New Covid-19 Vaccination Rules on U.S./Canada Border Have Shippers & Carriers Alarmed

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ERS report: U.S./China trade war price tag: $27 billion in lost ag export sales

 

                                                In Today’s Digital Newspaper

 

Market Focus:
• U.S. retail sales fell 1.9% in December
• USDA daily export sales:
  — 100,422 MT corn to Mexico during MY 2021-2022
  — 100,000 MT soybean meal to Spain during MY 2022-2023
• Port of L.A. defers fee plan for containers that languish
• Another Fed official warns rates may need to go higher if inflation not tamed
• Mortgage rates hit highest level since March 2020
• Electricity demand surges
• Record heat
• At least 40% of continental U.S. has gone 68 straight weeks in drought conditions  
• Ag demand update

• Followthrough selling in soybeans and wheat, corn bounces
• Russia’s wheat export tax declines for first time since late September
• Cash cattle trade mostly finished
• Hog slaughter sharply below year-ago 

Policy Focus:
• FMCSA announces apprenticeship pilot program for trucking   

Afghanistan:
• U.N. calls on U.S. and World Bank to unlock Afghan funds 

Personnel:
• FDA closer to having permanent leader
• Biden sets nominations for three Fed posts 

China Update:
• U.S./China trade war price tag: $27 billion in lost ag export sales
• China’s exports had a bumper year
• China imported fewer soybeans last year for first time since 2018
• China to release oil reserves around the Lunar New Year
• China drafts rule to cap banks’ commercial bill financing
• China’s meat imports dropped 5.4% last year 

Trade Policy:
• USMCA deputies meet, acknowledging ‘challenges’
• House lawmakers urge action against India’s wheat and rice subsidies 

Energy & Climate Change:
• Big oil companies fleeing Canada’s oil sands, but production to continue for decades 


Livestock, Food & Beverage Industry Update:
• Some U.S. supermarkets reducing hours and cutting services due to Covid cases 


Coronavirus Update:
• SCOTUS bars Biden’s inoculation rule for most workers; allows it for healthcare employees
• U.S. will procure 500 million additional at-home rapid Covid-19 tests
• Biden announces military teams in response to Omicron wave
• New Covid vaccine rules may keep U.S., Canada from trucking across border 

Politics & Elections:
• Democrats want to give federal employees a 5.1% average pay raise in 2023
• Oath Keepers leader and 10 other people charged with seditious conspiracy
• GOP Sen. Marshall plans to introduce 'Fauci Act' after doctor called him a 'moron' 

Congress:
• Dems’ voting rights plan wanes after Sens. Sinema and Manchin reject filibuster change

Other Items of Note:
• U.S./Russia stalemate
• Cotton AWP rises another week
• U.S. plans to spend more than $27 billion to repair bridges nationwide over next five years
• Illinois can go to hell?
• Feminist nuns growing weed in California 

 

MARKET FOCUS

 

Equities today: Global stock markets were mostly weaker overnight. U.S. Dow opened up almost 300 points lower. The Nasdaq after opening lower has now turned higher. Asian equities closed lower as market losses in the US Thursday weighed on investor sentiment. The Nikkei fell 364.85 points, 1.28%, at 28,124.28. The Hang Seng Index was down 46.45 points, 0.19%, at 24,383.32. European equities are under pressure in early trading with the Stoxx 600 down 0.9% and regional markets 0.2% to 1.2% lower. Major financial firms including BlackRock, Citigroup, JPMorgan Chase and Wells Fargo are set to report their quarterly results today.

     U.S. equities yesterday: The Dow closed down 176.70 points, 0.49%, at 36,113.62, unable to lift back into positive territory after a late-session decline. The Nasdaq dropped 381.58 points, 2.51%, at 14,806.81. The S&P 500 lost 67.32 points, 1.42%, at 4,659.03.

     Stocks 011322

On tap today:

     • U.S. retail sales for December are expected to fall 0.1% from the prior month. (8:30 a.m. ET) UPDATE: U.S. retail sales dropped by 1.9% in December as the Omicron variant of Covid-19 and inflation surged, damping the end of the holiday shopping season. December’s sharp decline followed record-level retail sales that started with a 1.8% gain in October from the prior month. Sales at retail stores, online and restaurants grew 16.9% in December when compared with the same month a year ago, the Commerce Department said.
     • U.S. import prices for December are expected to increase 0.2% from the prior month. (8:30 a.m. ET)
     • U.S. industrial production for December is expected to increase 0.2% from the prior month. (9:15 a.m. ET)
     • U.S. business inventories for November are expected to increase 1.2% from the prior month. (10 a.m. ET)
     • University of Michigan's preliminary consumer sentiment index for January is expected to tick down to 70 from 70.6 at the end of December. (10 a.m. ET)
     • New York Fed President John Williams speaks to the Council on Foreign Relations at 11 a.m. ET.
     • Baker Hughes rig count is out at 1 p.m. ET.
     • CFTC Commitments of Traders report, 3:30 p.m. ET.

Port of L.A. defers fee plan for containers that languish. The penalty, designed to clear backlogs, may have ‘unintended consequences,’ according to the port’s executive director. The Port of Los Angeles, the nation’s largest for container traffic, has deferred a plan to charge ocean carriers that fail to clear empty containers off the docks and is consulting with the logistics industry about alternatives on how to cut the backlogs. The proposed $100 daily penalty — which would have kicked in at the end of the month — may have “unintended consequences,” because some of the empty containers that have been sitting the longest may be buried under others, costing time “that our marine terminals simply don’t have to waste right now,” port Executive Director Gene Seroka said Thursday. He was speaking in a presentation to the Harbor Commission, which was scheduled to vote on the fee at the meeting. Seroka said the fee proposal was intended to get the industry talking and in that, it had been successful.

     The commission also amended the dwell fee so that import containers moving by truck or rail can be charged the penalty fee after nine days, matching the period for containers bound for trucks and up from six days previously. Although the twin ports of Los Angeles and Long Beach haven’t yet implemented the charge, its threat has reduced the number of import boxes sitting on marine terminals since late October by more than 60%, the ports said this week.

Another Fed official warned that the central bank would have to move interest rates up more aggressively if inflation stays high through the first half of the year. Fed governor Christopher Waller said he still thought it was reasonable to pencil in three rate increases this year, but that the rate path would ultimately depend on what inflation looks like in the second half of the year. Waller said in a Bloomberg Television interview (link) that while three hikes in 2022 is a good baseline, the case could be made for four or even five if inflation remains too high.

Mortgage rates have hit their highest level since March 2020, the month the coronavirus pandemic took hold in the U.S. and roiled markets. The average rate for a 30-year fixed-rate loan was 3.45% for the week ended Thursday, according to mortgage finance giant Freddie Mac, up from 3.22% a week ago. Expectations that the Fed will raise interest rates multiple times this year are driving up mortgage rates, which are closely tied to the 10-year U.S. Treasury.

     Mortgage rates

Demand for agricultural loans continues to decline. The strong agricultural economy, led by high commodity prices, has reduced farmers' reliance on farm lenders, despite concerns about rising input costs, according to a Federal Reserve survey of ag bankers. "Higher costs are likely to put upward pressure on demand for credit, but strong farm income and working capital could also supplement financing for some borrowers," said the Kansas City Fed on Thursday. Link for details.

Market perspectives:

     • Martin Luther King Jr. Day schedule. Markets and government offices will be closed for Martin Luther King Jr. Day on Monday, Jan. 17. Grain markets will reopen with the overnight session at 7:00 p.m. CT on Monday, Jan. 17, while livestock markets will resume trade at 8:30 a.m. CT on Tuesday, Jan. 18.

     • Outside markets: The U.S. dollar index was nearly unchanged ahead of U.S. economic updates with a mixed tone in foreign rival currencies versus the greenback. The yield on the 10-year U.S. Treasury note was firmer, trading above 1.73%. Gold and silver futures were weaker ahead of U.S. economic data, with gold around $1,820 per troy ounce and silver around $23 per troy ounce.


     • Crude oil futures are higher ahead of U.S. trading, with U.S. crude trading around $82.50 per barrel and Brent around $85.05 per barrel. Crude futures had a firmer tone in Asian action, with U.S. crude up nine cents at $82.19 per barrel and Brent up 46 cents at $84.88 per barrel.

     • Electricity demand surges. Global electricity demand increased significantly in 2021, while growth in coal-fired power outstripped that of renewable energy according to a new report from the International Energy Agency. The increase in demand of 1,500 terawatt-hours, of which 50% was driven by China, is a new record, as is the growth in corresponding carbon emissions. The results of the report “underscore the massive changes needed for the electricity sector to fulfill its critical role in decarbonizing the broader energy system,” IEA chief Fatih Birol said in a statement.

     • Record heat. Earth’s average surface temperature in 2021 reached its sixth-highest level since reliable temperature record-keeping began in 1880, according to new reports by two federal agencies.

     • At least 40% of the continental U.S. has gone 68 straight weeks in drought conditions. Almost all of the U.S. drought is located west of the Mississippi River, with the worst of it hitting the far Western states.

     • USDA daily export sales:

       — 100,422 MT corn to Mexico during MY 2021-2022 
       — 100,000 MT soybean meal to Spain during MY 2022-2023 

     • Ag demand: South Korea purchased 198,000 MT of corn — 133,000 MT optional origin and 65,000 MT South American or South African origin — and 50,000 MT of optional origin feed wheat. Algeria purchased an unspecified amount of milling wheat expected to be sourced from South America and the Black Sea region. Taiwan tendered to buy 49,395 MT of U.S. milling wheat. 

     • NWS weather: Heavy snow for parts of the Upper/Middle Mississippi Valley on Friday... ...Snow for parts of the Lower Mississippi, Tennessee Valleys, and Southern Appalachians on Saturday... ...Pockets of rain/freezing rain over parts of the Carolinas and Southern Appalachians on Saturday. 

         NWS 011422
        Wx 011422 

Items in Pro Farmer's First Thing Today include:

     • Followthrough selling in soybeans and wheat, corn bounces
     • Russia’s wheat export tax declines for first time since late September
     • Cash cattle trade mostly finished
     • Hog slaughter sharply below year-ago

 

POLICY FOCUS


FMCSA announces apprenticeship pilot program for trucking. The Federal Motor Carrier Safety Administration (FCMSA) has published a notice in the Federal Register (link) announcing the launch of a pilot program to allow persons ages 18,19 and 20 to operate commercial motor vehicles (CMV) in interstate commerce.

     The effort is largely one drawn up by the Trump administration in 2020 and is being put in place under provisions of the Bipartisan Infrastructure Law (BIL) signed into law Nov. 15, 2021.

     FCMSA said the Safe Driver Apprenticeship Pilot Program consists of two probationary periods — one for 120 hours and the other for 280 hours — which include driving time with an experienced driver and performance benchmarks. FCMSA said because the pilot program called for in BIL is “substantially the same” as the one the agency proposed in September 2020, the comments received on that proposal count as the requirements for the effort being launched now. 

     Some groups outlined their concerns with program requirements FMCSA submitted to the Office of Management and Budget that “create unnecessary administrative burdens and may inhibit participation in the program by stakeholders of various sizes.” In order not to discourage robust participation in the pilot program, the groups suggested FMCSA improve its proposal by removing its registered apprenticeship requirement and reducing the amount of monthly data employers must provide to FMCSA. “Importantly, without these changes, there is a very real possibility that overall subscription to the program may be delayed or reduced due to the costs and burdens associated,” the groups said. In its proposal, FMCSA required pilot program participants to create “registered apprenticeships,” but some organizations said this provision should be voluntary. “Many employers may not want to create a registered apprenticeship program,” the letter added. “It is unnecessary to the program and will likely reduce participation.”

     Impact: Up to 3,000 apprentices will be able to participate, with FCMSA estimating that up 1,000 companies would be involved in the effort which is expected to last up to three years but could end sooner if the agency gathers what it was “sufficient” data. 

 

AFGHANISTAN


— U.N. Secretary-General António Guterres has called on the U.S. and World Bank to unlock Afghan funds frozen since the Taliban seized power in August. U.S. officials have frozen roughly $9.5 billion in Afghan central bank assets and, like most nations, has refused to recognize the Taliban-led government as legitimate. The call to release the funds comes as Afghanistan faces an acute hunger crisis, with U.N. agencies calling for $5 billion in aid for the country in 2022. “Freezing temperatures and frozen assets are a lethal combination for the people of Afghanistan,” Guterres said.

 

PERSONNEL


Robert Califf is one step closer to becoming the new head of the Food and Drug Administration after a Senate panel Thursday voted to advance his nomination. The Senate Health, Education, Labor, and Pensions Committee voted 13-8 to support Califf, who previously led the agency in the final year of the Obama administration. The vote followed a December hearing that saw Califf get bipartisan support from committee members, despite some opposition over his drug industry ties. Sens. Bernie Sanders (I-Vt.) and Maggie Hassan (D-N.H.) were the only members on the Democratic side to vote against Califf. Sen. Richard Burr (R-N.C.), ranking member of the HELP committee, along with Republican Sens. Susan Collins (Maine), Lisa Murkowski (Alaska) and Mitt Romney (Utah) were the only Republican members to back the nominee. Califf’s nomination now moves to the full Senate, where former FDA officials and policy analysts say he is likely to gain overwhelming support.

— Fed nominees announced. President Biden will nominate Sarah Bloom Raskin, a former senior Treasury Department official, to serve as the Federal Reserve’s top banking regulator, the White House said. Biden also plans to nominate two economists for other Fed board seats: Lisa Cook, a professor of economics and international relations at Michigan State University; and Philip Jefferson, a professor and administrator at Davidson College in North Carolina. The three picks would complete Biden’s remake of the Fed board, following his decision in November to offer a second term to Fed Chairman Jerome Powell and nominate Fed governor Lael Brainard to become Fed vice chairwoman.

 

CHINA UPDATE


— U.S./China trade war price tag: $27 billion in lost ag export sales. China accounted for 95% of the $27 billion in U.S. farm export sales that were lost in 2018 and 2019 because of the trade war begun by former President Donald Trump, said a USDA report, The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture (link). Sales to China rebounded after the Phase 1 trade agreement, but U.S. market share has remained lower than before the tit-for-tat tariffs.

     Six U.S. trade partners — Canada, China, the EU, India, Mexico, and Turkey — responded with retaliatory tariffs after the U.S. imposed duties on imported steel and aluminum and on China for its policies on intellectual property and technology transfer. The USDA’s Economic Research Service estimated total losses of farm exports at $27 billion over two years, or $13.2 billion a year. Sales to the EU fell by $600 million and to Mexico by $500 million.

     Among commodities, soybeans saw 71% of the reductions, followed by sorghum at 6% and pork at 5%

     “At the state level, estimated losses were largely concentrated in the Midwest region,” said the ERS report. Iowa lost $1.46 billion a year, Illinois lost $1.41 billion, and Kansas lost $955 million.

     Note: Source of farm payment charts is Purdue Ag Economics. 

     ERS China 1
     ERS China 2
     Farm payments 1
     Farm payments 2  

— China’s exports had a bumper year. According to official data the country posted a record trade surplus of $676 billion in 2021, up from $524 billion the previous year and the highest since 1950. China also posted the highest trade surplus for December, $94.5 billion, since records began in 1994. Altogether, China exported $3.4 trillion worth of goods last year.

— China imported fewer soybeans last year for the first time since 2018. China imported 8.9 MMT of soybeans in December, bringing its total for 2021 to 96.5 MMT, down 3.8% from 100.3 MMT in 2020. That was China’s first annual decline in soybean imports since 2018, as crush demand slowed amid reduced soymeal use by China’s hog sector given poor production margins and more wheat feeding.

— China to release oil reserves around the Lunar New Year. China will release crude oil from its national strategic stockpiles around the Lunar New Year holidays that start on Feb. 1 as part of a plan coordinated by the U.S. with other major consumers to reduce global prices, sources told Reuters. “China agreed to release a relatively bigger amount if oil is above $85 a barrel, and a smaller volume if oil stays near the $75 level,” Reuters reported one source saying, without elaborating. Meanwhile, China’s annual crude oil imports dropped 5.4% in 2021, declining for the first time since 2001, as Beijing clamped down on the refining sector to curb excess domestic fuel production while refiners drew down massive inventories.

— China drafts rule to cap banks’ commercial bill financing. The People’s Bank of China (PBOC) published draft rules on Friday to strengthen risk management over the use of commercial bills and set up caps for banks’ commercial bills financing business. Banks and finance companies shall not conduct commercial bill financing business of more than 15% of their total assets, according to the draft released by PBOC. Financial institutions should also be prudent when conducting commercial paper business and take measures to prevent market risks and credit risks, according to the rules.

— China’s meat imports dropped 5.4% last year. China imported 654,000 MT of meat in December, bringing the yearly total for 2021 to 9.4 MMT, down 5.4% from 2020. China’s imports of beef jumped last year, but demand for pork fell sharply amid a surge in domestic supplies as the country’s hog sector rebuilt from the African swine fever outbreak that started in August 2019.

 

TRADE POLICY


— USMCA deputies meet, acknowledging ‘challenges.’ The first meeting of deputies under the U.S.-Mexico-Canada Agreement (USMCA) took place this week with the officials issuing a positive statement on the meeting which they noted “though there have been challenges, progress continues to be made.”

     The challenges likely referred to trade cases that have been brought or are in process under the pact, including Mexico’s challenge of the U.S. interpretation of automobile content rules. Canada announced, as expected, they would align with Mexico on the matter, saying the U.S. interpretation was “inconsistent” with USMCA provisions. Mexico last week formally requested a dispute settlement panel be established on the situation. A spokesperson for the Office of the U.S. Trade Representative (USTR) said they were “confident” the U.S. interpretation of the provisions was “consistent” with USMCA.

     Four key issues. The statement from the deputies meeting indicated the three officials — Mexico’s Undersecretary of Foreign Trade, Luz María de la Mora, Deputy U.S. Trade Representative Jayme White, and Canada’s Deputy Minister for International Trade, David Morrison — focused on four key issues: Labor, environment, inclusive trade (including SMEs — small and medium-sized enterprises and competitiveness) and state-owned enterprises (SOEs). Regarding SOEs, which most view as focusing on China without naming the country, the post-meeting statement said USMCA has “high standards and robust disciplines designed to address the trade distortions caused by the non-market-based activities of SOEs.”

— House lawmakers urge action against India’s wheat and rice subsidies. On Thursday, 28 House lawmakers sent a letter to USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai requesting the administration pursue a World Trade Organization (WTO) case against India’s domestic support for rice and wheat production. The U.S. has previously highlighted India’s non-compliance through counter-notifications at the WTO Committee on Agriculture. Last month, Sen. John Boozman (R-Ark.), the Ranking Member of the Senate Ag Committee, led a parallel letter in the Senate. That letter included 18 U.S. senators.

     “Wheat and rice farmers rely on open markets and fair trade to facilitate trade, which plays a vital role in supporting our growers and jobs in rural America. NAWG appreciates U.S. Rep. Tracey Mann (R-Kan.) and Rick Crawford (R-Ark.) for leading these efforts outlining the importance of open markets,” said NAWG CEO Chandler Goule. “It is important that as a WTO member, India adhere to international commitments and not continue to create unfair advantages for its domestic production and distort world trade. We appreciate the Representatives for bringing the issue to the attention of the Administration and will continue to work with the USDA and USTR in enhancing the competitiveness of U.S. wheat in the world.”

     The letter states: “Trade distorting domestic support has always been a major challenge for farmers, and WTO rules were created to limit these practices. For the most part, the system has been successful, but there are repeat offenders, like China and India, where enforcement is necessary. Your teams have continually pressed India at the WTO to reform its price support program, but to no avail.”

 

ENERGY & CLIMATE CHANGE


Big oil companies are fleeing Canada’s oil sands — but production is expected to continue for decades. As international energy companies have moved out of the Alberta oil sands — one of the largest oil reserves in the world and, by some measures, one of the dirtiest — smaller independents and private investors have come in, and some have moved to increase production, the Wall Street Journal reports (link). Last year, the oil sands were on track to deliver more oil than ever. Governments and financial institutions are pushing to wean the world from fossil fuels to address climate change. But demand for energy remains robust. So long as existing oil fields — no matter their carbon footprint —r emain profitable, they are likely to remain in production.

     Canada 1

 

LIVESTOCK, FOOD & BEVERAGE INDUSTRY


— Some U.S. supermarkets are reducing hours and cutting services as Covid-19’s Omicron variant infects cashiers, baggers and stockers, deepening grocery chains’ staffing challenges. Shopper demand for groceries, meanwhile, remains high. Piggly Wiggly stores in Alabama and Georgia used workers from temporary agencies to shore up warehouse staff and keep products flowing. Ohio-based supermarket chain Fresh Encounter cut back 24-hour operations and has been closing its deli counters early. It’s also selling fewer items that require hands-on labor, such as store-made chicken salad and some cuts of meat. Consumers in some areas are reverting to shopping patterns from earlier in the pandemic as infections rise. At Connecticut mini-chain LaBonne’s Market, demand for curbside pickup and delivery has jumped by about 50% in the weeks since Christmas.

     Meanwhile, CVS Health and Walgreens Boots Alliance are shutting some pharmacies on weekends as the spread of Covid-19 and the Omicron variant exacerbates already severe staffing shortages.

 

CORONAVIRUS UPDATE


Summary: Global cases of Covid-19 are at 320,249,932 with 5,522,703 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 64,082,824 with 846,488 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 524,199,956 doses administered, 208,564,894 have been fully vaccinated, or 63.54% of the U.S. population.   

— Biden announces military teams in response to Omicron wave. President Biden announced in an address to the nation that the military is deploying medical personnel to several states to help reinforce hospitals strained by the Omicron wave, following through on a plan that he outlined last month. Biden also said his administration will double its purchase of home coronavirus tests to be distributed for free through a government website, and will also make "high-quality masks" available for free.

— Supreme Court blocks Biden vaccine rules for private employers, allows them for healthcare workers. The Supreme Court on Thursday blocked in a 6-3 decision the Biden administration’s Covid-19 vaccine-or-testing rules for large private employers, upending the government’s most aggressive effort to combat the pandemic in the workplace. The high court, however, did give the administration more latitude in the healthcare industry, allowing it to impose a vaccine mandate for more than 10 million healthcare workers whose facilities participate in Medicare and Medicaid, a holding that leaves one part of the president’s Covid-19 playbook in place. The court ruled 5-4 to keep the health care worker mandate, with Chief Justice Roberts and Justice Brett Kavanaugh joining the more liberal Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan. Congress may have given OSHA the power to regulate workplace dangers, the court explained, but it “has not given that agency the power to regulate public health more broadly.” The vaccine-or-test mandate will remain on hold while the challenges to its legality continue in the U.S. Court of Appeals for the 6th Circuit. The ruling doesn’t prevent employers from instituting their own vaccine requirements, as large companies such as United Airlines and Tyson Foods have done.  

     President Biden comments. In a statement after the ruling, Biden said, “I am disappointed that the Supreme Court has chosen to block common-sense life-saving requirements for employees at large businesses that were grounded squarely in both science and the law.”

— Canada reverses course, says truck drivers still required to show vaccination. Reports Thursday quoted Canadian officials as saying the country was no longer going to require that truckers entering Canada would have to show as of Jan. 15 they are vaccinated. But late Thursday, a joint statement from Canada’s ministers of health, transport and public safety indicated that initial announcement was in error. “On Nov. 19, 2021, we announced that as of Jan. 15, 2022, certain categories of travelers who are currently exempt from entry requirements, will only be allowed to enter the country if they are fully vaccinated with one of the vaccines approved for entry into Canada,” the statement said. “These groups include several essential service providers, including truck drivers. Let us be clear: This has not changed. The information shared yesterday was provided in error. Our teams have been in touch with industry representatives to ensure they have the correct information.”

     Canada impacts. Stephen Laskowsi, president of the Canadian Trucking Alliance, said a survey of Canadian truckers suggested that “at least” 10% of 120,000 truckers in the country weren’t vaccinated. “Really what has to happen for relief in the supply chain is both Ottawa and Washington need to move simultaneously, lifting their foreign national requirement because without that, we suffer from the same issues that we were talking about the day before,” Laskowski told Canada’s Global News. The Canadian Truckers Association estimated that the Canadian trucking industry would lose 12,000-16,000 (10-15%) cross-border truck drivers due to the mandate. Canada is already short on truck drivers in Canada as data from Statistics Canada indicates there were 23,000 job vacancies in the sector. Dennis Darby, president of the Canadian Manufacturers and Exporters, a lobby group, warned Canadian Prime Minister Justin Trudeau in a Jan. 11 letter against implementing the vaccine mandate for Canadian and U.S. truckers at the border. “Without adequate trucking services, manufacturers would be unable to maintain their current supply chains and production will stop or slow across the country,” he said.

     U.S. impacts. The U.S. has signaled that foreign truck drivers will have to show proof of inoculation to enter the U.S. starting on Jan. 22. According to U.S. trade data, two-way trade in merchandise goods between the U.S. and Canada totaled over $600 billion in 2019. About 80% of those goods move on trucks, the Canadian exporter and trucking sectors estimate. 

     Upshot: Although details are scarce, the U.S. has signaled that foreign truck drivers will have to show proof of inoculation to enter the U.S. starting on Jan. 22. So if both countries keep their respective bans on unvaccinated foreign drivers, thousands will be taken off the roads, creating the first policy measure since the pandemic began that could limit cross-border trucking traffic. Absent a bilateral solution, which is still possible, trucking and manufacturing trade groups warn of supply-chain upheaval that could lead to further price increases and a possible shortage of critical goods such as food. At a time when inflation is a key concern of the White House, pressure is mounting on this issue. The American Trucking Associations, an industry group, is urging leaders in Ottawa and Washington to reconsider the cross-border mandates “so we can avoid any further economic disruptions,” said Bob Costello, the group’s chief economist and senior vice president of international trade policy and cross-border operations.

 

POLITICS & ELECTIONS


— Democrats want to give federal employees a 5.1% average pay raise in 2023. A bill from Democratic lawmakers would provide federal workers with a 4.1% across-the-board boost, along with an average 1% increase in locality pay. The bill is similar to previous efforts by the lawmakers to secure a bigger pay raise for federal employees, although the legislation is rarely acted upon. Last year, the lawmakers pushed for feds to receive an average 3.2% pay increase, but the bill failed to gain traction, leading to President Biden implementing an average 2.7% raise for both civilian federal employees and military service members. The bill quickly drew endorsements from unions and other federal employee groups.

— Oath Keepers leader Stewart Rhodes and 10 other people have been charged with seditious conspiracy, marking an escalation of the Justice Department’s investigation into the Jan. 6, 2021, attack on the U.S. Capitol. Separately, the House panel investigating the riot issued subpoenas to Alphabet, Reddit, Meta and Twitter.

— GOP Sen. Marshall plans to introduce 'Fauci Act' after doctor called him a 'moron'. Sen. Roger Marshall (R-Kan.) is planning to introduce legislation named after Dr. Anthony Fauci after the nation's top infectious diseases expert made headlines for calling Marshall "a moron" on a hot mic earlier this week. Marshall's bill, which will be titled the Financial Accountability for Uniquely Compensated Individuals (FAUCI) Act, will mandate that the Office of Government Ethics (OGE) provide a list of all confidential filers within the government whose financial disclosures are not public, as first reported by The Hill. Fauci and Marshall sparred Tuesday on Capitol Hill when the senator asked about Fauci’s financial interests. Link for details.

 

CONGRESS


— Democrats’ strategy to begin a Senate debate on voting rights began to crumble Thursday when two key moderates reiterated their support for keeping the filibuster, another Democrat quarantined with the coronavirus and President Biden expressed doubt that landmark legislation would land on his desk anytime soon.

     Sinema pulls the plug, again. Ahead of a Biden visit to Capitol Hill to rally Democrats, centrist Sen. Kyrsten Sinema (D-Ariz.) reiterated her long-standing support for the 60-vote threshold to pass legislation and her opposition to Democrats’ efforts to weaken it. “While I continue to support these [voting rights] bills,” Sinema said in a 20-minute floor speech, “I will not support separate actions that would worsen the underlying disease of division infecting our country.”

     Senate Minority Leader Mitch McConnell (R-Ky.), who has led Republican opposition to the bills and to efforts to abandon the filibuster, said Sinema “saved the Senate as an institution.”

     Biden left the meeting with Democrats unconvinced that he had swayed Sinema and Sen. Joe Manchin(D-W.Va.), another key moderate.

     Also complicating the timetable was news that Sen. Brian Schatz (D-Hawaii) was quarantining after he tested positive for the coronavirus, despite being vaccinated and boosted. It was unclear how that might affect the voting schedule.

     Bottom line: Biden met again last night with Sinema and Manchin but as has been evident for a while, Democrats do not have enough of their members to clear filibuster hurdles to pass the controversial legislation.  

 

OTHER ITEMS OF NOTE


— U.S./Russia stalemate. Russia’s deputy foreign minister said talks with the U.S. over the security situation in Ukraine had stalled and suggested that Moscow could dispatch a military deployment to Venezuela and Cuba, as the Kremlin looks to pressure Washington to respond to its demands.

— Cotton AWP rises another week. The Adjusted World Price (AWP) for cotton rose to 105.58 cents per pound, effective today (Jan. 14), up from 103.85 cents per pound the prior week. This marks the second week in a row the AWP has been over $1 per pound and is the highest since it was at 108.86 cents per pound the week of July 8, 2011. Meanwhile, USDA said that Special Import Quota #13 will be established Jan. 30 for 43,904 bales of Upland Cotton, applying to cotton purchased not later than April 19 and entered into the not later than July 18.

— U.S. plans to spend more than $27 billion to repair bridges nationwide over the next five years, funded by the roughly $1 trillion infrastructure package. States will be awarded funds based on need, with California slated to get $4.2 billion. State and local governments generally have to kick in up to 20% of the costs of bridge work to win federal funding. Administration officials said Thursday they are removing that requirement for bridges not connected to the federal highway system. That will serve as an incentive for state and local governments to take on projects that might not normally give priority to, administration officials said. If states want to use the federal money for bridges that are part of the federal highway system, they will still have to kick in 20% of the cost of those projects, officials said. There are more than 45,000 bridges in poor condition nationwide, according to the Transportation Department’s 2020 National Bridge Inventory. Any bridge on the inventory is eligible for part of the $27 billion, officials said. Link for details via the WSJ.

— Illinois can go to hell? An Illinois school district is defending an elementary school offering “After School Satan Club,” an extracurricular educational program sponsored by the Satanic Temple of the United States. Link for details.

— Feminist nuns growing weed in California. An organization called Sisters of the Valley is reimagining spiritual devotion — one joint at a time. Link for details.

     Nuns


 

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