Trump's Copper Tariff Echoes Through Global Mining Tunnels

President Donald Trump announced that the United States will impose a 50% tariff on all copper imports starting August 1. The decision threatens to disrupt a global supply chain for one of the key inputs for the American industry and a crucial commodity for the green technology transition.

The White House laid the groundwork for this decision as early as February 25, warning of national security risks associated with America's growing dependence on foreign copper.

The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted, and refined copper," the administration stated.

Despite having domestic copper reserves, the U.S. remains a net importer because of its underdeveloped smelting and refining capacity. Over half of global smelting is controlled by a single foreign producer, which Washington sees as a strategic threat.

Since February, U.S. copper imports have surged as traders scrambled to beat the tariff deadline. Between January and April 2025, the U.S. imported 461,000 tons of copper, 232,000 tons more than in the same period last year.

On the London Metal Exchange, this frenzy drained inventories and drove up prices. Still, spreads have collapsed recently as the arbitrage window closes and traders recognize that shipments now risk arriving after the tariff has taken effect.

Following the cabinet meeting, Commerce Secretary Howard Lutnick, who led the investigation, confirmed the tariff's timeline to CNBC.

"Copper is finished. We're done with our study. We've handed the study over to the president… he has the ability… to set the market tariff for copper." He added that the levy is "likely to be put in place end of July — maybe August 1," he said.

Chile, home to BHP's (NYSE:BHP) Escondida, the largest global copper mine, has gone on alert. State-owned miner Codelco, which exported roughly $5.72 billion worth of copper to the U.S. in 2024—less than 7% of its total—has requested clarity.

"What we need to do is understand what this is about. What products are affected?" Codelco chairman Maximo Pacheco told Reuters, pointing to the need to determine the specific magnitude of tariffs.

"I think it's premature to comment." Chile's government said it has yet to receive formal notice from the U.S.

Mexican President Claudia Sheinbaum reflected on the matter at a press conference, stating, "Copper is needed in many places around the world, so there are some options there." Despite its proximity, Mexico's copper exports to the U.S. pale in comparison to those of Chile or Canada.

Meanwhile, Australia has emerged as a potential beneficiary. With less than 1% of its copper exports headed to the U.S., the country is relatively insulated from the immediate impact.

"These measures disrupt global trade… The right response is not to raise barriers," Minerals Council of Australia CEO Tania Constable said in a statement.

Australia is projected to grow copper exports to 1 million tons by 2026/27, reinforcing its status as a trusted, low-risk supplier.

Price Watch: Southern Copper (NYSE:SCCO), the largest publicly traded copper miner, is up 10.29% year-to-date.

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