Global copper market weighs Trump tariff threat

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0:57Good morning from the Financial Times. Today is Thursday, July 10th, and this is your FT News Briefing. There's a new nuclear weapons pact in Europe, and NVIDIA just set a new record. Plus, the price of copper is going through some intense fluctuations. I'm Mark Filippino, and here's the news you need to start your day.

1:24The UK and France made a nuclear agreement yesterday. The two countries said that, for the first time ever, they will coordinate how they use their nuclear weapons should that be necessary. The announcement came out of a three-day trip to the UK by French President Emmanuel Macron. He and UK Prime Minister Keir Starmer said the two countries would jointly respond to protect Europe from any, quote, extreme threat. This is a big deal because Paris normally does its own thing when it comes to making decisions on its nuclear program. The UK said yesterday that the two countries would also work together on a few other weapons projects, things like developing next-generation air-to-air missiles and jammers for downing drones.

2:12The copper market is really rattled right now. U.S. President Donald Trump threatened to put 50 % tariffs on the metal, and those could go into effect as soon as the end of July. Here to talk about the impact of the world's most important industrial metal is Leslie Hook. She's the FT's Natural Resources Editor. Hey, Leslie. Hi, Mark. So just to start off, give me some numbers here. How rattled is the copper market? Well, we've seen copper prices shoot up right after Trump's announcement. U.S. copper prices rose to a record high on Tuesday evening. On Wednesday, prices settled back down and traders are expecting that these tariffs could reduce copper demand in the medium to long term.

2:54So the market effect today has been more muted. But there's still a huge difference in the U.S. copper price and the international copper price, which is benchmarked on the London Metals Exchange. U.S. copper prices are about 28 % more expensive than the global benchmark, And that reflects the market's expectation that these tariffs will come into place, making copper much more expensive in the U.S. Now, why are the potential tariffs impacting the price of copper so much in the U.S.? The U.S. imports about 60 percent of its copper. The rest comes from domestic sources. Existing U.S. domestic production is not enough to meet the U.S.

3:35copper needs. Some people in the industry are worried about how this is going to impact U.S. supply chains because you can't just snap your fingers and build a copper smelter. It takes years. But other people in the industry do think this could be an opportunity for U.S. producers and U.S. smelters who are poised to benefit from this policy. Yeah. Tell me about this relationship between the U.S. market and the ripple effects on copper around the world. I mean, how do they interact with one another? Well, for the past six or seven months, the copper trading community has been kind of expecting and waiting for Trump to introduce these tariffs.

4:13They didn't know that he was going to announce them right now, but the U.S. had said in February that it was going to investigate copper for possible tariffs. So there was a bit of an expectation that this could be coming. And because of that, copper has been surging into the U.S. this year, and consumers and traders have been building up copper stockpiles inside the U.S. basically as much as possible. And that's made it really hard to get your hands on refined copper in the rest of the world because the U.S. has sort of sucked all that copper out of the market for the past six months. Leslie, in my introduction, I called copper the most important industrial metal.

4:54Why is that the case? Why are we talking about it so much? Well, copper is used in almost everything that you touch in daily life. It's in electricity wires, it's in electric vehicles, it's in your refrigerator, and without it, the modern world would be totally different. Copper is particularly in high demand because of the build-out of electricity grids and the energy transition, which means that it's going to be one of the fastest growing metals in the years to come. Okay, so since copper is such an important metal, what kind of knock-on effects could we see for consumers from all this market volatility?

5:33Well, I think the first impact is going to be higher prices for U.S. users of copper. And as everyone from car manufacturers to all kinds of manufacturers, we don't yet know exactly what types of copper are going to be facing this levy. whether it's all refined copper or just certain products. So I think the industry is kind of waiting with bated breath now for some type of formal announcement from the White House about what exactly is going to be included. Will there be any exemptions, any waivers? Will there be a quota system for countries that maybe have a free trade agreement with the U.S.?

6:14So everyone's kind of on edge. Leslie Hook is the FT's Natural Resources Editor. Thanks, Leslie. Thanks, Mark.

6:27NVIDIA broke a major record yesterday. The company became the first to hit$4 trillion in market value. That beat the$3.9 trillion mark Apple reached in December. NVIDIA's stock soared in May when U.S. President Donald Trump cooled the trade war with China. Overall, the company can thank the boom in artificial intelligence for its success. AI relies on the kind of processing chips NVIDIA produces. Investors say that as long as demand for AI grows, so will the company's bottom line.

7:01Before we go, I want to ask you a favor. I host another podcast at the FT called Swamp Notes. It's all about U.S. politics and the economy. And I know that all the news in Washington can get pretty confusing. That's why I want your questions. Send me your biggest questions about what's happening in D.C. to the email in the show notes, and I'll get you some answers on Swamp Notes. If you send us a voice recording of your questions, we might even play it on the show. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing.

7:32Check back tomorrow for the latest business news.

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