Copper markets upended by Trump’s 50% tariff threat on imports
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The news: Copper markets were left reeling on Wednesday following US President Donald Trump’s threat to impose 50% tariffs on imports of the metal to the US.
The numbers: While US copper prices shot up to a record high on Tuesday immediately after the announcement, the global price on the London Metal Exchange (LME) dropped 2.4% on Wednesday’s open as traders bet that the tariffs will ultimately slow demand for the metal.
Prices for copper on New York’s Comex exchange soared 13% to a new record high of USD5.69 ($8.72) a pound, around 25% higher than those on the London Metal Exchange.
The context: Speaking during a Cabinet meeting on Tuesday, Trump said, “Today we’re doing copper,” and added, “I believe the tariff on copper we’re going to make it 50%.” He did not specify when the tariff would take effect. His comments follow a Section 232 investigation into copper imports ordered in February. Copper futures in New York surged as much as 17% following the remarks.
Following Trump’s comments, Minerals Council chief executive Tania Constable said that although Australia’s copper exports to the US are limited, “trade restrictions imposed on other key trading partners” could disrupt global supply chains, increasing costs and uncertainty for local companies.
What they said: Yongcheng Zhao, principal analyst of the China copper market at Benchmark Mineral Intelligence told Bloomberg: “The tariff increase is a bearish factor for LME copper prices in the near term. We expect continued volatility until the tariff officially kicks in, followed by the potential for a sharp decline.”
