On July 8, 2025, US Commerce Secretary Lutnick announced that over the next two days, 15 to 20 tariff letters would be sent out. The most notable one was that President Trump planned to impose a 50% tariff on copper, and the policy was expected to take effect in late July or August 1st. At the same time, the EU submitted a series of trade agreement proposals to the US, suggesting that they would open up their markets in exchange for tariff reductions. Meanwhile, the tariff studies for the pharmaceutical and semiconductor industries would also be completed by the end of the month. These series of policy developments are reshaping the short-term and medium-term trends of copper prices.
1. 50% copper tariff: Direct impact on the US market
The US plan to impose a 50% tariff on copper will significantly increase the import cost. According to data from the US Geological Survey (USGS), the US has a high dependence on imported copper for consumption, with the proportion of imports exceeding 30% in 2024. After the implementation of the tariff, the landed cost of imported copper will rise sharply, which may directly push up the domestic copper price in the US.
Short-term impact: If the tariffs are implemented as scheduled by the end of July, American copper processing enterprises and end-users (such as the construction and power industries) may rush to purchase their inventory in advance, resulting in a temporary increase in copper prices on the London Metal Exchange (LME) and the New York Mercantile Exchange (COMEX) in the middle and late July.
Medium and long-term risks: High tariffs may reduce the demand for copper in the US manufacturing sector, especially in cost-sensitive industries such as automobiles and electronics. If demand shrinks, copper prices may face downward pressure.
II. EU Trade Agreement: Potential Supply Hedging
The trade agreement proposal put forward by the EU, especially the indication of opening up the market, has added uncertainties to the fluctuation of copper prices. If the EU agrees to lower tariffs on American automobiles or expand the import quotas for copper products, it may increase the liquidity of global copper supply.
Supply-side relief: As the third-largest copper consumer in the world, the EU, if it opens its market, may attract copper mines from South America and Africa to export to Europe, thereby indirectly alleviating the global copper shortage situation.
Price transmission effect: The outcome of the trade negotiations between the EU and the US may influence the global market through the LME copper price. If an agreement is reached, the increase in copper prices may be limited; if the negotiations break down, the risk-averse sentiment may push up copper prices.
III. Industry Synergy Effect: Indirect Impact of Tariffs on Pharmaceuticals and Semiconductors
The US's research on tariffs on the pharmaceutical and semiconductor industries, although not directly related to copper, may indirectly affect copper demand through the industrial chain.
Semiconductor industry: Copper is a key material for chip manufacturing (such as in packaging substrates). If the United States imposes tariffs on semiconductors, it may lead to an increase in the cost of the global semiconductor supply chain, thereby reducing the demand for copper in the consumer electronics industry.
Pharmaceutical industry: Copper is widely used in pharmaceutical equipment (such as reaction vessels, pipelines). If the cost of pharmaceutical production increases, it may lead to a reduction in the budget for equipment renewal by pharmaceutical companies, thereby indirectly reducing copper consumption.
