Investing.com -- Copper prices in London declined as markets reacted to President Trump’s announcement of a 50% tariff on copper imports, which exceeded market expectations.

London Metal Exchange three-month copper futures dropped 0.55% to $9,629 a metric ton and have fallen 3.2% over the week.

Market participants anticipate that the substantial tariff will reduce previously strong U.S. import demand for the metal.

BMI analysts noted in a report that the economic justification for the levy remains unclear and predicted it would likely be reversed in the future. The analysts explained that the tariff would increase domestic prices in the United States and reduce the competitiveness of American manufacturing companies, without meaningfully reducing the country’s dependence on imports.

The BMI report suggested that President Trump would probably walk back this latest threat, though the timing of any potential reversal remains uncertain. The analysts cautioned that another reversal would reinforce perceptions that Trump consistently backs down on tariffs, which could set the stage for a difficult situation if he eventually follows through with the policy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.