China and U.S. Pledge to Advance More “Stable” Trade Relationship
Hassett signals Fed Rate cut likely, defends tariffs, and outlines 2025 economic vision | Benign PCE report
Link: Hassett Signals Fed Rate Cut Likely, Defends Tariffs, and
Outlines 2025 Economic Vision
Link: Trump, Rollins Prepare “North of $12 Billion” Farm Aid Package as Bridge to 2026
Link: Santa Teresa Port Reinspection Set for Dec. 9; Still No Reopening Date
as FDA Approves NWS/Cattle Fever
Link: Fuel Industry Groups Urge Trump to Back Long-Term Fix for E15
and Refinery Exemptions
Link: Video: Wiesemeyer’s Perspectives, Nov. 28, updated late this afternoon
Link: Audio: Wiesemeyer’s Perspectives, Nov 28, updated late this afternoon
Today’s Updates:
TOP STORIES
— Farmer aid plan is now becoming clearer
— Hassett signals Fed rate cut likely, defends tariffs, and outlines 2025 economic vision
— China and U.S. pledge to advance more “stable” trade relationship
— New steps in screwworm response: inspections, new drug option advance
— Sheinbaum rebuffs Trump: USMCA will continue, only a scheduled review in 2026
— New push for U.S./India trade breakthrough
— Greer signals cautious engagement with China as U.S. prioritizes trade calm
— Quarter-century-old glyphosate safety paper retracted,
fueling MAHA movement’s push for pesticide crackdowns
FINANCIAL MARKETS
— Equities today: Global shares rose ahead of key U.S. inflation data; Dow up 250
— Equities yesterday
— PCE inflation holds steady in September, but goods prices reaccelerate
— Netflix clinches $82.7 billion deal for Warner Bros., beating out rivals
— Hassett signals imminent Fed rate cut as Trump edges toward chair decision
— Commentary: Laffer and Moore argue tariffs should fund a payroll tax cut
— Trump warns Europe faces “civilizational erasure” without dramatic societal shift
AG MARKETS
— USDA daily export sale: 462,000 MT soybeans to China 2025/2026 MY
— Malaysia halts most Spanish pork imports after African swine fever detected
— Global food markets end 2025 well-supplied but uneven, AMIS says
— Feedlot contraction deepens as border closures, plant cuts distort cattle cycle
— Cotton AWP moves higher, leaves small LDP available
— Agriculture markets yesterday
FARM POLICY
— House farm bill 2.0 push slips to January
— FSA seeks extension of data collection for Emergency Relief Program
OTT DICAMBA
— OTT dicamba: most likely timeline for possible 2026 use
ENERGY MARKETS & POLICY
— Friday: Oil prices were steady, supported by stalled Ukraine peace talks
— Thursday: Oil prices edge higher on rate-cut hopes
TRADE POLICY
— Industry pleads for USMCA renewal as Greer signals Trump could walk away
— Lawmakers press Greer to tighten USMCA dairy rules in 2026 review
POLITICS & ELECTIONS
— Supreme Court clears Texas GOP-favored map for 2026, strengthening
Trump’s midterm strategy
FOOD & FOOD INDUSTRY
— Global food costs extend slide as FAO index drops for third straight month
WEATHER
— NWS outlook: Active winter weather pattern continues with snow and rain
through the weekend
Updates: Policy/News/Markets, Dec. 5, 2025
UP FRONT — Farmer aid plan: Trump and Rollins are poised to unveil a $12–$14 billion farm aid package, including specialty crops, with payments likely in early January.— Hassett on economy/Fed: NEC Director Kevin Hassett, front-runner for Fed chair, signals a likely rate cut next week and defends tariffs while pitching Trump’s affordability and AI-driven growth agenda.— China/U.S. trade call: He Lifeng, Bessent and Greer pledge to expand cooperation and narrow disputes, signaling continued focus on a “stable” trade relationship.— New screwworm steps: USDA will inspect the idle Santa Teresa crossing and a Mexican facility as FDA conditionally approves a second NWS/cattle-tick treatment, expanding control tools.— Sheinbaum on USMCA: Mexico’s president rebuffs Trump’s claim the USMCA could end in 2026, stressing it will undergo review, not expiration, as leaders meet in Washington.— U.S./India talks: A Switzer-led U.S. delegation heads to New Delhi to push a phased tariff-relief deal aimed at easing 50% duties that are squeezing key Indian export sectors.— Greer on China strategy: USTR Jamieson Greer says the U.S. is prioritizing trade stability over confrontation with China while steering purchases toward non-sensitive U.S. exports and monitoring flows “daily.”— Glyphosate paper retracted: A cornerstone industry-backed glyphosate safety study is pulled for relying on unpublished Monsanto data, emboldening MAHA advocates and intensifying pressure on EPA and the White House.— Equities today: Global stocks are higher ahead of long-delayed September PCE data, with markets betting the report won’t derail a Fed rate cut next week. Dow up around 250 points.— Equities yesterday: U.S. stocks ended little changed on Dec. 4, with modest moves in the Dow, Nasdaq and S&P 500.— PCE inflation: September PCE rose 0.3% again, with tame 0.2% core inflation but a rebound in goods prices and a sharp jump in energy costs. Signals 25 bp cut in rates Dec. 10 but Jobs report will be key.— Netflix–Warner Bros. deal: Netflix will buy Warner Bros. and HBO Max for $82.7 billion, one of the biggest media mergers ever, while spinning off Discovery.— Hassett on imminent cut: Hassett tells Fox News he expects a 25-bp Fed rate cut next week and says rates ultimately should go “much lower,” as Trump edges toward a chair pick.— Tariffs for payroll tax cut: Laffer and Moore urge Trump to use tariff revenues to finance a temporary 5-point payroll-tax cut instead of $2,000 “tariff dividend” checks.— Trump’s Europe warning: A new National Security Strategy warns Europe faces “civilizational erasure” without reversing course on immigration, censorship and EU policies, while pushing for a fast end to the Ukraine war.— Soy export sale: USDA reports a 462,000-ton soybean sale to China for 2025/26, underscoring renewed demand.— Malaysia bans Spanish pork: Malaysia halts most pork imports from Spain after African swine fever cases near Barcelona, allowing only tightly certified product.— Global food balance (AMIS): AMIS says wheat, corn and soy supplies remain ample and prices mixed heading into 2026, with La Niña weather and policy shifts the main risks.— Cattle/feedlot squeeze: Farm Bureau’s Bernt Nelson says fewer cattle on feed reflect lost Mexican imports and plant cutbacks, not herd rebuilding, with tight supplies likely into 2026–28.— Cotton AWP/LDP: Cotton’s Adjusted World Price nudged up to 51.28 cents, leaving a smaller but still positive LDP of 0.72 cent.— Ag markets: Grains closed mostly higher Dec. 4, cattle and hog futures rallied, and cotton eased.— Farm bill delay: Deep partisan rifts over OBBBA nutrition changes, hemp, Prop 12 and pesticides have pushed House farm bill work into January, with big fights still unresolved.— ERP data collection: FSA is seeking to extend ERP information-gathering authority for compliance checks, with no effect on payments already made.— OTT dicamba outlook: EPA is aiming to re-approve over-the-top dicamba for 2026 with tighter labels, but state actions and likely lawsuits mean any comeback remains uncertain.— Oil Friday: Crude trades steady as stalled Ukraine peace talks support prices but looming 2026 oversupply caps gains.— Oil Thursday: Prices rose on Fed rate-cut hopes despite mixed inventories, Ukraine-related supply risks and exporters cutting official selling prices.— Industry on USMCA review: Manufacturers and farm groups urge the administration to extend and strengthen USMCA in 2026, even as Greer signals Trump could walk away or pivot to bilateral deals.— USMCA dairy pressure: A large bipartisan bloc of lawmakers presses Greer to crack down on Canada’s dairy TRQ practices and close loopholes in the 2026 review to secure real market access.— Texas map ruling: The Supreme Court lets Texas use a GOP-favoring congressional map in 2026, likely giving Republicans up to five extra House seats and bolstering Trump’s midterm strategy.— FAO food prices: The FAO index fell for a third month in November, with vegoils, meat and dairy cheaper and only cereals showing price gains.— Weather: NWS expects continued active winter weather with snow for the Mid-Atlantic, Midwest and Rockies, heavy Gulf-Coast rains, and well-below-normal temperatures across much of the northern and eastern U.S. TOP STORIES—Farmer aid plan is now becoming clearer $12-$14 billion covering low prices and trade mitigation A farmer aid package is expected to be announced next week by President Donald Trump and USDA Secretary Brooke Rollins, as we noted in a special report Thursday (link). The commodity list will include specialty crops, with the payment structure unclear at this time. Rollins has previously said payments would be made in early January, unless that timeline changes with the official announcement. The total funding is expected to be between $12 billion and $14 billion. —Hassett signals Fed rate cut likely, defends tariffs, and outlines 2025 economic visionNEC Director — now the clear front-runner to replace Jay Powell — talks AI, tariffs, wages, growth, affordability, and Trump’s upcoming economic push White House National Economic Council Director Kevin Hassett, now widely viewed as the leading candidate to replace Jay Powell as Federal Reserve Chair, appeared on Mornings with Maria (Maria Bartiromo) for a sweeping discussion of the economy, monetary policy, tariffs, and the administration’s affordability agenda. Hassett did not confirm whether he will take the Fed job, but he strongly suggested the Federal Reserve should cut rates at next week’s meeting, citing weak labor indicators, missing data from the government shutdown, and a powerful AI-driven productivity boom. Link to full interview. Hassett defended the administration’s tariff authority amid an imminent Supreme Court ruling, touted Trump’s “$18 trillion” investment wave, and argued that affordability problems stem from Biden-era inflation and regulation. He also previewed the President’s new nationwide affordability tour, expanded housing efforts, and the launch of “Trump Accounts for Newborns,” which he called one of the administration’s most consequential long-term policies. —China and U.S. pledge to advance more “stable” trade relationshipHe Lifeng, Bessent, and Greer hold constructive video call; both sides commit to expanding cooperation and narrowing disputes. China and the United States reaffirmed their commitment to building a more stable trade relationship during a Friday video call between Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer, according to China’s official Xinhua News Agency. Xinhua reported that the discussions were “in-depth and constructive,” with both sides addressing each other’s economic and trade concerns. Officials from Beijing and Washington offered positive assessments of the progress made following recent China-U.S. economic consultations held in Kuala Lumpur. They agreed to continue fully utilizing the bilateral consultation mechanism, expand their list of cooperative areas, and narrow the range of outstanding issues. The two governments vowed to promote what they described as the “steady and sound” development of China-U.S. economic and trade ties, signaling continued efforts to maintain stability amid broader geopolitical tensions. —New steps in screwworm response: inspections, new drug option advanceSanta Teresa review set for Dec. 9; FDA conditionally approves second NWS treatment Fresh developments in the New World screwworm (NWS) situation include a federal inspection at the long-shuttered Santa Teresa, New Mexico, International Livestock Crossing station and the conditional approval of a new parasitic treatment by the Food and Drug Administration. Link to a Thursday special report for more. USDA inspectors are scheduled to review the Santa Teresa port of entry — a facility that ordinarily processes roughly 3,000 head of cattle per day but has remained largely idle for most of the year due to NWS-related restrictions. Local outlet KFOX also reported an inspection at the San Jerónimo pre-export quarantine facility in Chihuahua, Mexico. At the same time, FDA has conditionally approved Exzolt Cattle-CA1 (fluralaner), a topical solution for preventing and treating NWS larval infestations and for controlling cattle fever tick in beef cattle 2 months and older, as well as replacement dairy heifers under 20 months. The product requires a 98-day withdrawal period to avoid residues in meat and is prohibited for use in lactating dairy cattle, dairy calves, veal calves, or breeding-age bulls. Exzolt Cattle-CA1 is the second NWS-related treatment to receive conditional approval, adding another tool to ongoing efforts to contain and eradicate the pest. —Sheinbaum rebuffs Trump: USMCA will continue, only a scheduled review in 2026Mexico’s president stresses stability in North American trade pact ahead of meeting today with Trump and Canada’s Carney Mexico President Claudia Sheinbaum moved quickly to counter President Donald Trump’s assertion that the U.S.–Mexico–Canada Agreement (USMCA) could expire next year, emphasizing that the pact does not end in 2026 but instead undergoes its first mandated joint review. Speaking at her morning press conference, Sheinbaum said Trump’s comments — that the U.S. might “let it expire or perhaps reach another agreement” — do not reflect the treaty’s structure. “The treaty doesn’t end; there’s a review underway,” she said. “It’s not true that the treaty ends next year.” Sheinbaum will meet with Trump and Canadian Prime Minister Mark Carney today during her visit to Washington for the FIFA World Cup draw. She said the brief meeting will allow leaders to discuss trade issues, including automotive, steel, and aluminum provisions, and the progress Mexico has made in resolving 54 tariff barriers. The president also pushed back on Trump’s campaign-season critique that Mexico and Canada “take advantage” of the United States, calling it part of his communication style. She stressed that Mexico maintains one of the most favorable positions under the U.S. global tariff regime and aims to strengthen North American competitiveness as the 2026 review approaches. —New push for U.S./India trade breakthroughSwitzer-led delegation heads to New Delhi as tariff relief talks enter crucial phase The Trump administration will send a team of negotiators to India next week, led by Deputy U.S. Trade Representative Rick Switzer, to intensify efforts toward a phased U.S./India trade agreement, according to a U.S. official familiar with the plans. India is pushing to seal an initial deal that would begin unwinding steep U.S. retaliatory tariffs — now at 50% — that have strained some of its most labor-intensive export sectors. Indian Commerce Secretary Rajesh Agrawal said last week that New Delhi is “very optimistic” about landing a framework agreement before year’s end, emphasizing that the priority is establishing a structure capable of addressing reciprocal tariffs on both sides. Washington and New Delhi have been negotiating a multi-stage arrangement focused first on rolling back the duties President Donald Trump imposed in response to India’s earlier purchases of Russian crude oil. Improved political tenor between Trump and Prime Minister Narendra Modi — following India’s decision to curtail those Russian imports — has accelerated momentum for a deal. Trump said last month the two countries were getting “pretty close” to an agreement and suggested tariff reductions on Indian products could come “at some point.” Negotiators have met repeatedly in recent months, and India’s government has signaled cautious optimism that a resolution is within reach. The U.S. is India’s most important export destination, and the elevated duties have weighed heavily on sectors such as textiles, leather, footwear and jewelry — raising pressure on Modi’s government to secure relief. —Greer signals cautious engagement with China as U.S. prioritizes trade calmUSTR says Washington is choosing stability over confrontation while monitoring Beijing “daily” and pressing for balanced, non-sensitive trade flows U.S. Trade Representative Jamieson Greer said Thursday that the U.S. is deliberately pursuing a stable, de-escalatory trade posture with China, even as several allies push for more aggressive, coordinated action against Beijing. Speaking at the American Growth Summit in Washington, Greer stressed that the administration is not seeking an economic clash. “I don’t think anyone wants to have a full-on economic conflict with China — and we’re not having that,” he said. He added that President Donald Trump has intentionally refrained from deploying the full range of U.S. leverage on issues like software and semiconductors, despite encouragement from partners. Greer pointed to a roughly 25% reduction in the bilateral U.S. trade deficit with China since President Trump took office — progress he argued showed movement toward a healthier flow of goods. Still, he acknowledged that Chinese products continue to enter the U.S. market through transshipment. For now, the priority is ensuring China buys “the kinds of things from us we should be selling them: aircraft, chemicals, medical devices and agricultural products,” Greer said, while the U.S. remains open to importing non-sensitive goods from China. The October agreement between Trump and Chinese President Xi Jinping — extending the tariff truce and easing some export controls — has helped cool tensions, though several elements remain unresolved, including TikTok’s U.S. operations, expanded soybean purchases, and additional Chinese licenses to export critical rare earths. Greer said the Biden/Xi framework is being monitored “literally on a daily basis,” but emphasized that the administration’s approach is rooted in restraint. “The decision right now is we want to have stability in this relationship,” he said. “We have to get our own house in order. We need to make sure that we are on a good path to reindustrialization, including for critical minerals.” —Quarter-century-old glyphosate safety paper retracted, fueling MAHA movement’s push for pesticide crackdownsJournal cites undisclosed Monsanto involvement and reliance on unpublished industry studies; retraction intensifies political pressure on EPA and the Trump administration An influential scientific paper long cited to defend the safety of glyphosate — the active ingredient in Roundup — has been formally retracted 25 years after publication, sending shockwaves through regulatory and political circles and energizing leaders of the Make America Healthy Again (MAHA) movement. The journal Regulatory Toxicology and Pharmacology said this week that the paper’s conclusions on glyphosate’s carcinogenicity were “solely based on unpublished studies from Monsanto” and raised red flags that Monsanto employees acted as undisclosed co-authors. Monsanto is now owned by Bayer. The study has been cited repeatedly by regulatory authorities over two decades, including the Environmental Protection Agency, often as evidence that glyphosate carried minimal human health risks. Environmental and MAHA reactions. Environmental advocates celebrated the retraction as overdue accountability. “The pesticide industry’s decades of efforts to hijack the science and manipulate it to boost its profits is finally being exposed,” said Nathan Donley, environmental health science director, Center for Biological Diversity. For MAHA leaders, the decision hands them a powerful new example in their push to restrict pesticide use and pressure the Trump administration on chemical safety. The White House’s own MAHA report listed pesticides among the environmental toxins harming children — yet the administration has also approved pesticides flagged as potential “forever chemicals.” Political fallout: EPA under fire. The episode is inflaming tensions inside the administration and among Republican lawmakers:• EPA’s pesticide office is led by top industry lobbyists, a longstanding complaint from MAHA advocates.• The White House this week filed a friend-of-the-court brief urging the Supreme Court to hear Bayer’s effort to overturn hundreds of cancer lawsuits tied to Roundup — further galvanizing critics.• MAHA organizers have openly threatened to primary GOP lawmakers who resist stronger chemical regulations. A Change.org petition launched by MAHA activists calls for the removal of EPA Administrator Lee Zeldin, alleging he has “prioritized the interests of chemical corporations over the well-being of American families and children.” Elizabeth Kucinich, a prominent MAHA advocate, said the retraction exposes a deeper pattern: “The administration has … seeded the government with appointees working directly against [Robert F.] Kennedy [Jr.] and the MAHA mandate, like Lee Zeldin. This is the blatant dismantling of MAHA at warp speed.” Alex Clark, a wellness podcaster and co-architect of the petition, warned the political cost may rise as the 2026 midterms approach: “This should be very concerning as midterms are approaching, and MAHA moms are not going to stand for this.” Upshot: With a central pillar of the scientific case for glyphosate’s safety now discredited, pressure is likely to intensify on EPA regulators, congressional Republicans, and White House policymakers — and the MAHA movement appears ready to use the moment to escalate its campaign. |
| FINANCIAL MARKETS |
—Equities today: Global shares rose ahead of key U.S. inflation data that investors believe will not prevent the Federal Reserve from cutting rates next week. Dow is currently up around 250 points after markets closed little changed yesterday. Japanese stocks declined 1% and gave back some of Thursday’s rally on more hawkish chatter, as a rate hike later this month remains a distinct possibility. The Sevens Report notes that today focus will be on economic data and the most important report will be the September Core PCE Price Index (E: 0.3% m/m, 2.9% y/y) — see details below. This is a delayed report from the government shutdown and it’s “old” data at this point, but it’s also the first major inflation report markets have seen in months and for this rally to continue, “we’ll need to see in-line data that does not hint at any sudden rise in inflation (which could jeopardize another Fed rate cut).” In Asia, Japan -1.1%. Hong Kong +0.6%. China +0.7%. India +0.5%. In Europe, at midday, London +0.1%. Paris +0.3%. Frankfurt +0.6%.
—Equities yesterday:
| Equity Index | Closing Price Dec. 4 | Point Difference from Dec. 3 | % Difference from Dec. 3 |
| Dow | 47,850.94 | -31.96 | -0.07% |
| Nasdaq | 23,505.14 | +51.04 | +0.22% |
| S&P 500 | 6,857.12 | +7.40 | +0.11% |
—PCE inflation holds steady in September, but goods prices reaccelerate
Core gauge remains tame even as energy costs surge
The U.S. Personal Consumption Expenditures (PCE) price index rose 0.3% in September 2025, unchanged from August and in line with expectations, but the composition of inflation shifted notably.
Goods prices jumped 0.5%, a sharp acceleration from the 0.1% increase in August, while services inflation slowed to 0.2% from 0.3% the prior month.
Core PCE — excluding food and energy — held at a 0.2% monthly gain, matching both August’s reading and market forecasts, signaling that underlying inflation pressures remain relatively contained.
Food prices increased 0.4%, a moderation from 0.5% in August, while energy costs surged 1.7%, more than doubling the previous month’s 0.8% rise and contributing substantially to the overall index.
Bottom Line: The data appears to back the expectations for a 25 bp cut at the Dec. 10 conclusion of the FOMC meeting, but the jobs update that morning looms large in the final expectations.
—Netflix clinches $82.7 billion deal for Warner Bros., beating out rivals
Streaming giant wins weeks-long bidding war; Discovery to be spun off
Netflix announced Friday it will acquire Warner Bros. — including its iconic film and TV studios and the HBO Max streaming platform — in an $82.7 billion deal, capping a fierce bidding contest that also drew interest from Paramount and Comcast.
The acquisition marks one of the largest media mergers in history and signals Netflix’s push into full-scale studio ownership after years of competing for content. As part of the agreement, Discovery will be separated from Warner Bros. and spun off as an independent entity.
The deal positions Netflix to dramatically expand its library, gain control of major franchises, and deepen its foothold in global streaming as consolidation continues reshaping the entertainment industry.
—Hassett signals imminent Fed rate cut as Trump edges toward chair decision
NEC director predicts a 25-basis-point move and sidesteps questions about his potential tenure atop the Federal Reserve
National Economic Council Director Kevin Hassett said he believes the Federal Reserve should cut interest rates next week and expects policymakers to deliver a 25-basis-point reduction — comments that land as President Donald Trump inches closer to naming his pick for Fed chair.
In an interview with Fox News, Hassett said recent statements from Fed governors and regional presidents suggest the Federal Open Market Committee is “leaning in the direction of a rate cut.” He added that he hoped to reach “a much lower rate” over time but would welcome an initial quarter-point move if consensus is forming around it.
Pressed on how many cuts he might favor if ultimately nominated and confirmed as chair, Hassett declined to say, stressing that the job requires being “very data responsive” and weighing how rate adjustments affect inflation and employment.
Trump has repeatedly praised Hassett in recent days and teased his potential nomination, saying earlier this week he plans to announce his Fed pick in early 2026 and has already chosen a finalist. During a White House event Tuesday, the president nodded to Hassett’s rising profile: “I guess a potential Fed chair is here too… He’s a respected person, that I can tell you.”
If Hassett is tapped, Trump allies have discussed shifting his current NEC role to Treasury Secretary Scott Bessent, consolidating key economic policymaking under one portfolio.
—Commentary: Laffer and Moore argue tariffs should fund a payroll tax cut
Economists say tying tariff revenues to work — not rebate checks — would boost supply, lower prices, and raise take-home pay.
In a Wall Street Journal commentary (link), economists Arthur Laffer and Stephen Moore argue that President Trump’s proposal to send every American family a $2,000 “tariff dividend” check is inferior to a targeted payroll-tax cut that directly rewards work and production.
They acknowledge that while incomes have outpaced inflation this year, families remain frustrated by high healthcare, housing and tuition costs. Returning tariff revenues to Americans, they write, is sensible in concept—but only if the money encourages work rather than demand-side consumption.
Laffer and Moore contend that stimulating supply, not demand, is what lowers prices and sustainably raises wages. They propose using tariff revenues to cut the federal payroll tax by up to 5 percentage points for 12–18 months, split between employers and employees. Such a cut would immediately raise take-home pay for all workers — particularly low- and middle-income earners — and reduce labor costs across the economy. It would also lower input costs for U.S. exporters and domestic producers competing with imports.
By contrast, they argue, mailing rebate checks would simply replicate what they describe as the Biden administration’s inflation-fueling stimulus payments, boosting consumer demand without expanding supply and thereby pushing prices higher.
The authors note that President Trump reacted favorably when they recommended the payroll-tax cut, which they claim could be executed through an executive order suspending payroll-tax withholding for up to 18 months.
They estimate a static cost of roughly $600 billion for a 12-month, or $900 billion for an 18-month, 5-point payroll-tax reduction. But they argue the dynamic cost would be far lower, as increased work and production would expand the tax base. Tariff revenues, they say, could be used to fully backfill Social Security and Medicare trust funds.
Laffer and Moore conclude that if Trump wants tariffs to create more high-paying American jobs, using the revenue to cut taxes — not sending checks — is the most effective path.
—Trump administration warns Europe faces “civilizational erasure” without dramatic societal shift
New National Security Strategy casts EU policies, immigration, and political censorship as greater threats than economic decline, urging a reset of Europe’s trajectory and a rapid end to the Ukraine war.
The Trump administration issued a stark warning Friday that Europe risks being “wiped away” within two decades unless it reverses course on what the White House sees as deep-rooted cultural and political failures.
In a newly released 29-page National Security Strategy signed by President Donald Trump, the administration argues that Europe’s long-running economic stagnation is overshadowed by a far more severe challenge: the potential “erasure” of European civilization driven by immigration, censorship, and what it describes as EU-enabled political decay.
Quote of note: “This economic decline is eclipsed by the real and more stark prospect of civilizational erasure,” the report declares. “Should present trends continue, the continent will be unrecognizable in 20 years or less.”
Nearly a year into Trump’s return to office, tensions between Washington and Europe have sharpened. The White House has criticized EU regulatory actions targeting U.S. tech firms, openly supported far-right parties across the continent, and threatened to suspend aid to Ukraine unless Kyiv agrees to sweeping concessions to Russian President Vladimir Putin.
Ukraine: The strategy document also confirms U.S. efforts to persuade certain European governments to delay approval of an EU plan to release €90 billion in critical funding for Ukraine’s war effort, according to diplomats who spoke with Bloomberg.
The report lays substantial blame on the European Union, asserting that the bloc has weakened political freedoms while failing to curb immigration, which Washington contends is intensifying social tensions. It also condemns what it calls pervasive censorship and restrictions on opposition political movements.
Looking ahead, the Trump administration outlines four priority objectives in Europe:
• securing a rapid end to the war in Ukraine,
• fostering “resistance to Europe’s current trajectory,”
• expanding market access for U.S. companies, and
• blocking further NATO enlargement.
Despite the harsh critique, the strategy stresses that the U.S. cannot afford to disengage from the continent.“Europe remains strategically and culturally vital to the United States,” it concludes. “Not only can we not afford to write Europe off — doing so would be self-defeating for what this strategy aims to achieve.”
| AG MARKETS |
—USDA daily export sale: 462,000 MT soybeans to China 2025/2026 MY.
—Malaysia halts most Spanish pork imports after African swine fever detected
Kuala Lumpur imposes immediate restrictions, allowing only limited certified products
Malaysia has imposed an immediate ban on most pork and pork-product imports from Spain after African swine fever (ASF) was confirmed in wild boars near Barcelona late last month. The country’s Veterinary Services Department said Friday the restrictions apply broadly but exclude retort (heat-sterilized) products.
Spanish pork may still be imported under tightly defined conditions: consignments must carry a veterinary health certificate issued on or before Nov. 28 confirming the animals were slaughtered before Nov. 14 and processed before Nov. 28.
The move follows multiple ASF detections in Spain and reflects Malaysia’s effort to prevent the virus from entering its domestic herd.
—Global food markets end 2025 well-supplied but uneven, AMIS says
Wheat, corn, and soybeans strengthen while rice cools; trade policy shifts and weather patterns shape early-2026 risks
The December AMIS Market Monitor reports that global agricultural markets remain broadly well supplied as 2025 concludes, though price movements diverged across major staples. A year marked by trade-policy uncertainty, weather disruptions tied to La Niña and a negative Indian Ocean Dipole, and elevated fertilizer costs ended with renewed optimism as U.S./China trade prospects improved and key government data streams returned following the US shutdown. Fertilizer prices have eased, but the gap between input costs and crop values remains historically wide, restraining application rates in several regions.
Global Supply–Demand Outlook
WHEAT
• Production revised upward on record Argentine output and higher U.S. estimates.
• Utilization up 1.1%, mainly from stronger feed use.
• Trade nudged higher with more competitive Argentine exports.
• Stocks increased on larger North and South American crops.
CORN
• Global production unchanged month-to-month: a U.S. yield downgrade offset by a Brazil upgrade.
• Utilization trimmed due to weaker demand in Brazil and the EU.
• Trade steady, still pointing to slight year-over-year growth.
• Stocks rise on larger expected carryover in Brazil and the U.S.
RICE
• Production raised, mainly due to higher area in Indonesia plus better outlooks in Bangladesh and Japan.
• Utilization expanding at the fastest pace in four seasons.
• Trade expected to fall modestly in 2026 with reduced Asian imports.
• Stocks projected to exceed record opening levels.
SOYBEANS
• Production trimmed with lower U.S. yields outweighing Russian gains.
• Utilization stable, still signaling 4% year-over-year growth.
• Trade slightly higher with increased Argentine/Brazilian exports and stronger Chinese buying.
• Stocks revised up, led by projected gains in China.
Crop Conditions Snapshot
•Wheat: Mostly favorable sowing and winter establishment globally, though U.S. winter wheat shows mixed conditions due to dryness. Exceptional yields in Australia and Argentina.
•Corn: U.S. harvest nearing completion with above-average yields; Brazil expanding planted area; Ukraine impacted by drought and conflict.
• Rice: Weather disruptions—monsoons, storms, and flooding—affected parts of Southeast Asia, especially the Philippines and northern Thailand.
• Soybeans: Excellent U.S. harvest; Brazil progressing well despite isolated extreme weather; Argentina sowing slowed in pockets by excess moisture.
Weather risks: La Niña expected to persist into early 2026, bringing below-average rainfall to East Africa, Central/South Asia, southern South America, and the southern U.S., while increasing precipitation in Southeast Asia, Australia, and northern South America.
Policy Developments
•China suspending its 24% retaliatory tariff on U.S. imports (10% remains).
• Indonesia banning rice imports and the Philippines extending its rice import suspension while setting a 2026 tariff band.
•China reinstating soybean import licenses for three U.S. traders.
•U.S. tariff exemptions for fertilizers and biodiesel reinstated after the shutdown.
• Russia introducing a sulfur export ban and raising fertilizer export quotas.
• EU delaying the Deforestation Regulation to December 2026.
International Price Movements
• IGC Grains & Oilseeds Index up 3.8% m/m, slightly below year-ago levels.
• Wheat +2.5% — supported by U.S. and Canadian markets.
• Corn +3% —driven by strong U.S. export demand.
• Rice –1.9% — pressured by soft importer interest and seasonal harvest flow.
• Soybeans +6.1% — boosted by renewed U.S./China trade optimism.
Futures Markets & Investment Flows
• Corn, wheat, and soybeans posted mild recoveries, though global supply abundance caps upside.
• Volatility remains subdued, implying limited near-term shock risk.
•Speculative funds remain net-short, confirming rallies were demand-driven rather than speculative.
•Forward curves for wheat and soybeans remain in contango but flattening, indicating stronger short-term demand, while corn’s carry structure remains steady.
Fertilizer Outlook
• Prices eased modestly, but fertilizer remains expensive relative to crop prices.
• Natural gas: Steady in Europe, higher in the U.S. due to export demand.
• Nitrogen: Softening globally except in Europe, where CBAM uncertainty pushed prices up.
•Phosphate: Lower prices but potential tightening due to Chinese export policies and higher input costs.
• Potash: Stable, with subdued demand outside China.
• Affordability remains strained across key production regions.
Overall Assessment. Heading into 2026, AMIS characterizes the global outlook as stable:
• Supplies of major crops remain ample.
• Fertilizer costs are easing but still burdensome.
• Trade frictions in several regions (notably rice) bear watching.
•Weather volatility from La Niña and persistent input affordability challenges pose the most immediate risks.
—Feedlot contraction deepens as border closures, plant cuts distort cattle cycle
Farm Bureau economist says bullish signals in USDA’s latest Cattle on Feed report are misleading, with Mexican import bans — not heifer retention — driving the numbers as packer cutbacks add long-term pressure
USDA’s November Cattle on Feed report appears bullish, but Bernt Nelson of the American Farm Bureau Federation stresses the findings should not be misread. The decline in placements — 2.04 million head, down 10% from last year — and the drop in heifers on feed stem largely from the halted flow of feeder cattle from Mexico following New World screwworm-related border closures. Link to report.
Between November 2024 and August 2025, the U.S. imported 795,000 fewer Mexican cattle, including a collapse in spayed heifer imports from 116,000 last year to just 1,672. This makes the heifer decline appear bullish, Nelson says, but it does not signal domestic retention for rebuilding. Feedlot inventories fell to 11.7 million head, the lowest November total since 2018.
At the same time, the industry faces structural shocks: Tyson’s planned closure of its Lexington, Neb., beef plant — about 5% of U.S. slaughter capacity — and reduced shifts in Amarillo triggered limit-down futures and heightened volatility. With input costs still near record highs, producers have strong incentives to market cattle rather than hold heifers for breeding.
Farm Bureau’s Bottom Line: Tight supplies will persist into 2026, and meaningful herd expansion remains unlikely until 2028.
—Cotton AWP moves higher, leaves small LDP available. The Adjusted World Price (AWP) for cotton rose to 51.28 cents per pound, effective today (Dec. 5), up from 50.77 cents per pound the prior week. The increase still leaves a small LDP of 0.72 cent per pound, down from 1.23 cents per pound the prior week. Small LDPs have been available in six of the last eight weeks, peaking at 1.23 cents per pound last week.
—Agriculture markets yesterday:
| Commodity | Contract Month | Close Dec. 4 | Change vs Dec. 3 |
| Corn | March | 4.47 1/4 | +3 3/4 |
| Soybeans | January | 11.19 1/2 | +3 3/4 |
| Soybean Meal | March | 316.40 | +0.30 |
| Soybean Oil | March | 52.29 | +0.10 |
| SRW Wheat | March | 5.40 1/4 | +2 |
| HRW Wheat | March | 5.34 | +4 1/2 |
| Spring Wheat | March | 5.73 | -3 1/4 |
| Cotton | March | 64.08 | -0.38 |
| Live Cattle | February | 224.00 | +2.10 |
| Feeder Cattle | January | 336.575 | +4.725 |
| Lean Hogs | February | 81.85 | +0.85 |
| FARM POLICY |
—House farm bill 2.0 push slips to January
Partisan divisions stall work as key issues prove too contentious for year-end
House lawmakers have put farm bill negotiations on ice until January, with Politico reporting that deep policy rifts between Republicans and Democrats have halted progress on remaining provisions. House Ag Committee Chair GT Thompson (R-Pa.) told the outlet he still hopes for a markup early next year, but he acknowledged that tying the bill to an expected continuing resolution to fund the government past Jan. 30 may prove too complicated.
On the Senate side, Ag Committee Chair John Boozman (R-Ark.) signaled he wants to advance a bill that avoids the most divisive fights — including changes to hemp rules, California’s Proposition 12, and pesticide labeling. “We’ll have to have a discussion individually on all of those,” Boozman said, noting those issues divide not just the parties but also Republicans internally. Thompson said Boozman conveyed that view to him but argued those topics “need to be addressed” in the next full farm bill.
Democrats, meanwhile, continue to push for reversals to nutrition policy changes made under the One Big Beautiful Bill Act (OBBBA) — a demand Republicans are poised to reject.
Bottom Line: The latest comments from both chambers highlight how even a narrowed farm bill agenda remains fraught, virtually ensuring that any major movement will now wait until after the new year, with the same issues confronting it at that time too.
—FSA seeks extension of data collection for Emergency Relief Program
Agency says additional information may be needed to verify eligibility; no impact on payments
The Farm Service Agency is requesting public comments on extending its information-collection authority for Phase 1 and Phase 2 of the Emergency Relief Program (ERP), even though both signup periods have closed.
According to the agency’s notice, FSA may need supplemental documentation to verify producer eligibility and ensure compliance with program requirements. The request is routine and does not affect any ERP payments already issued to farmers.
Comments on the proposed extension are due February 3.
| OTT DICAMBA |
—OTT dicamba: most likely timeline for possible 2026 use
Regulatory milestones to watch — and where the bottlenecks are
Over-the-top dicamba could return to farm fields in 2026, but the path remains far from certain. EPA has proposed re-registering three dicamba formulations for use on dicamba-tolerant soybeans and cotton, and the agency’s timeline signals an intent to restore applications as early as next spring. To meet that goal, EPA would need to finalize the new labels — featuring tighter temperature limits, buffers and other drift-reduction measures — by early 2026, allowing states to complete their own approvals ahead of planting. Even if that occurs, however, the program will face immediate legal scrutiny. The two previous dicamba registrations were struck down in court, and many observers expect new litigation aimed at blocking or delaying 2026 use. As a result, dicamba’s availability next season remains possible and even plausible, but not guaranteed.
1. EPA final decision window
Late 2025 – Early 2026
• EPA is reviewing public comments and completing ecological/endangered-species analysis.
• If the agency wants OTT dicamba available for the 2026 season, the final decision must be issued no later than early spring 2026.
• EPA signaled in its proposal that the intent is to restore use for 2026, but this is not a guarantee.
2. Label issuance + state registration
Early–Mid Spring 2026
Once EPA issues a final registration:
• Final labels for XtendiMax/Engenia/Tavium-type products would need to be released.
• States then must approve or amend the labels, and several states (especially Ark., Ill., Minn., Iowa, Tenn., Mo.) have historically added additional cut-off dates or restrictions.
• This step can take 2–6 weeks, depending on the state.
3. First possible 2026 applications
Late Spring – Early Summer 2026
Assuming no litigation halts the new registration:
• Farmers could begin over-the-top applications during early vegetative stages of dicamba-tolerant soybeans/cotton.
• New EPA temperature-based limits and buffer requirements would constrain application windows more tightly than 2018–2024 labels.
4. Litigation risk window
Immediate — through Summer 2026
• Opponents will almost certainly sue again (as they did in 2020 and 2024).
• If litigation is filed, courts could:
- Allow use to continue during review (most likely), or
- Issue an emergency stay, halting use mid-season (less likely but possible).
• EPA believes the new mitigation framework is more legally durable, but this remains a major uncertainty.
Best overall assessment
A 2026 comeback for OTT dicamba is possible and even plausible, but not locked in.
The earliest realistic green light would be spring 2026, with first field applications following soon after — if EPA finalizes the registration on time and litigation doesn’t trigger an immediate freeze.
| ENERGY MARKETS & POLICY |
—Friday: Oil prices were steady, supported by stalled Ukraine peace talks, though gains were offset by expectations of a supply glut. Brent crude fell about 0.1% to $63.18 a barrel. WTI dipped 0.2% to $59.53 a barrel. The lack of progress in the Ukrainian peace talks provides a bullish backstop, but resilient OPEC production provides a bearish backstop.
—Thursday: Oil prices edge higher on rate-cut hopes
Geopolitical tensions, stalled Ukraine talks limit downside as supply concerns linger
Oil prices settled higher Thursday as growing expectations of a December Federal Reserve rate cut boosted market sentiment, even as stalled Ukraine/Russia negotiations and fresh attacks on Russian energy infrastructure kept geopolitical risks elevated. Brent closed up $0.59 at $63.26, while WTI gained $0.72 to finish at $59.67.
Crude futures briefly rose more than a dollar earlier in the session after U.S. labor data signaled a cooling job market, reinforcing speculation that the Fed could ease policy again next month. A weaker dollar added support by making oil comparatively cheaper for global buyers. Analysts emphasized that monetary-policy expectations now overshadow other drivers, with lower borrowing costs poised to lift economic activity and energy demand.
Geopolitical developments added further complexity. Rising U.S./Venezuela tensions stoked concerns of future disruptions to Venezuelan output. At the same time, prospects for progress in Ukraine dimmed after U.S. envoys left Moscow without breakthroughs, reducing the likelihood of Russian barrels returning to global markets soon. Kyiv continued strikes on Russian energy assets — including part of the Druzhba pipeline and Black Sea infrastructure — with analysts noting months of drone attacks have significantly reduced Russian refinery throughput heading into winter.
Fundamental signals were mixed. U.S. crude inventories rose by 574,000 barrels last week, and gasoline and distillate stocks also increased, raising concerns about a mounting supply surplus in 2026. Fitch echoed those worries, cutting its multi-year oil price assumptions on expectations that global production growth will continue to outpace consumption.
Exporters are already adjusting to the pressure. Saudi Arabia lowered its January official selling price for Arab Light to Asia to a five-year low, highlighting intensifying competitiveness. Kazakhstan also reported a drop in early December output following a Ukrainian strike on infrastructure tied to the CPC system.
Despite Thursday’s gains, analysts said crude remains caught between optimism over potential Fed easing and persistent fears of oversupply — a balance that continues to cap rallies and limit downside.
| TRADE POLICY |
—Industry pleads for USMCA renewal as Greer signals Trump could walk away
Aerospace, steel, auto and other sectors urge continuity in North American trade pact, even as USTR Greer says a 2026 U.S. withdrawal remains on the table
Officials from a broad swath of U.S. industry lined up on Thursday to urge the Trump administration to reaffirm the U.S.-Mexico-Canada Agreement (USMCA) during its upcoming 2026 joint review — even as U.S. Trade Representative Jamieson Greer signals President Trump may be open to letting the pact expire and replacing it with bilateral agreements.
At the Dec. 4 hearing, industry speakers diverged on whether USMCA needs major overhauls or targeted tweaks, but nearly all said the deal should remain in force well beyond 2026. Donnie Holder of tubing manufacturer Webco Industries called USMCA “a signature achievement of President Trump’s first administration” and said the review is an opportunity to make the trading bloc “even more successful.”
The hearing — the second day of USTR’s public sessions — is designed to gather input ahead of the review process that begins in July 2026. Under USMCA’s terms, the three countries must decide whether to extend the agreement for 16 years or allow it to move toward expiration, with the option of annual meetings to reach later consensus.
Thursday’s lineup was dominated by industry representatives from aerospace, automotive, shipbuilding, steel, aluminum and electronics — a stark contrast from the research and civil-society voices that opened the hearings on day one.
Many described USMCA as essential to North America’s competitiveness. Robyn Boerstling of the National Marine Manufacturers Association praised it as a “successful trade regime,” while Nasim Fussell of the Business Roundtable called extension “critical to the vitality of U.S. businesses.”
But steel and aluminum interests warned that loopholes allow China and other non-market economies to route products through Mexico or Canada to secure duty-free treatment. Jason Weber of the Aluminum Extruders Council said the rules must be tightened to prevent abuse, adding that while the 2018 pact represented “progress,” it now “must be strengthened.” Brian Raff of the American Institute of Steel Construction said ongoing circumvention issues make reform “more crucial” in the 2026 review.
Amid these calls for continuity, Greer has been suggesting that Trump may be prepared to leave the agreement altogether. In remarks to previewed ahead of a Dec. 5 podcast interview, Greer said withdrawal is “always a scenario,” arguing the review period was designed to allow revision — or exit — if the deal no longer meets U.S. needs. He also floated replacing USMCA with bilateral deals, saying the U.S./Canada and U.S./Mexico economic relationships are dissimilar enough that “it doesn’t make a ton of economic sense why we would marry those three together.”
Greer previously signaled that next year’s discussions would likely proceed as largely separate bilateral negotiations rather than a trilateral process.
President Trump himself has vacillated publicly: at a May press conference with Canadian Prime Minister Mark Carney, he called USMCA a “transitional deal” and questioned whether it was “necessary anymore,” prompting both Canada and Mexico to insist they would fight to preserve it.
This week, Trump again hinted at the possibility of a break, telling reporters that USMCA “expires in about a year” and that the administration may “let it expire” or attempt new bilateral arrangements. Industry, however, made clear on Thursday that they see the pact’s continuity — not its unraveling — as central to sustaining North American competitiveness in 2026 and beyond.
—Lawmakers press Greer to tighten USMCA dairy rules in 2026 review
Bipartisan coalition urges tougher enforcement on Canada’s market barriers and closure of dairy export loopholes
A broad, bipartisan group of lawmakers is urging U.S. Trade Representative (USTR) Jamieson Greer to make the upcoming 2026 review of the United States-Mexico-Canada Agreement (USMCA) a turning point for American dairy farmers, arguing that Canada has failed to deliver the market access it committed to more than five years ago.
In a detailed letter to Greer (link), more than 70 members of Congress warn that the agreement’s dairy provisions — central to winning U.S. support for USMCA in 2020 — have not been fully realized. They say Canada continues to administer its tariff-rate quotas (TRQs) in a way that blocks U.S. exporters from meeting strong Canadian demand for American dairy products.
Canada’s TRQ practices still limiting U.S. access. The letter says Canada’s quota allocations overwhelmingly favor Canadian processors, who have little incentive to import U.S. products. Retailers, restaurants, and food-service buyers — those most likely to use the imports — have been granted “zero access,” the lawmakers argue.
They also accuse Canada of:
• Restricting imports of U.S. dairy while simultaneously exporting low-priced nonfat milk solids that depress global markets.
• Avoiding export-discipline commitments embedded in USMCA by exploiting loopholes in the agreement’s dairy disciplines.
The lawmakers say these long-standing tactics undermine fair competition and erode the value of concessions the U.S. secured in the original USMCA negotiations.
Backing the Section 332 investigation. The Trump administration’s decision to request a U.S. International Trade Commission Section 332 investigation into global nonfat milk-solids markets is praised as an “important step” to document how Canada’s practices distort trade. That analysis, members argue, will strengthen the U.S. position heading into the 2026 review.
Mexico mostly a bright spot — with caveats. While pressing for a more aggressive stance toward Canada, the letter also notes that Mexico has largely upheld its dairy trade commitments, preserving open channels for U.S. exports. The lawmakers say the review should safeguard this progress, though they acknowledge that further work is needed to ensure compliance on common-cheese-name protections.
USMCA review framed as a chance to “finish the job.” The lawmakers emphasize that USMCA has delivered major wins for agriculture — citing $58.7 billion in U.S. farm exports to Canada and Mexico in 2024 — but they stress that dairy remains an area where “targeted adjustments” are badly needed to make the agreement function as intended.
They urge Greer to:
• Hold Canada accountable to its original commitments
• Close loopholes in the dairy export-discipline system
• Secure new, enforceable commitments to ensure U.S. producers gain meaningful access
• Strengthen the agreement rather than reopen it broadly
“American dairy producers can compete anywhere in the world,” the lawmakers write, “as long as there is a level playing field.”
| POLITICS & ELECTIONS |
—Supreme Court clears Texas GOP-favored map for 2026, strengthening Trump’s midterm strategy
6–3 ruling allows mid-decade redistricting push to proceed, likely handing Republicans up to five extra House seats
The Supreme Court on Thursday allowed Texas to use its newly redrawn congressional map — a plan explicitly crafted to expand Republican representation — in next year’s midterm elections. The ruling, delivered on a 6–3 vote, blocks a lower-court order that would have forced the state back to its 2021 district lines. The court’s three liberals — Justices Elena Kagen, Sonia Sotomayor and Ketanji Brown Jackson — dissented from the opinion.
Texas officials argued that the mid-decade overhaul was justified, and the Court’s conservative majority agreed, giving President Donald Trump a significant political lift as he encourages GOP-led states to pursue similar redistricting maneuvers. Analysts say the map could net Republicans as many as five additional House seats, an important buffer for maintaining the party’s narrow majority.
In its order, the Court also referenced recent Democrat-driven redistricting efforts in California — a signal that the justices may be disinclined to intervene in partisan map-drawing battles elsewhere, regardless of which party benefits.
| FOOD & FOOD INDUSTRY |
—Global food costs extend slide as FAO index drops for third straight month
November declines driven by vegoils, meat, and dairy; only cereals saw price gains amid firmer wheat and corn markets
Global food commodity prices continued to ease in November, with the UN Food and Agriculture Organization reporting its Food Price Index fell 1.2% to 125.1 points — the third straight monthly decline. The index now sits 2.1% below year-ago levels and nearly 22% below its March 2022 peak.
Cereals were the lone category to rise, gaining 1.3% on firmer wheat and corn markets; wheat climbed 2.5% while rice prices slipped. Vegetable oil prices fell 2.6%, led by declines in palm, rapeseed, and sunflower oils, which outweighed biodiesel-driven strength in soyoil.
Meat prices dipped 0.8% on weaker poultry and pork markets, while beef remained “mostly stable.” FAO noted that the U.S. removal of beef import tariffs helped blunt upward pressure on Australian beef, keeping global bovine prices steady.
| WEATHER |
— NWS outlook: Active winter weather pattern continues with snow expected for the Mid-Atlantic, the Midwest, and the Rockies through Saturday… …Moderate to heavy rainfall for the Gulf Coast is likely through the upcoming weekend… …Well below average temperatures continue for many areas from the northern Plains to the East Coast.
