EU Delays Tariffs on U.S. Goods Until Mid-April for Negotiations

Updates: Policy/News/Markets, March 20, 2025

— Supreme Court may revisit presidential power over Fed. A new legal case could challenge the long-standing belief that the White House cannot remove Federal Reserve leadership, according to former senior Fed official David Wilcox. The issue gained attention after Trump fired two Democratic FTC members, recalling a 1933 case where the Supreme Court ruled Congress could limit presidential firing power. Wilcox, in a research note, warns that if the court overturns that precedent, the Federal Reserve’s independence could be at serious risk.

— Former Trump energy official returns to DOE for renewable research. Angelos Kokkinos, a former top official in the Department of Energy’s fossil office under President Trump, has rejoined the DOE as a senior adviser in the Office of Energy Efficiency and Renewable Energy (EERE). Kokkinos, who recently served as a judge for the Elon Musk Foundation’s XPrize carbon removal competition, will oversee research and development efforts to advance renewable energy and efficiency technologies. His return aligns with a trend of EERE leadership, including office chief Audrey Robertson, having backgrounds in fossil fuel industries.

— Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to lower openings. In Asia, Japan closed. Hong Kong -2.2%. China -0.5%. India +1.2%. In Europe, at midday, London -0.4%. Paris -1.3%. Frankfurt -1.9%.

Equities yesterday:

(Exchanges)

— Trump pressures Fed for rate cuts amid tariff concerns. President Donald Trump has renewed calls for the Federal Reserve to cut interest rates, arguing that lower rates would support his tariff policies. Despite inflationary pressures and slowing growth tied to these tariffs, the Fed on March 19 kept rates steady at 4.25%-4.5%, citing economic uncertainty (see next item). Chair Jerome Powell acknowledged tariffs’ role in rising prices but remains cautious about immediate cuts, forecasting two reductions in 2025 instead. While Trump views rate cuts as part of his broader economic strategy, economists warn that his policies could fuel inflation and escalate global trade tensions.

— Fed holds rates steady, eyes two cuts amid rising uncertainty. The Federal Reserve on March 19 kept its benchmark interest rate unchanged at 4.25%-4.5% while signaling two rate cuts in 2025, maintaining its December outlook despite rising economic uncertainties. The central bank also announced a slowdown in balance sheet reduction, though one official dissented on that move.

Revised projections show lower GDP growth (1.7% in 2025 vs. 2.1% previously) and higher inflation expectations. Fed Chair Jerome Powell highlighted the difficulty of separating inflationary pressures from recent policy changes, particularly tariffs, but admitted it’s difficult to quantify their exact impact. While confirming that “a good part” of inflation is tariff-driven, he emphasized the Fed’s challenge of distinguishing tariff-related inflation from other sources. Powell reiterated that some inflation might be temporary, reviving the term “transitory” despite its previous retirement. However, he cautioned that while the Fed’s base case assumes inflation will fade on its own, there’s uncertainty, and they will need to monitor how things unfold. The Fed emphasized patience, opting to wait for clearer economic signals before making policy adjustments.

Some worry that Powell may be mistakenly playing down the risks of Trump’s trade war, as he did in 2022 when he wrongly called inflation “transitory.”

Of note: Powell was asked why consumers appear to are still seeing high grocery bills. Grocery bills are based on past inflation, Powell noted, “It’s not the change in prices.” Consumers are unhappy, “and they are not wrong that prices went up quite a bit and they are paying for those things.” He commented that the fundamentals for the economy are still solid “We have 4.1% unemployment and 2% growth,” he remarked. “It’s a pretty good economy. But people are unhappy because of the price level. And we completely understand and accept that.”

Bottom line from Tom Essaye of the Sevens Report: “This was a slightly dovish meeting as the Fed clearly signaled it’s watching the economy and it’s getting a bit nervous about growth. Practically, this should keep rate-cut expectations stable at two-three cuts in 2025, with the first one coming in June (perhaps May became slightly more likely, but not materially). From a market reaction standpoint, the moves confirmed our view that this was a slightly dovish statement. The Dollar Index fell 0.1% after its release (but was still up solidly on the day), while the 10-year yield dipped 2 basis points (it was 3 basis points higher pre-Fed and just 1 basis point higher post-Fed). Stocks saw a mild extension of the rally on the slightly dovish out-come, but since it didn’t dramatically alter the outlook for the Fed (first cut in June) it wasn’t a market-moving event. Bottom line: the Fed was slightly dovish vs. expectations because it highlighted risks to growth and lowered the monthly Treasury bond run-off. But it wasn’t a big enough surprise to materially move markets or change the outlook.

— Nvidia Chief Executive Jensen Huang told the Financial Times the company would spend hundreds of billions of dollars on chips and other electronics made in the U.S. His remarks came as Nvidia hosts its flagship AI conference.

— Ag markets today:

• Soybeans continue to lead weakness. Soybeans continue to see relative weakness with wheat following to the downside. Corn is seeing relative strength. As of 7:30 a.m. ET, corn futures were steady to a penny higher, soybeans were 3 to 5 cents lower and winter wheat futures were 4 to 6 cents lower. The U.S. dollar index was up around 500 points, while front-month crude oil futures were trading near unchanged.
• Choice cutout surges higher. Cutout has shown impressive strength following last week’s breakout higher in cattle prices. Choice cutout surged $6.29 to $329.61 on Wednesday, while Select lost 55 cents to $308.68. Cash cattle trade remains non-existent so far this week.
• Cash hog fundamentals shaky. The CME lean hog index is up another 9 cents to $89.41, but USDA data points to another turn lower to end the week. Pork cutout continues to inch lower near recent lows, falling 45 cents to $95.19 Wednesday, led by losses in ribs.

— More U.S. cotton sales to China canceled as outstanding sales totals continue to fall. Weekly Export Sales activity to China for the week ended March 13 noted 2024-25 activity including net sales of 400 metric tons of corn, 269,892 metric tons of soybeans, and net reductions of 49,337 running bales of upland cotton. Activity for 2025 included net sales of 192 metric tons of beef and 262 metric tons of pork. The data also showed the outstanding sales totals to China have continued to decline with just 191 metric tons of corn, 4,000 metric tons of sorghum, 1,223,564 metric tons of soybeans, and 155,348 running bales of upland cotton for 2024/25 and 16,779 metric tons of beef and 19,445 metric tons of pork for 2025.

— NASS reinstates key agricultural reports. USDA’s National Agricultural Statistics Service (NASS) announced it will reinstate the July Cattle report and County Estimates for Crops and Livestock after previously discontinuing them. The Cattle report will be released on July 25, while county estimates for major row crops will resume for the 2024 crop season and for small grains in 2025. Specific release dates include corn, sorghum, and soybeans (May 6), cotton (May 12), cattle (May 13), and rice and peanuts (May 23). Notably, NASS did not reinstate the Cotton Objective Yield Survey and has not disclosed how it secured funding for the report restorations.

— Allendale releases planting survey. A survey of farmers released by Allendale showed plantings of corn up 3.7% from 2024 at 93.981 million acres and plantings of soybeans down 3.2% at 84.283 million acres. That is not far from USDA’s projections at Outlook Forum, which pegged corn seedings at 94 million acres and soybeans at 84 million acres. The Allendale survey pegged wheat plantings at 45.863 million acres.

— Canada’s January potash exports hit a record as U.S. buyers anticipated tariffs, a trend that may extend with the Trump administration’s policy still fluid, according to Bloomberg Intelligence.

Background on potash exports

• Canada’s position: Canada is the world’s largest exporter of potash, accounting for just over 41% of global exports. The majority of its exports come from Saskatchewan, making it a crucial player in the global potash market.
• U.S. dependence: The U.S. relies heavily on Canadian potash, importing over 80% of its needs from Canada. This reliance makes the U.S. particularly vulnerable to changes in Canadian export policies or U.S. tariffs.

Impact of U.S. tariffs

• Tariff implementation: The Trump administration implemented a 25% tariff on Canadian potash imports, which was later reduced to 10%. This move was part of broader trade tensions between the U.S. and Canada.
• Market response: As noted, the anticipation of tariffs led U.S. buyers to stockpile Canadian potash, contributing to the record exports in January. This stockpiling was a strategic move to secure supplies before tariffs took effect.

— EU to cut Ukrainian sugar imports amid farmer protests. The European Commission is set to significantly reduce sugar imports from Ukraine following complaints from EU farmers about falling prices, sources told Reuters. Initially, Brussels granted Ukraine free access to agricultural markets as support after Russia’s 2022 invasion. However, pressure from farmers has led to a rollback in policies. EU Agriculture Commissioner Christophe Hansen discussed the planned cuts with French farm unions in February, saying imports would drop “well below” current levels. Ukrainian Deputy Economy Minister Taras Kachka urged a “fair deal” and warned against reverting to outdated trade terms. The EU previously reintroduced quotas on Ukrainian sugar, but imports still surged, contributing to a 30% drop in European sugar prices last year.

— Agriculture markets yesterday:

(Exchanges)

— Oil prices little changed, as a higher-than-expected fuel inventories drawdown in the U.S and renewed tensions in the Middle East countered strength in the dollar.
Brent crude futures slipped 11 cents, 0.16%, to $70.67 a barre, while U.S. West Texas Intermediate crude (WTI) contract for April was flat. The more active WTI May contract fell 12 cents, 0.18%, to $66.79.

— Oil prices edged up Wednesday amid inventory draws and geopolitical tensions. Oil prices rose slightly on Wednesday after U.S. government data showed a draw in fuel inventories, though gains were limited by the Federal Reserve’s decision to hold interest rates steady. Brent crude settled up 22 cents (0.31%) at $70.78, while WTI gained 26 cents (0.39%) to $67.16. While U.S. crude stocks increased by 1.7 million barrels, distillate inventories saw a sharp decline of 2.8 million barrels, exceeding forecasts. Analysts interpreted the net product draw as a bullish signal for prices.

— EPA delays year-round E15 in Ohio, South Dakota counties. EPA finalized a one-year delay in implementing the 1-psi waiver for year-round E15 fuel sales in Ohio and nine South Dakota counties. The rule, published in the Federal Register (link), pushes the effective date to April 28, 2026. The agency cited supply concerns following a refinery explosion affecting western South Dakota, and Ohio’s lack of infrastructure for low-RVP gasoline. Without the delay, EPA warned of an insufficient gasoline supply in the affected areas.

— Biofuel slowdown in U.S. and Canada driven by policy uncertainty and trade tensions. The recent decline in biofuel production in the U.S. and Canada is largely due to unclear policies on green fuel subsidies and escalating trade tensions, Reuters reports. Key factors include:

• Policy uncertainty: The Clean Fuel Production Credit (CFPC), replacing the Blenders Tax Credit, lacks clear implementation guidelines, affecting production planning.
• Trade barriers: Tariffs on imported feedstocks, including a 25% duty starting March 4, are raising costs for biofuel producers, leading to reduced output.
• Oilseed demand impact: Lower biofuel production is weakening demand for soybeans and canola, causing price drops and potential planting reductions.
• Economic consequences: Rural economies reliant on biofuel production face financial strain, while global vegetable oil markets could experience disruptions.

Upshot: Without clearer policies and stable trade conditions, the North American biofuel industry faces prolonged uncertainty.

— Trump weighs extending Chevron’s Venezuela license while penalizing other buyers. The Wall Street Journal first reported that the Trump administration is considering extending Chevron’s license to pump oil in Venezuela while imposing financial penalties on other countries purchasing oil from the South American nation. According to WSJ sources familiar with the discussions, President Trump met with Chevron CEO Mike Wirth and top administration officials Wednesday at the White House (see next item). Trump signaled openness to reversing a previous order requiring Chevron to wind down its Venezuela operations by next month. As part of this move, the administration is exploring tariffs or sanctions targeting countries — particularly China — that buy Venezuelan oil. This measure is aimed at maintaining a U.S. foothold in Venezuela’s energy sector while deterring foreign competitors.

Chevron has argued that its departure would allow China to expand its influence over Venezuela’s oil industry, a key concern for U.S. policymakers. Commerce Secretary Howard Lutnick suggested that financial penalties on Venezuela’s buyers could pressure President Nicolás Maduro into negotiations, particularly regarding the deportation of Venezuelan migrants from the U.S. — a Trump administration priority.

The potential shift has sparked political debate, particularly among Florida Republicans who have long advocated for strict sanctions on Maduro’s regime. Secretary of State Marco Rubio and National Security Adviser Mike Waltz, both vocal critics of Maduro, have expressed opposition to Chevron’s continued presence in Venezuela.

Trump’s move to revoke Chevron’s license in February came after Florida lawmakers pressured the White House, but the administration previously signaled willingness to negotiate with Maduro, securing the release of six American hostages and a resumption of deportation flights.

— White House meeting focuses on deregulation, not oil prices. President Donald Trump and top energy officials met with oil executives Wednesday, emphasizing deregulation, domestic energy production, and the U.S. electric grid. Interior Secretary Doug Burgum noted there was “really no discussion on price.” Instead, talks centered on permitting, with industry leaders pushing for lasting legislative changes beyond executive actions. Energy Secretary Chris Wright said tariff discussions remain ongoing. Congress has yet to reach a bipartisan agreement on permitting reform despite multiple efforts.

— Canadian lumber firms eye U.S. amid tariff threat. President Donald Trump’s proposed tariffs on Canadian lumber could drive more producers to relocate operations to the U.S. South while prompting efforts to tap alternate markets, industry experts say, according to Reuters (link). The proposed 25% tariff — combined with existing duties of 14.54% — could push levies to 40%.

Canadian firms have increasingly shifted to the U.S. South due to lower costs and looser harvesting regulations. The region surpassed Canada in softwood lumber capacity in 2022 and is expected to expand further. However, efforts to redirect supplies to Asia face logistical challenges.

Meanwhile, rising lumber costs could drive up U.S. home prices, with analysts warning of short-term financial pain for the industry.

— Trump’s reciprocal tariff plan faces legal hurdles. President Trump’s plan to impose reciprocal tariffs on April 2 aims to counter perceived trade imbalances by matching tariffs imposed by other nations on U.S. exports. The strategy seeks to protect domestic industries and reduce the trade deficit, but its legal basis is uncertain.

While Congress holds constitutional authority over tariffs, past laws have delegated some power to the executive branch. Trump may rely on statutes like the International Emergency Economic Powers Act (IEEPA), though its use for trade rather than national emergencies is untested. The Reciprocal Trade Agreements Act of 1934 allows trade negotiations but does not explicitly authorize unilateral tariffs.

Legal challenges could arise over the president’s authority, the lack of congressional approval, and potential violations of international trade agreements. Courts may need to decide whether trade imbalances qualify as a national emergency under IEEPA and whether the plan aligns with U.S. commitments under the WTO. Given the novel legal arguments involved, Trump’s tariff strategy is likely to face significant judicial scrutiny.

— Trade tensions shake up New York special election. President Donald Trump’s escalating trade dispute with Canada is injecting uncertainty into a special election in New York’s 21st District, potentially making it more competitive for Democrats. The seat, currently held by Rep. Elise Stefanik (R-N.Y.)), is open as she was tapped to be Trump’s ambassador to the United Nations. Though the district strongly backed Trump in 2024, the economic impact of tariffs on Canadian goods could erode GOP support. Democratic candidate Blake Gendebien, a dairy farmer, is emphasizing cross-border trade concerns, while multiple Republican contenders, including state lawmakers and a wealthy businessman, vie for the nomination. The outcome could have national implications, influencing control of the House and Trump’s legislative agenda.

Of note: Stefanik’s nomination has been delayed due to the slim Republican majority in the House, which relies on her vote to pass key legislation. However, her confirmation process is expected to move forward on April 2, after the seating of new House members from Florida, which will provide Speaker Mike Johnson (R-La.) with more flexibility in the House. The Senate Foreign Relations Committee approved her nomination via voice vote on Jan. 30, but the full Senate has not yet voted on her confirmation

— Farm Bureau: Proposed USTR fees on Chinese ships could hurt U.S. farmers. A new proposal from the U.S. Trade Representative (USTR) to impose fees on Chinese-operated and Chinese-built ocean carriers could have serious financial consequences for American farmers and ranchers, according to an analysis (link) by the American Farm Bureau Federation (AFBF). Public comments on the proposed action are due on March 24 (link).

With two-thirds of U.S. agricultural exports shipped overseas, increased transportation costs could significantly impact profitability. The proposed fees — up to $1.5 million per port call — are part of a broader effort by the Trump administration to counter China’s dominance in global shipping and logistics.

AFBF economists warn that these fees could add between $372 million and $930 million in annual transportation costs for bulk agricultural exporters. The Market Intel report notes that this could increase costs by 9.5 to 27.8 cents per bushel of soybeans, a significant loss in an industry where margins are razor thin.

Beyond exports, essential imports such as fertilizer, machinery, and specialty crop supplies could also see cost increases if carriers pass these fees on to consumers. “Farmers support the goals of creating a level playing field for trade and strengthening the nation’s supply chain,” said AFBF President Zippy Duvall. “Unfortunately, farmers may feel the brunt of increased costs in exporting their goods. They’ve lost money on almost all major crops for the past three years. Higher freight rates could make things even worse by reducing their competitiveness overseas.”

The USTR plan also calls for prioritizing U.S.-flagged, U.S.-operated, and U.S.-built vessels. However, China currently controls over 5,500 commercial vessels, while the U.S. has only around 100. The ability to build more American ships presents a challenge, as U.S. shipyards are fewer and take up to four years to complete a vessel, compared to 12 months in some Asian shipyards.

(Farm Bureau )

— Long-term drug use may delay Alzheimer’s symptoms. Scientists have discovered that taking an amyloid-lowering drug for about eight years could cut the risk of developing Alzheimer’s symptoms in half. A study published in Lancet Neurology found that beta amyloid plaques, which accumulate between neurons and disrupt brain function, may be managed effectively with early intervention. Dr. Eric McDade of Washington University in St. Louis called it the first evidence suggesting a significant delay in symptom onset.

— Push for “food as medicine” gains momentum. Advocates of the “food as medicine” movement are urging the healthcare industry to recognize the role of nutrition in health outcomes. Speaking at a Wednesday webinar hosted by the Center for Food as Medicine, Natasha Pernicka, executive director of The Alliance for a Hunger Free New York, emphasized the need for policy solutions that prioritize healthier food choices. She called for increased investment in specialty crops, arguing that they offer better health benefits than ultra-processed foods.

The movement has gained traction since the Biden administration’s 2022 conference on nutrition and health. Supporters hope the “Making America Healthy Again” (MAHA) initiative will drive policy changes, particularly in hospitals, where food insecurity is often overlooked.

Meanwhile, Trump’s USDA has cut $1 billion in funding for food banks and schools to purchase local foods, adding urgency to the push for reform.

— China’s imports of U.S. beans up sharply. China’s soybean imports from the U.S. jumped 84.1% from year ago in the first two months of 2025. China brought in 9.13 MMT of soybeans in the first two months of 2025, up from 4.96 MMT last year. Competition from Brazil is expected to limit imports in the coming months. Imports from Brazil in January to February fell 48.4% from a year ago to 3.59 MMT. The recent harvest surge should allow more beans to flow to China from Brazil in the next couple months.

— IRS, DHS discuss sharing tax data for deportations. The IRS and the Department of Homeland Security are in talks to share confidential taxpayer data to aid deportation efforts. Currently, undocumented immigrants can register with the IRS and pay taxes, with their information protected under tax law. However, this new effort could change that. Two immigrant rights groups have sued to block the move, but a district judge on Wednesday declined to issue an emergency order preventing the IRS from sharing the data.

— NWS outlook: CoolingMajor late winter/early spring snowstorm to push into the Upper Mississippi Valley and Great Lakes... ...Severe weather possible this evening across much of Illinois and Indiana... ...Light to moderate snow over the Cascades and Northern Intermountain Region; light snow over the Great Lakes, Central Appalachians, and Northeast... ...There is a Critical Risk of fire weather over the parts of the Southern High Plains and Florida on Thursday and an Elevated Risk over the Central/Southern Plains and Middle/Lower Mississippi Valley on Friday.

(NWS)

20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

Economic aid for farmers | Disaster aid for farmers | Farm Bureau summary of aid/disaster/farm bill extension | 45Z tax incentive program | Poultry and swine line speeds | U.S./China Phase 1 agreement | WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | RFS | IRA: Biofuels | IRA: Ag | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum | Eggs/HPAI | NEC task force on HPAI, egg prices | Options for HPAI/Egg prices | Trump tariffs | Greer responses to lawmakers | Trump reciprocal tariffs |