(BOE Report)– Commodities were pelted in 2025 by the whirlwind of tariffs and policies imposed by U.S. President Donald Trump, and while the storm may recede in 2026, the ripples will last some time.
Trump’s efforts to remake global trade and his shifting geopolitical moves have boosted volatility in commodity markets, with prices being driven by daily headlines rather than fundamentals.
This has created winners and losers, a trend likely to persist into 2026, even if the Trump administration calms its tariff wars and smoothes ruffled feathers with traditional allies such as the European Union and India.
However, the list of winners and losers in 2026 may be different from 2025, largely depending on which version of Trump the world gets.
GOLD’S BIG YEAR MEETS POLICY RISK
A more settled U.S. policy would likely see gold, the star performer of 2025 with a gain of 60%, move into a consolidation phase, albeit with the bullish support of ongoing central bank purchases and investors seeking alternatives to previously safe assets such as U.S. Treasuries.
It would take a new crisis to spark another surge in gold, with a candidate for such an event being the risk that the U.S. Federal Reserve loses credibility if its new chair is seen to be a political lackey of Trump and cuts interest rates to juice the economy even as inflation persists.
The risk of a market reaction to the ongoing high fiscal deficits and debt burdens in much of the developed world is another event that could bolster gold.
If these risks materialise and global economic growth comes under pressure, it’s likely that commodities such as crude oil and copper would come under significant pressure.
Even assuming the world economy successfully navigates the second year of Trump’s second stint in the White House, there are downside risks to many major commodities.
OIL, GAS AND THE SUPPLY OVERHANG
Crude oil may come under pressure from rising supply and the potential return of Russian barrels to the open market, assuming a peace deal is reached to end the conflict in Ukraine.
Liquefied natural gas (LNG) may also come under pressure as more U.S. plants are commissioned, and lower prices are needed to clear the overhang of supply.
Another uncertainty about what policies Trump will pursue is what happens when he and his administration realise that the trade commitments promised by some nations are not being kept.
One of the key features of many of his so-called trade deals has been commitments to increase purchases of U.S. energy, often to levels that are at best unrealistic and at worst delusional.
The EU’s undertaking to buy $250 billion a year of U.S. energy is a case in point.
Using average prices for 2025, Europe’s imports of U.S. crude oil, LNG and coal were worth about $82.3 billion in 2025, up slightly from the $79.1 billion in 2024.
Crude oil volumes fell to 1.73 million barrels per day (bpd) in 2025 from 1.91 million bpd in 2024, while LNG imports rose to about 72.24 million metric tons from 45.14 million, and coal was largely steady at 20.73 million tons from 20.44 million in 2024, according to data compiled by commodity analysts Kpler.
There is zero chance that the EU’s imports of U.S. energy can more than triple in 2026 from 2025, as there simply isn’t enough available crude, LNG and coal.
Europe’s leaders and the wider commodity market are probably hoping that Trump turns a blind eye to what is likely to be a massive shortfall on the unrealistic commitment, but the risk is that he doesn’t and seeks some form of trade retribution.
METALS ROUNDABOUT
Copper is another commodity that has been on the Trump rollercoaster, hitting a record high in December as more metal flowed to the U.S. amid concerns that Trump will impose new tariffs early in 2026.
The U.S. is likely to have doubled its imports in 2025, meaning that it has built up a stockpile while depleting inventories in the rest of the world.
How this gets resolved will depend on what Trump actually does, but assuming there is some form of tariff on refined copper imports that have so far been spared, it’s likely that U.S. imports will decline in 2026 as inventories are used up, which in turn will allow buyers such as top importer China to increase purchases.
Another set of commodities that are likely to end up on 2026’s winners’ list is rare earths and other critical minerals.
The Trump administration is likely to continue to commit resources and investment to building supply chains for these minerals that don’t rely on China, which currently dominates mining and refining for many of them, including lithium and cobalt.
CHINA’S GRIP ON IRON ORE AND COAL
There are some commodities that are less exposed to the actions of the U.S., and more dependent on the outlook for China, the world’s second-biggest economy.
Chief among these is iron ore, with about three-quarters of all global seaborne cargoes heading to China’s steel mills.
Iron ore enjoyed a stable 2025 as Chinese demand remained robust, but 2026 could put pressure on prices as the huge new Simandou mine – a largely Chinese venture in Guinea – starts to ramp up output.
Coal is also largely a commodity dominated by China and India, the world’s two biggest producers and importers respectively.
Seaborne thermal coal prices will depend largely on how domestic output and electricity generation evolve in China and India, with the risk that they may come under pressure as both Asian countries increase renewable energy production.
Tariffs and trade spats will keep jolting prices, but the heavier drag in 2026 is likely to be softer demand meeting rising supply. If growth stumbles while new mines, LNG trains and oil barrels hit the market, crude, copper and coal look more vulnerable than gold.
In that world, the risks for commodities are not only the next Trump social-media post, but also a wave of physical supply that the market struggles to absorb.
The views expressed here are those of the author, a columnist for Reuters.
(By Clyde Russell Editing by Marguerita Choy)
