Recently, copper prices have skyrocketed following news of potential tariffs proposed by U.S. President Donald Trump.

The planned 25% tariffs on copper imports are expected to take effect in the coming weeks, pending necessary administrative processes.

This move has created uncertainty in the global metals market, particularly as the price of copper has already increased by approximately 30% this year, earning it the nickname 'red gold'.

Analysts have noted that tariffs could intensify existing market pressures, particularly given that the U.S. currently only produces about 50% of the copper it requires, with production declines of nearly 10% over the last year.

Industry experts emphasize that increasing domestic production of copper is challenging, citing regulatory hurdles and the lengthy timeline necessary to establish new mining operations.

The identification and approval of new mining sites could take nearly two years, with key obstacles including permitting delays.

In the meantime, international producers are likely to redirect copper shipments away from the U.S. towards markets in Europe or Asia.

Simultaneously, U.S. construction industries, particularly residential builders, may face increased financial pressure due to higher copper costs.

The anticipated tariffs have already prompted a significant influx of copper imports into the U.S., with reports indicating 500,000 tons arrived in March alone, likely in response to the expected tariff impact.

Futures contracts for copper on the New York Comex reached unprecedented levels earlier this week, while prices on the London Metal Exchange are trading at a historical discount compared to U.S. prices.

This discrepancy enables traders to profit by purchasing copper on international markets and reselling it in the U.S. before tariffs are imposed.

The ramifications of these proposed tariffs extend to China's economy, as it is the world's largest consumer of copper.

The rising costs could impede China’s development as it faces increased expenditures on this essential metal, thereby straining its growth.

Additionally, exporting roughly 17% of its copper from Canada renders this tariff strategy particularly contentious for Canadian economic relations.

According to the U.S. Geological Survey, identified copper reserves amount to 2.1 billion tons, with an estimated 3.5 billion tons of undiscovered reserves, suggesting a long-term potential for copper extraction.

Yet, the ongoing challenge is that extraction capacity has not kept pace with burgeoning consumption demands.

Copper plays a pivotal role in the global energy infrastructure, as it is widely used in electrical wiring, transmission lines, batteries, and efficient LED lighting.

Growing demand, particularly driven by technological advancements and energy transitions, is likely to amplify the pressure on the copper market moving forward.

In a separate trend, gold has also reached new historical heights, surpassing $3,085 per ounce, driven by heightened demand for safe-haven assets amid global economic uncertainty.

This surge is reflective of accelerated purchasing by central banks and strong inflows into gold-backed exchange-traded funds (ETFs).

Gold's appeal as a tangible asset with global recognition is reinvigorating interest among investors seeking to mitigate risks posed by fluctuating currencies and volatile market conditions.