(Bloomberg) — The US copper market suffered its largest intra-day fall on record after President Donald Trump shocked traders by exempting the most widely imported form of copper from his planned tariffs.

Most Read from Bloomberg

• The World’s Data Center Capital Has Residents Surrounded

• An Abandoned Art-Deco Landmark in Buffalo Awaits Revival

• Budapest’s Most Historic Site Gets a Controversial Rebuild

• San Francisco in Talks With Vanderbilt for Downtown Campus

• We Should All Be Biking Along the Beach

Tariffs of 50% will apply to imports of semi-finished copper products from Aug. 1, but not to imports of refined metal, the White House said on Wednesday.

US copper futures on Comex plunged 20% after the announcement. Until Wednesday afternoon, US copper prices had been trading around 28% above benchmark copper futures on the London Metal Exchange, as traders anticipated the tariff would be applied to all refined metal imports.

The decision is the latest surprise from Trump to upend the copper market. When the US president first flagged the likelihood of tariffs early this year, he triggered a surge in US copper prices relative to the rest of the world and set off a race to ship copper to the US to beat the tariffs, delivering substantial profits to some of the world’s biggest metals traders.

Then earlier this month, he triggered a further surge in the US copper market with an announcement that the tariff would be 50% — twice what most market participants had been expecting — which sent prices to a new all-time high.

The decision to exclude refined copper — known as cathodes — from the tariffs is likely to further roil global trade flows of the metal, which plays a crucial role in the global economy thanks to its widespread use in electrical wiring. The massive volumes of copper that have been shipped to the US in recent months created a huge stockpile that now may be re-exported.

“If cathode is excluded, the arb is over,” said Michael Haigh, head of FIC and Commodity Research at Societe Generale. The market “should approach parity again.”

The move to differentiate between refined metal and semi-processed products in the tariff policy follows lobbying from the copper industry, with some key players arguing that the US did not have sufficient capacity to replace all of its copper imports immediately.

“The Trump Administration listened to the concerns of our industry and made a smart, strategic decision,” said Juan Ignacio Díaz, the president of the International Copper Association. “This action protects US interests while maintaining strong ties with reliable partners, ensuring a secure and resilient copper supply chain.”

Still, the prospect of import tariffs on refined copper may not have entirely disappeared. A proclamation published by the White House on Wednesday stated that the Department of Commerce had recommended a delayed imposition of import tariffs on refined metal, with the rate set at 15% starting in 2027, rising to 30% in 2028.

Trump directed the Secretary of Commerce to provide an update on US copper markets by the end of June 2026, so that the president could determine whether such “a phased universal import duty on refined copper” would be warranted.

The 50% import tariff announced on Wednesday will apply to semi-finished products such as copper pipes, wires, rods, sheets and tubes, and to copper-intensive goods like pipe fittings, cables, connectors and electrical components, according to the White House statement. Less processed goods, including copper ore, concentrates, mattes, cathodes and anodes are not subject to the tariffs.

The copper levies, which come under Section 232 of the Trade Expansion Act, will not stack on top of separate charges on automobile imports, which Trump put in place earlier this year, according to the White House. If a product is subject to auto tariffs, the import tax on vehicles will apply and not the copper duty, the White House said.

The White House also said it would require that 25% of high-quality copper scrap and forms of raw copper made in the US to be sold domestically.

However, the export requirements look unlikely to have any meaningful effect in the near term, since around 40% of US copper scrap and around 75% of US copper concentrates are already processed domestically.

Shares in US producers such as Freeport-McMoRan Inc. slumped as the proclamation eroded the American copper premium. The decision is a relief to major shippers of refined copper to the US led by Chilean state-owned supplier Codelco.

“This is good news for Chile, for Codelco, and for our customers in the USA,” Codelco Chairman Maximo Pacheco said.

–With assistance from Julian Luk and James Attwood.

(Updates with detail on future review of refined metal tariffs.)

Most Read from Bloomberg Businessweek

• Russia Builds a New Web Around Kremlin’s Handpicked Super App

• Burning Man Is Burning Through Cash

• It’s Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan

• Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off

• Cage-Free Eggs Are Booming in the US, Despite Cost and Trump’s Efforts

©2025 Bloomberg L.P.