Updates: Policy/News/Markets, April 10, 2025
— Core inflation hit 4-year low of 2.8% In March — but tariffs still loom. U.S. consumer prices fell 0.1% month-over-month in March and rose 2.4% year-over-year, the slowest annual rate since September. · Core inflation: Stripping out food and energy, core CPI rose just 0.1% monthly and 2.8% annually, beating forecasts and hitting its lowest mark since March 2021. Despite the welcome inflation dip, Trump-era tariff policy looms large over the rest of 2025. Goldman Sachs warns that even with a 90-day pause on new tariffs outside of China, the effective U.S. tariff rate is expected to rise 15 percentage points. This would put significant upward pressure on foreign goods prices, with Goldman projecting core CPI could re-accelerate to 3.7% by year-end. The Fed is watching closely. March’s FOMC minutes revealed growing concern that tariff-related inflation could derail progress toward stable prices (more details below). With consumer confidence at stake and business investment weakening, a return of price pressures could stall — or reverse — rate cut plans. As a reminder: the Fed’s dual mandate prioritizes both price stability and economic growth. These tariff-induced dynamics could force a hawkish pivot, even amid softening inflation data. — Food prices have continued to rise, with the food index increasing by 0.4% in March. Specifically, egg prices have surged significantly. As of March 2025, the average price for a dozen Grade A large eggs reached $6.23, up from $5.90 in February and $4.95 in January. This sharp increase is attributed to factors such as the avian flu outbreak, which led to the culling of over 30 million egg-laying hens earlier this year. Of note: Despite the absence of new bird flu outbreaks and a decline in wholesale egg prices in March, retail egg prices have continued to climb, particularly ahead of the Easter holiday when demand typically rises. Additionally, major egg producers like Cal-Maine Foods have reported substantial profit increases, prompting the Department of Justice to investigate potential price-fixing within the industry. — Kevin Hassett: U.S. already has offers from over 15 countries relative to tariffs. “That doesn’t mean there is a deal, but there are specifical offers from at least 15 countries I have been informed by USTR,” Hassett told Fox News this morning. “So this is going to be fast,” said Hassett, who is director of the National Economic Council (NEC). — EU puts retaliation on hold after pause announced for most countries. The EU said it was pausing its own countermeasures to try and work things out with the Trump administration, while China has doubled down on its own retaliatory duties. “We took note of the announcement by President Trump. We want to give negotiations a chance,” said European Commission President Ursula von der Leyen in a post on X this morning. “While finalizing the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days,” von der Leyen said, less than a day after European Union lawmakers voted in favor of retaliatory duties on the tariffs the Trump administration put on imported European steel and aluminum in February. But “if negotiations are not satisfactory, our countermeasures will kick in,” she added. — ASEAN says it won’t retaliate. The Association of Southeast Asian Nations (ASEAN) said today that it won’t impose retaliatory measures in response to Trump’s tariffs. ASEAN is “deeply concerned” over the U.S. duties and seeks a “frank and constructive dialogue” with the U.S., the 10-nation group said in a joint statement. The region will continue to boost internal trade and investment, ASEAN added. — South Korea must negotiate to ‘escape the burden of tariffs,’ acting president says. Acting South Korean President Han Duck-soo said the country must negotiate to escape tariffs after Trump paused most levies Wednesday. “Over the next 90 days, we must make progress in all negotiations to escape the burden of tariffs, and we must put in even greater effort,” Han said at a Cabinet meeting Thursday local time, his office said. “As a country like South Korea, which depends heavily on trade for its growth and development, I urge all ministers to put in special efforts and show determination,” Han said, according to his office. Trump announced Wednesday he was pausing most of the tariffs for 90 days. — Japan takes Trump tariff suspension ‘positively’ but urges further review. Japan’s chief Cabinet Secretary Yoshimasa Hayashi said today that his government was pleased Trump suspended some of the threatened tariffs — but it urged continued review. “We would first like to carefully examine the details of what will be announced in the coming days,” Hayashi said. “We have explained our concerns at various levels and have urged for the reconsideration of these measures, and so we take this recent announcement by the U.S. government positively,” he told reporters at a briefing. “We will continue to strongly urge the United States to review its reciprocal tariffs and their levies on steel and aluminum products, as well as automobiles and auto parts,” he said. — Trump pauses global tariffs for 90 days, escalates China duties to 125%. In a dramatic turn of events on Wednesday, President Trump reversed course on his sweeping tariff policy just hours after implementation of the reciprocal tariffs. The administration paused its planned increase in tariffs on nearly 100 nations — except China — sending stocks surging and financial markets into a frenzy. Key developments: The tariff rollercoaster was felt sharply across Wall Street. Markets responded with record-breaking gains: The reversal brought sudden relief to bond markets as well. Long-term yields dipped while short-term yields jumped, reflecting cooling fears of deep economic fallout — at least for now. Trump: “They were getting yippy.” President Trump defended the pause as a strategic move, emphasizing flexibility in negotiations. He claimed many nations, including China, are now approaching the U.S. to make deals. “China wants to make a deal,” Trump said. “They are proud people, but they’re thinking hard.” He hinted the pause was triggered by market anxiety and economic warnings — particularly a Fox Business interview with JPMorganChase CEO Jamie Dimon, who warned of a recession but endorsed the concept of tariffs. Trump on Truth Social: “THIS IS A GREAT TIME TO BUY!!!” Trump said the tariff pause was done because over 75 countries reached out to the U.S. to negotiate and did not retaliate in response to reciprocal tariffs announced last week. Mixed reactions in Washington Meanwhile, U.S. Trade Representative Jamieson Greer, testifying before Congress during the announcement, faced tough questions over what he knew and when. Some lawmakers from both political parties think Greer is being kept out of the loop on key trade policy decisions made by others. Canada and Mexico remain exempt for now from the 10% baseline tariff. However, both countries are still under separate 25% tariffs tied to fentanyl-related trade policy concerns — though auto exports and USMCA-compliant goods are protected. Sen. Bill Hagerty (R-Tenn.), a key Trump trade ally, says foreign governments are “lining up” to strike favorable deals. Trump, he says, will demand: Outlook: The 90-day pause sets the stage for a tense period of backroom trade negotiations, with allies and rivals alike scrambling to cut deals and avoid steep penalties. With markets on edge and political scrutiny rising, expect more volatility as Trump’s tariff chessboard evolves. — Bond vigilantes major factor forcing Trump to pause tariffs. In a dramatic policy U-turn, President Trump announced a three-month pause on expanded tariffs just 14 hours after they officially took effect — a move prompted not by political pressure, but by turmoil in the bond market, seasoned analysts note. While equities had been reeling for a week since Trump’s tariff announcement, it was the soaring yields on U.S. Treasuries — with the 10-year posting its biggest three-day jump since 2001 — that ultimately triggered the reversal, they agree. Markets quickly reacted: bond prices are rebounding, sending yields lower and stocks rallying sharply. Strategists now expect drawn-out trade talks that could leave markets in limbo for months, as traders struggle to price in the inflationary and growth-related consequences of global supply shifts. Trump acknowledged the bond market’s power during a White House event, saying investors were getting “a little bit yippy, a little bit afraid.” Ed Yardeni summed up the sentiment with a historical nod: “The bond vigilantes have struck again. As far as we can tell, at least with respect to U.S. financial markets, they are the only 1.000 hitters in history.” Bottom line: This latest episode underscores the enduring influence of bond markets on policy, particularly when inflation and borrowing costs converge to create political risk — even for a tariff-hardened White House. — U.S. trade strategy narrows its focus to China. The Trump administration has pivoted from a broad global tariff strategy to a more concentrated trade war with China, though universal tariffs — such as the 10% blanket duty and those targeting autos and metals — will remain in place. The shift comes as new trade negotiations are set to begin within the next 90 days, as noted above. According to the White House, only China retaliated following the latest tariff salvo. As a result, Chinese exports to the U.S. will now face levies as high as 125%, significantly affecting consumer goods and disrupting global supply chains. “China is the most imbalanced economy in the history of the modern world, and they are the biggest source of U.S. trade problems with the rest of the world... If China starts devaluing, then that is a tax on the rest of the world,” Treasury Secretary Scott Bessent said in a statement. President Trump appears to be using the China standoff as a signal to the rest of the world: retaliate, and face a similar economic onslaught. This strategic targeting aligns with Trump’s re-industrialization agenda, aiming to reshape global trade flows and reduce U.S. reliance on Chinese manufacturing. Containment and decoupling are no longer just talking points — they are core pillars of current U.S. trade policy. — China’s leadership gathers for emergency stimulus talks amid trade shock. China’s top leadership convened an emergency meeting today to discuss a broad stimulus package, following a fresh tariff barrage from President Donald Trump that’s roiled global markets and further strained U.S./China relations. According to Bloomberg, the high-level discussions centered on boosting housing, consumer spending, and technological innovation, as Beijing moves swiftly to cushion the economy from what analysts say could be a major hit to growth. Key developments: Economic impact: Policy expectations: Beijing is weighing accelerated stimulus, including: In a televised interview, Standard Chartered’s Becky Liu said the PBOC is likely to let the yuan weaken in a “measured” fashion, providing policymakers with room to ease monetary policy while enhancing export competitiveness. Beyond economics, China has also taken regulatory steps to limit outbound investment into the U.S. — a move seen as part of a broader strategy to build leverage in any future trade talks with Washington. — China’s foreign ministry calls the U.S. a ‘21st century barbarian.’ China’s public language on its trade war with the U.S. has become increasingly bellicose and took a new turn today when Beijing’s foreign ministry said the Trump administration’s tariffs have made the U.S. a “barbarian of the 21st century.” Trump’s tariffs will “never America great again” ministry of foreign affairs spokesperson Huang Jingrui, wrote in an open letter today in Hong Kong’s newspaper South China Morning Post. “A tariff-wielding barbarian who attempts to force countries to call and beg for mercy can never expect that call from China,” Huang said, adding that the U.S. is “obsessed with the art of bullying and blackmailing the entire world.” Of note: China’s State Administration Council said 84% tariffs against U.S. imports took effect at 12:01 a.m. Thursday. Goods shipped to China that left before 12:01 a.m. and are received before midnight Sunday won’t be subjected to the tariff, China said. China levied retaliatory tariffs in response to tariffs Trump imposed Wednesday, which raise the total duties on Chinese imports to 125%. — U.S. and Panama seal Canal defense pact amid China tensions. Washington and Panama City have finalized a landmark defense and security agreement to reinforce control over the Panama Canal, as strategic competition with China intensifies across Latin America. U.S. Defense Secretary Pete Hegseth underscored the canal’s role in U.S. national security, calling it a “linchpin” in deterring China’s regional expansion. Key provisions of the agreement: Strategic access & cost-sharing: The pact follows Panama’s formal withdrawal from China’s Belt and Road Initiative, marking a significant pivot toward U.S. alignment. Recent moves to sell Chinese-operated canal-adjacent ports to a consortium including BlackRock Inc. have also shifted key infrastructure control away from Beijing’s hands. Hegseth warned of surveillance risks tied to Chinese port operations near the canal. Although Panama refuted claims that China controls canal operations directly, the U.S. remains wary of foreign influence in this strategic chokepoint. This agreement is part of a wider U.S. push to curb China’s geopolitical foothold in the Western Hemisphere — mirroring defense pacts, increased deployments, and infrastructure partnerships elsewhere in the region. |
| FINANCIAL MARKETS |
— Equities today: U.S. stock futures dropped and the dollar weakened as investors pivoted from relief to renewed fears that the trade war could inflict lasting economic harm. This came after a global equity surge — especially in Europe and Asia — fueled by President Trump’s unexpected move to pause most tariffs. In Asia, Japan +9.1%. Hong Kong +2.1%. China +1.2%. India closed. In Europe, at midday, London +4.7%. Paris +5.7%. Frankfurt +5.8%. Meanwhile, U.S. Treasuries rallied, reflecting lingering caution following a volatile trading session. There was no new tariff or trade news overnight and investors digested the good news/bad news of no punitive global reciprocal tariffs (positive) but still-in-place 125% tariffs on China and 10% tariffs on most U.S. imports (negative). Today focus will turn back towards economic data and the two key reports are CPI and Jobless Claims. Turning to the Fed, there are multiple speakers today, but they are unlikely to move markets (the Fed is in “wait and see” mode like the rest of us). Speakers today include:Barkin (8:30 a.m. ET), Logan (9:30 a.m. ET), Schmid & Bowman (10:00 a.m. ET), Goolsbee & Harker (12:00 p.m. ET).
Equities yesterday:
— $304 billion: The increase yesterday in the combined net worth of the world’s wealthiest people, the largest one-day gain in the history of the Bloomberg Billionaires Index.
— Historical odds stack against S&P 500’s 2025 comeback. This may be an equity rebound with a warning label: Despite a powerful rebound in U.S. equities this week, history suggests that a full-year recovery for the S&P 500 remains a long shot. The index had fallen over 15% earlier this year before staging its latest rally. But according to Carson Group’s Ryan Detrick, in the 16 historical instances where the S&P 500 dropped 15% or more within a calendar year, it only ended the year with gains three times: 1982, 2009, and 2020.
— A Fed rescue? Not this time. What separates those rare comebacks from today’s environment is Federal Reserve support. In each of the previous rebounds, the Fed took decisive easing action to shore up the economy. That’s unlikely in 2025, as the Fed remains focused on curbing inflation — a job complicated by renewed trade tensions and the inflationary potential of new tariffs. “The Fed probably isn’t going to come to the rescue this time, since they’re still very worried about inflation,” Detrick cautioned. “That puts them in a hard spot right now.”
Bottom line: Unless there’s a major pivot in monetary policy, historical precedent suggests a bumpy road ahead for equities — even after very strong short-term rallies.
— Fed leans against inflation, shuns preemptive cuts amid tariff turbulence. The Federal Reserve is standing firm against inflation risks and refusing to preemptively cut interest rates, even as Donald Trump’s new tariff wave rattles markets and clouds the economic outlook.
Fed’s stance: Hold steady, watch inflation. Federal Reserve officials signaled they are in no rush to lower rates, despite slowing economic momentum and market volatility triggered by President Trump’s latest round of tariffs. Instead, they are sharpening their focus on keeping inflation expectations anchored — a move meant to protect the credibility of the Fed after its late response to post-pandemic inflation. “The hurdle to change the federal funds rate one way or the other has increased due to tariffs,” said Minneapolis Fed President Neel Kashkari.
Powell’s patience. Fed Chair Jerome Powell emphasized a cautious, data-driven approach: “We’re going to need to wait and see how this plays out before we can start to make those adjustments.” The Fed is resisting market pressure, as futures still price in three rate cuts this year — currently CME Fed funds futures probabilities signal market expectations for three rate cuts with 25-basis-point reductions at the June, July and September meetings. Powell, however, appears committed to protecting the Fed’s inflation-fighting credibility, especially with core PCE inflation still elevated at 2.5% in February — above the 2% target.
Tariffs take center stage. Trump’s latest tariff changes — slashing most duties to 10% but raising those on Chinese goods to a punitive 125% — did little to ease the overall tariff burden. Bloomberg Economics estimates the average tariff rate only dipped from 27% to 24%, keeping pressure on supply chains and consumer prices. “We’re seeing signs of tariff-related inflation pickup and rising inflation expectations,” noted Cleveland Fed President Beth Hammack.
No safety net for a slowdown. The Fed’s stance also reflects its reluctance to act preemptively without hard evidence of labor market deterioration. Officials say the economy remains on solid footing for now, despite volatile markets and declining consumer sentiment.
Outlook: Watch for labor, sentiment, and inflation drift. The Fed is expected to remain on pause unless faced with:
- A sharp rise in unemployment claims
- Sustained consumer sentiment deterioration
- Unanchored long-term inflation expectations
As of now, none of these thresholds have been decisively met.
— FOMC minutes: Fed faces uncertain path as tariff concerns take center stage. The March Federal Open Market Committee (FOMC) minutes revealed a deep undercurrent of concern and uncertainty among officials over the inflationary impacts of rising tariffs. While the Fed held interest rates steady and agreed to slow the balance sheet runoff, the backdrop was one of mounting ambiguity over how trade policy might complicate the path for monetary policy.
A key takeaway from the meeting: tariffs weren’t a sidebar — they were a central theme. Fed Chair Jerome Powell acknowledged after the meeting that the committee lacked clarity on the scale and duration of tariff-related inflation. The minutes echoed this, noting that “most” officials believed recent increases in core goods inflation likely stemmed from anticipated tariff hikes.
Several officials flagged that planned tariffs were broader and steeper than expected by business contacts, and that companies were already reporting cost increases—or planning to pass those on to consumers. A few participants also pointed to structural factors like immigration policy affecting housing inflation, and questioned whether inflation caused by tariffs would prove transient or persistent.
Key inflation uncertainty drivers included:
- The role of intermediate goods in tariff plans.
- Potential retaliatory actions by trading partners.
- Supply chain reconfigurations.
- The anchoring of long-term inflation expectations.
Despite the concern, “almost all” participants judged long-term inflation expectations to remain stable — a moderating factor.
Tariffs also weighed on business sentiment. Most officials cited deteriorating confidence and postponed capital spending, especially in sectors like autos, where cross-border supply chains are exposed. The agriculture sector faced its own pressures, with fears of declining export prices and rising input costs.
Not all was bleak — some businesses expressed cautious optimism, driven by expected gains from AI and possible regulatory or fiscal shifts.
Staff outlook: Growth risks tilt down, inflation risks up. The Fed’s internal staff revised its economic outlook downward since January, noting weaker-than-expected consumer and business spending, and softer sentiment indicators. However, inflation risks were viewed as skewed to the upside, primarily due to sticky core inflation and unexpected pressure from evolving trade policy.
| AG MARKETS |
— Ag markets today:
- Grains remain resilient in face of tariffs uncertainty. Corn, soybeans and wheat extended Wednesday’s gains during the overnight session. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents higher, soybeans were 4 to 6 cents higher and wheat futures were 1 to 5 cents higher. Gold continues to rise amid trade tensions, with spot gold trading at $3,119.18 per ounce as of early morning, marking a significant increase of over 1%. Crude oil: WTI crude is trading at $61.38 per barrel (+0.13%), while Brent crude stands at $64.67 (+0.23%), reflecting slight recoveries following recent volatility. The U.S. dollar index has dropped to 101.91 (-0.96%), continuing its decline amid trade policy uncertainty.
- Strong underlying retailer beef demand. Wholesale beef prices declined 24 cents for Choice to $337.86 and $1.45 for Select to $320.61 on Wednesday. Movement was strong at 154 loads, signaling strong underlying demand on weaker values, despite overall high prices.
- Cash hog fundamentals weaken. The CME lean hog index is down another 16 cents to $88.00 as of April 8, the lowest since Feb. 12. Pork cutout fell $2.69 to $90.76 on Wednesday, the lowest since Jan. 22, as all cuts except picnics posted sharp losses.
— WASDE out at noon ET. Usage updates in USDA’s World Agricultural Supply and Demand Estimates (WASDE) Report at 11:00 a.m. CT will reflect March 1 stocks and trade policies currently in effect. Typically, the April report is rather uneventful, though how USDA will handle usage forecasts in the face of the trade/tariffs turmoil adds some uncertainty.
— Agriculture markets yesterday:
| FARM POLICY |
— Some U.S. farmers ask: Why can’t farm-state lawmakers ink a new farm bill that includes a true safety net for trade wars and other problems? That is the gist of questions farmers have been asking me during more than a few speeches throughout farm country. GOP farm-state lawmakers privately worry about Trump’s tariffs and another trade war with China. Yet they can’t get a big boost in reference prices legislated. Democratic farm-state lawmakers have quickly used farmer concerns about long-term trade policy in criticizing Trump’s tariff positions and flip-flops. Yet, those same Democratic farm-state lawmakers cannot come to agreement with their GOP counterparts in getting a new farm bill passed.
| ENERGY MARKETS & POLICY |
— Oil prices sink as trade war fears eclipse tariff reprieve. Oil prices slid nearly 3% on Thursday, reversing gains from the previous session as renewed concerns over a U.S./China trade war and the potential for a global recession outweighed the temporary relief provided by President Donald Trump’s 90-day suspension of broad tariffs. Brent crude dropped $1.94, or 2.96%, settling at $63.54 a barrel. West Texas Intermediate (WTI) fell $1.88, or 3.02%, to $60.47 a barrel.
— Oil prices bounded back Wednesday as Trump tariff pivot roils markets. Oil prices staged a dramatic rebound Wednesday, soaring over 4% after touching four-year lows earlier in the day. The turnaround followed President Trump’s surprise announcement of a 90-day tariff pause for most U.S. trade partners, while sharply escalating tariffs on China to 125% effective immediately — just as a previously announced 104% tariff on Chinese goods took effect. Brent crude climbed $2.66 (+4.23%) to settle at $65.48 per barrel. WTI crude surged $2.77 (+4.65%) to close at $62.35. Both benchmarks had earlier been down nearly 7% intraday.
Of note: OPEC+’s planned output increase of 411,000 barrels/day in May could tip the market into surplus. Meanwhile, U.S. crude inventories rose by 2.6 million barrels, hitting 442.3 million, far above expectations. A Keystone pipeline force majeure following a leak in North Dakota added to near-term supply concerns (see related item below).
— Pipeline trouble: Keystone declares force majeure after oil spill. The Keystone Pipeline’s owner, South Bow Corp., has declared force majeure on scheduled crude oil shipments following a spill that released approximately 3,500 barrels of oil into a North Dakota field. The disruption threatens to ripple across fuel markets, particularly in the Midwest. According to a notice, the company informed customers that it might be unable to fulfill its delivery obligations dating back to 5 p.m. local time on Tuesday. Excavation efforts to pinpoint the leak were expected to begin as early as Wednesday evening.
The Keystone system is a key artery, transporting over 620,000 barrels of crude daily from Canada to U.S. markets. It was shut down early Tuesday after crude was detected in a remote area of North Dakota. Crews are currently constructing a land bridge to bring in heavy machinery, according to the North Dakota Department of Environmental Quality.
In response to the outage, Canadian heavy crude markets are already seeing volatility. The discount on Western Canadian Select (WCS) widened to $10.25 per barrel below West Texas Intermediate (WTI) in Alberta — up from $10.10 the previous day. Meanwhile, uncertainty on the U.S. Gulf Coast led to a modest strengthening in WCS prices, narrowing the discount to $2.70 from $2.85.
Midwestern fuel markets may feel the brunt of the disruption, according to analysts. The region’s gasoline inventories have fallen for four straight weeks, reaching their lowest levels since late January. Diesel supplies have been sliding for six weeks and are now at their lowest since December, per new data from the U.S. Energy Information Administration.
Bottom line: A prolonged shutdown could heighten upward pressure on retail gasoline and diesel prices in the Midwest, where refineries rely heavily on Canadian crude.
| TRADE POLICY |
— Trade turmoil: Tariff pause shocks Hill, exposes rift in Trump policy. In a dramatic turn during a high-stakes hearing on Capitol Hill, U.S. Trade Representative Jamieson Greer came under fire from both parties after President Donald Trump unexpectedly announced a 90-day pause on reciprocal tariffs via Truth Social — while Greer was still testifying before the House Ways and Means Committee.
Trump’s social media post paused reciprocal tariffs for most countries, lowering them to a uniform 10%. Simultaneously, tariffs on Chinese imports were hiked to 125%, citing China’s retaliatory measures.
Greer admitted under questioning that he had no prior knowledge of the announcement — despite ongoing internal discussions. Rep. Steven Horsford (D-Nev.) sharply rebuked Greer, accusing him of either withholding key information or being left out of the loop. Republicans, including Sen. Thom Tillis (R-N.C.), voiced rare public discontent, pointing to adverse effects on manufacturing and agriculture in their districts.
Agriculture in the crosshairs. U.S. farmers — especially soybean producers — remain among the hardest hit, facing plummeting exports to China. Greer emphasized ongoing efforts to dismantle foreign trade barriers, but made no commitments to aid farmers enduring retaliatory losses.
Analysts fear the volatility of Trump’s tariff maneuvers could drag the economy toward recession — even as markets briefly rallied on news of the pause. Manufacturers and farmers are absorbing rising input costs and shrinking export channels.
Shifting global trade. As the U.S./China standoff deepens, countries like Brazil continue strengthening their agricultural trade relationships with Beijing, threatening long-term market share for American farmers.
Political fallout? Trump’s once-reliable rural support is wavering in some areas. Some in farm country — long a Republican stronghold — are expressing disillusionment as financial pressures mount. With 2026 midterms on the horizon, GOP leaders are increasingly concerned about erosion in key battlegrounds.
Upshot: Greer’s blindsided appearance and the sudden tariff pause underscore a broader issue: strategic incoherence within the administration’s trade team. The bipartisan backlash illustrates growing unease with a policy approach seen as reactive, opaque, and economically destabilizing. As the ripple effects deepen, the future of Trump’s trade legacy — and its political viability — faces serious questions.
— Canadian academic pushes back after White House cites his work to justify tariffs. A Canadian professor’s weekend pickup basketball game ended with a surprising twist — international fame, and not the kind he wanted. Dr. Pau Pujolas, a professor of economics at McMaster University, was stunned to learn that a White House official had publicly cited his academic paper to justify the Trump administration’s sweeping new tariff agenda — an agenda the author says completely misapplies his work. “They understood it very well. But they are using it for something the paper was never intended to support.” — Pujolas, in an interview with The Globe and Mail.
The citation came from Stephen Miran, chair of the White House Council of Economic Advisers, during remarks at a conservative think tank. He used Pujolas’ co-authored 2024 study to argue that “in the presence of large trade deficits, optimal tariffs are higher.” That quote, Pujolas admits, is technically accurate. But it leaves out the nuance. “Yes, the U.S. can, in theory, improve its position… but the kinds of tariffs being used now are not what our model describes… We used a supercomputer,” he added. “The White House would have far better tools than we do. But that’s not what they’ve done.”
The academic’s paper, written with Jack Rossbach of Georgetown University, used complex simulations — including a genetic algorithm — to test optimal tariff scenarios. It found the U.S. might have gained marginal welfare improvements if it had calibrated tariffs very precisely back in 2018. But those gains would have come at China’s expense, and the global effect would have been negative. “We find that the best outcome is to lower tariffs altogether… The world as a whole gains.” — Pujolas told The Globe and Mail.
Instead of inspiring policy at institutions like the IMF or WTO, as intended, the research has now been invoked to support aggressive U.S. trade escalation, including 125% tariffs on Chinese imports and reciprocal retaliation by China with 84% tariffs on all U.S. goods. Markets are reeling, with oil at a four-year low and bond yields spiking. “We didn’t write the paper as an encouragement for any country, in particular the U.S., to start the trade war. That was never intended,” said Pujolas. “I was hoping it would lead to a world with fewer trade wars… And that is saddening.”
| CONGRESS |
— GOP budget showdown delays House vote on FY 2025 plan. House Speaker Mike Johnson (R-La.) abruptly pulled a scheduled vote on the Senate’s fiscal year (FY) 2025 budget resolution late Wednesday, after failing to secure support from arch conservative Republicans. The sticking point: insufficient spending cuts compared to the more austere version previously passed by the House.
Johnson and GOP leadership held late-night meetings with holdouts, pledging that a vote could still happen as soon as Thursday morning. In the meantime, alternatives are being weighed. Options include amending the Senate resolution before sending it back to that chamber, or adding a provision to the House rules making any future reconciliation bill contingent on the inclusion of deeper spending cuts demanded by conservatives.
With lawmakers preparing to leave Friday for a two-week Easter recess, Johnson clarified he would not hold members in session over the weekend — but left open the possibility of calling them back next week for a vote.
Though non-binding, passage of the FY 2025 budget resolution is essential for Republicans to unlock the budget reconciliation process. That would allow them to pursue partisan priorities — such as renewing key provisions of the 2017 tax cuts and bolstering defense and border security — without needing Democratic support. The budget measure may also serve as a legislative vehicle for some updates to the long-delayed 2018 Farm Bill.
— House passes GOP bill to curb nationwide injunctions, Senate showdown looms. In a narrow 219-213 vote, the House passed a Republican-led bill on Wednesday to limit the authority of federal district judges to issue nationwide injunctions — rulings that block federal actions across the country, even for individuals not party to a lawsuit. The bill, introduced by Rep. Darrell Issa (R-Calif.), aims to rein in what Republicans argue is judicial overreach that has repeatedly stalled executive actions, particularly under former President Trump. The measure includes some exceptions, such as cases filed jointly by multiple states.
During floor debate, Issa said the rise of national injunctions has enabled “individual judges to dictate national policy” and obstruct the Constitution. He emphasized that current rules allow non-parties to benefit from judicial relief, even if they disagree with the lawsuit’s outcome.
Rep. Jamie Raskin (D-Md.), the top Democrat on the House Judiciary Committee, countered that courts have appropriately ruled against unlawful Trump executive orders. “If it seems like an incredible number of cases to lose in less than 100 days, recall that Trump is engaged in a record number of illegal actions,” Raskin said.
The bill now heads to the GOP-controlled Senate. Sen. Chuck Grassley (R-Iowa) introduced similar legislation in the Senate. The bill to limit nationwide injunctions still faces hurdles like potential filibuster threats or moderate GOP hesitation. Expect Judiciary Committee hearings in the Senate and possible markup in the coming weeks.
| PERSONNEL |
— Court backs Trump on federal firings, deals blow to state lawsuits. A federal appeals court ruled in favor of the Trump administration Wednesday, allowing the continued dismissal of thousands of probationary federal employees as part of a sweeping effort to reduce the size of the federal workforce. This comes just one day after a similar decision from the U.S. Supreme Court, delivering back-to-back legal victories for President Trump and his administration.
Developments:
- The 4th U.S. Circuit Court of Appeals issued a 2-1 ruling staying a lower court’s decision that had temporarily blocked the firings.
- The panel found the government is “likely to succeed” in its argument that the lower court lacked jurisdiction to intervene.
- This ruling means fired employees will need to pursue appeals through individual employment dispute channels, rather than through the courts.
The case originated from a lawsuit brought by 20 states, claiming the administration violated federal reduction-in-force statutes by skipping proper notice procedures.
Dissenting Judge DeAndra Gist Benjamin strongly disagreed, arguing that the states had clear standing, and that the government failed to demonstrate irreparable harm.
Earlier this year, a federal judge had ordered 18 agencies (including Agriculture, Treasury, and Veterans Affairs) to rehire some workers and halt further terminations. However, many of those workers were placed on paid administrative leave rather than fully reinstated, pending legal outcomes. The states’ lawsuit contends that the sudden firings burden state economies and violate federal procedure.
Related Supreme Court action:
· On Tuesday, the U.S. Supreme Court ruled in a parallel case involving agencies in California, again siding with the Trump administration. That decision paused a lower court order to rehire approximately 16,000 probationary staffers, allowing the employees to remain on paid leave for now.
Upshot: This ruling bolsters Trump’s broader deregulatory agenda heading into 2026, further signaling judicial deference to executive authority in reshaping the federal workforce. However, ongoing litigation from states and labor advocates promises continued legal and political friction.
| TRANSPORTATION & LOGISTICS |
— U.S. backs out of global shipping carbon talks, warns of retaliation. The United States has withdrawn from international negotiations on placing a carbon charge on shipping emissions, warning it will take reciprocal action if American-flagged vessels are penalized under any future global greenhouse gas (GHG) pricing regime. The talks, currently underway at the International Maritime Organization (IMO) in London, aim to finalize a carbon pricing mechanism for the maritime sector — part of a broader effort to bring shipping in line with global climate goals. The U.S. stated that it “rejects any and all efforts to impose economic measures against its ships based on greenhouse gas emissions or fuel choice.”
Background. While the U.S. has significant diplomatic weight, its merchant fleet is comparatively small, raising questions about its influence on rule implementation, which hinges on the decisions of flag states — where ships are officially registered. IMO decisions are typically made by consensus, though ballots can be held if needed.
Despite the U.S. pushback, negotiations appear to be progressing. “There are no indications from within the room that the U.S. statement has had a significant impact,” said Jesse Fahnestock of the Global Maritime Forum, which includes stakeholders like BP Plc.
If GHG-cutting amendments to MARPOL Annex VI are passed, the U.S. could theoretically withdraw from the annex or the broader treaty, according to reports. The U.S. government has signaled potential economic countermeasures to “offset any fees charged to U.S. ships and compensate the American people for any other economic harm” stemming from the proposed measures.
IMO Secretary General Arsenio Dominguez confirmed this week that a compromise proposal is in the works and reiterated that “there will be a price on emissions.” The organization set a target in 2023 for the global shipping sector to reach net-zero emissions by mid-century.
| CHINA |
— China lowers corn, cotton import forecasts amid U.S. tariffs. China’s ag ministry cut its forecast for 2024-25 corn imports by 2 MMT to 7 MMT, down 16.41 MMT (70.1%) from last year. It reduced cotton imports by 200,000 MT to 1.5 MMT, down 1.75 MMT (53.8%) from 2023-24. The ministry cited U.S. tariffs for the cuts to expected corn and cotton imports. It left its 2024-25 soybean import forecast at 94.6 MMT, down 10.15 MMT (9.7%) from last year.
| WEATHER |
— NWS outlook: Elevated risk of severe weather from portions of the Lower Ohio Valley and the Mid/Deep South Thursday into parts of the southern Eastern Seaboard Friday... ...Mixed rain/wet snow from the Great Lakes to interior New England Thursday will be followed by cold soaking rain showers across the Mid-Atlantic Friday into early Saturday... ...Well above normal and near-record warmth builds across the West and into the Plains through the weekend... ...Turning cooler and unsettled across the Pacific Northwest.
| KEY DATES IN MARCH & APRIL |
10: CPI | Crop Production | WASDE
10: The Masters (golf)
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 |