The tariff and trade war initiated by US President Donald Trump in his new term is creating volatility in global commodity and energy markets, with uncertainties expected to grow.
After suspending the 25% tariff on Canada and Mexico for 30 days, Trump said that the EU is 'crossing the line' and announced plans to impose a new tariff.
After Trump decided to impose an additional 10% tariff on Chinese goods, China responded by announcing a tariff on energy imports from the US. Additionally, the country began implementing export controls on certain critical minerals.
Further, Trump announced 25% tariff on steel and aluminum imports on Monday.
Experts suggest that Trump aims to use tariffs to shift industrial production back to the US, increase government revenue, reduce the trade deficit with other countries, and strengthen Washington's position in negotiations.
Trump is pressuring various countries with different demands, including urging Saudi Arabia to boost oil production and threatening Russia and BRICS with high tariffs, all aimed at securing economic advantages for the US.
Russian officials said Trump's demand that Saudi Arabia increase oil production to lower oil prices was 'unacceptable.'
While Trump threatened Russia and BRICS with tariffs up to 100%, the Kremlin stated that there was no 'new element' in these threats.
Trump's statements about seeking access to Ukraine's rare earth element resources have emerged as another notable remark in his new term.
Market tensions over tariffs and expectations of a trade war have driven gold prices to record levels.
Numerous investment institutions, including Citigroup, said the price of gold will exceed $3,000 per ounce within the year, revising their forecasts upward.
- International analyses
An analysis by US-based Columbia SIPA Center for Global Energy Policy pointed out that while Canada could strongly retaliate against the US through its oil and natural gas exports, Mexico lacks a similar advantage.
The analysis noted that China is already engaged in a battle with the US over critical minerals and warned that imposing tariffs on mineral imports from Mexico and Canada could weaken the US' position against China.
China's response to US tariffs, limited to energy and certain critical minerals, is measured but has the potential to escalate in the short term, the analysis noted.
ING's analysis titled 'Tariffs rattle markets' stated that the trade war has placed pressure on metal and agricultural products.
The analysis explained that tariffs are particularly harming metal trade and due to the inflationary nature, the tariffs could limit interest rate cuts by the US Federal Reserve (Fed). Trump's tariff actions led to expectations that the Fed will not reduce rates before June.
UK-based global research and consultancy group Wood Mackenzie's latest report, 'US energy companies brace for tariff impact' noted that companies have started to deeply analyze the supply chain.
The report indicated that efforts are ongoing to identify suppliers and products expected to be affected by tariffs, adding that 'Where no adequate alternatives exist, they are looking at accelerating purchases to stock up on products that may soon be more expensive.'
Munich-based think tank, the ifo Institute, reported that Trump's tariffs on Canada, Mexico and China will harm the US economy, with China's exports potentially decreasing by up to 3.8%, Canada's by 28%, and Mexico's by 35%.
- Possible developments in global energy markets
Aleksandr Frolov, an energy expert at InfoTEK, told Anadolu that Canada and Mexico are the most dependent countries on the US in the energy field.
'The US is Canada's main source of oil and natural gas, providing approximately 80 billion cubic meters of gas per year. Mexico, on the other hand, imports about 66 billion cubic meters of natural gas annually from the US through pipelines,' Frolov said.
Stating that if the trade war continues in these areas, its impact on the market will be limited, Frolov added that, 'Canada and Mexico will have to accept the losses of their companies due to additional tariffs.'
Emphasizing that China is hardly dependent on US products, he said this means China has more room to maneuver and can easily find new buyers for oil, gas and coal.
'A trade war with China can only have an impact on the global oil and gas market if major news outlets insist that the war will shake the Chinese economy and lower energy demand,' he said.
Reporting by Emre Gurkan Abay in Moscow
Writing by Basak Erkalan
Anadolu Agency
energy@aa.com.tr