Copper Futures Plummet After Trump 'Backflip'

Copper futures in the US took a historic dive Wednesday, plunging nearly 20% in late trading after President Trump announced a 50% tariff—not on raw copper, but on finished copper products. The move marked another episode of market volatility linked to shifting trade policies from the White House, the Wall Street Journal reports. If the decline holds through Thursday, it will eclipse the previous biggest one-day fall for copper, a 12% drop set during 1987's Black Monday.

Earlier this month, copper prices soared to record levels after Trump initially floated the idea of a broad 50% tariff targeting all copper imports, prompting traders and firms to rush shipments into US warehouses before the policy's August 1 start date. But the administration abruptly revised its plan, deciding to exempt less processed forms of copper—like concentrate, cathodes, and scrap—and focus the tariff on items such as copper wire, tubing, and sheeting. The tariff will be calculated based on the copper content in finished products, rather than on the full value of those goods.

The policy shift left copper futures tumbling back to levels seen before Trump's July announcement, erasing the premium US prices had briefly enjoyed over global benchmarks. Shares of major US copper companies, including Freeport-McMoRan and Ivanhoe Electric, also fell sharply. "Markets are now busily repricing refined copper much lower after Trump's epic backflip on his own import tariff policy," said Tom Price, an analyst at the London brokerage Panmure Liberum, per Reuters. "Someone must have finally got through to (Trump) that the US economy simply can't afford this new trade-hit."

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While the new tariff could offer some relief to domestic manufacturers of copper-containing products, it does not benefit miners or smelters. After Trump's July announcement, some analysts warned against bidding up copper prices, the Journal reports. "Trump has declared massive tariffs before and then not implemented them," Bernstein analyst Bob Brackett told clients in a July 9 note, noting that the US is heavily reliant on imported copper and boosting processing capacity would take years and cost billions. "The tariff incents no proper economic action but rather simply adds cost to US manufacturers," he wrote.