President Donald Trump has directed the government to explore potential tariffs on copper, as part of the administration's efforts to impose taxes on various imports and reshape global trade. The executive order signed by Trump aims to study the impact of copper imports, with the president emphasizing that it will have significant implications.
The move is seen as a response to China's expansion in the copper sector and a strategy to address national security concerns. There is a push to revive domestic mining, smelting, and refining of copper to meet potential military and technological needs.
Despite the United States running a surplus with copper, the administration perceives a national security risk due to supply and demand projections. In 2019, the U.S. exported $11.3 billion worth of copper while importing $9.6 billion, according to the Census Bureau.
The Federal Reserve's index of copper, nickel, lead, and zinc mining has declined by over 30% since its peak in 1998. Trump has recently eliminated exemptions on steel and aluminum tariffs and plans to impose 25% tariffs on all imports from Mexico and Canada, with specific taxes on Canadian energy products.
The president has also pledged to match tariffs imposed by other countries and has proposed specific tariffs on autos, computer chips, and pharmaceutical drugs. While economists have expressed concerns about the broader impact of tariffs on the economy, the relatively modest role of copper in trade suggests limited inflationary effects from potential tariffs on this commodity.
