Trump Announces 50% Tariff On Copper, Effective August 1

Summary:

U.S. President Donald Trump on Wednesday announced a 50% tariff on copper imports, claiming that the measure was aimed at boosting the domestic copper industry.

Trump announced the tariff in a social media post, making good on his threat from earlier in the week. He also criticized his predecessor Joe Biden in the post, claiming that the Biden administration had compromised the U.S. copper industry.

“Copper is the second most used material by the Department of Defense… This 50% TARIFF will reverse the Biden Administration’s thoughtless behavior, and stupidity. America will, once again, build a DOMINANT Copper Industry,” Trump said.

The president had repeatedly threatened to tariff the red metal and boost domestic production. The U.S. domestically produces just over half the refined copper it consumes annually, with the remainder being imported.

Chile, Canada, and Peru are the biggest copper exporters to the U.S., and have all called for the Trump administration to exempt them from the planned tariffs.

China is the world’s largest copper refiner, but is also the largest consumer of the red metal.

Freeport shares rallied, while U.S. copper futures soared to record highs earlier this week after Trump’s tariff threat.

Source: Investing

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Manuel

Cryptocurrency

A key US Senate panel took up the debate over proposed regulation of digital assets, with Republicans calling for a soft approach and Democrats warning about potential loopholes and conflicts of interest.

The Senate Banking Committee’s hearing Wednesday aimed to keep legislation for crypto-market structure on track for a Sept. 30 panel deadline. The House is set to consider its own measure next week.

“Our job is to set clear, light-touch guardrails to protect investors, stop fraud, and allow responsible innovation to flourish,” Senate Banking Committee Chairman Tim Scott said. He noted that legislation should clearly define which tokens are securities and ensure appropriate illicit finance protections.

Senator Raphael Warnock, a Georgia Democrat, criticized the digital asset proposal and said it doesn’t do enough to deal with conflict of interests from the executive branch. President Donald Trump and his family have launched memecoins and backed a crypto token that’s moving closer to trading openly on exchanges.

“Ironically, for those who want to see us do something on market structure, it seems to me that that’s not a fair market or a free market,” Warnock said.

The hearing included former Commodity Futures Trading Commission Chair Timothy Massad, Blockchain Association’s Summer Mersinger and Ripple’s Brad Garlinghouse. Massad warned senators that the current legislation provided too broad of an exemption for decentralized crypto firms, saying the way the proposals are currently written would cause “the migration of regulated activity into an unregulated space.”

Democrats also raised concerns over plans that allow for crypto firms to list themselves as decentralized platforms and questioned whether firms will avoid registering with the CFTC or Securities and Exchange Commission.

Republican Senators Cynthia Lummis, Thom Tillis, Bill Hagerty and Scott released market structure principles last month calling for clearly defined legal status of digital assets and regulatory authority. That plan is largely in line with the CLARITY Act, which was advanced by House committees in June.

Hagerty said that he isn’t concerned about losing bipartisan support for market structure legislation, predicting that Democrats who backed stablecoin legislation will “get down to business.”

“I wouldn’t be dissuaded by what you just heard in that hearing,” Hagerty said.

Source: Bloomberg

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James Whitman

Central Bank

Economic

Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates, split between concerns over tariff-fueled inflation and signs of labor market weakness and economic strength.

Minutes from the June 17-18 meeting released Wednesday showed that policymakers largely held to a wait-and-see position on future rate moves. The meeting ended with Federal Open Market Committee members voting unanimously to hold the central bank's key borrowing rate in a range between 4.25%-4.5%, where it has been since December 2024.

However, the summary also showed a growing divide over how policy should proceed from here.

"Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate," the minutes stated, as officials saw tariff-induced inflation pressures as potentially "temporary and modest" while economic growth and hiring could weaken.

How far the cuts could go, though, was a matter of debate.

Opinions ranged from a "couple" officials who said the next cut could come as soon as this month to "some" who thought no cuts this year would be appropriate. Though the minutes do not mention names, Fed governors Michelle Bowman and Christopher Waller have gone on record saying they could see their way to cutting rates as soon as the July 29-30 Fed meeting if inflation stays under control.

At the same time, "several" officials said they thought the current overnight funds rate "may not be far" from a neutral level, meaning only a few cuts may be ahead. Those officials cited inflation still above the 2% goal amid a "resilient" economy.

In Fed parlance, some is more than several.

Officials at the meeting updated their projections for rate cuts, expecting two this year followed by three more over the next couple years.

The release comes with President Donald Trump ramping up pressure on Fed Chair Jerome Powell and his cohorts to cut aggressively. In public statements and on his Truth Social site, Trump has lambasted Powell, going as far to call for his resignation.

Powell has said repeatedly that he won't bow to political pressure when it comes to setting monetary policy. For the most part, he has joined the cautious approach, insisting that with a strong economy and uncertainty over inflation, the Fed is in a good position to stay on hold until it has more information.

The minutes largely reflect that position that policy is currently well-positioned to respond to changes in the data.

"Participants agreed that although uncertainty about inflation and the economic outlook had decreased, it remained appropriate to take a careful approach in adjusting monetary policy," the document stated.

Officials also noted that they "might face difficult tradeoffs if elevated inflation proved to be more persistent while the outlook for employment weakened." In that case, they said they would weigh which side was further from its goal in formulating policy.

Since the meeting, Trump has continued negotiations with key U.S. trading partners, with the tariff ground shifting on a near-daily basis. Trump initially announced tariffs on April 2, and then has altered deadlines for agreements, most recently ticking off a series of letters to foreign leaders notifying them of looming levies should they not act.

Recent data indicate that Trump's tariffs have not Fed into prices, at least on a large scale.

The consumer price index showed an increase of just 0.1% in May. While inflation gauges are still mostly above the Fed's 2% target, recent sentiment surveys show the public is growing less fearful of inflation further down the road.

"Many participants noted that the eventual effect of tariffs on inflation could be more limited if trade deals are reached soon, if firms are able to quickly adjust their supply chains, or if firms can use other margins of adjustment to reduce their exposure to the effects of tariffs," the minutes stated.

At the same time, job gains have slowed considerably, though the rate of nonfarm payrolls growth has consistent surprised economists. June showed an increase of 147,000, against the consensus forecast for 110,000, while the unemployment rate unexpectedly fell to 4.1%.

Consumer spending has slowed considerably. Personal expenditures declined 0.1% in May, while retail sales tumbled 0.9%.

Source: CNBC

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James Whitman

Economic

U.S. President Donald Trump turned his trade ire against Brazil on Wednesday, threatening Latin America's largest economy with a punitive 50% tariff on exports to the U.S. and ordering an unfair trade practices investigation that could lead to even higher tariffs.

Trump set the Aug. 1 tariff rate -- far higher than the 10% duty imposed on Brazil on April 2 -- in a tariff letter to Brazilian President Luiz Inacio Lula da Silva, that vented anger over what he called the "Witch Hunt" trial of Lula's right-wing predecessor, Jair Bolsonaro.

Criticizing what he said were Brazil's attacks on free elections and speech and "SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms," Trump also ordered the U.S. Trade Representative's office to open an unfair trade practices investigation into Brazil's policies under Section 301 of the Trade Act of 1974.

The probe could lead to further tariffs on Brazilian exports.

Trump's broadside against Brazil came as his administration was inching closer to a deal with its biggest trading partner bloc, the European Union.

Trump earlier on his Truth Social media platform issued Aug. 1 tariff notices to seven minor trading partners: a 20% tariff on goods from the Philippines, 30% on goods from Sri Lanka, Algeria, Iraq, and Libya, and 25% on Brunei and Moldova.

Those countries are bit players in the U.S. trade deficit, accounting for just under $15 billion in U.S. imports in 2024.

Brazil is the 15th largest U.S. trading partner, with total two-way trade of $92 billion in 2024, and a rare $7.4 billion U.S. trade surplus.

But Trump's letter to Lula contained the same language as previous form letters describing Brazil's trading relationship as "very unfair".

The latest letters add to 14 others issued earlier in the week including 25% tariffs for powerhouse U.S. suppliers South Korea and Japan, which are also to take effect August 1 barring any trade deals reached before then.

They were issued a day after Trump said he was broadening his trade war by imposing a 50% tariff on imported copper and would soon introduce long-threatened levies on semiconductors and pharmaceuticals. Trump's rapid-fire tariff moves have cast a shadow over the global economic outlook, paralyzing business decision-making.

NEGOTIATIONS WITH THE EU

Trump said trade talks have been going well with China and the European Union, which is the biggest bilateral trading partner of the U.S.

Trump said he would "probably" tell the EU within two days what rate it could expect for its exports to the U.S., adding that the 27-nation bloc had become much more cooperative.

"They treated us very badly until recently, and now they're treating us very nicely. It's like a different world, actually," he said.

EU trade chief Maros Sefcovic said good progress had been made on a framework trade agreement and a deal may even be possible within days.

Sefcovic told EU lawmakers he hoped that EU negotiators could finalise their work soon, with additional time now from the extension of a U.S. deadline to August 1 from July 9.

"I hope to reach a satisfactory conclusion, potentially even in the coming days," Sefcovic said.

However, Italian Economy Minister Giancarlo Giorgetti had earlier warned that talks between the two sides were "very complicated" and could continue right up to the deadline.

EU officials and auto industry sources said that U.S. and EU negotiators were discussing a range of potential measures aimed at protecting the European Union's auto industry, including tariff cuts, import quotas and credits against the value of EU automakers' U.S. exports.

Shows annual tariff revenue collections

HIGHEST TARIFF LEVELS SINCE 1934

Equity markets shrugged off the Republican president's latest tariff salvo on Wednesday, while the yen remained on the back foot after the levies imposed on Japan.

Following Trump's announcement of higher tariffs for imports from the 14 countries, U.S. research group Yale Budget Lab estimated consumers face an effective U.S. tariff rate of 17.6%, up from 15.8% previously and the highest in nine decades.

Trump's administration has been touting those tariffs as a significant revenue source. Treasury Secretary Scott Bessent said Washington has taken in about $100 billion so far and could collect $300 billion by the end of the year. The United States has taken in about $80 billion annually in tariff revenue in recent years.

The Trump administration promised "90 deals in 90 days" after he unveiled an array of country-specific duties in early April. So far, only two agreements have been reached, with Britain and Vietnam. Trump has said a deal with India was close.

Massachusetts Governor Maura Healey, a Democrat, blasted Trump for his "failed trade war".

"President Trump was elected to lower costs, and all he is doing is raising prices and hurting our businesses," she said in a statement.

Source: Reuters

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Manuel

Commodity

Political

President Trump's threat this week to impose a 50% tariff on U.S. copper imports targets a vital metal that is widely used in many products and industries. That could lead to higher prices for everything from appliances and electronics to cars and home repairs, economists and industry experts said.

Although Mr. Trump has yet to officially announce the metal tariff, the threat alone caused copper prices to shoot up 13% on Tuesday, reaching a record high.

Ryan Young, a senior economist at the Competitive Enterprise Institute, a nonpartisan think tank, said copper is an integral component in electrical wiring and plumbing, as well being used as a heat conductor in radiators and household appliances. He worries that a hefty copper tariff will trigger inflation.

"It's bad news all around," Young said of Mr. Trump's proposed copper tariff. "If companies' costs go up they pass them along to consumers, so we'd see higher prices for home repairs and anything that uses copper."

Copper tariffs could also make maintaining the nation's electric grid more expensive and drive up household energy costs, Young said. "It would negatively affect the electricity industry and anybody who uses electricity."

Mr. Trump has said that tariffs provide financial incentives to ramp up domestic production, including of critical materials like copper, and help create manufacturing jobs.

"America cannot be reliant on foreign imports of the copper that's necessary for key military hardware, infrastructure and everyday electronics," White House Spokesman Kush Desai told CBS MoneyWatch in a statement. "The Trump administration is committed to reshoring manufacturing that's critical [to] our national and economic security with a two-pronged approach of tariffs and a full suite of supply-side reforms like deregulation and the pro-growth tax cuts of The One, Big, Beautiful Bill."

Ripple effects

The biggest users of copper — and therefore most exposed to the tariff increase — include a vast range of industries, covering everything from construction to semiconductors, electric vehicles and renewable energy components such as solar panels, according to industry data.

Daan de Jonge, copper demand and prices lead analyst at Benchmark Mineral Intelligence, said in a research note that "a 50% price hike will have inevitable ripple effects on the cost of new infrastructure, the cost of housing the cost of fridges, cars, air conditioning."

For consumers, that means the cost of appliances such as refrigerators and air conditioners, as well as EVs, would likely rise if this 50% tariff goes into effect, according to analysts.

"Copper is an important element in development of semiconductors and electric vehicles. And the tariff announcement caused prices to go up quite dramatically, so you can tell it's a pretty big deal," Veronique de Rugy, a professor of political economy and senior research fellow at George Mason University's Mercatus Center, told CBS MoneyWatch. "The reason President Trump picked copper is because it's such a big deal for a lot of important things."

Carveouts for key partners?

The U.S. relies heavily on copper imports from Chile, followed by Canada. The U.S.'s net copper imports met 53% of U.S. demand for copper last year, according to Morgan Stanley research.

Experts note that Mr. Trump isn't certain to hike duties on copper, saying his proposal could be aimed more at securing concession from exporters.

"These are two examples of countries that the U.S. could offer some sort of quota or export restraint relief to as part of a broader deal," UBS chief investment strategist Kurt Reiman told CBS MoneyWatch, referring to Canada and Chile. A revamped U.S. trade policy could also include carveouts for foreign copper suppliers, he added

Although the U.S. could ramp up domestic copper production, it would take years to significantly increase output, Reiman said. "We aren't ready. The mines would have to be built out, and that's typically a multi-year process."

The sectoral tariff threats come after Mr. Trump this week announced stiff new tariff rates on 20 nations that have not yet reached trade agreements with the U.S and that he said would take effect on Aug. 1. He outlined the new rates, posted in nearly identical letters on his Truth Social social media platform, as a 90-day pause on so-called "reciprocal" levies was set to expire on Wednesday.

Source: CBS News

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Manuel

Stocks

Wall Street indexes closed higher on Wednesday, led by the tech-heavy Nasdaq as Nvidia briefly reached a $4 trillion valuation, and Federal Reserve meeting minutes fueled hopes that inflation pressures from President Donald Trump's tariffs would not derail interest rate cuts this year.

The minutes for the mid-June meeting showed that most Fed officials said they expect rate cuts will be appropriate later this year, with price shocks from Trump's import taxes expected to be "temporary or modest." However, there was little support for a rate cut at the end of July meeting.

Nvidia (NVDA.O), became the world's first company to hit a $4 trillion market value on Wednesday morning, solidifying its position as one of Wall Street's most favored stocks to tap in the ongoing surge in demand for artificial intelligence technologies. Shares in the chip company ended Wednesday up 1.8% with a market capitalization of around $3.97 trillion.

It helped lift the Nasdaq, which closed at an all-time high.

While concerns about tariff-induced inflation pressure did not stop Wall Street from hitting fresh record highs last week, Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted that they have caused the Fed to pause interest rate hikes.

"Fed officials suggested that they believe inflation will be higher down the road. At the same time, many or most officials suggested that they expect lower interest rates at some point this year. Those two things don't match," said Chris Brigati, chief investment officer at SWBC, an investment company in San Antonio, Texas. "Perhaps they're starting to put a little bit more weight into what's going on with the labor market."

Besides Nvidia, other market boosts came from megacap companies including Microsoft Corp (MSFT.O), which rose 1.4% and Amazon.com (AMZN.O), which added 1.5%.

"There's definitely a megacaps bias. ... To some extent it's a flight to safety but not what you would traditionally think of as a safety trade," said Kevin Gordon, senior investment strategist at Charles Schwab. "From a trade standpoint it's not like you're getting much clarity."

While Wall Street indexes had fallen on trade jitters on Monday, they have steadied since then, with analysts noting that investors have become used to Trump's pattern of saber-rattling on tariffs. And with the deadline for the latest tariffs pushed to August 1, many are betting that negotiations will defuse the trade war.

Trump issued letters to seven countries on Wednesday, calling for tariffs of 30% on Algeria, Iraq, Libya and Sri Lanka, 25% on Brunei and Moldova, and 20% on the Philippines. The European Union has said it could reach an outline trade agreement with the U.S. in the coming days.

On Tuesday, Trump had ramped up his trade offensive with the announcement of a 50% tariff on copper and a vow to slap long-threatened levies on semiconductors and pharmaceuticals. On Monday, Trump hit 14 trading partners with a fresh wave of tariff warnings, including Japan and South Korea.

"The market is becoming a little desensitized to the bad news of tariffs. ... You had three months of still constructive growth and things have not been that bad so the market's saying maybe we can get through these tariffs," said SWBC's Brigati.

The Dow Jones Industrial Average (.DJI),rose 217.54 points, or 0.49%, to 44,458.30, the S&P 500 (.SPX), gained 37.74 points, or 0.61%, to 6,263.26 and the Nasdaq Composite (.IXIC), gained 192.87 points, or 0.95%, to 20,611.34.

Eight of the 11 S&P 500's major industry sectors advanced, led by utilities (.SPLRCU), up 1%, and technology (.SPLRCT), up 0.9%. Consumer staples (.SPLRCS), often seen as a more defensive sector, was the biggest loser, ending down 0.6%.

After last week's record closes for the S&P 500 and the Nasdaq - buoyed by a surprisingly robust jobs report - investors are turning their attention to Thursday's initial jobless claims for the next pulse check on the labor market.

Among individual stocks, AES Corp (AES.N), rallied 19.8% after Bloomberg reported that the power provider was exploring options, including a sale.

Boeing (BA.N), shares advanced 3.7% as Susquehanna raised its price target after the planemaker reported on Tuesday that its airplane deliveries in June increased 27% on a yearly basis.

UnitedHealth Group (UNH.N), shares slipped 1.6% after the Wall Street Journal reported that the U.S. Department of Justice was investigating how the health insurer deployed doctors and nurses to gather diagnoses that increased its Medicare payments.

Advancing issues outnumbered decliners by a 2.17-to-1 ratio on the NYSE where there were 280 new highs and 39 new lows on the NYSE.

On the Nasdaq, 2,988 stocks rose and 1,551 fell as advancing issues outnumbered decliners by a 1.93-to-1 ratio.

The S&P 500 posted 20 new 52-week highs and six new lows while the Nasdaq Composite recorded 72 new highs and 44 new lows.

On U.S. exchanges, 18.10 billion shares changed hands compared with the 18.35 billion average for the last 20 sessions.

Source: Reuters

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Manuel

Cryptocurrency

Political

A top U.S. securities regulator known for her supportive stance on the cryptocurrency industry said on Wednesday that new models for trading securities known as "tokenization" must still meet regulations for other securities.

Hester Peirce, a Republican commissioner on the Securities and Exchange Commission who has been nicknamed "crypto mom," said in a statement: "As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset. Tokenized securities are still securities."

Tokenizing equities is a process by which shares of a company are converted into a digital token, similar to how cryptocurrencies are traded. Instead of holding the securities directly, investors hold tokens that represent ownership of the securities.

Such tokens could be created by the security issuer itself, or by an entirely unrelated third party. Anyone who buys a third-party token could face unique risks, she said.

Crypto firms and others have been increasingly discussing the prospect of tokenizing securities as a new way to facilitate trading. Coinbase recently told Reuters it was seeking a U.S. green light from the SEC to offer blockchain-based stocks.

SEC Chairman Paul Atkins, also a Republican, said in a CNBC interview last week that the agency should encourage innovation when asked about the prospect of tokenizing securities.

Critics say the new technology could become a way to evade SEC oversight and expose retail investors to new risks.