Trump Vows No Tariff Extension, Hardens Threats on Copper, Drugs

Doug Irwin, Professor of Economics at Dartmouth, discusses the latest developments on President Trump's unfolding tariff strategy and their broader economic impact.

President Donald Trump vowed to push forward with his aggressive tariff regime in the coming days, stressing he would not offer additional extensions on country-specific levies set to now hit in early August while indicating he could announce substantial new rates on imports of copper and pharmaceuticals.

The posturing on social media and at a Cabinet meeting on Tuesday came after traders initially shrugged off a series of letters and executive actions Trump issued Monday, pushing back the deadline for his so-called “reciprocal” tariffs while announcing the latest rates he planned for more than a dozen countries that had not succeeded in brokering quick trade agreements.

That changed Tuesday as Trump signaled a renewed determination to push ahead with his plans to heavily tax foreign imports.

Trump said he would offer no additional delays on the country-specific tariffs, despite the previous night allowing he was “not 100% firm” on his August 1 deadline. He foreshadowed an update to the trade status of at least seven countries to be released Wednesday morning, Washington time, with more to come in the afternoon.

The president said he would impose a 50% rate on copper products being sent into the US, spurring a record spike in US futures and a drop in the global benchmark.

Since February, when Trump first laid out plans for the levies, global traders have sent record volumes of the metal to the US, targeting huge profits on cargoes that can be delivered before the tariffs land.

A 50% tariff — which could be in place within weeks — signals an imminent end to that trade but injects new uncertainties, including on timing and potential carve-outs for some large producers. In the short-term, one crucial question for traders is whether or not copper that’s already on its way to the US will be hit with tariffs when it arrives.

Citigroup Inc. called it a watershed moment for copper, closing the window for significant shipments into the US market.

“The degree of impact will heavily depend on the details,” said Marcus Garvey, Macquarie Group’s head of commodities strategy. “Not only the rate of any tariff but which forms of copper it is applied to, and whether or not there is any grace period ahead of its implementation.”

If the tariff takes hold, it will inflict higher costs across a broad section of the US economy due to the myriad of industries and applications that rely on copper — even as Trump piles pressure on the Federal Reserve to lower interest rates.

Trump’s already imposed 50% levies on steel and aluminum, but there’s particular concern about the economic impact of copper tariffs because the US is highly reliant on imports. US buyers have already warned that the measure risks undermining Trump’s core ambitions to revive manufacturing and challenge China’s industrial might.

“The US does not have nearly enough mine/smelter/refinery capacity to be self-sufficient in copper,” Jefferies LLC analysts including Christopher LaFemina wrote in a note. “As a result, import tariffs are likely to lead to continued significant price premiums in the US relative to other regions.”

Contracts on the Comex surged to an unprecedented 25% premium over London Metal Exchange prices — the global benchmark — in the aftermath of Trump’s comments, a level that also suggests the market is not fully convinced that a 50% levy will be imposed universally. A single carve-out for a top supplier like Chile would materially dampen the blow for importers, and manufacturers now have huge buffer stocks to fall back on thanks to the record-breaking imports seen over recent months.

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