Oil takes a major hit as US slaps China with 104% tariff

Brent crude’s price is trading around $60/bbl for the first time in four years, as trade tensions between the US and China continue to escalate.

CONCEPT: Flags of the US and China on a cracked wall depicting trade tensions. Getty Images

President Donald Trump-led US administration struck back at Beijing yesterday with a 104% tariff on all imports, following China’s retaliatory move last week to impose an additional 34% tariff on all US imports – a response to the US tariffs imposed on global trade partners on 2 April.

Besides, the White House confirmed that, as scheduled, country-specific tariffs of up to 50% would still come into effect at 12:01 a.m. Eastern Time (0401 GMT) today.

Following today’s crash, Brent crude futures are on track to hit their lowest levels since the peak of the COVID-19 pandemic in mid-2021, Reuters’ data shows.

“Crude oil extended losses amid signs of escalation in the trade war,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked. “President Trump insisted the US is planning to go ahead with 104% tariffs on goods it imports from Chinese [exporters],” he added.

Tariff threats pose the risk of sparking major trade wars and reducing global demand, which could slow the economy and trigger sharp swings in financial markets. Analysts say the impact is already visible in the commodities sector.

“The push back from Beijing sets the scene for further escalation between the two biggest economies in the world, which weighed on sentiment across the commodities complex,” Hynes said.

By Aparupa Mazumder

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