Donald Trump just announced a 50% tariff on imported copper. This announcement has rippled across the U.S. economy, wreaking havoc on American copper consumers and driving up copper prices for American buyers. This ruling will have an impact on arguably the largest copper suppliers—Chile, Canada, Peru and Mexico. As a strategic material for advanced machinery, electronics, and housing and infrastructure construction, the importance of copper to the national economy makes this regulatory change an incredibly impactful economic domino—far beyond the copper sector itself.
Immediately after Trump made his announcement about infrastructure, the price of copper shot up to their highest levels ever. On Tuesday, U.S. copper prices jumped more than 13%. They ended at $5.69 per pound, an all-time high in the futures market. In the past, this would have sent copper prices near-zero, with averages of $150 per metric ton in 2024. U.S. consumers are expected to feel the sticker shock soon, with analysts predicting copper costs will reach almost $15,000 per metric ton by August. The global market remains close to $10,000.
A gigantic tariff has opened up a massive difference in copper prices. This gap between the United States and other countries can be seen on a regional and local level. Almost 50 percent of the copper consumed in the U.S. is imported. This prospect has many wringing their hands that cash-strapped consumers will flock to lower-cost imports produced abroad. Export-comex price premium skyrocketed by 138% hitting over $2,600 per tonne. Since February, when Trump ordered a Section 232 investigation into copper tariffs, the delta between U.S. Comex futures and their London Metal Exchange (LME) counterparts has swung widely. During this entire period it has fluctuated between $500 and $1,500.
Market analysts have touted that this moment in time could be a turning point for the copper market. Citi analysts labeled Tuesday a “watershed moment for the copper market in 2025,” highlighting the urgency surrounding the situation.
“Imminent flagged tariff implementation should abruptly close the window for further significant U.S.-bound copper shipments (possibly for the rest of 2025),” – Analysts at Citi.
The implications of these increasing copper prices are far-reaching. According to European Policy Analyst Daan de Jonge, these increased costs must first be absorbed, which will directly impact household expenditure.
“On household spending, if you’re buying a new fridge, air conditioner, car, everything is going to get more expensive, and companies could reasonably be expected to pass that on,” – Daan de Jonge.
Furthermore, as de Jonge cautioned, the economic pressure may start to affect public investment too. U.S. debt is becoming increasingly expensive, the dollar is in a tailspin. Third, as raw material prices increase for the infrastructure projects we are able to fund, we could soon see positive effects on employment diminish.
Peter Chase raised concerns about the feasibility of substituting imported products with domestically produced goods in light of these changes.
“The question is, can America substitute imported products with domestically-made products, and how quickly?” – Peter Chase.
Chase underscored that the primary purpose of the tariff is to encourage more copper to be produced domestically. He cautioned that it will lead to an instant explosion.
“There’s a reality that has to be dealt with, and the price of copper with a 50% tariff is not going to mean copper production in the U.S. goes through the roof tomorrow,” – Peter Chase.
Traders have been overly sensitive to presidential announcements concerning copper duties since February. With the current steel and aluminum tariffs just recently put into place, the market has never been more active and alive. Manufacturing industry experts fear a trend will begin in projects where cheaper alternatives, such as aluminum, are used to avoid increasing costs.
Daan de Jonge summed up the main fear for demand destruction with prices sky rocketing.
“All of this definitely enters the risk range of demand destruction,” – Daan de Jonge.