US-China tariff wars push down oil and stock prices, but agricultural markets remain stable

Stock markets continue to see speculative jumps of 2-4%, driven by rumors of a possible end to the “crazy” tariffs. However, yesterday Trump announced the imposition of an additional 50% tariff on China, which, amid a possible response from China and the EU, again lowered stock indices and oil prices.

The Dow Jones index ultimately fell by 0.84%, the S&P 500 by 1.57%, and the high-tech Nasdaq by 1.95% on expectations of an escalation of the trade war with China.

Trump said that if China does not remove the 34% tariff imposed in response to the US tariffs, an additional 50% tariff will be imposed on Chinese goods, bringing the total to 104%. China promised to take action in response to Trump’s threats, noting that “the threat of raising tariffs on China is a mistake of the US, so China will continue its fight.”

June Brent crude futures fell by 4.1% to $62.9/barrel (-18.4% for the week) since Monday, and US WTI futures fell by 4.6% to $59/barrel (-20%) and will continue to fall on expectations of an escalation of the trade war, economic crisis, and reduced demand for energy.

The crude oil market remains under pressure from news from Saudi Arabia, which announced a reduction in its flagship prices for May oil deliveries to customers by $2.3/barrel, which will be the largest decrease in the last two years.

It is worth noting that stock market quotes for agricultural goods remain stable for now, as traders hope that the “tariff wars” will be stopped. In Congress, 10 Republicans are already ready to vote, together with Democrats, for a ban on Trump from imposing tariffs. Some representatives of Trump’s entourage, in particular Elon Musk, are against the tariff policy, but he has already been removed from the White House.