Trade policy tensions after the US Supreme Court struck down President Donald Trump’s country-specific tariffs and the president’s decision to implement a 10% global tariff have raised concerns among participants in the US grains and beef markets.

In a 6-3 decision, justices said broad tariffs imposed under the 1977 International Emergency Economic Powers Act, or IEEPA, were beyond the president’s legal authority.

The court’s majority held that only Congress has clear constitutional authority to impose tariffs, and that the emergency-powers law cited by the administration did not grant the executive branch the authority to impose extensive import duties.

In response to the ruling, Trump announced he would sign an order on Feb. 20 to implement a temporary 10% global tariff under Section 122 of the Trade Act of 1974, a separate statute that allows the executive branch to impose short-term duties to address trade imbalances.

The proposed measure would replace the broader tariffs struck down by the court and could remain in effect for up to 150 days. The administration also indicated it may explore additional trade actions under other authorities, signaling that tariff policy remains uncertain despite the Supreme Court’s decision.

Agricultural markets faced uncertainty, as participants assessed whether alternative trade statutes could be used to reinstate tariffs. While the ruling limits the administration’s use of emergency powers, it does not eliminate other tariff authorities, leaving exporters, importers and commodity traders in a wait-and-see mode.

The lack of clarity over potential next steps, including possible appeals, new legal pathways or trade responses from key partners, heightened concerns about volatility across grains and feed ingredients, market participants said Feb. 20.

Trade tensions spark volatility in grain markets
Sentiment in the grains market turned cautious as participants weighed the risk of retaliation or disrupted trade flows.

A US-based broker said the overall theme was uncertainty, warning that the environment is “bad for grain” if trade tensions escalate. Tariffs could be revived under a different statute, according to the broker.

The US-based broker pointed to soybeans, suggesting that if China decided to cancel a cargo shipment due to the situation, the market reaction could trigger a sudden price break.

When asked whether feed ingredient markets such as corn and distillers dried grains with solubles would feel the impact, the broker responded, “Yes. Big time,” adding that they expect a broader market correction or trade disruptions.

Beyond price implications, the broker also mentioned the possibility that some countries might seek repayment or concessions tied to previously collected duties.

The broker was skeptical that such requests would succeed. They also expressed concern that approving broad payouts or trade concessions would carry political consequences, arguing it would deepen domestic tensions.

According to a source in the FOB Gulf market of corn, soybean meal and DDGS, there will be days of volatility that will be favorable for the traders.

“I think we’ll definitely see some near-term volatility as some of these tariffs unwind, which is great — volatility makes traders trade!” the source said.

Another source in the grains export market said that “Everyone is extremely defensive right now.”

The National Corn Growers Association released a statement on Feb. 20 urging the administration to move swiftly to implement and finalize ongoing trade deals. “NCGA continues to advocate for stability as farmers approach the 2026 planting season, for both the purchasing of necessary inputs and the marketing of their crops,” it said.

Meanwhile, Mary Kate Scruggs, principal corn analyst at S&P Global Energy CERA, said that it was still unclear whether this would affect corn either directly or through soybeans.

“While the Supreme Court stated IEEPA could not be used to invoke tariffs, they gave no clarity about the trade agreements made under the tariffs — that would be the primary question for the corn and soybean market,” Scruggs said.

Platts, part of S&P Global Energy, assessed CIF New Orleans DDGS barges for the February shipment period at $216/short ton, and the Chicago DDGS truck market for the same delivery period at $182/st.

Platts assessed the outright price for corn CIF New Orleans for February shipments at $208.85/metric ton on Feb. 20, up about 70 cents from Feb. 19. Platts-assessed basis for corn CIF NOLA for February shipment was at 103 cents/bushel over the H corn futures contract.

The outright price for corn CIF NOLA for March shipment was assessed at $208.05/mt on Feb. 20. Platts assessed basis for corn CIF NOLA for March shipment to 101 cents/bu over the H corn futures contract. The outright price for corn FOB Gulf for April was assessed at $211.32/mt, with basis assessed to 97 cents/bu over the May (K) corn futures contract.

US beef importers face refund concerns
The US lean beef trimming imports market has been thin in volume but very well supported by record-low US cattle numbers amid strong demand, and uncertainty in trade policies has made it even more difficult for participants to navigate this market, according to sources.

Although the ruling and Trump’s decision to immediately implement alternative tariffs did not affect the import prices of lean beef trimmings, market participants expressed concerns regarding the uncertain trade outlook.

“I don’t see it changing anything on the beef side,” a global beef trader said regarding the impact on US beef imports.

“Let’s see how this settles in a week or so,” an importer said.

“Members are calling for recommendations, but we thought it was best just to kind of wait until we figured everything out,” an official from a US meat importers association said on condition of anonymity.

Despite the market still digesting the news, some buyers already had concerns or hopes of refunds.

“I have no idea really [how the announcements will affect beef imports], but I did have a customer ask already when they will receive a refund,” a US beef trader said. “This is a mess for sure. I am OK with the tariffs going away, but the refunds are going to cause huge issues. At this point, the ruling doesn’t mention refunds, but I guess it is assumed they will be refunded.”

Platts assessed 90CL beef CIF US at $8,135/mt, or $3.69/lb, Feb. 20 for a 30- to 60-day shipment, compared with $7,981/mt, or $3.62/lb, Jan. 20, and with $6,680/mt, or $3.03/lb, Feb. 20, 2025.
Source: Platts