US Copper Prices Plummet 22% Amid Tariff Announcement

US copper futures fell 22% in a record daily drop after the White House announced a 50% tariff on copper products, not raw copper. The market had expected a 50% tariff on raw copper, which had caused prices to surge earlier this month. The announcement reversed course and led to a significant drop in prices.

The U.S. copper futures market experienced a significant shock on Wednesday, July 1, 2025, as the White House announced a 50% tariff on semi-finished copper products, not raw copper as initially expected. The market had anticipated a 50% tariff on raw copper, which had caused prices to surge earlier this month. The reversal of expectations led to a record daily drop of 22% in copper futures [2].

The White House's final order on copper tariffs applies to semi-finished products such as pipes, rods, sheets, and wires, impacting copper-intensive items like cables and electrical components. However, raw input materials such as copper cathode, copper ores, concentrates, and scraps are exempted from the tariffs [2]. This deviation from market expectations sent U.S. market prices tumbling, with COMEX copper futures falling 19% in the biggest intraday fall on record [2].

The initial tariff announcement had prompted a surge in refined copper imports, with prices reaching record highs and a significant premium over the global benchmark [2]. The reversal of expectations has led to a substantial price correction, with the U.S. price premium over the LME dropping from around $2,637 to just $90 [2].

The tariffs are expected to feed through into price rises in consumer goods and construction, as manufacturers of products containing copper, such as cookware, air conditioning units, and plumbing parts, will face higher costs [2]. Analysts predict that the price increase will be reflected in some end goods, potentially leading to higher production costs for manufacturers and higher prices for consumers [2].

The U.S. copper market is currently supplied by major exporters including Chile, Canada, Peru, and Mexico, with the country importing around half its copper. The tariffs are not expected to significantly change the copper supply-demand balance, but they may put COMEX under heavy pressure [2]. The overhang of refined copper inventories in the U.S. could see high shipments back into the global market, where supply has become tight [2].

The tariffs have also impacted the automotive industry. Ford Motor Company has revised its full-year projection, expecting to lose a net $2 billion due to the trade measures [3]. The company's second-quarter sales were higher than expected, but the impact of tariffs on earnings was significant [3].

In conclusion, the U.S. copper tariffs have led to a significant market shock, with prices experiencing a record daily drop. The tariffs are expected to have economic implications, with potential price increases for consumer goods and higher costs for manufacturers. The automotive industry is also expected to be affected, with Ford Motor Company revising its full-year projection due to the trade measures.

References:

[1] https://economymiddleeast.com/news/white-house-announces-additional-40-percent-trade-tariff-on-brazil-raising-total-to-50-percent/
[2] https://www.cnbc.com/2025/07/31/why-us-copper-tariff-exemption-wont-fully-ease-price-rises.html
[3] https://www.gurufocus.com/news/3025033/ford-reinstates-2025-outlook-sees-2-billion-tariff-hit