Trump suddenly signals a 50% tariff on copper, causing copper prices in New York to soar overnight and reach a historic high!

As US President Trump announced plans to impose a 50% tariff on imported copper, the price of New York copper futures rose significantly, potentially causing massive supply chain disruptions in the global metal market. Data shows that on Tuesday, Comex copper futures contracts rose by as much as 17%, setting a record for the largest single-day increase. Currently, the premium of New York copper prices relative to the London benchmark price has reached an unprecedented 25%. New York copper prices reached a historical high of $5.8955 per pound, ultimately closing at $5.6855. Analysts suggest that if the tariff policy is implemented, various industries and applications that rely on copper materials will face cost pressures in the US economy. From consumer electronics, automobiles to residential construction and data centers, copper applications are ubiquitous. Meanwhile, given the significant premium in the US market, there may be a mismatch in supply and demand for copper. In recent months, traders have been shipping record amounts of copper to the US to avoid potential tariff policies. The recent surge in Comex prices will further stimulate traders to rush shipments of copper before the tariffs take effect. Juan Carlos Guajardo, founder of consulting firm Plusmining, stated, "Prices are expected to rise significantly in the short term because the expected tariff rate in the market was lower than it is now. Therefore, there will be a lot of purchases before the tariff comes into effect." US copper importers have warned of the long-term harm of tariffs, believing that this could undermine Trump's core goal of revitalizing manufacturing and challenging China's industrial advantage. Southwire, the largest copper importer in the US, stated in a written opinion submitted to the US Department of Commerce in April, "Any restrictions on the import of cathode copper will only shift supply to China, and US copper producers will face severe supply shortages - especially in the short to medium term, as domestic production capacity cannot fill the supply gap." Trump's move comes at a time when the US and the rest of the world expect a significant increase in demand for industrial metals over the next decade. Data centers, automotive manufacturers, power companies, among others, are globally seeking raw materials to expand electric vehicle production and grid capacity. The demand for copper needed for the transition of energy and transportation systems to renewable energy far exceeds the commitments of current producers. The global copper industry has been preparing for tariffs since February when Trump ordered the Department of Commerce to study the feasibility of imposing tariffs on national security grounds under Section 232 of the Trade Expansion Act. The plan has faced opposition from manufacturers heavily dependent on imports. Trump made the above statement in a press conference after a cabinet meeting on Tuesday. "I think copper tariffs should be set at 50%," he said in response to a reporter's question. After the meeting, Secretary of Commerce Howard Lutnick stated that the department's investigation into copper had ended, and tariffs were expected to be implemented "around the end of July or August 1." Lutnick said, "The copper investigation is complete. We have submitted a research report to the President. The President is clear that he has the authority to set copper tariffs based on our market research." His statement has shifted market attention to the industry landscape after the implementation of tariffs. For manufacturers, the only consolation at the moment is that there is still sufficient copper available in the US, although at staggering prices. As traders are shipping copper to the US at record levels for arbitrage, the copper inventory in Comex warehouses has exceeded the total inventory of the London Metal Exchange and the Shanghai Futures Exchange. Analysts at Morgan Stanley believe that Trump's latest move will support Comex copper prices as it reflects the cost of copper entering the US. However, the increase in domestic inventory should help mitigate short-term impacts. There are still many unresolved issues in the market, including the specific timetable for tariff implementation. The industry is also waiting for detailed explanations of the types of copper products affected and whether there are exemptions. Chile, as the largest copper supplier to the US, is closely monitoring policy details, as officials in the mining industry await more information. The country exports approximately 500,000 tons of refined copper to the US annually, accounting for the vast majority of the 700,000 tons of copper imported by the US each year. State-owned company Codelco alone supplies about 350,000 tons. In response to the remarks about the 50% tariff, the Chilean Ministry of Foreign Affairs pointed out that they have not yet received formal notification from the US Department of Commerce. Codelco's chairman Maximo Pacheco also stated that it is too early to draw conclusions now. However, analysts predict that once the US tariffs take effect and the rush to ship copper subsides, Comex prices may cool down. According to data from the US Geological Survey, the US is expected to consume approximately 1.6 million tons of refined copper by 2024. Although domestic mines produced about 850,000 tons of native copper last year, the US still relies on imports from major trade partners. Chile is the largest source of imports (38%), followed by Canada (28%) and Mexico (8%). According to research by Morgan Stanley, net imports account for 36% of US copper demand.