Copper Stocks React to Potential US Tariffs on Imports

Market Performance

Copper prices in New York increased by as much as 3.1%, reaching a record of $5.3740 per pound before settling around $5.3005 per pound. This rise coincided with gains in copper-related stocks, including Hindustan Copper, Hindalco Industries, and Vedanta, during the March 26, 2025 opening session.

At 9:20 AM, Hindustan Copper's share price increased by 1.3% to Rs 232. Hindalco's stock rose by 0.6% to Rs 697.8, while Vedanta's share price climbed 1.6% to Rs 468.4.

US Tariff Proposal on Copper Imports

US President Donald Trump has accelerated plans to impose tariffs on copper imports, advancing the previously indicated timeline. In February 2025, Trump directed the Commerce Department to investigate the potential implementation of these tariffs under the provisions of the Section 232 of the Trade Expansion Act of 1962. This is the legal mechanism used during his previous term to impose a 25% tariff on steel and aluminium.

The investigation's report, initially expected in several months, maybe presented earlier. This development has contributed to the upward movement in copper prices.

National Security Investigation

The White House directive instructs Commerce Secretary Howard Lutnick to assess whether copper imports threaten US national security. According to Peter Navarro, the White House trade adviser, the investigation is being conducted with urgency. Navarro claimed that China utilizes state subsidies and surplus production to dominate the global copper market, similar to its strategies in the steel and aluminium industries.

Trade Policy and Global Impact

President Trump has indicated that few exemptions will be granted for trading partners under the proposed tariff regime. He emphasized a restrictive exception approach, reinforcing his administration's stance on enforcing reciprocal duties. This move is part of a broader strategy to address trade imbalances and reduce foreign competition in key industrial sectors.

Summary

The announcement of a potential US tariff on copper imports has led to a sharp rise in copper prices and an increase in the share prices of copper-related companies. The White House has expedited the national security investigation into copper imports, with a report expected soon. This policy aligns with the administration's broader efforts to protect domestic industries and limit trade concessions for international partners.