Goldman Sachs is eyeing a high-reward opportunity in copper that could pay off big if the U.S. follows through on its protectionist policy shift.
In a note published on Wednesday, Goldman Sachs analysts led by Eoin Dinsmore outlined a bullish view on what they are calling “The Copper Tariff Trade,” a strategy built on the expectation of a potential import tax from the Trump Administration.
What’s Happening With Copper Tariffs?
In February, the Trump Administration launched a formal investigation into copper imports under Section 232 — a process used to determine if certain imports pose a national security risk. It’s the same move that led to tariffs on steel and aluminum years ago.
“For metals there is a stated and very real commitment to tariffs, which we believe they will deliver on,” Dinsmore wrote.
Goldman Sachs thinks copper is next in line. The bank says there’s a 90% chance the U.S. will impose a 25% import tariff on foreign copper, possibly as soon as June. But right now, markets are acting like there’s only a 60% chance of that happening.
That’s where the trade opportunity comes in.
The Trade: Bet On COMEX Over LME Copper
Goldman says the market is underpricing this risk and suggests a tactical move: go long …