In a dramatic policy reversal, US President Donald Trump excluded the most widely imported form of refined copper from new import tariffs, triggering a 20% collapse in copper prices on Wednesday afternoon.
The most actively traded COMEX copper futures plummeted 19.6% to $4.5235 per pound as of 4:15 p.m. ET, hitting their lowest level since early May.
The White House confirmed the 50% import tariff will apply solely to semi-finished copper products (including pipes, wires, rods, sheets, and tubes) and copper-intensive goods (such as pipe fittings, cables, connectors, and electrical components). Copper input materials and copper scrap are explicitly exempted from Section 232 tariffs.
The administration further clarified that copper tariffs won’t stack atop separate automotive import duties implemented earlier this year.
Concurrently, a new executive order mandates that 25% of US-produced copper raw materials (including ores, concentrates, mattes, cathodes, and anodes) must be sold domestically starting in 2027, rising to 30% in 2028 and 40% in 2029. The order invokes the Defense Production Act to boost domestic copper manufacturing capacity and directs the Commerce Department to establish export licensing rules for high-grade copper scrap.
Analysts noted that while retaining scrap could support US smelting, new facilities take years to build, potentially creating temporary supply shortages that could lift prices during the transition.
Natalie Scott-Gray, senior metals analyst at StoneX Financial, termed the policy shift a massive market surprise and predicted further copper price declines. The exclusion contradicted market expectations of blanket refined copper tariffs, under which US copper prices had traded at a 28% premium to the London benchmark.
This marks Trump’s second major disruption to copper markets this year: an initial tariff investigation sparked a price surge and import rush in early 2025, followed by record highs when the 50% tariff rate—double market expectations—was announced earlier this month.
Analysts warned the cathode copper exemption could severely disrupt global copper trade flows. Massive inventories accumulated in the US during recent months may now face re-export. Michael Haigh, head of FIC and Commodity Research at Societe Generale, stated: If cathode is excluded, the arbitrage window closes. Prices should return to parity.
The refined/semi-finished product distinction resulted from industry lobbying, with key players emphasizing the US cannot immediately replace all copper imports. Tom Price, analyst at London brokerage Panmure Liberum, commented: Markets are repricing refined copper lower after Trump’s stunning U-turn on his own tariff policy. Someone must have convinced him the US economy can’t afford this new trade hit.
RBC Capital Markets identified Freeport-McMoRan as potentially the most adversely affected by the scaled-back tariffs, with US mine developers Hudbay Minerals and Arizona Sonoran also impacted. The move effectively benefits Chile and Peru—top global copper producers and major US suppliers.
