Trump Announces 50% Copper Tariff; Pharma Faces Up to 200% Duties- 09.07.2025

This global tariff impact and market reaction update highlights how markets were largely steady Tuesday, but beneath the surface, volatility surged in commodities and strategic sectors after former President Trump announced a 50% tariff on copper imports and threatened up to 200% duties on pharmaceuticals. The move — framed as national security-driven — sent copper prices to record highs and raised alarm bells globally, especially among exporting nations. Meanwhile, traders braced for a busy Wednesday featuring the $39 billion 10-year Treasury auction and release of the June FOMC minutes, as expectations build for a potential Fed rate cut in September. In Europe, weaker export data out of Germany added to trade concern, while Japan and China responded cautiously to the U.S. tariff stance. From copper’s 12% surge to mounting supply chain worries, markets are now preparing for inflationary pressures, policy uncertainty, and potential retaliatory moves in the weeks ahead.

Global Tariff Impact and Market Reaction: United States

Previous Day (July 8, 2025):

Markets traded cautiously as President Trump unveiled a new wave of tariffs that could reshape global trade flows and domestic inflation dynamics. A 50% tariff on copper imports was officially announced, to take effect August 1. Trump also proposed pharmaceutical tariffs of up to 200%, though implementation would be delayed 12–18 months to allow companies time to adjust. These measures aim to boost U.S. self-sufficiency in strategic sectors, but they risk inflaming tensions with major trading partners, especially China and India.

The tariff news triggered a sharp rally in copper futures, which surged over 12%, while pharma stocks saw mixed reactions — U.S. generic drugmakers rose on competitive advantage expectations, while Asian exporters declined. Equity indices were mostly flat, but underlying sector rotations reflected investor repricing of supply chain and inflation risks.

• At a cabinet meeting, President Trump officially unveiled a 50% tariff on copper imports, to be implemented by August 1, aiming to protect domestic production.
• He also threatened tariffs of up to 200% on pharmaceutical imports, although enforcement would wait 12–18 months to allow companies to adjust.
• As a result, copper futures surged over 12% to a record high, the U.S. dollar strengthened, and Treasury yields edged higher. Market attention shifts to the upcoming 10‑year Treasury auction and FOMC minutes.

Global Tariff Impact and Market Reaction: Euro Area

Previous Day (July 8, 2025):

• European equity markets ended mostly flat as investors weighed escalating U.S. trade actions and softer regional data.
• The copper tariff announcement rattled European industrials, particularly German and Polish copper processors.
• Germany’s May exports dropped 1.4% m/m, underperforming expectations as front-loaded trade activity waned ahead of known U.S. policy risks.
• European bond yields moved slightly lower as safe-haven demand ticked up, though the euro held steady against the dollar.

Global Tariff Impact and Market Reaction: United Kingdom

Previous Day:

• UK markets were muted.
• Gilts sold off modestly, following global yield trends.
• Investors remained focused on post-election policy signals and public finance risks. The OBR (Office for Budget Responsibility) reiterated warnings about the sustainability of public finances given rising debt levels.
• No material UK macro data was released, but pound sterling was stable.

China Economic and Trade Developments

Previous Day:

• Beijing denounced the new tariffs, especially the copper levy, warning of global supply chain disruption.
• Officials emphasized the potential economic harm, signaling possible retaliatory measures if U.S. escalation continues.

EMEA and Emerging Markets Snapshot

• Emerging copper exporters like Chile and Peru saw sharp currency and equity moves following the tariff threat
• Pharma-exporting nations such as Australia (A$2.1 bn exports) and India voiced concerns over the impending duties

Commodities Overview

• Copper surged ~12–17%, setting new highs on COMEX and triggering volatility across global markets
• Gold rallied further as a safe-haven on trade tension and inflation fears.
• Pharmaceutical stocks saw mixed moves—U.S. generics firms rallied on protective rhetoric; some Asian med-tech players declined.

Key Takeaways and Market Themes

• Comex copper jumped 12%+ post-announcement.
• Formal tariff posting expected before August 1.
• Copper exporters and pharma-sensitive economies express deep concern.

Bottom Line:
The confirmed 50% copper tariff and looming pharma duties mark a significant escalation in trade policy. Markets are bracing for inflationary pressures, supply chain disruptions, and global retaliatory responses. Central bank signals, trade developments, and upcoming Treasury actions will dominate the near-term macroeconomic landscape.