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Copper Market in Turmoil as Trump Touts 50% Tariff on US Imports.

commodities :: 2025-07-09 :: source - bloomberg

By Katharine Gemmell and Martin Ritchie

(Bloomberg) — President Donald Trump sowed fresh chaos in metals markets by indicating the US would implement a higher-than-expected 50% tariff on copper (HG=F) imports, spurring a record spike in New York futures and a drop in the global benchmark.

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The plan, announced in an apparently off-the-cuff comment to reporters, marks the latest twist in a tumultuous period for industrial commodities, as the US leader aims to encourage more mining and smelting at home. He’s already raised fees on steel and aluminum imports, while probes into flows of multiple other metals are in train.

Since February, when Trump first laid out plans for the levies, global traders have sent record volumes of the metal to the US, targeting huge profits on cargoes that can be delivered before the tariffs land.

A 50% tariff — which could be in place within weeks — signals an imminent end to that trade but injects new uncertainties, including on timing and potential carve-outs for some large producers. In the short-term, one crucial question for traders is whether or not copper that’s already on its way to the US will be hit with tariffs when it arrives.

Citigroup Inc. called it a watershed moment for copper, closing the window for significant shipments into the US market.

“The degree of impact will heavily depend on the details,” said Marcus Garvey, Macquarie Group’s head of commodities strategy. “Not only the rate of any tariff but which forms of copper it is applied to, and whether or not there is any grace period ahead of its implementation.”

If the tariff takes hold, it will inflict higher costs across a broad section of the US economy due to the myriad of industries and applications that rely on copper — even as Trump piles pressure on the Federal Reserve to lower interest rates.

Trump’s already imposed 50% levies on steel and aluminum (ALI=F), but there’s particular concern about the economic impact of copper tariffs because the US is highly reliant on imports. US buyers have already warned that the measure risks undermining Trump’s core ambitions to revive manufacturing and challenge China’s industrial might.

“The US does not have nearly enough mine/smelter/refinery capacity to be self-sufficient in copper,” Jefferies LLC analysts including Christopher LaFemina wrote in a note. “As a result, import tariffs are likely to lead to continued significant price premiums in the US relative to other regions.”

Contracts on the Comex surged to an unprecedented 25% premium over London Metal Exchange prices — the global benchmark — in the aftermath of Trump’s comments, a level that also suggests the market is not fully convinced that a 50% levy will be imposed universally. A single carve-out for a top supplier like Chile would materially dampen the blow for importers, and manufacturers now have huge buffer stocks to fall back on thanks to the record-breaking imports seen over recent months.


Copper climbed as much as 17% in New York on Tuesday, a record one-day spike to an all-time high, before falling more than 4% in early trading on Wednesday. On the LME, the metal slid as much as 2.4% at the open, before easing to change hands at $9,608.50 a ton, 1.9% lower, at 9:51 a.m. local time.

“The tariff increase is a bearish factor for LME copper prices in the near term,” said Yongcheng Zhao, principal analyst of the China copper market at Benchmark Mineral Intelligence. “We expect continued volatility until the tariff officially kicks in, followed by the potential for a sharp decline.”

Trump’s 50% pledge comes as copper demand is expected to surge over the coming decade, with data centers, automakers, power companies and others scouring the globe for feedstock. Retooling power and transportation systems to run on renewable energy will require far more copper than the companies that produce it are currently committed to deliver.

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The path toward greater US self-reliance in copper is a fraught one for the US given the paucity of existing capacity and the challenges in building new plants. Net copper imports account for 36% of demand, according to Morgan Stanley research.

“The longer term aim of the Trump administration may be for the US to be fully self-sufficient in copper, but mines take too long to develop for this to be achieved in less than a 10-year time horizon,” Jefferies analysts wrote. “The US will still rely on foreign mines to meet demand for the foreseeable future.”

A shorter-term solution would be for the US to boost production from copper scrap, which has historically been shipped to processors overseas, particularly in China. Those flows ground to a halt as the spike in Comex prices made US scrap more expensive, but for now the country lacks the smelting capacity to fully work through the backlog of scrap that’s been piling up.

Major players in the US copper industry have called on President Trump to restrict exports of ore and scrap instead of imposing tariffs on imports. They’ve also warned that putting tariffs solely on refined copper could lead to a flood of imports of value-added copper products that aren’t subject to the levies.

Elaborating on Trump’s copper comments, Commerce Secretary Howard Lutnick later said the levy would be in place in late July or by Aug. 1. There were no details, including on which particular products would be hit by the tariff rate, or whether there could be exemptions for large producers like Chile.

Many analysts and traders had been expecting tariffs at the relatively lower level of 25%, and the higher threshold means those carve-outs become more important. The massive flow of copper to the US this year also means the market there is relatively well-supplied for now.

“A 50% tariff is arguably comparatively bearish,” Macquarie’s Garvey said. “It would be more demand destructive at the margin in the US and extends the period of working down excess inventory.”

The global copper industry has been bracing for the levies since February, when Trump ordered the Commerce Department to lay out the case for imposing them on national-security grounds as part of a review under Section 232 of the Trade Expansion Act. It had until later in the year to complete the investigation.

—With assistance from Alfred Cang.

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