Tariff deadline comes and goes, copper feels the pressure

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It’s July 9. The 90-day pause on most of President Trump’s reciprocal tariffs was supposed to end today, but the start date has once again been pushed back. Color me surprised. 

The White House now says most countries have until August 1 to secure trade agreements, or else the new levies go into effect. For real this time. 

Investors seem decently optimistic that deals will materialize. Markets were modestly in the green this afternoon, with the S&P 500 and Nasdaq Composite up 0.3% and 0.6%, respectively, at 2 p.m. ET. Similarly, BTC was flat, up 0.1% at that time. 

To recap the current tariff situation: Trump posted copies of letters he sent to 14 countries — including Japan and South Korea — on Monday. He said that seven more letters should go out today. 

During yesterday’s cabinet meeting, Trump also revealed a new tariff on copper of 50%. The president did not specify when, exactly, this rate will go into effect. 

US copper prices had already been on the rise on expectations of higher levies, but Tuesday’s announcement sent premiums to new highs. The US price premium over the global benchmark reached 138% yesterday. 

US copper prices closed Tuesday 13% higher, the largest single-day increase in decades. 

We wrote about copper in the lead-up to Liberation Day as analysts speculated about what new tariffs could mean for metal markets. 

As a reminder: The US currently produces about half the amount of copper it consumes annually — meaning around 1 million metric tons are imported, according to the US Geological Survey. Copper is in virtually everything: wiring, plumbing, motors, medical devices, personal electronics, you name it. 

The tariffs have so far had a limited impact on inflation, and there are a few theories as to why. First, companies were expecting tariffs, so it’s likely they increased inventories to prepare (in which case they have not had to raise prices for consumers yet). Many sectors have also experienced lower demand, making price increases less likely. 

That said, I think we could see a bigger impact on consumer prices from these copper tariffs. Domestic copper production has remained relatively steady over the past few years. Glencore, a top international producer, expects global demand for the metal to rise going forward.

The problem with bringing production onshore is that it’s a slow process. It takes, on average, about 18 years for a copper mine to move from discovery to production, according to S&P Global Market Intelligence. That’s assuming rich deposits are found in the first place. 

We’ll be keeping an eye on metal markets and how they’re impacting equities and crypto assets. 

Stay tuned.

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