Navigating the Trade War's Impact on Metals and Mining Stocks through ETFs

President Trump's trade war has affected the metals market, with tariffs on imported copper and a focus on rare earth elements. ETFs like SPDR S&P Mining and Metals ETF (XME) and VanEck Rare Earth ETF (REMX) have risen in value. Copper prices have increased, and metals and mining ETFs focusing on copper have also seen gains. Investors can benefit from these trends by investing in ETFs that focus on stocks and commodities in the mining sector.

The metals market has been significantly influenced by recent trade policies, with President Trump's tariffs and focus on strategic materials like rare earth elements drawing considerable attention. The latest developments have sparked interest in exchange-traded funds (ETFs) targeting metals and mining stocks, as seen in the surge of ETFs like SPDR S&P Mining and Metals ETF (XME) and VanEck Rare Earth ETF (REMX).

Tariffs and Strategic Materials

President Trump's decision to impose a 50% tariff on imported copper, effective August 1, has had a notable impact on the market [1]. This move, aimed at boosting domestic production, has led to increased copper prices and a rise in demand for copper-focused ETFs. The SPDR S&P Mining and Metals ETF (XME) hit its highest price since 2011, reflecting the broader sector's rise [1].

Rare earth elements, crucial for technologies ranging from fighter jets to power tools, have also been a focus. The Pentagon's investment in MP Materials, the sole operational rare earth mine in the U.S., underscores the strategic importance of these elements [1]. Apple's deal with MP Materials to secure domestic supply of neodymium magnets used in Apple products further highlights the demand for these materials [1].

ETF Performance

The VanEck Rare Earth ETF (REMX) has seen a significant increase of over 17% in the past month, driven by the demand for rare earth elements [1]. Meanwhile, ETFs focusing specifically on copper, such as iShares Copper and Metal Mining ETF (ICOP) and Global X Copper Miners (COPX), have also shown strong performance, rising by roughly 16% year-to-date [1].

Recycling and Sustainability

As the U.S. seeks to reduce its reliance on foreign sources for critical metals, recycling has emerged as a key strategy. Glencore, a major miner and marketer of metals and minerals, sees recycling as a significant contributor to the supply chain, even if it currently accounts for a small percentage of its total EBITDA [2]. The company's smelter in Quebec, Canada, processes both mined copper concentrates and recyclable materials like e-waste, demonstrating the potential of recycling in meeting growing demand.

Future Prospects

The trend towards recycling is expected to grow, with estimates suggesting that recycled copper will meet 45% of demand by 2050, up from around a third today [2]. This shift is being driven by the need for sustainable and reliable sources of critical materials, as well as the strategic importance of these materials in various industries.

Conclusion

President Trump's trade policies have had a profound impact on the metals market, driving up prices and increasing demand for ETFs that focus on metals and mining stocks. As the U.S. seeks to secure its supply of critical materials, recycling is emerging as a key strategy to meet growing demand. Investors can benefit from these trends by exploring ETFs that focus on stocks and commodities in the mining sector.

References

[1] https://www.cnbc.com/2025/07/15/how-to-navigate-trade-wars-metals-and-mining-conflicts-using-etfs.html

[2] https://www.cnbc.com/2025/07/13/rare-earths-conflict-with-china-giving-new-life-to-old-pcs-phones-.html