Tariff Tango: Wax On, Wax Off, Trade On, Trade Off
Tariffs come on, tariffs come off. Wax on, wax off. Mr. Miyagi could not have done it any better. The U.S. and China have agreed to slash the trade war tariffs on each other’s goods for 90 days. Each country will cut tariffs by 115%. This game of chicken will delete the reciprocal tariffs and the brinksmanship these countries had escalated on one another. What comes next? That’s easy. Go to Atlantic City. Go to the roulette wheel. Take out a chip. Put it on red…no wait…black…no wait…RED! I meant black! No more bets! Doh. Speaking of Atlantic City, we hope to see some of you at the Eastern Energy Expo next Monday at Harrahs. We still have some time slots available if you’d like to set up a 30 minute meeting with us. Let us know.
The oil markets are getting dizzy from this spinning roulette wheel. The pause in the tariff trade war between the US and China boosted oil prices back into the 60’s as WTI traded higher than $63 yesterday. Here’s what we do know. The economic calendar this week will reveal an update on CPI and inflation. The CPI for April is expected to rise by 0.3%. Fed Chairman Powell (remember him?) will be at a conference in DC and will likely provide some insight towards his view of the markets. Last week he decided to leave rates unchanged while holding up a yellow card for the possibility of stagflation – higher inflation along with higher unemployment. Also, the import/export price report on Friday will provide some indication on whether or not the tariff implementation is actually going to stimulate more inflation.
A recent notable on the renewables front: a bill was introduced that would reinstate the $1/gal biodiesel blenders tax credit retroactive to January 1, 2025, and extend it through December 31, 2026. A coalition of biodiesel producers have obviously publicly supported the bill as this would essentially reinvigorate the bio trade. It will be interesting to watch its progress and to see who else gets behind it.
Finally, our Chief Marketing Officer turned 100 years old yesterday. After much consideration and internal debate, The Tank Tiger decided to give him a half a day off to enjoy some cake and ice cream from our Florida office. All kidding aside, Steven, Jeanine, Jeff and I are so proud of our Poppa and all he has accomplished in his long and distinguished life and career. How blessed are we? How high are the stars.
