Oil slides after China announces tariff on US crude

Andrew Burton/Getty Images

Oil prices slumped Wednesday after Beijing announced it would
retaliate against the Trump administration with a 25%

tariff on another $16 billion worth of US products, including
crude exports to China.

West Texas Intermediate, the US benchmark, shed 2% to $67.70
per barrel after the Ministry of Commerce released a new list of
American goods that will be subject to tariffs. Brent
was down 0.6% to just above $74 a barrel. In addition to crude
oil and liquified natural gas, other
listed products include diesel, coal, chemicals, cars, steel
products and medical equipment.

The announcement came after the Trump
administration followed
through with a 25% tariff on an additional $16 billion of

Chinese goods Tuesday evening. The latest round of
American and Chinese tariffs, which bring the running total of
targeted goods to $50 billion on each side, are set to take
effect August 23.

Jameel Ahmad, global head of currency strategy and market
research at FXTM, said the escalation “is just reminding
investors that their trade war concerns are going nowhere anytime
soon.”

President Donald Trump has threatened to impose tariffs on nearly
all Chinese imports to the US. Beijing can’t match that
dollar-for-dollar because it imports significantly fewer American
products than the US does from China. But officials have
threatened to retaliate in other ways, like increasing the rate
of tariffs on additional American imports.

Oil prices had been edging higher prior to the announcement. A
weekly report by the Energy Information Administration, scheduled
to be released at 10:30 a.m. ET, is expected to show a drawdown
in US inventories. 

WTI is up 40% year-over-year. 

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