $2 billion for digital and engineering projects.
The investments will help create about 800 new positions and indirectly support the creation of more than 2,200 jobs by 2028, Gilead said. The company said it’s planning to build three new facilities and upgrade three existing sites in the U.S. in the coming years. Gilead is already better positioned than many large drugmakers to stave off the effects of industry-specific tariffs. The “vast majority” of the company’s intellectual property is in the U.S. and more than 80% of profits are recognized in its home country, CEO Daniel O’Day told analysts and investors last month on a conference call.
Read more at Manufacturing Dive
NRG 2025 Summer Climate and Hurricane Outlook
The 2025 summer is forecasted to be the 10th warmest since 1950, driven by neutral ENSO conditions, severe drought in the Southern Plains and Southwest, and long-term climate trends. June is expected to be the hottest month, with cooler risks in the East later in the season. Drought expansion across the US may amplify heat, particularly in Texas. The Atlantic hurricane season is predicted to be near the 10-year average, with 16-18 named storms, 8-9 hurricanes, and 4 major hurricanes.
Renewable energy generation is expected to benefit from above-normal wind and solar conditions, though late-season tropical activity may pose challenges. Uncertainty remains around ENSO evolution, which could influence both summer temperatures and hurricane activity.
Read more at NRG
Learn more about the Council of Industry Energy Consortium
IBM Replaced Hundreds of HR Workers With AI, According to Its CEO
IBM CEO Arvind Krishna told The Wall Street Journal on Monday that the tech giant had tapped into AI to take over the work of several hundred human resources employees. However, IBM's workforce expanded instead of shrinking—the company used the resources freed up by the layoffs to hire more programmers and salespeople. "Our total employment has actually gone up, because what [AI] does is it gives you more investment to put into other areas," Krishna told The Journal. Krishna specified that those "other areas" included software engineering, marketing, and sales or roles focused on "critical thinking," where employees "face up or against other humans, as opposed to just doing rote process work."
IBM CTO Ji-eun Lee said earlier this year that IBM's AskHR agent had automated 94% of simple, routine human resources tasks, like vacation requests and pay statements. Meanwhile, IBM's AskIT agent reduced the number of calls and chats for the IT team by 70%. IBM saw a "productivity improvement" of $3.5 billion over the past two years by using AI in more than 70 business areas, Lee stated. IBM did not disclose when the HR layoffs and subsequent hiring in other departments occurred. The company employed 270,300 workers globally as of its 2024 annual report.