LME copper prices fell as much as 2.4% after former President Trump announced plans to impose a 50% tariff, raising concerns over demand and global trade tensions.

LME copper prices fell as much as 2.4% after former President Trump announced plans to impose a 50% tariff, raising concerns over demand and global trade tensions.

LME copper prices experienced a significant decline following former President Donald Trump's announcement of plans to impose a 50% tariff on copper imports. The move, which aims to revive U.S. manufacturing and challenge China's industrial might, has sparked concerns over global trade tensions and potential demand disruptions.

The fresh spike in U.S. prices came after Trump reiterated his threat to place a 50% tariff on copper, doubling down on an initial proposal made in February. This new levy would match the duties already imposed on steel and aluminum, but it would have a particularly heavy toll on American factories that rely on overseas suppliers for nearly half of their copper needs [1].

The impact on LME copper prices was immediate and substantial. On July 2, 2025, LME copper futures fell as much as 2.4% in response to the announcement. This decline reflects the heightened uncertainty and potential disruptions in the global copper supply chain, as well as the increased input costs for American manufacturers. The price of copper in New York has been ratcheting higher for months as buyers have rushed to stock up before the levies are implemented, leading to a significant disconnect between U.S. and global prices [1].

The tariff threat has also led to increased copper inventories worldwide. As of July 7, 2025, nationwide copper inventories in China rose by 11,100 mt month-over-month, reaching a total of 142,900 mt. This buildup is primarily attributed to robust imported copper volumes and weakening end-use consumption, particularly in sectors like construction and consumer electronics [2].

Market sentiment has been cautious, with institutional investors reducing their appetite for long-term copper contracts. The combination of macroeconomic policy disturbances and changing fundamental supply-demand dynamics has created a "resonance effect," amplifying the impact of the tariff announcements on market psychology [2].

The U.S. tariff notices have sent significant ripples through global copper markets, creating volatility and uncertainty across trading hubs. The recent extension of the tariff negotiation deadline until August 1, 2025, provides a critical window for diplomatic engagement and potential compromise solutions [2]. However, the long-term effects of the tariffs on copper prices and global trade remain uncertain, and the market continues to closely watch for any signs of flexibility from both the U.S. administration and affected trading partners.

References:
[1] https://finance.yahoo.com/news/trump-copper-tariff-threats-already-212050605.html
[2] https://discoveryalert.com.au/news/us-tariff-2025-global-copper-market-effects/