Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Your Pro Farmer newsletter is now available... The U.S. reached a framework trade deal with the United Kingdom, the first since President Donald Trump enacted his tariffs strategy. Agriculture was featured prominently in the deal, though market impact was muted. Traders are more interested in what happens during a weekend trade meeting between top U.S. and Chinese officials. Though no major breakthroughs are expected, Trump indicated he may reduce tariffs on China if talks go well. Data signals tariffs are already having an effect on the U.S. and Chinese economies – and those impacts could intensify if supply-chain disruptions intensify. The Fed remained in pause mode with monetary policy, as expected, though it signaled risks to inflation and unemployment are elevated. On the ag policy front, economists are not optimistic a new farm bill will be passed this year as the same hurdles with remain with the blame game continuing in Congress. We cover all of these items and much more in this week’s newsletter, which you can access here.
USDA’s first official look at 2025-26 coming Monday... USDA will release its Supply & Demand and Crop Production Reports on Monday. They will feature updates to the old-crop balance sheets and the first official look at the 2025-26 marketing year, including USDA’s initial winter wheat production estimate and new-crop corn and soybean production projections based on March planting intentions and trendline yields. Click here to view pre-report expectations.
Navarro: EU ‘very high’ on U.S. priority list for tariff talks... White House trade adviser Peter Navarro has emphasized the European Union is a top focus for the Trump administration’s ongoing tariff negotiations, citing the significant U.S. trade deficit with the bloc as a driving factor. Navarro reiterated on Bloomberg TV a key complaint is the EU’s value-added tax (VAT), which he argues acts as a non-tariff barrier disadvantaging U.S. exporters. He has called on the EU to reduce or abandon its 19% VAT, describing it as a form of “cheating” that makes American goods less competitive in European markets. Navarro’s comments reflect a broader administration strategy to push for not only lower tariffs but also the removal of non-tariff barriers such as VAT and regulatory hurdles.
The U.S. trade deficit with the EU remains substantial, reaching approximately $235 billion in 2024, with U.S. exports to the bloc at $370 billion and imports from the EU at $605 billion. This imbalance has fueled the Trump administration’s decision to impose a 20% tariff on EU goods, besides existing tariffs of 25% on steel, aluminum and automobiles. The administration argues these measures are necessary to protect American industries and reduce the trade gap.
In response, the European Commission has announced plans to launch a dispute at the World Trade Organization (WTO) over the United States’ “reciprocal” tariff strategy and has prepared a list of $107 billion (95 billion euros) worth of American goods that could face retaliatory tariffs if negotiations fail. The EU’s proposed countermeasures target a wide range of products, including agricultural goods, spirits, machinery and vehicle components.
The bloc maintains that the U.S. tariffs violate fundamental World Trade Organization rules, and its priority remains to reach a negotiated settlement. “The EU firmly believes that these [U.S.] tariffs clearly contravene fundamental WTO regulations. The objective of the EU is to reaffirm that internationally agreed rules are important and cannot be disregarded unilaterally by any WTO member, including the U.S,” European Commission said.
Navarro has signaled a willingness to engage in dialogue with the EU, stating, “Let’s talk, let’s figure this out,” but he also warned that retaliatory EU tariffs would hurt prospects for a deal. The administration’s stance is clear: any meaningful agreement must address both tariff and non-tariff barriers, including the contentious VAT.
With both sides escalating threats but expressing a preference for negotiation, the coming weeks will be critical in determining whether the U.S. and EU can avert a full-blown trade war or if tit-for-tat tariffs will deepen the rift between the two major economies.
Major MAHA Report Coming Next Week... A significant report from the Make America Healthy Again (MAHA) Commission is scheduled to be released next week. The report is the culmination of a commission established by President Donald Trump via executive order, tasked with developing recommendations to “Make America Healthy Again.” The MAHA initiative has been a central focus of the Trump administration’s health policy agenda, with significant funding and organizational restructuring at the Department of Health and Human Services (HHS) dedicated to its implementation.
The report is expected to address a broad range of public health issues, including chronic disease prevention, nutrition, physical activity, healthy lifestyles, over-reliance on medication, the effects of technology habits, environmental impacts and food and drug quality and safety. The commission’s findings are anticipated to have major implications for federal health policy, potentially influencing funding priorities, program structures, and public health strategies in the coming years.
The upcoming MAHA Commission report is widely expected to address both sugar and farm chemicals.
Sugar: The MAHA Commission’s mandate includes targeting chronic diseases linked to diet, such as obesity and diabetes, with a focus on root causes like added sugars and ultra-processed foods. Given Robert F. Kennedy Jr.’s leadership and recent public statements, it is highly likely that the report will include strong recommendations for reducing sugar consumption, enhancing food labeling and educating the public about sugar’s health risks.
Farm chemicals: There is significant debate within the MAHA Commission about the role of pesticides and other farm chemicals. While Kennedy and some MAHA advocates push for restrictions on pesticides and synthetic additives, there is pushback from lawmakers and agricultural groups urging the Commission to rely on established science and not undermine food security or farm productivity. The report will likely address the issue, but the extent of proposed regulatory changes or bans remains uncertain, as stakeholders are urging a balanced, science-based approach.
USDA Secretary Brooke Rollins has publicly supported the MAHA Commission, emphasizing a collaborative approach with RFK Jr. She described their partnership as a “once in a generation opportunity” to align USDA and HHS efforts to improve nutrition and public health. She said, “Our farmers, ranchers and producers dedicate their lives to growing the safest most abundant food supply in the world and we need to make sure our kids and families are consuming the healthiest food we produce. There is a chronic health problem in our country, and American agriculture is at the core of the solution.” Rollins’ balancing of public health initiatives while protecting farmers and agricultural interests makes her a likely target for criticism from both MAHA advocates and ag stakeholders.
Maersk warns of trade-driven shipping volatility... A.P. Moeller-Maersk, one of the world’s largest container shipping firms, warned that global volumes it carries could fall by up to 1% or rise as much as 4% in 2025, depending on the outcome of trade negotiations between the U.S. and China. CEO Vincent Clerc told the Wall Street Journal that shipping volumes between the U.S. and China have plunged by 30% to 40% since early April, following President Trump’s sweeping tariff hikes. In a TV interview, Clerc added that Maersk had already redeployed larger vessels to alternative routes as American demand for Chinese goods dried up. Despite the disruption, Maersk said it was maintaining its full-year underlying profit forecast, signaling confidence in its ability to adjust to shifting trade flows.
Recently, Gene Seroka, CEO at the Port of Los Angeles, told Bloomberg TV:
- The Port of LA, North America’s largest container handler, has already seen about a one-third drop in import volumes from China. Ocean freight to all sources from China is down around 60%.
- CEOs are hitting the pause button on imports amid trade uncertainty.
- Hiring and capital investment have also been paused.
- In the coming weeks there will likely be a serious negative ripple effect on the economy.
- Retailers have about five to seven weeks of “normal” inventory. After that, spot shortages will show up.
- Even if trade deals are reached soon, the rebuilding of supply chains will take at least a month.
Fed’s Barr warns Trump tariffs risk higher inflation and job losses... Federal Reserve Governor Michael Barr issued a stark warning Friday about the economic risks posed by President Donald Trump’s sweeping tariffs, cautioning that the levies could ignite persistent inflation while simultaneously slowing growth and raising unemployment. However, he noted it is too soon to assess the full fallout from the tariffs, whose final form remains unclear.
Barr, who stepped down earlier this year as the Fed’s regulatory chief under political pressure, emphasized that policymakers could afford to be patient for now. “The U.S. economy is in a good place,” he said, citing robust labor market data and a solid current inflation backdrop. Still, he flagged a troubling divergence: while recent data shows stability, forward-looking indicators — so-called “soft data” — are flashing warning signs. “In my view, higher tariffs could lead to disruption to global supply chains and create persistent upward pressure on inflation,” Barr said. “I am equally concerned that tariffs will lead to higher unemployment as the economy slows.”
If both risks materialize, the Federal Open Market Committee (FOMC) could be forced into an uncomfortable bind, trying to address inflation without crushing employment. “The FOMC may be in a difficult position if we were to see both rising inflation and rising unemployment,” Barr said.