2025-01-23 19:10
Rollins discussed trade, deportation, ethanol at Thursday nomination hearing USDA could issue direct payments to farmers from tariff losses Rollins could not answer whether farms would be targeted in Trump deportation campaign Jan 23 (Reuters) - President Donald Trump's pick to lead the U.S. Department of Agriculture said on Thursday she would consider direct payments to farmers to offset losses from proposed tariffs, modeled after the approach taken in Trump's first term. If confirmed, Brooke Rollins would lead the $200 billion agency and its nearly 100,000 employees whose broad remit includes nutrition and commodity programs, farm loans, forestry, and trade. Trump's tariffs on Chinese imports in his first term resulted in retaliatory tariffs on soybeans. The administration then paid billions to farmers to offset losses. Trump has threatened to impose tariffs on China as well as Mexico and Canada. Rollins said during her Thursday nomination hearing before the Senate Agriculture Committee that she has spoken with Sonny Perdue, Trump's farm secretary in his first term, about how the agency managed the trade war. "We are prepared to execute something similar, if approved, if confirmed," she said, later adding, "we can't reinvent the wheel." Some senators on the committee challenged the approach. "What we've heard from our farmers and ranchers over and over again is they want to be able to do the work. They want to be able to export. They don't want to solve this problem by getting aid," said Michael Bennet, a Democrat from Colorado. Rollins, who led the White House Domestic Policy Council under Trump's first term, said she would prioritize expanding access to trade markets and reducing the country's $42 billion agricultural trade deficit. Rollins was also questioned about her record on ethanol. Reuters reported on Wednesday that a Texas policy group helmed by Rollins repeatedly criticized the politically important biofuel for raising prices and receiving undue government support. Rollins said the organization put out hundreds of papers and comments every year and that she did not author any that were critical of ethanol. She said she would support all energy sources. Asked whether the USDA would protect immigrant farmworkers from Trump's mass deportation effort, Rollins said she would listen to the labor needs of farm businesses but that she had not been involved in conversations about the deportation plan and could not answer whether farms would be targeted. Rollins also said that the country's H2A visa program for seasonal farm labor needed to be reformed, but did not provide details. Farmworkers, about half of whom are undocumented, have been concerned about potential raids and farm industry groups have urged the administration not to carry out raids at farm and food businesses. Sign up here. https://www.reuters.com/world/us/trump-pick-lead-usda-considering-payments-farmers-trade-losses-2025-01-23/
2025-01-23 19:04
Europe trying to reduce dependency on gas from Russia Trump not worried about export effect on domestic gas price Trump says 'clean coal' could back up some power plants Jan 23 (Reuters) - President Donald Trump said on Thursday the United States would guarantee supplies of liquefied natural gas to Europe, even amid worries that the booming export industry could boost prices of gas for U.S. consumers. TotalEnergies (TTEF.PA) , opens new tab CEO Patrick Pouyanne asked Trump, who was speaking remotely at the World Economic Forum on Thursday in Davos, Switzerland, what he would do if expected growth in U.S. LNG projects boosted the domestic gas price. He also asked Trump if he would agree to guarantee security of LNG supplies to Europe, which is reducing its dependency on gas from Russia. "I would make sure that you get it," Trump said, adding that he is looking at speeding up permits for LNG projects even after the U.S. became the world's top exporter of the super-chilled form of natural gas in 2023 under his predecessor. "I think the more that you do, the lower the price is going to go, and what I'd like to see is rapid approvals," Trump said. The president on Monday ordered the U.S. Energy Department to resume considering applications for LNG exports after the previous Biden administration froze them. The department this week also extended a comment period on a study on the environmental and economic impacts of the flourishing industry, indicating that approvals would not be immediate. Some U.S. manufacturing businesses that consume large amounts of gas have opposed the rapid build-out of LNG, worried that it could boost the price for consumers. Trump also said the U.S. is going to build more power plants amid growing electricity demand from artificial intelligence. "I'm going to get them the approval under emergency declaration, I can get the approvals done myself without having to go through years of waiting." He also praised coal as a potential backup to power generating facilities. Decades ago coal generated about 50% of U.S. electricity, but it has since dropped to about 16% on concerns about its carbon emissions, and competition from natural gas and wind and solar. "There are some companies in the U.S. that have coal sitting right by the plant, so that if there's an emergency, they can go to that short-term basis and use our very clean coal," Trump said. He also said the European Union treated the U.S. badly and made it difficult to get products into Europe, "and yet they expect to be selling and they do sell their products in the United States". Sign up here. https://www.reuters.com/business/energy/trump-says-us-will-guarantee-lng-supplies-europe-2025-01-23/
2025-01-23 18:59
Ukraine eyes bigger privatisations to draw foreign capital Economy Ministry estimates $500 bln needed to rebuild Foreign firms eye opportunity in defence tech, renewables DAVOS, Switzerland, Jan 23 (Reuters) - As Ukraine's president discussed peacekeeping forces needed to enforce any ceasefire and U.S. President Donald Trump urged an end to three years of war, Ukrainian officials were courting private investors this week to help rebuild the country. Oleksiy Sobolev, first deputy economy minister, described a $500 billion reconstruction effort that would pay both strategic and financial dividends to Western investors, as Kyiv steps up privatisation plans to attract foreign capital. "It's the private sector that's going to be doing these investments," Sobolev said on the sidelines of the World Economic Forum's annual meeting, describing recent success with smaller privatisations. "We're looking at privatising more. It's the right time right now to open the bigger companies," he added. U.S. President Donald Trump told WEF attendees on Thursday that he wants to end the war in Ukraine. "Our efforts to secure a peace settlement between Russia and Ukraine are now, hopefully underway. It's so important to get that done," Trump said in an address from Washington. Trump's fledgling second administration has led some to recast the bilateral relationship between the U.S. and Ukraine in terms of narrow economic interest. "Your country first. Win with us," suggested the sign greeting visitors to the Ukraine House in Davos. "The discussion about Ukraine is always about ... how do we help Ukraine?" said Kurt Volker, a former U.S. ambassador to NATO, adding: "We need to look at Ukraine as part of the solution for so many of the problems that we need to deal with." He highlighted Ukraine's potential as a producer of cleaner and more secure energy for Europe, and as a supplier of battle-tested weaponry on a continent where defence spending is on the rise. President Volodymyr Zelenskiy told leaders on Tuesday that domestic assembly lines already produced 40% of the weaponry Ukrainian forces are using on the front lines. His special adviser Oleksandr Kamyshyn told Reuters that this share has risen due in part to the "dozens" of domestic joint ventures with defence firms from Western nations already investing in Ukrainian facilities. "That's not only a local office (or) local factory, that's also R&D," Kamyshyn said in an interview. He declined to name partners, but said more than 10 are German, adding: "They are quite heavy ... big names from the U.S. side." Russian attacks on Ukraine's power sector, including strikes on coal-fired plants dating back to the 1960s and 1970s, have also created an opening for the country to pivot towards cleaner and less centralized power generation. Danish wind turbine maker Vestas (VWS.CO) , opens new tab announced a $470 million deal at Davos with DTEK, Ukraine's largest private energy firm, to expand a wind farm near the Black Sea coast. Vestas CEO Henrik Andersen said it had been a struggle to line up funding for a project in a place that many lenders consider a war zone, dragging out a process that ordinarily takes weeks into talks that took "several quarters". Andersen said public funding was crucial to get the ball rolling on what would be a gargantuan reconstruction effort. "The recovery starts before a peace deal," he said. Sign up here. https://www.reuters.com/markets/europe/ukraine-seeks-recovery-investment-davos-trump-urges-peace-2025-01-23/
2025-01-23 18:53
LONDON, Jan 23 (Reuters) - Emerging markets could be seeing a dreaded "sudden stop" of capital flows as President Donald Trump's 'America First' policies pump up the U.S. economy and suck money away from poorer countries, investment bank JPMorgan warned on Thursday. Analysts fear sudden stops in capital flows because they starve economies of the money they need to grow or even just keep going. JPMorgan's in-house indications show there were $19 billion worth of "net capital outflows" from developing economies not including China in the last quarter, with another $10 billion expected to flee in Q1. "Put simply, using the widely accepted academic definition, this would signal that EM ex China is on the verge of a sudden stop," the bank said in research note, adding that the phenomenon was not something "to be taken lightly". There are some caveats for now. The current slowdown in capital flows is not being driven by an EM-centric event, but rather the tightening of financial conditions globally as Trump's tariffs and tax cut pledges raise the possibility that U.S. interest rates stay higher for longer. With this in mind, "this is not a situation where specific EM countries are under pressure and are facing balance of payments or currency pressures as was the case in 1998-2002, 2013, 2015," JPMorgan added. Nor was it a case of weak U.S. economy driving a "risk-off" worldwide sell-off. "Rather, it is one of a strong US economy and policy risks pulling flows out of EM," analysts wrote. How the situation plays out from here will depend on what Trump does and whether key U.S. data on jobs, inflation and retail sales prove strong enough to affect the Fed's interest rate moves, JPMorgan said. Even if a sudden stop does take hold in EM, most economies should be able to absorb that shock. JPMorgan said those most at risk were Romania, Malaysia, South Africa and Hungary. Sign up here. https://www.reuters.com/markets/emerging-economies-facing-sudden-stop-capital-flows-jpmorgan-warns-2025-01-23/
2025-01-23 18:53
Mantle Ridge's victory may inspire more activist investor actions Hilal and nominees campaigned for board changes and succession plan Air Products plans new president announcement by March end NEW YORK, Jan 23 (Reuters) - Air Products and Chemicals (APD.N) , opens new tab shareholders on Thursday handed victory to an activist investor who had pushed the industrial gases company to replace its 80-year-old chief, by electing three new directors and unseating the CEO from the board. The company said preliminary tallies showed investors elected three of Mantle Ridge Capital Management's four director candidates to the company's nine-member board. They did not elect CEO Seiffolah Ghasemi, who had also been the board chair, lead director Edward Monser nor long-serving director Charles Cogut. Investors reacted positively to the news by pushing up the stock price 1.6%, trading at $321.94. The vote ends one of the most fiercely contested board battles in recent memory, with a CEO facing off against an investor who had helped put him on the board more than a decade ago in an earlier battle with another activist investor. The outcome, which bankers and lawyers called a resounding win for Mantle Ridge, raises questions about Ghasemi's future at Air Products as it is highly unusual for a CEO to be voted off his own board. For now, the company said Ghasemi will remain CEO. The board will promptly appoint a new board chair and discuss succession planning. It welcomed the newcomers, thanked the outgoing directors and said it appreciated engaging with shareholders during the proxy fight. The vote may embolden other activists to start corporate fights if management and boards do not listen to the agitators. For months, Mantle Ridge founder Paul Hilal, the board nominees and industry executive Eduardo Menezes crisscrossed the country to press their case with mutual funds, pension funds and other investors. Their arguments, that new blood was needed on the board to push for a succession plan for Ghasemi, persuade the company to allocate its capital differently and scale back on risky projects, resonated. Shareholders elected Hilal, Andrew Evans, a former chief financial officer with experience in emissions trading for utilities, and Dennis Reilley, an executive with knowledge of the industrial gases industry. Proxy advisory firm Institutional Shareholder Services had recommended these three candidates. For Hilal, who founded Mantle Ridge in 2016, this marked the second time he tangled with Air Products after having been a partner at Pershing Square Capital Management when the hedge fund battled the company more than a decade ago and helped seat Ghasemi and Monser on the board. Unlike Bill Ackman, who runs Pershing Square, Hilal has avoided noisy proxy fights and largely stayed out of the limelight. But investors expect him to help shift gears at Air Products, and the stock price has climbed more than 10% since Mantle Ridge's stake was disclosed in early October. By the time many institutional investors were already voting, Air Products last week laid out a more specific timeline for Ghasemi's departure. Air Products said it will announce a new president by the end of March and that this person will then become CEO within three months of joining. Mantle Ridge lined up industrial gases executive Eduardo Menezes, a former executive vice president at Linde and senior executive at Praxair, as a possible successor to Ghasemi. The company had repeatedly warned that electing even one of Mantle Ridge's candidates would be disorienting and disruptive for the company's leadership and long-term strategy. Sign up here. https://www.reuters.com/markets/commodities/air-products-investors-elect-three-mantle-ridge-directors-source-says-2025-01-23/
2025-01-23 18:45
Trump, citing lower oil prices, demands lower interest rates Trump pressure to cut rates comes as Fed officials set to meet Fed officials viewing current policy landscape with caution Jan 23 (Reuters) - U.S. President Donald Trump on Thursday said he wants the Federal Reserve to cut interest rates at a time the central bank has hit pause for an uncertain duration, arguing he understands monetary policy better than those charged with setting it. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump told the World Economic Forum on Thursday in Davos, Switzerland. At a White House event following those comments, Trump said, "I think I know interest rates much better than they do, and I think I know it certainly much better than the one who's primarily in charge of making that decision," in an apparent reference to Federal Reserve Chairman Jerome Powell, who Trump appointed as Fed leader in his first stint as president. Trump's remarks come five days before the Fed's first policy meeting to be held during his administration - on Jan. 28 and 29 - with very broad expectations officials will leave rates unchanged. The Fed last cut its overnight interest rate target by a quarter percentage point at its December policy meeting to between 4.25% and 4.5%. For all of 2024, the Fed lowered rates by a full percentage point amid easing inflation pressures and a sense among Fed officials that they wanted monetary policy to exert less restraint on the economy's momentum. The December meeting also saw officials trim estimates of cuts in 2025 amid expectations of higher levels of inflation and slightly better growth. Trump's comments on Fed interest rate policy are highly unusual for presidents in the modern era and conflict with the agency's design of setting interest rate policy independently. The Fed, which does not have to follow any instructions from the president, did not immediately respond to a request for comment. POLICY UNCERTAINTY A number of Fed officials, including Powell, have already expressed a need for caution about lowering rates further because of sticky inflation. Several policymakers had made an effort to take potential Trump policies into account in new forecasts issued at the December policy meeting. Lowering rates when inflation is still above the Fed's 2% target could prompt price pressures to worsen rather than improve. Speaking last week, New York Fed President John Williams noted that uncertainty surrounding government policy actions makes it particularly hard to offer guidance about the outlook for monetary policy right now. “The economic outlook remains highly uncertain, especially around potential fiscal, trade, immigration, and regulatory policies,” Williams said, “therefore, our decisions on future monetary policy actions will continue to be based on the totality of the data, the evolution of the economic outlook, and the risks to achieving our dual mandate goals.” Trump's pursuit of large-scale tariffs on America's trading partners, which are de facto taxes on imports, together with his plan to deport large numbers of undocumented immigrants, run a real risk of reigniting inflation pressures, in the view of many economists and investors. The question that would then loom is whether Fed officials believe the price increase is a one-off or the start of a more enduring rise, which could in turn call for higher interest rates. Some Fed officials believe enough clarity could soon arrive on the inflation front to get back to lowering rates. Citing recent favorable price pressure data, Fed Governor Christopher Waller told CNBC on Jan. 16 that "if we continue getting numbers like this, it's reasonable to think that possibly rate cuts could happen in the first half of the year." Waller, who was selected as a Fed governor by Trump and took office in 2020, has also been somewhat skeptical that the trade tariffs envisioned by Trump will drive up inflation in the way many economists reckon. He said on Jan. 8 that, "if, as I expect, tariffs do not have a significant or persistent effect on inflation, they are unlikely to affect my view of appropriate monetary policy." Trump was broadly critical of the Fed for raising rates during the first two years of his first term in office and lambasted Powell, whom Trump had elevated to lead the U.S. central bank, for leading that effort. Powell's term as Fed chairman ends in 2026 and before taking office, Trump said he was not inclined to remove Powell early, amid legal questions to whether such an action would even be possible. Sign up here. https://www.reuters.com/markets/us/trump-says-he-will-demand-lower-interest-rates-immediately-2025-01-23/
