President Trump Renews Tariff Threats, Impacting Global Markets
Commodities Fall
Oil and base metals declined following President Trump's announcement that tariffs on Mexico and Canada may be implemented by February 1. This reignites trade war concerns, despite no immediate tariffs on China.
Oil Market
Brent crude dropped below $80 per barrel after Trump mentioned increased domestic oil production, which could potentially reduce prices.
Industrial Metals
Most industrial metals on the London Metal Exchange fell due to the tariff comments. Ewa Manthey of ING Groep NV highlighted tariffs' disruption to trade flows and economic volatility.
Gold and Silver
Gold rose as investors sought safe haven assets. Silver, largely mined in Mexico, also gained initially but later pared its gains. The impact of tariffs on silver imports remains uncertain.
Grain Markets
Soybean futures and corn rose due to the absence of immediate tariffs on China, a major importer. However, the threat of future tariffs on China lingers, with potential retaliation impacting American agricultural exports.
Energy Policies
Trump plans to refill the US strategic oil reserve and withdraw from the Paris Climate Agreement. He also revoked offshore oil and gas leasing bans.
Analyst Insights
Ole Hansen of Saxo Bank A/S warns that tariff threats pose risks to global growth and commodity consumption. Manthey emphasizes that tariffs will increase economic volatility and disrupt trade.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.