US to impose sweeping 50% tariff on imports of semi-finished copper products

The US will impose a sweeping 50% tariff on imports of semi-finished copper products, while leaving alone less refined materials like copper ores, concentrates and cathodes, the White House said in a July 30 proclamation and accompanying fact sheet.

The announcement of the tariff, which goes live on Aug. 1, comes after months of speculation about the trade policy. In recent months a surge of copper imports flooded the US, fueled by higher domestic copper prices in anticipation of the policy.

The Trump administration also directed the Commerce Secretary to "take steps" under the Defense Production Act to require a quarter of domestic production of high-quality scrap copper to be sold in the country, the White House said in a fact sheet.

The policy also ordered Commerce to take steps to force a quarter of input for refined copper like copper ores, concentrates, mattes, cathodes and anodes to be produced and sold in the US starting in 2027. The amount increases to 30% in 2028 and 40% in 2029.

"This will boost US refining capacity by ensuring low-cost inputs while domestic refiners grow their operations," the White House said on July 30.

The order covers all imports of semi-finished copper products, except as otherwise noted in an annex to the July 30 proclamation outlining the new trade policies.

Trump also directed the Commerce Secretary to expand the tariff to more derivative copper products within 90 days of the proclamation.

The tariff will make imports of more finished copper products like pipes and wire much more expensive in the US.

But producers of raw copper inputs got a huge reprieve with the carve out for raw materials like copper cathode.

"This is much less bad than anyone was thinking it would be," Pierre Gratton, president and CEO of the Mining Association of Canada, told Platts in an interview.

Gratton added that it would be painful for manufacturers and companies exporting added-value copper products to the US.

"It's really downstream that's getting hit," Gratton said.

Chilean copper mining giant Codelco cast the tariff as a win for miners in a July 30 statement.

"It is good news for Chile, for Codelco, and for our customers in the United States," said Codelco President Maximo Pacheco.

Likewise, the US-based Copper Development Association (CDA), which represents copper producers, lauded Trump for the trade policy which it said echoed recommendations it had made.

"The forthcoming details will be important to understand full impacts, but the initial framework appears to be highly aligned with the solutions recommended by CDA's fabricator members," Adam Estelle, the association's president and CEO, said in an emailed statement.

The carveout for raw materials is a "massive market surprise," Natalie Scott-Gray, a senior metals demand analyst at financial firm StoneX, said in a July 30 note.

By allowing raw materials to continue flowing to the US, US copper prices will surely retreat, coming more into line with non-US prices. Meanwhile, the market may have to absorb US inventories that built up in recent months.

"Regarding how much material can come out of the US, it is still expensive to ship material back out of US, so we would expect material to take some time to reverse flows, although this will not take away the negative impact on [London Metal Exchange] prices," Scott-Gray said.

The new tariff only applies to the copper content of an import. The non-copper portion of imported products that are subject to the copper tariff will be taxed at rates under earlier reciprocal tariff policies, according to the July 30 proclamation. The US will mandate rules for declaring copper content in products, with penalties for non-compliance.

Meanwhile, copper imports already taxed under March 26 tariffs on vehicle imports will not be subject to the new tariff.