US President Donald Trump hasn’t yet imposed import tariffs on copper but the market is already pricing in the likelihood that the red metal will be next on the list after aluminum and steel.
The arbitrage between the CME and the London Metal Exchange (LME) contracts has blown wider in recent days, with the CME premium exceeding $1,000 per metric ton earlier this week. Given that LME three-month copper is currently trading around $9,400 per ton, the transatlantic gap implies the market is expecting a 10% tariff at the very least.
Were Trump to go for the same blanket 25% tariffs that have been applied to imports of aluminum and steel, there is obviously further upside potential for the CME premium. Overlooked for now is how Doctor Copper would likely react to an escalating tariff war with all the negative implications for global growth.
For the rest of this article: https://www.reuters.com/markets/commodities/tariff-threat-opens-up-transatlantic-rift-copper-pricing-andy-home-2025-02-12/