Latest news with #AmericanEconomy
CNN
17-07-2025
- Business
- CNN
Copper prices have surged to record highs — and they could jump higher. Here's why
Copper is at the core of the American economy. It's in the wires of our pervasive electronics, in the walls of homes and in the engines of cars. Experts say President Donald Trump's plan for tariffs on the red metal could stymy the goal of boosting American manufacturing while potentially igniting inflation. Trump's July 8 announcement of a 50% tariff on copper imports beginning August 1 sent prices surging 13% in one day, up to a record high of $5.69 per pound. It was the biggest single-day increase in copper prices on record going back to 1968, according to FactSet. And those prices could just be a sign of things to come. A 50% tariff would be a 'massive tax on consumers of copper,' Ole Hansen, head of commodity strategy at Saxo Bank, said in a note. While Trump says his copper tariff is needed to spur domestic production due to national security concerns, there is no quick fix. The US imports over 50% of the copper it needs, primarily from South America, Hansen said, 'with no clear path to improving that for years to come.' That's because it takes almost 32 years, on average, from the discovery of mineable copper in the US to production, according to S&P Global Market Intelligence. And the end result of a big and fast copper tariff could simply be higher prices for many items, economists say. 'A tariff-induced price premium risks making copper—and by extension, US manufacturing and infrastructure—materially more expensive,' Hansen said. Copper is highly conductive, making it a critical input for electrical and electronic products. Copper can be found in the chips in mobile phones, plumbing in houses and in the engines of cars. 'This is a vital metal for everyday use,' Rob Haworth, senior investment strategy director at US Bank's asset management group, told CNN. 'You probably don't go a day where you haven't used something that has copper in it.' As Trump's self-imposed August 1 tariff deadline approaches, businesses and investors don't know what will happen in the wake of a massive tariff on a key component of the economy — let alone if the president will follow through with it at all, considering his history of backing off tariff threats. Copper is one of the most widely used metals in the world. The typical American-made car has over 50 pounds of copper, according to the Copper Development Association, a trade group. And the price of copper has been rising in recent years. The growing market for electric vehicles and the expansion of data centers thanks to the artificial intelligence boom have helped drive global demand for copper. Copper prices this year have smashed through previous records amid Trump's threat of tariffs. Copper futures in New York have soared almost 39% this year, outpacing the S&P 500's 6% gain, bitcoin's 24% gain and gold's 26% gain. Trump's tariffs on metals, including steel and aluminum, are intended to bolster US supply chains. His administration also cited national security concerns for levying a tariff on copper. But an import tax on copper would raise production costs for manufacturers in industries including construction, electronic goods and automobiles, according to Grace Zwemmer, an associate economist at Oxford Economics. 'All these tariffs raise costs and therefore injure downstream manufacturing,' Maurice Obstfeld, a professor of economics at UC Berkeley and member of former president Barack Obama's council of economic advisers, told CNN. 'For the US, this seems like a fairly pointless act of self-harm,' Obstfeld added. Businesses would face higher costs because there aren't many viable substitutes for copper, according to Brandon Parsons, a practitioner of economics at Pepperdine Graziadio Business School. While aluminum can be a substitute, it is more flammable and does not have the same conductivity, making it less viable for using in items like semiconductor chips. 'There isn't really a good way for businesses or consumers to avoid these higher costs,' he said. 'It's going to be felt widespread through the economy.' Chile, Canada and Peru provided over 90% of US copper imports in 2024, according to the US Geological Survey. The United States in 2024 mined an estimated 1.1 million tons of copper, according to the US Geological Survey, meeting just under half of its consumption. Arizona was home to more than 70% of domestic copper production in 2024. Shifting economic incentives in the modern era and the opening of free trade have both contributed to a decline in US copper production, according to Pepperdine's Parsons. The United States in recent decades has produced less copper as the global economy liberalized, enabling the country to import relatively cheap copper from countries like Chile and allowing the US economy to expand to other industries. Industrial buyers and Wall Street traders in recent months have shipped enormous amounts of copper to the United States to get ahead of potential tariffs. Morgan Stanley estimates 400,000 tons, or roughly six months' worth of 'extra' copper was front-loaded and delivered to the US in the early months of 2025. The copper stockpiles could 'temporarily buffer' the market when tariffs go into effect, according to Ewa Manthey, a commodity strategist at Dutch bank ING. However, the buildup of copper won't last forever, and it'll be difficult for the US to produce enough copper domestically. At some point, the US will likely need to import more copper under the 50% tariff, which could risk a resurgence in inflation, Manthey said. 'Higher copper prices also risk higher inflation, raising costs for US manufacturers without a domestic alternative available,' Manthey said. It remains to be seen whether companies will absorb the higher costs or pass the costs onto consumers in the form of higher prices, although economic theory suggests businesses would pass on higher costs to consumers when possible. Wall Street and corporate America have been expecting tariffs on copper — just not 50%. 'Investors were caught off guard, as the market had been expecting a much lower tariff rate,' Adam Turnquist, chief technical strategist at LPL Financial, said in an email. Smaller tariff rates such as 10% can be used strategically to encourage domestic manufacturing, economists say. But a rate as high as 50% could send a shock to markets, even leading to a drop in demand because prices are just too high. That could lead to slower economic growth across industries, such as a lull in home building. Trump has espoused using tariffs as a means to boost US manufacturing. But tariffs are not a panacea that will revive the manufacturing industry, Pepperdine's Parsons said. 'The rationale for this is to encourage production and investment in copper in the United States,' Parsons said. 'The issue is it's not like producing water, where you just open up the faucet. It could take years and years to open up a new copper mine, or even to expand production. So, while this does provide some incentive, it's something that's more long-run. You're going to feel the short-run pain.' Incentives like direct government subsidies or credits could promote domestic production of copper and fortify US supply chains, according to Parsons. While tariffs can help domestic companies sell more in the market, the higher prices can create unwanted ripple effects throughout the supply chain. Trump in February signed an executive order opening a Section 232 investigation into copper imports. That section of the 1962 Trade Expansion Act gives the president the authority to impose import duties to protect industries deemed vital to US national security. 'The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted and refined copper,' the executive order said. A Section 232 investigation comes with a 270-day deadline for an investigation, which means the Trump administration had until November to complete its review of copper, according to ING's Manthey. 'There are many foreign suppliers of copper, including close allies like Canada, so a national security rationale seems contrived,' Berkeley's Obstfeld said. Trump said in a social media post on July 9 confirming his intent to impose tariffs on copper that the metal is the second most-used metal in the Defense Department. But copper was not one of the 50 critical minerals designated by the US Geological Survey in 2022. The US Geological Survey is expected to publish an updated classification list for critical minerals this year. However, copper is considered a 'critical material' for energy, according to the Energy Department. 'The US has very limited current mining capacity,' Obstfeld said. 'It will take a decade or more to onshore copper production substantially. That will still leave copper prices much higher in the US, and in the meantime, American consumers and businesses will suffer even more.'
CNN
17-07-2025
- Business
- CNN
Copper prices have surged to record highs — and they could jump higher. Here's why
Copper is at the core of the American economy. It's in the wires of our pervasive electronics, in the walls of homes and in the engines of cars. Experts say President Donald Trump's plan for tariffs on the red metal could stymy the goal of boosting American manufacturing while potentially igniting inflation. Trump's July 8 announcement of a 50% tariff on copper imports beginning August 1 sent prices surging 13% in one day, up to a record high of $5.69 per pound. It was the biggest single-day increase in copper prices on record going back to 1968, according to FactSet. And those prices could just be a sign of things to come. A 50% tariff would be a 'massive tax on consumers of copper,' Ole Hansen, head of commodity strategy at Saxo Bank, said in a note. While Trump says his copper tariff is needed to spur domestic production due to national security concerns, there is no quick fix. The US imports over 50% of the copper it needs, primarily from South America, Hansen said, 'with no clear path to improving that for years to come.' That's because it takes almost 32 years, on average, from the discovery of mineable copper in the US to production, according to S&P Global Market Intelligence. And the end result of a big and fast copper tariff could simply be higher prices for many items, economists say. 'A tariff-induced price premium risks making copper—and by extension, US manufacturing and infrastructure—materially more expensive,' Hansen said. Copper is highly conductive, making it a critical input for electrical and electronic products. Copper can be found in the chips in mobile phones, plumbing in houses and in the engines of cars. 'This is a vital metal for everyday use,' Rob Haworth, senior investment strategy director at US Bank's asset management group, told CNN. 'You probably don't go a day where you haven't used something that has copper in it.' As Trump's self-imposed August 1 tariff deadline approaches, businesses and investors don't know what will happen in the wake of a massive tariff on a key component of the economy — let alone if the president will follow through with it at all, considering his history of backing off tariff threats. Copper is one of the most widely used metals in the world. The typical American-made car has over 50 pounds of copper, according to the Copper Development Association, a trade group. And the price of copper has been rising in recent years. The growing market for electric vehicles and the expansion of data centers thanks to the artificial intelligence boom have helped drive global demand for copper. Copper prices this year have smashed through previous records amid Trump's threat of tariffs. Copper futures in New York have soared almost 39% this year, outpacing the S&P 500's 6% gain, bitcoin's 24% gain and gold's 26% gain. Trump's tariffs on metals, including steel and aluminum, are intended to bolster US supply chains. His administration also cited national security concerns for levying a tariff on copper. But an import tax on copper would raise production costs for manufacturers in industries including construction, electronic goods and automobiles, according to Grace Zwemmer, an associate economist at Oxford Economics. 'All these tariffs raise costs and therefore injure downstream manufacturing,' Maurice Obstfeld, a professor of economics at UC Berkeley and member of former president Barack Obama's council of economic advisers, told CNN. 'For the US, this seems like a fairly pointless act of self-harm,' Obstfeld added. Businesses would face higher costs because there aren't many viable substitutes for copper, according to Brandon Parsons, a practitioner of economics at Pepperdine Graziadio Business School. While aluminum can be a substitute, it is more flammable and does not have the same conductivity, making it less viable for using in items like semiconductor chips. 'There isn't really a good way for businesses or consumers to avoid these higher costs,' he said. 'It's going to be felt widespread through the economy.' Chile, Canada and Peru provided over 90% of US copper imports in 2024, according to the US Geological Survey. The United States in 2024 mined an estimated 1.1 million tons of copper, according to the US Geological Survey, meeting just under half of its consumption. Arizona was home to more than 70% of domestic copper production in 2024. Shifting economic incentives in the modern era and the opening of free trade have both contributed to a decline in US copper production, according to Pepperdine's Parsons. The United States in recent decades has produced less copper as the global economy liberalized, enabling the country to import relatively cheap copper from countries like Chile and allowing the US economy to expand to other industries. Industrial buyers and Wall Street traders in recent months have shipped enormous amounts of copper to the United States to get ahead of potential tariffs. Morgan Stanley estimates 400,000 tons, or roughly six months' worth of 'extra' copper was front-loaded and delivered to the US in the early months of 2025. The copper stockpiles could 'temporarily buffer' the market when tariffs go into effect, according to Ewa Manthey, a commodity strategist at Dutch bank ING. However, the buildup of copper won't last forever, and it'll be difficult for the US to produce enough copper domestically. At some point, the US will likely need to import more copper under the 50% tariff, which could risk a resurgence in inflation, Manthey said. 'Higher copper prices also risk higher inflation, raising costs for US manufacturers without a domestic alternative available,' Manthey said. It remains to be seen whether companies will absorb the higher costs or pass the costs onto consumers in the form of higher prices, although economic theory suggests businesses would pass on higher costs to consumers when possible. Wall Street and corporate America have been expecting tariffs on copper — just not 50%. 'Investors were caught off guard, as the market had been expecting a much lower tariff rate,' Adam Turnquist, chief technical strategist at LPL Financial, said in an email. Smaller tariff rates such as 10% can be used strategically to encourage domestic manufacturing, economists say. But a rate as high as 50% could send a shock to markets, even leading to a drop in demand because prices are just too high. That could lead to slower economic growth across industries, such as a lull in home building. Trump has espoused using tariffs as a means to boost US manufacturing. But tariffs are not a panacea that will revive the manufacturing industry, Pepperdine's Parsons said. 'The rationale for this is to encourage production and investment in copper in the United States,' Parsons said. 'The issue is it's not like producing water, where you just open up the faucet. It could take years and years to open up a new copper mine, or even to expand production. So, while this does provide some incentive, it's something that's more long-run. You're going to feel the short-run pain.' Incentives like direct government subsidies or credits could promote domestic production of copper and fortify US supply chains, according to Parsons. While tariffs can help domestic companies sell more in the market, the higher prices can create unwanted ripple effects throughout the supply chain. Trump in February signed an executive order opening a Section 232 investigation into copper imports. That section of the 1962 Trade Expansion Act gives the president the authority to impose import duties to protect industries deemed vital to US national security. 'The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted and refined copper,' the executive order said. A Section 232 investigation comes with a 270-day deadline for an investigation, which means the Trump administration had until November to complete its review of copper, according to ING's Manthey. 'There are many foreign suppliers of copper, including close allies like Canada, so a national security rationale seems contrived,' Berkeley's Obstfeld said. Trump said in a social media post on July 9 confirming his intent to impose tariffs on copper that the metal is the second most-used metal in the Defense Department. But copper was not one of the 50 critical minerals designated by the US Geological Survey in 2022. The US Geological Survey is expected to publish an updated classification list for critical minerals this year. However, copper is considered a 'critical material' for energy, according to the Energy Department. 'The US has very limited current mining capacity,' Obstfeld said. 'It will take a decade or more to onshore copper production substantially. That will still leave copper prices much higher in the US, and in the meantime, American consumers and businesses will suffer even more.'
New York Times
09-07-2025
- Business
- New York Times
Trump Says He's Making America More Competitive. Is He?
President Trump won his office twice by promising to turbocharge the American economy and restore its global dominance over international competitors. This week, he turned back to his favorite tool, dealing out threats of tariffs like a blackjack dealer confident that the house always wins. 'Tariffs are making our country 'BOOM,'' Trump wrote on his social media site yesterday, where he also pronounced the country the 'hottest' in the world. Economists and industry experts, though, warn that Trump's sweeping changes to the economy and the country may have the opposite effect, potentially positioning the United States to be less competitive on the global stage. The tariffs are just one pillar of Trump's industrial policy. Tonight, I'm taking a look at that aspect, as well as two others, and I'll explain why some experts fear that six months of Trumponomics could stifle a key driver of American competitiveness: innovation. Trade restrictions like tariffs are a longstanding strategy for presidents who want to strengthen or bring back domestic industries, a goal that can bolster national security objectives as well as economic ones. Robert Atkinson, the president of the Information Technology and Innovation Foundation, told me that tariffs could increase national competitiveness — but they come with risks, too. Tariffs can wall off the American market while other countries trade freely with one another. And they can raise the prices of the goods American companies need to import in order to make their products, forcing them to reckon with higher costs, which their foreign competitors might not face. Want all of The Times? Subscribe.
Globe and Mail
09-07-2025
- Business
- Globe and Mail
27.3% of Warren Buffett's $258.7 Billion Portfolio Is Invested in These 2 American Stocks
Key Points Warren Buffett has often said to never bet against the American economy. American Express is one of Berkshire Hathaway's largest investment positions. Bank of America is a banking giant with durable earnings power. 10 stocks we like better than American Express › Warren Buffett has said time and time again to never bet against America. Investors who buy and hold American stocks have seen miraculous gains in wealth over the last century, due to the economic dominance of the country that now has a gross domestic product (GDP) of $30 trillion. It is no surprise then to see Buffett focus on American stocks in his investment portfolio over at Berkshire Hathaway (NYSE: BRK.B)(NYSE: BRK.A). Here are two blue chip American stocks that make up 27.3% of Berkshire Hathaway's stock portfolio today. A long-standing premium credit card franchise Close to 17% of Buffett's portfolio is invested in American Express (NYSE: AXP), which Berkshire has owned since 1991. The company dominates the premium credit card industry, with a focus on catering to travel, dining, and entertainment spending. It has built up a strong brand over the decades, with customers willing to pay high fees to have access to the American Express credit card network. The company now has 147.5 million credit cards in circulation and is adding over 3 million net new card additions to its network quarterly. After a period of stagnation in the early 21st century, American Express' new leadership team has reinvigorated the brand by catering to younger consumers with features like annual ride sharing credits on Uber. These younger consumers grew spending at 14% year over year last quarter through American Express cards compared to 7% for the overall business, which directly translates into revenue. These customers have high lifetime values as they will stick around with American Express for many years. Earnings per share (EPS) is up 159% in the last 10 years, with an acceleration in growth coming out of the COVID-19 pandemic. Buffett likes American Express as well because of its capital returns program, which includes buybacks and dividends. Buybacks have reduced American Express shares outstanding by 30% cumulatively in the last 10 years. Add it all up, and you can see why American Express is one of Buffett's largest holdings and looks to be a permanent position in the Berkshire Hathaway universe. BAC Shares Outstanding data by YCharts A durable banking giant Another Buffett stock that literally has "America" in the name is Bank of America (NYSE: BAC). It is Buffett's third-largest stock position (the first is Apple). He first bought shares in 2011 after the Great Recession and banking crisis when shares were cheap. Bank of America has been a mainstay of the U.S. banking system for over a century. It has nearly $3.4 trillion in total assets spread across consumer banking, wealth management, and global investment banking. If there is a legal financial service to be provided, you can bet that Bank of America does it. This is why it has 40 million mobile banking users, people who have stuck around with the banking giant for many years. Buffett loves investing in franchises that have long customer relationships, which describes a consumer banking giant like Bank of America perfectly. Coming out of the great financial crisis, Bank of America has seen its earnings grow substantially. Net income is up close to 2,000% since 2011 when Buffett purchased. Like American Express, Bank of America has reduced its shares outstanding by around 30% in the last 10 years, which juiced shareholder returns. Today, you can buy Bank of America at a reasonable price-to-earnings (P/E) ratio of just under 15. This makes it a great blue chip stock you can buy alongside Buffett for your investing portfolio. Should you invest $1,000 in American Express right now? Before you buy stock in American Express, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $695,481!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $969,935!* Now, it's worth noting Stock Advisor 's total average return is1,053% — a market-crushing outperformance compared to179%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. *Stock Advisor returns as of July 7, 2025
Yahoo
09-07-2025
- Business
- Yahoo
27.3% of Warren Buffett's $258.7 Billion Portfolio Is Invested in These 2 American Stocks
Warren Buffett has often said to never bet against the American economy. American Express is one of Berkshire Hathaway's largest investment positions. Bank of America is a banking giant with durable earnings power. 10 stocks we like better than American Express › Warren Buffett has said time and time again to never bet against America. Investors who buy and hold American stocks have seen miraculous gains in wealth over the last century, due to the economic dominance of the country that now has a gross domestic product (GDP) of $30 trillion. It is no surprise then to see Buffett focus on American stocks in his investment portfolio over at Berkshire Hathaway (NYSE: BRK.B) (NYSE: BRK.A). Here are two blue chip American stocks that make up 27.3% of Berkshire Hathaway's stock portfolio today. Close to 17% of Buffett's portfolio is invested in American Express (NYSE: AXP), which Berkshire has owned since 1991. The company dominates the premium credit card industry, with a focus on catering to travel, dining, and entertainment spending. It has built up a strong brand over the decades, with customers willing to pay high fees to have access to the American Express credit card network. The company now has 147.5 million credit cards in circulation and is adding over 3 million net new card additions to its network quarterly. After a period of stagnation in the early 21st century, American Express' new leadership team has reinvigorated the brand by catering to younger consumers with features like annual ride sharing credits on Uber. These younger consumers grew spending at 14% year over year last quarter through American Express cards compared to 7% for the overall business, which directly translates into revenue. These customers have high lifetime values as they will stick around with American Express for many years. Earnings per share (EPS) is up 159% in the last 10 years, with an acceleration in growth coming out of the COVID-19 pandemic. Buffett likes American Express as well because of its capital returns program, which includes buybacks and dividends. Buybacks have reduced American Express shares outstanding by 30% cumulatively in the last 10 years. Add it all up, and you can see why American Express is one of Buffett's largest holdings and looks to be a permanent position in the Berkshire Hathaway universe. Another Buffett stock that literally has "America" in the name is Bank of America (NYSE: BAC). It is Buffett's third-largest stock position (the first is Apple). He first bought shares in 2011 after the Great Recession and banking crisis when shares were cheap. Bank of America has been a mainstay of the U.S. banking system for over a century. It has nearly $3.4 trillion in total assets spread across consumer banking, wealth management, and global investment banking. If there is a legal financial service to be provided, you can bet that Bank of America does it. This is why it has 40 million mobile banking users, people who have stuck around with the banking giant for many years. Buffett loves investing in franchises that have long customer relationships, which describes a consumer banking giant like Bank of America perfectly. Coming out of the great financial crisis, Bank of America has seen its earnings grow substantially. Net income is up close to 2,000% since 2011 when Buffett purchased. Like American Express, Bank of America has reduced its shares outstanding by around 30% in the last 10 years, which juiced shareholder returns. Today, you can buy Bank of America at a reasonable price-to-earnings (P/E) ratio of just under 15. This makes it a great blue chip stock you can buy alongside Buffett for your investing portfolio. Before you buy stock in American Express, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and American Express wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $695,481!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $969,935!* Now, it's worth noting Stock Advisor's total average return is 1,053% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Uber Technologies. The Motley Fool has a disclosure policy. 27.3% of Warren Buffett's $258.7 Billion Portfolio Is Invested in These 2 American Stocks was originally published by The Motley Fool Sign in to access your portfolio
