Trump’s Tariff Changes Shift Copper Markets Dramatically

US copper prices have experienced significant fluctuations following a major announcement from President Donald Trump. As of July 30, 2025, the administration revealed a critical exemption for raw copper materials from the previously anticipated 50% tariff on imported copper goods. This decision has sent shockwaves through the copper market, leading to a dramatic decline in prices.

Between April 1 and July 29, copper futures on the COMEX surged from $9,667 per tonne to $12,355 per tonne, the highest level since the recovery from the COVID-19 pandemic began. During this period, concerns over potential supply disruptions and rising costs for US manufacturers fueled market speculation. In stark contrast, the London Metal Exchange (LME) saw prices remain relatively stable, trading around $9,600 per tonne. The resulting price disparity created a 28% premium for US copper, prompting a wave of arbitrage opportunities that drained inventories from European and Asian markets.

This influx of copper into the US was evident, with COMEX copper stocks rising from 97,524 tonnes to 257,915 tonnes by the end of July. Meanwhile, LME stocks fell sharply, dropping from 213,275 tonnes to 138,200 tonnes. The Shanghai Exchange mirrored this trend, as its copper inventories dwindled from 235,296 tonnes to 72,573 tonnes in the same timeframe.

Market Reactions and Impacts

The July 30 announcement acted as a catalyst for a swift market reaction. Copper futures on the COMEX plummeted by over 20% in a single day, marking the largest daily drop in US copper price history. Prices fell from $12,282 per tonne to $9,548 per tonne. The previous lucrative arbitrage opportunity between the COMEX and LME evaporated, with the spread collapsing from $2,704 per tonne to merely $29 per tonne.

This sudden shift left many US mining companies, including Freeport-McMoRan, reeling. Freeport, the largest copper miner in the US, had anticipated a substantial increase in cash flow, projecting an additional $1.7 billion annually if domestic prices remained elevated. Following the tariff exemption announcement, the company’s share price fell by 11%, from $43.2 to $38.8 per share.

Conversely, the situation has provided relief for copper suppliers, particularly those in Chile, the world’s leading copper producer. The exemption means that most US copper imports will remain unaffected, with the new tariff regime primarily targeting electronic conductors and copper pipes, which accounted for approximately 28% of US copper-related imports in 2024, valued at around $4.7 billion. Notably, 23% of the value of these targeted products came from China.

Future Outlook

As US copper markets adjust to the new tariff landscape, the implications for domestic miners and smelters remain significant. While smelter operators may benefit from lower raw material costs, the overall surplus in US copper inventories suggests a potential reversal of flows back to European and Asian markets.

Currently, the United States operates only two primary copper smelters, one managed by Freeport-McMoRan in Miami, Arizona, and the other by Rio Tinto in Kennecott, Utah. President Trump has indicated a willingness to impose further tariffs if deemed necessary, which could lead to additional market volatility.

With COMEX inventories currently exceeding those held in the Shanghai Exchange by more than three times, a reversal in market dynamics appears inevitable. The overheated US copper market may soon face a discount compared to LME prices, particularly as hedge funds reassess their positions in copper trading. Recent trends indicate a net decline in positions within the US market, contrasting sharply with the increased long positions in London.

The copper market is now at a crossroads, with US policies and global supply chains poised for significant shifts in the coming months.