en.Wedoany.com Reported - The most closely watched focus in the global metals market is whether U.S. President Donald Trump will proceed with tariffs on refined copper, as he has previously threatened. This decision, expected to be finalized within the coming weeks, will directly reshape global copper trade flows, inventory patterns, and trigger a new wave of price shocks.

"Everyone is watching and waiting for policy clarity before entering the market," said Nicole Ni, Deputy General Manager of copper trading firm Eagle Metal International Pte. "This policy has a significant impact on copper prices."

In fact, the looming tariff threat has dominated copper market trends over the past year—repeatedly pushing Comex copper futures prices above LME prices, creating lucrative arbitrage opportunities for traders.

In July last year, Trump issued a proclamation requiring the U.S. Secretary of Commerce to submit a follow-up report before deciding whether to impose phased tariffs on refined copper imports, with an initial rate of 15%.

Currently, while there is no clear consensus on what the Trump administration will ultimately decide, three possible scenarios have been widely discussed:

1. Implementation of Tariffs

If the Trump administration announces a 15% tariff on refined copper starting next January, it is bound to trigger a new "copper rush." Large volumes of refined copper would flood into Comex-designated compliant warehouses from Europe, Asia, and Africa, directly pushing copper prices to historic highs. Moreover, Trump could signal a stronger stance, hinting that the tariff rate might further rise to 30% by 2028.

Morgan Stanley analysts noted in a report earlier this June that the probability of a 15% refined copper tariff taking effect next January is 43%.

Over the past month, the premium of New York copper prices over London copper has been widening, indicating that some investors are betting on this direction.

Jefferies analysts believe that tariffs on refined copper would be relatively beneficial for copper producers operating in the U.S., including Freeport-McMoRan, Rio Tinto Group, Hudbay Minerals Inc., and Ivanhoe Electric Inc.

Domestic supporters of copper tariffs argue that as copper's strategic importance increasingly approaches that of oil in the past, U.S. dependence on foreign copper has reached a dangerous level. Given that Trump's broad tariff measures face legal challenges, copper tariffs may be seen as a more durable measure, as they would stem from an independent national security review process.

2. Tariffs Shelved

Conversely, if Trump ultimately rejects copper tariffs entirely, the "arbitrage premium" for shipping metal to the U.S. could vanish instantly, completely reversing global copper market logistics. This would not only significantly ease supply concerns in other regions but also pour cold water on elevated copper prices.

In that case, traders' first move would be to shift copper stranded in Comex warehouses to nearby LME warehouses, quickly unwinding the massive positions built up during the previous speculation. Whether these metals ultimately leave the U.S. would depend on demand from major global copper consumers like China.

While copper tariffs might encourage domestic mining and processing in the U.S., opponents argue that such tariffs would raise costs for manufacturers reliant on imported copper, potentially weakening the competitiveness of U.S.-made goods. Critics also warn that adding tariffs on top of the existing 50% tariff on copper semi-finished products and derivatives could lead to demand reductions from higher costs outweighing any demand created.

"I've heard that companies that lobbied against tariffs last year are still actively and vigorously lobbying against them now," said David Wilson, Senior Metals Strategist at BNP Paribas in Singapore. "Logically, imposing tariffs on raw materials doesn't make sense because you can't suddenly stimulate new supply that way."

3. Decision Delayed

A third option for the U.S. government is to further delay the decision while keeping the tariff option on the table.

This would largely maintain the status quo for the market: large stockpiles of metal would remain in the U.S., while copper flows would enter at a more cautious pace than over the past year, as traders hedge against the risk of another unexpected policy reversal.

BNP Paribas expects the decision to be delayed, possibly with alternative measures such as direct supply agreements with other countries.

Of course, even if the U.S. Commerce Department recommends copper tariffs, there is no guarantee Trump will implement them, leaving the industry still groping in the dark.

U.S. copper product manufacturers have been lobbying against tariffs on the copper raw materials they purchase, warning that higher costs would be passed on to customers. However, Amy O’Shaughnessy of Revere Copper Products, a member of the U.S. Copper Products Manufacturers Alliance, said: "There are currently no signs indicating which way the government is leaning."

This decision will also serve as one of the clearest litmus tests yet—whether Trump's economic team prioritizes lowering costs for manufacturers or bringing raw material production back to the U.S. At the same time, it will directly determine the future flow of this core strategic metal. Amid current geopolitical rivalries and the wave of power grids and data center infrastructure supporting the AI computing boom, copper has long been an indispensable critical metal.

But no matter which side of the coin Trump ultimately lands on, given copper's irreplaceable essential demand in artificial intelligence infrastructure, most analysts and traders are currently relatively optimistic about copper's long-term outlook. However, before that, the market may experience a period of dramatic volatility.