United States: Impact on the Commodities Market

The inauguration of Donald Trump as President of the United States on January 20, 2025, introduced several policies and actions that promise to influence the commodities market. In the first days of his administration, the Republican announced measures that mainly affect the energy and agricultural sectors. 

With this scenario in mind, Hedgepoint’s team of experts has highlighted how these government changes are likely to shape the market. Check out the key points below and enjoy the read! 

Impact on the Energy Market 

The new U.S. president has brought significant changes to the energy sector. His policies focus on expanding domestic fossil fuel production, reducing environmental regulations, and imposing new tariffs on trading partners. This new scenario has impacted trade flows, global prices and energy security in several regions of the world. 

The government’s sanctions against Russian oil producers and tankers have created an environment of uncertainty in the global energy market. As a result, major importers such as India and China are looking for alternative suppliers, putting upward pressure on Brent and Middle East oil prices. The ability of these countries to quickly diversify their supply sources will determine the impact on budgets. 

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• Risk Management in Times of Volatility: Expectations for 2025 

Change in trade flows 

According to Hedgepoint experts, with the reduction of Russian imports, India is likely to increase its dependence on Middle Eastern suppliers. This could reduce supply in the region and drive up oil prices, increasing competition. The behavior of OPEC+ (Organization of the Petroleum Exporting Countries) and its production adjustments will be critical to market dynamics in the coming months. India, which relies on Russia for about 40% of its oil imports, faces challenges in securing energy supplies. Limited access to discounted Russian oil could force the country to explore new partnerships and increase imports from existing sources. The success of these strategies will determine the country’s long-term energy stability. 

Read also: 

• How do conflicts in the Middle East affect oil prices in Asia? 

Impact on costs and prices 

The new US administration has signaled the imposition of a 25% tariff on all oil imports from Canada and Mexico on March 1. This is particularly significant given that 66% of all U.S. oil imports between January and October 2024 came from Canada, according to the Energy Information Administration (EIA). 

Tariffs on Canadian and Mexican oil could lead to higher costs for U.S. refiners, especially those that rely on Canadian crude. Increased costs could translate into higher prices for gasoline and diesel fuel, impacting consumers and domestic inflation. The impact will depend on the ability of refiners to absorb these costs and the response of the supply chain. 

The New Direction of US Energy Policy 

On his first day in office, Trump signed executive orders that favor oil and gas development in Alaska, roll back Biden’s environmental goals, and facilitate the expansion of energy infrastructure. His policies prioritize removing environmental restrictions and speeding up permitting for transmission and pipeline projects. 

Oil exploration in the Arctic and offshore the US could become a viable option, but high costs make it uncertain whether companies will actually invest in this expansion. Currently, about 40% of U.S. production is concentrated in the Permian Basin, and an easing of infrastructure permitting could lead to more production in this region. 

The U.S. energy market is undergoing significant changes. Sanctions against Russia, the imposition of tariffs on imports from Canada and Mexico, and policies to encourage domestic production could redefine trade flows and global prices. Monitoring the market response, OPEC+ adjustments, and the strategies of major importers will be essential to understanding the evolution of the sector in the coming years. 

Implications for the agricultural sector 

Donald Trump’s re-election raises questions about the impact on the grain market, both in the US and globally. The experience of his first term (2017-2020) may provide clues as to what to expect. Changes in trade tariffs, biofuels policy, and export flows are key factors to watch.

While trade tariffs will get most of the attention, the domestic impact may be felt first. During the Biden administration, many of Trump’s tariffs remained in place, and a new increase could cause trade volatility. However, current export flows already reflect these barriers. 

U.S. biofuel policy could be an important factor with an immediate impact. Corn-based ethanol and soybean meal are key to American farmers. During Trump’s first term, the EPA granted record waivers to oil refineries, hurting the renewable energy sector. Currently, domestic demand for corn and soybeans exceeds exports: 55% of soybeans are destined for domestic processing, while 42% are exported. Of corn, 36% is used for ethanol and only 16% is exported. 

Changing global scenario 

China has reduced its dependence on American soybeans. In 2023, it imported 105 million tons of soybeans, 75% of which came from Brazil. Its reserves have increased significantly since 2017/18, rising from 22.6 million tons to 46 million tons in 2024/25. 

Brazil expanded its soybean production during the trade war between the US and China, and remains the main supplier of soybeans and corn to the Asian country. The depreciation of the real is also helping Brazilian exports. 

The new US administration could bring significant changes to the grain market, from biofuels policy to trade relations with China. Although tariffs could cause volatility, the strengthening of domestic demand in the US and the diversification of suppliers by China show that the current scenario is different from that of 2017. 

Brazil continues to consolidate as a major global supplier of soybeans and corn, and its future will depend on how political and economic factors evolve. 

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