Last week was a stark reminder of the volatility that can be unleashed by shifting trade policies, as U.S. copper markets experienced a dramatic flash crash. The catalyst was a late-Wednesday announcement by President Trump, who unveiled a 50% tariff on certain copper products, but notably, not on the raw material itself. This decision sent U.S. copper futures plunging by roughly 20% in late trading on Wednesday, August 6, 2025, marking a monumental reversal in a market that had been soaring for weeks.
From Record Highs to Record Lows
The saga began earlier in the month, after President Trump initially pitched a 50% import tax on copper at a press conference in early July. This off-the-cuff statement ignited a frenzy in the market. Traders and businesses, anticipating the tariff, raced to import copper ahead of its August 1 effective date, filling metals warehouses across key U.S. storage hubs. This surge in demand pushed U.S. copper prices to new record highs, significantly above global prices.
However, the market’s wild rally came to a screeching halt on Wednesday, August 6. In a move that surprised many, the White House backed away from taxing less-processed copper forms like concentrate, cathodes, and scrap. Instead, the administration slapped the 50% levy on a more targeted list of copper products, including wire, tubing, and sheeting. The tariff will also apply to the copper content within other products, such as electrical wiring and pipe fittings.
The Impact on the Industry
The new, more targeted tariff structure has created a divide in the domestic industry. The levy is designed to insulate U.S. manufacturers of electronics and plumbing fittings, as it makes imported finished goods more expensive. However, it offers no protection for miners, smelters, and those looking to invest in new domestic production capacity for raw copper.
This was immediately reflected in the stock market. Shares of Freeport-McMoRan, the largest U.S. copper producer, closed 9.5% lower, while Ivanhoe Electric, which plans to begin construction on a major mine in Arizona next year, shed a staggering 17%.
A Lesson in Market Uncertainty
The abrupt shift in policy has brought U.S. copper prices back in line with global prices, settling around the $4.50 a pound mark—a level they were at before the President’s initial tariff threat in early July.
The episode highlights the significant risks associated with trading on political rhetoric. While the initial threat of a tariff excited some miners and fueled optimism about new domestic investment, others, like Bernstein analyst Bob Brackett, urged caution. In a July 9 client note, Brackett pointed out that the U.S. relies on imports for over half of its copper supply and has very limited domestic smelting capacity, making a broad tariff economically unsound. He argued that the tariff would “incents no proper economic action but rather simply adds cost to U.S. manufacturers.”
The unexpected change in the tariff’s scope proves that off-the-cuff statements that the president makes can inject extreme volatility into markets, and that the final policy implementation can be dramatically different from the initial, broad-stroke threats. For traders, this serves as a powerful reminder of the need for caution and the importance of separating political grandstanding from concrete, final policy decisions.
Start Trading with Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team’s round-the-clock availability on trading days to provide assistance for all your trading needs.
