Barclays-European Metals Mining US copper tariff implications for EU equities-20250714

A 50% US copper tariff from 1 August could see copper pricescome under pressure due to an airpocket in demand as thebuyer of the marginal LME tonne disappears. We expect anyimpact on LME prices to be shortlived and would be buyerson weakness in our preferred copper plays AAL and FM (bothOW)

President Trump announced the US will implement a 50% tariff on copper imports from 1 August 2025. Details, such as which forms of copper imports will be subject to the tariff andany exemptions either of forms or countries, have not been unveiled as yet. However, we notethat the Section 232 investigation was commissioned to look at imports of all forms ofcopper. It may be instructive to consider aluminium and steel, which have already beensubject to a 50% tariff since early June: here the administration excluded tariffs on scrapimports but granted no country-specific exemptions. In response, the US landed Midwestaluminium price is trading at a 48% premium to the LME, i.e., almost fully covering theincremental tariff cost.