Oil slumps as Trump announces tariffs on all trade partners

Brent crude’s price moved lower after US President Donald Trump unleashed the highly anticipated tariffs on all global trade partners.

CONCEPT: The flag of US with the White House in the background and a warning sign stating 'tariffs'. Getty Images

The US President announced that a minimum 10% reciprocal tariff will be imposed on all countries exporting goods to the US from 5 April, in response to the high tariffs those nations already impose on American exports.

“All articles imported into the customs territory of the United States shall be, consistent with law, subject to an additional ad valorem rate of duty of 10 percent,” the White House said.

Besides, several partners with a bigger trade imbalance – including the EU and China – will be subjected to even higher tariffs, the White House said in a statement. China’s total tariff rate will now be a staggering 54%.

The announcement has jarred global equity markets and heightened uncertainty in the commodities sector pushing oil lower, according to market analysts. “Oil prices are under pressure this morning, following other risk assets lower, after the Trump administration unveiled a base tariff of 10% on all imports from all trading partners,” two analysts from ING Bank commented.

The news has escalated global trade war concerns, raising fears of economic uncertainties and demand growth slowdown, analysts say. Both China and the EU have warned of similar moves that could lead to severe consequences for global commerce.

“The consequences will be dire for millions of people around the globe,” President of the European Commission Ursula von der Leyen said, adding that the 27-member bloc was “prepared to respond” if negotiations with Washington failed.

“The scale of some of Trump’s tariffs will raise global demand concerns. There’s also increased uncertainty, with markets waiting to see how trading partners retaliate,” ING Bank’s analysts added.

By Aparupa Mazumder

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