Copper Prices Plummet Amid Trump's Tariff Surprise, Ending Months-Long Rally

Copper prices plummeted nearly 20% after President Trump excluded refined copper from a 50% import tariff, erasing the premium between US and global prices. The tariff only applies to semi-finished copper products, not raw materials like ores and concentrates. The move ended a months-long rally fueled by trade restriction fears, causing leading copper firms to drop in value. The market is now repricing refined copper lower.

Copper prices plummeted nearly 20% on July 30, 2025, following President Donald Trump's announcement of a 50% import tariff on semi-finished copper products. The tariff, effective August 1, 2025, excludes refined copper, ores, concentrates, and other raw materials, causing a significant shift in the market.

The surprise move by the Trump administration, which initially suggested a more sweeping tariff, led to a sharp decline in U.S. copper prices. The Comex exchange saw copper prices drop by over 17%, unwinding a premium over the London global benchmark that had grown in anticipation of higher domestic prices [1]. The tariff, which targets pipes, tubes, and other semi-finished copper products, as well as copper-intensive derivatives, is expected to benefit Chile and Peru, major copper suppliers to the U.S. [1].

The decision to exclude refined copper has ended a months-long rally fueled by trade restriction fears. Analysts at Panmure Liberum described the move as a "massive market surprise," suggesting that U.S. copper prices are likely to fall further [1]. Freeport-McMoRan, Hudbay Minerals, and Arizona Sonoran, among other mining companies, are expected to be significantly impacted by the tariff [1].

Goldman Sachs, in a recent note, maintained its copper price forecast despite the exemption of refined copper from import tariffs. The bank expects London Metal Exchange (LME) copper to drop to a low of $9,550 per ton in August before rebounding to $9,700 per ton by December [4]. The market is now repricing refined copper lower, with copper cathode likely to flow into U.S. LME warehouses due to high U.S. copper cathode inventories [4].

The tariffs are part of a broader strategy to support the domestic copper industry, which has long advocated for permitting reform and other measures to boost growth. The administration has also called for requiring 25% of high-quality scrap produced in the U.S. to be sold within the country [3]. However, the tariff's impact on the U.S. economy and global trade dynamics remains to be seen.

References:
[1] https://www.reuters.com/business/trump-shocks-markets-with-scaled-back-copper-tariff-us-prices-plunge-2025-07-30/
[2] https://www.ainvest.com/news/trump-imposes-50-tariff-copper-brazilian-goods-effective-august-1-2507/
[3] https://www.mining.com/web/trump-imposes-50-tariff-on-copper-imports-white-house-says/
[4] https://www.investing.com/news/commodities-news/trumps-copper-tariff-exemption-unlikely-to-alter-market-goldman-says-93CH-4162060