Evening Report | U.S., China trade talks going well

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Lutnick signals progress in trade talks with China... Commerce Secretary Howard Lutnick said trade talks with Chinese officials in London were going well and he hoped they would end on Tuesday night, but said they could run into Wednesday.

“I think the talks are going really, really well. We’re very much spending time and effort and energy – everybody’s got their head down working closely,” Lutnick told reporters at Lancaster House in London, where teams from both countries have met for two days. “I hope they end this evening, but if they need be, we’ll be here tomorrow, but I hope they end this evening,” he added.

Modest changes expected in June Crop Production, WASDE reports... USDA’s June Crop Production and Supply & Demand (WASDE) Reports on Thursday will feature the second winter wheat crop estimate, along with updated old-crop and new-crop balance sheets. Modest changes are expected to winter wheat production and ending stocks. The following pre-report expectations are from a Reuters survey; Bloomberg for cotton.

Perspective: While there is always potential for a surprise in USDA’s monthly reports, the data that is likely to be more market-moving comes at the end of June via the Acreage and Grain Stocks Reports.

U.S. Appeals Court weighs extended pause on ruling against Trump tariffs... The U.S. Department of Justice has asked the U.S. Court of Appeals for the Federal Circuit to extend its stay on a lower court’s decision that found most of President Donald Trump’s global tariffs illegal. The request, filed Monday, aims to keep the tariffs in place while the protracted legal fight over their legitimacy continues — a process that could take months and potentially reach the Supreme Court.

On May 28, a three-judge panel of the U.S. Court of International Trade (CIT) ruled that Trump exceeded his authority under the 1977 International Emergency Economic Powers Act (IEEPA) by imposing broad tariffs, including a 10% global levy and the April 2 “Liberation Day” tariffs. CIT concluded that IEEPA does not grant the president unlimited power to impose tariffs and that the tariffs did not directly address the emergencies cited as justification.

Other tariffs imposed under separate statutes — such as those on steel, aluminum, and automobiles — remain unaffected by these rulings.

In its latest filing, the Justice Department contends that lifting the tariffs would harm the president’s ability to conduct foreign policy and weaken America’s negotiating position in sensitive trade talks. The administration warned that removing the tariffs now would “catastrophically harm our economy,” embolden other countries to exploit U.S. vulnerability, and disrupt ongoing trade negotiations.

The government also pushed back against arguments from small businesses and Democratic-led states that alternative legal avenues exist for imposing tariffs. DOJ argued that such hypothetical alternatives would not address the urgent timing of current economic and diplomatic challenges: “The emergencies are looming now, negotiations are proceeding now, and the CIT’s injunction threatens them,” the government stated.

The Federal Circuit could rule at any time on whether to maintain the pause for the length of the appeals process, which is expected to last several months. Several related lawsuits have been put on hold pending this decision, though at least one case regarding a specific tariff exemption is moving forward in a lower court.

If the appeals court ultimately rules against the administration, the case is likely to proceed to the Supreme Court, with the outcome potentially reshaping the scope of presidential authority over U.S. trade policy.

Import surge expected as retailers rush to beat tariff pause deadlines... U.S. container ports are expected to experience a sharp surge in import cargo volumes this summer, as retailers scramble to capitalize on the 90-day reduction in tariffs on Chinese goods, according to the Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates.

“This is the busiest time of year for retailers,” said Jonathan Gold, NRF’s Vice President for Supply Chain and Customs Policy. “Retailers had paused imports due to 145% tariffs announced in April, but the recent rollback to 30% and the temporary pause — set to expire Aug. 12 — have reignited orders.” He warned, however, that uncertainty looms beyond the summer unless negotiations yield lasting tariff relief.

Ports saw a 9.6% year-over-year rise in April, reaching 2.21 million TEUs, but volumes dropped sharply in May — projected at 1.91 million TEUs— as businesses reacted to initial tariff hikes. With the tariff pause now in effect, NRF forecasts a bounce-back, though volumes will remain below year-ago:

• June: 2.01M TEU (down 6.2% YoY)
• July: 2.13M TEU (down 8.1% YoY)
• August: 1.98M TEU (down 14.7% YoY)

Hackett Associates founder Ben Hackett noted that this year’s holiday import peak is expected to arrive early, overlapping with the back-to-school season. However, unless tariffs are further delayed, “we can expect the final four months of the year to see declining volumes of imports.”

Total volume for the first half of 2025 is projected at 12.54M TEU, up 3.7% from last year and above previous estimates, though still below pre-April tariff expectations.

Leadership change ahead in House GOP... Rep. Mark Green (R-Tenn.), chairman of the House Homeland Security Committee, announced he will resign from Congress following a vote on the current budget-reconciliation bill. Green, a key figure in shaping GOP policy on border security and national threats, said he intends to step down once the legislation clears the chamber, though he did not provide an exact date.

Green’s departure comes at a precarious moment for House Republicans, who hold a razor-thin 219-212 majority. With every vote critical for passing legislation aligned with President Donald Trump’s policy agenda, Green’s exit could complicate efforts to maintain internal unity — particularly as contentious votes on taxes, spending, and immigration loom in the coming weeks.

COFCO International reports huge drop in revenue, sales... COFCO International reported revenue of $38.5 billion in 2024, down from $50.1 billion the previous year, while its third-party sales volumes fell to 108.4 MMT from 121.7 MMT, the agricultural commodities trader said. The company did not elaborate on the reasons for the lower sales, which were outlined in an annual sustainability report.

Geneva-based COFCO International, which is owned by Chinese state-owned food group COFCO, said in its sustainability analysis that 99% of its soybeans sourced in Brazil last year were verified as coming from deforestation and conversion-free (DCF) land. The company has a goal of removing deforestation-linked corn and soy crops from its South American supply chain by 2025.