Trump's Copper Tariffs Might Come Sooner Rather Than Later, Insiders Warn

U.S. tariffs on copper imports could arrive within weeks. In February, President Donald Trump directed the U.S. Commerce Department to conduct an investigation, giving this executive department a nine-month deadline.

Per a Bloomberg report, the investigation is seen as "little more than a formality.” An announcement is likely to come well ahead of the November deadline.

The proposed tariffs, which could reach as high as 25%, would shift the global copper market. The US is a major copper consumer, needing between 1.7 and 1.9 million metric tons annually. Yet, it produces less than half of that, relying on Chile, Canada, and Peru for 90% of its imports.

Rising copper costs would boost domestic producers like Freeport McMoRan (NYSE:FCX). They could also be a catalyst for resolving the standstill in Arizona. Recall how Native American opposition stalled Rio Tinto (NYSE:RIO) and BHP's (NYSE:BHP) Resolution Copper mine located in the southern part of the Tonto National Forest—a $64 billion flagship project that could supply 25% of projected future domestic copper demand.

The looming tariffs have triggered a surge in U.S. copper imports, as traders rush to front-run potential duties. According to Mercuria, around 500,000 metric tons of copper are en route to the U.S. That far exceeds the usual monthly average of 70,000 tons, Reuters noted.

This situation has driven up prices on New York's COMEX exchange, where copper trades at a record $1,400 premium over the London Metal Exchange (LME) benchmark. Unforeseen circumstances further tightened the supply, as Glencore paused its major Chilean copper smelter after experiencing furnace issues.

Investment banks and commodity traders expect further price increases if tariffs are imposed. Goldman Sachs and Citigroup have both forecast that a 25% duty could be in place by year-end, while Trafigura has projected that copper prices could climb to $12,000 per ton from the current level of around $10,000, as reported by The Financial Times.

Trump, however, has remained vague on the timing of the tariff announcement. On March 5, he mistakenly implied that copper tariffs were already in effect, saying, "I imposed a 25% tariff on foreign aluminum, steel, lumber, and copper."

Besides this slip, he remained vague about potential tariff exceptions ahead of the April 2 announcement, touted as a "Liberation Day" for US trade policy. First, he took a strict tone against tariff exceptions, before softening the stance in a Tuesday interview for Newsmax,

"I'll probably be more lenient than reciprocal because if I was reciprocal, that would be very tough for people," he said, according to CNBC.

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