Trump’s Tariffs Are Adding Up, But Some Still Think They Are Just ‘Leveraging’

EQIP woes | China hits back with tariffs | U.S. foreign aid | India’s leader to meet with Trump

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February 10, 2025 08:09 AM

Updates: Policy/News/Markets, Feb. 10, 2025

Other topics include: (1) Trump says he will announce 25% tariffs on all imports of steel and aluminum today; (2) Australia seeks U.S. tariff exemption, citing jobs and defense ties; (3) Sen. Joni Ernst: USAID must answer for mismanagement and secrecy; (4) Trump says Elon Musk’s gov’t-efficiency push may have found irregularities in Treasuries; (5) Gabbard and Kennedy (maybe Rollins) set for crucial confirmation votes this week; (6) Report on state of America’s land, water and wildlife halts with Trump executive order; (7) U.S. penny’s days are numbered as Treasury pushes to halt production; (8) McDonald’s Q4 2024: Modest sales growth amid boycott pressures; (9) Gold prices hit new all-time highs; (10) Indian sugar mills close early, driving up local prices; (11) Brazil’s January bean, corn exports well below year-ago; (12) IKAR cuts Russian wheat export, production forecasts; (13) Oil prices rebound amid tariff and trade uncertainty; (14) Europe faces new energy crisis amid soaring gas prices; (15) Baltic states successfully disconnected from Russia’s electricity grid this weekend; (16) Overview of Trump’s various tariff actions and threats; (17) High-stakes GOP budget battle; (18) Republicans surge in voter registration, sounding alarms for Democrats; (19) Scott’s 55-seat Senate GOP strategy for 2026 elections; (20) Russia awaits “satisfactory” proposals for Ukraine peace talks; (21) Chinese President Xi Jinping has accepted Russia’s invitation; (22) China vows to boost consumption and wages; and (23) Chinese ports see record traffic in January ahead of U.S. tariffs, holiday.

— Trump says he will announce 25% tariffs on all imports of steel and aluminum today (Feb. 10). President Trump, speaking to reporters Sunday on Air Force One, said the tariffs will apply to the metal imports from all countries. He didn’t specify when the duties would take effect. This marks a significant escalation in his trade policy. These new tariffs appear to be in addition to existing duties on metals from certain countries. Canada stands to lose big. The country is a major supplier of both steel and aluminum to the U.S.; the Canadian dollar fell this morning versus the greenback (see charts below for details.) Also, check the Trade Policy section for a handy table on tariffs announced, proposed or threatened.

Of note: Nick Pinchuk, the CEO of the toolmaker Snap-on, compared the turmoil to “being on Space Mountain at Disney World.”

Trump also plans to announce “reciprocal tariffs” later in the week, likely on Tuesday or Wednesday. These reciprocal tariffs would match duties imposed by other countries on U.S. goods, following Trump’s “if they charge us, we charge them” approach.

During his first term, Trump imposed 25% tariffs on steel and 10% on aluminum in 2018, citing national security concerns. Some trading partners were later granted duty-free quotas.

The new tariffs come shortly after Trump imposed an additional 10% tariff on all goods imported from China.

The proposed tariffs are expected to have significant economic consequences:
· They may raise costs for U.S. manufacturers who import steel and aluminum.
· Consumer prices could increase due to higher production costs.

The U.S. steel industry has been seeking protection, citing renewed import competition affecting profits and production. However, downstream industries that use steel and aluminum in their production processes may be negatively impacted.

China has already retaliated against recent U.S. tariffs by imposing duties on certain chips and metals and launching investigations into U.S. companies. Other affected countries may also consider retaliatory measures.

Of note: Link to how USTR nominee Jamieson Greer responded to lawmakers questions.

— Australia seeks U.S. tariff exemption, citing jobs and defense ties. Australia’s Trade Minister Don Farrell emphasized that Australian steel and aluminum exports to the U.S. support “thousands of good paying American jobs” and play a critical role in shared defense interests. His comments come as Australia presses for an exemption to President Donald Trump’s newly announced 25% tariffs on all steel and aluminum imports, which escalate his trade policy overhaul.

Australia, a key U.S. Indo-Pacific ally, hopes to secure the same exemption it received in 2018. Australian officials have been lobbying U.S. counterparts for months, with Prime Minister Anthony Albanese set to discuss the issue with Trump. Meanwhile, Defense Minister Richard Marles recently met with his U.S. counterpart, highlighting Australia’s $500 million contribution to U.S. submarine production under the AUKUS pact.

Facts and figures. Australia shipped $275 million worth of aluminum to the U.S. in 2024 and $237 million of steel products in 2023, according to UN trade data.

— China hits back with $14 billion in tariffs amid trade war escalation. China’s tariffs on $14 billion worth of U.S. exports were set to take effect Monday, following President Donald Trump’s 10% tariff hike on all Chinese goods. Hopes for talks between Trump and Chinese President Xi Jinping failed to materialize, with Chinese analysts suggesting the short negotiation window set by Trump may have backfired, some Chinese analysts told the Financial Times. Beijing’s retaliatory duties target U.S. manufacturing and energy sectors, which could hit Republican-leaning states hardest, according to analysts.

— Trump says Elon Musk’s gov’t-efficiency push may have found irregularities in Treasuries and “maybe we have less debt than we thought.” Earlier, DOGE gained read-only access to Treasury’s accounting data, days after a judge blocked some access to other information amid more than 40 legal challenges to the administration. Link to more via Bloomberg.

— Sen. Joni Ernst: USAID must answer for mismanagement and secrecy. Sen. Joni Ernst’s (R-Iowa) Wall Street Journal commentary (link) criticizes the U.S. Agency for International Development (USAID) for what she describes as rogue behavior, lack of transparency, and wasteful spending. According to Ernst, USAID dodges congressional scrutiny, making it nearly impossible to track how billions of taxpayer dollars are used. Her investigation revealed that some funds intended for humanitarian aid were instead diverted to questionable projects like sending Ukrainian models to fashion weeks in New York and Europe, promoting tourism in Lebanon, and encouraging farming in Afghanistan, which allegedly led to increased poppy cultivation.

Ernst also highlights USAID’s role in funding bat virus research at the Wuhan Institute of Virology, using pass-through organizations like EcoHealth Alliance to avoid disclosing the grants. She connects this to suspicions about the lab’s role in the origin of Covid-19.

Additionally, she alleges USAID-funded programs have inadvertently supported sex traffickers and violent terrorist groups.

The senator calls for greater accountability and transparency, arguing that USAID is not only wasting taxpayer money but possibly endangering global security through its actions.

— U.S. foreign aid: A WSJ deep dive into spending and strategic shifts. The U.S. has long been the world’s largest funder of foreign aid, with nearly $65 billion allocated in 2023 alone, according to a Wall Street Journal in depth report (link). While traditionally aimed at supporting education, health, human rights, and humanitarian assistance, a significant portion also strengthened militaries in allied nations and addressed global challenges like opioid production and fossil fuel reduction.

During the early week of Trump 2.0, the U.S. Agency for International Development (USAID) — which historically oversaw two-thirds of foreign assistance — was significantly dismantled, raising questions about oversight and program continuation. A 90-day freeze on most foreign aid followed, with a partial waiver granted for lifesaving humanitarian projects.

Key highlights:
· Biggest aid areas: Economic development, humanitarian assistance, peace and security, and health received the most funding.
· Global comparisons: While the U.S. spent more in total than other countries, it ranked lower as a percentage of its national income (0.24%).
· Top recipients: Ukraine ($17.2B), Israel ($3.3B), Jordan, and Egypt were major recipients, reflecting both humanitarian needs and strategic U.S. interests.
· Pepfar success: Since its launch in 2003, the U.S.-funded President’s Emergency Plan for AIDS Relief (Pepfar) has saved 26 million lives and transformed HIV from a death sentence to a manageable chronic disease.

Despite successes, U.S. aid efforts have faced setbacks in regions like Africa’s Sahel, where U.S.-trained militaries were toppled by coups, leading new regimes to pivot toward Russia.

— Gabbard and Kennedy set for crucial confirmation votes this week. Senate Republicans are gearing up for a second consecutive week focused on confirming President Donald Trump’s Cabinet nominees, with high-stakes votes for two of the more controversial picks — former Rep. Tulsi Gabbard and Robert F. Kennedy Jr.

Gabbard’s nomination as director of national intelligence is up first, with a key procedural cloture vote tonight. If successful, her confirmation could happen late Tuesday or early Wednesday. While GOP Sens. John Curtis (Utah) and Mitch McConnell (Ky.) remain potential swing votes, Gabbard is expected to secure approval.

Next, the Senate will pivot to Kennedy’s nomination to lead the Health and Human Services (HHS) Department. Despite lingering opposition from McConnell, Kennedy’s confirmation seems likely, especially with Sen. Bill Cassidy (R-La.) now supporting him.

Additional nominations in line for possible votes this week include Brooke Rollins for USDA secretary, Howard Lutnick for Commerce secretary, and former Sen. Kelly Loeffler (R-Ga.) for Small Business administrator.

Meanwhile, the Senate Judiciary Committee is set to vote Thursday on Kash Patel’s nomination for FBI director. Although Democrats delayed the process for a week, Patel appears poised to advance despite scrutiny over his financial ties to Chinese and Russian entities.

Link to more on The Week Ahead in Washington.

— India’s leader Narendra Modi will be in Washington Feb. 13 to meet with his American counterpart Donald Trump after the U.S. deportation of undocumented Indians sparked protest by Modi’s opposition rivals. An estimated 725,000 Indians make up the third-largest group of unauthorized immigrants after Mexicans and Salvadorans, according to a Pew Research Center analysis. Those from China totaled 375,000, while there were 130,000 from the Philippines, the data shows.

The foreign ministries of China and India said in late January their countries would take in repatriates as long as their nationalities and documents are verified, without sharing details of how many deportees they’ll accept. Early public reactions in India to the first deportation flight were broadly negative, with social media commentators lamenting that the deportees were obliged to make the lengthy journey in handcuffs and shackles.

During the visit, Modi and Trump are expected to hold bilateral meetings in both restricted and delegation-level formats. The discussions are likely to focus on several key areas:
· Trade and tariffs
· Defense cooperation
· Energy collaboration
· Technology partnerships
· Immigration issues

Some reports note Trump may host a dinner for Modi during the visit. While not yet confirmed, there are also proposals for Modi to meet with U.S. business executives, including Tesla CEO Elon Musk.

— A first-of-its-kind report on the state of America’s land, water and wildlife was weeks from completion when Trump ended the effort by executive order. Key experts are figuring out how to finish and publish it anyway, according to the New York Times. Link for details.

— U.S. penny’s days are numbered as Treasury pushes to halt production. President Trump has instructed the Treasury Department to stop minting pennies as part of his cost-cutting agenda. While the move would require an act of Congress, bipartisan support could materialize this time, with other countries like Canada, Australia, and New Zealand already phasing out one-cent coins. Inflation and rising production costs further strengthen the case for eliminating the penny.

Pennies are inefficient for commerce, slow down transactions, and aren’t universally accepted by vending machines, toll booths, or parking meters. Most notably, it costs nearly three times a penny’s value to produce one, despite the switch to cheaper zinc in 1982.

Artazn, the sole supplier of penny blanks, has backed a strong pro-penny lobby. The company, now owned by private equity, indirectly profits from keeping the coin in circulation, as does Coinstar, which recycles billions of pennies annually.

Will nickels be next? Some advocate for rounding prices to the nearest 5 or 10 cents, which would target the nickel. With production costs of 13.78 cents per nickel, eliminating it could bring more savings. However, no U.S. coin has been withdrawn since the half-cent was discontinued in 1857.

FINANCIAL MARKETS

— Equities today: Asian and European shares were mixed to firmer in trading overnight. In Asia, Japan flat. Hong Kong +1.8%. China +0.6%. India -0.7%. In Europe, at midday, London +0.6%. Paris +0.3%. Frankfurt +0.3%. U.S. stock indexes are set to open higher. U.S. stock index futures rose, with steelmakers leading gains after President Donald Trump announced new 25% tariffs on all steel and aluminum imports, on top of existing duties. He also mentioned reciprocal tariffs would be imposed on countries matching their tariffs. A Barron’s article says stock markets think Trump is crying wolf on more tariffs.

Steel and aluminum stocks rallied:

U.S. Steel surged 9.7% after Nippon Steel reportedly considered buying it.
Cleveland-Cliffs jumped 12%; Nucor rose nearly 10%.
Aluminum producer Alcoa was up 6.2%.

Of note: Economists at Jefferies noted that market volatility is likely from these announcements but expected the tariffs might not be as damaging as feared. However, the fast pace of U.S. tariffs are causing some economists to start re-evaluating their impact on the economy, with some warning that the risks to growth are front-loaded. Meanwhile, immigration restrictions are set to shave 0.3 to 0.4 percentage points off potential gross domestic product growth this year, according to Goldman Sachs.

Equities Friday and for the week: On Friday, the major U.S. stock indexes experienced significant declines: The Dow by 444.23 points, 0.99%, to 44,303.40. The S&P 500 declined 57.58 points, 0.95%, at 6,025.99. The Nasdaq dropped 268.59, 1.36%, at 19,523.40. For the week, the Dow fell approximately 0.5%, the S&P 500 declined about 1%, and the Nasdaq had the largest weekly decline, falling approximately 1.4% for the week.

Of note: More than half the S&P 500’s return last year came from just seven companies.

— McDonald’s Q4 2024: Modest sales growth amid boycott pressures. McDonald’s reported a 0.4% increase in global comparable sales for Q4 2024, defying expectations of a 1% decline. This growth signals recovery after two consecutive quarters of declines, though challenges related to boycotts stemming from the Israel-Gaza conflict persist. The boycott significantly affected McDonald’s performance in parts of the Middle East, Malaysia, and Indonesia, despite 4.1% growth in the International Developmental Licensed Markets segment. The burger giant’s U.S. business performed worse than expected: same-store sales fell 1.4%, compared with Wall Street’s estimate of a 0.6% drop. Traffic improved during the quarter, but customers spent slightly less than usual, as the chain relied on value meals to draw diners. CEO Chris Kempczinski reaffirmed confidence in the Accelerating the Arches strategy, emphasizing value, menu innovation, and culturally relevant marketing to regain market share. McDonald’s remains cautiously optimistic as it addresses lingering challenges while focusing on growth. The firm said they had a 5% drop in net income to $2.04 billion on an adjusted basis, below expectations.

— Gold prices hit new all-time highs on Monday as investors sought safe-haven assets amid rising global trade tensions. International prices climbed to $2,878.75 per ounce, up 0.62%. This marks the seventh record high for gold in 2025. Key drivers of the rally:

Trade war fears: U.S. President Donald Trump’s announcement of new 25% tariffs on steel and aluminum imports heightened concerns about a global trade war.
Safe-haven demand: Growing economic and geopolitical uncertainties have driven investors toward gold.
Weakening U.S. dollar: A softer dollar has made gold more attractive to international investors.
Central bank purchases: Continued central bank buying has bolstered gold demand.
Inflation concerns: Trade tensions have raised inflation worries, increasing gold’s appeal as a hedge.

Analysts believe gold could surpass $3,000 per ounce if these conditions persist, reinforcing its status as a hedge against risk and a store of wealth.

Of note: A pilot program in China that allows insurers to buy gold for the first time could free up billions of dollars of investment in the metal, adding further impetus to a record-setting rally. The move would potentially free up $27 billion of funds, says Minsheng Securities.

AG MARKETS

— Ag markets today:

Grains mildly weaker to open the week. Corn, soybeans and wheat faced light price pressure overnight amid escalating trade tensions. As of 7:30 a.m. ET, corn and soybeans futures were trading fractionally to a penny lower, winter wheat markets were 2 to 3 cents lower and spring wheat was fractionally lower in most contracts. The U.S. dollar index was around 250 points higher, while front-month crude oil futures were nearly $1.00 higher. Gold futures surged to a record high overnight (see related item above).
Money flow key for cattle futures. Cattle futures faced heavy long liquidate the past two weeks as funds lightened their recent record long stance. While the selloff in futures was accompanied by pressure on cash cattle prices and wholesale beef values, money flow will be the key factor in whether recent heavy losses are extended this week.
Cash hog index continues to climb. The CME lean hog index is up another 34 cents to $85.39 as of Feb. 6. The index is now nearly $5.00 off its seasonal low in early January. February lean hog futures, which expire on Friday and are settled against the cash index on Feb. 19, finished Friday $1.86 above today’s cash quote while the April contract held at $6.76 premium.

— USDA daily export sale:
· 365,000 MT of corn received in the reporting period to Mexico, 2024-25.

— Indian sugar mills close early, driving up local prices. Over three dozen sugar mills in India’s leading sugarcane-producing states have shut down nearly two months earlier than usual due to reduced cane supplies caused by adverse weather conditions, Reuters reports. This unexpected early closure is pushing up local sugar prices and encouraging mills to demand higher prices for their limited export quotas. The closures indicate that India, the world’s second-largest sugar producer, is likely to produce less sugar than earlier projections, tightening global supplies. India’s sugar output for the 2024–25 marketing year could fall 14.7% to 27.27 million metric tons, according to the Indian Sugar and Bio Energy Manufacturers Association. However, dealers anticipate production may drop even further to around 26 million metric tons due to the rapid pace of mill closures. Local sugar prices have surged 10% in the past month, and mills are now seeking at least 45,000 rupees per ton for exports, up from earlier levels. This trend is providing financial relief for domestic mills but tightening the global sugar supply chain.

— Brazil’s January bean, corn exports well below year-ago. Brazil exported 1.072 MMT of soybeans during January, down 932,000 MT (46.5%) from December and 1.786 MMT (625%) below last year. Brazil’s corn exports totaled 3.594 MMT last month, down 672,000 MT (15.8%) from December and 1.282 MMT (26.3%) below January 2024.

— IKAR cuts Russian wheat export, production forecasts. IKAR consultancy cut its 2024-25 wheat export forecast by 500,000 MMT to 43 MMT, citing low stocks and poor margins as the main factors. IKAR also cut its 2025 wheat production estimate to 82 MMT from 84 MMT previously in a baseline scenario, saying forecasts for freezing temperatures could damage crops amid a lack of snow cover.

— Agriculture markets Friday and for the week:
• Corn: March corn futures closed 7 3/4 cents lower to $4.87 1/2, though still marked a 5 1/2 cent gain on the week.
• Soy complex: March soybeans fell 11 cents to $10.49 1/2 but still gained 7 1/2 cents on the week. March soymeal fell $5.00 to $301.40 but managed to notch a 30-cent weekly gain. March soyoil rose 58 points to 45.98 cents and ended the week down 13 points.
• Wheat: March SRW futures slid a nickel to $5.82 3/4 though climbed 23 1/4 cents on the week. March HRW futures fell 3 1/4 cents to $6.04 1/4, though still climbed a quarter on the week.
• Cotton: March cotton fell 40 points to 65.63 cents and lost 25 points on the week.
• Cattle: Futures stabilized in the wake of this week’s breakdown, with nearby February rising 15 cents to $200.775 at Friday’s close. Most-active April futures closed unchanged at $196.775; the settlement price represented a weekly drop of $5.525. March feeder futures fell 40 cents to $264.90, thereby marking a weekly plunge of $10.825.
• Hogs: Futures continued their rally into the weekend, with the expiring February contract rallying 60 cents to $87.25. Most-active April gained 40 cents to close at $92.15. That represented a weekly rise of $1.80.

FARM POLICY

— EQIP update. The Trump administration has frozen funding for several USDA conservation programs, including EQIP (link). This freeze has left many farmers in a difficult position, as they had already made business decisions and investments based on expected EQIP funding.

The freeze affects contracts funded through the Inflation Reduction Act (IRA). Some farmers have already purchased materials and signed contracts for conservation projects, expecting reimbursement through EQIP. The funding freeze has caused confusion and uncertainty among farmers and conservation groups.

Courts have temporarily lifted the funding freeze while litigation plays out, but there are reports of inconsistencies in how funds are being distributed.

The freeze has had significant impacts on farmers who were relying on EQIP funding:

Some farmers are at risk of losing their farms due to financial commitments made based on expected EQIP contracts.
There are reports of farmers being unable to pay for materials they’ve already purchased or fulfill contracts they’ve signed.
The Iowa Soybean Association has stated that farmers in their state are contractually owed $11 million for practices implemented in 2024.

Before the establishment of EQIP in 1996, farmers relied on various other conservation programs and traditional farming practices:

The Soil Conservation Act of 1935 established the Soil Conservation Service and provided funding for soil conservation practices.
The Agricultural Conservation Reserve Program (ACP), created in 1936, provided payments to farmers to shift acreage from surplus crops to soil-conserving legumes and grasses.
The Water Quality Incentives Program (WQIP), created in the 1990 Farm Bill, focused on water quality protection.

Before modern conservation programs, farmers relied on various techniques to maintain soil health and productivity:

Crop rotation was widely practiced to maintain soil fertility and reduce pest problems.
Cover crops were used to protect soil from erosion and add organic matter.
Farmers used draft horses for hard labor until the early 20th century, when mechanization began to take over.
Manual tools like hoes, sickles, and scythes were common for planting and harvesting.
Fencing was a constant task, with farmers regularly mending wooden barriers to protect crops.

Bottom line: The current freeze on EQIP funding represents a significant disruption to modern conservation efforts, highlighting the importance of these programs in supporting sustainable agricultural practices.

ENERGY MARKETS & POLICY

— Oil prices rebound amid tariff and trade uncertainty. Oil prices rose today after a volatile week driven by concerns over U.S. trade policies. Brent crude futures climbed 1% to $75.40 a barrel, while U.S. West Texas Intermediate also gained 1% to $71.72 a barrel. Market concerns centered on President Donald Trump’s plan to impose 25% tariffs on steel and aluminum imports, raising fears of a global trade war.

— Oil prices rose Friday amid sanctions on Iran but end week lower on trade war concerns. Oil prices edged higher on Friday after the U.S. imposed new sanctions targeting Iran’s crude exports. Brent crude settled at $74.66 per barrel (+0.5%), and WTI closed at $71.00 (+0.55%). Despite the daily gains, Brent posted a weekly loss of over 2% as markets remained cautious due to escalating trade tensions between President Trump and China. Traders remain wary, with uncertainty over U.S. tariff policies dampening demand outlooks. Analysts emphasized that while sanctions usually drive prices upward, the risk of a global economic slowdown has limited gains. The new U.S. sanctions aim to curb Iranian oil shipments to China, intensifying pressure on Tehran.

Of note: Oil prices have given up all of their 2025 gains as trade war concerns continue to weigh on both Brent and WTI.

— Europe faces new energy crisis amid soaring gas prices. Europe is on the brink of another energy crunch as natural gas prices hit a two-year high. Rapidly depleting gas inventories this winter are raising concerns, as lower reserves will require greater effort to replenish. With summer prices so elevated that it’s unprofitable for energy giants like Uniper SE and Eni SpA to store gas, government intervention may become necessary to ensure adequate supply, analysts note.

— Baltic states successfully disconnected from Russia’s electricity grid this weekend and plugged into continental Europe’s network, securing long-sought energy independence from Moscow.

TRADE POLICY

— Overview of Trump’s various tariff actions and threats, ranging from implemented measures to proposed and suggested tariffs across different countries and sectors:

Of note: Broadly increasing tariffs would require agencies to reset “tens of thousands” of tariff codes, said Christine McDaniel, former senior trade economist in the White House Council of Economic Advisers. Business executives also have been grappling with how to gauge the effects of new tariffs on their bottom lines.

CONGRESS

— High-stakes GOP budget battle. House Republican leaders aim to cut federal spending by $2 trillion to $2.5 trillion as part of their reconciliation strategy, according to reports, with Medicaid on the chopping block. Negotiators are considering deep cuts to benefits to hit their targets, raising concerns among some Republicans and the White House. Meanwhile, Senate Budget Committee Chair Lindsey Graham (R-S.C.) plans a separate budget resolution with $340 billion in defense and border security spending offset by cuts, despite Speaker Mike Johnson’s (R-La.) request for delay.

The House and Senate remain divided on strategy. Johnson over the weekend hinted the House might delay its Budget Committee markup, complicating the push to avoid a government shutdown. With Medicaid cuts, tax reductions for the wealthy, and potential sequesters looming, tensions are high as both chambers race to find a solution before the federal government runs out of funding in 32 days.

POLITICS & ELECTIONS

— Republicans surge in voter registration, sounding alarms for Democrats. Republican gains in voter registration across key states are raising concerns for Democrats, signaling the inroads the GOP has made nationwide since 2024. In battleground Nevada, active registered Republicans now outnumber Democrats for the first time in nearly two decades. Similar trends have emerged in traditionally blue states like New Jersey, and Florida’s Hillsborough County flipped from Democratic to Republican majority.

The shifting voter rolls reflect broader changes seen in the 2024 elections, where Trump improved margins in several battlegrounds. Democrats face an uphill climb, particularly in states like Pennsylvania, Arizona, and North Carolina, where Republicans have significantly narrowed the registration gap. Analysts warn that these shifts indicate growing momentum for the GOP, though party registration does not always guarantee votes.

Experts stress the importance of voter outreach, especially among nonpartisan voters, who continue to grow in number. Democrats are re-evaluating their voter registration strategies, with calls to reinvest in grassroots efforts to counter Republican gains and recapture key constituencies.

— Scott’s 55-seat Senate GOP strategy for 2026 elections. At the NRSC’s winter retreat in Palm Beach, Fla., Chair Tim Scott (R-S.C.) outlined an ambitious plan to expand Republican control in the Senate to 55 seats after the 2026 midterms. Scott identified six battleground states: Georgia, Michigan, New Hampshire, Maine, North Carolina, and Ohio. The Republicans currently control the Senate, 53-47.

To reach 55 seats, the GOP must defend vulnerable incumbents — Sens. Susan Collins (Maine), Thom Tillis (N.C.), and Jon Husted (Ohio) — while flipping at least two Democratic seats. Scott singled out Georgia as the most promising flip opportunity, where Republicans aim to unseat Democratic Sen. Jon Ossoff, potentially with Gov. Brian Kemp as a contender.

Scott also mentioned Minnesota, Virginia, and New Mexico as possible stretch targets, hinting at a broader map if the political environment is favorable. He urged incumbents to secure red-state victories early and focus on aggressive fundraising to avoid surprises, citing Sen. Deb Fischer’s (R-Neb.) narrow 2024 win as a cautionary example.

The weekend retreat featured briefings on the White House’s economic message from National Economic Council Director Kevin Hassett, and strategy discussions with Senate Leadership Fund leaders.

RUSSIA & UKRAINE

— Russia awaits “satisfactory” proposals for Ukraine peace talks. Russia has yet to receive a concrete offer to begin talks on ending the war in Ukraine, Deputy Foreign Minister Mikhail Galuzin said on Monday, despite President Donald Trump’s recent optimism about progress in negotiations. Galuzin emphasized the need for “practical steps” that recognize Russia’s interests and new geopolitical realities. Moscow insists on halting NATO’s expansion and safeguarding the rights of Russian-speaking residents in Ukraine. Trump has stated he aims to stop the conflict and expects further discussions with Russian President Vladimir Putin. However, Ukrainian President Volodymyr Zelenskyy maintains that territorial concessions are off the table, reaffirming his focus on NATO integration.

CHINA

— Chinese President Xi Jinping has accepted Russia’s invitation to attend the commemorations of the Soviet victory over Nazi Germany in World War Two, TASS state news agency reported on Monday.

— China vows to boost consumption and wages. China will prioritize boosting domestic consumption and expanding its consumer goods trade-in subsidy program, Premier Li Qiang announced at a recent cabinet meeting. According to state broadcaster CCTV, the government plans to better address housing consumption needs and promote steady wage growth. Additionally, more targeted measures will be introduced to stabilize foreign investment and strengthen economic resilience.

— Chinese ports see record traffic in January ahead of U.S. tariffs, holiday. China’s busiest port processed a record amount of goods in January, as companies rushed to get their products onto ships before U.S. tariffs kicked in and ahead of its Lunar New Year holiday. Shanghai’s port processed a record 5 million containers last month, well above any previous month in data going back to 2007. Last year, the port was the first globally to process over 50 million containers in one year. The nearby Ningbo port also saw a spike in cargo. It reported 59 MMT in foreign trade processed at the port last month. Despite the record, trade flows slowed in the last week of January and the first week of February, according to separate government data, as companies shut down for more than a week for the Lunar New Year holiday.

WEATHER

— NWS outlook: Heavy snow over the Central Plains and Ohio Valley into the Mid-Atlantic on Tuesday... ...Rain/freezing rain over parts of the Southern Plains, Lower Mississippi Valley, and Mid-Atlantic/Central Appalachians with 0.25 inches of ice accumulations possible... ...There is a Slight Risk of excessive rainfall over parts of the Lower Mississippi Valley, Tennessee Valley, and Southern Appalachians on Tuesday... ...Temperatures will be 25 to 40 degrees below average across the Northern Rockies/Northern High Plains.

KEY DATES IN FEBRUARY

11: USDA Crop Production, WASDE, world market circulars
12: Consumer Price Index report
13: Producer Price Index-FD | USDA outlook reports for several commodities
14: Retail Sales | Valentine’s Day
16: Daytona 500
17: Presidents Day; U.S. gov’t and market holiday
21: Univ. of Michigan Consumer Sentiment | Existing Home Sales | USDA Cattle on Feed
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

LINKS