Copper futures in New York skyrocketed after President Trump announced plans for a 50% tariff on copper imports, triggering shockwaves across global metal markets.
On July 8, Comex copper contracts surged as much as 17%, marking the biggest single-day price jump ever recorded. The unprecedented rally pushed copper prices to an all-time high of US$5.8955 per pound before finally settling at US$5.6855. Analysts expect further volatility as industries brace for escalating costs and supply disruptions.
Copper’s Critical Role in the US Economy
Copper is an indispensable material used in nearly every modern industry, ranging from smartphones and electric vehicles to power grids and residential construction. American factories rely heavily on imported metal to maintain production, with nearly half of their copper supply sourced abroad. A 50% tariff will significantly raise costs for manufacturers who already face tight margins and fierce competition. Companies fear this policy could undermine efforts to revive domestic manufacturing and invest in next-generation infrastructure.
Why the Tariff Threatens Global Supply Chains
Industry experts warn that a steep copper tariff could create massive ripples throughout global supply chains, shifting trade flows and distorting prices worldwide. Chile, the world’s largest exporter, supplies roughly 500,000 tonnes of refined copper to the US annually. State-owned producer Codelco alone accounts for 350,000 tonnes of that volume. If the US imposes these duties, Chilean producers may redirect copper shipments to China, which could further tighten supply and inflate prices globally.
US Manufacturers Sound the Alarm Over Supply Gaps
Major buyers, including Southwire Company, have urged the administration to reconsider, citing the risk of severe supply shortages in the short and medium term. US mines produced about 850,000 tonnes of primary copper last year, but total demand reached 1.6 million tonnes, forcing manufacturers to depend heavily on imports. Industry groups argue that domestic production cannot expand quickly enough to fill this gap, which will leave American factories vulnerable to rising costs and unreliable supplies.
Short-Term Relief as Copper Inventories Build Up
In anticipation of the proposed tariffs, traders have rushed to ship record volumes of copper into the US, resulting in a surge of inventories stored in Comex warehouses. For now, this stockpile provides a temporary cushion for manufacturers grappling with soaring prices.
Chile Awaits Clarity on Tariff Details
Officials in Chile emphasized that there has been no formal executive order confirming the 50% tariff, and they are still waiting for official notification. Nevertheless, mining executives are preparing for significant disruption if the administration moves forward. Many fear that the tariff will push more copper into Asian markets, intensifying competition among buyers and driving up global prices.
What Comes Next
While the timing and scope of the tariff remain uncertain, manufacturers and traders are bracing for a potentially transformative shift in copper markets. A 50% duty would amplify costs across critical industries and test the resilience of global supply chains. For US policymakers, balancing the goal of revitalizing domestic production with the practical needs of manufacturers will be a defining challenge in the coming months. Companies and consumers alike must prepare for a new era of volatility and higher prices in the copper market.
