Jefferies analysts outlined scenarios under which the U.S. could extend tariffs to refined copper imports and described the likely near-term market reactions and longer-term supply effects. The firm said a presidential decision could be announced later this month, with implementation possibly scheduled to start on January 1, 2027 at a 15% rate and then increase to 30% on January 1, 2028. Jefferies also noted the possibility that any implementation could be postponed by six to twelve months.
The bank named Freeport-McMoRan and Rio Tinto as the companies with the highest exposure to U.S. copper prices. It also highlighted Hudbay Minerals and Ivanhoe Electric as companies that would face potential impacts under an extension of tariffs to refined copper.
Those potential measures would build on actions taken earlier. On August 1, 2025, the administration implemented Section 232 tariffs at a 50% rate on semi-finished copper products and on copper-intensive derivative products, citing national security grounds. Those levies were applied to the copper content of affected products rather than to the full value of the product. At that time refined copper imports were excluded from the tariff measures. The August 2025 package also imposed export restrictions on copper scrap, requiring that 25% of U.S.-produced scrap be marketed domestically.
The Department of Commerce recommended a 15% tariff on copper raw material imports effective January 1, 2027, with a planned increase to 30% on January 1, 2028. The Commerce Department must deliver an updated report on copper by June 30, 2026, which would inform the presidential decision on whether to apply tariffs to refined copper imports.
Imports currently supply roughly 40% to 50% of refined copper availability in the United States. Jefferies said that including refined copper in the tariff regime would raise domestic price premiums and tighten available supply until the sector invested in new downstream refining and smelting capacity, a process the bank expects would require several years to unfold.
Market indicators have already shifted in response to the tariff possibility. COMEX prices have moved above LME prices amid anticipation of potential measures, and COMEX inventories have climbed to multi-year highs. Despite that move, the present COMEX premium over the LME remains below the level implied by a 15% tariff. Jefferies noted a precedent in the first half of 2025, when a similar price differential emerged ahead of a prospective refined copper tariff decision; when the administration ultimately decided not to impose refined copper tariffs at that time, the premium collapsed.
Jefferies added that if an announcement to impose tariffs were made, the immediate reaction in the United States would likely be short-term destocking that could exert downward pressure on prices. Conversely, a delayed decision would probably encourage additional stockpiling and push prices higher while market participants positioned ahead of any future restriction.
Key points
- Presidential decision could be announced later this month with potential implementation starting January 1, 2027 at 15% and rising to 30% on January 1, 2028, or delayed by six to twelve months.
- Freeport-McMoRan and Rio Tinto are the firms Jefferies sees as most exposed to U.S. copper prices; Hudbay Minerals and Ivanhoe Electric also face impacts.
- Imports currently supply about 40% to 50% of U.S. refined copper; extending tariffs would raise domestic premiums and tighten supply until new refining capacity is built.
Risks and uncertainties
- Timing risk - an immediate announcement could trigger destocking and lower prices, while a delayed decision could prompt stockpiling and higher prices.
- Supply-side uncertainty - domestic premiums and availability depend on the long and uncertain timeline for building downstream refining and smelting capacity.
- Market reaction risk - COMEX and LME price relationships and inventory levels may shift rapidly around announcements, affecting miners and commodity traders.