Donald Trump pledged Wednesday to impose a 50% tariff on copper imports that resonated across the market for the world’s most important industrial metals.
US copper prices shot high after the US president poses a threat on Tuesday, but the global price of London’s metal exchange sank on Wednesday as traders bet that tariffs would eventually reach metal demand.
“Ultimately, growth in physical copper demand worldwide is under pressure as downstream players are trying to postpone consumption,” said Tom Price, a product analyst at Panmure Liberum.
The US imports about 60% of the copper, with the rest filled with domestic mines or recycled scrap.
Copper stocks at COMEX Exchange in New York hit a record high earlier this month on expectations that Trump would ultimately target imports. Metals are widely used in electronics, construction and industrial equipment.
COMEX metal prices fell 2.1% at $5.53 per pound on Wednesday morning, surged around 13% in the previous session.
“The copper market’s response to Trump’s announcement was fast and furious,” said Ed Maia, consultant at product broker Marex, adding that the 50% tariff would be a “smash hit” for US consumers.
Commerce Secretary Howard Lutnick said in an interview with CNBC on Tuesday that he expects his duties to be carried out soon at the end of this month.
Traders said they are likely to be rushed to put this year’s copper into the US, likely to be slower, with arrivals set to be set after August 1st and likely re-routed to avoid a tariff hit.
