President Trump imposes 50% tariff on precious metal, making it the most expensive in the world
On July 8, US President Donald Trump announced that he would impose a 50% tax on imported copper. Immediately after the announcement, the price of copper in the US increased by more than 13% to a record of 5.69 USD/pound, the strongest increase in a day since 1989.
US announces 50% tax on imported copper
On July 8, US President Donald Trump announced that he would impose a 50% tax on imported copper. This was a surprise move in a strategy to protect domestic production, along with a signal that the tax would be expanded to other sectors. Although the official implementation date has not been announced, this announcement immediately shocked the market.
Immediately after the above statement, copper prices in the US increased by more than 13% in the trading session on July 8, reaching a record of 5.69 USD/pound, the strongest increase in one day since 1989.
Meanwhile, copper prices on the London Stock Exchange only increased slightly by 0.3%. The price gap between the US and the world is widening, putting pressure on both US businesses and consumers.
Copper is an essential metal used in electronics, machinery, appliances and infrastructure. A sharp price increase due to tariffs could make a range of products from refrigerators to cars more expensive.
The costs are likely to be passed on to consumers. Some investors warn that higher costs could also slow down public infrastructure projects and hurt the labor market.
While the government wants to encourage domestic copper production, experts say it is difficult to do so immediately. Expanding capacity would take years and require large investments. In addition, the process of obtaining new mining permits is lengthy. As a result, in the short term, the United States will remain largely dependent on imported copper from Chile, Canada, Peru, and Mexico.
The Trump administration launched a national security investigation into copper imports in February, a precursor to the current decision. Some companies have increased their inventory from Europe and Asia to counter the risk.
However, the exact timing of the tariffs remains unclear, and the possibility of exemptions or adjustments to the tariffs remains open. US Commerce Secretary Howard Lutnick said the tariffs could be imposed in late July or early August.
Copper price difference between US and world up to 2,600 USD/ton
According to Benchmark Mineral Intelligence, the price differential between US and world copper has increased by 138%, surpassing $2,600/ton. If the 50% tariff is implemented, US consumers could pay up to $15,000/ton of copper, while prices in other countries would be around $10,000. This is the largest differential ever seen in the modern history of the copper market.
As copper prices rise, some industries may switch to aluminum, a cheaper material for some applications. However, aluminum is heavier and has higher long-term maintenance costs. This puts copper demand at risk of a sharp decline, especially when prices are volatile and domestic production cannot meet demand immediately.
Peter Chase, an expert at the German Marshall Fund, warned that rising copper costs could affect plans to develop AI technology infrastructure in the US.
