Donald Trump’s announcement of a 50 per cent tariff on copper imports caused turmoil in the global market for this crucial industrial metal on Wednesday.
Although US copper prices initially surged after the president’s declaration on Tuesday, the London Metal Exchange saw a decline on Wednesday as traders anticipated a decrease in demand due to the tariffs.
Tom Price, a commodities analyst at Panmure Liberum, commented, “Eventually, there will be pressure on global copper demand as downstream players look to postpone consumption.”
With the US relying on imports for about 60 per cent of its copper supply, the threat of tariffs has raised concerns. Copper, essential in electronics, construction, and industrial machinery, saw record high stocks on New York’s Comex exchange earlier this month in anticipation of Trump’s actions.
On Wednesday morning, Comex copper prices dropped by 2.1 per cent to $5.53 per pound after a significant surge in the previous session.
Ed Meir, a consultant at Marex, described the reaction in the copper market as “fast and furious,” warning that a 50 per cent tariff would have a significant impact on US consumers.
Commerce Secretary Howard Lutnick mentioned in a CNBC interview that he anticipated the tariffs to be implemented by the end of the month.
Traders predict a slowdown in copper shipments to the US this year, with post-August 1 deliveries likely to be redirected to avoid the tariff repercussions.