On Wednesday, U.S. President Donald Trump announced a “historic” global tariff policy, triggering dramatic upheavals in the global commodities markets. While gold and silver prices surged following the announcement, copper prices faced potential risks of a steep decline due to disruptions in the supply chain.
In a post-market speech at the White House, Trump passionately emphasized his stance on trade protectionism by stating: For decades, our country has been relentlessly looted and exploited by neighboring countries, allies, and adversaries alike. Foreign thieves have stolen our jobs, plundered our factories, and torn apart our beautiful American dream.
During his fiery remarks, spot gold prices swung sharply, fluctuating by as much as $39 per ounce during the speech. Prices ultimately stabilized between $3,127 and $3,138 per ounce toward the end of the address. Silver also saw a strong rally, spiking to an intraday high of $34.154 per ounce.
The centerpiece of what Trump called a “Declaration of Economic Independence” is the imposition of “reciprocal tariffs” on countries worldwide. The White House claims the new policy will generate “trillions of dollars” of revenue, which will be used to fund tax reductions and pay down the national debt.
However, market reactions have been mixed. Chris Zaccarelli, Chief Investment Officer of Northlight Asset Management, noted that initial optimism about a baseline 10% tariff was shattered by the announcement of significantly higher rates ranging between 24% and 49%. He highlighted that frequent policy changes and uncertainty surrounding outcomes will likely continue to unsettle investors.
In stark contrast to the risk-hedging rally in precious metals, industrial metals such as copper are facing severe challenges.
A recent report from BNP Paribas warned that copper prices might “collapse” to $8,500 per ton in the second quarter as the rush to export copper to the U.S. ahead of the 25% tariff implementation subsides. Despite London copper futures briefly breaking through the $10,000-per-ton mark earlier this week—a nine-month high—and NYMEX copper futures hitting a record $5.216 per pound, speculation about potential early enforcement of copper tariffs has already stalled the rally.
David Wilson, a commodity strategist at BNP Paribas, explained that the shortened adjustment window for the tariffs will severely disrupt copper supply chains. The bank has revised its forecast for global copper consumption growth in 2025, lowering it from 3.1% to 2.3%. Additionally, the estimated surplus in copper supplies has been significantly increased to 460,000 tons.
Market participants are concerned that this global trade war, waged under the banner of “Making America Great Again,” could seriously damage the already fragile industrial metals market.
