US trade policies are a pivotal factor in shaping the global market, particularly commodity prices. By imposing tariffs and engaging in trade wars, Washington is changing the map of trade flows and commodity prices, from oil to lithium.
Oil and Gas Market
“US trade policies are creating uncertainty, prompting producing countries to reduce or increase production in anticipation of any trade escalation,” says Dan Yergin, energy expert at IHS Markit.
The International Energy Agency said on Tuesday, April 15, 2025, that global oil demand is expected to grow this year at its slowest pace in five years, and that the rise in US production will also slow, due to the tariffs imposed by US President Donald Trump on trading partners and their retaliatory responses.
"Investors are still struggling to find a catalyst to drive a strong recovery in prices, especially given expectations of a slowdown in global growth due to US tariffs, which threatens oil demand," said IG Markets Analyst Yip Junrong.
He added, "The downward trend in oil prices remains intact, and the temporary optimism surrounding a potential reduction in tariffs may fade, while upcoming economic data may return markets to a more pessimistic reality."
The International Energy Agency said global oil demand is expected to rise by 730,000 barrels per day this year, a sharp drop from last month's forecast of 1.03 million barrels per day. This reduction in forecasts is larger than the reduction announced by OPEC on Monday.
“As the IEA has indicated, demand growth is likely to remain subdued, and the imbalance between global oil supply and demand is weighing on the market,” said Tetsu Emori, CEO of Emori Fund Management. “If the stock market, currently under pressure from tariffs, recovers, we could see oil prices rise, pushing WTI above $65. However, without this support, prices are likely to remain in the early $60s.”
Fears of escalating tariffs by Trump, coupled with rising production from the OPEC+ group, which includes OPEC and its allies like Russia, have led to a 13% decline in oil prices since the beginning of this month.
Uncertainty surrounding trade tensions has prompted a number of banks, including UBS, BNP Paribas, and HSBC, to lower their oil price forecasts.
Trump's Policies and Food Prices
The imposition of tariffs on soybean and corn exports between the US and China has directly impacted American farmers and led to fluctuations in global prices.
As transportation and logistics costs rise due to tariffs, global prices of grains, sugar, and coffee have risen.
Developing countries are among those most affected by Trump's trade policies, which have led to rising prices and, consequently, food inflation in food-importing countries.
Trump imposed a 10% tariff on all countries and imposed higher reciprocal tariffs on 60 countries and trading blocs. These tariffs will be borne by American companies that ship goods from abroad, and they will in turn bear a portion of the higher costs for consumers.
According to experts, shoppers expect higher prices for seafood, coffee, fruits, cheese, nuts, candy bars, and other imported foods.
Goods containing components and packaging materials such as plastic and aluminum from other countries will also be affected, and perishable food prices will rise first, followed by goods that remain on shelves for a long time.
Consumers may also see smaller products, known as deflationary inflation, and find that some types of these products have been eliminated as companies seek to offset higher prices due to tariffs.
Biominerals under pressure
Trump's use of tariffs to escalate the trade war with China has prompted Beijing to take retaliatory measures. But in addition to tariffs, Beijing has deployed another economic weapon in its arsenal that could have a more powerful impact: its ability to control global supplies of rare earths, thereby driving up prices.
By restricting access to these vital minerals, China has the potential to inflict significant damage on the US defense industry and undermine the Trump administration's broader ambitions for re-industrialization, says Dr. William Matthews, a senior research fellow with the Asia-Pacific Program at the Royal Institute of International Affairs (Chatham House), in an analysis published by the institute. Ultimately, this could give Beijing a decisive strategic advantage in the long-term US-China competition for technological and military supremacy and bolster its existing lead in manufacturing.
Among the most prominent metals whose prices have increased is lithium, which is used in electric batteries and relied upon by major technology companies. US sanctions on China, the largest battery manufacturer, have increased lithium prices due to supply chain disruptions.
“Playing the trade card in the metals market threatens future energy security, especially with the advent of electric vehicles,” says Helena Croft of RBC Capital Markets.
Roger Tesca, professor of economics at the University of Sydney, says, "US policies are creating strategic shifts in Australian exports to new partners, but they threaten long-term revenue stability."
Finally, US trade policies are an influential tool in determining commodity pricing, whether directly through sanctions or indirectly through supply chain disruptions. Experts therefore recommend monitoring US-China relations as a crucial factor in the future of food, energy, and metal prices.