Natalie Sherman
Business reporter, BBC News
AFP/Getty
Copper entering the US from other countries is set to face a new tax of 50%, President Donald Trump has said.
The decision carries through on tariff threats he made earlier this year, when he ordered an investigation into how imports of the metal were affecting national security.
Similar probes are looming over other sectors, including pharmaceuticals, semiconductors and lumber, as part of a wider embrace of tariffs that Trump claims will protect and boost American industry.
Copper prices in the US jumped after his announcement of the new import tax, which Commerce Department Secretary Howard Lutnick said he expected would come into effect around the end of the month.
Lutnick said he expected Trump to sign documents in the coming days to formalise the decision, which the president revealed in an offhand remark at a televised meeting of his cabinet.
“Today we’re doing copper,” Trump said. “We’re going to make it 50%.”
The US imported about 810,000 metric tons of refined copper last year, about half of what it consumed, according to the US Geological Survey.
Chile was the biggest supplier, followed by Canada.
The metal is a key component in military equipment, as well as electric vehicles and construction. Current US tariff rates on copper are typically far lower than 50%.
A new 50% rate would match the recently imposed levy on steel and aluminium products, but would be higher than many in the industry had expected.
Some in the industry said they wanted to see the final order before speaking out, noting that some countries and products might secure exemptions.
“We have to see whether this will apply to all countries or only some,” said the chairman of Chile’s state-run copper producer Codelco.
Scott Lincicome, vice president of economics and trade at the Cato Institute, said the announcement seemed like “more of the same” – stirring uncertainty, while at the same time making it “quite clear” that higher tariffs of some sort were coming.
“We’re going to get some sort of new level of historically high US tariffs – we’re really just wrangling over the exact number and coverage,” he said, adding that the measure would help US producers but hurt the many more firms in the US that need copper as an input.
UK steelmakers still waiting on tariff exemption
Trump’s plans for copper come as the White House is also separately preparing to start raising tariffs on goods from countries around the world from 1 August.
Trump has already imposed a 10% tariff on most products, but he had called off his more aggressive plans after financial markets recoiled at steeper tariffs and business groups in the US pleaded for reprieve.
Trump sent letters to leaders of 14 countries on Monday, including South Korea and Japan, warning them of plans to institute new levies ranging from 25% to 40%.
Many trading partners are still hoping to strike deals before 1 August.
Trump on Tuesday said talks were going well with the European Union and he was “probably two days off” from sending a letter unveiling a new tariff rate.
In the UK, steelmakers are anxiously waiting to hear if they will be able to avoid tariffs of 50% on their products.
The US and UK agreed in May that the US would allow UK steel and aluminium into the US free of tariffs, up to an amount to be determined, as part of a wider tariff deal.
While the deal came into force last month, the tariff reductions on metals were yet to be finalised.
Currently, steel and aluminium products arriving on US shores from the UK remain subject to a 25% import tax, which could double if a deal between the two countries is not implemented by 9 July.
The White House did not respond to a request for comment on the status of those talks.
In his remarks Trump also said he planned to move forward with tariffs of up to 200% on pharmaceuticals, but said he would give the industry at least a year to adjust.
Additional reporting from Oliver Smith