Rubio Signals U.S. Trade Policy Reset | OECD Says Trade Tensions Slowing Global Growth

French PM questions EU tariff on U.S. bourbon | Bessent downplays economic fears | China takes steps to revive consumption | Egg imports

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March 17, 2025 07:59 AM

Updates: Policy/News/Markets, March 17, 2025

— Rubio signals U.S. trade policy reset amid tariff escalation. U.S. Secretary of State Marco Rubio stated on Sunday that after imposing tariffs on major trading partners, the U.S. could pursue bilateral trade talks to establish new agreements. His comments follow President Donald Trump’s threat to impose a 200% tariff on European alcohol imports, intensifying global trade tensions (see next item). Speaking on Face the Nation, Rubio emphasized that the tariff measures are universal and aimed at creating a new “baseline of fairness and reciprocity” before engaging in further negotiations. “This is global. It’s not against Canada, it’s not against Mexico, it’s not against the EU, it’s everybody,” Rubio said. He reiterated that the current trade dynamics are unsustainable and require a fundamental reset.

— OECD warns of trade tensions slowing global growth. The OECD today cautioned that escalating trade tensions, particularly those initiated by President Donald Trump, will negatively impact global economic growth.

U.S. economy: Growth forecasts have been downgraded to 2.2% in 2025 and 1.6% in 2026, with tariffs driving up inflation and potentially reducing economic output beyond tariff revenue gains. This represents a significant decrease from earlier projections. The OECD suggests that an expanded trade conflict could further reduce U.S. economic growth, potentially costing more than the revenue generated by the tariffs.

Global growth: Global economic growth is projected to slow from 3.2% in 2024 to 3.1% in 2025 and further to 3.0% in 2026. This slowdown is largely attributed to rising trade tensions and geopolitical uncertainties.

Regional Impact: Canada’s growth forecast has been drastically reduced to 0.7%, while Mexico is expected to enter a recession. The UK’s growth forecast has been revised downward to 1.4% for 2025 and 1.2% for 2026. The OECD also noted that the UK will experience faster growth than several other major European economies.

— Canadian PM Carney signals trade progress amid U.S. tensions. Canadian Prime Minister Mark Carney, in his first press conference, acknowledged progress in U.S. trade talks despite ongoing tensions fueled by President Trump’s tariffs and provocative remarks about Canada’s sovereignty. U.S. tariffs on Canadian goods have led to retaliatory measures, straining relations. Trump has suggested Canada could become the 51st U.S. state, sparking backlash.

Carney is prioritizing European alliances to counterbalance U.S. influence.

Meanwhile, Carney ordered a review of the country’s contract for Lockheed Martin Corp.'s F-35 fighter jets — a purchase that’s supposed to send more than $13 billion to the U.S. manufacturer. The scope of work is supposed to be 88 fighters. Legal commitments are in place only for the first 16 of those. A spokesman said the goal of the review is to determine if that contract “is the best investment for Canada, and if there are other options that could better meet Canada’s needs.”

Of note: Carney does not plan an immediate visit to Washington but hopes to speak with Trump soon. With an election on the horizon, Carney’s economic expertise and diplomatic maneuvers will be key in managing trade tensions and reinforcing Canada’s global partnerships.

— French PM questions EU tariff on American bourbon. French Prime Minister Francois Bayrou admitted the EU likely made a mistake in targeting American whiskey in its response to U.S. tariffs. “A very old (product) list has been retrieved without it being checked like it should have been,” he told France Inter radio. Bayrou called for negotiations to prevent further economic damage, particularly to France’s cognac industry, after President Donald Trump threatened a 200% tariff on European wines and spirits.

European producers, already impacted by Beijing’s tariffs on French cognac, are concerned about further trade disputes. Talks with Washington and Beijing are expected, though no dates have been set.

Of note: The EU’s first round of counter-tariffs against U.S. goods including bourbon is due to take effect on April 1.

— Transatlantic tariff conflict threatens $9.5 trillion business ties. The U.S./European tariff conflict is putting at risk a transatlantic business relationship worth $9.5 trillion annually, according to the American Chamber of Commerce to the EU (AmCham EU). Its latest Transatlantic Economy report highlights record trade figures in 2024 but warns that 2025 could bring both opportunities and risks. Recent U.S. tariffs on steel and aluminum, EU retaliation plans, and President Trump’s threats of 200% tariffs on European wine and spirits have escalated tensions. AmCham stresses that investment, rather than trade, is the true benchmark of economic ties, with U.S. and European firms deeply intertwined.

The report warns that intra-firm trade, crucial for economies like Germany and Ireland, could be hit, with potential spillover effects on services, data flows, and energy — especially given Europe’s reliance on U.S. LNG. Experts caution that the disruption could lead to inefficiencies and undermine global competitiveness.

— U.S. meat Industry eyes China’s customs hurdles. The U.S. meat industry is closely monitoring China’s handling of exporter registrations with its General Administration of Customs (GACC). While a few companies’ registrations expired in February, over 800 more expired on March 16, with no sign of renewal despite repeated USDA and FDA requests. Under the Phase 1 trade deal, China was supposed to recognize U.S. agency approvals, but the delay raises concerns. However, the U.S. ag attaché in China noted that trade has continued for affected firms, and past cases suggest GACC may still facilitate trade while working on renewals.

— Bessent downplays market fears but won’t rule out recession. Treasury Secretary Scott Bessent expressed confidence in the stock market despite recent declines, calling market corrections “healthy” and “normal.” Speaking on Meet the Press, he emphasized that long-term growth depends on tax policy, deregulation, and energy security. However, he acknowledged that a U.S. recession remains a possibility, stating, “There are no guarantees.” Meanwhile, new NBC polling shows voter disapproval of President Trump’s economic performance, with concerns about inflation and declining consumer confidence weighing on markets. The S&P 500, Dow, and Nasdaq all ended last week in the red. More economic analysis in items below.

— Fed meeting in focus: Markets eye policy signals. The March 18-19 FOMC meeting is the key event of the week, with Fed Chair Jerome Powell emphasizing data-driven decision-making over external policy shifts. Powell has described the U.S. economy as stable, with a strong labor market and low layoffs outside tech and government. Markets do not anticipate a rate change from the current Fed-funds rate at 4.25%-4.50%, but the Summary of Economic Projections (SEP) will be scrutinized for signs of a 2025 GDP slowdown, rising unemployment, or inflation concerns. U.S. money markets now price in the potential for three 25 basis-point reductions, having previously priced in only two or even one earlier this year, LSEG data show. Some analysts conjecture the Fed may also signal an end to its balance sheet reduction, having cut reserves by $2 trillion since mid-2022.

Of note: Interest-rate decisions are also due in Japan, the UK, Switzerland, Sweden, Brazil, Taiwan and Indonesia.

Link to The Week Ahead for this week’s economic reports and events.

— Trump’s CEO approach to his second term. Michael Drury, Chief Economist for McVean Trading & Investments, writes: “We feel that President Trump is taking a familiar CEO approach by addressing all the bad news upfront, aiming to rebuild on a stronger foundation. Viewing himself as a returning executive after what he sees as a failed interim leadership under Biden, Trump is unapologetic in his criticism of his predecessor. His first term, in his view, was hindered early on by Republican infighting over ObamaCare repeal, but he later gained momentum with tax cuts in 2018, the USMCA trade deal in 2019, and Phase 1 of his China strategy. However, Covid disrupted his progress and ultimately led to a leadership change. Now, bypassing Congress, he is pushing forward with his policy agenda on his own terms.”

— Trump to speak Tuesday with Putin on Ukraine ceasefire plan. President Donald Trump announced he would speak with Russian President Vladimir Putin on Tuesday to seek an agreement on ending Moscow’s full-scale invasion of Ukraine, launched in February 2022. “A lot of work’s been done over the weekend,” Trump said aboard Air Force One on Sunday. “We want to see if we can bring that war to an end. Maybe we can, maybe we can’t, but I think we have a very good chance.” His comments followed a visit by his envoy, Steve Witkoff, to Moscow for direct negotiations with Putin. Ukraine has already agreed to a 30-day ceasefire during Saudi-hosted talks, contingent on Russia’s participation. Putin’s stance remains unclear.

The Kremlin confirmed that Putin is due to speak to Trump on Tuesday amid the U.S. push for a ceasefire in the war in Ukraine. “Such a conversation is being prepared for Tuesday,” Putin’s spokesman, Dmitry Peskov, told reporters on Monday, according to the Interfax news service. He declined to comment further on the planned discussions.

Meanwhile, UK Prime Minister Keir Starmer stated that 25 allied leaders have agreed to further tighten economic restrictions on Russia.

— Top broadband official warns of Musk-favored policy shift. A senior Commerce Department official, Evan Feinman, left his role overseeing the $42.5 billion Broadband Equity, Access and Deployment Program (BEAD) with a sharp warning that the Trump administration is poised to favor Elon Musk’s Starlink at the expense of rural communities. In an email obtained by Politico, Feinman accused Washington of betraying rural America by pushing for broadband rules that would enrich Musk while delivering inferior internet service. He urged lawmakers and the public to resist changes that prioritize slower, costlier satellite technology over fiber.

Commerce Secretary Howard Lutnick is reviewing the program, potentially removing existing requirements and opening the door for Starlink to claim a larger share of subsidies. While Musk and Starlink did not comment, Feinman cautioned that changes could stall state projects and derail broadband expansion efforts.

— U.S. seeks European egg imports amid high prices. USDA has reached out to Denmark and other European nations to explore egg imports as domestic prices surge due to a worsening bird flu outbreak, Reuters reported. Wholesale egg prices in the U.S. have hit record highs, rising 59% year-over-year in February, despite President Donald Trump’s earlier pledge to lower them.

A letter reviewed by Reuters shows that U.S. officials formally inquired about European egg supplies in late February, with follow-up requests to Denmark in early March. However, the Danish Egg Association noted that Europe is also facing shortages due to increased consumption and avian flu.

The move comes amid broader economic tensions, including new U.S. tariffs on European countries and Trump’s threats of economic sanctions against Denmark over Greenland. Turkey has already begun exporting eggs to the U.S., while Washington is pursuing a $1 billion effort to address the crisis. The U.S. embassy in Copenhagen and the Department of Agriculture have not yet commented on the situation.

— Stakeholders still buzzing about EPA’s major policy changes. EPA last Wednesday announced 31 moves to repeal environmental protections, shifting focus to economic growth. The Trump administration, led by EPA Administrator Lee Zeldin, on March 12 announced plans to roll back dozens of key environmental regulations, including limits on air and water pollution, protections for wetlands (WOTUS), and the agency’s authority to regulate greenhouse gases. In a video statement, Zeldin reframed the EPA’s mission as reducing costs for businesses and consumers, omitting references to environmental or public health protections.

The proposed deregulations, which will undergo a formal review process, have drawn sharp criticism from environmental advocates and Democrats, who argue they undermine efforts to combat climate change and protect public health.

Among the most significant changes, the EPA plans to challenge the legal basis for regulating carbon emissions, a move some experts say is unlikely to succeed but signals a dramatic shift in environmental policy.

Of note: The effort to revise EPA’s 2009 “endangerment finding” is a significant move because that legal opinion determines that greenhouse gas emissions endanger public health. This finding grants the agency the authority to regulate emissions from key sources like automobiles, factories, power plants, and oil and gas wells. If it were eliminated, EPA would lose its legal basis to enforce climate pollution regulations, making it much harder to address greenhouse gas emissions.

— Western states push for overhaul of Glen Canyon dam amid water crisis. Representatives from California, Arizona, and Nevada are urging the Trump administration to address infrastructure issues at Glen Canyon Dam as part of new rules for managing the Colorado River’s ongoing water shortages. In a letter (link) to Interior Secretary Doug Burgum, state officials criticized the Biden administration’s previous approach and called for engineering fixes to prevent major water delivery disruptions. With Lake Powell’s water levels dwindling, concerns over potential bottlenecks at the dam have intensified, as damage to existing bypass tubes could restrict downstream water flow. The states argue that neglecting these infrastructure issues could violate the 1922 Colorado River Compact and lead to legal battles between upper and lower basin states. Federal officials have acknowledged the risks and are considering various repair options, but disagreements over water distribution persist. With existing management rules set to expire in 2026, stakeholders remain deadlocked, increasing the urgency for a long-term, sustainable solution.

FINANCIAL MARKETS

— Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to slightly lower openings. Asian shares climbed after China pledged more steps to revive consumption (see item in China section). U.S. equity futures slid as Treasury Secretary Scott Bessent dismissed the market’s recent decline as healthy (see item above). In Asia, Japan +0.9%. Hong Kong +0.8%. China +0.2%. India +0.5%. In Europe, at midday, London +0.2%. Paris +0.3%. Frankfurt +0.4%.

Equities Friday and the week of March 10-14:

— Louis-Dreyfus family sells Russian agricultural stake at discount: Interfax. The Louis-Dreyfus family has sold its stake in Russian agricultural firm RZ Agro to co-owner Steppe Agroholding, according to Interfax. The deal, completed at a “big discount,” was reportedly expected and amicable. Steppe, owned by Russia’s AFK Sistema, declined to comment. The Louis-Dreyfus family held its stake via Sierentz, a commodity investment firm, though they have not been involved in Louis Dreyfus Company (LDC) for years. LDC has been winding down its Russian operations since 2022 following Moscow’s invasion of Ukraine.

— Dollar index sees prolonged decline amid economic uncertainty. The WSJ Dollar Index has fallen for seven of the past nine weeks, erasing much of its post-election gains. This decline reflects broader economic and geopolitical factors, including expectations of Federal Reserve rate cuts, rising trade tensions, and increasing demand for safe-haven assets. With fears of a U.S. recession and a narrowing global growth disparity, the dollar’s weakening trend continues, despite initial predictions of strength due to fiscal policies. The index, which peaked at 105.14, has dropped about 5.75% as of early March 2025.

Safe-haven assets like the Japanese yen and U.S. Treasurys have seen increases, further impacting the dollar’s value. Expectations for Federal Reserve interest rate cuts have risen, with markets pricing in several reductions by the end of 2025. This, combined with lower U.S. Treasury yields, has contributed to the dollar’s decline.

Major shifts in U.S. foreign policy have had significant ripple effects on global markets, particularly in Europe. The U.S. dollar has dropped sharply against the euro, likely due to policy changes that reduce confidence in the dollar or boost European economic prospects. Investors see these U.S. policy shifts as beneficial for Europe, pushing European stock markets to record highs. Surging German bond yields —comparable to the post-Berlin Wall era — signals that investors expect stronger growth and possibly tighter monetary policy in Europe.

— U.S. retail sales rebound less than expected in February. Retail sales in the U.S. rose 0.2% month-over-month in February 2025, recovering from a revised 1.2% decline in January but falling short of the expected 0.6% increase. Nonstore retailers led gains (2.4%), followed by health & personal care stores (1.7%) and food & beverage outlets (0.4%). Meanwhile, sales dropped at food services & drinking places (-1.5%), gasoline stations (-1%), and clothing stores (-0.6%), among others.

The report offers insights into consumer spending trends amid economic uncertainty. Consumer sentiment has declined for three straight months, and Bank of America data shows a 2.3% drop in spending per household year-over-year. The weak report could fuel recession concerns, and provide the Federal Reserve with more flexibility ahead of its March 18-19 meeting.

Of note: After adjusting for inflation, consumer spending has grown 17% more than personal income over the past three years and 44% more over the past 12 months. Says a WSJ opinion column: “Americans can’t spend more than they earn forever.”

AG MARKETS

— Overnight ag markets:

Grains lead overnight strength. Wheat is trading at more than two-week highs while corn is seeing spillover strength. Soybeans struggled to build on grain strength. As of 6:30 a.m. CT, corn futures are trading 4 to 6 cents higher, soybeans are around a penny higher, and wheat is 11 to 16 cents higher. The U.S. dollar index is around 200 points lower while front-month crude oil futures are about a dollar higher.
Cash cattle trade providing little direction. Cash cattle trade remained light into Friday of last week, with very few head trading hands ahead of the end of the week. Trade is likely to be pushed late into the week again this week given the Cattle on Feed report.
Cash hog fundamentals remain choppy. The CME lean hog index is down 19 cents to $89.55 as of March 13, though that remains above the late February low. Pork cutout inched 9 cents higher to $97.38 Friday, led by strength in ribs.

— Ag trade: Iran bought around 120,000 MT of wheat, expected to be sourced from Russia.

— Indonesia’s palm oil exports surge 62% in February amid lower taxes. Indonesia’s crude and refined palm oil exports soared 62.2% in February from the previous month, reaching a four-month high of 2.06 million metric tons, according to the statistics bureau. The increase was driven by Jakarta’s move to cut export taxes, making Indonesian palm oil more competitive than Malaysia’s. The shift in buyer preference led to a 16.27% drop in Malaysia’s exports, which hit a four-year low. Despite curbs on used cooking oil, Indonesia’s exports remain strong, supported by a 40% mandatory biodiesel blend.

— Brazilian corn prices reach highest mark in nearly three years. Domestic corn prices in Brazil ended last week solidly higher at the highest level since April 2022. This year, Brazilian corn prices are up about 24%, led by strong feed and ethanol demand and low inventories. Stocks are likely to remain tight ahead of Brazil’s safrinha corn harvest in the early summer. Strong domestic demand could limit the amount of corn Brazil can export, potentially benefiting U.S. exports.

— Russia trims wheat export tax. Russia’s tax on wheat exports will decline to 2,403.0 rubles ($28.54) per metric ton for March 19-25, down from 2,444.4 rubles ($29.13) the previous week. That is nearly half of where it was at the beginning of the year. Russian exports continue to fall below year-ago despite lower export taxes. Russia is estimated to export 1.5 MMT of wheat in March, down from 1.9 MMT in February and 4.8 MMT in March 2024.

— BNSF to serve new grain-loading terminal in Wisconsin. ALCIVIA, a member-owned agricultural and energy cooperative, has opened a new grain shuttle loading facility in Hager City, Wisconsin, on BNSF Railway’s network. The 40-acre facility, under construction since April 2024, features eight grain bins with a total storage capacity of 3.9 million bushels, high-speed grain handling equipment, and year-round rail shipping access. These advancements will streamline grain logistics, reducing wait times and enabling winter shipments. BNSF and ALCIVIA officials celebrated the facility’s launch with a ribbon-cutting ceremony.

— Agriculture markets Friday and the week (March 10-14):

FARM POLICY

— This is deadline week for $10 billion in farmer economic aid authorized in legislation last Dec. 21. USDA Secretary Brooke Rollins said USDA is on track to meet the March 21 deadline, with applications expected to be available shortly.

Economic assistance program: The $10 billion economic aid will be distributed through the Emergency Commodity Assistance Program (E-CAP), with payments based on crops planted and market prices.
Application process: Pre-filled applications will be sent to producers where information is already on file, using 2024 acreage reporting data. Producers can review, sign, and return these applications to local FSA service centers.
Deadline and timing: Initial payments are likely to be around 85% of the total, followed by a supplemental payment in the summer.
Farmers can expect to receive the economic assistance aid relatively quickly after submitting their applications, as USDA aims to distribute the funds efficiently. The process is designed to be simple, transparent, and fast, with pre-filled applications being sent to producers where information is already on file, using 2024 acreage reporting data. Exact payment schedules may vary based on the efficiency of the application process and the speed at which USDA can verify and process applications.

ENERGY MARKETS & POLICY

— Oil prices rise amid U.S. strikes on Houthis and Chinese economic optimism. Oil prices climbed on Monday as the U.S. pledged to continue strikes against Yemen’s Houthis until their attacks on Red Sea shipping cease. Brent crude rose 63 cents, 0.9%, to $71.21 per barrel, while WTI gained 62 cents, 0.9%, to $67.80. Support also came from stronger-than-expected Chinese economic data, with retail sales growth boosting demand prospects. However, concerns over a global slowdown and OPEC+ production increases continue to weigh on the market. Analysts see short-term buying opportunities amid geopolitical risks and potential U.S. sanctions on Iran. Meanwhile, Goldman Sachs cut oil price forecasts due to slowing U.S. economic growth and higher-than-expected OPEC+ supply.

— Oil prices rebounded Friday as geopolitical uncertainty weighs. Oil prices rebounded 1%, on Friday, leaving the week nearly unchanged as hopes for a swift resolution to the Ukraine war faded. Brent settled at $70.58 (up 70 cents) while WTI rose 63 cents to $67.18, recovering from Thursday’s declines. Russia signaled openness to a U.S.-proposed ceasefire but attached conditions, while Trump urged Moscow to accept the deal. Sanctions on Russian oil remained in place, prompting Chinese state firms to limit imports. Meanwhile, the IEA maintained its forecast of a global oil surplus in 2025, citing rising U.S. production and weaker demand. OPEC+ output and macroeconomic concerns continued to weigh on price recovery, despite geopolitical risks. In the U.S., oil rig counts edged higher, signaling modest production growth.

— Renewable energy group targets GOP in ad blitz to avoid clawing back IRA biofuel tax incentives. American Energy Action has launched a nationwide ad campaign against key Republican lawmakers, urging them to protect tax credits for the renewable energy industry. The ads (link) target Senate Majority Leader John Thune (R-S.D.) and several Senate Finance Committee members, including Thom Tillis (R-N.C.), Bill Cassidy (R-La.), and Chuck Grassley (R-Iowa). House Ways and Means Committee members and other GOP representatives also face pressure. The campaign emphasizes clean energy’s economic benefits, framing it as a job creator and financial boon for farmers (link to letter).

Of note: With Republicans considering cuts to the Inflation Reduction Act’s (IRA/Climate Act) tax credits to help provide funding offsets for tax cut extensions and new tax cuts, the renewable energy sector is mobilizing to defend its interests.

TRADE POLICY

— Canada resumes U.S. pork imports after temporary suspension. Canada has resumed imports from Smithfield Foods’ Tar Heel, North Carolina, pork-processing plant after a week-long suspension, the company confirmed. The temporary halt, which lasted from March 6 to March 12, stemmed from an issue with offal shipments at the border and was not related to tariffs, according to Smithfield CEO Shane Smith. The suspension briefly disrupted a key export market amid ongoing trade concerns for U.S. pork producers, who fear the impact of tariff disputes with major buyers like Canada, Mexico, and China.

— Trade hawks demand tougher tariff enforcement. As President Donald Trump escalates tariffs, American manufacturers worry that enforcement remains too weak, allowing foreign firms to circumvent duties. A coalition of producers — from auto parts to kitchen cabinets — has found that companies, particularly from China, reroute goods through third countries like Thailand and Vietnam to avoid tariffs. Frustrated by the porous system, they are pushing for stricter border enforcement, with bipartisan support in Congress backing new trade crime task forces. One would create a task force in the Department of Justice to focus on trade-related crime. Another would focus on the demand side, stripping the right to import from people proven to have engaged in fraud.

Meanwhile, the U.S. tariffs imposed on Chinese goods under Trump’s administration led to a shift in global trade patterns, with companies redirecting investments to Mexico, Vietnam, and Thailand to bypass trade restrictions. These countries became key hubs for assembling Chinese components into final products bound for the U.S. While China’s trade surplus with the U.S. has significantly declined since 2018, its exports to developing markets — especially Mexico — have surged. China now exports far more to Mexico than it imports, with Chinese auto parts being assembled there into vehicles sold in the U.S. Beijing is now worried that Washington might pressure Mexico into restricting Chinese imports in exchange for tariff relief on its own exports to the U.S. This puts Mexico in a tough position, as its economic growth and job market heavily depend on trade with both the U.S. and China.

Of note: A WTO loophole is a serious concern for China because it allows Mexico — and other low- and middle-income countries — to impose steep, sudden tariff hikes on Chinese goods without violating WTO rules. More critically, Beijing would not have the legal right to retaliate under WTO guidelines. Analysts say this could lead to a wave of protectionist measures by countries looking to shield their domestic industries from Chinese imports. Given Mexico’s growing role as a nearshoring hub for U.S. supply chains, such tariff increases could further shift trade flows away from China. If more nations exploit this rule, it could undermine China’s export-driven economic strategy.

Chinese officials likely see this as a structural vulnerability within global trade rules, limiting their ability to counter foreign trade barriers. China watchers say to expect Beijing to explore diplomatic or legal ways to neutralize this threat.

CONGRESS

— Both the House and Senate are on recess this week. Link for key agenda items this week via The Week Ahead.

HPAI/BIRD FLU

— First U.S. H7N9 bird flu outbreak since 2017. The United States has reported its first outbreak of H7N9 bird flu on a poultry farm since 2017, according to the World Organization for Animal Health. The highly pathogenic avian influenza has spread globally in recent years, leading to the culling of hundreds of millions of poultry, including in the U.S.

CHINA

— China’s economy shows modest retail sales gains amid challenges. China’s economic data for the first two months of 2025 indicate a modest improvement, offering some relief to policymakers. Retail sales grew by 4% year-on-year, up from 3.7% in December, signaling a push in domestic consumption despite U.S. tariffs and weak exports. Excluding autos, retail sales growth was 4.8%. Urban retail sales rose by 3.8%, while rural areas saw a 4.6% gain. Online sales surged 7.3% YoY, with physical goods up by 5%.

— China’s industrial growth moderates despite beating forecasts. China’s industrial production grew by 5.9% year-over-year in January-February 2025, surpassing market expectations of 5.3% but slowing from December’s 6.2% growth. Manufacturing expansion eased (6.9% vs. 7.4%), while mining accelerated (4.3% vs. 2.4%). Key manufacturing sectors saw notable growth, including automobiles (12.0%) and chemical products (9.5%). However, industrial output contracted by 0.51% in February. China combines January-February data to offset Lunar New Year distortions.

— China unveils measures to boost consumption amid economic woes. China’s State Council on Sunday, March 16, announced new policies to stimulate consumption by increasing incomes, stabilizing stock and real estate markets, and encouraging higher birth rates, Xinhua reported. The plan includes wage growth, a childcare subsidy system, and expanded investment in consumer-driven sectors.

Additional steps involve pension increases, student aid, unemployment benefits, and financial support for farmers. The government also plans to ease restrictions on consumption, promote duty-free shopping, and advance smart technologies. The announcement follows recent deflation concerns and a push at parliamentary meetings to prioritize economic revival.

Concludes ING Economics: “We think this year’s attention to boosting consumption, combined with last year’s relatively low base, will help consumption growth recover to mid-single-digit growth in 2025. Further upside would likely hinge on a sustainable recovery of consumption.”

— China’s cautious stimulus: Balancing growth amid challenges. China has set a GDP growth target of around 5% for 2025, maintaining last year’s goal while rolling out stimulus measures, including a 300-billion-yuan ($41.5 billion) consumer subsidy, a 500-billion-yuan state bank injection, and an increased budget deficit-to-GDP ratio of 4%. Officials claim the economy is gaining momentum, but deflationary pressures and a worsening U.S. trade war pose risks.

— China’s food security push amid tariff war. As China navigates the trade war, food security remains a priority. Despite record grain output surpassing 700 million tonnes last year, Premier Li emphasized the need for comprehensive resource development. The country’s self-sufficiency rate has declined, forcing reliance on imports to balance supply and demand.

Agriculture Minister Han Jun underscored the risks, warning that China must not assume its food situation is secure.

Meanwhile, escalating tariffs on U.S. and Canadian agricultural imports signal Beijing’s determination to enhance self-reliance. However, Han cautioned against overconfidence, stressing that feeding 1.4 billion people must be a domestic effort.

BORDER, IMMIGRATION, DEPORTATION & LABOR

— U.S. uses wartime law to deport Venezuelans amid legal challenge. The U.S. deported hundreds of Venezuelans to El Salvador despite a judge’s attempt to block the move. President Donald Trump invoked the rarely used Alien Enemies Act of 1798, historically applied only during wars. Last used in World War II, the law requires an “invasion or predatory incursion” by an enemy government. The White House justified the action by claiming the deportees were gang members. Some legal scholars question whether the law applies, with one expert calling the government’s broad definition of “invasion” a “ludicrously low bar.”

WEATHER

— Hailstorms: The hidden driver of America’s insurance crisis. As the cost of repairing storm damage soars, insurers are dropping policyholders and hiking premiums, particularly in the American heartland. While hurricanes and wildfires dominate headlines, severe convective storms — especially hail — are the leading cause of weather-related insurance losses, costing insurers $58 billion in 2023, according to broker Gallagher Re. That is more than every U.S. hurricane except Katrina and Ian, according to the Insurance Information Institute.

Homeowners in states like Oklahoma are seeing skyrocketing premiums and policy cancellations, with some areas at risk of becoming “insurance deserts.” Meanwhile, major insurers report growing surpluses, partly due to higher premiums and reduced roof coverage. For many, home insurance is becoming a financial burden rather than a safety net.

— NWS outlook: Heavy snow over the Sierra Nevada Mountains/ Northern Rockies on Monday and Northern/Central Rockies on Tuesday; light to moderate snow from the
Central Plains to the Upper Great Lakes on Tuesday into Wednesday morning... ...Temperatures will be 15 to 25 degrees above average over parts of the Central Plains and adjacent regions... ...There is a Critical Risk of fire weather over the parts of the Central/Southern High Plains on Monday and Extreme Risk over the Southern High Plains.

KEY DATES IN MARCH

8-20: FOMC blackout where Fed officials cannot comment on monetary policy or the economy.
18: NCAA men’s basketball finals
18-19: FOMC meets (interest rates)
20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

LINKS