Gold bars to be exempt from tariffs, White House clarifies
Comex copper plunged by more than 19% in minutes after President Trump excluded refined metal from his planned import tariff. The 19% fall on Wednesday was the largest intraday fall on record. Prices later pared some of the losses
Comex Copper Plunges 19% in Minutes
CME, ING Research
The 50% levies will apply to imports of semi-finished copper products, including copper pipes, wires, rods, sheets and tubes, and to copper-intensive goods like pipe fittings, cables, connectors and electrical components from 1 August, but not to imports of copper ore, concentrates, mattes, cathodes and anodes, according to the White House statement.
Wire Is The Second Biggest Import After Refined Copper
Source: TradeMap, ING Research
Until the announcement, copper prices in the US had been trading at a 28% premium over the LME prices, with the market front-running the expected tariff. We now expect the Comex-LME premium to collapse from the current levels.
Trump’s first musings of a tariff on copper imports back in January unleashed record shipments of the metal to American ports. US refined copper imports increased by almost 130% year-over-year from January to May. Meanwhile, copper inventories at Comex warehouses climbed to the highest in 21 years. There is now an excess inventory in the US, and that stockpile might now be re-exported. This will be bearish for LME prices with more copper now showing up in LME warehouses.
The copper tariff, which comes under Section 232 of the Trade Expansion Act, will not stack on top of the separate charges on automobile imports, which were put in place earlier this year, the White House said. If a product is subject to auto tariffs, the import tax on vehicles will apply and not the copper duty.
Trump also invoked the Defense Production Act - a law which allows the president to direct industries to boost production of materials critical to national security - to require that 25% of high-quality copper scrap and forms of raw copper made in the US are sold domestically. The percentage of certain raw copper materials mandated for US sale would increase to 30% in 2028 and then 40% in 2029.
Copper prices should now move beyond the recent focus on US import tariffs, which have dominated sentiment for most of the year. Prices have been rising this year largely because the market has been front-running the tariff policy and not because the demand picture has been improving or because the supply has actually been tightening.
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