US President Donald Trump’s announcement of an executive order to review potential copper tariffs or quotas has sent shockwaves through the market. The review is set to examine national security concerns, domestic demand, production levels, and foreign government subsidies.
Copper miners face divergent outcomes as US tariffs could drive up prices and create a supply crunch. However, analysts say that companies with existing US production stand to benefit from higher prices. Freeport-McMoRan and Rio Tinto are among the largest US domestic producers of copper.
The introduction of tariffs is expected to increase US consumer costs, particularly if foreign countries like Chile do not comply with new regulations. Conversely, companies in countries like Chile may experience a decrease in exports to the US due to rising freight differentials.
Analysts warn that the initial boost to mining stocks will be short-lived and could lead to lower metal demand and prices in the long run. The arbitrage spread between US COMEX prices and those on the London Metal Exchange is expected to remain elevated, with US consumers taking the brunt of higher copper prices.
Source: https://www.cnbc.com/2025/02/28/stocks-to-watch-with-copper-in-trumps-tariff-crosshairs.html