U.S. President Donald Trump has signed an executive action directing the U.S. Commerce Department to examine possible copper tariffs, the latest in a string of measures aimed at imposing sector-specific levies that could reshape global supply chains.
Trump said the order would have a “big impact” as he signed it 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, briefing reporters on condition of anonymity, said it was premature to discuss a potential rate for the tariffs. Copper futures in New York surged nearly 5% for their biggest intraday gain since May last year.
Copper is a critical material for modern economies because of its widespread use in the wiring that delivers electricity to homes and factories. Many analysts forecast higher prices this decade as supply fails to keep pace with demand. As with other metals, China’s grip is particularly strong when it comes to processing — the country accounted for about 44% of the world’s refined copper last year, according to the United States Geological Survey.
Great industry
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% tariffs on two other industrial metals — steel and aluminum — with those levies slated to take effect in March.
Lutnick said in a statement that the action would also probe products that include copper, and said the administration aimed to rejuvenate the domestic copper industry.
“Like our steel and aluminum 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 defense.”
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 tons of refined copper in 2024, according to the US Geological Survey. While the US has significant mines, producing some 850,000 tons 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% of total import volumes, followed by Canada and Mexico at 28% and 8%, respectively.
Net copper imports account for 36% of demand, according to Morgan Stanley research.
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 had avoided being caught in the president’s trade war during his first term.
Benchmark prices on futures in New York are up about 17% this year amid speculation that any trade barriers would raise prices on US consumers. Washington’s announcement has fed a historic disconnect from other global price benchmarks, with Comex copper futures at one point trading at a premium of roughly $1,000 a ton to equivalent contracts traded on the London Metal Exchange.
Jia Zheng, head of trading at Shanghai Soochow Jiuying Investment Management Co., said trade would continue to shift away from China, with the spread between the Shanghai exchange, the LME and Comex remaining wide through the investigation period. Given limited domestic production, she said copper supply in China would come under pressure.
“Prices will move higher globally,” Jia said.
Comex futures were up 4.2% at 10:26 a.m. Shanghai time at $4.7145 a pound. LME copper was trading up 0.9% to $9,481.50.
Trump has also said additional tariffs on automobiles, lumber, semiconductors and pharmaceutical drugs of around 25% are forthcoming, with an announcement as soon as April 2. Individual countries are also in his sights, with China already facing a new 10% levy on imports and Trump saying on Monday that tariffs scheduled to hit Canada and Mexico with a 25% 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 fueling 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.
With assistance from Joe Deaux, Jennifer A. Dlouhy, Akayla Gardner, Winnie Zhu, Martin Ritchie and Yasufumi Saito.
Hadriana Lowenkron and Josh Wingrove, Bloomberg News
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