Investing.com -- U.S. tariffs on copper could be introduced within weeks, much earlier than expected, reported Bloomberg, with Morgan Stanley stating in a note Wednesday that they could significantly impact price spreads.

"If tariffs were set at 25% (as for steel and aluminum), we think the COMEX-LME spread would widen to this level," the Morgan Stanley analysts wrote, adding that the adjustment may come more from London Metal Exchange (LME) weakness than COMEX strength, as U.S. import demand dries up.

Currently, the COMEX-LME spread stands at approximately 19% for the front contract and 23% for 12 months forward.

Concerns around potential tariffs have already contributed to a wider spread and tightened copper markets outside the U.S., with up to 500,000 tons of copper reportedly en route to the U.S., said Morgan Stanley, citing Bloomberg.

However, they believe an actual tariff announcement could trigger a reversal in LME prices.

The U.S. imports about 50% of its copper needs, or 900,000 tons per year, but with front-loaded shipments, "we could see U.S. import demand temporarily dry up if tariffs are implemented," the analysts noted.

In the equities market, Freeport-McMoRan (NYSE: FCX ) would benefit the most from a wider COMEX-LME spread due to its direct exposure to COMEX copper prices, Morgan Stanley said.

The bank adds that if tariffs are delayed, not implemented, or exemptions are granted, the impact could differ.

"If the Section 232 investigation takes longer, the current status quo may continue," Morgan Stanley noted.

They also state that exemptions for certain countries could narrow the COMEX-LME spread, while a complete rejection of tariffs could pressure COMEX prices.