The price of copper in the United States plummeted by 20%! Trump's "50% copper tariff" changes: exempting raw ore products, only targeting semi-finished products.

The copper market in the United States experienced its largest single-day drop in history, as President Trump unexpectedly announced plans to exempt the most widely imported copper products from the tariffs he had planned. This move shocked traders. The White House announced on Wednesday that starting from August 1st, semi-finished copper products from China would be subject to a 50% tariff, while imports of refined metal would not be subject to such tariffs. Following this announcement, copper futures prices on the New York Mercantile Exchange plummeted by 20%. As of Wednesday, U.S. copper prices had been trading at a premium of about 28% to the benchmark copper futures prices on the London Metal Exchange, as traders expected tariffs to apply to all refined metal imports. This decision marks the latest significant blow that Trump has dealt to the copper market. Earlier this year, when Trump first mentioned the possibility of tariffs, it caused U.S. copper prices to surge relative to other regions globally, sparking a rush to ship copper to the U.S. to avoid tariffs and resulting in hefty profits for some of the world's largest metal traders. Earlier this month, he again caused a significant increase in U.S. copper prices. The tariffs he announced were set at 50%double what most market participants had expectedresulting in record-high copper prices. The decision to exclude refined copper (cathode) from tariffs is likely to further disrupt the global trade flow of this metal. Due to its widespread use in wire manufacturing, copper plays a crucial role in the global economy. Large amounts of copper shipped to the U.S. in recent months have created massive inventories, which may now be re-exported. Michael Haigh, head of foreign exchange and commodities research at the French Industrial Bank, said, "If cathode products are excluded, the trading is over." The market "should return to a balanced state." The distinction between refined metals and semi-finished products in the tariff policy is a result of pressure from the copper industry lobbying groups. Some major companies believe that the U.S. currently does not have the immediate capability to fully replace all imported copper. Juan Ignacio Daz, Chairman of the International Copper Association, said, "The Trump administration has listened to the concerns of our industry and made a wise and strategic decision. This measure protects U.S. interests while maintaining close ties with reliable partners, ensuring the security and stability of the copper supply chain." However, the possibility of imposing tariffs on refined copper imports may not be completely eliminated. A White House announcement on Wednesday stated that the U.S. Department of Commerce has recommended delaying the imposition of import tariffs on refined metals, starting at a rate of 15% in 2027 and increasing to 30% by 2028. Trump instructed the Secretary of Commerce to submit a report on the U.S. copper market situation by the end of June 2026, so the president can decide whether it is necessary to implement measures for "phased universal import tariffs on refined copper." According to the White House statement, the 50% import tariffs announced on Wednesday will apply to semi-finished products such as copper pipes, wires, bars, sheets, and tubes, as well as goods made from copper such as fittings, cables, connectors, and electrical components. Goods that have not undergone much processing, including copper input materials (such as copper ore, concentrates, blister copper, cathodes, and anodes) and copper scrap, will not be subject to this tariff. The White House stated that these tariffs on copper materials (under Section 232 of the Trade Expansion Act) will not be stacked on top of the separate tariffs on automotive imports that Trump implemented earlier this year. The White House said that if a product is subject to automotive tariffs, it will be subject to import taxes on vehicles rather than copper. The White House also stated that domestically produced high-quality copper scrap and various raw copper products must have 25% sold domestically. However, these export requirements are unlikely to have any substantial impact in the short term, as about 40% of U.S. copper scrap and approximately 75% of copper concentrates are already processed domestically. The stock prices of U.S. copper producers such as Freeport-McMoRan Copper & Gold Inc. (FCX.US) have plummeted significantly as this policy weakens the U.S.'s copper price advantage. This decision is good news for major producers supplying refined copper to the U.S., led by Chilean state-owned company, Codelco.