Do Trump tariffs feel like a lifetime ago? Remember the spring frosts across southern Europe? It’s hard to believe that all of these events happened in the first half of 2025, but this year so far has been anything but predictable.. For businesses of all sizes, managing procurement costs and supply chain stability has been a significant challenge as a perfect storm of volatility brewed across the fuel, metal and agricultural markets.
Amidst an onslaught of new tariffs, extreme weather events and ongoing conflict in the Middle East and Ukraine, businesses are operating at a heightened level of risk, and as if that wasn’t enough, we still don’t know what the rest of the year has in store yet.
We take a look back at the events of the first half of this year that have impacted the markets and the companies trading in them. Businesses grappling with these fluctuations will have had changing input costs and risked eroding their bottom line, but hedging allows businesses of all sizes to predict their upcoming prices, no matter what’s around the corner.
How have Trumps’ tariffs impacted the commodity markets?
Perhaps the most disruptive factor of this year so far has been the re-imposition and expansion of tariffs by the Trump administration. Fulfilling a key tenet of his “America First” trade policy, Trump imposed a series of aggressive trade measures in the first half of 2025, sending markets into flux.
In early April, the administration implemented a baseline 10% tariff on nearly all imported goods, signaling a broad protectionist shift. This was followed by the reinstatement and increase of tariffs on specific commodities, including a 25% tariff on steel and aluminum from major trading partners. These measures have been met with retaliatory tariffs from affected nations and blocs, including the European Union and China, creating a tit-for-tat escalation that has distorted global trade flows. Think the storm has all blown over? Think again; the repercussions are still being felt across markets.
The metals market in particular has been changeable. The announcement of a forthcoming 50% tariff on copper imports, set to take effect on August 1st, has already led to significant market distortions. In anticipation of the tariff, US buyers have been aggressively stockpiling copper, driving a significant premium for US copper contracts compared to global benchmarks on the London Metal Exchange (LME). This has created short-term price spikes and uncertainty about future demand once the tariffs are fully implemented. No one knows the extent of damage to be done here, but it all hangs in the balance as we see the rest of trading relationships recalibrating.
How will China’s next move impact my business?
These tariffs have redefined global trading relationships, with some superpowers holding the key to impacts on markets globally. The US-China trade relationship, in particular, has seen great changes. At one point, the US levied tariffs of up to 145% on a wide range of Chinese goods, prompting Beijing to respond with its own steep duties. This has trickled down right onto the trading floor, with prices only just recovering. For example, China has significantly reduced its purchase of US soybeans, turning to alternative suppliers such as Brazil.
China’s economic trajectory adds another layer of complexity to the global ecosystem. As the world’s largest consumer of many commodities, the health of its economy is a critical barometer for global demand. Whilst the country has continued its efforts to stimulate growth, the pace of its recovery has had a direct bearing on the demand for industrial metals, energy and agricultural products. Any signs of slowing industrial production or construction activity in China have tended to put downward pressure on the prices of these essential raw materials.
What happened to fuel prices during the Israel and Iran conflict?
After a period where businesses had become accustomed to fuel prices hovering near four-year lows, the sudden conflict between Israel and Iran introduced a significant geopolitical risk premium virtually overnight. Fears of a wider regional conflict and potential disruptions to the flow of oil through the critical Strait of Hormuz caused Brent crude features to surge, pulling refined products like diesel and petrol up with them, too.
Any company that had forecast their annual budgets with stable, low-cost energy prices in mind will have been in for a shock when they woke up to this news. Impacting everything from logistics and distribution to the cost of manufacturing, events like these just go to show that you can’t rely on baseline costs staying the same.
How is climate change impacting the agricultural market?
The increasing frequency of extreme weather events is no longer a future risk, but a present reality impacting agricultural commodity prices. As global warming continues, the climate becomes increasingly unpredictable and it becomes even more important to ensure that what you bring in from the field reaches your bottom line.
Key agricultural breadbaskets across the globe were hit by adverse weather in the first half of the year, with severe frosts in March and April disrupting fruit crops across southern Europe and storms and hail in Spain causing issues for many farmers. This has damaged crop yields for staples like wheat, corn, and other essential soft commodities.
For any business in the food and beverage sector or those using agricultural products in manufacturing, this translates directly into price volatility and potential supply shortages.
The answer to volatility?
What’s become clear is we are navigating a delicate market. Volatility in the first half of the year has left some markets in shock, and any changes around the corner may just tip the difference into hardships for certain industries.
So how can you protect your business from this heightened state of risk? Forward financial planning with certainty. Enter hedging. With Attara, businesses of all sizes can rest easy knowing that their prices are locked in, and their numbers won’t change overnight.
In such a changeable environment, don’t leave your business to chance. We can’t predict what’s coming over the hill, but we can ensure that you’re prepared with the tools to mitigate against it.