Trump Roils Markets with Greenland Focus & EU Resistance

Screwworm spreads into Mexico’s wildlife | China removes block on Canadian beef | SCOTUS in focus | OMB adds more 45Z meetings

LINKS

Link: Updates, Jan. 19: IMF: Global Growth Outlook Brightens as Tariff
          Pressures Ease and AI Investment Surges
Link: The Week Ahead, Jan. 18: Davos 2026: Trump’s Presence Sharpens
         Focus on Trade, Power and Global Risk

Link: Video: Wiesemeyer’s Perspectives, Jan. 16
Link: Audio: Wiesemeyer’s Perspectives, Jan. 16
 

Updates: Policy/News/Markets, Jan. 20, 2026

UP FRONT

 TOP STORIES

— Screwworm spreads into Mexico’s wildlife, raising alarm along U.S. border — New World screwworm cases are moving north in Mexico and expanding beyond livestock; a first confirmed wildlife death heightens Texas biosecurity concerns and import/trade disruption risk.

— China’s economy defies gravity as U.S. allies edge closer to Beijing — China’s reported 5% growth fuels a narrative shift as allies like Canada pursue Beijing deals; analyst Michael Pillsbury warns allies risk strategic and economic blowback if they decouple coordination with Washington.

— Davos tests the dollar’s staying power — The Economist frames Davos as a referendum on dollar dominance: reserve share has eroded, but network effects and lack of credible alternatives keep the dollar on top—unless U.S. political risk undermines trust.

— Bessent defends Greenland tariff threats as lawmakers warn of NATO rift — Treasury casts Greenland-linked tariffs as an “economic emergency” tied to Arctic security, but bipartisan lawmakers and low public support spotlight alliance and political backlash risks.

— Starmer slams Trump’s Greenland tariff threats — UK PM Keir Starmer calls tariff pressure on allies “completely wrong,” pushing diplomacy over retaliation even as Europe weighs tougher countermeasures.

— Trump threatens 200% tariff on French wine after publishing private Macron message — Trump escalates the Greenland dispute with a major tariff threat and publicized messages, while the EU accelerates retaliation planning and emergency talks.

— SCOTUS decision watch intensifies on tariff authority — Markets and policymakers focus on whether the Court rules on IEEPA-based tariff powers, with potential implications for tariff legality, refunds, and next-step litigation.

— Powell to attend Supreme Court hearing on Trump’s authority over Fed governors — Fed independence moves to center stage as Powell attends arguments in a case on presidential removal power; the backdrop includes heightened political/legal pressure on Fed leadership.

FINANCIAL MARKETS

— Equities today — Risk sentiment sours on Greenland-driven trade escalation: global stocks slide, bonds weaken, gold and silver hit records, and the dollar drops as investors reassess U.S./Europe friction.

— Tariffs raise economic stakes without triggering recession fears — Economists see slower growth and higher prices as the base case—not an outright recession—while warning that capital flows (Europe trimming U.S. assets) could tighten U.S. financial conditions.

— What the Greenland headlines mean for markets — Sevens Report says the key transmission is via higher yields: headline tariffs matter less for trade and more for inflation/rates — yields are the barometer for when “noise” becomes macro damage.

— China cuts U.S. Treasury exposure to post-2008 low as Fed independence fears mount — Beijing continues paring Treasuries and shifting toward gold/non-U.S. assets, citing debt sustainability and politicization concerns even as overall foreign Treasury ownership hits records.

— U.S. growth stays above potential as inflation and China risks loom — McVean’s Michael Drury argues U.S. growth remains solid but inflation sticky (food-led), while China’s massive trade surplus is the underappreciated strategic macro risk.

MARKET CONCENTRATION IN AG INDUSTRY

— Market concentration in U.S. agriculture raises policy tensions over scale, power, and tariffs — AEI economists argue consolidation often reflects scale/innovation, but warn tariffs are inflating farm costs in ways easily misattributed to market power.

FARM POLICY

— USDA unveils ‘lender lens’ to open rural loan data to the public — USDA launches a downloadable dashboard of Rural Development guaranteed loans to boost transparency, performance tracking, and geographic/sector analysis.

TAX POLICY

— IRS opens 2026 filing season on time despite staffing strains and major tax changes — Jan. 26 start holds despite OB3 implementation; refunds may rise, but service frictions grow as staffing shrinks and paper refund checks are phased out.

ENERGY MARKETS & POLICY

— Tuesday: Oil prices steady as Trump’s Greenland tariff threats offset by stronger global growth signals — Crude holds steady as trade-war risk competes with firmer IMF growth expectations and supportive China demand signals.

— OMB docket fills up as Clean Fuel Tax Credit Review drags on — Section 45Z rule review draws a growing list of stakeholder meetings, signaling heavy lobbying and uncertainty on timing/final provisions.

TRADE POLICY

— China keeps pork tariffs intact despite Canada/China trade reset — Beijing eases some canola-related pressure and reopens beef access, but leaves the retaliatory 25% pork tariff in place—suggesting a phased, selective détente.

CHINA

— China’s birthrate hits record low, deepening demographic crisis — Births fall to a historic low as deaths outpace births again; even aggressive pro-natalist policies aren’t reversing a structural drag on growth and public finances.

POLITICS & ELECTIONS

— House battlefield tilts blue as Democrats gain momentum — Cook Political Report moves 18 ratings toward Democrats, signaling a deteriorating GOP environment even if many Toss Ups remain GOP-held.

— Takaichi backs food tax suspension as election nears — Japan’s PM revives a two-year food tax suspension ahead of a snap election, raising fiscal concerns and scrutiny over political timing/consistency.

FOOD POLICY & FOOD INDUSTRY

— America’s bean king thrives as protein craze boosts demand — Rancho Gordo’s subscription bean cult rides protein/fiber trends and affordability tailwinds, validating a long-term bet to premium-ize beans.

LABOR & IMMIGRATION POLICY

— Colorado bars Brighton farm from H-2A program over wage theft — State imposes a rare permanent H-2A ban and $1.7M back-wage/penalty order after repeated nonpayment findings and alleged obstruction.

WEATHER

— NWS outlook — Lake-effect snow persists near the Great Lakes; an Arctic blast lingers in the Northeast before moderating, while freeze warnings stretch into parts of Georgia and Florida.

TOP STORIES—Screwworm spreads into Mexico’s wildlife, raising alarm along U.S. borderSurge in New World screwworm cases in cattle and a first fatal infection in a wild howler monkey intensify biosecurity concerns for Texas producers New World screwworm (NWS) infestations are expanding across Mexico and increasingly affecting both livestock and wildlife, prompting heightened warnings for U.S. producers — especially in Texas — about the risk of northward spread. Mexican authorities confirmed the first recorded death of a wild animal from NWS myiasis after an endangered howler monkey died in Palenque, Chiapas, from a larval infestation. Until now, only a handful of cases in wild birds and captive exotic animals had been documented in southern states, all of which recovered after treatment. The wildlife fatality signals a troubling escalation in the outbreak. Meanwhile, NWS cases are clustering closer to the U.S. border. Mexico’s National Service for Agrifood Health, Safety and Quality (Senasica) reported 11 active cattle cases in Tamaulipas since Dec. 31, 2025, including an initial infection in a six-day-old calf with an umbilical wound. Crucially, Mexican officials say there is no evidence the affected animals moved from other regions, raising concerns that the flies themselves may now be spreading naturally rather than hitchhiking via livestock transport. The development has sharpened concern in Texas. Texas Department of Agriculture (TDA) and Agriculture Commissioner Sid Miller urged producers — particularly along the border — to inspect animals daily, treat any wound as a potential entry point, and report suspicious cases immediately. Officials emphasized close monitoring of navels in newborn animals and rapid isolation of suspect cases as key defenses. NWS larvae, from a parasitic blowfly species, invade open wounds and consume living tissue in warm-blooded animals. After advancing steadily north from Central America over the past 16 months, the pest has already disrupted trade: the U.S. suspended Mexican cattle imports three times last year, most recently after cases appeared near the border in September. As of Jan. 7, Senasica counted 692 active NWS cases across 13 Mexican states. Chiapas (137 cases) leads, followed by Oaxaca (134), Veracruz (117), Guerrero (65) and Quintana Roo (46). Cattle account for 343 cases, but infections are also widespread among dogs (184) and present in pigs, horses, sheep, goats, cats, and even a farm bird — underscoring the broadening host range and rising risk to animal health on both sides of the border.—China’s economy defies gravity as U.S. allies edge closer to BeijingChina expert Pillsbury warns Canada is “playing with fire” as Trump’s tariff strategy reshapes global alignments Speaking on a Fox Business show with Liz Claman, Michael Pillsbury, senior fellow for China strategy at the Heritage Foundation and a Fox News contributor, said new data showing China’s economy growing 5% last year — despite President Donald Trump’s sweeping trade actions — mask deeper strategic risks for U.S. allies. Pillsbury argued that Canada’s decision to ease tensions with Beijing risks undercutting coordination with Washington and could backfire politically and economically, given China’s track record of failing to honor trade commitments. China’s economy is once again challenging expectations. Official data released this week show the world’s second-largest economy expanding by 5% last year, a result Beijing touts as proof that it has weathered President Trump’s trade war. But according to Michael Pillsbury, the headline numbers conceal a more consequential story: the reshaping of global alliances triggered by U.S. tariff pressure on allies as much as adversaries. Pillsbury addressed growing concern that U.S. tariffs — particularly those aimed at close partners — are nudging allies toward China. The immediate example is Canada, whose prime minister, Mark Carney, traveled to Beijing last week to strike a deal with Xi Jinping. Under that arrangement, Canada would ease tariffs on Chinese-made electric vehicles, while China would reduce tariffs on Canadian exports including canola meal, crab, lobster, and peas (see Trade Policy section for details and perspective). To some observers, the deal signals the emergence of a “China-friendly” bloc among U.S. allies frustrated by Washington’s trade tactics. Pillsbury sees it differently — and more darkly. “It’s a possibility,” he said of allies drifting toward Beijing, “but what’s really happening is the Canadian prime minister is playing with fire.” “Playing with fire” on trade. Pillsbury argued that Canada’s outreach to Beijing amounts to a public challenge to President Trump’s broader effort to reshape the global trading system. While Trump has publicly said he does not oppose allies pursuing their own agreements with China, Pillsbury suggested that stance carries a warning. “There’s a double meaning there,” he said. “China doesn’t always implement or honor its trade agreements.” In Pillsbury’s view, striking bilateral deals with Beijing — without coordination with Washington — is naïve. He warned that China could exploit Canada politically and economically, leaving its leadership “taken to the cleaners” and exposed to domestic backlash. The stakes are high, he noted, because roughly 75% of Canada’s exports go to the United States, making Washington far more consequential to Ottawa’s economic future than Beijing. Tariffs as leverage, not taxation. Throughout the interview, Pillsbury emphasized that President Trump views tariffs primarily as political leverage, not as a conventional economic tool. He traced that thinking back decades, arguing Trump has seen tariffs as a means to force policy change since at least the late 1980s. “This isn’t some kind of tax bill,” Pillsbury said. “It’s designed to get major countries to change their policies.” From that perspective, Trump’s pressure on allies — whether over trade balances, security burdens, or even strategic issues like Greenland — is intended to extract concessions and realign behavior. Pillsbury pointed to the announced U.S./UK trade agreement as evidence that the strategy can produce results, even amid controversy. World order rhetoric and political risk. Pillsbury also criticized Prime Minister Carney’s public rhetoric abroad, noting speeches in Beijing and Qatar in which Carney suggested the global order is becoming unstable and implied that U.S. policy is a driving factor. “If he wants to criticize Trump’s approach to a new world order, he should do it face to face,” Pillsbury said. Publicly questioning U.S. leadership while relying on the American market, he warned, is “just unwise.” Such moves, Pillsbury predicted, could carry political consequences at home — especially if trade friction with Washington intensifies. A long view on Trump’s strategy. Despite acknowledging the diplomatic friction and market volatility surrounding Trump’s tariff threats, Pillsbury urged viewers to take a longer view. He predicted that, over time, Trump’s approach would be judged by outcomes rather than rhetoric. “At the end of another year or two, we’re going to see some real accomplishments,” Pillsbury said. “People will look back and see he applied leverage very cleverly to get these agreements.” For now, however, China appears content to watch Western allies squabble — and to capitalize where it can. Whether Canada’s gamble pays off, or proves Pillsbury’s warning correct, may become one of the clearest tests yet of how far Trump’s tariff-driven strategy can reshape the global economic order.—Davos tests the dollar’s staying powerAs Trump reshapes geopolitics, the Economist examines whether global finance is finally ready to move beyond the greenback Writing from Davos, Switzerland, the Economist frames this year’s World Economic Forum as a stress test not just for globalization, but for the U.S. dollar itself. In a special live episode of Inside Economics, the magazine’s editors are joined by Ken Rogoff and Gita Gopinath, both of Harvard University and both former chief economists of the International Monetary Fund, to debate whether the foundations of dollar dominance are beginning to crack. “Davos is an icon of globalization,” the Economist notes — and that symbolism matters. The discussion comes exactly one year after Donald Trump returned to the White House, a period in which the United States has imposed sweeping tariffs, threatened allies over Greenland, and pursued a far more confrontational approach to diplomacy. The question animating the debate in the Alps is whether this political upheaval will spill over into the plumbing of global finance. The dollar’s supremacy is no longer absolute. According to the Economist, the currency’s share of global foreign-exchange reserves has fallen sharply over the long run, from about 85% in 1970 to roughly 58% today. After last year’s so-called “Liberation Day” tariffs, investors rushed to hedge dollar exposure, contributing to a roughly 10% slide in the greenback over the course of 2025. Yet the magazine cautions against confusing erosion with eclipse. “Reserve currencies benefit from powerful network effects,” the Economist writes. “The more people use them, the greater the incentive for everyone else to stay in the system.” By almost every operational measure that matters — trade invoicing, foreign-exchange transactions, and global debt issuance — the dollar still towers over its rivals. That resilience underpins a key argument explored in Davos: even as Washington unsettles allies and markets, no alternative currency yet offers the depth, liquidity, and institutional backing required to replace the dollar at the core of the global system. The euro remains fragmented, China’s renminbi constrained by capital controls, and gold or commodities impractical as modern reserve anchors. Intriguingly, the Economist adds that the Trump administration does not see technological change as a threat to dollar primacy. On the contrary, officials argue that the rise of dollar-linked stablecoins could reinforce U.S. monetary dominance by extending the greenback’s reach through new digital payment rails rather than displacing it. From Davos, the magazine’s conclusion is deliberately unresolved. The dollar may be less dominant than it once was, but it remains unrivalled. The real test, the Economist suggests, is whether America’s political choices eventually undermine the trust and stability on which that dominance rests — or whether, once again, predictions of the dollar’s decline prove premature.—Bessent defends Greenland tariff threats as lawmakers warn of NATO riftTreasury chief frames tariffs as an “economic emergency” tied to Arctic security, while bipartisan critics cite low public support and risks to U.S. alliances U.S. Treasury Secretary Scott Bessent defended President Donald Trump’s plan to impose tariffs on European countries that oppose his bid to take control of Greenland, arguing the measures fall within presidential authority during an economic emergency. Bessent said U.S. control of Greenland is necessary to deter conflict in the Arctic, summing up the administration’s rationale as: “The national emergency is avoiding a national emergency.” Public support for the idea remains limited. A poll conducted by YouGov for the Economist found that just 8% of Americans approve of taking Greenland by force, while 13% favor attempting to purchase the territory. The tariff threats have drawn sharp criticism on Capitol Hill, including from within the president’s own party. Several Republican lawmakers warned the move could fracture NATO and inflict economic damage at home. Senate Democratic Leader Chuck Schumer (D-N.Y.) said Democrats would introduce legislation aimed at blocking the tariffs. Former Senate Republican leader Mitch McConnell (R-Ky.) went further, cautioning that attempting to seize Greenland by force “would be more disastrous for the president’s legacy than withdrawing from Afghanistan” was for Joe Biden, underscoring the deepening bipartisan unease over the strategy. —Starmer slams Trump’s Greenland tariff threatsUK prime minister calls pressure on allies “completely wrong,” urges diplomacy over trade war UK Prime Minister Keir Starmer has broken publicly with Donald Trump, condemning Trump’s threat to impose tariffs on European allies — including the UK — to force Denmark to sell Greenland. Starmer said using tariffs against allies is “completely wrong” and warned that a trade war would be “in no one’s interest.” While acknowledging the growing strategic importance of Greenland as Arctic competition intensifies, he stressed that any decisions must involve Greenland and Denmark and be handled through calm discussions among allies, not economic coercion. Rejecting retaliatory tariffs for now, Starmer said the UK will act in its national interest while supporting allied security efforts through NATO. His stance contrasts with tougher signals from the European Union, which is weighing countermeasures if Trump follows through. The comments mark Starmer’s sharpest rebuke of Trump to date, despite an otherwise close UK/U.S. relationship, and come as Greenland and Denmark continue to reject any suggestion of U.S. control over the territory. —Trump threatens 200% tariff on French wine after publishing private Macron messageGreenland sovereignty dispute deepens rift with Europe as Paris pushes EU retaliation and emergency summit looms President Donald Trump escalated his confrontation with European allies by threatening a 200% tariff on French wine and champagne and publicly posting a private message exchange with French President Emmanuel Macron. The clash centers on Trump’s push to acquire Greenland from Denmark, a fellow NATO member, and Macron’s leadership in urging a tougher European response. Macron has taken one of the hardest lines in Europe, pressing the bloc to deploy its most powerful trade tools against Washington and backing Denmark with a symbolic deployment of French troops to Greenland. Trump also bristled at France’s reluctance to join a proposed U.S.-led “Board of Peace,” which Paris fears could undermine the role of the United Nations. “I’ll put a 200% tariff on his wines and champagnes,” Trump said, dismissing Macron’s objections and predicting he would soon be out of office. Private messages made public. Hours after the tariff threat, Trump posted a screenshot on Truth Social of an exchange with Macron that French officials confirmed as authentic. In it, Macron told Trump he did not understand the Greenland push, proposed hosting a G7 meeting that would invite Russia and others, and said he was aligned with Trump on Syria and open to cooperation on Iran. Neither side disclosed when the messages were sent. Davos and NATO tensions. Macron is attending the World Economic Forum in Davos, but aides say there is no plan to extend his visit to meet Trump, who arrives later. The standoff threatens to further strain NATO unity, already rattling European industry and global markets. EU retaliation gathers pace. Trump has vowed to impose escalating tariffs on several European allies starting Feb. 1 unless the U.S. is allowed to acquire Greenland — moves EU leaders have denounced as blackmail. In response, the European Union is convening an emergency summit in Brussels on Thursday and weighing the activation of its Anti-Coercion Instrument, which could curb access to public tenders or restrict services trade — an area where the U.S. runs a surplus. European officials are also considering a €93 billion (around $108 billion) retaliatory tariff package. Macron allies say France is being singled out for “leading the resistance.” Despite years of direct engagement with Trump — often through informal calls and texts — the relationship has entered its most volatile phase yet, with Greenland now at the center of a widening transatlantic trade and security dispute. Treasury Secretary Scott Bessent urged calm amid the growing transatlantic rift, calling for allies to honor their trade agreements and saying the idea that Europeans might dump Treasuries and other U.S. assets “defies any logic.” —SCOTUS decision watch intensifies on tariff authorityAttention turns to whether justices weigh in on the Trump administration’s emergency-powers trade strategy The Supreme Court is back in focus as it has designated today, Jan. 20, as an opinion release day, raising the possibility of a long-awaited ruling on legal challenges to the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imported goods. Court watchers say that if no opinion is issued today, the decision may be pushed off until February.  The stakes are significant: the justices could invalidate the use of IEEPA as a tariff-imposing tool, determine what remedies would follow such a ruling — including whether previously collected tariffs must be repaid — and decide whether to send unresolved questions back to lower courts for further consideration. —Powell to attend Supreme Court hearing on Trump’s authority over Fed governorsCase testing presidential power to fire Lisa Cook unfolds as Fed independence comes under scrutiny Federal Reserve Chair Jerome Powell plans to attend oral arguments Wednesday at the Supreme Court in a case challenging whether President Donald Trump can remove Fed Governor Lisa Cook, according to a person familiar with the matter who spoke to CNBC. The high-stakes hearing places the Fed’s institutional independence squarely before the Court, with implications for how much control the White House can exert over the central bank’s leadership. Powell’s decision to attend underscores the significance of the case for the Fed at a moment of heightened political and legal pressure. Powell’s appearance also comes amid separate legal scrutiny: he is under criminal investigation by the U.S. Attorney’s Office in Washington, D.C., related to a multibillion-dollar renovation of the Fed’s headquarters and his congressional testimony about that project. Of note: Trump may announce his pick for the new Federal Reserve chair as soon as next week, Treasury Secretary Scott Bessent said, amid intense anticipation over the search for a new central-bank chief.

FINANCIAL MARKETS

—Equities today: Markets are in high anxiety mode as Trump ratchets up disputes with European leaders over Greenland. Trump said he will meet with several parties over his ambition to take over the island during the World Economic Forum in Davos, Switzerland. He’s due to speak there on Wednesday. U.S. equity futures plunged to one-month lows as the standoff over Greenland deepens. Treasuries also fell as the allure of U.S. assets dimmed. Investors are looking for havens, pushing gold to a record high, while silver also reached an all-time peak with trade war fears rising. The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.94% to 98.46. In Asia, Japan -1.1%. Hong Kong -0.3%. China flat. India -1.3%. In Europe, at midday, London -1.1%. Paris -1.4%. Frankfurt -1.7%.

—Tariffs raise economic stakes without triggering recession fears

Economists warn of slower U.S. growth, higher prices, and financial market fallout as trade tensions with Europe threaten cornerstone transatlantic relationships

Economists argue that retaliatory tariffs are unlikely to tip the U.S. into recession, but they could weigh on growth, further strain an already sluggish manufacturing sector, and drive up costs for consumers and businesses at a time when inflation remains stubbornly above comfortable levels.

Over the longer term, a deterioration in transatlantic relations could prompt Europe to reduce its reliance on the U.S. and expand trade ties elsewhere, eroding an economic partnership that has underpinned prosperity on both sides of the Atlantic.

Trade tensions also carry financial risks. Some analysts warn that Trump’s threats toward Europe could prompt European investors to scale back holdings of U.S. stocks and bonds, putting downward pressure on the dollar, dragging on equity markets, and pushing up U.S. borrowing costs.

—What the Greenland headlines mean for markets

Tariff threats tied to Greenland talks are pushing yields higher and testing investor confidence — without yet derailing the broader rally

Escalating headlines around Greenland and U.S./EU trade relations are beginning to register in financial markets, primarily through higher bond yields and a more cautious risk tone, according to the Sevens Report. While equity markets have so far absorbed the policy noise, the analysis warns that continued escalation could become a meaningful headwind if it drives rates materially higher.

In its January 20 market note, Sevens Report said the Trump administration’s decision to impose a 10% tariff on European Union imports, with a threat to raise those levies to 25% by June absent progress on Greenland negotiations, added to an already crowded slate of pro-growth but inflation-prone policy measures. Markets responded late last week and over the long weekend with stocks slipping despite “Goldilocks” economic data, while the 10-year Treasury yield climbed to a multi-month high.

Why Greenland matters to markets. Sevens Report argues the Greenland-linked tariff threat matters less for its direct trade impact and more for what it signals about policy direction. Tariffs, even modest ones, tend to push prices higher, reinforcing a “run-hot” economic backdrop already fueled by tax cuts, elevated federal spending under the One Big Beautiful Bill Act, mortgage purchases by Fannie Mae and Freddie Mac, and deregulation. Stronger aggregate demand against finite supply increases inflation risks, which in turn can keep the Federal Reserve less dovish and pressure yields higher across the curve.

That dynamic showed up quickly in rates. The 10-year Treasury yield moved above 4.20%, with Sevens Report noting that while this level is not yet problematic for equities, yields approaching 4.50% or higher would pose a much more serious challenge for stocks and the broader economy.

Markets still standing — for now. Despite the policy turbulence, Sevens Report emphasizes that the core supports of the rally remain largely intact. The firm points to four pillars still underpinning markets: AI-driven enthusiasm, stable economic growth, expectations for Fed rate cuts later in 2026, and relative tariff stability outside headline shocks. These factors have helped prevent sharper equity declines even as volatility has picked up.

The risk, however, is persistence. Sevens Report cautions that if “policy chaos” continues — through repeated tariff threats, geopolitical disputes with allies, or industry-specific pressure campaigns — markets will not remain immune. The recent rise in Treasury yields is described as an early signal that investors are starting to demand compensation for that uncertainty.

The indicator to watch. For investors, Sevens Report identifies Treasury yields as the key market barometer tied to the Greenland headlines. If yields remain contained below levels that materially tighten financial conditions, equity markets can likely continue to look through geopolitical noise. But sustained upward pressure on rates would turn the Greenland dispute from a headline risk into a tangible macro and market problem.

—China cuts U.S. Treasury exposure to post-2008 low as Fed independence fears mount

Beijing pares back debt holdings amid Trump/Powell clash, shifts reserves toward gold and non-U.S. assets

China reduced its holdings of U.S. Treasuries in November to the lowest level since the global financial crisis, underscoring Beijing’s growing unease over U.S. debt sustainability and the independence of the Federal Reserve under President Donald Trump.

According to U.S. Treasury Department data, China’s Treasury stockpile fell to $682.6 billion in November from $688.7 billion in October, marking the weakest level since September 2008 and a nearly 10% decline over the past year, data provider Wind shows.

Of note: The move diverges sharply from a global trend that saw total foreign ownership of U.S. Treasuries hit a record $9.36 trillion.

Analysts say the sell-down reflects mounting concern in Beijing that U.S. fiscal dynamics are becoming unsustainable and increasingly politicized. Shao Yu, chief economist at Fudan University’s Sci-tech Innovation Management Research Centre, likened the U.S. debt trajectory to a “Ponzi-like” cycle reliant on ever-larger issuance to refinance existing obligations, arguing China is seeking to reduce exposure to that risk.

Those worries have intensified as uncertainty grows around the Federal Reserve’s future. Fed Chair Jerome Powell, whose term expires in May, disclosed that the Trump administration has opened a criminal investigation into him — something Powell said he believes is tied to his refusal to align interest-rate policy with presidential preferences. While Trump has said he was unaware of the probe, analysts expect any successor he names to be more politically aligned, raising fears of aggressive rate cuts and renewed quantitative easing.

Beijing appears to be rebalancing its reserves toward gold, non-U.S. currencies, and overseas equity investments. China added gold for a 14th consecutive month in December, lifting its holdings to 74.15 million ounces, according to official data.

China’s retreat contrasts with moves by other major holders. Japan and the United Kingdom, the two largest foreign owners of U.S. Treasuries, both increased their positions in November, while Belgium and Canada also posted sizable gains. China, meanwhile, has slipped to third place among foreign Treasury holders, continuing a gradual drawdown that began during Trump’s first term.

Bottom Line:The divergence highlights a widening split in how global investors assess U.S. fiscal and monetary credibility—one that could have lasting implications for reserve allocation and global capital flows.

—U.S. growth stays above potential as inflation and China risks loom

McVean Chief Economist Michael Drury argues U.S. growth remains well above potential despite sticky inflation, while warning that China’s $1.2 trillion trade surplus poses a larger long-term risk to global investment and economic power

Growth still strong, but overstated by politics. The U.S. economy continued to expand at a solid pace in Q4 2025, with Drury estimating real GDP growth around 2.5%, well above the economy’s rising potential rate of roughly 1.5%, but far below the 5%+ figures cited by President Trump based on Atlanta Fed GDPNow. Growth remains consistent with the average of the past three quarters and slightly below 2024’s pace, with immigration restrictions limiting labor-force growth rather than per-capita output gains.

Productivity gains predate the AI hype. Drury argues that much of the productivity and profit strength often attributed to artificial intelligence has been underway for years, driven instead by firms streamlining operations after Covid disruptions, regulatory changes during the Biden era, and now tariffs and immigration reform. Adaptability, not policy design, is identified as the decisive factor in sustaining growth.

Inflation remains sticky, driven by food prices. December CPI data showed inflation reverting to its mid-2025 trend, with headline CPI up 0.26% and core up 0.28%. A sharp 0.7% increase in food prices—accounting for about 40% of the monthly CPI rise—has become central to affordability concerns. Drury expects average inflation in 2026 to remain above 2.5%, well above the Federal Reserve’s target

Retail sales volatile, but consumption resilient. Holiday retail sales were stronger than expected, with the National Retail Federation estimating 4.1% growth, supported by credit-card data. While Q4 real retail sales likely stalled due to price volatility, Drury sees consumption rebounding in early 2026 unless an unusually strong December triggers a post-holiday slowdown.

Biggest strategic worry: China’s trade surplus. Drury flags China’s $1.2 trillion 2025 trade surplus — nearly 1% of global GDP — as his primary concern. Despite tariffs, the surplus has tripled since Covid and continues to fuel China’s global investment influence. He warns that surplus-driven capital flows into technology and strategic assets could amplify China’s economic and geopolitical power, especially if yuan appreciation attracts investment back toward Chinese firms.

Bottom Line: The U.S. economy remains stronger than its long-run potential, inflation pressures are easing only slowly, and consumer demand is holding up despite volatility. Strategically, however, Drury sees China’s massive and growing trade surplus — and its deployment into global investments — as the most underappreciated macro risk heading into 2026.

MARKET CONCENTRATION IN AG INDUSTRY

—Market concentration in U.S. agriculture raises policy tensions over scale, power, and tariffs

AEI economists argue consolidation reflects efficiency gains as much as market power — but tariffs are amplifying cost pressures for farmers

A new analysis (link) by Barry K. Goodwin and Joe Glauber of the American Enterprise Institute (AEI) examines the growing concentration across U.S. agricultural input and processing industries and cautions policymakers against assuming that consolidation automatically harms farmers or consumers. While seed, fertilizer, food retail, and meatpacking markets are dominated by a small number of firms, the authors argue that much of this concentration reflects economies of scale and technological change rather than illegal collusion or excessive market power.

The paper situates the debate in the context of President Donald Trump’s November 2025 directive ordering the Justice Department to investigate alleged price-fixing and collusion in the meatpacking sector. The administration contends that a handful of dominant firms have squeezed producers and driven up grocery prices. Goodwin and Glauber acknowledge the high concentration levels but stress that similar patterns extend well beyond meatpacking — and that the economic effects are more nuanced.

Seeds: innovation and IP drove consolidation. The authors show that the U.S. seed industry is now dominated by three firms — Bayer, Corteva, and Syngenta — a shift driven by biotechnology, intellectual property protections, and major mergers such as Bayer’s acquisition of Monsanto. While concentration is high, they argue that proprietary genetics and R&D scale have delivered yield gains and lower per-unit production costs, complicating claims that farmers are unequivocally worse off.

Fertilizer: fewer firms, higher vulnerability. Fertilizer markets are similarly concentrated, with the top four firms controlling roughly three-quarters of U.S. nitrogen fertilizer sales and nearly all domestic phosphate and potash production. The paper highlights how global shocks — natural gas prices, the war in Ukraine, and export restrictions — drove fertilizer prices sharply higher in 2021–22. Although prices have eased, they remain elevated relative to pre-pandemic levels, leaving farmers exposed to both market structure and geopolitics.

Meatpacking: high concentration, long-standing structure. In livestock processing, four-firm concentration ratios exceed 80% in beef and remain high for hogs, broilers, and turkeys. However, Goodwin and Glauber note that this concentration largely dates back decades and has not materially increased in recent years. Past research, they argue, finds that while processors may exert modest market power over livestock prices, efficiency gains from scale have more than offset those effects for consumers through lower retail meat prices.

Tariffs complicate the policy picture. A key theme of the paper is that recent tariff policy is muddying the debate. New Trump-era tariffs, antidumping duties, and threats of additional levies — including on Canadian fertilizer — have raised input costs for farmers. The authors caution that price increases driven by trade policy are often misattributed to market power, when tariffs themselves may be the dominant factor pushing costs higher.

Bottom Line: Goodwin and Glauber conclude that while agricultural markets are undeniably concentrated, concentration alone is a poor proxy for harm. In many cases, economies of scale, innovation, and lower consumer prices have outweighed the downsides of reduced firm numbers. They warn that aggressive antitrust or trade interventions, if not carefully targeted, risk raising costs for farmers and consumers alike without addressing the underlying economic forces shaping modern U.S. agriculture. 

FARM POLICY

—USDA unveils ‘lender lens’ to open rural loan data to the public

New dashboard expands transparency around federally backed lending and investment across rural America

USDA on Monday launched Lender Lens, a new public dashboard designed to give communities, lenders, and borrowers unprecedented visibility into the agency’s Rural Development guaranteed loan portfolio (link).

Unveiled by USDA Deputy Secretary Stephen Vaden, the tool sits within the Rural Data Gateway and makes USDA’s entire commercial guaranteed loan book accessible through interactive, downloadable data. Users can track total loan volume, average loan size, sector distribution, geographic reach, and delinquency rates, with information refreshed monthly and available down to the individual-loan level.

Of note: USDA says the dashboard is meant to help stakeholders monitor performance, identify trends, and better manage Rural Development loan guarantees, while giving the public a clearer picture of where federal dollars are flowing in rural communities.

Vaden said the initiative reflects the Trump Administration’s emphasis on government transparency, arguing that Lender Lens will show how USDA-backed capital is being used to support health care access, job creation, and essential infrastructure such as drinking water systems across rural America.

The Rural Data Gateway itself, first launched in 2023, already aggregates a decade of Rural Development investment data across roughly 80 programs. USDA officials say Lender Lens builds on that platform by adding a more granular, lender-focused view that allows analysis by state, county, and congressional district.

The effort also aligns with federal open-data requirements under the Open, Public, Electronic, and Necessary Government Data Act of 2018, which directs agencies to expand public access to government data.

TAX POLICY

—IRS opens 2026 filing season on time despite staffing strains and major tax changes

Returns for tax year 2025 will be accepted starting Jan. 26, with bigger refunds expected — but slower service likely as the agency grapples with workforce losses and new rules under the One Big Beautiful Bill (OB3)

The 2026 tax filing season is officially underway, with the Internal Revenue Service set to begin accepting 2025 federal income tax returns on January 26. Some tax professionals had expected a delay, given the extensive work required to implement tax changes under the OB3, many of which apply to 2025 returns.

That concern appeared justified last summer, when former IRS Commissioner Billy Long said the agency was aiming for a Presidents’ Day start. Instead, IRS employees pushed to open the season largely on time.

Smooth start, rough edges expected. Tax experts broadly expect a functional filing season, but with notable friction. The IRS workforce has shrunk by about 25% over the past year, with losses across taxpayer service, collections, IT support, and enforcement. As a result:

• Phone assistance is expected to involve long wait times, and getting clear answers on how OB3 provisions apply to specific situations may be difficult.

• Written correspondence will move slowly, particularly responses to automated IRS notices or information requests.

• Some IRS staff are likely to be reassigned to filing-season support, putting other agency functions on hold.

Bigger refunds for many filers. Despite service challenges, refunds are expected to be larger than in recent years, driven by new and expanded tax breaks in the OB3, including:

• Higher standard deductions.

• A $6,000 deduction for filers age 65 or older ($12,000 if both spouses qualify).

• Deductions for up to $25,000 in qualified tips.

• Deductions for $12,500 of qualified overtime pay ($25,000 for joint filers).

• Up to $10,000 in interest on loans used to buy a new car.

• An increased $40,000 cap on state and local tax (SALT) deductions for itemizers.

Paper refund checks being phased out. A major operational change this year affects how refunds are paid. To comply with a White House executive order, the IRS is phasing out paper refund checks. Going forward:

• Refunds will generally be issued only by direct deposit or other electronic methods.

• Taxpayers who do not provide bank account information — or who do not qualify for an exemption — should expect delayed refunds.

• The IRS is urging taxpayers without bank accounts to open one. While the Social Security Administration offers prepaid debit cards to beneficiaries, the IRS has not yet adopted a similar option.

Paying taxes by check still allowed. While refund payments are moving electronic, the IRS will continue to accept paper checks for tax payments sent by mail. The agency encourages electronic payments and debit or credit cards, but there is no indication it will stop accepting checks during this filing season.

Upshot: Tax professionals say the coming weeks will reveal whether the IRS can maintain stability under these pressures, and they plan to closely monitor the agency’s guidance and performance as the season unfolds.

ENERGY MARKETS & POLICY

—Tuesday: Oil prices steady as Trump’s Greenland tariff threats offset by stronger global growth signals

Markets weigh renewed trade-war risks against upbeat IMF outlook and resilient Chinese demand

Oil prices were little changed Tuesday as investors balanced escalating tariff threats from Donald Trump over Greenland with improving signals on global growth and demand.

Brent crude futures for March advanced 0.34% to $64.15 a barrel. The West Texas Intermediate (WTI) crude contract for March delivery was up 0.27% at $59.50.

Brent crude slipped 11 cents to $63.83 a barrel, while U.S. West Texas Intermediate fell 49 cents to $58.95, reflecting near-term caution rather than a shift in fundamentals.

Analysts said Trump’s proposed tariffs on European countries tied to his Greenland push are unlikely to have an immediate impact on the oil balance. Instead, prices found support from firmer diesel markets and an upward revision to global growth forecasts by the International Monetary Fund.

Trade-war concerns resurfaced after Trump warned of an additional 10% levy starting Feb. 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain — potentially rising to 25% by June 1 absent a Greenland deal.

Oil markets were also buoyed by stronger-than-expected economic data from China, the world’s top crude importer. Fourth-quarter GDP surprised to the upside, with full-year growth at 5.0%, supporting demand sentiment despite modest gains in domestic crude output.

Meanwhile, traders are watching developments in Venezuela after Trump said the U.S. would take control of the country’s oil industry following the capture of Nicolás Maduro. In response, Vitol was reported to be offering Venezuelan crude to Chinese buyers at discounts of about $5 per barrel to ICE Brent for April delivery — highlighting ongoing shifts in global crude flows.
 

—OMB docket fills up as Clean Fuel Tax Credit Review drags on

Section 45Z rule draws growing list of stakeholder meetings ahead of late-January window

More stakeholder meetings continue to be added to the Office of Management and Budget docket as review of the Treasury Department’s proposed rule for the Section 45Z Clean Fuel Production Credit stretches on.

Additional sessions are now scheduled through Jan. 28, bringing the total number of listed meetings to 22. Newly posted entries include meetings with Anew Climate on Jan. 27, followed by the Illinois Corn Growers Association and the SAF Coalition on Jan. 28.

The expanding schedule underscores the intensity of industry engagement with the rule, which is being finalized by the U.S. Department of the Treasury. That said, it remains unclear whether every scheduled meeting will ultimately take place. In past regulatory reviews, OMB has occasionally wrapped up its process before all docketed sessions were held, leaving some meetings unused as the rule moves toward completion.

TRADE POLICY

—China keeps pork tariffs intact despite Canada/China trade reset

Recent agreement slashes duties on canola and eases EV tensions, but Beijing leaves 25% levy on Canadian pork untouched amid lingering trade retaliation

China’s recent agreement with Canada to reset strained trade relations did not include any reduction in tariffs on Canadian pork, leaving a key livestock sector excluded from the initial round of concessions even as other agricultural exports gained relief.

Under the deal, Beijing agreed to roll back punitive duties on Canadian canola seed, cutting tariffs that had reached roughly 84% to about 15%, while Ottawa moved to ease its hard line on Chinese electric vehicles. Those steps marked a significant thaw after months of escalating trade tension between China and Canada — but pork was notably absent.

Why pork was left out. China’s 25% tariff on Canadian pork, imposed in 2025, remains in force. The duty was introduced as part of a broader retaliatory package after Canada levied tariffs on Chinese EVs, steel, and aluminum. Because the pork tariff is explicitly retaliatory, it has proven harder to unwind than product-specific disputes like canola, where China framed the issue around anti-dumping and quality concerns.

Trade officials and industry groups say the recent agreement focused on high-leverage, politically sensitive items that could quickly stabilize the relationship. Canola — a flagship Canadian export — and EVs, a strategic Chinese priority, offered clear bargaining chips. Pork, by contrast, was not central to the immediate trade-off and was deferred.

A phased approach to negotiations. Both governments have characterized the agreement as a first step, not a comprehensive settlement. Canadian pork producers had hoped the easing of EV tariffs would unlock relief for meat exports, but Beijing has so far separated those issues.

Industry representatives argue pork is likely to re-enter negotiations in a later phase, particularly if broader retaliatory measures are dismantled. For now, however, Canadian pork shipments to China continue to face a significant cost disadvantage compared with competitors.

Of note: China’s duties on canola oil had been part of earlier retaliatory tariffs (including anti-dumping measures at 100% or high rates), but the formal text of the recent Canada/China tariff agreement does not explicitly list canola oil reductions yet. Instead, official statements and industry group responses highlight seed and meal tariff relief, with ongoing discussions to extend that relief into oil and other canola products.

Meanwhile, the preliminary Canada/China trade agreement does not make explicit new tariff cuts for Canadian beef — tariffs remain in place. However, China has reopened its market to Canadian beef for the first time since 2021, lifting a suspension imposed after an atypical case of bovine spongiform encephalopathy (BSE) was detected in Alberta. Canada’s agriculture minister Heath MacDonald confirmed the move in a Jan. 19 social media post, saying Beijing had “restored market access for Canadian beef” and signed a new pet food safety and sanitation protocol aimed at accelerating the resumption of Canadian pet food exports.

The Canadian Cattle Association said it is working with government and industry partners to clarify details of the reopening, including whether China will impose safeguard measures as imports resume.

Renewed focus on beef. While China agreed to ease tariffs on Canadian canola products, peas, and seafood in exchange for Canada loosening restrictions on Chinese electric vehicle imports, beef was not mentioned publicly at the time, but the lifting of the ban marks another step in the thawing of agricultural trade ties. Industry leaders say they will continue pressing Ottawa to expand market access and remove both tariff and non-tariff barriers as exports to China resume.

Bottom Line: Despite the high-profile reset in Canada/China relations, pork remains outside the deal. The 25% tariff stays in place, underscoring that the agreement was designed to stop further deterioration — not to resolve every trade dispute at once. For Canadian hog producers, meaningful access to the Chinese market will depend on whether future talks move beyond symbolic resets to tackle retaliation head-on.

CHINA

—China’s birthrate hits record low, deepening demographic crisis

Deaths again outpaced births in 2025 despite aggressive state efforts, leaving China older, smaller, and facing mounting economic strain

China’s population shrank for a fourth consecutive year in 2025 as births plunged to their lowest level since the founding of the People’s Republic in 1949, underscoring the failure of increasingly forceful government attempts to reverse a worsening demographic crisis.

Official data show just 7.92 million babies were born in 2025, down sharply from 9.54 million in 2024, while 11.31 million people died, continuing a steady rise in mortality. The birthrate fell to 5.63 births per 1,000 people, the lowest level ever recorded in China.

The decline comes despite a barrage of pro-natalist measures by the ruling Communist Party, including appeals to patriotism, pressure on newlyweds, financial incentives, and more controversial steps such as tracking women’s menstrual cycles and imposing a new 13% value-added tax on contraceptives and condoms. Many young Chinese have greeted these policies with skepticism or ridicule, saying they do little to address the high cost of housing, childcare, and education.

President Xi Jinping has urged officials to foster a “new type of marriage and childbearing culture,” but demographers warn that China has already crossed a critical threshold. With fertility so low, population decline is now widely viewed as unavoidable.

Economists and sociologists say the implications are profound. Fewer births today mean fewer workers in the future to support a rapidly expanding elderly population. China’s working-age population is already shrinking, while the number of people aged 60 and over is projected to reach around 400 million by 2035. At the same time, pension and health-care systems remain underfunded, youth unemployment is elevated, and confidence has been battered by a prolonged property downturn.

Monetary incentives, experts note, have had little success globally in lifting fertility rates. In China’s case, rising economic uncertainty and shifting social attitudes toward marriage have compounded the challenge. Marriage rates have fallen over the past decade, divorces have risen, and many young people say they simply do not want to marry or have children.

Taken together, the data suggest that China’s demographic reversal is accelerating faster than policymakers anticipated — a structural shift likely to weigh on economic growth, public finances, and social stability for decades to come.

POLITICS & ELECTIONS

—House battlefield tilts blue as Democrats gain momentum

Cook Political Report shifts 18 ratings toward Democrats as the 2026 map comes into focus

Ten months before Election Day, Democrats appear increasingly well positioned to reclaim control of the House. In a new analysis by Erin Covey of the Cook Political Report, the nonpartisan race handicapper shifts 18 House ratings in Democrats’ favor, underscoring how the political environment has moved steadily against Republicans as the 2026 battleground map comes into clearer view.

Eight of the changes move races from Likely Democrat to Solid Democrat, signaling that those contests are no longer considered competitive.

Another ten races shift one step toward Democrats across the ratings spectrum. 

Even after these moves, Republicans still hold 14 of the 18 Toss Up seats, but the overall trend points to a strengthening Democratic position heading into November.

House race rating changes (18 seats)

District	Previous Rating	New Rating
CA-13	Toss Up	Lean Democrat
CA-25	Likely Democrat	Solid Democrat
CA-47	Likely Democrat	Solid Democrat
CO-05	Solid Republican	Likely Republican
CT-05	Likely Democrat	Solid Democrat
FL-07	Solid Republican	Likely Republican
IA-03	Lean Republican	Toss Up
IL-17	Likely Democrat	Solid Democrat
MI-03	Likely Democrat	Solid Democrat
NM-02	Toss Up	Lean Democrat
NY-04	Toss Up	Lean Democrat
NY-17	Lean Republican	Toss Up
NY-18	Likely Democrat	Solid Democrat
NY-22	Likely Democrat	Solid Democrat
OH-09	Lean Republican	Toss Up
PA-17	Likely Democrat	Solid Democrat
TN-05	Solid Republican	Likely Republican
TX-34	Lean Republican	Toss Up

—Takaichi backs food tax suspension as election nears

Prime minister revives long-debated proposal, drawing scrutiny over timing and fiscal risks

Japanese Prime Minister Sanae Takaichi has endorsed a two-year suspension of Japan’s consumption tax on food, calling it a long-held goal as she dissolved the lower house and set a snap election for Feb. 8.

Cost impact. The plan, included in the ruling Liberal Democratic Party’s coalition agreement with the Japan Innovation Party, would cost an estimated ¥5 trillion ($31.6 billion) in lost revenue and has raised concerns about public finances and market reaction.

Takaichi’s stance has shifted repeatedly. She backed a zero tax rate on food in 2025, later cited a lack of party consensus, and as prime minister emphasized practical hurdles and the consumption tax’s role in funding social security. As recently as December, she questioned whether a cut would offer immediate inflation relief, instead favoring a refundable tax credit — now uncertain amid the campaign.

Opposition pressure is growing, with the Centrist Reform Alliance supporting removal of the food tax. The LDP remains wary of voter backlash from perceived flip-flopping, recalling its 1998 election defeat under then-Prime Minister Ryutaro Hashimoto after mixed signals on tax cuts.

FOOD POLICY & FOOD INDUSTRY

—America’s bean king thrives as protein craze boosts demand

Rancho Gordo’s heirloom beans ride health trends — but founder Steve Sando is playing a much longer game

America’s hottest “club” right now doesn’t pour drinks — it ships beans. According to The Hustle, the Rancho Gordo Bean Club has grown into a cult-like subscription with roughly 30,000 members and nearly as many stuck on a waitlist, all paying $200 a year for quarterly boxes of heirloom beans.

The beans come from Steve Sando, founder of Rancho Gordo, who has spent more than two decades obsessing over dry beans that most Americans once ignored. His 40-plus varieties — including Christmas lima beans — sell for about $7.50 a pound, far above supermarket commodity beans. The pitch: they’re fresher, cook faster, and taste dramatically better.

Sando launched Rancho Gordo in 2001, long before beans were fashionable. The payoff has been substantial. Since 2019, sales have tripled, and the company now sells about 2.5 million pounds of beans annually, according to the Wall Street Journal.

A boom built on protein — and fiber. Beans are benefiting from powerful tailwinds. As grocery prices rise, Americans are rediscovering beans as a cheap, protein- and fiber-rich staple. U.S. bean sales surged during the pandemic — famously jumping 400% at Goya — and demand has stayed elevated.

Meanwhile, protein has become a dominant food trend, with nearly every brand racing to add protein-rich products. Fiber is having its own moment, fueled by social media trends like “fibermaxxing” and viral #BeanTok videos. Beans also check boxes for heart health and environmental efficiency compared with animal protein.

Not chasing a fad. Yet Sando insists he’s not riding the protein or fiber craze. His ambition is bigger and slower: to permanently change how Americans think about beans. As he once put it in a 2009 interview with the New York Times, when people say they hate beans, it’s usually because their only exposure was limp kidney beans from a salad bar. Improve the reference point, he argues, and beans stop being a punishment food — and start becoming a cornerstone of the American diet.

That long-term bet, The Hustle notes, now looks increasingly well-timed.

LABOR & IMMIGRATION POLICY

—Colorado bars Brighton farm from H-2A program over wage theft

State orders Star Farms to pay $1.7 million after probe finds months of unpaid wages and obstruction of investigators

According to the Denver Post, Colorado labor regulators have permanently barred Star Farms and its owner, Angelo Palombo, from hiring seasonal foreign workers under the federal H-2A visa program after determining the farm failed to pay workers for months and interfered with a state investigation.

The Colorado Department of Labor and Employment issued the order on Nov. 12, assessing more than $1.7 million in back wages and penalties. Investigators found 63 workers were owed over $388,000 for missed paychecks and underpayments in 2024–2025, concluding that delaying enforcement would cause “substantial harm” to affected workers.

Palombo said he plans to appeal and claimed he had exited the H-2A program for unrelated reasons, asserting he “pretty much” paid workers on time. State records, however, describe repeated noncompliance: investigators said Palombo provided misleading information, failed to fully respond to requests, and did not pay wages across seven pay periods between May and September 2025. The probe also found non-H-2A workers were paid less than visa holders — another program violation.

The action follows a long history of labor violations. Federal investigations dating back to 1998 repeatedly found late or unpaid wages, improper charges to workers, and housing violations. In 2023 bankruptcy filings, Palombo acknowledged more than $231,000 in unpaid wages, prompting renewed scrutiny. Worker advocates urged state intervention, which culminated in the current ban.

The Post reports that Colorado has rarely used this authority, but enforcement has increased since a 2024 investigative series. Since then, three employers — including Star Farms — have been barred; two others were later reinstated under probation and enhanced compliance checks. Regulators say the state is using its H-2A enforcement powers more regularly, though such orders remain uncommon.

Colorado growers increasingly rely on H-2A as farm labor tightens, but experts warn the program is ripe for abuse because workers are tied to a single employer and cannot easily leave. State officials say the Star Farms case underscores the risks — and the need for closer oversight — when violations are persistent and severe.

WEATHER

— NWS outlook: Lake effect snow expected downwind of the Great Lakes… …Frigid Arctic airmass remains in place over Northeastern U.S. today before temperatures moderate on Wednesday… …Freeze warnings in effect from southern Georgia down to central Florida.