Member Briefing May 15, 2025
The China Tariff Pause Has Wall Street Scaling Back Recession Calls
Discussion of an economic downturn later in 2025 had surged as economists argued Trump's widespread tariffs would boost inflation and slow economic growth. Now, with the bulk of tariffs on goods from China paused for 90 days — and optimism around further trade deals building — economists argue that economic growth will still slow later this year, but the odds of a recession have diminished. "The administration's recent dialing down of some of the more draconian tariffs placed on China should reduce the risk that the US economy slips into recession this year," wrote JPMorgan chief US economist Michael Feroli, who had been the first Wall Street economist to call for a recession after Trump's large tariff increase.
"We believe recession risks are still elevated, but now below 50%." Feroli's logic is simple: Tariffs are essentially a tax. With the latest tariff cuts, the estimated effective US tariff rate has fallen from roughly 24% to 14%. This creates a $300 billion "tax cut" for American consumers that likely would've been swallowing the brunt of the price increases caused by tariffs. Americans paying higher prices and eventually being unable to spend as much was a key part of why economists have been worried about tariffs leading to an economic slowdown.
EPA Announces Rollback On ‘Forever Chemicals’ In Drinking Water, Delays Reporting to 2026
The Environmental Protection Agency once again delayed its PFAS reporting rule implementation another year as it continues developing and testing software needed for data collection, the agency said Monday. Most manufacturers will begin reporting the presence of PFAS in their supply chains on April 13, 2026, with a deadline of Oct. 13, 2026, according to the interim final rule. Manufacturers were expected to begin submitting information to the EPA on July 11, 2025 and had until Jan. 22, 2026. For qualifying small manufacturers, their deadline was moved from July 11, 2026, to April 13, 2027.
The EPA said the extra time will also allow the agency to gather critical feedback and additional guidance that could be useful for the reporting, as well as consider any additional modifications. The EPA will reopen the interim final rule’s comments in the Federal Register until June 12.
Read more at Manufacturing Dive
Global Headlines
Middle East
- Israeli Strikes In Northern Gaza Kill At Least 50, Hospital Says – BBC
- Hamas Military Chief Mohammed Sinwar Reportedly Target Of Israeli Strike On Gaza Hospital - CNN
- Netanyahu Says There Is ‘No Way’ Israel Halts The War In Gaza Until Hamas Is Defeated - Reuters
- Arabs React to Trump's Middle East Vision - Newsweek
- After Handshake, Trump Urges New Syrian Leader Al-Sharaa To Mend Ties With Israel - Politico
- Syrian Leader Sharaa's Path From Global Jihad To Meeting Trump - Reuters
- Netanyahu Slams Macron Over Criticism Of Gaza Aid Blockade – France 24
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Putin Not Attending Peace Talks, Zelenskiy Says Russian Delegation Is 'Decorative' - Reuters
- Ukraine and Russia Can’t Even Agree on Who Will Meet Where for Peace Talks – WSJ
- Taking Inches in Battle, Russia Demands Miles in Talks - NYT
- EU Backs 17th Round Of Russia Sanctions - Politico
- Germany Foils Alleged Russian Plot to Mail Incendiary Devices - WSJ
- Ukraine Crisis Could Spark 'Direct' Russia-US Confrontation—NORAD Commander - Newsweek
- 'Go Back To Ukraine': War Refugees Complain Of Abuse In Poland - BBC
- 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
- UN Mission In Libya Calls For De-Escalation After Fighting Erupts In Capital – CNN
- Macron Open to Deploying Nuclear Weapons Across Europe - Newsweek
- World Health Organization Scales Back Work After Funding Cuts - Reuters
- A Stunning Fall From Grace For World Economic Forum Founder Klaus Schwab, The King Of Davos - WSJ
- Merz Woos Trump With Invitation To German Ancestral Village - Politico
- Argentina Inflation Seen Slowing in April, Reviving Downward Trend: Reuters Poll – US News
- India and Pakistan Talked Big, but Satellite Imagery Shows Limited Damage - NYT
- Peru's Prime Minister Resigns Ahead Of No-Confidence Vote – BBC
Policy and Politics
Lawmakers Channel Budget Frustrations Into Bipartisan Constitutional Amendment Push
Nearly 30 state senators have signed onto the 2025 version of a state constitutional amendment proposal to rein in the governor’s inherent power over the state budget, with others signaling they are in favor. Similar language has been proposed several times in recent years, but there is a sense of urgency among lawmakers this year given that the budget was the latest in 15 years and that they argue Hochul made a public display of holding the process up until her policy proposals were woven into the final budget to her satisfaction.
The current version of the amendment is sponsored by State Sen. Gustavo Rivera. Senate Majority Leader Andrea Stewart-Cousins didn’t rule out bringing the bill to the floor this session, but pointed to the lengthy process that would be required to get it approved by voters. “There are years that it would take in order to change the way that it is if the voters wanted to change it,” she said, before adding, “The conference is discussing it.” She subsequently downplayed it as a priority during the final sprint to the legislative finish line on June 12.
Read more at NY State of Politics
NAM: Ways and Means Tax Bill Will Drive Manufacturing Investment and Job Creation
The National Association of Manufacturers commends the House Ways and Means Committee for acting on manufacturers’ top policy priority in our comprehensive manufacturing strategy: preserving and extending President Trump’s historic 2017 tax reforms. This action marks a vital step forward in securing a competitive tax environment that empowers manufacturers to create jobs, invest, grow and compete. “The 2017 tax reforms were rocket fuel for manufacturers—driving job growth, higher wages and investment in communities. This bill brings us closer to the vision of a 15% effective tax rate for manufacturers that President Trump and I discussed in 2016,” said NAM President and CEO Jay Timmons.
- For the 96% of manufacturers that are organized as pass-through businesses, this bill makes permanent the job-creating pass-through deduction.
- To support small business job creation, the bill increases and makes permanent the pass-through deduction.
- Protects more family-owned manufacturers from the estate tax
- The bill preserves the 21% corporate tax rate as well as the TCJA’s international tax provisions.
- The bill revives and extends immediate R&D expensing, full expensing for capital equipment purchases and a pro-growth standard for interest deductibility.
GLP-1 Medications Fuel $806B U.S. Prescription Drug Spending Spree
Prescription drug spending in the United States rose by 10.2% to nearly $806 billion last year, thanks in part to the popularity of GLP weight-loss drugs. GLP-1s are now the top drug category by total spending and the fastest-growing segment in the market, according to the report from the American Society of Health-System Pharmacists. Looking ahead to 2025, researchers caution that proposed U.S. tariffs on pharmaceutical ingredients and components, especially those sourced from China, could exacerbate shortages and push patients toward more-expensive brand-name alternatives. Among the highlights of the report:
- Clinic drug spending rose by 14.4% to $158.2 billion, while nonfederal hospitals saw a more modest 4.9% increase to $39 billion. With GLP-1 shortage issue largely resolved, continued growth in this category is expected, although direct-to-consumer channels may complicate efforts to track usage trends.
- Overall U.S. drug spending is projected to increase by between 9% and 11% in 2025, with clinic expenditures rising from 11% to 13% and hospital spending growing between 2% and 4%.
- Oncology spending continues to grow at a double-digit pace, driven by the introduction of new high-cost drugs and broader application of existing therapies.
- Vaccine expenditures have declined post-pandemic, even with new vaccine products on the market. This trend may continue because of growing antivaccine sentiment.
- New generics and biosimilars may help moderate overall spending growth by providing lower-cost alternatives as key patents -- including for Entresto, a widely used heart failure drug – expire.
Political Headlines
- US Supreme Court Hears Arguments On Trump's Order To End Birthright Citizenship - BBC
- Trump Officials Balk at RFK Jr.’s Attack on Pesticides - WSJ
- House Ways & Means Committee Advances Tax Bill — But ‘SALT’ Deduction Still Undecided - CNBC
- GOP Divide Over Medicaid As Right Calls For Deeper Cuts – The Hill
- Lawmakers Question Kennedy On Staffing Cuts, Funding Freezes And Policy Changes At Health Department – The Hill
- Despite Missteps, Andrew Cuomo Maintains Commanding Lead In New York Mayor’s Race - Politico
- Relief On China's Factory Floors As US Tariffs Put On Hold - BBC
- FTC To Keep Focus On Key Sectors, Address Personal Liberty – Law360
- Global Perception of the U.S. Plummets Amid Trump’s Second Term – US News
- OSHA Files Suit Alleging USPS Fired Whistleblower – EHS Today
- Judge Orders Release of Georgetown Academic Arrested by Federal Agents - WSJ
- HHS Reinstates Fired Workers Responsible For Coal Miner Health Protection – The Hill
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Scientists Are Uncovering Surprising Connections Between Diet And Mental Health
You’ve undoubtedly heard the adage that you are what you eat. It turns out that it may apply to brain health nearly as much as physical health. Research increasingly supports the idea that eating the right foods and avoiding the wrong ones may improve your mood and emotional well-being over time. “Just as we recognize that diet plays a role in conditions like heart disease or diabetes, we now understand that food choices can affect brain function, mood, and mental health disorders,” says Wolfgang Marx, deputy director of the Food & Mood Centre at Deakin University in Australia and president of the International Society for Nutritional Psychiatry Research, a growing field that explores how diet influences mental health and brain function.
“Diets high in ultra-processed foods and low in nutrient quality are consistently associated with a higher risk of depression and anxiety,” says Marx. By contrast, a review of 13 studies published in the February 2025 issue of Nutrition Reviews found that the Mediterranean diet could reduce the risks of depression, anxiety, and attention deficit hyperactivity disorder (ADHD) among children and teenagers.
Read more at National Geographic
Industry News
Trade War Updates
- Honda, Nissan Expect to Be Hit Hard by U.S. Tariffs – WSJ
- Nissan Maneuvers To Soften $3B Hit From Tariffs – Supply Chain Dive
- Global Trade Rules Must Evolve To Tackle Persistent Imbalances, Says Bank Of England Boss - Politico
- US Companies Front-Load China Orders After Trade Truce – Nikkei Asia
- China Got The Mutual Respect It Craves From The U.S., But The Trauma For Businesses Is Real - CNBC
- US Launches Section 232 Probe Into Aircraft Industry – Supply Chain Dive
- Japan, Netherlands Win As China's Chip Tool Imports Surge On US Tensions – Nikkei Asia
- Adidas Warns US Customers Will Soon Pay More For Its Shoes As Company Runs Up Against Trump’s ‘Tariff Wall’ – Yahoo Finance
Honda Postpones EV Project in Canada
Honda Motor Co. Ltd. has tabled its $11-billion plan to start electric vehicle manufacturing in Alliston, Ont. The decision coincided with the automaker reducing its 2026 revenue forecast, and underscored the uncertainty in North American automotive sector due to U.S. tariffs on imported vehicles. In April of this year, the U.S. initiated a 25% tariff on imported passenger vehicles, light trucks, and certain automobile parts, which has forced the non-U.S. automakers like Honda to review their strategy for supplying finished vehicles to the North American market – and likewise how they supply component parts to their onshore manufacturing operations.
Honda CEO Toshihiro Mibe said the company will review the Canadian project again in two years. the electric vehicle market is in two years before deciding whether to keep going with the project. "What happens after two years and the starting time of the project, we have to observe … and ultimately make the decision," he said. "In the midterm, if the tariff measures are to be in place for a long time, then we will have to increase our production capacity in the United States."
Read more at American Machinist
Anheuser-Busch Invests $300M To Expand Beer Manufacturing Facilities Across The US
Anheuser-Busch has announced plans to invest $300 million in its manufacturing facilities across the United States. The company, which produces beers including Michelob ULTRA, Budweiser, Bud Light, and Busch Light, is making this investment to support its operations and workforce, adding to nearly $2 billion invested in the past five years. This investment supports the company’s goals to create and sustain manufacturing jobs, enhance operational capabilities at its 100 U.S. facilities, and strengthen career opportunities for veterans through a new digital credentialing system.
As part of the investment, Anheuser-Busch is expanding its Technical Excellence Center model beyond St. Louis, Missouri, starting with a new regional facility in Columbus, Ohio. These centers are designed to upskill employees through hands-on training and are expected to benefit the entire regional technical workforce over the next three years. The company will also open these centers to students and educators to help develop future talent pipelines.
Ketchup Maker Kraft Heinz Investing $3 Billion Upgrading U.S. Manufacturing
Kraft Heinz is spending $3 billion to upgrade its U.S. factories, its largest investment in its plants in a decade, even as executives say consumer sentiment is at its second-lowest point in 70 years, and it has cut sales and profit forecasts. The upgrades will help lower costs by making the plants more efficient, which in turn may help offset President Donald Trump’s tariffs, which factored into the company’s decision to make the investment, said Pedro Navio, Kraft Heinz’s president of North America, in an interview with Reuters. The investment also allows the packaged food maker to come up with and sell new products faster, he said.
Kraft Heinz manufactures its market-leading Heinz ketchup, Kraft macaroni and cheese and Philadelphia cream cheese, among other products, at 30 plants across the United States. Kraft Heinz told Wall Street analysts last month that tariffs were adding to its costs and that consumers were buying less due to economic uncertainty. But the company is moving forward and making the new investment now to defend its market share, Navio said.
GE Completes Key Endurance Tests For RISE Engine Technology
GE Aerospace has completed more than 3,000 cycles of endurance tests on its next-generation high-pressure turbine airfoil technologies, a key milestone in the development of a more compact engine core for future aircraft it said. The test campaign involved high pressure turbine (HPT) blades and nozzles with the GE’s latest cooling technology that demonstrated improved durability and fuel efficiency compared to conventional turbine technology. The airfoils were inserted in the core of an F110 engine for testing.
GE Aerospace is developing the compact engine core including high-pressure compressor, HPT blades and combustor technologies for a core demonstrator scheduled to be completed later this decade through the CFM RISE program. The compact core design targets significant improvements in thermal efficiency and power-to-weight ratio compared to current engine architectures. The RISE (Revolutionary Innovation for Sustainable Engines) program, unveiled in 2021, has completed more than 250 tests and is one of the aviation industry’s most comprehensive technology demonstration efforts. Beyond the compact core, RISE is advancing engine architectures including Open Fan and hybrid electric systems.
Read more at Aerospace Testing International
Navy Seeks To Fast Track Nuclear Weapons Systems
The U.S. Navy’s Strategic Systems Program is working to fast track the improvement and development of three critical weapons systems, Vice Admiral Johnny Wolfe told members of the House Armed Services Committee. These include the Trident II D5 Strategic Weapons System, hypersonic missiles and the sea-launched nuclear cruise missile in development, known as the SLCM-N. “The Navy’s strategic deterrent stands at a critical juncture,” said Wolfe, who directs the program responsible for the country’s sea-based nuclear weapons. “To maintain our advantage in the face of evolving threats, we must prioritize the modernization of our nuclear infrastructure and industrial base.”
Wolfe stressed that his command, Strategic Systems Programs, required the expertise of its already lean workforce, which he said needs to grow. “Our modernization needs cannot succeed without investing in research and development, the critical skills for our workforce, and the facilities needed to produce, sustain and certify our nuclear systems,” Wolfe said. He described the task faced by Strategic Systems Programs in overseeing the development and readiness of nuclear missile systems as critical to U.S. national security. “It is the foundation of the national defense strategy and is a top priority of the Department of Defense,” Wolfe said.
Qatar Airways Signs Deal For 160 Boeing Jets During Trump Visit
State carrier Qatar Airways signed a deal on Wednesday to purchase jets from U.S. manufacturer Boeing during President Donald Trump's visit to the Gulf Arab country. Trump said the deal was worth $200 billion and included 160 jets. Trump and Qatar's Emir Sheikh Tamim bin Hamad Al-Thani witnessed the signing ceremony in Doha. The deal was signed during Trump's second stop on a tour of Gulf states after he struck a string of deals with Saudi Arabia on Tuesday.
Trump said Boeing CEO Kelly Ortberg, who signed the deal with Qatar Airways CEO Badr Mohammed Al-Meer next to Trump and the Qatari emir, told him "it's the largest order of jets in the history of Boeing, that's good". It's not clear which Boeing aircraft models would be part of the deal and whether the orders from Qatar are firm, which require a deposit and several contractual obligations, or are options. Boeing no longer issues catalogue prices but based on the most recent published value for its most expensive jet, the 777X, a deal for 160 of the long-range aircraft would be worth some $70 billion. Aviation analysts say that airlines typically get large discounts for bulk deals.
Oil Declines After Biggest US Crude Stockpile Gain Since March
Oil dropped after a government report showed US crude inventories rose by the most in two months, overshadowing the lingering relief from the trade truce between the world’s two largest economies. West Texas Intermediate dipped more than 0.5% to trade near $63 a barrel after gaining almost 10% in the prior four sessions. Global benchmark Brent hovered around $66. US crude stockpiles rose 3.45 million barrels, the biggest gain since March, the Energy Information Administration said Wednesday.
The bearish government data stalled a rally spurred by the US-China trade détente and President Donald Trump’s hostile rhetoric on Iranian supply. Trump reiterated Wednesday that Tehran can’t have a nuclear weapon — while Iran’s foreign minister urged the US to take a “more realistic” approach to talks.
Microsoft Laying Off 6,000 Employees
Microsoft on Tuesday began laying off nearly 3 percent of its total workforce — or about 6,000 employees. “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.” a Microsoft spokesperson told The Hill in an emailed statement. The Washington state-based tech company has a total of 228,000 workers globally, according to the corporation’s latest figures, with some 126,000 in the United States. Tuesday’s cuts will impact thousands.
Microsoft CFO Amy Hood said during an earnings call in late April that “operating margins increased 1 point year over year to 46 percent, better than expected as we continue to focus on building high-performing teams and increasing our agility by reducing layers with fewer managers.” The company reported bringing in just more than $70 billion in revenue for the third quarter of fiscal 2025. The company’s net income was $25.8 billion, increasing by 18 percent.