U.S. 50% Copper Tariff Sparks 6.2% Price Drop Chile Seeks Exemption

The U.S. imposition of a 50% tariff on copper imports, effective August 1, has triggered immediate market volatility and raised uncertainties for global supply chains. The sudden policy, announced by President Donald Trump’s administration without clear implementation guidelines, caught analysts off guard and sent copper prices on the New York Comex down as much as 6.2% to $5.4265 per pound, though they later partially recovered [1]. Chilean Finance Minister Mario Marcel swiftly responded, stating he would push for an exemption during trade discussions with Washington, citing prior agreements that excluded raw materials like steel. Chile, which supplies half of U.S. imported copper, emphasized that U.S. industries reliant on copper would face no alternatives if exemptions are denied, forcing them to absorb higher costs [1].

The tariff’s abrupt rollout has left companies scrambling to prepare, as it remains unclear which copper forms will be taxed. This uncertainty drove a pre-August 1 surge in shipments to U.S. ports, with Comex copper prices remaining 27% above London Metal Exchange (LME) levels as of the latest data. By Monday, Comex copper fell 2.9% to $5.6155 per pound, while the LME benchmark rose 0.2% to $9,793 per tonne [1]. Marcel also ruled out retaliatory tariffs, arguing they would harm Chilean consumers, but stressed that any trade agreement excluding copper and timber—key exports to the U.S.—would be ineffective [1].

The smartphone market has similarly been affected by shifting trade dynamics. U.S. smartphone shipments grew just 1% year-on-year in Q2 2025, as manufacturers front-loaded inventories ahead of the copper tariffs and broader trade uncertainties. The administration’s focus on reducing Chinese influence led to a 240% year-on-year increase in India-manufactured smartphone shipments to the U.S., with India overtaking China for the first time. Apple, which shifted most U.S.-market iPhones to Indian assembly plants, saw its shipments drop 11%, while Samsung gained 38% [1]. Analysts attribute the muted growth to weak demand and a widening gap between sell-in and sell-through metrics, highlighting economic pressures and trade-driven production relocations [1].

Trade tensions have escalated further, with the European Union warning of 30% tariffs on $100 billion in U.S. goods if negotiations fail, and Canada citing potential GDP losses of 2.5% from sector-specific tariffs. Analysts caution that U.S. businesses could face backfired consequences, including weakened competitiveness from higher copper costs and retaliatory measures disrupting exports of agricultural or industrial goods [2]. While the administration has hinted at scaling back some tariffs, the economic shock remains a critical concern as supply chains adjust and trade talks continue [2].

The interplay of rising input costs, retaliatory policies, and shifting production hubs will define market dynamics in the coming months. Investors are advised to monitor U.S.-EU and U.S.-Canada negotiations, as well as how domestic producers adapt to the new regulatory landscape.

Sources:

[1] [U.S. Tariffs Hit Copper and Smartphone Markets](https://coinmarketcap.com/community/articles/68880a254b2f3f471eb49105/)

[2] [Trump Tariffs Live Updates: US-EU Deal Details](https://finance.yahoo.com/news/live/trump-tariffs-live-updates-us-eu-deal-details-emerge-as-china-talks-begin-trump-seeks-15-20-world-tariff-200619425.html)