Crude Oil Prices Drop as Trump Unleashes Fresh Tariffs

President Trump revealed that a minimum 10 per cent tariff would be imposed on all countries exporting goods to the US, stoking concerns that a global trade war may dampen demand for crude.

Additionally, 60 countries with the largest trade imbalances including China, the European Union, and Vietnam now face even steeper levies.

It noted that China, the world’s largest oil importer, will see its total tariff level soar to 54 per cent.

Despite the broad reach of the new tariffs, the energy sector was largely spared as a US official confirmed that imports of oil, gas, and refined products are exempt from the measures.

However, the policies could stoke inflation, slow economic growth and escalate trade disputes, and these could limit oil price gains.

Also, traders remained cautious amid fears that retaliatory measures and a potential global trade slowdown could ultimately weigh on crude demand.

Reports showed that Canada was formally exempted from Wednesday’s reciprocal tariff action. However, the White House noted that non-compliant CUSMA (Canada–US–Mexico Agreement) goods would still be subject to a 25 per cent tariff, and non-compliant CUSMA energy and potash exports would face a 10 per cent duty.

According to the US government, the new duties are due to take effect immediately after President Trump announces them, while a separate 25 per cent global tariff on auto imports will take effect on April 3.

In his first ten weeks in office, the US President has implemented new 20 per cent tariffs on all Chinese imports over fentanyl concerns and reinstated the 25 per cent tariffs on steel and aluminum, expanding them to nearly $150 billion in downstream products.

Mexican President, Ms Claudia Sheinbaum said on Wednesday that Mexico does not plan to impose a reciprocal tariffs on the US.

President Trump had threatened to impose secondary tariffs on Russian oil.

On Monday, he toughened sanctions on Iran as part of his administration’s maximum pressure campaign to cut its exports.

Adding to the supply woes, Russia, the world’s second-largest oil exporter, on Wednesday imposed restrictions on another major oil export route.

The country suspended a mooring at the Black Sea port of Novorossiisk a day after restricting loadings from a key Caspian pipeline.

US crude inventories posted a surprisingly large build of about 6.2 million barrels last week, Energy Information Administration data (EIA) showed on Wednesday.