Trump Threatens 200% Tariff on European Alcohol as Trade War Escalates

Axios: White House to pull CDC director nomination | WOTUS rule rewrite | Federal layoff plans due today

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March 13, 2025 08:14 AM

Updates: Policy/News/Markets, March 13, 2025

— Trump administration moves to dismantle environmental regulations. As we detail in several separate items below, the Trump administration announced a sweeping rollback of environmental protections, including limits on pollution from vehicles and power plants, wetlands protections (WOTUS), and the EPA’s authority to regulate greenhouse gases. EPA Administrator Lee Zeldin reframed the agency’s mission, prioritizing lower energy costs over environmental and public health safeguards. Among the most consequential changes, EPA aims to overturn its legal authority to regulate carbon emissions, a move critics say would undermine efforts to combat climate change. The announcements have drawn praise from industry groups but fierce opposition from environmental advocates and Democrats, who warn of severe consequences for air and water quality, climate policy, and public health.

— Canada hits back with $21 billion in tariffs on U.S. goods. Canada announced new 25% counter-tariffs on approximately C$30 billion ($20.8 billion) worth of U.S.-made goods in direct response to the Trump administration’s global levies on steel and aluminum. The tariffs, which took effect early today, will target U.S. steel, aluminum, and consumer products such as computers and sporting goods. Canadian officials emphasized that the measures mirror the U.S. tariffs “dollar for dollar.” Foreign Minister Mélanie Joly criticized the U.S. tariffs as “unjustified and unjustifiable” and plans to discuss the issue with U.S. Secretary of State Marco Rubio at the upcoming G7 foreign ministers’ meeting. These actions come amid escalating trade tensions, with Prime Minister Justin Trudeau’s government having already placed tariffs on C$30 billion of U.S. products, including alcoholic beverages, cosmetics, and peanut butter.

Canadian Finance Minister Dominic LeBlanc said the government is following a “dollar for dollar” approach in response to Trump’s increased tariffs on steel and aluminum that could cost Canada significant U.S. sales.

The Canadian tariffs, which started at 12:01 a.m. Thursday, will hit steel products worth roughly $8.7 billion ($12.6 billion CAD), aluminum products worth $2.08 billion ($3 billion CAD) and $9.85 billion ($14.2 billion CAD) of additional imported U.S. goods.

— Canada/U.S. trade talks today as Canada seeks tariff relief. Canadian officials, including Finance Minister Dominic LeBlanc, Innovation Minister François-Philippe Champagne, and Ontario Premier Doug Ford, are set to meet today with U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. The discussions will focus on persuading the U.S. to drop tariffs on Canadian goods, particularly steel and aluminum, which have led to retaliatory measures from Canada.

Key topics include potential updates to the USMCA trade pact and efforts to prevent further tariff escalations ahead of the April 2 deadline. However, challenges remain, particularly given President Donald Trump’s hardline stance on tariffs and trade leverage. The meeting aims to ease tensions and stabilize economic relations between the two countries.

Canada needs to let the U.S. build its steel, aluminum for national security purposes, Lutnick said on Bloomberg TV, adding that Canada’s retaliatory tariffs on sporting goods are “tone deaf.” He said the USMCA pact remains intact and added, “If you have enough U.S. content in certain products or it’s actually made domestically, then you can trade between our countries, tax free. That remains intact.” He noted President Trump will describe how to balance trade on April 2.

— Trump: U.S. to retaliate if EU tariffs not removed Immediately. The U.S. will place a 200% tariff on all wines, champagnes and alcoholic products from France and other EU countries, President Trump wrote in a Truth Social post. Trump said he will place the tariff if the EU does not remove its 50% tariff on whiskey. He referred to EU as “hostile” with “abusive taxing.”

Of note: The European Union is requesting to hold consultations with the U.S. at the World Trade Organization over Trump’s steel and aluminum tariffs.

Commerce Secretary Howard Lutnick praised the UK and Mexico for refraining from engaging in tit-for-tat tariff hikes with the U.S., warning that those trading partners that upset President Donald Trump with their responses to American protectionist steps open themselves to a severe reaction. “If you make him unhappy, he responds unhappy,” Lutnick said of Trump’s move Thursday to slap a 200% tariff on European Union alcohol products in reaction to the EU’s retaliation against new U.S. steel and aluminum duties. Trump’s intention is to “break down those walls” preventing American products from coming in, and to build manufacturing capacity in industries crucial to national security, Lutnick said in an interview with Bloomberg Television. Countries that understand that motive and are open to working with the US will get different treatment, he said. “The British didn’t respond, the Mexicans didn’t respond — you have some countries that actually thoughtfully examine how they do business with us,” Lutnick said. For those nations that “go right back to old-school” tit-for-tat measures “the president’s going to deal with them with strength and with power,” he said. Lutnick also said that Canada’s retaliatory measures against U.S. tariff hikes were done out of domestic political considerations, as the American neighbor heads toward elections. “You think it’s about a trade war — this is their way of getting election votes,” Lutnick said.

— Mexico holds off on tariff retaliation amid U.S. negotiations. Mexico is holding back on retaliatory tariffs against the U.S. as President Claudia Sheinbaum opts for diplomacy over immediate action. While Canada and the EU imposed counter-tariffs following U.S. steel and aluminum levies, Sheinbaum prefers to wait until President Trump finalizes a decision on broader 25% tariffs on Mexican imports, expected by April 2. Mexico’s Economy Minister Marcelo Ebrard is currently in Washington for negotiations.

Meanwhile, Brazil is also taking a measured approach, prioritizing talks before considering reciprocal tariffs.

Also: Vietnam’s top trade official is heading to the U.S. in a bid to persuade Trump’s team that Hanoi is serious about resetting trade ties, to avert tariffs that could rattle its export-driven economy.

— U.S. food companies seeking exemptions on tariffs. Several packaged food companies are seeking targeted exemptions from the tariffs that target items not produced in the U.S., according to Reuters, with the firms focusing on products like cocoa and fruit.

— Trump defends tariff shifts as ‘flexibility’ amid market jitters. President Donald Trump on Wednesday rejected claims that his shifting tariff policies reflected inconsistency, instead arguing they demonstrated “flexibility.” Speaking in the Oval Office, Trump defended his recent exemptions and delays, particularly for auto parts from Mexico and Canada, after pressure from U.S. automakers. “There’s no inconsistency,” Trump said. “I have the right to adjust.” His tariff strategy has unsettled financial markets, with traders wary of its unpredictability. Trump reaffirmed that April 2 would mark a major step in imposing reciprocal tariffs on nations levying duties on U.S. goods. Recent moves include steel and aluminum tariffs, as well as threats to target sectors like cars, pharmaceuticals, and semiconductors.

— EPA to revise WOTUS rule for clarity and cost reduction. EPA Administrator Lee Zeldin announced that the agency will revise the definition of “waters of the United States” (WOTUS) in coordination with the U.S. Army Corps of Engineers. The goal is to streamline permitting, cut compliance costs, and align regulations with the Supreme Court’s Sackett v. EPA ruling. The revised rule aims to provide clarity for farmers, landowners, and businesses while maintaining protections for navigable waters. The review process will include stakeholder input and prioritize state-level decision-making to balance environmental protection with economic growth. “We are pursuing a definition that is simple, that is durable, and it will withstand Zeldin during a Wednesday event at the agency’s headquarters with Republican lawmakers and business leaders said, “Our goal in going through this process is not to be an activist. This is to simply follow the rule of law, to follow the Constitution, to listen to the stakeholders and to make the right decision for the American people.”

EPA will seek public input as it undertakes the rulemaking process to revise the 2023 definition of WOTUS with a focus on clarity, simplicity and improvements that will stand the test of time. EPA also said that while the rulemaking process takes place, the agency will provide guidance to those states implementing the pre-2015 definition of WOTUS. EPA unveiled a request for recommendations (link to the pre-publication version) that will be published in the Federal Register that seeks serves as a notice to gather information inform actions to clarify the definition of WOTUS guided by the U.S. Supreme Court decision.

The agency intends to hold at least six listening sessions in late March and early April — two open to all stakeholders, one open to States, one open to Tribes, one open to industry and agricultural stakeholders, and one open to environmental and conservational stakeholders. EPA and the Corps also released a document (link) outlining the joint guidance on continuous surface connection relative to WOTUS.

Rep. Doug LaMalfa (R-Calif.) said at the event that the Biden and Obama administrations caused chaos and confusion for farmers and ranchers with even tiny waterways on their properties. “It’s not every mud puddle that they should regulate,” LaMalfa said. “If you can float a rubber duck in it for a half-hour after the rain, that does not mean this is something they can regulate.”

Zippy Duvall, president of the American Farm Bureau Federation, praised the move, which comes as many farmers face uncertainty due to Trump’s tariffs and trade decisions. “This is a first big step in a very difficult farm economy that gives farmers and ranchers hope — hope that good things are going to happen in the future,” he said.

— Canceled climate grants. EPA said that it was canceling $20 billion in grants for climate and clean energy programs that have been frozen for weeks. Lee Zeldin, the EPA’s administrator, has tried to claw back the grants given to eight nonprofits through the 2022 Inflation Reduction Act (Climate Act).

— Is Russia open to U.S. talks on Ukraine ceasefire proposal? A top Russian negotiator dismissed a proposed 30-day cease-fire in Ukraine, arguing it would allow Kyiv to regroup. The Wall Street Journal reports that Yuri Ushakov, a senior aide to President Vladimir Putin, stated that Russia aims for a “long-term peaceful resolution” and accused the proposal of being a mere “time-out” for Ukrainian forces. Meanwhile, Russian troops continue their push to reclaim territory in the Kursk region, where they recently retook the key town of Sudzha. The rejection comes as U.S. special envoy Steve Witkoff prepares to meet with Russian officials in Moscow.

Reuters reports that Russian Foreign Ministry spokeswoman Maria Zakharova stated that Russia is prepared to discuss a peace initiative between the United States and Ukraine, with potential talks as soon as today. This follows discussions in Saudi Arabia where Ukraine expressed willingness for a 30-day ceasefire, and the U.S. relayed the proposal to Moscow. The Kremlin also confirmed that U.S. negotiators were en route to Russia.

Of note: Putin’s surprise trip to Kursk, a Russian-occupied region near the Ukrainian border, appears aimed at reinforcing Russia’s territorial claims and bolstering troop morale. His presence in military uniform underscores the Kremlin’s portrayal of the war as a patriotic struggle. Meanwhile, Russia’s recapture of Sudzha, a key town in Kursk, significantly weakens Ukraine’s bargaining position. If Kyiv loses all territorial footholds inside Russia, its leverage in negotiations diminishes. If Putin agrees to the ceasefire, it could signal a tactical pause rather than an end to hostilities, allowing Russia to consolidate gains. If he rejects it, Russia may be preparing for a larger offensive, using its recent battlefield momentum to push deeper into Ukraine. The ceasefire’s effectiveness depends on whether both sides see it as a genuine step toward peace or merely a temporary repositioning.

PERSONNEL

— Axios: White House to pull CDC director nomination. The White House is withdrawing the nomination of Dave Weldon to be the director of the Centers for Disease Control and Prevention, Axios reports, citing a source close to the Senate health committee and another source familiar. The former Florida congressman was scheduled to appear before the committee this morning for his confirmation hearing. But his anti-vaccine views have garnered attention since he was nominated months ago and were sure to play a prominent role in questioning. Weldon is an internal medicine doctor who served in the House of Representatives from 1995 through 2009. While in Congress, he was one of the sponsors of a bill that would have banned mercury from vaccines.

— Federal layoff plans are due today. President Trump has ordered government organizations to present proposals for “initial agency cuts and reductions,” a deadline that Politico reports is being met with dread inside several departments. The Trump administration has instructed agencies to prepare for “large-scale reductions in force,” which could lead to substantial layoffs and the elimination of job positions. This process is expected to continue over the next few months, with further plans due in April. There have been legal challenges to some of the layoffs, particularly those involving probationary employees. A federal judge has temporarily blocked some of these firings, citing potential illegality.

Of note: Thousands of USDA employees have been terminated, primarily probationary workers. However, a federal civil service board has ordered the temporary reinstatement of over 5,600 of these employees due to potential violations of federal regulations. Critics charge the layoffs have impacted USDA’s ability to perform critical functions such as responding to the avian flu outbreak, processing farm loans, and providing disaster relief. Former employees report that these terminations have stalled projects like irrigation systems and rural housing initiatives.

FINANCIAL MARKETS

— Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to weaker openings.

Equities yesterday: The Dow finished lower after a late drop into negative territory while the Nasdaq and S&P 500 ended higher, with only the Nasdaq trading in positive territory throughout the session. The Dow ended down 82.55 points, 0.20%, at 41,350.93. The Nasdaq gained 212.35 points, 1.22%, at 17,648.45. The S&P 500 rose 27.23 points, 0.49%, at 5,599.30.

— Trump’s high-stakes gamble: Will Americans endure economic pain for manufacturing revival? President Trump’s aggressive tariff strategy — targeting Canada, Mexico, China, and the European Union — is a bold economic and political bet. He argues that short-term economic disruptions are a necessary sacrifice for long-term industrial revitalization. However, analysts note that history suggests a mixed record, with past tariffs often leading to job losses and higher costs. While Trump sees tariffs as a tool for leverage, revenue, and re-industrialization, retaliatory measures from trade partners and slow domestic manufacturing growth may test voters’ patience. As the U.S. potentially heads into a recession, the ultimate question remains: will Americans endure economic hardship for Trump’s vision of restored manufacturing dominance? Link to more on this via the New York Times.

— U.S. producer prices stall in February amid service sector decline. U.S. producer prices remained flat in February 2025 after a revised 0.6% rise in January, falling short of the expected 0.3% gain. This marks the lowest rate in seven months, driven by a 0.2% drop in services prices — the steepest decline since July 2024 — led by falling margins in machinery and vehicle wholesaling. Meanwhile, goods prices rose 0.3%, with a 53.6% surge in chicken egg prices contributing significantly. Year-over-year, producer prices rose 3.2%, down from January’s 3.7% and below the 3.3% forecast. Core PPI fell 0.1% monthly and 3.4% annually, missing expectations.

— $1.1 trillion budget deficit fuels tax debate. The U.S. budget deficit has surged to $1.15 trillion for the first five months of the fiscal year, marking a 17% increase from the prior year. February alone saw a $307 billion shortfall, driven by rising Medicare costs and debt servicing. The growing deficit complicates President Donald Trump’s efforts to extend his 2017 tax cuts, set to expire this year. While fiscal conservatives may push for spending cuts, supporters warn that failing to extend the tax cuts could hurt economic growth. Revenues have risen modestly, but spending on Medicare, Social Security, and interest payments continues to climb.

Details: For the fiscal year to date, revenues came in at $1.89 trillion, up an adjusted 2% on 2024. Outlays totaled $3.04 trillion, and were up 7% after accounting for calendar differences. Among the categories showing the biggest increases in spending was the Medicare program, where costs for the past five months climbed by $124 billion from the prior fiscal year, to $518 billion. Interest on the public debt increased by $45 billion to $478 billion. Social Security outlays rose by $49 billion to $663 billion.

AG MARKETS

— Ag markets today: Traders to the ca

Grains firmer overnight. Corn, soybeans and wheat posted corrective gains during the overnight session. As of 7:30 a.m. ET, corn futures were trading 1 to 3 cents higher, soybeans were 6 to 8 cents higher, and wheat was 4 to 8 cents higher. The U.S. dollar index was up around 125 points and front-month crude oil futures were trading just below unchanged.
Slow start to cash cattle trade. So far, only light cash cattle activity has been reported in Kansas at $200.00, roughly steady with week-ago. With the strength in cattle futures, most feedlots continue to hold out for higher prices, though packers remain reluctant to raise bids given highly negative margins.
Cash hog index ends skid. The CME lean hog index is up 7 cents to $89.77 as of March 11, ending a five-day price slide. The pork cutout fell $3.00 to $94.58 on Wednesday, led lower by a $13.25 decline in primal bellies. April lean hog futures finished Wednesday $3.27 below today’s index quote.

— Ag trade: South Korea purchased a total of 262,000 MT of corn in three separate tenders — 132,000 MT to be sourced from the U.S., South America or South Africa, 65,000 MT to be sourced from the U.S. or South America and 65,000 MT optional origin. South Korea also tendered to buy up to another 140,000 MT of corn to be sourced from the U.S., South America or South Africa. Bangladesh tendered to buy 50,000 MT of optional origin non-basmati parboiled rice.

— U.S. ag export sales activity to China continues to slow. USDA weekly Export Sales data for the week ended March 6 included no sales activity for corn or wheat, net sales of 1,500 metric tons of sorghum, 208,299 metric tons of soybeans, and net reductions of 39,070 running bales of upland cotton. For 2025, USDA reported net sales of 2,494 metric tons of beef and 166 metric tons of pork.

— Record harvest fuels fertilizer demand in Brazil. Brazil’s fertilizer industry is poised for growth as a record grain harvest boosts demand for soil nutrients. According to Eduardo Monteiro, head of Mosaic’s Brazil and Paraguay operations, the increased nutrient extraction from the soil will drive fertilizer sales for the next planting season. In 2024, Brazil delivered 45.6 million tonnes of fertilizer, the second-highest volume on record. Monteiro expects deliveries to reach a new record of 46 million tonnes. Meanwhile, Brazil’s grain harvest for 2024-25 is projected by Conab at 325.7 million tonnes, a 9.4% increase over the previous season. Stronger corn prices and a favorable grain-to-input exchange ratio further support fertilizer demand, with soybean and corn farmers accounting for 60% of total usage.

— China expects record soybean imports in second quarter. China is poised to receive record soybean imports in the second quarter after delayed Brazilian shipments and slow customs clearances have caused supply tightness that forced several processors to halt operations. China is forecast to import a record 31.3 MMT of soybeans from April to June, according to a Reuters survey, up 1.39 MMT (4.6%) from the same period last year. According to data from China-based consultancy Mysteel, soybean inventories at Chinese ports shrank to 4 MMT as March 7, a decrease of 600,700 MT from the previous week and down 892,500 MT from last year. Tight supplies have driven crush margins in processing hub of Rizhao to more than 450 yuan ($62.19) per metric ton.

— Exchange lowers Argentine soybean, corn crop forecasts. The Rosario Grain Exchange cut its Argentine crop estimates due to impacts from heat and dryness stress. The exchange forecasts soybean production at 46.5 MMT, down 1 MMT from its prior outlook. It cut the Argentine corn crop estimate 1.5 MMT to 44.5 MMT.

— IKAR further reduces Russian wheat export forecast. IKAR consultancy lowered its 2024-25 Russian wheat export forecast another 1.5 MMT to 41 MMT. The consultancy said exports could reach 42.5 MMT under a best-case scenario or fall to 38.5 MMT under a worst-case outcome — depending on the ruble and export price fluctuations.

— Agriculture markets yesterday:
• Corn: May corn fell 9 1/2 cents to $4.60 3/4, closing below the 10- and 100-day moving averages.
• Soy complex: May soybeans fell 10 3/4 cents to $10.00 1/2, nearer the daily low and closed at 2.5-month low close. May soybean meal lost $1.60 to $300.20 and nearer the daily low. May soybean oil fell 25 points to 41.68 cents, nearer the session low and hit a nine-week low.
• Wheat: May SRW wheat fell 2 3/4 cents to $5.54, while May HRW wheat rose a penny to $5.73, each forging high-range closes. May HRS futures fell 2 3/4 cents to $5.94 1/2.
• Cotton: May cotton rose 98 points to 66.98 cents and near the daily high.
• Cattle: April live cattle futures climbed $1.85 to $201.40. April feeder futures jumped $3.025 to $280.725.
• Hogs: April lean hog futures fell a nickel to $86.50 and closed near mid-range.

ENERGY MARKETS & POLICY

— Oil prices steady amid demand hopes and economic uncertainty. Oil prices remained stable on Thursday after a strong rally driven by a larger-than-expected drop in U.S. gasoline stocks. Brent crude edged up to $71.12 per barrel, while WTI rose to $67.81. Markets balanced near-term demand expectations — supported by a 5.7-million-barrel decline in U.S. gasoline inventories — against broader economic concerns, including the impact of ongoing trade tensions. President Trump’s renewed tariff threats on the EU fueled fears of a global slowdown, while OPEC+ struggles with production compliance. Despite pressures from weaker jet fuel demand, global oil consumption continues to expand, averaging 102.2 million barrels per day, exceeding projections. Analysts at Citi predict Brent could fall to $60 per barrel by late 2025.

— Oil prices rose Tuesday on stronger demand, weaker dollar. Oil prices climbed 2% on Wednesday as U.S. data showed smaller-than-expected crude inventory builds and larger-than-anticipated fuel draws, signaling strong demand. Brent settled at $70.95 (+$1.39, 2%), while WTI rose to $67.68 (+$1.43, 2.2%). Crude stockpiles increased by 1.4 million barrels, below the expected 2 million. Gasoline inventories dropped sharply by 5.7 million barrels, far exceeding the forecasted 1.9 million. A weaker U.S. dollar, which fell to a five-month low, further supported prices by making crude cheaper for foreign buyers. Despite OPEC maintaining its 2025 oil demand growth forecast, concerns over U.S. tariffs, inflation, and recession risks kept market sentiment cautious. OPEC+ production rose by 363,000 bpd in February, driven mainly by Kazakhstan exceeding its quota.

— IEA lowers 2025 oil demand growth forecast amid economic uncertainty. The International Energy Agency (IEA) revised its 2025 oil demand growth forecast downward to 1 million barrels per day (bpd), a reduction of 70,000 bpd from its previous estimate. This could increase the oil surplus to 600,000 bpd. If OPEC extends its unwinding of output cuts, the surplus could grow by another 400,000 bpd. The IEA cited worsening macroeconomic conditions, including escalating trade tensions involving the U.S., as key factors behind the revision. Meanwhile, oil supply is expected to grow by 1.5 million bpd, doubling 2024’s pace, posing a challenge for OPEC+ as it navigates output decisions amid slowing demand growth.

— EPA reconsiders Biden/Harris Clean Power Plan 2.0. The Environmental Protection Agency (EPA) under Administrator Lee Zeldin announced a reconsideration of the Biden/Harris Administration’s Clean Power Plan 2.0, citing concerns over regulatory overreach and economic impact. The move aligns with the Trump administration’s broader efforts to deregulate the energy sector, ensuring affordable and reliable electricity while adhering to Supreme Court precedent. Critics of the 2024 rule argue it mirrors the previously struck-down Clean Power Plan by attempting to shift the nation’s energy mix. The decision is part of a broader push to implement President Trump’s executive orders aimed at deregulation and energy independence.

Of note: Zeldin announced the agency will undertake 31 historic actions (link) “in the greatest and most consequential day of deregulation in U.S. history, to advance President Trump’s Day One executive orders and Power the Great American Comeback.” Through the Administrative Procedures Act, EPA is re-evaluating policies enacted last year by the Biden administration meant to reduce emissions for light, medium and heavy-duty vehicles. The estimated regulatory and compliance cost of the current rules comes to $700 billion.

CONGRESS

— Schumer vows to block GOP shutdown prevention plan. Senate Minority Leader Chuck Schumer (D-N.Y.) stated that Democrats will block a Republican bill aimed at preventing a government shutdown, urging the GOP to support a Democratic proposal for a 30-day interim funding measure instead. With 60 votes needed to advance legislation in the Senate and Republicans holding only 53 seats, Schumer asserted that the GOP lacks the votes to push their bill through. “Funding the government should be a bipartisan effort but Republicans chose a partisan path, drafting their [continuing resolution] without any input — any input — from congressional Democrats,” Schumer said on the Senate floor Wednesday.”

House Republicans passed their funding measure on Tuesday, which extends government funding through Sept. 30 but has drawn Democratic opposition for not curbing Elon Musk’s cost-cutting measures. Senate Republicans insist no alternative exists beyond the House-passed bill. House Republicans left town after passing the six-month funding bill.

Next steps: Senate Majority Leader John Thune (R-S.D.) filed cloture on the House-passed CR Wednesday night, the first step in bringing this partisan showdown to a head. Thune set up a cloture vote for Friday. A time agreement would be necessary in order to avert at least a temporary shutdown. Two possible paths:

Scenario 1: A theatrical compromise. Democrats may agree to provide votes for cloture in exchange for a vote on their own 28-day continuing resolution (CR), extending funding until April 11. This allows Democrats to publicly oppose a shutdown while allowing Republicans to pass their own CR. The Democratic CR is unlikely to pass, sources signal, but serves as a symbolic gesture to their base. Thune is reportedly open to discussing amendment votes but hasn’t received a formal offer yet. Democrats argue that a shutdown now would be particularly damaging, and they see a short-term CR as a way to continue negotiations on a full-year funding bill. But prior bipartisan negotiations collapsed due to disagreements over restricting Trump’s spending power, and the House has already adjourned.

Scenario 2: Democrats hold the line, leading to a shutdown. Some key Democratic senators have signaled they will vote against cloture, reducing the chances of passing the House GOP’s CR. A government shutdown would not have an immediate effect — its full impact wouldn’t be felt until Monday. The Trump administration could make the shutdown particularly painful for Democrats by deciding which agencies and services stay open. Democrats face a dilemma: either hold out and try to force Republicans back to the table or eventually cave to end the shutdown. Trump and Musk could exploit the shutdown to justify federal layoffs, a key concern for Democrats.

Bottom line: Democrats face a choice between a largely symbolic compromise or a risky shutdown that could backfire. While they hold some leverage due to the ticking clock, Republicans appear willing to let the shutdown happen, betting that Democrats will eventually fold.

U.S. government shutdowns from 1995-1996 to the present:

POLITICS & ELECTIONS

— Sen. Jeanne Shaheen to retire in 2026, citing need for new leadership. Sen. Jeanne Shaheen (D-N.H.) announced she will not seek re-election in 2026, stating that Democrats need a new generation of political leaders. The 78-year-old senator and former governor acknowledged that the decision was difficult, particularly given the current political climate. Her departure could impact Democrats’ efforts to regain control of the Senate. Senate Democrats are already defending open seats in the battleground states of Michigan and Minnesota — Sens. Gary Peters (D-Mich.) and Tina Smith (D-Min.). Shaheen has served in the Senate since 2009 and was the first woman elected governor of New Hampshire. She is currently the top Democrat on the Foreign Relations Committee and has led the party’s response to the shuttering of USAID.

Early expected Democratic candidates include Reps. Chris Pappas (D-N.H.) and Maggie Goodlander (D-N.H.). Former Republican governor Chris Sununu is among those eyeing the competitive race. Another GOP possibility is Scott Brown, the former Massachusetts senator who later moved to New Hampshire. The last Republican senator from New Hampshire was Kelly Ayotte, who lost re-election in 2016. President Donald Trump lost the state by 3 percentage points last year.

— Report: Buttigieg to bow out of Senate bid, eyes 2028 presidential run. Pete Buttigieg is set to announce that he will not run for Michigan’s open Senate seat, a move widely seen as preserving his prospects for a 2028 presidential campaign. According to Politico, allies framed the decision as a strategic effort to avoid tough electoral battles in 2026 and 2028 while keeping his political ambitions intact. His absence from the Senate race leaves Democrats scrambling to secure a candidate for the critical swing-state seat.

FOOD & FOOD INDUSTRY

— Trump EPA moves to reduce grocery costs by reconsidering refrigeration rule. EPA Administrator Lee Zeldin announced that the agency is reconsidering a regulation requiring specific refrigeration technologies, which has contributed to rising food costs. The move aligns with President Trump’s broader efforts to lower living expenses and bolster American energy. Zeldin emphasized a “commonsense approach” to environmental protection while also noting the rule’s impact on semiconductor manufacturing, a critical industry for the U.S.’ AI leadership. This initiative is part of Zeldin’s “Powering the Great American Comeback” strategy.

CHINA

— China’s central bank vows appropriate and timely measures to ensure liquidity. The People’s Bank of China (PBOC) said it would cut interest rates and the bank reserve requirement ratio at the appropriate time to maintain ample liquidity. PBOC also vowed to strengthen guidance on expectations and drive the lowering in social financing costs.

HPAI/BIRD FLU

— Study reveals widespread H5N1 infection in cattle. A new study indicates that the H5N1 bird flu virus is more prevalent in dairy cows than previously reported. Scientists have identified a concerning genetic mutation, PB2 E627K, in four dairy cow herds nearly a year after the virus was first detected in Texas cattle. This mutation, linked to increased mammal-to-mammal transmission, was also found in the first human case — a Texas dairy worker — last March. The outbreak has led to 70 human infections and one fatality. Since the initial cases, nearly 1,000 dairy herds have been affected, with California reporting the highest number of infections. Link for more info via the Los Angeles Times.

WEATHER

— NWS outlook: Severe Weather outbreak probable across Mississippi Valley and parts of Ohio/Tennessee Valleys on Friday... ...Storm system brings unsettled weather to the West... ...Critical Fire Weather Risk over parts of the Southern Plains for the rest of the week... ...Warm temperatures across the Central and Eastern U.S.

KEY DATES IN MARCH

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

LINKS