Copper holds losses amid US tariff uncertainty

Copper futures held below $5 per pound on Tuesday after falling for three consecutive sessions, as investors reassessed the demand outlook in light of the latest US trade policy developments.

The decline follows a recent rally that had pushed copper prices to a three-month high, driven by tightening global supply and a surge in shipments redirected to the US in anticipation of incoming tariffs. However, sentiment has since shifted, with market participants growing cautious amid signs of escalating protectionism and broader macroeconomic uncertainty.

US President Donald Trump announced updated tariff rates on 14 countries that have not finalized trade deals with Washington, targeting major export-driven economies such as Japan and South Korea with 25% levies.

The announcement raised concerns among traders and industrial users about potential supply chain disruptions and rising costs across manufacturing sectors. In addition, Trump signed an executive order extending the deadline for reciprocal tariffs to August 1 from July 9, offering a short window for diplomatic resolution but keeping pressure high on global trading partners.

Further rattling markets, Trump threatened to impose an additional 10% tariff on countries aligning with what he labeled “anti-American policies on BRICS,” coinciding with a high-profile summit of the bloc in Brazil. The warning stoked fears of deepening geopolitical divisions and economic fragmentation, which analysts say could have far-reaching implications for global trade flows and commodity demand. Copper, widely regarded as a bellwether for global economic activity, is especially sensitive to changes in trade policy and manufacturing momentum.

Analysts cautioned that the widening scope of US trade measures could dampen global growth, particularly in Asia and emerging markets—key demand centers for industrial metals. Slower construction and infrastructure activity, coupled with weaker manufacturing output, could pressure copper prices in the medium term, even as supply constraints persist.

On the supply side, disruptions in Latin American mining operations, combined with falling inventories at major exchanges, continue to offer some support to prices. However, the prevailing uncertainty over tariffs and monetary policy is keeping traders on edge.

Market participants will be closely watching upcoming trade negotiations, macroeconomic indicators, and central bank guidance for further clues on copper’s trajectory. Any signals of easing tensions or stimulus measures from major economies—especially China—could provide a boost to demand sentiment, while further escalation could push prices lower.