Senate Ag Committee Votes Monday on USDA Secretary Nominee Brooke Rollins

USTR nominee hearing Thursday | Update on Trump tariffs and reaction from Canada, Mexico and China

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February 02, 2025 06:34 AM

WEEK AHEAD_PF_FINAL.jpg — The Week Ahead

The Week Ahead: Feb. 2, 2025

— Canada hits back with retaliatory tariffs on U.S. imports. In response to President Donald Trump’s decision to impose 25% tariffs on Canadian and Mexican goods (link to special report), Canada announced its own 25% tariffs on $155 billion worth of U.S. imports. Prime Minister Justin Trudeau stated that the tariffs will roll out in two phases, starting Feb. 4 on $30 bil. targeting American products such as alcohol, produce, household goods, and industrial materials, the same day the American tariffs are set to begin. The tariffs on the other $125 billion worth of goods will come in 21 days, to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized that Canada’s response would be “strong but appropriate,” while also considering non-tariff measures like restrictions on critical minerals. The move has drawn mixed reactions within Canada, with provincial leaders urging strategic countermeasures while ensuring minimal harm to the domestic economy. Meanwhile, the White House justifies the tariffs as a measure against drug trafficking and illegal border crossings, further straining trade relations between the two countries.

American items that Canadians tariffs will be applied to include:
· Beer, wine, and bourbon
· Fruits and fruit juices including orange juice, as well as vegetables
· Perfume, clothing, and shoes
· Major consumer products such as household appliances and furniture
· Sports equipment
· Other materials such as lumber and plastics

The government of Canada says a more detailed list of impacted products will be released soon.

More tariffs coming. Foreign Affairs Minister Mélanie Joly said on Jan. 31 that Canada’s retaliatory tariffs would be coming in rounds. “There would be a first round of measures, second round of measures, and a third round of measures,” Joly said at a press conference in Washington. “And we’ll keep ourselves also some leverage.”

When asked if Canada would be shutting off oil exports to the U.S., Trudeau said he will be ensuring Canada’s response will be “equitable” and won’t be damaging to one part of the country more than the others. Energy-rich Alberta has strongly opposed any export tariffs on oil, or for Canada to stop oil exports altogether. Trump said on Jan. 31 that the U.S. tariffs will be lower on Canada’s oil and gas exports, at 10%, while other goods will have a tariff of 25%.

Canada’s trade surplus in merchandise with the U.S. was around $100 billion (US$59 billion) last year, according to a report by TD Bank. If Canadian oil exports to the U.S. are removed from the figure, the “scales tip to America’s favor,” the report says, meaning the United States would have a $60 billion (US$41 billion) trade surplus.

Canada and the U.S. conduct two-way trade worth $1.3 trillion every year. According to the Canadian Chamber of Commerce, 2.3 million Canadian jobs are supported by exports to the U.S., and 1.4 million American jobs are supported by exports to Canada. A Bank of Canada analysis says that under a mutual 25% tariffs scenario, Canada’s GDP would take a 2.4% hit.

— Mexican President Claudia Sheinbaum announced its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled. Sheinbaum said she had told her economy minister “to implement Plan B” which she said “includes tariff and non-tariff measures” though it was not clear what those measures were exactly.

— China’s Ministry of Commerce denounced Trump’s tariffs, saying they undermine “the normal economic and trade cooperation” between the U.S. and China. The ministry said it would challenge the U.S. action at the World Trade Organization (WTO) and take countermeasures “to firmly safeguard its own rights and interests.” The WTO dispute settlement mechanism has been dysfunctional for years amid U.S. opposition to the appointment of new judges.

— USDA’s Animal and Plant Health Inspection Service (APHIS) is set to resume cattle and bison imports from Mexico in the coming days, following a temporary suspension due to a New World screwworm (NWS) outbreak. Link to our report. The National Cattlemen’s Beef Association (NCBA) expressed gratitude to President Donald Trump and USDA for their swift action in protecting the U.S. cattle herd from the threat of New World screwworm. NCBA CEO Colin Woodall praised the USDA and Mexican counterparts for instituting a thorough inspection program, ensuring cattle health while supporting rural livelihoods. The organization continues to advocate for additional funding for sterile flies, a key tool in eradicating screwworm infestations.

— USAID website goes dark amid Trump’s foreign aid review. The USAID website was inaccessible over the weekend as the Trump administration re-evaluates U.S. foreign aid, following an executive order that froze billions in assistance. Democrats warn the move cedes influence to China and Russia, as Secretary of State Marco Rubio allows limited humanitarian exemptions during a three-month review. Reports suggest USAID could be folded into the State Department, drawing backlash from lawmakers who argue the agency is vital to national security and global stability.

— President Donald Trump wants Ukraine to hold new elections by the end of this year, according to his special envoy for Ukraine and Russia-related affairs.

— President Trump issued a memorandum on Friday directing all agreements with unions executed in the 30 days before he was inaugurated to be deemed invalid. Link for details.

— Deregulation: In another order signed on Friday, President Trump directed agencies to limit the number of regulations they impose and eliminate 10 existing regulations for every new one enacted. Link for details.

— Prosecutors on Jan. 31 arrested a former senior Federal Reserve advisor, accusing him of stealing trade secrets from the agency that could allow China to manipulate the U.S. market.

— 6 Americans detained in Venezuela released after visit by Trump envoy. The six American citizens who had been held in Venezuela were freed following a meeting between President Nicolás Maduro and Richard Grenell, a senior U.S. official, according to the Trump administration. Trump told reporters that the meeting with the Venezuelan leader was not meant to give credibility to the Maduro presidency, which is not recognized by the United States and a number of other countries.

WASHINGTON FOCUS

Congress is in this week and while there will be lots of hearings and Trump nominee-related action (Senate Ag panel vote Monday on USDA secretary nominee Brooke Rollins; Senate Finance hearing Thursday on USTR nominee Jamieson Greer), the focus will be on tariffs that President Trump announced Saturday on Canada, Mexico and China. Link to our report on the announcements, with analysis. Some tariff updates:

Trump said the tariffs were imposed via the International Emergency Economic Powers Act “because of the major threat of illegal aliens and deadly drugs killing our citizens, including fentanyl.”
Exemptions: Reuters said if goods were loaded on a vessel or their final mode of transport prior to entering the U.S. before 12:01 a.m. ET they would be exempt from the tariffs.
Trump also suspended de minimis rules for the three countries that allow small packages valued at less than $800 to enter the United States on a duty-free basis, which officials have said is another route for illicit drugs to reach U.S. streets. This would hit Chinese e-commerce companies Shein and Temu, which had used the exemption to ship millions of dollars worth of inexpensive clothes and other items to the American market.
There is no provision in the president’s orders for companies to seek an exemption from the tariffs for items that are unavailable from suppliers outside of North America, according to a White House official. That is a possible blow to homebuilders who rely on Canadian lumber as well as farmers, automakers and other industries.
The 10% tariffs on China so far is far lower than the 60% tariffs Trump had threatened to deploy against China during his presidential election campaign. Many see this as a signal of a willingness to negotiate with Chinese President Xi Jinping.
Federal Reserve response awaited. The details of the tariff plans will be key for the Federal Reserve as Fed Chair Jerome Powell said they needed to see the actual policies deployed by Trump before trying to determine what if any monetary policy response could be needed to address any impacts.
Impact: For the typical U.S. household, the tariffs will mean a loss of about $1,200 in annual purchasing power, according to the Budget Lab at Yale University, a nonpartisan research center.
Democrats were quick to warn that any inflation going forward was the result of Trump’s actions. “You’re worried about grocery prices. Don’s raising prices with his tariffs,” Senate Democratic leader Chuck Schumer (D-N.Y.) wrote in a series of posts on X. “You’re worried about tomato prices. Wait till Trump’s Mexico tariffs raise your tomato prices,” read another. “You’re worried about car prices. Wait till Trump’s Canada tariffs raise your car prices,” read another.
The U.S. tariffs will remain in place until the president determines that the three countries have taken sufficient action to address the U.S. complaints. “In Donald Trump’s golden age, we will have only legal immigration and we will have zero Americans dying from Chinese/Mexican/Canadian fentanyl,” a White House official said. The official did not provide specific benchmarks that could be met to lift the new tariffs.
Link to fact sheet on U.S. tariffs on Canada, Mexico and China.
Link to executive order imposing duties to address the flow of illicit drugs across the northern border.

— Ken Martin, the longtime leader of Minnesota’s Democratic-Farmer-Labor Party, was elected chairman of the Democratic National Committee on Saturday, as the party turns to a seasoned but low-profile Midwestern strategist to spearhead its recovery from November’s election loss. Martin defeated Wisconsin Democratic Party Chair Ben Wikler on the first ballot, earning 246 votes out of the 428 cast.

— Rohit Chopra, director of the Consumer Financial Protection Bureau, on Saturday announced his departure from the agency, which has faced criticism from Republicans and others over claims of regulatory overreach, along with constitutional challenges to its existence.

— Uncertainty surrounds USDA EQIP loans amid Trump administration review. The status of USDA’s Environmental Quality Incentives Program (EQIP) loans remains uncertain following recent actions by the Trump administration. Recent developments:

Jan. 27: A memo ordered a freeze on most federal grants and loans, creating uncertainty in the agriculture sector.
Jan. 28: A federal judge temporarily blocked the order.
Jan. 29: The administration rescinded the memo but maintained plans to scrutinize federal funding.

EQIP is funded by the Inflation Reduction Act (IRA), which allocated $18 billion for USDA conservation programs. The Trump administration ordered a pause on IRA-related spending, which may affect EQIP funding. While EQIP wasn’t specifically mentioned, the program could face delays or changes as part of broader federal funding reviews.

Of note: Farmers and ranchers relying on EQIP should monitor USDA updates and consult local FSA offices for the latest information.

OTHER EVENTS & HEARINGS

Monday, Feb. 3
· Rollins nomination vote. Senate Ag Committee to hold a business meeting to consider Brooke Rollins, of Texas, to be Secretary of Agriculture.

Tuesday, Feb. 4

Fentanyl. Senate Judiciary Committee hearing on “The Poisoning of America: Fentanyl, its Analogues, and the Need for Permanent Class Scheduling.”
Mexican political risks. The Wilson Center’s Mexico Institute holds a virtual discussion on a new report, “Ten Political Risks for Mexico in 2025.”

Wednesday, Feb. 5
· Farmer views on U.S. ag economy. Senate Ag Committee hearing on “Perspectives from the Field: Farmer and Rancher Views on the Agricultural Economy, Part 1.” Leaders of the American Farm Bureau Federation and several farm and commodity organizations are scheduled to testify.
· Nomination vote: Commerce. Senate Commerce, Science and Transportation Committee markup pending legislation and vote on the nomination of Howard Lutnick to be Commerce secretary.
· Nomination vote: SBA. Senate Small Business and Entrepreneurship Committee markup of pending legislation and vote on the nomination of Kelly Loeffler to be SBA administrator.
· Committee organization: House Science, Space and Technology. House Science, Space and Technology Committee meeting to organize for the 119th Congress.
· Government organization. House Oversight and Government Reform Committee hearing on “Rightsizing Federal Government.”
· Legislative and administration outlook. Axios discussion on “plans for action on top legislative business in the year ahead, opportunities for bipartisan collaboration and what they’re looking to get done in the first 100 days of the Trump administration.”
· Eurozone outlook. Peterson Institute for International Economics virtual discussion on “The Euro Area in 2025.”
· Small business growth. House Small Business Committee hearing on “Hope on the Horizon: Prioritizing Small Business Growth in the 119th Congress.”
· Community banking. House Financial Services Committee hearing on “Make Community Banking Great Again.”
· U.S. science and technology leadership. House Science, Space and Technology Committee hearing on “The State of U.S. Science and Technology: Ensuring U.S. Global Leadership.”
· Maritime infrastructure. House Transportation and Infrastructure Coast Guard and Maritime Transportation Subcommittee hearing on “America Builds: Maritime Infrastructure.”
· Trumpification of Europe. FiscalNote and Oxford Analytica virtual discussion on “The Trumpification of Europe and the Consequences for EU Policy.”
· Cyber workforce. House Homeland Security Committee hearing on “Preparing the Pipeline: Examining the State of America’s Cyber Workforce.”
· Banking issues. Senate Banking, Housing and Urban Affairs Committee hearing on “Investigating the Real Impacts of Debanking in America.”
· U.S. energy capability. House Energy and Commerce Energy Subcommittee hearing on “Powering America’s Future: Unleashing American Energy.”
· U.S., IMF and global growth. Reuters virtual discussion on “the challenges facing the global economy at a time when heightened trade tensions between the United States — the IMF’s largest shareholder — and other countries threaten to hamper already lackluster global growth prospects.”

Thursday, Feb. 6
· Nomination hearing: USTR. Senate Finance Committee hearing on the nomination of Jamieson Greer to be U.S. Trade Representative.
· China panel hearing. U.S./China Economic and Security Review Commission holds a hearing on “Made in China 2025 — Who Is Winning?” — addressing the extent to which China met the goals and targets outlined in its Made in China 2025 industrial policy document.
· Illegal drug threats. House Energy and Commerce Health Subcommittee hearing on “Combatting Existing and Emerging Illicit Drug Threats.”
· Domestic ore mining. House Natural Resources Energy and Mineral Resources Subcommittee hearing on “Now Ore Never: The Importance of Domestic Mining for U.S. National Security.”
· California fires. House Judiciary Administrative State, Regulatory Reform, and Antitrust Subcommittee hearing on “California Fires and the Consequences of Overregulation.”
· Drones. House Transportation and Infrastructure Aviation Subcommittee hearing on “Counter-Unmanned Aircraft Systems.”
· Trump energy policies. Cato Institute virtual forum on “Exploring Energy Policy under the Trump Administration.”
· VA oversight. House Veterans Affairs Oversight and Investigations Subcommittee hearing on “VA First, Veteran Second: The Biden/Harris Legacy.”
· Crypto policy review. House Financial Services Oversight and Investigations Subcommittee hearing on “Operation Choke Point 2.: The Biden Administration’s Efforts to Put Crypto in the Crosshairs.”
· Unemployment benefits fraud. House Ways and Means Work and Welfare Subcommittee hearing on “Time’s Running Out: Prosecuting Fraudsters for Stealing Billions in Unemployment Benefits from American Workers.”
· Government animal research. House Oversight and Government Reform Cybersecurity, Information Technology, and Government Innovation Subcommittee hearing on federally funded research involving animals.

Friday, Feb. 7
· Economic impacts of Trump. The Johns Hopkins University School of Advanced International Studies virtual discussion on “The Economic Consequences of President Trump.”

ECONOMIC REPORTS & EVENTS

Key U.S. jobs data ahead. Investors will have a packed week with several key U.S. economic reports. The spotlight will be on Friday’s jobs report, while Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) for December will offer additional insights into the employment landscape.

Monday, Feb. 3

Federal Reserve. Atlanta Fed President Raphael Bostic, St. Louis Fed President Alberto Musalem scheduled to speak.
PMI Manufacturing
Construction Spending
ISM Manufacturing Index

Tuesday, Feb. 4

Federal Reserve. Fed Vice Philip Jefferson speaks on US Economic Outlook and Monetary Policy at Lafayette College in Easton, Pennsylvania. Atlanta Fed President Raphael Bostic, San Francisco Fed President Mary Daly scheduled to speak.
Factory Orders
JOLTS

Wednesday, Feb. 5

Federal Reserve. Fed Governor Michelle Bowman gives remarks on Brief Economic Update and Bank Regulation at Kansas Bankers Association meeting; Fed Vice Chair Philip Jefferson speaks on Do Non-Inflationary Economic Expansions Promote Shared Prosperity? at event in Pennsylvania. Richmond Fed President Thomas Barkin, Chicago Fed President Austan Goolsbee scheduled to speak.
ADP Employment Report
International Trade
PMI Composite Final
ISM Services Index

Thursday, Feb. 6

Federal Reserve. Fed Governor Christopher Waller speaks on Payments in Washington, DC.
Jobless Claims
Productivity and Costs
Fed Balance Sheet
Money Supply

Friday, Feb. 7

Federal Reserve. Fed Governor Michelle Bowman delivers remarks on Brief Economic Update and Bank Regulation at Wisconsin Bankers Conference; Fed Governor Adriana Kugler delivers remarks on Entrepreneurship and Aggregate Productivity in Florida.
Employment
Consumer Sentiment
Wholesale Inventories
Consumer Credit

KEY USDA & INTERNATIONAL AG & ENERGY REPORTS & EVENTS

Ag focus: The United Nations’ monthly food price index will be released on Friday, Feb. 7. Tyson Foods Inc. and Archer-Daniels-Midland Co. are scheduled to report results.

Energy focus: ConocoPhillips, Marathon Petroleum and TotalEnergies will be among the major energy companies reporting earnings during the week. On Monday, the OPEC+ Joint Ministerial Monitoring Committee will convene virtually for a scheduled discussion on supply policy, against the backdrop of President Donald Trump’s call for lower oil prices.

Monday, Feb. 3

Ag reports and events: