Copper futures dropped over 4.5% to $4.6 per pound on Friday, marking a steep 10.2% loss for the week. The sharp decline was driven by growing concerns that escalating U.S. tariffs and retaliatory actions from global trading partners could push the global economy toward a recession.
Copper extends weekly losses to over 10%
China announced it would impose a 34% tariff on all U.S. imports starting April 10, alongside plans to impose export controls on rare earths, in a direct retaliation to the tariffs imposed by the Trump administration earlier this week. These actions have stoked fears that a full-blown trade war could severely disrupt global supply chains and economic activity.
On Wednesday, President Trump unveiled sweeping tariffs, including a 10% baseline levy on all imports, with particularly high rates targeting major copper-consuming economies like China (54%), the European Union (20%), Japan (24%), and India (27%). While copper itself was not included in the new tariffs, the overall environment of heightened trade tensions has raised significant concerns about the demand for industrial metals, especially copper, which is highly sensitive to global economic health due to its widespread use in construction, electronics, and energy infrastructure.
Uncertainty reigns over the markets
Despite the absence of copper-specific tariffs, the broader market reaction has been one of uncertainty, with copper prices retreating from the record high of $5.2 per pound seen in late March. At that time, there was speculation that the Trump administration might impose targeted tariffs on copper, which caused a surge in prices. However, as it became clear that such tariffs were not forthcoming, copper prices have since reversed course, reflecting a shift in market sentiment.
Traders eye tariffs long-term consequences
With fears of a global recession growing due to the escalating trade war, copper is particularly vulnerable, as slowing economic growth would directly impact demand for the metal. Traders are now focusing on the potential long-term economic consequences of the trade conflict, including disruptions to global manufacturing and industrial production. While copper remains an essential commodity, its price is likely to continue facing downward pressure until there is clarity on the resolution—or further escalation—of the trade dispute. The outlook for the metal will largely depend on the ability of the U.S. and its trade partners to de-escalate tensions or implement measures that could stabilize market confidence.
