In This Article:
Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump with this daily recap compiled by The Fly:
Discover the Best Stocks and Maximize Your Portfolio:
-
See what stocks are receiving Strong Buy ratings from top-rated analysts.
-
Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
COPPER IMPORTS: President Donald Trump has ordered an investigation into potential new tariffs on copper imports in an effort to thwart what his advisers see as a move by China to dominate the global copper market, Reuters’ David Lawder and Andrea Shalal report. According to the report, Trump signed an order at the White House directing Commerce Secretary Howard Lutnick to start a national security probe under Section 232 of the Trade Expansion Act of 1962, the same law Trump used in his first term to impose 25% global tariffs on steel and aluminum. Publicly traded companies in the copper sector include Freeport McMoRan (FCX), Southern Copper (SCCO), Rio Tinto (RIO), BHP (BHP), and Glencore (GLNCY).
After proposing tariffs on aluminum/steel, Trump has signed an executive action to
examine the possibility of copper tariffs. UBS says that what the market is “pricing-in” for tariffs can be seen in the spread between Comex and LME copper futures prices. Historically, the spread has been limited but since the U.S. election it has been widening. The U.S. imports about 70% of the refined copper it consumes and, in the firm’s view, the constraint to increasing domestic copper supply in the U.S. is permitting rather than economics. Therefore, UBS struggles to see the economic logic/rationale of copper tariffs, but if tariffs were imposed it would result in the Comex price trading at a persistent premium to LME benefiting U.S. domestic producers of refined copper due to higher realized prices, the firm argues.
Also commenting on the news, Citi noted that the Trump administration plans to begin a Section 232 investigation into copper, similar to those on steel and aluminum in Trump 1.0. The results remain to be seen, but it is hard to imagine that nothing will happen, the firm adds. In Citi’s view, the big winner would be Freeport, which produces and processes about 1.4M lbs of copper in the U.S. every year. A 10% copper tariff would flow straight to COMEX prices, boosting Freeport’s attributable EBITDA by 9% and attributable free cash flow by 37%. More broadly, the U.S. already has no shortage of potential new copper mines, but they are all held up by permitting, not prices, Citi adds.