The US administration's decision to impose a universal 50 percent tariff on imported semi-finished copper products and copper-intensive derivatives has triggered chaotic disruptions in global copper markets,another example of how the uncertainty of US trade policies is destabilizing global supply chains,a Chinese expert said.
The US President Donald Trump on Wednesday signed a proclamation to address the effects of copper imports,imposing universal 50 percent tariffs on imports of semi-finished copper products and copper-intensive derivative products,effective on August 1.
The proclamation imposes universal 50 percent tariffs on imports of semi-finished copper products(such as copper pipes,wires,rods,sheets and tubes)and copper-intensive derivative products(such as pipe fittings,cables,connectors and electrical components),the White House said in a fact sheet.
The order was not as broad as anticipated,and it stopped short of imposing new tariffs on raw copper.The announcement sent US copper prices plummeting by nearly 20 percent on Wednesday afternoon,as investors reversed their bets that more expansive tariffs would send the cost of the highly traded metal skyrocketing,the New York Times reported.
The US copper market suffered its largest intra-day fall on record after the tariff announcement shocked traders by exempting the refined form of the metal,the Bloomberg reported.
US copper futures on Comex plunged 20 percent after the announcement.Until Wednesday afternoon,US copper prices had been trading around 28 percent above benchmark copper futures on the London Metal Exchange,as traders anticipated the tariff would be applied to all refined metal imports,according to the Bloomberg.
When the US first flagged the likelihood of tariffs early this year,it triggered a surge in US copper prices relative to the rest of the world and set off a race to ship copper to the US to beat the tariffs.The decision to exclude refined copper from the tariffs is likely to further roil global trade flows of the metal,according to the Blomberg.
Galaxy Futures'senior copper researcher Wang Wei told the Global Times on Wednesday that a universal copper tariff would hit Chile and Canada the hardest.But with tariffs on semi-finished copper,Chile–supplying 70 percent of US refined copper imports–would be far less affected.
Canada,however,exported 154,000 tons of refined copper,roughly 16.6 percent of US imports,and 150,000 tons of copper materials to the US last year,so the tariffs will clearly impact Canada,Wang said.
He stressed the tariffs have negligible impact on China.In 2024,the US imported 50,000 tons of copper pipe fittings,with about 14,000 tons from China–the only marginally notable Chinese copper export to the US.Yet Wang believes the new tariffs may disrupt global copper supply and demand,affecting global prices and thus indirectly touching Chinese firms'production and sales costs.
The US administration says that the new duties,which follow 50 percent US tariffs already imposed on steel and aluminum,are aimed at boosting domestic industries and addressing“trade imbalances.”But experts warn that they could raise prices on all sorts of products,ranging from construction materials to electronics,that utilize the versatile metal,the CNBC reported.
The levies are likely to raise costs for domestic industries that rely on those products,including manufacturers and home builders,the New York Times reported.
Zhou Mi,a senior researcher at the Chinese Academy of International Trade and Economic Cooperation,told the Global Times on Thursday that the constant changes and persistent uncertainty in US tariff policies have caused obvious shocks to the stability of global market supply chains.
With uncertainty surrounding the coverage scope and specific tax rates,businesses find it extremely difficult to plan ahead for procurement or arrange shipping schedules,Zhou noted.This has significantly disrupted the market.
Given that different stages of the upstream and downstream supply chains have been impacted to varying degrees,the effects on the costs of global manufactured goods will also require a period to reach a new equilibrium,Zhou added.
