On July 8, 2025, Trump announced plans to impose tariffs on specific industries including pharmaceuticals, semiconductors and metals. When asked about the tariff rates for these products, Trump replied, "I think we will impose a 50% tariff on copper." The US Commerce Secretary said that the copper tariff will be implemented later in July or on August 1, and the investigation in the pharmaceutical and semiconductor sectors will be completed by the end of the month.
Influenced by this, on July 8th, the main contract of copper futures in New York - the COMEX September copper contract - saw its gains expand rapidly, once approaching $5.90 per pound, with an intraday increase of 17.3%. Later, it declined somewhat, closing up 13.1% at $5.6855 per pound. On that day, the reaction of LME copper was completely different. It dropped to a low of $9,569.5 per ton and closed at $9,665 per ton, down 1.22% from the previous trading day.
On February 25, 2025, the President of the United States signed Executive Order 14220, authorizing the Secretary of Commerce to launch an investigation into whether imported copper products pose a threat to the national security and economic stability of the United States under Section 232 of the Trade Expansion Act of 1962 (the "232" investigation), and may take measures such as tariffs or export controls to reshape the domestic copper industry chain. The investigation must be completed within 270 days (by November 22, 2025), and the president will decide on the action plan within 90 days (by March 30, 2026 at the latest).
Previously, the tariffs imposed by the Trump administration on specific industries mainly focused on automobiles and steel and aluminum. On June 3, 2025, the White House of the United States issued a statement saying that Trump announced that the tariffs on imported steel, aluminum and their derivatives would be raised from 25% to 50%. This tariff policy will take effect at 00:01 AM Eastern Time on June 4.
Since the beginning of this year, due to Trump's threat to impose import tariffs on copper, the Comex copper price has significantly outpriced the LME, attracting global copper inventories to shift to the United States and causing a sharp increase in US copper inventories. Data shows that in the first five months of this year, the United States imported 675,000 tons of refined copper, a year-on-year increase of 129.6%, with an increase of 381,000 tons. Including the import volume in June and the inventory at undeclared ports, the increase in imports this year should exceed 500,000 tons. Copper inventories outside the United States have dropped significantly. For instance, LME copper inventories have plummeted from 271,000 tons at the beginning of the year to around 100,000 tons recently. SHFE inventories accumulated to over 260,000 tons in the first quarter and have since rapidly fallen below 100,000 tons.
Although the US government has imposed high tariffs on copper under the pretext of reshaping the domestic copper industry chain, the copper tariff barriers have no substantial beneficial impact on the US copper industry in the short term. However, as part of the US government's tariff combination policy, it will only be late and never absent. Although the announcement of the implementation time of the copper tariffs this time is rather sudden, it can still be regarded as "reasonable".
Looking ahead to the market after the implementation of the copper tariff, the arbitrage opportunities brought about by the previous premium differentiation will be significantly weakened, and the tight supply situation in non-US regions may also ease accordingly. It is even possible that some non-US regions will gradually turn into a supply surplus. Meanwhile, the high copper prices in the United States may curb some of its copper consumption and also significantly reduce copper exports. It will take time for the domestic copper supply and demand balance in the United States to digest the large amount of copper imports in the early stage. After the tariffs take effect, the copper imports in the United States will sharply decline. Overall, the fundamental driving logic for copper prices is relatively bearish.
It is particularly worth noting that the export of scrap copper from the United States will be greatly restrained as a result, and the pressure on waste-utilizing enterprises and some smelting enterprises in other countries and regions is likely to increase.
Of course, considering the historical "credibility" of the Trump administration, the copper tariff policy may still fluctuate or change before it is implemented. At that time, it will cause a short-term reversal of expectations and lead to significant short-term fluctuations in prices.
