PRESIDENT Donald Trump signed an executive action directing the Commerce Department to examine possible copper tariffs, the latest in a string of measures aimed at imposing sector-specific levies that offer to reshape global supply chains.
Trump said the order would have a “big impact” as he signed it on Tuesday (Feb 25) in the Oval Office, joined by Commerce Secretary Howard Lutnick.
Senior administration officials earlier on Tuesday cast the step as necessary to address what they said was a national security issue. They argued that dumping and overcapacity in world markets had impacted domestic US copper production, leaving weapons systems and other critical products dependent on imports. The officials briefed reporters on condition of anonymity to discuss moves that had not yet been made public.
The officials said it was premature to discuss a potential rate for the copper tariffs in response to a reporter’s question.
The investigation will be carried out under Section 232 of the Trade Expansion Act, which gives the president broad authority to impose trade restrictions on domestic security grounds. Trump is also employing that authority to impose 25 per cent tariffs on two other industrial metals – steel and aluminium – with those levies slated to take effect in March.
Lutnick said that the action would also probe products that include copper, and said the administration aimed to rejuvenate the domestic copper industry.
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“Like our steel and aluminium industries, our great American copper industry has been decimated by global actors attacking our domestic production,” Lutnick said. “Tariffs can help build back our copper industry, if necessary, and strengthen our national defence.”
Peter Navarro, a Trump trade adviser, singled out China, saying it had “long used industrial overcapacity and dumping as an economic weapon to dominate global markets, systematically undercutting competitors and driving rival industries out of business”.
The US consumed about 1.6 million tonnes of refined copper in 2024, according to the US Geological Survey. The US relies on significant imports of the metal, used in everything from electrical wiring to solar panels and gutters, with net copper imports accounting for 36 per cent of demand, according to Morgan Stanley research.
While the US is a significant producer of the metal, producing some 850,000 tonnes of primary copper last year, it still relies on imports from key trade allies to fill the need. Chile is the largest import source, accounting for 38 per cent of total import volumes, followed by Canada and Mexico at 28 per cent and 8 per cent, respectively.
Trump’s comments last month that he intended to implement tariffs on copper came as a surprise to the physically traded copper market, as the key commodity avoided being caught in the president’s trade war during his first term.
Benchmark prices on futures in New York are up about 13 per cent this year amid speculation that any trade barriers would raise prices on US consumers. Trump’s sudden announcement fuelled a historic disconnect from other global price benchmarks, with Comex copper futures at one point trading at a premium of more than US$1,200 a ton to equivalent contracts traded on the London Metal Exchange.
Questions are sure to arise as to how such a tariff will affect the flow of metal to the US market. The tariff will surely raise the cost to obtain metal from foreign countries, potentially forcing sellers to divert tonnes elsewhere in the world. Though, to be sure, its not certain. Aluminium, for example, is continuing to flow to US buyers despite the looming tariffs on that metal as alternative markets in Europe and elsewhere are already well supplied.
Trump has also said additional tariffs on automobiles, lumber, semiconductors and pharmaceutical drugs of around 25 per cent are forthcoming, with an announcement as soon as Apr 2. Individual countries are also in his sights, with China already facing a new 10 per cent levy on imports and Trump saying on Monday that tariffs scheduled to hit Canada and Mexico with a 25 per cent rate in March were “on time”, even as a US official cautioned that schedule was less certain.
His most sweeping action, though, promises to be reciprocal tariffs, with recommendations due in April. Those import taxes will target countries that have their own levies on the US, with Trump aiming to match tariff and non-tariff barriers.
Most mainstream economists warn import taxes risk fuelling inflation that already has Americans on edge, will fail to bring in the revenue Trump foresees, and are poised to reduce or redirect trade flows. BLOOMBERG
