Automakers and their suppliers are considering whether they should shift some manufacturing of parts to China.

China’s stranglehold on rare-earth magnets is driving the companies to what would be a remarkable outcome in a trade war initiated by President Trump, the WSJ’s Sean McLain and Ryan Felton write. Rare-earth magnets allow EV motors to function at high speed and they serve several less-exotic, though still critical functions in everything from windshield wipers to headlights. China’s slow-walking of export permits for these magnets–after agreeing to ease them as part of the trade truce–threatens to force car makers to shut down some production within weeks. Moving production of parts to the U.S.’s chief trade rival would work because the export restrictions only cover the magnets themselves, not finished parts, people familiar with the matter said. The maneuver would expose companies to additional tariffs, and shipping an unfinished part to China to have a chiclet-size magnet installed adds costs. Auto executives believe the alternative could be worse. Already, Ford Motor shut down production of the Ford Explorer at its Chicago plant for a week in May because of a rare-earth shortage. Other options for conserving dwindling supplies of these magnets include reverting to older EV technology, and stripping out some premium features.

• President Trump’s tariff blitz is set to crimp U.S. economic growth and boost inflation, the Organization for Economic Cooperation and Development said as it cut its outlook. (WSJ)

Rising logistics costs, supply-chain upheaval and unpredictable consumer demand are all in store for American businesses this year, following a false dawn of normalcy in 2024. That is the gist of comments from freight-sector experts following the release of the latest annual State of Logistics Report from the Council of Supply Chain Management Professionals. U.S. businesses’ logistics costs as a share of gross domestic product last year stayed flat from 2023 as supply-chain activities settled into more normal, prepandemic seasonal patterns, the WSJ Logistics Report’s Liz Young writes. Flat freight volumes, excess truck capacity, rising labor and fuel costs and attacks on shipping in the Red Sea were factors last year, but overall the industry seemed to be healing from years of disruption, the CSCMP’s report says. Not anymore. President Trump’s new tariffs and fluctuating trade policies have shifted the ground under logistics firms’ feet, driving consultants to advise clients to map out plans for multiple scenarios this year.

The nearly century-old founding company of the Toyota business empire plans to go private in a deal that values the maker of forklifts, auto parts and logistics software at about $34 billion.

Established in 1926 by Sakichi Toyoda to make automatic looms, Toyota Industries is a key supplier to Toyota Motor, which was spun off in 1937. The WSJ’s Kosaku Narioka writes that Toyota Industries plans to advance development of autonomous technologies for forklifts and logistics-management software through the privatization. About a year ago, the company launched Toyota Automated Logistics to house its logistics and forklift business, along with firms it had acquired. These include supply-chain integration firm Bastian Solutions, Dutch logistics process-automation company Vanderlande and Germany’s viastore, which sells materials-handling systems and warehouse-management software. Toyota Motor Chairman Akio Toyoda, the founder’s famously lachrymose great-grandson, is backing the deal, which involves the group’s real-estate arm, Toyota Fudosan, setting up an entity to buy Toyota Industries shares and take it private. 

A private gauge of China’s manufacturing activity tumbled into contraction in May, touching the lowest level since September 2022 as tariffs bite despite the U.S. trade truce. (WSJ)

Eurozone inflation fell to 1.9% in May, below the European Central Bank’s target, signaling potential victory over post-pandemic inflation. (WSJ)

Switzerland posted year-over-year consumer-price deflation in May of 0.1%, the first recorded deflation since March 2021. (WSJ)

Turkey’s annual inflation rate slowed to 35.4% in May, down from 37.9% in April, after the central bank lifted its key interest rate in response to recent political turmoil and market jitters. (WSJ)

Taiwan Semiconductor Manufacturing faces limited impact from tariffs, its CEO said, with AI demand remaining strong and despite supply chain strains at Apple, Nvidia and other top clients. (WSJ)

The Federal Emergency Management Agency scrapped a new hurricane plan nearing completion and will revert to last year’s guidance despite program and staff cuts. (WSJ)

Meta Platforms will buy the power generation of a nuclear plant in Illinois for 20 years under a deal with Constellation Energy to help power its AI ambitions. (WSJ)

Plans for a U.S. nuclear-power revival have stoked demand for shares in companies that produce the fuel, but the spot-market price for uranium has barely reacted. (WSJ)

The Department of Transportation will make $5.4 billion in grant funding available for building, replacing or fixing bridges under the 2021 infrastructure law, but is cutting diversity requirements. (Reuters)

DHL Group signed a so-called transport-as-a-service deal with Daimler Truck and zero-emission vehicle rental firm Hylane to use 30 Mercedes-Benz electric trucks. (electrive)

Maritime casualty incidents rose 42% between 2018 and 2024, outpacing fleet growth of 10% over the same period, according to maritime classification group DNV. (gCaptain)

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.