Citigroup cuts copper forecast on tariffs risk, China outlook
The bank has cut its short-term outlook for copper prices by 11% to $8,500 a ton over the next three months.
A trade meeting between the US and European Union due to take place next month is expected to slip to early next year as the two allies remain deadlocked in talks about steel and critical minerals.
The Trade and Technology Council was meant to take place last month in parallel to the US-EU summit but was postponed to mid-December. The TTC meeting is now likely to happen in early 2024, according to people familiar with the matter.
The delay comes as negotiations to agree on global steel accords and a critical minerals deal have both stalled. Bloomberg previously reported that the US wants to maintain the status quo on steel and aluminum trade for two more years, while the EU is looking for changes to the arrangement as it says it’s unfair and cumbersome.
The TTC has aimed to improve the transatlantic dialogue but fallen short of concrete deliverables on relevant issues, such as answering the question of how to engage with China and how to approach technology issues. Some officials have questioned the relevance of the forum.
The pursuit of a metals accord is aimed at settling a Trump-era dispute sparked by tariffs on European imports on the grounds they posed risks to American national security. Brussels scoffed at that justification and responded with retaliatory measures. The dispute resulted in tariffs on as much as $10 billion in transatlantic trade.
The two sides reached a temporary truce in 2021, which expires at year-end, to provide time to negotiate a lasting agreement.
As part of the temporary arrangements, the US partly removed the Trump measure and introduced a set of tariff-rate quotas above which duties on the metals are applied, while the EU froze all of its restrictive measures. That has created an unbalanced situation that has seen EU exporters pay over $350 million a year in duties, said the people, who spoke on the condition of anonymity.
Meanwhile, talks to agree on a critical minerals agreement needed to allow European companies to access some of the benefits of the green subsidies in the Inflation Reduction Act remain stalled over labor rights, said the people.
(By Alberto Nardelli)
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