Odds On: Bettors see Trump following through on copper tariffs

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U.S. President Donald Trump vowed to impose 50% tariffs on copper imports, sending the metal markets into turmoil on Wednesday. The higher-than-expected levy could be placed within weeks.

The plan, announced in an apparently off-the-cuff comment to reporters, marks the latest twist in a tumultuous period for industrial commodities, as the U.S. leader aims to encourage more mining and smelting at home, Bloomberg’s Katharine Gemmell and Marting Ritchie write. He’s already raised fees on steel and aluminum imports, while probes into flows of multiple other metals are in train, the authors note. If the tariff takes hold, it will inflict higher costs across a broad section of the U.S. 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.

“The tariff increase is a bearish factor for LME copper prices in the near term,” said Yongcheng Zhao, principal analyst of the China copper market at Benchmark Mineral Intelligence. “We expect continued volatility until the tariff officially kicks in, followed by the potential for a sharp decline.”

Several names in the space are in the spotlight following Trump’s comments, including Freeport McMoRan (FCX), Southern Copper (SCCO), Rio Tinto (RIO), BHP (BHP), and Glencore (GLNCY).

THE BET: The Kalshi Events Market pegged the chances of tariffs on copper at 87%, a sharp increase from June 27 odds, which were below 50%. The platform currently allows bettors to choose YES for 91c or bet on “NO” for 13c. For every dollar you bet, you would win 9c on “YES” and 87c on “NO,” excluding fees, at current odds. The betting asymmetry is quite large, as betting $100 on “YES” would win you just $9 but $87 on “NO,” excluding fees.

BIGGEST WINNER: Scotiabank raised the firm’s price target on Freeport-McMoRan to $52 from $48 on Wednesday, while keeping an Outperform rating on the shares. The firm believes Freeport-McMoRan is the biggest winner of punitive Copper tariffs given its domestic production and exposure to premium Comex prices.

PRICE ACTION: Shares of Freeport-McMoran slipped about 1% in afternoon trading, while Southern Copper’s stock slid about 3%. Also lower were shares of Rio Tinto.