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Mexico, U.S. reach deal to delay tariffs for one month... President Donald Trump paused new tariffs on Mexico for one month after Mexico agreed on Monday to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs. The agreement also includes a U.S. commitment to act to prevent trafficking of high-powered weapons to Mexico, Mexican President Claudia Sheinbaum said. The countries will use the month-long suspension to engage in further negotiations, Trump said.
A senior Canadian official told the New York Times that Ottawa is not optimistic a similar delay in tariffs is in the offing.
China did not announce retaliatory tariffs and Trump said U.S. officials may speak with Beijing on tariffs over the next day. Trump said, “If we can’t make a deal with China, then the tariffs will be very, very substantial.”
Meanwhile, EU leaders at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the U.S. imposes tariffs, as Trump threatened, but also called for reason and negotiation.
Record soybean crush in December but not quite as strong as expected... U.S. processors crushed a record 217.7 million bu. of soybeans in December, though that was slightly less than the 218.1 million bu. analysts expected. Crush increased 7.7 million bu. (3.7%) from November and 13.4 million bu. (6.6%) from year-ago.
Corn-for-ethanol use rises in December but falls shy of expectations... Corn-for-ethanol use totaled 473.2 million bu. in December, up 1.6 million bu. (0.3%) from November but 11.0 million bu. (2.3%) below year-ago and 6.8 million bu. less than analysts expected.
Trump’s tariff salvo: Economic shockwaves and global retaliation... As new U.S. tariffs take effect at 12:01 a.m. ET Tuesday, economists shift from forecasting their potential impact to assessing their immediate fallout. With 25% duties on imports from Canada and Mexico and 10% on Chinese goods, the move will likely raise consumer prices, disrupt trade worth $1.3 trillion, and shake financial markets.
Bloomberg Economics estimates the tariffs could trim U.S. GDP by 1.2% and add 0.7% to core inflation. Canada and Mexico face even sharper blows, with 16% and 14% of their GDPs directly exposed to U.S. exports. Markets reacted swiftly, with a stronger dollar offsetting some inflationary effects but undercutting Trump’s competitiveness goals.
WSJ: China seeks trade talks with Trump amid tariff pressure... As the Trump administration implements a 10% tariff on Chinese imports, Beijing is preparing an initial proposal to restart trade negotiations and prevent further economic confrontation, the Wall Street Journal reports. Citing sources familiar with Beijing’s approach, WSJ says China’s offer will center on reviving the 2020 Phase 1 trade deal, which required it to increase U.S. imports by $200 billion — a target it previously failed to meet. While Trump’s tariffs are a clear pressure tactic, China sees room for dialogue, particularly given its current economic difficulties. Besides increasing purchases of U.S. goods, China is considering investments in American sectors like electric vehicle batteries and making commitments on currency stabilization and fentanyl precursor exports. A key point of negotiation will be TikTok, which Beijing intends to treat as a “commercial matter,” potentially allowing U.S. investors a stake but maintaining control over its proprietary algorithm. Trump, who has hinted at a willingness to negotiate, faces internal administration divisions, with some advisors pushing for broader decoupling from China, including stricter tech restrictions.
With both economic and geopolitical stakes high, China is eager to gauge Trump’s demands before a potential summit between the two leaders.
Trump moves to close e-commerce loophole benefiting Temu, Shein... President Trump is set to eliminate a long-standing tariff exemption that has allowed international e-commerce giants like Temu and Shein to avoid duties on packages under $800. The move, part of broader trade levies on China, Canada and Mexico, aims to close a loophole that has helped Chinese retailers gain a competitive edge over Amazon and other U.S. firms.
Temu and Shein have relied on the “de minimis” rule to ship low-cost goods directly to American consumers without incurring tariffs. While these companies have begun adjusting their logistics, the crackdown is expected to impact their business models significantly. The decision also raises concerns about the future of Shein’s planned IPO and its broader implications for U.S. shoppers, particularly lower-income consumers who benefit from these low-cost imports.
USAID HQ closed amid growing uncertainty over agency’s future... The headquarters of the U.S. Agency for International Development (USAID) in Washington, D.C., was abruptly closed Monday, with employees instructed to work remotely, except for essential personnel. The closure follows escalating tensions as President Donald Trump and Elon Musk push for a federal government overhaul, targeting USAID as allegedly partisan.
Over the weekend, security officials at the agency were placed on leave after resisting access requests from the Department of Government Efficiency (DOGE). Meanwhile, USAID’s branding has been removed from its offices, and senior leadership has been dismissed amid a 90-day freeze on foreign aid. The agency’s website and social media presence were also taken offline.
India’s tariff cuts signal shift from protectionism... India’s latest budget introduces broad-based reductions in import tariffs, marking a strategic pivot toward a more open trade policy. The move appears to be a proactive response to potential trade tensions with the U.S. under President Donald Trump. Highlights:
- Broad tariff reductions: Lower duties on electronics, textiles, and high-end motorcycles, aligning with a broader customs duty rationalization effort.
- Lower average tariff rates: India’s average customs duty drops from 11.65% to 10.66%, bringing it closer to ASEAN standards.
- Targeted protection: Retains higher tariffs (15-20%) for sectors under Production Linked Incentive (PLI) and Phased Manufacturing Program (PMP).
- Strategic U.S. relations: Reductions address long-standing U.S. concerns, such as high duties on Harley-Davidson motorcycles, possibly to avoid retaliatory tariffs.
- Balanced approach: Uses alternative measures like the Agriculture Infrastructure and Development Cess (AIDC) to protect domestic industries while promoting an open economy.
Bottom line: India’s tariff policy shift reflects a calculated effort to strengthen its global trade position while maintaining selective protections for key industries.
New U.S. cases of HPAI... Iowa’s ag department announced a new case of H5N1 highly pathogenic avian influenza (HPA() in a commercial layer flock in O’Brien County. This is Iowa’s second confirmed case of HPAI in 2025 following a string of outbreaks in late 2024. Iowa Gov. Kim Reynolds issued a disaster proclamation to elevate tracking, detection and containment efforts.
Michigan’s ag department detected an outbreak of HPAI in a backyard poultry flock in Alpena County.
Japan considers tapping rice reserves amid rising prices... Japan may dip into its strategic rice reserve to counter inflation and fears of a shortage. For the first time, the government is easing its policy on releasing stockpiled rice, allowing sales to major distributors. The country’s 1 MMT emergency reserve was last used after the 2011 Fukushima disaster. Rice prices recently saw their steepest-ever increase, fueling concerns.