U.S. President Donald Trump announced a new 50 percent tariff on copper imports on Wednesday, set to take effect on August 1, aiming to boost domestic production in a sector vital to defense, electronics, and automotive manufacturing. The measure is the latest in a series of industry-specific tariffs, including those on steel and aluminum, which economists warn could raise costs for American consumers.
Trump had hinted at the copper tariffs a day earlier, triggering a surge in U.S. Comex copper futures to record levels. U.S. copper futures surged over 10 percent in the previous session to an all-time high. In contrast, copper futures in London and Shanghai declined on Wednesday, likely because traders may not have enough time to export significant volumes to the U.S. before the tariffs take effect.
As of 6:36 GMT, U.S. copper futures are trading 1.73 percent higher at $5.6380.
Tariffs essential to safeguard U.S. copper production
In February, the White House initiated a Section 232 investigation into copper imports, invoking a law that allows the president to impose tariffs on national security grounds. On Wednesday, Trump stated that he had received a “robust” national security assessment, which determined that tariffs were essential to safeguard U.S. copper production, a resource vital to multiple key industries.
“Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense,” said Trump in a post on Truth Social.
The U.S. relies on imports for nearly half of its refined copper needs, bringing in 810,000 metric tons in 2024, according to the U.S. Geological Survey. The countries likely to be most impacted by the new tariff are Chile, Canada, and Mexico—America’s top sources of refined copper, copper alloys, and related products last year, based on U.S. Census Bureau data.
Chile, Canada, and Peru, all of which have free trade agreements with the U.S., have urged the administration to exempt their exports, arguing that their copper shipments pose no threat to U.S. national interests.
The 50 percent tariff is aimed at spurring domestic production. Over two-thirds of U.S. copper is mined in Arizona, where a major new project led by Rio Tinto and BHP has remained stalled for more than a decade.
U.S. copper futures hit fresh record high
High-grade copper futures in New York surged on Tuesday, reaching a fresh record high of $5.8955/lb, after President Trump, during a cabinet meeting, stated he was considering a 50 percent tariff on copper imports, well above the 25 percent anticipated by the market.
“The U.S., like China and other major economies, is facing a rapidly rising demand for electricity—driven by the electrification of transport, industrial reshoring, and especially the explosive growth of AI and hyperscale data centers. To meet this surge, the U.S. is not only expanding renewables but also reopening nuclear plants to ensure grid reliability,” said Ole Hansen, head of commodity strategy, Saxo Bank.
However, the U.S. remains structurally short on copper, importing over 50 percent of its needs—primarily from South America—due to decades of underinvestment in domestic mining and refining. Addressing that shortfall will take years, if not decades, Hansen said. In the meantime, a tariff-induced price premium risks making copper—and by extension, U.S. manufacturing and infrastructure—materially more expensive, he added.
“Recent months have seen a surge in copper shipments to the U.S. ahead of potential tariffs, and CME-monitored inventories now exceed those of London and Shanghai combined, even though the U.S. only consumes around 7 percent of global copper,” Hansen added.
This front-loading of inventories has temporarily reduced import needs, helping to ease the New York premium from above 30 percent to around 27 percent, though the full impact of a 50 percent tariff will take time to be felt in prices as current stocks are drawn down.
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Copper prices to remain volatile and trend higher
The tariffs on copper have sparked concern among consumers, who fear long-term uncompetitiveness due to the slow pace of domestic supply expansion. “Given this, it is our view that the eventual tariff may land closer to 25 percent—underscoring the importance of watching what Trump does, not what he says,” Hansen added.
The recent rally—initially driven by a tangible supply squeeze—highlights how quickly fundamentals can reassert themselves in a tight market. But the real story extends well beyond the short term. The accelerating shift toward clean energy, AI-driven digital infrastructure, and electrification is laying the foundation for sustained, structural demand growth.
“If supply continues to lag—constrained by underinvestment in new mines and refining capacity—copper prices are poised to remain volatile and trend higher,” he added. With both short-term momentum and long-term megatrend tailwinds in its favor, copper is increasingly cementing its role as the defining commodity of the energy and digital transition era.
