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Almost a third of global container traffic goes through the Suez Canal, and around 8% of the world’s oil and gas. Because of its pivotal location between the Indian Ocean and the Mediterranean, the Suez Canal — and thus the Red Sea, which feeds into the canal — connects the huge flow of goods and commodities from the Middle East and Asia to Europe.
On Thursday, conflict in the Red Sea and its surrounding waterways reached a new pitch, with United States and allied forces striking several targets in Yemen as a response to weeks of attacks on shipping and naval assets in the area. The Houthis, a rebel group backed by Iran that controls large portions of the country, including the capital, have justified their attack as a response to Israeli strikes in the Gaza Strip.
So far, according to market researcher Rory Johnston, author of the Commodity Context newsletter, the effect on the global oil market has been muted.
Some oil tankers rerouted away from the Red Sea, according to Reuters; of the roughly 2,000 ships diverted in total, Johnston said, “only a few dozen have been tankers,” although that number rose Friday morning. While oil prices jumped around 3% early Friday, they have since gone roughly flat on the day. So far, missiles from Yemen “had a narrow miss” with a Russian oil tanker in the Gulf of Aden, Bloomberg reported.
“This’ll be the test, but I don’t yet have any reason to believe that it will be a material factor for oil markets,” Johnston told me. “[The] ultimate question will be how the Houthis respond.”
The Houthi attacks have been going on for months, but the major energy producers in the Middle East have yet to curtail their production and exports, Eurasia analyst Greg Brew told me.
“Overall, the crisis in the Red Sea represents a disruption risk to oil and gas, but not a threat to supply,” Brew said. “Tankers have alternate routes, and while a diversion of oil and gas shipments on par with the container ship diversion would add premiums to oil and gas prices and might bring slight inventory draws in consumer markets, they’re unlikely to seriously upset energy flows.”
It’s not just fossil fuels that are affected by turmoil in the Red Sea. Tesla’s Berlin plant will pause production for two weeks because of delays in getting parts. Citing both the plant delays and Hertz’s decision to sell off tens of thousands of Teslas from its rental fleet, Morgan Stanley analysts declared in a note to clients “EV Momentum Hits the Skids.”
The alternative route from the Middle East to Europe runs around the Cape of Good Hope, an added distance of around 6,000 miles and two extra weeks of shipping time. If more ships are forced to detour around Africa, that doesn’t just mean higher costs and longer waits, it also means more emissions. Shipping accounts for about 3% of global greenhouse gas emissions, a figure that could rise if global supply chains become less efficient.
The Suez Canal is not the only global shipping chokepoint under pressure. The Panama Canal — through which about 6% of global trade flows — has had to reduce the number of ships it allows through due to an ongoing drought that has lowered levels in the artificial waterway that feeds the canal system. Last year was the “second driest year in recorded history of the Panama Canal Watershed,” according to the Panama Canal Authority, with the driest October on record.
The Authority announced recently that it would up the number of ships allowed through every day from 22 to 24, although typically in January, 36 ships would be able go to go through.
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“I believe the tariff on copper — we’re going to make it 50%.”
President Trump announced Tuesday during a cabinet meeting that he plans to impose a hefty tax on U.S. copper imports.
“I believe the tariff on copper — we’re going to make it 50%,” he told reporters.
Copper traders and producers have anticipated tariffs on copper since Trump announced in February that his administration would investigate the national security implications of copper imports, calling the metal an “essential material for national security, economic strength, and industrial resilience.”
Trump has already imposed tariffs for similarly strategically and economically important metals such as steel and aluminum. The process for imposing these tariffs under section 232 of the Trade Expansion Act of 1962 involves a finding by the Secretary of Commerce that the product being tariffed is essential to national security, and thus that the United States should be able to supply it on its own.
Copper has been referred to as the “metal of electrification” because of its centrality to a broad array of electrical technologies, including transmission lines, batteries, and electric motors. Electric vehicles contain around 180 pounds of copper on average. “Copper, scrap copper, and copper’s derivative products play a vital role in defense applications, infrastructure, and emerging technologies, including clean energy, electric vehicles, and advanced electronics,” the White House said in February.
Copper prices had risen around 25% this year through Monday. Prices for copper futures jumped by as much as 17% after the tariff announcement and are currently trading at around $5.50 a pound.
The tariffs, when implemented, could provide renewed impetus to expand copper mining in the United States. But tariffs can happen in a matter of months. A copper mine takes years to open — and that’s if investors decide to put the money toward the project in the first place. Congress took a swipe at the electric vehicle market in the U.S. last week, extinguishing subsidies for both consumers and manufacturers as part of the One Big Beautiful Bill Act. That will undoubtedly shrink domestic demand for EV inputs like copper, which could make investors nervous about sinking years and dollars into new or expanded copper mines.
Even if the Trump administration succeeds in its efforts to accelerate permitting for and construction of new copper mines, the copper will need to be smelted and refined before it can be used, and China dominates the copper smelting and refining industry.
The U.S. produced just over 1.1 million tons of copper in 2023, with 850,000 tons being mined from ore and the balance recycled from scrap, according to United States Geological Survey data. It imported almost 900,000 tons.
With the prospect of tariffs driving up prices for domestically mined ore, the immediate beneficiaries are those who already have mines. Shares in Freeport-McMoRan, which operates seven copper mines in Arizona and New Mexico, were up over 4.5% in afternoon trading Tuesday.
“We had enough assurance that the president was going to deal with them.”
A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.
Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.
It’s not entirely clear what the president could do to unilaterally “deal with” tax credits already codified into law. Norman declined to answer direct questions from reporters about whether GOP holdouts like himself were seeking an executive order on the matter. But another Republican holdout on the bill, Representative Chip Roy of Texas, told reporters Wednesday that his vote was also conditional on blocking IRA “subsidies.”
“If the subsidies will flow, we’re not gonna be able to get there. If the subsidies are not gonna flow, then there might be a path," he said, according to Jake Sherman of Punchbowl News.
As of publication, Roy has still not voted on the rule that would allow the bill to proceed to the floor — one of only eight Republicans yet to formally weigh in. House Speaker Mike Johnson says he’ll, “keep the vote open for as long as it takes,” as President Trump aims to sign the giant tax package by the July 4th holiday. Norman voted to let the bill proceed to debate, and will reportedly now vote yes on it too.
Earlier Wednesday, Norman said he was “getting a handle on” whether his various misgivings could be handled by Trump via executive orders or through promises of future legislation. According to CNN, the congressman later said, “We got clarification on what’s going to be enforced. We got clarification on how the IRAs were going to be dealt with. We got clarification on the tax cuts — and still we’ll be meeting tomorrow on the specifics of it.”
Neither Norman nor Roy’s press offices responded to a request for comment.
The state’s senior senator, Thom Tillis, has been vocal about the need to maintain clean energy tax credits.
The majority of voters in North Carolina want Congress to leave the Inflation Reduction Act well enough alone, a new poll from Data for Progress finds.
The survey, which asked North Carolina voters specifically about the clean energy and climate provisions in the bill, presented respondents with a choice between two statements: “The IRA should be repealed by Congress” and “The IRA should be kept in place by Congress.” (“Don’t know” was also an option.)
The responses from voters broke down predictably along party lines, with 71% of Democrats preferring to keep the IRA in place compared to just 31% of Republicans, with half of independent voters in favor of keeping the climate law. Overall, half of North Carolina voters surveyed wanted the IRA to stick around, compared to 37% who’d rather see it go — a significant spread for a state that, prior to the passage of the climate law, was home to little in the way of clean energy development.
But North Carolina now has a lot to lose with the potential repeal of the Inflation Reduction Act, as my colleague Emily Pontecorvo has pointed out. The IRA brought more than 17,000 jobs to the state, per Climate Power, along with $20 billion in investment spread out over 34 clean energy projects. Electric vehicle and charging manufacturers in particular have flocked to the state, with Toyota investing $13.9 billion in its Liberty EV battery manufacturing facility, which opened this past April.
North Carolina Senator Thom Tillis was one of the four co-authors of a letter sent to Majority Leader John Thune in April advocating for the preservation of the law. Together, they wrote that gutting the IRA’s tax credits “would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” It seems that the majority of North Carolina voters are aligned with their senator — which is lucky for him, as he’s up for reelection in 2026.