Copper price challenges the government

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La Moneda Palace, Santiago de Chile. Photo by Eduardo Zárate

Metal prices collapse and Chile is the first country to feel the effects of the economic slowdown in China and the trade war with the USA.

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For many years, Chinese economic expansion has driven growth in Latin America, but now the customs tariffs applied by the USA may curb copper demand within the Asian giant. Washington could apply tariffs of 25% on US$200M of imports from China, despite initial reports that it would not exceed 10%. The red metal represents more than 45% of Chilean exports, and at the end of July they fell to their lowest level for the last 12 months.

In recent weeks, the International Monetary Fund forecast that growth in the region would be 1.6% this year, 0.4 points lower than its forecast at the end of the first quarter.

Similarly, Moody’s downgraded Chile’s rating, alleging a «broad deterioration» in its credit profile.

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