Liberation Day and a possible trade war

Copper's volatile two-week-period

Looking back at the past two weeks in the copper market, one thing is on everyone’s lips: Liberation Day. That’s the name traders have given to the day Donald Trump introduced his tariffs on numerous countries. And it is safe to say the market has been volatile the last two weeks caused by these tariffs. Because the announcement of tariffs is not the only thing that has happened.

Copper prices the last 2 weeks on CME

Copper prices took a steep dive once the tariffs were confirmed. Then came a flurry of mixed signals. First, there were rumors that the tariffs might be paused, speculation that was quickly denied by the White House on X (formerly Twitter). Just days later, however, came an official announcement: a 90-day pause on some of the tariffs. This did, not surprisingly, cause a volatile week for copper prices, and stock markets all over the world. The copper prices have not fully recovered to where it was two weeks ago, but have risen significantly from the bottom. If you are a copper trader, the straddle method would have been a very good method the last two weeks, and can potentially be a good strategy in the weeks to come aswell, if the volatility continues. This method takes adventages of price movements.

Potential trade war between China and USA

AI generated picture replicating Xi Jinping and Donald Trump

The 90 day pause on tariffs did not include the most copper consuming country in the world, China. They instead received an increased tariff, now at 125%, and the world economy and the copper market are waiting to see how China will react to these tariffs. Will there be retaliation and a trade war between China and the USA? Will China try to defuse the situation and not retaliate? This will be answered in the days or weeks to come. As it stands, the copper market remains in a state of heightened tension. Prices may have stabilized somewhat from their lowest point, but with so much geopolitical uncertainty, it's unlikely that the volatility is behind us.

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