Trump’s Tariff Digest: potential 50% Tariff on Copper and 200% in Pharma
President Donald Trump planned to impose 50% tariffs on copper with the intention of bringing the copper production home, while leaving time for pharma to move their production to the US before imposing 200% tariffs on it. The effective date will likely be later in July or August 01st, the same date as other trade agreements.
The intention is clear: “create more production in the US,” as he believes that demand for industrial metal with data centers, automobiles, or more will significantly increase in the coming year. Therefore, threatening with border tariffs while leaving 0% tariffs on US production will likely benefit the US in the very long term.
Who might be affected?
As per Morgan Stanley’s research and Bloomberg, “Chile is the largest import source, accounting for 38% of total import volumes, followed by Canada at 28% and Mexico, with an 8% share.
Therefore, increasing the tariff on copper → price increase → production might be very limited, particularly in countries such as Chile, Canada, and Mexico.
Potential Stock market
Watch out for TESLA and NVIDIA.
GOLD price reaction
The gold price has been sideways and has not reacted much after the news release. Therefore, the market might possibly digest later on.
Extra News:
Trump repeatedly threatened countries in the BRIC with an additional 10% tariff, and that also includes Russia, which has evidently fallen out of his favor, except for China.
However, do consider other news, including a delay in the trade agreement, a potential ceasefire, and a delay in the Federal Reserve rate cut that might potentially push the gold downward as well. And vice versa.
