Trump Plans 50% Tariff on Copper Imports to Boost Domestic Production

On July 8, 2025, President Donald Trump announced plans to impose a 50% tariff on imported copper, aiming to bolster domestic production of this critical metal. The exact implementation date was not specified, but Commerce Secretary Howard Lutnick indicated the tariff could take effect by the end of July or August 1.

The announcement led to a significant market reaction, with U.S. Comex copper futures surging over 12% to a record high. The U.S., which imports approximately half of its copper needs annually—primarily from Chile—faces potential supply chain challenges due to this policy shift.

Additionally, President Trump mentioned forthcoming tariffs on pharmaceuticals, suggesting a potential 200% duty, with a grace period of up to 18 months for companies to adjust.

This development is part of the administration's broader trade strategy, which has previously included tariffs on steel, aluminum, and automobiles. The copper tariff is expected to have significant implications for global trade, particularly affecting major exporters like Chile.

The United States imports approximately half of its annual copper consumption, with major suppliers being Chile (51%), Canada (31%), Mexico (7%), Peru (5%), and the Democratic Republic of Congo (2%). In 2024, the U.S. imported 810,000 metric tons of refined copper, while domestic production stood at 850,000 metric tons.

Chile, the world's leading copper producer, is cautiously assessing the implications of the U.S. tariff. Chilean state miner Codelco, through its chairman Máximo Pacheco, is seeking clarity on which copper products are affected and whether the tariffs will apply universally or be country-specific. Although the U.S. represents less than 7% of Chile’s refined copper exports—with China being the primary destination—Chilean industry leaders warn the tariff could generate market volatility and disrupt global supply chains.

Shares of Phoenix-based Freeport-McMoRan, the world's largest copper producer, rose nearly 5% following the announcement, as investors anticipate potential benefits for domestic producers. However, the company has expressed concerns that such tariffs could harm the global economy and has advised the administration to focus on boosting U.S. copper production instead.

The tariff is being implemented under Section 232 of the Trade Expansion Act of 1962, which allows the president to adjust imports if they are deemed a threat to national security. This move follows similar tariffs imposed on steel and aluminum during Trump's first term. In response to the administration's increasing use of unilateral trade actions, the Trade Review Act of 2025 (S.1272) has been introduced in Congress. This bipartisan bill seeks to reassert Congressional authority over trade policy decisions by requiring the president to notify Congress of any new tariffs, provide economic justifications, and obtain Congressional approval for those tariffs to remain in effect beyond 60 days.

The 50% tariff on copper imports is expected to have significant implications for industries reliant on the metal, including construction, electronics, and transportation. The increased costs could lead to higher prices for consumers and potential disruptions in supply chains. Additionally, the tariff may strain trade relations with key partners such as Chile, Canada, and Mexico, who have expressed concerns over the potential economic impact.

This is not the first time the Trump administration has utilized tariffs as a tool to influence trade policy. Previous tariffs on steel and aluminum led to significant market reactions and strained international relations. The current copper tariff, however, is notable for its magnitude and the critical role of copper in various industries, potentially leading to more pronounced economic and diplomatic repercussions.

As the administration moves forward with its trade strategy, stakeholders across industries and international partners will be closely monitoring the implementation and impact of these tariffs. The coming months will reveal the broader consequences of this policy shift on the U.S. economy and global trade dynamics.