The Supreme Court ruled 6 to 3 yesterday that the President cannot impose tariffs under the International Emergency Economic Powers Act. Within hours, a 10 percent global tariff was signed under a different statute. The rate barely moved. The legal architecture underneath it moved completely, and it now carries an expiry date.

The ruling

The Supreme Court of the United States held yesterday, by a 6 to 3 majority, that IEEPA does not authorise the President to impose tariffs. The decision invalidates the tariff authority that has been in effect since early 2025.

The structure that falls with it was built in layers over roughly twelve months: a fentanyl related tariff on Chinese goods from February 2025, a 10 percent baseline tariff on most imports from April 2025, and country specific reciprocal rates implemented in August 2025. Those layers created sharply differential exposure across trading partners, with China and Brazil among the most heavily burdened.

Brazil is the case most relevant to this readership. The additional 40 percent levy applied to Brazilian goods since 6 August 2025 was imposed by executive order under a declared national emergency, which is to say under IEEPA. That is the authority the Court has just struck down.

The response, the same day

Later on 20 February, the President signed an executive order invoking Section 122 of the Trade Act of 1974, applying a 10 percent global tariff. It takes effect on 24 February, and a subsequent announcement has indicated the rate will increase to 15 percent. A complete list of product exemptions is set out in Annex II of the order.

Section 122 is a different instrument from IEEPA in ways that matter commercially.

It permits short term tariffs to address balance of payments issues. It caps the rate at 15 percent. And it caps the duration at 150 days.

That last constraint is the one to put in your calendar. A measure effective 24 February reaches its statutory limit around 24 July 2026. Section 122 is a stopgap, not a replacement, and the administration knows it. Expect the coming months to be spent constructing a durable legal basis for whatever is intended to follow, most plausibly through Section 232 on national security grounds or Section 301 on unfair trade practice grounds, both of which survive the ruling untouched. Section 301 in particular requires a formal investigation and findings, which takes months, so any such process is likely already under way even if it is not yet public.

For anyone with US import exposure, planning on the assumption that the current 10 to 15 percent global rate is a stable state through the second half of 2026 would be unwise.

What this means for softs

Brazilian coffee. Green coffee was already exempted from the Brazil levies in November 2025, when an executive order covered 238 tariff classifications across 11 categories of Brazilian food and agricultural goods, retroactive to arrivals from 13 November. Unflavored instant coffee was pointedly left out and has remained subject to duty, with Brazilian soluble exports to the US falling close to 30 percent year on year as a result. If the underlying IEEPA authority is invalid, the legal basis for that remaining instant coffee duty is now in question. Exporters and their US counterparties should be taking advice on it this week rather than waiting for guidance.

Refunds. Importers who paid duties under the invalidated actions are expected to be entitled to refunds. This is a live receivable, not a theoretical one, and the beef sector in particular is already assessing it. Any client who has paid IEEPA based duties over the past twelve months should be quantifying the exposure now and preserving the entry documentation needed to claim.

Renewed uncertainty rather than relief. The initial reaction across US grains and beef markets yesterday was concern rather than celebration, and that is the correct reading. A known tariff can be priced. A tariff regime being rebuilt in real time under a statute with a 150 day fuse cannot.

The damage already recorded

The scale of what the invalidated regime did to agricultural trade is now measurable, and it is a useful reference point for anyone modelling what a successor regime might do.

Over the period from March 2025 through February 2026, the tariffs are estimated to have reduced US agricultural exports to China by approximately 14.9 billion dollars on an annualised basis. The losses were broad based: soybeans at around 6.8 billion dollars, beef and cotton at roughly 1.3 billion each, tree nuts at 964 million and corn at 333 million.

Those flows did not disappear. They were redirected. Brazilian and Argentine origin captured a substantial share of Chinese demand, and the trade routes established during that period will not automatically revert simply because a court has ruled.

What clients should do this week

Preserve documentation. Every entry on which IEEPA based duty was paid is potentially refundable. Entry summaries, duty payment records and broker files should be secured now.

Re run landed costs from 24 February. The new Section 122 rate applies from that date, with the Annex II exemption list determining scope. Check classification against the annex rather than assuming continuity with the previous exemption lists, because they are not identical documents.

Diarise 24 July. The 150 day statutory limit is the single most important date in the US trade calendar this year. Contracts running across it should allocate tariff risk explicitly rather than assuming the position at signature will hold.

Do not assume the ruling reduces risk. It removes one instrument. It does not remove the policy intent behind it, and the alternative instruments available carry longer processes but also longer duration and no rate cap.

If you sell into the US from Brazil: the position on any product still carrying an IEEPA based duty, instant coffee in particular, needs a legal opinion rather than an assumption. There is a plausible case that those duties are now unenforceable and refundable, and a plausible case that a successor measure reimposes them within months.

PAM Trade advises clients on trade compliance, tariff classification and commodity structuring across UAE, Hong Kong and European jurisdictions. This note is for information only and does not constitute legal or customs advice. Clients should confirm classification, duty treatment and refund eligibility with a licensed customs broker or trade counsel.