The White House Extends Tariff Deadline to August 1, Markets Respond Modestly
The three-month suspension on most of President Trump’s “reciprocal tariffs,” initially set to expire on July 9, has been extended by the administration. Countries are now given until August 1 to secure agreements to avoid new import levies.
Investors appear cautiously optimistic regarding deal progress. Mid-day trading on July 9 showed the S&P 500 index and the Nasdaq Composite both edging higher by 0.3% and 0.6%, respectively, while Bitcoin was virtually flat. This muted market reaction suggests a degree of confidence that negotiations will yield results before the deadline.
Recap: Current Tariff Situation
President Trump directed the release of letters addressed to 14 trading partners, including Japan and South Korea, on Monday. A further seven communications are scheduled to be dispatched today. During a cabinet meeting, the president also announced a proposed 50% tariff on copper imports.
Copper: Soaring Prices Signal High Stakes
The market reaction to the anticipated copper tariffs was swift and pronounced. US copper prices surged to near-record heights during Tuesday’s session, with the price differential compared to the global benchmark reaching 138%. Domestic prices concluded the day 13% higher, the largest single-day gain for copper in decades.
US Copper Dependency
Around half of the copper consumed in the United States is imported, according to the US Geological Survey, with demand spanning virtually all sectors of manufacturing.
Why Potentially Minimal Inflation So Far?
Economists posit several reasons for the modest impact on inflation thus far. Companies may have preemptively stocked inventory anticipating future tariffs. Additionally, declining demand in numerous industries might preclude immediate price hikes.
Down the Road: Copper and Consumer Prices
However, the outlook suggests future price pressures could materialize. US domestic copper production remains relatively stagnant. Initiating new mining projects is a lengthy process—averaging nearly 18 years from discovery to production—posing a significant challenge to immediate supply-side adjustments.
Ongoing Monitoring
Analysts will continue to assess the evolving situation across commodity markets and their potential ramifications for broader financial markets, including equities and digital assets.