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The 10% blanket reciprocal tariff imposed by President Donald Trump on most U.S. trading partners via Section 122 after last week’s Supreme Court ruling lowers the U.S. effective tariff rate (ETR) to 9.4% from 12.7%, according to Fitch Ratings. If Trump follows through with a plan to raise the levy to 15%, the ETR would rise to 11.3%, the credit-rating firm said.
Trump moved fast to reinstate tariffs after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, with the 10% tariff authorized under Section 122 of the Trade Act of 1974. It expires in 150 days unless extended by Congress. Section 122 permits a maximum tariff rate of 15%.
Fitch noted that the lower ETR of 9.4% incorporates carve-outs applied to the previous IEEPA reciprocal tariffs for passenger vehicles, pharmaceuticals, United States-Mexico-Canada Agreement (USMCA)-compliant goods and certain electronics. “The status of existing trade agreements is unclear as the administration continues to use tariffs as a revenue-raising and policy lever,” Fitch said.
Before the Supreme Court ruling, China has been subject to two reciprocal tariffs – a fentanyl tariff of 10% that applied to all imports and 10% reciprocal tariff on an import base subject to carveouts, Fitch noted. The two tariffs have been consolidated into a 10% blanket tariff, cutting China’s ETR to around 19% from 29%, though that’s still the highest among major U.S. trading partners.
Fitch noted that of the U.S.’s 31 largest trading partners, 26 will see their ETRs decline. Brazil benefits most, with its ETR dropping to 11% from 29%.
Living up to the deal: Indonesia could struggle to live up to its pledge to substantially increase imports of U.S. agricultural goods under its new trade deal, Reuters reported, citing traders who noted the burden of vastly increasing U.S. soymeal purchases will fall on a state agency newly tasked to buy animal feed.
- The trade agreement finalized last week lowers U.S. tariffs on the country’s goods to 19% from 32%, with key commodities including palm oil, cocoa and rubber exempted from import duties.
In return, Indonesia pledged to raise annual U.S. wheat imports to 2 million metric tons from 1.1 million tons last year, boost soybean purchases to 3.5 million tons from 2.2 million tons, and increase soymeal imports to 3.8 million tons from 216,257 tons, among other commitments, the report noted.
Indonesia already buys most of its cargoes from the U.S. to meet rising demand for tofu and tempeh, a traditional cake-like fermented bean product, Reuters noted, and its new commitment to Washington exceeds its overall annual imports. Indonesia consumes 2.7 million to 2.9 million tons of soybeans per year, according Akindo, the country’s soybean importers association, nearly all of it imported.
“The commitment to purchase 3.5 million tons per year needs to be assessed realistically so that it will not exceed domestic demand, disrupt supply balance,” Akindo Chairman Hidayatullah Suralaga said on Tuesday, the report said.
Meanwhile, Indonesia bought 216,257 tons of U.S. soymeal in 2025, up around 50% from a year earlier but far short of the 3.8 million tons of the animal feed ingredient it has committed to buy, Reuters said.
Welcome rains seen Down Under: Several parts of eastern Australia and South Australia received varying amounts of rain over the past week, which is beneficial for late-planted coarse grain, oilseeds and cotton that remain in the development stages, said World Weather Inc. on Wednesday. The forecaster said maturation and early-season harvest has also advanced with few disruptions outside the areas that saw the most rain, while concerns remain over possible yield declines due to a severe heatwave that affected several locations earlier in the summer despite recent precipitation.
- “A slow-moving disturbance will promote waves of rain for South Australia, Victoria, and portions of western and southern New South Wales during the coming week,” World Weather wrote. “Crops that are still in the developmental stages will welcome the additional rain and may see production potentials increase marginally.”
A fixer-upper opportunity: In the market for a massive, New Deal-era office block in the heart of the nation’s capital? USDA has a deal for you.
Agriculture Secretary Brooke Rollins announced Wednesday that the administration was returning the department’s South Building to the General Services Administration, which will attempt to dispose of it.
The South Building was once the “beating heart of USDA, alive with research and teeming with activity,” Rollins said at a news conference, according to Agri-Pulse. “Today it is a former shell of what it once was.”
The building is now largely empty and faces a $1.6 billion backlog of maintenance, she said, in a news release.
The Old Cotton Annex building, which sits across the street from the South building, has been converted into a block of luxury apartments, Agri-Pulse noted, while Rollins argued that the building is “a great example of what could happen” to the South Building.
The building was erected between 1930 and 1936 to provide laboratory and office space. The building has 4,500 rooms, seven miles of corridors, 12 million bricks, and 11,000 miles of structural steel, according to the GSA website, which contains histories of major federal government buildings.
The GSA entry noted:
- While no historical events of singular importance are known to be associated with this building, its broader association with the growth of the Department of Agriculture is significant. Between the two World Wars, Washington was transformed by the rapid growth of the federal government. The concurrent demand for buildings to house these federal workers resulted in the vastly scaled building program conducted by the Office of the Supervising Architect. Through the 1950s, the South Building continued to function in the capacity for which it was originally intended; the removal of laboratory functions to the Department’s Beltsville, Maryland, facility has left the building exclusively occupied by offices.
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