US crude prices down nearly 2 percent as levies on China take effect

US crude prices fell by nearly 2 percent on Tuesday as US tariffs on China took effect, though President Donald Trump paused for a month a decision on steep levies on neighbours Canada and Mexico.

US West Texas Intermediate (WTI) crude declined $1.32 (HK$10.3), or 1.8 percent, to trade at $71.84 per barrel, while Brent futures fell 87 cents, or 1.2 percent, to $75.09 by 0617 GMT.

US tariffs of 10 percent on Chinese imports took effect at mid-day in Asian trade, spurring Beijing to retaliate with levies of 15 percent on US coal and liquefied natural gas and 10 percent on crude oil starting from Feb. 10.

"China’s counter-tariffs on the US may be perceived as a sign of escalation and may reduce the likelihood of a temporary resolution akin to US agreements with Mexico and Canada," IG market strategist Yeap Jun Rong said in an email.