[News] Trump’s Tariff Plans on Critical Metals, Including AI-Essential Copper, Could Hurt U.S. Industry

According to Liberty Times, citing The Hill, U.S. President Donald Trump announced that he will impose tariffs on semiconductors, pharmaceuticals, steel, aluminum, oil and natural gas, as well as copper, by mid-February. Notably, the move of imposing tariffs on copper, according to the reports, could severely harm U.S. industries.

Trump has already announced an increase in tariffs on steel and aluminum imports to 25% on Monday, as a report from Bloomberg notes. The new rates will take effect on March 12,  according to proclamations made by the White House late Monday.

The report from The Hill highlights that the U.S. has high demand for copper, as it is a critical material for AI technology, data centers, and other cutting-edge innovations. The Hill notes that market projections indicate global copper demand will increase by 75% by 2050.

Tariffs on Copper Could Backfire for U.S. Manufacturing

Trump believes tariffs can help revive U.S. manufacturing by encouraging foreign investors to establish operations in the U.S. rather than exporting from abroad. However, the report from The Hill points out that this strategy is ineffective when applied to copper.

The copper supply chain is highly complex, involving multiple stages such as mining, smelting, refining, semi-finished processing, and final product manufacturing, and the U.S. lacks competitive advantages across these critical supply chain segments, as the report notes.

In fact, The Hill reports that China controls 97% of global copper smelting and refining capacity, making it the dominant player in the industry. Meanwhile, the U.S. is becoming increasingly dependent on copper imports.

According to the report from The Hill, in 1995, only 10% of U.S. copper demand was met through imports, but this figure has since surged to 50%. Market projections estimate that by 2035, U.S. copper import dependence will rise to two-thirds of total demand.

Canada as a Key Copper Supplier for the U.S.

As indicated in The Hill’s report, the U.S.’ primary copper supplier is Canada, which accounts for approximately half of U.S. copper imports. The report further notes that U.S. businesses rely heavily on refined copper, an industry with an economic output of USD 77 billion.

Similar to the automotive industry, the U.S. and Canada share an integrated copper supply chain, meaning that Trump’s potential tariffs on copper would only exacerbate the challenges facing the domestic mining industry, as the report from The Hill indicates.

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