A decision from the Supreme Court is expected any day regarding the legality of President Donald Trump’s tariff policy, and that decision could have immense implications. Arlan Suderman, Chief Commodities Economist for StoneX Group, says the Trump Administration does have a “Plan B” waiting should the high court not rule in its favor.
“Other legal means for implementing the tariffs, but they’re much more cumbersome and time consuming, and so he wouldn’t be able to use it as a threat in negotiations as much, and so we would lose some negotiating power from that.”
Suderman says where we would see that most is with China.
“China backed off on their rare earth minerals restrictions because of the threat of 100% tariff. That gets taken away with, potentially, with an adverse ruling, and that would allow China to fully pick the winners and losers in the world on manufacturing and on defense weapons. And in fact, the White House issued summarizing results of a study detailing out how dependent we are for not only manufacturing and consumer goods, from cell phones to pickup trucks, but to defense weapons, and how critically short we are for the rare earth minerals for defense weapons to being a national security issue.”
Agriculture could feel the impact most directly through imported proteins.
“When you look at the proteins and meats that we import, it’s a substantial amount since we’re down on beef numbers, cattle numbers now because of the multi-year drought in the west. And so we import a tremendous amount of beef, particularly from Brazil, but also Australia, etc. And so if you lose the ability on the tariffs, we could see a big impact there, where we would see a surge of imported meat come in to hurt our domestic producers. Might be good for the consumer, you’d argue, but certainly negative for our cattle industry that we’re trying to incentivize to expand right now.”