Itís not the best of times for the copper market, and as the world looks on at the China-US trade dispute, metal prices are plummeting. It came to light this week that Washington is seriously considering imposing higher tariffs on Chinese goods. The tariffs may be increased to 25% from the previously-proposed 10%. Itíll probably be a matter of weeks before a final decision is made on the scale of the tariffs and when to impose them. The tariffs are expected to apply to around 200bn USD worth of Chinese products. This will make it more and more difficult for China to break into US markets. There are already tariffs in place on around 50bn USD worth of Chinese goods, which have already caused jitters on the market.

China consumes about half of the worldís copper supply, so any news items that could threaten its position across global supply chains is going to bring metal prices down.

If the US continues to act so aggressively in its trade relations with China, it could hamper Chinaís economic growth. The macro data doesnít look good either: Chinaís PMI dropped from 51.5 to 51.2 in June. This indicator reflects the optimism among business owners regarding supply from manufacturers, and its decline to a 5-month low perfectly illustrates how sensitive the economy and its productivity are to external factors. This trade standoff could be costly for both sides, and we still donít know how Beijing will respond to this latest attack.

Copper has been trading within a downwards channel since the 10th of June, during which time itís lost nearly 20% in value and is now at 6,052 USD per tonne. The technicals suggest that prices are set to consolidate between 5,895 and 6,315 USD per tonne, that is, if the trade war narrative subsides for a bit. If the US does impose new levies, and China finally responds to this aggression, coper could easily fall to 5,500 USD per tonne. You can see forex trading software information in