Copper price tumbles as Trump threatens massive new tariffs on China

Copper plunged after President Donald Trump threatened a massive increase of tariffs on goods from China, the world’s top buyer of the industrial metal.

Prices slid almost 5% below $10,400 a ton on the London Metal Exchange, in the biggest drop in five months. The move wiped out gains that lifted prices towards a record high on Thursday.

Trump’s comments on a social media post sparked turmoil across financial markets, with stocks dropping sharply in the US, while bonds and gold gained. Copper is particularly sensitive to concerns about trade and the global economy given its widespread use in manufacturing and key role in the world’s growing electrification.

Friday’s slump reversed a rally that was fueled by major setbacks at massive copper mines in Chile, Democratic Republic of Congo and Indonesia. With other projects also struggling to hit production targets, investors had been piling into the metal in recent weeks on a bet that the market could be heading for deep shortages.

Trump said he saw “no reason” to meet Chinese President Xi Jinping at a scheduled meeting in South Korea later this month, citing “hostile” export controls on rare earth minerals. One countermeasure the US is considering “is a massive increase of Tariffs on Chinese products coming into the United States of America,” he said.

The post follows a series of moves by both the US and China to potentially curb flows of technology and materials between the countries.

LME copper prices were down 4% at $10,440 a ton as of 12:47 p.m. New York time, as all metals declined on the exchange. Futures contracts on New York’s Comex also tanked.

Prices had rallied to $11,000 on Thursday, about $100 shy of an all-time high struck in May last year.

(By Mark Burton)