The discussions, led by Treasury Secretary Scott Bessent, come amid rising anticipation that a rollback of the crippling 145% tariffs on $1.2 trillion worth of Chinese goods could be imminent.
On Truth Social, Trump wrote: “80% Tariff on China seems right! Up to Scott B,” followed by: “CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!” Goldman Sachs estimates that even a 50% tariff reduction could boost global GDP by 0.3 percentage points –with energy demand likely to surge as trade reaccelerates.
Game-Changer In Motion: A U.S-China Deal Could Unleash Oil’s Next Major Leg Higher
China, the world’s largest crude importer, brought in 11.5 million barrels per day (bpd) in Q1 2025 – already 4.7% higher year-on-year. Analysts at GSC Commodity Intelligence forecast that figure could climb above 13 million bpd if trade tensions ease and manufacturing picks up. Meanwhile, global inventories have declined by 6.2% since January, with OPEC+ maintaining disciplined output. This creates a fragile balance where even a modest demand shock could ignite a major price breakout.
GSC Commodity Intelligence believes the current environment is the most asymmetric setup in years. In a note to clients, analysts stated: “We’re looking at an asset that’s been mispriced for months. Recession fears dragged oil down, but the macro has flipped – and the market hasn’t caught up yet.” Adjusted for inflation and supply dynamics, crude is trading at a 30% discount to its five-year average.
China’s Exports Surprise To The Upside. Is The Global Engine Restarting?
Fresh economic data points to green shoots. China’s outbound shipments rose 8.1% year-over-year in April, even as exports to the U.S plunged by 21.7%. The divergence suggests a pivot to alternative markets and early signs of an industrial rebound that could fuel higher energy consumption across Asia’s manufacturing hubs.
JPMorgan recently upgraded Crude oil to its top “overweight” trade idea, forecasting WTI could reach $78 within 90 days if tariffs are eased.
