Introduction: The Tariff Tug-of-War

Picture yourself at a gas station, wincing as the price per gallon creeps higher. Or maybe you’re shopping for a new phone, only to find it’s pricier than expected. These moments aren’t just random—they’re part of a global trade tug-of-war driven by tariffs in 2025. Tariffs, taxes slapped on imported goods, are shaking up the prices and availability of commodities like oil, natural gas, steel, coal, rare earths, and soybeans. These raw materials aren’t just items on a trade list; they’re the lifeblood of our daily lives, from fueling cars to building homes and powering tech.

Why do these commodities hold such sway in trade policy? They’re strategic assets, critical to industries, economies, and even national security. Countries use tariffs to protect their markets, gain leverage, or retaliate in trade disputes. In 2025, the U.S. is imposing tariffs on China, Canada, and Mexico, while China counters with export controls and tariffs of its own. This back-and-forth affects countries tied to these commodities, like Saudi Arabia’s oil empire or China’s rare earth dominance. Join us as we dive into each commodity’s story, exploring how tariffs shape trade and why these materials are at the heart of global negotiations.

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Oil: Fueling Trade and Tensions

Oil is the lifeblood of the global economy, powering everything from your morning commute to international shipping. In 2025, tariffs are shaking up oil markets, especially with Trump threatening imposing tariffs on Canadian crude and announcing reciprocal tariffs, which drove gas prices to drop by -2.1% and -6.4%, respectively.

Why is oil a trade policy heavyweight? It’s a strategic resource that countries leverage for economic and political power. Saudi Arabia, with its vast reserves, relies on oil exports for over 80% of its revenue. Russia uses oil to fund its government, while the U.S., a top producer and consumer, feels every price shift at the pump. In 2018, trade tensions indirectly hit oil by raising steel costs for drilling, showing how tariffs ripple through markets. Today, oil-producing nations face tariff-induced uncertainty, making oil a focal point in trade talks.

While China and the US both heavily relied on crude oil consumption (the 1st and the 2nd in the world), they do not directly trade with each other. For China, the largest suppliers include Russia, Malaysia, Saudi Arabia; for US, the largest suppliers include Canada and OPEC.

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Natural Gas: Powering the Trade Game

Natural gas, the quieter cousin of oil, heats homes and fuels power plants. In 2025, it’s caught in the tariff crossfire, especially for liquefied natural gas (LNG). China’s 15% tariff on U.S. LNG exports has dampened demand, threatening U.S. producers who rely on Asian markets. This could push natural gas prices higher as exporters scramble for new buyers.

Natural gas is a trade policy player because it’s a growing energy source, with LNG trade shaping global alliances. The U.S., the world’s top LNG exporter, faces competition from Russia and Qatar, who may gain market share if U.S. exports falter. In 2019, China’s tariffs on U.S. LNG during the trade war disrupted flows, showing how tariffs can shift energy markets. Countries like Japan and South Korea, major LNG importers, are also affected, as tariffs could raise their energy costs, impacting their trade balances.

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Steel: Building Trade Barriers

Steel is the backbone of modern life, from skyscrapers to cars. In 2025, U.S. tariffs on steel imports are driving up prices. These tariffs aim to shield U.S. producers but raise costs for industries like automotive, where car prices could jump by $2,700.

Steel’s trade policy clout comes from its industrial importance. In 2018, U.S. steel tariffs boosted domestic jobs by 1,000 but hurt manufacturers downstream, costing jobs in industries like construction. While China is the largest steel producer and exporter, tariff in 2018 has shut most Chinese steel out of the market. In 2024, only less than 2% American steel imports came from China. Yet, steel is a trade policy battleground because it symbolizes industrial strength, making it a target for protectionism.

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Coal: A Fading Trade Pawn

Coal, once a global energy giant, is fading due to green energy shifts, but tariffs still stir its market in 2025. China’s 15% tariff on U.S. coal has slashed exports, reshaping global coal flows and pressuring U.S. producers. Coal prices are projected to drop 27% in 2025 as demand wanes.

Coal’s trade policy role is tied to its historical significance and remaining industrial uses, like steel production. The U.S., China, and India, major coal producers, feel tariff impacts differently. China’s coal imports fuel its industries, while U.S. exporters lose market share to competitors like Australia. In 2018, trade tensions indirectly hit coal by raising mining costs, showing its vulnerability to trade policies. Coal remains a trade pawn, used to signal economic strength or retaliation.

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Rare Earths: Tech’s Trade Weapon

Rare earths are the secret sauce behind your smartphone, electric car, and even military tech. These tiny minerals are critical, and in 2025, they’re at the heart of U.S.-China trade tensions. China, controlling 90% of global production, has tightened export controls in response to U.S. tariffs, driving price volatility. For example, dysprosium oxide, priced at $230-280 per kg in 2024, is stabilizing as demand for clean energy grows.

Why are rare earths so vital? Take your electric car—say, a Tesla. It relies on neodymium and dysprosium to make powerful magnets for its electric motors. These magnets are lightweight and strong, letting EVs go farther and faster. Without them, electric cars would be less efficient, slowing the green revolution. Or think about your iPhone. Lanthanum polishes the glass screen to make it crystal clear, while neodymium magnets power the speakers for crisp sound. These minerals are in tiny amounts, but they’re make-or-break for modern tech.

Why are rare earths trade policy stars? They’re critical for tech and defense, from drones to wind turbines, making them a strategic weapon. The US relies on China for about 70% of its imports of rare earth, and China has increasingly weaponized this dependency over recent months. Besides, it is said that making one F35 fighter jet requires 417kg of rare earth materials. There is no doubt why China placed more than a dozen strategic minerals under export restrictions responding US tariffs. In 2010, China’s export curbs sparked global panic, showing rare earths’ power in trade disputes. Countries like Japan, a tech hub, are also vulnerable, as tariffs could disrupt their supply chains.

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Soybeans: Farmers’ Trade Battle

Soybeans feed livestock, make tofu, and fuel trade wars. China has been a critical market for US farmers, representing more than half of US soybean exports in recent years. In 2025, U.S. soybean farmers are reeling from China’s 125% retaliatory tariffs on U.S. imports, echoing the 2018 trade war when prices dropped $2 in days. These tariffs have slashed U.S. exports, boosting competitors like Brazil.

The Midwest is hit hardest because agriculture, especially soybeans, is the backbone of these states’ economies. Iowa alone produces millions of tons, and farmers there are vocal about the tariffs’ devastating impact. This isn’t just about money—it’s about families and communities struggling to survive. With the 2026 midterm elections looming, this issue could sway voters in these key states. Politicians are already campaigning on promises of better trade deals or farm subsidies, knowing that rural votes in places like Iowa and Missouri could make or break their chances. For President Biden, who won some of these states in 2024, addressing soybean tariffs could be critical to holding support in 2026.

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Conclusion: The Trade Web Unraveled

Tariffs have been weaving a complex web across global trade, with commodities like oil, natural gas, steel, coal, rare earths, and soybeans at the center. These materials are trade policy linchpins because they power economies, industries, and innovations. Tariffs can protect domestic markets but often raise prices and spark retaliation, affecting countries like Saudi Arabia, China, the U.S. and many others in unique ways.

The stories of these commodities show how interconnected our world is. A tariff on Canadian oil can raise U.S. gas prices, while China’s rare earth curbs can stall tech production in the US. For consumers, tariffs mean higher costs; for producers, they’re a test of resilience. As trade policies evolve, understanding these commodities’ roles helps us navigate the global trade landscape, where every move sends ripples far and wide.

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