COMMODITIES-Oil dives most in 3 years; copper, soy slide as Trump tariffs rattle markets

By Naveen Thukral and Karl Plume

SINGAPORE/CHICAGO, April 3 (Reuters) - Oil prices sank on Thursday to their steepest percentage loss in three years, and commodities including copper and soybeans also fell as U.S. President Donald Trump's aggressive tariffs fuelled fears of a global recession.

Safe-heaven gold notched an all-time high before ending down in a broader market selloff.

Trump announced a 10% minimum tariff on most U.S. imports, with significantly higher duties on goods from dozens of countries including China. Investors expect countermeasures that will drive up prices and reduce demand for U.S. goods.

"The higher-than-expected reciprocal tariffs have predictably raised worries of a U.S. recession and slower global growth," Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.

Wall Street benchmarks plunged to their largest percentage losses in years, with high-flying technology stocks suffering big declines. Now facing 54% tariffs on exports to the U.S., the world's No. 2 economy China vowed countermeasures, which it has yet to specify.

Retaliatory tariffs by China, the world's biggest importer of agricultural goods, could further dent demand for U.S. products such as soybeans, which have already declined since the trade war during Trump's first term in 2018.

"Any retaliatory tariffs by impacted countries could weigh on global economic growth. The subsequent impact on industrial activity would see commodity markets come under pressure," said Daniel Hynes, senior commodity strategist at ANZ Research.

Beijing raised duties last month on $21 billion worth of U.S. agricultural products in response to Washington's earlier round of tariffs on Chinese goods.

SOYBEANS AND OIL

Soybeans Sv1 fell 1.7% on Thursday on concerns that trading partners like China would soon impose retaliatory measures. Losses in corn Cv1 and wheat Wv1 were more measured on relief that major importer Mexico was excluded from additional tariffs. GRA/

Oil prices fell by more than 6% to settle with their steepest percentage loss since 2022 after OPEC+ agreed to a surprise output increase a day after Trump's tariff announcement. Slower economic growth and a trade war would be likely to hit oil demand.

Brent futures LCOc1 settled at $70.14 a barrel, down $4.81, or 6.42%. U.S. West Texas Intermediate CLc1 crude futures CLc1 finished at $66.95 a barrel, down $4.76, or 6.64%.

"A slowdown in economic activity would naturally translate to weaker fuel demand," said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova in Singapore.

U.S. energy product imports including crude oil, natural gas and refined products will be exempt from the new tariffs.

London Metal Exchange copper CMCU3 hit a one-month low on tariff-related demand fears while aluminium CMAL3 lost 1.5%. In March, the U.S. imposed effective tariffs of 25% on steel and aluminium imports.

Spot gold XAU= touched an all-time high of $3,167.57 and ounce on Thursday but ended down over 2% as the wider market selloff infected bullion traders. GOL/

Gold, a hedge against political and financial instabilities, has surged more than 19% year-to-date, mainly driven by tariff jitters, rate cut possibilities, geopolitical conflicts, and central bank buying.