The United States is set to implement a 50% tariff on copper imports, indicating a marked intensification in its trade policy under President Donald Trump. This development, announced during a White House Cabinet meeting, aims to strengthen domestic manufacturing and curtailing reliance on foreign suppliers in key sectors.
Commerce Secretary Howard Lutnick has indicated that the copper tariff is expected to come into effect by late July or early August, following the conclusion of a Section 232 investigation into whether copper imports pose a threat to national security. This inquiry, initiated earlier this year, follows a precedent set by similar investigations that resulted in tariffs on steel and aluminium.
Copper plays a crucial role in various industries, including construction, clean energy, and defence, ranking as the third most utilised metal in the U.S. after iron and aluminium. The country imports nearly half of its copper requirements, with Chile and Canada being the principal sources. In 2024, the U.S. imported approximately 1.7 million metric tonnes of copper and related products, valued at over $17 billion.
The announcement of the tariff has already caused market reactions. Copper futures on the New York Comex surged to record highs, climbing by as much as 17% in a single day, reaching $5.89 per pound. Shares of domestic producers, such as Freeport-McMoRan, rose in response, while manufacturers dependent on imported copper are expected to face increased costs.
Additionally, the U.S. has seen a notable accumulation of copper inventories as importers rush to secure supplies ahead of the tariff’s implementation.
In tandem with the copper tariffs, President Trump has revealed plans to impose duties of up to 200% on imported pharmaceuticals. Firms will be allowed an 18-month grace period to relocate production to the U.S. before these tariffs take effect. Given that the U.S. imports over $200 billion worth of pharmaceuticals annually, these measures are designed to encourage domestic manufacturing of medicines and critical ingredients.
However, industry experts have expressed concerns that such tariffs could disrupt supply chains, elevate consumer prices, and hinder innovation within the healthcare sector.
These sector-specific tariffs are being introduced alongside a new tranche of “reciprocal” tariffs targeting imports from more than a dozen countries, including Japan and South Korea, with rates ranging between 25% and 40%, scheduled to commence on August 1.
The administration’s aggressive trade stance has drawn criticism from several U.S. trading partners, who caution that these measures may provoke retaliatory tariffs and further destabilise global trade.
The legal basis for these tariffs rests on Section 232 of the Trade Expansion Act of 1962, which grants the U.S. president authority to impose trade restrictions on national security grounds. This mechanism was previously employed to justify the 2018 tariffs on steel and aluminium, which significantly altered global metals markets.
Despite concerns about inflationary pressures, recent data from the Federal Reserve Bank of New York indicates that consumer inflation expectations remain relatively stable, with forecasts for the coming year holding steady at around 3%.