Bayer Warns of Possible Roundup Exit in U.S. Over Legal Risks

U.S. job growth slows in February amid federal layoffs

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March 07, 2025 08:07 AM

Updates: Policy/News/Markets, March 7, 2025

— Bayer warns of possible Roundup exit in U.S. over legal risks. Bayer has cautioned U.S. lawmakers that it might cease selling its widely used Roundup weedkiller unless stronger legal protections are established against product liability litigation. The company has already paid around $10 billion to settle claims linking the glyphosate-based herbicide to cancer, with an additional 67,000 cases pending and $5.9 billion set aside for legal provisions. Bayer, which acquired Roundup through its $63 billion purchase of Monsanto in 2018, is lobbying for federal legal clarity and considering all options to end litigation. The move could disrupt U.S. agriculture, which heavily relies on glyphosate-resistant crops.

Bayer argues that lawsuits invoking state laws should not be allowed because the Environmental Protection Agency (EPA) has repeatedly deemed glyphosate safe for use, as have regulators in other countries. Despite this, Bayer’s attempts to secure federal legal protections have so far been unsuccessful, including a failed petition to the Supreme Court in 2022.

Impacts: Glyphosate is critical to U.S. agriculture, used on approximately 87% of corn, soybean, and cotton acres. A report commissioned by Bayer highlights that losing glyphosate would lead to increased production costs — estimated at $1.9 billion annually — and higher food prices due to inflationary pressures. Farmers would face substantial environmental and operational challenges, such as increased greenhouse gas emissions from tillage practices. If Bayer exits the U.S. market for Roundup, it could disrupt farming operations reliant on glyphosate-resistant crops and conservation practices like no-till farming. Small farmers may be disproportionately affected due to higher operating costs and limited access to alternatives.

Of note: The company has already replaced glyphosate with alternative substances in consumer products sold in the U.S., but discontinuing Roundup for agricultural use would mark a significant shift.

— U.S. job growth slows in February amid federal layoffs. The U.S. economy added 151,000 jobs in February, slightly below expectations of 160,000 and marking the first full month of job growth under President Trump’s second term. The unemployment rate rose unexpectedly to 4.1% from 4%. While healthcare, financial activities, and transportation sectors showed gains, federal layoffs contributed to uncertainty, with 62,242 government job cuts reported. The labor force participation rate edged down to 62.4% from 62.6% in January. Hourly wages were up 0.3% in February and were up 4.0% from February 2024. Economists warn that budget cuts could affect private sector hiring, and the Federal Reserve may consider these trends when setting interest rates this month.

The December jobs figure was revised up to 323,000 (307,000 previously) while the January number was trimmed to 125,000 (143,000 prior) for a net reduction in 2,000.

— Record U.S. trade deficit driven by agricultural imports. In January, the U.S. agricultural trade balance hit a record deficit of $6.25 billion, driven by a sharp 13.1% rise in agricultural imports to $20.66 billion and a 10.8% drop in exports to $14.41 billion. Fiscal year (FY) 2025 totals now show $63.97 billion in exports against $75.95 billion in imports, a deficit of $11.98 billion. With USDA projecting $170.5 billion in exports and $219.5 billion in imports for FY 2025, the pressure is on for exports to average $13.32 billion and imports $17.94 billion monthly. Elevated U.S. dollar value and potential economic slowdowns could further challenge export growth and drive import demand.

— China’s Wang Yi condemns U.S. tariffs, reaffirms stance on Taiwan.Chinese Foreign Minister Wang Yi criticized the United States for employing a “law of the jungle” approach and pledged to “firmly counter” what he described as America’s “arbitrary” tariffs. Speaking at a press conference during the Two Sessions, China’s largest annual political gathering, Wang reiterated Beijing’s firm position on Taiwan, stating, “China will and must be reunified.”

Of note: President Trump is confident that China won’t make a move on Taiwan when he is in the White House, Treasury Secretary Scott Bessent says on CNBC.

— China sets record $540 billion in exports amid U.S. tariff hike. China’s exports surged to a record $540 billion in the first two months of 2025, driven by a rush to beat U.S. tariffs. Exports rose 2.3%, while imports fell 8.4%, creating a record trade surplus of nearly $171 billion. The U.S. increased tariffs on almost all Chinese imports from 10% to 20% this week, prompting companies to frontload shipments. Exports to the U.S. reached $76 billion, the highest in three years for the same period. Economists warn the tariff impact may become more evident in the coming months.

— U.S. suspends tariffs on USMCA goods from Mexico and Canada. The Trump administration suspended 25% tariffs on goods covered by the U.S.-Mexico-Canada Agreement (USMCA), effective March 7. President Trump signed executive orders (Mexico, Canada) at the White House on March 6, lifting tariffs on imports from Mexico and Canada that were in place since March 4.

— Uncertain relief: USMCA tariff suspension raises questions. The temporary suspension of tariffs on goods covered under the USMCA offers only limited relief, according to trade experts cited by the Wall Street Journal (link). The complexity of USMCA rules has led many businesses to opt for paying tariffs rather than navigating compliance. In 2024, 50% of Mexican and 38% of Canadian exports entered the U.S. duty-free under USMCA, while 40% of goods from both countries, including key commodities like potash, avoided tariffs outside of the agreement. When 25% tariffs take effect, more businesses might seek to determine their eligibility under USMCA rules.

— President Trump’s latest trade stance reduces tariffs on Canadian potash from 25% to 10% as part of a broader strategy to manage trade with Canada and Mexico. This move is part of a temporary reprieve on tariffs for goods compliant with the U.S.-Mexico-Canada Agreement (USMCA), which will last until April 2. Key points:
· Tariff reduction on potash: The tariff on Canadian potash has been lowered to 10% from the initial 25% imposed earlier. This reduction aims to alleviate some pressure on U.S. farmers, who rely heavily on Canadian potash for fertilizer.
· USMCA compliance: Goods from Canada and Mexico that comply with USMCA rules of origin will not incur tariffs until April 2. This exemption is intended to minimize disruptions to industries like automotive manufacturing.
· Energy tariffs: A 10% tariff remains on Canadian energy imports, which are not covered by the USMCA.
· Impact on farmers: The tariffs have raised concerns among U.S. farmers due to increased costs for imported goods like potash. Approximately 85% of U.S. potash comes from Canada, and higher costs could affect agricultural production.
· Trade tensions: Canada has responded with retaliatory tariffs on U.S. goods and is considering further actions. The situation remains volatile, with both countries seeking more stable trade conditions.

— Tense Trump/Trudeau call highlights trade war frictions with focus on Canadian dairy policy. Canadian Prime Minister Justin Trudeau described his 50-minute phone call with former President Donald Trump as “colorful” and “heated,” focusing on resolving the American-led trade war. While the conversation had moments of tension, Trudeau noted it was ultimately “substantive” and hinted at a potential short-term resolution. However, he acknowledged that Trump’s commitment to tariffs could prolong the trade war.

A senior official revealed that Trump used profanity while discussing dairy products and became animated over fentanyl. Despite the heated exchanges, the call ended on a somewhat friendly note, with both leaders agreeing to explore potential tariff exemptions for USMCA-compliant products.

Canada’s high tariffs on dairy imports as part of its supply management system, coupled with U.S. dissatisfaction over unmet USMCA commitments, have led to tariff escalations affecting a $1.2 billion dairy trade. As the 2026 USMCA review approaches, the U.S. is expected to push for further reforms to secure better market access for American dairy producers, with calls for swift diplomatic resolutions to avoid prolonged economic impacts.

— Trudeau says trade war with U.S. will continue. Canada outgoing Prime Minister Justin Trudeau announced countermeasures on U.S. imports and ominously predicted: “We will continue to be in a trade war that was launched by the United States for the foreseeable future.” That prompted Scott Bessent, the Treasury secretary, to call Trudeau a “numbskull” at an Economic Club of New York event yesterday. Meanwhile, some Canadian retailers have pulled California wine, Kentucky bourbon and other American products off store shelves. “That’s worse than a tariff because it’s literally taking your sales away,” Lawson Whiting, the chief executive of the corporation that owns the Tennessee whiskey brand Jack Daniel’s, said on an analyst call this week.

Of note: The leader of Canada’s most populous province, Ontario Premier Doug Ford, then threatened to cut off power to 1.5 million Americans “with a smile on my face.”

— Trump warns of potential tariff hikes on Canada and Mexico. President Trump in an interview Friday suggested that tariffs on Mexico and Canada could rise above the 25% rate paused earlier this week, further unsettling markets and businesses. While he paused the tariffs until April 2 for goods under the USMCA agreement, Trump hinted that higher tariffs might still come, stating, “The tariffs could go up as time goes by.” The move follows a market selloff and concerns from Republicans and industry leaders about the economic impact of the largest U.S. tariff increase in a century.

— U.S. levies on aluminum and steel will continue as planned next week, and carmakers will not be exempt when tariffs take effect in April, Trump said.

— Treasury Secretary Scott Bessent calls it the “America First Trade Policy.” He dismissed concerns that tariffs could worsen inflation, calling them a one-time price adjustment. The U.S. will put economic pressure not just on adversaries, but also allies who don’t align with Trump’s vision, he said.

DOGE

— Trump shifts strategy on job cuts, moves away from Musk-style firings. President Trump announced that Cabinet secretaries, not Elon Musk, will now lead job cut decisions as part of his streamlining effort. This change follows lawsuits and resistance from high-level officials after mass firings and unorthodox directives from the Department of Government Efficiency (DOGE). Cabinet chiefs will now have precise control over staffing, signaling a departure from Musk’s rapid-fire approach. The president encouraged them to take a more active role to retain good workers and sack not-so-good ones. Trump coupled that directive with the threat that “if they don’t cut, then Elon will do the cutting.”

FINANCIAL MARKETS

— Equities today: Global stock markets declined despite Donald Trump’s announcement to postpone tariffs on some Canadian and Mexican imports. Europe’s Stoxx 600 dropped around 1%, and Japan’s Nikkei 225 hit a six-month low. Trump confirmed that steel and aluminum tariffs would proceed next week, with carmakers facing levies from April 2. U.S. stock indexes are pointed to firmer openings.

The S&P 500 is on track for its worst weekly loss since the collapse of the Silicon Valley Bank crisis two years ago. Investors have wiped out post-Election Day gains as President Trump’s start-stop tariff policy fuels volatility. President Trump, who has long cited stock market rallies as a sign his policies are working, blamed “globalists” for tanking stocks. “I’m not even looking at the market, because long term the United States will be very strong with what is happening here,” he told reporters in the Oval Office yesterday.

Source: LSEG Data & Analytics | Note: Data is through March 6. | By Christine Zhang

Equities yesterday: The Dow finished down 427.51 points, 0.99%, at 42,579.08. The Nasdaq lost 483.48 points, 2.61%, at 18,069.26. The S&P 500 declined 104.11 points, 1.78%, at 5,738.52. All three major indexes are on pace for their worst week since September 2024.

— U.S. establishes strategic bitcoin reserve, crypto markets react. Cryptocurrencies dropped Thursday evening after President Trump signed an executive order to create a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. White House Crypto and AI Czar David Sacks announced that the reserve will be funded using bitcoin seized in criminal and civil forfeiture cases, ensuring no taxpayer cost. The stockpile will also include other confiscated cryptocurrencies. The move comes just ahead of the White House’s inaugural Crypto Summit today. The reveal that the government won’t plow any new funding into Bitcoin disappointed investors. The cryptocurrency dropped more than 7% over the past month, and it’s now trading about 23% below the record price it hit back in January.

— Walgreens goes private in $10 billion deal. Walgreens is ending its nearly 100-year run as a public company, announcing a $10 billion deal with private equity firm Sycamore Partners to take the struggling drugstore chain private. CEO Tim Wentworth emphasized the need for focus and change best managed outside the public market, as Walgreens grapples with a 70% drop in its stock value over the past three years.

— Mortgage rate drop could boost homebuyer activity. The average 30-year fixed-rate mortgage fell to 6.63%, the lowest since mid-December, potentially sparking interest as the spring homebuying season begins. Lower rates increase purchasing power, with mortgage applications rising 9% week-over-week. Despite industry uncertainty, the drop could save buyers around $120 monthly on a median-priced $400,000 home.

AG MARKETS

— Ag markets today:

Grains weaker early this morning. Corn, soybeans and wheat initially pushed higher in an extension of corrective gains the two previous days during the overnight session but have weakened this morning. As of 7:30 a.m. ET, corn futures were trading 1 to 2 cents lower, soybeans were mostly a penny lower and wheat futures were 7 to 9 cents lower. The U.S. dollar index was down around 250 points and front-month crude oil futures were about 90 cents higher.
Light cash cattle trade. Cash cattle trade was light through Thursday, with prices generally $1.00 lower. Feedlots appear to be in no hurry to actively move cattle at lower prices after slow sales last week.
Cash hog index continues to chop. The CME lean hog index is down 2 cents to $90.18 as of March 5. The index has been chopping around the $90.00 for the past two weeks.

— Ag trade: South Korea purchased 131,000 MT of optional origin corn. Japan purchased 94,282 MT of milling wheat via its weekly tender, including 35,882 MT U.S., 33,670 MT Canadian and 24,730 MT Australian.

— Cotton AWP falls with first LDP in years available. The Adjusted World Price (AWP) for cotton fell to 51.88 cents per pound, effective today, down from 53.89 cents per pound the prior week. The AWP level also generates an LDP of 12 cents, the first time since the week of Oct. 9, 2020, when a 52 cent LDP was available.

— U.S. soyoil exports surge in January. U.S. soyoil exports surged to 212,714 MT in January, according to Census Bureau data, the most for any month since January 2010 and the fourth largest tally for any month on record. Global importers have increasing turned to soyoil given its competitive price advantage over rival vegoils, especially palm oil.

— China’s soybean imports rise to start 2025. China imported 13.61 MMT of soybeans during the first two months of this year, up 570,000 MT (4.4%) from the same period last year, as importers brought in U.S. supplies before an anticipated trade disruption. Analysts expect March imports will be less than 6 MMT, despite tightening stocks held by crushers, given trade tensions with the U.S. and delays in Brazilian shipments. On March 10, China will impose an additional 10% tariff on U.S. soybeans.

— China’s Jan.-Feb. meat imports slightly below year-ago. China imported 1.098 MMT of meat (including offal) during the first two months of the year, down 3,000 MT (0.2%) from last year. China doesn’t break down meat imports by category in the preliminary data, but the bulk is pork/pork products.

— Vietnam looking to boost rice exports amid oversupply. The Vietnamese government has told the trade ministry to seek to boost rice exports to the U.S., China, the EU and Japan as the country looks to manage an oversupply of the grain, according to a government document reviewed by Reuters. The government has also told the central bank to extend loans to firms so they can stockpile rice, according to the document which was signed this week by Prime Minister Pham Minh Chinh. Vietnam, the world’s third-largest rice exporter after India and Thailand, has seen its exports fall amid rising shipments from India. Vietnam’s 5% broken rice price has plunged 19% so far this year amid weakening exports, according to the Vietnam Food Association.

— Agriculture markets yesterday:
• Corn: May corn rose 8 1/4 cents to $4.64, forging a mid-range close.
• Soy complex: May soybean futures surged 15 1/2 cents higher to $10.27 1/4 though closed off session highs. May meal futures climbed $5.10 to $304.90, nearer session highs. May bean oil inched 18 points higher to 43.17 cents.
• Wheat: May SRW wheat rose 5 3/4 cents to $5.54 and near mid-range. May HRW wheat gained 8 3/4 cents to $5.65 3/4, nearer the daily high. May spring wheat futures rose 6 cents to $5.94.
• Cotton: May cotton futures surged 154 points to 65.21 cents though closed off session highs as technical resistance limited gains.
• Cattle: April live cattle lost 27 1/2 cents to $195.275 and nearer the daily high. May feeder cattle fell $1.225 to $273.85 and near mid-range.
• Hogs: Nearby April futures jumped $1.95 to $86.65 at the close.

ENERGY MARKETS & POLICY

— Oil prices edge higher, weekly decline looms amid trade volatility. Oil prices rose Friday, with Brent futures nearing $70 a barrel, but remained on track for the biggest weekly drop since late 2023. Volatility spiked as President Trump’s shifting tariff policies on major trade partners rattled global markets. Brent gained 1.4% to $70.45, while WTI rose to $67.31 a barrel. OPEC+'s plan to increase output and fading geopolitical risks added to bearish sentiment. Separately, Treasury Secretary Scott Bessent said the U.S. will not hesitate to go “all in” on sanctions on Russian energy if the measures help lead to a ceasefire in the Ukraine war.

— Big Oil vs. independent refiners: The biofuels battle heats up. A brewing battle between Big Oil and independent refiners over U.S. biofuel (RFS) mandates is intensifying. While major oil companies and agricultural groups push for increased biofuel blending, independent refiners argue it would raise costs and threaten profits. The dispute underscores shifting alliances as Big Oil embraces biofuels amid the rise of electric vehicles. The delayed update on blending requirements (December 2025) adds further uncertainty.

— South Dakota bans eminent domain for carbon pipelines. South Dakota Governor Larry Rhoden signed a bill banning the use of eminent domain for carbon dioxide pipelines, a win for property-rights activists opposing Summit Carbon Solutions’ proposed $9 billion carbon capture project. The new law prohibits carbon pipeline developers from using eminent domain to acquire land, emphasizing voluntary easements instead. Summit criticized the legislation as unfair and signaled potential legal action, stating, “all options are on the table.” The project, which aims to transport carbon dioxide from over 50 ethanol plants to North Dakota, continues in other states despite facing permitting challenges in South Dakota.

Of note: The Iowa House Judiciary Committee advanced bills Thursday to block hazardous liquid pipelines carrying carbon dioxide from the use of eminent domain.

— Trump administration seeks $20 billion to refill oil reserve. U.S. Energy Secretary Chris Wright aims to secure up to $20 billion to meet President Donald Trump’s goal of refilling the Strategic Petroleum Reserve (SPR) to its maximum capacity. The initiative could take years and would restore holdings “just close to the top” to maintain operational efficiency. The SPR, created in the 1970s following the Arab oil embargo, currently holds 395 million barrels, far below its 700-million-barrel capacity. The reserve was significantly depleted during the Biden administration amid gasoline price surges following Russia’s invasion of Ukraine. Congressional approval is required to fund the refill, and Wright acknowledged potential maintenance costs due to infrastructure damage from rapid drawdowns.

CONGRESS

— House Speaker Johnson pushes stopgap funding bill to avoid shutdown. Speaker Mike Johnson (R-La.) has introduced a stopgap funding bill to maintain current federal spending levels from March 14 through Sept. 30, aiming to prevent a government shutdown. The “clean” continuing resolution (CR) extends Biden-era spending while avoiding immediate cuts, with promises of future fiscal reforms in fiscal year (FY) 2026. Johnson faces conservative resistance within his party and strong opposition from Democrats, who argue the bill grants too much power to the Trump administration. The bill’s passage in the House depends on a narrow Republican majority, and it will need at least seven Democratic votes in the Senate. The measure includes potential health-related provisions, adding complexity to negotiations. If not passed by March 14, a shutdown looms, with both parties likely to blame each other. Another option is a short-term stopgap spending measure.

— House reprimands Al Green for heckling Trump. The House of Representatives formally reprimanded Democratic Congressman Al Green of Texas for heckling former President Donald Trump about Medicaid cuts during his speech to Congress. Ten Democrats joined Republicans in passing the motion. Green, known for calling for Trump’s impeachment in 2017 and planning another impeachment motion, vowed to “refuse to stay silent in the face of injustice.”

FOOD & FOOD INDUSTRY

— Global food prices surge in February led by sugar. Global food commodity prices rose in February, driven by a 6.6% spike in sugar prices amid supply concerns, according to the UN Food and Agriculture Organization (FAO). The FAO’s Food Price Index hit 127.1, marking a 1.6% increase from January and an 8.2% rise year-over-year. Dairy prices climbed 4%, while vegetable oil prices rose 2%, with strong demand and supply constraints impacting palm, soy, and sunflower oils.

— Brazil to eliminate import taxes to tackle food prices. Brazil’s government will eliminate import taxes on products including sugar, coffee, corn and meat, as part of a set of measures aimed at reducing food prices, Vice President Geraldo Alckmin announced. Biscuits, pasta, olive oil, sunflower oil and sardines also will be exempted from import duties, said Alckmin. The import quota for olive oil will be raised to 150,000 MT. Currently, Brazil charges a 9% import tax for coffee and 7.2% for corn, while beef and sugar import duties can be as high as 10.8% and 14%, respectively. The measures to cut import rates still need to be approved by government trade body CAMEX. Alckmin said the government did not discuss measures to raise export taxes.

CHINA

— U.S. to levy fees on China-linked ships, push allies to follow suit. The U.S. is planning to charge fees for docking at U.S. ports on any ship that is part of a fleet that includes Chinese-built or Chinese-flagged vessels and will push allies to act similarly or face retaliation, a draft executive order stated. The draft executive order, dated Feb. 27 and reviewed by Reuters, proposes fees should be imposed on any vessel that enters a U.S. port, “regardless of where it was built or flagged, if that vessel is part of a fleet that includes vessels built or flagged in the PRC (People’s Republic of China).” The order aims to resuscitate domestic shipbuilding and weaken China’s grip on the global shipping industry. Chinese shipbuilders account for more than 50% of all merchant vessel cargo capacity produced globally each year, up from just 5% in 1999, according to the Center for Strategic and International Studies.

Impact: Commodity trader and analyst Richard Crow says, “With Trump’s statement that a levy will be imposed on any China-linked ship calling on a U.S. port, the U.S. will be a residual supplier of grains. Imported cost will be elevated.”

WEATHER

— NWS outlook: Heavy Snow over portions of the Four Corners and Southern Rockies/High Plains... ...Chilly airmass spreads into Southern Plains... ...Critical Fire Weather across parts of the Southern High Plains this weekend.

KEY DATES IN MARCH

7: Employment report
8-20: FOMC blackout where Fed officials cannot comment on monetary policy or the economy.
9: Daylight saving time starts
11: USDA WASDE, Crop Production
12: CPI
13: PPI-FD
13: Purim Fun Jewish holiday
14: Final day of current continuing resolution (CR)
15: Tax filing deadline for partnerships and S corporations
18: NCAA men’s basketball finals
18-19: FOMC meets (interest rates)
20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

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