Trump Administration Cuts 1,600 USAID Jobs Amid Foreign Aid Freeze

Updates: Policy/News/Markets, Feb. 24, 2025

Link to Feb. 23 Updates
Link to Feb. 22 The Week Ahead

— Trump administration cuts 1,600 USAID jobs amid foreign aid freeze. The move places most remaining personnel on paid administrative leave, following a federal judge’s ruling that cleared the way for the cuts. Led by Elon Musk’s Department of Government Efficiency (DOGE), the effort is part of a broader push to scale back the U.S. Agency for International Development (USAID), a key instrument of American “soft power.” Former USAID officials warn the move undermines U.S. crisis response capabilities, while critics argue it is an attempt to dismantle the agency. The administration has approved $5.3 billion in aid exemptions, primarily for security programs, but only a fraction has gone to USAID humanitarian efforts.

— Federal workers face ultimatum from Musk-led agency. Federal agencies are scrambling after an email ordered by Elon Musk demanded that employees submit five bullet points detailing their work last week. While the message from the Office of Personnel Management did not specify consequences, Musk, head of the Department of Government Efficiency, warned on social media that noncompliance by tonight’s 11:59 p.m. ET deadline would result in dismissal.

By late Sunday, major agencies, including the Pentagon, FBI, and State Department, had advised their staff not to respond. “For now, please pause any response,” a top Pentagon official told employees this weekend, adding that the Defense Department “will conduct any review in accordance with its own procedures.” Similar messages went out from Tulsi Gabbard, the director of national intelligence; Kash Patel, the director of the FBI; the State Department; and more.

Opposition. Everett Kelley, the president of the American Federation of Government Employees, said Musk and the Trump administration have again “shown their utter disdain for federal employees and the critical services they provide to the American people.”

— Equities today: Asian and European shares were mixed to weaker in trading overnight. U.S. stock indexes are set to open higher. In Asia, Japan closed. Hong Kong -0.6%. China -0.2%. India -1.1%. In Europe, at midday, London +0.1%. Paris -0.1%. Frankfurt +1%.

— German stocks surge as Merz’s conservatives win election. German stocks jumped on Monday after Friedrich Merz’s conservative opposition secured victory in the national election. The DAX index climbed 0.8%, fueled by gains in defense stocks such as Rheinmetall and Hensoldt, anticipating increased military spending under the new administration. The broader STOXX 600 rose 0.2%, led by real estate and utilities. Meanwhile, the mid-cap MDAX surged 2.3%, and small caps advanced 1.1%. However, prolonged coalition talks could delay key economic reforms. The far-right AfD surged to second place, complicating governance. Investors remain cautious, eyeing policy implementation timelines.

— Nvidia leads key earnings reports this week. Nvidia’s $3.3 trillion market cap will make it the most influential company in the market this week as it reports earnings for the first time since Chinese startup DeepSeek shook up the AI landscape in January. Investors will also watch Home Depot and Lowe’s for insights into consumer spending and the housing market. Key reports to watch:

Tuesday: Home Depot (before the bell)
Wednesday: Lowe’s, TJX (before the bell); Nvidia, com (after the bell)

— Gold near record high as weaker dollar and trade war fears boost appeal. Gold prices edged higher on Monday, trading close to record levels as a weaker U.S. dollar and trade tensions fueled investor demand. Spot gold rose 0.3% to $2,943.50 an ounce after hitting an all-time high of $2,954.69 last week, while U.S. gold futures gained 0.2% to $2,958.20. Analysts attribute gold’s resilience to a weaker dollar and inflows into bullion-backed ETFs. Concerns over President Donald Trump’s tariff threats — potentially impacting imports of cars, semiconductors, pharmaceuticals, and lumber — have heightened investor interest in gold as a safe-haven asset.

Traders are watching Friday’s Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge, for insights into future interest rate decisions. While expectations point to a rate cut in September, uncertainty remains, keeping gold investors cautious about breaching the $3,000 per ounce level.

Meanwhile, spot silver edged down 0.1% to $32.50, platinum fell 0.4% to $966.13, and palladium lost 1.2% to $957.32.

— Apple said that it will hire 20,000 new workers and produce AI servers in the U.S., part of plans to spend $500 billion domestically over the next four years, just days after Tim Cook, Apple’s chief executive, met with President Trump. The iPhone maker stands to lose out should the president hit China with more tariffs: In Trump’s first term, Cook persuaded him to forgo new levies that could have hurt iPhone sales. Trump wrote in a post on his social network Truth Social that Apple was making the investment because of “faith in what we are doing.” Apple didn’t say whether the new investments were already underway before Trump’s win.

— Ag markets today:

• Grains lower to open the week. Corn, soybeans and wheat faced price pressure during the overnight session. As of 7:30 a.m. ET, corn and soybean futures were trading 2 to 3 cents lower, while wheat futures were 8 to 9 cents lower. The U.S. dollar index and front-month crude oil futures were both modestly firmer.
• Neutral Cattle on Feed report. USDA estimated the large feedlot (1,000-plus head) inventory at 11.716 million head as of Feb. 1, down 0.7% from year-ago. Placements increased 1.7% while marketings rose 1.4% from year-ago levels during January. All three categories were close to pre-report expectations and will have limited market impact.
• Cash hog index declines. The CME lean hog index is down 69 cents to $90.53 as of Feb. 20, ending an extended string of price gains. April lean hog futures finished last Friday $2.855 below today’s index quote, while June hogs held a $10.095 premium.

— Ag trade: Algeria tendered to buy an unspecified amount of milling wheat.

— Egypt’s Suez Canal Authority said 47 ships have rerouted to use the waterway since the start of February, a tentative recovery after a ceasefire between Israel and Hamas prompted Yemeni rebels to scale back attacks on Red Sea shipping.

— Dockworkers set to vote on historic labor contract. Unionized dockworkers will vote this week on a new labor contract expected to bring stability to U.S. ports through September 2030. The deal, widely anticipated to pass on Tuesday, includes a 62% pay increase and guarantees against automation, a victory hailed by the International Longshoremen’s Association. Port employers also see benefits, as the agreement allows for the introduction of remote-operated cranes and other efficiency-boosting technologies, helping offset increased labor costs. The contract aims to prevent disruptions like the three-day strike in October that disrupted U.S. trade.

— AgRural cuts Brazilian soybean production forecast. AgRural reduced its Brazilian soybean production forecast by 2.8 MMT to 168.2 MMT, led by cuts to the crop in Rio Grande do Sul. The firm said soybean harvest reached 39% as of last Thursday, nearly caught up to last year’s 40% on this date. Safrinha corn planting jumped to 64% done, though that was still behind 73% at this time last year.

— Brazil’s rice exports surge 34% in January, imports drop. Brazil’s rice exports reached 112,500 tonnes in January 2025, marking a 34% year-over-year increase in volume and generating $35.9 million in revenue. Meanwhile, imports plummeted by 43% to 118,600 tonnes, amounting to $40.3 million — a 54% decline in value. Processed rice made up 99.7% of exports, with Senegal, Gambia, and Peru among the top destinations. Mexico, a key buyer in recent years, was absent from the export list after revoking its tariff exemption on Brazilian processed rice, reinstating a 16% duty. Brazilian officials are seeking fairer terms to maintain market access.

— India’s palm oil imports to drop below soft oils for first time. India’s palm oil imports are set to decline below soft oils like soyoil and sunflower oil for the first time, as rising prices push refiners toward more affordable alternatives. Industry leader Sanjeev Asthana predicts palm oil imports could drop to 7.5 million metric tons in 2024-25, the lowest in five years. Soft oils are expected to take a larger market share, with soyoil imports potentially rising by up to 1.5 million tons. The shift comes amid supply disruptions from Indonesia and Malaysia, which have driven up palm oil’s premium over rivals. However, imports may rebound if palm oil prices drop in the coming months.

— Malaysia halts plans to increase palm oil biodiesel blend. Malaysia has ruled out raising its palm oil biodiesel blend from 10% to 20% due to high infrastructure costs, estimated at 643 million ringgit ($146.2 million). Plantation and Commodities Minister Johari Abdul Ghani stated that neither the government nor the industry is willing to fund the required upgrades. While some regions, including Labuan, Langkawi, and parts of Sarawak, already use a 20% blend, nationwide expansion is not feasible. Meanwhile, Indonesia’s B40 biodiesel mandate has tightened global palm oil supply, raising prices.

— Agriculture markets Friday and for the week:
• Corn: May corn futures closed 7 3/4 cents lower to $5.05 and settled on session lows. That marked a 3 3/4 cent loss on the week.
• Soy complex: March soybeans fell 6 cents to $10.39 1/2 but still rose 3 1/2 cents on the week. March soymeal closed down $1.20 to $294.80 and for the week down $1.10. March soyoil slid 45 points to 46.81 and gained 74 points on the week.
• Wheat: March SRW wheat rose 4 1/2 cents to $5.90, nearer the daily high and for the week down 10 cents. March HRW wheat gained 1 3/4 cents to $6.09 1/4, near mid-range and for the week 12 cents lower. March spring wheat futures fell a penny to $6.31 3/4 but ended the week down 1 3/4 cents.
• Cotton: March cotton rose 11 points to 66.08 cents but ended the week down 103 points.
• Cattle: April live cattle futures rose 15 cents to $193.95 and near mid-range. For the week, April live cattle fell 30 cents. March feeder cattle futures rose $1.125 to $267.95, near mid-range and for the week up $1.30.
• Hogs: Nearby hog futures slipped to end the week, whereas the deferred contracts posted moderate gains. April hogs lost 85 cents on the day to $87.675. That marked a weekly drop of $4.925.

— Oil prices steady amid Ukraine talks and Iraq supply prospects. Oil prices remained stable on Monday as investors awaited developments in negotiations to end the war in Ukraine and monitored the potential resumption of crude exports from northern Iraq. Brent crude rose 13 cents, 0.2%, to $74.56 per barrel, while U.S. West Texas Intermediate (WTI) increased 11 cents, 0.2%, to $70.51.

Global oil markets continue to react to geopolitical events, including EU discussions on additional support for Ukraine and reports that President Donald Trump has engaged in talks with Russia without involving Ukraine or the EU. While an end to the war may not immediately impact Russian oil supply due to OPEC+ production curbs, analysts suggest that reduced geopolitical risk could still drive prices lower.

Additionally, an anticipated increase in supply from Iraq is putting downward pressure on prices, though the timeline for the Iraq-Turkey pipeline reopening remains uncertain. Iraq is set to export 185,000 barrels per day from Kurdistan once flows resume.

— As we noted Friday, EPA confirmed that the Trump administration will uphold waivers for eight Midwest states, allowing year-round sales of E15 fuel. States can request one-year delays by Feb. 26. The agency is also working with Congress on legislation to make E15 sales permanent, which many see as necessary to avoid recurring emergency waivers. If no legislative solution is reached, the EPA may continue issuing emergency waivers as needed.

— Trump stalls U.S. wind power industry with permit freeze. The Biden-era momentum for wind energy has ground to a halt under President Trump, who has paused federal permitting and leasing for wind projects, leaving major developers in limbo. As the Wall Street Journal reports (link), companies such as TotalEnergies, Shell, and Orsted have either shelved projects or recorded billion-dollar impairments due to the uncertainty. “We aren’t going to do the wind thing,” Trump declared at a rally on Jan. 20, dismissing turbines as “big ugly windmills” that “ruin your neighborhood.”

The sweeping freeze affects offshore and land-based wind projects alike, with multiple federal agencies — including the Army Corps of Engineers, the Federal Aviation Administration, and the Bureau of Land Management — now reassessing their roles in permitting. The Lava Ridge Wind Project in Idaho, specifically named in Trump’s executive order, has been halted for further review. Sen. Jim Risch (R-Idaho), who personally lobbied Trump to stop the project, commented, “He gets it. It’s not a hard lift because he shares my reticence about windmills.”

Beyond permitting, the wind industry also faces possible cuts to tax credits from the 2022 Inflation Reduction Act (aka Climate Act), which Trump has called a “scam.” Developers rushed to begin projects before the new administration took office, securing tax benefits before potential policy changes. But as David Hindman of AlixPartners warned, “All parties — developers, financers, others — are going to want to have more certainty than we have now.”

While offshore wind projects were already contending with rising costs and supply-chain disruptions, the pause has added another layer of risk. Industry advocates stress that projects still in development or under construction are vital to the economy. “They’re providing a key benefit to our economy already,” Frank Macchiarola of the American Clean Power Association, told the WSJ.

Bottom line: For now, wind energy developers are left in a state of paralysis, waiting for regulatory clarity as the Trump administration reshapes America’s energy landscape.

— Tariffs and trade: The shift towards reciprocity. “There is God, country, motherhood, apple pie, and tariffs,” notes Dr. Vince Malanga, president of LaSalle Economics. Until Trump, tariffs never made the list. Recently, a proposed 25% tariff on imports from Colombia, Mexico, and Canada was postponed as these countries made concessions on border security and deportations. Meanwhile, a 10% blanket tariff on China was imposed, though it was smaller than feared. Additionally, a 25% tariff has been levied on steel and aluminum, with potential extensions to vehicles, chips, pharmaceuticals, and lumber. A broader reciprocal tariff policy has been announced and is under review.

“Reciprocity is the new buzzword,” says Malanga. “From our vantage point, it is far preferable to a blanket tariff.” In this context, reciprocity aims to eliminate tariff and non-tariff differentials between the U.S. and its trading partners. Unlike broad tariffs targeting specific nations, this approach focuses on individual products. The Commerce Department is tasked with identifying these disparities by April 1.

A reciprocal tariff regime could be a “win-win,” as Malanga notes, reducing trade friction, expanding global trade, and boosting economic growth and productivity. In contrast to blanket tariffs, this approach may be disinflationary rather than inflationary. Given the Federal Reserve’s sensitivity to inflationary pressures, this policy shift could provide much-needed stability, he observes.

Energy prices play a crucial role in the inflation outlook. Malanga highlights that “weakness in energy prices is important to this forecast as lower costs seep through the entire price structure.” Currently, energy prices sit at the lower end of a prolonged range. A resolution in the Russia/Ukraine conflict could drive them even lower, particularly if sanctions on Russian oil ease. Additionally, OPEC is set to review its production quotas in May, with several members eager to boost output. Meanwhile, U.S. policies are easing restrictions on production and exploration, which could further reduce costs.

Public concern over inflation remains high after years of price increases. The Trump administration has pledged to combat inflation, but tariffs may not align with that goal — at least in the short term, Malanga says. “The public’s patience is not endless,” Malanga warns, stressing that demonstrable progress is essential. Interestingly, tariff revenues are not being factored into congressional budget resolutions, which he sees as a positive sign.

Bottom line: Malanga says ultimately, the administration would be best served by “downplaying tariffs and focusing on spending reductions and an extension of the 2017-18 tax cut.” He concludes a study-based approach to trade reciprocity, rather than immediate implementation, could provide the necessary window to prioritize these economic measures.

— De minimis tax break faces uncertain future. Lobbyists are scrambling to save the de minimis exception, a trade rule allowing duty-free entry for goods under $800. The Trump administration’s attempt to scrap it earlier this month created chaos, only for the president to backtrack after corporate pushback.

The rule’s removal is seen as a way to curb fentanyl imports, but business leaders warn it would increase costs for companies like Amazon and FedEx, potentially reigniting inflation. Critics argue enforcement would require costly government expansion, while supporters claim it closes a loophole benefiting China.

Upshot. With de minimis shipments soaring — 1.36 billion packages arrived in 2024 — its fate remains uncertain as trade hawks and corporations clash over its future.

— Canada, Mexico push to avert Trump’s 25% tariffs amid border, fentanyl talks. Canada and Mexico are ramping up negotiations with the U.S. this week to prevent the implementation of a 25% tariff on their exports, set to take effect on March 4. Both nations have bolstered border security and fentanyl countermeasures, seeking to convince President Trump’s administration that their actions are yielding results. Despite progress, legal experts suggest Trump may keep the tariff threat in place until clear evidence of reduced fentanyl trafficking and illegal migration emerges. Meanwhile, additional tariff threats on steel, autos, and other imports could trigger an early renegotiation of the USMCA trade deal (see next item).

— Canada holds firm on dairy market access ahead of USMCA review. There is no concrete evidence that Canada will offer dairy market concessions in the upcoming USMCA review. However, tensions persist between the United States and Canada over market access, shaping a complex and contentious trade landscape.

Since the USMCA took effect in 2020, U.S. dairy exports to Canada have increased by 34% ($173 million), falling short of the 43.8% ($227 million) forecasted by the U.S. International Trade Commission (ITC). This shortfall is attributed to Canada’s partial compliance with tariff-rate quota (TRQ) allocations, which the U.S. sees as restrictive.

Recent developments

• Dispute panel ruling: In November 2023, a USMCA dispute panel ruled in favor of Canada, allowing it to maintain its current TRQ allocation system, a setback for U.S. dairy interests.
• U.S. concerns persist: Despite the ruling, U.S. trade officials continue to voice concerns about Canada’s approach.
• Potential U.S. retaliation: The Trump administration has announced it will impose 25% tariffs on Canadian and Mexican imports on March 4 (10% on energy from Canada and March 12 startup for tariffs on steel and aluminum), potentially escalating trade tensions.
• Of note: Both New Zealand and Australia have similarly complained about Canada’s definition of the TRQ applications.

With the 2026 USMCA review on the horizon July 2026, dairy market access remains a flashpoint:

• The U.S. is likely to push for stricter enforcement of dairy trade commitments.
• Canada’s Bill C-282, if passed, could further limit its flexibility on market access, strengthening the U.S. negotiating position. (The bill amends the Department of Foreign Affairs, Trade and Development Act to prevent the Minister from making commitments that could increase tariff rate quotas or reduce tariffs on these products. The legislative process was interrupted on Jan. 6, when Prime Minister Justin Trudeau announced the prorogation of Parliament. This action effectively terminated all bills under consideration, including Bill C-282. If the election is called, the bill dies. `Any future efforts to legislate protections for supply-managed sectors will require the introduction of a new bill and the initiation of the legislative process from the beginning.)
• While Canada is unlikely to offer voluntary concessions, sustained U.S. pressure and the threat of trade penalties may shape its stance.

Bottom line: Despite ongoing friction, Canada’s historically strong protections for its dairy industry suggest that any significant policy shift would require substantial leverage or incentives from the U.S.

— Rural small business disaster assistance. The SBA Office of Disaster Recovery and Resilience would have to ensure individuals and small businesses located in rural areas can access the agency’s disaster assistance and loan programs following a declared disaster under HR 804. The office would be directed to provided targeted outreach and marketing materials, among other actions. The bill was referred to the Small Business Committee, which hasn’t acted on it.

— China prioritizes food security amid rising demand. China’s government has emphasized the need to boost grain production to meet growing food demand, despite recent record-high harvests. Han Wenxiu, a director at the Central Rural Work Leading Group, highlighted the rising consumption of meat, eggs, and dairy, which increases demand for animal feed. China, the world’s largest agricultural producer and importer, brought in over 157 million metric tons of grains and soybeans last year while achieving a record 706.5-million-ton grain output. The latest rural policy blueprint underscores self-sufficiency and supply stability, aiming to counter potential trade disruptions with the U.S., EU, and Canada. The agriculture ministry targets a 50-million-ton production increase by 2030, reinforcing China’s commitment to food security amid global uncertainties.

— Researcher: China’s pork demand has no more room for growth. There is no more room for Chinese demand for pork to grow in the future, Zhu Zengyong, a researcher with the state-backed Chinese Academy of Agricultural Sciences said. Current demand in China is stable and unlikely to rise further. Given the current price of pork, it is not recommended that companies expand breeding sow capacity this year and they should instead focus on improving the efficiency of breeding sows, he said. The State Council said it will strictly enforce and supervise pig slaughter and regulate pork production capacity. China’s imports of pork meat and offal shrunk 15.7% last year, a fourth consecutive annual decline, and Zou forecasts imports to further decline in 2025.

— NWS outlook: Atmospheric River bringing heavy rain, gusty winds, and scattered instances of flooding to the Northwest through Monday... ...Showers and thunderstorms with locally heavy rainfall forecast for the Florida Peninsula Monday... ...Temperatures continue to slowly moderate across the southern U.S. as most of the country sees a period of above average, milder temperatures.

(NWS)

24: USDA Chickens & Eggs report
25: Consumer Confidence | USDA Food Price Outlook
27: Durable Goods Orders | GDP | USDA Outlook Forum | Outlook for U.S. Agricultural Trade report
28: Personal Income and Outlays (PCE Price Index) | International Trade in Goods | USDA Outlook Forum concludes

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 |