Global Commodity Markets Rattle as Trade War Fears Spark Broad Selloff

Energy and Metals Take the First Hit

Global commodity markets are facing heightened pressure as escalating trade tensions between the U.S. and major international partners fuel fears of a global economic slowdown. The latest round of sweeping tariffs announced by the U.S. government, including a 10% baseline import duty and higher rates for China and the EU, has triggered sharp declines across multiple commodity classes.

Oil prices have tumbled to their lowest levels since 2021. Brent crude fell more than 3% to $63.30 per barrel, while U.S. West Texas Intermediate (WTI) dropped to $59.79. Market participants are increasingly worried that an all-out trade war could suppress industrial activity and transport demand worldwide, driving down crude consumption. Reuters reports that traders are now bracing for further downside unless tensions de-escalate.

Base metals also saw steep declines. The London Metal Exchange (LME) index fell 6% amid widespread concerns over reduced global manufacturing output. Aluminum markets were hit especially hard following the U.S. implementation of a 25% import tariff, which threatens to disrupt long-standing supply chains. Other metals like copper and tin have followed suit, with speculative demand drying up quickly. As Reuters analyst Andy Home notes, tariffs are beginning to reshape pricing dynamics across the board.

Even gold, a traditional safe haven, has not been immune. After earlier-week gains, gold prices retreated more than 3% as investors sold off holdings to cover equity market losses. The move highlights how even perceived hedges can come under pressure during broad-based liquidation events.

Agriculture and Crypto Join the Slide

Agricultural commodities are also in retreat, particularly those dependent on U.S.-China trade. Soybean prices dropped sharply after China retaliated against U.S. tariffs by placing heavy duties on American farm goods. This move directly impacts U.S. exporters and comes as planting season is about to peak. Corn futures have also seen reduced speculative interest as traders reassess risk exposure amid potential export disruptions.

According to Reuters, this downturn in agriculture prices reflects the growing unpredictability of trade flows and the vulnerability of rural economies in global disputes.

Even cryptocurrencies are feeling the pressure. Bitcoin has dropped over 5%, trading at around $78,892, while Ethereum fell nearly 10% to $1,617. Digital assets, once viewed as uncorrelated alternatives, are now reacting similarly to traditional markets in times of extreme uncertainty.

Outlook: A Stormy Road Ahead

As trade hostilities intensify, commodity markets may remain under pressure. Analysts are closely watching for any policy shifts or negotiations that could ease tensions. Until then, volatility is expected to persist across energy, metals, agriculture, and even digital assets.

With global recession risks rising, traders and investors should prepare for continued turbulence and reassess exposure to vulnerable sectors.