Trump says steep copper tariffs in store as he broadens his trade war

U.S. President Donald Trump on Tuesday said he would impose a 50 percent tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening his trade war that has rattled markets worldwide. 

One day after he pressured 14 trading partners, including powerhouse U.S. suppliers like Korea and Japan, with sharply higher tariffs, Trump reiterated his threat of 10 percent tariffs on products from Brazil, India and other members of the BRICS group of countries.

He also said trade talks have been going well with the EU and China, though he added he is only days away from sending a tariff letter to the EU. Trump's remarks, made during a White House cabinet meeting, could inject further instability into a global economy that has been shaken by the tariffs he has imposed or threatened on imports to the world's largest consumer market. 

U.S. copper futures jumped more than 10 percent after Trump's announcement of new duties on a metal that is critical to electric vehicles, military hardware, the power grid and many consumer goods. They would join duties already in place for steel, aluminum and automobile imports, though it was unclear when the new tariffs might take effect. 

U.S. pharmaceutical stocks also slid following Trump's threat of 200 percent tariffs on drug imports, which he said could be delayed by about a year.

Other countries, meanwhile, said they would try to soften the impact of Trump's threatened duties after he pushed back a Wednesday deadline to Aug. 1.

Trump's administration promised "90 deals in 90 days" after he unveiled an array of country-specific duties in early April. So far, only two agreements have been reached, with the United Kingdom and Vietnam. Trump has said a deal with India is close.

Trump said countries have been clamoring to negotiate.

"It's about time the United States of America started collecting money from countries that were ripping us off [...] and laughing behind our back at how stupid we were," he said.

Trading partners across the globe say it has been difficult to negotiate even framework agreements with the U.S. given the haphazard way new tariffs are announced, complicating their internal discussions about concessions.

Highest levels since 1934 

Following Trump's announcement of higher tariffs for imports from the 14 countries, U.S. research group Yale Budget Lab estimated consumers face an effective U.S. tariff rate of 17.6 percent, up from 15.8 percent previously and the highest in nine decades.

Trump's administration has been touting those tariffs as a significant revenue source. Treasury Secretary Scott Bessent said Washington has taken in about $100 billion so far and could collect $300 billion by the end of the year. The United States has taken in about $80 billion annually in tariff revenue in recent years.

The S&P 500 finished slightly lower on Tuesday, a day after Wall Street markets sold off sharply following Trump's new tariffs announcement.

Trump said he will "probably" tell the European Union within two days what rate it can expect for its exports to the United States, adding that the 27-member bloc had been treating his administration "very nicely" in trade talks. 

The EU, the largest bilateral trade partner of the United States, aims to strike a deal before Aug. 1 with concessions for key export industries such as aircraft, medical equipment and spirits, according to EU sources. Brussels is also considering an arrangement that would protect European automakers with large U.S. production facilities.

However, German Finance Minister Lars Klingbeil warned that the EU was prepared to retaliate if necessary.

"If we don't reach a fair trade deal with the U.S., the EU is ready to take countermeasures," he said in the lower house of parliament.

Japan, which faces a possible 25 percent tariff, wants concessions for its large automobile industry and will not sacrifice its agriculture sector, a powerful domestic lobby, for the sake of an early deal, top trade negotiator Ryosei Akazawa said on Tuesday.

Korea, which also faces a possible 25 percent tariff, said it planned to intensify trade talks over the coming weeks "to reach a mutually beneficial result." 

Washington and Beijing agreed to a trade framework in June, but with many of the details still unclear, traders and investors are watching to see if it unravels before a separate, U.S.-imposed Aug. 12 deadline or leads to a lasting detente.

"We have had a really good relationship with China lately, and we're getting along with them very well. They've been very fair on our trade deal, honestly," Trump said, adding that he has been speaking regularly with Chinese President Xi Jinping. 

Trump said the United States would impose tariffs of 25 percent on goods from Tunisia, Malaysia and Kazakhstan; 30 percent on South Africa and Bosnia and Herzegovina; 32 percent on Indonesia; 35 percent on Serbia and Bangladesh; 36 percent on Cambodia and Thailand; and 40 percent on Laos and Myanmar. 

Cambodia hailed as a big success a reduction in the tariff rate from 49 percent to 36 percent and said it was seeking to negotiate a further cut. The tariffs have been an issue for Cambodia's garments and footwear sector, the biggest driver of its economy.

The United States is also the main export market for Bangladesh's ready-made garments industry, which accounts for more than 80 percent of its export earnings and employs 4 million people.

Reuters