Optimism Around US-China Trade Deal Pushes Oil Prices Higher

Brent crude futures rose by $1.07 or 1.7 per cent to settle at $63.91 per barrel and the US West Texas Intermediate (WTI) crude futures advanced by $1.11 or about 1.9 per cent to finish at $61.02 per barrel.

US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet Chinese economic negotiator, Mr He Lifeng, in Switzerland to discuss containing the damaging trade war between the world’s two biggest economies.

US President Donald Trump on Friday said he expected there to be substantive talks this weekend and predicted US tariffs were likely to come down.

He said China should open its market to the US, and that an 80 per cent tariff on Chinese goods “seems right”

This comes a day after he announced a deal lowering tariffs on British car and steel exports, among other agreements with the United Kingdom.

China’s foreign ministry has decried what it calls abusive and bullying economic tactics and said China remains firmly opposed to what it calls an unsustainable approach to trade by the US.

Since taking office in January, President Trump has hiked the tariffs paid by US importers for goods from China to 145 per cent, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.

China hit back by imposing export curbs on some rare earth elements, vital for US manufacturers of weapons and electronic consumer goods, and raising tariffs on U.S. goods to 125 per cent. It also imposed extra levies on some products including soybeans and liquefied natural gas.

Analysts estimates that lowering tariffs on China to 80 per cent would bring the overall effective import tax rate from all the tariffs imposed by President Trump so far to 18 per cent from around 22 per cent now.

Meanwhile,  Chinese exports rose faster than expected in April while imports narrowed their decline, customs data showed on Friday, giving the world’s largest oil importer some relief ahead of the talks.

The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) oil output edged lower in April as production declines in Libya, Venezuela and Iraq outweighed a scheduled increase in output.