Copper bulls at Bernstein push back on potential 50% Trump tariff

Published 09/07/2025, 10:00
© Reuters.

Investing.com -- Copper bulls at Bernstein are pushing back against the notion that a proposed 50% tariff from U.S. President Trump will ultimately be implemented. The firm describes the recent tariff headlines as illogical and potentially disruptive.

“We don’t believe that a 50% tariff on copper is a logical policy, and we don’t think it will be implemented,” said Bob Brackett, a commodities analyst at Bernstein.

Brackett points out that Trump has previously floated aggressive tariffs without formal follow-through, adding that this latest proposal came as an offhand comment during a Cabinet meeting rather than an official order.

The U.S. imports about half of its copper needs, and over 90% of those imports come from Chile, Canada and Peru.

Bernstein calculates that a 50% tariff on roughly 900,000 tons of imported copper at $10,000 per ton would amount to $4.5 billion in added costs. Brackett argues such a policy “incents no proper economic action but rather simply adds cost to U.S. manufacturers.”

With only two primary smelters operating in the U.S., and a typical five-year timeline and $6 billion cost to build a new one, Bernstein sees little chance of domestic smelting capacity expanding in response to tariffs.

The global smelting industry is also facing poor economics, with negative treatment and refining charges.

As such, Bernstein expects logic will “ultimately prevail,” and anticipates a carve-out for friendly trading partners.

“Keeping 50% on everyone else but exempting ‘friendly trading partners’ Chile, Canada and Peru from the tariffs solves the problem,” the analyst said.

Until there is more clarity, he warns that reduced copper flow into the U.S. from the LME exchange could drive further volatility, including a potential short squeeze.

If no significant tariffs are enacted, Bernstein expects copper prices to soften and companies like Antofagasta (LON:ANTO) and Freeport-McMoRan (NYSE:FCX) to give up recent gains.

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