Published by Global Banking & Finance Review®
Posted on February 3, 2025
3 min readLast updated: January 26, 2026
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Trump's tariffs on Canada, Mexico, and China could disrupt commodity and energy markets, affecting oil, gas, and metal prices.
(Reuters) - U.S. President Donald Trump slapped Canada and Mexico with duties of 25% and China with a 10% levy on Saturday, calling the measures necessary to combat illegal immigration and the drug trade.
Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization and take other countermeasures.
Trump's move has sparked volatility in the commodities market. Here are some reactions to the news:
GOLDMAN SACHS
"We still expect Canadian oil producers to eventually bear most of the burden of the tariff with a $3 to $4 a barrel wider-than-normal discount on Canadian crude given limited alternative export markets, with U.S. consumers of refined products bearing the remaining $2 to $3 a barrel burden.
"We estimate Canadian natural gas exports to the U.S. might drop by a modest 0.16 billion cubic feet per day (bcfd) as a result of 10% import tariffs, with little if any impact on U.S. gas prices."
BARCLAYS
"It would be fair to assume that all the three parties in the supply chain (Canadian producers, refiners - primarily in the Midwest - and end-consumers) will bear the incremental cost equally.
"Tariffs in general are not good for oil because they weigh on demand and boost the U.S. dollar, so we would feel more comfortable positioning for a narrower Brent-WTI spread."
CITI
"We see further tariff escalation as bullish for gold to $3,000 per ounce and silver to $36 per ounce on a 6-12 months basis and bearish copper to $8,500 per ton over the next three months, on an ex-U.S. price basis."
JP MORGAN
"We maintain our tactically bearish stance on base metals in the near term and see LME 3M copper prices at risk of falling towards $8,500/mt while LME 3M aluminum could move lower towards $2,400/mt amid a near-term pricing in of risk premium given the ramped up economic and inflationary risks of tariffs.
"For silver, platinum and palladium, the hit to industrial sentiment and threat to the automotive sector could drive a sharper divergence with gold in the near term, keeping our bullish preference primarily in gold for the time being."
RBC CAPITAL MARKETS
"Tariffs are highly unlikely to lower U.S. gas prices, and we believe these tariffs could lead to mildly higher U.S. gas prices than would otherwise be the case over the near and medium term as long as they are in effect.
"If tariffs broaden further, it simply means that gold will cost more in the U.S. than it otherwise would."
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Jacqueline Wong)
Trump imposed a 25% tariff on Canada and Mexico, and a 10% levy on China.
Goldman Sachs expects Canadian oil producers to bear most of the burden, leading to a $3 to $4 wider-than-normal discount on Canadian crude.
RBC Capital Markets believes the tariffs are unlikely to lower U.S. gas prices and could lead to mildly higher prices in the near and medium term.
Citi predicts that further tariff escalation could drive gold prices to $3,000 per ounce within 6-12 months.
JP Morgan maintains a tactically bearish stance on base metals, predicting LME 3M copper prices could fall towards $8,500/mt.
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