(Bloomberg) -- Copper extended this year’s rally as the incoming Trump administration is said to consider slowly ramping up trade tariffs, rather than imposing sizable levies in one go.
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The approach is aimed at boosting negotiating leverage and avoiding a spike in inflation, according to people familiar with the matter. That stirred some optimism in Asian stock markets and weighed on the dollar, making commodities priced in the currency more attractive for many buyers.
Trump had floated the possibility of trade tariffs of 60% or higher on Chinese exports and levies of 10% to 20% on all imports during his presidential campaign. The prospect of gradual implementation is relatively positive for copper, which has risen 4% this year after falling last quarter on a strengthening dollar and as China’s efforts to revive growth proved largely ineffective.
The tariff proposal is still in its early stages and hasn’t been shown to President-elect Donald Trump yet, the people said.
China, meanwhile, will use a broad range of stimulus measures to offset the effects of expected US tariffs and a persistent housing downturn, Goldman Sachs Group Inc. Chief Economist Jan Hatzius told Bloomberg Television on Tuesday. Growth in the world’s top metal importer would likely slow to 4.5% this year from a probable 5% in 2024, he said.
Copper rose 0.7% to $9,159.00 a ton on the London Metal Exchange as of 5:26 p.m. local time. Aluminum, zinc and nickel were little changed.
--With assistance from Winnie Zhu.
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