It was meant to be a triumph. “Liberation Day,” declared Donald Trump, marking the return of tariff walls in the name of economic sovereignty. But in the commodity markets, the mood is anything but celebratory.
According to a new analysis from Goldman Sachs, the latest wave of reciprocal tariffs imposed by the former US president is already reshaping global expectations for oil, metals and gold — with ripple effects likely to last well into next year.
At the heart of the issue is a stark shift in the global growth outlook.
Goldman economists estimate that the combined effect of tariffs introduced so far has raised the effective US tariff rate by 18.7 percentage points.
Big economic shock
That’s not just a number: it is enough to knock down forecasts for United States economic growth in 2025 and cloud prospects for Asian economies reliant on global trade.
“The prospect for escalation… suggests a risk that the US effective tariff rate rises more than the 15pp increase we assume,” the bank warned.
The most immediate casualty has been oil. A softening global economy means weaker demand for energy, just as Opec has announced a surprise boost in supply for May.
Goldman has now cut its forecast for year-end Brent crude prices to $66 per barrel, down from $71. “The two key downside risks to oil prices we had been flagging are starting to realise,” the analysts wrote. They suggest refiners consider locking in margins now, while producers should hedge against further falls.
Industrials will feel pinch
Industrial metals are not far behind. Aluminium and steel were already subject to 25 per cent US import duties. Now copper is expected to join them under Section 232 tariffs. Goldman’s analysts remain cautious.
The copper market has long been expected to fall into deficit (that is, demand outstripping supply) but slowing growth could postpone that crunch. Copper could even dip below $9,000 a tonne in the second quarter, the report says, as recession fears ripple across markets.
But not every commodity is under pressure. Gold, typically a safe haven in times of turbulence, is proving resilient.
Prices slipped after the tariffs were announced, partly because investors were liquidating positions to cover losses elsewhere, but Goldman sees this as an opportunity.
One bright spot
“We continue to recommend [gold] as our highest-conviction view in commodities,” the bank said, citing strong demand from emerging market central banks and rising inflows into gold-backed exchange-traded funds. Its year-end forecast: $3,300 per ounce.
As Trump’s economic nationalism plays out across markets, investors are left with a familiar challenge: brace for volatility or find shelter in the storm. For Goldman Sachs, that shelter looks decidedly golden.