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Trump to announce reciprocal tariffs by Thursday... President Donald Trump’s administration will announce reciprocal tariffs on every country that charges duties on U.S. imports by Thursday, the White House said. Trump’s latest round of tariffs will be announced before India Prime Minister Narendra Modi’s visit on Thursday, White House spokeswoman Karoline Leavitt said.
China’s waning grain imports signal shift for global markets... Karen Braun of Reuters notes that China’s role as a major grain importer is declining, signaling a significant shift in global agricultural trade. USDA revised China’s 2024-25 grain import forecasts, cutting expected corn imports to 10 MMT and wheat imports to 8 MMT — down nearly 25% from January projections and significantly below recent years. Braun notes this trend contrasts with the surge in Chinese demand during the early 2020s when the country’s corn imports peaked at 29.5 MMT. Much of this was driven by concerns about dwindling domestic stocks and spoilage. Since then, China has shifted its purchasing strategy, favoring Brazilian suppliers while reducing imports from the U.S. and Australia. Braun concludes that China’s recent record corn and wheat harvests, coupled with slowing economic growth, suggest continued reduced demand for imported grain. She says global exporters like the U.S. and Brazil may need to adjust expectations and focus on long-term trade strategies with other buyers.
Russian wheat stocks widen deficit to year-ago... As of Jan. 1, Russia’s wheat stocks totaled 28.7 MMT, according to a SovEcon estimate based on quarterly Rosstat data. Stocks stood 21% below last year’s level, widening the gap from 14% in October, driven lower by active farmer sales and exports.
SovEcon noted wheat stocks were notably lower than last year’s figures in all export regions. In the South, stocks at 7.8 MMT, fell 37% from last year; in the Center, at 6.3 MMT, down 32%; and in the Volga region, at 6.4 MMT, down 17%.
U.S. consumer inflation rises more than expected in January... The consumer price index (CPI) rose 0.5% from the previous month and 3% annually during January, both exceeding expectations. That was the highest monthly inflation rate since August 2023. Core inflation, which excludes food and energy costs, rose 0.4% from the previous month and 3.3% from year-ago.
Food prices increased 2.5% from year-ago, with food-at-home (grocery) costs up 1.9% and food-away-from-home (restaurant) prices up 3.4%.
Note: The index for eggs saw a dramatic increase of 15.2% in January compared to December. This surge in egg prices was the largest since June 2015 and accounted for approximately two-thirds of the total monthly food-at-home increase.
Trump signs executive order to cut federal workforce... President Donald Trump signed an executive order Tuesday to reduce the federal government workforce through efficiency improvements and attrition. The Department of Government Efficiency Workforce Optimization Initiative directs the Office of Management and Budget (OMB) to create a plan allowing agencies to hire only one employee for every four who leave, once the current hiring freeze ends. Exemptions will apply to public safety, immigration enforcement, and law enforcement roles.
Agencies must submit data-driven reorganization plans within 30 days, focusing on consolidating or eliminating offices not mandated by law. Plans for large-scale reductions in force (RIFs) will prioritize non-essential functions. While this order targets broad cuts across the government, legal challenges are likely, as seen with previous executive actions by the Trump administration.
Ag sector impacts. The executive order could have significant impacts on meat inspectors and USDA Farm Service Agency (FSA) county and state offices.
The executive order’s implications for meat inspectors could be substantial even though the Federal Meat Inspection Act (FMIA) requires that all meat sold commercially be inspected and passed to ensure that it is safe, wholesome, and properly labeled.
- Staffing shortages: The one-for-four hiring policy could lead to critical understaffing in meat inspection roles. This is particularly concerning given the already demanding nature of the job and its high turnover rate.
- Food safety concerns: Reduced staffing of meat inspectors could potentially compromise food safety standards and increase the risk of contaminated products reaching consumers.
- Industry pressure: The meat processing industry may face increased pressure to maintain production levels with fewer federal inspectors present, potentially leading to safety shortcuts.
- Workload increase: Remaining inspectors may face significantly increased workloads, potentially affecting the thoroughness of inspections and worker well-being.
USDA’s Farm Service Agency could also see significant changes:
- Office closures: The directive to consolidate or eliminate offices not mandated by law could lead to the closure of some FSA county and state offices, reducing local access to services for farmers and ranchers.
- Service delays: With potential staff reductions, farmers and ranchers may experience longer wait times for loan processing, program enrollment and other critical services.
- Program implementation: The ability to implement new farm bill programs or respond to agricultural emergencies could be hampered by reduced staffing levels.
- Rural impact: As FSA offices are often significant employers in rural areas, closures or staff reductions could have broader economic impacts on rural communities.
Exemptions: While the order exempts public safety, immigration enforcement and law enforcement roles, it’s unclear if food safety inspectors will be included in these exemptions.
As with previous Trump administration actions, this order is likely to face legal challenges, particularly from federal employee unions and advocacy groups.
Long-term consequences: The attrition-based approach could lead to a loss of institutional knowledge and expertise in critical areas of food safety and agricultural support.
Modernization vs. cuts: While the administration frames this as an efficiency measure, critics argue it could lead to a hollowing out of essential government services rather than true modernization.
The newly created Department of Government Efficiency (DOGE) will play a significant role in implementing these changes, adding a layer of uncertainty to how cuts will be determined and executed.
Inspectors general sue Trump administration over alleged unlawful firings... Eight inspectors general fired by President Trump in January filed a lawsuit alleging their termination violated federal law requiring 30-day notice and reasons provided to Congress. The lawsuit, filed in U.S. District Court, accuses the administration of illegal interference, as the inspectors general were blocked from accessing their workplaces and official systems. The plaintiffs, who include IGs from agencies such as Defense, State and Veterans Affairs, are seeking reinstatement. The firings — part of a broader purge of 17 inspectors general — drew bipartisan concern. Sen. Chuck Grassley (R-Iowa) criticized the lack of legally required notice. The suit adds to mounting legal challenges facing Trump, including efforts to downsize the federal workforce and end birthright citizenship. Trump fired a 19th inspector general, the USAID’s watchdog, this week.
Of note: One of the IGs who is suing, Phyllis Fong, had been in her position at USDA for more than 20 years. After Fong was told she was fired, she continued to go to work, “recognizing that her termination was not effective because it failed to comply with the IG Act’s requirements,” her attorneys wrote, until her federal badge was deactivated, and her computer and phone were taken back by USDA.
Trump advisers consider redirecting USAID funds to Wall Street-backed development agency... President Trump’s advisers are discussing plans to shift billions in funding from USAID to the U.S. International Development Finance Corporation (DFC), which is expected to be led by Ben Black, son of Apollo Global Management co-founder Leon Black. The move would reduce traditional humanitarian aid and prioritize private-sector investments, giving Wall Street a greater role in U.S. foreign policy as it counters China’s global influence. Meanwhile, Elon Musk, with Trump’s support, is advocating for the shutdown of USAID’s $43 billion budget, a longstanding pillar of U.S. foreign aid efforts.
House Republicans unveil budget resolution with spending cuts and debt limit increase... House Republicans released a budget resolution to begin the reconciliation process. The resolution allocates $4.5 trillion to the House Ways and Means Committee for tax cuts, falling short of what tax writers say is needed for the president’s tax priorities. It also includes a $4 trillion debt limit increase and outlines $1.4 trillion in spending cuts over the next decade. Of note: Dozens of current GOP lawmakers are opposed to raising the debt ceiling on principle and have never voted to support an increase to the nation’s borrowing limit. Previous increases have required bipartisan support.
House Speaker Mike Johnson’s budget plan is at risk due to ongoing Republican infighting and a slim House majority. Fiscal budget Hawks in the House are demanding deeper non-defense spending cuts in any tax bill. Moderate Republicans oppose cutting social programs like Medicaid.
GOP members also disagree on how much deficit increase is acceptable to facilitate tax cuts.
The House budget resolution does not provide specific details on the $230 billion in agriculture-related cuts. The resolution directs the Agriculture Committee to find $230 billion in spending reductions over 10 years. However, the exact breakdown of these cuts is not specified in the resolution itself. Key points about the proposed agriculture cuts:
- The $230 billion figure is a target for the Agriculture Committee to meet through spending reductions.
- While specific details are not provided, it is likely that a significant portion of these cuts would come from the Supplemental Nutrition Assistance Program (SNAP/food stamps). Republicans have stated that any SNAP-related changes would focus on reducing waste and fraud rather than cutting existing benefits for participants. Some potential areas for cuts being considered include updating work requirements and limiting future updates to the Thrifty Food Plan, which is used to calculate SNAP benefits.
- The $230 billion figure is not necessarily all from SNAP.
This budget resolution is a blueprint for a later reconciliation bill, and the specific details of the cuts will need to be worked out by the Agriculture Committee and negotiated with the Senate. The final numbers and policy changes may differ from what is currently proposed in the resolution.
Frustrated by House delays, Senate Republicans are proposing a scaled-back plan. Defense and border security funding would be offset by unspecified spending cuts. Tax cuts are postponed for now.
Democrats argue GOP’s plan prioritizes tax cuts for the wealthy at the expense of social programs that help low-income Americans.
Without congressional action, the 2017 tax cuts — such as lower individual tax rates and business-related tax breaks — will expire at the end of 2025.
Gabbard confirmed; RFK Jr., Greer nominations advanced... The Senate confirmed Tulsi Gabbard as the next director of national intelligence, ultimately winning support from key Republicans in part over her intentions to slim down the organization. Former Republican Senate leader Mitch McConnell was the sole GOP vote against her.
The Senate advanced Robert F. Kennedy Jr.'s nomination for Secretary of Health and Human Services on Wednesday with a 53-47 vote along party lines, setting the stage for a likely confirmation later this week. Despite concerns about his past vaccine skepticism and shifting policy positions, Kennedy received unanimous support from Senate Republicans.
The Senate Finance Committee voted 15-12 to advance Jamieson Greer’s nomination as U.S. Trade Representative despite opposition from some Democrats concerned about his alignment with President Trump’s trade policies. Greer, previously chief of staff for former USTR Robert Lighthizer, played a key role in negotiating the U.S.-Mexico-Canada Agreement (USMCA), the U.S./Japan trade deal and the Phase 1 deal between the U.S. and China. Supporters highlighted his extensive experience and commitment to American industry advocacy.
Japan seeks exemption from U.S. steel and aluminum tariffs... Japan’s industry minister, Yoji Muto, announced on Wednesday that Japan has formally requested an exemption from the newly imposed U.S. tariffs on steel and aluminum. President Donald Trump raised tariffs to 25% on Monday, aiming to protect struggling domestic industries. While Trump hinted at a possible exemption for Australia due to its trade deficit with the U.S., Japan is also seeking relief from these measures to avoid potential economic fallout.
Italy warns Trump against bilateral trade deals with EU countries... Italian Industry Minister Adolfo Urso warned President Trump that striking bilateral trade deals with individual EU member states would be “impossible” and could undermine the bloc’s unity on commerce. Urso highlighted that EU countries cannot negotiate separate trade agreements, emphasizing that trade policy decisions are solely handled by EU institutions. Italy is particularly concerned about tariffs due to its significant trade surplus with the United States. However, Urso noted that recently announced U.S. duties on steel and aluminum would have minimal impact on Italian exports. While praising Prime Minister Giorgia Meloni’s strong relationship with Trump, Urso stressed Meloni’s commitment to maintaining EU cohesion and avoiding a trade war. EU trade ministers discussed the matter in a virtual meeting today.
OPEC sticks to strong oil demand forecast for 2025 amid energy transition uncertainty... OPEC reaffirmed its forecast for robust global oil demand growth in 2025, expecting a rise of 1.45 million barrels per day (bpd), followed by 1.43 million bpd in 2026, unchanged from last month. The group cited air and road travel as key drivers, dismissing concerns that potential trade tariffs could significantly impact global economic growth. Despite ongoing uncertainty over U.S. trade policy, OPEC+ continues to implement gradual output cuts to balance the market.