FUND - Copper futures fall over 2% amid sudden US trade policy shifts despite weekly gains

Copper futures dropped fell 2.5% to $5.46 per pound on Friday, despite being poised for a weekly gain of around 10% with analysts at BMI pointing to sudden shifts in U.S. trade policy. ...

Experts also questioned the economic logic behind President Trump’s threat to impose a 50% tariff on imported copper.

"A 50% tariff on copper imports would push up US domestic prices and hurt American manufacturing firms’ competitiveness without significantly reducing the country’s dependence on imports," BMI said.

"Another walk back will, however, entrench markets’ sanguine view that US President Trump always backs down on his tariff threats (TACO). This view would set up markets for a painful adjustment if policy ever surprises the other way."

Copper traded in New York jumped by over 10% on July 8.

Since copper is a key input in the manufacturing sector, this will raise the price of US-made manufactured goods and reduce US firms’ competitiveness compared to Chinese or European rivals. The impact will probably be largest in the automobile and electronic sectors, the brokerage noted.