Copper Retreats as Trump Hints at New Severe Tariffs on China

Last month, Mexico announced plans to raise tariffs on auto parts and vehicle imports from countries like China. In its argument, the country explained that the tariffs surging to 50% would protect thousands upon thousands of industry and manufacturing jobs. Despite this, analysts argue that the increase may have also been a way to appease President Trump. 

Shortly after this announcement, the Chinese government released a statement condemning the plan, noting that the move was discriminatory. Lian Jian, the spokesperson of China’s Ministry of Foreign Affairs, argued that the country opposed all forms of protectionism and would protect its interests and rights in view of recent events. 

China is the 2nd largest trading partner for Mexico, after the United States. 

These developments have seen Mexico’s Congress delay the approval of the proposed hikes while it engaged in discussions with those countries and evaluated possible amendments. Morena legislators, who currently occupy majority seats in Congress, note that the proposal may not be approved in its current form and would likely be amended. 

It should be noted that any amendments would create fiscal gaps in Mexico’s 2026 national budget given that the Finance Ministry anticipates the proposed tariffs to raise approximately $3.76 billion. 

If approved in their original form, the hikes would apply to almost 1500 imports originating from countries Mexico doesn’t have trade agreements with, like Turkey, China, South Korea, Russia, India, Indonesia, and Thailand. 

In the event that Mexico does go ahead and approve the increased tariffs in November and China retaliates, copper may be next on the chopping board. 

The North American country exported about 5% of copper ore to China in the period between January and July, a modest share but one that underscores the countries’ trade interdependence. 

Southern Copper, a subsidiary of Grupo Mexico, dominates the nation’s copper production, positioning it at the center of any potential fallout. 

With global copper markets already tight—driven by surging demand from electrification and renewable energy projects—any disruption to trade flows could heighten price volatility. A retaliatory move from Beijing would not only weigh on the North American country’s export earnings but also cloud the outlook for Southern Copper and other miners as investors brace for short-term uncertainty in the metals sector. 

Trump’s renewed hints at imposing even harsher tariffs on Chinese goods have only amplified market jitters, fueling fears of a broader trade confrontation that could further rattle global commodities. 

Copper exploration companies like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) will be watching how the market for commodities shifts in light of the trade conflicts engulfing the U.S. and its allies on one hand and China with its allies on the other. 

NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF 

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