Is the US copper tariff on the horizon? Citibank predicts a 25% tariff will be implemented in Q4 of 2025.

Citibank said in a report on Wednesday that following President Donald Trump's executive order to initiate an investigation into U.S. copper imports, they expect a 25% tariff on copper to be implemented by the fourth quarter of 2025. Trump opened another front in his attack on global trade norms on Tuesday, ordering an investigation into potential new tariffs on copper imports to rebuild U.S. copper production. Copper is crucial for electric vehicles, military hardware, the electrical grid, and many consumer goods. Citibank predicts that once confirmed later this year, the COMEX copper premium for a 1-year period against the LME will eventually reflect a 25% tariff (around $2400/ton), but in the meantime, prices could actually be 15-20% (around $1400/ton to $1900/ton). The bank stated that the tariff announcement should boost confidence in the final tariff, and before the tariff goes into effect, U.S. buyers may hoard copper, driving up prices, but once the tariff is in place, this trend may reverse. The bank also warned that the effective tariffs on U.S. copper imports may come faster through other channels, such as reciprocal tariffs, but could also be imposed on specific countries like Canada and Mexico. As part of broader trade measures, the U.S. could potentially impose reciprocal tariffs on copper imports as early as the second quarter of 2025. Citibank said the investigation will cover various forms of copper, including ore, refined metal, alloys, scrap, and finished products. The bank stated in a report, "Our base case for implementing Section 232-specific copper tariffs is in the fourth quarter of 2025, no earlier than May." While the official review process will take 270 days (until the end of November 2025), Citibank noted that past cases (such as steel and aluminum) have shown that this process could be faster.