No Decision on Copper Tariff as US Warehouses Hold Over 1 Million Tons and the Price Gap Narrows to $310

A trade built on a decision that hasn't been made is starting to wobble.

Since Trump ordered a study of copper tariffs in February 2025, traders have moved enormous volumes of metal into the United States. The Commerce Department was due to report on the domestic copper market by June 30. That report was meant to let Trump decide whether to impose a 15% tariff on refined copper imports starting Jan. 1, 2027, rising to 30% in 2028.

No decision has been announced.

The stockpile

The numbers are large. Comex-approved warehouses hold roughly 70% of the world's visible copper stocks, and US inventories now exceed 1 million metric tons. Macquarie estimates total US stocks, on and off exchange, at about 1.6 million tons.

Comex stocks alone have climbed nearly 750% since the end of February 2025, to more than 714,000 tons. Copper in LME-registered warehouses in New Orleans and Baltimore has jumped 44% since mid-August to nearly 130,000 tons.

The drain on the rest of the world pushed prices up even though the global market is in surplus. LME copper reached a record near $15,000 a ton last month. LME cash copper settled at $14,822 on Oct. 12, a record for a cash settlement, and at $14,741 on Oct. 13. Comex copper hit $6.83 a pound, or $15,057 a ton, on Sept. 22.

Three-month LME futures traded near $14,340 a ton in London after a 0.5% drop on Monday.

The arbitrage is shrinking

The engine was the premium on New York copper over London. That gap reached a record above $3,000 a ton in July 2025. It is now about $310.

"The arbitrage has collapsed, so the incentive to keep moving metal to the US is much weaker right now," said Charles Cooper, an analyst at Wood Mackenzie.

Cooper also gave the administration credit for the result. "The US built a copper stockpile without spending taxpayer money, with policy and an almost existential threat of import levies," he said.

Tom Price, an analyst at Panmure Liberum, was less impressed. "Only traders are making money," he said. He argued that buyers could have quietly collected the metal from the off-exchange market around the world at lower cost. Price expects the US to hold about 1.6 million tons more than it needs this year.

Traders start betting against the levy

Comex prices embed any duty Trump might impose, which is why they sat so far above London. Traders can sell Comex and buy LME to close that gap. Until recently almost nobody did, according to Marc Bailey, chief executive of Sucden Financial, one of the market's largest brokerages. Anyone short Comex would take heavy losses if tariffs arrived.

Bailey said Sucden has recently been fielding inquiries from investors interested in that trade again.

Natixis analysts have warned that the tariff trade has built a bubble that could burst if tariffs are ruled out. Macquarie's scenarios are stark. Prices could fall toward $10,000 a ton if tariffs never come. They could rise as far as $18,000 if tariffs are announced with a lag that lets traders ship even more metal into the US.

"I have never seen anything like this before, with the future price direction ultimately resting on the decision of one man," said Alice Fox, a commodities strategist at Macquarie.

The midterm elections add another variable. Investors are asking whether a strong Democratic showing would disrupt Trump's trade agenda, or push him to double down on tariffs.

What the administration says about tariffs

The White House has not announced a copper decision. On tariffs generally, it rejects the argument that Americans foot the bill.

New research from the Federal Reserve Bank of New York estimates that tariffs added about 2.9 percentage points to prices across the consumer goods it studied. It attributes roughly two-thirds of that to imports and one-third to US-made products.

White House spokeswoman Taylor Rogers responded that "President Trump's America First trade agenda is reshaping the international economic order to reduce our trade deficit, revitalize American manufacturing, and deliver lasting benefits to our workers, farmers and producers." She said the administration maintains that foreign exporters reliant on US market access will ultimately bear the cost.

That research covers consumer goods broadly, not copper. A refined copper levy would hit a different set of buyers, including cable makers, builders and electrical manufacturers.

What happens next

LME Week, the industry's annual gathering in London, began Oct. 18. The timing of any US decision, and whether the prospect of a tariff can keep drawing metal across the Atlantic, are among its main topics.

Fox's most likely scenario is that the January deadline passes with no decision, leaving the question open. In that case she expects the arbitrage to come off in the short term, then return to about current levels. That would be "not quite high enough to encourage additional metal, but high enough to keep metal in the US."

That would leave more than a million tons of copper in American warehouses and the tariff question unresolved on Jan. 1, 2027.