Don 't look like copper: how the new US duties will affect global trade

By imposing tariffs on countries in the Middle East and North Africa, Donald Trump is pursuing two big goals — to expand his influence in the regions and destroy competitors in oil production, experts interviewed by Izvestia believe. This is necessary to protect local producers. At the same time, the possible losses of Algeria, Tunisia and Iraq from duties can be estimated at $ 10-15 billion this year. The American leader also announced a 50% levy on copper imports into the country. Its prices have already jumped by 17%. This metal is especially important for creating various types of weapons — airplanes, ships, ammunition. Russia ranks seventh in the world in copper production. How all this will affect the Russian Federation is in the Izvestia article.

Trump's Updated Duties

On July 9, US President Donald Trump announced new import tariffs against a number of countries. Starting from August 1, 30% fees will be charged for Algeria, Libya, Iraq and Sri Lanka, 25% for Brunei and Moldova, and 20% for the Philippines. In general, the duties correspond to the rates initially announced by the American leader in April, but for Iraq they were lowered from 39%, and for Sri Lanka - from 44%. Trump also imposed tariffs on Brazil of 50%.

For the United States, only the Philippines is among the top 50 major trading partners - in 2024, they supplied over $14 billion worth of products to the American market. Imports from other countries are below this level.

Despite the small trade with these countries, the region itself — the Middle East and North Africa — is significant, because Washington wants to increase its influence there, says Maxim Chirkov, associate professor at the Department of Economic Policy and Economic Dimensions at the Institute of Economics of Finance at the State University of Management.

At the same time, the American administration is trying to destroy competitors in oil production by its actions, says Yulia Davydova, associate professor of the Department of Political Analysis and Socio-Psychological Processes, director of the Center for Socio-Political Studies at Plekhanov Russian University of Economics. She recalled that Algeria, Libya and Iraq are suppliers of oil and petroleum products on the world market.

Donald Trump aims to play against the oil market, thereby pushing these countries to abandon participation in OPEC+ and production reduction programs in order to further bring down prices, says Mikhail Khachaturian, associate professor at the Department of Strategic and Innovative Development at the Financial University. As explained by independent expert Andrey Barkhota, cheaper oil, which will flow to US manufacturing plants, will help curb the rising costs of manufacturers of finished products in the process of American reindustrialization. This, in turn, will support local oil companies. Although by July, Brent quotes had regained some of their losses (on July 9, it was trading at $69.5 per barrel), overall, energy prices have fallen by a quarter since the beginning of the year.

— The estimated losses of Algeria, Tunisia and Iraq from duties can be estimated at $10-15 billion this year. But most likely, these countries will try to come to an agreement with the United States on mutual trade by reducing their own duties on American goods," Mikhail Khachaturian added.

According to the expert, Trump's "tariff tsunami" will continue its movement. The American leader will put pressure on his main trading partners — the European Union, Canada, China, Mexico, and Japan, trying to get favorable terms from them.

What will happen to copper in 2025

The American president also announced duties of 50% on copper imports into the country. In an official statement, he explained that this metal is particularly useful for the needs of the Ministry of Defense — it is used for semiconductors, aircraft, ships, ammunition, radar and missile defense systems, as well as to create hypersonic weapons.

Trump chose copper for a reason — the United States ranks second in the world in terms of copper ore reserves, but there are not many developed deposits in the country, said Yulia Davydova from Plekhanov Russian University of Economics. According to her, the high duties will stimulate domestic copper production and return the US to its dominant position in this area.

— Trump's idea is to stimulate domestic production of strategically important metals. However, it is important to remember that incentives are a long process, and the needs of the industry already exist. There is still nowhere to get additional metal, it remains only to import it. Therefore, American consumers will either overpay or reduce their copper consumption," said Alexey Kalachev, an analyst at Finam.

He added: on the contrary, metal surpluses will increase in foreign markets, and prices will be low, especially against the background of slower economic growth in China, the main global consumer.

After the announcement of new duties on copper, its price updated a historical record — September futures on the Comex exchange jumped by 17% and peaked at almost $5,900 per pound (0.453 kg).

At the moment, metal traders started buying copper in order to fix the cost, so prices rose significantly, explained Kirill Seleznev, an expert on the Garda Capital stock market. He clarified: as the high demand is satisfied, there will be a pullback in quotations — there will be few people willing to buy metal at such high prices.

Experts interviewed by Izvestia expect that by the end of the year, copper will cost about $6-6.3 thousand per pound.

Of these two measures — tariffs on copper and duties against countries in the Middle East and North Africa — it is the former that will have the greatest effect. The largest copper exporters in the United States are Chile, Canada, Mexico and Peru. At the same time, Chile accounts for the bulk of copper imports to the United States, said Olga Belenkaya, Head of the Macroeconomic Analysis Department at Finam. These countries will be affected by duties more than those against which Trump has imposed direct restrictions.

As Vladimir Chernov, an analyst at Freedom Finance Global, pointed out, Algeria, Libya, the Philippines and others will not lose so much, because they do not depend on the United States as a platform where goods can be sold.

What are the risks for Russia from Trump's tariffs

Our country is a major producer of copper, with reserves of about 930,000 tons, said Mikhail Khachaturian from the University of Finance. This is the seventh place in the world. However, due to sanctions, copper exports to the United States are not carried out, so the duties will not affect Russia, he added. Currently, the Russian Federation is more focused on the supply of copper concentrate to China, which is justified by the geographical location of natural resources, added Alexey Kalachev from Finam.

Nevertheless, any trade wars provoke a decrease in global demand and an increase in uncertainty, which already leads to a drop in commodity prices. Now there is a risk of losing oil and gas revenues due to the reduced cost of energy resources. At the same time, the Finance Ministry has already tripled its budget deficit forecast to 3.8 trillion rubles.

In addition, Donald Trump threatened to impose tariffs of 500% on goods imported into the United States from countries that purchase energy from Russia. He is currently studying the bill. According to independent expert Andrey Barkhota, such measures are really real — perhaps this is the "small surprise" promised by the American leader. But its details have not yet been disclosed.