Copper and Silver Futures Surge Amid Fears of Trump-Era Import Tariffs

Copper and silver futures in New York are surging past international price benchmarks as traders brace for potential sweeping import tariffs under Donald Trump’s administration. Front-month Comex silver futures are trading at a premium of more than $0.90 per ounce over London spot bullion prices, nearing December peaks fueled by Trump’s pledges to apply universal tariffs on all imports, targeting both adversaries like China and allies such as Canada and Mexico.

This surge reflects growing market anxiety over Trump's trade policies ahead of his January 20 inauguration. Reports from The Washington Post suggest his team is considering tariffs on critical goods, possibly including copper. While Trump denied these claims, CNN reported that he may declare a national economic emergency to legally justify universal tariffs.

Ole Hansen, head of commodities strategy at Saxo Bank, stated, “Investors are seeking protection against inflation, fiscal debt concerns, and Trump’s unpredictability. The spike in Comex prices is part of that story.”

Comex copper futures have also soared, trading at a $623-per-ton premium over London Metal Exchange (LME) futures, approaching record levels last seen during last year’s global copper market short squeeze. Traders are rushing to deliver copper to U.S. warehouses to capitalize on these price surges.

While this creates profit opportunities for traders with metal to deliver, it also poses significant risks for those betting on narrowing price gaps. Historically, arbitrage trades between New York and London markets help stabilize prices, but widening gaps can lead to severe losses, as seen in last year’s copper squeeze.

Silver faces similar risks. Limited metal availability for Comex futures could trigger a market squeeze. TD Securities’ senior commodity strategist, Daniel Ghali, warned, “The market is sleepwalking into a squeeze right now.” Recent inflows of 15 million ounces into Comex warehouses have been insufficient against depleted London silver stockpiles, strained by years of production shortfalls.

Ghali predicts this supply drain could sharply drive silver prices higher, calling it “the silver squeeze that you can buy into.”