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US copper prices spiked after US President Donald Trump said he planned to place a 50% tariff on imports of the metal on Tuesday.
Copper futures traded in New York jumped around 13% to $5.69 a pound, a record closing-price, dramatically outpacing gains on copper futures traded in London.
As of around 3.30am EDT on Wednesday, the New York price had dropped to around $5.59, although it remained at a much higher level than before Trump’s announcement.
The president commented on the tariff during a televised cabinet meeting, without giving great detail, and Commerce Secretary Howard Lutnick said the administration would formalise the decision in the coming days. Lutnick suggested that the duty would come into effect around the end of this month, or in early August.
The development also comes as Trump is nearing his 1 August deadline, before which he has vowed to slap “so-called” reciprocal duties on countries running a trade surplus with the US.
The president has been sending out letters to trading partners, notifying them of tariff rates, and he said that seven more country-specific rates would be announced on Wednesday. So far, the US has reached trade agreements with the UK, China, and Vietnam.
Copper is used in a wide variety of products, meaning the tariff will affect electronics, construction, and industrial machinery, likely to push up inflation across the board.
This comes as Trump is putting pressure on Federal Reserve Chair Jerome Powell to cut interest rates. Powell said last week that the Fed would have eased monetary policy by now if not for the new US tariffs, which are sowing uncertainty and risking economic stability.
According to the US Geological Survey, the US imported about 810,000 metric tons of refined copper last year, about half of what it consumed. Chile is the most significant exporter to the US, followed by Canada.
A 50% tariff on the metal would bring the rate in line with the duties already placed on aluminium and steel, which became effective in June.
Although the exact rate was undisclosed, the copper duty itself was not unexpected, as Trump in February ordered a Section 232 investigation into imports of the metal. The probe intends to determine whether Trump has the right to impose the tariffs on national-security grounds.
Trump also said on Tuesday that a 200% tariff on pharmaceuticals was coming “very soon”, but he added that he would give the industry at least a year to adjust.
