Quick overview

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Goldman Sachs increased its estimate for the baseline US tariff rate on the metal to 50% following President Donald Trump’s announcement that this levy rate would soon be applied to copper imports.

Trump stated during a cabinet meeting on Tuesday that the world’s largest economy would impose duties on copper, a vital metal used in the production of automobiles to military hardware, and electric grid infrastructure.

Goldman Sachs analysts wrote in a note to clients on Wednesday that the 50% figure was twice what Wall Street had anticipated. Following Trump’s remarks, US COMEX copper futures surged to an all-time high of $13,000 per metric ton, while Freeport-McMoran’s stock, the largest copper producer in the world, increased by more than 2.5 percent.

He announced that a so-called Section 232 investigation into US imports of the red metal was complete, and the Commerce Secretary echoed Trump’s remarks. The investigation was initially planned to conclude in November and was first announced in February.

Howard Lutnick stated, “The goal is to bring copper home, bring copper production home, and bring the ability to make copper, which is essential to the industrial sector, back home to America.”. The higher copper tariff is anticipated to be implemented by the end of July or the beginning of August, he continued. The Goldman analysts wrote,

“We change our baseline to a 50 percent tariff on US copper imports from 25 percent previously, as the short timeline to implementation increases the risk that a 50 percent tariff could be imposed.”.

They projected that an increase in copper shipments into the United States would result from the new duty’s elevated risk. S. in the upcoming weeks as exporters try to avoid the higher tariffs and lock in lower rates.

The Goldman strategists noted a “reduced risk that the price rises above $10,000 in the third quarter,” but they kept their prediction for December London Metal Exchange copper futures at $9,700 per ton. Following Trump’s announcement, LME copper prices plummeted, causing an arbitrage to widen significantly.