U.S. oil drops below $60 amid recession fears and new tariffs
Oil prices in the U.S. dropped below $60 per barrel, and experts are warning that President Donald Trump's new tariffs could push the United States and the entire global economy into a recession. These concerns have affected forecasts regarding oil demand, CNBC reports.
Oil prices fell below $60 per barrel on Sunday. This drop is linked to President Donald Trump's reversal of U.S. tariff policy. For several days, persistent voices have suggested that this policy change will negatively impact the economy and could lead to a recession both in the U.S. and globally.
West Texas Intermediate (WTI) crude oil futures dropped by over 3% to $59.78, marking the lowest level since April 2021. The decline in oil prices is due to a series of previous discounts amounting to 6% last week, and the newly announced tariffs have further raised concerns that higher prices for businesses might lead to an economic slowdown, explains CNBC.
According to JPMorgan, these new tariffs could drive the United States and possibly the world into a recession by 2025. The bank currently estimates the risk of a U.S. recession at 60%, up from 40%. Mohamed El-Erian, Allianz’s chief economic advisor, says the recession risk in the United States has jumped to 50%. He believes that markets still underestimate the impact that President Trump's aggressive trade policies will have on inflation. As production costs rise due to the new tariffs, oil demand could decrease, potentially keeping raw material prices low.
Donald Trump imposes tariffs on the entire world
On April 2, Donald Trump announced drastic tariffs on almost the world: 10% on all imports and 25% on foreign cars. He then revealed a list of countries and the tariff rates that will be applied. General tariffs went into effect on April 5, and additional tariffs for specific countries will take effect on April 9.
American tariffs imposed on the EU will reach 20%. This is less than the new tariffs Donald Trump aims to impose on China, which will be as high as 34%, but more than the retaliatory tariffs aimed, for example, at Brazil, which will be 10%.
During a news conference in front of the White House, the U.S. president argued that these would be "nice tariffs," not as high as those other countries impose on the U.S.A. He claimed that this tariff policy would make America prosperous again.
