Copper Tariff Shock: Trump Plans 50 Per Cent Duty To Revive Domestic Industry

The announcement sent copper futures surging, with US Comex contracts jumping over 12 per cent to a record high, reflecting market surprise at both the timing and the steepness of the proposed rate.

The move is expected to most significantly affect copper exporters such as Chile, Canada, and Mexico—three of the United States’ largest suppliers of copper and copper-based products.

Source : Freepik

US President Donald Trump has declared plans to impose a 50 per cent tariff on copper imports, a move he says is aimed at revitalising domestic production of a metal vital to a range of sectors, including electric vehicles, power infrastructure, and defence manufacturing.

Speaking during a Cabinet meeting at the White House on Tuesday, Trump stated, "I believe the tariff on copper, we're going to make 50 per cent," though he did not confirm when the measure would come into effect, reported Reuters.

The announcement sent copper futures surging, with US Comex contracts jumping over 12 per cent to a record high, reflecting market surprise at both the timing and the steepness of the proposed rate.

Commerce Secretary Howard Lutnick later told CNBC that the tariff could be implemented by late July or as soon as August 1. He added that further details would be posted by the president on his Truth Social account. As of Wednesday evening, a formal notification had yet to be made, and multiple stakeholders, including foreign governments and mining companies, were awaiting clarity on the scope of the proposal.

Concerns Rise Among Trade Partners and Copper Users

The move is expected to most significantly affect copper exporters such as Chile, Canada, and Mexico—three of the United States’ largest suppliers of copper and copper-based products. Officials in these countries, many of which have free trade agreements with the US, have voiced concern, with Chile’s Foreign Ministry stating it had received no official notification. Codelco Chairman Máximo Pacheco noted the company is eager to understand which copper categories the tariff will target.

Pierre Gratton, head of the Mining Association of Canada, expressed concern regarding the potential impact on facilities like Glencore’s Horne smelter in Quebec, while Saxo Bank’s Ole Hansen warned of a likely correction in copper prices after the initial surge. “The US has imported a whole year of demand over the past six months, so the local storage levels are ample,” Hansen explained.

Industry Reacts Cautiously as Uncertainty Persists

Freeport-McMoRan, the US’s largest copper producer,  which mined 1.26 billion pounds (approximately 571,530 metric tonnes) of copper domestically in 2024, has reportedly urged the administration to focus on incentivising domestic production rather than implementing protectionist measures that could ripple through the global economy.

The tariff proposal follows a Section 232 investigation launched in February to assess whether copper imports pose a national security risk. While the review was initially scheduled to conclude by November, Secretary Lutnick confirmed that the investigation is now complete.

“The idea is to bring copper home, bring copper production home, bring the ability to make copper, which is key to the industrial sector, back home to America,” Lutnick said.

While the National Mining Association withheld comment, indicating it would respond once full details were available, analysts from RBC Capital Markets warned of short-term turbulence in copper prices and copper-related equities should the policy be enforced.

With demand for copper set to rise in the coming years due to electrification and infrastructure upgrades, the proposed tariff underscores the tension between boosting domestic capability and maintaining stable global trade flows.