President Donald Trump ordered an investigation into copper imports on Tuesday, considering the imposition of new tariffs to rebuild the U.S. copper production capacity.
Copper is a metal crucial for electric vehicles, military equipment, power grids, and many consumer goods. Since his second inauguration last month, Trump has issued a series of tariff orders.
While only a 10% new tariff on all imports from China is currently in place, a 25% tariff on goods from Canada and Mexico will take effect next week, with other tariffs targeting steel, aluminum, and motor vehicles also set to take effect soon or rapidly advancing.
Trump’s blitz has already begun to affect consumer confidence. Earlier on Tuesday, the Conference Board reported the largest drop in consumer confidence in three and a half years, with households expecting inflation to rise again.
Before the announcement of the copper investigation, Wall Street stocks fell for the fourth consecutive day, a decline largely attributed to the increasing uncertainty surrounding Trump’s trade policies.
However, some companies seen as winners saw their stock prices rise: Freeport-McMoRan (FCX), the world’s largest copper producer, saw its stock surge 5% in after-hours trading. The company produced 1.26 billion pounds of copper in the U.S. last year. Comex copper futures rose by 2.4% at one point, marking the largest intraday gain since February 12.
White House trade advisor Peter Navarro stated that the tariff investigation would be completed quickly. Goldman Sachs said the copper market sees a 50% chance of the U.S. imposing a 10% tariff by the end of the first quarter. Data from the U.S. Census Bureau shows that the countries most affected by the new U.S. copper tariffs will be Chile, Canada, and Mexico, which are the main suppliers of refined copper, copper alloys, and copper products in 2024.
White House officials said that based on the current demand for electric vehicles and power-hungry AI applications, the U.S. will face a copper shortage in the future. Unless the industry has reasonable long-term trade protection certainty, the U.S. cannot develop sufficient copper smelting and refining capacity.
