In a bold move late Wednesday, U.S. President Donald Trump announced that a sweeping set of new tariffs would take effect from midnight, reinforcing his administration’s aggressive trade stance and sending ripples through global markets. The announcement includes levies ranging from 15% to 50% on major U.S. trading partners, even as negotiations with some of these countries continue. Trump’s declaration, posted on social media, emphasized his administration’s intent to reclaim economic ground, targeting what he described as decades of imbalanced trade practices that have disadvantaged the United States. Brazil and India have been hit hardest, with each facing cumulative tariffs of up to 50%. Japan, South Korea, and the European Union, which have recently finalized trade agreements with Washington, will face a more moderate 15% tariff, while Canada is subject to a 35% duty. Mexico, still negotiating, secured a 90-day extension before new levies take effect. Boost your financial skills with professional trading courses from MJFXM – learn, trade, and grow with confidence.
Specifically, India’s tariff burden has now risen by 25%, with an additional 25% set to follow in just under three weeks, prompted by its continued imports of Russian oil. Brazil’s penalties are also politically charged, tied in part to Trump’s claim of unjust treatment of former Brazilian President Jair Bolsonaro. On a separate but related front, Trump has announced a 100% tariff on all semiconductor imports, exempting only companies that commit to manufacturing in the United States. These aggressive economic measures are not only aimed at curbing the trade deficit—particularly with China, where 50% tariffs still apply—but also at fostering domestic industry growth and opening new overseas markets for U.S. goods.
While the long-term effects remain uncertain, the immediate reaction was felt in oil markets, where prices bounced back after a five-session decline. Brent crude rose to $67.51 a barrel, while West Texas Intermediate climbed to $65.03, as signs of solid U.S. demand offset wider macroeconomic concerns. Wednesday’s report from the Energy Information Administration revealed a significant drop in U.S. crude inventories—down by 3 million barrels to 423.7 million—far surpassing analysts’ expectations. This drawdown was largely driven by rising exports and an uptick in refinery activity, especially on the Gulf and West Coasts, now at their highest levels since 2023.
Still, the global oil outlook remains fragile. Market participants are wary of the broader economic implications of Trump’s tariff strategy, particularly its effects on demand from key economies like India and China. Trump hinted at further tariffs on China, echoing those imposed on India, as part of his continued pressure campaign over Russian oil trade. Meanwhile, a potential meeting between Trump and Russian President Vladimir Putin looms, signaling possible geopolitical shifts that could further influence market dynamics. Although the U.S. is preparing secondary sanctions aimed at China, the market’s short-term optimism about crude demand in the U.S. is temporarily balancing the scale. However, the looming uncertainty of trade wars and geopolitical entanglements could cloud the energy sector’s near-term trajectory.