China Blocks Shipments from Five Brazilian Soybean Plants
CME trading mostly restored as halt extended for hours after data-center failure | Canada’s trade moves will impact USMCA negotiations | Grain storage squeeze deepens as rail shipments climb | USDA daily export sales
Link: Deere Tops Q4 Forecasts but 2026 Outlook Disappoints, Sending Shares Lower
Link: Audio: Wiesemeyer’s Perspectives, Nov 21, updated later today
Link: Video: Wiesemeyer’s Perspectives, Nov. 21, updated later today
Today’s Updates:
TOP STORIES
— CME trading initially halted for hours after data-center failure; now restored
— China blocks shipments from five Brazilian soybean plants
— OPEC+ poised to hold fire on 2026 output hike
— Putin signals openness — but no concessions — on Trump’s Ukraine proposal
— Canada greenlights new pipeline as Ottawa pivots from U.S. dependence
— Canada’s pivot to Asia rewires the USMCA battlefield
FINANCIAL MARKETS
— Equities today: Global equities steady after four-day rally; Dow opens 70 higher
— Equities Wednesday
— Adobe predicts $43.7B in U.S. online spending from Thanksgiving to Cyber Monday
AG MARKETS
— USDA daily export sales
— Grain storage squeeze deepens as rail shipments climb
— Brazil, China launch joint venture to modernize family farming
— Agriculture markets Wednesday
ENERGY MARKETS & POLICY
— Brent edges higher as peace-talk uncertainty and CME outage shake oil markets
— Brazil eases biofuel rules as U.S. trade frictions subside
TRADE POLICY
— October 2025 tariff collections hit record — what it means for year-end forecasts
TAX POLICY
— OBBBA tax bill rewrites the rules
CONGRESS
— Budget scoring in dark: Why Congress needs real transparency from fiscal referees
TRANSPORTATION/LOGISTICS
— Iowa lifts weight limits to speed harvest transport
BORDER, IMMIGRATION, DEPORTATION & LABOR
— Guard member dies of injuries; Trump threatens immigration policy changes
WEATHER
— NWS outlook: Heavy lake-effect snow, winter storm for Plains/Midwest,
below-normal temps into weekend
Updates: Policy/News/Markets, Nov. 28, 2025
Up Front— CME trading halt: A cooling-system failure at CyrusOne froze CME futures and options for hours before partial trading resumed; volumes remained thin amid a holiday-shortened session.— China blocks Brazil soy plants: Beijing suspended imports from five Brazilian facilities after detecting pesticide-treated wheat in soybean cargoes, prompting traders to consider rerouting shipments.— OPEC+ holds on 2026 output: The group is expected to maintain its pause on early-2026 production hikes, with Trump-led Ukraine peace efforts adding new uncertainty to oil-supply forecasts.— Putin on Trump proposal: Putin signaled Trump’s Ukraine plan could serve as a future basis for talks but emphasized no current concessions as Moscow continues fighting.— Canada approves pipeline: Ottawa greenlit a major Pacific-bound oil pipeline, accelerating a shift away from U.S. dependence amid tariffs and a climate-policy reset.— Canada pivot reshapes USMCA: Canada’s new Asian-focused energy strategy strengthens its bargaining leverage and raises U.S. concerns over energy security and Chinese influence in upcoming USMCA talks.— Global equities: Markets were steady after a Fed-cut-driven rally; U.S. trading was muted due to Thanksgiving and complicated by the CME outage.— USDA sales: China bought 312,000 MT of U.S. soybeans; nearly 274,000 MT of corn was recorded to unknown destinations.— Grain storage squeeze: USDA reports the largest U.S. grain-storage deficit since 2016, driving surges in rail shipments in Kansas, Minnesota, and South Dakota.— Brazil–China farm-machinery JV: New binational alliance will produce low-cost small-scale tractors and equipment in Brazil to modernize family farming through technology transfer.— Ag markets: Grains mostly firm; cattle and hog futures continued strong gains; soybean meal and spring wheat weakened modestly.— Brent edges up: Oil rose slightly on peace-talk uncertainty and ahead of OPEC+, while WTI remained frozen by the CME outage.— Brazil eases biofuel rules: RenovaBio adjustments resolve most U.S. complaints, though broader Section 301 issues with Washington remain unresolved.— Tariff revenue record: October customs receipts hit $31.4B, signaling a potentially massive FY2025 haul but with economic, legal, and trade-volume risks to forecasts.— OBBBA tax overhaul: Beneath an unchanged 37% rate, the tax bill rewrites definitions of income and introduces new phase-outs that can push effective tax rates sharply higher.— CBO/JCT transparency push: A Wall Street Journal commentary argues Congress must force budget scorers to release full models and data to avoid costly fiscal errors.— Iowa weight-limit waiver: Temporary rules allow trucks up to 90,000 lbs to move grain, fertilizer, and manure statewide through Dec. 19.— Guard member killed; Trump escalates immigration vows: After a D.C. ambush killed a National Guard specialist, Trump announced sweeping immigration restrictions and reviews targeting Afghan evacuees and green-card holders from 19 countries.— NWS weather: Heavy lake-effect snow continues; a major winter storm will hit the Plains and Midwest into Saturday, with widespread below-normal temperatures east of the Rockies. TOP STORIES — CME trading halt extended for hours after data-center failureCooling fault at CyrusOne facility freezes futures and options across key markets A major outage at the Chicago Mercantile Exchange halted futures and options trading for hours, disrupting activity across equities, foreign exchange, bond, and commodity markets. The data-center malfunction has already exceeded the duration of a similar incident in 2019, highlighting the global reach of CME Group’s Globex electronic trading platform and prompting widespread frustration among traders bracing for a potentially lost session. The disruption froze millions of contracts tied to the S&P 500, Dow, and Nasdaq 100, which typically trade nearly 24 hours a day. A CME spokesman confirmed the issue stemmed from cooling failures at data centers operated by CyrusOne, the Dallas-based provider, though no timeline for restoring service was offered. CyrusOne operates more than 55 data centers in the U.S., Europe and Japan. Trading in U.S. Treasury futures was also halted, while European and UK bond markets — hosted on other exchanges — continued operating normally. Update: The CME began restoring most trading operations. The exchange’s Globex Futures & Options markets, which handles futures, options, and commodities trading and accounts for 90% of CME Group’s volume, opened at 8:30 a.m. New York time, with trades reported in U.S. futures and options. Volume remained light across many markets at the open. CME Direct, a platform used to trade some of the company’s markets, was still unavailable, according to an alert shortly before the exchange said that all its markets were open. Most U.S. markets were closed on Thursday for the Thanksgiving holiday, and are due to reopen for a shortened trading day. There is limited news expected today with no economic data scheduled for release in the U.S., and there are no expected Federal Reserve speakers ahead of a blackout period leading up to their anticipated December 9-10 FOMC decision. — China blocks shipments from five Brazilian soybean plantsBeijing flags contamination in select facilities as traders weigh cargo diversions China has suspended soybean imports from five Brazilian processing plants operated by major global traders after inspectors detected contamination in recent shipments, Bloomberg reports, citing people familiar with the matter. Chinese authorities reportedly halted purchases from two Cargill Inc. units and additional plants run by Louis Dreyfus Co., CHS Agronegócios, and Tres Tentos Agroindustrial SA. Inspectors reportedly found wheat grains treated with pesticides mixed into soybean cargoes destined for China. None of the companies immediately responded to requests for comment. The disruption lands at a sensitive moment for global oilseed flows. China has resumed buying some U.S. soybeans following the recent Washington/Beijing trade truce but continues to source heavily from Brazil due to persistent concerns about supply gaps. Of note: The suspensions apply only to the specific units flagged for contamination, and traders can still export to China from other approved facilities. Some companies with cargoes already en route are evaluating alternative plans, including rerouting shipments to other buyers. Earlier this year, China raised similar contamination concerns over Brazilian soybean cargoes, though those restrictions were later eased. — OPEC+ poised to hold fire on 2026 output hikeOnline meeting expected to rubber stamp earlier pause as Ukraine peace push clouds supply outlook OPEC+ nations are expected to reaffirm their decision to pause planned oil-production increases in early 2026 when they convene online this Sunday, according to reports familiar with the talks. The gathering is on track to simply ratify the policy framework agreed earlier this month, signaling a desire for stability amid uncertain market conditions. Still, the moment is anything but straightforward. President Donald Trump’s push for a Ukraine peace deal has introduced a new variable into the global oil equation. Any breakthrough — however distant — could eventually reopen pathways for additional Russian barrels to reach the market. For now, OPEC+ members appear content to hold steady and wait for clearer signals before revisiting their production strategy. — Putin signals openness — but no concessions — on Trump’s Ukraine proposalRussian leader says U.S. plan could serve as a future “basis,” even as Moscow digs in President Vladimir Putin said Friday that President Donald Trump’s proposal to end Russia’s war in Ukraine could, at some future point, form the “basis for agreements,” offering the first public hint of receptiveness from Moscow as backchannel diplomacy inches forward. Speaking in Kyrgyzstan ahead of next week’s planned meetings in Moscow with U.S. presidential envoy Steve Witkoff, Putin cautioned that any suggestion of a breakthrough is premature. “It would be impolite of me to talk about any final versions now. There are none,” he said. His comments underscore the ambiguity of Russia’s position: publicly skeptical, quietly engaged. The remarks come as Trump touts “tremendous progress” in the talks, though both sides continue to signal that negotiations remain at a very early stage. Diplomats familiar with the process say both Washington and Moscow appear willing to keep the channels open, but fundamental gaps remain — particularly over territory, long-term security guarantees, and Ukraine’s political future. Meanwhile, the war’s impact on Russia is deepening as the conflict enters its fourth winter. Drone strikes on energy infrastructure and residential areas near the frontlines have become more frequent, while households far from the fighting are tightening food budgets amid rising economic strain. The toll, while far less devastating than Ukraine’s suffering, highlights the mounting costs of Putin’s 2022 decision to launch the full-scale invasion — costs that still show no signs of pushing the Kremlin toward an exit. — Canada greenlights new pipeline as Ottawa pivots from U.S. dependenceTariffs, climate-policy reversal, and a push toward Asian markets drive a historic shift in Canadian trade strategy Canada has approved a major new pipeline to boost its Pacific-bound oil exports, marking one of the clearest breaks yet from its longstanding trade reliance on the United States. The move comes as President Donald Trump’s tariffs on Canadian imports continue to squeeze an economy in which roughly 91% of oil shipments typically flow south across the border. The approval also fits into what analysts describe as a broader reversal of Ottawa’s climate agenda — a strategic recalibration aimed at protecting Canada’s export-driven economy after successive rounds of U.S. trade pressure. Prime Minister Mark Carney has pledged to double non-U.S. exports in the next decade, a shift that is increasingly steering Canada toward China and India despite diplomatic frictions with both. Quote of note: The Canadian government framed the shift in stark terms in its latest budget proposal: “This is not a transition,” it wrote. “It is a rupture.” — Canada’s pivot to Asia rewires the USMCA battlefieldNew pipeline capacity, tariff pressures, and Ottawa’s climate-policy reversal strengthen Canada’s leverage while deepening U.S. concerns over energy security and Chinese influence USMCA impacts. Canada’s pipeline approval and broader pivot away from U.S. dependency directly affects the dynamics of USMCA negotiations — not by altering the text of the agreement, but by reshaping each side’s leverage, incentives, and political posture. Here’s how it plays out, according to trade analysts: 1. Canada gains alternative market leverage. For decades, Washington has negotiated with the assumption that Canada had nowhere else to send its oil. By accelerating Pacific export capacity — and signaling a strategic reorientation toward Asia — Ottawa increases its bargaining power. Effect on USMCA:• Canada becomes less vulnerable to threats related to energy trade.• Ottawa can resist U.S. demands on dairy, autos, digital rules, and procurement with more confidence.• It blunts the impact of Trump’s tariffs because Canada is building a non-U.S. pressure-release valve. 2. The U.S. may push harder on “continental energy security” provisions. President Trump has framed U.S. energy security as tied to North American supply chains. A Canadian pipeline aimed at Asia threatens that framing. Effect on USMCA: U.S. negotiators may seek tighter energy-integration language, including commitments on:• long-term supply assurances,• pipeline permitting cooperation,• limits on export redirection in crisis scenarios. Washington could also pressure Canada on rules-of-origin in EVs and critical minerals to retain Canada in U.S.-aligned supply chains. 3. Canada’s climate-policy reversal adds a political twist. Ottawa’s shift away from its earlier climate targets — coupled with new export infrastructure — may be used by U.S. negotiators to demand concessions elsewhere. Effect on USMCA:• U.S. may argue Canada is gaining a competitiveness advantage through looser climate rules.• Expect renewed debate on carbon border adjustments, methane rules, and cross-border environmental inspections. 4. The move deepens U.S. suspicion about China and India ties. With Ottawa openly courting China and India for energy sales, U.S. negotiators will see a strategic risk: the possibility of Asian influence expanding inside North America’s supply chains. Effect on USMCA: Expect harder U.S. scrutiny on:• investment screening,• port access and ownership rules,• digital trade and data security,• agricultural phytosanitary standards (if Canada’s firms collaborate more deeply with Chinese buyers). Washington may also re-litigate USMCA’s “poison pill” anti-China clause (Article 32.10), pushing tighter enforcement. 5. The tariff environment raises the stakes. With Trump’s reciprocal-tariff regime in place, the U.S./Canada relationship is already under unusual strain. Canada’s decision signals that Ottawa is preparing for a more confrontational trade era. Effect on USMCA:• Negotiations become more transactional, less cooperative.• Canada may start linking concessions across unrelated files (e.g., dairy access in exchange for tariff relief).• U.S. industries — autos, beef, lumber — will lobby harder to protect existing USMCA gains. Bottom Line: Canada’s pipeline approval isn’t an isolated energy decision — it’s a strategic realignment that forces Washington to reassess the foundation of USMCA. It increases Canada’s negotiating leverage, triggers U.S. security concerns, and raises the likelihood that upcoming USMCA talks will be harder, more politicized, and more deeply entangled with the U.S./China rivalry. |
| FINANCIAL MARKETS |
— Equities today: Global equities on Thursday steadied after a four-day rally driven by growing expectations that the Federal Reserve will move more quickly on rate cuts. The MSCI All Country World Index was little changed, having pared its November loss to 0.4% after clawing back from a nearly 4% decline just over a week earlier. European and Asian markets saw modest moves, while U.S. trading remained closed for Thanksgiving. Friday: The S&P 500 was on course for its first monthly loss since April before a technical outage at the Chicago Mercantile Exchange disrupted trading (see related item above). Futures for the U.S. benchmark are little changed. U.S. Dow opened up around 70 points. Stock and bond markets will close in early afternoon after the Thanksgiving holiday yesterday. Moves across global equities were muted. Europe’s Stoxx 600 was little changed, while an Asian gauge trimmed gains after a four-day rally. Money markets were signaling around an 80% chance of a Fed cut in the Dec. 9-10 FOMC meeting. In Asia, Japan +0.2%. Hong Kong -0.3%. China +0.3%. India flat. In Europe, at midday, London +0.1%. Paris +0.1%. Frankfurt -0.1%.
— Equities Wednesday:
| Equity Index | Closing Price Nov. 26 | Point Difference from Nov. 25 | % Difference from Nov. 25 |
| Dow | 47,427.12 | +314.67 | +0.67% |
| Nasdaq | 23,214.69 | +189.10 | +0.82% |
| S&P 500 | 6,812.61 | +46.73 | +0.69% |
— Adobe predicts Americans will spend $43.7 billion online in the five days from Thanksgiving to Cyber Monday, up 6.3% from 2024. Shoppers are projected to spend $11.7 billion on Black Friday and another $14.2 billion on Cyber Monday.
| AG MARKETS |
— USDA daily export sales:
• 312,000 metric tons of soybeans to China during 2025/2026 marketing year
• 273,988 MT corn received in reporting period to unknown destinations during the 2025/2026 marketing year
— Grain storage squeeze deepens as rail shipments climb
USDA Grain Transportation Report highlights largest national storage deficit since 2016
U.S. grain storage capacity is under its tightest pressure in nearly a decade. USDA estimates total fall grain supplies at 25.66 billion bushels — including Sept. 1 stocks plus new production of corn, soybeans, and sorghum — 10% above the five-year average. When compared against total on- and off-farm storage capacity, this year’s supplies imply a national storage deficit of 184 million bushels (mbu), the largest shortfall since 2016. The imbalance is increasing pressure on grain handling, drying, and transportation systems across major producing regions.
Several top-producing States entered harvest with significantly less storage available than average, including:
• Iowa: –390 mbu
• Kansas: –320 mbu
• South Dakota: –318 mbu
• North Dakota: –310 mbu
• Nebraska: –257 mbu
• Minnesota: –205 mbu
These States also account for most of the emergency temporary storage authorized under the U.S. Warehouse Act, reflecting the severity of the space crunch.
Transportation activity is responding. Over the past six weeks through November 14, grain railcar loadings have surged in several key States:
• Kansas: +5,270 cars (+43%)
• Minnesota: +3,180 cars (+17%)
• South Dakota: +1,180 cars (+10%)
The uptick underscores how the rail sector is absorbing the overflow from constrained storage and heavy harvest movement, helping relieve pressure on elevators facing record-tight capacity.
— Brazil, China launch joint venture to modernize family farming
New alliance will produce low-cost machinery with technology transfer and local manufacturing
Brazil and China have formed a new binational alliance to close the mechanization gap in family farming, launching a joint venture that will manufacture lightweight, affordable agricultural machinery inside Brazil. The agreement — signed at the Ministry of Agrarian Development (MDA) with Minister Paulo Teixeira and executives from both countries — pairs a Brazilian agricultural company with a globally active Chinese firm operating in 54 nations.
The partnership will produce small tractors ranging from 7 to 20 horsepower and other essential implements priced below R$ 50,000 — a segment where affordable equipment is nearly nonexistent. A gradual technology-transfer component will allow Brazilian production lines to localize designs, reduce logistics costs, and strengthen the domestic machinery industry.
Teixeira noted that Brazil has “one of the lowest mechanization rates in Latin America,” stressing that family farmers need tools adapted to small and mixed-use farms to boost productivity and relieve physical labor. The initiative aims not only to sell machinery but to support a broader rural transformation that keeps young people in agriculture and reduces the debt burden associated with high-cost equipment.
The Chinese manufacturer will bring experience in seeders and light machinery, while the Brazilian partner will ensure products fit local topographies, diversified systems, and regional practices. Prototypes are already in development, and a production facility is expected to be announced soon. The equipment will launch with an accompanying technical-support and spare-parts network.
This alliance forms part of Brazil’s wider strategy to modernize family agriculture through credit expansion, technical assistance, machinery-fleet renewal, and rural innovation programs — all aimed at boosting productivity, family income, and sustainable small-scale farming.
— Agriculture markets Wednesday:
| Commodity | Contract Month | Closing Price Nov. 26 | Difference from Nov. 25 |
| Corn | March | 4.45 1/4 | +7 cents |
| Soybeans | January | 11.31 1/2 | +6 3/4 cents |
| Soybean Meal | March | 325.90 | -20 cents |
| Soybean Oil | March | 51.54 cents | +38 points |
| Wheat SRW | March | 5.40 1/2 | +1 1/4 cents |
| Wheat HRW | March | 5.30 | +1 3/4 cents |
| Spring Wheat | March | 5.78 1/2 | -2 1/4 cents |
| Cotton | March | 64.57 cents | +34 points |
| Live Cattle | February | 212.925 | +$5.60 |
| Feeder Cattle | January | 315.125 | +$8.05 |
| Lean Hogs | February | 81.375 | +$2.375 |
| ENERGY MARKETS & POLICY |
— Brent edges higher as peace-talk uncertainty and CME outage shake oil markets
WTI frozen by CME halt; OPEC+ meeting in focus as traders weigh supply risks
Brent crude oil futures ticked up on Friday as protracted Russia/Ukraine peace talks kept geopolitical risk elevated, even as traders looked ahead to Sunday’s OPEC+ meeting for any signals on future production levels (see related item above in Blue Box). Meanwhile, U.S. West Texas Intermediate (WTI) crude was left frozen after a sweeping system outage at CME Group halted all futures and options trading on Globex.
Front-month January Brent, expiring Friday, rose 26 cents (0.4%) to $63.60 a barrel, while the February contract traded at $63.10, up 23 cents. WTI remained fixed at $59.08, up 43 cents (0.73%), with no Thursday settlement due to the U.S. Thanksgiving holiday.
Despite gaining more than 1% on the week, both benchmarks are on track for their fourth straight monthly decline — their longest losing streak since 2023 — amid expectations of rising global supply. While off-season refinery margins are supporting crude demand in some regions, the looming surplus continues to pressure prices.
Oil swung sharply earlier in the week on signs that a Russia/Ukraine peace agreement might be nearing. Prices have since rebounded for three consecutive sessions as negotiations slowed. President Vladimir Putin said Thursday that draft proposals discussed by the U.S. and Ukraine could eventually form the basis for a settlement, but warned Russia would continue fighting if no deal emerges.
Saudi Arabia, the world’s largest crude exporter, is expected to cut its January selling price to Asian buyers for a second month — bringing it to the lowest level in five years — as rising supply and surplus forecasts weigh on market sentiment, according to sources cited by Reuters.
— Brazil eases biofuel rules as U.S. trade frictions subside
RenovaBio adjustments help address Washington’s complaints, but wider Section 301 issues still loom
Brazilian Vice President Geraldo Alckmin said this week that the country’s long-running frictions with Washington over U.S. biofuel access are now “practically resolved,” thanks to regulatory changes that respond directly to American concerns.
According to Brazil’s Development, Industry, Trade and Services Ministry, Alckmin was referring to mid-year adjustments to the RenovaBio program — the national decarbonization policy that the Trump administration had flagged as a non-tariff barrier in its National Trade Estimate Report. RenovaBio promotes the use of biofuels like ethanol and biodiesel, but until June required foreign exporters to work through Brazilian intermediaries to obtain certification and issue decarbonization credits. A June resolution from oil regulator ANP removed that requirement and allowed foreign exporters to become certified directly. The ministry told Reuters this has already “leveled the playing field” for U.S. suppliers disadvantaged under the old system.
Non-tariff issues broader than biofuels. Speaking at an American Chamber of Commerce event in Brazil, Alckmin emphasized that other non-tariff matters remain central in ongoing talks with Washington — from data-center rules to rare earths to major technology platforms. He said Brazil remains fully engaged, especially after the U.S. last week expanded the list of Brazilian goods exempt from its 50% tariff.
Fernando Pimentel, who heads trade policy at Brazil’s Foreign Ministry, added that Brazil is still awaiting clarity on U.S. demands under a Section 301 investigation launched earlier this year. The probe covers a wide swath of Brazilian policies, including Pix (the country’s wildly popular instant-payments system), ethanol market access, illegal deforestation, and intellectual property protections.
| TRADE POLICY |
— October 2025 tariff collections hit record — what it means for year-end forecasts
With U.S. Dept. of Treasury reporting a record-high $31.4 billion in customs duties for October, tariff revenues could push 2025 totals well above half a trillion — but economic, legal and trade-volume risks cloud the outlook
In October 2025, U.S. net customs (tariff) receipts reached $31.4 billion — the highest monthly haul since the current tariff regime began. That amount represents a dramatic leap compared with October 2024, when customs receipts were reportedly just $7.3 billion.
The surge reflects the steep new tariffs imposed in 2025, combined with sustained import volumes and fewer exemptions/delays — underscoring that this is not just a transitory “import-front-loading” spike.
October’s record haul helped push total federal receipts to $404 billion, a 24% increase from October 2024 — though a large part of the headline federal deficit ($ 284 billion) stemmed from timing shifts in benefit payments following a prolonged government shutdown.
What October suggests for 2025 tariff revenue outlook. Some private-sector trackers already project 2025 customs duty collections in the $ 50-375 billion range if late-year momentum continues. Analysts at Committee for a Responsible Federal Budget (CRFB) note that the second half of FY 2025 saw nearly $151 billion in customs duties — a roughly three-fold increase vs the same period in FY 2024.
Under conventional scoring, some estimates suggest that tariffs enacted in 2025 could raise around $2–3 trillion over the next decade (pre-dynamic-effect).
Caveat: If higher tariff costs depress demand or shift sourcing abroad, monthly customs revenue could fall materially, undercutting high-end projections.
Legal and trade policy risk: Many of the new tariffs face legal challenges at the Supreme Court of the United States and among trading partners — an adverse ruling or trade-deal reversals could sharply reduce collections.
Economic feedback effects: Elevated import costs may slow growth, dampen consumer spending, and push real wages lower, which could partly offset the fiscal benefit of tariff revenue.
Of note: Sustained high tariffs could raise input costs for fertilizers, machinery, and imported feed additives — increasing inflation risks in farm production and supply chains.
On the corporate side: firms dependent on imported components or finished goods may face margin pressure, potentially driving shifts in sourcing and supply-chain realignment — a trend that could ripple through manufacturing and trading patterns.
For fiscal policy: strong customs-duty receipts give the government greater short-term flexibility, whether for deficit reduction or “tariff-dividend” proposals — but volatility remains high.
| TAX POLICY |
— The OBBBA tax bill rewrites the rules
Behind the unchanged 37% rate is a sweeping overhaul of what counts as income — with hidden traps that can push effective taxes far higher
Below is a digest from Anna Eisenberg of the real structural changes buried in the One Big Beautiful Bill Act (OBBBA) tax bill:
The newspapers say “nothing changed” because the top marginal tax rate remains 37%. But the real action isn’t in the rate — it’s in the definition of income, the architecture of deductions, and the timing of phase-outs. The OBBBA quietly rewires the tax code by shifting the battleground from rates to what counts as taxable income. It adds trap doors, kill zones, and new incentive conflicts that can push some taxpayers into effective tax rates approaching 60% if they follow old rules.
The SALT Cap Trap
The law raises the SALT deduction cap to $40,000, which looks like a win for high-tax states. But a hidden phase-out for incomes between $500,000 and $600,000 creates a “phantom” marginal tax rate. Taxpayers in this “kill zone” lose benefit as income rises, turning the higher SALT cap into a stealth penalty.
The Small Business Trap
The 20% pass-through (QBI) deduction becomes permanent — but now includes a new conflict between paying yourself overtime or keeping wages high enough to support the deduction. Pull the wrong lever and you save pennies on payroll costs but lose far more by shrinking your QBI benefit.
The New “Haircut” on Itemized Deductions
Starting in 2026, high earners face a value cap that reduces the benefit of itemized deductions. A second layer — “the Shave” — trims deductions before the cap is even applied. Together, they function as a hidden surtax that increases effective rates without changing the statutory brackets.
The Social Security “Gotcha”
Politicians promised no new Social Security taxes — and technically kept that promise. But they added a new deduction for seniors that evaporates once income crosses certain thresholds. IRA withdrawals can now trigger a double hit: higher AGI plus a lost deduction.
The End of Casual Charity
Small charitable gifts — $50, $100, $500 — often no longer move the needle. A new floor eliminates the deductibility of modest contributions, pushing donors toward “bunching” strategies to preserve tax value.
The “Blue Collar” Loophole
Tips and overtime receive new tax-favored treatment that reduces AGI — and under the OBBBA, AGI is the master key determining eligibility for nearly every other tax break. This opens the door for high earners to explore reclassification strategies that were previously irrelevant.
The Estate Tax Flip-Flop
With the exemption locked at $15 million, the smartest move may no longer be removing assets from the estate. Because basis rules become more valuable, some taxpayers may now add assets back to capture stepped-up basis advantages. Trust “decanting” strategies gain new relevance.
The Hidden Levers
Deep in the bill are niche perks — from a federal-funded newborn savings account to a car-loan write-off that only applies if the vehicle was final-assembled in the United States. Many accountants haven’t spotted these yet.
The OBBBA didn’t raise the top rate — it changed the entire playbook. Tax planning based on the old rules isn’t just outdated; it may trigger the very penalties these hidden mechanics are designed to spring.
| CONGRESS |
— Budget scoring in the dark: Why Congress needs real transparency from its fiscal referees
A Wall Street Journal commentary argues that hidden models at the Congressional Budget Office and Joint Committee on Taxation are fueling costly errors and eroding trust — and that Congress must force these agencies to “show their work”
Washington’s intensifying budget pressures are colliding with a credibility crisis at two of the government’s most important fiscal referees: the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). According to Wall Street Journal contributors Joshua Rauh and Benjamin Jaros, years of poor transparency, opaque modeling, and major scoring mistakes have left lawmakers increasingly mistrustful of the budget scores that shape trillions of dollars in federal policy. Link
A “black box” budget system. The authors argue that the CBO and JCT rely on concealed models and hidden assumptions — leaving Congress and the public unable to understand how key fiscal estimates are derived. This lack of transparency, they write, has produced costly errors that effectively shift the burden to taxpayers or undermine program funding.
One recent example highlighted in the WSJ commentary: the CBO’s analysis of the One Big Beautiful Bill Act (OBBBA), which used interest-rate assumptions and methods that were still being revised internally. Lawmakers, unaware of these internal updates, were left working from estimates that likely overstated the legislation’s budget impact.
Past misses add to the distrust. The commentary notes several high-profile scoring failures:
• Inflation Reduction Act energy credits — The JCT underestimated costs by at least $400 billion.
• Medicare drug-price negotiations under the IRA — Early data suggests CBO was overly optimistic on expected price cuts.
These errors, the authors argue, stem from the agencies’ reliance on unpublished or frequently changing methodologies.
Transparency lags behind academic standards. Rauh and Jaros emphasize that in academic economics, journals require researchers to publish full code, data, and documentation so others can replicate findings. Yet the CBO and JCT — whose work has far greater national impact — operate with far lower standards.
The CBO has begun posting limited code on GitHub, but only six partial models have appeared since 2022. The JCT has posted none.
The WSJ authors recount CBO Director Phillip Swagel’s response to Rep. Marlin Stutzman, in which Swagel defended the agency’s limited transparency by comparing it to private groups like Yale Budget Lab — an argument the authors call misplaced, because only the CBO and JCT have legal authority to produce the scores Congress must use.
Policy fixes proposed. The commentary lays out a clear reform path:
• Require full public release of models, data, and documentation for major estimates.
• Expand the CBO Show Your Work Act, championed by Rep. Warren Davidson and Sen. Mike Lee, to include the JCT.
• Create transparency ombudsmen at the House Budget Committee and House Ways and Means Committee.
• Allow limited disclosure exemptions only when models use protected taxpayer data—paired with variable descriptions and summary statistics.
A warning from congress. House Budget Chairman Jodey Arrington (R-Tex.) is quoted as warning that “independent scrutiny” is essential, and that accountability begins with genuine — not superficial — transparency.
The authors conclude that as federal budget pressures mount, Congress cannot rely on hidden models and opaque methods. For the CBO and JCT, it’s time to finally “show their work.”
| TRANSPORTATION/LOGISTICS |
— Iowa lifts weight limits to speed harvest transport
Temporary waiver allows trucks up to 90,000 pounds to move grain, fertilizer, and manure through Dec. 19
Iowa has issued a harvest-time emergency proclamation temporarily suspending standard weight limits for agricultural transport. Effective through Dec. 19, the order permits trucks hauling corn, soybeans, hay, straw, silage, stover, fertilizer (dry, liquid, or gas), and manure (dry or liquid) to operate up to 90,000 pounds gross weight without permits. The waiver also allows vehicles to exceed the normal 20,000-pound axle limit by up to 12.5%, provided they follow all posted road and bridge restrictions. The exemption covers all highways within the state except the Interstate system, giving producers and haulers broader flexibility during the peak harvest and manure-application season.
| BORDER, IMMIGRATION, DEPORTATION & LABOR |
— Guard member dies of injuries; Trump threatens immigration policy changes
Trump to halt migration “from all Third World Countries,” among other threats
A 20-year-old National Guard specialist, Sarah Beckstrom of West Virginia, has died from injuries sustained in an ambush near the White House, President Donald Trump confirmed Thursday. Beckstrom and Air Force Staff Sgt. Andrew Wolfe, 24, were shot in what officials called a targeted attack; Wolfe remains hospitalized.
Authorities identified the suspect as Rahmanullah Lakanwal, 29, an Afghan national who arrived in 2021 under Operation Allies Welcome, the Biden-era resettlement program for Afghans who assisted U.S. forces. Officials say Lakanwal previously worked with one of the CIA’s covert “Zero Units,” which targeted extremist groups during the Afghanistan war. FBI Director Kash Patel labeled the attack “a heinous act of terrorism,” though details remain limited.
Beckstrom’s death came hours before President Trump posted a series of aggressive anti-immigration messages online — without mentioning the shooting directly — amid days of intensifying White House rhetoric. Trump said Beckstrom was “outstanding in every single way” and had spoken with her parents Thursday evening.
Following the attack, the Trump administration announced:
• A halt to all immigration processing for Afghan nationals, indefinitely.
• A review of Afghans admitted to the U.S. under the Biden administration.
• An order for USCIS to reexamine green-card holders from 19 countries.
• Trump’s vow to “permanently pause migration from all Third World Countries.”
• Promises to strip federal benefits from noncitizens and “denaturalize migrants who undermine domestic tranquility.”
The White House provided no details on how these proposals would be implemented. Trump also repeated accusations that the Biden administration used an “unauthorized and illegal Autopen approval process” to admit migrants.
Officials say Lakanwal drove from Washington state to carry out the attack. Federal authorities executed multiple search warrants nationwide.
Beckstrom and Wolfe were among more than 2,000 National Guard troops deployed to Washington as part of Trump’s declared “crime emergency” in D.C. A judge recently ruled that the troop deployment was illegal, but Trump has since ordered an additional 500 troops to mobilize.
| WEATHER |
— NWS outlook: Heavy lake-effect snow will continue across the Great Lakes region into early Saturday morning; impactful snow squalls likely for the Interior Northeast Friday… …The next major winter storm will affect the northern Plains and the Midwest Friday into Saturday bringing with it heavy snow and hazardous travel conditions… …A wintry pattern will bring well below average, chilly temperatures to much of the eastern and central U.S. heading into the weekend.
