Copper Prices Surge After Trump Announces Tariff Plan
Copper prices experienced a significant surge Tuesday following **President Donald Trump’s** announcement of a 50% tariff on imported copper. The announcement sent shockwaves through the market, leading to record highs before prices retreated slightly.
Trump’s Tariff Triggers Market Frenzy
**President Trump** stated, “I believe the tariff on copper we’re going to make it 50%,”
in response to a reporter’s inquiry. This levy is part of broader sectoral tariffs planned by the administration, potentially impacting industries like drugs and semiconductors.
Following **Trump’s** announcement, copper futures in New York reached a peak of $5.9535/lb, marking an intraday increase of almost 17%. By Wednesday’s market open, prices had decreased to around $5.5580/lb.
Analysts Weigh In
**Marcus Garvey**, head of commodities strategy at Macquarie Group, views the S232 copper tariffs as “bearish development for LME prices.”
**Yongcheng Zhao**, principal analyst of the China copper market at Benchmark Mineral Intelligence, anticipates “continued volatility until the tariff officially kicks in, followed by the potential for a sharp decline.”
“The US does not have nearly enough mine/smelter/refinery capacity to be self-sufficient in copper. As a result, import tariffs are likely to lead to continued significant price premiums in the US relative to other regions.”
—**Christopher LaFemina** and team, Jefferies LLC
US Copper Market Faces Transformation
Many expect the global copper market to change dramatically because most anticipated a lower tariff of 25%. Currently, the United States relies heavily on foreign copper to meet its demand, importing roughly 36% of its copper needs according to a Morgan Stanley study.
Potential Outcomes and Long-Term Implications
BMO analysts predict the spread between New York and London prices could “rapidly move towards 50% in the coming days”
in response to the tariff. They estimate COMEX copper could reach as high as $6.6/lb, based on current LME prices of $9,800/t.
While the tariff’s exact impact remains uncertain, boosting production from copper scrap could provide a solution for the U.S. Furthermore, the Infrastructure Investment and Jobs Act, which was signed into law in 2021, has allocated $65 billion to upgrade the nation’s power infrastructure, which will require significant amounts of copper (White House Briefing Room).
Achieving complete self-sufficiency in copper within a short timeframe is unlikely due to the long lead times required for mine development. Despite the administration’s goals, foreign mines will remain crucial in meeting U.S. copper demand for the foreseeable future.
