Copper ETF Plunges After Trump's 50% Tariff Executive Order
- President Trump has imposed 50% tariffs on copper imports effective Aug. 1.
- CPER dropped 18% in afternoon trading following the tariff announcement.
- The fund holds $234.7 million in assets under management.
The United States Copper Index Fund (CPER) plummeted 18% in afternoon trading Wednesday, according to FactSet data, after President Donald Trump signed a proclamation imposing 50% tariffs on copper imports.
The copper ETF's sharp decline reflects market concerns about the impact of Trump's new trade measures on copper-related investments. The fund, which tracks copper prices through futures contracts, holds $234.7 million in assets under management, according to the data.
Trump's proclamation targets semi-finished copper products, including pipes, wires, rods, sheets and tubes, along with copper-intensive derivative products such as pipe fittings, cables and electrical components, according to the White House fact sheet. The tariffs take effect Aug. 1.
The president's action follows a Section 232 investigation that found foreign competitors' practices have undercut the American copper industry, according to the White House. The investigation determined that copper imports pose a threat to national security given the metal's role in defense systems.
Despite Wednesday's selloff, the copper ETF has posted gains across longer periods, according to FactSet. The fund shows a 10.5% return over the past month and 39.1% year-to-date performance.
CPER: Copper ETF Faces Outflow Pressure
Fund flows data reveal mixed investor sentiment in recent periods, according to FactSet. The fund experienced $10.9 million in outflows over the past month, while attracting $27.7 million in inflows year to date.
The proclamation also authorizes the commerce secretary to require 25% of high-quality copper scrap produced in the United States to be sold domestically, according to the White House. Additionally, starting in 2027, 25% of copper input materials produced domestically must be sold in the United States, rising to 40% by 2029.
The tariffs represent Trump's latest effort to protect domestic industries through trade measures, according to the White House. The proclamation follows previous actions, including 10% additional tariffs on Chinese imports and reciprocal tariffs designed to address trade imbalances.
Copper input materials such as ores, concentrates and cathodes remain exempt from the new tariffs, according to the fact sheet. The measures also direct the commerce secretary to establish an inclusion process for adding additional copper derivative products to the tariff schedule.
