Trump Targets 50% Copper Tariff, Sparking 18% Price Surge

Abstract: President Trump’s announcement of tariffs up to 50% on copper imports, far exceeding market expectations of 25%, triggered a 13% surge in New York copper futures, marking the largest single-day gain since 1968 and a record closing high. The tariffs are expected to directly benefit COMEX copper prices while driving up the stock prices of U.S. copper producers like Freeport-McMoRan, which rallied over 8.8% at one point.

Ultima Markets offers trading services on its MT5 platform for New York copper futures (ticker: Copper-C) and CFDs on U.S. copper stocks (like FCX), allowing investors to engage with this historic market opportunity by trading copper price volatility and related equities.

Original Content Attribution: Ultima Markets

Senior Analyst: Elon Gu

U.S. President Donald Trump has threatened to impose tariffs of up to 50% on copper imports, a move aimed at reshaping supply chains for the key industrial metal that also risks upending the global copper market, driving up domestic inflation, and adding a new layer of uncertainty to the global economy.

On Tuesday, Trump unveiled the tariff plan, which far exceeded market expectations and sent U.S. copper futures prices spiking 13%—the largest single-day gain since 1968 and a new record closing high. U.S. Commerce Secretary Lutenick stated that the new tariffs could take effect as early as August 1, representing another round of trade barriers on key industrial goods, following those on steel, aluminum, and automobiles.

This move does not just affect copper. Trump also threatened high tariffs on imported pharmaceuticals and semiconductors. Ultima Markets notes that this signals a potential further expansion of his protectionist trade policies, presenting new challenges for investors and markets.

Unexpected Tariffs and Market Shock

The 50% copper tariff announced by the Trump administration, a rate roughly double the 25% widely anticipated by the market, caught investors off guard.

The legal basis for this tariff is Section 232 of the Trade Expansion Act of 1962, which authorizes the president to impose restrictions on imported goods for national security reasons.

According to White House documents, the U.S. Department of Commerce has been investigating potential threats to copper supply for several months. The investigation, originally slated to last up to 270 days and extend to the end of November, concluded earlier than expected. Although the tariff plan has been announced, specific implementation details, such as whether it applies to all copper products and if exemptions will exist, remain unclear.

The market reaction was swift and dramatic. New York spot copper prices (ticker on Ultima Markets MT5: Copper-C) surged as much as 18% from their lows.

(1-Hour Chart of Copper Prices, Source: Ultima Markets MT5)

As one of the leading U.S. copper producers, shares of Freeport-McMoRan also rallied on the news, rising over 8.8% at one point before closing with a 2.5% gain. CFDs on this stock are also available for direct trading on Ultima Markets’ MT5 platform under the ticker FCX.

(1 Hour Chart of Freeport-McMoRan, Source: Ultima Markets MT5)

The U.S. Copper Supply Chain’s Reliance on Imports

Copper is a cornerstone of modern industry, widely used in construction, automobiles, mobile phones, and computer chips. Its demand has surged recently due to the energy transition and the boom in data center construction. However, the United States is highly dependent on imports for this critical metal.

According to the U.S. Geological Survey, net copper imports accounted for 53% of the nation’s total demand last year. The main suppliers were Chile (45%), Canada (25%), Peru (6%), and Mexico (3%).

Despite possessing ample copper reserves, the White House admitted in a February statement that “our smelting and refining capacity significantly lags behind our global competitors.”

Globally, China’s dominance in the copper supply chain is growing. According to Wood Mackenzie, China accounted for nearly half of the $55 billion in new global copper mine investments between 2019 and 2024. Furthermore, since 2000, 75% of the world’s new smelting capacity has come from China. The Trump administration’s objective with this move is precisely to ensure the U.S. has a more resilient domestic supply chain.

Elon Gu, a senior analyst at Ultima Markets, noted, “We saw the potential impact of U.S. trade protectionism on commodities back in March, when prices for U.S. COMEX-related commodities were higher than LME prices. This creates a potential driver for higher global commodity prices.”

Because COMEX reflects the duty-paid price for physical delivery in the U.S., the tariffs will directly increase import costs, thus benefiting COMEX copper prices.

However, this impact may be buffered in the short term. The U.S. has been stockpiling copper since the Section 232 investigation began. According to reports, the U.S. has imported an “additional” 400,000 metric tons of refined copper, equivalent to about six months of imports. These inventories can be consumed first, delaying the full pass-through of the tariffs to prices. Drawing from the experience with aluminum tariffs, price transmission also takes time.

Meanwhile, LME copper prices could face downward pressure. Previous tariff expectations led to a “rush to import” in the U.S., which at one point drained inventories in other parts of the world and supported LME prices.

Once the tariffs take effect, U.S. import demand will drop sharply as consumers prioritize using cheaper, already onshore inventory. This would divert copper originally bound for the U.S. to other markets, potentially leading to looser supply conditions outside the U.S. and thus depressing LME copper prices.

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