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Trump signals shift to tariffs over sanctions for economic diplomacy in second term... President-elect Donald Trump has signaled a shift in his approach to economic diplomacy for his upcoming second term, emphasizing a preference for tariffs over sanctions as a tool to advance U.S. interests on the global stage. During his speech at the Economic Club of New York on Sept. 5, Trump made several key points regarding his economic policy plans:
· Limited use of sanctions: Trump expressed his intention to use sanctions “as little as possible” during his second term. This marks a potential departure from the widespread use of sanctions as a foreign policy tool in recent years.
· Preference for tariffs: Trump emphasized his belief in the power of tariffs as an alternative to sanctions. He claimed, “I stopped wars with the threat of tariffs,” although he did not provide specific examples.
· Trade as a powerful tool: Trump highlighted trade as a more potent instrument than sanctions in international relations.
· Preserving the dollar standard: Trump stressed the importance of maintaining the U.S. dollar’s status as the global reserve currency, stating, “We cannot lose our dollar standard.”
This stance aligns with Trump’s broader economic strategy, which includes:
· Proposing a universal tariff: Trump has suggested implementing a 10% to 20% tariff on all imports, with higher rates for products from China.
· Focusing on domestic manufacturing: The tariff strategy is partly aimed at incentivizing companies to relocate production to the U.S., although economists remain skeptical about its effectiveness.
· Tax cuts: Trump plans to extend aspects of the 2017 tax cuts and has proposed further reductions in corporate taxes.
Of note: While Trump’s preference for tariffs over sanctions might signal a shift in U.S. economic diplomacy, the implementation and impact of such policies would depend on various factors, including congressional support and international reactions. Economists have cautioned that widespread tariffs could increase costs for American businesses and consumers and potentially provoke retaliatory measures from trading partners.
Kashkari warns of economic uncertainty from immigration crackdown, tariffs under Trump... Minneapolis Fed President Neel Kashkari noted potential business disruptions if Trump follows through on mass deportations of undocumented workers but said the broader economic impact remains unclear. Appearing on Face the Nation, Kashkari highlighted how policies like tariffs and tax cuts under Trump’s second term could influence inflation, now near the Fed’s 2% target, with details and international responses shaping long-term effects. Tariff escalations could lead to price hikes and trade tensions, he warned, while the Fed assesses further rate adjustments.
China urges U.S. lawmakers to halt efforts to change trade status... China’s foreign ministry warned U.S. lawmakers against proposed legislation to revoke China’s Permanent Normal Trade Relations status, urging them to avoid actions that would harm bilateral ties. The ministry accused some U.S. politicians of seeking to reverse economic relations to a Cold War footing.
Trump taps Stefanik as UN Ambassador, Homan as border czar, Zeldin to lead EPA... Trump has chosen Rep. Elise Stefanik (R-N.Y.) to serve as U.S. ambassador to the United Nations. Stefanik’s House departure could create a minor disruption for the slim GOP majority but her safe, deep-red district mitigates major risk. A seasoned national security and intelligence veteran, Stefanik’s Senate confirmation is expected to be swift. Her exit triggers a scramble for GOP leadership roles, with potential contenders including Reps. Ashley Hinson (Iowa), Byron Donalds (Fla.), Stephanie Bice (Okla.), and Blake Moore (Utah). GOP leaders are likely to seek female candidates for diversity among top ranks.
Trump says former ICE Director Tom Homan will be joining his administration as the Border Czar. He will be in charge of the nation’s borders and “all deportation of illegal aliens back to their country of origin,” Trump added.
Trump said on Monday he will appoint former congressman Lee Zeldin to run EPA.
Add Doud to the list as possible USDA Secretary... Gregg Doud is a notable addition to the list of potential USDA Secretary candidates. He served as the Chief Agricultural Negotiator with the rank of Ambassador in the Office of the United States Trade Representative, confirmed by the U.S. Senate on March 1, 2018. In this role, Ambassador Doud was responsible for conducting and overseeing international negotiations related to trade in agricultural products. Doud grew up on a dry-land wheat, grain sorghum, soybean, swine, and cow-calf operation near Mankato, Kansas, which he remains involved with today. Prior to his role as Chief Agricultural Negotiator, he served as the President of the Commodity Markets Council from 2013. He has experience as a Professional Staff member of the Senate Ag Committee, working for Senators Pat Roberts and Thad Cochran. Doud has held various roles in the agriculture industry, including positions with the National Cattlemen’s Beef Association, U.S. Wheat Associates, and the agricultural commodity consulting firm World Perspectives. Doud’s current employment is as the President and Chief Executive Officer of the National Milk Producers Federation (NMPF). Prior to joining NMPF, Doud worked at Aimpoint Research, a global intelligence firm specializing in agriculture and food (Aimpoint Research joined with Directions Research and SEEK Company to form a new entity called The Directions Group).
Mexico’s GM corn restrictions likely to stay despite U.S. trade dispute win... New Mexican President Claudia Sheinbaum is expected to maintain restrictions on genetically modified (GM) corn planting and its use in tortillas, despite reports of a U.S. victory in a trade case. Tufts researcher Timothy Wise noted Mexico’s restrictions have minimal impact on U.S. exports and are popular domestically, according to Politico. Economy Minister Marcelo Ebard confirmed Mexico and the U.S. received a preliminary ruling under the U.S.-Mexico-Canada Agreement, with a final decision expected Dec. 14. U.S. officials continue to express concern over Mexico’s biotechnology policies affecting American corn exports.
Nestlé, P&G probe palm oil supply chains following deforestation report... Nestlé and Procter & Gamble are investigating a report by the Rainforest Action Network (RAN) claiming palm oil linked to illegal deforestation in Indonesia’s Rawa Singkil Wildlife Reserve may have entered their supply chains. The report, based on satellite imagery from February 2024, alleges that 2,609 hectares of forest were cleared since 2016, with palm trees now covering 645 hectares. Fresh fruit bunches from the illegal plantations were reportedly sold to mills supplying major brands. Procter & Gamble has stopped sourcing from the implicated mills, while both companies vowed to take further action if necessary.
USDA’s livestock, meat S&D changes... USDA raised its 2024 beef production forecast as higher dressed weights and cow slaughter more than offset lower expected steer and heifer slaughter. Beef production is now expected to rise 0.2% from year-ago. USDA also raised its beef export forecast, though it is still expected to decline 2.6% from last year. USDA raised its average cash steer price to $186.68, up 50 cents from last month and $11.14 above year-ago.
For 2025, USDA increased its beef production projection from last month, though output is still expected to decline 2.7%. USDA upped its beef export outlook, though shipments are still projected to fall another 8.8%. USDA raised its average cash steer price projection by $1.00 to $188.00.
USDA reduced its 2024 pork production forecast on a slower pace of slaughter in the fourth quarter and slightly lighter dressed weights, though output is still expected to rise 2.0% from last year. The pork export figure was modestly increased and is expected to rise 4.8% from year-ago. USDA increased the average cash hog price $1.25 from last month to $61.05, which would be up $2.46 from last year.
For 2025, USDA cut its pork production outlook, though it is still expected to rise 1.9%. The pork export outlook was lowered but is still projected to rise 2.8%. USDA raised its average cash hog price projection by $1.00 to $59.00.