U.S. crude oil falls on escalating U.S.-China trade war

Crude oil futures fell more than 3% on Thursday, as President Donald Trump‘s steep tariffs on China overshadowed his 90-day pause on higher rates for most other countries.

U.S. crude oil fell $2.28, or 3.66%, to close at $60.07 per barrel, while global benchmark Brent lost $2.15, or 3.28%, to settle at $63.33 per barrel.

Crude prices rallied Wednesday after Trump announced a lower, temporary tariff rate of 10% on most U.S. trade partners. Trump said he was open to negotiating deals with countries that don’t retaliate. West Texas Intermediate swung 13% from the session low to close at $62.35 per barrel.

But Trump’s decision to increase tariffs on China, the world’s second-largest economy and biggest crude importer, to an eye-watering 145% weighed on the market Thursday.

“The tariffs on China are now higher — that’s still pretty significant,” said Jim Burkhard, head of oil market research at S&P Global Commodity Insights. “These negotiations with all these different countries — can the U.S negotiate with 70 countries all at once? I don’t think the chaos is over.”