The latest trade war drama… the potential fallout of the copper tariff… how to hedge yourself… why Nvidia continues to be Louis Navellier’s favorite stock… sell this dog immediately
Yesterday, President Trump announced a 35% tariff on Canadian imports starting August 1st.
In a letter to Prime Minister Mark Carney that Trump posted on Truth Social, the President added:
If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge.
While such an announcement would have likely resulted in a steep market selloff two months ago, stocks are only modestly lower as I write Friday approaching lunch. Wall Street is now familiar with the bluster, looking past it in expectation of eventual deals.
Here’s our hypergrowth expert Luke Lango explaining in yesterday’s Innovation Investor Daily Notes:
Trump’s playbook is obvious at this point: talk tough, rattle sabers, then strike deals and claim victory.
In the end, we think deals will get done. Tariffs will settle at manageable levels (our base case remains ~10%, up from 2.5% in 2024 but down from ~30% post-Liberation Day), and the market will move on.
Once that happens, investors will refocus on what really matters — the AI Boom — and tech will lead the next leg higher.
We hope Luke is right because Canada is an important trading partner. Last year, it was the third-largest source of goods imported into the U.S. And it was the top recipient of goods exported from the U.S.
But this Canada tariff isn’t the only new trade war worry that’s rattled markets this week…
Is the new tariff on copper a portfolio killer?
On Wednesday, President Trump announced that a 50% tariff on imported copper would take effect August 1.
U.S. copper futures on the Comex jumped a staggering 17% in a single day – an unprecedented one-day move – hitting an all-time high.
By contrast, London Metal Exchange prices fell about 2–4%, reflecting the tariff-based split between U.S. and global markets.
So, what’s going on here? And what are the potential domino effects?
First, for context, copper is a critical metal for tomorrow’s leading technologies. Its use spans modern industry – from autos and wiring to EVs, data centers, plumbing, renewable energy, and far more. It’s everywhere.
So, if its price races higher, the risk is that we’ll feel it directly in our wallets. And of course, if prices jump higher, that will likely slow down the Fed with interest rate cuts – which would have all sorts of knock-on economic effects.
With so much at risk, what, exactly, is President Trump doing?
It appears he wants to boost domestic production and reduce our reliance on imports. A 50% tariff on imports creates loads of overhead room for domestic copper miners to step in and build out a homegrown industry.
But it’s not that simple.
Here’s ING:
The US produces only about 5% of the world’s copper and has seen a 20% decline in production over the last decade. Building new mines in the US can take up to 29 years due to lengthy permitting processes…
What’s more, previous tariffs on steel and aluminum did not lead to increased domestic production of the two metals.
In 2024, the output of the US steel industry was 1% lower than it had been in 2017 before the introduction of the first round of tariffs by Trump, while the aluminum industry produced almost 10% less.
So, what’s the risk of significant inflation from these copper tariffs?
Let’s return to Luke:
The relationship between copper and inflation is confusing.
Copper prices used to be highly correlated with inflation from 2007 to 2022. But that correlation has broken in the past 3 years, with copper prices spiking from $350 to $550 while inflation has fallen from 9% to 2%.
Are we due for a sharp snapback in this correlation? Will inflation spike to reconnect with spiking copper prices? Or is this correlation broken? Are we in a new economic world order that relies less on copper?
Copper content in EVs has been falling, driven by efficiency improvements and the adoption of thinner materials and alternative materials like aluminum. Maybe that’s happening everywhere.
I’m inclined to say the correlation is broken: Higher copper prices will not create meaningful reinflation.
Once again, we hope Luke is right. But if you’re looking to hedge your portfolio against rising copper prices, check out Freeport-McMoRan (FCX).
Tariffs that raise the price of imported copper shift demand toward domestic supply, boosting sales volumes and profit margins. And Freeport has significant U.S. operations (notably in Arizona and New Mexico).
For more on this, let’s go to Tom Yeung, Eric Fry’s lead analyst in Fry’s Investment Report
Eric and Tom have held FCX in their portfolio since 2020 and are now sitting on 217% gains.
Here’s Tom:
As one of the world’s largest publicly traded copper producers, Freeport-McMoRan is up 23% year-to-date…and more gains are likely ahead.
Freeport-McMoRan operates one of the last two copper smelters in America, and a 50% tariff on imports would mean it no longer must compete against cut-priced imports.
Years of overproduction in China have left the country with too much capacity, causing refining charges to turn negative in recent years.
“It’s a really hard business,” Freeport CEO Kathleen Quirk said in a recent interview with Bloomberg News. “Unless you’re compelled to build one – unless the government says you have to do it – you’re just going to be economically incentivized to export.”
Even if cooler heads prevail and Trump drops his 50% tariff, Tom points toward copper’s role as a critical material in next-gen AI technology as a tailwind for prices:
Dr. Copper’s prediction is that spending on artificial intelligence infrastructure will surge.
Since January, U.S. copper prices have crept up from $4 per pound to $5. The conductive metal is essential to the electrical wiring that powers AI data centers, and rising demand has steadily pushed its prices higher.
That demand is expected to accelerate in the coming years. Analysts at the International Energy Agency (IEA) expect copper demand to rise another 50% through 2050 in both Announced Pledges Scenario (APS) and Net Zero Emissions (NZE).
Meanwhile, mining supplies are set to decline. By the time we get to 2040, the IEA believes that current projects might only supply half of the world’s needs.
Bottom line: Whether you’re playing offense, seeing copper as a critical part of the global AI buildout, or defense, buying domestic copper producers as a hedge against tariffs, FCX is worth a look today.
For more from Tom and Eric in Fry’s Investment Report, you can learn more about joining them here.
A monopoly for the next decade
If you own Nvidia, keep holding – it’s going to make you wealthy over the next decade.
That’s Louis Navellier’s bottom line. But this isn’t solely a reflection of the company’s AI dominance today – it’s also laying the foundation of being the quantum computing dominator of tomorrow.
Here’s Louis from yesterday’s Flash Alert in Breakout Trader:
I’m sure most of you know that NVIDIA is my largest holding, I’ve had it for a long, long time…
I’ve written a lot of articles about NVIDIA – about why you shouldn’t sell it, how it’s a monopoly, how it’s going to dominate the AI chips to the end of the decade.
And then, of course, it’s trying to make a transition to quantum computing. Essentially, they’re trying to dominate the way they program the quantum computers.
The reason there has to be a shift to quantum computing at the end of the decade is NVIDIA won’t be able to make its chips faster. It’s approaching the atomic level on transistors, and you can’t exactly split atoms to make chips faster.
So, it’s a wonderful stock – this is why monopoly stocks are safe.
Now, although NVIDIA is a monopoly, it has its own vulnerabilities.
Specifically, it relies on rare earth elements (REEs) in the manufacturing of its high-performance computing and graphics processing units (GPUs).
And as we delved into in yesterday’s Digest, we’re currently in a battle with China for access to critical REEs… and by extension, AI/quantum supremacy… which is the key to tomorrow’s global leadership.
Louis profiled all this in his live broadcast Wednesday night, giving away one of his favorite rare earth stocks for free – MP Materials.
The timing was remarkable. Yesterday morning, news broke that the Pentagon had become MP Material’s largest shareholder. The stock surged 51% yesterday. As I write Friday, it’s up even more, though traders are beginning to take some profits.
According to Louis, this is just the beginning – the bulk of the investment returns remains on the table. And not just from MP Materials; Louis has found a handful of leading REE plays that he believes have quadruple-digit return potential.
We’ll keep you updated on all these stories here in the Digest.
Have a good evening,
Jeff Remsburg
