Evening Report | USDA’s March WASDE Report will factor in tariffs

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

USDA’s demand forecasts will factor in tariffs... USDA’s monthly Supply & Demand Report on Tuesday will consider trade policies currently in place at the time of publication and assume those will remain throughout the forecast time period. President Donald Trump suspended tariffs on Canada and Mexico until April 2 for goods covered by the U.S.-Mexico-Canada Agreement, but non-USMCA-compliant goods face duties. Additional Chinese tariffs on U.S. ag goods kicked in today. The Chinese duties include a 15% additional tariff on corn, wheat and cotton; 10% for soybeans, sorghum, pork, beef and dairy products. The following pre-report estimates are from a Reuters survey; Bloomberg for cotton.

EU trade chief says U.S. not seeking deal to avert tariffs... The Trump administration does not seem to be engaging in talks to avoid trade conflict with the European Union, said European Trade Commissioner Maros Sefcovic. He said, “I traveled to U.S. last month. I was seeking constructive dialogue to avoid the unnecessary pain of measures and countermeasures. We jointly identified a few areas that would allow us to move forward by fostering mutual benefits. But in the end, as it said, one hand cannot clap.”
Sefcovic noted, “We will always protect European businesses, workers and consumers from unjustified tariffs. I think we’ve been very clear about it, and we know that they expect no less from us.”

Trump comments spark recession concerns... President Donald Trump said the U.S. economy faces “a period of transition,” deflecting concerns about the risks of a recession, while refusing to rule out the possibility of an economic soft patch. Asked on Fox News’ Sunday Morning Futures whether he’s expecting a recession this year, Trump said, “I hate to predict things like that. There is a period of transition, because what we’re doing is very big.”
Economists have been raising odds for a U.S. economic downturn amid uncertainty with Trump’s trade and economic policies, geopolitical risks, rising volatility and elevated inflation.
The U.S. stock market indexes fell sharply on Monday amid the building recession concerns.

Malanga: Budget progress overshadowed by tariff uncertainty... Dr. Vince Malanga, President of LaSalle Economics, says that fortunately, the budget resolution, which includes an extension of the 2017 tax cut, passed the House by the narrowest of margins. However, he notes the Senate version is significantly different, requiring reconciliation. Neither version includes full retroactive expensing of capital equipment investment, despite presidential support. With a possible government shutdown looming, formal legislation may not be enacted until mid-spring.

Tariffs, now back on with exemptions, have blunted budget progress, contributing to market turbulence and consumer confusion, Malanga notes. Business decisions are being delayed, capital expenditures are weakening, and the economy is barely growing this quarter. Fiscal drag is beginning to assert itself, suggesting further weakness ahead.

Tariff-induced inflationary pressures are not a primary concern, as energy prices are declining, Malanga observes. He says the labor market is showing warning signs, with jobless claims rising in the Capital area and weak aggregate hours worked. Employers may start cutting payrolls if demand remains soft, pressuring income and spending.

The housing market remains sluggish, with fiscal drag from the Department of Government Efficiency replacing prior government stimulus. Malanga says the Federal Reserve may need to ease monetary policy quickly and meaningfully to support housing and capital spending. However, he adds there is concern that an undue focus on tariffs and tax cuts could delay needed agility from the Fed.

U.S. to press Ukraine for truce commitments... U.S. and Ukrainian officials will meet in Saudi Arabia this week to discuss the timing and scope of an initial ceasefire with Russia, with multiple points of tension still to be ironed out. The planned talks in Jeddah will follow several days of intense pressure by President Donald Trump’s administration on the Ukrainian leader Volodymyr Zelenskyy, including the suspension of military aid and intelligence assistance.

An economic agreement between Washington and Kyiv on Ukraine’s natural resources has been tied to securing a truce commitment, Bloomberg has reported. Trump said Sunday he believes Zelenskiy will sign the resources deal. Steve Witkoff, the U.S. Middle East envoy, on Monday echoed that optimism, saying he “certainly” hoped the deal would be completed this week.

Russia is willing to discuss a temporary truce in Ukraine provided there is progress toward a final peace settlement, people familiar with the matter in Moscow told Bloomberg.

India, EU push for ambitious trade deal amid geopolitical tensions... India and the European Union are set to hold a new round of trade talks in Brussels from today to Friday, aiming to finalize a comprehensive trade agreement by the end of the year. The negotiations, relaunched in June 2022, follow an earlier attempt between 2007 and 2013 that failed to reach a deal after 16 rounds of discussions. The renewed urgency comes as geopolitical tensions rise and the threat of tariffs from President Donald Trump looms.