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Trump confirms tariffs start on Tuesday, says duties on ag imports coming April 2... President Donald Trump confirmed tariffs on imports from Mexico and Canada are “all set” to go into effect on Tuesday. There will be a 25% tariff on all imports from Canada and Mexico, except Canadian energy, which would face a 10% rate. The White House said Trump also signed an order doubling a tariff on China to 20% that will take effect Tuesday. The directive said Beijing had “not taken adequate steps” to address the flow of illicit fentanyl into the United States.
Mexico and Canada reportedly sought to avoid tariffs via last-minute deals, but Trump said there was “no room left” to negotiate. He said the tariffs are to force the two countries to step up their fight against fentanyl trafficking into America.
Trump also said the U.S. would impose tariffs on “external” agricultural products starting on April 2. Trump wrote on social media, “To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!” It’s unclear if his plan is part of a previously announced effort to enact so-called “reciprocal” tariffs on nearly all U.S. trading partners, which are expected to begin next month.
Farmers no longer need to submit tax returns for USDA aid... USDA Secretary Brooke Rollins stated that farmers will no longer be required to submit tax returns for financial aid. During her speech at Commodity Classic in Denver, Rollins announced changes to the disaster aid distribution process, saying, “Gone are the days of progressive factoring. No longer will you be required to turn in your tax returns.” She emphasized that this marks “a new day at USDA” and that the distribution of the $21 billion in disaster aid would be based strictly on need, regardless of skin color or geographic location.
Soybean crush slips from all-time high but not by as much as expected... U.S. processors crushed 212.5 million bu. of soybeans during January, which was 1.6 million bu. more than analysts expected. Crush declined 5.1 million bu. (2.4%) from the all-time record in December but increased 18.3 million bu. (9.4%) from last year.
Corn-for-ethanol use drops more than expected in January... USDA reported corn-for-ethanol use totaled 457.4 million bu. during January, 8.4 million bu. less than analysts expected. Corn ethanol use fell 22.3 million bu. (4.6%) from the upwardly revised figure for December but rose 16.3 million bu. (3.7%) from January 2024.
Of note: USDA increased its December corn-for-ethanol usage figure by 6.5 million bushels. Given the historically high per-bushel yield of 3.04 gallons for January, up from 2.95 gallons in December, we expect an upward revision to the January usage figure next month.
Through the first five months of 2024-25, corn-for-ethanol use totaled 2.323 billion bu., up 2.2% from the same period last year. To reach USDA’s forecast of 5.500 billion bu., the corn ethanol usage pace would need to run 0.9% below year-ago the final seven months of 2024-25.
Argentine grain export value jumps 45% in February... Argentina exported $2.18 billion of ag goods in February, a 5.2% rise from January and a 45% surge from year-ago, according to the CIARA-CEC chamber of oilseed and grains crushers and exporters. The jump in export revenue followed a presidential decree in late January that reduced export taxes on grains and oilseeds.
U.S. manufacturing stagnation concerns mount... U.S. factory activity last month edged closer to stagnation as orders and employment contracted, while a gauge of prices paid for materials surged to the highest since June 2022 as tariff concerns mounted. The Institute for Supply Management’s (ISM) manufacturing index slipped by 0.6 point in February to 50.3. ISM’s employment index dropped 2.7 points to 47.6, while the price measure increased 7.5 points to 62.4.
Bloomberg reported that rising costs represent a challenge for manufacturers against a backdrop of shrinking orders that suggests demand is at risk of retrenching as businesses weigh the implications of tariffs from the Trump administration. It noted producers may be hard-pressed to pass on higher costs should sales continue to weaken.
“Demand eased, production stabilized and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement. “Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts.”
Gov’t shutdown looms as funding deadline nears... With less than two weeks until the March 14 government funding deadline, there’s still no agreement in sight. GOP leaders, who previously promised to handle the situation early, are now scrambling to pass a continuing resolution (CR) to maintain funding at current levels until Sept. 30. However, Democrats are demanding that any funding bill include provisions requiring President Donald Trump to follow congressional spending directives — something he has resisted, and Republican leaders oppose. House Speaker Mike Johnson (R-La.) may struggle to pass a CR with only Republican votes, and Democrats are wary of stepping in to help, particularly amid fallout from the DOGE program cuts and layoffs, including 7,000 workers from the Social Security Administration, layoffs at the VA and FAA layoffs while Musk is pushing to get a new Starlink contract out of the agency. While Johnson recently signaled he won’t pursue DOGE cuts until fiscal year 2026, his stance could create friction within his own party.
Republicans concerned as Trump overlooks high prices, risks economic backlash... President Trump’s focus on federal workers, diversity programs and foreign policy has left Republicans worried that his lack of attention to high consumer prices — especially record egg costs — could hurt him politically if inflation persists, the Wall Street Journal reports. Despite his campaign promises to lower prices, Trump’s proposed tariffs on foreign imports could further drive up costs. With U.S. consumer confidence seeing its steepest decline in four years, GOP strategists fear voters’ patience may wear thin if tangible economic relief doesn’t materialize soon.
Tariffs: Economic and price impacts... Tariffs could worsen inflation, influencing the Federal Reserve’s cautious approach to interest rate cuts. Meanwhile, cost-cutting and jobs elimination measures could affect employment data over time. The Bloomberg Economics team has slashed its U.S. GDP forecasts to 0.4% for this quarter and 0.9% for the second quarter, from 1.5% and 2% previously. On Wall Street, the narrative has shifted from “U.S. exceptionalism” to discussion of recession risks. “Stagflation” has also re-entered the conversation.
Treasury Secretary Scott Bessent says the administration is recalibrating the economy so that growth is led by the private sector, not government spending. Inflation will come down as Trump’s agenda of deregulation, energy expansion and permanent tax cuts takes hold, he said in an interview on Bloomberg TV Friday.
Meanwhile, a Wall Street Journal item on tariffs explained why impacts on some goods are more than others. A 10% tariff doesn’t always mean a 10% price increase. While Italian wine might see nearly the full tariff passed to consumers, raising prices by almost 10%, shoes from China might only rise about 4%. Factors like currency fluctuations, available alternatives and producer pricing strategies influence how much of a tariff consumers actually feel. Moody’s analysis, cited by the Wall Street Journal, shows that a 10% tariff on Indian tablecloths would only bump prices by 2%, demonstrating how competition and market dynamics soften the impact of tariffs.
Trump unveils U.S. crypto reserve plan, boosting market... President Trump announced the inclusion of five digital assets — bitcoin, ether, XRP, solana and cardano — in a new U.S. strategic reserve of cryptocurrencies. The announcement, made on Truth Social, caused a surge in cryptocurrency values. The total cryptocurrency market gained over $300 billion, according to CoinGecko. The move marks a significant shift in U.S. crypto policy, with analysts noting its potential to accelerate institutional adoption and provide regulatory clarity. Trump’s administration has taken a more favorable stance toward the crypto industry, including withdrawing SEC investigations into several crypto companies. Trump will host the first White House Crypto Summit on Friday as his administration pushes forward on pro-crypto initiatives.
Lutnick proposes stripping government spending from GDP measure... Commerce Secretary Howard Lutnick announced plans to exclude government spending from the gross domestic product (GDP) report, aiming for greater transparency. While offering no timeline for the change, Lutnick argued that current GDP metrics overstate economic performance by including government expenditures. He dismissed fears of a recession despite recent economic indicators and defended the Trump administration’s policies of deep spending cuts and layoffs. Economists warned that altering GDP calculations could increase volatility and hinder comparisons with other economies.