UBS released a report indicating that potential tariffs on copper imports could significantly impact market prices. The analysis follows President Trump’s early-July threat to impose a universal 50% tariff on all copper imports beginning August 1, similar to recently implemented aluminum and steel tariffs.

The report highlights that despite any new tariffs, the United States would likely remain a net copper importer over the medium term. UBS identifies smelting capacity as the primary bottleneck in domestic production, noting that appetite for investment in new capacity remains low at current levels of U.S. mine production.

UBS analysts point to ongoing global supply challenges that should continue to support copper prices regardless of U.S. policy changes. With limited mine supply growth worldwide, the market is expected to be undersupplied in the coming years, creating upward pressure on prices.

Several questions remain unanswered regarding the implementation of these potential tariffs, including whether they would extend to all copper products. The report does not speculate on the likelihood of the tariffs being enacted as threatened.

If the tariffs are implemented, UBS expects domestic copper prices to rise further, with U.S. manufacturers well-positioned to pass on any incremental costs to consumers due to the limited availability of substitutes for copper in many applications.
Source: Investing.com