In late July 2025, the United States and European Union announced a long-awaited trade agreement aimed at de-escalating tensions and avoiding a full-scale tariff war. The deal, which imposes a capped 15% tariff rate on most goods and includes sector-specific exemptions, marks a shift toward stability in transatlantic trade relations. But beyond diplomacy, this pact carries significant implications for global commodity markets, from energy and metals to agricultural exports and currency dynamics.

Energy: LNG Commitments Signal Long-Term Tailwinds

One of the most notable outcomes of the deal is the EU’s commitment to purchase up to $750 billion in U.S. energy exports, primarily liquefied natural gas (LNG), over the next three years. This promise, if realized, could reshape global gas flows, reduce Europe’s dependence on Russian and Middle Eastern suppliers, and entrench the U.S. as a top-tier energy exporter.

In the short term, however, markets have greeted the news with caution. Natural gas futures dipped slightly as traders questioned whether the U.S. has the infrastructure to fulfill such aggressive supply promises on that timeline. Still, the longer-term implications are clear: stronger demand for U.S. LNG should provide support for gas prices and catalyze further investment in export terminals, pipelines, and shipping capacity.

Metals and Industrials: Relief for Strategic Supply Chains

The agreement notably excludes certain sectors from tariffs altogether—particularly semiconductors, aircraft parts, chemicals, and generic pharmaceuticals. These carve-outs are strategically significant, as they help safeguard critical industrial supply chains between the U.S. and EU.

For metals markets, this is a mixed but generally positive signal. The removal of severe tariff threats reduces uncertainty for manufacturers reliant on transatlantic flows of aluminum, steel, and copper-containing components. Base metals, which often trade on macroeconomic sentiment, may see increased stability and demand if industrial production picks up on both sides of the Atlantic.

Precious Metals: Risk Sentiment Weighs on Gold

As equity markets rallied and the U.S. dollar strengthened in response to the deal, gold prices declined to a two-week low, reflecting investors’ shift toward risk assets. The reduction in trade uncertainty has, at least temporarily, diminished the safe-haven appeal of gold and other precious metals.

However, with lingering geopolitical tensions elsewhere (e.g., in the Middle East and South China Sea), it would be premature to count gold out entirely. For now, though, the trade deal has introduced downward pressure on haven assets.

Agriculture: A Watch-and-Wait Situation

Unlike energy and industrials, agricultural commodities were not a major focus of this particular agreement. However, the general reduction in tariff risk and the more stable trade environment could improve U.S. export prospects for products like soybeans, corn, and wheat—especially if further bilateral discussions open market access or resolve past frictions around food safety and environmental standards.

Farmers and exporters may benefit indirectly through improved shipping conditions, lower insurance premiums on transatlantic freight, and reduced policy volatility.

Currency and Inflation: Dollar Strength Creates Crosswinds

A stronger U.S. dollar—bolstered by increased investor confidence and the relative attractiveness of U.S. energy and industrial goods—could exert downward pressure on dollar-denominated commodity prices globally. This means buyers using weaker currencies (e.g., in emerging markets) could face higher import costs, even if nominal prices remain flat.

At the same time, the easing of trade tensions has moderated some inflation expectations, especially in Europe. Central banks may now have more room to hold or lower interest rates, which could, over time, reinvigorate demand for commodities tied to industrial output and construction.

Stability is Not Certain

The most valuable product of the U.S.–EU trade deal may not be LNG or steel—it’s predictability. By replacing threats of 30–50% tariffs with a consistent 15% ceiling and clear exemptions for strategic sectors, the deal brings a much-needed dose of certainty to global supply chains.

However, the much awaited deals with China, Japan, and other countries still leaves a lot of uncertainty. As policies shift across the countries and sentiments change, various commodities are still ripe for rapid price movements, which can bring unprecedented harm to businesses. 

This type of uncertainty is exactly why we built Pillar. 

Pillar offers automated hedging programs to make sure your business is protected from the potential volatility ahead. With a few clicks, you can have an effective hedging program up and running in minutes. Reach out today for a demo so we can show you how you can take your risk management to the next level!