U.S. Jobless Claims Drop to Near-Year Lows as Labor Market Holds Steady
Russia sets larger grain export quota for late season, signaling push to revive shipments | U.S. hog inventory edges higher as productivity gains offset breeding contraction
Link: USDA Lifts 2026 Ag Export Outlook but Offers Little New Analysis
Link: ASA Urges Balance on Agricultural Drone Policy
Link: National Energy Dominance Council Emerges as Quiet Power Broker
in Renewable Fuel Standard Battles
Link: Video: Wiesemeyer’s Perspectives, Dec. 20
Link: Audio: Wiesemeyer’s Perspectives, Dec. 20
Updates: Policy/News/Markets, Dec. 24, 2025
UP FRONT
— USDA lifts FY 2026 ag export outlook, deficit still near records: Higher exports and slightly lower imports narrow the projected gap, but FY 2026 still points to a $37B deficit — the second largest on record — with China demand well below historical norms and no analysis explaining the revisions.
— UP/Norfolk Southern merger formally enters review: Nearly 7,000-page filing with the STB launches scrutiny of a deal that would create the first U.S. transcontinental railroad, with major implications for grain and bulk commodity shippers.
— Markets quiet in holiday trade: U.S. equity futures edge lower in thin volumes, following record highs in the S&P 500 on strong Q3 GDP data; trading closes early amid a light data and earnings calendar.
— Jobless claims fall to near-year lows: Initial claims drop well below expectations despite holiday volatility, while continuing claims rise modestly — reinforcing a stable, low-hire, low-fire labor market.
— Dollar posts worst year in decades: The greenback slides roughly 10% in 2025 as Europe outperforms and risk currencies rebound; weaker USD offers limited support to U.S. ag exports amid trade frictions.
— Russia expands late-season grain export quota: A larger allowance signals a push to revive wheat and coarse grain shipments despite weak margins, with Black Sea risks adding uncertainty to global supply.
— U.S. hog inventory edges higher on productivity gains: Modest herd growth is driven by record pigs per litter rather than sow expansion, keeping pork supplies steady heading into 2026.
— Wheat extends rally on Black Sea strikes and U.S. dryness: Geopolitical risks and emerging weather stress support the longest Chicago wheat rally since spring.
— Oil prices extend late-December rebound: Strong U.S. growth and geopolitical risks lift prices for a sixth session, even as crude heads for its steepest annual decline since 2020.
— U.S. delays China chip tariffs: Trump administration pushes semiconductor duties to June 2027, signaling a tactical pause while preserving leverage in broader trade negotiations.
— China shipping push threatens Panama Canal ports deal: COSCO’s demand for control raises geopolitical and regulatory risks, putting the BlackRock–MSC-led transaction in doubt.
— H-1B visa lottery overhauled: Wage-weighted selection replaces random draws starting February, intensifying debates over skilled immigration and labor costs.
— Weather risks persist: Heavy rain threatens Southern California, with snow and mixed precipitation impacting the Northeast, Great Lakes, and Sierra Nevada.
TOP STORIES
—USDA lifts FY 2026 ag export outlook, but deficit remains historically largeHigher exports and slightly lower imports narrow the projected gap, though forecasts still trail FY 2025 levels and offer little insight into underlying drivers USDA raised its fiscal year (FY) 2026 agricultural export outlook while making only a modest trim to projected imports, resulting in a smaller — but still historically large — trade deficit for the sector. Link Key takeaways from the updated outlook•Exports revised higher, still below last year: USDA now projects FY 2026 agricultural exports at $173 billion, up from $169 billion in its August outlook. However, the forecast would still fall short of FY 2025 exports of $174.1 billion, meaning exports would not surpass last year’s level.•Imports trimmed slightly: Imports are forecast at $210 billion, down just $500 million from August. That puts the projected FY 2026 trade deficit at $37 billion, which would rank as the second-largest agricultural trade deficit on record.• FY 2025 context: The prior fiscal year closed with exports of $174.1 billion and imports of $219.4 billion, producing a record $43.7 billion deficit. While exports improved relative to USDA’s earlier expectations, imports again set a record and drove the imbalance. China outlook improves — but remains weak by historical standards. USDA increased its FY 2026 forecast for agricultural exports to China to $12 billion, up from $9 billion in August. Even so, that figure remains well below:• $16.24 billion in FY 2025, and• an average of $31.8 billion during FY 2022–2024. China accounted for 9.2% of U.S. agricultural exports in FY 2025, underscoring how far current projections remain from earlier peaks. Other major export markets:• Mexico remains the top destination, with FY 2026 exports forecast at $31.5 billion, slightly above August and up from $30.35 billion in FY 2025. Mexico represented 17.3% of U.S. ag exports last year.•Canada holds second place at $27.9 billion, unchanged from August but down from $28.2 billion in FY 2025.• Japan ranks third at $13 billion, up from $12.6 billion in the prior outlook and $12.45 billion in FY 2025.•Asia overall is forecast at $59.8 billion, up from August but still below the $62.6 billion shipped to the region in FY 2025. Import-side shifts: livestock and beef stand out.•Livestock, dairy, and poultry imports are forecast at $31.7 billion, higher than August but slightly below FY 2025.• Beef and veal imports are projected at $13.9 billion, up from August and above FY 2025 levels, reflecting continued reliance on foreign supply.• Cattle and calf imports rise modestly from August but remain well below FY 2025. Imports from Brazil are forecast to rebound to $7.8 billion, though still short of FY 2025 levels, while Argentina is seen steady near $2 billion. Horticulture, sugar, and tropical products. Horticultural imports remain the largest category at $96.9 billion, down from both August and FY 2025. Sugar and tropical products are forecast at $37.7 billion, with declines largely driven by lower coffee and cocoa imports. Bottom Line: USDA again released a data-only outlook, offering no explanation or economic narrative behind the revised forecasts — a practice that began earlier this year when the report was delayed. The absence of analysis leaves open questions about where additional exports will materialize, particularly given that China remains well below historical buying levels. While a nearly 4% pullback in imports from FY 2025 helps reduce the projected deficit by more than 15%, the outlook underscores that rebuilding U.S. agricultural exports and restoring a trade surplus will take time, even with incremental improvements in key markets. —Timeline: UP/NS merger bid sets stage for first U.S. transcontinental railroadRailroads file nearly 7,000-page application with STB, launching review of a deal that would reshape grain and freight transportation Union Pacific Railroad and Norfolk Southern Railway formally submitted a merger application to the Surface Transportation Board (STB) on Dec. 19, initiating federal review of a transaction that would create the first single-company, East-West transcontinental railroad in the United States. The nearly 7,000-page filing is divided into four volumes covering claimed public benefits, market analysis and operating plans, statements of support, and extensive supporting exhibits. Because the deal involves two major Class I railroads, it is subject to the STB’s most stringent merger review standards. If approved, the combined Union Pacific Railroad–Norfolk Southern Railway system would control a significant share of U.S. rail traffic. Based on STB service metrics, the two railroads together handled 43% of all Class I rail traffic in 2024, including 34% of grain carloads and 42% of grain mill product carloads such as soybean meal, corn syrup, flour, and distillers dried grains — figures that underscore the merger’s importance for agriculture and bulk commodity shippers. The STB has 30 days from the filing date to determine whether the application is complete. The agency has invited comments limited to completeness issues by Dec. 29. Under the proposed procedural schedule, broader comments on the merits of the merger from interested parties would be due within 120 days of Dec. 19, setting the stage for an extended and closely watched regulatory battle. |
| FINANCIAL MARKETS |
—Equities today: U.S. equity futures are modestly lower in thin holiday trade. There are no Fed officials scheduled to speak today and no noteworthy earnings releases which will result in a likely quiet holiday trading session with equity trading closing early at 1:00 p.m. ET. In Asia, Japan -0.1%. Hong Kong +0.2%. China +0.5%. India -0.1%. In Europe, at midday, London +-0.1%. Paris +0.2%. Frankfurt closed.
—Equities yesterday: The S&P 500 closed at a record high on Tuesday for the 38th time this year, on news that the U.S. economy grew at its fastest pace in two years in the third quarter, far ahead of expectations.
| Equity Index | Closing Price Dec. 23 | Point Difference from Dec. 22 | % Difference from Dec. 22 |
| Dow | 48,442.41 | +79.73 | +0.16% |
| Nasdaq | 23,561.84 | +133.02 | +0.57% |
| S&P 500 | 6,909.79 | +31.30 | +0.46% |
—U.S. jobless claims drop to near-year lows as labor market holds steady
Initial filings fall well below expectations despite holiday volatility, while continuing claims edge higher, reinforcing a low-hire, low-fire backdrop
Initial jobless claims in the U.S. fell by 10,000 to 214,000 for the week ending Dec. 20, coming in well below expectations of 223,000 despite the typically volatile holiday period. The reading marked the lowest level since January, aside from the Thanksgiving week dip to a three-year low of 192,000.
Meanwhile, continuing claims rose for a second consecutive week to 1.92 million in the prior reporting period, suggesting that while layoffs remain limited, unemployed workers are taking longer to find new jobs. Together, the data reinforce the view of a labor market that has stabilized, characterized by subdued hiring and restrained firing rather than renewed momentum or sharp deterioration.
—Dollar slides in 2025, marking worst year in decades as Europe outperforms and “risk” FX rebounds
Greenback fell roughly 10% on a trade-weighted basis, with the euro up about 14% and sterling up more than 8% as rate expectations, confidence in Fed independence, and shifting capital flows reshaped FX markets
The U.S. dollar ended 2025 on the back foot, posting its steepest annual decline in many years after a bruising first half and only a partial stabilization later in the year. By late December, the dollar index — a widely watched gauge against a basket of major peers — was down about 9.6%–9.9% year to date, putting it on track for its worst annual performance since 2003 (and its biggest fall since 2017, depending on final levels).
A two-act year: sharp H1 drop, then consolidation. Strategists and market pricing broadly framed 2025 as a “two-act” story: an early, forceful dollar selloff followed by a choppy second-half pause. MUFG, for example, noted the bulk of the decline occurred in the first half (with a modest rebound/consolidation in the second half), a pattern consistent with a market that moved aggressively to reprice U.S. relative growth and rate advantages before turning more selective.
The core drivers: rates, policy credibility, and global risk appetite. Several forces combined to pressure the greenback:
•Rate expectations turned against the dollar. Even with pockets of strong U.S. data (including a notably firm Q3 GDP reading that briefly supported the currency), markets increasingly priced a more dovish Federal Reserve path into 2026, eroding the dollar’s yield support.
• Fed independence became an FX variable. Late-year commentary highlighted that investor unease about political influence and monetary-policy uncertainty weighed on the dollar alongside shifting rate differentials.
• “Risk” currencies improved as the dollar weakened. As global risk appetite recovered at points—and as the U.S. rate premium narrowed—higher-beta currencies found more support, reinforcing the dollar’s downtrend.
How dollar stacked up vs major peers. The headline of 2025 wasn’t just “dollar down” — it was who benefited most:
• Euro: the standout gainer. The euro rose more than 14% versus the dollar on the year, helped by shifting expectations around European policy and growth relative to the U.S.
• British pound: firm gains. Sterling gained over 8% in 2025, also reflecting relative-rate repricing and improved sentiment toward the UK outlook compared with earlier in the year.
• Australian and New Zealand dollars: “risk FX” rebound. The Aussie and kiwi advanced about 8.4% and 4.5%, respectively, as markets leaned into a less USD-centric rate story and a more constructive global risk backdrop.
• Japanese yen: the laggard among majors. Despite broad USD weakness, the yen’s performance was constrained by Japan’s still-cautious normalization and recurring concerns about excessive moves—keeping intervention risk in focus even late in the year.
Bottom Line: By year-end, the foreign-exchange market’s verdict was clear: 2025 was a year in which the dollar’s traditional supports — superior yields, policy clarity, and “U.S. exceptionalism” capital flows — proved less durable than investors expected. The result was a broad-based dollar retreat, led by euro strength, solid gains in sterling and select commodity/risk currencies, and a more complicated story in JPY, where domestic policy and intervention dynamics kept the currency from fully capitalizing on the weaker greenback. A weaker U.S. dollar in 2025 did offer some competitive support to American agricultural exports, but that benefit was significantly muted by trade frictions and a farm trade deficit.
| AG MARKETS |
—Russia sets larger grain export quota for late season, signaling push to revive shipments
Expanded allowance from mid-February aims to lift wheat, barley and corn exports despite weak margins and currency headwinds
Russia has approved a 20-million-ton grain export quota for the latter half of the marketing season, a move that should allow the world’s largest wheat exporter to sustain a sizable presence in global markets despite a slow start to the year.
The quota applies from Feb. 15 through June 30 and covers multiple grains, including wheat, barley and corn, according to a government decree. That compares with 10.6 million tons during the same period last season, when barley and corn were excluded. Moscow is targeting 53–55 million tons of total grain exports for the full season, banking on improved shipment economics if global prices continue to firm.
Export momentum has lagged so far this year. Russian grain sales have been constrained by low global prices and a strong ruble, squeezing margins. Wheat exports in the opening months of the season are running about 30% below last year’s pace, highlighting the pressure on traders.
Russia has relied on export quotas since 2020, making the mechanism permanent in 2021, with volumes adjusted annually based on harvest size and early-season shipments. Notably, 2025 has marked the lowest quota level to date for the second half—underscoring how cautious authorities have been amid sluggish flows.
Recent geopolitical risks may be shifting the backdrop. Grain and oilseed prices have edged higher this month after attacks on vessels and port infrastructure in the Black Sea region raised concerns about export reliability from both Russia and Ukraine.
Supply prospects remain robust. Earlier this month, consultancy SovEcon lifted its estimate for Russia’s 2025 grain harvest to 136.2 million tons, including 88.8 million tons of wheat. SovEcon director Andrey Sizov expects Russia to ship 15–16 million tons of wheat during the quota period, suggesting the new cap should not be a binding constraint if prices and margins improve.
—U.S. hog inventory edges higher as productivity gains offset breeding contraction
December USDA Hogs and Pigs report shows modest herd growth, record productivity, and uneven state-level shifts heading into 2026
The latest Quarterly Hogs and Pigs report from USDA’s National Agricultural Statistics Service shows the U.S. hog herd continuing to expand modestly, even as producers remain cautious about rebuilding the breeding base. As of December 1, 2025, total U.S. hog and pig inventory rose to 75.5 million head, up 1% from a year earlier and slightly higher than September levels.
Hogs & Pigs Report Comparison
| Category | USDA % of year-ago | Average Estimate % of year-ago |
| All hogs on Dec 1 | 100.6 | 99.1 |
| Kept for breeding | 99.1 | 99.1 |
| Marketed | 100.8 | 99.2 |
| Market hog inventory – under 50 lbs. | 101.0 | 98.7 |
| Market hog inventory – 50–119 lbs. | 99.1 | 98.8 |
| Market hog inventory – 120–179 lbs. | 100.6 | 99.0 |
| Market hog inventory – over 180 lbs. | 102.8 | 100.2 |
| Pig crop (Sept–Nov) | 100.4 | 98.6 |
| Pigs per litter (Sept–Nov) | 100.0 | 100.8 |
| Farrowings (Sept–Nov) | 100.3 | 97.9 |
| Farrowing intentions (Dec–Feb) | 99.6 | 101.9 |
| Farrowing intentions (Mar–May) | 100.7 | 102.0 |
National snapshot: growth driven by efficiency, not herd expansion
While overall numbers increased, the breeding herd slipped 1% year over year to 5.95 million head, signaling continued restraint among sow operators amid margin pressure and uncertainty over feed costs, disease risk, and export demand.
Growth instead came from the market hog inventory, which climbed to 69.6 million head, up 1% from 2024.
Productivity remains the dominant story. The September–November pig crop reached 35.0 million head, slightly above last year, while pigs per litter rose to 11.93, matching the highest level on record for that quarter.
USDA data show pigs per litter running at or near record levels in 2025, helping lift total hog inventories modestly higher even as the breeding herd remains flat to slightly lower — underscoring how gains in genetics, nutrition, and management are driving growth through productivity rather than sow expansion.
Looking ahead, producers intend to increase farrowings modestly in early 2026. Intended sows farrowing for December–February and March–May are both projected 2% above year-earlier levels, suggesting cautious optimism rather than aggressive expansion.
State-level dynamics: Midwest growth offsets declines elsewhere. At the state level, the data highlight continued consolidation and regional divergence.
• Iowa, the nation’s largest hog producer, increased total inventory 4% to 25.3 million head, reflecting gains in both market hog numbers and steady breeding capacity.
•Minnesota and Illinois also posted modest gains, each rising about 1% year over year, reinforcing the Upper Midwest’s role as the engine of U.S. hog production.
•Nebraska saw a 3% increase, driven largely by higher market hog inventories.
By contrast, several states registered notable declines:
• North Carolina, the second-largest hog state, saw total inventory fall 4% to 7.9 million head, continuing a multi-year pattern of contraction tied to environmental constraints and limited new investment.
• Missouri declined 3%) and Pennsylvania (down 7%), while Texas slipped 3%, reflecting broader pressures on smaller or less-integrated production regions.
The report also shows a growing share of hogs under contract. Operations with more than 5,000 head now account for 52% of total U.S. inventory, up 2 percentage points from last year, reinforcing the trend toward large-scale, vertically coordinated production.
Market implications: steady supplies, limited downside risk
From a market perspective, the data point to ample but not burdensome pork supplies heading into 2026. The modest herd increase, combined with record pigs per litter, suggests slaughter levels will remain strong, but the lack of breeding herd expansion limits the risk of a sharp supply surge.
For producers, this balance may help stabilize hog prices — especially if export demand improves or domestic consumption remains resilient. For packers, the data signal continued throughput strength, particularly in the Midwest, where most incremental production is concentrated.
Overall, the December report paints a picture of an industry growing carefully, leaning heavily on productivity gains rather than herd rebuilding, and increasingly shaped by regional concentration and large-scale operations — a dynamic likely to define the U.S. hog sector well into 2026.
—Wheat extends run as Black Sea strikes and U.S. dryness tighten outlook
Geopolitical risks around Ukraine and Russia, alongside emerging weather stress in U.S. wheat belts, underpin the longest rally since spring
Chicago wheat futures climbed for a fifth straight session, setting up their longest rally since April as traders weighed mounting supply risks from the Black Sea and worsening weather conditions in key U.S. growing regions, according to Bloomberg.
The latest support came after Russian missile and drone attacks struck targets across Ukraine on Tuesday, damaging energy and port infrastructure in the Odesa region along the Black Sea and causing civilian casualties, Ukrainian officials said. The attacks add to a recent pattern of strikes affecting infrastructure in both Ukraine and Russia, two of the world’s most important exporters of grains and edible oils. Any sustained disruption to ports or logistics in the region raises the risk of tighter global wheat supplies.
Weather concerns are also building in the United States. Forecaster Vaisala said dryness is intensifying across northern and southern U.S. wheat areas, with conditions expected to persist through the week. USDA echoed those concerns, noting “dry weather accompanies record-setting warmth across the central and southern Plains,” a combination that threatens soil moisture levels as crops head deeper into winter dormancy.
—Agriculture markets yesterday:
| Commodity | Contract Month | Close Dec. 23 | Change vs Dec. 22 |
| Corn | March | $4.47 1/2 | +0.5¢ |
| Soybeans | January | $10.51 1/2 | -1.75¢ |
| Soybean Meal | January | $301.10 | +$2.50 |
| Soybean Oil | January | 48.30¢ | -0.25¢ |
| Wheat (SRW) | March | $5.17 | +1.5¢ |
| Wheat (HRW) | March | $5.28 | +6.75¢ |
| Spring Wheat | March | $5.80 1/4 | +0.25¢ |
| Cotton | March | 64.01¢ | +0.40¢ |
| Live Cattle | February | $230.00 | -$1.425 |
| Feeder Cattle | January | $344.625 | -$1.875 |
| Lean Hogs | February | $85.975 | +0.625¢ |
| ENERGY MARKETS & POLICY |
—Wednesday: Oil extends rally on growth and geopolitics, but faces worst annual drop since 2020
Prices rose for a sixth straight session as strong U.S. economic data and supply risks from Venezuela and Russia offered near-term support, even as markets remain on track for their steepest yearly losses since the pandemic
Oil prices edged higher Wednesday, extending a late-December rebound driven by resilient U.S. growth and escalating geopolitical risks. Brent crude climbed 16 cents, 0.3%, to $62.54 a barrel, while U.S. West Texas Intermediate gained 23 cents, 0.4%, to $58.61. Both benchmarks have risen about 6% since plunging to near five-year lows on Dec. 16.
Analysts attributed the move to thin holiday trading, position-squaring after last week’s selloff failed to gain traction, and renewed supply concerns. Support was reinforced by U.S. data showing the economy expanded at its fastest pace in two years in the third quarter, fueled by robust consumer spending and a rebound in exports—lifting near-term demand expectations.
Geopolitics remained a key pillar. Disruptions to Venezuelan exports intensified after the U.S. seized a sanctioned supertanker earlier this month and targeted additional vessels over the weekend. More than a dozen loaded ships are reportedly waiting offshore for new instructions, raising the risk of production shut-ins as storage tightens. Ongoing attacks on energy infrastructure tied to the Russia-Ukraine conflict also added a risk premium.
Despite the recent rally, the broader picture remains bearish for 2025. Brent and WTI are on pace to fall roughly 16% and 18% this year, respectively — their steepest annual declines since 2020 — reflecting expectations that global supply will continue to outpace demand.
On the data front, U.S. crude inventories rose by 2.39 million barrels last week, according to industry estimates, alongside increases in gasoline and distillate stocks. Official figures from the U.S. Energy Information Administration are due Monday, delayed by the Christmas holiday.
—Tuesday: Oil prices edged higher as growth optimism offsets supply risks
Stronger U.S. economic data underpins demand outlook, while Venezuela and Russia tensions keep supply concerns in focus
Oil prices settled modestly higher as markets balanced upbeat U.S. growth signals against rising geopolitical risks to supply. Brent crude gained 31 cents, 0.5%, to $62.38 a barrel, while WTI rose 37 cents, 0.6%, to $58.38. The advance extended Monday’s rally, when Brent logged its biggest daily gain in two months and WTI posted its strongest move since mid-November.
Support came from stronger-than-expected U.S. economic growth in the third quarter, driven by resilient consumer spending, which bolstered demand expectations. Meanwhile, investors weighed whether sustained economic strength could keep the Federal Reserve cautious on rate cuts. Other indicators were mixed, with consumer confidence weakening in December and factory output flat in November.
Geopolitical risks remained a key pillar of support. Concerns over Venezuelan supply disruptions persisted after the U.S. moved to blockade sanctioned oil tankers, slowing loadings and raising the risk of production shut-ins as storage tightens. Meanwhile, renewed attacks around the Black Sea heightened uncertainty over Russian exports, with strikes damaging port infrastructure and vessels and underscoring ongoing risks to maritime oil flows.
Looking ahead, analysts still expect ample global supply in early 2026. However, they caution that prolonged disruptions tied to Venezuela or Russia could erode the projected surplus later in the year, keeping prices sensitive to geopolitical developments.
| TRADE POLICY |
—U.S. delays China chip tariffs, signaling a tactical pause in trade tensions
Trump administration sets June 2027 start date for semiconductor duties while keeping tariffs at zero for the next 18 months
The Trump administration has pushed back planned tariffs on Chinese semiconductor imports, setting June 2027 as the new target date while keeping the duty rate at zero for at least the next 18 months, according to a Federal Register filing released by the Office of the U.S. Trade Representative.
The filing stems from a USTR investigation launched roughly a year ago that concluded China is engaging in unfair trade practices in the semiconductor sector, including state-backed subsidies and policies that disadvantage foreign competitors. While the investigation laid the legal groundwork for tariffs, the delayed implementation underscores a strategic choice by the Trump administration to slow escalation rather than immediately impose new trade barriers.
Cooling trade frictions — for now. The decision effectively grants a temporary reprieve to U.S. chip users and global supply chains that rely on Chinese-made semiconductors, particularly in lower-end and legacy chips used in autos, industrial equipment, and consumer electronics. By keeping tariffs at zero through at least late 2026, the administration avoids adding near-term cost pressure to inflation-sensitive sectors while preserving leverage for future negotiations.
Trade analysts view the delay as consistent with a broader pattern in Trump administration trade policy: aggressive use of investigations and tariff authority, paired with selective timing aimed at maximizing negotiating leverage rather than triggering immediate retaliation. The move may also reflect concern about compounding costs for U.S. manufacturers already navigating higher input prices, reshoring efforts, and uncertainty over global chip supply.
Strategic leverage ahead of 2027. By locking in a future tariff date, the administration signals that the issue remains unresolved and that duties could still be imposed if China fails to address U.S. concerns. The June 2027 timeline also creates a long runway for diplomatic engagement, industry adjustment, and potential coordination with allies that share concerns about China’s semiconductor industrial policies.
For China, the delay offers short-term relief but little clarity beyond 2026. For U.S. policymakers, it preserves the option to escalate later — potentially aligning chip tariffs with broader trade or national security negotiations.
In short, the tariff delay does not mark a retreat from enforcement, but rather a calibrated pause — keeping pressure on Beijing while avoiding an immediate flare-up in U.S./China trade tensions.
| TRANSPORTATION & LOGISTICS |
—China shipping push threatens Panama Canal ports sale
Cosco’s demand for control raises political, regulatory, and geopolitical risks for BlackRock-MSC consortium
A proposed deal to acquire key port assets at the Panama Canal is in jeopardy after China’s state-owned shipping giant COSCO Shipping demanded a majority stake, a move that has heightened political sensitivities and raised the prospect that Western bidders could walk away, according to reporting by the Financial Times.
The transaction centers on the potential sale of port terminals at the Panama Canal currently owned by CK Hutchison Holdings, assets viewed as strategically critical given their role in global trade flows between the Atlantic and Pacific. A consortium led by BlackRock and **Mediterranean Shipping Company (MSC) has been in talks to acquire the ports, but those discussions have become strained as COSCO Shipping pushes for a controlling position.
Why Cosco’s demand matters. According to the FT, Cosco’s insistence on majority ownership has fundamentally altered the deal’s risk profile. A Chinese-controlled stake in Panama Canal ports would likely trigger intense scrutiny from U.S. policymakers and regulators, who already view Chinese influence over global maritime infrastructure as a national-security concern. The canal is a vital artery for U.S. agricultural exports, energy shipments, and containerized trade, making ownership issues especially sensitive in Washington.
For BlackRock and MSC, accepting a minority position alongside a Chinese state-owned firm could expose the consortium to political backlash, reputational risk, and potential regulatory delays — factors that may outweigh the commercial upside of the investment.
Geopolitics collides with infrastructure finance. The episode underscores how geopolitics is increasingly shaping infrastructure transactions. While the ports are commercially attractive—handling a significant share of canal-linked container traffic — the strategic nature of the assets means buyers are judged not just on price, but on nationality, governance, and perceived alignment with Western security interests.
Financial Times reporting notes that the BlackRock-MSC group is now weighing whether to continue negotiations at all if Cosco maintains its demand for control. Walking away would mark a rare public breakdown in a mega-infrastructure deal driven less by valuation gaps than by geopolitical red lines.
Implications beyond Panama. A collapse of the talks would reverberate beyond the canal. It would reinforce the growing divide between Western capital and Chinese state-owned enterprises in global ports and logistics, and signal that even private-sector investors face limits when deals intersect with strategic chokepoints.
For global shipping and commodity markets — including U.S. agriculture that relies heavily on canal transits — the uncertainty highlights how ownership disputes can translate into longer-term questions about access, governance, and political leverage over critical trade corridors.
| LABOR & IMMIGRATION POLICY |
—Trump administration overhauls H-1B visa lottery to favor higher-paid workers
New wage-weighted selection system replaces random draw ahead of 2026 filing season, intensifying legal and policy debates over skilled immigration
The Trump administration has finalized a rule eliminating the random lottery used to award H-1B visas, replacing it with a wage-weighted selection process designed to favor higher-paid foreign workers. The rule, released Tuesday, takes effect Feb. 27, ensuring it will govern the upcoming spring filing season for the specialty occupation visas heavily used by the tech sector.
Under the new framework, the annual cap of 85,000 H-1B visas — including 20,000 reserved for advanced degree holders — will no longer be allocated by chance. Instead, applicants will receive multiple entries in the selection pool based on their assigned Department of Labor wage level: four entries for the highest wage level, three for the next, two for the third, and just one for the lowest.
Administration officials argue the shift better aligns with congressional intent. USCIS spokesman Matthew Tragesser said the “weighted selection will better serve Congress’ intent for the H-1B program and strengthen America’s competitiveness by incentivizing American employers to petition for higher-paid, higher-skilled foreign workers.”
The rule largely mirrors a draft issued in September, despite pushback from employer groups and think tanks. Critics warned that wage levels reflect relative seniority within an occupation, not actual pay, meaning many well-compensated H-1B workers could still fall into lower wage tiers and face reduced odds. The Department of Homeland Security countered that the rule is neutral across industries and employers.
The change is part of a broader Trump administration effort to tighten the H-1B program, including a controversial $100,000 fee on H-1B workers hired from outside the U.S. — a measure already facing multiple legal challenges. Together, the moves signal a sharper emphasis on restricting visas for lower-paid roles while prioritizing what the administration views as the most economically valuable foreign labor.
| WEATHER |
— NWS outlook: There is a High Risk of excessive rainfall over parts of Southern
California on Wednesday… …Moderate to heavy snow over the Northeast and Sierra Nevada Mountains… …Rain/freezing rain possible over the Pennsylvania and Great Lakes.
