The Policy Market - Tariffs Remain In Focus

|
Includes: ADM, AGR, AMZN, BBL, BHP, GPRE, HD, PEIX, REGI, REX, RIO, VALE
by: The Policy Market

Welcome to The Policy Market - Seeking Alpha's presentation of today’s top policy-related news stories with potential market impact. Follow this account and turn the e-mail alert on to receive this article in your inbox each morning before the market open.

25% tariffs squeeze businesses

"Eighty percent of my time and nearly 100% of my energy goes to dealing with the tariffs," says Harlan Stone, owner of a vinyl flooring importing business. While suppliers, importers, distributors and retailers were able to work together to shoulder the 10% tariffs on Chinese imports imposed about a year ago, the new 25% tariffs won't be nearly as manageable. "This is a chaos moment," says Stone, whose main customer is Home Depot (NYSE:HD). "If I pay the tariffs, I don’t have any money."

Senators want answers on 'Amazon's Choice'

Senators Bob Menendez and Richard Blumenthal wrote a letter to Amazon's (NASDAQ:AMZN) Jeff Bezos requesting more information on how the company chooses the "Amazon's Choice" products on its platform. The letter cites a recent BuzzFeed report that many "Choice" products are inferior or defective. Last December, Blumenthal accused The House of Bezos of stifling market competition by blocking third-party sellers from selling products at a lower price on rival platforms. Amazon later removed that policy.

Delay for major U.S. offshore wind farm

In a surprising and disappointment development (according to the project's sponsor), the Trump administration has delayed indefinitely the final environmental review for Vineyard Wind - the first major U.S. offshore wind farm. The Interior Department ordered a supplemental review for the 800 MW project to consider the potential impact on commercial fishing. Vineyard Wind, a joint venture between Avangrid (NYSE:AGR) and Copenhagen Infrastructure Partners, was expected to start construction this year and become operational by early 2022.

Fuel blending credit prices plunge on EPA waivers

The EPA approved 31 exemptions for small refineries of their federal biofuel obligations for 2018. Ahead of the news, prices for U.S renewable fuel blending credits plunged nearly 50% to just more than a dime each. Farm and biofuels groups condemned the announcement, which arrived three weeks late and followed a heated summer of debate over EPA's administration of the mandates. Affected companies include Archer-Daniels-Midland (NYSE:ADM), Renewable Energy Group (NASDAQ:REGI), Green Plains (NASDAQ:GPRE), Pacific Ethanol (NASDAQ:PEIX), REX American Resources (NYSE:REX).

Iron ore collapse continues

Trade war ===> Fears about global growth ===> Plunging iron ore prices. The likes of Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), and Vale (NYSE:VALE) are mulling another 4-5% slide in the price of iron ore. While iron ore has little direct exposure to the U.S./China trade dispute, Capital Economics notes it's likely to add to concerns about an already-slowing Chinese economy, the construction sector in particular. It was only one month ago that iron prices were sitting at multi-year highs.