Codelco, Canadian Mining Association warn US copper tariffs likely to pressure US markets

US President Donald Trump's new 50% tariffs on copper will likely put US markets in a difficult position as major copper trade partners will find other markets.

Trump announced the new duty on copper imports during a July 8 cabinet meeting, although the White House has yet to issue an executive order to implement it. Trump has made tariff policy a core of his economic and foreign policy, and the copper tariffs would join 50% duties on steel and aluminum, a global 10% tariff on most goods, and the implementation of his "reciprocal" tariffs on individual countries.

Even without knowing the details, Chile and Canada, who combined supply 86.8% of US copper imports, warned that the US will struggle to close a domestic supply gap.

"Until now, there has been no official communication from the United States, which is why we are unaware of the exact measures that will be taken; it is not clear, for example, whether this tariff will apply to all copper products, including cathodes, nor do we know if there will be exceptions for some countries like ours," Máximo Pacheco, chairman of the board of the National Copper Corporation of Chile, also known as Codelco, said in a July 8 statement sent to Platts.

"The only clear thing is that the demand for copper is increasing at a rate of 3% globally in 2025, while production is not growing. The world and the United States will need more and more copper every day to face the energy transition, and Codelco, as the largest producer worldwide, is and will continue to be a safe and reliable supplier, which is why we are very calm."

Trump announced a national security investigation into a copper tariff on March 18. The results of the Section 232 investigation, as they are called for the part of the law that authorizes them, have not been released, and the White House did not respond to a request for comment.

The US produced 908,000 mt of refined copper while consuming 1.62 million mt in 2024, according to S&P Global Market Intelligence data. This domestic supply gap of nearly 700,000 mt leaves the US reliant on foreign supply.

Chile accounted for 70.1% of US copper imports under HS code 7403, according Market Intelligence Global Trade Analytics Suite data.

Canada and Peru are major suppliers as well, accounting for 16.7% and 6.9% of 2024 imports, respectively.

The new duty would have mixed impacts on the Canadian copper sector, according to the Canadian Mining Association.

"For a lot of Canada's copper this is immaterial, as they sell to other markets in Europe and Asia. For the copper midstream based out of Quebec, this is very concerning," Pierre Gratton, the association's president and CEO, said in a July 9 statement sent to Platts. "We are waiting for the 232 report, but, as usual, President Trump has jumped the gun. We need to find out what this means, whether our trade talks include copper, and how it will be applied."

The US and Canada are engaged in trade and tariff negotiations after meeting leaders of the two nations met at the G7 summit in June.

"The North American copper market is very integrated, so this will hurt copper producers who sell concentrate to Canada and to manufacturers who purchase Canadian refined copper products," Gratton added. "It may inadvertently help Chinese refiners that operate newer, lower-cost refineries."

A 50% US duty on copper imports would "significantly disrupt established trade flows" as exporters redirect shipments away from the US, Patricia Barreto, base metals senior analyst for S&P Global Energy told Platts.

"This policy would likely trigger a sharp reduction in US copper imports, leading to a drawdown of the accumulated inventories as domestic supply struggles to fill the gap," said Barreto. "Meanwhile, copper that would have otherwise gone to the US would flow into markets like China and the EU, helping to alleviate tightness and replenish stocks outside the US."

The high tariff rate will likely lead to significantly elevated copper prices in the US compared to other markets.

"The US would see a sustained premium for copper compared to international benchmarks, reflecting both the higher cost of imports and ongoing uncertainty about future supply," added Barreto. "In contrast, global prices outside the US could come under pressure before redirected supply loosens previously tight markets."

Trump's tariff announcement caused US copper futures prices to surge 17.5% on the COMEX and reach record highs on July 8 before slightly pulling back on July 9.