“Homegrown tomatoes, homegrown tomatoes, what’d life be without homegrown tomatoes? Only two things that money can’t buy – that’s true love & homegrown tomatoes.” – Guy Clark
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Although China has made great strides in improving agricultural productivity and output in recent decades, it is still partially dependent on imports to feed its people. Perhaps that’s why, along with the sheer size of its population, it is the world’s largest food importer. This is a nagging reality that transcends mere intellectual understanding for government officials and population: with the last major famine in Chinese history having officially ended in 1961 and a majority of the population officially living in extreme poverty until the mid-1990s, many in China have a direct, visceral experience with extreme hunger. Government policy thus focuses on maintaining production and strategic reserves of staple grains like rice, wheat, and corn. (China also maintains a strategic pork reserve.)
China used to import a significant share of staples like soybeans, corn, and sorghum from the U.S. After going through a trade war with the U.S. that President Donald Trump instigated during his first administration, China sought to remove a potential source of U.S.-driven insecurity, shifting a significant percentage of its food supply chain away from the U.S. (and close allies) to Central and South America, and to ASEAN and various African countries. But China still imports sufficient volumes of agricultural products from the U.S. ($29.25 billion worth as of 2024), which helps farmers at home (and are thus vulnerable to counter-tariffs).
To our great fortune, famines have not frequently emerged in American history. The Great Depression was the last time we Americans experienced any significant food insecurity. While we also import much of our food, we are technically capable of feeding ourselves without any imports, with the exception of certain items like coffee and chocolate, which are difficult to grow in the climates and terrain of the U.S. Aside from those, our agricultural imports are largely driven by year-round consumer demand for seasonal items (for example, strawberries, grapes, and tomatoes). Some of us might not want to go without fresh strawberries in December, but that hardly makes importing them a necessity.
Yet a U.S.-China trade war has implications for our food supply as well–not so much for the food itself but more what goes into growing our food. As Sen.Pete Ricketts (R-Nebraska) asserted recently, “China’s strategic control over crucial sectors of our food and agricultural supply chains poses a serious national security threat.” He co-sponsored a bill with Sen. Elissa Slotkin (D-Michigan) to mandate the assessment of China’s control of constituents critical to U.S. agricultural productivity. These include “essential agricultural inputs like vitamins, veterinary pharmaceuticals, and crop protection tools.” The senators noted that “China now controls over 90% of vitamin C and vitamin B6 production and up to 85% of amino acids used in animal feed.”
It would be foolish to believe that the U.S. holds all the cards in this trade war.
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Question: Does coal have a real future, or is this just a fleeting reprieve from the end?
Answer: Coal is an abundant natural resource that we should use wisely, along with all the other forms of energy, to help meet our rapidly increasing electricity needs. While some coal-fired electrical generation plants, already connected to the grid, could be brought back online (potentially over 300), the use of coal needs to be modernized for better economics and cleaner emissions.
Over 15 years ago, the USAF sponsored an MIT project to demonstrate a process to convert coal to liquid (CTL) for use as jet fuel, in case of a national emergency. Combining biomass with CTL can significantly improve emissions. CTL could be used with the latest turbine generators to create electricity. The catch is that while coal is relatively cheap, the capital investment for the CTL process is currently expensive.
Catch up with FS Insight
The actions taken on Friday evening to delay reciprocal tariffs on selected semi-conductor and smartphone products is unequivocally positive.
Technical
At this point, it remains premature for me to consider this a bear market, nor should the US economy enter a recession.
Crypto
We outline our growing optimism that crypto can stage a rally in the coming weeks and highlight the favorable risk/reward setup for SOL and the broader altcoin complex.
News We’re Following
Breaking News
- Goldman Sachs Profit Surges, Powered by Trading Revenue WSJ
- Apple, Dell, and Super Micro Stocks Gain on Tariffs Exemption. What Happens Next. BR
Markets and economy
- More than 60% of CEOs expect a recession in the next 6 months as tariff turmoil grows, survey says CNBC
- Economic Outlook Dives Just Three Months Into Trump’s Term WSJ
- How the U.S. Lost Its Place as the World’s Manufacturing Powerhouse WSJ
- Even after the selloff, U.S. stocks are still too pricey, says Citigroup, cutting them to neutral MW
Business
- Pfizer Halts Development of Weight-Loss Pill WSJ
- Airlines bank even more on splurging vacationers as clouds form on economy CNBC
- Mark Zuckerberg, Serial Witness, Will Take the Hot Seat Again NYT
Politics
- EU issues US-bound staff with burner phones over spying fears FT
- Nato acquires AI military system from Palantir FT
- Argentina’s Milei in Washington seeking trade deal with US SEM
Overseas
- How India’s middle-class debt crisis is threatening growth FT
- Ecuador’s President Daniel Noboa reelected as cartel violence escalates SEM
- Why Europe Fears a Flood of Cheap Goods From China NYT
Of Interest
- Roasted Duck, Plums and Cheese: The Bizarre Brews Fueling China’s Coffee War WSJ
- Storage units are the new hemline index FT
| Overnight |
| S&P Futures +66
point(s) (+1.2%
) overnight range: +19 to +92 point(s) |
| APAC |
| Nikkei +1.18%
Topix +0.88% China SHCOMP +0.76% Hang Seng +2.40% Korea +0.95% Singapore +1.04% Australia +1.34% India +1.92% Taiwan -0.08% |
| Europe |
| Stoxx 50 +2.11%
Stoxx 600 +2.07% FTSE 100 +1.70% DAX +2.22% CAC 40 +2.04% Italy +2.30% IBEX +1.94% |
| FX |
| Dollar Index (DXY) -0.57%
to 99.53 EUR/USD +0.20% to 1.1378 GBP/USD +0.63% to 1.3170 USD/JPY +0.20% to 143.26 USD/CNY -0.26% to 7.3110 USD/CNH -0.39% to 7.3162 USD/CHF -0.63% to 0.8200 USD/CAD +0.01% to 1.3874 AUD/USD +0.32% to 0.6309 |
| UST Term Structure |
| 2Y-3
M Spread narrowed -3.5bps
to -41.3bps
10Y-2 Y Spread narrowed -0.3bps to 52.0bps 30Y-10 Y Spread widened 2.9bps to 40.5bps |
| Yesterday's Recap |
| SPX +1.81%
SPX Eq Wt +1.52% NASDAQ 100 +1.89% NASDAQ Comp +2.06% Russell Midcap +1.56% R2k +1.57% R1k Value +1.54% R1k Growth +1.98% R2k Value +1.25% R2k Growth +1.89% FANG+ +2.11% Semis +2.60% Software +0.82% Biotech +3.80% Regional Banks -0.28% SPX GICS1 Sorted: Cons Disc +1.09% Comm Srvcs +1.10% Utes +1.18% Cons Staples +1.25% REITs +1.28% Healthcare +1.45% Fin +1.67% Indu +1.73% SPX +1.81% Energy +2.50% Tech +2.56% Materials +2.99% |
| USD HY OaS |
| All Sectors -1.7bps
to 457bps All Sectors ex-Energy -1.7bps 420bps Cons Disc -2.8bps 450bps Indu -3.1bps 342bps Tech -2.8bps 455bps Comm Srvcs -2.1bps 636bps Materials -1.5bps 438bps Energy -0.1bps 522bps Fin Snr -2.0bps 390bps Fin Sub -3.1bps 304bps Cons Staples -1.0bps 307bps Healthcare +1.8bps 460bps Utes -1.4bps 318bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 4/14 | 11:00 AM | Mar NYFed 1yr Inf Exp | n/a | 3.13 |
| 4/15 | 8:30 AM | Mar Import Price m/m | 0 | 0.4 |
| 4/16 | 8:30 AM | Mar Retail Sales m/m | 1.4 | 0.2 |
| 4/16 | 10:00 AM | Apr Homebuilder Sentiment | 38 | 39 |
| 4/16 | 4:00 PM | Feb Net TIC Flows | n/a | -48.82 |
