Oil prices were largely holding steady Wednesday afternoon, waiting for the other shoe to drop on the prospect of a failed nuclear deal with Iran that could lead to military conflict, and as the Trump administration gears up to make a big market-rattling tariff announcement in the afternoon.
At 2:47 p.m. ET on Wednesday, Brent crude was trading up 0.66%, at $74.98, while the U.S. crude benchmark, West Texas Intermediate (WTI), was trading up 0.80% at $71.77.
Most market attention at the moment remains focused on Trump’s plan to announce sweeping “Liberation Day” tariffs later on Wednesday, with no details, creating a situation that has the market guessing and preparing to panic over the prospect of a global trade war.
At 4:00 pm on Wednesday at the “Make America Wealthy Again” event at the Rose Garden in the White House, Trump is expected to make his tariff announcement.
Last week, Trump unveiled 25% tariffs on auto imports, for all cars and parts manufactured outside of the U.S. Those tariffs went into effect today, with retaliatory responses from Brussels, Mexico City and Ottawa now expected.
According to Goldman Sachs, Trump’s trade war could end up costing the world $1.4 trillion, to which it has responded by cutting the UK’s growth forecast as it projects a crunch from the spillover of tariffs, Bloomberg reported on Wednesday.
Also on Wednesday, former Treasury Secretary Lawrence Summers warned that Trump’s tariff plan would lead to an economic shock that would reduce productive capacity and lead to higher prices and unemployment.
“This is the kind of thing you discuss in the way we would usually discuss an oil-price spike or earthquake or a drought, as a supply shock,” Summers told Bloomberg Television.
Source: By Charles Kennedy from Oilprice.com