Traders were caught off guard this week after Donald Trump threw out a headline-grabbing pledge: a 50% tariff on imported copper. That number was higher than most expected—and markets reacted fast. Copper futures in New York spiked as much as 17%, marking a historic single-day jump before retreating on profit-taking and uncertainty. The policy, announced off the cuff but reiterated by Commerce Secretary Howard Lutnick, could take effect as soon as late July or early August. Until then, copper cargoes are flooding into the U.S. in record volumes, as importers race the clock.
Citigroup called the announcement a turning point. Jefferies flagged a structural issue: the U.S. still relies on imports for 36% of its copper needs, and domestic mining just can't scale fast enough to close that gap. Marcus Garvey at Macquarie noted that without clear details—what counts as taxable copper, which producers get exemptions, whether there's a grace period—the 50% number could be more damaging than protective. Meanwhile, prices on the Comex are now trading at a premium of up to 25% over global benchmarks. That spread says it all: markets aren't sure how hard this will hit, but they're not waiting around to find out.
Longer term, the math doesn't get any easier. Mines take years to develop, and America's copper smelting capacity is still playing catch-up. Scrap copper recycling is one workaround—but that, too, is bottlenecked by infrastructure. Some U.S. industry leaders are lobbying for a different approach: restrict exports instead of taxing imports. Others warn that targeting only refined copper could invite a flood of copper-based products exempt from the tariff. With green energy, EVs, and AI data centers expected to drive copper demand through the next decade, the stakes are rising fast—and so are the costs.
