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Trump's watered-down copper tariffs crush Comex premium
Published by Global Banking & Finance Review®
Posted on July 31, 2025
3 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 31, 2025
3 min readLast updated: January 22, 2026
Trump's copper tariffs caused U.S. copper prices to drop over 20%, turning a premium into a discount. Market reactions suggest potential re-exporting due to excess inventories.
By Lewis Jackson and Polina Devitt
BEIJING/LONDON (Reuters) -The once-mighty premium U.S. copper enjoyed over the global benchmark swung to a discount on Thursday as markets clawed back months of gains in hours of frenzied trading after President Donald Trump surprised markets with pared-back tariffs.
Trump said on Wednesday the United States would impose a 50% tariff on copper pipes and wiring, but the levy fell short of the sweeping restrictions expected and left out copper materials such as ores, concentrates and cathodes.
The surprise move dragged down U.S. copper prices more than 20% on the Comex exchange and unwound the premium over the London global benchmark that had grown in recent weeks, with shipments diverted into the U.S. in anticipation of higher domestic prices.
"We think the LME flips to a premium in the short term due to excess inventories in the U.S.," Anant Jatia, founder and chief investment officer at Greenland Investment Management, a hedge fund specialising in commodity arbitrage trading, told Reuters.
"Over time Comex moves back to a premium as inventories draw and downstream tariffs leave a sustained U.S. premium."
U.S. September Comex copper futures were last down 22% to $4.359 a lb or $9,610 per metric ton on Thursday, meaning a discount over LME copper of $20 a ton.
This compares with last week's premium of $3,000. Benchmark LME copper fell 0.7% to $9,630 a ton.
WHAT HAPPENS TO U.S. INVENTORIES
Months of meaty premiums had sucked in enormous volumes of copper from around the world since Trump first flagged the possibility of tariffs in February.
As recently as a few weeks ago, traders were still redirecting cargoes to the United States in a rush to get copper into the country before the tariffs.
Trump's unexpected pivot now raises the question of whether some of that stockpile might be re-exported. Macquarie estimated earlier this month it would take nine months of normal consumption just to run down the inventories built up in the first half of the year.
Goldman Sachs said in a note on Thursday that Trump's threat to potentially impose tariffs on refined copper in 2027 would keep U.S. and global prices near parity and limit any large scale re-exporting.
Trump first teased the tariff in early July, implying that it would apply to all types of the red metal, ranging from cathodes produced by mines and smelters to wiring and other finished products.
Yet in a proclamation released by the White House, the administration said the tariff starting this Friday will apply only to pipes, tubes and other semi-finished copper products, as well as products that copper is heavily used to manufacture, including cable and electrical components.
(Reporting by Lewis Jackson in Beijing, Polina Devitt and Eric Onstad in London and Hongmei Li in Singapore; Additional reporting by Pratima Desai in London; Editing by Christopher Cushing, Michael Perry, Lincoln Feast and Kate Mayberry)
Copper trading involves buying and selling copper commodities in financial markets, often influenced by supply and demand factors.
A market premium refers to the amount by which the price of a commodity exceeds its benchmark price in the market.
U.S. copper inventories are the stockpiles of copper held in the United States, which can impact pricing and availability.
The Comex exchange is a division of the New York Mercantile Exchange where metals, including copper, are traded.
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