Never-ending trade war sinks commodities into a world of trouble

The U.S.-China trade war is sparking so much fear over demand that even those parts of the commodity world that aren’t in the direct firing line are getting burned, says a report by Bloomberg.

Oil had its biggest sell-off in four years after U.S. President Donald Trump brought an abrupt end to a truce forged with Chinese counterpart Xi Jinping in June 2019. That is after Beijing has spared crude from levies. Meanwhile, crop markets, industrial metals and shares of agricultural traders have all got walloped over the months.

The dispute between the two major economies is overwhelming concerns over supply. Tensions in the Middle East’s most important oil chokepoint are still simmering, the wettest 12 months of rains disrupted planting in the U.S. crop belt and a deadly pig virus is decimating pigs in China. For investors, the threat posed by the trade war to global economic health is trumping everything else.

Trump announced last week that he would impose a 10% tariff on a further $300 billion in Chinese imports, including smart-phones, laptops and children’s clothing, from 1 September, 2019. Beijing has vowed to respond. That sent the Bloomberg Commodity Index, which measures returns from raw materials including oil, corn and copper, 2.5% lower — the most in over a year.

While the new levies may have limited direct impact on industrial metals, the repercussions for the economy in China, the world’s biggest metals consumer, will be significant.

To read full report, please visit: https://www.indoasiancommodities.com/2019/08/05/never-ending-trade-war-sinks-commodities-into-a-world-of-trouble-bloomberg/

Spread the love

Related posts

Leave a Comment