Trump Shrugs Off EU Retaliation Risk Over Greenland as Tariff Tensions Rise

Bessent presses China on soybean buys at Davos
 

Link: IEEPA Fertilizer Tariffs Generated Modest Revenue but Imposed Outsized Costs on U.S. Farmers

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

TOP STORIES

— Financial markets: Risk-off sentiment intensified as gold surged to record highs above $4,700/oz amid geopolitical and tariff tensions, the VIX jumped above 20 for the first time since November, the dollar suffered its worst day since August, Treasury yields hit their highest levels since September, and U.S. equities posted their worst session since Oct. 10.

— Trump shrugs off EU retaliation risk over Greenland tariffs: President Trump dismissed warnings that Greenland-linked tariffs could unravel the U.S./EU trade deal, downplayed market fallout, and insisted Europe would not retaliate, even as EU leaders openly criticized the move ahead of Davos.

— Bessent urges Europe to pause, avoid retaliation: Treasury Secretary Scott Bessent pressed European governments to “take a deep breath,” stick to last summer’s tariff pact, and avoid escalation, warning that retaliation could expose the EU to broader U.S. trade penalties.

— Bessent presses China on soybean buys: Bessent publicly urged Beijing to purchase more than its roughly 25-million-ton U.S. soybean commitment, underscoring agriculture’s role as a stabilizer in strained U.S.–China relations.

— Supreme Court holds fire on Trump tariff case: The Court again declined to rule on challenges to Trump’s use of IEEPA for tariffs, prolonging legal, policy, and market uncertainty over the scope of presidential trade authority.

— U.S. expands access to Venezuelan oil: Washington plans to widen licenses allowing more traders and refiners to buy Venezuelan crude, potentially easing port congestion and restarting shut-in production as sanctions policy shifts.

— Congress locks in final FY 2026 spending package: Lawmakers reached a bipartisan deal on the last FY 2026 appropriations bills ahead of the Jan. 30 deadline, setting up imminent House votes on defense, homeland security, and major domestic funding.

— Minibus outlook for E15 and disaster aid: Leadership is keeping year-round E15 and agricultural disaster aid out of the current minibus, with both issues expected to move separately later to avoid jeopardizing the funding deal.

— Letlow jumps into Louisiana Senate race: Rep. Julia Letlow formally entered the GOP primary against Sen. Bill Cassidy with Trump’s endorsement, turning the race into a high-profile test of Trump loyalty within the party.

— Tyson beef plant closures hit jobs and capacity: Tyson’s Nebraska shutdown and Texas shift reduction are set to lay off about 5,000 workers and remove roughly 7,700 head of daily slaughter capacity, drawing scrutiny from Senate Democrats and raising cattle-market concerns.

— NCC backs Supreme Court review of glyphosate case: The National Cotton Council welcomed the Court’s decision to hear Durnell v. Monsanto, calling it pivotal for preserving federal authority over pesticide labeling and regulatory certainty for farmers.

— Ag markets today: Grain markets were mixed amid heavy macro volatility; soybeans found modest support on renewed China demand talk while corn lagged on ample supplies. Wheat firmed on Plains weather concerns, cattle eased on weaker beef values and plant-closure impacts, and hogs were steady. Macro risk-off flows and tariff uncertainty dominated ag price direction.

NEWS UPDATES—Financial markets: •Gold futures and spot prices are at record highs: Spot gold has traded above $4,700 per ounce today, hitting new all-time highs around $4,750+ per ounce intraday. This marks the first time gold has exceeded roughly the $4,700-plus level as markets react to geopolitical and tariff tensions.•The VIX — Wall Street’s key gauge of expected near-term volatility — is up sharply on the day: The index is up ~+10–11% vs. yesterday’s close; up roughly ~25–28% from lower levels earlier in the week. The VIX rose above 20 points — a level that signals elevated volatility — for the first time since November. •The dollar index, which measures the dollar’s strength against six major currencies, fell 0.8% Tuesday — a huge move in currency markets. The dollar index had its worst day since August. The euro was up 0.65% against the dollar. • The benchmark 10-year U.S. Treasury yield, which trades in opposite direction to prices, rose to 4.29%. The 30-year Treasury yield jumped to 4.92%. Both yields hit their highest level since September.•The Dow, S&P and Nasdaq each had their worst day since Oct. 10, when Trump had threatened to hike tariffs on imports from China. —Trump shrugs off EU retaliation risk over Greenland tariff threatsPresident says Europe “needs” transatlantic trade deal, downplays market fallout and allied backlash ahead of Davos meetings President Donald Trump said he doubts European leaders would follow through on retaliation or abandon investment pledges even if the U.S. imposes new tariffs tied to his push to secure control of Greenland, dismissing warnings that the dispute could unravel last year’s transatlantic trade deal. Speaking at a White House press conference Tuesday, Trump said the European Union “needs that agreement very badly,” brushing off concerns that Greenland-related tariffs could prompt Europe to renege. His comments came hours after European Commission President Ursula von der Leyen warned that Trump’s threats would violate the accord and called the stance a “mistake,” as EU officials quietly draft contingency plans. Trump has announced a 10% tariff on goods from eight European countries starting Feb. 1, rising to 25% in June, unless there is progress toward a deal for the “purchase of Greenland,” a semi-autonomous territory of Denmark. Asked how far he would go to secure the island, Trump replied: “You’ll find out.” The dispute looms over the World Economic Forum in Davos, where Trump is expected to confront angry European leaders. He predicted that multiple meetings this week would “work out pretty well,” and downplayed criticism from Emmanuel Macron and Keir Starmer, saying leaders are friendlier in person. Markets have already reacted to the escalation, with stocks and the dollar falling and gold hitting a record high. Trump nonetheless dismissed concerns about deeper financial fallout, including speculation that Europe could sell U.S. Treasuries. Treasury Secretary Scott Bessent, speaking in Davos, echoed that view, urging partners not to retaliate and calling fears of a bond selloff a “false narrative.” European leaders remain divided on how to respond. Macron has floated using the EU’s anti-coercion tools, while German Chancellor Friedrich Merz has sought to tamp down escalation. Danish Prime Minister Mette Frederiksen has warned that any use of force would effectively end NATO — an unlikely scenario, but one Greenland’s own prime minister said authorities must nevertheless begin preparing for. Trump argues U.S. control of Greenland is vital for national and global security, citing Russian and Chinese influence and alleging NATO partners have underinvested in the island’s defense. He also renewed claims—widely disputed—that Norway controls Nobel Peace Prize decisions, linking the issue to his long-running grievance. Despite the widening rift, Trump insisted the alliance would endure. “I think that we will work something out where NATO is going to be very happy and where we’re going to be very happy,” he said, even as the Greenland fight threatens to overshadow Davos and further strain ties with key U.S. allies.—Bessent urges Europe to pause, avoid retaliation as Greenland tariff tensions riseU.S. officials press EU to stick with last summer’s tariff pact despite Trump’s threat of new Greenland-linked duties U.S. Treasury Secretary Scott Bessent urged European governments to “take a deep breath,” keep an open mind on President Donald Trump’s Greenland demands, and avoid retaliating against looming U.S. tariffs, arguing that Washington intends to press ahead with the U.S./EU tariff deal reached last summer. Speaking at the annual meeting of the World Economic Forum in Davos, Bessent warned that retaliation could further destabilize trans-Atlantic relations after Trump announced 10% tariffs — rising to 25% by June 1 — on eight European countries tied to a joint military exercise in Greenland. Bessent said the president would personally deliver his message in Davos and urged Europe not to reflexively reject U.S. demands. European leaders quickly criticized the tariff threat, warning it risks a “dangerous, downward spiral” in relations. Still, U.S. officials emphasized compartmentalizing the Greenland dispute from the broader trade framework. U.S. Trade Representative Jamieson Greer said the Greenland tariffs fall outside the scope of the U.S./EU deal and argued Europe faces a choice: uphold the agreement or act on domestic political pressures—even if that invites retaliation. Commerce Secretary Howard Lutnick reinforced that view, calling U.S. tariff arrangements with Europe “durable and stable,” and warning that breaking the deal would expose the EU to higher duties on autos and pharmaceuticals. Under the agreement, the U.S. capped most Section 232 tariffs on European goods at 15%; semiconductor tariffs have yet to take effect. European Commission President Ursula von der Leyen, however, suggested Washington may already be straying from its commitments. In prepared remarks, she said additional tariffs between long-standing allies were a mistake and stressed that “a deal is a deal,” particularly on Arctic security. Complicating matters, Trump’s plan to target six EU member states — plus Norway and the UK — would break from longstanding U.S. practice of treating the EU as a single trade entity and could violate the joint statement issued last August limiting U.S. tariffs to 15%. Several European lawmakers are now urging the EU to deploy its anti-coercion instrument, potentially paving the way for retaliatory measures on roughly $109 billion of U.S. goods. EU leaders are set to meet Thursday to weigh their response, with any retaliation requiring member-state backing — leaving the fate of the trans-Atlantic tariff deal, and broader relations, hanging in the balance. —Bessent presses China on soybean buys at DavosU.S. Treasury chief urges Beijing to exceed prior 25-million-ton commitment amid trade tensions U.S. Treasury Secretary Scott Bessent used a meeting at the World Economic Forum in Davos to press China to step up agricultural purchases, telling a public audience that he encouraged Chinese Vice Premier He Lifeng to buy “a little more” soybeans than Beijing has already committed to purchase. Speaking at Davos, Bessent said soybean purchases were explicitly discussed during his meeting with He Lifeng on Monday. China previously committed to buying roughly 25 million metric tons of U.S. soybeans, a level that has become a recurring benchmark in bilateral trade discussions. The comments underscore the Trump administration’s effort to keep agricultural trade flowing even as broader U.S./China relations remain strained by tariffs, geopolitics, and industrial policy disputes. Soybeans remain the single largest U.S. farm export to China, and any signal of increased buying is closely watched by grain markets, Midwest producers, and global commodity traders. Bessent’s public nudge suggests Washington is seeking not just adherence to prior purchase pledges but incremental gains that could help offset uncertainty created by ongoing tariff threats and shifting trade alliances. For Beijing, soybeans are a politically sensitive import, balancing food security needs, domestic support programs, and diversification toward suppliers such as Brazil. Upshot: While no new purchase volumes were formally announced, the Davos exchange highlights agriculture’s continued role as a stabilizing — and negotiable — pillar in U.S./China economic relations, even as tensions persist across other fronts. —Supreme Court holds fire on Trump tariff case, extending uncertainty for trade policyJustices’ decision not to issue an opinion keeps IEEPA tariff authority in limbo, setting up weeks of legal and market uncertainty The U.S. Supreme Court again declined to issue an opinion on the high-stakes cases challenging President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs, leaving one of the most consequential trade disputes of the Trump administration unresolved. The absence of a ruling means the court is still deliberating whether IEEPA can be used as a legal foundation for broad, economy-wide import tariffs — a question with major implications for U.S. trade policy, executive power, and billions of dollars in duties already collected. What happens next 1. The court could rule later this termThe justices can issue an opinion at any remaining opinion day in the current term. If the case is not resolved soon, attention will shift to late winter or early spring as the most likely window for a decision. 2. Possible outcomes remain wide-rangingIf the court upholds the administration’s position, it would effectively validate expansive presidential tariff authority under IEEPA.If it rules against the government, the justices would still need to decide:• Whether existing tariffs must be unwound• Whether previously collected duties must be refunded• Whether implementation details should be sent back to lower courts A narrower ruling — limiting IEEPA’s use without fully invalidating past actions — also remains possible. 3. Lower courts stay on holdBecause the case is before the Supreme Court, related litigation in lower courts remains largely frozen. A remand could trigger months of additional proceedings, extending uncertainty well beyond the Supreme Court’s decision. 4. Markets and policymakers remain in limboUntil the court rules, businesses must continue operating under existing tariff regimes without clarity on their durability. For Congress, the delay keeps pressure on lawmakers debating whether to statutorily clarify or rein in emergency trade powers regardless of how the court ultimately rules. Why the delay matters. The court’s silence underscores how legally and politically complex the case is. A ruling could:•  Redefine the balance of power between Congress and the presidency on trade• Set precedent for future “emergency” economic actions• Determine whether tariffs imposed under IEEPA become a permanent tool of U.S. trade policy or a one-off experiment For now, the lack of an opinion means the status quo holds — but with every passing opinion day, expectations grow that the Supreme Court is preparing a decision with far-reaching consequences. All eyes now remain on the next opinion calendar from the Supreme Court of the United States. —U.S. expands access to Venezuelan oil for traders and refinersWashington moves to widen crude exports beyond existing licenses as sanctions regime shifts The U.S. gov’t is poised to permit additional trading firms and refiners — beyond Vitol Group and Trafigura Group — to buy and sell Venezuelan crude oil, according to a Trump administration official. The change is expected through a general license that would ease current sanctions restrictions, mandating that all Venezuelan oil supply deals be routed through the U.S. market. This policy shift marks a departure from the approach taken with the first tranche of Venezuelan oil — roughly 50 million barrels held in storage after a partial U.S. blockade — which was initially marketed under special permissions. Under the new framework, Vitol and Trafigura could see increased competition as U.S. refiners consider direct purchases from state-owned Petróleos de Venezuela S.A. (PDVSA). A broader license is also expected to help relieve congestion at Venezuelan ports and storage facilities, potentially allowing oil wells that were offline due to the blockade to resume production. Additional developments tied to this evolving strategy include reports that companies like Chevron, Marathon Petroleum, Valero, Mercuria, and Glencore are in talks to obtain new or expanded U.S. authorizations to access Venezuelan supplies. —Congress locks in final FY 2026 spending package ahead of Jan. 30 deadlineHouse vote set for Wednesday/Thursday as lawmakers bundle defense, domestic priorities and key program extensions Lawmakers reached a deal on the final set of fiscal 2026 appropriations bills as Congress races to avert a government shutdown before the Jan. 30 deadline. The agreement would fund Defense, Labor–HHS–Education, Transportation–HUD, and Homeland Security through the rest of FY 2026, covering the bulk of discretionary spending. A House vote is scheduled for Wednesday, according to a notice sent to lawmakers. Quote of note: “It’s time to get it across the finish line,” said House Appropriations Committee Chairman Tom Cole (R-Okla.). The package has bipartisan backing. Ranking member Rosa DeLauro (D-Ct.) said she supports the deal, noting that House Republicans committed to a separate vote on the Homeland Security bill, so it is not tied to the broader three-bill minibus. Beyond the core spending measures, the package includes extensions for health authorities, flood insurance, and trade initiatives for sub-Saharan Africa and Haiti, among other programs. Separately, the Senate last week cleared the Commerce–Justice–Science, Energy and Water, and Interior–Environment bills, sending that package to Donald Trump’s desk. Senators are expected to take up the Financial Services and National Security–State bills when they return from recess.  FY 2026 Minibus Advances with Bipartisan Deal, Key Policy Riders, and Tariff Politics LoomingHouse eyes floor vote on $1.2T package as leadership navigates attendance issues, DHS oversight fights, and expiring tariff protections A sprawling, 1,000-plus-page FY 2026 funding minibus unveiled early this morning packages together some of Congress’ most difficult appropriations bills — Defense, Homeland Security, Transportation-HUD, and Labor-HHS — setting up a likely House floor vote later this week, potentially Thursday. Big picture: simply reaching a bipartisan agreement on these accounts is a major accomplishment. Lawmakers from both parties say the package avoids the partisan “poison pills” that often doom large funding deals, even as it rejects many of President Donald Trump’s proposed spending cuts and places new limits on how the administration can use certain funds. Key toplines• Price tag: roughly $1.2 trillion• Winners: boosts funding for agencies such as the NIH, includes billions in earmarks, and steers clear of ideologically charged riders• Constraints on the administration: tighter guardrails on spending flexibility in several areas Homeland Security provisions to watch. Democrats on Appropriations emphasized new accountability requirements at DHS, though it remains unclear if these measures will satisfy the broader caucus:• Monthly DHS reports to Congress on spending plans for OBBB funds• Limits on DHS’ ability to transfer funds internally• $20 million for body cameras for ICE and CBP officers• An explicit ban on DHS imposing — or even studying — a new border-crossing fee Notable policy riders. Several significant authorizing and policy items are folded into the minibus:• Pharmacy benefit manager (PBM) overhaul: limits PBMs’ ability to retain rebates as profits and tightens federal oversight.•Trade programs revived: renews the African Growth and Opportunity Act (AGOA) and a Haiti export program through Dec. 31, 2026, after lapsing on Sept. 30, 2025.• National Flood Insurance Program: extended through Sept. 30.• Prescription drug imports: codifies FDA policy allowing Americans to import a 90-day supply of drugs from Canada. Floor dynamics and political pressure points. The House returns this evening, with the Rules Committee meeting at 3 p.m. ET. GOP leadership has not yet officially scheduled the minibus, likely requiring an additional Rules hearing. Attendance remains a challenge for Republicans. While Reps. Derrick Van Orden (R-Wis.) and Greg Murphy (R-N.C.) are expected back, Rep. Steve Womack (R-Ark.) announced the death of his wife, further tightening margins. Tariffs in the background: GOP leaders have kept in place rules blocking rank-and-file efforts to force votes disapproving of Trump’s tariff regime. That protection expires at the end of the month, making this week potentially their last chance to shield the administration from a tariff backlash in the House. What’s next: Even if the House moves the minibus this week, the Senate must pass two separate minibuses next week to avert a government shutdown — all while the House will be out of session, raising the stakes for Senate timing and coordination.   —Will the minibus include year-round E15 language and/or ag disaster aid?Very unlikely. Reasons: This current minibus package is already:• Bipartisan and tightly negotiated• Focused on must-pass appropriations• Deliberately scrubbed of politically explosive riders Leadership on both sides is trying to get these hardest bills across the finish line. Adding E15 or disaster aid would almost certainly:• Trigger regional fights (Midwest vs. oil-state Republicans on E15)• Blow up the spending topline (disaster aid)• Invite amendment warfare in Rules In short: leadership incentives are aligned against adding either. Year-round E15: separate energy or tax vehicle. Year-round E15 is still alive, but not here. What’s blocking it:• It’s a policy change, not funding• Oil-state Republicans continue to resist attaching it to appropriations• Leadership prefers a standalone deal to avoid collateral damage Where it could land instead:• A standalone E15 bill if leadership sees 60+ votes in the Senate• A broader energy package• A tax or extender-style vehicle later this year (especially if paired with RIN or small-refiner relief) Bottom line: Year-round E15 is being quarantined from the minibus to keep this deal intact. Disaster aid: definitely a different bill. Disaster funding is even more clearly off-limits here. Why:• Disaster aid requires tens of billions, not offsets tucked into appropriations• The House GOP still wants offsets, while the Senate and White House do not• Leadership doesn’t want to reopen OBBB, FEMA, or USDA disaster debates inside this minibus Where disaster aid will move:• A standalone emergency supplemental• Possibly paired with border, Ukraine, or national security funding• Or late-breaking action after the Senate finishes the minibuses If disaster aid were added now, it would almost certainly sink the package. What to watch instead •Rules Committee: if leadership even allows an E15 or disaster amendment, that’s a major signal — but right now, that’s very unlikely. • Post-minibus window: once appropriations are cleared, pressure builds fast to move:disaster aid before the next recessyear-round E15 before peak summer driving season politics fully kick intariff backlash dynamics: if tariff pressure forces leadership concessions later this month, E15 could become a bargaining chip — but not this week. Bottom line: •Year-round E15: alive, but not in this minibus•Disaster aid: definitely separate This minibus is about locking in bipartisan funding, not reopening fights leadership is actively trying to avoid —Letlow jumps into Louisiana Senate race with Trump’s backingGOP primary sets up a high-profile intraparty test tied to Trump loyalty and the legacy of impeachment Rep. Julia Letlow on Monday made her Senate bid official, announcing she will challenge Republican incumbent Bill Cassidy in Louisiana’s 2026 GOP primary after securing a fresh endorsement from Donald Trump. Letlow, who has represented Louisiana’s 5th Congressional District since 2021, is framing the race as a referendum on party loyalty and alignment with Trump’s agenda. The endorsement immediately elevates the contest, turning what might have been a routine re-election bid for Cassidy into one of the most closely watched Republican primaries of the cycle. Cassidy is seeking a third term and has largely supported Trump’s legislative priorities and nominees over the past year. But his 2021 vote to convict Trump during the second impeachment — over the Jan. 6 Capitol riots — remains a defining fault line inside the GOP, and one that Trump allies continue to spotlight. Strategically, Letlow enters the race with several advantages: statewide name recognition boosted by Trump’s backing, strong fundraising potential, and a Republican electorate that has grown more receptive to primary challenges against incumbents seen as insufficiently aligned with Trump. Cassidy, meanwhile, retains deep establishment ties, a record of conservative policy wins, and support from business and health-care interests. Louisiana’s Republican primary is set for May 16, with a runoff — if no candidate clears the majority threshold — scheduled for June 27. Given Trump’s direct involvement and the state’s solidly Republican lean, the primary is widely expected to determine who ultimately holds the Senate seat. —Tyson Beef plant closures trigger major layoffs and cut U.S. slaughter capacityShutdown of Nebraska facility and shift reduction in Texas set to idle thousands of workers and remove significant cattle processing capacity from the system On Jan. 21, roughly 5,000 workers are expected to be laid off as Tyson Foods moves forward with previously announced changes to its beef operations, including the closure of its Lexington, Nebraska, plant and the conversion of its Amarillo, Texas, facility to a single full-capacity shift. According to a Worker Adjustment Retraining Notification (WARN) filed with the Texas Workforce Commission, 1,761 employees will be laid off from Amarillo’s B-shift operations. A separate WARN notice was issued by the Nebraska Department of Labor following the Lexington closure announcement. Tyson said the moves are part of a broader effort to rebalance production across its network. “To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across our network,” the company said in November, while acknowledging the impact on workers and local communities. Impacts: In a January 2026 market outlook for MEAT+POULTRY, contributing editor Steve Kay estimated the actions will remove about 7,700 head of maximum daily slaughter capacity. The Lexington plant alone has a capacity of roughly 4,800 to 5,000 head per day, while Amarillo’s total capacity is about 5,800 head per day before the shift reduction. An economic analysis from the University of Nebraska–Lincoln underscored the scale of the disruption. UNL estimated the Lexington closure will carry an annual statewide economic impact of $3.28 billion. The plant employs about 3,200 workers and accounts for roughly 4.8% of total daily U.S. beef slaughter, highlighting the broader implications for cattle markets and regional economies. Meanwhile, Senate Majority Leader Chuck Schumer (D-N.Y.) urged USDA Secretary Brooke Rollins to intervene and stop Tyson Foods from closing a meat-processing plant in Lexington, arguing the move would have outsized economic and consumer impacts. In a letter sent Friday (link), Schumer said the closure would eliminate more than a quarter of local jobs and exacerbate already rising beef prices. “Beef prices are already on the rise; this closure ensures prices will remain sky-high,” he said, calling it “an abdication of the administration’s responsibility” not to prevent what he labeled an illegal shutdown. Schumer characterized the decision as a “textbook violation” of price-manipulation law, contending that closing the facility—rather than selling it to a competitor—would further consolidate the beef-packing industry and allow tighter control over prices. Tyson Foods declined to comment on the letter. A spokesperson for USDA said President Donald Trump and his cabinet are working to lower prices for consumers. —NCC backs Supreme Court review of glyphosate liability caseCotton group says outcome will be pivotal for federal pesticide labeling authority and farm input certainty The National Cotton Council (NCC) welcomed the U.S. Supreme Court’s decision to hear Durnell v. Monsanto, calling the case a critical test of whether pesticide manufacturers can face liability under state “failure to warn” laws when federal regulators have already approved product labels as safe. The case, now headed to the U.S. Supreme Court, centers on whether states can impose additional or conflicting warning requirements beyond those set by the Environmental Protection Agency under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). NCC Chairman Patrick Johnson said cotton producers rely on EPA’s science-based reviews to ensure both safety and consistency in pesticide use. He emphasized that EPA and other major regulatory bodies have repeatedly found glyphosate does not pose a cancer risk when used as directed. Johnson warned that allowing state-level labeling mandates that contradict federal determinations would erode the uniform regulatory framework farmers depend on, potentially creating confusion, higher costs, and reduced access to crop protection tools. The National Cotton Council said it views the Court’s review as essential to preserving federal primacy in pesticide regulation and maintaining clarity for producers and consumers alike. —Agriculture markets today: