Copper futures rise after Trump announces a 50% tariff on imported copper

The President Donald Trump announced that he would announce a 50% copper tariff on Tuesday in order to increase U.S. production. Copper is a critical metal for electric vehicles, military equipment, the power grid, and many consumer products.

U.S. Comex Copper Futures jumped over 12%, reaching a new record high, after Trump announced his planned tariffs. The announcement came earlier than expected and at a steeper rate.

Trump informed reporters during a cabinet meeting at the White House that he would announce the copper tariff later in the afternoon, but did not specify when it would go into effect.

Trump stated that he believes the tariff on copper will result in a 50% increase.

Howard Lutnick, U.S. Secretary of Commerce, said in an CNBC interview that after Trump's speech the copper tariffs were likely to be implemented by the end or August 1. He said Trump will post the details on his Truth Social Media account on Tuesday.

In February, the U.S. administration announced a Section 232 investigation of U.S. imports. Lutnick claimed that the review had already been completed by the November deadline.

Lutnick stated, "The idea is that copper will be brought home, copper production will be brought home, and the ability to produce copper, which is crucial to the industrial sector in America, is going to come home."

The National Mining Association refused to comment and said it would rather wait for more details to be released. American Critical Minerals Association didn't immediately respond to comments.

Copper is used for construction, transportation and electronics, among other things. About half of the copper that America needs is imported each year.

The major copper mining projects in the U.S., such as Rio Tinto's and BHP's Resolution Copper Project in Arizona and Northern Dynasty Minerals Pebble mine project in Alaska have been met with strong opposition for a number of reasons.

Freeport-McMoRan shares, the largest copper producer in the world, based in Phoenix, rose nearly 5% on Tuesday afternoon. The company did not respond immediately to a comment request. It produced 1.26 billion lbs of copper in the U.S.

Freeport, a company that would benefit from U.S. tariffs on copper but is concerned about the impact of the duties on the global economy has advised Trump to concentrate his efforts on increasing U.S. production of copper.

According to U.S. Census Bureau statistics, the countries most likely to be affected by a new U.S. tariff on copper are Chile, Canada, and Mexico. These three countries were the U.S.'s top suppliers of refined copper and copper alloys in 2024.

Chile, Canada, and Peru are three of the biggest copper suppliers in the U.S. They have informed the administration that their imports do not pose a threat to U.S. interest and therefore should not be subjected to tariffs. All three countries have free-trade agreements with the U.S.

Requests for comments from the Mexican Economy Ministry, Chilean Foreign Ministry, and Canadian Finance Ministry were not immediately responded to. Chile's Mining Ministry, as well as Codelco, the country's largest copper miner, refused to comment.

Ole Hansen is the head of commodity strategy for Saxo Bank. He said that a 50% tariff on imported copper would hurt U.S. businesses who use the metal, because the country has years to go before it can meet its own needs.

Hansen stated that the U.S. imported enough copper to meet a year's worth of demand in the last six months. "I expect a correction of copper prices after the initial spike." Reporting by Andrea Shalal, Jarrett Renshaw, Additional reporting by Polina Devtt, Toronto, Divya Raagapal, Fabian Cambero, and Daina Beth Solon in Santiago, Editing by Veronica Brown and Franklin Paul; Cynthia Osterman, Mark Porter, and David Gregorio

(source: Reuters)