President Trump signed an executive order Wednesday imposing a 50 percent tariff on imports of certain products made with copper, a move that he said would shore up American production of a metal that is important for national security.
The order, which will take effect Friday, was not as broad as anticipated, and it stopped short of imposing new tariffs on raw copper. The announcement sent U.S. copper prices plummeting by nearly 20 percent on Wednesday afternoon, as investors reversed their bets that more expansive tariffs would send the cost of the highly traded metal skyrocketing.
The tariffs will apply to copper pipes, wires, rods, sheets and tubes, as well as certain products made with copper, including pipe fittings, cables, connectors and electrical components, the White House said. The levies are likely to raise costs for domestic industries that rely on those products, including manufacturers and home builders.
The executive order also contained a notable use of the Defense Production Act, a Korean War-era law that allows the government to intervene in the economy for national security purposes. Under that authority, the Trump administration will require a quarter of copper scrap produced in the United States to be sold within the country, rather than exported.
It will also require a certain proportion of inputs that are needed to make copper, like copper ore, concentrates, cathodes and anodes, to be sold domestically rather than abroad. That proportion will start at 25 percent in 2027, increasing to 40 percent in 2029.
The White House said that the moves — an unusual intervention by the government into a private market — would help ensure a low-cost supply of scrap and materials for domestic refiners that are trying to expand their operations.
An investigation by the Trump administration this year concluded that copper is essential for national defense, as a raw material for aircraft, ships, submarines and ammunition, and that foreign countries’ predatory practices had undercut the American copper industry.
Mr. Trump teased the prospect of copper tariffs earlier this year, and as a result, prices in the United States had been higher than the rest of the world. U.S. copper futures rose to almost $6 per pound earlier in July — a record high — after Mr. Trump announced a 50 percent tariff on copper imports, without specifying which products would be hit with the new levies.
But the administration’s decision on Wednesday to exclude refined copper from the tariffs sent U.S. copper prices tumbling, to roughly $4.50 per pound. Shares in major copper miners also fell, with Freeport-McMoRan’s stock down about 10 percent.
The Trump administration has imposed or is considering tariffs on a variety of industries on similar national security grounds. The president raised tariffs on foreign steel to 50 percent in June, and officials have signaled that they will issue tariffs on foreign semiconductors and pharmaceuticals in the coming weeks.
Since copper tariffs were proposed in February, importers have brought in huge amounts of copper to U.S. warehouses, aiming to sell the metal after tariffs increased prices, analysts at Benchmark Minerals said. The United States imports most of its copper from Chile, followed by Canada and Mexico.
Danielle Kaye contributed reporting.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
The post Trump Targets Copper With Tariffs, Though Not as Aggressively as Expected appeared first on New York Times.
