President Trump announced Tuesday that he would raise tariffs on copper to 50%. Within hours, copper futures surged 17% — the largest intraday jump since 1988.
Some investors are about to get rich. Others will take a bath. The winners will cheer Trump for protecting American industry. The losers will cry economic illiteracy.
So what does a 50% copper tariff do? Nothing good.
So which is it? Are tariffs good or bad?
Answer: both. Tariffs work — when they serve a purpose. When they don’t, they’re just another dumb tax.
Hamilton warned us
In 1791, Alexander Hamilton laid out the American case for tariffs in his “Report on Manufactures.” The goal wasn’t ideology. It was survival.
America, newly independent, couldn’t defend itself if it couldn’t manufacture firearms or steel. The French had supplied over 80,000 muskets during the Revolutionary War. Without them, we would have lost. Hamilton understood: Manufacturing wasn’t just useful — it was a matter of national security.
It was also a path to national prosperity.
Hamilton had seen how Great Britain used mercantilism to enrich itself at the colonies’ expense. Raw materials went out. Finished goods came in. British factories thrived. By 1770, nearly one in five Britons worked in manufacturing — and colonial demand fueled much of it.
Between 1720 and 1770, Britain’s trade surplus with the colonies exploded, rising from £67,000 to £739,000. American dependency on British goods helped trigger the Revolution.
Hamilton wanted to flip the script.
And for a while, we did.
For over a century, the United States followed Hamilton’s blueprint: protective tariffs, industrial development, and domestic manufacturing dominance. America prospered under what became known as the “American System” — essentially a more self-respecting version of British mercantilism.
Throughout the 19th century, the United States had the highest average tariff rates in the world. That protection helped launch the industrial might that made us the most powerful economy on earth.
Then we blew it.
After World War II, we tore up the playbook. By 1973, much of the American System had been dismantled. Since 2001 alone, we’ve lost more than 60,000 factories and 5 million manufacturing jobs.
So: Why tariffs now?
Better to be a country than a colony
Trump’s basic impulse is right. We should want economic self-sufficiency. We should want to prioritize value-added production over raw material extraction.
In short: It’s better to be a country than a colony.
Tariffs, when targeted, help get us there. But they need to be smart. They have to promote industry — not punish it.
So what does a 50% copper tariff do? Nothing good.
Losing the plot
In 2024, the U.S. produced about 1.1 million metric tons of copper. We consumed closer to 1.8 or even 2 million. That means over 40% of our copper use depends on imports.
A 50% tariff will raise copper prices across the board. That’s bad news for American manufacturers — especially electronics and high-tech industries.
Now, when tariffs hit manufactured goods, domestic producers can usually ramp up production. Most manufacturers operate at about 60% capacity. That means we have room to grow. Plus, manufacturing benefits from economies of scale: The more you make, the cheaper each unit gets.
Copper mining isn’t like that.
Mines take years — sometimes decades — to start production. They don’t scale easily. They need huge capital investment. And thanks to layers of environmental regulation, the domestic copper supply is basically inelastic.
So prices go up. Supply doesn’t. That’s a recipe for pain.
The China bonus
Ironically, Trump’s copper tariff might end up helping China.
As U.S. demand for imported copper drops, global copper prices may fall — once the Wall Street day-traders have had their fun. And that means cheaper raw materials for Chinese factories.
Bad for us. Great for them.
That matters because raw materials are the single largest cost input in manufacturing. (See: every iPhone ever made.)
Want to boost American competitiveness? Don’t spike copper prices. Expand domestic supply.
Smarter than tariffs
Copper is a genuine national security issue. But tariffs in this case aren’t the best tool.
Better to ease restrictions on mining and recycling. We could meet most of our copper demand just by processing domestic scrap instead of sending it overseas.
About 40% of U.S. copper comes from recycling. Yet we ship our junk electronics abroad, only to buy back the copper at a markup. That’s madness.
Let Americans mine. Let Americans recycle. Prices would drop. Supply would rise.
Tariffs wouldn’t be necessary.
A tariff without a cause
Given all of this, Trump’s copper tariff looks more like a tax-grab than a strategic move. It’s right up there with tariffs on bananas and coffee: symbolic but economically useless.
Trump has the right instincts. But instincts need discipline. If the goal is to rebuild industry and secure supply chains, he should target tariffs where they’ll create jobs and grow GDP — not score short-term political points.
Hamilton showed us the way. It’s time to stop losing the plot.
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