• Global markets slipped this morning on the news that President Trump wants a 35% tariff on Canada. And if he puts a 200% tariff on pharmaceuticals it might wipe 4% off the GDP of Switzerland, Pantheon Macroeconomics estimates. Yet many investors are assuming that much of this will never happen.

S&P 500 futures slipped 0.7% this morning, premarket, after the index hit a new all-time high yesterday of 6,280. Around the world, markets in Asia sold off today but mostly at levels of less than 1%. In Europe, the Stoxx Europe 600 was down 1% in early trading. Many of those indexes have also hit recent all-time highs, so—fingers crossed!—this could be routine profit-taking rather than the first rumblings of an earthquake.

Emma Wu at JPMorgan noted that retail investors recently became more cautious. “Activity slowed further this week as profit-taking continued,” she told clients in a note seen by Fortune. “Over the past week, they net bought $5.7B – broadly in line with the 12M average but $1B below the YTD weekly pace.”

Nonetheless, it’s a stark contrast to the panic of early April, when President Trump made his first announcements about new trade tariffs and markets went into a nose-dive. This time around, investors are assuming that whatever Trump announces today will either not happen, get delayed, or be moderated in a future deal. 

In Trumpworld, tomorrow never comes.

This level of calm requires investors to ignore a lot of new elephants in various asset-market rooms. Last night, Trump announced he wanted a 35% tariff on Canada. But analysts today are noting that the tariff would only apply to goods not covered by the existing trade deal between the U.S. and Canada.

“So the bark is probably stronger than the bite here and this probably reflects why S&P futures are only down a couple of tenths so far this morning,” Jim Reid and his team at Deutsche Bank told clients this morning.

And then there’s the 200% tariff on pharmaceuticals. If that was to ever actually happen it would wipe 4% off the GDP of Switzerland, according to Claus Vistesen and Melanie Debono at Pantheon Macroeconomics. (The Swiss make and export a lot of drugs.) But there’s no need to freak out, the pair say. “The timeline is distant, and the threat was an off-hand comment in an interview—which we think is why most pharma stocks fell by less than 1% on the news.”

At UBS, Paul Donovan had a similar theme: “Most of Trump’s tax burden hits US consumers with a delay of several months,” he wrote this morning. “Investors are inclined to assume that Trump will retreat as Trump has done so often.”

Stock investors were also likely cheered by hearing two of the Fed’s regional presidents say yesterday that the effect of tariffs remains long-delayed and that companies are so far absorbing the price increases in their margins rather than pushing them onto consumers.

Thus the markets remain buoyant—so far—despite the apparent dangers. Investors in U.S. equities may be shaping up to take a more negative view, judging by the decline in futures prices this morning. We’ll see.

If the Americans stay optimistic, it presents the president with a paradox, UBS’s Donovan said: “Markets are strong on the assumption Trump will retreat; markets being strong reduces the incentive for Trump to retreat.” 

Here’s a snapshot of the action prior to the opening bell in New York:

• S&P 500 futures were down 0.7% this morning after the index hit another all-time high yesterday, closing up 0.27% at 6,280.
• Bitcoin went on a tear and hit another all-time high. It is now above $117K.
• The VIX fear index was up 6% yesterday.
• Stoxx Europe 600 sold off by 1% in early trading.
• The UK’s FTSE 100 was down 0.38% this morning after hitting an all-time high yesterday.
• India’s Nifty 50 declined 0.79%.
• South Korea’s Kospi was off 0.19% this morning.
• China was widely up.

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• President Trump’s 50% tariffs on copper, due to start August 1, are causing unusual distortions in the metal markets. Copper is now 25% more expensive in New York than London. And there’s a rally in copper scrap.

It’s happening. President Trump is indeed imposing a 50% tariff on all imported copper. He posted on Truth Social yesterday: “After receiving a robust NATIONAL SECURITY ASSESSMENT. Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense!”

The markets are already behaving strangely. Copper futures spiked upward, obviously.

Now the price of copper is 25% higher in New York than it is in London, according to Bloomberg. This chart from Canaccord Genuity, via Dalton Baretto et al., shows the spread:

Copper is used in a vast array of consumer and industrial products.

Most businesses, even if only marginally, are affected by the price of copper. While the cost of copper is going up for American businesses and consumers, the rest of the world is scratching its head while it enjoys a considerable discount on the price of copper.

Trump thinks the U.S. will become self-sufficient in copper production, but that is extremely unlikely to happen, according to Bernstein analysts Bob Brackett and Andrianto Guntoro:

“The US is home to only two primary smelters. The cost of building a smelter is perhaps $6 bln per million tons capacity … The timeline of building a smelter from scratch is perhaps 5 years. Globally, smelters are oversupplied, and smelter economics are terrible (negative treatment charges/refining charges). It is highly unlikely that a company would invest $5-6 bln for a project that wouldn’t be operational during a Trump presidency with poor margins. Therefore, the tariff incents no proper economic action but rather simply adds cost to US manufacturers. Therefore, we think logic ultimately prevails, and the policy is radically transformed (keeping 50% on everyone else but exempting ‘friendly trading partners’ Chile, Canada and Peru from the tariffs solves the problem),” they told clients.

Jefferies analysts Christopher LaFemina and Patricia Hove agree: “The US will still rely on foreign mines to meet demand for the foreseeable future.”

In the meantime, weird distortions in the metals markets have already started to kick in.

In addition to the New York-London spread, there’s suddenly a rally in scrap copper.

Bloomberg’s John Authers reports: “A short-term fix … requires boosting production from copper scrap, which has traditionally been shipped to processors overseas. The surge in Comex prices invariably fed into scrap. That might now turn out to be a lifeline, even if temporary, while policymakers await the broader impact from tariffs.”

This is where we are now: The Golden Age of scrap metal.

Here’s a snapshot of the action prior to the opening bell in New York:

• S&P 500 futures were down marginally this morning, premarket. The underlying index rose 0.61% yesterday.
• The UK’s FTSE 100 rose 1.14% to touch a new all-time high.
• Stoxx Europe 600 was up 0.59% in early trading.
• South Korea’s Kospi was up 1.58% this morning.
• The Nikkei 225 was down 0.44%.
• Bitcoin neared its all-time high according to Bloomberg, hitting $112,009 on some exchanges. Coinbase rose 5.36% on the news. BTC is currently just above $111K.

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• The price of copper moved upward sharply yesterday after President Trump said he thought imports should be taxed at 50%. He also said pharmaceuticals should be tariffed at 200%. The U.S. is not self-sufficient in either product—which would make life more expensive for Americans if Trump follows through with his plans. This morning, investors seem to be betting that he’ll eventually climb down.

Forgive yourself if you haven’t given much thought to the copper futures market recently. But yesterday, the price of contracts for the not-very-precious metal spiked upward viciously because—you guessed it—President Trump announced a new tariff plan.

“Today we’re doing copper,” Trump said, while floating the notion that the U.S. should impose a 50% tariff on imported copper.

Copper prices were up 17% in New York on Tuesday but fell back this morning. Futures contracts were $5.54 per pound this morning, up 8% over the previous five days. There hasn’t been this much drama in the copper market since the financial crisis of 2008.

Analysts, investors, and economists are agog.

The U.S., as everyone knows, is not self-sufficient in copper. The U.S. imports 810,000 metric tons of copper every year, because the metal is used to make … pretty much everything! Certainly, every electronic gadget in your home and car contains copper.

This isn’t a debate, by the way. There’s broad agreement that the U.S. can’t produce all the copper it needs. Jeffries analyst Christopher LaFemina says so. The Mining Association of Canada says so. And Morgan Stanley says so: About 36% of copper consumed in the U.S. is imported, according to research cited by Bloomberg. It would take years to dig the mining capacity needed for the U.S. to generate all the copper it needs.

Trump’s 50% tariff would therefore be a straightforward price increase imposed on U.S. businesses and consumers. Copper prices actually fell in London this morning as producers anticipated reduced demand from the American market.

This poses a problem for Trump, who has been bullying U.S. Federal Reserve Chairman Jerome Powell to lower interest rates. But Powell won’t be lowering rates if the spiralling price of copper is lifting inflation. Research by UBS and Pantheon Macroeconomics—seen by Fortune this morning—suggest that a copper tariff would add 0.02% to 0.03% onto the inflation rate. That’s not a huge amount—so it might still give Powell the wiggle room he needs to cut the rate in September despite the copper problem.

And behind the copper chaos, there’s a bigger potential issue waiting: Trump’s proposed 200% tariff on imported pharmaceuticals: “A 200% tariff rate on pharmaceuticals would be a much bigger deal, as they account for 8% of total imports. But the president threatened this exorbitant rate after a proposed transition period of at least one year, allowing time for massive stockpiling, which would limit the impact on businesses’ costs and consumer price inflation,” Samuel Tombs and Oliver Allen told clients in a note this morning.

Not just a “bigger deal” for the markets, of course. It could be a political problem for the president. Somehow, Trump will have to sell more expensive copper and drugs to a voting public that, presumably, would rather not pay more for these essentials. 

Today, the smart money is saying that this is all drama for drama’s sake. It’s waiting for the actual tariff deals to get cut before it believes the headlines. S&P futures were sitting placidly this morning, up only 0.12%. It’s almost as if investors don’t believe that Trump will ultimately go through with these plans.

Here’s a snapshot of the action prior to the opening bell in New York:

• S&P 500 futures were flat this morning in premarket trading after the index itself closed flat yesterday at 6,225. 
• Asian markets were largely up this morning with the exception of China, where the CSI 300 sank 0.18% and the Hang Seng in Hong Kong lost more than a point. 
• Stoxx Europe 600 was up 0.5% in early trading. 
• The UK’s FTSE 100 rose 0.22% as it neared another all-time high. 
• Bitcoin remained above $108K.

This story was originally featured on Fortune.com

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