Traders will incur significant losses if US imposes tariffs on copper imports earlier — Bloomberg

Recent news about the US planning to issue copper import tariffs soon has sparked uneasiness in the market. The spread between prices on New York's COMEX and the London Metal Exchange (LME) means traders can make a fortune by buying cheap metal abroad and shipping it to the United States. However, if copper cargoes arrive in the country after the duties are imposed, traders could suffer significant losses, Bloomberg reports.

Donald Trump's import tariffs may be implemented several months earlier than expected, the agency notes. According to analysts' general opinion and the statements by the American leader, the charges will be set at 25%, or about $2,500 per ton of copper. 

Large flows of metal were previously expected to be shipped to the United States. As a result, the global market would see a deficit, which could drive up prices. However, if the US duties are imposed within a few weeks, that would confirm that LME price appreciation has run its course, said Michael Cuoco of StoneX Group Inc.

In addition, the tariffs are likely to have a negative impact on copper demand not only in the US, but also globally. In particular, they are set to throttle the Chinese economy, Bart Melek of TD Securities believes.