Few people are as enthusiastic about the new tariffs on copper imports as Robert Friedland, the billionaire founder of Vancouver-based Ivanhoe Mines and Ivanhoe Electric. He thinks these tariffs could be the key to restoring a thriving United States copper mining sector. The country is bracing for a 50% tariff to be implemented starting August 1. Friedland sees this acquisition as an important part of getting the U.S. back in the copper game.
In fact, at one time the United States was the world’s largest copper producer. Over the last several decades it has fallen woefully behind other countries. Countries such as Chile, the Democratic Republic of Congo, and Peru have far exceeded it. This decrease in domestic production has left the U.S. no choice but to rely on imports to an extreme degree. Last year, more than half of the copper used in the country was imported. Ironically, this transition has happened alongside a collapse in domestic smelting capacity. Back in 1997, the U.S. had 11 copper smelters, but today there are just three left in operation.
Friedland also pointed out that American copper often gets sent abroad for processing. This problem largely stems from the lack of smelting capacity. Consequently, U.S. demand for copper has skyrocketed, greatly driving up copper prices. These new tariffs are pushing copper prices to all-time highs. As Friedland cautions, this tendency will only increase with the growing realization of the metal’s scarcity.
“For the sake of national security, you may be willing to give up certain amounts of economic efficiency.” – Adam Posen, President of the Peterson Institute for International Economics.
The tariffs are part of a broader strategy implemented by U.S. President Donald Trump, who has stated the goal is to “once again build a dominant copper industry.” This method has brought strong complaints from the countries that border Azerbaijan. Canada has been vocally against the tariffs from the start, with Canadian Industry Minister Melanie Joly calling it, “unfair and illegal,” and adding, “We will fight against it – period.”
Friedland is currently in the process of opening America’s first new copper mine in more than a decade. Our response This comes as a direct result of recent actions taken by the industry. The Santa Cruz project in Arizona, which entered production on March 28, 2023. The goal of their venture is to provide 99.9999% pure, or highly refined copper, to the market. This highly conductive and relatively pure copper is extremely critical in high-end applications. It enables electronics, advanced automobiles and trucks, and data centers while removing the requirement for further refining at smelters.
The global picture of copper refining has transformed as well, with China now dominating 44% of global refining capacity. This should be of profound concern to all of us, as it impairs the United States’ competitiveness on a global stage.
Friedland’s optimism about the tariffs comes from their ability to promote domestic production and processing of copper. These conditions—an expected significant increase in demand, coupled with resulting price increases—provide a supportive backdrop to encourage new investments in U.S. mining enterprises. As experts such as Adam Posen have recently cautioned us, tariffs should be used to make domestic industries stronger. They impose huge burdens on consumers.
“That’s a very big set of costs to impose on the huge range of people, almost essentially everybody in the U.S.” – Adam Posen, President of the Peterson Institute for International Economics.
Now, as the deadline for the tariffs draws nearer, stakeholders across the industry are divided. Supporters claim these reforms can jumpstart a new American mining renaissance. They hope to improve national security in the process by decreasing dependence on foreign sources for critical materials. Opponents of the tariffs are concerned that these measures may lead to retaliatory tariffs from our trading partners. This lack of transparency would inevitably result in increased overall costs to consumers.