Updates: Policy/News/Markets, April 1, 2025
— Former Reagan administration official on Trump and tariff strategy: “Reagan went through the same situation in 1981 and 1982… budget cuts, deregulation, tax reform… lots of folks complained but all of it happened…because it had to. “We are running a $1 trillion trade deficit… $290 billion China, $230 billion EU, $130 billion Mexico and $80 billion Canada. I know everyone embraces the law of comparative advantage… but let’s get serious… these countries are using subsidies, non-tariff trade barriers, VAT taxes, etc., which disadvantage U.S. producers and limit our market access. In ag alone we are running a nearly $50 billion ag trade deficit… and the trend is likely to get worse. “Meanwhile we have a $36 trillion total federal debt… adding $1.5-2 trillion a year to this number. We are spending more on the interest on our debt than defense. The Social Security trust fund won’t be able to make full payments by 2035… Medicare Hospital trust fund facing same dilemma in 2036. “Do we as a Nation have a choice? You may argue with the approach, the tactics… but can we afford to simply keep on the path we are on with ballooning Federal debt and growing U.S. trade deficits?” — Trade tough: Trump’s tariff push sparks global buzz. White House press secretary Karoline Leavitt signaled a bold new wave of tariffs in an announcement expected Wednesday, though she didn’t specify how many countries would be affected. The move, she said, is aimed at countering what the U.S. considers decades of unfair trade practices. Leavitt said there would be no exemptions for farmers. Leavitt pointed to specific examples, including Japan’s 700% tariff on U.S. rice, India’s 100% tariff on American agricultural goods, and Canada’s nearly 300% tariff on U.S. butter and cheese. India, she added, has already offered to reduce some of its tariffs to ease tensions with Trump. “It’s put a lot of Americans out of business and out of work over the past several decades,” Leavitt said. “It’s time for reciprocity.” Leavitt also brushed off concerns about recent market volatility, saying Trump remains focused on working-class Americans, not Wall Street fluctuations. “The president has always said the stock market is a snapshot of a moment in time and he’s doing what’s best for Main Street,” she said. — Trump teases ‘Liberation Day’ tariff plan, keeps details under wraps. President Donald Trump Monday evening confirmed he has finalized his long-awaited “Liberation Day” tariff plan — but he’s not saying what it is just yet. Set to be unveiled by Wednesday, the announcement could reshape global trade dynamics and signal how aggressively the Trump administration plans to use tariffs in his second term. Trump’s advisers are reportedly split between: Aides were unsure which path Trump had chosen, with discussions reportedly still fluid as late as Monday. The president’s surprise statement that he had decided on a plan caught some in the White House off guard. Trump is set to unveil the plan in a high-profile Rose Garden event Wednesday at 3 pm ET. His campaign has leaned on promises to re-shore U.S. manufacturing and use tariffs to offset tax cuts — particularly for working-class voters. But do not be surprised if portions of the plan leak out this evening, or even in remarks from Trump himself. Also, this administration has a habit of doing op-ed/commentary items ahead of big decisions. — Rural recoil: Trump’s cuts & tariffs rattle his farmer base. In a detailed report by the Wall Street Journal (link), rural support for President Trump is showing cracks as his second-term policies — marked by spending freezes and looming tariffs — begin to hit America’s heartland where it hurts most: the farm. Farmers react. Beekeeper and Army veteran Jim Hartman of Linden, North Carolina, once optimistic about his 2025 prospects, is now facing a $100,000 blow to his revenue. USDA’s decision to phase out pandemic-era food programs, along with freezing conservation and climate-related funding, has upended his business. “Stuff like this is pushing me left,” said Hartman, a lifelong Republican. “The people he’s appointed and the way they’re going about things, it’s not OK.” Across the country, farmers are contending with a trifecta of challenges: suspended federal funding, shrinking labor availability due to increased deportations, and new tariffs targeting major trading partners like Canada, Mexico, and China. Trump has dubbed April 2 “Liberation Day,” promising to unveil a fresh round of tariffs — with no exemptions for farmers. “It’s hitting us on all fronts,” said Caleb Ragland, president of the American Soybean Association. “You’re talking about the potential of a flat-out crisis in rural America and the farm economy.” The administration’s freezing of billions in Biden-era agricultural and climate program funding has left many small-scale producers scrambling. The WSJ account noted that Maryland vegetable grower Michael Protas is waiting on a USDA reimbursement for solar panels after taking out a $100,000 loan, while North Carolina farmer Patrick Brown has put up land as collateral just to buy seed and fertilizer. “Buying seeds and fertilizer before planting begins in April pretty much has wiped all my savings out,” said Brown. Trump’s aggressive trade agenda has reignited fears of a replay of the 2018-2019 trade war, which cost American farmers more than $27 billion in export losses. China has since shifted much of its soybean purchases to Brazil — market share that American farmers haven’t reclaimed. “It’s kind of scary because I really don’t know what my new crop will be worth if we’re in the midst of a trade war,” Minnesota corn and soy farmer David Legvold told the WSJ. Despite White House reassurances that Trump “has farmers’ backs,” many remain unconvinced. USDA Secretary Brooke Rollins emphasized on Fox Business that “real change takes disruption,” while Trump encouraged farmers to prepare to sell domestically: “To the Great Farmers of the United States: get ready to start making a lot of agricultural products to be sold INSIDE of the United States. Have fun!” But critics argue that without structural changes — like immigration reform and infrastructure investment — Trump’s vision is out of touch with agricultural reality. Political implication: With 54% of farmers opposing Trump’s tariffs (AgWeb poll), rural support could be at risk if the economic pain continues into the summer, the WSJ article concluded. — Republicans eye budget to cushion tariff blow. As former President Donald Trump prepares to launch a new wave of reciprocal tariffs, House Republican leaders are urging swift passage of their budget to help offset short-term economic pain — especially in politically sensitive states like Michigan. “We are going to have some short-term discomfort for those long-term gains,” said House Republican Conference Chairwoman Lisa McClain (R-Mich.) in an interview with Bloomberg Government on Monday. She likened the anticipated market reaction to “second-day soreness after a workout.” With Trump’s tariffs set to take effect soon, McClain acknowledged the risk of economic blowback — particularly in her home state of Michigan, a critical swing state and the heart of the U.S. auto industry. Automotive leaders, including MichAuto, have already voiced concern over potential tariffs on imported vehicles and parts. Amid market jitters, McClain emphasized the need for fiscal action. “It’s so incumbent upon us to get the budget passed,” she said, describing the reconciliation process as something the GOP can “control” amid external trade shocks. She also cautioned Senate Republicans against overhauling the House budget resolution, warning that deep spending cuts could alienate members in her chamber. The message is clear: GOP leaders are bracing for economic friction — but hope a unified budget strategy will provide political and market cover as Trump’s trade agenda ramps up once again. — Tax cuts and tariff plans: Key updates from Treasury Secretary Scott Bessent. In an exclusive interview with Sean Hannity on Fox News, Treasury Secretary Scott Bessent outlined the administration’s plans to extend the 2017 tax cuts permanently and introduce new measures inspired by President Donald Trump’s campaign promises. Bessent emphasized, “We’re going to make it permanent, and then we’re going to layer on President Trump’s campaign promises — no tax on tips, no tax on Social Security, no tax on overtime, and we’re going to make purchasing an American car tax deductible again.” Additionally, Bessent confirmed that Trump will unveil a reciprocal tariff plan on Wednesday, April 2. The initiative aims to encourage trading partners to lower tariffs, eliminate non-tariff barriers, halt currency manipulation, and end labor subsidies. According to Bessent, “Everyone will have the opportunity to lower their tariffs, lower their non-tariff barriers, stop the currency manipulation, stop subsidizing labor.” — USDA Secretary Brooke Rollins highlights biofuels, trade, and farmer support during Iowa visit. Rollins engaged in a series of events and discussions centered on agriculture, biofuels, trade policy, and farmer support. Key topics and comments made during her trip: Biofuel infrastructure funding Trade policy and potential farmer aid Support for farmers and rural economy Ethanol policy advocacy Engagement with Iowa agricultural leaders — A look at Commodity Credit Corporation (CCC) funding levels. The current level is around $15 billion now, but at the end of the fiscal year (Sept. 30), the level will be around $5 billion post ARC and PLC payouts. The CCC has permanent borrowing authority from the U.S. Treasury, capped at $30 billion since 1987. It can also borrow from private lending agencies, though this is less common. The borrowed funds are used to finance various agricultural programs, including price support, conservation initiatives, etc. Congress replenishes the CCC annually for its net realized losses — expenses that cannot be recovered, such as commodity sales costs, uncollectible loans, transportation expenses, and farm program payments. These appropriations restore the borrowing authority used in the previous fiscal year. The CCC’s financial operations are overseen by the USDA Secretary of Agriculture and a Board of Directors, ensuring alignment with agricultural policy goals set by Congress. — Should farm-state lawmakers be far bolder regarding a possible increase in reference prices? USDA Secretary Brooke Rollins on Monday said there is less funding available compared to the previous trade war under Trump’s first term. Some contacts say reference prices should be raised in the coming GOP reconciliation measure and should be bolder than what’s been proposed by House and Senate Ag panels. Said one contact: “Imagine a farm bill that was good enough to handle a trade war? That should be the goal. Payment limits would have to be more sensible too. But not much else would be required.” — China courts global CEOs amid U.S. tensions: Xi Jinping champions free trade. Chinese President Xi Jinping recently convened over 40 top global CEOs at Beijing’s Great Hall of the People, casting China as a steady force for free trade in a world increasingly defined by geopolitical fault lines — especially with the United States. The high-profile meeting marks a continued push by Xi to restore foreign investor confidence and promote China as an open, stable economic partner. Key takeaways from Xi’s message: · Against protectionism: Without naming names, Xi criticized U.S. trade policies — particularly under President Donald Trump — for fueling tariffs and trade friction. He urged CEOs to reject “zero-sum approaches” and resist the politicization of commerce. Who was there? Executives spanned industries from pharma (Pfizer, Sanofi) and autos (Mercedes-Benz, Toyota) to tech (Samsung) and logistics (FedEx). Pharma had a notable presence, highlighting ongoing investment in China’s healthcare sector. Foreign direct investment in China has slumped due to geopolitical uncertainty, regulatory burdens, and dominance by state-backed firms. Xi’s outreach signals a desire to reverse this trend — but confidence hinges on whether Beijing follows up with meaningful reforms to ensure fair market access and level competition. Bottom line: Xi’s CEO charm offensive positions China as a champion of global trade in contrast to rising protectionism. Whether this narrative sticks will depend on China’s willingness to address entrenched investor concerns. — Cautious calculus: Why China is slow-walking a Trump/Xi summit. Despite President Trump’s public willingness to meet with Xi Jinping, China’s top leader, Beijing is in no rush. As reported by the New York Times (link), Chinese officials are wary of rushing into a summit without careful groundwork — and they want it scripted to the finest detail. Behind the scenes, top Communist Party officials and government advisers have been taken aback by Trump’s “rapid-fire moves” on tariffs, Ukraine, and even his bizarre commentary on Greenland. His erratic diplomatic style, including public criticism of allies like Ukrainian President Volodymyr Zelenskyy, has made China hesitant to enter a high-level meeting that could backfire diplomatically. “The Chinese side would like to wait for a more constructive and sensible signal from the administration,” said Wu Xinbo, dean of the Institute of International Studies at Fudan University, in an interview with the New York Times. What’s holding things up? The issue isn’t just optics — it’s substance. Chinese officials want a summit that produces a tangible, lasting agreement that would remain in effect through the rest of Trump’s term. But Washington has yet to present a clear deal structure. According to the Times, Sen. Steve Daines (R-MT) traveled to Beijing this month in an informal diplomatic effort to smooth the path toward a summit. After meeting with Vice Premier He Lifeng, Daines predicted a summit “by the end of the year,” a timeline slower than many in Washington anticipated. Further complicating matters, Trump is set to implement a new round of tariffs this week, which could escalate already tense trade relations. In response, China has retaliated by targeting key U.S. exports — including a quiet but devastating move to halt nearly all American beef imports. “The effects of this decision on U.S. ranchers can hardly be overstated,” Daines told Times, referencing China’s expiration of slaughterhouse export licenses. Daines called on Beijing to reverse the move. One telling development: China, once a $1 billion annual buyer of U.S. beef, let key export licenses expire in March, effectively shutting down the American beef pipeline. Weekly shipments dropped from 2,000 tons to just 54. Though the Chinese Foreign Ministry claimed it was “not aware” of the issue, the move appears strategically timed. As the NYT notes, this is a pointed way to put pressure on the Trump administration without blowing up broader negotiations. Looking ahead: Is September a possibility? Some experts floated the idea of a Trump/Xi meeting on the sidelines of the United Nations General Assembly in New York this September. But as the NYT reports, insiders believe it’s unlikely the two sides will achieve enough progress by then. “The Chinese side believes the Trump administration has not really figured out what is the way to deal with China and make a deal,” Wu Xinbo told the newspaper. Upshot: For now, Beijing is watching and waiting — and making it clear that any handshake will have to follow a playbook of its own design. |
| DOGE |
— Musk targets ‘strangely wealthy’ lawmakers with new DOGE probe. At a Sunday night town hall in Wisconsin, Elon Musk made headlines by revealing that his Department of Government Efficiency (DOGE) will investigate how some U.S. lawmakers have amassed considerable wealth despite their relatively modest government salaries. Responding to an attendee’s question about alleged USAID funds tied to Democratic lawmakers Maxine Waters, Adam Schiff, and Chuck Schumer, Musk claimed there may be a pattern of funds being routed through international NGOs before circling back into the U.S. and into certain political pockets. “There’s a lot of strangely wealthy members of Congress where I’m trying to connect the dots,” Musk told the crowd.
While Musk acknowledged the process is “circuitous,” he expressed confidence that DOGE’s team will trace the financial trails and determine how some public servants achieved what he called “generational wealth.”
This move is likely to escalate tensions between Musk and Democratic leaders, particularly as DOGE ramps up oversight efforts. It also amplifies broader calls for transparency and accountability in congressional financial disclosures. The comments sparked a storm of speculation online, with many Americans debating whether Musk’s efforts are overdue scrutiny — or political theater.
| FINANCIAL MARKETS |
Equities yesterday:
— Gold prices reached a record high of $3,128.06 per ounce Monday as the impending Trump tariffs prompted investors to seek the safety of the precious metal. The cost of gold has risen by 18% this year.
| AG MARKETS |
— NASS prospective plantings estimates:
- Corn planted area for all purposes in 2025 is estimated at 95.3 million acres, up 5% or 4.73 million acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 40 of the 48 estimating states.
- Soybean planted area for 2025 is estimated at 83.5 million acres, down 4% from last year. Compared with last year, planted acreage is down or unchanged in 23 of the 29 estimating states.
- All wheat planted area for 2025 is estimated at 45.4 million acres, down 2% from 2024. If realized, this represents the second lowest all wheat planted area since records began in 1919.
- The 2025 winter wheat planted area, at 33.3 million acres, is down 2% from the previous estimate and down less than 1% from last year. Of this total, about 23.6 million acres are Hard Red Winter, 6.09 million acres are Soft Red Winter, and 3.66 million acres are White Winter.
- Area expected to be planted to other spring wheat for 2025 is estimated at 10.0 million acres, down 6% from 2024 estimate. Of this total, about 9.40 million acres are Hard Red Spring wheat.
- Durum planted area for 2025 is expected to total 2.02 million acres, down 2% from the previous year.
- Upland area is estimated at 9.71 million acres, down 12% from 2024. American Pima area is estimated at 157,000 acres, down 24% from 2024.
- All cotton planted area for 2025 is estimated at 9.87 million acres, down 12% from last year.
— Fertilizer friction: Trump pushes domestic potash, but reliance on imports persists. President Donald Trump is calling for an immediate ramp-up in domestic potash production as part of his broader strategy to reduce U.S. reliance on foreign minerals (link). However, Bloomberg reports that industry experts say the move won’t be enough to offset America’s deep dependence on imports — especially from Canada.
Currently, the U.S. imports about 90% of its potash, a key ingredient in producing corn and soybeans. Canadian producers dominate the market, while U.S. production makes up less than 1% of domestic demand, according to Corey Rosenbusch, CEO of the Fertilizer Institute. “Increased production helps, but we still would be very reliant on Canadian potash,” Rosenbusch said.
The timing is critical. As the spring planting season kicks off, U.S. farmers and fertilizer firms are preparing for possible new tariffs — between 10% and 25% — on Canadian fertilizer imports. Any duties could raise costs for growers and, ultimately, for consumers.
The Fertilizer Institute is lobbying to have potash added to the U.S. list of critical minerals — a designation that could bolster the case for tariff exemptions and elevate its status in national security and economic planning.
Meanwhile, Michigan Potash & Salt Co. is leading efforts to boost domestic supply. CEO Theodore Pagano says the company has access to a massive potash reserve in Michigan valued at up to $65 billion. The firm aims to meet 10% of U.S. potash needs by 2028 — and potentially scale up to 40% with that single deposit, according to COO Aric Glasser.
Reality: With Canadian potash entrenched in the U.S. supply chain, industry voices remain skeptical that domestic output can fill the gap anytime soon.
— Agriculture markets yesterday:
| FARM POLICY |
— Decision time nears: ARC and PLC enrollment deadline approaches. With spring crop insurance decisions now finalized, attention turns to the next big decision for U.S. farmers: enrollment in Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) by the fast-approaching April 15 deadline.
Support levels for several crops are reaching near-record highs. Notably, ARC benchmark prices for the 2025 crop year are set at $5.03/bushel for corn and $12.17/bushel for soybeans — the highest levels in nearly a decade, according to a report from Terrain (link). Given these elevated support levels, farmers are closely weighing the projected benefits of each program on a crop-by-crop basis. A quick reminder:
- ARC offers support based on county-level revenue declines.
- PLC kicks in when there are market-wide price drops.
Given current price projections, and holding yield risk constant, the Terrain assessment notes:
- For corn, ARC is projected to result in a program payment of 13 cents/bu. and PLC is projected to pay 6 cents/bu.;
- For soybeans, ARC program payments are projected at 47 cents/bu. and no PLC payments are expected (prices would need to fall by more than 34 cents/bu. from current projections to result in a PLC payment);
- For wheat, a 28 cents/bu. program payment is projected for ARC and a 6 cents/bu. payment is projected for PLC; and
- For sorghum, projected ARC and PLC payments are 56 cents/bu. and 51 cents/bu., respectively.
Under the current price forecast for 2025-26, Terrain says ARC is largely expected to outperform PLC for corn, soybeans and wheat, holding yields constant. For sorghum, ARC and PLC benefits are not materially different.
While these program payments are far from certain, Terrain says early price projections suggest:
- A national average ARC payment for corn of $20 per program acre (payments are made on 85% of a farm’s eligible base acres), ranging from a low of $14/ac. in Texas to approximately $26/ac. across the corn belt to highs of $30/ac. in areas with higher irrigated yields such as Washington and Arizona.
- Soybean ARC payments are expected to average $22 per program acre nationally and are expected to be highest across the corn belt — approaching $30/ac. — where productivity levels are among the highest in the U.S.
- ARC payments for wheat are projected to average $16/ac. and are likely to be the lowest in areas recently experiencing drought conditions such as Texas, Oklahoma, Colorado and Kansas. Areas with higher benchmark yields are projected to see program payments at or above $20/ac.
- With the expectations for a steep decline in sorghum prices, and the higher levels of ARC and PLC support, sorghum program payments are projected to average more than $30/ac. nationally.
Bottom line: For many, the choice will hinge on local yield outlooks and market price expectations — making this an important season for strategic planning.
| ENERGY MARKETS & POLICY |
— Oil prices inched higher on Tuesday after threats by President Donald Trump to impose secondary tariffs on Russian crude and attack Iran, though worries about the impact of a trade war on global growth capped gains. Brent futures rose 16 cents, 0.2%, to $74.93 a barrel, while U.S. West Texas Intermediate crude futures climbed 13 cents, 0.2%, to $71.61.
— On Monday, oil prices hit 5-week highs amid Trump tariff threats, Iran tensions, and supply disruptions. Brent rose $1.11 (+1.5%), closing at $74.74 and WTI gained $2.12 (+3.1%), closing at $71.48, narrowing their spread to a 9-month low. The rally was driven by Trump’s threats of steep tariffs on Russian oil buyers and possible strikes on Iran, which retaliated by seizing foreign tankers. Falling U.S. output, potential curbs on Venezuelan and Kurdish exports, and strong Chinese manufacturing data added momentum. Still, doubts linger over Trump’s follow-through and the impact of trade tensions on long-term demand.
— USDA releases $537 million in biofuel infrastructure funding. In a major boost to rural energy development, USDA Secretary Brooke Rollins announced the release of $537 million in obligated funding under the Higher Blends Infrastructure Incentive Program (HBIIP). The funding will support 543 projects across 29 states, advancing President Trump’s energy agenda and fulfilling his Jan. 20 Executive Order on Unleashing American Energy. USDA said the announcement, made at Elite Octane LLC in Iowa — a national leader in ethanol and biodiesel production — spotlighted the administration’s commitment to farmers, ranchers, and small businesses, especially in regions where agriculture fuels bioenergy. “President Trump is honoring our commitment to America’s farmers, ranchers and small businesses, especially here in Iowa where corn and soy growers are crucial to supporting ethanol and biodiesel production,” said Secretary Rollins.
Rollins emphasized a shift away from “misguided climate policies” like the Green New Deal, positioning USDA investments as catalysts for job creation, energy independence, and rural economic growth.
Background on HBIIP. Created during Trump’s first term, HBIIP supports the expansion of biofuel use by funding infrastructure upgrades — such as pumps and storage tanks — that allow gas stations to offer blends like E15, E85, and B20. These fuels are made from U.S.-grown agricultural commodities, benefiting farmers and consumers alike. USDA is also coordinating with the Environmental Protection Agency (EPA) to establish Renewable Volume Obligations (RVOs) that support the biofuel industry and facilitate nationwide, year-round sales of E15, reinforcing biofuels as a pillar of the rural economy.
Impacts: USDA said that with Iowa’s 42 ethanol plants and 10 biodiesel facilities leading the way, the funding is expected to create jobs, diversify the energy supply, and bolster rural resilience amid global trade and energy challenges.
| TRADE POLICY |
— Senate to vote today on ending Trump’s tariff emergency on Canada. President Trump’s declaration of a national emergency to impose sweeping tariffs on Canadian goods is facing a legislative challenge. SJRes 37, introduced by Sen. Tim Kaine (D-Va.), seeks to terminate the emergency declaration that Trump invoked under the 1977 International Emergency Economic Powers Act, which allowed him to issue a 25% tariff on most Canadian imports.
Trump’s Feb. 1 executive order accused Canada of failing to effectively coordinate with the U.S. to stop the flow of illegal drugs, specifically fentanyl. However, only 0.2% of U.S. fentanyl seizures in fiscal year (FY) 2024 occurred at the northern border, raising bipartisan skepticism over the justification for the tariffs. Goods protected under the U.S.-Mexico-Canada Agreement (USMCA) — about 38% of Canadian imports — are temporarily exempted until April 2.
Kaine argues the emergency is a political move, not a policy necessity. “Americans... want lower prices, not higher ones,” he said, pressing colleagues to choose between constituents’ interests and “Trump’s worst impulses.”
Under the 1976 National Emergencies Act, Congress can overturn emergency declarations via joint resolution. SJRes 37 has bipartisan support, including Sen. Rand Paul (R-Ky.), and is expected to receive a Senate vote by April 1. A simple majority is required.
While the resolution may clear the Senate, its future in the House is bleak. The chamber has already taken steps to block expedited procedures for undoing Trump’s February declarations. Even if passed, overriding a likely presidential veto would require a two-thirds majority in both chambers — a very high bar.
Congress has rarely used this power. The last successful use was in April 2023, when lawmakers ended the Covid-19 emergency. Two prior attempts to roll back Trump’s 2019 border emergency were vetoed. A similar Kaine resolution on a separate emergency earlier this year was narrowly defeated in the Senate.
| TRANSPORTATION & LOGISTICS |
— Mexico unveils bold shipping corridor to rival Panama Canal. President Claudia Sheinbaum spotlighted a major leap forward in Mexico’s trade infrastructure during her Monday morning press conference: the first vehicle shipment transported across the Interoceanic Corridor of the Isthmus of Tehuantepec, a project hailed as an “alternative to the Panama Canal.”
Over the weekend, 900 Hyundai vehicles from South Korea were moved by rail between the Pacific port of Salina Cruz, Oaxaca, and the Gulf port of Coatzacoalcos, Veracruz — marking the inaugural full-scale cargo transfer along the revamped 308-kilometer rail line. The cargo had arrived aboard the Hyundai Glovis vessel, making its “first arrival” at the newly modernized Salina Cruz port.
Key takeaways:
- Strategic corridor: The rail line is the backbone of the Interoceanic Corridor (CIIT), a flagship project aimed at boosting trade between Asia and the U.S. East Coast without relying on the Panama Canal.
- Efficiency gains: According to Oaxaca’s Ministry of Economic Development, the route shaves five days off total shipping time and cuts logistics costs by 15%.
- Ongoing development: While Salina Cruz is still under development, investments are flowing into port infrastructure, including a grain terminal and industrial parks along the corridor.
- Presidential praise: Sheinbaum called the project “exceptional,” noting its potential to increase shipping capacity once construction is fully complete.
Economic & geopolitical implications
1. Regional economic boost:
The corridor is expected to generate jobs, attract foreign direct investment, and accelerate industrial development in southern Mexico — traditionally one of the country’s less developed regions. The 10 planned industrial parks along the route could become magnets for manufacturing and logistics operations, integrating the region more deeply into North American supply chains.
2. Trade diversification & U.S. linkage:
The corridor strengthens Mexico’s position as a critical node in global trade — especially for goods moving between Asia and the eastern United States. As nearshoring gains traction, the CIIT may further solidify U.S./Mexico economic ties, reducing reliance on more volatile global chokepoints.
3. Strategic leverage in the Americas:
With growing congestion and drought-related constraints impacting the Panama Canal, Mexico’s alternative corridor could shift trade routes and bargaining power. It also positions Mexico to compete more directly with Central American logistics hubs and gain geopolitical influence as a key facilitator of inter-oceanic trade.
4. Foreign policy signaling:
Sheinbaum’s emphasis on infrastructure continuity from the AMLO era sends a message of policy stability to investors and global partners. The involvement of South Korean automakers and continued U.S. interest could deepen Mexico’s multilateral economic relationships — potentially balancing China’s growing influence in Latin America.
Impact on agricultural trade
1. Faster, cheaper export routes for Mexican producers
The CIIT provides a streamlined route for agricultural products from southern and southeastern Mexico to reach global markets more efficiently. Instead of shipping crops via longer trucking routes or through the congested Panama Canal, producers can use the corridor to export to:
- U.S. East Coast
- Europe
- Asia-Pacific markets
Analysts say this could be a game-changer for states like Veracruz, Chiapas, Oaxaca, and Tabasco, which are major producers of coffee, tropical fruits, sugar, and grains but often face high transportation costs and bottlenecks.
2. Development of agro-industrial hubs
The planned industrial parks along the corridor open the door for value-added processing of agricultural goods (e.g., coffee roasting, fruit canning, grain milling), which could:
- Increase rural employment
- Attract agro-industry investment
- Reduce waste by shortening time to market
3. Port infrastructure for agri-bulk exports
Sheinbaum confirmed the construction of a grain storage terminal at Salina Cruz — a strategic move that directly supports bulk agricultural exports. This infrastructure could turn the port into a key launch point for shipping commodities like:
- Corn, soybeans, and sorghum to Asia
- Coffee and cocoa to Europe and the U.S.
4. Import pathway for agricultural inputs
The corridor isn’t just for exports. It could also speed up the import of fertilizers, equipment, and livestock feed into southern Mexico, helping boost productivity and resilience in the ag sector.
5. Regional food security and trade resilience
With the Panama Canal facing climate-driven limitations (like droughts and shipping delays), the corridor offers a reliable alternative that enhances regional food security and reduces dependence on a single maritime chokepoint.
| CHINA |
— Xi/Trump trade tensions flare as U.S. review challenges China deal. Bloomberg reports (link) that the U.S. is preparing to deliver a long-anticipated verdict on China’s compliance with the 2020 “Phase 1” trade deal — a review that could escalate tensions between Donald Trump and Xi Jinping during an already high-stakes week for U.S./China relations. The review, ordered by Trump on his first day back in office, focuses on whether Beijing upheld its pledge to purchase an additional $200 billion in U.S. goods — a target that official data shows was missed. The findings could influence a range of decisions, including whether to revoke China’s permanent normal trade relations (PNTR) status, a move likened to slapping a 30% tariff on Chinese goods.
Beyond Phase 1 compliance, Bloomberg reports the review touches on broader economic and geopolitical concerns:
- Reciprocal tariffs incoming: Just a day after the review’s due date, Trump plans to unveil a sweeping plan for “reciprocal tariffs” — a policy likely to affect key partners including China.
- TikTok’s deadline looms: By Saturday, Chinese tech firm ByteDance must strike a deal to divest TikTok to a U.S. buyer or face increased tariffs. Trump has suggested reducing levies to gain Beijing’s cooperation on the deal.
- Port pressure: A U.S. push to force a Hong Kong-based conglomerate to offload Panama port holdings has triggered retaliatory threats from China, which may freeze deals linked to the CK Hutchison Holdings family.
| BORDER, IMMIGRATION, DEPORTATION & LABOR |
— Sheinbaum, Noem meet in Mexico City: Progress made, but border issues remain. U.S. Secretary of Homeland Security Kristi Noem met with Mexican President Claudia Sheinbaum in Mexico City last Friday to discuss migration and security along the U.S./Mexico border. While Sheinbaum described the meeting as “fruitful,” Noem underscored that “there is still much work to be done” in stemming the flow of drugs and migrants.
This marked Noem’s first international trip since taking office in January. Her three-day Latin America tour included stops in El Salvador and Colombia, where she focused on immigration, crime, and deportation.
Sheinbaum emphasized that the two nations share a respectful relationship and mutual commitment to collaboration. Foreign Affairs Minister Juan Ramón de la Fuente also participated in the discussions.
Noem praised Mexico’s deployment of 10,000 National Guard troops to the northern border and its acceptance of deportation flights, but stressed that further joint efforts are necessary. “Our partnership will help make America and the Central American region safe again,” she wrote on social media.
The meeting follows a high-stakes agreement in early March between Sheinbaum and President Donald Trump that temporarily lifted 25% tariffs imposed on Mexican and Canadian imports. The tariffs had been introduced due to concerns about the flow of fentanyl and other drugs into the U.S.
Key stats on border security
Migration:
- CBP reported 11,709 enforcement encounters in February — down 80.9% from January and 93.8% year-over-year.
- The drop coincides with both Mexico’s National Guard deployment and Trump’s newly reimplemented border policies.
Drug Seizures:
- February saw 14,679 pounds of drugs seized at the southern border, up 1.9% from January.
- Fentanyl seizures dropped 40.4% month-over-month and 51.9% year-over-year.
- Mexico reported 1,347 kg of fentanyl and over 2 million fentanyl pills confiscated since October.
Crackdown on Cartels:
- 29 cartel figures were extradited to the U.S. in late February.
- Six Mexican cartels were designated as foreign terrorist organizations by the U.S.
Bottom line: Despite increased cooperation, Sheinbaum has reiterated that Mexico will not allow U.S. military action on its soil, emphasizing a stance of shared responsibility while defending national sovereignty.
| WEATHER |
— NWS outlook: Southeast this evening... ...Pacific system brings unsettled weather to the West with lower elevation/coastal rains and heavy higher elevation snow... ...Severe weather threat Tuesday and Wednesday across portions of the Plains and Midwest; significant multi-day flash flood threat begins from the Ohio/Tennessee Valleys southwest through the ArkLaTex Wednesday... ...Another late season winter storm for the Northern Plains into the Upper Midwest/Great Lakes Tuesday into Wednesday with heavy snowfall expected.
| KEY DATES IN MARCH & APRIL |
1: JOLTS | USDA “industrial” reports on grain, oilseed crushings | Hatchery Production, Annual
1: Required minimum distribution due if you turned 73 in 2024
2: ADP Employment | U.S. reciprocal tariffs announced
3: International Trade in Goods and Services | U.S. will start collecting duties on imported vehicles
4: Employment
4: NCAA Women’s basketball Final Four starts
5: NCAA Men’s basketball Final Four starts
7: Crop Progress | Agricultural Trade Data Update
7: The Masters (golf)
9: Crop Production Historical Track Records
10: CPI | Crop Production | WASDE
11: PPI-FD | Consumer Sentiment
13: Passover begins
14: Crop Progress
15: 2024 income taxes due; last day for 2024 IRS, HSA contributions; first quarter 2025 taxes due
16: Retail Sales
17: Housing Starts and Permits; Cattle on Feed; National Hemp Report
18: Good Friday
20: Easter
21: Crop Progress | Chickens and Eggs
21: Boston Marathon
22: Existing Home Sales | Milk Production
23: New Home Sales
24: Durable Goods Orders | Cold Storage
25: Food Price Outlook | Consumer Sentiment
28: Crop Progress
29: International Trade in Goods | JOLTS | Consumer Confidence | Meat Animals - Prod., Disp., and Income | Milk - Prod., Disp., and Income | Poultry - Production and Value
30: ADP Employment | Employment Cost Index | GDP | Personal Income and Outlays incl. PCE Price Index | Ag Prices
| LINKS |
Economic aid for farmers | Disaster aid for farmers | Farm Bureau summary of aid/disaster/farm bill extension | 45Z tax incentive program | Poultry and swine line speeds | U.S./China Phase 1 agreement | WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | RFS | IRA: Biofuels | IRA: Ag | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum | Eggs/HPAI | NEC task force on HPAI, egg prices | Options for HPAI/Egg prices | Trump tariffs | Greer responses to lawmakers | Trump reciprocal tariffs |