Citi predicts 25% US copper-specific tariff by fourth quarter

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(Reuters) – Citi anticipates an eventual implementation of a 25% copper-specific tariff by the fourth quarter of 2025, following U.S. President Donald Trump’s executive order initiating an investigation into U.S. copper imports, the bank said in a note on Wednesday.

Trump opened yet another front on Tuesday in his assault on global trade norms, ordering a probe into potential new tariffs on copper imports to rebuild U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.

Citi expects the 1-year forward COMEX copper premium over LME to eventually reflect a 25% tariff (~$2,400/t) once confirmed later this year but may price at an effective 15-20% rate (~$1,400/t-$1,900/t) in the meantime.

The tariff announcement should boost confidence in eventual duties and ahead of the tariffs, U.S. buyers may stockpile copper, driving up prices, but this trend could reverse once the tariffs take effect, Citi said.

The bank also warns that “effective duties on U.S. copper imports could come sooner via other channels, namely reciprocal tariffs, but also country-specific duties like those announced on Canada and Mexico.”

The U.S. may impose reciprocal duties on copper imports as early as the second quarter of 2025 as part of broader trade measures, the bank added.

Citi said the investigation will cover various forms of copper, including raw ore, refined metal, alloys, scrap, and finished products.

“Our base case for the timing of a Section 232 copper-specific tariff is for implementation by 4Q’25, and no earlier than May,” the bank said in a note.

While the official review is set to take up to 270 days (until late November 2025), Citi notes that past cases, such as those on steel and aluminum, suggest the process could move faster.

(Reporting by Anmol Choubey and Sherin Elizabeth Varghese in Bengaluru; Editing by Chris Reese and Sandra Maler)