TITLE:
How Does the Trade Policy Uncertainty of the United States Affect the Prices of Crude Oil in Futures Markets?
AUTHORS:
Qi Wang, Dongdan Jiao, Xiangyun Xu
KEYWORDS:
Trade Policy Uncertainty, Crude Oil, Structural VAR Model
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.15 No.3,
September
21,
2026
ABSTRACT: Although the rise of trade policy uncertainty has become a hot topic in recent years, few studies explore whether and how the U.S. trade policy uncertainty affects the prices of commodities in futures markets. This paper aims to fill the gap theoretically and empirically. By extending the crude oil’s pricing model of Knittel and Pindyck (2016) and employing the Structural Vector Autoregression (SVAR) model, we demonstrate that the impacts of trade policy uncertainty shocks are insignificant before Donald Trump was elected as president of United States for first time but negatively significant since then and for the full sample, echoing the facts that the trade policy uncertainty began to increase and attracted the attention of market participants after 2016M11. In addition, our arguments are also applicable to other “pro-cyclical” commodities such as copper, gasoline oil and soybean. Our findings hold important implications for participants in commodity markets.