2025-02-26 20:39

Trump says Canada, Mexico tariffs take effect on April 2 White House official says Trump to review March 4 deadline Trump says tariffs on EU auto imports to be generally 25% Senate confirms Jamieson Greer as U.S. Trade Representative WASHINGTON, Feb 26 (Reuters) - U.S. President Donald Trump on Wednesday raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% "reciprocal" tariff on European cars and other goods. A White House official, however, said Trump's previous March 4 deadline for the 25% tariffs on Mexican and Canadian goods remained in effect "as of this moment," pending his review of Mexican and Canadian actions to secure their borders and halt the flow of migrants and the opioid fentanyl into the U.S. Trump sowed confusion during his first cabinet meeting on Wednesday, when he was asked about the timing for the start of the duties for Canada and Mexico and replied that it would be April 2. "I have to tell you that, you know, on April 2, I was going to do it on April 1," Trump said. "But I'm a little bit superstitious, I made it April 2, the tariffs go on. Not all of them but a lot of them." Trump's comments prompted jumps in the value of the Canadian dollar and Mexican peso versus the greenback. Canadian Innovation Minister Francois-Philippe Champagne told reporters that Canada would wait for signed executive orders from Trump before reacting. "Our mission is still to avoid the tariffs, extend the suspension if we need to," Champagne said. "We are prepared - there will be a targeted, strategic but a firm response" if Trump imposes tariffs. Mexico's Economy Ministry declined to comment on Trump's remarks, but said Economy Minister Marcelo Ebrard will meet on Thursday with newly confirmed U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick on Friday. Lutnick told the cabinet meeting that the fentanyl-related actions were paused for 30 days but referred to "overall" tariffs on April 2. He did not specify whether the March 4 deadline remained in effect. "So the big transaction is April 2, but the fentanyl-related things, we're working hard on the border," Lutnick said. "At the end of that 30 days, they have to prove to the president that they've satisfied him in that regard. If they have, he'll give them a pause, or he won't." EU TARIFF RATE Trump has targeted early April for imposing reciprocal tariffs matching import duty rates of other countries and offseting their other restrictions. His trade advisers consider European countries' value added taxes to be akin to a tariff. Trump, asked whether he has decided on a tariff rate for goods from the European Union, replied: "We have made a decision, and we'll be announcing it very soon, and it'll be 25%, generally speaking, and that'll be on cars, and all of the things." He said the EU is a "different case" from Canada and takes advantage of the U.S. in different ways. "They don't accept our cars. They don't accept, essentially our farm products," Trump said, adding that the EU was formed "in order to screw the United States." A European Commission spokesperson said the EU "will react firmly and immediately against unjustified barriers to free and fair trade," including for tariffs that challenge legal and non-discriminatory policies. "The European Union is the world's largest free market. And it has been a boon for the United States," the spokesperson said. Roberta Metsola, president of the European Parliament, was planning to meet with U.S. lawmakers in Washington on Wednesday, but not with any Trump administration officials. NEW USTR CONFIRMED Also on Wednesday, the U.S. Senate voted 56-43 to confirm Greer as U.S. Trade Representative, putting a veteran of the Republican president's first-term trade wars fully on the job. Greer, who served as chief of staff to former USTR Robert Lighthizer, won the support of five Democrats, including both senators from Michigan, the center of the U.S. auto industry. Trade groups welcomed Greer's confirmation, lauding his commitment to consulting with industry and standing up for U.S. businesses, farmers and workers. "We share Ambassador Greer's desire for an active and pragmatic trade policy that creates U.S. jobs and more resilient supply chains," said Jake Colvin, president of the National Foreign Trade Council. Greer told senators during his Senate confirmation hearing that he wanted to quickly renegotiate the U.S.-Mexico-Canada Agreement on trade to ensure China does not use it as a back door to the U.S. market to avoid other tariffs. "Right out of the gate, I expect that we'll be taking a second look at the USMCA," Greer said. Asked what changes he would like to see in the pact, Greer zeroed in on further tightening automotive content rules. "I think we should look at the rule of origin for automobiles and aerospace and other things to look and see if we need to have any kind of restriction on content or value added from foreign countries of concern, or non-market economies," he said, using language that U.S. trade officials often use to describe China. Sign up here. https://www.reuters.com/world/us/us-senate-confirms-trump-trade-chief-greer-ahead-canada-mexico-tariffs-2025-02-26/

2025-02-26 20:28

Japan's economic, price data fairly strong, Mimura says Solid data leading to hawkish BOJ communication Remarks suggest Tokyo sees no problem with recent yen rises CAPE TOWN, Feb 26 (Reuters) - Japan's top currency diplomat, Atsushi Mimura, said on Wednesday he did not see any disparity between recent rises in the yen and a slew of positive economic data, underscoring Tokyo's view that the currency's rebound was broadly in line with an improving economy that could justify hikes in Japan's interest rates. Mimura said recent Japanese data, including fourth-quarter gross domestic product, has shown the country's economy was in "fairly good shape." Japan has also seen some strong data on price growth with headline consumer inflation hitting 4% in January and import prices rising on a year-on-year basis, he told reporters on the sidelines of a Group of 20 finance leaders' meeting in Cape Town, South Africa. "The Bank of Japan is issuing various messages on its monetary policy outlook, taking into account such economic data," he said, when asked about the yen's recent rises. "I don't see any disparity" between the BOJ's messages and recent yen moves, he added, suggesting it was natural for the currency to rise in response to the central bank's recent hawkish message signaling the chance of a near-term rate hike. "Given high uncertainty, we must continue to scrutinise how speculative moves could affect financial markets, not just currency rates," Mimura said. Mimura oversees Japan's currency policy, including its decision on whether and when to intervene in the exchange-rate market to arrest any volatile moves in the yen. The yen has rebounded against the dollar on growing market prospects that the BOJ will continue to raise interest rates, while the U.S. Federal Reserve eyes cutting borrowing costs. The yen stood around 149 to the dollar on Wednesday, well off the three-decade low near 162 hit last year. The BOJ ended a decade-long massive stimulus last year and raised its short-term interest rate to 0.5% from 0.25% in January on the view that Japan was on the cusp of sustainably achieving its 2% inflation target. BOJ Governor Kazuo Ueda has said the central bank will keep raising interest rates if Japan continues to make progress in durably achieving 2% inflation backed by solid wage growth and domestic demand. Japan's recent foray in the currency market has been focused on preventing sharp declines in the yen, which gives exports a boost but hurts consumption and retailers by inflating the cost of raw material imports. Japan's economy grew an annualised 2.8% in the final quarter of last year on improved business spending and a surprise increase in consumption, shoring up the central bank's case for more interest rate hikes. Headline consumer inflation, including fresh food prices, hit a two-year high of 4.0% in January, accelerating from 3.6% the previous month, as rising food and fuel costs added to mounting inflationary pressure from higher wages. A majority of economists polled by Reuters expect the BOJ to hike rates once more this year, most probably during the third quarter, to 0.75%. Sign up here. https://www.reuters.com/markets/currencies/japans-top-currency-diplomat-sees-no-disparity-between-yen-moves-solid-economy-2025-02-26/

2025-02-26 19:59

Feb 26 (Reuters) - Citi anticipates an eventual implementation of a 25% copper-specific tariff by the fourth quarter of 2025, following U.S. President Donald Trump's executive order initiating an investigation into U.S. copper imports, the bank said in a note on Wednesday. Trump opened yet another front on Tuesday in his assault on global trade norms, ordering a probe into potential new tariffs on copper imports to rebuild U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. Citi expects the 1-year forward COMEX copper premium over LME to eventually reflect a 25% tariff (~$2,400/t) once confirmed later this year but may price at an effective 15-20% rate (~$1,400/t-$1,900/t) in the meantime. The tariff announcement should boost confidence in eventual duties and ahead of the tariffs, U.S. buyers may stockpile copper, driving up prices, but this trend could reverse once the tariffs take effect, Citi said. The bank also warns that "effective duties on U.S. copper imports could come sooner via other channels, namely reciprocal tariffs, but also country-specific duties like those announced on Canada and Mexico." The U.S. may impose reciprocal duties on copper imports as early as the second quarter of 2025 as part of broader trade measures, the bank added. Citi said the investigation will cover various forms of copper, including raw ore, refined metal, alloys, scrap, and finished products. "Our base case for the timing of a Section 232 copper-specific tariff is for implementation by 4Q’25, and no earlier than May," the bank said in a note. While the official review is set to take up to 270 days (until late November 2025), Citi notes that past cases, such as those on steel and aluminum, suggest the process could move faster. Sign up here. https://www.reuters.com/markets/commodities/citi-predicts-25-copper-specific-tariff-by-fourth-quarter-2025-02-26/

2025-02-26 19:31

USDA to provide free safety checks to farms US to import more eggs from Turkey as prices hit record after flu wiped out millions of hens USDA explores vaccine use but not ready to approve it WASHINGTON, Feb 26 (Reuters) - The U.S. will invest up to $1 billion to combat the spread of bird flu, as well as increase imports of eggs in an effort to drive down high prices, agriculture secretary Brooke Rollins said on Wednesday. A three-year bird flu outbreak in U.S. poultry has killed 166 million chickens since 2022, according to USDA data. The virus has also infected nearly 1,000 dairy herds and almost 70 people, including one who died, since early 2024. The USDA will spend up to $500 million to provide free biosecurity audits to farms and $400 million to increase payment rates to farmers who need to kill their chickens due to bird flu, Rollins said at a conference of state agriculture officials. In a Wednesday Wall Street Journal column, Rollins said some of the money will come from cuts to USDA spending by Elon Musk's Department of Government Efficiency. But on a call with reporters later in the day, Rollins' chief of staff, Kailee Tkacz Buller, said the money was coming from the USDA's Commodity Credit Corporation, a discretionary pool of funding available to the secretary. The agency did not immediately clarify the discrepancy. The USDA is exploring vaccines for chickens but is not yet authorizing their use, Rollins said. The poultry industry is divided on whether to vaccinate chickens because of potential trade implications. "It could be a solution, but to push that out now and require it, we're just not ready," Rollins said of vaccines when speaking to reporters at the White House on Wednesday. Some industry groups expressed relief on a Wednesday call with Rollins that the agency did not move to require vaccines, said Rick Phillips, director of poultry professional services veterinarians for drugmaker Boehringer Ingelheim, who was on the call. "There was a little bit of a sigh that they didn't move fast on certain things like immediately going to vaccination until we better understand the nature of what we're dealing with," he said. The company received a U.S. license in 2023 for a bird flu vaccine for chickens. The administration plans to increase imports and decrease exports of eggs to boost domestic supply and combat record high egg prices, Rollins said. Turkey has said it will export 15,000 tons of eggs to the U.S. through July. This year, Turkey is expected to supply about 420 million eggs to the U.S., up from about 70 million normally, Buller said on the press call. Egg prices have nearly doubled since last year. Scant supply is leading some consumers to "panic buy," said Virginia Tech economist Jadrian Wooten in an email. In May, the administration of President Joe Biden allocated more than $800 million to combat bird flu in livestock. About $450 million of that money is still available, a USDA official said on Tuesday at the National Association of State Departments of Agriculture conference. (This story has been corrected to remove a reference to Boehringer Ingelheim receiving a vaccine license for turkeys in paragraph 10) Sign up here. https://www.reuters.com/world/us/us-will-spend-up-1-billion-combat-bird-flu-usda-secretary-says-2025-02-26/

2025-02-26 19:10

Loonie falls 0.1% against the U.S. dollar Touches its weakest since February 10 at 1.4365 Price of US oil declines 0.5% Bond yields trade mixed across a flatter curve TORONTO, Feb 26 (Reuters) - The Canadian dollar weakened to a two-week low against its U.S. counterpart on Wednesday as trade uncertainty lingered for the domestic economy even after U.S. President Donald Trump pushed back a deadline to impose tariffs on Canadian goods. The loonie was trading 0.1% lower at 1.4330 per U.S. dollar, or 69.78 U.S. cents, after touching its weakest intraday level since February 10 at 1.4365. President Donald Trump said stiff new tariffs on imports from Mexico and Canada would take effect on April 2, about a month later than an earlier deadline for the levies to take effect, giving the loonie a short-lived boost. "It's another month, which is obviously good news for Canada but the tariff uncertainty is a real drag on the Canadian economy," said Adam Button, chief currency analyst at ForexLive. Canada sends about 75% of its exports to the United States. On Friday, Bank of Canada Governor Tiff Macklem said tariffs and subsequent retaliation from Canada could almost wipe out any domestic growth in 2025 and 2026. The price of oil, one of Canada's major exports, fell as a surprise build in U.S. fuel stockpiles signalled demand weakness and a potential peace deal between Russia and Ukraine continued to weigh on prices. U.S. crude oil futures were down 0.5% at $68.57 a barrel. Canadian bond yields were mixed across a flatter curve. The 10-year was down one basis point at 2.984% after earlier touching its lowest level since February 7 at 2.973%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-steadies-near-2-week-low-tariff-deadline-draws-closer-2025-02-26/

2025-02-26 18:11

LONDON, Feb 26 (Reuters) - The Bank of England's response to higher U.S. tariffs and other trade restrictions will depend on the extent to which they disrupt supply chains rather than just push up costs, BoE policymaker Swati Dhingra said on Tuesday. Dhingra - a trade specialist at the London School of Economics and a member of the BoE's Monetary Policy Committee - said that in the short term, the inflationary impact of higher tariffs was likely to be offset by weaker global growth. "If the world economy fragments in an orderly way, monetary policy would likely not need to respond while the world economy transitions and prices re-adjust to reflect the new geopolitical developments," she said. However, if tariffs evolved into a system that placed strict barriers on the foreign content of imported goods, that could lead to a disorderly break-up of supply chains. "In the extreme scenario, several large economies deciding to impose trade barriers similar to those proposed by the U.S., would put severe strain on a few sources of supply," she said in a speech delivered to Britain's National Institute of Economic and Social Research. Dhingra considered this scenario - which could lead to price spikes like those seen after Russia's full-scale invasion of Ukraine three years ago - as less likely than more modest frictions. "The world economy seems to be moving closer to an orderly fragmentation," she said. British finance minister Rachel Reeves told Reuters on Wednesday she was confident that U.S.-UK trade and investment would not be derailed by the new U.S. administration. Prime Minister Keir Starmer is due to meet Trump in Washington on Thursday with the risk of trade tariffs one of the key issues on the table. Monetary policy was ill-suited to dealing with supply shocks from trade tariffs that hit a small range of key sectors, Dhingra added. Higher interest rates needed to tame inflation risked stopping investment in sectors such as energy and food that were needed to boost resilience, she said. Dhingra has been the MPC member who has voted most often for looser monetary policy since she joined in August 2022. This month she voted for a half-point cut in interest rates to 4.25%, rather than the quarter-point cut favoured by a majority of MPC members. Earlier this week she said the BoE's current pace of loosening - quarter-point cuts each quarter - would still leave monetary policy in too restrictive a stance at the end of 2025. Sign up here. https://www.reuters.com/markets/europe/orderly-trade-fragmentation-might-not-require-boe-action-mpcs-dhingra-says-2025-02-26/