Stocks of copper miners such as Freeport-McMoRan (FCX), Teck Resources (TECK), and Southern Copper Corp. (SCCO) are sinking after U.S. President Donald Trump threatened to impose a 50% tariff on copper imports into America.
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The president also suggested that steep sector-specific duties on other metals might be on the way. At a cabinet meeting on July 8, President Trump said, “Today, we’re doing copper… I believe the tariff on copper; we’re going to make it 50%.”
Trump did not specify when that tariff would take effect or if there is room for negotiation. Copper prices jumped to a record high after the president’s comments, ending the trading day on July 8 up 13% for the metal’s best one-day gain since 1989. However, copper stocks are slumping on the news with shares of FCX, TECK, and SCCO each down more than 2% on July 9.
Targeting Metals
Copper is the third-most used metal in the world behind iron and aluminum. The U.S. imports nearly half of the copper it uses, most of which comes from Chile, according to data from the American government. In late February of this year, President Trump ordered a probe into potential new tariffs on copper imports based on national security concerns.
However, until now, Trump has delayed implementing higher tariffs on copper. The U.S. president has imposed tariffs of 25% on other metals, including steel and aluminum, sparking trade tensions with neighboring countries such as Canada and Mexico over the duties. FCX stock is up 22% this year.
Is FCX Stock a Buy?
The stock of Freeport-McMoran has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 11 Buy and three Hold recommendations issued in the last three months. The average FCX price target of $47.15 implies 4.48% upside from current levels.
