Chile is expected to be exempt from Trump's tariffs, copper in New York fell over 6%, and copper mining concept stocks generally declined
Chilean Finance Minister Mario Marcel expects that Chile will receive an exemption from U.S. copper tariffs and stated that Chile will not impose retaliatory tariffs on the U.S. This news caused New York copper futures to drop over 6%, with copper mining stocks generally declining. Marcel emphasized that copper is an important export commodity for Chile to the U.S., and hopes to include copper in the exemption scope during negotiations
Copper in New York fell more than 6% as Chile's finance minister expected to obtain an exemption from U.S. copper tariffs, and Chile would not retaliate against U.S. tariffs.
On Monday, July 28, Chilean Finance Minister Mario Marcel spoke about the ongoing tariff negotiations with the United States. There are two parts to these negotiations that could affect Chile: one is the general tariff, which applies uniformly to many countries. The other is the high tariff of 50% specifically on copper, but the details are still unclear.
Marcel believes there is hope to exclude copper from the high tariffs because, in similar negotiations with other countries, the U.S. has been willing to “greenlight” conditions for raw materials (such as steel and copper) separately. Marcel cited examples where steel was specifically discussed in the agreement between the UK and the U.S., and copper was also specifically discussed in the agreement between Indonesia and the U.S.
Therefore, Marcel hopes that the negotiations starting today in Washington will also include copper; otherwise, it would be meaningless. This is because more than half of the goods Chile exports to the U.S. are copper and timber, and if these are excluded from the negotiation results, then this agreement would not benefit Chile.
At the same time, Marcel explicitly denied the possibility of imposing retaliatory tariffs on U.S. products. He emphasized that increasing tariffs ultimately makes consumers in his own country pay the price, and he does not want to punish the people of Chile.
As a result of Marcel's remarks, COMEX copper futures plummeted in the short term, with the overall intraday decline quickly expanding to over 6%, before halving the loss. U.S. copper mining stocks also fell broadly, with McEwen dropping over 6% during the session and Freeport (FCX) falling more than 5% in early trading.
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