A Flood of Goods Headed to the US Due to Tariff Fears, Experts Warn of Global Shortages

Copper prices have surged recently due to increased demand from the US as President Donald Trump has hinted at imposing tariffs on this metal. This has caused global traders to shift their supply sources, creating a ripple effect of inventory shortages.

Three-month copper futures on the London Metal Exchange (LME) stood at $9,645 per ton on June 13, trading session, a 10% increase since the beginning of 2025, outpacing other base metals such as aluminum and nickel.

Trump’s tariff policies are contributing to the rise in copper prices. Although no additional tariffs on copper have been implemented yet, US tariffs on steel and aluminum increased from 25% to 50% on June 4.

In a report on June 2, Goldman Sachs stated that higher tariffs on other metals increase the likelihood of tariffs on copper. Back in February, Trump directed the US Department of Commerce to conduct an investigation into copper imports. A rush to secure copper supplies before any potential tariffs could be imposed has spread nationwide.

On June 2, the next working day after the announcement of the steel and aluminum tariff increase, copper futures on the New York Mercantile Exchange rose 6%. The price gap with three-month LME futures – the international copper standard is currently at $1,000 per ton.

The US is the world’s second-largest consumer of copper after China. Base metal traders have shifted their focus to the US market, shipping cheap copper ingots from South Korea, Taiwan, and Singapore and selling them to profit from the price differential.

Copper inventories at the New York Mercantile Exchange have doubled this year. If copper concentrates in the US, shortages could occur elsewhere.

The LME has warehouses worldwide to store copper for delivery in transactions. As of Thursday, physical inventories at the company’s eight warehouses in six countries and regions, including South Korea and the Netherlands, totaled approximately 114,000 tons. This is the lowest level in about 13 months, a decrease of about 60% since the beginning of 2025. Of the remaining inventory, about 60% has been scheduled for shipment, raising concerns about shortages.

Copper ingots are essential for various industries, including wire production and copper-drawn products.

“The future of the Chinese economy – a large consumer of copper, is uncertain, and with prices surging due to shortages. If copper demand continues to slow, this will hinder the profits of related companies,” said Yuki Takashima, an economist at Nomura Securities.