In the long term, tariffs could be bearish for copper and other industrial metals in the context of slowing growth and keeping inflation higher for longer. If US inflation remains persistent or rebounds, it could prompt the Federal Reserve to delay or increase interest rate cuts. With growth in the US likely to slow on the back of tariffs and China already struggling to revive its economy, demand for copper and other industrial metals is likely to weaken looking ahead.
In the near term, however – as the US investigation into copper imports continues – copper prices are likely to remain supported by the front-running of tariffs and tightening of the ex-US physical market as more metal makes its way to the US ahead of any potential levies.
Until the result of the investigation becomes clear, US import demand triggered by potential tariffs will continue to offset headwinds from slowing global growth and higher inflation as the trade war ramps up.
