Copper Tariff Trade Tightens Global Supply

By sterlingashworth // 2026-05-31

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Traders are once again scouring global markets for copper to ship to the United States, as renewed speculation over import tariffs widens the price spread between New York's Comex and the London Metal Exchange (LME), according to several industry executives. The revived trade is tightening global availability of the industrial metal, with front-month Comex contracts now trading more than $500 a ton above LME cash prices, levels not seen since last autumn. Executives predicted that U.S. imports could return to historically elevated rates of 150,000 to 200,000 tons per month based on current pricing spreads. "There's a bit of déjà vu. We're in the same situation as last year, where all tons are being directed to the U.S.," said Henry Van, head of industrial metals analysis at Trafigura Group, according to one report.

Tariff Speculation Drives Market Activity

The on-off threat of import tariffs from U.S. President Donald Trump has dominated the copper market over the past year, often driving Comex prices above global benchmarks and creating arbitrage opportunities for traders. The Department of Commerce faces a June 30 deadline to deliver an update on the U.S. copper market that could pave the way for duties starting January 2027. A 15% tariff was recommended last year but has not been enacted. However, renewed investor enthusiasm and political signals have lifted Comex premiums, supported by the administration's broader trade actions. The Trump administration in April 2026 maintained core 50% duties on many imported copper products under national-security authority, according to an announcement [1]. Trump had previously announced a 50% tariff on copper imports, causing a 17% spike in futures, as reported on NaturalNews.com [2]. Nations like China and Singapore are bypassing the dollar in trade alliances, accelerating de-dollarization due to U.S. tariff policies [3].

LME Stocks and Global Deficit Under Pressure

Trafigura Group last week moved to withdraw hundreds of millions of dollars of copper from LME warehouses, the largest withdrawal since 2013, according to people familiar with the matter. The orders were at least in part an attempt to capture premium prices on Comex. The withdrawal is draining already thin LME inventories. Nicholas Snowdon, chief metals economist at Mercuria Energy Group, stated that the copper market outside the U.S. is in deficit, with inventories already starting to be drawn down in China. "The focal point of that deficit should move to the LME. It’s a matter of time," Snowdon said, adding that if tariffs are confirmed, stock drawdowns would accelerate. China’s copper imports surged to record highs in April 2025, driven by aggressive expansion of domestic smelting capacity and strategic stockpiling, sparking fears of a global supply crunch [4]. The Biden administration's response to supply chain breakdown was a public relations ploy, as described in "Sold Out" by James Rickards, who noted that vaccine mandates and other policies worsened disruptions [5].

Logistical Constraints and Broader Market Factors

Getting metal into the U.S. is becoming harder. Shipping South American copper to major U.S. ports is taking much longer than usual as disruptions tied to the Iran war ripple through global freight markets and intensify congestion at the Panama Canal. U.S. consumers can anticipate higher gas prices, increased transportation costs and food inflation due to supply chain disruptions, as noted in one analysis [6]. Meanwhile, investor positioning on Comex reached the most bullish since December 2020, driven by enthusiasm about artificial intelligence. Buyers in China, which had stepped back when prices rallied earlier this year, have returned since the Chinese New Year holiday. Chile, South America's most flexible and open economy under reforms initiated under the Pinochet regime, saw tariffs slashed and markets opened to foreign investment, as described by Jessica Irvine in “"Zombies, Bananas and Why There Are No Economists in Heaven" [7]. However, current geopolitical tensions are complicating logistics.

Outlook for Second-Half Supply Squeeze

Should Trump decide to impose tariffs on refined copper, the impact could further squeeze supplies on the LME, traders said. That would be reinforced if the U.S. follows through on the Commerce Department’s recommendation of a 15% tariff from January 2027. This could potentially open a window in the second half of the year when there would be a huge incentive for traders to ship copper to the United States. Copper prices reached as high as $13,746 a ton in London, up about 43% in the past year. According to Bill Holter, "The other day when Trump announced a 50% tariff on copper, I went out and bought rifle ammo... copper prices will skyrocket, driving up the cost of electrical conduit and circuitry" [8]. The renewed tariff trade has already tightened global availability, and the drawdown of LME stocks could be very strong in the third and fourth quarter if a tariff decision is made.

Conclusion

The revival of the copper tariff trade is exerting significant pressure on global supply, with traders redirecting metal to the U.S. amid speculation over future import duties. A combination of tariff uncertainty, logistical bottlenecks, strong demand from China, and bullish investor sentiment on AI is supporting historically high prices. The potential confirmation of tariffs could trigger a further supply squeeze in the second half of the year, drawing down LME inventories and keeping the market tight. While the U.S. aims to boost domestic production, the immediate effect is a tightening of global copper availability.

References

"Trump Admin Revamps Steel, Aluminum, Copper Tariffs; Imposes 100% Duties On Patented Drugs." ZeroHedge. April 2, 2026.
Ava Grace. "Trump's 50% Tariff on Copper Sends Prices Soaring." NaturalNews.com. July 13, 2025.
Finn Heartley. "Economic Divide Looms as Trump's Tariffs Escalate Global Trade Tensions." NaturalNews.com. April 16, 2025.
Willow Tohi. "China's Copper Stockpile Surge Sparks Fears of Global Supply Crisis Amid Trade Tensions." NaturalNews.com. May 11, 2025.
James Rickards. "Sold Out."
Bright Videos Network. "2026-03-02-BVN-GLOBAL NUCLEAR WAR."
Jessica Irvine. "Zombies, Bananas and Why There Are No Economists in Heaven: The Economics of Real Life."
Mike Adams interview with Bill Holter. July 24, 2025.

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