Trump pushes 50% tariff on copper imports, sparks price rally

US President Donald Trump has announced plans to impose a 50 per cent tariff on copper imports, sparking sharp reactions across global metals markets and sending American copper futures to record levels.

What did Trump say?

During a Cabinet meeting on Tuesday, Trump confirmed the tariff would be set at 50 per cent, describing the move as essential to boosting domestic production of a metal vital for electric vehicles, military equipment, power infrastructure and consumer electronics.

“I believe the tariff on copper, we’re going to make 50%,” Trump told reporters at the White House, as quoted by Reuters. The announcement came earlier and was steeper than many in the industry had expected, fuelling an immediate rally in futures markets.

US copper futures surge on tariff shock

According to Reuters, US Comex copper futures climbed more than 12 per cent to an all-time high following the President’s remarks. Bloomberg reported an even more dramatic move: contracts on the Comex surged as much as 17 per cent on Tuesday, marking a record one-day spike before easing back slightly in overnight trading.

Prices in New York briefly commanded a 24 per cent premium over equivalent contracts in London, which sets the global benchmark. On Wednesday morning in Shanghai, Comex copper was quoted at $5.5085 per pound, while London Metal Exchange prices were down 1.7 per cent at $9,627 per tonne, as per Bloomberg data.

Commerce Secretary outlines timeline

Shortly after Trump’s statement, US Commerce Secretary Howard Lutnick told CNBC that the tariffs would likely come into force by late July or August 1. He confirmed that the Commerce Department’s Section 232 investigation into copper imports, launched in February on national security grounds, had concluded ahead of its original November deadline.

“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, as cited by Reuters. He added that further details would be posted on the President’s Truth Social account.

Impact on global suppliers and US industry

The announcement threatens to disrupt well-established copper supply chains. The US relies on imports for roughly half its annual copper needs. According to the US Geological Survey, American consumption of refined copper stood at around 1.6 million tonnes in 2024, while domestic production reached only about 850,000 tonnes. Reuters data show Chile, Canada and Mexico were the top suppliers of refined copper, copper alloys and copper products to the US last year. Chile alone supplied 38 per cent of total imports, followed by Canada at 28 per cent and Mexico at 8 per cent.

Chile’s Foreign Ministry said there had been no formal notification of any decision, while mining giant Codelco indicated it was too early to draw firm conclusions. Freeport-McMoRan, the largest US copper producer, saw its shares rise nearly 5 per cent in response to the tariff news, though the company did not immediately comment.

Concerns over costs and supply-chain disruption

Manufacturers and commodity analysts have warned the move will likely drive up costs for industries reliant on copper, from home construction to renewable energy and electric vehicle production. Saxo Bank’s head of commodity strategy Ole Hansen told Reuters that although US storage levels are currently ample, following a rush of imports in recent months, prices could still see a correction after the initial surge.

Bloomberg highlighted that traders have been accelerating shipments into the US to “front-run” the tariff’s introduction, adding to near-term dislocations in the market. Morgan Stanley analysts said the new tariff would embed import costs into the US market price, but that the recent build-up in inventories should help soften the immediate impact.

Debate over US mining and future demand

The tariff move also casts a spotlight on stalled US mining projects, such as Rio Tinto and BHP’s Resolution Copper in Arizona and Northern Dynasty Minerals’ Pebble Mine in Alaska, which have faced strong local opposition. Analysts note that the US and the world expects copper demand to surge in coming years as automakers, power companies and data centres expand capacity for electric vehicles and renewable energy systems.

For now, the industry is waiting for further details from the White House on the scope of the tariffs, including the types of copper products covered and potential exemptions.

As quoted by Bloomberg, Plusmining’s Juan Carlos Guajardo summarised the short-term effect: “In the short term, the price is going to rise significantly because the market was expecting a lower tariff rate.”