Copper futures dipped to approximately $5.50 per pound on Monday, retracing some of last week's gains amid renewed global trade tensions impacting investor risk appetite. This decline followed President Trump's announcement of imposing a 30% tariff on imports from the European Union and Mexico, set to be implemented on August 1. In retaliation, the EU is engaging in intensified discussions with other affected countries, such as Canada and Japan, with the possibility of coordinated countermeasures being reported.
Despite the current dip, copper prices remain near the historic peaks seen last week when Trump declared a 50% tariff on copper imports, also effective August 1. This strategy is aimed at encouraging domestic copper production and decreasing dependency on refined imports. However, analysts caution that this policy might pressure the US supply, given that nearly half of the copper consumed in the country is imported. This situation could be further exacerbated due to the limited refining and smelting capabilities, with only two operational smelters available in the US, prompting concerns over potential supply chain bottlenecks.
