As the market awaits a Commerce Secretary review due at the end of June that will inform Trump’s decision, traders are watching for signals on whether to unwind their copper positions or double down on bets that US prices will continue marching higher.
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“Everyone is waiting before we can step in to do relevant trades,” said Nicole Ni, vice general manager at Eagle Metal International Pte, a trading firm that sells copper to fabricators. “This policy has a significant impact on copper prices.”
BloombergThe tariff threat has dominated the copper market for much of the past year, repeatedly pushing futures prices on New York’s Comex above those on the London Metal Exchange and creating lucrative arbitrage opportunities for traders. In July, Trump issued a proclamation that called for a follow-up Commerce Secretary report before deciding whether to impose a phased tariff on refined copper imports starting at 15% in January 2027.
While there is no clear consensus on what the Trump administration will decide, there are three likely scenarios:
Push Ahead
An announcement to proceed with a 15% tariff would likely trigger a new wave of shipments, drawing metal into Comex warehouses from Europe, Asia and Africa and pushing prices higher. Trump may also indicate it could increase to 30% starting in 2028.Morgan Stanley analysts assigned a 43% chance of a 15% tariff from January, in a June 8 note. A widening premium for New York over London prices in the past month indicates some investors are betting that way.
A tariff on refined copper would be a relative positive for producers with US operations including Freeport-McMoRan Inc., Rio Tinto Group, Hudbay Minerals Inc. and Ivanhoe Electric Inc., according to Jefferies analysts.
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The pro-tariff camp argues that the US has become dangerously dependent on foreign copper when the metal is becoming as strategically important as oil once was. With Trump’s sweeping tariffs facing legal challenges, copper duties may be seen as a more durable measure because they would stem from a separate national security review process.
Stand Down
If Trump rules out copper tariffs, incentives to ship metal into the US would vanish and flows could reverse, easing supply pressures elsewhere and weighing on prices. Traders would likely start by moving copper from Comex warehouses to nearby LME facilities, unwinding positions built ahead of the decision. Whether the metal ultimately leaves the US would depend on demand in China and other major consumers.
BloombergWhile tariffs may encourage domestic mining and processing, opponents counter that such duties would raise costs for manufacturers that rely on imported copper, potentially making US-made goods less competitive. Coming on top of existing 50% tariffs on semi-finished copper products and derivatives, critics warn that higher costs could destroy more demand than they create.
“I have heard that the corporates that were lobbying against the tariff last year are still actively and significantly lobbying to not have a tariff,” said David Wilson, senior metals strategist at BNP Paribas SA in Singapore. “Logically, it doesn’t make sense to tariff a raw material because you can’t suddenly spur new supply that way.”
Delay Decision
A third option is to delay a decision while keeping tariffs on the table. That would largely preserve the status quo, keeping stockpiled metal in the US and encouraging inflows at a more measured pace than last year as traders hedge against the risk of another surprise policy reversal, such as the tariff exemption on raw metal announced in late July.
BNP Paribas expects the decision to be kicked down the road, with the possibility of alternatives such as direct supply arrangements with other countries.
If Commerce recommends a copper tariff, that doesn’t guarantee Trump will proceed, and industry participants remain largely in the dark.
US manufacturers of copper products have lobbied against tariffs on the raw metal they buy, warning that higher costs would be passed on to customers. Still, “there is not yet an indication of which way the administration is leaning,” said Amy O’Shaughnessy from Revere Copper Products Inc., a member of the American Copper Fabricators Coalition.
The decision will offer one of the clearest tests yet of whether Trump’s economic team prioritizes lower costs for manufacturers or the goal of bringing back raw material production to the US. It will also shape the flow of a metal increasingly viewed as strategic to both geopolitical competition and the build-out of the power grids and data centers underpinning the artificial-intelligence boom.
Whatever Trump decides, most analysts and traders are relatively bullish on the longer-term view for copper given the metal’s importance to AI infrastructure. But in the meantime, prices could swing.
“Expect tariff-driven volatility in the shorter term,” Jefferies analysts led by Christopher LaFemina wrote in a note to clients last week.