Insight Focus
There was US tariff upheaval in February. The Supreme Court struck down Trump’s emergency duties, prompting a temporary 10% import levy set to rise to 15%, applied to all trading partners and reshuffling trade advantages. China, Brazil and India will gain from lower relative penalties, while US allies like the EU and UK face higher tariffs. Winter weather, rising fertilizer costs and new trade deals with South Korea, Brazil and Indonesia add further pressures to global agricultural markets.
US Implements New Blanket Tariffs
There has been more tariff chaos this month following a ruling by the US Supreme Court that struck down emergency duties imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).
The decision forced the US administration to halt collection of the invalidated tariffs and replace them with a temporary blanket import duty under Section 122 of the Trade Act of 1974 — currently 10%, with plans to rise to 15% that have not yet taken effect. Unlike the previous regime, which targeted specific countries, the new tariff applies to all trading partners.
This compresses previous differences, reducing the penalty on some countries while raising costs for others, and redistributes relative trade advantages without easing overall protectionism.
Note: A positive value indicates a reduction in the overall tariff
Source: Financial Times
Who Benefits?
China
Beijing has criticised US unilateral tariffs and said it is conducting a “full assessment” of the ruling, urging Washington to remove what it views as trade measures that violate international norms. Despite that rhetoric, China emerges as a relative beneficiary of the reset: under the previous IEEPA framework it faced heavier, targeted duties and the shift to a uniform 15% rate narrows that differential.
For agricultural trade, the focus remains on soybeans. President Trump recently highlighted potential additional Chinese purchases, on top of roughly 12 million tonnes already bought under a prior truce, including volumes handled by state buyer Sinograin. However, Brazil’s large harvest continues to undercut US pricing, and without strong tariff leverage analysts question how much further Beijing will commit.
While tariffs remain elevated and further investigations could follow, the move to a uniform rate reduces the relative penalty China previously faced under country-specific measures.
Brazil
As a major agricultural exporter, especially in soybeans, beef and sugar, Brazil stands to benefit both from improved relative tariff positioning and from any slowdown in US–China agricultural flows. If Chinese buyers pivot further toward South American origin due to pricing and reduced political pressure, Brazil could consolidate additional market share during peak harvest shipments.
India
India stands to benefit from the US shift to a non-discriminatory tariff after the Supreme Court struck down Trump’s global duties. An interim trade deal earlier this month cut US tariffs on Indian exports from 50% to 18%, spanning industrial goods and select food and agricultural products.
Under the new 15% blanket levy, Indian exporters face a lower relative burden than long-standing US allies whose preferential rates are now diluted. Final talks in Washington have been postponed as both sides assess the implications, but the deal positions India to strengthen its competitiveness in US markets.
Who Loses?
Long-standing US allies appear more exposed under the new structure.
The EU
The bloc had negotiated a 15% framework that incorporated sector-specific exemptions and carve-outs. With a blanket 15% now applied more broadly, and uncertainty over how exemptions will be treated, the value of that negotiated arrangement is diminished. The European Commission has called for “full clarity” on how the new regime interacts with prior commitments, and ratification steps have been paused in the European Parliament.
The UK
The UK is in a particularly awkward position. Having secured a 10% baseline rate on many goods, British exporters could now see average tariffs rise to the new global rate. Business groups estimate that even a 5-percentage point increase would materially lift export costs, especially in food and drink, chemicals, industrial goods and automotive-linked supply chains.
Prime Minister Keir Starmer’s government has signalled ongoing dialogue with Washington, but uncertainty remains over whether negotiated terms will be honoured or overridden under Section 122’s non-discriminatory requirement.
Agriculture Still Under Pressure from Winter Storms
Severe winter weather continues to disrupt agriculture and logistics operations across multiple countries. In the US Northeast, a blizzard dumped up to 45cm of snow from New York City to New England, grounding flights, closing roads and rail lines, and delaying shipments, including agricultural goods.
Meanwhile, in the southeastern US, Florida’s freezes in late December and January caused preliminary agricultural losses exceeding USD 3 billion, damaging sugarcane, citrus, vegetables and melons, while labour shortages and limited storage slowed harvests and could affect future yields.
Across the pond, the UK has faced cold snaps and heavy rainfall, delaying harvests, limiting early grazing and tightening spring supplies of meat and produce ahead of Easter. These disruptions are expected to push up farmgate and retail prices, with knock-on effects for hospitality and foodservice sectors.
February Brings New Trade Partnerships
South Korean President Lee Jae Myung and Brazilian President Luiz Inácio (Lula) da Silva agreed to elevate their bilateral relationship into a strategic partnership, signing 10 agreements covering trade, strategic minerals, digital technology including AI, agriculture, health, biotech and small-business exchanges. The leaders adopted a four-year action plan outlining cooperation in defence, space, and food security, and agreed to resume talks on a South Korea–Mercosur trade deal suspended since 2018.
These steps aim to strengthen trade flows and industrial cooperation, particularly as Brazil remains South Korea’s largest trading partner in South America, while global markets navigate uncertainty from US tariff changes.
Meanwhile, the US and Indonesia have agreed on a reciprocal trade deal that removes tariffs on over 99% of US agricultural exports, including wheat, soybeans, dairy, meat and processed foods. Indonesia has pledged to increase US wheat imports to 2 million tonnes, soybeans to 3.5 million tonnes and soymeal to 3.8 million tonnes, while simplifying certification, labelling and licensing requirements to speed trade flows.
The agreement also links some duty-free Indonesian textile exports to US cotton inputs and strengthens supply chain cooperation, though traders note that meeting the high purchase commitments, particularly for soymeal, will be challenging for state agencies tasked with imports. The deal is expected to deepen US–Indonesia agricultural engagement and support food security in Southeast Asia.
Fertilizer Market Volatility Intensifies
Fertilizer prices rose 2.4% in early 2026, reversing late2025 stabilisation. The spike is attributed to higher natural gas costs, EU carbon border taxes (CBAM) and geopolitical tensions affecting Belarus, Russia and Iran. This threatens global crop production costs and food inflation.
Analysts warn that fertiliser prices remain the top threat to 2026 farm profitability, with phosphate use in North America down 20% in fall 2025 and uncertainty over spring demand. Despite cutbacks, US corn acreage (93–95 million acres) keeps demand high—especially for nitrogen.
Global ammonia demand continues to grow, driven 70–80% by fertilizer consumption, with China, India, and the US leading usage and major new capacity coming online.
In Other News:
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Ivory Coast Considers Cocoa Price Cut: Ivory Coast is considering reducing farmer prices for cocoa, following Ghana’s 30% cut, as unsold stocks in the country’s main crop threaten to reach 200,000 tonnes by the end of March. Authorities plan to announce mid-crop prices by the end of February to unlock sales, pay farmers and ease mounting stockpiles, which with Ghana account for roughly half of global cocoa output.
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Upcoming US-Iran Talks Boost Oil Prices: Oil hovered near seven-month highs ahead of Thursday’s Geneva talks between the US and Iran, as tensions over nuclear and missile programmes stoked supply concerns. Brent reached USD 71.10 and WTI USD 65.84, while Iran-China arms discussions and rising US crude stockpiles added further market uncertainty.
