US President Donald Trump to impose copper import tariffs within 3 weeks. This decision is already resulting in the most powerful currents ever recorded in the commodities and currency markets. The unexpected announcement has sent COMEX Copper to all-time highs of $5.37 – a clear reflection of market expectations and uncertainty. In repeating the claim, Trump is doubling down on his approach to fortify the US economy as he heads into the 2024 US presidential election. To defend American producers, he will use reciprocal tariff measures.
As written, the proposed tariffs would primarily impact copper imports from Mexico, China, and Canada. Combined, those three countries represented just 42% of all US imports in FY 2024. It’s no surprise given that for 2022, Mexico ranked as the United States’ number one export market at $466.6 billion. Trump's focus on these nations underscores his administration's intent to rebalance trade relations and support domestic industries.
In currency markets, Trump's tariff threats have contributed to the weakening of USD/JPY, which is trading near 150.00 during Wednesday's Asian session. As with NOK, AUD/USD is very weak indeed, currently trading around 0.6300. The hawkish commentary from the Bank of Japan (BoJ) and renewed demand for the safe-haven Japanese Yen have added pressure on the US Dollar, reflecting investor concerns over potential economic volatility.
Market participants are undoubtedly doing all they can to stay glued to the screens, keeping their eyes peeled for timely economic indicators. And the Core PCE, the Federal Reserve’s favored inflation gauge, comes out later this week. The coming business and consumer surveys will provide more information about where the US economy is headed in light of these new developments.