Trump's Tariff Tactic: U.S. Copper Market Faces New Challenges

President Donald Trump announced a 50% tariff on semi-finished copper products, excluding ores and cathodes. This unexpected move led to a significant drop in U.S. Comex copper futures, impacting global pricing expectations. The tariff is part of a strategy to protect U.S. national security by regulating imports.

The Trump administration revealed a pivotal move by announcing a 50% tariff on semi-finished copper products, a decision that omits key input materials like copper ores, concentrates, and cathodes. This measure aligns with efforts to protect national security and aims to impact import dynamics, particularly from Chile and Peru.

The immediate market reaction saw a significant 19.5% plunge in U.S. Comex copper futures, unraveling a previously extensive premium over the London benchmark. Previously, market speculations had favored U.S. copper mines reaping benefits from anticipated more comprehensive tariffs on all copper types.

Despite calls for broader tariffs, the administration's selective focus appears less stringent than market expectations. The ongoing strategy could introduce further tariffs, potentially reaching 30% on refined copper by 2028, contingent upon market evaluations. The measures accompany a mandate for increased domestic sales of U.S. high-quality copper scrap.

(With inputs from agencies.)