Trump, China, and More: 5 Key Variables That Could Shape Volatile Commodity Markets in 2025

Experts warn that 2025 could usher in unprecedented volatility for the global economy and commodity markets.

Analysts suggest that uncertainties in the Chinese economy and the incoming administration’s climate change skepticism may significantly impact the global energy transition as President-elect Donald Trump pledges to erect tariff barriers on global trade.

Industry insiders reported on Thursday that this year’s commodity market is expected to be heavily influenced by a complex interplay of factors, including Trump’s presidency, a potential Chinese economic recovery, and weakening OPEC+ cohesion.

If Trump’s second administration successfully negotiates with key trading partners, even the mere threat of tariffs could yield positive results, securing potential concessions.

In this scenario, easing inflation and looser monetary policy could strengthen commodity markets. Growth-sensitive materials like copper are likely to benefit the most.

However, Trump’s second term might take a more extreme approach, such as imposing large-scale trade barriers and withdrawing from international agreements, including the Paris Climate Accord and NATO.

If such extreme protectionism materializes, it could trigger global inflation and tighten monetary policies. Consequently, commodities like copper and iron ore might face weakened demand and declining prices.

China’s economic trajectory is another crucial factor for commodity markets. If Beijing successfully addresses its financial challenges and stimulates consumer sentiment and spending, it could positively impact key commodities like copper, iron ore, and natural gas.

China plans to bolster its partnerships with European and Global South countries, asserting leadership in energy transition technologies and products.

The cohesion of OPEC and its allies, known as OPEC+, which has maintained oil market stability in recent years, may also weaken.

Persistent weak demand and Trump’s potential policies to boost U.S. oil production could create fissures within OPEC+.

Some member nations might rush to monetize their reserves early, anticipating market shifts driven by the transition to electric vehicles.

As the energy transition gains momentum, the U.S. risks losing ground in international markets.

China will likely aim to dominate the global market for energy transition products such as electric vehicles, solar panels, and batteries.

While this could bolster commodity markets for copper, lithium, and silver, the U.S. may face long-term challenges if Trump’s “America First” policies undermine its competitiveness in energy transition technologies.

Despite the uncertainties, market analysts see potential investment opportunities in the 2025 commodity landscape.

While early 2025 may be highly volatile, the market is expected to adapt swiftly to global economic shifts. During this critical period, investors should closely monitor trends in key commodities such as copper, iron ore, and natural gas.