Trump shocks markets with scaled-back copper tariff, U.S. prices plunge

Pallets of copper cathodes are prepared for delivery at the Canadian Copper Refinery, part of the Glencore group, a copper and precious metal refinery in Montreal on Friday, July 25, 2025. THE CANADIAN PRESS/Christinne Muschi

The United States will impose a 50 per cent tariff on copper pipes and wiring, U.S. President Donald Trump said on Wednesday, but details of the levy fell short of the sweeping restrictions expected and left out copper input materials such as ores, concentrates and cathodes.

The surprise move dragged down U.S. copper prices more than 17 per cent on the Comex exchange HGc2 and unwound a premium over the London global benchmark CMCU3 that had grown in recent weeks, with shipments diverted there in anticipation of higher domestic prices.

“Markets are now busily repricing refined copper much lower after Trump’s epic backflip on his own import tariff policy,” said Tom Price, an analyst at the London brokerage Panmure Liberum.

“Someone must have finally got through to (Trump) that the U.S. economy simply can’t afford this new trade-hit.”

Freeport-McMoRan is likely to be among the most harmed by the trimmed tariff, according to RBC Capital Markets, with Hudbay Minerals, Arizona Sonoran and others developing mines in the country also affected.

Trump first teased the tariff in early July, implying that it would apply to all types of the red metal, ranging from cathodes produced by mines and smelters to wiring and other finished products.

Yet in a proclamation released by the White House, the administration said the tariff will apply starting this Friday only to pipes, tubes and other semi-finished copper products, as well as products that copper is heavily used to manufacture, including cable and electrical components.

The move aids manufacturers, but does little to boost the constrained U.S. copper mining industry, which for years has asked Washington for permitting reform or other steps that could fuel growth.

“Copper is being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States,” Trump said in his proclamation.

The tariffs will exclude copper scrap and copper concentrates, mattes, cathodes and anodes, some of the main products of copper mines and smelters.

The move is essentially a boost for Chile and Peru, two of the world’s largest copper miners and major suppliers to the United States.

The tariff details sparked a “massive market surprise,” said Natalie Scott-Gray, senior metals analyst at the consultancy group StoneX, adding that she expects U.S. copper prices to fall further.

Anant Jatia, founder and chief investment officer at Greenland Investment Management, a hedge fund specializing in commodity arbitrage trading, told Reuters he expects London copper prices to surpass U.S. prices in the short term as American inventories build.

More possible

The measure came after a U.S. investigation under Section 232, which Trump ordered in February. The report was delivered to the White House on June 30 by Commerce Secretary Howard Lutnick, according to the proclamation.

Trump said he may still impose further tariffs, and has asked Lutnick to provide an update on the domestic copper market by June 2026. At that point, Trump will evaluate whether to impose a phased universal import duty on refined copper of 15 per cent starting in 2027, and of 30 per cent starting in 2028, he said.

Along with tariffs, the order calls for steps to support the domestic copper industry, including requiring 25 per cent of high-quality scrap produced in the U.S. to also be sold within the country.

Freeport, the largest U.S. copper producer, said it would comment after it reviewed Trump’s order in detail.

Chile’s Codelco, the world’s biggest copper producer, praised the exclusion of cathodes as a positive for the company and for Chile, which is the top supplier of refined copper to the U.S.

BHP, which operates the world’s largest copper mine in Chile, and Antofagasta, which ships copper from Chile to the U.S. and wants to build a U.S. copper mine, did not immediately reply to requests for comment.

(Reporting by Daina Beth Solomon in Santiago, Ernest Scheyder in Houston, Divya Rajagopal in Toronto, and Pratima Desai and Polina Devitt in London; additional reporting by Ismail Shakil in Ottawa; writing by Ernest Scheyder; editing by Veronica Brown, Marguerita Choy and Rosalba O’Brien)