Trade war live: Trump says he will impose 50% tariff on copper and threatens drug levy

Donald Trump has said that the US will impose a roughly 50 per cent tariff on copper imports, sending prices for the industrial metal soaring and escalating his global trade war.

The president said at a cabinet meeting on Tuesday that “today we’re doing copper”, adding that he believed the levy on the metal would be 50 per cent. Trump’s threat to impose new levies on copper comes a day after he threatened 14 trading partners, including Japan and South Korea, with steep “reciprocal” levies beginning on August 1.

US copper prices soared after Trump’s announcement, with futures trading on the CME Group’s metals exchange up more than 10 per cent at above $5.50 per pound. Copper is widely used in electronics, industrial equipment and construction.

Shares in Arizona-based copper miner Freeport-McMoRan jumped more than 5.6 per cent on Trump’s announcement.

Chile is by far the biggest supplier of refined copper to the US, followed by Canada and Mexico, according to the US Geological Survey.

Trump also on Tuesday said he planned to impose tariffs of up to 200 per cent on drug imports, beginning after a transition period that could last up to a year and a half.

US copper futures soared to a record high after Donald Trump announced that he plans to implement a 50 per cent tariff on the metal.

Contracts leapt more than 11 per cent to $5.58 per pound on Tuesday afternoon.

Shares in US-listed copper miner Freeport-McMoRan jumped more than 5.6 per cent on Trump’s announcement as the president also floated a 200 per cent tariff on pharmaceuticals.

Donald Trump said that the US would be imposing tariffs of 50 per cent on copper imports on Tuesday.

“Today we’re doing copper,” the US president said, adding that he believed the levy on the metal would be 50 per cent.

Donald Trump threatened to impose 200 per cent tariffs on drug imports after a transition period that could last more than a year.

“We’ll be announcing something very soon on pharmaceuticals,” he said, increasing pressure on the sector. “We’re going to give people about a year, year and a half to come in, and after that they’re gonna be tariffed if they have to bring the pharmaceuticals into the country at a very high rate, like 200 per cent.”

The US is “probably two days off” from sending the EU a letter outlining its planned tariffs on goods from the 27-member bloc, Donald Trump said.

“We are talking to them,” the US president said on Tuesday, adding that Brussels was “being very nice to us”.

Donald Trump said that members of the Brics group of developing countries would have to pay a 10 per cent extra tariff, reiterating a threat he had posted on social media on Sunday.

“What they are trying to do is destroy the dollar so that another country can take over and be the standard,” he said of the group, whose leaders met in Brazil over the weekend.

Donald Trump defended his administration from accusations that its trade policy was constantly shifting after it set a new August 1 deadline to implement higher tariffs on many countries.

“We don’t change very much and every time we put out a statement, they say he ‘made a change’,” Trump said. “I didn’t make a change, [a] clarification maybe.”

US Treasury secretary Scott Bessent said tariffs could raise more than $300bn in revenue by the end of the year.

Speaking at a cabinet meeting on Tuesday, Bessent said the US had taken in “about $100bn” in revenue so far this year, with the higher tariffs taking effect in the second quarter.

The administration expects that number to climb further after higher levies take effect in August.

“The big money will start coming in on August 1,” Trump said introducing Bessent.

Markets are pricing in a “mildly stagflationary” impact on the US economy and limited gains for the S&P 500 amid uncertainty over the US’s tariff policy, analysts at UBS Wealth Management said.

The rally “needs to be put in perspective”, said Nadia Lovell, senior US equity strategist at UBS. “What’s driving the market are the sectors that are have earnings resilience, such as technology and AI.”

The US’s effective tariff rate is projected to increase to 16.5 per cent if current White House policy remains in place, according to estimates by Yale Budget Lab.

The figure would represent a sharp increase from the 2024 rate of 2.4 per cent.

The think tank’s projection assumes that so-called reciprocal tariffs will be levied on 14 countries after the ‘pause’ expires on August 1, combined with the broad array of tariffs already in effect.

YBL estimates that current tariff policy will increase the price level for American households by 1.7 per cent in the short term, equivalent to an annual loss of $2,300 on average.

In May, the effective tariff rate was recorded at 8.8 per cent, the highest level since 1946.

Wall Street stocks briefly hit session lows after Donald Trump warned the US’s trading partners there would be no extension to the new tariff deadline of August 1.

The S&P 500 fell after Trump announced the decision via the Truth Social platform on Tuesday morning, leaving it down as much as 0.2 per cent. The benchmark quickly recovered ground to trade flat.

The Nasdaq Composite was also trading flat after a similar, brief sell-off. The dollar, measured against a basket of rival currencies, remained about 0.3 per cent firmer.

Washington announced on Monday letters to 14 US trading partners warning that it would impose steep “reciprocal” tariffs on August 1, pushing back an initial deadline for the levies of July 9.

Overall, the US runs an annual global trade in goods deficit in excess of $1tn, but the picture varies considerably on a per-country level.

Donald Trump sent letters to 14 countries on Monday announcing plans to roll out steep “reciprocal” tariffs.

The countries targeted included Japan and South Korea, which are among the US’s biggest trading partners.

Trump said the US goods trade deficits with the countries were a “major threat to our economy and indeed our National Security”.

US stocks were flat in early trading on Wall Street as investors waited for further clarity about tariff levels that Washington planned to impose on trading partners.

The benchmark S&P 500 index oscillated between small gains and losses shortly after the opening bell on Tuesday. The tech-heavy Nasdaq Composite was 0.2 per cent higher.

An index tracking the US dollar against a basket of rival currencies was 0.3 per cent higher.

“Markets are willing to look through the stress,” UBS Global Wealth Management senior US equity strategist Nadia Lovell said. “It has been a winning strategy over the past couple of months.”

Lovell said the Trump administration’s decision to escalate the trade war “only to de-escalate” may help explain the relative calm in stock markets.

Global stock markets were steady on Tuesday as investors awaited the next moves from Donald Trump, after the president announced tariff rates for more than a dozen of the US’s trading partners.

On Wall Street the S&P 500 edged higher at the open, after falling nearly 1 per cent on Monday.

Speaking late on Monday, Trump left the door open for negotiations. He also extended the deadline for the tariffs to go into effect by three weeks to just after midnight on August 1.

Investors were “taking the view that nothing is final and that these letters merely mark another iteration on the journey towards trade deals”, analysts at ING noted.

US trade balances have been volatile since the start of the year as companies stockpile goods ahead of expected tariff increases.

Wall Street banks are turning more bullish on US stocks, despite President Donald Trump’s renewed threats of steep tariffs on major trading partners, with most big companies expected to shrug off the turmoil in the upcoming earnings season.

Goldman Sachs strategists this week joined JPMorgan Chase, Barclays, Citigroup and Deutsche in lifting their end-of-year target for the S&P 500, believing the index will rally 11 per cent beyond the record high it hit last week.

The optimism represents a major pivot since April, when Wall Street banks slashed their targets for the main US share gauge over growing fears about the fallout from Trump’s trade war.

Donald Trump’s renewed trade threats have had little impact on markets because they are “being viewed as part of an ongoing negotiation rather than a final policy”, analysts at Citigroup said.

In a note to clients, Citi said markets were calm in part because “the administration has been willing to pushback prior deadlines.”

“It also is due to the relatively small size of most of these trading relationships,” analyst Andrew Hollenhorst added.

In our base case the effective tariff rate stays around its current level as some tariffs go up, but others come down as deals are made. We continue to expect tariff costs to show up in higher goods prices over the next few months, but that this will be a one-time increase in the price level, rather than a persistent source of inflationary pressure.

Japanese businesses have criticised their government’s approach to negotiations with the US, after it consistently demanded an exemption from Donald Trump’s tariffs.

The US president on Monday unveiled a 25 per cent tariff on the country — one percentage point higher than initially announced in April — after talks failed to make headway.

But the weak yen will help Japanese businesses absorb the impact of the tariffs, said Mitsunobu Koshiba, a director of several leading Japanese companies.

“Today I’d be happy to take ¥145 in exchange for the tariffs,” he said, compared with the level of approximately ¥110 against the dollar during the first Trump administration.

The US is the world’s largest single importer, playing a crucial role in the global flow of goods. But trade volumes and partners vary considerably by sector.

Trump’s decision to slap punitive tariffs on countries that “trans-shipped” Chinese goods will be a huge opportunity for the supply chain management industry, according to Alex Capri, senior lecturer in the Business School at the National University of Singapore.

Last week, Trump announced that Vietnam had accepted a blanket 20 per cent tariff on exports to the US, but would pay a 40 per cent tariff on any Chinese goods found to have been trans-shipped via Vietnam to evade US tariffs on China.

“The new Trump tariffs will require importers to have reliable traceability practices to spare them from these arbitrary ‘trans-shipment tariffs’,” Capri said. “This will result in a burgeoning services sector around the necessary technologies and verification processes.”

India is waiting for news of a preliminary trade pact with the US, after Donald Trump said on Monday that the two countries were close to agreeing one, even as he levied punitive tariffs on several other countries, including close US allies.

Trump has threatened India, which has some of the highest average tariffs of any major economy, with a 26 per cent tariff. The two countries have previously said they intended to conclude the first tranche of a bilateral trade agreement by autumn of this year, which would cover both goods and services.

India’s negotiating team returned to New Delhi on Friday, after the two countries tried to bridge remaining differences on areas including access to India’s agriculture and dairy markets, politically and socially sensitive sectors that officials in the Modi government have described as red lines.

Alicia García Herrero, chief economist for Asia Pacific at Natixis, an investment bank, said there was still space for south-east Asian countries like Cambodia, Malaysia and Thailand — that are facing tariffs of up to 36 per cent — to negotiate a better deal with Washington.

Last week, Trump announced Vietnam had accepted a 20 per cent blanket tariff, but García Herrero said this did not necessarily set the benchmark for countries that were less dependent on China for their manufacturing inputs.

But whatever the final tariffs agreed, she warned they would force prices to rise for goods exported from south-east Asia which remains a key hub manufacturing for many consumer goods sold in the US.

Manufacturing will get more expensive in Asia generally, but it also means we have more regional supply chains.

The head of one of Japan’s most powerful business lobbies has accused the government of a “mistake” in its trade negotiating strategy with the US, after President Trump announced 25 per cent tariffs on Washington’s closest Asian ally.

Takeshi Niinami, chief executive of Suntory and chair of the influential Japan Association of Corporate Executives, said that Japan’s insistence on a total exemption from Trump’s tariffs may have left the US president feeling “betrayed”, adding that the country could have secured a 10 per cent base tariff had its negotiators shown more flexibility.

“They underestimated the determination of Trump,” Niinami told the Financial Times. “They thought time was on Japan’s side. It was a big mistake.”

The head of the International Chamber of Commerce has said that he hopes Trump’s letters will herald a concerted effort to strike deals and “remove the cloud of uncertainty” currently hanging over many major investment decisions.

John Denton, secretary-general at the global business group, said it was “extremely welcome” that the Trump administration had indicated that smaller economies would have their tariffs fixed at the baseline 10 per cent level, given many such countries were facing a simultaneous aid war and trade war.

“While the situation is clearly fluid, we’re hoping to see some positive movement in the days ahead — not just to keep tariffs low, but to bring back some much-needed certainty for business operations and investment,” he said in a statement.

Donald Trump’s threat of a 10 per cent extra tariff on pro-Brics countries raised tempers earlier this week.

Leaders at the Brics summit of developing nations — the 11-nation group that includes China, Russia and Iran — lashed out after a social media post by the US president on Sunday nightthreatened additional levies for nations aligning with the bloc.

Read the full story here

Stock markets were steady on Tuesday morning as investors girded for further news on reciprocal tariffs for the US’s trade partners.

The Stoxx Europe 600 was 0.1 per cent lower, while Germany’s Dax rose 0.3 per cent. Futures contracts tracking the US’s S&P 500 were up 0.1 per cent.

“Stocks are treading water amid the flurry of trade deadlines,” said Emmanuel Cau, head of European equity strategy at Barclays.

“Investors see Trump letters as negotiation tactics, likely to result in lower reciprocal tariffs down the road. The key is whether we get signs of progress towards a US-EU trade deal, as this is really what the market is looking for.”

Earlier on Tuesday, South Korea’s Kospi closed 2 per cent higher, while Japan’s Topix was up 0.2 per cent.

German finance minister Lars Klingbeil has warned that the EU stands ready to impose retaliatory measures against US goods if the two parties fail to reach a “fair” deal to resolvetheir trade dispute.

Klingbeil told German MPs on Tuesday:

“We want an agreement with the Americans but I also say very clearly that this deal must be fair. And if we do not succeed in reaching a fair deal with the United States, then the European Union will have to take countermeasures to protect our economy.”

He added: “This trade dispute is hurting us all, it must end quickly. The Europeans are still offering an open hand . . . But a deal must be fair. We will not go along with everything.”

Now the big day has been moved back to August 1. What will the next three-and-a-half weeks (and probably more) be like?

We got a taste of that today, when the president announced Japan and South Korea would face 25 per cent tariffs as of the first of the month, subject to change “depending on our relationship with your Country”. This sounds scary. The pair are the US’s biggest trading partners after Canada, Mexico and the EU.

But the market, rather than panicking, gave the equivalent of a depressed shrug. The S&P 500, already in a declining pattern when the announcement hit, fell another fifth of a per cent. The dollar strengthened 0.7 per cent against the Korean won and 1 per cent against the yen.

The modest moves are perfectly rational. For one, the new rates would not increase the effective tariff rate on either country very much.

Read Robert’s full Unhedged column here

The US effective tariff rate, which measures the revenue raised by duties on goods as a proportion of import value, had been on a downwards trajectory since before the second world war.

The euro has pared some of Monday’s falls as hopes rise for a trade accord between the EU and the US.

After falling 0.6 per cent on Monday as the US president announced tariffs on several countries, the euro rose 0.4 per cent on Tuesday after reports that Brussels and Washington could be close to a skeleton deal.

But the yen has weakened a little further, and is down 1.1 per cent so far this week at ¥146 to the dollar, as worries rise over the impact of tariffs.

“Yesterday’s announcement effectively represents another shorter delay as President Trump attempts to increase pressure on trading partners to make concessions,” ahead of the new August 1 deadline, said MUFG’s Lee Hardman.

Japan’s trade negotiator Ryosei Akazawa spoke to US commerce secretary Howard Lutnick for 40 minutes on Tuesday, and the two agreed to further negotiations, according to a Japanese official.

The new tariffs announced on Monday were roughly on a par with those Trump unveiled during his “liberation day” announcement on April 2, which prompted severe ructions across global financial markets.