Lighthizer Expects Supreme Court to Curb IEEPA tariffs

Lighthizer Expects Supreme Court to Curb IEEPA tariffs

Ag groups launch push to secure USMCA renewal ahead of 2026 review

LINKS

Link: Video: Wiesemeyer’s Perspectives, Feb. 1
Link: Audio: Wiesemeyer’s Perspectives, Feb. 1

Updates: Policy/News/Markets, Feb. 5, 2026

UP FRONT

FINANCIAL MARKETS

— Equities today: Global markets are mixed with U.S. futures little changed; Asia and Europe are mostly lower, reflecting cautious risk sentiment.

— Bitcoin slide: Bitcoin drops below $70,000 amid risk-off flows and after Treasury Secretary Scott Bessent says he lacks authority to invest taxpayer funds in crypto; investors rotate toward traditional havens.

— BoE / ECB watch: Bank of England holds after a tight vote while the ECB is expected to stay steady, keeping rate expectations front and center.

— Equities yesterday (close): Dow up, Nasdaq down, S&P slightly lower, reinforcing the “mixed risk” tone.

— U.S. dollar index climbs to two-week high: Risk aversion and positioning ahead of central bank decisions lift the dollar, pressuring commodities and crypto and amplifying cross-asset volatility.

— Bessent defends strong-dollar stance, tests boundaries of Fed independence: In House testimony, Bessent reiterates a “strong dollar” policy in response to Rep. Bill Foster (D-Ill.), while telling Rep. Emanuel Cleaver (D-Mo.) presidents have the right to publicly pressure the Fed — sharpening debate over Fed independence.

— Silver hit with fresh selloff in China after tentative recovery: Silver plunges again after a historic rout, with thin liquidity and a stronger dollar aggravating an unwind across metals; markets are watching key downside levels for broader risk sentiment.

AG MARKETS

— U.S. soybean export sales to China slow: Weekly export-sales data show continued ag sales to China but slower soybean momentum; commitments and outstanding sales remain sizable.

— EU court upholds national bans on GMO crop cultivation: The EU’s top court affirms member states can ban GMO cultivation even when approved at the EU level, reinforcing national discretion while leaving import and sales rules largely intact.

— Agriculture markets yesterday: Futures were mixed, with soy complex stronger while wheat was softer; livestock mostly higher.

FARM FINANCIAL SITUATION

— Rising interest rates and larger loans are squeezing farm borrowers: Farmdoc daily finds first-year payments and interest expenses across FSA direct and guaranteed loan programs have surged (especially since 2018), raising stress for leveraged producers and those exposed to variable-rate or short-term repricing.

ENERGY MARKETS & POLICY

— Thursday: Oil prices slip on U.S./Iran talks but hover near multi-month highs: Crude dips on diplomacy headlines but remains elevated on Middle East risk, Hormuz chokepoint sensitivity, and shifting crude flows (including Russian discounts to China).

— Wednesday: Oil jumps as U.S./Iran talks unravel, risk premium returns: Crude rallies more than 3% as negotiation doubts revive a geopolitical premium; traders focus on Hormuz risks and regional military incidents.

— Trump administration schedules second Gulf oil and gas lease sale under new mandate: BOEM sets a March 11 Gulf of America lease sale covering ~80 million acres, the second of 30 sales required under the One Big Beautiful Bill Act.

TRADE POLICY

— FT: There are good reasons to be cheerful about global trade: A Financial Times column argues globalization remains resilient despite Trump-era tariff escalation, citing the staying power of supply chains, digital connectivity, and multinational integration.

— U.S., Mexico link critical minerals action plan to USMCA review: USTR Jamieson Greer and Mexico agree to explore coordinated tools — including potential border-adjusted price floors and stockpiling — to harden North American critical mineral supply chains ahead of the USMCA joint review.

CHINA

— China set to lower 2026 growth target as provinces miss marks and stimulus expectations shift: Economists increasingly expect a 4.5%–5% target as provinces trim goals; analysts frame the target as policy-determinative, with stimulus now seen more as a ceiling than a baseline absent major external shocks.

POLITICS & ELECTIONS

— Supreme Court allows California’s redrawn House map to take effect for midterms: The Court declines an emergency GOP bid to block new districts, leaving a map that could net Democrats up to five seats in place while the case continues in lower courts.

— Republicans warn Trump backlash could put Senate Majority at Risk: After a Democratic upset in Texas and worsening economic polling, GOP senators voice rising concern about a 2026 wave; vulnerabilities span battleground and some traditionally red states as Senate control math tightens.

TRANSPORTATION & LOGISTICS

— Maersk braces for freight slump with job cuts, cost controls: Maersk plans 1,000 layoffs and $180 million in savings as freight rates sink and capacity returns; a gradual Red Sea reopening could further pressure pricing power even as demand holds steady.

WEATHER

— NWS outlook: Light winter weather in parts of the Mid-Atlantic and snow in the Great Lakes transitions into an arctic push this weekend for the Northeast and Mid-Atlantic, with snow showers and possible squalls.

TOP STORIES—Lighthizer expects Supreme Court to curb IEEPA tariffs, flags agriculture changes in USMCA reviewFormer USTR says Trump administration would pivot to other tariff authorities if court rules against IEEPA; predicts renewed focus on Canadian farm protections and China’s footprint in Mexico Former U.S. Trade Representative Robert Lighthizer said he expects the U.S. Supreme Court to at least partially rule against the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, while stressing that such a decision would not derail the administration’s broader trade agenda. Speaking at the Argus Americas Crude Summit, Lighthizer said, “My guess is that there’ll be, to some extent, an overruling of what he did,” referring to the administration’s reliance on IEEPA. While acknowledging IEEPA is a more expedient tool, Lighthizer argued that even an adverse ruling would simply push the administration to deploy other, more procedurally complex tariff authorities. “If he can’t, I think he’ll have the same policy,” he said. “He has those tools.” Lighthizer defended the strategic rationale behind tariffs despite acknowledging higher steel costs, arguing the longer-term payoff would be a stronger U.S. economy as trade imbalances are rebalanced. On inflation, he conceded the rollout could have been “less chaotic,” but stopped short of criticizing the policy’s substance. Turning to the upcoming review of the United States-Mexico-Canada Agreement, Lighthizer predicted targeted changes, including “some tweaks in Canada” related to agriculture. His comments point to renewed U.S. scrutiny of Canada’s dairy — and potentially poultry — supply management systems, longstanding friction points that Washington challenged during the first Trump administration. Lighthizer also forecast more sweeping revisions tied to Mexico, particularly aimed at countering China’s growing influence in Mexican manufacturing and supply chains. Of note: Given Lighthizer’s central role in crafting Trump-era trade policy and his deep grounding in trade law, his expectation that courts may rein in the use of IEEPA carries weight — even as he underscored that the administration’s tariff-first approach would continue through other legal channels if necessary.—Agriculture groups launch push to secure USMCA renewal ahead of 2026 reviewNew coalition of 40 farm organizations rolls out ad campaign, website, and economic report to underscore trade pact’s importance to U.S. agricultureA coalition of 40 farm and agricultural organizations has formally launched a coordinated effort to press for renewal of the United States–Mexico–Canada Agreement (USMCA), arguing the trade pact is a cornerstone of the U.S. farm economy and needs to be preserved as the mandatory 2026 review approaches.The newly formed Agricultural Coalition for USMCA announced the launch of a dedicated website and an aggressive advertising campaign in Washington aimed at highlighting the agreement’s benefits for U.S. food and agriculture. The coalition is also calling for targeted improvements to the pact, while emphasizing that renewal itself is critical for farmer certainty.Quote of note: “USMCA is one of President Trump’s signature achievements and one that has significantly propelled the ag economy,” said Bryan Goodman, a spokesperson for the coalition. While acknowledging the agreement is not flawless, Goodman stressed that renewal is “of paramount importance to farmers” in all three countries.Background: USMCA, signed during President Donald Trump’s first term in 2018 and implemented in 2020, replaced the North American Free Trade Agreement and established updated rules governing trade between the United States, Mexico, and Canada. Since taking effect, the deal has boosted U.S. agricultural exports to its two largest trading partners, improved predictability in cross-border trade, and created formal mechanisms for resolving disputes.Under the agreement, the three countries must begin a formal review by July 2026. If all parties agree to renew, USMCA would be extended for another 16 years, with a subsequent review in 2032. Failure to reach consensus could place the pact into annual consultations or, ultimately, lead to its expiration in 2036 — outcomes that agriculture groups warn would inject significant uncertainty into farm planning and investment.The Trump administration has indicated that renewal is not automatic, though it has acknowledged the agreement’s economic success to date. Farm advocates argue that uncertainty alone could have real-world consequences. “Our farmers make decisions a year or more in advance,” Goodman said. “They need the certainty of knowing USMCA is here to stay.”Coalition leaders also framed the agreement as a defining accomplishment of Trump’s trade agenda and said they intend to defend and expand upon it during the review process. The group plans to lean heavily on economic data and farmer testimony to make its case. As part of that effort, the coalition will host a Zoom press conference on Feb. 10 at 11 a.m. EST to release findings from a new economic report assessing USMCA’s impact on agriculture. The Agricultural Coalition for USMCA describes itself as a broad-based alliance representing farmers, ranchers, processors, exporters, state agriculture leaders, and supply-chain stakeholders. Together, the groups argue that stable trade with Canada and Mexico supports millions of U.S. jobs and accounts for nearly one-third of all U.S. agricultural exports — stakes they say make renewal essential for rural America. —Thompson targets late-month committee action on Farm Bill 2.0House Ag chair says revamped package will modernize credit, curb regulatory patchwork, and tackle Prop 12 House Ag Committee Chair Glenn “GT” Thompson (R-Pa.) told members of the National Association of State Departments of Agriculture that he wants a “Farm bill 2.0” cleared out of committee by the end of the month. Thompson said provisions folded into the One Big Beautiful Bill Act amount to “about 20% of the policy but 80% of the investment” in a full farm bill, leaving what he called “incredibly important” work still to be done. He emphasized that conditions across agriculture have changed markedly since the 2018 Farm Bill, requiring a fresh approach. “We are modernizing the credit title to help more producers have access to the capital that they need,” Thompson said. “We are addressing a patchwork of state regulations that has sprung up over the years and overburdened producers. We are expanding investments into rural communities. We are bringing costs down across the board for both consumers and producers and we are providing greater certainty about the future across our entire ag supply chain.” The chair also signaled the panel will not avoid controversial issues. According to Politico, Thompson outlined behind closed doors this week that the draft would address California’s Proposition 12 and block states from imposing pesticide labeling requirements that diverge from Environmental Protection Agency guidance. Thompson said he is aiming for a committee markup during the week of Feb. 23. Still, even if the bill advances out of committee, its path through the full House remains uncertain, with passage far from assured. Comments: The key to whether any Farm Bill 2.0 can clear Congress is up to the Democrats and in particular ranking Ag panel member Angie Craig (D-Minn.). If she supports the bill, it would garner more Democratic votes and those are needed because 40 or so Republicans would not likely vote on the skinny farm bill. —Klobuchar warns tariffs, USDA cuts are straining farm country ahead of USMCA reviewSenate Ag Committee’s top Democrat urges bipartisan farm bill action and restoration of USDA programs as Supreme Court weighs tariff authority Sen. Amy Klobuchar (D-Minn.), the ranking member of the Senate Committee on Agriculture, Nutrition, and Forestry, used remarks at the National Association of State Departments of Agriculture’s Winter Policy Conference to sound the alarm on trade uncertainty, shrinking USDA capacity, and the need for swift congressional action to stabilize rural America. Klobuchar pointed to the Supreme Court’s forthcoming decision on the administration’s across-the-board tariff policies as a critical inflection point for U.S. agriculture, stressing that regardless of the outcome, farmers will soon face another major test with the joint U.S.–Mexico–Canada Agreement review this summer. She urged farm groups and agribusinesses to engage forcefully in that process, calling USMCA a foundational trade agreement that took decades to build and “won’t be replaced overnight.” While acknowledging the need for targeted fixes — particularly on dairy — she said a reset on tariffs through either congressional action or the Court’s ruling would be essential before moving into USMCA negotiations and potential new trade deals. Beyond trade, Klobuchar sharply criticized what she described as the erosion of trust between rural communities and the federal government due to abrupt USDA funding and staffing cuts. She cited unfulfilled contracts, canceled programs such as local food purchasing assistance and food-for-schools initiatives, and cooperative agreements administered through state agriculture departments, arguing those moves have undermined farmers and state partners alike. Klobuchar also highlighted workforce attrition at USDA, noting that nearly one in five employees left the agency over the past year, putting added strain on state-level resources. She said she has requested an Inspector General report to establish a common factual baseline as lawmakers assess the impact of those departures. Looking ahead, Klobuchar pressed for passage of a bipartisan farm bill, even if pared down, to provide certainty as farm margins tighten under low commodity prices and high input costs. She welcomed USDA’s recently announced ad hoc assistance and farmer bridge programs as a starting point, but warned they fall short of need, pointing to $11 billion for row crops and $1 billion for specialty crops such as sugar beets as insufficient. She also noted that more than $10 billion in disaster aid approved by Congress over a year ago remains undistributed, saying she and Sen. Elissa Slotkin (D-Mich.) have urged USDA Secretary Brooke Rollins to move that funding out the door quickly.—Farming windfall turns soybeans into China’s strategic trade leverBeijing boosts domestic production and global sourcing to blunt U.S. pressure and stabilize pork prices Soybeans have emerged as one of the most powerful geopolitical pressure points in modern trade, given China’s heavy dependence on foreign supplies to sustain its pork industry — the primary protein source for roughly 1.4 billion people. While China is largely self-sufficient in staples like rice and wheat, more than 80% of its animal feed soybeans are imported, making supply disruptions a direct threat to food prices and social stability. To manage that vulnerability, Beijing has diversified aggressively, according to the Wall Street Journal. In recent years, China shifted substantial soybean purchases away from the U.S. toward Brazil and Argentina. At the same time, it has maintained a roughly 25 million-ton annual U.S. buying commitment, using those purchases as a stabilizing “anchor” under the current trade truce rather than as a primary supply source. Domestically, China is now leaning hard into production incentives. In Heilongjiang province — long dominated by corn — authorities are offering soybean subsidies of about $739 per hectare, nearly 17 times the support provided for corn. The scale of the subsidy is deliberately distortionary: it overwhelms normal market signals that would otherwise favor cheaper imported soybeans from the U.S. or South America, creating a near-term windfall for local farmers. Beijing is also targeting the longer-term constraint: yields. Researchers at the Chinese Academy of Sciences are accelerating work on high-yield soybean varieties designed to narrow the long-standing productivity gap with U.S. farms. The focus is on improving oil content and pest resistance under local growing conditions — incremental gains that, over time, could materially reduce import dependence. Beyond its borders, China is pushing companies to invest in agricultural production and logistics across Africa and Southeast Asia, reinforcing a broader strategy of supply-chain diversification that limits exposure to U.S. tariffs. The underlying calculation, according to people close to Beijing, is that economic separation from the U.S. is tolerable — even manageable — if China remains deeply integrated with the rest of the world. Upshot: The result is a soybean strategy that blends subsidies, science, and geopolitics, turning a single crop into both a domestic support tool and a global bargaining chip. —Trump floats bigger China purchases of U.S. ag, energy and aerospace goods in call with XiChina’s official readout stays vague on trade as Beijing stresses Taiwan and broader stability President Donald Trump said he pressed for expanded Chinese purchases of U.S. agricultural, energy and aerospace products during a phone call Wednesday with Xi Jinping, underscoring the administration’s continued effort to translate a fragile trade truce into concrete buying commitments. In a Truth Social post, Trump said the leaders discussed “the consideration by China of the purchase of additional Agricultural products,” including potentially lifting the current-season soybean tally to 20 million metric tons (from 12 MMT), while noting China has committed to 25 million metric tons for next season. Trump added that the call also covered the Russia/Ukraine war, the situation in Iran and Chinese purchases of U.S. energy. “The relationship with China, and my personal relationship with President Xi, is an extremely good one,” Trump wrote, predicting “many positive results” over the next three years of his presidency tied to ties with Beijing. Markets reacted quickly to Trump’s soybean comments, with soybean futures jumping intraday before finishing well off their highs by the close. As with the late-October understanding reached after Trump and Xi met in South Korea, there has been no independent confirmation of new Chinese soybean purchases. Traders will now watch for signs if China returns to the market for additional U.S. soybeans after completing roughly 12 million metric tons for the 2025/26 marketing year. The call follows the leaders’ late-October meeting in Korea, where the U.S. said China agreed to buy 12 million metric tons of U.S. soybeans and 25 million metric tons annually over the following three years. Beijing never publicly confirmed those volumes, and U.S. officials have repeatedly revised expectations on the timing of initial purchases. Trump later said in November that Xi had agreed to accelerate agricultural buying. In a lengthy social media post, Trump described Wednesday’s exchange as “a long and thorough call,” listing topics that included an April trip to China, Taiwan, Russia-Ukraine, Iran, and energy trade. He added that discussions around oil and gas purchases and “additional Agricultural products” were “all very positive.” Beijing’s official readout, however, made no mention of increased trade or commodity purchases. Xi emphasized the importance of stabilizing the bilateral relationship and framed progress in broader diplomatic terms. “The U.S. has its concerns, and China has its concerns,” Xi said, according to an informal translation, adding that solutions require equality, respect and mutual benefit. Of note: Rising U.S. soybean prices have sharply widened the cost gap with Brazilian cargoes, making U.S. shipments commercially unattractive for Chinese buyers, traders told Reuters. For April shipment, U.S. soybeans are quoted at $2.08–$2.48 per bushel over the Chicago Board of Trade May contract, including freight to China, compared with $1.18–$1.33 for Brazilian cargoes. On a free-on-board basis, the spread is roughly $50 per metric ton, a level traders say “doesn’t make commercial sense.” At current differentials, China would pay up to $400 million more to source 8 million tons from the U.S. rather than Brazil. But like the 12 MMT China bought after the Trump/Xi truce, China could push state trading companies to purchase additional U.S. soybeans ahead of a likely April Trump/Xi confab. And if those purchases transpire, that could boost odds of an increase in U.S. soybean plantings ahead. To manage inventories, Sinograin has held four reserve auctions since December, selling about 2 million tons of imported soybeans to clear space ahead of arriving U.S. shipments. Traders expect additional auctions after the Lunar New Year. China’s statement also highlighted Taiwan, with Xi calling it “the most important issue in China/U.S. relations” and urging Washington to handle arms sales to Taiwan with “extreme caution” — a reminder that geopolitical tensions continue to loom over any economic détente. For U.S. agriculture and energy exporters, the gap between Trump’s assertions and Beijing’s cautious language remains the central question. Markets have learned that verbal assurances do not always translate into timely cargoes, and traders will be watching Chinese customs data and state-buyer tenders for evidence that talk of larger purchases turns into execution. —India/U.S. trade deal seen signing in March, with tariff cuts and $500b purchase pledgeNew Delhi to lower duties and boost buys of U.S. energy, aircraft and chips, while Washington slashes tariffs on Indian exports India and the United States expect to sign a formal trade agreement in March, setting a 30–45-day window to finalize terms that would significantly reshape bilateral trade, Indian Trade Minister Piyush Goyal said Thursday. Under the framework announced earlier this week, the two governments plan to issue a joint statement within four to five days. Once that occurs, the U.S. will cut tariffs on Indian exports to 18% from 50%, while India commits to purchasing roughly $500 billion in U.S. goods over the next five years. Goyal said the buying spree would include $70–80 billion in aircraft from Boeing, with total aviation-related orders — including planes, engines and parts — approaching $100 billion. India also plans to step up imports of U.S. energy and semiconductors. The deal builds on an announcement by Donald Trump, under which Washington agreed to sharply reduce tariffs on Indian goods in exchange for New Delhi halting purchases of Russian oil, lowering trade barriers and committing to large-scale U.S. imports. Recent airline orders underscore the aviation component of the pact. Tata Group–owned Air India has nearly 200 Boeing aircraft on order, while Akasa Air has commitments for 226 Boeing 737 MAX jets. Markets in India rallied after the deal was unveiled, reflecting relief over reduced trade uncertainty between the two partners. Still, political scrutiny is building at home. India’s main opposition party is pressing the government for more detail, particularly over concerns that the agriculture sector could face increased foreign competition. Officials from both sides said this week that India will grant the U.S. limited access to its agricultural market, while maintaining key protections for sensitive domestic sectors. —Canada reconsiders U.S. F-35 fighter jet purchase amid trade tensionsDefense procurement review underscores how escalating Washington/Ottawa trade frictions are spilling into security cooperation Canada is re-evaluating its planned purchase of U.S.-made F-35 fighter jets, a move that highlights how rising trade tensions between Washington and Ottawa are beginning to bleed into the defense relationship between the two longtime allies. The review centers on Canada’s commitment to acquire up to 88 F-35 Lightning II aircraft from U.S. defense contractor Lockheed Martin, a deal valued at more than $13 billion that is intended to replace the Royal Canadian Air Force’s aging CF-18 fleet. While Canadian officials have stopped short of formally canceling the procurement, they have confirmed the government is reassessing the timeline, scope, and strategic assumptions behind the purchase. The reconsideration comes as bilateral trade relations have deteriorated, with the U.S. and Canada trading sharp rhetoric and policy moves tied to tariffs, industrial policy, and supply-chain security. Canadian officials have privately signaled concern that an increasingly transactional U.S. trade posture could expose Canada to future risks tied to parts availability, sustainment costs, or export controls on advanced defense systems. The F-35 is deeply integrated into U.S. and allied military planning, including North American Aerospace Defense Command (NORAD) missions and NATO operations. Any Canadian pullback would raise questions about interoperability with U.S. forces and long-term air defense coverage across the Arctic, an area of growing strategic importance as Russia and China expand their presence. Meanwhile, the procurement review is being framed in Ottawa as part of a broader reassessment of national security resilience. Canadian officials have emphasized the need to weigh industrial benefits, domestic defense manufacturing capacity, and supplier diversification alongside traditional military requirements. Some policymakers have floated the idea of supplementing or partially replacing the F-35 order with alternative aircraft or expanded investments in surveillance, drones, and missile defense. From Washington’s perspective, the potential rethink is being watched closely. The F-35 program is a cornerstone of U.S. defense exports and allied force integration, and any scaling back by Canada would be seen as a symbolic setback amid already strained economic ties. For now, both governments are signaling that defense cooperation remains a priority, even as trade disputes intensify. But Canada’s F-35 review underscores a broader reality: trade policy and national security are becoming increasingly intertwined, and procurement decisions once viewed as purely military are now being recalculated through an economic and geopolitical lens. —Mayor’s killing highlights rising U.S./Mexico tensions over cartelsFentanyl violence, U.S. pressure and Cuba oil disputes are squeezing President Claudia Sheinbaum from all sides The murder of Uruapan Mayor Carlos Manzo during Day of the Dead celebrations last November underscored the lethal risks facing Mexican officials who confront drug cartels. Manzo, a 40-year-old first-term mayor in Michoacán, had adopted a hard-line stance against criminal groups and became the seventh mayor killed in the state since 2022. The violence is tied to the fentanyl trade, which has surged as cartels shifted production toward the U.S. market. Nearly 50,000 Americans died from fentanyl overdoses last year, fueling pressure from President Donald Trump, who has designated cartels as terrorist organizations and threatened unilateral U.S. action in Mexico. President Claudia Sheinbaum says her government has increased extraditions, seizures and cooperation with U.S. agencies, but analysts warn progress is uneven and that continued cartel power could invite U.S. intervention. Tensions rose further after a high-profile cartel-linked arrest in Mexico involving U.S. authorities, sparking disputes over sovereignty. At the same time, Trump is threatening tariffs over Mexico’s oil shipments to Cuba, putting Sheinbaum in a bind between Washington, Havana and her own ruling party. Bottom Line: Analysts say the combination of cartel violence, fentanyl politics and trade threats has left Mexico walking a tightrope — with Manzo’s killing a stark symbol of how high the stakes have become.

FINANCIAL MARKETS

—Equities today: U.S. equity futures are little changed despite more mixed tech earnings. In Asia, Japan -0.9%. Hong Kong +0.1%. China -0.6%. India -0.6%. In Europe, at midday, London -0.4%. Paris +0.3%. Frankfurt -0.4%.

Bitcoin is extending a downward spiral that has seen it shed more than 42% from its peak in October last year. Bitcoin slid below $70,000 on Thursday — its first dip under that level since 2024 — after Treasury Secretary Scott Bessent told a House hearing that he lacks the authority to invest U.S. taxpayer funds in the cryptocurrency. The digital asset has now shed roughly 40% from its October peak above $120,000, as investors rotate into precious metals and other traditional safe-haven assets.

The Bank of England came within a vote of cutting interest rates as policymakers split 5-4 in favor of holding. European Central Bank is set to keep rates steady.

—Equities yesterday:

Equity Index	Closing Price Feb. 4	Point Difference from Feb. 3	% Difference from Feb. 3
Dow	49,501.30	+260.31	+0.53%
Nasdaq	22,904.58	-350.61	-1.51%
S&P 500	6,882.72	-35.09	-0.51%

—U.S. dollar index climbs to two-week high on risk aversion and central bank watch

Risk-off trading, safe-haven flows and looming central-bank decisions lift the greenback, pressuring commodities and other risk assets

The U.S. dollar index — a broad measure of the greenback’s strength against six major currencies — climbed to its highest level in roughly two weeks on Thursday, supported by a shift toward risk-averse market sentiment and growing focus on upcoming central bank decisions.

Dollar firm on safe-haven demand. The dollar rallied as volatility rippled through financial markets, particularly in tech stocks and precious metals, prompting investors to seek safer assets.

Market strategists said a cautious tone across risk assets — stemming from weak corporate earnings and notable selloffs in sectors like technology and software — has bolstered demand for the U.S. dollar. “When there’s risk aversion, the dollar tends to strengthen,” noted Sim Moh Siong, currency strategist at OCBC in Singapore.

Central banks in the spotlight. Traders are also positioning ahead of major monetary policy announcements from the European Central Bank (ECB) and the Bank of England (BoE), both scheduled to decide on interest rates later Thursday. Neither bank is widely expected to move rates, reinforcing the relative appeal of dollar-denominated assets.

In the euro area, data shows inflation remains below the ECB’s 2% target despite a relatively strong currency, a dynamic that has fed broader FX volatility and influenced traders’ expectations for policy.

Pressure on commodities and cryptocurrencies. The firmer dollar has weighed on dollar-priced commodities. Precious metals like gold and silver took sharp hits, with silver plunging more than 15% in recent trading, as investors unwound positions amid both stronger dollar dynamics and easing geopolitical risk.

Bitcoin and other cryptocurrencies also declined, with bitcoin dipping to its lowest levels since November 2024, reflecting broader risk-off behavior and dollar strength.

Equities and FX market reactions. Risk assets, particularly U.S. equities, have shown sensitivity to the shift in sentiment. The tech-heavy Nasdaq Composite saw significant declines over recent sessions, further reinforcing risk-averse positioning in currency markets.

In foreign exchange markets, the dollar strengthened against the yen and remained firm against the offshore Chinese yuan, while the euro and pound edged lower ahead of their respective central bank decisions.

What’s next for the dollar. While the recent uptick in the dollar reflects short-term positioning around risk sentiment and monetary policy expectations, market observers caution that the longer-term trend for the dollar remains influenced by broader expectations for Federal Reserve rate cuts and global economic conditions. A Reuters poll this week suggested that the current dollar rebound may prove temporary if markets continue to price in eventual rate reductions. Investors will be closely watching economic data releases and policy statements this week for additional clues on how central banks may navigate the evolving macroeconomic backdrop.

—Bessent defends strong-dollar stance, tests boundaries of Fed independence on Capitol Hill

Treasury secretary backs “strong dollar policy” while saying presidents retain the right to pressure the central bank

Treasury Secretary Scott Bessent faced pointed questions from House lawmakers this week as concerns mount over the slumping dollar, inflation risks, and the future independence of the Federal Reserve under the Trump administration.

Appearing before lawmakers on Capitol Hill, Bessent was pressed on whether the administration’s rhetoric — and potential actions — are undercutting confidence in the dollar. Responding to questions from Rep. Bill Foster (D-Ill.), Bessent emphasized continuity with long-standing Treasury doctrine.

“We always support a strong dollar policy,” Bessent said.

That assertion stands in some tension with past comments by Donald Trump, who has repeatedly argued that the U.S. suffers from a “currency problem” and that a weaker dollar can boost exports and economic growth. Markets have been sensitive to any sign that the administration might tolerate — or encourage — sustained dollar weakness.

The sharpest exchanges, however, centered on the Federal Reserve. Asked by Rep. Emanuel Cleaver (D-Mo.) whether he would advise a president to “verbally and politically interfere” with the Fed’s decision-making, Bessent replied that such actions fall within presidential authority. “It is his right… It is the right of everyone in here,” Bessent said, gesturing toward House members.

Bessent later reaffirmed his belief in the Fed’s operational independence on monetary policy, but his remarks underscored a key distinction the administration appears to be drawing: independence in formal decision-making does not preclude public pressure or political commentary.

For lawmakers, particularly Democrats, the comments raised alarms about whether repeated public criticism of the Fed could erode confidence in the central bank at a time when inflation, interest rates, and currency stability are already under close market scrutiny. For Republicans, the exchange reinforced arguments that the Fed should remain accountable to elected officials, especially when its policies have broad economic and political consequences.

Bottom Line: The hearing made clear that while Treasury continues to publicly embrace a “strong dollar” framework, debates over the limits of Fed independence — and the president’s role in shaping monetary policy expectations — are far from settled.

—Silver hit with fresh selloff in China after tentative recovery

Volatility surges as speculative unwind deepens, dragging precious and base metals lower

Silver was slammed by another wave of selling during Asian trading, erasing a brief two-day rebound and underscoring how fragile sentiment remains after last week’s historic rout in precious metals.

Spot silver plunged as much as 17% as trading opened in China, before trimming losses to around 11% by mid-morning in Europe. Even after the partial recovery, prices remain more than one-third below last week’s all-time high, marking one of the sharpest reversals on record for the metal.

The selloff follows an overheated rally fueled by Chinese speculative demand, geopolitical risk, and worries about U.S. central-bank independence. A rebound in the dollar late last week accelerated the unwinding of crowded bullish positions, triggering silver’s largest-ever daily drop on Friday and gold’s steepest fall since 2013.

Market participants say the damage has spilled beyond precious metals. Copper slid as much as 1.5%, briefly falling below $13,000 a ton, while spot gold dropped as much as 3.5% amid extremely choppy trading. Analysts warned that thin liquidity has amplified price swings across metals markets.

Attention is now turning to U.S. monetary policy after President Donald Trump reiterated expectations for further Federal Reserve rate cuts and weighed in on the nomination of Kevin Warsh as Fed chair. While lower rates are typically supportive for non-yielding assets like gold and silver, analysts caution that near-term price action will remain unstable until policy clarity improves.

By late morning in London, silver was down about 11% at $78.83 an ounce, gold fell roughly 2% to $4,881.64, and platinum and palladium also declined. The Bloomberg Dollar Spot Index edged higher, adding another headwind for commodities.

Strategists say markets are now watching whether silver can hold above the low-$70s range — warning that a break below $70 could deepen risk aversion across asset classes.

AG MARKETS

—U.S. soybean export sales to China slow in most recent weekly update. U.S. Export Sales data for the week ended Jan. 29 showed continuing export sales of U.S. agricultural products to China, but the pace of soybean sales has slowed. Activity for 20252/26 included net sales of 10,782 MT of sorghum, 233,020 MT of soybeans, and 36,627 running bales of upland cotton. Activity for 2026 included net sales of 5,203 MT of pork. U.S. soybean export commitments to China are at 9,886,612 MT with outstanding sales at 5,563,000 MT.

—EU court upholds national bans on GMO crop cultivation

Top judges rule member states can prohibit genetically modified crops without breaching EU trade or business laws

The European Union’s highest court has confirmed that individual EU countries are within their rights to ban the cultivation of genetically modified crops across part or all of their territory, even if those crops have been approved at the EU level.

In a ruling issued Thursday, the European Court of Justice backed Italy’s decision to prohibit the planting of genetically modified corn despite EU authorization. The case stemmed from an Italian farmer who planted Monsanto’s MON810 corn in defiance of a national ban. Italian authorities ordered the crop destroyed and imposed a €50,000 (about $59,000) fine.

Italian courts referred the dispute to the EU court, asking whether such bans violate core EU principles, including free movement of goods, freedom to conduct a business, non-discrimination, and proportionality.

The judges ruled that an EU procedure in place since 2015 — which allows member states to opt out of GMO cultivation without providing specific justification, provided the authorization holder does not object — is fully compatible with EU law. The court said the bans are proportionate, do not discriminate against farmers in different member states, and do not interfere with trade because they do not restrict the import or sale of GMO products within the EU.

The decision reinforces national discretion on GMO cultivation and is likely to strengthen the hand of EU countries that remain politically or environmentally opposed to growing genetically modified crops, even as GMO-derived products continue to circulate freely within the single market.

—Agriculture markets yesterday:

Commodity	Contract Month	Closing Price Feb. 4	Change from Feb. 3
Corn	March	$4.30	+$0.01
Soybeans	March	$10.92 1/4	+$0.26 1/2
Soybean Meal	March	$296.20	+$4.30
Soybean Oil	March	55.66¢	+117 pts
Wheat (SRW)	March	$5.26 3/4	-$0.02
Wheat (HRW)	March	$5.30 1/4	-$0.04 1/2
Spring Wheat	March	$5.66	-$0.02 1/4
Cotton	March	62.24¢	-7 pts
Live Cattle	April	$241.80	+$0.17 1/2
Feeder Cattle	March	$370.075	+$2.15
Lean Hogs	April	$98.45	+$0.30

FARM FINANCIAL SITUATION

—Rising interest rates and larger loans are squeezing farm borrowers

Farmdoc daily analysis finds first-year loan payments have surged across FSA programs as interest expenses and loan sizes climb

In the second installment (link) of a two-part series, farmdoc daily examines how rising interest rates and steadily larger loan balances have sharply increased both interest expenses and first-year loan payments for producers using USDA Farm Service Agency (FSA) direct and guaranteed loans between 2005 and 2025. While falling interest rates after the 2008 financial crisis temporarily eased borrowing costs, those gains were more than offset by larger loan sizes and, more recently, a rapid upswing in rates.

The analysis shows that guaranteed operating loans experienced the steepest increase in first-year interest expenses, nearly doubling over the 20-year period, with first-year total payments rising more than 90 percent. Guaranteed farm ownership loans, as well as direct operating and ownership loans, also saw substantial increases, though direct loans rose from a lower base due to smaller average balances.

Breaking the data into three periods — 2005-2012, 2012-2018, and 2018-2025 — highlights how the most recent years account for the sharpest escalation in borrower stress. From 2018 to 2025 alone, first-year total loan payments jumped roughly 50–62 percent on average, while interest expenses climbed 72–87 percent, driven by both higher rates and larger loans.

Atkinson notes that today’s producers face interest expenses comparable to or higher than those seen before the Great Recession, but on much larger loan balances, making the financial impact far more severe. The article warns that highly leveraged producers and those relying on variable-rate or short-term financing are especially vulnerable as loans reprice at higher rates.

The piece concludes with mitigation strategies for producers, including tighter cost control, cautious capital purchases, careful evaluation of land acquisitions, exploring alternative or supplemental credit programs, and working closely with lenders on refinancing or loan restructuring to better align payments with cash flow.

ENERGY MARKETS & POLICY

—Thursday: Oil prices slip on U.S./Iran talks but hover near multi-month highs

Markets stay tense as diplomacy, Middle East risks, and shifting crude flows keep a firm floor under prices

Oil prices fell more than 1% on Thursday but remained close to multi-month highs as traders focused on impending talks between the U.S. and Iran set for Friday in Oman. Brent crude dipped about 1.1% to roughly $68.70 a barrel, while U.S. West Texas Intermediate slid a similar amount to about $64.40.

Despite the pullback, analysts said prices continue to reflect elevated geopolitical risk. Oil markets remain highly sensitive to Middle East tensions, particularly with Washington building up forces in the region and regional players seeking to avoid a broader military confrontation.

Roughly one-fifth of global oil consumption moves through the Strait of Hormuz, a critical chokepoint between Oman and Iran. Major OPEC exporters — including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq — ship most of their crude through the strait, underscoring why even tentative diplomacy can move prices.

Volatility has already prompted investors to aggressively lock in prices. Record volumes of WTI Midland at Houston contracts traded in January, reflecting heightened concern over Middle Eastern supply risks and the prospect of additional Venezuelan crude flowing to the U.S. Gulf Coast.

Broader commodity sentiment was also pressured Thursday by a stronger U.S. dollar and turbulence in precious metals markets, analysts said.

On the supply side, discounts on Russian crude sold to China widened to record levels this week as sellers sought to sustain demand from the world’s largest importer. The move follows a new U.S.–India trade deal under which India agreed to halt purchases of Russian oil, likely forcing Moscow to lean more heavily on China.

Looking further out, Argentina could provide a counterweight to tightening supply elsewhere. Analysts told Reuters that the country’s energy trade surplus could rise to $8.5 billion to $10 billion in 2026, driven by growing crude output from the Vaca Muerta shale formation.

—Wednesday: Oil jumps as U.S./Iran talks unravel, risk premium returns

Crude rallies more than 3% as Middle East tensions revive fears of supply disruptions through the Strait of Hormuz

Oil prices surged Wednesday as geopolitical risk snapped back into focus, driven by uncertainty over planned U.S.–Iran talks and fresh signs of military friction in the Middle East.

Brent crude futures settled up $2.13, 3.16%, at $69.46 a barrel, while U.S. West Texas Intermediate climbed $1.93, 3.05%, to $65.14. The gains followed reports that negotiations scheduled for Friday could fall apart after the United States rejected Iran’s request to change the location of the talks.

Markets have whipsawed this week between hopes for diplomatic de-escalation and renewed fears of supply disruptions. Analysts said prices are being supported less by near-term fundamentals and more by a persistent geopolitical risk premium. While Iran produces about 3.4 million barrels per day, the larger concern for traders is its influence over the Strait of Hormuz, through which roughly 20% of global oil flows.

Tensions were reinforced by reports that the U.S. military shot down an Iranian drone that approached a U.S. aircraft carrier in the Arabian Sea, while Iranian gunboats separately moved toward a U.S.-flagged tanker north of Oman. Several major OPEC producers — including Saudi Arabia, Iran, Iraq, Kuwait and the UAE — ship most of their crude through the Strait, heightening market sensitivity to any escalation.

On the demand side, India’s imports of Russian crude slipped again in January, extending a decline that began in December as refiners sought alternative supplies amid sanctions pressure and ongoing U.S.–India trade discussions.

Prices also found late-session support from U.S. inventory data. The Energy Information Administration reported that crude stocks fell by 3.5 million barrels last week to 420.3 million barrels as winter storms curtailed output, defying expectations for a modest build. Still, analysts cautioned the bullish impact was limited, noting the draw was far smaller than the more than 11-million-barrel decline estimated earlier by the American Petroleum Institute.

—Trump administration schedules second Gulf oil and gas lease sale under new mandate

BOEM plans March 11 auction covering more than 80 million offshore acres, part of 30-sale requirement in OBBBA

The Trump administration will move forward next month with its second offshore oil and gas lease sale in the Gulf, expanding access for energy producers under a new statutory leasing mandate. The Interior Department’s Bureau of Ocean Energy Management (BOEM) said it will hold Lease Sale 2 on March 11, offering blocks in the Gulf of America Outer Continental Shelf as required under the One Big Beautiful Bill Act (OBBBA).

The sale will include approximately 15,066 unleased blocks, covering about 80.4 million acres, making it one of the largest offshore lease offerings in recent years. It is the second of 30 offshore oil and gas lease sales mandated by the OBBBA, which the Trump administration has framed as a central pillar of its broader push to boost domestic energy production, stabilize fuel prices, and strengthen U.S. energy security.

TRADE POLICY

—FT: There are good reasons to be cheerful about global trade

Despite a wave of import taxes and geopolitical friction, globalization persists

In a new column for the Financial Times, senior trade writer Alan Beattie argues that — even in the face of rising protectionism under U.S. President Donald Trump’s tariff campaign — the broad arc of globalization has not yet been broken.

Beattie underscores that “Donald Trump’s inept tariff campaign hasn’t yet derailed globalization,” suggesting that the world’s trading system remains resilient and adaptive despite significant political and economic headwinds.

According to Beattie, a combination of structural forces — including deeply embedded global supply chains, widespread digital connectivity, and interdependent multinational firms — continues to bind markets together and resist a full retreat into economic isolation. In his view, tariff measures have so far fallen short of fundamentally reversing the decades-long expansion of cross-border commerce.

Beattie’s analysis comes amid broader debate over whether recent tariff escalations — including those initiated by the United States — might significantly suppress global trade volumes and economic integration. His assessment positions the current moment as challenging but not catastrophic: global trade retains momentum and underlying economic incentives for openness remain strong.

—U.S., Mexico link critical minerals action plan to USMCA review

USTR Greer says coordinated trade tools — including price floors and stockpiling — are aimed at shoring up North American supply chains ahead of July talks

The United States and Mexico have agreed to a new “action plan” on critical minerals trade that U.S. Trade Representative (USTR) Jamieson Greer said is designed to reinforce North American supply chains ahead of the formal review of the United States–Mexico–Canada Agreement later this year.

Under the plan, Washington and Mexico City will spend the next 60 days exploring coordinated trade policies to address vulnerabilities in critical mineral markets, including the possible use of border-adjusted price floors on imports. The two sides will also identify specific minerals of interest and examine how such tools could ultimately be embedded in a binding plurilateral agreement with other like-minded partners.

Greer said the initiative is meant to counter “global market distortions” that have left North American mineral supply chains exposed to disruptions, adding that the timing is deliberate as the USMCA Joint Review approaches in July. That review will determine whether the pact is renewed for another 16 years or rolled into a longer negotiating period before its eventual expiration.

The action plan builds on Greer’s recent discussions with Mexican Economy Secretary Marcelo Ebrard, where critical minerals were flagged as a key negotiating issue. It also reflects earlier comments Greer made to lawmakers urging Canada and Mexico to help develop a regional “Critical Minerals Marketplace” spanning mining, processing, recycling, and manufacturing.

Beyond price floors, the plan outlines a broader menu of potential cooperation, including regulatory standards for mining and processing, trade measures to support resilient regional markets, and coordinated stockpiling. That dovetails with the Trump administration’s announcement this week of a U.S.-financed critical minerals stockpile, designed — with private-sector participation — to give companies more predictable access to key inputs at stable prices.

The U.S. rollout of the Mexico action plan coincided with a State Department–hosted Critical Minerals Ministerial involving 54 countries and the European Union, as well as new U.S. efforts to pursue similar action plans with the European Union and Japan. U.S. officials say those parallel talks are intended to lay the groundwork for a broader plurilateral framework on preferential trade in critical minerals — potentially featuring shared price floors, standards-based markets, subsidies to close price gaps, and coordinated offtake agreements.

Taken together, Greer framed the moves as an early but concrete step toward reshaping critical minerals trade rules before USMCA negotiations formally begin, with the goal of anchoring supply chains more firmly within North America and allied economies.

CHINA

—China set to lower 2026 growth target as provinces miss marks and stimulus expectations shift

Economists see Beijing aiming for 4.5%–5% GDP growth, with policy tools increasingly viewed as a ceiling rather than a baseline

China is increasingly expected to lower its official economic growth target for 2026, with economists converging on a range of 4.5% to 5% ahead of next month’s National People’s Congress. That would mark the first downward adjustment after three consecutive years of targets set at “about 5%.”

The shift comes as more than a dozen of China’s 31 mainland provinces have already trimmed their own growth goals, a signal that central authorities are preparing to follow suit. According to economists at Nomura, only about half of China’s provinces met or exceeded their targets last year. The country’s largest regional economy, Guangdong, managed growth of just 3.9%, well short of its roughly 5% aim, weighed down by the prolonged property-sector slump.

Nomura’s China economics team, led by Ting Lu, is among several forecasting a 4.5%–5% national target, a view echoed in recent reporting by the South China Morning Post. Once announced at the National People’s Congress, economists widely expect actual GDP growth to align closely with that figure.

Larry Hu, head of China economics at Macquarie Group, argues that the growth target effectively becomes policy-determinative. If external shocks emerge — such as a renewed deterioration in relations between Xi Jinping and President Donald Trump that leads to tougher tariffs or export controls — Beijing would likely deploy domestic stimulus to ensure the target is met. Absent such shocks, policymakers may continue to tolerate weak domestic demand.

That logic is already reshaping expectations around stimulus. Economists at Citigroup recently adjusted their outlook, noting that what they once viewed as a baseline policy package for 2026 — roughly 1 trillion yuan in fiscal measures, a 20-basis-point rate cut, and a 50-basis-point reduction in banks’ reserve requirements — now looks more like an upper bound. As Citigroup’s team put it, the emerging policy mix increasingly represents a ceiling rather than a default response.

Upshot: Together, the signals point to a more cautious growth framework for China in 2026, one that prioritizes manageability and policy control over ambitious headline targets.

POLITICS & ELECTIONS

—Supreme Court allows California’s redrawn House map to take effect for midterms

Justices decline emergency bid by Republicans, leaving new districts in place as legal fight continues in lower courts

The U.S. Supreme Court declined to block California’s newly redrawn congressional map, clearing the way for the districts to be used in November’s midterm elections even as a broader legal challenge moves forward.

The decision came after Republican plaintiffs asked the justices for an emergency ruling to halt the map, arguing it unconstitutionally favored Hispanic voters and, by extension, Democrats. The court’s refusal — issued without comment — does not resolve the underlying claims but keeps the new lines in place for the upcoming election cycle.

California voters last year approved giving state lawmakers authority to redraw congressional districts outside the state’s regular decennial redistricting process. Democrats moved quickly to adopt a revised map, citing population shifts and compliance with the federal Voting Rights Act. The changes are widely expected to make it easier for Democrats to win as many as five additional seats in the House, a potentially meaningful margin in a closely divided chamber.

Republicans contend the map amounts to an illegal racial gerrymander, alleging that Latino voters were used as a predominant factor in drawing district boundaries. They have argued that the plan dilutes the influence of non-Hispanic voters and violates the Constitution’s equal protection guarantees.

By declining to intervene on an emergency basis, the Supreme Court effectively endorsed the lower court’s decision to let the map stand for now, emphasizing its longstanding reluctance to upend election rules close to an election. The lawsuit will continue in the lower courts, where judges will weigh the merits of the constitutional claims — a process that could extend well beyond November.

For Democrats, the ruling removes immediate uncertainty and locks in a more favorable electoral terrain in the nation’s largest state.

For Republicans, it shifts the fight to a longer-term legal strategy, with any potential remedy likely coming too late to affect this year’s midterms.

—Republicans warn Trump backlash could put Senate Majority at Risk

Texas upset and weak economic polling heighten GOP fears of a Democratic wave in the 2026 midterms

Senate Republicans are increasingly anxious that voter backlash against President Trump’s handling of the economy and aggressive deportation policies could spark a Democratic wave large enough to flip both chambers of Congress — including the Senate, where Republicans currently hold a narrow majority.

Those concerns sharpened after Democrat Taylor Rehmet won a North Texas state Senate seat over the weekend in a district Trump carried by 17 points in 2024. GOP senators privately described the result as a “wake-up call,” warning it may signal broader trouble heading into November.

Republicans now hold 53 Senate seats, with Vice President J.D. Vance able to break ties, meaning Democrats need a net gain of four seats to retake control. Several GOP senators said internal discussions at the National Republican Senatorial Committee (NRSC) have grown more urgent as polling trends worsen.

Battleground-state Republicans such as Susan Collins (R-Maine) and retiring Thom Tillis (R-N.C.) have repeatedly warned colleagues that the political environment is “deteriorating.” Tillis, who opted not to seek reelection after clashing publicly with Trump over Medicaid cuts in the One Big Beautiful Bill Act, has cautioned that if economic perceptions do not improve by mid-2026, Republicans could face a difficult election night.

Ted Cruz (R-Texas) called Rehmet’s 14-point victory in Tarrant County “a rough night,” saying it underscored the need for stronger Republican turnout. Other senators privately worry that a sufficiently large Democratic wave could even put traditionally red states like Ohio, Alaska, or Iowa into play.

Polling has intensified those fears. Trump’s approval rating stands at 42.2 percent, with 54.6 percent disapproving, according to Decision Desk HQ averages. A Harvard CAPS/Harris poll released Monday found 51 percent of voters believe Trump is doing a worse job than President Biden, while CNN and Fox News surveys show broad pessimism about the economy and inflation.

Senate Majority Leader John Thune (R-S.D.) acknowledged the warning signs, saying Republicans must do a better job highlighting tax cuts and deregulation to spur growth. He urged candidates to sharpen their message and better communicate accomplishments ahead of what he described as an expensive, hard-fought cycle.

NRSC Chair Tim Scott (R-S.C.) has publicly struck a calm tone but has privately expressed concern about recent polling, according to GOP senators familiar with the discussions.

Democrats see their best pickup opportunity in North Carolina, where former Gov. Roy Cooper (D) is running for Tillis’s open seat in a state Trump won by three points in 2024. Other Republicans viewed as potentially vulnerable include Dan Sullivan (R-Alaska), John Cornyn (R-Texas), Jon Husted (R-Ohio), and Ashley Moody (R-Fla.), though all represent states Trump carried comfortably.

Republicans also point to history as a warning. Second-term midterms often turn brutal for the party in power — from Democrats’ losses in 2014 under President Obama to Republicans losing control in 2006 during President George W. Bush’s second term. As one GOP senator put it, the question is not whether a wave is coming, but “how high it gets.”

While Thune insists Republicans remain well-funded and competitive, he has acknowledged the “headwinds” facing the party, cautioning that GOP candidates must give voters a clear reason to stick with them in 2026.

TRANSPORTATION & LOGISTICS

—Maersk braces for freight slump with job cuts, cost controls

Carrier plans 1,000 layoffs and $180 million in savings as falling rates and a gradual Red Sea reopening threaten pricing power

Maersk is preparing for a tougher operating environment as sinking freight rates and rising capacity pressure margins across the container industry. In comments accompanying its annual report, the world’s No. 2 container carrier said it will eliminate about 1,000 jobs and target roughly $180 million in annual cost reductions, with a sharp push on productivity — including wider use of artificial intelligence.

Maersk expects global container trade to grow 2% to 4% this year and said it aims to perform in line with that demand. But executives cautioned that industry supply dynamics pose the bigger risk. After six years in which capacity constraints gave carriers strong pricing leverage, a return of ships to shorter routes could flip the balance back toward cargo owners.

That shift hinges in part on the Red Sea. Maersk in December completed its first transit in nearly two years through the Bab el-Mandeb Strait after attacks by Yemen-based Houthis subsided. CEO Vincent Clerc said a broader resumption of normal Red Sea transits could begin as soon as this year, starting with the most critical services and expanding gradually based on safety conditions.

For now, Maersk vessels still require naval escorts in the Red Sea, and Clerc said limited military capacity prevents a full return. The company is also closely monitoring U.S./Iran tensions for signs of renewed maritime disruption, noting it could reverse routing decisions if risks escalate.

Earlier this week, Maersk and alliance partner Hapag-Lloyd said they rerouted one shared Gemini Alliance service through the Red Sea with all passages secured by naval assistance.

Clerc warned that as shorter sailing distances bring more capacity back into the market in coming months, competition will intensify and put further pressure on freight rates. Still, he said underlying demand across Maersk’s shipping, terminal, and logistics businesses remains solid — even as the company tightens costs to navigate what’s shaping up to be a challenging year.

WEATHER

— NWS outlook: Light wintry precipitation in the Mid-Atlantic and rain/thunderstorms across the Southeast will gradually taper off…

…A pair of frontal systems will bring periods of light to locally moderate snow for the Great Lakes today and into Friday… …An arctic blast will bring frigid temperatur

Ag Intel

Lighthizer Expects Supreme Court to Curb IEEPA tariffs

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