Trump announces 50% tariff on copper imports; experts warn of price surge

Industry experts warn that the US is dependent on copper imports, and levies could increase costs across critical industries from electronics and automobiles to infrastructure and defence

US President Donald Trump on Thursday announced a 50 per cent tariff on copper imports, effective August 1, citing national security risks and the need to rebuild what he described as a “decimated” American copper industry.

 

“Copper is necessary for semiconductors, aircraft, ships, ammunition, data centres, lithium-ion batteries, radar systems, missile defence systems, and even hypersonic weapons,” Trump wrote in a post on Truth Social. “Copper is the second most used material by the Department of Defence! Why did our foolish (and sleepy!) ‘Leaders’ decimate this important industry?... this is, after all, our golden age!”

 

Copper tariff to hit downstream sectors

The tariff, floated earlier this week following a US Cabinet meeting, has already triggered volatility in US commodity markets. Copper prices surged 13 per cent on Tuesday, hitting record highs in anticipation of the formal announcement.

 

 

Copper is a critical raw material in sectors ranging from electronics and automobiles to infrastructure and defence. It is widely used in wiring, plumbing, radiators and appliances, and is a key input for the electric grid.

 

US economists and manufacturers have warned that the new tariff could raise input costs for everything from electric vehicles and air conditioners to home repairs and consumer electronics.

 

“This is going to hit manufacturers across the board,” Peter Logan, metals analyst at Morgan Stanley, told CBS News. “We’re expecting inflationary pressure across housing, transport and renewable sectors. Maintaining the electric grid alone could become significantly costlier.”

 

The US depends on copper imports

The United States relied on imports to meet 53 per cent of its copper demand in 2024, according to Morgan Stanley. Chile is the largest supplier, followed by Canada and a handful of other countries, including India.

 

Trump’s move is the latest in a string of protectionist trade policies. Earlier this week, he indicated that a 200 per cent tariff on pharmaceutical imports may be implemented in the next 12 to 18 months. The copper tariff follows broader duties already imposed this year, including a near-universal 10 per cent tariff on all imports and sector-specific tariffs on steel, aluminium and automobiles.

 

Limited impact of copper tariffs on India

India exported $2.1 billion worth of copper in 2024, with the US accounting for over 15 per cent of that total. However, the impact on Indian exporters is expected to be minimal, according to industry officials.

 

“India is a copper-deficient country, and most of our production is consumed domestically, especially with rising demand from renewable energy, EVs and other copper-intensive sectors,” said industry expert A Karmarkar, as earlier reported by Business Standard. “The US tariff will not have any material effect on Indian firms.”

 

Coal and Mines Minister G Kishan Reddy also said on Wednesday that the government will engage with the US to understand the broader ramifications, but stated that domestic consumption remains the priority for Indian producers.

 

 

US to collect $300 billion in tariff revenues

US Treasury Secretary Scott Bessent said this week that tariff collections have already crossed $100 billion this year. He expects the figure to rise to $300 billion by the end of 2025 as the full impact of new trade measures kicks in.

 

“Major collections began in the second quarter, when the universal 10 per cent import duty was implemented and sectoral tariffs were raised,” Bessent said in a White House meeting.

 

The Trump administration maintains that the tariff will strengthen domestic supply chains and national defence capabilities. Earlier today, the White House also sent out letters to nations with new tariffs. Brazil has already stated that it will look into retaliatory measures.