Copper prices on New York’s Comex experienced a significant slump following comments from Chilean Finance Minister Mario Marcel regarding a proposed US tariff on the metal. Marcel indicated that Chile would actively seek an exemption from the planned tariff. Copper prices fell as much as 6.2 per cent, reaching $US5.4265 a pound, before recovering slightly. The United States relies on imports for approximately half of its copper supply, with Chile being the primary source.
The copper market is currently on edge due to an impending August 1 tariff deadline set by former President Donald Trump. Earlier this month, Trump surprised market participants by announcing a 50 per cent tariff on copper imports, effective from the start of next month, a figure considerably higher than anticipated. The specific details of the tariff, including which forms of physical copper will be subject to the duty, remain unclear.
During an interview with Radio Duna, Minister Marcel stated that Chile would advocate for an exemption during trade discussions in Washington on Monday. He drew parallels to exemptions granted on certain raw materials in other trade agreements, such as UK steel. Marcel also pledged not to penalise Chilean taxpayers by implementing any retaliatory tariff should the US proceed with the 50 per cent copper levy.
Chilean officials have highlighted the fact that the United States’ dependence on imported copper leaves domestic manufacturers with limited immediate alternatives other than to bear the cost of the levy.
