'No consensus on anything' as new Covid-19 aid talks break no new ground
In Today’s Updates
* Fed warns resurgence of virus threatens economic recovery
* 'No consensus on anything' as new Covid-19 aid talks break no new ground
* U.S. releases its second-quarter GDP figures
* Germany’s economy plunged into a record slump in the second quarter
* Rally in U.S. lumber futures continues
* Former USDA Sec. John Block on this year's U.S. corn and soybean crops
* Ethanol lobbyists frustrated by lack of specifics for industry aid in Senate plan
* Hearing witnesses: U.S. needs to be actively engaged in negotiating WTO changes
* Corn prices in China are climbing
* Reuters: China needs 'explosive' buying to meet U.S. farm import target
* Bloomberg: China has amassed $1 billion glut of U.S. cotton it doesn't need
* WTO to appoint an arbitrator to rule on U.S./China trade clash
* Texas university in FBI probe over 'Chinese efforts to obtain research'
* Southern water crisis in China
U.S. food & beverage industry update:
* Fast-food restaurants are responding to changing consumer tastes
Update on reopening America... and around the world:
* American Federation of Teacher will support local chapters that decide to strike
* NBA returns
* EU updates its safe-country travel list
* Brazil registered a record number of cases and deaths
* Vietnam is battling a small but growing outbreak
* Rep. Louie Gohmert (R-Texas) tested positive for the coronavirus
* Russia plans to register a coronavirus vaccine as soon as August 10
* Wrinkle in stores’ mask policies: enforcement
Politics & Elections:
* Ballotpedia reviews Senate race to replace retiring Sen. Pat Roberts (R-Kan.)
* Impact of excluding undocumented immigrants from 2020 U.S. House apportionment
* What keep's Barack Obama up at night?
Other Items of Note:
* U.S. announces plans to withdraw about 12,000 troops from Germany
* House clears WRDA Act of 2020
* USDA continues investigating "mystery seed packets" from China
* Perdue: EU’s Green Deal climate plan could lower chances of U.S./EU trade deal
* Update on rail antitrust exclusion
* Existing Keystone pipeline can carry more oil-sands crude into the Midwest
* Indonesia signals move to B40 biodiesel back on track
* Big tech officials during hearing told they have 'too much power'
Equities today: Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are pointed toward lower openings. Traders are now focusing on why the Federal Reserve is keeping policies steady and the answer to that is linked to Covid-19 cases. White House Chief of Staff Mark Meadows said the White House and Democrats were "nowhere close" on a stimulus deal. Q2 GDP figures today will likely show an annualized contraction of nearly 35% quarter, while the latest weekly unemployment claims are also expected to show an increase to 1.45 million, before enhanced federal benefits expire on Saturday.
U.S. equities yesterday: The Dow rose 160.29 points, 0.61%, to 26,539.57. The S&P 500 increased 40 points, 1.24%, to 3,258.44. The Nasdaq added 140.85 points, 1.35%, to 10,542.94.
On tap today:
• USDA Weekly Export Sales, 8:30 a.m. ET
• U.S. gross domestic product for the second quarter is expected to fall at a 34.7% pace from the prior quarter. (8:30 a.m. ET) Data is expected to show the U.S. economy contracted by 35% on an annualized basis in the second quarter, the steepest decline on record, due to Covid-19 lockdowns.
• U.S. jobless claims for the week ending July 25 are expected to tick up to 1.45 million from 1.416 million a week earlier. (8:30 a.m. ET) Economists surveyed by Bloomberg expect today's weekly initial jobless claims to be around 1.4 million, in line with last week's total which was the first rise in since March.
• Japan's preliminary industrial production report for June is out at 7:50 p.m. ET.
• China's official manufacturing index for July is out at 9 p.m. ET.
“The current economic downturn is the most severe in our lifetimes,” Fed Chairman Jerome “Jay” Powell said during Wednesday’s news conference. He pledged the Fed would use its full range of tools to support the economy and reiterated that the course of the recovery would ultimately depend on the trajectory of the virus. After a two-day meeting on Wednesday, the Federal Open Market Committee (FOMC) made no significant changes to monetary policy, holding interest rates close to zero and pledging to do more to support the recovery if necessary.
Powell expressed fears that increases in Covid-19 infections across many U.S. states had started to hit the economy, citing “non-standard, high-frequency data” on credit card spending, employment, hotel occupancy, restaurant bookings and consumer surveys. “The pace of the recovery looks like it has slowed since the cases began that spike in June,” Powell said at a press conference following the meeting. “It’s too early to tell both how large that is and how sustained it will be. We just don’t know yet,” he added.
The Fed said it would extend emergency swap lines with some central banks until the end of the first quarter of 2021, as well as a temporary repurchase facility for international monetary authorities to swap Treasuries for dollars. “There’s nothing that’s going on in the market right now that raises any concerns, it’s just we want them to be there as a backstop for markets.”
“The path of the economy is going to depend to a very high extent on the course of the virus and on the measures that we take to keep it in check,” he said. “That is just a very fundamental fact about our economy right now. The two things are not in conflict... Social-distancing measures and fast reopening of the economy, they actually go together, they are not in competition with each other,” Powell added.
While the economy is expected to grow in the third quarter — possibly at a record pace — a surge in virus infections that started in mid-June appears to be slowing the recovery in some states. That's reflected in the labor market. The U.S. Census Bureau said in its latest weekly Household Pulse Survey that 51.1% of households experienced a loss of employment income in the week ended July 21, up from 48.3% four weeks ago.
Germany’s economy plunged into a record slump in the second quarter, when virus restrictions slammed businesses and households across Europe. Output fell 10.1%, the most since the quarterly series began in 1970, with declines in exports, consumer spending and investment. While survey indicators signal a recent return to growth, higher unemployment remains a risk, which would threaten the recovery.
• Gold prices settled Wednesday at another all-time high. Gold for July delivery, the front month futures contract, gained 0.5% to $1953.50, rising for nine consecutive days.
• Rally in U.S. lumber futures continues. Lumber for September delivery jumped by the exchange maximum $19, or 3.35% to $585.90 per 1,000 board feet, on the Chicago Mercantile Exchange on Wednesday. September lumber settled $566.90 per 1,000 board feet in the previous trading session. September futures expire Sept. 15, 2020. Lumber futures have more than doubled since early April. While lockdowns and stay-in-place restrictions were expected to curb demand for building materials, North Americans stuck inside decided to spend money and renovate their homes just as aggressive production cuts tightened supplies.
• Former USDA Sec. John Block sums up the U.S. corn and soybean crops. He writes, “All reports from the heartland tell us that this year’s crops look good. Corn and soybeans on my farm are as good as I can remember. However, they are not ready to harvest. A hot dry August could do some serious damage.”
• Crude oil edged higher in Asian action after modest gains in Wednesday U.S. trade, with U.S. crude up two cents at $41.29 per barrel and Brent up seven cents at $44.16 per barrel. But futures have fallen as the U.S. trading starts gets closer, with U.S. crude down more than 2% to trade around $40.35 per barrel and Brent crude down 1.8% to trade around $43.30 per barrel.
NASA launches its new Mars rover. Car-sized Perseverance is set to lift off from Florida and spend the next few years exploring and looking for signs of life on Jezero, an area of the Red Planet that once had a lake and a river delta.
For those of you who remember the 1960s... The Danish pianist and composer Bent Fabric (real name Bent Fabricius-Bjerre) wrote music for movies, television, theater and ballet, but was perhaps best known for Alley Cat, a piano tune that took the world by storm in 1962. Fabric died at 95. Link to song.
— Update on next aid package:
- Impasse remains on several new aid issues. "We're still very far apart on a lot of issues," Treasury Secretary Steven Mnuchin said after leaving an hour-long meeting in House Speaker Nancy Pelosi's (D-Calif.) office Wednesday afternoon. "I do think there is a subset of issues that we do agree on, but overall we’re far from an agreement." Mnuchin said there are areas like a second round of Paycheck Protection Program forgivable loans, education funding to help schools safely reopen and worker retention tax credits for hard-hit businesses where the two sides can come together. They will have a more challenging time negotiating a compromise on unemployment insurance, state and local assistance and liability protections for businesses, Mnuchin said.
- The Senate will not pass a coronavirus relief bill that does not have liability shields for businesses and universities, Majority Leader Mitch McConnell (R-Ky.) told CNBC. McConnell said the GOP was "not negotiating over liability protection," but he added the party was open to compromise with Democrats on other issues. Senate Republicans released their roughly $1 trillion legislative proposal on Monday.
- Democrats were unified in their opposition to a slimmed down package offered by some Republicans and apparently favored by President Trump. Mnuchin said time was running short and it might make sense to pivot to areas both sides can agree on. "We're looking at a deadline obviously of this Friday. The president's very focused on evictions and unemployment, and if we can't reach an agreement by then, the president wants to look at giving us more time to negotiate this," Mnuchin said
“We don’t know why the Republicans come around here with a skinny bill that does nothing to address really what’s happening with the virus,” Pelosi said after a meeting. “We're not accepting that. We have to have the comprehensive full bill.” Senate Majority Leader Chuck Schumer (D-N.Y.) argued there are too many urgent problems caused by the virus to only address one or two. “This is the greatest economic crisis we've had in 75 years, the greatest health care crisis in 100 years, and our Republican friends don’t come close to meeting the moment,” Schumer said. Pelosi pointed to comments made earlier in the day by Federal Reserve Chairman Jerome Powell, who said the “current economic downturn is the most severe in our lifetimes.”
— Biofuel/ethanol lobbyists again frustrated, this time by a lack of specifics for industry aid in Senate relief package. Renewable Fuels Association President and CEO Geoff Cooper said the Senate language isn’t clear on how or whether ethanol producers would benefit from being included as “agricultural processors” in the GOP bill’s agriculture relief provisions released Monday. “What is clear is that USDA is seeking unambiguous direction from Congress with regard to distributing assistance for ethanol producers,” Cooper said in a statement.
American Coalition for Ethanol (ACE) CEO Brian Jennings said that while he believes ethanol producers would be considered “processors” under the Republican proposal, Congress needs to be more specific because the bill so far “still leaves discretion to USDA, which has so far failed to use the authority to support our industry.” Jennings earlier this week noted that, “As I stated in my recent letter (link) to Senators McConnell and Schumer, direct aid for biofuel producers is long overdue. That is why we support and urged inclusion of the Grassley-Klobuchar bill which makes direct assistance certain. Ethanol producers have acted as an economic bridge for U.S. farmers when they purchased corn before the extent of the pandemic was known. It is only fair to aid the ethanol industry which has fronted cash to farm economies.”
— The U.S. needs to be actively engaged in negotiating changes to the World Trade Organization (WTO) to make the multinational institution an effective arbitrator on trade for the 21st century, witnesses told the Senate Finance Committee Wednesday. Five witnesses said the U.S. had generally fared well as a WTO founder and member, but they said the institution had been unable to adapt to a membership that includes free-market nations like the U.S. and economies like China that rely heavily on state-owned enterprises and which critics say isn't based on free markets. Link to hearing testimony and other details.
Many see the key problem as an inability to force China to adhere to membership terms to follow free-market principles, remove trade barriers, give foreign businesses equal footing with Chinese firms and protect intellectual property rights.
Problems with the WTO's appellate body. Jennifer Hillman, senior fellow for trade and international political economy at the Council on Foreign Relations, and Thomas R. Graham, partner at law firm Cassidy Levy Kent, agreed with U.S. officials that the WTO's appellate body frequently exceeded its authority with decisions that went beyond narrow legal issues raised in a case and set new precedent. Negotiations could lead to new rules limiting the body’s scope of power. Hillman suggested the U.S. could pursue talks to establish a separate dispute process at the WTO for reviewing challenges to a country’s anti-dumping and countervailing enforcement decisions or provide general guidance that defers to a country’s trade enforcement actions if it uses a fact-based process.
“Paralyzing the dispute settlement procedure would be a real loss to the global trading system,” Dr. Joe Glauber said. Glauber, former top USDA economist and now a senior research fellow with the International Food Policy Research Institute, added: “Beyond the immediate halt of proceedings, failure to make appointments could come at considerable costs to members’ long-term objectives and the stability of the multilateral trading system. The food system is one critical place where consequences could land: Disputes over food products that escalate or cause damage to the multilateral system could potentially have human costs for countries that rely on food trade, exacerbating hunger and hurting food producers’ income opportunities. To avoid such economic and human costs, it is critical that WTO members find a resolution to the current Appellate Body crisis.”
Senate Finance Chairman Chuck Grassley (R-Iowa) said U.S. agriculture has generally benefited from global rules enforced by the WTO that reduced protectionism limiting market access. But he said he was frustrated with WTO rules that allow China, the second largest economy in the world, and India, an emerging economic power, to claim developing nation status. He ranked the revival of the appellate body as a secondary priority. The first priority to getting the WTO on track should be a renewed focus on the institution producing trade agreements among its 164 members.
Sen. Rob Portman (R-Ohio) said a resolution (SRes 651) he and Sen. Benjamin L. Cardin (D-Md.) introduced lays out the need for the organization but also offers suggestions for changes such as restoring the ability of WTO members to use safeguards and other methods to respond to China’s nonmarket trade practices. Portman asked for a hearing on the proposal and a markup in the fall. Grassley said he would consider the hearing request but needed to look at the calendar.
— Update on China:
- Corn prices in China are climbing. As China’s formerly bloated stockpiles shrink, prices have climbed to a five-year high. Since January, front-month corn futures on the Dalian Commodity Exchange have risen 27% to about 2,306 yuan ($329) a metric ton, a level last seen in the summer of 2015. In good news for American farmers, the price increase comes as China steps up its imports of U.S. corn and grains in the first phase of a trade deal signed with the Trump administration earlier this year. “China is going to have to buy more grains, and the trade deal with the U.S. shoehorns that demand toward the U.S.,” said Tobin Gorey, agri-strategy director at Commonwealth Bank of Australia. That is providing some support to U.S. prices, he added, though not enough to overcome the effect of the looming large new crop. Link to details via a Wall Street Journal report.
- China needs 'explosive' buying to meet U.S. farm import target: Reuters. “With nearly seven months gone, an ambitious $36.5 billion target for Chinese imports of U.S. farm goods this year may not be quite out of reach, but it's looking like a big, big stretch,” says a Reuters article. “By end-May, imports were running behind 2017 levels — rather than 50% ahead as needed — and while orders for China's main farm import, soybeans, have started to pick up, scorching levels of buying would be needed to hit the mark.” Link for details.
By the end of the first half of this year, China had bought about 23% of the total purchase target of more than $170 billion for goods in 2020, according to Bloomberg, which based its calculations on Chinese Customs Administration data. While trade has increased over the past eight weeks, with Chinese companies booking more than $2.5 billion in U.S. soy purchases, imports really have to speed up in the second half of 2020 to hit trade deal goals. China may still not violate the deal if it misses the target due to the coronavirus (the trade pact grants flexibility in the event of "a natural disaster or other unforeseeable event").
- Bloomberg: China has amassed $1 billion glut of U.S. cotton it doesn't need. “Recent Chinese purchases have not been correlated with downstream demand,” said Jon Devine, chief economist for Cary, North Carolina-based researcher Cotton Inc. “Much of that cotton is believed to be destined for the Chinese reserve system. If it moves into storage, it can be used against future demand and offset future purchases.” With many clothing stores shuttered, China has little need for such large volumes of the crop. While China is buying up U.S. cotton at the highest rate since 2013, global consumption is expected to decline by 23 million bales, the steepest drop on record, according to USDA estimates. Link to Bloomberg article for details.
- WTO to appoint an arbitrator to rule on a U.S. request to slap retaliatory duties on $1.3 billion worth of Chinese goods in a dispute over China’s subsidies for wheat, corn and rice producers, a WTO official said on Wednesday. Washington says Beijing hasn’t complied with a 2019 WTO ruling against Chinese agricultural support programs in a case brought late in the Obama administration in 2016. China did not appeal the decision, and the U.S. agreed to give Beijing until the end of June 2020 to comply.
- U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link.
- Texas university in FBI probe over 'Chinese efforts to obtain research'. An American university whose work has contributed to some promising Covid-19 vaccine candidates has been contacted by the FBI over allegations that the Chinese consulate in Houston had sought to obtain such research, the South China Morning Post has learned. Link for details.
- Southern water crisis in China. Torrential rains are still battering southern China, causing the Yangtze River to rise again this week. Devastating flooding in the south this summer has displaced 3.7 million people and caused economic damage. More remote rural residents have seen little of the emergency funds released by the central government. China’s extensive dam-building programs, meanwhile, have left downriver Mekong nations seeing record water lows.
— Food and beverage industry update:
- Mondelez reported adjusted quarterly profit of 63 cents per share, 7 cents above estimates, with the snack maker's revenue slightly above Wall Street forecasts. Strong demand for its snacks in North America helped offset other declines, and Mondelez also announced an 11% dividend increase.
- Fast-food restaurants are responding to changing consumer tastes during the coronavirus pandemic in ways that have boosted profits at some chains to where they were before the health crisis or even higher, the Wall Street Journal reports (link). Some restaurants are focusing on expanding their takeout and drive-through businesses, while others are betting on delivery services. Many fast-food chains brought down staffing levels and cleaning costs by closing their dining rooms and aren’t in a rush to reopen them.
— Update on reopening America... and around the world:
- American Federation of Teachers, one of the largest teachers' unions in the U.S., will support any of its local chapters that decide to strike if they feel school reopening plans are not safe enough. The federation, which represents 1.7 million school employees, said in its Tuesday resolution that striking should be the last option, but it called for reopening plans to include social distancing measures and mask requirements. It also said buildings should only reopen in places where coronavirus transmission rates are low. Details in USA Today.
- The NBA returns. The 2020-21 season finally resumes in the league’s Disney World bubble, with the Utah Jazz facing the New Orleans Pelicans. There will be up to seven games a day, and although there is a barbershop and a lake for fishing, players can’t go on the rides in their downtime.
- The EU updated its safe-country travel list. Visitors from the U.S. still won’t be allowed in. New countries added to the list include Australia and Canada, while China’s inclusion rests on reciprocal access being granted to Europeans.
— Coronavirus update:
- Summary: Source: Johns Hopkins University as of 7:00 a.m. ET.
— 17,053,700: Confirmed cases world-wide, and 584,556 deaths
— 70,776: New U.S. cases recorded yesterday
— 4,427,493: Total confirmed cases in the U.S.
— 1,403: Deaths in the U.S. recorded yesterday
— 150,716: Total U.S. deaths
— 53,825,445: Tests conducted in the U.S.
The U.S. coronavirus death toll topped 150,000, the highest official toll in the world. Texas, Florida and California reported record daily fatalities.
Link to Covid Case Tracker
Link to Our World in Data
- Brazil registered a record number of cases and deaths after days of reported issues with the transfer of the data from local governments into the national system. The Latin American country added 69,074 cases on Wednesday, pushing the total number of infections to over 2.55 million.
- Vietnam is battling a small but growing outbreak after going months without a single confirmed case of local transmission.
- Rep. Louie Gohmert (R-Texas), who has frequently refused to wear a mask, has tested positive for the coronavirus. Gohmert has been actively participating in hearings this week. In a video recorded in his office after the diagnosis, Gohmert said he had probably gotten the “Wuhan virus” because he had occasionally worn a mask. House Speaker Nancy Pelosi (D-Calif.) responded by requiring lawmakers and staff members to wear masks on the House floor, on penalty of removal.
House Natural Resources Committee Chairman Raul Grijalva (D-Ariz.) announced he was self-quarantining after close contact with Gohmert, labeling Gohmert as being "selfish."
- Russia plans to register a coronavirus vaccine as soon as August 10, clearing the way for what its backers say would be the world’s first official approval of an inoculation against the virus.
- A wrinkle in stores’ mask policies: enforcement. Several large retailers have said that all customers must wear masks, but some employees have been told they cannot force those who refuse. Link to New York Times article.
POLITICS & ELECTIONS
— 2020 Presidential Election Interactive Map
— The Green Papers
- Ballotpedia takes a look at Senate race to replace retiring Sen. Pat Roberts (R-Kan.). Here is how Ballotpedia sums up the candidates:
“Eleven candidates are running. Incumbent Pat Roberts (R), who was first elected in 1996, is not seeking re-election. The last time Kansas had an open Senate seat was in 2010. Bob Hamilton, Kris Kobach, and Roger Marshall have led the candidate field in endorsements, fundraising, and media coverage. On July 21, Marshall was endorsed by Roberts. Kobach has received the support of former U.S. Sen. Jim DeMint (R-S.C.).
“Hamilton, a former plumbing business owner, says he is a political outsider who will bring his business savvy to Washington. He says he will be a citizen legislator who will work to limit lobbyists' influence.
“Kobach, who served as Kansas Secretary of State between 2011 and 2019 and was the Republican nominee for governor in 2018, says he is ‘committed to restoring the Constitution to the Founders’ intent, limiting the size of government and solving the humanitarian crisis at the border.’"
“Marshall currently represents Kansas' 1st Congressional District, having first won election in 2016. He says he has a record of accomplishments in the House including sitting on the Agriculture Committee, ensuring that protections for crop insurance were included in the Farm Bill, and passing a bill to reduce tax rates. Marshall has received endorsements from Roberts and 1996 presidential candidate Bob Dole (R-Kan.).”
- Saboto's Crystal Ball takes a look at excluding undocumented immigrants from the 2020 U.S. House apportionment. President Trump recently indicated that he wants the 2020 census reapportionment of House seats to exclude undocumented immigrants from the calculation. If undocumented immigrants are excluded, the 2020 reapportionment calculation will change, including changing the number of House seats allocated to the two largest states, California and Texas. “There are significant legal and logistical hurdles that probably will prevent undocumented immigrants from being excluded from congressional reapportionment calculations,” the election publication notes. Link for details.
- What keep's Barack Obama up at night? The New York Times reports that at an event this week with the actor George Clooney, an attendee asked Obama what kept him up at night these days. His answer: fears of voter suppression and a potential effort by Trump to question the election’s legitimacy. In private fund-raisers for Joe Biden, Obama has unloaded on President Trump, bringing up accusations of sexual assault and warning about Trump’s efforts to push “nativist, racist, sexist” fears and resentments.
OTHER ITEMS OF NOTE
- The U.S. announced plans to withdraw about 12,000 troops from Germany. President Trump said Germany has “taken advantage of us for many years. We don’t want to be the suckers anymore,” he added. Trump has long said Germany and other partners in the North Atlantic Treaty Organization (NATO) should ramp up efforts to meet the alliance’s goal that all members spend at least 2% of gross domestic product on defense. A U.S. official said the process, which would leave about 24,000 forces in Germany, would probably take years. Of the approximately 12,000 troops, 6,400 will be returning to the U.S., while the remainder will be sent to other countries in Europe — some soldiers will go to Belgium and Italy, others possibly to Poland and the Baltic republics, but more than half will return to America.
If November’s presidential election brings the Democrats to power, it may not happen at all: Joe Biden’s campaign has promised to review the decision if he wins.
- House clears inland waterway funding legislation. The Water Resources Development Act (WRDA) of 2020, passed the House by voice vote Wednesday. It would increase the federal government’s cost-share for inland waterways projects to 65%, with the rest coming from the Inland Waterways Trust Fund — construction and rehabilitation of inland waterways would get 35% of their funding from the Inland Waterways Trust Fund, a fund paid for via fuel taxes from commercial barges, with the rest coming from the general fund. The ratio is currently an even split. The Trump administration released a statement of administration policy arguing that the trust fund should continue to pay for 50% of investments into inland waterways. “Reducing the users’ share of the cost of capital projects would result in the taxpayer paying for nearly all of the cost that the Corps incurs to support commercial navigation on the inland waterways,” the statement read. “The Administration believes beneficiaries should pay their fair share.” Despite that and other concerns, the administration indicated it could support the bill with some adjustments.
The measure would release nearly $10 billion in unspent dollars in the Harbor Maintenance Trust Fund. It would authorize the construction of some 34 new corps' projects and 36 feasibility studies, and directs the corps to expedite the completion of 41 studies.
The Senate Environment and Public Works Committee approved its WRDA bill May 6. That bill (S 3591) would authorize $17 billion for water storage, floodwater protection, dredging ports, repairing aging wastewater and irrigation systems and maintaining the navigability of inland waterways. The Senate bill sets a two-year goal for the corps to complete feasibility studies for potential projects, reauthorizes the Clean Water State Revolving Loan Fund at increased levels and bolsters water storage in the West while building new flood management infrastructure in the Midwest. The Senate bill has yet to be scheduled for a floor vote.
- USDA continues investigating "mystery seed packets" from China. USDA’s preliminary analysis of seeds received so far has identified both horticultural and weed seeds, according to state agricultural officials briefed on the findings. Some state agricultural departments, which are conducting their own analyses, have had similar results, identifying everything from cucumber and cantaloupe seeds to grasses, gourds and wildflowers. The Federal Bureau of Investigation is also looking into the seed shipments, state agricultural commissioners said. USDA's Animal and Plant Health Service has released its initial analysis of the letters containing seeds that Americans have been receiving from China. “At this time, we don’t have any evidence indicating this is something other than a ‘brushing scam’ where people receive unsolicited items from a seller who then posts false customer reviews to boost sales,” the statement said. APHIS’ investigation will continue.
- USDA Sec. Sonny Perdue said the EU’s Green Deal climate plan could lower the chances of reaching a U.S./EU trade deal, warning that the proposed measures would “be extremely trade prohibitive and jeopardize agricultural output.” Perdue made the comments during an online conference hosted by European Parliament members.
- Update on rail antitrust exclusion. The Justice Department weighed in on a multi-district price-fixing case against the country’s top freight railroads in D.C. federal court, arguing that the railroads are overstating the impact of a federal law making certain rate communications inadmissible as antitrust evidence. Their “expansive” proposed reading of the Staggers Act provision “would exclude critical evidence of antitrust violations, giving carriers greater protection from the antitrust laws as their schemes become more complex and multifaceted,” the government said in a statement of interest filed Tuesday.
- The Trump administration will allow the existing Keystone pipeline to carry more oil-sands crude into the Midwest and U.S. Gulf Coast while the conduit’s decade-old expansion project faces renewed legal hurdles. A White House permit issued yesterday raises the cross-border shipping limit for the TC Energy Corp. line to 760,000 barrels a day, from 590,000 under a previous presidential permit, company spokesman Terry Cunha said. The White House decision came after President Trump’s earlier approval of TC Energy’s proposed Keystone XL expansion project was hampered by a federal court decision that blocked most construction.
Meanwhile, Trump yesterday during a visit to Double Eagle Energy Holdings in Midland, Texas, signed four presidential permits for pipeline and rail infrastructure on the border. Three of the permits will allow the export of Texas crude to Mexico, one of which went to Missouri-based Kansas City Southern Railway Company. Texas-based NuStar Energy received two permits: one to operate and maintain existing pipeline border facilities, and another to construct and connect pipeline facilities. A third permit went to the Canadian-based TC Energy Corporation, to export petroleum products across the northern U.S. border. Trump also announced extensions for export authorizations for liquefied natural gas through 2050.
- Indonesia signals move to B40 biodiesel back on track. Indonesia’s plan to move the bio-content of biodiesel based on palm oil to 40% -- so-called B40 – is back on track for implementation by July 2021, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. A delay in the plan had been expected based on low crude oil prices, but the price rise has facilitated the coming action. "I am targeting the implementation of B40 .... to be carried out by July 2021," Hartarto told CNBC Indonesia. The B40 will be produced with 30% fatty acid methyl ester (FAME) and 10% “green diesel” made of palm oil and conventional diesel.
- Big tech officials during hearing told they have 'too much power'. Jeff Bezos, Tim Cook, Mark Zuckerberg and Sundar Pichai spoke via videoconference during a Wednesday hearing. It was the first time the leaders have all appeared together before Congress. Rep. David Cicilline (D-R.I.), chairman of the House Antitrust Subcommittee, kicked off the hearing by declaring: “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.” The hearing highlighted the threat the companies face from ongoing investigations by antitrust authorities, with lawmakers citing internal company emails and witness interviews as evidence that the platforms improperly abuse their dominant position. Lawmakers pointed to evidence to zero in on Amazon’s treatment of third-party sellers on its platform — who compete in some cases with Amazon’s own products — and on Facebook’s acquisition of rival Instagram eight years ago — which eliminated a potential competitor. The four executives defended their companies’ practices and said that they face stiff competition that forces them to serve customers and innovate. Bezos conceded the company may have used data about third-party sellers to inform business decisions about its own service or products. “What I can tell you is, we have a policy against using seller-specific data to aid our private-label business. But I can’t guarantee you that policy has never been violated,” he said. Cicilline is expected to issue a report recommending ways to strengthen the antitrust laws that failed to rein in the tech giants. “Many of the practices used by these companies have harmful economic effects. They discourage entrepreneurship, destroy jobs, hike costs, and degrade quality. Simply put: they have too much power,” he said.