US copper prices soared to a record high on Tuesday after Donald Trump said Washington would impose 50 per cent tariffs on the industrial metal in the latest escalation of the president’s trade war.
“Today we’re doing copper,” Trump said before a cabinet meeting, adding he believed the tariffs would be 50 per cent.
The remarks opened the latest front in the US president’s sweeping trade wars, after Trump sent letters setting tariff rates for more than a dozen nations that will come into force on August 1.
Trump later said he would make trade announcements related to at least seven more countries on Wednesday.
The spectre of higher tariff rates on copper set off a rush to lock in supplies and prices for the metal, which is widely used in electronics, construction and industrial equipment.
Howard Lutnick, commerce secretary, said in a CNBC interview that he expected the copper tariffs to be put into place as soon as the end of this month, or early August.
Copper futures traded in New York soared 13 per cent to $5.69 a pound, marking an all-time closing high and the biggest jump on records stretching to 1969, according to FactSet data.
Shares in US copper miner Freeport-McMoRan surged almost 3 per cent.
“Our expectation is official confirmation of a 50 per cent rate within weeks and implementation within 30 days,” Citi analysts said.
“We think this is a watershed moment for the copper market in 2025 as imminent flagged tariff implementation should abruptly close the window for further significant US-bound copper shipments — possibly for the rest of 2025,” they added.
Prices in New York jumped to an “unprecedented” 25 per cent premium over futures on the London Metal Exchange, said Daniel Hynes, a senior commodity strategist at ANZ, in a note.
Chile is by far the biggest supplier of refined copper to the US, accounting for about 70 per cent of imports in dollar terms — followed by Canada and Peru, according to customs figures collated by Trade Data Monitor.
Rosario Navarro, president of Chile’s industrial business lobby, warned tariffs as high as 50 per cent could cause a “substantial worsening” in the country’s trade conditions.
Pierre Gratton, president of the Mining Association of Canada, said billions of dollars’ worth of energy infrastructure, such as copper piping, was shipped to the US as part of an integrated North American industry.
He added the US did not have enough copper refining capacity or smelters and relied on Canadian imports of the metal, adding such high tariff rates would “hurt US manufacturing”.
JPMorgan analysts noted “the market will be surprised” by the level of the proposed levy, adding that the Wall Street bank had pencilled in a 25 per cent tariff rate for imports of refined copper.
Trump’s proposed copper tariffs came a day after he sent letters to 14 trading partners, including Japan and South Korea, threatening to hit them with steep levies if they do not make a trade deal by August 1.
The president signalled more letters would be released on Wednesday, posting on Truth Social late on Tuesday: “We will be releasing a minimum of 7 Countries having to do with trade, tomorrow morning, with an additional number of Countries being released in the afternoon.”
Trump also foreshadowed the results of an investigation into pharmaceuticals, which includes finished generic and brand-name drug products, and critical inputs such as active ingredients.
“We’re going to give people about a year, year and a half to come in, and after that they’re going to be tariffed if they have to bring the pharmaceuticals into the country at a very high rate, like 200 per cent,” he said.
The S&P 500 pharmaceuticals index fell from the day’s highs after the president’s announcement, but still closed up 0.7 per cent.
With at least a year before tariffs kick in, lobbyists in Washington said they did not pose a significant threat to pharmaceutical companies in the near term. “Classic Trump hyperbole,” said one lobbyist.
The US has already announced steep tariffs on cars and steel as a result of national security probes but has pending investigations into pharmaceuticals, copper, lumber, aerospace, chips and consumer electronics.
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The probes into critical sectors, known as Section 232 investigations, has heightened uncertainty among US trading partners as they try to negotiate deals to shield themselves from Trump’s tariffs.
Only the UK has secured any form of relief from the sectoral tariffs. As part of its recent deal with the US, it was granted a reduced tariff of 10 per cent on an annual quota of 100,000 cars, instead of facing the 25 per cent tariff applied to most countries.
The US is also negotiating with the UK over a quota for lowered-tariff steel imports, and has pledged to negotiate carve-outs for British companies from the pharmaceutical tariffs.
Additional reporting by James Politi in Washington