Trump’s Copper Tariff Shocks Markets

by | Jul 18, 2025 | The Doctor's Dose

Copper Tariff Shocks Markets: How Investors Can Play the Surge and Brace for the Risks

Copper is surging—and not just on fundamentals. President Donald Trump’s July 8 announcement of a 50% tariff on imported copper has jolted the market, sending prices to an all-time high of $5.69 per pound. It was the single biggest daily gain since records began in 1968.

This massive policy shift is causing widespread economic and investment reverberations. Here’s what’s happening, what it means for markets, and how investors can position themselves.

Trump's Copper Tariff Shocks Markets

A Stunning Move: 50% Tariff by August 1

Wall Street had been expecting a 10% to 25% copper import tariff following Commerce Secretary Howard Lutnick’s Section 232 investigation launched in February. But Trump’s move to impose a full 50% tariff has caught even the most hawkish traders by surprise.

Goldman Sachs estimates a 60% chance that the tariff will take effect, with December 2025 copper futures already factoring it in. Copper is up 39% this year—12% of that coming just since the July 8 announcement.

Why Copper Matters

Dubbed the “Ph.D. of metals,” copper is a key barometer for economic growth. It powers everything from mobile devices and data centers to EVs and industrial machinery. Demand is booming from AI infrastructure, electric vehicles, and the expansion of renewable energy.

But the U.S. imports over half of its copper, mainly from Chile, Canada, and Peru. A 50% tariff could add significant costs to manufacturers and ripple through the economy, especially with few viable substitutes.

Short-Term Gains, Long-Term Pains?

For now, investors are front-running the tariff with stockpiling. U.S. copper prices are trading nearly 30% higher than on the London Metal Exchange. However, analysts warn that if Trump backs off, prices could tumble—and if tariffs are implemented, consumer inflation may surge.

Copper is already feeding inflation fears. Higher costs for cars, electronics, and infrastructure are virtually guaranteed if import prices stay elevated. And with mine development taking decades, there’s no quick path to domestic supply.

Investment Opportunities in the Copper Boom

For traders, a dip might be a buying opportunity. Long-term investors have two main strategies:

1. Copper ETFs

  • CPER (United States Copper Index Fund): Tracks futures contracts; up 38% YTD. Ideal for direct copper exposure, but comes with 1% expense ratio and rollover costs.
  • COPJ (Sprott Junior Copper Miners ETF): Holds junior mining stocks; up 40% YTD.

2. Mining Stocks and Funds

  • Freeport-McMoRan (FCX): Largest U.S. producer; 74% of revenue from copper. Expanding operations in the U.S., Chile, and Indonesia.
  • Hudbay Minerals and Arizona Sonoran Copper: Smaller-cap U.S.-based projects likely to benefit if tariffs persist.
  • ETFs like XME and PICK: Broader metals exposure with some copper insulation.

What’s Next?

The copper market is expected to remain volatile as the August 1 tariff deadline approaches. Investors should brace for sharp moves either way, especially if Trump alters course. Tariff implementation could keep prices sky-high, but walk-backs would almost certainly trigger a steep correction.

Meanwhile, U.S. companies and consumers are bracing for cost pressures. Analysts agree that the 50% tariff is unlikely to resolve supply chain issues in the short term and could exacerbate broader inflation risks.

Bottom Line: The copper rally is real, but risky. Investors should closely monitor policy developments and consider exposure through ETFs or diversified miners. For now, Trump holds the key to copper’s next big move.