President Donald Trump’s decision to delay an increase in tariffs on Chinese exports could indicate that the end of a trade dispute that has disrupted the scrap industry may be nearing.
A deal could help copper prices, which have struggled as the U.S. and China have exchanged tariffs in a year-long trade war.
The U.S. had planned to raise tariffs on $200 billion of Chinese goods from 10 percent to 25 percent on March 2. But the Office of the U.S. Trade Representative announced on Feb. 27 that the increase would be suspended indefinitely, thereby confirming a delay that Trump had first indicated was possible on Feb. 24, citing progress in trade talks.
According to Reuters, on Feb. 25, the three-month price of copper reached $6,516.50 per ton, its highest since July 4, 2018, Recycling Today reported in an article on how the copper price strengthened on positive China-U.S. talks.
U.S. exports of copper to other countries, like India, Japan, Malaysia and South Korea, have increased as China has tightened restrictions on imports, Institute of Scrap Recycling Industries economist Joe Pickard wrote in a recent summary of commodity news.
Total U.S. scrap exports to China decreased 37 percent, or by $1.9 billion, to $3.3 billion for the first 11 months of 2018, according to Pickard. U.S. scrap exports to countries other than China increased 13 percent, or by $2.5 billion, to $18.7 billion during that same period.
On Feb. 27, U.S. Trade Representative Robert Lighthizer told members of Congress that any deal that the administration reaches with China would not need congressional approval, unlike traditional free trade agreements, according to a CNN article on the U.S.-China trade war tariffs. “Instead, the scope of the agreement will focus on unfair trading practices specified in the Trump administration’s Section 301 investigation, which provided the basis for imposing tariffs last year.”